Hospital groups are suing the Centers for Medicare & Medicaid Services (CMS) over the 0.2 percent rate cut in Medicare inpatient payments during the 2014 fiscal year.

According to the hospital groups, CMS failed to provide a rationale for the rate cut and denied interested parties access to the data and analysis underlying its rate cut decision.

At the heart of the cut was CMS’s expectation that implementation of Medicare’s controversial “two-midnight rule” would result in an increase in admissions.  The rule was never fully implemented.

CMS has asked the court to dismiss the suit.

Learn more about the suit and find links to the hospitals’ and CMS’s legal briefs in this Fierce Healthcare article.