Congress needs lots of help in deciphering and analyzing Medicare provider payment policies and created an expert group – the Medicare Payment Advisory Commission – to advise on payment policy changes. A current major topic on Medicare payments relates to how hospitals are paid based upon the length of a hospital stay.
CQ HealthBeat’s (@CQHealthTweet) John Reichard reported this week that the Medicare payment commission is currently examining Medicare payment policy for single-day hospital stays.
Short inpatient stays, particularly for a single day, are one of the biggest money-makers for hospitals. Medicare currently pays hospitals a fixed sum for a particular diagnosis based on a calculation of costs that typically assumes a longer stay. However, Medicare auditors have targeted single-day stays in an effort to stamp out improper billing practices and the majority of Medicare claim denials in 2012 were for one-day stays.
Hospitals have taken steps to cut the risk of having their billings challenged and are increasingly classifying short-stay patients as being under “observational” status, which pays at lower outpatient rates. However, patients listed in observational status must pay a 20 percent copay for outpatient treatment while they pay a fixed deductible for inpatient care of $1,200.