Confirmed by a recent HHS-OIG Report, inpatient admissions related to short-stay hospital claims involving canceled elective surgeries that are not reasonable and necessary, constitutes Medicare fraud.
Under Medicare regulations, such admissions are only billable when a clinical condition existed on admission or a new condition emerged after admission that required inpatient medical care. For instance, after the beneficiary was anesthetized, the beneficiary developed a new cardiac condition, the symptoms and treatment of which warranted an inpatient admission.
Reviewing a sample of relevant claims from 2009-2011, HHS-OIG determined that a disturbing 80% of the claims were not medically reasonable and necessary.
Of particular note, HHS-OIG determined that many of the offending hospitals had not established utilization review controls to confirm whether inpatient admissions remained reasonable and necessary after an elective surgery was canceled.
Federal regulations require hospitals to have a utilization review plan that provides for review of services that each hospital furnishes to Medicare beneficiaries. (42 CFR § 482.30.) If a hospital recklessly disregards this requirement and allows false short-stay claims to flow to Medicare, the hospital is potentially liable for treble damages and hefty fines for violating the federal False Claims Act.