- The Washington Times - Wednesday, June 4, 2014

Medicare hospitals could be gaming the system at the detriment of patients’ health in order to get more money from the government, a new report warns.

In fact, some hospitals across the country could be delaying re-admitting patients in order to double the amount they can bill the government for, the Health and Human Services Inspector General said in a report released Wednesday.

“This raises concerns about whether financial incentives, rather than beneficiaries’ conditions, influenced readmission decisions,” investigators said.

“Long-term care hospitals,” or LTCHs, are the most expensive medical centers Medicare pays for, because they are meant to treat patients who have complex and ongoing conditions.

In order to save taxpayer money, the Centers for Medicare and Medicaid Services pays the hospitals for treatment of a patient only once, even if that patient temporarily leaves the hospital – say, for example, to get a specialized treatment someplace else.

But if the patient stays away too long, surpassing a fixed-day period, then they are counted as a new admission – and the hospital is paid again.

The IG warned that could leave a financial incentive for hospitals to delay re-admitting patients until they could get the double payment.

Sure enough, investigators found 59 hospitals across the country that had a large spike in the number of re-admissions immediately after the fixed-day period ended. In 2010 and 2011, Medicare paid roughly $12 million to these hospitals.

“The number of returns to these 59 LTCHs increased by over 200 percent immediately after the fixed-day period,” investigators said.

Of the 59, investigators noted that 23 of the hospitals were part of a chain, but did not state which one.

CMS officials “agree that inappropriate payments for interrupted stays should be prevented,” but said the IG had not yet provided them with data needed to track who exactly was abusing the system. They asked for the info which “indicates that existing program safeguards are not preventing inappropriate payments.”

Investigators said they would provide CMS leaders with the information needed.

Officials also noted that legislation and regulations regarding the LTCH payment system had recently been changed, and new rules would be enacted in fiscal 2016 that would overhaul the process.

The IG said there were also some mistakes on the part of CMS. Medicare officials mispaid $4.3 million for hospital re-admittances that should have been counted as part of the same stay.

• Phillip Swarts can be reached at pswarts@washingtontimes.com.

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