On February 24, 2014, the Centers for Medicare & Medicaid Services (CMS) issued additional guidance on the two-midnight rule, specifically related to the probe and educate audits. CMS is requesting that the Medicare Administrative Contractors (MACs) re-review all claims denied under the probe and educate process to ensure the claim decision and subsequent education is consistent with the most recent clarifications regarding the physician order and physician certification requirements for hospital inpatient admissions.

If the MAC determines that a claim is payable upon re-review, the MAC may reverse its decision and issue payment outside of the appeals process. In addition, claims denied on or before January 30, 2014, under the probe and educate process for which an appeal has been filed will also be subject to re-review; claims determined payable following re-review will be adjusted accordingly; and claims for which the denial is affirmed following re-review will be transferred to appeals automatically for a redetermination.

As a result of this new guidance, CMS is urging providers to work with their MACs to determine if a claim has been re-reviewed prior to submitting an appeal request. Furthermore, for redetermination requests received before September 30, 2014, (for denials under the probe and educate process that occurred on or before January 30, 2014), CMS will waive the 120-day timeframe for filing a request for redetermination to ensure that the re-review process does not affect the ability of a provider to file a timely appeal of a denied claim.

To give hospitals an idea of the types of errors the MACs are seeing during the probe and educate audits, CMS published a document with some examples and an explanation of why the claims are denied.