Various hospitals and hospital associations are challenging CMS' two-midnight rule and a related Medicare payment offset in federal court.
The hospitals and hospital groups claim the two-midnight rule — under which inpatient admissions must span at least two midnights to qualify for Medicare Part A payments — is "arbitrary" and "capricious." Their complaint states the rule "unwisely permits the government to supplant treating physicians' judgment." A separate but related complaint also filed in federal court opposes CMS' decision to reduce Medicare reimbursement rates because of increased costs resulting from the two-midnight rule.
The plaintiffs for both complaints include the American Hospital Association, Phoenix-based Banner Health, Mount Sinai Hospital in New York City, Philadelphia-based Albert Einstein Healthcare Network, Wake Forest University Baptist Medical Center in Winston-Salem, N.C., the Greater New York Hospital Association, Healthcare Association of New York State, the New Jersey Hospital Association and The Hospital & Healthsystem Association of Pennsylvania.
The two-midnight rule was established by the 2014 Medicare inpatient prospective payment rule. According to the policy, inpatient stays lasting fewer than two midnights must be treated and billed as outpatient services. CMS introduced the policy to better monitor Medicare reimbursement for short inpatient stays and ensure inpatient admissions are medically necessary.
Hospital leaders, physicians and healthcare groups have fiercely opposed the rule, saying it is unclear and undermines the medical judgment of physicians. Enforcement of the rule was previously scheduled to begin this October, but it will be delayed by six months under legislation President Barack Obama signed into law earlier this month.
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