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Hospital observation services are meant to care for hospitalized patients with less severe conditions and the expectation of a short length of stay. In recent years, use of these services has increased and been highly variable; but it is often unclear whether they're appropriate for a particular patient. The Centers for Medicare & Medicaid Services' (CMS) most recent attempt to address this was a policy known as the "Two Midnight" Rule which states that observation care should be provided to patients expected to be in the hospital for fewer than two midnights. Nearly one year after its passage, the rule has yet to be implemented and criticism is abundant. As CMS begins to reform these policies, factors such as clinical needs, cost, and post-acute care needs should be considered to maximize the utility and quality of care while also minimizing the costs incurred by CMS, patients, and providers.
