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USA Today Fact Check: It’s True Hospitals Are Paid More If Patients Listed as COVID-19, on Ventilators

Don't worry, nobody has ever acted on a powerful financial incentive

The claim: Hospitals get paid more if patients are listed as COVID-19, and 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:

“How can anyone not believe that increasing the number of COVID-19 deaths may create an avenue for states to receive a larger portion of federal dollars. Already some states are complaining that they are not getting enough of the CARES Act dollars because they are having significantly more proportional COVID-19 deaths.”

On April 19, he doubled down on his assertion via video on his Facebook page.

What have I been talking about…Conspiracy Theories…not.COVID-19 facts…yes.What are your thoughts?

Posted by Senator Scott Jensen on Monday, April 20, 2020

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 a 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.”

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.

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.

Jensen did not return an email request from USA TODAY for comment about his claim.

USA TODAY reached out to Dr. Marty Makary, a surgeon and professor of health policy and management at John Hopkins Bloomberg School of Public Health, about the claim. Makary said in an email on April 21, “… what Scott Jensen said sounds right to me.”

Makary did not elaborate, answer additional questions or respond to a request for an interview.

USA TODAY also reached out to both the American Hospital Association and Federation of American Hospitals on April 22, but as of publication had not received a response.

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 nationwide 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.”

Ask FactCheck also weighed in on April 21, stating: “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.”

Ask FactCheck reporter Angelo Fichera, who interviewed Jensen, noted: “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.”

Ask FactCheck’s conclusion: “Recent legislation pays hospitals higher Medicare rates for COVID-19 patients and treatment, but there is no evidence of fraudulent reporting.”

Julie Aultman, a member of the editorial board of the American Medical Association’s AMA Journal of Ethics, told PolitiFact it is “very unlikely that physicians or hospitals will falsify data or be motivated by money to do so.”

Our ruling: True

We rate the claim that hospitals get paid more if patients are listed as COVID-19 and on ventilators as TRUE.

Hospitals and doctors do get paid more for Medicare patients diagnosed with COVID-19 or if it’s considered presumed they have COVID-19 absent a laboratory-confirmed test, and three times more if placed on a ventilator to cover the cost of care and loss of business resulting from a shift in focus to treat COVID-19 cases.

This higher allocation of funds has been made possible under the CARES Act through a Medicare 20% add-on to its regular DRG payment for COVID-19 patients, as verified by USA TODAY through the American Hospital Association Special Bulletin on the topic.

Our fact-check sources

Source: USA Today

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