The notice was issued in response to a court ruling that required HHS to provide further justification for the payment cut and to take steps to fix notice and comment flaws.
“We do not believe this cut was or can be justified,” said Lawrence Hughes, American Hospital Association assistant general counsel. “However, we are evaluating the notice and will submit a robust critique to CMS as part of the comment process.”
Under the two-midnight rule, which was introduced in the 2014 Inpatient Prospective Payment System rule, CMS generally considers hospital stays of less than two midnights to be outpatient cases, while hospital admissions for stays spanning two midnights or longer are deemed appropriate.
Expecting a decline in the number of long observation stays and an increase in the number of inpatient admissions, CMS proposed offsetting the cost through a 0.2 percent reduction in inpatient payments. Hospitals strongly disagreed with the proposed cut and brought a lawsuit claiming HHS violated the Administrative Procedure Act by not providing adequate notice or a meaningful opportunity to comment on the payment reduction.
The comment period on the rule will remain open until Feb. 2, 2016.
More articles on healthcare finance:
OSU Wexner’s operating margin cut in half on CFO’s recommendation
8 hospital CFOs in the headlines
Duke University Health, UNC Health Care end fiscal year on high note: 9 things to know
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.