Court grants CMS more time for final notice regarding 0.2% 'two-midnight' cut

The U.S. District Court for the District of Columbia has granted the Centers for Medicare & Medicaid Services’ request to delay the issuing of a final notice justifying cutting inpatient prospective payment system payments by 0.2% in conjunction with its two-midnight policy. CMS now has until April 27 to issue the notice, which was originally due March 18. The cut was first included in the agency’s fiscal year 2014 IPPS final rule and took effect Oct. 1, 2013. In October 2015, a federal court rejected CMS’s arguments that it met all of the procedural legal requirements for rulemaking when it imposed the 0.2% cut, and ordered the agency to publish additional justification for the reduction and allow further opportunity for hospital comments. The order came in response to a consolidated federal case that includes a lawsuit brought by AHA, four hospital associations and four hospital organizations. CMS issued its revised justification Dec. 1 and accepted comment through Feb. 2. In response, AHA urged CMS to fully reverse the 0.2% reduction, revise inpatient PPS base payment rates accordingly and reimburse hospitals for the resulting Medicare payment shortfall for discharges beginning Oct. 1, 2013.