The Centers for Medicare and Medicaid Services (CMS) issued a final rule for 2024 requiring Medicare Advantage (MA) plans to follow the “two-midnight rule” when making inpatient coverage decisions. However, unlike traditional Medicare Part A, CMS does not mandate that MA plans automatically consider stays of two midnights as inpatient-level care, allowing these plans more freedom to audit claims.

What is the Two-Midnight Rule?
Introduced in 2013, the two-midnight rule allows inpatient services under Medicare Part A if a physician expects medically necessary care spanning two midnights. Traditional Medicare presumes these stays as appropriate, limiting audits. This presumption didn’t apply to MA plans until now.

Key Changes in 2024:

1. Adoption by Medicare Advantage Plans: MA plans must now follow the two-midnight rule, covering inpatient admissions that span two midnights, meet case-by-case exceptions, or involve procedures on the inpatient-only list.
2. No Automatic Presumption: Unlike traditional Medicare, MA plans don’t have to presume two-midnight stays are automatically appropriate. They retain the right to audit claims based on their contracts with providers.
3. Increased Documentation Scrutiny: Hospitals must ensure detailed documentation to justify the medical necessity of inpatient admissions, as MA plans are expected to audit more frequently.

Five Key Points to Remember:

1. The Rule’s Application: MA plans must now follow the two-midnight rule, ensuring consistency with traditional Medicare.
2. Coverage Requirements: The rule covers admissions over two midnights, case-by-case exceptions, and inpatient-only procedures.
3. Effective Date: The rule took effect on June 5, 2023, with full applicability in 2024.
4. Expect More Audits: MA plans will scrutinize inpatient claims more, making accurate documentation critical.
5. CMS’s Intent: This change aims to ensure MA enrollees receive access to medically necessary care equivalent to traditional Medicare.

Takeaways

• Improve documentation practices to meet the rule’s requirements.
• Collaborate with physicians to accurately document the expected duration and necessity of inpatient stays.
• Prepare for increased audits by MA plans to ensure compliance.

For more information on these changes and their impact, feel free to reach out. To read the entire ruling, click here.