,,ii  #aac? ,,congress  #b;d ,session   
,s4 #bjhb  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,m>* #e1 #bjad,mr4     
,m55dez 7= himself & ,mrs4 ,fis*]7      
introduc$ ! foll[+ bill2 :i* 0 read     
twice & ref]r$ to ! ,committee on       
,f9ance  ,a ,,bill  ,to provide = !     
developm5t ( crit]ia "u ! ,m$ic>e       
program = m$ically necess>y %ort        
inpati5t hospital /ays1 & = o!r         
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,two-,midnight ,rule       
,coord9ation & ,improvem5t ,act ( #bjad4
  #b4 ,developm5t ( crit]ia = m$ically  
necess>y %ort inpati5t hospital /ays    
7a7 ,9 g5]al  7#a7 ,developm5t ( crit]ia
 ,! ,secret>y %all develop appropriate  
crit]ia ) reg>d to ! two-midnight rule  
7z def9$ 9 subsection 7e77 = paym5t "u !
 ,m$ic>e program "u title ,,xviii ( !   
,social ,security ,act 7#db ,u4,s4,c4   
#acie et seq47 = a %ort inpati5t        
hospital /ay 7z def9$ 9 su* subsection74
  7#b7 ,requirem5ts ,! crit]ia develop$ 
"u p>agraph 7#a7 %all-- 7,a7 acc\nt =   

m$ical necessity & ! appropriat5ess ( an
 inpati5t /ay t is less ?an !           
two-midnight b5*m>k2 &  7,b7 subject to 
p>agraph 7#c71 be develop$ 9            
consultation ) int]e/$ /akehold]s4  7#c7
 ,implem5tation ,! consultation describ$
 9 p>agraph 7#b77;,b7 %all be conduct$ z
 "p ( ! annual notice & comm5t rulemak+ 
process implem5t+ ! ,m$ic>e hospital    
inpati5t prospective paym5t sy/em =     
fiscal ye> #bjae4  7b7 ,developm5t (    
%ort inpati5t hospital /ay paym5t       
me?odology  7#a7 ,9 g5]al ,! ,secret>y  
%all develop a paym5t me?odology "u !   
,m$ic>e program "u title ,,xviii ( !    
,social ,security ,act = hospitals =    
%ort inpati5t hospital /ays4 ,su*       
me?odology-- 7,a7 %all be implem5t$ 9 a 
budget neutral mann]2  7,b7 may be a    
r$uc$ paym5t am\nt = su* inpati5t       
hospital s]vices ?an w\ld o!rwise apply 
if paid = "u section #ahhf7;d7 ( !      
,social ,security ,act 7#db ,u4,s4,c4   
#acieww7d77 or be an alt]native paym5t  
me?odology2 &  7,c7 %all take into      

consid]ation ! crit]ia develop$ "u      
subsection 7a74  7#b7 ,timeframe ,!     
,secret>y %all promulgate su* me?odology
 z "p ( ! annual regulations implem5t+ !
 ,m$ic>e hospital inpati5t prospective  
paym5t sy/em = fiscal ye> #bjae4  7c7   
,crosswalk ( ,,icd-#aj codes & ,,cpt    
codes2 crosswalk ( ,,drg & ,,cpt codes  
7#a7 ,,icd-#aj-to-,,cpt crosswalk  7,a7 
,9 g5]al ,n lat] ?an #b ye>s aft] ! date
 ( ! enactm5t ( ?is ,act1 ! ,secret>y   
%all develop g5]al equival5cy maps      
7ref]r$ to 9 ?is subsection z           
crosswalks7 to l9k ! relevant ,,icd-#aj 
codes to relevant ,,cpt codes1 & !      
relevant ,,cpt codes to relevant        
,,icd-#aj codes1 9 ord] to p]mit        
comp>isons ( inpati5t hospital s]vices1 
= :i* paym5t is made "u section #ahhf ( 
! ,social ,security ,act 7#db ,u4,s4,c4 
#acieww71 & hospital outpati5t dep>tm5t 
s]vices1 = :i* paym5t is made "u section
 #ahcc7t7 ( su* ,act 7#db ,u4,s4,c4     
#aciel7t774 ,9 ?is subsection ! t]ms    
,,icd-#aj codes & ,,cpt codes include   

