“Two-midnight” rule halted by congressional action


At the agencies

The Centers for Medicare and Medicaid Services (CMS) announced on August 12 that it would be further delaying enforcement of the so-called “two-midnight” rule. Enforcement of this rule, which creates a presumption that a patient who stays for at least two midnights is inpatient for the purposes of Medicare Part A payments, had been temporarily halted by congressional action, with review scheduled to resume October 1, 2015. With this additional delay, recovery audit contractors may not conduct patient stay reviews pertaining to the two midnight rule until the extended moratorium expires on January 1, 2016.

On August 13, CMS announced that the next phase of its bundled payment initiative has begun.  According to the announcement over 2,100 facilities and providers are participating in this next phase. This new bundled pay initiative directly ties quality care and cost cutting with the Medicare payments these facilities and providers will receive. Under the program, participants will receive lump payments for entire episodes of care. This program is part of CMS’s plan to move 30 percent of Medicare payments to these alternative payment models by 2016.

A report from the Government Accountability Office (GAO) claims that pharmaceutical fraud throughout the Medicaid program is a real problem. The report, released August 10, points to “doctor shopping,” as a main concern. In the report, “doctor shopping” refers to patients who have prescriptions from five or more physicians for antipsychotic or respiratory medications.  The report found that state oversight of Medicaid pharmaceuticals is inadequate and as such the GAO recommended that states be required to report the specific controls they have in place to prevent such fraud.

On August 11, the Department of Health and Human Services (HHS) announced that it will provide $169 million to 266 community health centers nationwide. According to HHS the funding will expand care to 1.2 million people. Community health centers in 46 states, DC, and Puerto Rico will receive the funds. This is in addition to the $101 million HHS awarded to community health centers in May.


In the courts

On August 13, HHS Office of the Inspector General (OIG) issued an advisory opinion which explained that, since a home health provider’s introductory visits do not economically benefit beneficiaries or negatively impact taxpayers, these complimentary visits do not constitute kickbacks. An anonymous home health agency had been providing free initial visits to individuals once those patients selected them from a group of potential providers. During these visits, the agency would introduce their employees and services to the patients, but no claims were filed with Medicare or Medicaid. Since patients had already selected this home health agency before they received a free visit, the OIG explained that this does not serve to tempt potential patients to the provider, and therefore does not violate the Anti-Kickback Statute.

On August 14, the District of Columbia Circuit Court of Appeals ruled against a group of 41 New England hospitals who argued that HHS Secretary Sylvia Burwell’s 2005 calculation of the hospital wage index was unreasonable. In the case of Anna Jacques Hospital et al. v. Burwell, several multi-campus hospitals had their reimbursements negatively impacted when Secretary Burwell changed the geographic boundaries which are used to compute the wage index, as their campuses then straddled different regions. This ruling affirmed the ruling of a lower court, which was that Secretary Burwell’s actions in this matter were consistent with prior administration treatment of multi-campus hospital groups and therefore reasonable.

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