Hospitals mount challenge to two-midnight rule

The American Hospital Association and a variety of its members have begun the first steps in taking legal action against the Centers for Medicare & Medicaid Services' two-midnight rule regarding patient admissions, as well as cuts to the Inpatient Prospective Payment System, AHA News Now  reported.

The provider community has been grumbling about CMS' decision behind the rulemaking and the reimbursement cuts. The hospitals allege that the federal agency hasn't provided a reasonable explanation for the action and failed to follow regulations regarding proper notice and comment.

CMS issued the two-midnight rule last year in order to clarify criteria for hospitals to make the transition from observation to inpatient care in the case of short stays. Under the new rule, hospitals must admit patients as inpatients for at least two consecutive midnights in order to get beyond the short-stay threshold, a red flag for auditors. As part of the two-midnight rule, CMS has ordered Recovery Audit Contractors not to review any short-stay claims that span beyond two midnights for both acute care and critical access hospitals. The rule went into effect last October.

However, CMS also set a 0.2 percent rate cut to offset the cost of reviews required to ensure hospitals are meeting the threshold.

State hospital associations representing inpatient providers in New York, New Jersey and Pennsylvania and several hospitals also joined AHA in the legal action, filing an appeal with the Provider Reimbursement Review Board and asking it to turn over the decision to the federal courts. The hospitals involved in the appeal include Arizona-based Banner Health, the Mount Sinai Hospital in New York, the Einstein Healthcare Network in Philadelphia and Wake Forest University Baptist Medical Center in North Carolina. According to the claim, the PRRB does not have the legal power to provide the hospitals with relief.

To learn more:
- read the AHA News Now article

 

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