Hospitals Move Forward With Two-Midnight Rule Challenge

A group of hospital associations and systems has initiated the process of challenging CMS' new two-midnight rule and related policies, according to an AHA News report. 

Wake Forest Baptist Medical Center in Winston-Salem, N.C., The Mount Sinai Hospital in New York City, and hospitals that are part of Phoenix-based Banner Health and Philadelphia-based Einstein Healthcare Network have filed appeals asking the Provider Reimbursement Review Board to expedite judicial review of the hospitals' claims the two-midnight rule's 0.2 percent pay cut for hospitals in fiscal year 2014 is unlawful, according to the report.

The hospitals allege CMS offered no reasonable explanation for the reimbursement reduction and didn't comply with the Administrative Procedure Act’s requirements for proper notice and comment. They also claim the pay cut was not codified in regulation in accordance with the law, according to the report.

The two-midnight rule is a new regulation that was included in the 2014 Medicare inpatient prospective payment system final rule. CMS' final rule on inpatient rates for fiscal year 2014 included a 0.2 percentage point reimbursement reduction to offset the effect of the agency's inpatient admission and medical review criteria. Overall, factoring in the initial market basket update and other reductions, hospitals reimbursed through the inpatient prospective payment system will see a 0.7 percent rate increase this year.

The two-midnight rule generally considers inpatient admissions spanning two midnights as qualifying for payment under Medicare Part A. According to the regulation, stays lasting less than two midnights must be treated and billed as outpatient services. To assess compliance, Medicare administrative contractors will carry out prepayment patient status reviews for claims that span less than two midnights and have dates of admission on or after Oct. 1, 2013, and before March 31, 2014. Medicare contractors won't conduct post-payment patient status reviews for claims during that same period.

Hospitals have criticized the two-midnight rule since its release. The American Hospital Association has said the policy is unclear and undermines the medical judgment of physicians.

More Articles on the Two-Midnight Rule:
Blog Shows Flow Chart for Two-Midnight Rule
3 Key Medicare RAC Issues for Hospitals
House Introduces Bill to Delay Two-Midnight Rule 

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