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Patients wait for a COVID-19 test at Brooklyn Hospital Center in New York.  (AP Photo/John Minchillo) Patients wait for a COVID-19 test at Brooklyn Hospital Center in New York.  (AP Photo/John Minchillo)

Patients wait for a COVID-19 test at Brooklyn Hospital Center in New York. (AP Photo/John Minchillo)

Tom Kertscher
By Tom Kertscher April 21, 2020

Fact-check: Hospitals and COVID-19 payments

If Your Time is short

  • It’s standard for Medicare to pay a hospital roughly three times as much for a patient who goes on a ventilator, as for one who doesn’t.

  • Medicare is paying a 20% add-on to its regular hospital payments for the treatment of COVID-19 victims. That’s a result of a federal stimulus law.

  • The claim’s suggestion is that the number of COVID-19 cases is being padded; but evidence indicates the cases are being undercounted.

An article shared on Facebook questions whether the count of COVID-19 patients is inflated, saying hospitals have a financial incentive to claim that a patient has the virus.

"Hospitals get paid more to list patients as COVID-19 — 3 times as much if put on ventilator," the story’s headline states.

The article was posted on WorldNetDaily, a conservative news website. It was produced by The Spectator, which describes itself as a conservative publication. The Spectator reported on comments made by Dr. Scott Jensen, a Minnesota physician and Republican state senator, in an interview with Fox News host Laura Ingraham.

The article was flagged as part of Facebook’s efforts to combat false news and misinformation on its News Feed. (Read more about our partnership with Facebook.)

Jensen said on Fox News that doctors are being encouraged to cite COVID-19 as a cause of death on death certificates and he suggested that money is a motivation.

Medicare has determined that a hospital gets paid $13,000 if a COVID-19 patient on Medicare is admitted and $39,000 if the patient goes on a ventilator, he claimed.

Jensen did not respond to our request for information.

The federal government has decided to pay hospitals more for treating COVID-19 patients. But it isn’t a windfall in the way the headline suggests. And there is no indication that hospitals are over-identifying patients as having COVID-19. If anything, evidence suggests the illness is being underdiagnosed. 

How Medicare pays hospitals

Medicare pays for inpatient hospital stays using a diagnosis-related group (DRG) payment system. The hospital assigns a code to a patient at the time of discharge, based mainly on the patient’s main diagnosis and treatment given. 

Medicare then pays the hospital a prescribed amount of money — regardless of what it actually cost the hospital to provide the care. The amount can vary in different parts of the country to account for labor costs and other factors.

The amounts 

The dollar amounts Jensen cited are roughly what we found in an analysis published April 7 by the Kaiser Family Foundation, a leading source of health information. (Kaiser Health News, which partners with PolitiFact on health fact-checking, is an editorially independent program of the foundation.)

There isn’t a Medicare diagnostic code specifically for COVID-19. Using payment rates for similar respiratory conditions, Kaiser estimated the average Medicare payment at $13,297 for a less severe hospitalization and $40,218 for hospitalization in which a patient is treated with a ventilator for at least 96 hours. 

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"A COVID patient on a ventilator will need more services and more complicated services, not just the ventilator," said Joseph Antos, scholar in health care at the American Enterprise Institute. "It is reasonable that a patient who is on a ventilator would cost three times one who isn't that sick."

Medicare will pay hospitals a 20% "add-on" to the regular DRG payment for COVID-19 patients. That’s a result of the CARES Act, the largest of the three federal stimulus laws enacted in response to the coronavirus, which was signed into law March 27.

"This is no scandal," Antos said. "The 20% was added by Congress because hospitals have lost revenue from routine care and elective surgeries that they can't provide during this crisis, and because the cost of providing even routine services to COVID patients has jumped."

Julie Aultman, a member of the editorial board of the American Medical Association’s AMA Journal of Ethics, told PolitiFact it is "very unlikely that physicians or hospitals will falsify data or be motivated by money to do so."

"There are strict policies for reporting and, quite frankly, healthcare workers are only focusing on helping their patients and doing as much as they can with little resources," said Aultman, who is director of the medical ethics and humanities program at Northeast Ohio Medical University. "Ohio is reporting confirmed and suspected cases and so this is how our providers are responding to their patients -- they are being very transparent about confirmed versus suspected."

Indications of COVID-19 undercounts

As for the suggestion that there is an overcount of COVID-19 cases, "the data has suggested that, in fact, there’s a significant undercount of deaths due to COVID," Jennifer Kates, the Kaiser Family Foundation’s director of global health & HIV policy, told PolitiFact.

