BNA’s Medicare Report™ provides reliable, objective weekly news and analysis of all related legislation, regulation, litigation, and court and administrative...
Nov. 6 — MedPAC commissioners Nov. 6 discussed ways to alter several hospital short-term stay policies, which may affect how Recovery Audit Contractors operate.
Medicare Payment Advisory Commission (MedPAC) staff said during a presentation that some types of short-term stay policies, such as inpatient admission criteria, “are ambiguous and open to interpretation.” In addition, the staff presentation said one-day inpatient stays “are common and paid more than similar outpatient stays.”
The staff presentation also said RACs “have focused their audits on [the] appropriateness of 1-day inpatient stays.” Because of this, it said, “hospitals have increased use of outpatient observation.”
RACs, according to the Centers for Medicare & Medicaid Services website, work to detect overpayment in the Medicare program. RACs have drawn the ire of hospital trade associations, which want the program reformed.
MedPAC commissioners Sept. 12 said changes to the RAC program are necessary.
One idea several commissioners proposed was to eliminate observation status at hospitals and, instead, classify such stays as inpatient status. The idea, suggested by commissioners Cori Uccello of the American Academy of Actuariesin Washington and Craig Samitt, a health-care executive based in Arizona, received limited praise from MedPAC Chairman Glenn Hackbarth, an Oregon-based consultant.
According to Samitt, combining observation status into inpatient status would eliminate several downstream problems and could get rid of RAC audits entirely.
Other commissioners, however, said they feared the consequences of not having observation status for hospital stays. For example, Kathy Buto, a public health expert from Arlington, Va., said merging observation status into inpatient status could undermine the diagnosis-related groups (DRGs), which form the cornerstone of hospital billing procedures.
Buto, along with Commissioner Jack Hoadley, a doctor with the Health Policy Institute at Georgetown University, said such a change could also lead to higher beneficiary cost sharing.
To reduce the burden of RACs on hospitals and the Medicare system, commissioners weighed whether to suggest modifying RAC auditing processes so they are more targeted.
Primarily, commissioners discussed a point made in the staff presentation about “more targeted [RAC] reviews of inpatient appropriateness on hospitals with the highest rate of short stay admissions,” instead of the current, less-targeted system used today.
Staff said in their presentation that more targeted reviews “would likely result in lower aggregate recoveries” and increase Medicare spending.
Commissioners also considered changing the three-day rule that governs how Medicare pays for admission to skilled nursing facilities (SNFs). The rule states that hospitals must classify a patient's stay as inpatient for at least three days, as opposed to observation, before Medicare will pay for SNF coverage.
The commission didn't reach a consensus on any of the policy options discussed. Discussion from the meeting will inform future MedPAC staff research into possible changes to hospital short-stay policies.
An earlier MedPAC session focused on beneficiary access to hospital care and how service volume affects hospital costs.
To contact the reporter on this story: Michael D. Williamson in Washington at email@example.com
To contact the editor responsible for this story: Ward Pimley at firstname.lastname@example.org
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)