Members ask: How can our hospital succeed under the two-midnight rule?

We're concerned that the "two-midnight" rule for Medicare patient admissions will negatively impact our reimbursements. What steps can our hospital take to prepare for the new policy?

You're not the first organization to question how the new policy will impact upcoming payments. But before we address those concerns, here's the background:

CMS is allowing hospitals three months to get acclimated to the two-midnight for Medicare inpatient admissions before care review—and financial penalties—begin. And unless observation status is completely overhauled or eliminated during this period, the two-midnight rule is the perfect, albeit required, opportunity to tackle some of the operational challenges associated with "obs."

Based on conversations with our hospital members, the Cardiovascular Roundtable has outlined a few takeaways from the new rule, as well as three recommendations for how to prepare:

Step 1. Review processes that will help your physicians make the right call on admission. Hospitals should make sure their physicians have the support they need to make the right call on admission as early as possible. Secondly, hospitals should implement effective triggers to prompt reassessment of observation patients in a timely fashion, especially when the admission decision was ambiguous.

  • The Cardiovascular Roundtable has identified six steps to optimize observation care at your hospital. Get started with step one.

Step 2. Proactively educate your physicians on the new regulations.

Many CMOs have expressed that their physicians use observation status inconsistently, a perspective that we’ve also found in recent academic literature. The new rules provide an opportunity to review the appropriate uses of observation status with your frontline physicians.

Step 3. Don't just educate your physicians—educate your patients, too.

Low patient satisfaction scores may contribute to reduced Medicare reimbursement under the Value-Based Purchasing Program. Therefore, it will be important to make sure you are communicating effectively with patients about observation status and its associated financial implications.

  • Here are 16 best practices for reinvigorating inpatient care coordination infrastructure and ensuring safe handoffs to post-acute care settings.

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