Because the rule would increase the number of cases that are paid for under the IPPS, CMS reduced all inpatient rates by 0
This new standard is expected to have a significant effect on hospital payments, shifting some cases from inpatient status to outpatient and others from outpatient status to inpatient. The CMS actuary estimated that approximately 400,000 encounters would shift from payment under the OPPS to the IPPS, and approximately 360,000 encounters would shift from the IPPS to the OPPS. 2 percent for fiscal year 2014 to keep overall IPPS payments at the same amount Medicare would have paid had the previous guidance remained in effect.
Shortly after finalizing the policy, CMS partially delayed enforcement of the two-midnight rule, and Congress then extended that delay through . Under the delay, CMS will not conduct postpayment patient status reviews for claims with dates of admission from .
During this period, CMS will also undertake a “probe and educate” effort during which the Medicare claims processing contractors will review a sample of each hospital’s inpatient claims to determine https://hookupdate.net/escort-index/murfreesboro/ the appropriateness of the inpatient admission under the revised two-midnight rule. The contractors will then provide individual hospitals with education on the policy, as necessary, to correct improper payments.
Even though the two-midnight rule will not be used to make medical necessity determinations regarding the inpatient admission during this period, CMS instructed physicians to apply the standard in making admission decisions. CMS did not specify the documentation physicians will have to provide to demonstrate the expectation that a hospital stay spanning two midnights was reasonable. Instead, CMS anticipates that the information necessary to support this determination can be inferred from the patient’s plan of care, treatment orders, and physician notes.
What’s The Debate?
Hospitals are highly critical of the two-midnight rule. They describe it as arbitrary and note that the decision to admit a patient is complex, taking numerous factors into consideration that are not reflected in the time-based standard. They argue that the rule undermines the judgment of physicians and creates enormous administrative and financial hassles for hospitals.
Such a standard also penalizes hospitals for innovations that reduce length-of-stay. In addition to criticisms of the rule itself, hospitals fault CMS for failing to educate beneficiaries about the new benchmark and highlight the likelihood that beneficiaries will continue to be confused regarding their admission status.
Role of the RACs. Although Medicare applies automated screens to Medicare claims in order to prevent improper payment, most claims are paid without reviewing the patient’s medical records. Nevertheless, because of the volume of Medicare claims, some improper payments are unavoidable. Such payments cost the Medicare program billions of dollars. For fiscal year 2013 CMS estimated that the improper payment rate was 10.1 percent, which represented $36 billion.
The RACs’ mission is to identify and correct improper Medicare payments. Congress required that a permanent national RAC program be established by , and CMS phased in implementation of the national RAC program in 2008 and 2009. Of the overpayments identified by RACs in fiscal year 2013, 94 percent were inpatient claims, many of them for improper short-stay admissions.
Unlike other Medicare contractors such as claims processing contractors, the RACs are paid on a contingency fee basis, receiving a portion of the improper claims they identify. The American Hospital Association (AHA) argues that RACs have chosen to focus on inpatient claims because of the financial incentives created by these contingency fees: Inpatient claims are generally high dollar compared to outpatient claims and, therefore, make the most lucrative targets for a contractor that receives a percentage of the claims it denies as improperly paid. If the denial of a claim by a RAC is overturned on appeal, the RAC has to return the contingency fee it received, but the RAC faces no other financial penalty for having identified the claim as improperly paid.