OIG to restart short stay inpatient audits for 2-midnight compliance

The Office of Inspector General (OIG) is planning to audit hospital inpatient claims for compliance with the 2-midnight rule, according to a recent update to its Work Plan.

The OIG noted that it had previously suspended audits of short stay claims—claims for inpatient stays of less than two midnights—and it considers this update to the Work Plan as a notification that these audits will resume.

Past OIG audits have uncovered millions of dollars in overpayments for short stay inpatient claims that should have been billed as outpatient. The OIG will audit hospital short stay claims with dates of service after the implementation of the 2-midnight rule in 2013 and subsequent revisions to the rule. The OIG will determine whether these claims qualified to one of the exceptions to the 2-midnight rule, such as claims for inpatient-only procedures or newly initiated  mechanical ventilation, and were appropriately billed, or whether the claims should have been billed as outpatient and were inappropriately billed as inpatient. The OIG will recommend overpayment collections for claims that it determines were inappropriately billed as inpatient.

The OIG will also review Medicare Administrative Contractors’ and CMS’ policies and procedures for enforcing the 2-midnight rule.

Organizations should review their policies and procedures for ensuring compliance with the 2-midnight rule. Utilization review, HIM, billing, and coding staff, as well as medical staff, should be informed that the OIG will be restarting short stay audits.