CMS issues notice with comment period on 0.2% 'two-midnight' cut

The Centers for Medicare & Medicaid Services today issued a notice with comment period that discusses the basis for cutting hospitals’ inpatient payments by 0.2 percent in conjunction with its “two-midnight policy.” The notice comes in response to the court’s ruling in October in a consolidated challenge to the reduction that includes a case brought by the AHA, four hospital associations and four hospital organizations. The court ordered CMS to provide further justification and additional opportunity for hospitals to comment. The permanent, prospective cut was first included in the agency’s fiscal year 2014 inpatient prospective payment system final rule and took effect Oct. 1, 2013. “We do not believe this cut was or can be justified,” said Lawrence Hughes, AHA assistant general counsel. “However, we are evaluating the notice and will submit a robust critique to CMS as part of the comment process.” AHA members received a Special Bulletin with more information.