II 

113TH CONGRESS 

2D SESSION S. 2082 

To provide for the development of criteria under the Medicare program 

for medically necessary short inpatient hospital stays, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MARCH 5, 2014 

Mr. MENENDEZ (for himself and Mrs. FISCHER) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To provide for the development of criteria under the Medicare program for medically necessary short inpatient hospital stays, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Two-Midnight Rule 

5 Coordination and Improvement Act of 2014’’. 

6 SEC. 2. DEVELOPMENT OF CRITERIA FOR MEDICALLY NEC7 ESSARY SHORT INPATIENT HOSPITAL STAYS. 

8 (a) IN GENERAL.— 

9 (1) DEVELOPMENT OF CRITERIA.—The Sec10 retary shall develop appropriate criteria with regard 


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1 to the two-midnight rule (as defined in subsection 

2 (e)) for payment under the Medicare program under 

3 title XVIII of the Social Security Act (42 U.S.C. 

4 1395 et seq.) for a short inpatient hospital stay (as 

5 defined in such subsection). 

6 (2) REQUIREMENTS.—The criteria developed 

7 under paragraph (1) shall— 

8 (A) account for medical necessity and the 

9 appropriateness of an inpatient stay that is less 

10 than the two-midnight benchmark; and 

11 (B) subject to paragraph (3), be developed 

12 in consultation with interested stakeholders. 

13 (3) IMPLEMENTATION.—The consultation de14 scribed in paragraph (2)(B) shall be conducted as 

15 part of the annual notice and comment rulemaking 

16 process implementing the Medicare hospital inpa17 tient prospective payment system for fiscal year 

18 2015. 

19 (b) DEVELOPMENT OF SHORT INPATIENT HOSPITAL

20 STAY PAYMENT METHODOLOGY.— 

21 (1) IN GENERAL.—The Secretary shall develop 

22 a payment methodology under the Medicare program 

23 under title XVIII of the Social Security Act for hos24 pitals for short inpatient hospital stays. Such meth25 odology— 


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1 (A) shall be implemented in a budget neu2 tral manner; 

3 (B) may be a reduced payment amount for 

4 such inpatient hospital services than would oth5 erwise apply if paid for under section 1886(d) 

6 of the Social Security Act (42 U.S.C. 

7 1395ww(d)) or be an alternative payment meth8 odology; and 

9 (C) shall take into consideration the cri10 teria developed under subsection (a). 

11 (2) TIMEFRAME.—The Secretary shall promul12 gate such methodology as part of the annual regula13 tions implementing the Medicare hospital inpatient 

14 prospective payment system for fiscal year 2015. 

15 (c) CROSSWALK OF ICD–10 CODES AND CPT 

16 CODES; CROSSWALK OF DRG AND CPT CODES.— 

17 (1) ICD–10-TO-CPT CROSSWALK.— 

18 (A) IN GENERAL.—Not later than 2 years 

19 after the date of the enactment of this Act, the 

20 Secretary shall develop general equivalency 

21 maps (referred to in this subsection as ‘‘cross22 walks’’) to link the relevant ICD–10 codes to 

23 relevant CPT codes, and the relevant CPT 

24 codes to relevant ICD–10 codes, in order to 

25 permit comparisons of inpatient hospital servVerDate Mar 15 2010 04:31 Mar 06, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082

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1 ices, for which payment is made under section 

2 1886 of the Social Security Act (42 U.S.C. 

3 1395ww), and hospital outpatient department 

4 services, for which payment is made under sec5 tion 1833(t) of such Act (42 U.S.C. 1395l(t)). 

6 In this subsection the terms ‘‘ICD–10 codes’’ 

7 and ‘‘CPT codes’’ include procedure as well as 

8 diagnostic codes. 

9 (B) PROCESS.— 

10 (i) IN GENERAL.—In carrying out 

11 subparagraph (A), the Secretary shall de12 velop a proposed ICD–10-to-CPT cross13 walk which shall be made available for 

14 public comment for a period of not less 

15 than 60 days. 

16 (ii) NOTICE.—The Secretary shall 

17 provide notice of the comment period 

18 through the following: 

19 (I) Publication of notice of pro20 posed rulemaking in the Federal Reg21 ister. 

22 (II) A solicitation posted on the 

23 Internet Web site of the Centers for 

24 Medicare & Medicaid Services. 


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1 (III) An announcement on the 

2 Internet Web site of the Centers for 

3 Medicare & Medicaid Services of the 

4 availability of the proposed crosswalk 

5 and the deadline for comments. 

6 (IV) A broadcast through an ap7 propriate Listserv operated by the 

8 Centers for Medicare & Medicaid 

9 Services. 

10 (iii) USE OF THE ICD–9–CM COORDI11 NATION AND MAINTENANCE COMMITTEE.— 

12 The Secretary also shall instruct the ICD– 

13 9–CM Coordination and Maintenance 

14 Committee to convene a meeting to receive 

15 input from the public regarding the pro16 posed ICD–10-to-CPT crosswalk. 

