Aetna Updates Medicare Advantage Inpatient Reimbursement Policy Effective Nov 15

Aetna is introducing a new inpatient reimbursement policy for its Medicare Advantage and Special Needs Plans starting November 15. The policy targets urgent or emergent hospital admissions with at least a one-midnight stay for these members. It aims to expedite reimbursement by automatically approving inpatient admissions without upfront medical necessity reviews for eligible stays, while still allowing hospitals to appeal for higher payments.

Under the new policy, reimbursement will depend on clinical severity as assessed by Milliman Care Guidelines (MCG). Cases that meet inpatient criteria are compensated at the full inpatient contracted rate, whereas cases not meeting these criteria are paid at a lower observation-level rate, despite the patient staying overnight. Importantly, Aetna will not issue denials for admissions failing to meet inpatient criteria; instead, these stays will receive reduced reimbursement, bypassing traditional medical necessity appeals and peer-to-peer reviews.

Hospitals must resolve disputes through the payment dispute resolution process outlined in their contracts, as the usual appeal mechanisms tied to denials will not be applicable. This policy is designed to reduce payment delays and administrative burdens hospitals previously faced when claims had to be rebilled or formally appealed.

This change aligns with a CMS final rule effective January 2024 enforcing the "two-midnight rule," which classifies inpatient admissions based on the admitting physician's expectation of a patient stay spanning at least two midnights for inpatient status and reimbursement. Stays shorter than this are generally categorized as outpatient or observation with lower reimbursement.

The policy signals a broader industry effort to streamline payment processes under Medicare Advantage plans amidst increasing regulatory compliance requirements and efforts to manage healthcare costs. Providers and payers will need to adapt to new workflows for claim submissions, appeals, and reimbursement tracking under this revised framework.