Becker's Hospital Review

34 In the News In its proposed rule released July 1, CMS announced plans to make modifica- tions to the controversial two-midnight rule. Under the two-midnight rule, CMS generally considers hospital stays of less than two midnights to be outpatient cases, while hospital admissions for stays spanning two midnights or longer are deemed appropriate. CMS' changes to the two-midnight rule were outlined in its 2016 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center Payment System proposed payment rule. Here are five things to know about the changes CMS has proposed for the two-midnight rule. Comments are accepted through Aug. 31. 1. Under the proposed rule, certain stays that are less than two midnights would be payable under Medicare Part A. According to the proposed rule, "An inpatient admission would be payable under Medicare Part A on a case- by-case basis based on the judgment of the admitting physician." 2. For hospital stays that are expected to span less than two-midnights to be payable under Medicare Part A, documentation in a patient's medical record must support that an inpatient admission is necessary. For an admission to be payable under Part A the documentation in the medical record must support either the admitting physician's reasonable expectation a patient will require hospital care spanning at least two midnights or the physician's determina- tion that the patient requires formal admission to the hospital on an inpatient basis. 3. In the proposed rule, CMS said it plans to "prioritize these types of cases for medical review." 4. CMS made no changes to its policy regarding hospital stays that are ex- pected to be two midnights or longer in the proposed rule. 5. CMS said it attempted to balance multiple goals in the proposed rule, in- cluding respecting the judgment of physicians and providing clear guidelines for hospitals and physicians. n CMS' Proposed Changes to Two-Midnight Rule: 5 Things to Know By Ayla Ellison H artford, Conn.-based health insurer Aet- na entered into a definitive agreement in early July to acquire all outstanding shares of Louisville, Ky.-based Humana in a deal valued at $37 billion. Here are five things to know about the transac- tion. 1. Under the deal, Humana stockholders will receive $125 in cash and 0.8375 Aetna common shares for each Humana share. 2. Aetna will finance the cash portion of the trans- action with a combination of cash on hand and by issuing about $16 billion of new term loans, debt and commercial paper. 3. e combined company will have more than 33 million medical members, based on memberships as of March 31. 4. e transaction is expected to close in the sec- ond half of 2016. Aetna will make Louisville, Ky., the headquarters for its Medicare, Medicaid and TRICARE businesses aer the deal closes. 5. Aetna Chairman and CEO Mark Bertolini will serve as chairman and CEO of the combined company. "We have great respect for Humana, their talented team, their culture and their strong medical management capabilities," said Mr. Ber- tolini. "We look forward to working with them following the closing, as we enhance our com- bined portfolio of innovative healthcare offerings to provide significant benefits to consumers, em- ployers and providers, and to continue delivering value for our shareholders." n Aetna's $37B Acquisition of Humana: 5 Things to Know By Ayla Ellison Anthem Strikes Deal to Buy Cigna for $54.2B: 5 Things to Know By Ayla Ellison A nthem entered into a definitive agree- ment to acquire rival health insurer Cigna in a cash and stock transaction valued at $54.2 billion. Here are five things to know about the transac- tion. 1. Under the deal, Cigna stockholders will re- ceive $103.40 cash and 0.5152 Anthem common shares for each Cigna share. 2. Once the deal is closed, Anthem will have more than $115 billion in pro forma annual rev- enues and will cover approximately 53 million medical members. 3. Joseph Swedish, president and CEO of An- them, will serve as chairman and CEO of the combined company. "We believe that this trans- action will allow us to enhance our competitive position and be better positioned to apply the insights and access of a broad network and dedi- cated local presence to the healthcare challenges of the increasingly diverse markets, member- ship and communities we serve," Mr. Swedish said. 4. David Cordani, president and CEO of Cigna, will take on the role of president and COO of the combined company. 5. e deal is expected to close in the second half of 2016. n

• Cover