JoNell Moore, RN

jmoore@eidebailly.com

701.239.8690

Two-Midnight RulingPart A/Part B Re-billing

www.eidebail ly.com

Two-Midnight Ruling

• 2014 IPPS Final Rule (August 19, 2013)• CMS interpretations, clarifications, changes

happening daily• Opposition by AHA, HFMA, over 100 US

Congressmen (bipartisan coalition), Federation of American Hospitals, etc.

• All requesting to either eliminate the rule or revise the rule and at the very least, a 6 month delay

www.eidebail ly.com

Two-Midnight Ruling

WHY?• CMS has concerns regarding problems

with observation services from both the provider and beneficiary perspective

• Too many appeals• RAC audits of one-day stays• Ability to re-bill select services if inpatient

stay denied

www.eidebail ly.com

Two-Midnight Ruling

• Two concepts1. Two-Midnight “presumption”---Medicare

contractors are not to select inpatient claims for review if the inpatient stay spanned two midnights from the time of an admission (begins when inpatient order is written)

2. Two-Midnight “benchmark”---Instructs admitting practitioners and Medicare review contractors that an inpatient admission is generally appropriate when the admitting practitioner has a documented expectation that the patient will need to receive care for a period spanning two-midnights

www.eidebail ly.com

Two-Midnight Ruling

• Effective October 1, 2013• Given a 90 day transition period• Delays full implementation until January 1,

2014• From October 1, 2013 – December 31,

2013:• MACs and RACs are not to review claims

spanning > 2 midnights• RACs cannot review inpatient admissions of one

midnight or less• MACs and RACs cannot review any claims for

inpatient stays for CAHs

www.eidebail ly.com

Two-Midnight Ruling

• MACs will review a sample of claims spanning less than two midnights to determine medical necessity with admission dates during this time period

• 10 claims for a small hospital, 25 claims for larger hospitals----prepayment claims

• Hospitals can re-bill denied admissions• CMS will provide education• “Educate and Probe”

www.eidebail ly.com

Two-Midnight Ruling

• Practitioner “Order”• Not really anything new• Written to indicate “admission to inpatient”• Written by a practitioner who is licensed by the

State, granted privileges by the hospital to admit, knowledgeable about the patient’s hospital course, plan of care and condition at the time of admission

• Order must be written at or before the time of the admission

• Ordering physician may or may not be the physician signing the “Certification”

www.eidebail ly.com

Two-Midnight Ruling

• Physician “Certification”—evidence the services were reasonable and necessary• The most troublesome requirement• Must be completed, signed, dated and

documented in the medical record prior to discharge

• For CAHs, is required no later than 1 day prior to the submission of the claim for payment

www.eidebail ly.com

Two-Midnight Ruling

• Certification must include:• Authentication of the order….the physician

certifies the inpatient services are reasonable and necessary (evidenced by signature or counter signature)

• Reason for inpatient services• Estimated time the beneficiary will require

inpatient services (span of two-midnights or more)

• Plans for post-hospital care• For CAHs, must certify patient will be discharged

or transferred within 96 hours (subject to CMS clarification they say is coming soon)

www.eidebail ly.com

Two-Midnight Ruling

• Authorization to sign the Certification• At this point may only be signed by a physician,

dentist in special circumstances or doctor of podiatric medicine

• Mid-level practitioners cannot sign Certifications• No special forms needed---although most

facilities are creating forms• Could be part of medical record if the elements

are easily identified• Again, must be all completed prior to discharge

www.eidebail ly.com

Two-Midnight Ruling

• What will the claims look like?• No instructions finalized at this point• Some discussion on creating a new

occurrence span code indicating the patient was receiving outpatient services prior to the inpatient admission and the date span of those services

• Possibly create a condition code similar to condition code 44

www.eidebail ly.com

Two-Midnight Ruling

• CMS has stated:

“The Medicare review contractor may consider only information that was available to the admitting practitioner at the time of the admission, and must not consider information that becomes available only after the admission, such as the patient’s actual length of stay and outcome”

• In other words, no Monday morning quarterbacking!

