Hospital Execs Hope for Two-Midnight Rule Repeal

, April 28, 2014

The two-midnight rule is arbitrary, hurts healthcare providers, and creates unintended consequences for patients, say many healthcare leaders. A new lawsuit from the AHA aims to repeal the rule.

Healthcare finance executives who fear the financial fallout from the controversial two-midnight rule received a new ray of hope recently when the American Hospital Association and a coalition of its members filed a lawsuit against the Department of Health and Human Services to repeal the rule.

Many hospital leaders are concerned about the rule's potential impact on their organization's reimbursements because it states that if a patient is in the hospital for a stay that does not span at least two midnights, "the services are generally inappropriate for payment under Medicare Part A, regardless of the hour the patient came to the hospital or whether the patient used a bed."

According to the rule, providers will be reimbursed under Medicare Part B unless a patient is hospitalized for two midnights or more. Medicare patients on observation status are also typically responsible for a 20% copay and do not receive coverage for some medications administered in the hospital or for post-acute care, which adds to collection challenges for providers.


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