CMS Announces Two-Midnight Payment Cut Commentary Period
“When the patient walks in the door, you can’t have a crystal ball and know how long the patient will be there."
By - A notice and accompanying commentary period released yesterday from The Centers for Medicare & Medicaid Services (CMS) examines the core issue behind slashing hospital inpatient payments by 0.2 percent.
This financial cut is tied to a “two-midnight policy,” a rule which has been associated with a great deal of recent activity. According to this rule, if inpatient rates for treatment do not cover the timespan of two midnights, hospitals do not receive Medicare reimbursement.
“We do not believe this cut was or can be justified,” said Lawrence Hughes, Assistant General Counsel at the American Hospital Association, yesterday to AHA News. “However, we are evaluating the notice and will submit a robust critique to CMS as part of the comment process.”
Considering the two-midnight rule's past
Says AHA News, CMS’s notice is an answer to a court ruling last October involving the American Hospital Association (AHA), 4 hospital associations, and 4 hospital organizations.
“CMS violated the APA six ways to Sunday here. The remedy the statute and this Circuit imposes for those violations is vacatur. Fair is as fair does,” states the hospital parties’ court brief.
“If CMS wishes to impose a payment cut on the hospitals for a future fiscal year, it can promulgate a proposed rule that would do that for a future year; and if it can both explain why an across-the-board rate cut is consistent with the statute and adequately supported by evidence, then it can impose that cut.”
“But CMS does not get another opportunity now to impose a rate cut for 2014. To hold otherwise would permit CMS to flout the APA with total impunity, to the detriment of every hospital, knowing that if it is called out for its violations on appeal, the agency will get a costless and leisurely do-over. That would be unfair.”
Last August, CMS extended partial enforcement delay of the two-midnight policy to the end of December.
The American Hospital Association along with 8 other plaintiffs sued the Department of Health and Human Services (HHS) in 2014 regarding CMS’s decision to deny reimbursements if a patient was admitted for less than 3 days.
Other complaints disputed facets of the Administrative Procedure Act (APA), including Medicare Part B reimbursement for outpatient services.
According to the plaintiffs, hospitals were being denied rightful reimbursement and were heavily burdened with administrative and procedural tasks as a result.
Hospitals have openly spoken out over the past year or two about how flaws within the “two-midnight” rule are detrimental to patient admittance.
“When the patient walks in the door, you can’t have a crystal ball and know how long the patient will be there,” said Amy Deutschendorf, MS, R.N., Senior Director of Utilization and Clinical Resource Management at Johns Hopkins Health System.
“Patients either need the services that only a hospital can provide, or they don’t. If they need to be in a bed overnight, and we need that time to take care of them, it should be an admission."
