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Partly false claim: Hospitals get compensated 15% more when they admit, discharge, or lose a patient to COVID-19; New York City hospitals are inflating their case numbers to take advantage

Shared hundreds of times on Facebook, posts claim: “Every time a hospital admits, discharges, or loses a patient to Covid-19, they are compensated 15% more according to the CARES ACT, SEC 4409”. The posts also say that New York City hospitals are “inflating all of their #coronavirus numbers” to take advantage of this section of the act. The claims made in these posts are partly false.

Reuters Fact Check. REUTERS/Axel Schmidt

Examples of the post can be seen here and here .

It is true that a section of the Coronavirus Aid, Relief, and Economic Security Act (or the CARES Act) calls for higher compensation from the Centers for Medicare & Medicaid Services (CMS) for the care of patients with a primary or secondary diagnosis of COVID-19. Contrary to what the posts claim, however, the measure is found in Section 3710, not 4409, and the increase is 20%, not 15%. It appears that the content’s author confused the version of the bill that went through the Senate on March 21 ( here ) with the final House version ( here ), which became public law on March 27.

Section 3710 of the CARES Act calls for the following: “For discharges occurring during the emergency period described in section 1135(g)(1)(B), in the case of a discharge of an individual diagnosed with COVID–19, the Secretary (of Health and Human Services) shall increase the weighting factor that would otherwise apply to the diagnosis-related group to which the discharge is assigned by 20 percent.”

The “emergency period” refers to the length of time that the United States will remain in the national emergency that was declared by President Donald Trump on March 13 ( here ).

The terms “weighting factor” and “diagnosis-related group” are part of Medicare’s Prospective Payment System. Since 1983, the Centers for Medicare & Medicaid Services (CMS) has used the system to put medical and surgical services into different categories known as diagnosis-related groups. According to the U.S. Department of Health & Human Services, the system “creates a rate of payment based on the “average” cost to deliver care (bundled services) to a patient with a particular disease” (See page 5, here ). The CMS gives each diagnosis-related group a unique weight, which “reflects the average level of resources for an average Medicare patient” in that group, “relative to the average level of resources for all Medicare patients” (See page 6). For the purposes of the payment system, in-hospital deaths are considered discharges.

The posts’ claim that the payment increase applies “every time a hospital admits, discharges, or loses a patient to Covid-19” is false. The 20% weighted factor increase applies only to Medicare patients and those without health insurance. It does not apply to patients with other forms of health insurance, like Medicaid or private insurance.

Only about 16% of New York City’s population is enrolled in Medicare for hospital and medical insurance ( see zip file here ; here )

As for discharges of patients without insurance, the U.S. Department of Health & Human Services (HHS) says here , “Every health care provider who has provided treatment for uninsured COVID-19 patients on or after February 4, 2020, can request claims reimbursement through the program and will be reimbursed at Medicare rates, subject to available funding.” According to estimates from the U.S. Census Bureau, 9.6% of New York City residents under the age of 65 are uninsured ( here ).

The weight determines the amount CMS reimburses the hospital for the patient’s care. Conditions that are more expensive to manage have higher weights. For example, a heart transplant with a major complication or comorbidity has a weight of 26.4106 while an uncomplicated peptic ulcer without any major complication or comorbidity has a weight of 0.8553 (see Table 5 here ).

Under Section 3710 of the CARES Act, the diagnosis-related group weight for pulmonary edema (excess fluid in the lungs) and respiratory failure would increase by 20% from 1.2157 (See Table 5 here ) to 1.4588 if the patient’s condition is a complication of COVID-19. The weight for simple pneumonia & pleurisy (inflammation of the lung tissue) with major complication or comorbidity would go up by 20% from 1.3335 to 1.6002, according to Reuters calculations.

Health economist Sherry Glied, dean of New York University’s Robert F. Wagner Graduate School of Public Service and former Assistant Secretary for Planning and Evaluation at the Department of Health and Human Services ( here ) explained to Reuters: “COVID-related pneumonia costs more to treat than regular pneumonia because it’s so infectious.”

The social media posts did not cite any evidence to support the allegation that New York hospitals are inflating their COVID-19 case numbers to bring in more money. The CMS told Reuters it does not comment on investigative activity. A CMS representative said any false claims by healthcare providers would be subject to recoupment and/or other potential civil or criminal charges.

VERDICT

Partly false. The CARES Act calls for a 20%, rather than a 15%, increase in reimbursement when a hospital cares for a patient with COVID-19; the increase does not apply “every time,” but only to Medicare recipients and the uninsured; there is no evidence that New York City hospitals are inflating their case numbers.

This article was produced by the Reuters Fact Check team. Read more about our work to fact-check social media posts here .

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