Additional guidance on change to inpatient status determination for elective procedures effective February 1, 2026

On November 24, 2025, Blue Cross and Blue Shield of North Carolina (Blue Cross NC) issued a provider notice regarding a change in how inpatient status is approved for elective procedures for Medicare Advantage (MA) and Dual Eligible Special Needs Plan (D-SNP) products beginning February 1, 2026. Included below is additional guidance on this upcoming change.

What is changing (effective February 1, 2026)

Effective February 1, 2026, Blue Cross NC will no longer require pre-approval of inpatient status for elective procedures under our MA and D-SNP products, except for procedures designated as Inpatient Only by the Centers for Medicare & Medicaid Services (CMS).

What this means for providers

Blue Cross NC will continue to authorize the procedure itself when clinically appropriate. The patient’s status (inpatient vs. outpatient/observation) will be validated concurrently or determined after the procedure based on clinical documentation:

• Expected or actual medical necessity
• Consideration of complex medical factors documented in the medical record

Blue Cross NC follows general coverage and benefit conditions under Original Medicare unless superseded by Medicare Advantage requirements. This includes CMS payment criteria for inpatient admissions at 42CFR 412.3, such as the Two-Midnight benchmark (412.3(d)(1)).

Why it matters

This update streamlines processes and ensures consistency with CMS’ policy for Medicare Advantage plans. This supports case-by-case decisions based on actual medical necessity.

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Does Blue Cross NC follow the Two-Midnight rule/benchmark?

Yes. We comply with general coverage and benefit conditions under Original Medicare laws, including payment criteria for inpatient admissions at 42 CFR §412.3.

Does Blue Cross NC follow the Two-Midnight presumption?No. The “Two-Midnight presumption” is a medical review instruction given to Medicare fee-for-service contractors to guide selection of claims for medical necessity review. CMS has confirmed the Two-Midnight presumption does not apply to Medicare Advantage plans.

Does this mean all elective surgeries will be outpatient?

• No. Status is not predetermined and is not site-based. It depends on:

  • Patients’ medical necessity and/or associated medical factors as documented in the clinical record.
  • Physician documentation validated by Blue Cross NC utilization management.

What about inpatient-only (IPO) codes?

• If a code remains IPO, we will authorize inpatient as required by CMS.

If a patient has an outpatient (OP) authorization but is admitted inpatient, what happens?

• Admission notification is still required.
• Our utilization management team will review and validate the condition and medical status of the member as documented in the clinical records.

Will inpatient authorizations be automatically issued before surgery?

• No. Initially, we will authorize the procedure only.
• If the patient requires the admission to be at an inpatient level of care, documentation to support the clinical requirement will be necessary for medical necessity review by Blue Cross NC utilization management.
• Providers should submit admission notification and clinicals promptly (ideally within 24 hours) or within the next business day in accordance with the Blue Cross NC Provider Manual.

We are committed to ensuring our MA and D-SNP members receive care that is clinically appropriate and consistent with CMS policy. By collaborating with our provider partners, we are streamlining processes and keeping our focus on delivering high-quality care for our members.