Skip to main content
Sister Publication Links
  • ESG: THE IMPLEMENTATION IMPERATIVE
Subscribe
  • Sign Up Free
  • Login
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Digital Health
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Transformation
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Unwell in America
  • Opinion
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Excellence in Governance
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Diversity in Healthcare
      • - Luminaries
      • - Top 25 Diversity Leaders
      • - Leaders to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Digital Health Transformation Summit
    • ESG: The Implementation Imperative Summit
    • Leadership Symposium
    • Social Determinants of Health Symposium
    • Women Leaders in Healthcare Conference
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Diversity Leaders Gala
    • Top 25 Women Leaders Gala
    • - Hospital of the Future
    • - Value Based Care
    • - Hospital at Home
    • - Workplace of the Future
    • - Digital Health
    • - Future of Staffing
    • - Hospital of the Future (Fall)
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
  • Data Center
    • Data Center Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Providers
November 16, 2017 12:00 AM

CMS offers more cash to hospitals hit by two-midnight rule

Virgil Dickson
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Hospitals harmed under the CMS' controversial two-midnight rule will receive a boost to their discharge payments over the next year, which could amount to millions of dollars in additional funds.

    The CMS posted a notice on its website that instructed Medicare administrative contractors to give hospitals additional reimbursement on every discharge from June 1, 2017, to May 31, 2018. The exact amount was not specified in the notice.

    The notice, dated Nov. 9, applies to 67 hospitals including some operated by Oakwood Healthcare and Dignity Health, which recently settled litigation over the two-midnight rule.

    Some hospitals receiving the payment boost will benefit more than others, according to Dr. Chris Stanley, director of the consulting firm Navigant and former head of population health at Catholic Health Initiatives. That's because the volume of Medicare inpatient admissions may have changed since the two-midnight rule was first implemented.

    "Facilities that have grown their Medicare admissions will have an advantage, while those that have decreased in this time will not make up for lost revenue," Stanley said.

    Under the two-midnight rule, the CMS directed federal auditors to consider short-term hospital stays as inpatient admissions if they span two midnights, even though they otherwise should have been billed as an outpatient observation visit.

    The rule was a response to a surge in observation claims that the CMS attributed to hospitals trying to avoid having their claims challenged by Medicare's auditors. The agency expected the policy to yield an increase in inpatient claims, and the 0.2% rate reduction is intended to offset the estimated $220 million a year in additional costs to the program.

    The rule was ultimately scrapped last year after several lawsuits claimed that the HHS overstepped its authority when it drafted the policy.

    The CMS' inflation announcement confused some providers, since hospitals collectively got a 0.6% raise in the fiscal 2017 inpatient pay rule to make up for the 0.2% reduction to the rates under the two-midnight rule over the prior three fiscal years.

    "This settlement and adjustment is baffling," said Dr. Ronald Hirsch, a vice president at R1 Physician Advisory Services, a consulting firm on billing matters for providers. "It appears to be a way to make the lawsuits go away rather than indicating that the 0.6% payment boost in 2017 was actually inadequate to compensate hospitals for the three years of 0.2% reductions."

    A CMS spokesman declined to comment on the notice as the agency continues to face litigation over the rule.

    The MAC notice is meant to compensate these hospitals for inflation interest in costs of care that occurred over the three years it was in place according to Lori Rubin, senior counsel and litigation lawyer with Foley & Lardner.

    Rubin represents hundreds of hospitals that are in active litigation with HHS over the two-midnight rule rate reduction. More of these inflation interest notices will likely be released she said.

    In addition, there are still active cases in which hospitals contend that the 0.6% raise last year and an offer to reimburse for inflation won't reimburse them fully for their lost payments under the two-midnight rule.

    "For hospitals that have not yet settled, we're still hoping to get them more than interest," Rubin said.

    Correction: A prior version of the story incorrectly stated the amount of inflation interest to be paid to hospitals. This error has been corrected.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    373837936 (1).jpg
    New guidelines aim to limit trans healthcare at Catholic hospitals
    InDepth: Private Equity
    Legal questions surround private equity-backed Noble Health
    Most Popular
    1
    More healthcare organizations at risk of credit default, Moody's says
    2
    Centene fills out senior executive team with new president, COO
    3
    SCAN, CareOregon plan to merge into the HealthRight Group
    4
    Blue Cross Blue Shield of Michigan unveils big push that lets physicians take on risk, reap rewards
    5
    Bright Health weighs reverse stock split as delisting looms
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Digital Health
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Unwell in America
    • Opinion
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Excellence in Governance
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Diversity in Healthcare
          • - Luminaries
          • - Top 25 Diversity Leaders
          • - Leaders to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • Data Center
      • Data Center Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing