CHA News Article

OIG Finds Vulnerabilities Remain Under Two-Midnight Policy

The U.S. Department of Health and Human Services Office of Inspector General (OIG) last month issued a report titled Vulnerabilities Remain Under Medicare’s 2-Midnight Hospital Policy, which makes recommendations on improving oversight of hospital billing under the two-midnight policy. The report found that, while the number of inpatient stays decreased and the number of outpatient stays increased since the implementation of the two-midnight policy, hospitals are still billing for potentially inappropriate short inpatient stays. In addition, an increase in outpatient stays has caused adverse consequences for beneficiaries of long outpatient stays; notably, those patients may not receive the three inpatient nights needed to qualify for skilled-nursing facility services. To address these vulnerabilities, the OIG recommended that the Centers for Medicare & Medicaid Services:

  • Conduct routine analysis of hospital billing and target for review the hospitals with high or increasing numbers of short inpatient stays that are potentially inappropriate under the two-midnight policy.
  • Identify and target for review the short inpatient stays that are potentially inappropriate under the two-midnight policy.
  • Analyze the potential impacts of counting time spent as an outpatient toward the three-night requirement for skilled-nursing facility services so that beneficiaries receiving similar hospital care have similar access to these services.
  • Explore ways of protecting beneficiaries in outpatient stays from paying more than they would have paid as inpatients.

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