For weeks, it has been a source of internet conspiracy theories and speculation, an accusation that has been offered by so-called “coronavirus truthers” as an explanation for America’s rising Covid-19 toll: Hospitals are listing people as having Covid-19 illness even if they don’t.
The claims are used by those who are skeptical of the lethality of novel coronavirus, and as an argument that government restrictions aimed at mitigating the spread of the virus should be lifted. They’re bolstered by far-flung, often obscure websites who claim that hospitals are being paid to list patients as having Covid-19, even if the patient suffered from some other ailment. “Hospitals are being told to list patients as Covid-19 even if they aren’t,” goes one popular argument.
It seems that everyone has a story, usually handed down by word of mouth, of someone who noticed upon their release from the hospital, or upon reviewing the medical records of a loved one who died in the hospital, that the cause of illness or cause of death was incorrectly listed as Covid-19. Many of those stories are accompanied by explanations that hospital workers or administrators openly admitted that the hospital listed the diagnosis as coronavirus in order to earn more money for the hospital.
But hospitals who inaccurately diagnosed patients for billing purposes are subject to state and federal investigations, civil fines and even criminal charges. Additionally, hospitals who attempt to defraud the reimbursement system are subject to lose their Medicare-Medicaid contract with the federal government, which would leave most hospitals no option but to close their doors.
Yes, hospitals are being paid more
There is some truth to the conspiracy-based websites: Hospitals are receiving additional funding for treating coronavirus patients. That began on April 15, as part of the Coronavirus Aid, Relief & Economic Security (CARES) Act that was passed by Congress and signed into law by President Donald Trump. The CARES Act increases payment to the hospital by the federal government by 20%.
Jibril Boykin, a spokesperson for the federal Centers for Medicare & Medicaid Services (CMS) explained.
“The 20% increase is not a bonus but an increase in Medicare inpatient hospital payments provided for under the law for beneficiaries diagnosed with Covid-19 and treated during the Covid-19 Public Health Emergency,” Boykin told the Independent Herald. “This implementation is among the numerous continuing actions CMS is taking to protect the health and safety of our nation’s patients and providers in the wake of the Covid-19 outbreak.”
In other words, hospitals who are treating Covid-19 patients insured by the federal Medicare or Medicaid programs will receive 20% more reimbursement than they would ordinarily receive for rendering the same services. That is a significant percentage of patients for most hospitals. Currently, the Medicare program has 44 million beneficiaries — or about 15% of the U.S. population — according to a survey by the AARP.
In rural areas, like Scott County, a majority of hospital admissions are patients who are covered by Medicare or Medicaid, the state-federal partnership to cover low-income people. In 2019, there were over 75 million people enrolled in Medicaid.
Boykin said that the original Medicare reimbursement is determined by a variety of factors, under the Medicare Inpatient Prospective Payment System. For Covid-19 patients, payment would depend on things such as the principal diagnosis, the severity of illness, and the treatment that is performed during the hospital stay.
“For example, an inpatient stay where the patient requires a ventilator would generally be paid at a higher rate than an inpatient stay where the patient does not need a ventilator,” Boykin told the IH. “Additionally, Medicare adjusts hospital payment based on geographic variation in local costs.”
How diagnoses are classified
Upon their release from the hospital, patients who have been diagnosed with Covid-19 are classified based on the ICD-10 international system.
Prior to the beginning of April, Boykin said, patients treated for coronavirus were classified as B97.29 — “Other coronavirus as the cause of diseases classified elsewhere.” Beginning April 1, patients being discharged as U07.1, a new classification for Covid-19 illness.
“For Medicare beneficiaries that are enrolled in a Medicare Advantage plan, the hospital is paid based on the contract arrangement the hospital has with the Medicaid Advantage plan,” Boykin said.
In case of fraud
With hospitals already struggling — many states have put a stop to elective medical procedures indefinitely, which have forced layoffs and budget shortfalls at hospitals nationwide — it’s little wonder that conspiracy theories about hospitals intentionally mislabeling cases as Covid-19 for financial gain have taken root.
But not only is the federal government not encouraging hospitals to classify patients as Covid-19, as many of the less reputable sources have claimed, but doing so would actually subject hospitals to civil and criminal penalties.
“Medicare providers are required to accurately bill for services provided based on a beneficiary’s diagnosis,” Boykin said. “If a beneficiary is diagnosed with Covid-19 during the course of their treatment, then the medical records should support the services billed.”
Although Boykin did not specify that hospitals risk losing their CMS contract if they’re determined to have committed Covid-19 fraud, submitting fraudulent data is one of the reasons for CMS contract termination provided by federal law. In fact, it’s the very first reason listed in the federal legislation.
Generally, a hospital that loses its CMS contract is forced to close.
“Accurate billing of care and all related treatments by providers are part of Medicare’s standard policies,” Boykin said. “Claims with inaccurate diagnosis or DRG would be subject to recoupment and/or other potential civil or criminal charges for false claims.”