Skip to main content
Subscribe
  • Login
  • My Account
  • Logout
  • Register For Free
  • Subscribe
  • News
    • Current News
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • Digital Health
    • Transformation
    • ESG
    • People
    • Regional News
    • Digital Edition (Web Version)
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Midwest
    • Northeast
    • South
    • West
  • Blogs
    • AI
    • Deals
    • Layoff Tracker
    • HLTH 2024
    • Sponsored Content: Vital Signs Blog
  • Opinion
    • Letters
    • From the Editor
  • Events & Awards
    • Awards
    • Conferences
    • Galas
    • Virtual Briefings
    • Webinars
    • Nominate/Eligibility
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • 40 Under 40
    • Best Places to Work in Healthcare
    • Healthcare Marketing Impact Awards
    • Innovators Awards
    • Diversity Leaders
    • Leading Women
    • Best in Business Awards
    • The 2030 Playbook Conference
    • Innovations in Patient Experience
    • Leading Women Conference & Awards Luncheon
    • Leadership Summit
    • Workforce Summit
    • Best Places to Work Awards Gala
    • Diversity Leaders Gala
    • - Looking Ahead to 2025
    • - Financial Growth
    • - Hospital of the Future
    • - Value Based Care
    • - Looking Ahead to 2026
  • Multimedia
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Sponsored Video Series - One on One
    • Sponsored Video Series - Checking In with Dan Peres
  • Data & Insights
    • Data & Insights Home
    • Hospital Financials
    • Staffing & Compensation
    • Quality & Safety
    • Mergers & Acquisitions
    • Skilled Nursing Facilities
    • Data Archive
    • Resource Guide: By the Numbers
    • Surveys
    • Data Points
  • Newsletters
  • MORE+
    • Contact Us
    • Advertise
    • Media Kit
    • Jobs
    • People on the Move
    • Reprints & Licensing
    • Sponsored Content
MENU
Breadcrumb
  1. Home
  2. Providers
October 26, 2016 12:00 AM

Supporting Prime in false claims suit, AHA says allegations undermine physician judgment

Erica Teichert
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    The U.S. Justice Department's insistence on second-guessing physician judgment and treating questionable hospital admissions as false claims has sparked troubling changes in Medicare treatment that are raising costs for beneficiaries, the American Hospital Association claims.

    The advocacy group voiced concern on Tuesday that there was a significant uptick in outpatient observation care and a corresponding decrease in inpatient stays, which could be due to increased federal government and whistleblower scrutiny of physicians' judgment.

    The comments came in an amicus brief filed in a $50 million False Claims Act suit against Prime Healthcare, where the Justice Department alleges the hospital pressured physicians to admit Medicare patients for short inpatient stays rather outpatient observation visits. While the AHA didn't weigh in on how this particular case should be handled, it warned about the broader, concerning impact these False Claims Act suits are having on the medical community.

    “The chilling effect that results from second guessing these decisions in the absence of an articulated standard for observation status has had a clear impact on the way Medicare patients receive care in America's hospitals,” the AHA said.

    According to a MedPAC study cited by the AHA, observation stays jumped by 88% from 2006 to 2012. That sea change shows that they're concerned with being sued and accused of making false claims against the government based on their medical judgment. Now, they're increasingly erring on the side of caution to protect themselves from enforcement risks.

    But that could cause Medicare beneficiaries to suffer financially if they're inappropriately treated as outpatients rather than being admitted to the hospital.

    If a Medicare beneficiary is admitted to the hospital, all of the services rendered during that stay will be covered by a single deductible, and the patient may also be eligible for skilled nursing facility treatment after they are discharged. Patients could pay significantly more in an outpatient observation setting, as each test or service will be subject to coinsurance payments and some may not be covered by Medicare at all.

    The AHA noted that there is a class action pending in Connecticut federal court alleging the federal government has deprived Medicare beneficiaries of their Part A benefits by encouraging observation rather than inpatient admissions.

    “Predicting the length of time an elderly patient will require care in a hospital is never certain,” the AHA said in its brief. “But how could it be? A degree in medicine doesn't come with a crystal ball.”

    The DOJ intervened in a whistleblower False Claims Act suit against Ontario, Calif.-based Prime in June, alleging the health system created a “culture” that pressured physicians to use inpatient admissions for Medicare beneficiaries at 14 of its hospitals rather than outpatient observation visits. Prime maintains that the feds haven't connected those allegations to specific false claims, and the government is creating a “confusing” and “subjective” environment that inappropriately second guesses physician decisions.

    Under the CMS' guidelines, beneficiaries should be admitted for inpatient treatment if they need more than 24 hours of care, and outpatient observation stays are appropriate for less than 48 hours of treatment.

    Prime cited AHA data in its defense against the False Claims Act suit, which noted that 68% of denied medically necessary Medicare reimbursements in the third quarter of 2012 were for one-day stays provided in the wrong setting. The CMS' administrative law judges are also questioning the denials and have sided with hospitals in the majority of claims appeals.

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    mh-20250513-Yellowstone-rural
    How 24 rural hospitals look to improve value-based care
    mh-20250509-dementia
    Federal dementia pilot has rocky rollout for some providers
    Most Popular
    1
    UnitedHealth Group to cut Medicare drug plan commissions
    2
    PBM limits could finally pass, if Congress moves its tax-cut bill
    3
    ACOs call on Oz to fix Shared Savings Program benchmarking issue
    4
    Where top executive search firms are seeing changes in demand
    5
    Investors welcome a maturing digital health market
    Sponsored Content
    Modern Healthcare A.M. Newsletter: Sign up to receive a comprehensive weekday morning newsletter designed for busy healthcare executives who need the latest and most important healthcare news and analysis.
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Help Center
    • Advertise with Us
    • Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2025. Crain Communications, Inc. All Rights Reserved.
    • News
      • Current News
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • Digital Health
      • Transformation
        • Patients
        • Operations
        • Care Delivery
        • Payment
      • ESG
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition (Web Version)
    • Blogs
      • AI
      • Deals
      • Layoff Tracker
      • HLTH 2024
      • Sponsored Content: Vital Signs Blog
    • Opinion
      • Letters
      • From the Editor
    • Events & Awards
      • Awards
        • Nominate/Eligibility
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • 40 Under 40
        • Best Places to Work in Healthcare
        • Healthcare Marketing Impact Awards
        • Innovators Awards
        • Diversity Leaders
        • Leading Women
        • Best in Business Awards
      • Conferences
        • The 2030 Playbook Conference
        • Innovations in Patient Experience
        • Leading Women Conference & Awards Luncheon
        • Leadership Summit
        • Workforce Summit
      • Galas
        • Best Places to Work Awards Gala
        • Diversity Leaders Gala
      • Virtual Briefings
        • - Looking Ahead to 2025
        • - Financial Growth
        • - Hospital of the Future
        • - Value Based Care
        • - Looking Ahead to 2026
      • Webinars
    • Multimedia
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Sponsored Video Series - One on One
      • Sponsored Video Series - Checking In with Dan Peres
    • Data & Insights
      • Data & Insights Home
      • Hospital Financials
      • Staffing & Compensation
      • Quality & Safety
      • Mergers & Acquisitions
      • Skilled Nursing Facilities
      • Data Archive
      • Resource Guide: By the Numbers
      • Surveys
      • Data Points
    • Newsletters
    • MORE+
      • Contact Us
      • Advertise
      • Media Kit
      • Jobs
      • People on the Move
      • Reprints & Licensing
      • Sponsored Content