Inpatient Facility Coding & Compliance Alert

Question: What all is included in an acute care transfer and what are the rules for payment to hospitals here?

Kansas Subscriber

Answer: An “acute care transfer” occurs when a Medicare beneficiary in an IPPS hospital (with any MS-DRG) is:

• Transferred to another acute care IPPS hospital or unit for related care - patient discharge status code 02 (or 82 when an acute care hospital inpatient readmission is planned); or
• Discharged/leaves against medical advice - patient discharge status code 07 but is admitted to another PPS hospital on the same day; or
• Transferred to a hospital that would ordinarily be paid under prospective payment, but is excluded because of participation in a state or area wide cost control program - patient discharge status code 02 (or 82 when an acute care hospital inpatient readmission is planned); or
• Transferred to a hospital or hospital unit that has not been officially determined as being excluded from PPS such as:

1. An acute care hospital that would otherwise be eligible to be paid under the IPPS, but does not have an agreement to participate in the Medicare program (patient discharge status code 02 or 82 when an acute care hospital inpatient readmission is planned);
2. A critical access hospital (patient discharge status code 66 or 94 when an acute care hospital inpatient readmission is planned).

• Discharged but then readmitted the same day to another IPPS hospital (unless the readmission is unrelated to the initial discharge). This may occur when a hospital discharges the patient to home (01), the patient goes to a doctor’s appointment the same day and is then admitted to another hospital.

If the first hospital was unaware of the planned admission at the second hospital, it is likely the first hospital will have to adjust the previously submitted claim to correct the patient discharge status code to indicate a transfer (02), which reflects where the patient was later admitted on the same date.

The transferring hospital is paid a per diem payment (when the patient transfers to an IPPS hospital) up to and including the full DRG payment. The receiving hospital is paid based on the full prospective payment rate which may include a cost outlier payment if applicable or based on the rate of its respective payment system (if not IPPS).