Hospitals Get Paid More if Patients Listed as COVID-19 and Placed on Ventilators
Dr. Scott Jensen, a senator, and physician in Minnesota was interviewed by “The Ingraham Angle” host Laura Ingraham on April 8 on Fox News and claimed hospitals get paid more if Medicare patients are listed as having COVID-19 and get three times as much money if they end up needing a ventilator.
While his claim originated during an interview on Fox News, it was published on April 9 by The Spectator, a conservative publication and syndicator. WorldNetDaily shared it on April 10 and, according to Snopes, a related meme was shared on social media in mid-April.
Jensen took it to his own Facebook page on April 15, saying, in part:
On April 19, he doubled down on his assertion via video on his Facebook page.
Jensen said in the video: “Hospital administrators might well want to see COVID-19 attached to a discharge summary or a death certificate. Why? Because if it’s straight-forward, garden-variety pneumonia that a person is admitted to the hospital for — if they’re Medicare — typically the diagnosis-related group lump sum payment would be $5,000. But if it’s COVID-19 pneumonia, then it’s $13,000 and if that COVID-19 pneumonia patient ends up on a ventilator it goes up to $39,000.”
Jensen clarified in the video that he doesn’t think physicians are “gaming the system” so much as other “players,” such as hospital administrators, who he said may be pressuring physicians to cite all diagnoses, including “probable” COVID-19, on discharge papers or death certificates in order to get the higher Medicare allocation allowed under the CARES Act. Past practice, Jensen said, did not include probabilities.
He noted that some states, like his home state of Minnesota, as well as California, are only listing laboratory-confirmed COVID-19 diagnoses. But others, specifically New York, are listing all presumed cases, which is allowed under CDC guidelines as of mid-April, and that will result in a larger payout.
Jensen, however, added that he thinks the overall number of COVID-19 cases have been undercounted based on limitations in the number of tests available.
The Provision in the CARES Act
The CARES Act created a 20% premium, or add-on, for COVID-19 Medicare patients.
There have been no public reports that hospitals are exaggerating COVID-19 numbers to receive higher Medicare payments.
And Jensen didn’t explicitly make that claim. He simply suggested there is an “avenue” to do so now that “plausible” COVID-19, not just laboratory-confirmed, cases can be green-lighted for Medicare payment and eligible for the 20 percent add-on allowed under the CARES Act.
The initial $30 billion — out of $100 billion — in the CARES Act grants dedicated to health care providers to address the pandemic was disbursed according to 2019 Medicare reimbursements.
The second wave, however, will focus on providers in areas more heavily impacted by the outbreak, according to to Kaiser Health News, thus giving rise to Jensen’s concern that hospitals could exploit the CDC’s guidelines allowing presumed cases.
How does Medicare pay?
Snopes investigated the claim, finding it’s plausible Medicare is paying in the range Jensen mentions but doesn’t have a “one-size-fits-all” payment to hospitals for COVID-19 patients.
As explained by nurse Elizabeth Davis in her piece for verywellhealth.com, each hospital has a base payment rate assigned by Medicare. It takes into account national and regional trends, including labor costs and varying health care resources in each market.
Then, each diagnosis-related group, which classifies various diagnoses into groups and subgroups, is assigned a weight based on the average amount of resources it takes to care for a patient. Those figures are multiplied to determine the payment from Medicare. So, a hospital in one city and state may be paid more or less for treating a patient than a hospital in another.
PolitiFact reporter Tom Kertscher writes, “The dollar amounts Jensen cited are roughly what we found in an analysis published April 7 by the Kaiser Family Foundation, a leading source of health information.”
Our fact-check sources
- The Spectator: “Hospitals get more to list patients as COVID-19 and three times as much if the patient goes on ventilator”
- The World Net Daily: “Hospitals get paid more to list patients as COVID-19”
- Snopes: “Is Medicare paying hospitals $13K for patients diagnosed with COVID-19, $39K for those on ventilators
- PolitiFact: “Hospitals get paid more to list patients as COVID-19”
- Kaiser Health News: “Estimated cost for treating the uninsured hospitalized with COVID-19”
- Factcheck.org: “Hospital Payments and the COVID-19 Death Count”
- CARES Act
- U.S. Department of Health and Human Services: “Guidance for Certifying Death Due to COVID-19”
- Verywellhealth.com: “How a DRG determines how much a hospital gets paid”
- American Hospital Association Special Bulletin
- American Hospital Association Special Bulletin on CARES Act.