A federal judge has directed the Department of Health and Human Services to provide further explanation for why it proposed a 0.2% hospital payment reduction as part of its controversial two-midnight rule, according to news reports. The reduction was intended to offset increased revenue that HHS said hospitals would receive as they shifted outpatient care to inpatient care under the proposal.
The court ruling does not alter the two-midnight rule, which has not yet been implemented, or eliminate the proposed payment reductions. It simply requires the agency to provide justification for the reductions and consider public comments in response.
HHS proposed the two-midnight rule in 2013, requiring hospital stays that spanned less than two midnights to be billed under outpatient payment rules, rather than inpatient.