On August 17, 2018, the Centers for Medicare & Medicaid Services (CMS) published its Hospital Inpatient Prospective Payment Systems final rule for Fiscal Year 2019 (Final Rule). The Final Rule contains a number of important updates to Medicare Part A that take effect October 1, 2018.

Among other provisions  in the Final Rule, CMS finalized its proposed update of the regulations that govern hospital admissions under Medicare Part A (42 C.F.R. § 412.3). Specifically, the Final Rule revises language in 42 C.F.R. § 412.3(a) to remove the current requirement that an inpatient admission order “must be present in the medical record and be supported by the physician admission and progress notes, in order for the hospital to be paid for hospital inpatient services under Medicare Part A.” As a result, starting October 1, 2018, CMS will “no longer require a written inpatient admission order to be present in the medical record as a specific condition of Medicare Part A payment.”

Notably, the Final Rule does not change the current standard in that same regulation that an individual becomes an inpatient when formally admitted under an order for inpatient admission by a physician or other qualified practitioner in accordance with that regulation and the conditions of participation for Medicare-enrolled acute care hospitals (CoPs) (42 C.F.R. § 412.3). According to CMS, this regulatory standard remains significant because it reflects a determination by the treating physician (or other qualified practitioner) that inpatient services are medically necessary. CMS also noted that this change does not affect its requirements concerning which practitioners may issue inpatient admission orders.

CMS adopted the change in the Final Rule in response to reports of claims for medically necessary admissions being denied as a result of “technical discrepancies with the documentation of inpatient admission orders,” such as missing or late signatures. In some instances, technical errors were the primary reason for denying the Medicare payment, which CMS clarified was not the intent of the initial documentation requirements. In order to diminish the administrative burden on physicians and providers, CMS decided that if the hospital is operating consistently with the hospital CoPs, medical reviews of inpatient claims “should focus primarily on whether the inpatient admission was medically reasonable and necessary” instead of documentation issues.

This change is the latest in a series of policy actions undertaken by CMS to reduce the regulatory burden on acute care hospitals related to Part A admissions, dating back to its rescission of the physician certification requirement as a condition of payment for inpatient stays of less than twenty days effective January 1, 2015. Despite the change, acute care hospitals remain obligated to comply with all applicable CoPs, including without limitation requirements that patients be admitted to the hospital only on the recommendation of a licensed practitioner with authority to admit patients, that medical records contain sufficient information to justify admission and continued hospitalization of an inpatient, and that records document the admitting diagnosis and are dated, timed and authenticated properly by the ordering or attending practitioner in accordance with state law and hospital policies.


This post was co-authored by Alyssa Ferreone, legal intern at Robinson+Cole. Alyssa is not yet admitted to practice law.