Important Information Concerning Aetna

Aetna’s recent policy update, which became effective July 1, marks a significant change in how the insurer will manage hospital readmissions.

Previously, Aetna’s Diagnosis-Related Group (DRG) Readmission Policy focused on individual facilities by using the Provider Identification Number (PIN). The new policy now applies at the Tax Identification Number (TIN) level, meaning entire health systems are being evaluated as a single entity.

Although this does appear to have been a previously held practice by Aetna in some of their Medicaid products, such as Aetna Better Health, this new update will globally apply to all of Aetna’s products, unless there are state or provider contracting provisions to limit such practices.

This change was briefly mentioned in Aetna’s April 2024 update: “We want to improve the quality of care and general health of our members. Readmissions can put our members at risk for unnecessary complications. We currently apply the Diagnosis-Related Group (DRG) Readmission Policy on hospitals at the Provider Identification Number (PIN). Effective July 1, 2024, we will apply the policy at the Tax Identification Number (TIN).” 

This broader scope means that if a patient is readmitted to any facility within the same health system, the readmission could be flagged and potentially denied, even if the initial and subsequent admissions occur at different locations. This policy is designed to reduce unnecessary readmissions, which Aetna views as a risk to patient safety and a burden on healthcare resources.

This statement is interesting, as reports were recently released regarding the fact that Aetna’s operating income is down 39 percent, or $938 million, from the prior year. Conveniently, Aetna’s stricter criteria will result in higher denial rates, impacting reimbursement and patient care.

Health systems must now closely examine their discharge processes, post-discharge follow-ups, and care coordination across all facilities under the same TIN to avoid preventable readmissions. However, in reviewing Aetna’s policy, it becomes clear that health systems are able to request reconsideration to contest any denials that are potentially unrelated or were the result of a scheduled procedure. 

Aetna’s expansion of its DRG Readmission Policy to the TIN level is a strategic move to improve patient outcomes by reducing avoidable readmissions – and to likely yield financial benefit to Aetna. Health systems should proactively adapt their procedures to minimize the financial and operational impacts of this policy change.

Recommendations should be considered to check internal contracting language and state protections and to continue to adopt care transition protocols that will help with readmission prevention.