CHA News

CMS Provides “Two-Midnight Rule” Guidance for Medicare Advantage Plans

What’s happening: The Centers for Medicare & Medicaid Services (CMS) issued a frequently asked questions (FAQ) document on finalized contract year 2024 Medicare Advantage (MA) policies.   

What else to know: The document provides guidance on how the “two-midnight” hospital admissions policies apply to MA patients when MA organizations are permitted to deny payment through post-claim audits. 

CMS issued the document to clarify finalized policies from its 2024 MA final rule. Clarifications include:  

  • MA plans may utilize artificial intelligence and other technologies to assess coverage decisions, but the tools cannot override benefits rules and medical necessity standards. 
  • While MA plans are not required to follow the “two-midnight presumption,” which relates to medical review instructions for contractors in traditional Medicare, they are required to follow the inpatient admission criteria in 42 C.F.R. § 412.3, which include a “two-midnight benchmark” (meaning that patients must be in the hospital for at least “two midnights” before being admitted for inpatient care).  

The FAQs also offer guidance on when and how insurers are permitted to use internal coverage criteria instead of federal standards, as well as requirements for public disclosure of those criteria.