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OIG 2013 Work Plan to Include Hospital Transfers

February 7, 2013:

Trudy Whitehead, CPC-H, CMAS, Clinical/Technical Editor

The Office of Inspector General will be taking a close look at hospital discharges versus transfers, according to its 2013 Work Plan.

Medicare reduces MS-DRG payments when patients have a length of stay at least one day less than the geometric mean length of stay for the MS-DRG and are transferred to another hospital covered by the acute inpatient prospective payment system (PPS). There are close to 300 MS-DRGs for which the discharge is to a post-acute care setting.

The post-acute settings covered by the transfer policy include:

  • Long-term care hospitals
  • Rehabilitation facilities and units
  • Psychiatric facilities and units
  • Skilled nursing facilities
  • Home health care (if the patients receive clinically related care that begins within three days after the hospital stay)
  • Children’s hospitals
  • Cancer hospitals

Under the transfer policy, the transferring facility is paid a per diem rate rather than the full MS-DRG payment. Generally, hospitals receive twice the per diem rate for the first day and the per diem rate for each additional day up to the full MS-DRG rate.

As outlined in the 2013 OIG Work Plan, the OIG will review Medicare payments made to hospitals for discharges that should have been coded as transfers. The agency will determine whether the claims were processed and paid correctly and whether the Medicare administrative contractors’ processing edits identified transfer claims correctly. Based on federal regulations, the discharging hospital is paid the full DRG amount, whereas the transferring hospital is paid a graduated per diem rate that cannot exceed the full DRG rate that would have been paid had the beneficiary been discharged.


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