Hospital groups request immediate ruling in suit against two-midnight rule

The American Hospital Association (AHA) joined other hospital groups in a motion requesting an "immediate favorable ruling" in a lawsuit against the Centers for Medicare & Medicaid Services regarding the controversial two-midnight rule.

Four state hospital groups (representing Pennsylvania, New Jersey, New York State and Greater New York) and four health systems (Banner Health, Einstein Healthcare Network, Wake Forest and Mount Sinai) joined the AHA in the lawsuit, filed in U.S. District Court in April, as well as a related suit alleging that the rule "undoes decades of Medicare policy" and "unwisely permits the government to supplant treating physicians' judgment."

"CMS' 0.2 percent payment cut is based on the premise that a policy that makes it more difficult for a Medicare beneficiary to qualify as an inpatient will produce an increase in the number of inpatient cases," the AHA said in the motion. "That premise is both highly implausible and wholly unexplained. And the resulting policy is unlawful."

The court "can and should" throw out the reimbursement cut, the motion stated, and "order CMS to recalculate the Medicare [inpatient prospective payment system] amounts for federal fiscal year 2014 accordingly."

CMS, the motion stated, did not disclose calculations or assumptions in the proposed rule, leaving the plaintiffs unable to dispute the rule due to CMS' "failure to provide an opportunity for public comment." Moreover, it claims that CMS failed to explain the methodology behind the cut, making the proposal "arbitrary and capricious."

"Without affording hospitals any opportunity to weigh in or providing any plausible explanation for its choice, CMS has elected to take $220 million from the nation's hospitals," the motion concluded. "In doing so, it has violated both the Medicare Act and the APA [Administrative Procedure Act]." 

To learn more:
- read the motion (.pdf)

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