In January 2024, CMS’ final rule for Medicare Advantage (MA) and Part D went into effect, bringing several changes to MA plan oversight. Almost one year into implementation, a change that continues to present challenges for providers is the requirement that MA plans adhere to the Two-Midnight rule. Per CMS, this rule states that if an admitting physician expects a patient to require hospital care that spans at least two midnights, the admission is generally considered appropriate for inpatient status.
The Two-Midnight rule has applied to Medicare Part A since 2013, but new challenges have arisen as the rule is applied in the context of MA. Each MA plan can have its own internal policies and guidelines, which has led to variability in how the rule is implemented across payors. In this environment of uncertainty, the Two-Midnight rule can feel like a moving target to providers, who may experience delays in payment for inpatient care and disruptions to the revenue cycle if they cannot demonstrate the need for care for at least two midnights. One key step to help providers reduce these disruptions is to improve clinical documentation of medical necessity.
What Should Documentation of Medical Necessity Include?
Improving documentation should start once a patient presents to the emergency room. The patient is often “sickest” when in the emergency room, and this is a crucial time for providers to clearly state why the patient needs continued hospital-level care. Providers—specifically the admitting physician—should document not only the patient’s need to stay for two midnights, but also the possible consequences if the patient is discharged prior to the second midnight. The documentation needs to clearly state why the patient needs specific care that can only be provided within the hospital setting.
Additional important items to address in the documentation include:
- Any comorbid conditions and how they contribute to the patient’s risk and the necessity of inpatient admission
- The plan for treatment and testing, and how it contributes to the length of stay
- Concerns regarding the patient’s diagnoses
- Severity of the patient’s condition and risk of mortality
- Risks if the patient leaves the hospital, including the risk of readmission
For example, consider the hypothetical case of a patient on anticoagulation who may have experienced a stroke. The admitting physician should document the risks if the patient is discharged before ruling out a stroke or before determining whether to stop or continue anticoagulation. Such concerns are often part of the internal conversation and medical decision-making process, but the physicians do not always note them within the patient’s medical record. Clear and meticulous documentation of the risks of early discharge helps demonstrate to payors the medical necessity of hospital care.
Documentation from the emergency department, the history and physical examination, and the progress notes needs to remain consistent and free of conflicting information from the admitting provider’s documentation. Inconsistencies can lead to increased medical necessity denials.
It is important to note that simply crossing a second midnight does not mean you can move the patient into inpatient status. The patient must still meet the criteria for medical necessity. Documenting the risks and the patient’s need for hospital-level care will help support the case for a second midnight.
Providers also should note that some payors are now using artificial intelligence (AI) and other technologies to help them review documentation and make medical necessity decisions. Clear and detailed documentation is key to reducing uncertainty and helping these technologies understand the physician’s intent.
How Forvis Mazars Can Help
Our experienced professionals have a robust understanding of the revenue cycle and the impact of evolving policies on payment from MA plans and other payors. We can help providers identify areas to improve their current documentation and provide education with respect to clinical documentation to help support medical necessity.
If you have questions or need assistance with medical necessity denials from payors related to application of the Two-Midnight rule, reach out to a professional at Forvis Mazars.