Skip to content

Menu

LexBlog, Inc. logo
NetworkSub-MenuBrowse by SubjectBrowse by PublisherJoin the NetworkGet StartedSubscribeSupportContact
Search
Close

Enforcement of the Two-Midnight Rule Delayed Again

By Kenneth Yood & Lynsey Mitchel on April 7, 2014
Email this postTweet this postLike this postShare this post on LinkedIn

Last week President Obama signed into law a measure to extend Medicare physician pay rates for one year and to extend the enforcement delay of the “Two-Midnight” rule through March 2015.  Medicare Recovery Audit Contractors (RACs) are prohibited from auditing inpatient hospital claims for compliance with the rule from October 1, 2013, through March 31, 2015.

CMS promulgated the “Two-Midnight” rule because of concerns that hospitals were overusing observation status.  Under the “Two-Midnight” rule, if the ordering practitioner expects a beneficiary’s surgical procedure, diagnostic test or other treatment to require a stay in the hospital lasting at least two midnights, and admits the beneficiary as an inpatient based on that expectation, it is generally appropriate that the hospital receive Medicare Part A payment.  The final rule emphasizes the need for a formal order of inpatient admission to begin inpatient status, but permits the ordering practitioner to consider all time a patient has already spent in the hospital as an outpatient receiving observation services, or receiving care in the emergency department, operating room, or other treatment area in guiding their two-midnight expectation.

Physician documentation will be key.  Certifications must clearly justify the admission and must include the reason for the inpatient treatment or diagnostic study, special or unusual services the patient will receive, the estimated time the patient will stay in the hospital, and plans for post-hospital care.  We recommend that hospitals take a proactive compliance approach that includes a focus on physician education and internal chart auditing.

Photo of Kenneth Yood Kenneth Yood

Ken is a partner in the Corporate Practice Group in the firm’s Los Angeles office and a member of the Healthcare Team.

Read more about Kenneth YoodEmail
Photo of Lynsey Mitchel Lynsey Mitchel

Lynsey Mitchel is a partner in the Corporate Practice Group in the firm’s Century City office, a leader of the Health Plan Practice and a member of the firm’s Healthcare team.

Read more about Lynsey MitchelEmail
  • Posted in:
    Health Care and Life Sciences
  • Blog:
    Healthcare Law Blog
  • Organization:
    Sheppard, Mullin, Richter & Hampton LLP
  • Article: View Original Source

Call us at 1-800-913-0988 or email sales@lexblog.com.

Facebook LinkedIn Twitter RSS
The Library at LexBlog
  • About LexBlog
  • The Field We Built
  • Library at LexBlog
  • Our Beliefs
  • Our Team
  • Contact LexBlog
  • Disclaimer
  • Editorial Policy
  • Terms of Service
  • Get Started
  • Publishing Solutions
  • Compass
  • Submit a Request
  • Support Center
  • System Status
Copyright © 2026, LexBlog, Inc. All Rights Reserved.
Law blog design & platform by LexBlog LexBlog Logo