- The American Heart Association (AHA) and several other organizations filed a lawsuit challenging the 0.2% reduction to hospital inpatient payments proposed by CMS in conjunction with the two-midnight rule.
- The rule required physicians to make “medically necessary” inpatient admissions. The patient’s treatment would need to require at least a two-night hospital stay.
- The plaintiffs claimed HHS did not provide adequate notice or meaningful opportunity to comment on the payment reduction and therefore, violated the Administrative Procedure Act.
- U.S District Court Judge Randolph Moss said in his opinion there were "substantial" flaws, according to Becker's Hospital CFO.
- Rather than throwing the rule out, Judge Moss asked HHS to provide further justification for the pay cut and to fix the notice and comment issues. All parties were ordered by the judge to propose a timetable by Oct. 1 for reissuing the rule.
"This was not a case where the agency simply failed to provide sufficient detail in its explanation for its action or failed to address a discrete comment," Judge Moss wrote in his opinion. "Rather, the secretary omitted 'critical material on which it relie[d],' and thus 'deprive[d] commenters of a right...to participate in rulemaking.'"
If CMS does not meet the required Oct. 1 timetable, the court noted the payment cut may be set aside. The ruling does not change the two-midnight rule or the payment reduction for now, according to Modern Healthcare.