The American Hospital Association filed two lawsuits in the US District Court for the District of Columbia regarding the “two-midnight” rule employed by Medicare. This rule requires a physician to determine, on the day of admission, that the patient will need more than two nights of inpatient care before Medicare will pay for the stay under Medicare Part A benefits. If that determination is not made, Medicare Recovery Auditors will classify the stay "for observation." Under observation status, hospitals are reimbursed under Medicare Part B, which leaves the patient with a 20% co-pay.
The suits allege that the rule undermines the medical judgment of a physician and does not allow him or her to provide for an independent plan of care for the patient.
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