Corporate Compliance

The Hospital Guide to Contemporary Utilization Review: Applying the 2-Midnight Rule to Transfer Patients

Medicare Insider, May 26, 2015

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Editor’s note: The following is an except from The Hospital Guide to Contemporary Utilization Review, a comprehensive resource designed to identify utilization review (UR) best practices and provide guidance on developing and enhancing a contemporary UR committee. The book includes tips for intradepartmental collaboration to guide professionals through the process of selecting a physician advisor and partnering with nurses, case managers, and revenue cycle team members.
The 2-midnight rule also changes the way patient transfers are handled. If a patient requires hospital care that is expected to require more than two midnights, but the plan at the time of admission to the originating hospital is to transfer the patient to another facility prior to the second midnight, he or she should be placed as outpatient with observation services at the initial hospital. If the patient requires hospital care at the originating hospital that is expected to exceed two midnights and the initial plan is to care for the patient at the original hospital but then transfer if his or her condition deteriorates, the patient should be admitted as inpatient. If the patient is subsequently transferred, even within hours of admission, the billing status remains inpatient based on the initial plan.
The UR specialist in access management at the receiving hospitals should now consider any medically necessary midnights spent at the transferring hospital (including time spent emergency department at the sending hospital) and the number of anticipated midnights at their institution when making the decision on the proper status. For example, if a patient spent two or more midnights at the transferring hospital and is transferred for a procedure that may not require another midnight (i.e., a cardiac catheterization after a myocardial infarction), the UR specialist at the receiving hospital should still recommend inpatient admission. The stay at the receiving hospital may not pass any midnights, but the rule states the receiving hospital should admit the patient as inpatient. The patient will incur an inpatient deductible for the admission at the first hospital but since the admission to the second hospital is within the 60-day “spell of illness,” there is no deductible for that second admission. It will also not be considered a readmission as part of the CMS’ Hospital Readmission Reduction Program as the index admission will be coded using discharge status 02 (transfer to another acute care hospital), which is not counted as a readmission.
It should also be noted that CMS stated in the 2014 IPPS final rule that it expects providers to clearly document the need for hospitalization, including the risks and their plans for the patient:
The factors that lead a physician to admit a particular beneficiary based on the physician’s clinical expectation are significant clinical considerations and must be clearly and completely documented in the medical record. Because of the relationship that develops between a physician and his or her patient, the physician is in a unique position to incorporate complete medical evidence in a beneficiary’s medical records, and has ample opportunity to explain in detail why the expectation of the need for care spanning at least 2 midnights was appropriate in the context of that beneficiary’s acute condition.
—Medicare Program, 2013

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