Home Health & Hospice Week

Medicare claims system fails to apply postacute transfer policy.

Hospitals are feeling pressured on both sides of the home care discharge issue — which side will win out?

On one hand: In a new report, the HHS Of-fice of Inspector General takes both hospitals and the Centers for Medicare & Medicaid Services to task for $31.7 million in hospital claims that weren’t prorated for discharge to home care as required.

On the other hand: Hospitals’ own payments are getting docked for patient readmissions, and a chief way to prevent such rehospitalizations is by discharging patients to home care.

Background: Under Medicare’s post acute transfer policy, hospitals’ Diagnosis Related Group payments get prorated if they discharge a patient to home care before the median length of stay. The patient must go to home care within three days of discharge to trigger the proration. CMS expanded the policy to 273 DRGs in 2008. When the policy began in 1999, it applied to only 10 DRGs.

Initially, to work, the proration depended on hospitals’ coding at discharge, but the OIG called CMS on the carpet for paying for many full DRGs that should have been prorated (see Eli’s HCW, Vol. XVIII, No. 11). Then new edits went into place in 2008 that were supposed to catch the transfers, even if hospitals didn’t code them correctly.

But those edits still haven’t been identifying all the DRGs that should be prorated. In two reports last year, the OIG called out MACs Palmetto GBA (see Eli’s HCW, Vol. XXII, No. 22) and Noridian Healthcare Solutions (see Eli’s HCW, Vol. XXII, No. 43) over the issue.

In its latest report, the OIG takes on the issue throughout the Part A program. “Medicare could have saved … $31.7 million over 4 years if it had had controls to ensure that the CWF edits were working properly,” the OIG found after a claims review.

Of the incorrectly paid claims that the OIG found, 91 percent were followed by claims for home health services, and 9 percent were followed by claims for services in other postacute care settings, the report notes.

Among other recommendations, the OIG wants CMS to educate hospitals on the issue, particularly proper discharge coding, and to make sure the CWF edits actually work as intended.

CMS agrees to furnish an MLN Matters article on the topic to hospitals, it says in its comments on the report. Plus it will refer this topic to its Recovery Audit Contractors for potential action.

CMS has also improved its edits in this area since the time period reviewed, 2009 to 2012, the agency maintains.

While the OIG is looking for program savings, it actually may be achieving the opposite with this scrutiny, says attorney Robert Markette Jr. with Hall Render in Indianapolis. Getting patients out of the hospital and into home care saves the program money over all, particularly by preventing readmissions. “If anything, Medicare should pay hospitals more when they discharge to home care, not less,” Markette says. “We don’t want to disincentivize home health.” 

Note: The report is at http://oig.hhs.gov/oas/reports/region9/91302036.pdf.