Hospital Patient Status Review Frequently Asked Questions

Transition Information

1. Q: What change to Hospital Patient Status Reviews did the Centers for Medicare & Medicaid Services (CMS) announce in 2025?

A: On 5/22/25, CMS notified the public that Medicare Administrative Contractors (MACs) will perform short stay inpatient hospital medical reviews and provider education (i.e. patient status reviews). This type of review was previously conducted by the Beneficiary and Family Centered Care (BFCC) Quality Improvement Organization (QIO) (BFCC-QIO). The BFCC-QIO concluded all patient status reviews in August 2025.

2. Q: What is considered a Hospital Short Stay? 

A: CMS considers a short hospital stay to be one with a length of stay that is less than two midnights after inpatient admission. CMS will monitor the number of these types of admissions and may prioritize these types of cases for medical review. 

3. Q: What is a Short Stay Patient Status Review? 

A: The term “short stay patient status review” refers to medical record reviews conducted by Medicare contractors to determine if inpatient admissions are appropriate for Part A payment. 

4. Q: What is the role of the MACs in the claims review process?

A: To prevent improper payments and protect the Medicare Trust Fund, CMS contracts with a variety of contractors to conduct medical reviews. The MACs are one type of contractor that conducts medical reviews. They collect and conduct clinical review of medical records and related information to ensure that payment is made only for services that comply with Medicare requirements.

5. Q: Who are the Medicare Part A and B MACs that will assume responsibility from the BFCC-QIOs? 

A: Currently there are 12 Medicare Part A and B MACs that have assumed this workload. For a complete listing of the MACs see: https://www.cms.gov/medicare/coding-billing/medicare-administrative-contractors-macs/who-are-macs.

6. Q: When did the MACs assume responsibility for these types of reviews?

A: The MACs assumed responsibility for conducting patient status reviews on September 1, 2025. 

7. Q: What process will the MAC use to conduct these reviews? 

A: MACs will utilize the Targeted Probe and Educate (TPE) program to conduct Short Stay patient status reviews.  This program allows providers to benefit from one-on-one education, and when applicable, intra-probe education and intervention to correct easily curable errors. For more information on the TPE program, please see:  https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-and-education/targeted-probe-and-educate-tpe.

8. Q: What is the purpose of this type of MAC medical review and provider education? 

A: The purpose of this type of medical review activity is to determine the appropriateness of Part A payment for short stay hospital claims and, when warranted, offer provider education.

9. Q: What exactly has changed and what impact will there be on hospitals and beneficiaries? 

A: Hospital patient status review work has transitioned back to the MACs. This requires hospitals to incorporate internal changes to ensure requested medical records are submitted to the appropriate MAC rather than the BFCC-QIO. MACs will work closely with the provider community to ensure understanding of the appropriate processes that should be followed to ensure a seamless transition of this work.

There is no change in regulatory policies being applied to hospital patient status reviews. Transition of this work to the MACs will not impact CMS’ long-standing emphasis on the importance of a physician’s medical judgment in meeting the needs of Medicare beneficiaries. Therefore, we do not anticipate significant impact on hospitals or beneficiaries.

10. Q: Why did CMS make the decision to move reviews?

A: Transitioning this work to the MACs allows the BFCC-QIO to expand quality of care review efforts to other areas. Specifically, this change allows the BFCC-QIO program to focus its efforts on quality improvement initiatives including continuing its quality review work, expedited appeals determinations, and certain utilization reviews, such as provider-requested higher-weighted Diagnosis Related Group reviews and referral evaluations.

For more information about the BFCC-QIO program, see: https://www.cms.gov/medicare/quality/quality-improvement-organizations/family-centered-care.

11. Q: Will the BFCC-QIO still review any inpatient hospital claims?

A: The BFCC–QIO will continue to review post-payment inpatient hospital claims for higher weighted Diagnosis Related Groups, hospital discharge and service termination appeals, and quality of care concerns. The BFCC-QIO is statutorily required to determine the medical necessity of the admission (see Social Security Act, section 1154(a)(1)(A) and section 1862(a)(1) and (9)). While the BFCC-QIO will not specifically select short stay claims for the purpose of assessing compliance with the two-midnight rule, if the BFCC-QIO encounters a hospital short inpatient stay claim when reviewing for other reasons, the medical record will also be reviewed for compliance with the two-midnight rule. 

12. Q: How did CMS implement this change?

A: CMS developed a detailed transition plan with the BFCC-QIO and MAC organizations that included educational programs for our beneficiary and provider communities.

