On May 13, 2014, House Ways and Means Health Subcommittee Chairman Kevin Brady (R-TX) announced that the Subcommittee will hold a hearing on hospital issues facing Medicare providers, with an emphasis on the "Two-Midnight Rule," short inpatient stays, outpatient observation stays, audits and appeals. The hearing is scheduled for May 20, 2014, at 9:30 A.M. 

CMS established the Two-Midnight Rule as part of the Fiscal Year 2014 IPPS Final Rule in an effort to address improper hospital payments surrounding short inpatient stays, according to the Subcommittee’s announcement.  The announcement also notes challenges associated with implementation of the Two-Midnight Rule, as well as challenges related to the extensive backlog of Recovery Audit Contractor (RAC) appeals at the Administrative Law Judge level of the Medicare appeals process, and other issues of concern.  In addressing these issues, Chairman Brady stated, “We must work on a permanent solution.  We don’t want providers unnecessarily looking over their shoulders for auditors.  We want hospitals to be accurately reimbursed so that they can focus all of their time on providing the right type of care for patients.”

While oral testimony at the hearing will only be from invited witnesses, any individual or organization may submit a written statement for consideration by the Subcommittee and for the official hearing record.  Submissions are due by June 3, 2014.  Witnesses scheduled to testify include Sean Cavanaugh, Deputy Administrator and Director, Center of Medicare, CMS, and Ellen Evans, Corporate Medical Director of HealthDataInsights. 

In related news, on May 12, 2014, CMS formally announced that it will continue the Two-Midnight Rule Probe & Educate process through March 31, 2015, and will continue to prohibit RAC hospital inpatient status reviews for dates of admission between October 1, 2013 and March 31, 2015.  According to CMS's announcement, the extension is due to the passage of the Protecting Access to Medicare Act of 2014, signed by President Obama on April 1, 2014.

To view the hearing advisory, click here, and to view the official witness list, click here.  To read the CMS announcement, click here.