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Two-Midnights Rule Spells Grim Financial Forecast for Hospitals
Health Leaders Media

A gloomy Moody’s Investors Service sector comment on the controversial two-midnights rule for inpatient admissions came as little surprise last week to hospital finance executives, but federal officials say the negative impact on healthcare providers is overstated.

The comment, released Wednesday, predicts the “reimbursement difference between inpatient and outpatient cases will decrease profits” at hospitals, with the average revenue reduction per affected case set at $3,000 to $4,000. “Previously, inpatient status was largely determined by medical necessity,” Moody’s wrote. “We expect the rule change will weaken hospital operating profitability in calendar year 2014 because it will lower Medicare reimbursement for these cases.”