Two-Midnight Rule Coordination and Improvement Act of 2014

To provide for the development of criteria under the Medicare program for medically necessary short inpatient hospital stays, and for other purposes. 1. Short title This Act may be cited as the Two-Midnight Rule Coordination and Improvement Act of 2014 2. Development of criteria for medically necessary short inpatient hospital stays (a) In general (1) Development of criteria The Secretary shall develop appropriate criteria with regard to the two-midnight rule (as defined in subsection (e)) for payment under the Medicare program under title XVIII of the Social Security Act ( 42 U.S.C. 1395 et seq. (2) Requirements The criteria developed under paragraph (1) shall— (A) account for medical necessity and the appropriateness of an inpatient stay that is less than the two-midnight benchmark; and (B) subject to paragraph (3), be developed in consultation with interested stakeholders. (3) Implementation The consultation described in paragraph (2)(B) shall be conducted as part of the annual notice and comment rulemaking process implementing the Medicare hospital inpatient prospective payment system for fiscal year 2015. (b) Development of short inpatient hospital stay payment methodology (1) In general The Secretary shall develop a payment methodology under the Medicare program under title XVIII of the Social Security Act for hospitals for short inpatient hospital stays. Such methodology— (A) shall be implemented in a budget neutral manner; (B) may be a reduced payment amount for such inpatient hospital services than would otherwise apply if paid for under section 1886(d) of the Social Security Act (42 U.S.C. 1395ww(d)) or be an alternative payment methodology; and (C) shall take into consideration the criteria developed under subsection (a). (2) Timeframe The Secretary shall promulgate such methodology as part of the annual regulations implementing the Medicare hospital inpatient prospective payment system for fiscal year 2015. (c) Crosswalk of ICD–10 codes and CPT codes; crosswalk of DRG and CPT codes (1) ICD–10-to-CPT crosswalk (A) In general Not later than 2 years after the date of the enactment of this Act, the Secretary shall develop general equivalency maps (referred to in this subsection as crosswalks 42 U.S.C. 1395ww ICD–10 codes CPT codes (B) Process (i) In general In carrying out subparagraph (A), the Secretary shall develop a proposed ICD–10-to-CPT crosswalk which shall be made available for public comment for a period of not less than 60 days. (ii) Notice The Secretary shall provide notice of the comment period through the following: (I) Publication of notice of proposed rulemaking in the Federal Register. (II) A solicitation posted on the Internet Web site of the Centers for Medicare & Medicaid Services. (III) An announcement on the Internet Web site of the Centers for Medicare & Medicaid Services of the availability of the proposed crosswalk and the deadline for comments. (IV) A broadcast through an appropriate Listserv operated by the Centers for Medicare & Medicaid Services. (iii) Use of the ICD–9–CM Coordination and Maintenance Committee The Secretary also shall instruct the ICD–9–CM Coordination and Maintenance Committee to convene a meeting to receive input from the public regarding the proposed ICD–10-to-CPT crosswalk. (iv) Publication of final crosswalks Taking into consideration comments received on the proposed crosswalk, the Secretary shall publish a final ICD–10-to-CPT crosswalk under subparagraph (A) and shall post such crosswalk on the Internet Web site of the Centers for Medicare & Medicaid Services. (v) Updating The Secretary shall update such crosswalk on an annual basis. (2) DRG-to-APC crosswalk (A) In general The Secretary shall, using the ICD–10-to-CPT crosswalk developed under paragraph (1), develop a second crosswalk between diagnosis-related group (DRG) codes for inpatient hospital services and Ambulatory Payment Class (APC) codes for outpatient hospital services. (B) Data to be used In developing such crosswalk, the Secretary shall use claims data for inpatient hospital services for discharges occurring in fiscal years beginning with fiscal year 2015 and for outpatient hospital services furnished in years beginning with 2015. (C) Publication Not later than June 30, 2017, the Secretary shall publish the DRG-to-APC crosswalk developed under this paragraph. (d) Delay of enforcement of the two-Midnight rule (1) In general The Secretary shall not enforce the provisions of the two-midnight rule with respect to admissions to a hospital for which payment is made under the Medicare program under title XVIII of the Social Security Act— (A) for admissions occurring before October 1, 2014; and (B) in the case of admissions occurring on or after October 1, 2014, prior to the applicable date (as defined in paragraph (3)). (2) Application to Medicare review contractors Paragraph (1) shall also apply to Medicare review contractors (as defined in subsection (e)). No Medicare review contractor may, based on the provisions of the two-midnight rule, deny a claim for payment for inpatient hospital services furnished by a hospital, or inpatient critical access hospital services furnished by a critical access hospital, for which payment may be made under title XVIII of the Social Security Act for discharges occurring before the applicable date (as defined in paragraph (3))— (A) for medical necessity due to the length of an inpatient stay in such hospital or due to a determination that the services could have been provided on an outpatient basis; or (B) for requirements for orders, certifications, or recertifications, and associated documentation relating to the matters described in subparagraph (A). (3) Applicable date defined In this subsection, the term applicable date (A) the date on which the criteria described in subsection (a) are implemented pursuant to subsection (a)(3); or (B) October 1, 2015. (4) Continuation of Medicare Probe and Educate program for inpatient hospital admissions (A) In general Subject to subparagraph (B), nothing in this subsection shall be construed to preclude the Secretary from continuing the conduct by Medicare administrative contractors of the Medicare Probe and Educate program (as defined in