RISE looks at recent headlines that impact Medicare and Medicare Advantage.

OIG warns Medicare hospital stays vulnerable to inappropriate billing practices like upcoding

A new Office of Inspector General data brief looks at the trend of more expensive hospital stays in Medicare from FY 2014 through FY 2019 and offers lessons for improving the accuracy of inpatient hospital billing.

The OIG found that hospitals are increasingly billing for inpatient stays at the highest severity level, which is the most expensive one. The number of stays at the highest severity level increased almost 20 percent from FY 2014 through FY 2019, ultimately accounting for nearly half of all Medicare spending on inpatient hospital stays. The number of stays billed at each of the other severity levels decreased. At the same time, the average length of stay decreased for stays at the highest severity level, while the average length of all stays remained largely the same.

Stays at the highest severity level are vulnerable to inappropriate billing practices, such as upcoding—the practice of billing at a level that is higher than warranted, the OIG noted. Nearly a third of these stays lasted a particularly short amount of time and over half of the stays billed at the highest severity level had only one diagnosis qualifying them for payment at that level. Further, hospitals varied significantly in their billing of these stays, with some billing much differently than most.

The OIG recommended that the Centers for Medicare & Medicaid Services (CMS) conduct targeted reviews of MS-DRGs and stays that are vulnerable to upcoding, as well as the hospitals that frequently bill them. CMS did not agree but acknowledged that there is more work to be done to determine conclusively which changes in billing are attributable to upcoding. The OIG said more work needs to be done and continues to recommend that CMS conduct targeted reviews to identify stays involving upcoding and hospitals with patterns of upcoding.

AHIP disputes MedPAC report on Medicare Advantage spending

Medicare Advantage (MA) costs far less than fee-for-service (FFS) Medicare, AHIP’s Lynn Nonnemaker, VP of Medicare policy, and Mark Hamelburg, SVP of federal programs, write in a recent blog post in response to a Medicare Payment Advisory Commission (MedPac) presentation that indicated Medicare’s per beneficiary spending for MA enrollees is higher than per beneficiary spending in FFS Medicare. They claim there are two errors in MedPAC’s analysis. First, they write, there is a technical error in MedPAC’s calculation of per enrollee spending in Medicare Part B. They cite a Health Management Associates analysis which shows that once the error is corrected, average per enrollee spending in MA was lower than per enrollee FFAS spending from 2010 to 2018. Second, they say, MedPAC doesn’t make a fair comparison of program enrollees. Spending on MA enrollees includes services from Medicare Parts A and B. But the MedPAC analysis compares spending for these MA enrollees to beneficiaries enrolled in Part A and/or Part B.

“When both adjustments are made, average FFS spending per enrollee is 6.4 percent higher than MA spending per enrollee, rather than 8.5 percent lower as asserted by MedPAC. This is the case even though, unlike the FFS Medicare program, MA plans cap out-of-pocket costs and generally provide a more comprehensive, robust set of benefits. The data clearly show MA has delivered on its promise of lower costs and higher quality,” Nonnemaker and Hamelburg write.

Health Affairs study looks at telemedicine use in lower income communities

A new study published in the February issue of Health Affairs looks at the differences in total outpatient visits and telemedicine use among 16.7 million commercially insured and Medicare Advantage enrollees from January to June 2020. Although weekly telemedicine visits increased 23-fold compared during the pandemic, the overall number of outpatient visits decreased by 35 percent. Researchers found telemedicine use was lower in communities with higher rates of poverty. One reason for the disparities is the limited availability of broadband use in rural areas, which could be a barrier to telemedicine, they said.