Ordinarily, the loss of Medicare or Medicaid billing privileges is connected to allegations of Fraud or Abuse. Make no mistake, the fear of being placed on pre-payment review alone or having reimbursement suspended during an investigation is enough for many hospitals to justify their compliance efforts.
The case of Overland Park, Kansas-based Blue Valley Hospital is a bit different. Under Medicare rules for acute care hospitals, a facility must have an average of 2 inpatient admissions per day with an average 2-day length of stay in order to maintain status as an inpatient hospital for purposes of reimbursement. Blue Valley Hospital asserts that the requirements are arbitrary. The hospital performed outpatient surgeries at a ratio of 2:1 over inpatient surgeries in the period examined per Ellison (2018, June 12) and of the inpatient surgeries performed, patient were often discharged prior to the 2 day standard.