Dive Brief:
- The federal rule requiring doctors to certify that a patient needs two overnight stays to get Medicare coverage for inpatient care—"the two-midnight rule"—is causing consumer and hospital groups to attack CMS.
- Because of this new rule, which can impose large charges on consumers in hospital under observational status, CMS is being sued by consumer group the Center for Medicare Advocacy.
- Hospitals, for their part, sued HHS in April, arguing that the two-midnight rule was arbitrary and took away doctors' ability to make appropriate medical decisions.
Dive Insight:
CMS has said that it adopted the rule after auditors found many patients being admitted needlessly, and points to early data suggesting that the number of lengthy outpatient stays is down since the rule took effect. But despite CMS' tough stance on the issue, it's not clear how effective the two-midnight rule has been at saving money, according to the Center for Medicare Advocacy.
On the other hand, experts note, hospitals will have to better balance the use of inpatient vs. outpatient care going forward, whether in response to these rules or other restrictions. With the ACA instituting ongoing measures to lower the cost of healthcare, hospitals will need to develop new mechanisms to cope with inpatient payment limits. This will be quite difficult for hospitals, many of whom face excessive bed vacancy rates, but it seems inevitable nonetheless.