Providers Blast CMS on Two-Midnight Rule

Christopher Cheney, for HealthLeaders Media , July 1, 2014

Alternate Points on Time
While CMS officials show no sign of bending or breaking the two-midnight standard in their proposed Medicare payment rules for 2015, they have invited suggestions on creating a "short stay payment" (SSP) policy that would presumably supplement or supplant the two-midnight standard.

In their June 26 comment letter to CMS, American Hospital Association officials called on the federal agency to adopt an SSP that would build a more rational and effective approach to short hospital stays:

"The AHA strongly believes that CMS must appropriately and adequately reimburse hospitals for the care they provide. The existing two-midnight policy fails to meet this standard for medically necessary inpatient stays that span less than two midnights," the national hospital association officials wrote. "However, we believe that a short-stay payment policy, which would supplement the existing two-midnight policy, could reimburse hospitals more accurately for the resources they use to treat beneficiaries during these short stays."

The Michigan Health and Hospital Association is also encouraging CMS to adopt a new SSP policy, with deliberate speed. "If the CMS elects to implement a SSP, we urge the CMS to allow hospitals adequate time to comply," the Michigan officials wrote to the federal agency. "As a result, we recommend that CMS implement the SSP policy for FY 2016."

The Michigan group offers these specific recommendations for developing an SSP policy:

  • Payment rates would be higher than Medicare outpatient rates but lower than inpatient rates.
  • Payments rates for surgical cases should reflect that most costs are incurred in Day 1 of services.
  • The SSP would not apply to the list of short-stay procedures that automatically qualify for Medicare A payment.
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