Aetna’s New ‘Level of Severity Inpatient Payment Policy’ and the Two-midnight Rule

Aetna’s New ‘Level of Severity Inpatient Payment Policy’ and the Two-midnight Rule Policy raises questions as it appears to override federal law and may violate state contract laws Commercial health plans typically require contracting health care providers to comply with the health plans’ policies. Such policies may include procedures and timelines for seeking prior authorization, submitting medical bills, and appealing denials or underpayments. Some plans, however, take their policies further. What happens when a plan policy purports to override federal law? What if the policy changes the basic reimbursement terms of the contract? A recent policy announced by Aetna — slated to take effect Jan. 1, 2026 — raises these questions in the context of inpatient reimbursement for Medicare Advantage members.