Industry stakeholders received additional education and training via Medicare Learning Network Matters newsletters, frequently asked questions, and MAC provider bulletin updates. CMS hosted a call with stakeholders in July 2025 to ensure there was an understanding of the TPE process and how to submit medical record documentation to the MACs. CMS and the MACs have also ensured that providers received the appropriate contact information to direct questions or concerns related to this transition.

Targeted Probe and Educate

1. Q: What is the MAC Targeted Probe and Educate (TPE) Program?

A. Inpatient short stay reviews will mirror the existing TPE process already familiar to Part A and B providers. When performing medical review as part of TPE, MACs focus on specific providers that bill a particular item or service rather than all providers billing a particular item or service. MACs will focus only on providers who have been identified through data analysis as being a potential risk to the Medicare trust fund and/or whose billing patterns vary significantly from their peers. TPE typically involves the review of 20-40 claims per provider, per item or service. In some instances, for providers with lower billing volumes, a smaller sample of claims may be requested. This is considered a round, and the provider has a total of up to three rounds of review. After each round, providers are offered individualized education based on the results of their reviews. Providers are also offered individualized education during a round when errors that can be easily resolved are identified. 

For more information on the MAC TPE Program see:  https://www.cms.gov/data-research/monitoring-programs/medicare-fee-service-compliance-programs/medical-review-and-education/targeted-probe-and-educate-tpe.

2. Q: Will every Hospital be reviewed under the TPE program?

A: No, as indicated above, the TPE program is a targeted review approach that focuses only on providers who have been identified through data analysis demonstrating aberrant billing patterns that indicate the need for review and education. 

3. Q: Will MACs review hospital patient status short stay claims on a prepayment (before payment is made) or on a post-payment (after the claim has been paid) basis?

A: MACs will generally conduct the reviews on a prepayment basis (per their usual TPE process). We note that prepayment review has historically been provider preferred (for financial predictability/to avoid returning previously received payment) and is additionally beneficial for patient status reviews as timeliness is essential for A/B rebilling (i.e., the process where providers who are denied Part A payment receive partial payment under Part B). 

4. Q: Can you provide a summary of the MAC TPE Program?

A: MAC TPE Program details are summarized below: 

5. Q: Will MACs reimburse providers for the submission of medical records to perform TPE for Short Stay Medical Review? 

A. MACs do not reimburse for photocopy/electronic record transfer costs for any provider in any setting. Consistent with current MAC practice for all other provider types, MACs will not reimburse providers for the cost of copying/transferring medical records.

6. Q: Will there be a claim rebuttal process?   

A: No, there is no formal rebuttal process within the TPE process; however, when MACs identify errors in the claim(s) that can be easily cured during the course of a provider’s probe reviews, they will offer the provider an opportunity to do so. Easily curable errors include, but are not limited to, missing documentation that can be resolved through the submission of additional documentation and missing signatures that can be resolved with a signature attestation. When the MAC identifies an easily curable error, the MAC will contact the provider to address the error and allow the provider to submit missing documentation, etc. This will help providers avoid denials and similar errors later in the process. CMS’ experience has shown this educational approach is well received by providers and helps to prevent future errors. 

In the event an error cannot be cured during the TPE process, providers and beneficiaries may exercise their appeal rights as described below.

7. Q: What appeals process will be used should a provider disagree with the MAC’s claim decision?

A. No changes to the current appeals process are anticipated. Once an initial claim determination is made, any party to that initial determination, such as beneficiaries, providers, and or their respective appointed representatives – has the right to appeal the Medicare coverage and payment decision. For more information on who is a party, see 42 CFR 405.906.

Section 1869 of the Social Security Act and 42 CFR part 405 subpart I describe the procedures for conducting appeals of claims in Original Medicare (Medicare Part A and Part B).

There are five levels in the Medicare Part A and Part B appeals process. The levels are:

• First Level of Appeal: Redetermination by a Medicare Administrative Contractor
• Second Level of Appeal: Reconsideration by a Qualified Independent Contractor
• Third Level of Appeal: Decision by the Office of Medicare Hearings and Appeals
• Fourth Level of Appeal: Review by the Medicare Appeals Council
• Fifth Level of Appeal: Judicial Review in Federal District Court

For more information on the Medicare appeals process please see: https://www.cms.gov/medicare/appeals-grievances/fee-for-service.

8. Q: Does the use of Occurrence Span Code (OSC) 72 exempt a claim from audit under this program? 

A: There is no formal submission requirement for hospital providers to include OSC 72 on claims for an inpatient stay.  MACs will evaluate the use of OSC 72 during their data analysis process; however, submission of OSC 72 would not exempt a claim from review. 

