The United States District Court for the Eastern District of Michigan recently dismissed a False Claims Act (“FCA”) lawsuit brought against the City of Detroit.  The core issue in United States ex rel. Lynn v. City of Detroit revolved around Detroit’s annual certifications and assurances to comply with federal laws and regulations as a condition

On July 8, 2015, CMS issued proposed regulations that would modify the “two-midnight rule” that governs payments by Medicare Part A for short inpatient hospital stays.  The proposed changes are contained in the CY 2016 proposed regulations for the Hospital Outpatient Prospective Payment System (OPPS).  Stakeholders may submit comments on the proposal by August 31, 2015.

Inpatient vs. Outpatient Status

The distinction between inpatient and outpatient classification is important under Medicare.  Medicare reimbursement rates for identical services differ dramatically if the care is provided in an inpatient or outpatient setting.[1]

The admission status also has important implications for the patient.  Under Medicare Part A, a beneficiary admitted as an inpatient is required to pay a one-time deductible for the first sixty days in the hospital.[2]  For outpatient services under Medicare Part B, the beneficiary must make a co-payment for every individual service rendered by the provider.[3]

Background on the Two-Midnight Rule

In 2013, CMS created the “two-midnight rule” to determine whether Medicare Part A payment for inpatient stay is appropriate.  The “two-midnight rule” is based on the physician’s expectation of the patient’s length-of-stay at the time of admission.  It included two medical review policies:

  • Under the “two-midnight benchmark,” CMS considered an inpatient admission to be appropriate when the admitting physician had a reasonable and supportable expectation that a patient would need to receive care at the hospital for a period spanning two-midnights; and
  • Under the “two-midnight presumption,” auditors were directed not to select claims for review if the inpatient stay spanned two-midnights from the time of admission, absent evidence of gaming or abuse.

Continue Reading CMS Proposes To Modify “Two-Midnight Benchmark” To Broaden Exceptions for Part A Payments for Short Inpatient Stays