What is happening with transfer diagnostic-related group (DRG) payments in 2020? Well, the answer is complicated. People usually understand it as a focus on proper diagnosis and coding related to transferring a patient out of a hospital to a nursing facility. However, some hospitals are seeing nursing patients come back to hospitals because of the COVID-19 situation. It’s still a top concern for revenue integrity, so let’s review some recent policies and experiences at hospitals.
In May of this year, the Tampa Bay Business Journal reported that “Tampa Bay-area hospitals are acting as nursing-care facilities now that some positive COVID-19 residents have evacuated from nursing homes and moved to those hospitals, and they can expect to receive more payment for that service.” The article continues to quote different hospital spokespeople who state that in some cases “swing beds” (beds that can be used when nursing home patients move into hospitals) allow hospitals to establish “swing beds” and bill under a Medicare rate usually applied to skilled-nursing facilities.
“CMS (Centers for Medicare and Medicaid Services) stated in the updated guidance that the CARES Act directed the HHS Secretary to increase the IPPS weighting factor for the assigned DRG for an individual diagnosed with COVID-19 discharged during the public health emergency period.”
While this is good news in some cases, hospitals still have to manage certain reductions in payments due to transfer DRG rules. In an article from 2018, Becker’s Hospital Review identifies the heart of the problem: “Under the Post-Acute Care Transfer rule, certain DRGs are subject to reduced payment if a hospital discharges a patient early and the patient receives qualifying post-acute care. Today, over 270 DRGs are subject to reduced payment if a hospital discharges a patient early and the patient receives qualifying post-acute care. Hospitals may not be receiving the full reimbursement when beneficiaries transfer to facilities or home health 52% of the time. An astonishing 52% of Medicare discharges are coded as TDRGs and can average as much as $1500 in payment reductions for each inpatient account.”
A PDF from CMS on the “Acute Care Hospital Inpatient Prospective Payment System” explains that “Generally, Medicare pays acute care hospitals an IPPS payment on a per inpatient case or per inpatient discharge basis. The claim for the inpatient stay must include all outpatient diagnostic services and admission-related outpatient non-diagnostic services the admitting hospital or an entity wholly owned or operated by the admitting hospital furnished to the patient during the three days preceding the patient’s hospital admission.
Acute care hospitals cannot bill these services separately to Medicare Part B. The CMS assigns discharges to diagnosis-related groups (DRGs). A DRG groups similar clinical conditions (diagnoses) and the services provided during the inpatient hospital stay. The patient’s principal diagnosis and up to 24 secondary diagnoses, including any comorbidities or complications, determine the DRG assignment. Up to 25 procedures provided during the stay can affect the DRG. Other factors that influence DRG assignment include a patient’s gender, age and discharge status disposition.”
But hospitals have new considerations during the COVID-19 pandemic, including new ICD-10 codes. A recent article by RevCycle Intelligence reported that “CMS stated in the updated guidance that the CARES Act directed the HHS Secretary to increase the IPPS weighting factor for the assigned DRG for an individual diagnosed with COVID-19 discharged during the public health emergency period. The federal agency will identify these individuals based on the ICD-10-CM diagnosis codes B97.29 and U07.1, a new FAQ stated.” The article also explains that while “CMS has allowed state and local governments, hospitals and other organizations to create alternate-care sites,” the simplest path for reimbursement is to treat these sites as a “temporary expansion of their existing brick-and-mortar location.”
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