Some history. The “two-midnight” rule sounds very mysterious (or like an ill-conceived guideline for eating food left out of the refrigerator). It is a Medicare standard implemented in 2013 by the Centers for Medicare & Medicaid Services (CMS). The rule provides hospitals and physician administrators with distinctions between Part A (inpatient and fully covered) and Part B (outpatient and partially covered) care. The goals were to reduce overcharging insurers for services that would have been more appropriately handled on an outpatient, less expensive basis, minimize rejections by Medicare, and avoid surprise bills to patients.

In its simplest form, patients are generally eligible for inpatient, Part A-covered care if the admitting physician believes their stays will extend across two midnights.

What’s changed? A new rule that took effect June 5, 2023, mandates that Medicare Advantage plans comply with the two-midnight rule after audits showed they had been denying necessary coverage for hospital and skilled nursing care at higher rates than traditional Original Medicare. Beyond this, inpatient care will be covered case-by-case when deemed medically necessary.

Further, Part A coverage can’t be denied for:

• Patient death before 48 hours of care
• Unanticipated rapid improvement in condition
• Patient leaving care against medical advice

These stronger guidelines and expanded rules should increase a healthcare provider’s ability to make appropriate patient decisions. For more information on the recent updates, read CMS 2024 Medicare Advantage Final Rule.