News: Federal court rules CMS unlawfully imposed negative 0.2% 2-midnight rule cut

A federal judge, finding in favor of hospitals, rejected CMS’s arguments that it met all legal requirements for rulemaking when the organization cut hospital inpatient payments by 0.2% in conjunction with its 2-midnight policy, according to a statement issued by the American Hospital Association.

Judge Randolph Moss found that CMS violated the Administrative Procedure Act, which governs the way federal administrative agencies may propose and establish regulations, adding that CMS must provide further justification and additional opportunities for hospitals to provide feedback.

According to the statement, Moss ordered all parties involved to propose a new timetable for reissuing the rule, which will be due no later than Oct. 1. If CMS fails to comply, the court noted that the payment cut may be "set aside.”