November 12, 2013

The Two Midnight Rule and the Role of Medical Scribes

Last month the Centers for Medicare & Medicaid Services (CMS) announced that it is delaying enforcement of their new “Two Midnight Rule,” until Jan. 1, 2014. For many hospitals across the country this came as welcome news, originally the rule was set to take effect on October 1st.

Understandably, this attempt by CMS to clarify the difference between what constitutes an inpatient and an outpatient visit has some hospitals a bit upset. But what exactly is the Two Midnight Rule, and how will it impact American hospitals?

Outpatient vs. Inpatient

Historically it’s been fairly murky territory when it comes to defining exactly what the difference is between an inpatient and outpatient hospital stay. The Two Midnight Rule attempts to correct this. Simply the rule says that any inpatient hospital stay must last for at least two nights or it’s considered an outpatient visit, and will be reimbursed as such.

The intent of CMS is clear with this rule: the agency is targeting unnecessary extended observation stays as a way to save money. It’s hard to argue that there isn’t at least some waste happening in the system and no one can blame CMS for trying to correct the issue.

The problem though is that by mandating certain lengths of stay, hospitals lose out on bigger reimbursements for short stays that used to be considered inpatient. Not to mention that patients will also feel the effect through higher deductibles.

What does this mean for hospitals?

For hospitals the rule is a mixed bag. Many are outraged and nervous about the money they’ll lose because of the rule. But on the other side of the coin, the rule could actually end up saving hospitals money in the long run.

The Two Midnight Rule forces hospitals to be extremely efficient when admitting new patients, especially in the emergency department. The admitting staff will need to have quick, easy access to a patient’s medical records in order to determine whether the stay will be inpatient or outpatient. If the admitting staff overestimates the length of stay, CMS will reject their reimbursement claim.

Medical scribes to the rescue

While it might look like the Two Midnight Rule will be detrimental to American hospitals, it doesn’t have to be. Complying with the rule and avoiding rejected claims, really just boils down to plain old efficiency. Increased efficiency, especially in the emergency department, can free up more beds, and potentially save a hospital millions of dollars over the course of a year.

Preliminary data from a 2011 study conducted at Rochester General Hospital in Rochester, New York tested the effect of a Patient Centered Admissions Team (PCAT) on emergency department admissions. The PCAT team in the study included a hospitalist, two nurses, a pharmacist, an ED technician, and most importantly a medical scribe.

The experiment resulted in an 11 percent overall reduction of length of stay for patients admitted and an increase of 1.2 patients seen in a eight hour shift by the PCAT team. For Rochester General, that translated to an extra seven hospital beds available at any given time. That added up to approximate savings of $12 million a year for the hospital.

That 11 percent was a reduction of 0.6 days per patient. The study was conducted long before the introduction of the Two Midnight Rule, and 0.6 days does not seem like an awful long time. But from January 1. 2014, 0.6 days could make all the difference for a hospital trying to stay in compliance with the new rule.

What is remarkable though is that the study’s authors attributed 40 percent of the length of stay improvements to the presence of the medical scribe. We all know that a large percent of calls for admission occur before midnight, the goal is to see and admit them before the clock hits 12. With many new mandates coming, hospitals might be well advised to look to medical scribes as part of their strategy to prepare for the Two Midnight Rule.