17 (iv) PUBLICATION OF FINAL CROSS18 WALKS.—Taking into consideration com19 ments received on the proposed crosswalk, 

20 the Secretary shall publish a final ICD–10- 

21 to-CPT crosswalk under subparagraph (A) 

22 and shall post such crosswalk on the Inter23 net Web site of the Centers for Medicare 

24 & Medicaid Services. 


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1 (v) UPDATING.—The Secretary shall 

2 update such crosswalk on an annual basis. 

3 (2) DRG-TO-APC CROSSWALK.— 

4 (A) IN GENERAL.—The Secretary shall, 

5 using the ICD–10-to-CPT crosswalk developed 

6 under paragraph (1), develop a second cross7 walk between diagnosis-related group (DRG) 

8 codes for inpatient hospital services and Ambu9 latory Payment Class (APC) codes for out10 patient hospital services. 

11 (B) DATA TO BE USED.—In developing 

12 such crosswalk, the Secretary shall use claims 

13 data for inpatient hospital services for dis14 charges occurring in fiscal years beginning with 

15 fiscal year 2015 and for outpatient hospital 

16 services furnished in years beginning with 2015. 

17 (C) PUBLICATION.—Not later than June 

18 30, 2017, the Secretary shall publish the DRG19 to-APC crosswalk developed under this para20 graph. 

21 (d) DELAY OF ENFORCEMENT OF THE TWO-MID22 NIGHT RULE.— 

23 (1) IN GENERAL.—The Secretary shall not en24 force the provisions of the two-midnight rule with re25 spect to admissions to a hospital for which payment 


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1 is made under the Medicare program under title 

2 XVIII of the Social Security Act— 

3 (A) for admissions occurring before Octo4 ber 1, 2014; and 

5 (B) in the case of admissions occurring on 

6 or after October 1, 2014, prior to the applicable 

7 date (as defined in paragraph (3)). 

8 (2) APPLICATION TO MEDICARE REVIEW CON9 TRACTORS.—Paragraph (1) shall also apply to Medi10 care review contractors (as defined in subsection 

11 (e)). No Medicare review contractor may, based on 

12 the provisions of the two-midnight rule, deny a claim 

13 for payment for inpatient hospital services furnished 

14 by a hospital, or inpatient critical access hospital 

15 services furnished by a critical access hospital, for 

16 which payment may be made under title XVIII of 

17 the Social Security Act for discharges occurring be18 fore the applicable date (as defined in paragraph 

19 (3))— 

20 (A) for medical necessity due to the length 

21 of an inpatient stay in such hospital or due to 

22 a determination that the services could have 

23 been provided on an outpatient basis; or 

24 (B) for requirements for orders, certifi25 cations, or recertifications, and associated docuVerDate Mar 15 2010 04:31 Mar 06, 2014 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082

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1 mentation relating to the matters described in 

2 subparagraph (A). 

3 (3) APPLICABLE DATE DEFINED.—In this sub4 section, the term ‘‘applicable date’’ means the earlier 

5 of— 

6 (A) the date on which the criteria de7 scribed in subsection (a) are implemented pur8 suant to subsection (a)(3); or 

9 (B) October 1, 2015. 

10 (4) CONTINUATION OF MEDICARE PROBE AND

11 EDUCATE PROGRAM FOR INPATIENT HOSPITAL AD12 MISSIONS.— 

13 (A) IN GENERAL.—Subject to subpara14 graph (B), nothing in this subsection shall be 

15 construed to preclude the Secretary from con16 tinuing the conduct by Medicare administrative 

17 contractors of the Medicare Probe and Educate 

18 program (as defined in subparagraph (C)) for 

19 hospital admissions during the delay of enforce20 ment under paragraph (1). 

21 (B) MAINTENANCE OF SAMPLE PREPAY22 MENT RECORD LIMITS.—The Secretary may not 

23 increase the sample of claims selected for pre24 payment review under the Medicare Probe and 

25 Educate program above the number and type 


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1 established by the Secretary under such pro2 gram as of November 4, 2013, such as 10 

3 claims for most hospitals and 25 claims for 

4 large hospitals. 

5 (C) MEDICARE PROBE AND EDUCATE PRO6 GRAM DEFINED.—In this paragraph, the term 

7 ‘‘Medicare Probe and Educate program’’ means 

8 the program established by the Secretary as in 

9 effect on November 4, 2013 (and described in 

10 a public document made available by the Cen11 ters for Medicare & Medicaid Services on its 

12 Web site entitled ‘‘Frequently Asked Questions 

13 2 Midnight Inpatient Admission Guidance & 

14 Patient Status Reviews for Admissions on or 

15 after October 1, 2013’’), under which Medicare 

16 administrative contractors— 

17 (i) conduct prepayment patient status 

18 reviews for inpatient hospital claims with 

19 dates of admission on or after October 1, 

20 2013, and before March 31, 2014; and 

21 (ii) based on the results of such pre22 payment patient status reviews, conduct 

23 educational outreach efforts during the fol24 lowing 3 months. 

