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Two-midnight rule challenged

January 24, 2014

With the support of the AHA and the Greater New York, New York state, New Jersey and Pennsylvania hospital associations, four hospital systems Jan. 22 took the first steps to bringing a federal court challenge to the Centers for Medicare & Medicaid Services’ (CMS) twomidnight rule for admisson and medical review criteria. Hospitals that are part of Banner Health (AZ), Einstein Healthcare Network (PA) and Wake Forest University Baptist Medical Center (NC) and The Mount Sinai Hospital (NY) filed appeals asking the Provider Reimbursement Review Board (PRRB) to grant expedited judicial review for the hospitals’ claims that the rule’s 0.2% cut in Medicare inpatient payments is unlawful. The PRRB is responsible for making decisions regarding provider appeals on Medicare reimbursement issues. The hospitals contend that the cut is arbitrary and capricious because CMS relied on indefensible assumptions and offered no reasoned explanation for them. They also argue that it fails to comply with “Administrative Procedure Act’s” requirements for proper notice and comment and was not codified in regulation as the law requires.