During Enforcement Moratorium on CMS’s Two-Midnight Policy, Greater Qui Tam Scrutiny Required of Long-Stay Observation Stays

Recently, President Obama signed legislation which, among other things, extended the enforcement moratorium on the Centers for Medicare & Medicaid Services’s two-midnight policy through March 2015. This policy–which CMS made final last August in its rule for 2014 inpatient services—revised its guidance on inpatient admissions by stating that an admission is appropriate if the stay requires duration of at least two midnights. The intention behind this policy change was to limit the use of observation status to reduce its financial burden on Medicare beneficiaries. CMS was concerned, inter alia,  about the growth in long-stay observation cases (those greater than 48 hours), which increased from 3% of all observation cases in 2006 to 8% in 2011, may be subject to Medicare fraud.

However, citing confusion and expense, the healthcare provider community lobbied Congress to delay enforcement of this new policy. Ultimately, Congress responded by holding up RAC enforcement of the two-midnight policy through March 2015.

More information for whistleblowers is located at the Nolan Auerbach & White website.