AHA Files Suit Against HHS Over "Two-Midnight" Rule

The American Hospital Association filed two lawsuits Monday against the two-midnight rule and was joined in its suit by several state hospital associations and individual hospitals.

“The two-midnight rule undermines medical judgment and disregards the level of care needed to safely treat patients,” said Richard Umbdenstock, president and CEO of the AHA, in a release announcing the lawsuits. “Hospitals stand by a physician's decision on what care is appropriate for each patient. The two-midnight rule is misguided and we feel confident the court will agree.”

“The hospitals take issue with the wholly arbitrary requirement that a physician must certify at the time of admission that a Medicare patient is expected to need care in the hospital for a period spanning two midnights to be considered an inpatient,” the release also said.

The doc-fix bill recently approved by Congress included a six-month extension before compliance would be enforced for the two-midnight rule. AHA apparently plans to use that time contesting it in court.

The existing two-midnight rule says admitting physicians must have good reason to believe that a patient will need two nights in the hospital before Medicare will pay full inpatient rates under Part A for the stay. Lacking such documentation, Medicare auditors will generally classify the stay as outpatient observation, which pays hospitals much less under Part B and sticks the patient with a 20% co-payment. That rule went into effect Oct. 1. But it was modified so that Medicare's aggressive recovery audit contractors could not overturn claims under the new policy until Sept. 30, 2014.

The enacted legislation requires Medicare to extend that recovery-auditing moratorium until March 31, 2015. It also gives Medicare officials the discretion to extend what's known as the “probe and educate” process until the same date next year. Under that process, a different set of companies, known as Medicare administrative contractors, can audit a small number of short-stay inpatient claims and train hospitals on how to submit more accurate bills. 

Read the article in Modern Healthcare (requires a free subscription).  

HHS Secretary Kathleen Sebelius Resigns, OMB Director Sylvia Mathews Burwell to Step In

Health and Human Services Secretary Kathleen Sebelius announced her resignation Friday, ending a tumultuous tenure as the public face of the Affordable Care Act. In a Rose Garden ceremony, President Obama nominated his budget director as her successor.

According to federal health officials, Sebelius approached Obama in early March and told him that, with the insurance enrollment period ending that month, the time had come for new leadership at HHS. A White House official, who spoke on the condition of anonymity to discuss internal deliberations, said Sebelius told the president that “she felt confident in the trajectory for enrollment and implementation of the Affordable Care Act.”

Obama on Friday nominated Office of Management and Budget Director Sylvia Mathews Burwell to take Sebelius’s place. Although Burwell does not have an extensive background in healthcare policy, she is known for her strong management skills and has experience in issues of poverty and global health issues from her time at the Bill and Melinda Gates Foundation. Moreover, she is popular on Capitol Hill. The Senate confirmed her as OMB director 96 to 0 almost exactly a year ago. Her nomination to lead HHS will require Senate confirmation as well. Read the full article in The Washington Post.