Here are some of those indications:

Strict federal definition: Until April 14, the U.S. Centers for Disease Control and Prevention counted as COVID-19 deaths only those in which the coronavirus was confirmed in a laboratory test — even as testing was not widely available; now, CDC counts probable cases and deaths. The day the change was announced, New York City’s COVID-19 death tally soared by more than 3,700 when it included in its total the deaths of people who were suspected of having COVID-19 but were never tested. 

Surge in total deaths: The Economist reported on "excess mortality," which is the gap between the total number of people who died from any cause during a given period, and the historical average for the same place and time of year. In New York City, for the four-week period ending March 28, there was an excess of about 1,400 deaths, compared with 1,100 official COVID-19 fatalities.

Our ruling

A post shared on Facebook claims hospitals have a financial incentive to claim patients had COVID-19, saying payment is three times higher if a patient goes on a ventilator. An article the post links to includes comments from a doctor who suggests the number of coronavirus cases is being padded.

It is standard for Medicare to pay roughly three times more for a patient with a respiratory condition who goes on a ventilator than for one who does not. That has nothing to do with the coronavirus.

As part of a federal stimulus bill, Medicare is paying hospitals 20% more than standard rates for COVID-19 patients.

Indications are that due to a lack of testing and other factors, the number of coronavirus cases has been undercounted, not padded.

For a statement that is partially accurate, our rating is Half True.

Our Sources

WorldNetDaily, "Hospitals get paid more to list patients as COVID-19," April 10, 2020

The Spectator, "Hospitals Get Paid More to List Patients as COVID-19 and Three Times as Much if the Patient Goes on Ventilator," April 9, 2020

Fox News, Laura Ingraham April 8, 2020, interview of Dr. Scott Jensen, April 9, 2020

Interview, Kaiser Family Foundation senior vice president and director of global health & HIV policy Jennifer Kates, April 17, 2020

Email, Julie Aultman, director of the medical ethics and humanities program at Northeast Ohio Medical University and a member of the editorial board of the American Medical Association’s AMA Journal of Ethics, April 21, 2020

The Economist, "Tracking covid-19 excess deaths across countries," April 16, 2020

KVLY-TV, "MN Sen. Dr. says reported coronavirus deaths may be off," April 8, 2020, "S.3548 - CARES Act," accessed April 15, 2020

Email, Dr. Bob Kocher, partner at the Venrock venture capital firm and adjunct professor at Stanford University School of Medicine, April 15, 2020

Snopes, "Is Medicare Paying Hospitals $13K for Patients Diagnosed with COVID-19, $39K for Those on Ventilators?," April 17, 2020 

Very Well Health, "How a DRG Determines How Much a Hospital Gets Paid," March 9, 2020

Very Well Health, "Diagnostic Related Grouping and How It Works," Feb. 16, 2020

Kaiser Family Foundation, "The Coronavirus Aid, Relief, and Economic Security Act: Summary of Key Health Provisions," April 9, 2020

American Hospital Association, CARES Act bulletin, accessed April 15, 2020

PolitiFact, "COVID-19 skeptics say there’s an overcount. Doctors in the field say the opposite," April 14, 2020

Interview, Kaiser Family Foundation senior vice president and executive director of the program on medicare policy Tricia Neuman, April 17, 2020

Kaiser Family Foundation, "Estimated Cost of Treating the Uninsured Hospitalized with COVID-19," April 7, 2020

Kaiser Family Foundation, "How health costs might change with COVID-19," April 15, 2020

Washington Post, "Coronavirus death toll: Americans are almost certainly dying of covid-19 but being left out of the official count," April 5, 2020

Washington Post, "Which deaths count toward the covid-19 death toll? It depends on the state," April 16, 2020

Email, Joseph Antos, scholar in health care at the American Enterprise Institute, April 15, 2020

Email, Jack Hoadley, research professor emeritus in the Health Policy Institute of Georgetown University, April 15, 2020

Email, Paul Van de Water, senior fellow at the Center on Budget and Policy Priorities, specializing in Medicare, Social Security and health coverage, April 16, 2020

U.S. Centers for Disease Control and Prevention, "Cases in U.S.," April 16, 2020

USA Today, "Fact check: Is US coronavirus death toll inflated? Experts agree it's likely the opposite," April 17, 2020

Centers for Medicare & Medicaid Services, "Acute Care Hospital Inpatient Prospective Payment System," Feb. 20, 2019

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Fact-check: Hospitals and COVID-19 payments

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