American Hospital Association Urges Aetna to Rescind New Medicare Advantage Payment Policy

What's Happening?

Aetna, a subsidiary of CVS Health, is set to implement a new Medicare Advantage inpatient payment policy starting November 15. This policy introduces a 'level of severity inpatient payment' approach, automatically approving emergency and urgent inpatient admissions lasting more than one midnight. However, if the patient does not meet inpatient criteria according to Milliman Care Guidelines, Aetna will reimburse hospitals at a reduced rate for observation services. Legal experts have noted that this policy changes the traditional handling of inpatient claims, where hospitals could appeal formal denials. The American Hospital Association (AHA) has expressed concerns, stating that the policy could undermine transparency and regulatory protections, potentially affecting hospitals' ability to provide quality care. The AHA has called on Aetna to rescind the policy, highlighting its impact on Medicare Advantage Star Ratings and the financial strain it could impose on hospitals.

Why It's Important?

The new policy by Aetna could have significant implications for hospitals and patients under Medicare Advantage plans. By reimbursing at lower rates for observation services, hospitals may face financial challenges, impacting their ability to deliver high-quality care. The policy also raises concerns about transparency and regulatory compliance, as it bypasses established standards for inpatient coverage. This could affect consumer trust and decision-making regarding healthcare services. Additionally, the policy's impact on Medicare Advantage Star Ratings could influence Aetna's performance metrics, affecting its competitive standing in the healthcare market. Hospitals may need to invest in additional resources to manage disputes arising from this policy, potentially increasing operational costs.

What's Next?

The AHA has urged Aetna to reconsider the policy, and further discussions between healthcare providers and the insurer may ensue. Hospitals might need to adapt their billing and administrative processes to accommodate the new payment structure, potentially leading to increased arbitration cases. Stakeholders, including healthcare associations and regulatory bodies, may engage in dialogue to address the policy's implications and seek resolutions that align with federal regulations. The outcome of these discussions could influence future policy adjustments and healthcare practices within the Medicare Advantage framework.

Beyond the Headlines

The policy change by Aetna highlights broader issues in the healthcare industry, such as the balance between cost management and patient care quality. It underscores the ongoing debate over the use of proprietary criteria versus federal standards in determining medical necessity. The shift in payment structures may prompt discussions on ethical considerations in healthcare reimbursement practices, particularly regarding patient rights and hospital obligations. Long-term, this development could influence policy-making and regulatory oversight in the Medicare Advantage sector, shaping the future landscape of healthcare delivery and insurance practices.