Robert Menendez

US Senator for New Jersey
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Menendez, Fischer Introduce Bill to Address Problems with “Two Midnight Rule”

March 6, 2014

WASHINGTON, DC – U.S. Senators Robert Menendez (D-NJ) and Deb Fisher (R-NE) introduced the Two-Midnight Rule Coordination and Improvement Act of 2014 (S. 2082), a bipartisan bill to address the ongoing issues surrounding the so-called “two midnight rule” issued last year by the Center for Medicare and Medicaid Services (CMS) by establishing new guidelines for CMS.

“While I understand CMS’s intent in establishing the two midnight rule, there are some fundamental issues with the rule that still need to be addressed,” said Senator Menendez. "This common-sense, bipartisan legislation will ensure an open, collaborative and transparent process is in place to address these issues and ultimately ensure physicians are able to determine the best course of action for their patients." 

“The two midnight rule creates administrative and financial challenges for too many hospitals in Nebraska. The result is wasted time and resources to comply with this misguided regulation,” said Senator Fischer. “The red tape is especially burdensome for rural hospitals, which are key to providing critical care and job opportunities for countless communities across Nebraska. I’m pleased to work with Senator Menendez to offer this reasonable, bipartisan measure to help prevent another instance of the federal government coming in between patients and their doctors. Importantly, our bill also provides CMS with needed time to develop an alternative system that helps, and doesn't hinder, the ability of these hospitals to provide care to the patients they treat.”

Under this new rule, which was finalized as part of the fiscal year 2014 Inpatient Prospective Payment System final rule in August, 2014, a Medicare beneficiary is automatically deemed to be an inpatient if their hospital stay spans more than two consecutive midnights.  While this approach addresses some longstanding issues for beneficiaries requiring longer hospital stays, it fails to acknowledge instances where it is medically necessary for a beneficiary to receive inpatient services for a period spanning less than two midnights.  

The rigid approach currently taken by this rule could lead to instances where a physician is unable to make the proper medical determination for a beneficiary’s treatment.  Almost immediately after CMS finalized the rule it became clear it was inherently flawed and the rule’s enforcement has been delayed on three separate occasions.  The current enforcement delay, announced on January 30, 2014, is in effect through September 30, 2014. 

The Two-Midnight Rule Coordination and Improvement Act seeks to resolve these issue by establishing new guidelines for CMS, in consolation with hospitals, physicians and other experts, to establish criteria and payment methodologies applicable to beneficiaries in need of short inpatient stays.  Further, to ensure that hospitals are not subjected to potentially onerous audits while these criteria are being developed, the legislation codifies the enforcement delays CMS has already imposed.

What Others Are Saying About the Two Midnight Rule Coordination and Improvement Act S. 2082:

  • New Jersey Hospital Association
    "I applaud Senator Menendez's strong leadership on CMS' two-midnight policy.  This critically important legislation will provide CMS and the hospital industry the time and tools to develop a common sense policy that will protect Medicare beneficiaries” said Betsy Ryan, president and CEO of the New Jersey hospital association.
  • Nebraska Hospital Association
    “The Nebraska Hospital Association (NHA) appreciates Senator Fischer's leadership and efforts to address CMS' flawed ‘two-midnight’ policy,” said  Laura Redoutey, President of the Nebraska Hospital Association. "Excessive and harmful CMS policies, such as the ‘two-midnight’ policy, undermine hospitals' ability to care for the residents of Nebraska. The NHA supports the Two-Midnight Rule Coordination and Improvement Act of 2014."
  • Greater New York Hospital Association
    “The Menendez-Fischer bill will help correct a deeply misguided policy that harms hospitals financially and reduces protections and benefits for Medicare patients," said Greater New York Hospital Association President Kenneth E. Raske. "Equally important, the bill would require the development of a more sensible payment methodology for short inpatient hospital stays. Senators Menendez and Fischer should be applauded for his leadership on this issue.”
  • American Hospital Association
    “The AHA strongly supports this important legislation, which will delay enforcement of the so-called two-midnight policy,” said Rick Pollack, executive vice president of the American Hospital Association. “This policy is bad news for seniors as it undermines medical judgment of physicians. The bill also calls on the agency to develop an acceptable long-term payment solution.”
  • America’s Essential Hospitals
    “It’s vitally important that we get this policy right so that we don’t inadvertently destabilize hospitals that care for the vulnerable and serve as cornerstones in their communities,” said Bruce Siegel, MD, MPH, president and CEO of America’s Essential Hospitals. "We appreciate the efforts of Sens. Menendez and Fisher. They suggest a sensible approach to this issue and we look forward to working with Congress and the administration to work out the details.”
  • AAMC
    "The AAMC applauds Senators Menendez and Fischer's commitment to addressing serious concerns with the CMS two midnight rule,” said Atul Grover, M.D., Ph.D.,  AAMC Chief Public Policy Officer. “The bipartisan Two-Midnight Rule Coordination and Improvement Act takes important steps to ensure patients maintain access to critical inpatient care, including in our nation's teaching hospitals. The AAMC supports this legislation and looks forward to working with Congress to ensure all patients receive the care they need.”  

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