Hospital Short-Stay Review Ban Lifted by CMS

12 October 2016 Health Care Law Today Blog

Effective September 12, 2016, the Centers for Medicare & Medicaid Services (CMS) lifted the temporary ban on patient status reviews of hospital short stays for Medicare beneficiaries. Those reviews are currently conducted by the Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs).1 As of October 1, 2015, the responsibilities of the BFCC-QIOs include conducting the first-line medical reviews of short-stay inpatient hospital claims by acute care inpatient hospitals, long term care hospitals, and inpatient psychiatric facilities to determine the appropriateness of Medicare Part A (Part A) payments under the so-called “two-midnight rule.”

Under the two-midnight rule, an inpatient admission is generally appropriate if the provider admits the patient based on the reasonable expectation that the patient will need hospital care that crosses at least two midnights.2 For admissions that do not meet the two-midnight benchmark, Part A payment is deemed appropriate on a case-by-case basis when the medical record supports the admitting practitioner’s determination that the patient requires inpatient care. QIOs are instructed to consider “complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event” when making such case-by-case determinations.3

CMS paused the BFCC-QIO’s short-stay reviews on May 4, 2016 after becoming “aware of inconsistencies in the BFCC-QIOs’ application of the two-midnight policy.” The four-month pause was slated as an opportunity to improve standardization around the review process, retrain the BFCC-QIOs on the “two-midnight rule,” and conduct provider education. Moreover, on June 6, CMS directed BFCC-QIOs to re-review all short-stay claims that had been denied under the QIO medical review process since October 1, 2015, when the BFCC-QIOs began conducting the reviews. These re-reviews were conducted based on a six-month look-back period to ensure providers had sufficient time to rebill denied Part A claims under Medicare Part B, which typically permits rebilling within one calendar year after the date of service.

According to the agency, the temporary suspension was lifted in September because:

  • The BFCC-QIOs successfully completed re-training on the Two-Midnight policy;
  • The BFCC-QIOs have completed a re-review of claims that were previously formally denied;
  • CMS examined and validated the BFCC-QIOs peer review activities related to short stay reviews;
  • The BFCC-QIOs performed provider outreach on claims impacted by the temporary suspension; and
  • The BFCC-QIOs initiated provider outreach and education regarding the two-midnight policy.4

CMS will continue to oversee the BFCC-QIOs review by re-reviewing samples of completed claim reviews on a monthly basis; monitoring provider education efforts; and responding to individual inquires. Both CMS and the BFCC-QIOs will continue to review short-stay claims under the CMS guidance entitled, “Reviewing Short Stay Hospital Claims for Patient Status: Admissions On or After January 1, 2016.”5 The BFCC-QIOs have been instructed to conduct provider outreach and education through various approaches, including through their websites, newsletters, one-on-one training, and town hall type events. Any provider inquiries or concerns may be sent to the CMS Open Door Forum Mailbox at

Originally, this post was an alert sent to the American Health Lawyers Association’s (AHLA) Regulation, Accreditation, and Payment Practice Group Members. It appears here with permission. For more information, visit AHLA’s website.

 42 C.F.R. § 412.3(d).


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