At least one UPIC Doesn’t Understand the Two-Midnight Rule    

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One might presume that entities contracted by the federal government to provide oversight of healthcare would be intimately familiar with the rules of the game. But that’s not always the case.

Covent Bridge, the Unified Program Integrity Contractor (UPIC) for a variety of states in the Midwest, seems patently incapable of properly applying the two-midnight rule to inpatient reviews. Last year, an article described how Covent Bridge mistakenly framed the question of inpatient reviews as one of the level of care. Specifically, Covent Bridge asked whether the patient received an inpatient or outpatient “level of care.” That is NOT a question anyone reviewing Medicare claims should ask. Inpatient and outpatient care are both hospital care, and if a Medicare patient is expected to need hospital care over two midnights, they should be admitted. Period.    

But Covent Bridge auditors fail to grasp this regulatory reality. Here are excerpts from a recent UPIC letter describing a beneficiary who arrived at the hospital on Jan. 23, 2020. Pay attention to the dates.  “The beneficiary was correctly placed in observation status on 1/24/2020 at 0132.” That chart entry was written at 132 a.m., after the patient’s first midnight in the hospital. 

The letter continues: “the order for inpatient status was placed by a different provider on 1/25/20 at 1405, while the same provider’s documentation noted ‘patient noted the morning of 1/25 to complain of chest and abdominal discomfort.’” We have now passed the second midnight. This patient should have been admitted an inpatient, unless they should have been sent home. Covent Bridge then explains that the discharge order was placed 1/26/20 at 1056. 

The letter includes the following deeply troubling paragraph: “the provider’s documentation did not support that an inpatient level of care was required to observe the recipient’s symptoms. The provider’s documentation did not include any other abnormalities that would require an inpatient level of care, as opposed to monitoring an observation at the outpatient level. The documentation submitted does not support the severity of illness or intensity of service for an inpatient admission; therefore, this claim is denied.”

My head is going to explode. 

The patient arrived in the hospital the 23rd, they left the 26th. That is three midnights. In an act of true chutzpah, the letter says that the client should review the letter “to ensure you understand Medicare coverage and payment requirements.” In fact, the organization that really needs to review Medicare coverage and payment requirements is Covent Bridge. Their tagline is “think truth,” but they apparently do not “think accuracy.” Let’s be clear: when it comes to analyzing hospital admissions, there’s no such thing as an “inpatient level of care,” distinguished from an “outpatient level of care.” It’s conceivable that a patient doesn’t need to be in the hospital at all, but if you need outpatient care, and you’re there for two midnights, you’re an inpatient. That’s the way 42 C.F.R. 412.3 works. As a reminder, section (d)(!) of that regulation provides that:

Except as specified in paragraphs (d)(2) and (3) of this section, an inpatient admission is generally appropriate for payment under Medicare Part A when the admitting physician expects the patient to require hospital care that crosses two midnights.

Outpatient hospital care is, as the words themselves demonstrate, “hospital care.” If the patient is expected to need to be in the hospital for two midnights, they can and should be admitted. The fact that Covent Bridge continues to send denials suggesting that admission status depends on the severity of illness or intensity of service, nearly a decade after the two-midnight rule was published, is alarming.

Even BEFORE the two-midnight rule, Medicare did not require a severity of illness/intensity of service analysis. But since October 2013, the two-midnight rule has been the law of the land. Unfortunately, Covent Bridge hasn’t caught on.

Programming Note: Listen to David Glaser’s popular segment, “Risky Business,” Mondays on Monitor Mondays, 10 Eastern.


David M. Glaser, Esq.

David M. Glaser is a shareholder in Fredrikson & Byron's Health Law Group. David assists clinics, hospitals, and other health care entities negotiate the maze of healthcare regulations, providing advice about risk management, reimbursement, and business planning issues. He has considerable experience in healthcare regulation and litigation, including compliance, criminal and civil fraud investigations, and reimbursement disputes. David's goal is to explain the government's enforcement position, and to analyze whether this position is supported by the law or represents government overreaching. David is a member of the RACmonitor editorial board and is a popular guest on Monitor Mondays.

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