The 2-Midnight Rule, which governs inpatient admissions, applies to Medicare Advantage plans as well. Medicare Advantage enrollees must receive the same access to medically necessary care as those in traditional Medicare. Effective June 5, 2023, this rule requires Medicare Advantage plans to cover inpatient admissions for at least two midnights or based on a physician’s determination. Hospitals can expect increased scrutiny from payers and should improve documentation to support the need for inpatient care and the expected length of stay.
Significant changes are on the horizon for Medicare Advantage plans regarding their coverage of inpatient services in hospitals for plan members. These changes are expected to pose challenges for hospitals and the way physicians document inpatient care.
Here are six important things to know about the 2-Midnight Rule and its application to Medicare Advantage:
1. Introduction of the 2-Midnight Rule: In the 2014 Medicare inpatient prospective payment system final rule, CMS implemented a new regulation known as the 2-Midnight Rule for hospitals and health systems.
2. Coverage Criteria: According to this rule, inpatient admissions are covered for traditional Medicare beneficiaries if they require a hospital stay lasting more than one day or if their treatment is classified as inpatient-only. Stays lasting less than two midnights are considered outpatient and should be treated and billed as such.
3. Extension to Medicare Advantage: In December, CMS proposed a rule to ensure that Medicare Advantage enrollees receive the same access to medically necessary care as those in traditional Medicare. On April 5, CMS published the final rule, clarifying that Medicare Advantage plans must also adhere to the 2-Midnight Rule, including its case-by-case exception and the inpatient-only list.
4. Coverage Criteria for Medicare Advantage: Under the final rule, a Medicare Advantage plan must provide coverage for an inpatient admission if the admitting physician expects the patient to require hospital care for at least two nights. The plan must also cover cases where the physician determines inpatient care is necessary despite not expecting the care to cross two midnights (case-by-case exception). Additionally, coverage is required for inpatient admissions for surgical procedures specified as inpatient-only under Medicare (inpatient-only rule).
5. Effective Date for Medicare Advantage: There is debate surrounding the effective date of the entire rule for Medicare Advantage plans. According to a CMS spokesperson, “The rule took effect on June 5, 2023, and most of the final policies will begin to be applicable in 2024.”
6. Increased Scrutiny for Hospitals: Hospitals should anticipate heightened scrutiny from payers regarding inpatient admissions for Medicare Advantage members. “Hospitals must collaborate with their physicians to enhance documentation, not only to support the necessity of the patient’s hospital stay but also to specify the expected duration,” explained Ronald Hirsch, MD, Vice President of the Regulations and Education Group at R1 RCM. “Medicare Advantage plans may have to cover a greater number of inpatient admissions, leading to increased audits.”
Overall, the 2-Midnight Rule has implications for Medicare Advantage plans, requiring them to align with the same guidelines as traditional Medicare. Hospitals should prepare for increased oversight and ensure comprehensive documentation to support the need for inpatient care and the expected length of stay.