proc$ure z well z diagno/ic codes4  7,b7
 ,process  7i7 ,9 g5]al ,9 c>ry+ out    
subp>agraph 7,a71 ! ,secret>y %all      
develop a propos$ ,,icd-#aj-to-,,cpt    
crosswalk :i* %all be made available =  
public comm5t = a p]iod ( n less ?an #fj
 days4  7ii7 ,notice ,! ,secret>y %all  
provide notice ( ! comm5t p]iod ?r\gh ! 
foll[+3 7,i7 ,publication ( notice (    
propos$ rulemak+ 9 ! ,f$]al ,regi/]4    
7,,ii7 ,a solicitation po/$ on !        
,int]net ,web site ( ! ,c5t]s = ,m$ic>e 
,m$icaid ,s]vices4  7,,iii7 ,an         
ann\ncem5t on ! ,int]net ,web site ( !  
,c5t]s = ,m$ic>e  ,m$icaid ,s]vices ( ! 
availability ( ! propos$ crosswalk & !  
deadl9e = comm5ts4  7,,iv7 ,a broadca/  
?r\gh an appropriate ,li/s]v op]at$ by !
 ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices4   
7iii7 ,use ( ! ,,icd-#i-;,,cm           
,coord9ation & ,ma9t5ance ,committee ,! 
,secret>y also %all in/ruct !           
,,icd-#i-;,,cm ,coord9ation & ,ma9t5ance
 ,committee to conv5e a meet+ to receive
 input f ! public reg>d+ ! propos$      

,,icd-#aj-to-,,cpt crosswalk4  7iv7     
,publication ( f9al crosswalks ,tak+    
into consid]ation comm5ts receiv$ on !  
propos$ crosswalk1 ! ,secret>y %all     
publi% a f9al ,,icd-#aj-to-,,cpt        
crosswalk "u subp>agraph 7,a7 & %all po/
 su* crosswalk on ! ,int]net ,web site (
 ! ,c5t]s = ,m$ic>e  ,m$icaid ,s]vices4 
7v7 ,updat+ ,! ,secret>y %all update su*
 crosswalk on an annual basis4  7#b7    
,,drg-to-,,apc crosswalk  7,a7 ,9 g5]al 
,! ,secret>y %all1 us+ !                
,,icd-#aj-to-,,cpt crosswalk develop$ "u
 p>agraph 7#a71 develop a second        
crosswalk betwe5 diagnosis-relat$ gr\p  
7,,drg7 codes = inpati5t hospital       
s]vices & ,ambulatory ,paym5t ,class    
7,,apc7 codes = outpati5t hospital      
s]vices4  7,b7 ,data to be us$ ,9       
develop+ su* crosswalk1 ! ,secret>y %all
 use claims data = inpati5t hospital    
s]vices = dis*>ges occurr+ 9 fiscal ye>s
 beg9n+ ) fiscal ye> #bjae & = outpati5t
 hospital s]vices furni%$ 9 ye>s beg9n+ 
) #bjae4  7,c7 ,publication ,n lat] ?an 

,june #cj1 #bjag1 ! ,secret>y %all      
publi% ! ,,drg-to-,,apc crosswalk       
develop$ "u ?is p>agraph4  7d7 ,delay ( 
en=cem5t ( ! two-,midnight rule  7#a7 ,9
 g5]al ,! ,secret>y %all n en=ce !      
provisions ( ! two-midnight rule )      
respect to admissions to a hospital =   
:i* paym5t is made "u ! ,m$ic>e program 
"u title ,,xviii ( ! ,social ,security  
,act-- 7,a7 = admissions occurr+ be=e   
,octob] #a1 #bjad2 &  7,b7 9 ! case (   
admissions occurr+ on or aft] ,octob]   
#a1 #bjad1 prior to ! applicable date 7z
 def9$ 9 p>agraph 7#c774  7#b7          
,application to ,m$ic>e review          
contractors ,p>agraph 7#a7 %all also    
apply to ,m$ic>e review contractors 7z  
def9$ 9 subsection 7e774 ,no ,m$ic>e    
review contractor may1 bas$ on !        
provisions ( ! two-midnight rule1 d5y a 
claim = paym5t = inpati5t hospital      
s]vices furni%$ by a hospital1 or       
inpati5t critical access hospital       
s]vices furni%$ by a critical access    
hospital1 = :i* paym5t may be made "u   

