An American College of Physician Advisors’ (ACPA) recent report concurs with earlier data from AppriseMD that many Medicare Advantage Organizations (MAOs) are not complying with the guidelines that the Centers for Medicare and Medicaid Services established under rule 4201-F.
In its News to Note from July 20241, the ACPA looked at whether all of the projected outcomes from the new rule have materialized. Their assessment concluded bluntly with one word, “hardly.” One prediction when CMS decided MA plans must follow the Two-Midnight Rule was that denials from MA would decrease quickly. “This has NOT happened because the Rule doesn’t simply involve passage of a second midnight,” ACPA wrote in its News to Note. “It involves medical necessity of the second midnight. As much as it seems we have been talking about this incessantly, many continue to apply the concept of medical necessity inappropriately.”
Hospital utilization review data that AppriseMD collected in the first two months of 2024 shows that MAOs were denying claims that would have been approved under Traditional Medicare.2 According to the data, the MAOs appear to be misapplying criteria and citing arbitrary findings to reach the conclusion that hospital claims lack medical necessity. In fact, an analysis of AppriseMD peer-to-peer (P2P) reviews during the first two months of 2024 yielded a mere 20% compliance with 4201-F. The rest (80%) of the P2P cases that met 4201-F remain denied by the MAOs, highlighting just how severe the problem is.
“While CMS made it clear that MA plans must utilize the Rule, they didn’t include any consequences if they don’t,” ACPA notes in its report. “Some have recommended filing complaints to CMS, but there isn’t a formal grievance process. As such, there is technically nothing – at this point – to stop MA plans from electing not to comply with the Rule.”
While the CMS rule requires MA plans to adopt the Two-Midnight Rule, MA plans issued their own guidance in late 2023 outlining how they would apply the final rule in admission determinations. In the first quarter of 2024, AppriseMD data suggested that MA plan medical directors were ignoring their own guidance. AppriseMD physician advisors observed non-compliance at both the initial level and during the appeal process when a hospital challenges an inpatient admission denial made by an MA plan. Additionally, the same data showed that MA plans appeared to be overutilizing commercial criteria to deny claims when the patient exceeded a two-midnight stay for inpatient level of care (LOC) services. In this scenario, the MAOs’ ability to audit inpatient admissions that exceed two midnights is an opportunity for them to challenge the authenticity of the medical necessity claim.
The ACPA pointed out, “Everyone should know MA plans must follow the Two-Midnight Rule and that hospitals should file complaints when the MA plans blatantly ignore the Rule. But many don’t know there are also rules for Medicaid about when inpatient admission is appropriate.” The July report said that “inpatient” as defined by 42 CFR 440.2 can also be a patient “admitted to a medical institution as an inpatient on recommendation of a physician or dentist and who receives room, board and professional services in the institution for a 24-hour period or longer … or is expected to stay but does not actually stay in the institution for 24 hours. That’s right, no midnights to count, this rule strictly involves 24 hours.” But it went on to say that “most Medicaid plans, especially Managed Medicaid, ignore this rule. Their usual argument involves the patient was getting better at 24 hours, so Inpatient admission is not approved or that criteria for Inpatient admission are not met.”
ACPA called for providers to push back and report when plans ignore the rules, stating that “with enough complaints, CMS will be forced to address this abhorrent behavior.” There are various ways to report non-compliance by the MAOs in addition to appealing all denials that contradict the CMS regulation. Hospitals can contact the CMS regional office to file a concern by visiting CMS here.
Sources:
- “News to Note,” American College of Physician Advisors. July 2024.
- “Medicare Advantage and the Two-Midnight Rule: 2024 Findings,” AppriseMD. May 17, 2024.
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