Medicare Compliance & Reimbursement

Hospitals with high error rates for post-acute transfers could be in for aggressive enforcement actions from federal regulators.

In its latest review of post-acute transfer compliance, the HHS Office of Inspector General estimates that hospitals collected more than $60 million in overpayments in 2000 based on improperly classifying transfer patients as discharges.

Under the post-acute transfer policy, if a beneficiary in one of 10 specified diagnosis related groups is discharged to a post-acute provider, the discharge will be treated as a transfer for payment purposes. In essence, that means that the hospital will be paid a per diem rate for the patient's care, rather than the full DRG amount.

The OIG's findings suggest that compliance with the rule is something of a train wreck. Out of 200 claims the agency reviewed, 188 resulted in improper payments, the agency says in "Compliance with Medicare's Postacute Care Transfer Policy for Fiscal Year 2000" (A-04-02-07005). Compliance, however, can be a big challenge for hospitals: For example, a hospital may have no way of knowing whether a patient receives home health care after discharge.

Nevertheless, both the OIG and the Centers for Medicare & Medicaid Services are frustrated with the results - and the agencies may be about to pounce. "We are interested in exploring potential cooperative arrangements with OIG to identify, investigate, and sanction abusive hospitals," CMS chief Tom Scully warns.

The DRGs affected by the policy are: 014, 113, 209, 210, 211, 236, 263, 264, 429 and 483.

To see the report, go to http://oig.hhs.gov/oas/reports/region4/40207005.htm.

Lesson Learned: Hospitals beware - CMS and the OIG may soon up the ante on post-acute transfer policy enforcement.