title ,,xviii ( ! ,social ,security ,act
 = dis*>ges occurr+ be=e ! applicable   
date 7z def9$ 9 p>agraph 7#c77-- 7,a7 = 
m$ical necessity due to ! l5g? ( an     
inpati5t /ay 9 su* hospital or due to a 
det]m9ation t ! s]vices c\ld h be5      
provid$ on an outpati5t basis2 or  7,b7 
= requirem5ts = ord]s1 c]tifications1 or
 rec]tifications1 & associat$           
docum5tation relat+ to ! matt]s describ$
 9 subp>agraph 7,a74  7#c7 ,applicable  
date def9$ ,9 ?is subsection1 ! t]m     
applicable date means ! e>li] (-- 7,a7 !
 date on :i* ! crit]ia describ$ 9       
subsection 7a7 are implem5t$ pursuant to
 subsection 7a77#c72 or  7,b7 ,octob]   
#a1 #bjae4  7#d7 ,cont9uation ( ,m$ic>e 
,probe & ,educate program = inpati5t    
hospital admissions  7,a7 ,9 g5]al      
,subject to subp>agraph 7,b71 no?+ 9 ?is
 subsection %all be con/ru$ to preclude 
! ,secret>y f cont9u+ ! conduct by      
,m$ic>e adm9i/rative contractors ( !    
,m$ic>e ,probe & ,educate program 7z    
def9$ 9 subp>agraph 7,c77 = hospital    

admissions dur+ ! delay ( en=cem5t "u   
p>agraph 7#a74  7,b7 ,ma9t5ance ( sample
 prepaym5t record limits ,! ,secret>y   
may n increase ! sample ( claims select$
 = prepaym5t review "u ! ,m$ic>e ,probe 
& ,educate program above ! numb] & type 
e/abli%$ by ! ,secret>y "u su* program z
 ( ,novemb] #d1 #bjac1 su* z #aj claims 
= mo/ hospitals & #be claims = l>ge     
hospitals4  7,c7 ,m$ic>e ,probe &       
,educate program def9$ ,9 ?is p>agraph1 
! t]m ,m$ic>e ,probe & ,educate program 
means ! program e/abli%$ by ! ,secret>y 
z 9 effect on ,novemb] #d1 #bjac 7&     
describ$ 9 a public docum5t made        
available by ! ,c5t]s = ,m$ic>e         
,m$icaid ,s]vices on its ,web site      
entitl$ ,frequ5tly ,ask$ ,que/ions #b   
,midnight ,inpati5t ,admission ,guidance
  ,pati5t ,/atus ,reviews = ,admissions 
on or aft] ,octob] #a1 #bjac71 "u :i*   
,m$ic>e adm9i/rative contractors-- 7i7  
conduct prepaym5t pati5t /atus reviews =
 inpati5t hospital claims ) dates (     
admission on or aft] ,octob] #a1 #bjac1 

& be=e ,m>* #ca1 #bjad2 &  7ii7 bas$ on 
! results ( su* prepaym5t pati5t /atus  
reviews1 conduct educational outrea*    
ef=ts dur+ ! foll[+ #c mon?s4  7e7      
,def9itions ,9 ?is section3 7#a7        
,hospital ,! t]m hospital means ! foll[+
 7ins(> z su* t]ms are us$ "u title     
,,xviii ( ! ,social ,security ,act73    
7,a7 ,an acute c>e hospital4  7,b7 ,a   
critical access hospital4  7,c7 ,a      
long-t]m c>e hospital4  7,d7 ,an        
inpati5t psy*iatric facility4  7#b7     
,int]e/$ /akehold]s ,! t]m int]e/$      
/akehold]s means ! foll[+3 7,a7         
,hospitals4  7,b7 ,physicians  7,c7     
,m$ic>e adm9i/rative contractors "u     
section #ahgd;,a ( ! ,social ,security  
,act 7#db ,u4,s4,c4 #aciekk-#a74  7,d7  
,recov]y audit contractors "u section   
#ahic7;h7 ( su* ,act 7#db ,u4,s4,c4     
#acie;ddd7h774  7,e7 ,o!r p>ties det]m9$
 appropriate by ! ,secret>y4  7#c7      
,,ipps ,,fy #bjad ,f9al ,rule ,! t]m    
,,ipps ,,fy #bjad ,f9al ,rule means !   
f9al rule 7,,cms-#aeii-;,f1             

