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
complaint
—
filed
Monday
by
Jefferson
and
co-plaintiff
Lehigh
Valley
Physician
Hospital
Organization
—
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.
In
the
lawsuit,
the
plaintiffs
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.
Jefferson
argued
that
this
effectively
“downcodes”
legitimate
inpatient
care,
therefore
reducing
hospital
revenue
and
creating
additional
administrative
burdens
for
providers
to
deal
with
as
they
appeal
the
lower
payments.
The
health
system
also
said
that
Aetna
unilaterally
created
a
new
payment
tier
that
was
never
negotiated
as
a
part
of
their
shared
Medicare
Advantage
contract.
The
complaint
also
claims
that
the
policy
violates
CMS’
two-midnight
rule,
which
requires
Medicare
to
cover
hospital
stays
as
inpatient
when
a
physician
expects
the
patient
to
need
care
for
at
least
two
midnights.
It
asserts
that
Medicare
Advantage
plans
must
follow
the
same
standard.
Overall,
Jefferson
contends
that
by
paying
some
qualifying
inpatient
stays
at
the
lower
rate,
Aetna
is
ignoring
federal
guidelines,
breaching
its
provider
contracts
and
shifting
financial
risk
onto
hospitals.
The
health
system
is
seeking
an
injunction
stopping
Aetna
from
using
the
policy,
as
well
as
compensation
for
legal
fees
and
damages.
Aetna
is
defending
its
policy,
according
to
a
statement
a
company
spokesperson
shared
with
MedCity
News.
“Aetna’s
policies,
including
the
Level
of
Severity
Inpatient
Payment
Policy,
comply
with
all
applicable
federal
law
and
regulations
and
with
the
terms
of
our
provider
contracts.
Aetna
disagrees
with
the
allegations
in
the
lawsuit
and
will
respond
in
the
appropriate
forum,”
the
statement
read.
This
lawsuit
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.
If
Jefferson
wins
the
case,
the
ruling
could
limit
how
Medicare
Advantage
plans
adjust
hospital
payments
for
short
stays.
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One
Punch,
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