The Two-Midnight Rule 2021

Five Immediate Actions for Hospitals and Compliance Officers

In November of 2020, the HHS Office of Inspector General (OIG) announced it was resuming audits of inpatient (IP) claims with short lengths of stay and added the audits to its annual work plan for 2021.¹ In addition, the Centers for Medicare and Medicaid Services (CMS) announced a three-year phase-out of the Inpatient Only List (“CMS IPOL”) beginning in 2021.² With these two factors in mind, hospitals and compliance officers must place a renewed focus on the Two-Midnight Rule.

Hospitals and compliance officers need to take immediate action before the OIG knocks on their door. Performing data analysis and documentation review on Medicare short-stay inpatient admissions to identify and mitigate risk areas is advised. Additionally, organizations should review changes to the CMS IPOL and assess current policies and procedures to ensure compliance with the Two-Midnight Rule. Finally, simply spreading the word about the reinstated audits and IPOL changes can help ensure your organization is prepared to comply with all relevant regulations.

FTI Consulting has been involved with several of the largest short-stay settlements with the Department of Justice in the past eight years. We have assisted clients by performing detailed data mining and benchmarking analyses as well as reviewing medical record documentation. Additionally, we have worked closely with consulting physicians to further analyze and defend appropriate admissions. FTI Consulting’s knowledge of relevant risk areas and extensive experience in conducting medical necessity and appropriate reviews allow us to provide the highest level of service to our clients and support positive outcomes.

Footnotes:

1: US Department of Health and Human Services Office of Inspector General – CMS Oversight of the Two-Midnight Rule for Inpatient Admissions: https://oig.hhs.gov/reports-and-publications/workplan/summary/wp-summary-0000538.asp

2: CMS Fact Sheet: CY 2021 Medicare Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System Final Rule: https://www.cms.gov/newsroom/fact-sheets/cy-2021-medicare-hospital-outpatient-prospective-payment-system-and-ambulatory-surgical-center-0