,,cms-#adee-;,f7 publi%$ by ! ,c5t]s =  
,m$ic>e  ,m$icaid ,s]vices 9 ! ,f$]al   
,regi/] on ,augu/ #ai1 #bjac1 entitl$   
,m$ic>e ,program2 ,hospital ,inpati5t   
,prospective ,paym5t ,sy/ems = ,acute   
,c>e ,hospitals & ! ,long-,t]m ,c>e     
,hospital ,prospective ,paym5t ,sy/em & 
,fiscal ,ye> #bjad ,rates2 ,quality     
,report+ ,requirem5ts = ,specific       
,provid]s2 ,hospital ,conditions (      
,p>ticipation2 ,paym5t ,policies ,relat$
 to ,pati5t ,/atus 7#gh ,f$4 ,reg4      
#ejdif et seq474  7#d7 ,m$ic>e review   
contractor ,! t]m ,m$ic>e review        
contractor means any contractor or      
entity t has ent]$ into a contract or   
subcontract ) ! ,c5t]s = ,m$ic>e        
,m$icaid ,s]vices ) respect to ! ,m$ic>e
 program to review claims = items &     
s]vices furni%$ = :i* paym5t is made "u 
title ,,xviii ( ! ,social ,security     
,act1 includ+-- 7,a7 ,m$ic>e            
adm9i/rative contractors "u section     
#ahgd;,a ( ! ,social ,security ,act 7#db
 ,u4,s4,c4 #aciekk-#a72 &  7,b7 recov]y 

audit contractors "u section #ahic7;h7 (
 su* ,act 7#db ,u4,s4,c4 #acie;ddd7h774 
7#e7 ,secret>y ,! t]m ,secret>y means ! 
,secret>y ( ,heal? & ,human ,s]vices4   
7#f7 ,%ort inpati5t hospital /ay ,! t]m 
%ort inpati5t hospital /ay means1 )     
respect to an inpati5t admission ( an   
individual entitl$ to b5efits "u "p ,a (
 title ,,xviii ( ! ,social ,security    
,act to a hospital1 a l5g? ( /ay t is   
less ?an ! l5g? ( /ay requir$ to satisfy
 ! #b-midnight b5*m>k describ$ 9 section
 #dab4c ( title #db1 ,code ( ,f$]al     
,regulations1 z am5d$ "u ! am5dm5t #b   
ref]r$ to 9 p>agraph 7#g77;,a74  7#g7   
,two-midnight rule ,! t]m two-midnight  
rule means ! foll[+ numb]$ am5dm5ts to  
#db ,,cfr ,*apt] ,,iv conta9$ 9 ! ,,ipps
 ,,fy #bjad ,f9al ,rule 7& includes any 
sub-regulatory guidance issu$ 9 !       
implem5tation ( su* am5dm5ts & any      
portion ( ! preamble ( section ,,xi4,c4 
( su* rule relat+ to su* am5dm5ts73 7,a7
 ,am5dm5t #b 7on page #ejife71 :i* adds 
a section #dab4c ( title #db1 ,code (   

,f$]al ,regulations 7relat+ to          
admissions74  7,b7 ,am5dm5t #c 7on page 
#ejife71 :i* revises section #dab4df (  
su* title 7relat+ to m$ical review      
requirem5ts74  7,c7 ,am5dm5t #bc 7on    
page #ejifi71 :i* am5ds p>agraphs 7d7 & 
7e77#b7 ( section #dbd4aa ( su* title   
7relat+ to conditions ( paym5t3 ,g5]al  
proc$ures74  7,d7 ,am5dm5t #bd 7on pages
 #ejifi & #ejigj71 :i* revises section  
#dbd4ac ( su* title 7relat+ to          
requirem5ts = inpati5t s]vices (        
hospitals o!r ?an inpati5t psy*iatric   
facilities74  7,e7 ,am5dm5t #be 7on page
 #ejigj71 :i* revises p>agraphs 7a71    
7b71 7d77#a71 & 7e7 ( section #dbd4ad ( 
su* title 7relat+ to requirem5ts =      
inpati5t s]vices ( inpati5t psy*iatric  
facilities74  7,f7 ,am5dm5t #bf 7on page
 #ejigj71 :i* revises section #dbd4ae ( 
su* title 7relat+ to requirem5ts =      
inpati5t ,,cah s]vices74