With enforcement of the Two-Midnight Rule delayed through September 30, 2014, providers should ensure that they are sufficiently documenting the basis for inpatient admissions. As a condition of payment for hospital inpatient services under Medicare Part A, section 1814(a) of the Social Security Act requires physicians to certify that it is medically necessary for such services to be provided on an inpatient basis. The order to admit as an inpatient is an essential element of this physician certification, and is consequently also required for hospital inpatient coverage and payment under Part A. The regulations at 42 C.F.R. § 412.3 require that an order for inpatient admission must be present in the medical record. The preamble of the FY 2014 IPPS Final Rule at 78 Fed. Reg. 50942 states that, “the order must specify the admitting practitioner’s recommendation to admit ‘to inpatient,’ ‘as an inpatient,’ ‘for inpatient services,’ or similar language specifying his or her recommendation for inpatient care.” ccordingly, the inclusion of the term “inpatient” in the admission order is most likely to satisfy the specificity requirements as detailed above.

If a physician does not include the term “inpatient” in his or her admission order, however, CMS has advised that “the admission order may still be consistent with 42 C.F.R. § 412.3 provided that the intent to admit as an inpatient is clear.” See Centers for Medicare & Medicaid Services, Hospital Inpatient Admission Order and Certification (Sept. 5, 2013) (emphasis added). CMS stated that orders specifying the following will likely qualify as meeting the specificity requirements even if they do not contain the word, “inpatient”: (1) admission to an inpatient unit; (2) admission for a service that is typically provided on an inpatient basis; and (3) admission under the care of an admitting practitioner.” Id. at 4. Furthermore, “orders that do not specify beyond the word ‘Admit,’ will be considered to specify admission to an inpatient status provided that this interpretation is consistent with the remainder of the medical record.” Id.

CMS will continue to treat orders that admit to a typically outpatient or other limited service as defining a non-inpatient service. Such orders will not be treated as meeting the inpatient admission requirements. Therefore, it is critical for physicians to document their specific intent to admit a Medicare beneficiary for inpatient care in order to limit the risk of claim denial under CMS’s new “Two-Midnight Rule.”