Medicare Compliance & Reimbursement

Hospital compliance officers should make sure their staff knows the ropes when it comes to coding transfers and discharges.

Although the issue is one of the older compliance watch areas, many hospitals are still struggling with the issue — and the HHS Office of Inspector General is still watching for mistakes.

Most recently, an OIG report took the measure of Medicaid transfer/discharge snafus in Indiana. Under federal reimbursement rules, when a hospital transfers a patient to another inpatient setting, the transferring hospital should be paid a per diem rate rather than collecting the full diagnosis related group payment.

Transferring hospitals should use patient status codes 02 (discharged/transferred to another short-term hospital for inpatient care) or 05 (discharge/transfer to another institution for inpatient care) to ensure that transfers are paid properly, the OIG says in “Review of Hospital Patient Transfers Paid as Discharges and Claimed Improperly Under the Indiana Medicaid Program” (A-05-02-00041).

However, in its Hoosier State review, the OIG found that 97 out of the 127 claims it scrutinized were transfers improperly coded as discharges. The OIG said those mistakes resulted in more than $750,000 in overpayments.

Lesson Learned: Hospitals should make sure their discharge coding practices jibe with Medicare and Medicaid rules on prospective payment system transfer payments.

To see the report, go to http://oig.hhs.gov/oas/reports/region5/50200041.pdf.