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CCAGW Opposes Bill to Delay Two-Midnight Rule Enforcement



For Immediate Release Contact: Alexandra Booze 202-467-5318
December 19,2013 Leslie K. Paige 202-467-5300

(Washington, D.C.) – Today, the Council for Citizens Against Government Waste (CCAGW) voiced its strong opposition to H.R. 3698, the Two-Midnight Rule Delay Act of 2013, introduced by Rep. Jim Gerlach (R-Pa.) on December 11, 2013.  The legislation delays enforcement of Medicare’s two-midnight rule for reimbursement of short inpatient hospital admissions from March 31, 2014 to October 2014. 


The bill is a direct assault on the most successful Medicare oversight tool taxpayers have ever had: recovery auditing contractors (RAC), which have clawed back $4.8 billion since 2009 in improper payments to hospitals, a significant portion of which were related to improperly billed in-patient hospital stays.  A Department of Health and Human Services fiscal year (FY) 2013 Agency Financial Report, released on December 16, showed that improper payments by Medicare rose to $49.9 billion in 2013 from $44.3 billion in 2012. 


This misguided legislation is backed by six original co-sponsors, Reps. Michael Burgess (R-Texas), Joseph Crowley (D-N.Y.), Lynn Jenkins (R-Kan.), Ron Kind (D-Wis.), Tom Reed (R-N.Y.), and Peter Roskam (R-Ill.).  It would cost the fiscally unstable Medciare Trust Fund $2 billion, according to the Congressional Budget Office (CBO). 


The new two midnight rule, which was adopted by CMS in late 2013, included a grace period through March 31, 2014 to supposedly help hospitals learn adjust to the new regulations.  CMS also suspended RAC audits until the end of March, which grants hospitals a green light to bill improperly for short-stay patients until that date.  If H.R. 3698 is enacted, claims through the end of October will never be reviewed.  Given the CBO estimate of a $2 billion cost for the legislation and the report from HHS showing that improper payments are increasing, Rep. Gerlach’s proposal is puzzling.


“It is hard to fathom why any member of Congress would further damage the fiscal stability of Medicare,” said CCAGW President Tom Schatz.  “H.R. 3698 both directs CMS officials to turn a blind eye to improper payments that hospitals have known about for years and weakens Medicare oversight.  A rare victory in the war on government waste will be tarnished if H.R. 3698 is enacted.” 


The Council for Citizens Against Government Waste is the lobbying arm of Citizens Against Government Waste, the nation’s largest nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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