CMS Backs Down on Two-Midnight Rule

23835693_lUnitedHealth will drop most of its Obamacare business, and Wal-Mart just waded into the prescription drug pricing debate. But first: A victory for providers in CMS’s latest inpatient payment proposal.

CMS BACKS DOWN ON TWO-MIDNIGHT RULE — The much-derided, much-delayed provision was set to have major implications for hospital reimbursement; instead, CMS on Monday said it will permanently remove the policy’s negative payment effects for the current as well as the past two fiscal years by adjusting the FY 2017 payment rates.

What CMS is proposing instead: That hospitals provide Medicare beneficiaries with a special notice if the patient has been receiving observation services as an outpatient for more than 24 hours.

Providers’ reaction: Relief. The industry applauded CMS’s switch, saying it was long overdue.

— Premier’s Blair Childs: “Members of the Premier healthcare alliance are extremely pleased that CMS finally saw the light and proposed to terminate their flawed Two Midnight payment cut.”

But organizations were unhappy about other changes put forth in Monday’s inpatient prospective payment proposal — including several cuts.

— American Hospital Association’s Rick Pollack: “While a cut in the hospital update factor was mandated by law in 2012, CMS’s proposal is significantly larger than Congress indicated and the hospital field anticipated. Congress was clear in its passage of physician payment reform last year that this cut should be 0.8%, but CMS ignored this directive and almost doubled the reduction.”

CONGRESS TO CMS: DELAY THE STAR RATINGS — More than half of Congress is asking CMS to delay the looming release of the agency’s star ratings, which are designed to identify hospitals that have high patient quality and experience.

On Monday, 225 House representatives co-signed a letter to CMS Acting Administrator Andy Slavitt, asking him to hold off on issuing the ratings this month; last week, 60 senators signed onto a similar letter.

— Lawmakers’ complaint: “We are concerned that the hospital star ratings, in their current form, may be unfairly masking quality or, possibly, over-weighting of patient experience measures and will therefore not help consumers make well-informed decisions about which hospitals to use,” the representatives warn.


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