CMS Two-Midnight Rule: Analysis of Short Stay and Non-Stay DRG Weights

To understand the potential impact of alternative payment rules for short inpatient hospital stay cases, KNG Health was commissioned to evaluate and simulate multiple payment models for reimbursing short-stay cases. We used 2012 Medicare Inpatient and Outpatient Claims data to identify short-stay and non-short-stay cases. We then developed a payment model based on DRG weights under the IPPS. Payments for identified cases were modeled with and without the Two-Midnight Rule in place. The results and policy implications were presented in a MS Excel file.

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