CMS relents on payment cuts tied to the two-midnight rule

Light broke on hospital providers as CMS relented on payment cuts tied to the controversial two-midnight rule.

 

Instead of continuing a 0.2% pay cut for hospital services, CMS absolved the decrease and plans to issue a 0.8% increase to make up for the two-midnight cuts that have trimmed hospital reimbursement for the past three years, according to the 2017 hospital inpatient prospective payment system (IPPS) proposed rule released April 18.

 

Speaking to the previous rule that established the pay decrease, the agency stated that it "believes the assumptions underlying the -0.2 percent adjustment were reasonable at the time they were made," according to a proposed rule fact sheet.

 

Nonetheless, CMS will indeed amend its rates -- and do so retrospectively to account for the cumulative reductions in payment. "The impact of this proposal is to increase FY 2017 payments by approximately 0.8 percent," states CMS.

 

The two-midnight rule was issued in hopes of clarifying a patient's status -- that is, whether that patient was considered an inpatient or under observation care (PBN 8/24/15). Largely, the rule has sown confusion among providers.

 

Access the IPPS proposed rule fact sheet here.