As part of the 2014 inpatient hospital payment policy, CMS announced what has become known as the “Two-Midnight Rule.”  This rule states that hospital stays lasting longer than two days – defined as a stay that spans at least two midnights – will be deemed as legitimate uses of inpatient care and not subject to auditing.  Stays that are shorter than two midnights must withstand a RAC audit that will evaluate if the patient’s condition would have been more appropriately treated as an outpatient observation.

After the outcry of several groups, CMS will now be offering hospitals additional calendar time to comply with its Two-Midnight inpatient review policy.  Although RAC auditors will not be auditing claims of “0-1 midnight stays” through March 31, 2014, compliance is expected as of April 1, 2014.

Precise and Real-Time Documentation
In preparation for this deadline, hospitals must take into consideration how their physicians are documenting patient care.  If a facility is audited, the RAC reviewers will be looking for the timely documentation of a physician order and certification, as well as supportive documentation.  CMS specifically states that the medical record should clearly indicate why a physician deemed an inpatient stay necessary, supported by medical factors including patient history, the presence of co-morbidities, signs and symptoms, current patient care requirements, and the risk of an adverse event during the hospital stay.

This new rule puts even more pressure for upfront, timely clinical documentation of medical necessity, and emphasizes the need for a close working relationship between clinical documentation improvement (CDI) staff and clinicians.


Meriter Health Services Builds Strong Documentation Program to Prepare for Two Midnight Rule
Meriter Health Services, based in Madison, Wisconsin, is a 448-bed, acute-care hospital that began building its CDI program in September 2011.  With 875 credentialed physicians, including 27 hospitalists, Meriter is committed to its clinical documentation improvement program.  Today, they’re utilizing five clinical data specialists (CDSs) to review their diagnosis-related group (DRG) based cases.

Since 2011, Meriter has enjoyed a 15 percent increase in its case mix index (CMI) which can partially be attributed to their CDI program.  Their program is fully electronic and utilized for physician communication and clinical documentation clarification, as well as for the reporting of complication and mortality rates on an individual and group level.

As part of their CDI program, the facility began to capture more of its comorbid conditions (CC) and major complications and comorbidities (MCC) diagnoses, track and share physician and hospitalist performance openly, and fully engage and motivate physician participation and buy-in.  According to Meriter, much of their CDI program’s success can be attributed to physician leadership.  To date, physician engagement in the program has been nothing short of remarkable.  Like many physicians, those at Meriter are highly patient-centric.  They realize that documentation directly impacts patient care and, when documentation is not done properly, patients may experience denials of service and related responsibilities for paying for their care.

Meriter attributes much of their success to CDI strategy: “documentation is key to everything we do here.”  And, on the heels of the Two-Midnight Rule, they understand that now, more than ever, physicians need to clearly document the need for inpatient status.  In order to help focus their teams on the importance of identifying medical necessity for inpatient status, avoid negative audits and denial of payment, and translate the reasoning for inpatient status into clear, code-worthy documentation, they have introduced a new round of education and physician ‘road shows.’  This ensures that all stakeholders are on the same page, supporting the identification of quality core measures and any patient safety issues that may need to be addressed, and ensuring more timely reimbursement.



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Bonnie Cassidy

About Bonnie Cassidy

This was a contributed post by Bonnie Cassidy. Bonnie serves as the 2015 Chair of the Commission on Accreditation for Health Informatics and Information Management (CAHIIM) Board of Directors, is a Fellow of AHIMA, an AHIMA Academy ICD-10-CM/PCS Certificate Holder and ICD-10 Ambassador, and a Fellow of HIMSS. Bonnie also served as the vice president of HIM product management & innovation at QuadraMed, and served as an executive with the Certification Commission for Healthcare Information Technology (CCHIT), Ernst & Young and the Cleveland Clinic Foundation. Bonnie was the 2011 President/Chair of AHIMA, recipient of the 2014 AHIMA Distinguished Member Triumph Award and the 2015 (Georgia) GHIMA Distinguished Member Award. Bonnie received her graduate degree from Cleveland State University and her Bachelor’s Degree in HIM from Daemen College. Bonnie grew up in Buffalo, NY, lived in Cleveland, OH and has been a resident of Atlanta, GA for 17 years. She considers the Bills, the Browns and the Falcons her hometown teams.