The Office of Inspector General (OIG), Health & Human Services recently released a report detailing its analysis of hospital compliance with the Centers for Medicare & Medicaid (CMS) “two-midnight” rule during fiscal year 2014, which allows Medicare payment for inpatient claims only if the treating physician expects that the patient will require hospital services at least two midnights. The two-midnight policy was implemented by CMS to, in part, reduce inconsistent use of inpatient and outpatient hospital stays and address improper payment for short inpatient stays. The OIG found that hospitals continue to bill for potentially inappropriate short hospital stays and for a large number of long inpatient hospital stays. In addition, hospitals continue to vary in their use of short inpatient stays and long outpatient stays, including treatment for the same diagnosis. Hospitals that treated a patient for chest pain, for example, with a short inpatient stay received payments averaging approximately $2,500 more than a hospital that treated a patient with chest pain with a short outpatient stay. This potentially inappropriate use of short inpatient stays cost CMS approximately $2.9 billion in fiscal year 2014. The OIG has recommended that CMS more closely monitor hospital billing for short inpatient stays.
