A Project of The Annenberg Public Policy Center

Hospital Payments and the COVID-19 Death Count


Q: Are hospitals inflating the number of COVID-19 cases and deaths so they can be paid more?

A: Recent legislation pays hospitals higher Medicare rates for COVID-19 patients and treatment, but there is no evidence of fraudulent reporting.

FULL QUESTION

Are hospitals getting 13,000 per patient if they write that on the diagnosis is COVID19 on the patient’s chart, and 35,000 for each patient if they are on ventilators?

I keep seeing posts in social media claiming that hospitals are over-stating covid-19 deaths because the they are paid more for these deaths … The YouTube video link here is attributed to Fox News with the headline “US: Hospitals Get Paid More to List Patients as COVID-19…” Can you provide any clarification?

FULL ANSWER

A Minnesota state senator’s recent interview on Fox News about Medicare payments for COVID-19 hospitalizations has generated a frenzy of headlines on social media suggesting that hospitals may have a financial motivation when it comes to classifying cases or deaths as related to COVID-19.

One website ran a story headlined, “US Hospitals Getting Paid More to Label Cause of Death as ‘Coronavirus.'” It called the information “disturbing” and the interview “bone-chilling.”

Numerous readers have asked us about such claims, some of which imply that hospitals are making money by simply listing patients as having the disease — when in fact the payments referenced are for treating patients. And while some of the posts imply that fraud may be afoot, multiple experts told us that such theories of hospitals deliberately miscoding patients as COVID-19 are not supported by any evidence. 

The initial comment was made by Minnesota State Sen. Scott Jensen, a family physician, who spoke with Fox News host Laura Ingraham on April 8 about the idea that the number of COVID-19 deaths may be inflated. Jensen was responding to National Institute of Allergy and Infectious Diseases Director Anthony Fauci, who — while answering a reporter’s question about that theory — said “you will always have conspiracy theories when you have very challenging public health crises. They are nothing but distractions.”

Jensen, April 8: I would remind him that anytime health care intersects with dollars it gets awkward. Right now Medicare has determined that if you have a COVID-19 admission to the hospital, you’ll get paid $13,000. If that COVID-19 patient goes on a ventilator, you get $39,000, three times as much. Nobody can tell me after 35 years in the world of medicine that sometimes those kinds of things impact on what we do.

In an interview with FactCheck.org, however, Jensen said he did not think that hospitals were intentionally misclassifying cases for financial reasons.

But that’s how his comments have been widely interpreted and paraded on social media. One YouTube video with Jensen’s interview, viewed 42,000 times, was titled “US: Hospitals Get Paid More to List Patients as COVID-19…” That video was then posted in a Facebook group called “X22 Report [Geopolitical]” with a caption referencing the specific dollar amounts that read in part: “This also explains the inflated amount of covid deaths.” Nearly 3,000 users shared the video from that post.

“So, hospitals get an extra $13,000 if they diagnose a death as COVID-19,” a widely shared meme on Facebook claimed. “And an additional $39,000 if they use a ventilator!” One post of the meme, shared by hundreds, was captioned: “And then we wonder why the numbers of deaths are embellished…”

The figures cited by Jensen generally square with estimated Medicare payments for COVID-19 hospitalizations, based on average Medicare payments for patients with similar diagnoses.

Medicare — the federal health insurance program for Americans 65 and older, a central at-risk population when it comes to COVID-19 — pays hospitals in part using fixed rates at discharge based off a grouping system known as diagnosis-related groups.

The Centers for Medicare & Medicaid Services has classified COVID-19 cases with existing groups for respiratory infections and inflammations. A CMS spokesperson told us exact payments vary, depending on a patient’s principal diagnosis and severity, as well as treatments and procedures. There are also geographic variations.

