BNA’s Health Care Daily Report™ sets the standard for reliable, high-intensity coverage of breaking health care news, covering all major legal, policy, industry, and consumer developments in a...
Feb. 3 — The CMS still hasn't established a rational and lawful basis for its decision to implement a controversial reimbursement policy that cut inpatient Medicare payments, the largest hospital industry group told the agency Feb. 2.
A court-ordered explanation for the cut from the Centers for Medicare & Medicaid Services failed to disclose key data and methodological assumptions about the payment changes, the American Hospital Association (AHA) said.
Moreover, the methodology provided in the explanation is “fraught with problems that lead to an unreasonable calculation of financial impact,” another hospital industry group, the Federation of American Hospitals, said Feb. 2.
In a December notice (80 Fed. Reg. 75,107), the CMS sought comments on the methodology that cut Medicare Part A inpatient hospital reimbursement by 0.2 percent as part of its original two-midnight payment policy .
Comments (CMS–1658–NC) were due Feb. 2.
The CMS adopted the two-midnight rule for admissions beginning on or after Oct. 1, 2013. Under the policy, Medicare Part A payment is generally not appropriate for hospital stays not expected to span at least two midnights. When the CMS implemented the two-midnight policy, it also established a 0.2 percent pay cut for inpatient payment. The CMS assumed the two-midnight policy would lead to an estimated $220 million in additional reimbursements for inpatient stays in fiscal 2014, the CMS said in 2013.
However, a federal district court in September said the CMS didn't adequately explain the reasoning for the 0.2 percent pay cut in 2013, and it ordered the agency to explain its rationale for slashing inpatient reimbursements (Shands Jacksonville Med. Ctr. v. Burwell, 2015 BL 305589, D.D.C., No. 1:14-cv-00263-RDM, 9/21/15). Separately, the CMS, in a late October final rule, said it was changing how it reviews short stays, as part of the calendar year 2016 hospital outpatient prospective payment system rule.
The continued absence of a full and transparent explanation of the data the agency used to justify the cut renders the 0.2 percent reduction unfounded, the AHA said. Moreover, actual inpatient claims data demonstrate that predictions that inpatient admissions would increase under the two-midnight policy haven't materialized, according to the group.
This reality “provides further evidence of the lack of a reasoned basis to impose the 0.2 percent reduction,” the AHA told the CMS.
“Consequently, we believe strongly that the agency must reverse its 0.2 percent reduction in full,” the AHA said, adding that inpatient payment rates for fiscal 2014 and subsequent years “must be revised accordingly, and hospitals should be reimbursed for the shortfall in Medicare payments they received for hospital discharges on or after Oct. 1, 2013 that resulted from the CMS' unlawful imposition of the 0.2 percent payment reduction.”
To contact the reporter on this story: Michael D. Williamson in Washington at email@example.com
To contact the editor responsible for this story: Brent Bierman at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)