​Effective September 12, 2016, Beneficiary and Family Centered Care (BFCC) Quality Improvement Organizations (QIOs) resumed their hospital initial patient status reviews. The purpose of these reviews is to determine the appropriateness of Medicare Part A payments for short stays in acute care inpatient hospitals, long-term care hospitals, and inpatient psychiatric facilities.

Originally, the BFCC-QIOs conducted initial patient status reviews for short stay inpatient hospital claims on October 1, 2015. However, the Centers for Medicare and Medicaid Services (CMS) suspended these reviews on May 4, 2016 after learning about the BFCC-QIOs’ inconsistent application of the two-midnight policy. The purpose of the suspension was to allow time to promote the consistent application of the medical review of patient status for short hospital stays and to improve standardization in the BFCC-QIOs’ review process.

CMS ended the suspension on September 12 and reinstated these reviews because:

During the suspension, CMS made no changes to its guidance for the BFCC-QIOs regarding these reviews. The guidance, “Reviewing Short Stay Hospital Claims for Patient Status: Admissions On or After January 1, 2016,” can be found at: CMS.gov. CMS will continue to monitor this area by reviewing a sample of BFCC-QIO completed reviews every month, monitoring provider education calls, and responding to individual provider questions.

In addition to the resumption of the BFCC-QIO reviews, Medicare providers may also notice a corresponding increase in Recovery Audit Contractor activity. The BFCC-QIOs can refer providers that demonstrate persistent noncompliance with Medicare payment policies to Recovery Auditors. As the BFCC-QIOs’ reviews increase, there is the potential that referrals to Recovery Auditors will increase also. Medicare providers should continue to audit and monitor their operations to ensure compliance with the Medicare 2-day stay and observation status requirements.

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