An analysis by the Kaiser Family Foundation looked at average Medicare payments for hospital admissions for the existing diagnosis-related groups and noted that the “average Medicare payment for respiratory infections and inflammations with major comorbidities or complications in 2017 … was $13,297. For more severe hospitalizations, we use the average Medicare payment for a respiratory system diagnosis with ventilator support for greater than 96 hours, which was $40,218.”

It is true, however, that the government will pay more to hospitals for COVID-19 cases in two senses: By paying an additional 20% on top of traditional Medicare rates for COVID-19 patients during the public health emergency, and by reimbursing hospitals for treating the uninsured patients with the disease (at that enhanced Medicare rate).

Both of those provisions stem from the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act.

The CARES Act created the 20% add-on to be paid for Medicare patients with COVID-19. The act further created a $100 billion fund that is being used to financially assist hospitals — a “portion” of which will be “used to reimburse healthcare providers, at Medicare rates, for COVID-related treatment of the uninsured,” according to the U.S. Department of Health and Human Services.

As the Kaiser analysis noted, though, “it is unclear whether the new fund will be able to cover the costs of the uninsured in addition to other needs, such as the purchase of medical supplies and the construction of temporary facilities.”

Either way, the fact that government programs are paying hospitals for treating patients who have COVID-19 isn’t on its own representative of anything nefarious.

“There’s an implication here that hospitals are over-reporting their COVID patients because they have an economic advantage of doing so, [which] is really an outrageous claim,” Gerald Kominski, senior fellow at the UCLA Center for Health Policy Research, told us. And, he said, any suggestion that patients may be put on ventilators out of financial gain, not medical need, “is basically saying physicians are violating their Hippocratic Oath … it would be like providing heart surgery on someone who doesn’t need it.”

Robert Berenson, an institute fellow at the Urban Institute, said the notion that hospitals are profiting off the pandemic — as some of the social media posts may imply — isn’t borne out by facts, either.

Berenson said revenues appear to be down for hospitals this quarter because many have suspended elective procedures, which are key to their revenue, forcing some hospitals to cut staff. He surmised that potential instances of patients being wrongly “upcoded” — or classified as COVID-19 when they’re not — are “trivial compared to these other forces that are affecting hospital finances.”

Berenson and others we spoke with also said that hospitals have profound disincentives for “upcoding,” which can result in criminal or civil liabilities, such as being susceptible to being kicked out of the Medicare program.

Jensen himself said in a phone interview that he was not alleging widespread medical fraud.

“Do I think people are misclassifying? No,” Jensen said. He said his concerns centered on what he deemed “less precise standards” for certifying deaths promulgated by the U.S. Centers for Disease Control and Prevention, and how deaths classified as COVID-19 without corroborating positive test results could lead to an over-counting.

The CDC guidance says that officials should report deaths in which the patient tested positive for COVID-19 — or, if a test isn’t available, “if the circumstances are compelling within a reasonable degree of certainty.” It further indicates that if a “definite diagnosis of COVID–19 cannot be made, but it is suspected or likely (e.g., the circumstances are compelling within a reasonable degree of certainty), it is acceptable to report COVID-19 on a death certificate as ‘probable’ or ‘presumed.'”

“If we think it’s presumptive … we can go ahead and put down COVID-19,” Jensen said, “or even in some situations, even if it’s negative.” He pointed to the example of a 38-year-old man in Minnesota whose death was attributed to the coronavirus even though he tested negative.

The man’s mother, however, told the St. Paul Pioneer Press that doctors determined the test result was likely a false negative. It’s not known exactly how common false negatives are in the U.S., but public health experts and doctors have raised concerns about many instances of tests showing negative results even when all other indicators point to COVID-19.

Fact sheets for different COVID-19 tests from the Food and Drug Administration note that a “negative result does not exclude the possibility of COVID-19. When diagnostic testing is negative, the possibility of a false negative result should be considered in the context of a patient’s recent exposures and the presence of clinical signs and symptoms consistent with COVID-19. The possibility of a false negative result should especially be considered if the patient’s recent exposures or clinical presentation indicate that COVID-19 is likely, and diagnostic tests for other causes of illness (e.g., other respiratory illness) are negative.”

