This year is bringing even more changes for Medicare Advantage (MA) plans. One of the predominant adjustments is that MA plans will now follow the two-midnight rule. This means members’ hospital stays will be covered if their physician expects they will require inpatient care for two or more midnights. This rule has been in place for traditional Medicare plans since 2014, but it has just become effective for MA plans starting this year.

The two-midnight rule has never been used to determine whether or not someone can be admitted to hospitals. However, organizations that offer MA plans may still evaluate medical necessity for inpatient care based on the complexity of a patient’s medical needs. This will not only assist with managing demand for services but also ensure that insurance reimbursement is valid.

Due to the timing of these updates and increased inpatient service utilization, it’s likely that over 20% of MA members will be affected by this rule. It’s still early in the year, and not all claims have been settled, so it’s difficult to discern how exactly this rule will influence payer behavior. It’s recommended that executives look toward year-end data when the time comes for information on the precise impact this rule has had in 2024.

In the meantime, health plans and provider networks alike can make changes to maximize their efficiency during this period of transition:


  1. Health plans that offer MA might want to recruit nurses, therapists, and other health care clinicians to assist with medical necessity evaluations. By having a skilled eye performing chart reviews and supporting documentation, insurers can better manage costs along with overall service utilization.
  2. Some health plans are opting to make provisions to their bids in preparation for the changes they will see. This aims to decrease the amount of appeals due to unclear verbiage.
  3. Health systems and provider networks as a whole are urged to use electronic medical records (EMRs) and other technology to identify patient risk factors for readmission. This will help reduce service utilization stemming from repeat admissions.
  4. Organizations should double-check their protocols for medication reconciliation to help prevent unnecessary hospital admissions. If none are in place, ensure everyone across the provider network is dedicating resources to developing workflows in this area.