IPPS Proposed Rule Pinches Hospitals

Christopher Cheney, for HealthLeaders Media , May 7, 2014

Two-Midnight Rule
The proposed IPPS rules are more about staying the course than breaking new ground, several observers say.

"It's 1,700 pages of a pretty boring rule," Eric Hammelman, VP of data analytics at DC-based Avalere Health, said Friday.

Anyone expecting CMS to chart a new course on its so-called "two-midnight rule" for hospital admissions is surely disappointed. Under the rule CMS set last summer, patients who stay at a hospital for a period of time spanning less than two midnights are generally considered appropriate for payment at outpatient rates under Medicare Part B. Inpatient hospital stays are reimbursed at the higher Medicare Part A rate.

Hospital Execs Hope for Two-Midnight Rule Repeal

In its proposal, CMS invites providers to offer exceptions to the two-midnight rule via email for inclusion on a list of procedures that are automatically designated for inpatient payment. But there is no new guidance on the rule.

"They didn't change any of the regulations," Paul Clark, a supervisor at Wolters Kluwer's Health Reform KnowlEDGE Center, said Thursday. "They just repeated guidance that RACs are at bay until March 2015."

Medicare recovery audit contractors are the biggest two-midnight rule losers for now, he says. "[Contractors] are not going to be making as much money. They are not happy."

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2 comments on "IPPS Proposed Rule Pinches Hospitals"

BJ Reed, RN, BA (7/7/2014 at 3:18 PM)
I just retired from working in Hospitals and Long Term Care for over 50 years (Yes, before CMS even existed). I have also been on the receiving end of care. It's sad that these struggles about cost-shifting often result in the patient getting the short end of the stick financially and from the perspective of quality of care received.

Ronald Hirsch (5/7/2014 at 12:11 PM)
It is amazing how many so-called experts misunderstand the two midnight rule. The rule makes sense; it is the payment for services that used to be inpatient and are now outpatient that has everyone's panties in a bunch. Ask CMS to address the payment disparities but do not rescind the rule or ask for more exceptions.




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