Policy Particulars
According to Aetna, the policy—which goes into effect November 15 of this year—will apply to all participating Medicare facilities that have a Medicare allowable payment methodology and that participate in Aetna Medicare Advantage and/or Special Needs Plans (SNPs). The policy represents a new reimbursement approach for hospital stays of 1+ midnight in cases where a member is urgently or emergently admitted to a hospital and the provider has submitted an inpatient order. In such circumstances, here’s what will happen:
- Aetna will approve the inpatient stay without a medical necessity review but will pay the claim at a lower level of severity rate that’s comparable to the rate for observation services.
- If the inpatient stay meets MCG (Aetna Supplemental Guidelines for inpatient admissions), Aetna will reimburse the claim at the inpatient rate in accordance with the hospital agreement.
The carrier notes that they won’t use MCG to determine whether an inpatient stay is medically necessary. Instead, they’ll use it to determine the severity of an inpatient admission and whether that severity justifies the inpatient contracted rate. This policy doesn’t apply to stays that are less than 1 midnight. Cases that are less than 1 midnight will still be subject to medical necessity reviews using the Centers for Medicare & Medicaid Services (CMS) guidelines.
Impact and Pushback
According to the payer, the effect of this new policy will be faster payment. Currently, Aetna denies a stay that doesn’t meet MCG, requiring you to either resubmit a claim for observation or submit an appeal to receive the inpatient contracted rate. But, beginning November 15, providers will get paid faster without having to re-bill claims for 1+ midnight stays that don’t meet MCG. You maintain your right to dispute the inpatient reimbursement rate.
Well, that all sounds good, right? The American Hospital Association (AHA) is not so sure. It sent a letter to Aetna’s president, outlining potential problems with the new approach. Here are a few excerpts:
America’s hospitals and health systems are deeply concerned about Aetna’s recently announced “level of severity inpatient payment” policy. This policy could erode the transparency consumers rely on to make informed decisions about their care, undermine important regulatory protections that safeguard patients’ coverage, and jeopardize the ability of hospitals to provide high-quality, accessible care to all who need it. The American Hospital Association urges Aetna to rescind this policy.
Well, they’re certainly not pulling any punches. The AHA is clearly unhappy with Aetna’s new approach to reimbursement—at least as to these particular services for these particular cases. (This policy only applies to Aetna’s Medicare Advantage and dual eligible lines of business.) The problem, as the AHA sees it, is that Aetna will approve these inpatient stays but will reimburse hospitals at a lower rate it determined unilaterally outside of the good faith contract and rate negotiation process.
One of the most worrying consequences of this policy, according to the AHA’s letter, is the impact it could have on beneficiaries’ and regulators’ ability to assess the quality of Aetna’s coverage. “Specifically, this policy could distort data that have direct bearing on Aetna’s performance on several measures that make up the Medicare Advantage Star Ratings Program.” The AHA is especially concerned about the impact on ratings related to the health plan’s handling of appeals since Aetna’s policy will reduce the opportunity for patients and providers to file appeals. “Fewer appeals could impact the calculations for these measures, and, as a result, this policy could give the impression that Aetna’s performance has improved.” The AHA reasons that all this could influence whether Aetna qualifies for a performance bonus and for how much, potentially redirecting millions in taxpayer dollars to the health plan for reasons entirely unrelated to the goals of the Star Ratings Program.
In addition, the AHA letter asserts that the new Aetna policy would appear to circumvent established regulatory standards regarding coverage for Medicare Advantage beneficiaries. “Under current practice, the decision by Aetna to deny an inpatient claim and cover it as observation is subject to federal regulations that, among other requirements, require plans to use CMS coverage rules and disallows use of proprietary criteria to determine whether care is medically necessary and should therefore be covered.” The AHA asserted the following:
By treating this as solely an issue of payment, Aetna avoids these rules and explicitly indicates it will use the proprietary MCG guidelines to determine the level of payment, not whether the care is medically necessary. The federal government adopted these regulations to safeguard beneficiaries against inappropriate denials and downgrades of care, but Aetna’s policy will now shield the company from critical oversight.
So, we may not have heard the last of this new Aetna payment policy. As we’ve seen in the past, pushback by sufficient forces (industry leaders, lobbying organizations, etc.) can sometimes cause payers to rethink a proposed new initiative. And, if this policy does indeed run afoul of certain federal regulations, Aetna may have no choice but to rescind it.