Somebody had to do it—sue HHS to overturn the much-maligned two-midnight rule.  So, yesterday the American Hospital Association, joined by several other high-profile hospital organizations, filed a lawsuit against HHS Secretary Katherine Sebelius (no wonder she’s resigning) to prevent enforcement of the two-midnight rule.  And while at the courthouse, they also sued to invalidate the 0.2% across-the-board cut imposed by CMS to offset what it says will be increased hospital stays resulting from the two-midnight rule.

The plaintiffs argue that the rule promotes bad patient care because it makes inpatient status depend on the judgment of the physician at the time of patient intake, when often a final decision cannot and should not be made at that point.  It also says that the two-midnight requirement is at odds with custom, sound medical practice and law because it effectively redefines “inpatient” as “three-day” (i.e., midnight day one, midnight day two, day three).

The suit also attacks the one-year time limit on Part B payment requests submitted after Recovery Audit Contractors disallow inpatient stays.  When a RAC auditor disallows an inpatient stay, the hospital is nearly always entitled to a Part B payment for outpatient treatment.  But the RAC auditors never evenbegin an audit until over a year after the fact.  So, a limit of one year from time of treatment effectively means that a hospital won’t ever be paid the Part B payment it’s entitled to.

The case is AHA et. al. v. Sebelius, D.D.C., Case 1:14-cv-00609.