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Hospitals challenge observational case designation

Pittsburgh Business Times, April 22, 2014
Finally, some pushback against hospital visits that insurers categorize as an observation case rather than admission, costing hospitals a bundle in recent years. The American Hospital Association has filed two related lawsuits against the Department of Health and Human Services to challenge the government's "two-midnight" admission rule. Effective this year, the stay of two consecutive midnights constitutes a hospital admission rather than an observation case. The federal standard is used by private insurers. But the standard is arbitrary, according to AHA, which deprives hospitals full Medicare reimbursement for providing care.