AHA Responds to House Bill Concerning RACs and Two-Midnight Rule

King & Spalding

In a December 18, 2014 letter to U.S. Representative Kevin Brady, the American Hospital Association (AHA) voiced its opinion on a discussion draft of the Hospital Improvements for Payment Act of 2014 (HIP). The House Ways and Means Subcommittee on Health announced Representative Brady’s unveiling of HIP in November 2014. According to the subcommittee, HIP “address[es] the problems associated with Medicare’s two-midnights policy, short inpatient stays, outpatient observation stays, auditing, and appeals” and “retains the needed oversight of auditors while offering reforms to the RAC process and appeals.” 

Summarizing its views on the discussion draft, AHA stated in its letter that it agrees with HIP’s proposed “repeal of the 0.2 percent payment reduction associated with the two-midnight policy; the continued enforcement delay of the two-midnight policy for an additional six months and the more limited enforcement delay until fiscal year 2020; and a transition period for developing a short-stay payment solution.” Nevertheless, AHA emphasized that HIP’s “proposed short-stay payment solution is complex, confusing and administratively burdensome” and that “the proposed reforms of the [RAC] program fall far short of what will be necessary to reduce excessive and inappropriate denials by RACs and alleviate the administrative and financial burden the RAC program imposes on hospitals and the administrative appeals process.”

View a copy of AHA’s letter by clicking here and a copy of the discussion draft of HIP by clicking here.

Reporter, Ramsey Prather, Atlanta, + 1 404 572 4624, rprather@kslaw.com.

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