January 28, 2014

The Honorable Joseph Crowley
United States House of Representatives
1436 Longworth House Office Building
Washington, D.C. 20515
Via facsimile: (202) 225-1909

The Honorable Jim Gerlach
United States House of Representatives
2442 Rayburn House Office Building
Washington, D.C. 20515
Via facsimile: (202) 225-8440

Re: Two-Midnight Rule Delay Act (H.R. 3698)

Dear Representative Crowley and Representative Gerlach:

On behalf of our 40,000 healthcare financial professionals representing hospitals, physician practices, payers, and post-acute-care providers, the Healthcare Financial Management Association (HFMA) supports your legislation, Two-Midnight Rule Delay Act (H.R. 3698), to delay enforcement of the Medicare inpatient admission and review criteria (the two-midnight rule).

The two-midnight rule is a concern for hospitals and physicians to comply given that many questions about the rule remain unanswered. The Centers for Medicare & Medicaid Services (CMS) has issued some guidance but it still lacks the clarity needed for both hospitals and physicians. Though there is a partial delay in enforcement through March 31, 2014, there is inadequate time for hospitals and physicians to adjust their processes. Providers need additional time to reevaluate and potentially change many internal policies, update electronic medical records systems, and alter work flow processes to ensure compliance.

As your legislation requires, we also believe a workable approach is to delay enforcement of the two-midnight rule until October 1, 2014. During this delay, CMS can convene a meeting with stakeholders to develop alternate policy solutions that will address the use of observation care and the related issues that its increased use has caused for hospitals, physicians, and patients. H.R. 3698 directs CMS to implement a payment methodology that will address this trend as well as provide for the acute inpatient-level services currently provided by hospitals to Medicare beneficiaries which are reasonable and necessary but do not appear on the inpatient-only list and are not expected to span two midnights.

We appreciate your leadership in introducing legislation on this timely issue. HFMA looks forward to any opportunity to provide assistance or additional comments. As an organization, we take pride in our long history of providing balanced, objective financial technical expertise to Congress, CMS, and advisory groups. We are at your service to help gain a balanced perspective on this issue. If you have additional questions, you may reach me or Richard Gundling, Vice President of HFMA’s Washington, DC, office, at (202) 296-2920. The Association and I look forward to working with you.

Joe Fifer sig

Joseph J. Fifer, FHFMA, CPA
President and Chief Executive Officer
Healthcare Financial Management Association


About HFMA

HFMA is the nation's leading membership organization for more than 40,000 healthcare financial management professionals. Our members are widely diverse, employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant.


HFMA is a nonpartisan professional practice organization. As part of its education, information, and professional development services, HFMA develops and promotes ethical, high-quality healthcare finance practices. HFMA works with a broad cross-section of stakeholders to improve the healthcare industry by identifying and bridging gaps in knowledge, best practices, and standards.


Publication Date: Thursday, January 30, 2014