www.eidebail ly.com

Two-Midnight Ruling

• CMS states they understand there may be appropriate inpatient stays that do not span two-midnights:• “Inpatient-only procedures” where a patient may

be safely discharged before two-midnights• Patients that are transferred before two mid-

nights• Patient’s death• Patient’s leaving against medical advice

www.eidebail ly.com

Two-Midnight Ruling

• Inpatient Criteria per CMS• Based on documented medical factors and

physician judgment• Patient history, co-morbidities, severity of signs

and symptoms• Current medical needs• Risk of an adverse event happening• CMS will be issuing a sub-regulatory guidance

to address what happens when there is a conflict between the screening tools (InterQual or Milliman) and the new criteria

www.eidebail ly.com

Two-Midnight Ruling

Email address for questions for CMS• IPPSAdmissions@cms.hhs.gov

Website for Q&A’s on Two-Midnight Ruling• www.CMS.gov/medical-review

(click on “Inpatient Hospital Reviews” and under “Downloads” click on “Questions and Answers Relating to Patient Status Reviews”)

www.eidebail ly.com

Two-Midnight Ruling

• Possible effects:• Numerous• AHA is requesting a payment solution for “those

intense, inpatient-level services provided by hospitals that are reasonable and necessary but do not appear on the inpatient-only list and are not expected to span two-midnights (i.e., vascular procedures)

• CMS states reimbursement will increase due to more inpatient stays

www.eidebail ly.com

Two-Midnight Ruling

• AHA and Federation of Hospitals state,

“CMS used flawed and arbitrary assumptions to justify its $200 million payment cut to hospitals (0.2% reduction in the PPS market basket update), purportedly to achieve budget neutrality for the two-midnight rule”

www.eidebail ly.com

Part B Re-billing

• Historically hospitals/physician reluctant to order an inpatient admission due to denials

• If the inpatient admission was denied, hospitals could only bill a limited number of ancillary services

• If the patient had been an outpatient from the beginning, the services would have been payable

www.eidebail ly.com

Part B Re-billing

• Resulted in extended observation services• CMS concerned about “prolonged

outpatient treatment period trend” (CY 2013 OPPS/ASC proposed and final rule)

• Concerned this was resulting in increased patient liability in the form of Medicare Part B copayments, charges for self-administered drugs and post-hospital skilled nursing care

www.eidebail ly.com

Part B Re-billing

• MLN Matters Number SE1333 • For admissions on or after October 1, 2013

“Will allow payment for all hospital services that were furnished and would have been reasonable and necessary if the beneficiary had been treated as an outpatient, rather than an inpatient, except for those services that specifically require an outpatient status such as outpatient visits, emergency department visits, and observation services, that are, by definition, provided to hospital outpatients and not inpatients”

www.eidebail ly.com

Part B Re-billing

• Must be timely filed• Cannot bill both an inpatient and outpatient

claim simultaneously to hedge your bets• A “no pay/provider liable” claim must be

present in the system and posted in the claims history

• The patient is responsible for the Part B liability amounts

• The status of the patient does not change from inpatient to outpatient even with an inpatient Part A denial, so there may still be a possibility of SNF coverage

www.eidebail ly.com

Part B Re-billing

• Now can bill OR services, therapy (caps apply for PPS hospitals)

• Must refund to patient the Part A liability amounts (cannot off set against their Part B liability)

• May have two claims---131 TOB for all services provided in the 3-day window for PPS hospitals and 121 TOB for all services performed during the inpatient stay

• Use the same billing and coding rules used for assigning dates of service to services that cross midnight

• Use the start of the service to determine correct claim placement

• “Inpatient-only-procedures” performed prior to admission will not be paid under the Part B Re-billing rule

www.eidebail ly.com

Part B Re-billing

• Patients that are not entitled to Part A or have exhausted their Part A benefits, hospitals may only bill for the limited inpatient services as indicated in the Medicare Benefit Policy Manual Chapter 6, Section 10

www.eidebail ly.com

Part B Re-billing

• If submitting a Part B claim for a denied Part A inpatient claim, there are no appeal rights for the Part A claim

• Cannot bill infusions, injections, blood transfusions, nebulizers under Part B (considered nursing services and part of the inpatient room charge)

• DSMT, clinic visits are not billable under Part B

www.eidebail ly.com

Questions?

• Questions?

• Miscellaneous Items