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

There are two ways for a hospital patient to meet the Medicare benchmark of a two-midnight stay that supports inpatient Part A billing.

First, at the time of admission, if the admitting physician determines that care in the hospital is required and that the patient is expected to remain in the hospital through two midnights, inpatient admission is appropriate. Once the patient has spent two midnights in the hospital following the admission order, Medicare auditors are to offer the “presumption” of medical necessity for inpatient status and for Part A payment, so these claims are relatively (but not completely) immune from medical necessity review.

The second way to meet the benchmark for inpatient status is for a patient to spend one midnight in the hospital in an outpatient bed and a second midnight as an inpatient. The 2014 Inpatient Prospective Payment System (IPPS) rule in fact states that “the decision to admit becomes easier as the time approaches the second midnight, and beneficiaries in necessary hospitalizations should not pass a second midnight prior to the admission order being written.” These so-called “benchmark admissions” are not offered the presumption of medical necessity by auditors unless the patient has spent two midnights in the hospital following the admission order; thus, they are subject to audit for medical necessity, for the decision to treat in the hospital, and for the need for the second midnight of hospital-level care.

Let’s go back to the first case, in which a patient has been admitted with the expectation of a two-midnight stay but after one midnight recovers sufficiently (and unexpectedly rapidly) to return home before spending a second midnight in the hospital. These are also one-midnight stays, but unlike with a benchmark admission, admission from the ED requires a reasonable basis for the physician’s prediction of a stay lasting at least two midnights; medical necessity also must be documented by a physician demonstrating complex medical judgment. As a result of this distinction, Medicare auditors will be looking for different criteria for each of the two types of one-midnight stays. The bar will be considerably lower for a benchmark admission after a patient spends a night in an outpatient bed when the requirement for admission is the medical necessity for continued in hospital care (as opposed to the patient admitted from the ED, for whom an anticipation of a two-midnight stay is the rule).

There is currently a six-month moratorium in effect (through March 31, 2014) on retrospective medical necessity reviews, but the Centers for Medicare & Medicaid Services (CMS) has directed the Medicare Administrative Contractors (MACs) to perform probe audits at every hospital to review justification for admission of one-midnight stays. Next year, once the Recovery Auditor Contractors (RACs) are up and running again under new contracts, they too will be looking at medical necessity for one-midnight stays. These and other auditors naturally are interested in finding and denying payment for what they consider inappropriate inpatient billing, and they will be interested in reviewing the claims with the highest risk of denial. Considering the existence of two types of one-midnight stays, it is only natural that they would prefer to review those stays that did not feature a preceding night as an outpatient – but until now, it would have been very difficult for them to identify these cases with certainty based on hospitals’ UB–04 bills. Working with CMS, the National Uniform Billing Committee (NUBC) has created a new definition for Occurrence Code 72, “First/Last Visit Dates.” In addition to signifying on outpatient claims that “the entire billing record is not represented by the actual From/Through service dates of Form Locator 06 (Statement Covers Period),” it now will be applied to inpatient hospital claims “to denote contiguous outpatient hospital services that preceded the inpatient admission.”

According to personal correspondence with George Arges, senior director of the Health Data Management Group at the American Hospital Association and a member of the NUBC group that recommended the new occurrence code definition, CMS will be clarifying that in order to use Occurrence Code 72 on an inpatient claim, the preceding contiguous outpatient care in the hospital must have crossed one midnight and thus have contributed to meeting the two-midnight benchmark for admission. “The reason for repurposing the existing Occurrence Code 72 to include the two-midnight benchmark is that no additional programing was needed by their contractors,” Arges explained.  “But,” he added, “it allows them to remove such cases from short stay review,” thus confirming that CMS will be using this designation to focus their reviews on the more high-risk cases.

Argus stated that CMS soon will be issuing a Medicare Learning Network document explaining the new use of Occurrence Code 72, which will become effective on Dec. 1, 2013.

About the Author

Steven J. Meyerson, M.D., is a Senior Vice President of the Regulations and Education Group (the “REGs Specialists”) for AccretivePAS®. He is Board Certified in Internal Medicine and Geriatrics. He has recently been the Medical Director of Care Management and a compliance leader of a large multi-hospital system in Florida. He has distinguished himself by creating innovative service lines and managing education for Accretive PAS®.

Contact the Author


To comment on this article please go to editor@racmonitor.com


Steven J. Meyerson, MD, CHCQM-PHYADV

Steven Meyerson, MD, CHCQM-PHYADV, is the founder of Steven Meyerson Consulting. Dr. Meyerson is a nationally recognized expert and consultant in the physician advisor role, case management, and hospital Medicare compliance. He is board certified in internal medicine and geriatrics and serves on the board of the American College of Physician Advisors (ACPA). He edits and writes for the ACPA online blog.

You May Also Like

Leave a Reply

Your Name(Required)
Your Email(Required)