The Two-Midnight Rule – Whose Expectation Matters?

The Two-Midnight Rule – Whose Expectation Matters?

Let me start with a wild Medicare Advantage (MA) denial of inpatient admission. This was a 75-year-old male who fell. The patent had chronic atrial fibrillation and a mechanical heart valve, and was on warfarin, an anticoagulant. He had a CT scan and was found to have a subdural hematoma. He was given intravenous vitamin K and intravenous desmopressin, and was admitted to the intensive care unit (ICU) for close monitoring.

He was monitored past the second midnight and had a repeat CT scan, which showed no further expansion of the hematoma, and the patient was discharged to outpatient follow-up. The MA plan denied inpatient admission, noting that the patient was “only being watched,” and inpatient admission criteria were not met. A peer-to-peer conversation between the physician and a payor medical director was also unsuccessful. The MA plan insisted that the Two-Midnight Rule provisions were not met.

Now, let me contrast that with a case I mentioned last week: the elderly patient with traditional Medicare who was on aspirin and had a fall with head injury, but no bleeding, nor any mental status changes. In this case, the patient was monitored overnight and had no changes. But here the patient was initially admitted as inpatient, then changed to observation via Condition Code 44, and stayed for three days, as the family was not cooperating with discharge planning. In this case, the Beneficiary and Family Centered Care-Quality Improvement Organization (BFCC-QIO) determined that inpatient admission was warranted due to the risk of a delayed subdural hematoma.

So the patient with no intracranial bleeding and on aspirin was at high risk and warranted inpatient admission for monitoring in case there is bleeding in the brain, but the patient with actual bleeding on the brain and on a potent anticoagulant who stayed over two midnights, including one day in the ICU, did not warrant inpatient admission?

Now, what the MA plan did not anticipate was that they were dealing with Eileen Sullivan – and if you know her, she was not going to let this denial stand, instead ensuring that the Centers for Medicare & Medicaid Services (CMS) recognizes that the MA plan was blatantly ignoring federal regulations.

Her patient absolutely warranted inpatient admission. On admission, the patient clearly had a two-midnight expectation, with bleeding and the presence of an anticoagulant, even though reversal agents were given. In addition, this patient would fit the case-by-case exception for patients who are at high risk of an adverse outcome. Not any of us would be allowed to ignore a federal regulation almost a year and a half after it became effective. We would be one of the headlines on the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) webpage. Yet the MA plans continue to second-guess physician judgement and appropriate standards of medical care, time after time.

Moving on from the status determination confusion, a discussion that recently came up online is one that many will face – and planning ahead may prevent a compliance issue in the future. Say a patient is brought to the ED by police. He was arrested for a felony, and in the process was severely injured. The police state that they are leaving him for care and ask you to call them when his care is done, so they can come back and take him back into custody. Do you call them when he is ready for discharge? Or does the patient have the right of privacy afforded every other patient, and without patient consent you should not call the police?

In cases like this, the police are trying to avoid taking on the financial responsibility for the hospital care mandated for persons in custody, but at what cost to their mission to protect the safety of the community? And what is your obligation to not let an accused felon walk free, versus respecting their privacy, as with any patient?

If you have not been faced with this scenario, now is the time to talk to compliance and determine what you should do.

EDITOR’S NOTE:

The opinions expressed in this article are solely those of the author and do not necessarily represent the views or opinions of MedLearn Media. We provide a platform for diverse perspectives, but the content and opinions expressed herein are the author’s own. MedLearn Media does not endorse or guarantee the accuracy of the information presented. Readers are encouraged to critically evaluate the content and conduct their own research. Any actions taken based on this article are at the reader’s own discretion.

Facebook
Twitter
LinkedIn

Ronald Hirsch, MD, FACP, ACPA-C, CHCQM, CHRI

Ronald Hirsch, MD, is vice president of the Regulations and Education Group at R1 Physician Advisory Services. Dr. Hirsch’s career in medicine includes many clinical leadership roles at healthcare organizations ranging from acute-care hospitals and home health agencies to long-term care facilities and group medical practices. In addition to serving as a medical director of case management and medical necessity reviewer throughout his career, Dr. Hirsch has delivered numerous peer lectures on case management best practices and is a published author on the topic. He is a member of the Advisory Board of the American College of Physician Advisors, and the National Association of Healthcare Revenue Integrity, a member of the American Case Management Association, and a Fellow of the American College of Physicians. Dr. Hirsch is a member of the RACmonitor editorial board and is regular panelist on Monitor Mondays. The opinions expressed are those of the author and do not necessarily reflect the views, policies, or opinions of R1 RCM, Inc. or R1 Physician Advisory Services (R1 PAS).

Related Stories

Leave a Reply

Please log in to your account to comment on this article.

Featured Webcasts

Sepsis Sequencing in Focus: From Documentation to Defensible Coding

Sepsis sequencing continues to challenge even experienced coding and CDI professionals, with evolving guidelines, documentation gaps, and payer scrutiny driving denials and data inconsistencies. In this webcast, Payal Sinha, MBA, RHIA, CCDS, CDIP, CCS, CCS-P, CCDS-O, CRC, CRCR, provides clear guideline-based strategies to accurately code sepsis, severe sepsis, and septic shock, assign POA indicators, clarify the relationship between infection and organ dysfunction, and align documentation across teams. Attendees will gain practical tools to strengthen audit defensibility, improve first-pass accuracy, support appeal success, reduce denials, and ensure accurate quality reporting, empowering organizations to achieve consistent, compliant sepsis coding outcomes.

March 26, 2026
I022426_SQUARE

Fracture Care Coding: Reduce Denials Through Accurate Coding, Sequencing, and Modifier Use

Expert presenters Kathy Pride, RHIT, CPC, CCS-P, CPMA, and Brandi Russell, RHIA, CCS, COC, CPMA, break down complex fracture care coding rules, walk through correct modifier application (-25, -57, 54, 55), and clarify sequencing for initial and subsequent encounters. Attendees will gain the practical knowledge needed to submit clean claims, ensure compliance, and stay one step ahead of payer audits in 2026.

February 24, 2026
Mastering Principal Diagnosis: Coding Precision, Medical Necessity, and Quality Impact

Mastering Principal Diagnosis: Coding Precision, Medical Necessity, and Quality Impact

Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.

December 3, 2025

Proactive Denial Management: Data-Driven Strategies to Prevent Revenue Loss

Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.

November 25, 2025

Trending News

Featured Webcasts

Mastering MDM for Accurate Professional Fee Coding

In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.

March 31, 2026

The PEPPER Returns – Risk and Opportunity at Your Fingertips

Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.

March 19, 2026

Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue

Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.

January 29, 2026

AI in Claims Auditing: Turning Compliance Risks into Defensible Systems

As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.

January 13, 2026

Trending News

Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25

CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24