25 (e) DEFINITIONS.—In this section: 


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1 (1) HOSPITAL.—The term ‘‘hospital’’ means 

2 the following (insofar as such terms are used under 

3 title XVIII of the Social Security Act): 

4 (A) An acute care hospital. 

5 (B) A critical access hospital. 

6 (C) A long-term care hospital. 

7 (D) An inpatient psychiatric facility. 

8 (2) INTERESTED STAKEHOLDERS.—The term 

9 ‘‘interested stakeholders’’ means the following: 

10 (A) Hospitals. 

11 (B) Physicians 

12 (C) Medicare administrative contractors 

13 under section 1874A of the Social Security Act 

14 (42 U.S.C. 1395kk–1). 

15 (D) Recovery audit contractors under sec16 tion 1893(h) of such Act (42 U.S.C. 

17 1395ddd(h)). 

18 (E) Other parties determined appropriate 

19 by the Secretary. 

20 (3) IPPS FY 2014 FINAL RULE.—The term 

21 ‘‘IPPS FY 2014 Final Rule’’ means the final rule 

22 (CMS–1599–F, CMS–1455–F) published by the 

23 Centers for Medicare & Medicaid Services in the 

24 Federal Register on August 19, 2013, entitled 

25 ‘‘Medicare Program; Hospital Inpatient Prospective 


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1 Payment Systems for Acute Care Hospitals and the 

2 Long-Term Care Hospital Prospective Payment Sys3 tem and Fiscal Year 2014 Rates; Quality Reporting 

4 Requirements for Specific Providers; Hospital Con5 ditions of Participation; Payment Policies Related to 

6 Patient Status’’ (78 Fed. Reg. 50496 et seq.). 

7 (4) MEDICARE REVIEW CONTRACTOR.—The 

8 term ‘‘Medicare review contractor’’ means any con9 tractor or entity that has entered into a contract or 

10 subcontract with the Centers for Medicare & Med11 icaid Services with respect to the Medicare program 

12 to review claims for items and services furnished for 

13 which payment is made under title XVIII of the So14 cial Security Act, including— 

15 (A) Medicare administrative contractors 

16 under section 1874A of the Social Security Act 

17 (42 U.S.C. 1395kk–1); and 

18 (B) recovery audit contractors under sec19 tion 1893(h) of such Act (42 U.S.C. 

20 1395ddd(h)). 

21 (5) SECRETARY.—The term ‘‘Secretary’’ means 

22 the Secretary of Health and Human Services. 

23 (6) SHORT INPATIENT HOSPITAL STAY.—The 

24 term ‘‘short inpatient hospital stay’’ means, with re25 spect to an inpatient admission of an individual entiVerDate Mar 15 2010 04:31 Mar 06, 2014 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2082.IS S2082

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1 tled to benefits under part A of title XVIII of the 

2 Social Security Act to a hospital, a length of stay 

3 that is less than the length of stay required to sat4 isfy the 2-midnight benchmark described in section 

5 412.3 of title 42, Code of Federal Regulations, as 

6 amended under the amendment 2 referred to in 

7 paragraph (7)(A). 

8 (7) TWO-MIDNIGHT RULE.—The term ‘‘two9 midnight rule’’ means the following numbered 

10 amendments to 42 CFR Chapter IV contained in the 

11 IPPS FY 2014 Final Rule (and includes any sub12 regulatory guidance issued in the implementation of 

13 such amendments and any portion of the preamble 

14 of section XI.C. of such rule relating to such amend15 ments): 

16 (A) Amendment 2 (on page 50965), which 

17 adds a section 412.3 of title 42, Code of Fed18 eral Regulations (relating to admissions). 

19 (B) Amendment 3 (on page 50965), which 

20 revises section 412.46 of such title (relating to 

21 medical review requirements). 

22 (C) Amendment 23 (on page 50969), 

23 which amends paragraphs (d) and (e)(2) of sec24 tion 424.11 of such title (relating to conditions 

25 of payment: General procedures). 


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1 (D) Amendment 24 (on pages 50969 and 

2 50970), which revises section 424.13 of such 

3 title (relating to requirements for inpatient 

4 services of hospitals other than inpatient psy5 chiatric facilities). 

6 (E) Amendment 25 (on page 50970), 

7 which revises paragraphs (a), (b), (d)(1), and 

8 (e) of section 424.14 of such title (relating to 

9 requirements for inpatient services of inpatient 

10 psychiatric facilities). 

11 (F) Amendment 26 (on page 50970), 

12 which revises section 424.15 of such title (relat13 ing to requirements for inpatient CAH serv14 ices). 

Æ 


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