The CFO's guide to the two-midnight rule

The two-midnight rule was introduced in 2013 to stem the rapidly growing use of long-stay outpatient observation cases.

Under this rule, an inpatient admission is considered appropriate when the physician expects a case will require a two-midnight stay. Cases that fall short of this rule and do not meet medical necessity requirements for admission may be converted to and paid as an outpatient visit.

We analyzed FY 2014 Medicare data to provide key takeaways for CFOs and which MSDRGs and service lines are most at risk.

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