Hospitals are preparing a legal and legislative blitz on the “two-midnight rule.”
A few hospitals and systems, including Banner Health in Arizona, have laid the groundwork for legal action against the policy, which the CMS included in a payment rule for 2014. On Jan. 28, the American Hospital Association will convene a panel on Capitol Hill with leaders from Johns Hopkins Hospital, the Cleveland Clinic and the Mayo Clinic, who will explain how the rule weighs on their admissions decisions.
The policy directs Medicare's contractors to assume admissions are reasonable for patients who stay in a hospital through two midnights. Shorter stays are presumed legitimate if coded as outpatient observation. The agency developed the policy in response to a rise in observation stays, which expose patients to higher out-of-pocket costs.
Hospitals themselves had been asking for clarity on the issue so they could better defend their admissions to Medicare's auditors. The AHA, though, concluded that the policy—in the words of a letter supporting legislation to delay it—“undermines the judgment of physicians and disregards the level of care actually needed.” The hospitals also oppose a 0.2% cut to hospital reimbursement that the CMS imposed to pay for an expected $220 million increase in inpatient expenditures.
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