Stay updated on the evolving landscape of Medicare Advantage (MA) with these comprehensive insights into the implementation of the two-midnight rule. Discover key updates from CMS guidance to insurers’ responses and healthcare providers’ strategic adjustments. Understand the implications of the rule on inpatient admissions and billing practices, along with the ongoing efforts to ensure alignment with Medicare regulations. Explore how MA plans are navigating the challenges and opportunities presented by this regulatory change, and gain valuable perspectives from industry leaders on its impact on patient care and financial outcomes.
The Medicare Advantage (MA) landscape is continually evolving, with regulatory changes shaping how healthcare providers deliver and insurers reimburse for services. One such regulation, the two-midnight rule, has significant implications for inpatient admissions and billing practices under MA plans. As of 2024, MA plans are mandated to provide coverage for inpatient admissions lasting at least two midnights, prompting strategic adjustments across the healthcare industry. This article provides a comprehensive overview of recent updates surrounding the two-midnight rule, from CMS guidance to insurers’ responses and healthcare providers’ preparations. Delve into the complexities of navigating MA under this regulatory framework and gain insights into its impact on patient care and financial outcomes.
The origins of this rule traced back to the 2014 Medicare inpatient prospective payment system final rule. In 2023, the Centers for Medicare & Medicaid Services (CMS) clarified in its final rule that MA plans must adhere to the two-midnight rule, including its case-by-case exception and the inpatient-only list, effective from 2024 onwards.
Ronald Hirsch, MD, Vice President of Regulations and Education Group at R1 Physician Advisory Services, emphasized the importance of hospitals collaborating with physicians to enhance documentation. This documentation should not only justify the necessity of the patient’s hospitalization but also specify the expected duration, considering the potential increase in inpatient admissions under MA plans.
Here are seven key updates regarding the implementation and impact of the two-midnight rule:
1. On February 6, CMS guided insurers on implementing the two-midnight rule, highlighting that MA plans must adhere to inpatient admission criteria. However, they are not obliged to follow the ‘two-midnight presumption’ applicable to traditional Medicare’s medical review instructions.
2. UnitedHealthcare issued its guidance in January, indicating that MA plans can establish internal coverage criteria when existing Medicare criteria are not fully established. They are permitted to use InterQual criteria, a clinical decision support software, to aid in this process.
3. Chip Kahn, President and CEO of the Federation of American Hospitals, discussed the implications of the final rule, suggesting that while MA plans aren’t required to strictly adhere to the two-midnight rule, they must align with its principles. Concerns were raised regarding the variation in denials between MA plans and fee-for-service, prompting CMS to solicit information on measuring health plan performance.
4. Centene’s CFO, Drew Asher, assured investors on February 6 that the company has been preparing for the two-midnight rule and anticipates its impact in their forecasts for 2024.
5. CVS Health’s CFO, Tom Cowhey, stated on February 7 that the company has made internal adjustments in response to the rule, accounting for changes in inpatient utilization rates within their forecasts.
6. Humana’s CFO, Susan Diamond, acknowledged on January 25 that they are assessing the two-midnight rule’s impact on rising MA utilization rates and subsequent financial implications.
7. HCA Healthcare’s CFO, Bill Rutherford, stated on January 30 that while it’s too early to gauge the rule’s full impact, the company expects potential benefits for patients over time.
Overall, the implementation of the two-midnight rule represents a significant regulatory change within the Medicare Advantage (MA) landscape. As MA plans adapt to comply with this rule, healthcare providers are faced with the challenge of ensuring appropriate documentation and billing practices while maintaining quality patient care. While uncertainties remain regarding the rule’s long-term impact, industry stakeholders are actively monitoring and responding to its implications. Through collaboration and strategic adjustments, MA plans, insurers, and healthcare providers aim to navigate these regulatory changes effectively, ultimately improving the delivery of care and financial sustainability within the MA system.