The American Hospital Association (AHA) has asked the Centers for Medicare & Medicaid Services (CMS) to delay enforcement of its controversial two-midnight policy until Oct. 1, 2015, or until the agency develops and implements a short-stay payment policy, whichever comes later.
In a letter to Sean Cavanaugh, deputy administrator and director of CMS, Linda E. Fishman, AHA’s senior vice president for public policy, analysis, and development, stated that “the two-midnight rule results in inadequate reimbursement to hospitals for beneficiaries who require an inpatient level of care, but who stay in the hospital less than two midnights.”
The two-midnight rule was intended to give hospitals guidance on what constitutes an inpatient admission and what is outpatient with observation services, but instead has caused confusion and controversy and even prompted the U.S. Congress to intervene.
In the spring of 2014, as part of a bill to stave off cuts to Medicare physician payments, Congress delayed post-payment audits of the two-midnight rule until March 31, 2015, to give CMS time to issue guidance on the rule and to develop a payment system for short stays.
In the Inpatient Prospective Payment System proposed rule for fiscal 2014, CMS said it was looking for ways to identify short stays and alternatives for paying for short stays, but it didn’t put forth a proposal in the final rule and, so far, has not issued further guidance on the two-midnight rule or announced a policy to address short-stay patients who need inpatient services but don’t need to be in the hospital over two midnights.