- More than 50 hospitals across the U.S. have filed a lawsuit against the Department of Health and Human Services over the two-midnight rule, which would reduce inpatient services compensation by 0.2%.
- This latest lawsuit is, at least, the fourth regarding the issue, with previous ones including one filed by the American Hospital Association (AHA) and more than 100 hospitals, as previously reported by Healthcare Dive.
- The controversial pay reduction was implemented to offset an estimated $220 million in additional costs every year to Medicare. Hospitals dispute that estimate and called HHS' rule "arbitrary and capricious" according to Modern Healthcare.
There were additional lawsuits filed over the past few months: Six Ohio hospitals filed against HHS in November, and more than 30 hospitals filed a similar lawsuit in October. CMS provided a final rule in November without accepting any counterproposals to the two-midnight policy.
A federal judge ruled in the AHA case in September 2015 the HHS secretary must provide better justification for the pay cut and reopen that provision of the two-midnight rule to comments. In response, CMS issued a notice and request for comments in December 2015 but stood firm on the payment reduction. The agency said it does "not propose to reconsider this reduction" in light of its analysis of historical inpatient and outpatient admissions data, according to Modern Healthcare. CMS has to accept comments and publish another notice by March 18.
Hospitals filing a lawsuit must first present their grievances before the federal Provider Reimbursement Review Board, which has said it is unable to rule on the issue because it doesn't have the authority to invalidate a HHS regulation, said Don Romano, an attorney with Foley & Lardner - the firm representing hospitals in this latest lawsuit.
Despite the fact these lawsuits make the same arguments, hospitals continue to file more legal challenges to help ensure if they do win in court or with CMS they will gain some benefits. "Each year that CMS keeps the payment cut in place, the more lawsuits there will probably be," Romano told Modern Healthcare.