The Medicare Payment Advisory Commission (MedPAC), recently issued its June Report to Congress.  Echoing the comments of the healthcare community, MedPAC recommended that CMS rescind its Two-Midnight Rule.

As a reminder, CMS implemented the Two-Midnight Rule in the FY 2014 IPPS Rulemaking. There are three main elements to the Rule:

  1. Amended the definition of “inpatient” to mean an admitted patient who is expected to require a minimum stay spanning two midnights.
  2. Implemented a new policy on when a hospital can request – and receive – payment if a patient is improperly classified under the Rule as an inpatient, versus an outpatient.
  3. Implemented a requirement that there be a written physician order for every inpatient admission.

Not surprisingly, the Two-Midnight Rule has been controversial, and its enforcement has been delayed by both CMS and Congress.  Multiple pending cases are also challenging aspects of the Two-Midnight Rule.  As a result, MedPAC’s recommendation may be the final straw to pressure CMS to rescind the Rule.

Even if CMS rescinds the Two- Midnight Rule, providers should, at a minimum, remember to protest the 0.2% reduction to the standardized amount that CMS instituted in FY 2014 to finance the implementation of the Rule.  (In addition to the 0.2% reduction, providers can also protest the reimbursement amount lost as a result of complying with the Rule.)  A refresher on the cost report appeals process for both self-disallowance and late NPRs is available here.

It’s not too late to challenge the 0.2% reduction for FY 2014!