title: Observation and inpatient status: clinical impact of the 2-midnight rule.
abstract: BACKGROUND
  In response to growing concern over frequency and duration of observation encounters, the Centers for Medicare and Medicaid Services enacted a rules change on October 1, 2013, classifying most hospital encounters of <2 midnights as observation, and those ≥2 midnights as inpatient. However, limited data exist to predict the impact of the new rule.
  
  
  OBJECTIVE
  To answer the following: (1) Will the rule reduce observation encounter frequency? (2) Are short-stay (<2 midnights) inpatient encounters often misclassified observation encounters? (3) Do 2 midnights separate distinct clinical populations, making this rule logical? (4) Do nonclinical factors such as time of day of admission impact classification under the rule?
  
  
  METHODS
  Retrospective descriptive study of all observation and inpatient encounters initiated between January 1, 2012 and February 28, 2013 at a Midwestern academic medical center.
  
  
  METHODS
  Demographics, insurance type, and characteristics of hospitalization were abstracted for each encounter.
  
  
  RESULTS
  Of 36,193 encounters, 4,769 (13.2%) were observation. Applying the new rules predicted a net loss of 14.9% inpatient stays; for Medicare only, a loss of 7.4%. Less than 2-midnight inpatient and observation stays were different, sharing only 1 of 5 top International Classification of Diseases, 9th Revision (ICD-9) codes, but for encounters classified as observation, 4 of 5 top ICD-9 codes were the same across the length of stay. Observation encounters starting before 8:00 am less commonly spanned 2 midnights (13.6%) than later encounters (31.2%).
  
  
  CONCLUSIONS
  The 2-midnight rule adds new challenges to observation and inpatient policy. These findings suggest a need for rules modification.
authors.affiliation: Department of Medicine, Division of Hospital Medicine, University of Wisconsin School of Medicine and Public Health, Madison, Wisconsin.
authors.forename: Ann M
authors.initials: AM
authors.lastname: Sheehy
authors.forename: Bartho
authors.initials: B
authors.lastname: Caponi
authors.forename: Sreedevi
authors.initials: S
authors.lastname: Gangireddy
authors.forename: Azita G
authors.initials: AG
authors.lastname: Hamedani
authors.forename: Jeffrey J
authors.initials: JJ
authors.lastname: Pothof
authors.forename: Eric
authors.initials: E
authors.lastname: Siegal
authors.forename: Ben K
authors.initials: BK
authors.lastname: Graf
mesh_terms: D000328:Adult; D000368:Aged; D000369:Aged, 80 and over; D014487:Centers for Medicare and Medicaid Services, U.S. / Q000331:legislation & jurisprudence*; D005260:Female; D006801:Humans; D007297:Inpatients / Q000331:legislation & jurisprudence*; D007902:Length of Stay / Q000331:legislation & jurisprudence; D008297:Male; D008875:Middle Aged; D012189:Retrospective Studies; D012959:Socioeconomic Factors; D014481:United States