Medicare beneficiaries could see higher bills for short outpatient stays than for some short inpatient stays, according to a report from HHS' Office of Inspector General.
For the report, the OIG examined paid Medicare claims data from fiscal year 2013 and FY 2014. The office said it used Part A hospital claims to identify inpatient stays and Part B hospital claims to identify outpatient stays. The OIG distinguished claims as "short stay" as one that lasted fewer than two midnights and a "long stay" as one that lasted two midnights or longer. For short inpatient stays, the OIG said it determined whether claims information met CMS criteria for payment under the two-midnight policy (e.g., if the stay included an inpatient-only procedure).
The OIG found that hospitals were billing for many short inpatient stays inappropriately categorized under the two-midnight policy. In FY 2014, Medicare paid almost $2.9 billion for these stays, the office said.
The OIG also found Medicare paid more for some short inpatient stays than for short outpatient stays, although the stays were for similar reasons.
Additionally, an increased number of beneficiaries in outpatient stays paid more and had limited access to skilled nursing facility services than they would have as inpatients, the OIG said.
The OIG recommended CMS improve oversight of hospital billing under the two-midnight policy and increase protections for beneficiaries. Specifically, the OIG said, it recommends CMS conduct routine analysis of hospital billing and "target for review the hospitals with high or increasing numbers of short inpatient stays that are potentially inappropriate under the two-midnight policy."
It also recommended CMS identify and review the short inpatient stays that are potentially inappropriate under the two-midnight policy, and examine the potential impacts of counting time spent as an outpatient toward the three-night requirement for skilled nursing facility services "so that beneficiaries receiving similar hospital care have similar access to these services." The OIG said CMS should also make efforts to find ways to protect Medicare beneficiaries in outpatient stays from paying more than they would have paid as inpatients.
CMS concurred with all of the OIG's recommendations.
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