subparagraph (C)) for hospital admissions during the delay of enforcement under paragraph (1). (B) Maintenance of sample prepayment record limits The Secretary may not increase the sample of claims selected for prepayment review under the Medicare Probe and Educate program above the number and type established by the Secretary under such program as of November 4, 2013, such as 10 claims for most hospitals and 25 claims for large hospitals. (C) Medicare Probe and Educate program defined In this paragraph, the term Medicare Probe and Educate program Frequently Asked Questions 2 Midnight Inpatient Admission Guidance & Patient Status Reviews for Admissions on or after October 1, 2013 (i) conduct prepayment patient status reviews for inpatient hospital claims with dates of admission on or after October 1, 2013, and before March 31, 2014; and (ii) based on the results of such prepayment patient status reviews, conduct educational outreach efforts during the following 3 months. (e) Definitions In this section: (1) Hospital The term hospital (A) An acute care hospital. (B) A critical access hospital. (C) A long-term care hospital. (D) An inpatient psychiatric facility. (2) Interested stakeholders The term interested stakeholders (A) Hospitals. (B) Physicians (C) Medicare administrative contractors under section 1874A of the Social Security Act (42 U.S.C. 1395kk–1). (D) Recovery audit contractors under section 1893(h) of such Act ( 42 U.S.C. 1395ddd(h) (E) Other parties determined appropriate by the Secretary. (3) IPPS FY 2014 Final Rule The term IPPS FY 2014 Final Rule Medicare Program; Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2014 Rates; Quality Reporting Requirements for Specific Providers; Hospital Conditions of Participation; Payment Policies Related to Patient Status (4) Medicare review contractor The term Medicare review contractor (A) Medicare administrative contractors under section 1874A of the Social Security Act (42 U.S.C. 1395kk–1); and (B) recovery audit contractors under section 1893(h) of such Act ( 42 U.S.C. 1395ddd(h) (5) Secretary The term Secretary (6) Short inpatient hospital stay The term short inpatient hospital stay section 412.3 (7) Two-midnight rule The term two-midnight rule (A) Amendment 2 (on page 50965), which adds a section 412.3 (B) Amendment 3 (on page 50965), which revises section 412.46 of such title (relating to medical review requirements). (C) Amendment 23 (on page 50969), which amends paragraphs (d) and (e)(2) of section 424.11 of such title (relating to conditions of payment: General procedures). (D) Amendment 24 (on pages 50969 and 50970), which revises section 424.13 of such title (relating to requirements for inpatient services of hospitals other than inpatient psychiatric facilities). (E) Amendment 25 (on page 50970), which revises paragraphs (a), (b), (d)(1), and (e) of section 424.14 of such title (relating to requirements for inpatient services of inpatient psychiatric facilities). (F) Amendment 26 (on page 50970), which revises section 424.15 of such title (relating to requirements for inpatient CAH services).

Summary: Two-Midnight Rule Coordination and Improvement Act of 2014 - Directs the Secretary of Health and Human Services (HHS) to develop appropriate criteria with regard to the two-midnight rule for payment under title XVIII (Medicare) of the Social Security Act for a short inpatient hospital stay. (The two-midnight rule allows Medicare coverage of only hospital stays for which a physician admits to a hospital a beneficiary expected to require care that crosses two midnights, but generally denies coverage of care expected to require less than a two-midnight stay.) Requires the criteria developed by the Secretary to: (1) account for medical necessity and the appropriateness of an inpatient stay that is less than the two-midnight benchmark, and (2) be developed in consultation with interested stakeholders. Directs the Secretary to develop a budget-neutral Medicare payment methodology for hospitals for short inpatient hospital stays. Allows the methodology to be: (1) a reduced payment amount than would otherwise apply to inpatient hospital services if paid for under the Medicare prospective payment schedule, or (2) an alternative payment methodology. Directs the Secretary to develop: (1) general equivalency maps to link the relevant International Statistical Classification of Diseases and Related Health Problems (ICD)-10 codes (used to report medical diagnoses and inpatient procedures) to relevant Current Procedural Terminology (CPT) codes, and the relevant CPT codes to relevant ICD-10 codes, in order to permit comparison of inpatient hospital services and hospital outpatient department services; and (2) a second crosswalk between Diagnosis-Related Group (DRG) codes for inpatient hospital services and Ambulatory Payment Class (APC) codes for outpatient hospital services. Prohibits the Secretary from enforcing the two-midnight rule for admissions occurring: (1) before October 1, 2014; and (2) on or after that date until October 1, 2015, or the new two-midnight rule criteria are implemented, if sooner (applicable date). Prohibits a Medicare review contractor from denying a claim for inpatient hospital services furnished by a hospital, or inpatient critical access hospital services furnished by a critical access hospital, on the basis of the two-midnight rule for discharges occurring before the applicable date for: (1) medical necessity due to the length of an inpatient stay in such hospital or due to a determination that the services could have been provided on an outpatient basis; or (2) requirements for orders, certifications, or recertifications, and associated documentation relating to such matters. Declares that nothing in this Act shall be construed to preclude the Secretary from continuing the conduct by Medicare administrative contractors of the Medicare Probe and Educate program for hospital admissions during the delayed enforcement of the two-midnight rule. Prohibits the Secretary from increasing the sample of claims selected for prepayment review under the Medicare Probe and Educate program above the number and type established by the Secretary as of November 4, 2013, such as 10 claims for most hospitals and 25 claims for large hospitals.