2-midnight rule offers 'incremental opportunity,' UHS CFO says

Steve Filton, CFO of King of Prussia, Pa.-based Universal Health Services, shares the cautious optimism on CMS' two-midnight rule as other for-profit CFOs. 

In 2024, Medicare Advantage plans must provide coverage for an inpatient admission when the admitting physician expects the patient to require hospital care for at least two midnights, otherwise known as the two-midnight rule. The rule was included in the 2014 Medicare inpatient prospective payment system final rule. In 2023, CMS clarified in its final rule that MA plans must also follow the two-midnight rule, its case-by-case exception and the inpatient-only list beginning in 2024.

Mr. Filton said on UHS' Feb. 28 earnings call that said the system has not included in its guidance a specific impact on how payers will use the two-midnight rule going forward, according to a call transcript from Seeking Alpha.  

"We believe there may be an incremental opportunity there, but I don’t think we necessarily feel it’s material until we really see the behavior on the part of the payers change," he said. 

Nashville, Tenn.-based HCA Healthcare's CFO, Bill Rutherford, said on his system's earnings call the rule should be "positive for us if it plays out as expected." 

Kevin Hammons, CFO of Franklin, Tenn.-based Community Health Systems, said on his system's earnings call that they "have yet to see any real change that's meaningful or measurable, but having said that, we do expect there to be some favorable movement into 2024."

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