The Centers for Medicare & Medicaid Services (“CMS”) recently announced that the Medicare Inpatient “probe and educate” period will be extended through April 30, 2015. Prior to this announcement, the Probe and Educate period was set to expire on March 31, 2015.

As brief background, the “probe and educate” period was a CMS effort hoped to clarify the regulatory landscape with regard to the changed inpatient admission criteria implemented by the 2014 Inpatient Prospective Payment System Final Rule. These changes have become commonly known as the “two midnight” rule. During the probe and educate period, Medicare review contractors are prohibited from conducting post-payment inpatient hospital status reviews on claims with dates of admission during the probe and educate period. With the current extension, the probe and educate period will ultimately span from October 1, 2013 through April 30, 2015.

The CMS attributed the necessity for the extension of the probe and educate period to potential congressional action on H.R. 2, the Medicare Access and CHIP Reauthorization Act of 2015. The key provisions of the Act can be found here: https://www.congress.gov/bill/114th-congress/house-bill/2. The bill, introduced by Texas Representative Michael C. Burgess on March 24, 2015, was passed by the House on March 26, 2015 and referred to the Senate Subcommittee on Federal Lands for review on April 7, 2015.

If H.R. 2 is passed in the Senate and signed by the President, it will, among other things, further delay full implementation of the “two-midnight” rule until October 1, 2015. The MACs would be required to continue the current provider probe and educate effort through September 30, 2015.

H.R. 2 would also amend the Social Security Act to add a requirement that Medicare Administrative Contractors (“MACs”) permanently implement an improper payment outreach and education program to provide education and training activities to providers and suppliers in each MAC’s geographic area. These services would not be limited to the current probe and educate period, but would be provided on an ongoing basis. The bill provisions give education and training priority to those items or services with the highest rates or greatest dollar amounts of improper payments and to those due to a clear misapplication or misinterpretation of Medicare policies or to a common or inadvertent clerical or administrative errors. These priority areas will be determined by data collected by the MACs and Recovery Auditors (“RAs”).

Further, if signed into law in its current form, H.R. 2 would also amend Section 1893(h) of the Social Security Act to permit CMS to reserve a portion (limited to 15%) of annual RAC overpayment recoveries, subject to some limitations, to the CMS program management account for carrying out specific CMS activities.

Note that the passing of H.R. 2 is not a certainty. As of now, the probe & educate period is set to expire on April 30, 2015, which means that providers could see implementation of the “two-midnight” rule for new admissions as early as May 1, 2015. We recommend that providers keep apprised of developments. Even if signed into law, H.R. 2 would not change the underlying requirements of the “two-midnight” rule and providers should be prepared for increased audit activity for inpatient admissions on or after October 1, 2015 when the hold on routine audit activity expires.

 

Depending on the outcome of the Senate’s review of the bill, we will address further details of the proposed legislation in later publications. Should you have any questions regarding the potential impact of the provisions of H.R. 2 or the “two-midnight” inpatient admission guidelines on your practice, please contact Jennifer Gross ([email protected]) or Briar Siljander ([email protected]) at (810) 227-3103.