SCAN
NCH
September 2013

CMS issues final rule on Part B Medicare patients and two midnight rule

The Centers for Medicare & Medicaid Services (CMS) has issued a final rule that permits hospitals to receive payment for inpatient services under Medicare Part B for hospital inpatient admissions denied as not medically necessary under Part A, according to a CMS fact sheet.

Under the rule, if a physician documents a beneficiary's surgical procedure, diagnostic test or other treatment will require a medically necessary stay in the hospital lasting at least two midnights, and admits the beneficiary to the hospital based on that expectation, it is presumed to be appropriate that the hospital receive Medicare Part A payment.

"A hospital also can bill and be paid for these inpatient services under Part B if—after the patient has been discharged—it determines through self-audit (utilization review) that the patient should have not been admitted as an inpatient," the fact sheet said.

The final rule will go into effect for discharges on or after Oct. 1, 2013, according to the CMS. "This rule makes it even more important that the physician be very clear in his or her initial note that there is a medically necessary reason to expect the patient will be in the hospital for the next two midnights and state this explicitly," says Dr. Panayota Kleinman, Director of Medical Services at NCH.