CMS shelves two-midnight rule again

The two-midnight rule is yet again on ice.

The Centers for Medicare & Medicaid Services has put off implementation of the controversial rule for six months, Greater New York Hospital Association (GNYHA) President Kenneth Raske told Capital New York.

CMS was supposed to implement the rule on March 31, but has now delayed it until Oct. 1. It is the third time CMS delayed implementation of the rule. 

Under the auspices of the two-midnight rule, Medicare would only pay hospitals at inpatient rates when patients are admitted for two consecutive midnights.

The change was made to dispel confusion about how to handle short-stay patients, whose treatment often triggered audits from Recovery Audit Contractors (RACs), prompting many hospitals to keep them in observation care. CMS ordered RACs last fall to stop undertaking short-stay audits for any admission that spanned beyond two midnights. But hospitals say the loss of discretion in such matters could cost them as much as $2 billion a year in reimbursement.

The New York City Health and Hospital Corp., which operates 11 facilities within the city's five boroughs, estimates it would lose as much as $38 million a year in inpatient revenue.

Hospital associations, such as GNYHA and the American Hospital Association (AHA), have been lobbying to have the rule repealed, arguing that it is arbitrary and would hurt their autonomy and operations. The AHA, along with the GNYHA and Mount Sinai Health system, have begun mounting a legal challenge that is expected to eventually litigate the matter in federal court.

"This is welcome news," Raske said in a letter to the group's members, according to Capital New York. "The fact remains, however, that the two-midnight policy still stands...We will continue to vigorously oppose the two-midnight policy and seek to overturn it through both legislation and the judicial process."

To learn more:
- read the Capital New York article