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Washington Highlights

Bipartisan Senate Legislation Introduced to Delay CMS “Two Midnight” Rule

March 7, 2014—AAMC President and CEO Darrell G. Kirch, M.D., sent a March 6 letter  to Sens. Robert Menendez (D-N.J.) and Deb Fischer (R-Neb.) thanking them for introducing bipartisan legislation to delay enforcement of the Centers for Medicare and Medicaid Services’ (CMS) “two midnight” rule so that appropriate criteria of medically necessary short inpatient hospital stays may be developed.

CMS finalized the “two midnight” rule, which establishes new rules regarding how short hospital stays will be paid under Medicare, as part of the fiscal year (FY) 2014 Medicare inpatient prospective payment system (IPPS) final rule [see Washington Highlights, Aug. 9].

According to the new standard, effective Oct. 1, 2013, hospital stays lasting “two midnights” or longer can continue to be billed as typical Medicare Part A inpatient care. However, the new rule requires, with a few limited exceptions, hospital stays that are shorter than “two midnights” to be categorized as outpatient care and billed under Medicare Part B.

The Two-Midnight Rule Coordination and Improvement Act of 2014 (S. 2082) would delay enforcement of the Medicare “two midnight” rule until Oct. 1, 2014, require CMS to develop new criteria and payment methodology to account for medical necessity and appropriateness of short hospital stays, and instruct CMS to consult with interested stakeholders regarding newly developed methodology.

The legislation further requires the Health and Human Services Secretary to develop general equivalency maps referred to as “cross-walks” after two years of enactment that would link ICD-10 codes to relevant CPT codes to permit comparisons of inpatient and outpatient department services.

The bill is similar to the Two-Midnight Rule Delay Act of 2013 (H.R. 3698), bipartisan legislation introduced in the House in Dec. 2013 [see Washington Highlights, Dec. 20].

CMS Jan. 31 issued additional guidance and delayed enforcement of the “two midnight” through Sept. 30, 2014.


Len Marquez
Director, Government Relations
Telephone: 202-862-6281

Courtney Summers
Senior Legislative Analyst
Telephone: 202-862-6042


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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Jason Kleinman
Sr. Legislative Analyst, Govt. Relations
Telephone: 202-903-0806