While supplies last! Free 2022 Coding Essentials for Infusion & Injection Therapy Services book with every RACmonitor webcast order. No code required. Order now >

In the Medicare world, 24 hours often does not equal one day.

The headline seems to ask a simple question, but in the Medicare compliance and billing world, it’s not.

Keeping days and hours clear is crucial. Let’s take a deep dive into that topic, but be prepared for a wild ride. I want to give credit to Rebecca Benson, the regional manager of utilization review at Samaritan Health in Corvallis, Ore., for inspiring this article. She asked me a fascinating question: How does the Centers for Medicare & Medicaid Services (CMS) calculate the length of stay in a critical access hospital?

Critical Access Hospitals and Length of Stay

Critical access hospitals (CAHs) are those hospitals with 25 or fewer beds that generally serve rural areas. They are paid on a per-cost basis in order to allow them to remain financially viable.

If you live in a rural area or are traveling through one and need hospital care, you should be glad that the government pays CAHs in a special manner to be there when you need one. One of their conditions of participating in the Medicare program is that physicians must certify that each inpatient is expected to be discharged or transferred within 96 hours of admission, and the average inpatient length of stay for all patients must not exceed 96 hours in any given year (note that the regulation specifies 96 hours and not four days).

If the physician must certify that and the hospital must calculate the annual average, and the Medicare Administrative Contractors (MACs) must ensure that the hospital meets that requirement, the length of stay in hours for each patient must be calculated. As easy as that seems, it rarely can be done without direct access to medical records.

When an inpatient admission is billed, the claim includes in form locator 12 the date of inpatient admission and in form locator 13 the hour of admission. But note that in the Medicare Claims Processing Manual, form locator 13 is designated as an optional field, which, “if submitted, will be ignored.” The date of discharge is reported in form locator 6; the “statement covers” dates but the hour of discharge, which could go in form locator 16, labeled “DHR” (this is noted by CMS in the Manual to be “not required,” and I wonder in the hierarchy of comments which is worse, “will be ignored” or “not required.”)

Without the claim indicating the hour of admission and the hour of discharge, it is impossible to calculate the length of stay of an inpatient admission in hours. For the patient who comes to the emergency department late Sunday night and has an admission order written Monday at 1 a.m. and goes home four days later, on Friday at noon he or she will have spent 107 hours as inpatient (uh oh!); whereas, the patient admitted Monday at 10 p.m. and discharged on Friday at 4 p.m. would have spent 88 hours there (whew!).

If a MAC wanted to calculate a hospital’s yearly average and the hospital did not report admission or discharge hours, they would be forced to use calendar days and consider any patient who occupied an inpatient bed at midnight as having spent 24 hours in the hospital. While over the course of a year the number of patients who stayed four days and whose length of stay was over or under 96 hours would likely average out, that is no guarantee. So it raises the question, if CMS and its contractors could not possibly calculate the length of stay in hours, why did they specify 96 hours in the regulation and not simply four days?

Next, let’s take a look at the CMS-required notices and how hours and days come into play when handling the federal delivery requirements.

The Important Message from Medicare and the MOON

In 2006, as the result of a settlement agreement in the Weichardt v. Leavitt case, CMS began requiring hospitals to furnish every Medicare-eligible beneficiary a notice called the Important Message from Medicare (IMM) informing the patient of their rights to appeal their discharge. The regulation requires that this notice be provided within two calendar days of admission. The patient must also be given a follow-up copy of the letter if the discharge is more than two calendar days after the original copy was given.

This requirement is often misstated as “within 48 hours of admission” and “48 hours since the first copy was given.” As illustrated earlier, if a patient admitted as inpatient on Monday at 1 a.m., the hospital has until Wednesday at 11:59 p.m. to give the first copy of the IMM. Waiting that long is not optimal, but it is compliant. Likewise, if that first notice is provided at 8 a.m. on Wednesday, a follow-up copy is not required unless the patient remains hospitalized past Friday at midnight. A follow-up copy is not required if discharge is at 5 p.m. on Friday. Misstating this regulation as “48 hours” instead of two calendar days may create more work for your staff than required.

On the other hand, the Notice of Observation Treatment and Implication for Care Eligibility (NOTICE) Act, passed by Congress and signed by the President in 2015, requires hospitals to provide the Medicare Outpatient Observation Notice (MOON) to all patients who receive observation services for more than 24 hours and to deliver this notice prior to the 36th hour of observation services. The MOON notifies the patient that although he or she is in a hospital bed and may spend a night in the hospital, they are not admitted as an inpatient, with all the implications thereof. Counting hours for the MOON begins with the order for observation services being written, even though observation services may not start at that exact moment.

