Informing Medicare’s Two-Midnight Rule Policy With an Analysis of Hospital-Based Long Observation Stays

Outpatient observation stays are increasingly substituting for standard inpatient hospitalizations. In 2013, the Centers for Medicare & Medicaid Services adopted the controversial Two-Midnight Rule policy to curb long observation stays and better define the use of hospital-based observation services versus inpatient hospitalizations. We seek to determine the extent to which Medicare beneficiaries exposed to long observation stays (>48 hours) are clinically similar to those with short observation stays (≤48 hours) because this has relevance to the Two-Midnight Rule.

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