| The skinny
Philadelphia-based health system Jefferson Health is suing Aetna, claiming the payer is unfairly reducing payments for some hospital stays under Medicare Advantage. Aetna said that it has done nothing wrong. The alleged underpayment
The complaint centers on Aetna’s “level of severity inpatient payment policy” for Medicare Advantage beneficiaries, which took effect on January 1. Under this policy, some hospital stays that are technically approved as inpatient are paid at a lower “observation-level” rate if Aetna decides the patient wasn’t sick enough. This mainly applies to hospital stays lasting between one and four midnights, even when a physician has admitted the patient as an inpatient. Aetna is defending its policy, saying it complies with both the law and the company’s provider contracts. Defining “severity”
The lawsuit described a situation from earlier this year in which Aetna deemed the following patient as “low severity”: a 72-year-old who came to the hospital with altered mental status, a prior stroke and hypoxia — who then required intubation and developed acute renal failure after admission. “After the patient’s second midnight in the hospital, Aetna determined the patient was ‘low severity,’ even though the patient was intubated in an ICU, had acute renal failure, and was administered broad spectrum IV antibiotics for multifocal pneumonia. The admitting physician determined the patient’s inpatient stay was medically necessary, but Aetna decided the patient was not ‘severe’ enough to qualify for payment at an inpatient rate,” the complaint read. Providers are fed up with MA
This legal battle touches on a broader national fight between hospitals and Medicare Advantage insurers — one in which hospitals say MA plans apply stricter medical-necessity criteria than traditional Medicare and often reduce payments through post-claim reviews, and payers argue they’re preventing unnecessary admissions and managing their spending. — By Katie Adams |
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