Philadelphia-area hospitals are learning that Medicare and its merry band of contractors aren't the only ones paying attention to national, regional and state outliers. Over the past 18 months, the hospitals have experienced a sharp increase in health insurers downcoding claims for short-stay (three or fewer days) inpatient hospital claims to outpatient observation care, reports The Intelligencer. For example, Doyleston Hospital admitted a man through the emergency room for evaluation and determined he needed emergency cardiac catheterization. The insurer looked at the medical record and downcoded the hospital's claim for inpatient services, saying the patient needed 24-hour medical observation and outpatient follow-up care.
All of the hospitals experiencing this downcoding say that inpatient admissions are based on a physician's clinical determination rather than financial issues. However, insurers aren't necessarily buying medical necessity--and they have data to justify their closer scrutiny of inpatient admissions. Philadelphia saw 372 annual inpatient days per 1,000 members in 2008-2009 vs. the national average of 289 days, according to Milliman Inc. In addition to coming in 29 percent higher than the national average, Philadelphia ranked fifth out of 64 metropolitan areas across the country.
Independence Blue Cross, the area's largest health insurer, is targeting inappropriate inpatient admissions for patients who could be treated safely but more cost-efficiently on an outpatient basis, Don Liss, senior medical director of clinical programs and policy, told The Intelligencer.
Insurers are downcoding 40 to 50 patients to observational status each month, at a cost of $5,000 per patient or $3 million annually, said spokesman Ron Watson. Doylestown recently laid off 20 of its 2,200 workers--a move the hospital said was forced by increased insurer denials as well as decreased patient volumes, reports the Bucks County Courier Times. The downcoding situation is even more severe at Abington Memorial Hospital, where some 200 patients (10 to 15 percent of admissions) are downcoded per month, at a cost of $3,500 per patient or $9 million a year, Meg McGoldrick, vice president and chief operating officer, told The Intelligencer.
If insurers are comparing local vs. state or national data to target issues for claims review, Philadelphia hospitals may have more than short-stay inpatient claims to worry about. Rates for urinary tract and blood stream infections jumped at several area hospitals in 2009 while overall hospital infections dropped 12.5 percent statewide, according to a recent Pennsylvania Department of Health study, reports The Intelligencer.