STAT+: New Medicare Advantage rule is boon for providers, drag on insurers
A new Medicare Advantage plan rule went largely overlooked, but recent financial reports show it could have a noteworthy effect on hospitals, health insurers, and patients.
Starting this year, private Medicare plans have to cover their members’ hospitalizations at the higher inpatient rate if their doctors predict they’ll have to stay beyond two midnights.
It’s the same rule — appropriately called the two-midnight rule — that traditional Medicare has followed for a decade. After it came out that Medicare Advantage plans were routinely denying coverage for necessary services, the federal government decided they ought to be held to the same standard, at least when it comes to hospital care.
As hospitals and health insurers release their profit projections for 2024, it’s become clear that this change — largely overlooked when it was announced — could have a marked effect on companies’ finances. For patients with MA plans, it could mean better access and smaller out-of-pocket costs after a hospitalization.
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