9. Q: Is there a specific Diagnosis-Related Group (DRG) or diagnosis that will be targeted for the short stay review, or will it    just be 20-40 claims, regardless of diagnosis or DRG?

A: Selection of claims is based on data analysis and assessment of varying provider billing patterns and utilization within the MAC Jurisdiction(s). 

10. Q: What is the acceptable error rate after the first round for the audit to be considered passed?

A: Each MAC determines the error rate threshold for their TPE program.  In some instances, the threshold may vary depending on the specific area under review. 

11. Q: How is the error rate calculated? Will there be categories like those previously used - Major, Moderate, and Minor offenders?

A: The Program Integrity Manual 100-8 Chapter 3, Section 3.7.1.1 provides error rate formulas. Various error rate thresholds/descriptors may be used by MACs based on outcomes and trends identified within the MAC jurisdiction. 

Billing

1. Q: Is there a process for situations that may be identified by the provider post billing that identifies the claim as an A/B rebill scenario before the ADR's due date to exclude the claim from the possible error rate? Or more specifically, what is CMS’s stance on this situation as the provider has self-identified?

A: MACs select claims for review based on service details reported on the initial claim. Providers should submit medical record documentation in response to the additional documentation request to the MAC for a final claim determination. Providers should not rebill or cancel claims until the initial claim has been reviewed and adjudicated by the MAC.

2. Q: If the inpatient claim is denied, can the hospital bill observation charges?

A: Yes, subject to timely filing requirements, 42 C.F.R. § 414.5 permits hospitals to bill under Medicare Part B for certain services when a MAC denies an inpatient Part A claim because the inpatient admission was deemed not reasonable and necessary.

3. Q: Since the hospice election replaces the patient’s Medicare Part A coverage, what happens if the hospital unknowingly bills Medicare Part A for a patient who is already under hospice care? Isn't this type of situation typically included in short stay reviews?

A: As a general rule, the Medicare claims system will identify beneficiaries that have elected hospice and will deny the claim to indicate services are not eligible since the patient elected to receive hospice services. Therefore, this claim type would not ordinarily be selected for patient status review.

Medical Record Review

1. Q: Has CMS made any changes to the hospital patient status review policy which MACs will use to make claims determinations?

A: No, the MACs will continue to follow regulatory guidance in accordance with 42 C.F.R. § 412.3. A general outline of the review policy and process has been updated to reflect that hospital patient status reviews will be performed by MACs, and a guideline outlining the MAC review determination process will be available in a future update of the Program Integrity Manual 100-8 Chapter 6 and in the exhibit section.   

2. Q: What type of MAC clinician reviewer will make the hospital patient status review determination on the claim? 

A: MAC hospital patient status reviews will be performed by Registered Nurses. However, MAC Medical Directors will serve as a readily available source of medical information to provide guidance in questionable claims review situations. As with all other Medicare claim types, MACs are not required to use physicians to review every inpatient hospital claim. 

3. Q: How will CMS ensure that MAC clinician determinations are consistent with CMS policy?

A: MACs are required to maintain a quality assurance program for all medical review program activities. CMS conducts special and regularly scheduled quality assurance activities to monitor the quality and accuracy of MAC medical review program activities and clinical determinations. 

4. Q. The BFCC-QIO does not currently utilize screening review tools during their hospital patient status reviews. Will the MACs use proprietary commercial screening tools to adjudicate these claims? 

A. As indicated in the Hospital OPPS Final Rule 1633-F, CMS does not mandate the use of such tools, nor is it necessary for a beneficiary to meet an inpatient “level of care,” as may be defined by a commercial screening tool, for Part A payment to be appropriate. 

MACs will not be using screening tools as part of their review. CMS expects MACs to evaluate hospital patient status documentation to ensure patient medical records provide detail of the patient’s condition and support the need for services to be provided in a hospital setting in accordance with 42 C.F.R. § 412.3(d). The MACs will rely on the documentation found in the medical record and their clinical expertise to determine if Part A payment is appropriate in accordance with CMS regulations.

5. Q: Are you able to provide the reason code and narrative that will be applied to the short stay probe reviews?

A: The Hospital Short Stay Reason Codes have been finalized and published to the web, https://www.cms.gov/data-research/computer-data-systems/esmd/reason-statements-and-document-emdr-codes.

