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1 1 AMERICAN MEDICAL ASSOCIATION HOUSE OF DELEGATES 2 3 4 Resolution: 217 5 (A-09) 6 7Introduced by: Pennsylvania Delegation 8 9Subject: Hospital Systems’ Practices of Reclassification of Place of Service, Opting 10 Not to Bill Medicare for Hospital and Aggressive Denial of Hospital Days in 11 Reaction to Recovery Audits 12 13Referred to: Reference Committee B 14 (Monica C. Wehby, MD, Chair) 15 16 17Whereas, Some hospital systems, possibly out of concern over adverse outcomes from 18Recovery Audits Contractors (RAC), are reacting by aggressively denying hospital days, and in 19some cases possibly illegally not even submitting bills to Medicare for patients that are 20hospitalized, but may opt to bill some of the services as outpatient services; and 21 22Whereas, RACs link Part A and Part B place of service, (such as outpatient, inpatient, or 23observation status) and hospital systems sometimes shift between inpatient and observation 24status up to the time of a patient's discharge, and have even retroactively opted not to bill 25inpatient services in order to avoid adverse outcomes from RACs; and 26 27Whereas, Physicians’ billing services, both attendings and consultants, may not be informed of 28such status changes, therefore putting physicians at risk for denial of claims for legitimate 29services that they have provided either because of lack of matching of their Part B place of 30service with that claimed by hospital systems, or even the inability to link with any Part A service 31when hospital systems opt not to bill Medicare; and 32 33Whereas, This creates confusion and unnecessary hassle, and cost to physicians, and may 34result in non-payment for legitimate services provided, and potential adverse actions by RACs; 35and 36 37Whereas, Hospital systems' aggressive denial of hospital days, and/or possibly illegally opting 38not to bill for inpatient Medicare services in order to avoid adverse outcomes from RACs, places 39patients in harms way both by possible unanticipated co-payments for services when patients 40are reclassified from inpatient to observation status, and also when they possibly illegally 41reclassify from inpatient to outpatient status in order to avoid adverse outcomes from RACs; and 42 43Whereas, Hospital systems' aggressive denial of hospital days, and/or possibly illegally opting 44not to bill for inpatient Medicare services also exposes patients and their families to financial 45liability for skilled nursing home services, due to Medicare’s three-day hospital admission 46requirement; therefore be it 47 48RESOLVED, That our American Medical Association work with Centers for Medicare & Medicaid 49Services (CMS) to remove the requirement of linkage of Part A and Part B place of service, both 50for physicians' reimbursements and also as a requirement of Recovery Audits Contractors, and 51report back at the 2009 Interim Meeting (Directive to Take Action); and be it further 2

3 Resolution: 217 (A-09) 4 Page 2 5 6 1RESOLVED, That our AMA study and work with CMS to establish policy and/or regulations 2preventing hospital systems from the practice of possibly illegally attempting to avoid adverse 3outcomes from RACs by opting to not bill for inpatient Medicare services, and report back at the 42009 Interim Meeting (Directive to Take Action); and be it further 5 6RESOLVED, That our AMA work with CMS to protect patients from adverse outcomes such as 7unanticipated co-pays resulting from hospital systems' reclassification of patients from inpatient 8to observation or outpatient status, and also to protect patients and their families from 9unanticipated skilled nursing home charges that may result from hospital systems' aggressive 10denial of inpatient hospital days in order to avoid adverse outcomes from RACs. (Directive to 11Take Action) 12 13Fiscal Note: Implement accordingly at estimated staff cost of $3,056. 14 15Received: 05/06/09

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