Understanding the “Two Midnight Rule”

2Effective October 1, 2013, Medicare will implement the following new guidelines and documentation requirements for inpatient admissions.

Admission Guidelines – Two Midnight Benchmark

Medicare’s admission guidelines state that when a physician expects a patient to remain in the hospital for at least two midnights, the patient should generally be considered inpatient. Conversely, if the physician expects the patient to remain in the hospital less than two midnights, the patient should generally be considered outpatient, unless those patients are receiving an “inpatient only procedure,” in which case these are inpatients. When a physician is unsure or cannot reasonably predict the patient’s length of stay, the physician should not admit the patient, but instead place him/her in outpatient status with or without observation services.  As new information becomes available, the physician should reassess the patient and either order inpatient admission or discharge him/her. 

Medicare’s new two midnight benchmark is not meant to override the clinical judgment of the physician to keep the patient in the hospital. Rather, the benchmark is meant to ensure Medicare patients’ inpatient hospital benefits are consistently applied. The enclosed illustration demonstrates how this benchmark should be applied. 

Documentation Requirements

To support a patient’s inpatient admission, Medicare’s two midnight benchmark requires specific documentation, including:

  • An order that clearly states admission to inpatient status; and
  • A certification statement that specifies the reason for admission and estimates the time the patient will need hospital services

Your progress notes and other clinical documentation from the medical record will also be required to support the order and certification.

To help facilitate this process, the hospital has adopted the attached order and certification form to be completed by you. This form will be available either in paper or electronic format.  The paper copy of the form is attached.   For elective surgeries, physicians will be asked to complete this form at the time of scheduling so that the appropriate patient status can be determined prior to the patient presenting at the hospital.

In the coming weeks, we will provide additional tools and educational resources to assist in the implementation of these requirements, including discussion at our various medical staff meetings.



Operational FAQs

What is the two midnight rule?

CMS has established a two midnight benchmark for physicians to use in determining patient status for inpatient or outpatient care. CMS specifies that when the physician expects the patient to require care that crosses two midnights and orders admission based upon that expectation, inpatient status is generally appropriate. Conversely, CMS specifies that hospital stays in which the physician expects the patient to require care for less than two midnights, inpatient status is generally inappropriate.

CMS also states that an inpatient admission is appropriate for cases involving procedures on Medicare’s inpatient-only list, regardless of length of stay. They clarify that certain situations, such as deaths or transfers, are also exceptions to the two midnight rule.

To what hospitals does this apply?

The two midnight rule applies to all inpatient acute care hospitals, including Long Term Care Hospitals (LTCH) and critical access hospitals (CAH). However, it does not apply to inpatient rehab facilities (IRF) as there are very specific regulatory guidelines for admission to these units and facilities.

Does the two midnight rule apply to all payers?

No. The two midnight rule only applies when traditional Medicare is the primary payer.

Does the order have to be written in a specific format?

HCA has created a Medicare Order Form to assist in this process. No modifications may be made to this form.

Who can order inpatient admission?

The inpatient admission order can be written by a physician with admitting privileges who is knowledgeable about the case. It does not have to be the attending physician. A hospitalist or ED physician with admitting privileges can write the admission order. If the ED physician does not have admitting privileges, a verbal order must be obtained from a physician with admitting privileges. Verbal admission orders must be authenticated prior to discharge.

What will be the case manager’s role in statusing patients?

The case managers will no longer use InterQual to status Medicare patients. However, they will assist physicians who have questions about the two midnight rule. They will also focus on care coordination and discharge planning.

Will the external physician advisors continue to be used?

The external physician advisors will not be used for determining whether a Medicare patient should be an inpatient or outpatient.

What tools has HCA developed to assist facilities with the implementation of the two midnight rule?

HCA has created the following resources: fact sheet; Medicare order form; a letter to be used in communicating with physicians; and a physician education poster. These resources are available on http://atlas2.medcity.net/portal/site/gos/menuitem.9165230bc3890871c1fbeff09c01a1a0/

How do I know if a patient is on CMS’ Inpatient Only List?

Medicare has a list of procedures by CPT codes that are considered to be inpatient only. The facility case manager will be able to assist in identifying the procedures that are inpatient only.

Will the one day stay edit remain in place?

HCA will be maintaining the current one day stay edit which stops all Medicare inpatient one day stay claims. New criteria for resolving the edit will be provided.

Documentation Requirements for Medicare Inpatient Admissions

Progress notes and other clinical documentation in the medical record must support the inpatient admission. In addition, the medical record must contain an inpatient admission order and a physician certification. Collectively, these requirements are necessary to support inpatient admission. Contractor review of inpatient admissions will focus on these requirements. HCA has developed a Medicare order form to facilitate obtaining the appropriate patient status order based on the two midnight rule.

1. Inpatient Admission Order

a. Must be obtained at admission.

b. Must be supported by the physician admission and progress notes.

c. Must be furnished by a physician or other practitioner who is:

i. Licensed by the State to admit inpatients to hospitals,

ii. Granted admitting privileges by the hospital to admit inpatients to that specific facility, and

iii. Knowledgeable about the patient’s hospital course, medical plan of care, and current condition at the time of admission.

2. Physician Certification of Medical Necessity of an Inpatient Admission

a. Certification begins with the order for admission.

b. Certification must be completed, signed, dated and documented prior to discharge.

c. Content of the certification: (See table below)

Admission order authentication  Signature or countersignature of certifying physician 
Reason for inpatient services  Diagnosis, admission assessment, plan of care, and/or orders 
Estimated length of stay  Admission order written in accordance with two midnight benchmark, supplemented by physician notes and discharge planning instructions 
Post hospital care  Discharge planning instructions 

3. Physician Documentation supporting Inpatient Admission

In addition to the admission order and certification, documentation by the physician in other areas of the medical record must be sufficient to support that hospital services were reasonable and necessary. The documentation can be present in the H&P, progress notes and the discharge summary. The documentation must include:

a. Patient history and comorbidities

b. Severity of signs and symptoms

c. Risk of adverse events

d. Current medical needs requiring inpatient care (e.g., frequent two-to-four hour monitoring, IV medication requiring hospitalization, high risk of possible infection, etc.)

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