6. Q: We frequently hear from Managed Care Organizations (MCOs) that care could be given in an observation setting despite that the patient was in house for two midnights and despite that the attending made the decision that that patient needed inpatient care. They base this on the fact that CMS allows observation for up to 48 hours. How will the MACs look at observation of 48 hours versus inpatient of 48 hours (spanning across two midnights) for the very same care and interventions?

A: MAC Patient Status Reviews are a targeted type of review that looks specifically at the appropriateness of the inpatient admission being submitted for payment to determine a hospital’s compliance with Medicare requirements for Part A payment, not whether observation care would be more appropriate. CMS Fee For Service MACs have been instructed to follow regulatory requirements found at 42 C.F.R. § 412.3, and Program Integrity Manual (PIM), Chapter 6 Section 6.5 - Medical Review of Inpatient Hospital Claims for Part A Payment, available at:  https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c06.pdf (PDF). MACs will follow the step-by-step review guidelines provided in PIM Exhibit 48.  MACs will be analyzing the key questions noted in the review guideline to determine compliance with Medicare requirements to bill for Medicare Part A payment. During this targeted type of review, MACs will not be basing decisions on the fact that CMS allows observation for up to 48 hours, since this situation is not applicable to the two-midnight rule. If you have specific questions regarding the Medicare managed care (e.g., Medicare Advantage) review processes, please contact the CMS Division of Medicare Advantage and Drug Error Rate at: DMADER@cms.hhs.gov.

7. Q: How will transfers from an emergency department (ED) be reviewed for a service that cannot be provided, but the total care takes less than two midnights? The transfer was for care that cannot be provided, but the overall length of stay was less than two midnights. How would that short stay be analyzed?

A: Medical review contractors would look at the reasonableness of the expectation at the time of admission, taking into account the time in the ED.  For more information on hospital to hospital transfers, please see Program Integrity Manual 100-08, Chapter 6, https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/pim83c06.pdf (PDF).

8. Q: When evaluating the “case-by-case” exception for inpatient admissions with a physician/qualified practitioner expectation of less than two midnights, do the MAC reviewers have the ability to say “no, we don’t agree. The severity of the signs and symptoms (risk) are not severe enough to warrant inpatient admission”?

A: Yes, MACs have statutory authority under the Social Security Act to review Medicare claims and can make denials when they believe the supporting information in the medical record does not justify claim payment according to Medicare payment policy. The medical reviewer’s clinical judgment would involve the synthesis of all submitted medical record information (for example, physician’s plan of care, progress notes, diagnostic findings, medications, nursing notes, and other supporting documentation) to make a medical review determination on whether the policy requirements have been met. In cases in which the MAC disagrees with the provider’s/qualified practitioner’s decision-making, CMS has asked the MACs to provide clear review rationale as to why they disagree with the admitting physician’s/qualified practitioner’s decision. If a provider/qualified practitioner disagrees with the MAC determination, the provider/qualified practitioner can exercise their appeal rights.

9. Q: What guidance has been given to the MACs that can be shared with providers so providers know how to apply the rules, as the MACs will apply them for “case-by-case” exceptions for inpatient admissions with a physician/qualified practitioner expectation of less than two midnights?

A: CMS has recently reminded the MACs of CMS’ longstanding policy that recognizes the important role of physician judgment and individual patient needs in the hospital admission decision-making process. CMS encourages providers to ensure that they clearly articulate their rationale for admission to assist reviewers in understanding why admission for inpatient care is appropriate despite an expected length of stay that is less than two midnights. In other words, the medical record should reflect exactly what the current medical needs and/or other complex medical factors are that the physician/qualified practitioner is concerned about that would justify a case-by-case exception to the two-midnight rule (i.e., that inpatient care is needed, despite an expected length of stay that is less than two midnights). 

CMS has also instructed the MACs to continue to follow other longstanding guidance that they review the reasonableness of the inpatient admission for the purposes of Part A payment based on the information known to the physician at the time of admission. We have informed the MACs that the expectation of time and the determination of the underlying need for inpatient care despite an expected length of stay that is less than two midnights should be supported by the patient’s complex medical factors such as history and comorbidities, the severity of signs and symptoms, current medical needs, and the risk of an adverse event. MACs will expect such factors to be documented in the medical record. The entire medical record may be reviewed to support or refute the reasonableness of the physician’s/qualified practitioner’s expectation, but entries after the point of the admission order are only used in the context of interpreting what the physician/qualified practitioner knew and expected at the time of admission. Additionally, we have provided guidance to MACs that comorbidities and other complex medical factors are to be considered in the context of their contribution to the need for hospital services.