SGR Bill Would Extend Delay of 'Two-Midnights' Policy

The House Ways and Means bill to temporarily prevent Medicare physician payment cuts also would deliver an Easter gift to hospitals-a six-month extension to comply with a controversial new inpatient payment rule for hospitals.

The House Ways and Means bill to temporarily prevent Medicare physician payment cuts also would deliver an Easter gift to hospitals—a six-month extension to comply with a controversial new inpatient payment rule for hospitals.

The existing “two-midnights” rule says admitting physicians must have good reason to believe that a patient will need two nights in the hospital before Medicare will pay full inpatient rates under Part A for the stay. Lacking such documentation, Medicare auditors will generally classify the stay as outpatient observation, which pays hospitals much less under Part B and sticks the patient with a 20% copayment. That rule went into effect Oct. 1. But it was modified so that Medicare's aggressive recovery auditing companies could not overturn claims under the new policy until Sept. 30, 2014.

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Source: Modern Healthcare