The Office of Inspector General ("OIG") in its November Work Plan has put hospitals on notice that it is going to begin auditing short-stay inpatient claims for compliance with CMS's Two-Midnight Rule.
Short stay claims - claims for inpatient stays of less than two midnights - have caused hospitals and providers considerable confusion over the years. Unfortunately, OIG believes inpatient admission errors continue and are costing the Medicare programs millions of dollars.
This news marks a significant change from OIG's past position when OIG went on record that it was not going to audit short stays after CMS implemented the Two-Midnight Rule on October 1, 2013. OIG's upcoming audits are designed to determine whether inpatient claims with short lengths of stay were incorrectly billed as inpatient and should have been billed as outpatient or outpatient with observation. OIG will also review Medicare Administrative Contractors' and CMS's policies and procedures for enforcing the Two-Midnight Rule.
Hospitals can assess their risk and prepare for these audits by taking the following steps:
- Run data analytics on Medicare short-stay inpatient admissions, paying particular attention to admissions from Emergency Department, telemetry and outpatient surgery.
- Consider performing a documentation review of Medicare short inpatient stays. Physician documentation should provide rationale for expected two-midnight stay, as well as rationale for why the patient was discharged prior to the second midnight.
- Consider the application of Occurrence Code 72 on inpatient Medicare claims.
- Analyze current policies and processes for patient status determinations and verify that clinical indicators such as Milliman and InterQual are used as resources and not as the determining factor.
- Analyze current processes for accurate Two-Midnight Rule documentation and billing and prepare a gap analysis with corrective action plans, if needed.
- Re-educate providers and case managers on proper documentation requirements for the Two-Midnight Rule.
- Notify providers, coders, HIM, Billing and Utilization Review that OIG is going to begin these audits.
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