“How do you know the two-midnight rule doesn’t deliver?” We just learned why.

By  |  July 30, 2014 | 

93% of Hospitalist respondents rated observation policy as critical, but close to two-thirds were not confident in determining a patient’s status.

For several years, hospital-based practitioners have struggled with observation status, the two-midnight rule, and recovery audit mechanisms.  Doubly so because of the evolving regulations CMS continues to proffer.  Expect additional guidance as the workings (and vagaries) of the rule still plague patient admissions.

We all toil with “medical necessity” and what the term means.  The linchpin of successfully implementing the rule hinges on deciphering that very term.  We look towards colleagues, administrators, and consultants for aid.

However, after countless internal meetings, conference calls, and failed attempts in obtaining an instruction manual, we realized no one had answers.  Moreover, we at SHM did not know if members were coping and applying the rule in a consistent manner.

There has been plenty of national news coverage, but given the absence of any nationwide data–from any regulatory body or professional society–we at the Public Policy Committee perceived a need to accrue information from members on how the rule affected front line clinicians.  Again, no one had undertaken a survey as large and comprehensive as ours.

Months of work have led us to our white paper, entitled, The Observation Status Problem: Impact and Recommendations for Change. The release utilizes a multidimensional data set of significant size and includes a finding synthesis.  It is our hope to use the information we collected to inform Congress, CMS, media, and members on the somewhat chaotic understanding of observation status policy.  The answers came from you, our nation’s inpatient workforce.

To give you a sense of what we wished to query, our efforts focused on how you comprehend the rule and received training in its use, if the rule interfered with your clinical decision-making, and whether the regulation may have negative impacts on beneficiaries.

We have assembled a formidable document.  I can confide the findings will raise some eyebrows, and after you read the results, I am certain you will concur.

Accolades must go to many folks within our organization for a job well done!  Ann Sheehy MD, MS testified last month in Congress and repeated her role on July 30th,  in the Senate Special Committee on Aging. We all anticipate improvement on the observation policy front–resulting from both the dissemination of our paper, as well as our continued advocacy efforts in Congress.  Now go read!


Note: When discussing the observation status issue, use #ObsStatus and tag @SHMLive.


  1. Avatar
    Dan Dunlop July 31, 2014 at 10:02 am - Reply

    Paul Levy, on his “Not Running a Hospital Blog,” does a nice job of reviewing the white paper and its findings. Very positive. http://www.runningahospital.blogspot.com/2014/07/observing-observation-status.html

  2. Avatar
    Ronald Hirsch, MD July 31, 2014 at 2:17 pm - Reply

    It’s pretty pitiful that highly educated doctors cannot answer two questions- does the patient need to be in the hospital (realizing that needs to be in the hospital is not the same as wants to be in the hosiptal)? If not, send them home or to a SNF. If so, how long do you think the patient will need to be in the hospital? If over two midnights, admit them. If not, observation. And write a note that justifies the need to be in the hospital and what you are going to do for them (also known as a complete H&P). If your prediction is wrong, that’s ok and the hospital will be paid as long as your rationale was sound. How hard is that?????

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About the Author: Bradley Flansbaum

Bradley Flansbaum
Bradley Flansbaum, DO, MPH, MHM works for Geisinger Health System in Danville, PA in both the divisions of hospital medicine and population health. He began working as a hospitalist in 1996, at the inception of the hospital medicine movement. He is a founding member of the Society of Hospital Medicine and served as a board member and officer. He speaks nationally in promoting hospital medicine and has presented at many statewide meetings and conferences. He is also actively involved in house staff education. Currently, he serves on the SHM Public Policy Committee and has an interest in payment policy, healthcare market competition, health disparities, cost-effectiveness analysis, and pain and palliative care. He is SHM’s delegate for the AMA House of Delegates. Dr. Flansbaum received his undergraduate degree from Union College in Schenectady, NY and attended medical school at the New York College of Osteopathic Medicine. He completed his residency and chief residency in Internal Medicine at Long Island Jewish Medical Center in New York. He received his M.P.H. in Health Policy and Management at Columbia University. He is a political junky, and loves to cook, stay fit, read non-fiction, listen to many genres of music, and is a resident of Danville, PA.


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