Hospitals Sue HHS to Revoke Two-Midnight Rule

6957964_lA group of hospitals and hospital associations filed two related lawsuits in the U.S. District Court for the District of Columbia April 14 against the Department of Health and Human Services (HHS) challenging the agency’s controversial “two-midnight” rule. Plaintiffs in the suits are the American Hospital Association (AHA), the Greater New York Hospital Association, the Healthcare Association of New York State, New Jersey Hospital Association, and the Hospital & Healthcare Association of Pennsylvania. The hospital plaintiffs are Wake Forest University Baptist Medical Center and The Mount Sinai Hospital, as well as hospitals that are part of Banner Health and Einstein Healthcare Network. Under the 2014 Inpatient Prospective Payment System final rule, issued in August 2013, where a physician admits a patient with the assumption the stay will span at least two midnights, the admission will presumptively qualify as appropriate for payment under Medicare Part A. Conversely, admissions spanning less than that time period presumptively should have been provided on an outpatient basis under Medicare Part B. Accordingly, if a physician admits a patient who is not expected to stay until day three, and the hospital bills for that patient’s care under Medicare Part A, HHS will refuse to pay for that inpatient stay, which “will deprive hospitals of Medicare reimbursement for reasonable, medically necessary care they provide to patients,” the complaint said. The rule took effect October 1, 2013 but the Centers for Medicare & Medicaid Services delayed its full implementation through September 30, 2014. The recent “doc fix” legislation further extended the implementation delay through March 31, 2015. The plaintiff hospitals take issue “with the wholly arbitrary requirement that a physician must certify at the time of admission that a Medicare patient is expected to need care in the hospital for a period spanning two midnights to be considered an inpatient,” according to AHA. “The two-midnight rule undermines medical judgment and disregards the level of care needed to safely treat patients,” said Rich Umbdenstock, AHA’s president and chief executive officer. “Hospitals stand by a physician’s decision on what care is appropriate for each patient. The two-midnight rule is misguided and we feel confident the court will agree.” The lawsuits also argue the 0.2% payment cut in 2014 the agency implemented to offset the increased costs to the Medicare program from the two-midnight rule is arbitrary and should be revoked.

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