The Medicare Two Midnight Rule, which applies to both traditional Medicare and Medicare Advantage, states that inpatient is generally appropriate when the admitting provider expects the patient will need two or more midnights of hospital services. Hospital services that count towards the two-midnight threshold include those provided in the outpatient setting such as:
- Emergency department services
- Observation services
- Surgical procedure
Two Midnights of Hospital Services at the Same or Affiliated Facilities
Because Medicare only requires two-midnights of hospital services to support inpatient medical necessity, there will be times when hospitals will submit a one-day inpatient claim, but a total of two midnights of hospital services were provided at the same facility. When this occurs, hospitals should include Occurrence Span Code 72 on the claim.
Occurrence Span Code 72 is added to an inpatient claim, so Medicare contractors are aware when a patient had contiguous outpatient hospital services that preceded an inpatient admission at the same facility.
- Use of occurrence span code 72 signals that the total hospital time is greater than what is reflected by the admission date.
- This code is only reported when the outpatient services are provided at the same hospital where the inpatient admission occurs.
- Off campus emergency departments affiliated with the receiving hospital (both operate under a single CMS Certification Number) are considered the same hospital for the purpose of billing Medicare and use of occurrence span code 72 is allowed.
Two Midnights of Hospital Services at Two Non-Affiliated Facilities
When a transfer occurs between healthcare facilities that are not affiliated (do not operate under the same CMS Certification Number), Medicare allows medically necessary outpatient services at the initial facility to count towards the two-midnight threshold at the receiving hospital. Unfortunately, occurrence span code 72 cannot be used in these types of situations. Instead, if the claim is audited as a Medicare short-say admission, the hospital billing the inpatient claim should provide records from the initial/transferring facility demonstrating at least one midnight was crossed while delivering hospital services.
