A new notification requirement is coming next summer. Under the law, the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, which was signed by President Barack Obama on August 6, any patient in observation who has been in the hospital for more than 24 hours must be clearly told?verbally and in writing?of his or her outpatient status. Hospital officials have to deliver this notification no more than 36 hours after the patient's outpatient treatments begin.
If your organization is like many others, you've probably still got some lingering questions about how to comply with the 2-midnight rule. During a recent HCPro webcast "Medical Necessity Documentation and Short Stays," Steven Greenspan, JD, LLM, vice president of regulatory affairs at Executive Health Resources in Newtown Square, Pennsylvania, and Kurt Hopfensperger, MD, JD, vice president of compliance and physician education for Executive Health Resources, tried to shed some light on areas of confusion.
Compliance with the 2-midnight rule has been tricky for many organizations?and things aren't expected to get easier anytime soon. The 2016 OPPS proposed rule may bring some additional tweaks to the 2-midnight rule (see related story, "Proposed OPPS rule suggests tweaksto 2-midnight rule," in the September issue of CMM), and education and enforcement may change hands from Recovery Auditors to Quality Improvement Organizations.
This week CMS released guidance on the new Place of Service (POS) code for off-campus provider-based facilities, the 2-Midnight Rule, and appeals of claims denied by post-payment review contractors. Each item is short, but provides information on topics important to providers and physicians.
The 2-midnight rule may get a little tweak if the proposals in CMS' 2016 OPPS proposed rule comes to fruition. The rule proposes that physicians now be granted a little more flexibility when it comes to ordering inpatient admissions, even when the stay is expected to be less than two midnights?provided of course that the stay is justifiable from a medical standpoint and the physician clearly documents his or her thinking on the case.
CMS has sharply accelerated its push toward moving outpatient payments from a fee-for-service model to a true prospective payment system with a number of its proposals in the 2016 OPPS proposed rule (https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-16577.pdf), including new comprehensive APCs (C-APC) and extensive APC consolidation and reconfiguration.
This week’s note is about the changes to the 2-Midnight Rule in the 2016 OPPS proposed rule. In the 2016 OPPS Proposed Rule, CMS announced that October 1, 2015 they will be transitioning the medical review of inpatient admissions from Medicare Administrative Contractors (MAC) to Quality Improvement Organizations (QIO). This policy will limit the future review of inpatient admissions by the Recovery Auditors and may be related to CMS’ withdrawal of the Request for Quotes for new Recovery Auditors announced July 10.
CMS is reexamining inpatient criteria because it has seen a significant increase in the number of patients spending more than 24 hours in observation. Providers are worried that a Recovery Auditor will deny a short inpatient stay for lack of medical necessity and recoup payment years later. So instead, some facilities place patients in observation for longer time periods.
Documentation and billing for observation stays has come under increased scrutiny from the OIG, though many hospitals have struggled with changing regulations and frequently updated guidance.
