CHA News Article

AHA Lawsuits Challenge Two-Midnight Rule

The American Hospital Association (AHA) filed two lawsuits yesterday challenging the Centers for Medicare & Medicaid Services (CMS) two-midnight rule on inpatient admissions, and a 0.2 percent Medicare payment cut associated with the rule. The first suit states the two-midnight rule burdens hospitals with arbitrary standards and documentation requirements and deprives them of Medicare reimbursement. In the suit, AHA contends the rule’s requirement that a physician determine at the time of admission that a patient is expected to stay two midnights is arbitrary and capricious and therefore invalid under federal law and regulation.

The lawsuit also claims it is arbitrary for CMS to apply a one-year time limit from the date of care to requests for outpatient payment when inpatient payment is denied by a Recovery Audit Contractor, and to require — in direct contradiction of Medicare law — a written physician order for every inpatient stay as a condition of Medicare payment. The second lawsuit challenges CMS’ decision to cut Medicare reimbursement rates by 0.2 percent across the board in response to alleged increased costs from the two-midnight rule. AHA was joined in the lawsuit by the Greater New York Hospital Association, the Healthcare Association of New York State, New Jersey Hospital Association and the Hospital & Healthcare Association of Pennsylvania, as well as a number of individual hospitals and health systems. Both complaints are attached.