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In August, in its Final Hospital Inpatient Rule, CMS clarified how payments will be
provided for inpatient status, as some Medicare beneficiaries are seen under the
observation stay status as compared to inpatient status, which prevents them
from reaching the three-day qualifying stay required to have skilled nursing
services covered.  This clarification will help determine when the
hospital inpatient status should be extended to a patient. The expectation with
this final rule is that Medicare beneficiaries who are able to receive
inpatient Medicare Part A coverage status will increase. These changes will be
effective for hospital discharges that occur on or after October 1, 2013.


Below is information included in the CMS Fact Sheet.

Admission and Medical Review Criteria for Inpatient
.  The final rule modifies and clarifies CMS’s longstanding policy on
how Medicare contractors review inpatient hospital admissions for payment purposes. 
Under this final rule, in addition to services designated as inpatient-only,
surgical procedures, diagnostic tests and other treatments are generally
appropriate for inpatient hospital admission and payment under Medicare Part A
when the physician (1) expects the beneficiary to require a stay that crosses
at least two midnights and (2) admits the beneficiary to the hospital based
upon that expectation. This policy responds to both hospital calls for more
guidance about when a beneficiary is appropriately treated—and paid by
Medicare—as an inpatient, and beneficiaries’ concerns about increasingly long
stays as outpatients due to hospitals’ uncertainties about payment.


The final rule specifies that the timeframe used in determining the
expectation of a stay surpassing two midnights begins when the beneficiary
starts receiving services in the hospital. This includes outpatient observation
services or services in an emergency department, operating room or other
treatment area. While the final rule emphasizes that the time a beneficiary
spends as an outpatient before the formal inpatient admission order is not
inpatient time, the physician—and the Medicare review contractor—may consider
this period when determining if it is reasonable and generally appropriate to
expect the patient to stay in the hospital at least two midnights as part of an
admission decision.  Documentation in the medical record must support a
reasonable expectation of the need for the beneficiary to require a medically
necessary stay lasting at least two midnights.  If the inpatient admission
lasts fewer than two midnights due to an unforeseen circumstance this also must
be clearly documented in the medical record. 

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