Hundreds of hospitals join fight with HHS over 'two-midnight' rule

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More than 200 hospitals have filed new lawsuits in the ongoing battle between providers and the Department of Health and Human Services over its controversial “two-midnight” rule.

The new suits, filed on Thursday, are the latest in a series of challenges from hospitals who oppose the rule's 0.2% reduction of inpatient compensation. The earlier legal challenges led to HHS killing the payment cut in April for fiscal year 2017, and temporarily increasing payment rates.

Both lawsuits, filed by a total of 211 hospitals, allege the agency violated federal regulations when it implemented the pay cuts and did not take hospital's concerns into accounts.

“Despite the concerns raised by commenters in the rulemaking process, [HHS Secretary Sylvia Burwell] completely ignored these comments,” one of the suits reads. “She instead continued to implement her 0.2% reduction to [inpatient prospective payment systems] payment rates for FFY 2015 without engaging in any reasoned analysis.”

The hospitals ask that HHS retract the rule, and reimburse providers for funds they lost as a result.

The two-midnight rule requires a Medicare beneficiary to be in a hospital for “two midnights” before their stay is considered an inpatient admission — a benchmark necessary to qualify for Medicare coverage of subsequent skilled nursing care. The rule and its inpatient cuts were estimated to cut hospital payments by $220 million each year.