OIG: Two-midnight policy led to limited access to skilled nursing care

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The policy increased the number of beneficiaries with hospital stays that did not qualify them for Medicare SNF coverage
The policy increased the number of beneficiaries with hospital stays that did not qualify them for Medicare SNF coverage

The implementation of the Centers for Medicare & Medicaid Services' controversial two-midnight rule has left some “vulnerabilities” in its wake, according to a federal report published on Monday.

They include an increasing number of Medicare beneficiaries in outpatient stays who had more limited access to skilled nursing services than they would have, had they been qualified as an inpatient stay, according to a report from the Department of Health and Human Services' Office of Inspector General. Investigators analyzed Medicare hospital claims from fiscal years 2013 and 2014 assess the impact of the policy, which was implemented in fiscal 2014.

That year Medicare beneficiaries had 633,000 hospital stays that lasted at least three nights but did not include three inpatient nights, a necessity to becoming eligible for Medicare SNF coverage. That number represents a 6% increase of non-SNF eligible stays over fiscal 2013, the OIG noted.

“These beneficiaries did not qualify for SNF services under Medicare and, therefore, would have been responsible for any SNF charges incurred following their hospital stays,” report authors wrote.

The OIG found that the number of inpatient stays decreased under the two-midnight policy, which requires a Medicare beneficiary to be in a hospital for “two midnights” before their stay is considered an inpatient admission. The number of outpatient stays increased under the policy.

Additional “vulnerabilities” left after the rule's implementation included hospitals billing for potentially inappropriate short inpatient stays, Medicare paying more for some short inpatient stays than short outpatient stays, and hospitals varying in how they use inpatient and outpatient stays.

Report authors recommend that CMS address the shortcomings by improving oversight of the policy, and “analyze the potential impacts of counting time spent as an outpatient toward the 3-night requirement for SNF services so that beneficiaries receiving similar hospital care have similar access to these services.”

Click here to read the full OIG report.