Leaders of the four major publicly traded for-profit health systems were asked about the effects of the expansion of the two-midnight rule during the Wells Fargo Healthcare Conference held in early September.
Mike Marks, the CFO of Nashville, Tenn.-based HCA Healthcare, said the system has seen a "modest benefit" for the expanded rule. He said that during the first six months, they're seeing their physician community adapt and are writing more inpatient orders and fewer observation visits, particularly for accounts over $2 million, "as expected."
As for how the rule is playing out with payers, Mr. Marks said HCA has seen a slight improvement in denial rates, which he is encouraged by. He said there are still too many denials, however, and they're working with Medicare Advantage payers to fully adopt the rule.
"Overall, it has supported inpatient admissions, contributing about half a point of growth in the first six months. We expect further improvement as payers continue to adjust," he said.
Saum Sutaria, MD, CEO of Dallas-based Tenet Healthcare, said the most appropriate questions about the two-midnight rule are "about how effectively the plans are adhering to CMS guidance."
"We're taking care of patients one way or another," Dr. Sutaria said.
He added that he is still struggling to see that it's a "large or material, quantifiable benefit."
"I'm sure it's slightly positive, but it's not something that we've really quantified as being largely or materially positive," he said.
Steve Filton, CFO of King of Prussia, Pa.-based Universal Health Services, said they don't detect a material change in our volumes as a result of the expansion of the two-midnight rule.
"I will say that we've really been focused on this area for several years now, we engage a third-party consultant who helps us determine what are appropriate admissions versus observation days," Mr. Filton said. "They really help us appeal the ones that we dispute with the payers, etc. So maybe we're not being impacted because we've been a bit more focused on this issue than some of our peers in the last few years. But again, the bottom line answer is we just don't think whatever strength we're seeing in acute care volumes, we don't think whatever strength we're seeing in acute care volumes is due to the two-midnight rule."
Kevin Hammons, CFO of Franklin, Tenn.-based Community Health Systems, said they're seeing an increase in shorter stay admissions, but they believe "that's largely being driven by some of the work we're doing internally with our physician advisor group, our utilization review group, making sure that we have documentation appropriate to support admissions, as opposed to payer behavior."