Physician and hospital groups call for delay of 'two-midnight rule'

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A policy meant to reduce the number of hospital observation stays is not workable, and stakeholders should collaborate on more comprehensive solutions to the observation stay situation, according to the American Medical Association and American Hospital Association.

The Centers for Medicare & Medicaid Services finalized a so-called “two-midnight rule” in August, and the measure took effect Oct. 1. It calls for hospital stays that span two or more midnights to be considered “reasonable and necessary” for inpatient status.

The new rule likely would decrease the number of patients who remain under observation status for lengthy stays in the hospital. The rise in observation stays has saddled Medicare beneficiaries with unexpected and expensive bills for subsequent care because they are not covered for skilled nursing services unless they spent three midnights as a hospital inpatient.

Yet the two-midnight rule is not popular among hospitals. The rule is overly complicated and ignores clinical realities in favor of a strictly time-based system for determining whether someone should be considered an inpatient or outpatient, the AMA and AHA stated in a Nov. 8 letter to Marilyn Tavenner, administrator of the Centers for Medicare & Medicaid Services.

The groups want CMS to delay implementation until Oct. 1, 2014. They also urged CMS to bring “affected stakeholders” together to “develop alternate policy solutions” to address observation stays. These policies might include “a long-term payment solution,” the letter stated.

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