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Report claims hospital discharges increase at payment thresholds

by Gus Iversen, Editor in Chief | February 19, 2015
An investigative report claims that many long-term hospital Medicare patients are discharged at a time that also yields the highest reimbursements.

The report is based on a Wall Street Journal analysis of nearly 860,000 Medicare-paid claims for long-term acute-care hospital stays. The analysis looked at patterns of discharge – and how the duration of stays matched up with Medicare payment thresholds.

One such example, the paper cited, involved a Kindred Healthcare Inc. hospital in Houston. It discharged a patient to a nursing home after 23 days and netted “nearly $36,000 from Medicare,” according to the paper. If the patient had been discharged one day earlier, reimbursement would have $15,000 less. If the patient had stayed any longer, Medicare would have paid no more.

That’s because Medicare sets lump-sum payment thresholds based on diagnosis. A longer stay does not yield any more money to the facility, a shorter stay yields less. But discharge at the precise limit covered by the lump sum maximizes the reimbursement for the institution.

The Journal’s analysis of discharge data, "found that many long-term-hospital companies discharge a disproportionate share of patients during that window when hospitals stand to make the most."

Tom Finucane, a doctor and professor at Johns Hopkins University School of Medicine, told the Journal, about these findings, that this was “troubling and disturbing,” and that to act in any way that did not aim to improve a patient’s condition was “a corruption.”

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