Recent buzz suggests that the 2-Midnight Rule may be replaced with a “kinder, gentler” short-stay payment model. But long-time Medicare watchers say, “don’t bet on it.” Even though the Centers for Medicare & Medicaid Services (CMS) is asking for input on a short stay payment structure, there’s no guarantee that the controversial rule will go away anytime soon…if ever.

The 2-Midnight Rule is intended to reduce the admission of Medicare patients who could be treated on an outpatient basis. The rule aims to limit the growth in extended observation stays at hospitals, which have skyrocketed in recent years.


Justification of admission now requires a great deal of documentation at or before the time of inpatient admission. The qualified admitting physician/practitioner must include an inpatient admission order in the record, as well as adequate documentation of the factors that support the expectation that the patient will require an inpatient stay of at least two midnights (patient current condition, course of hospitalization, plan of care, etc.). Additionally, the order must be certified prior to the patient’s discharge. If these requirements are not met, the hospital will not receive reimbursement for inpatient services.

Recovery Audit Contractor auditors, whose compensation is tied to Medicare savings, tend to target reviews of short hospital stays. Such reviews determine whether an admitted patient could have received the same care as an outpatient or under observation status. (Even if observation patients are placed on a unit and stay multiple days, the hospital is reimbursed at significantly lower outpatient rates.)

Although hospital case managers are generally responsible for overseeing compliance with the 2-Midnight Rule, they are not typically on-site 24/7 and are often overwhelmed. Thus, nurses are often asked to support compliance efforts for an “all hands on deck” approach, although it’s challenging because they do not have access to case management documentation systems. TeleTracking’s Capacity Management Suite™ system provides access to several features that can make 2-Midnight compliance much easier.

To help clients reduce potential penalties, TeleTracking has designed a focused service and consulting offering, ‘Midnight Express,’ that assists hospitals with meeting the documentation requirements. The consulting and configuration of key features, with or without case management system integration, also provides the added benefit of assuring the documentation for the discharge process is completed in a timely manner.

TeleTracking consultants will analyze the hospital’s current discharge process, document compliance, provide a map of the current process, identify and prioritize improvements and design an ideal state process map. Following the development of an action plan with the hospital’s senior leadership, TeleTracking’s implementation personnel will design, configure, test and bring live key features of the PreAdmitTracking® and PatientTracking Portal™ applications.

TeleTracking’s Midnight Express offering:

  • Captures qualifying data on admit orders, bed requests and on the nursing portal
  • Displays observation status and sends electronic notifications based on timer thresholds
  • Provides a path to help ensure completion of required documentation prior to discharge
  • Integrates milestones to enhance the discharge process

The long term benefits of such an engagement, regardless of the future of the 2-Midnight Rule, are that it significantly streamlines the discharge process and better prepares the client for whatever CMS decides when it comes to requirements regarding observation versus inpatient stays.

~ Nanne Finis

To learn more about TeleTracking’s offering, choose one of the dates below to register for one of our upcoming webinars.

Tue, Aug 12, 2014 11:30 AM – 12:00 PM EDT

Thu, Aug 21, 2014 11:30 AM – 12:00 PM EDT

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