CMS Prepared to Modify Controversial Two-Midnight Rule

CMS Prepared to Modify Controversial Two-Midnight Rule


Earlier this month, CMS released the Hospital Outpatient Prospective Payment System (HOPPS) Proposed Rule for CY 2016. While there are a number of payment updates proposed in the plan, the two-midnight rule is garnering most of the attention. The proposal seeks to significantly expand a current exception to the two-midnight rule, but  it also raises serious questions regarding the practical implications of the potential rule change. In addition, CMS announced changes regarding the review of patient status claims. No later than October 1, 2015, CMS intends to have Quality Improvement Organization (QIO) contractors conduct reviews of short inpatient stays rather than the Medicare Administrative Contractors. Those hospitals that are found to have high denial rates will be referred to Recovery Audit Contractors (RACs) for further audits.

Here are some key takeaways from CMS’ HOPPS proposal:

As is always the case, the devil is in the details - how and when this will be implemented has yet to be seen. Right now, this is a proposal, and it does not go into effect until January 1, 2016. Presently, the 60-day comment period remains open until August 31. As in the past, proposals may change significantly prior to the release of the final rule, expected around November 1.

For more information from the CMS on the proposed two-midnight rule changes, please see this helpful fact sheet.

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