Unlike the IMM, where there is a two-day grace period, the MOON hour counting must be monitored closely. Although the MOON can be given prior to the 24th hour of observation services, and can even be given at the initiation of observation, there is no grace period after 36 hours. If it is not given by that point, or if the patient is discharged after more than 24 hours but less than 36 hours and did not receive the MOON, you have violated the law. Fortunately, there is no prescribed penalty for violating this law, but such violations should still be avoided.

We now will proceed to a look at the fun world of payment bundling, or in this case, how pre-admission services are paid.

The Three Days Prior to an Inpatient Admission: The Payment Window

The three-day payment window was established in 1998 to require most hospitals to include in the inpatient claim many of the services performed by the hospital or any entities owned by the hospital in the three days prior to admission. (The rules are different for CAHs and specialty hospitals.) This rule has remained relatively intact, with some modification in 2010 to expand the range of non-diagnostic services included in the payment window. That means for the last 20 years, the three-day payment window has been incorrectly labeled by many as the 72-hour payment window.

A discussion of what services provided in the three calendar days prior to the inpatient admission day are to be included on the inpatient claim is beyond the scope of this article. And with the increasing merger activity and high number of physician practice acquisitions by hospitals and health systems, the determination of whether a physician practice is “wholly owned or operated” by a hospital and therefore subject to this rule is also beyond our scope. But the important message is that this payment window encompasses three calendar days and not 72 hours. Once again, 24 hours often does not equal one day.

It is also worth noting that although the window opens three calendar days prior to the date of admission, that window slams shut at the exact moment of discharge. That means that some services provided to the patient after formal discharge may be billed as outpatient services, even if they are performed on the same calendar day as discharge.

But this is not all-inclusive. If a service should be performed during the inpatient admission, such as a follow-up chest computerized tomography scan on a patient admitted with pneumonia, that should occur prior to discharge and be included on the inpatient claim. If the patient were to be discharged and sent down to get the scan, it would be considered unbundling. But if that same patient was found on a scan to have an incidental, asymptomatic thyroid nodule, the patient could be discharged, sent down to radiology, have their scan, and the scan could be billed as an outpatient service.

And how could any discussion on hours and days not include a discussion of the two-midnight rule? So let’s take a look at how hours and days come into play here.

The Two-Midnight Rule, the 24-Hour Benchmark, and Counting Midnights

In 2013, CMS proposed the two-midnight rule, and I distinctly recall talking to Nina Youngstrom, the editor of the Health Care Compliance Association’s (HCCA’s) Report on Medicare Compliance, the day prior to the expected release of the final rule (I was standing in the entryway of Powell’s Books in Portland while my wife and daughter were shopping amongst their 1.6 acres of books.) I told her there was no way CMS was going to finalize the proposal; asking doctors to count midnights made no sense whatsoever, and confusion would reign if it was adopted. It turns out I was half-right; CMS did finalize the two-midnight rule, but confusion did reign, and still reigns over four years later.

To make it even more confusing, CMS performed a fascinating sleight of hand in order to claim that the change in the regulation was actually not a change in the regulation at all. For many years, a decision about the status of a patient was partially dependent on the anticipated length of stay, with 24 hours serving as the benchmark. If under 24 hours of hospital care was expected, the patient was treated as an outpatient with observation services.

What CMS did was take that 24-hour benchmark, and instead of allowing it to start with the time of the initiation of care and end with the anticipated discharge, it was made to start with the first midnight the patient spends in the hospital, ending with the next midnight. They even came up with a term for this: a “Medicare utilization day.”

With this new terminology, the patient who presented on Monday at 1 a.m. and was discharged on Tuesday afternoon and the patient who presented on Monday at 10 p.m. and was discharged Tuesday afternoon were deemed to have spent the same amount of time in the hospital, one Medicare utilization day. The benchmark is now the 24-hour period between two midnights, hence the two-midnight rule.

Once again, hours seem to have morphed into days.
Federal regulations are difficult to interpret, with much ambiguity and their often being subject to varying interpretation, depending on who you ask. But that interpretation is made even more difficult when it is not clear whether one should be using a clock to count hours or a calendar to count days.

Listen to Dr. Hirsch every Monday on Monitor Mondays, 10-10:30 am ET.


Ronald Hirsch, MD, FACP, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

You May Also Like

Leave a Reply

Your Name(Required)
Your Email(Required)