As for the accuracy of the death toll, other experts have previously told us that while it’s true that some deaths attributed to COVID-19 likely would have occurred regardless of the disease, other factors — like the deaths of undiagnosed COVID-19 victims, including those that occur at home — contribute to a more significant problem of under-counting the deaths.

New York City recently added more than 3,700 victims to its death toll to account for presumed cases. The CDC’s national count now makes note of how many cases and deaths were deemed “probable.” 

Jensen said he actually believed there could be both instances of under-counting and over-counting of COVID-19 cases and deaths — but said that “if there’s an over-count it’s conceivable that that could down the road translate to increased dollars in terms of some of the recovery dollars from COVID-19.”

When it comes to the $100 billion fund to help providers, future grants by HHS are supposed to focus on providers in areas hit hard by the outbreak, among others. But the initial allocation of $30 billion from that $100 billion fund to assist hospitals wasn’t distributed in that way. Instead, it was based on prior Medicare business.

A Kaiser Health News analysis found that the distribution of that initial $30 billion resulted in hospitals in states less affected by the pandemic — such as Minnesota, Nebraska and Montana — being given funding that worked out to be about “$300,000 per reported COVID-19 case.” In New York, which has the highest number of COVID-19 cases, the grant money amounted to “only $12,000 per case.”

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Sources

Berenson, Robert. Institute Fellow, Urban Institute. Phone interview with FactCheck.org. 20 Apr 2020.

Cases of Coronavirus Disease (COVID-19) in the U.S.” U.S. Centers for Disease Control and Prevention. Accessed 20 Apr 2020.

DePillis, Lydia and Caroline Chen. “Coronavirus Tests Are Being Fast-Tracked by the FDA, but It’s Unclear How Accurate They Are.” ProPublica. 10 Apr 2020.

Divine, Mary. “‘He died all alone.’ Family mourns loss of father, brother, son to coronavirus.” St. Paul Pioneer Press. 9 Apr 2020.

Guidance for Certifying Deaths Due to Coronavirus Disease 2019 (COVID–19).” Vital Statistics Reporting Guidance. National Center for Health Statistics, U.S. Centers for Disease Control and Prevention. 2 Apr 2020.

Hancock, Jay, et. al. “Furor Erupts: Billions Going To Hospitals Based On Medicare Billings, Not COVID-19.” Kaiser Health News. 10 Apr 2020.

Jensen, Scott. State senator, Minnesota. Phone interview with FactCheck.org. 20 Apr 2020.

Kominski, Gerald. Senior fellow, UCLA Center for Health Policy Research. Phone interview with FactCheck.org. 17 Apr 2020. 

Levitt, Larry, et. al. “Estimated Cost of Treating the Uninsured Hospitalized with COVID-19.” Kaiser Family Foundation. 7 Apr 2020.

Medicare Payment Advisory Commission. “Payment Basics | Hospital Acute Inpatient Services Payment System.” 11 Oct 2019.

Remarks by President Trump, Vice President Pence, and Members of the Coronavirus Task Force in Press Briefing.” White House. 8 Apr 2020.

Schwartz, Karyn. Senior fellow, Kaiser Family Foundation. Phone interview with FactCheck.org. 16 Apr 2020.

U.S. Centers for Medicare & Medicaid Services. “ICD-10 MS-DRGs Version 37.1 R1 Effective April 1, 2020.” Accessed 20 Apr 2020.

U.S. Centers for Medicare & Medicaid Services. “ICD-10-CM/PCS MS-DRG v37.0 Definitions Manual.” Accessed 20 Apr 2020.

U.S. Department of Health and Human Services. “CARES Act Provider Relief Fund.” 16 Apr 2020.

U.S. House. “H.R.748, CARES Act.” (as signed into law 27 Mar 2020)