DC court hears arguments in 0.2% payment cut case

The District of Columbia federal court today heard arguments on respective motions for summary judgment in consolidated cases challenging the Centers for Medicare & Medicaid Services’ 0.2% offset related to the two-midnight requirements, including a case brought by the AHA, four hospital associations and four hospital organizations. Cate Stetson of Hogan Lovells, counsel for the AHA and the associations and hospitals, explained the many reasons why CMS’s imposition of the 0.2% reduction violates the legal requirements for rulemaking under the Administrative Procedure Act, including, for example, CMS’s failure to reveal and explain certain critical assumptions made by its actuaries in determining the need for and level of the reduction. The government counsel in response suggested that those legal requirements were met because hospitals were informed about the high-level assumptions CMS considered in imposing the offset, and that the final reduction resulted from an analysis that was “self-evident.” The court did not issue any decision as a result of argument today but instead requested that all parties submit supplemental briefs addressing some issues related to legal remedies.