The factors to be considered when deciding whether to admit a patient according to the Medicare guidelines and the two-midnight rule are discussed. The role of the Quality Improvement Organizations (QIOs) is to review inpatient admissions and decide whether or not the admission was medically necessary. The role of a hospital’s utilization management (UM) processes is to assist physicians in determining inpatient admission or not. The Milliman Care Guidelines and Interqual are guidelines that can be used to help the physician to decide if a patient needs to be admitted, although use of these guidelines is not mandated by the Centers for Medicare and Medicaid (CMS). When hospital internal review determines that an admission does not meet inpatient criteria then code 44 may be used. The criteria to be met when using code 44 are outlined. Specific examples are used to illustrate these processes.