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Jefferson Health, which is part of Thomas Jefferson University, and Lehigh Valley Physicians Hospital Organization have sued Aetna over its policy on payment of Medicare Advantage claims.
The lawsuit was filed Monday in the federal court in Pennsylvania.
Jefferson Health claims Aetna violated federal law and failed to comply with the terms of the agreement it had with the health system.
Aetna implemented a "Level of Severity Inpatient Payment Policy" in January that resulted in improper denials and underpayment for inpatient hospital care for Aetna Medicare Advantage plan members, according to the complaint.
The policy further violates the Two Midnight Rule set by the Centers for Medicare & Medicaid Services, the lawsuit said. The Two Midnight Rule determines that inpatient hospital admissions are paid under Medicare Part A if the patient will require care spanning at least two midnights.
Aetna's policy states that it would begin approving Medicare Advantage members' urgent and emergent stays that last between one and four midnights without a medical necessity review. However, Aetna said it would pay the claim at a lower level of severity rate, which is comparable to the rate for observation services.
"Aetna adjusts the payment to a lower reimbursement rate if Aetna decides that certain 'level of severity' criteria are not met for that inpatient stay. As a result, Aetna is able to tell its Medicare Advantage members (and CMS) that it is 'covering' the inpatient admission, while simultaneously paying the Hospitals for the equivalent of outpatient observation care," the lawsuit said.
The hospitals' contracts with Aetna provide one rate for inpatient services, not two rates from which Aetna gets to choose, the complaint said.
The plaintiffs want the court to order Aetna to comply with the Two Midnight Rule for claims for inpatient services for Aetna members and also enter an injunction stopping Aetna from implementing its policy.
Jefferson Health is a nonprofit, multi-state health system of 33 hospitals in the Philadelphia region and South Jersey. It serves as a teaching hospital system for Thomas Jefferson University.
Email the writer: SMorse@himss.org