WEEKLY UPDATE: 10/30/25
The Connecticut Hospital Association (CHA) has sent a letter to Aetna requesting the commercial health insurance company immediately withdraw a new payment policy that undermines regulatory safeguards designed to uphold physician judgment, protect beneficiary coverage, and encourage program transparency. The “level of severity inpatient payment” policy, beginning November 15, 2025, deviates from the longstanding medical necessity review and denial processes by automatically approving certain claims at a lower rate of reimbursement, effectively eliminating the opportunity for hospitals to request a peer-to-peer or concurrent review before admission or while a patient is receiving treatment in a facility to ensure appropriate payment for the care provided.
Aetna has created a new “low severity inpatient stays” category for inpatient payment reimbursement that applies to urgent and emergent hospital admissions of one or more midnights for Aetna’s Medicare Advantage (MA) and/or Special Needs Plans (SNP). Instead of issuing medical necessity denials at the time of admission, Aetna will reimburse these hospital services at a lower rate comparable to outpatient observation status and eliminate hospitals’ option to appeal until after claim adjudication — a change that reduces front-end peer-to-peer review opportunities and delays fair reimbursement for the care provided. Under the current practice for medical necessity review established by the Centers for Medicare and Medicaid Services (CMS), hospitals that seek reimbursement for inpatient admissions spanning one or more midnights may receive a denial for the inpatient claim, with the ability to contest a denial through a standard appeals process. Aetna’s new policy shifts the burden to hospitals to address needed adjustments retrospectively, a process that requires more resources and time, ultimately inflating administrative costs, increasing financial pressure on hospitals, and straining healthcare delivery.
“The consequences of payment policies that do not reflect the true level of care provided lead to reduced access to inpatient care, increased waiting times for critical services, and strained emergency departments,” CHA’s letter reads. “We urge Aetna to work collaboratively with hospitals and CMS to ensure that payment practices are consistent with federal standards and that patients’ access to timely and medically appropriate care is protected.”
The Aetna policy change comes at the same time Cigna is rolling out a reimbursement policy shift involving downcoding. The Cigna policy would impact evaluation and management, or E/M, by downcoding six billing codes through an automated process, resulting in lower reimbursements for services such as office visits and outpatient consultations. Connecticut U.S. Senator Richard Blumenthal penned a letter to Cigna in September expressing concerns that the policy “creates onerous administrative burdens for physicians, needlessly raises costs for healthcare providers, and jeopardizes patient care.”
Providers across the country have sounded the alarm about these shifts in reimbursement policy that will impose more administrative burden on healthcare providers and negatively impact healthcare delivery.
Click here to read CHA’s letter to Aetna.
