Hospitals Say Some Medicare Advantage Plans Are Skirting CMS Rules

by Cheryl Clark, Contributing Writer
November 27, 2023
Some Medicare Advantage (MA) plans do not intend to abide by the 2024 CMS rule that prohibits them from denying coverage of services that traditional Medicare would cover. Instead, the private plans are using their own rules or terminology to block or delay inpatient care doctors say their patients need, circumventing the federal agency’s intentions.
Those are among concerns the American Hospital Association (AHA) and the Federation of American Hospitals (FAH) expressed last week in letters to CMS based on reports from their members. The organizations are pleading with the agency to tighten some of the language in the rule and enforce provisions that restrict how MA plans can delay or deny coverage.
Retroactive Appropriateness Determinations
Their key issue deals with the “two-midnight” rule, a decade-old Medicare policy that says a hospital is entitled to reimbursement for an inpatient stay if the admitting physician at the time had a reasonable expectation that the patient was sick enough to need acute care spanning two midnights.
“We hear reports from our members about patients who are staying in the hospital receiving inpatient care for 3, 4, 5, 6 and sometimes more days,” Michelle Millerick, AHA’s senior associate director of health insurance coverage, said in an interview with MedPage Today. “Then, that the plan retroactively is coming back and saying no. Even though you provided a number of days’ worth of inpatient care, that actually didn’t meet the criteria for inpatient care; and so we’re only going to pay you for observation.”
An observation stay pays the hospital substantially less than an inpatient stay.
As evidence, the AHA and the FAH noted that UnitedHealthcare, the largest MA provider, published its policy saying that in 2024 (after the CMS policy goes into effect) it plans to continue using its own internal coverage criteria in deciding to pay a claim.
“United is saying it’s going to use the ‘two-midnight’ rule, but it’s also going to apply its own internal coverage criteria, specifically InterQual, to evaluate whether the physician’s judgment — that the care would extend beyond two midnights — is reasonable,” Millerick said.
InterQual is a proprietary tool licensed to hospitals to determine appropriateness of inpatient care and licensed to other entities for medical review of that care.
Opaque Determination Tools
According to CMS rules, such private tools can only be used when Medicare coverage criteria has not been fully established, and those circumstances are very limited, Millerick said.
Terrence Cunningham, AHA’s director of administrative simplification policy, said the additional clinical criteria an MA plan may impose could be a vital sign threshold or any other clinical criteria that each MA plan develops on its own.
“I think that’s what this rule is trying to reel in,” he said. Cunningham and Millerick made their comments in a phone call during which an AHA public affairs representative was present.