May

19

Mass adjustment to post-acute transfer cases assigned to MS-DRG 956

By Medicare Weekly Update

By Judith Kares, JD, CPC, regulatory specialist for HCPro, Inc.,

On May 8, 2009, CMS released transmittal R492OTN. This transmittal instructed Part A contractors (Fiscal Intermediaries and Medicare Administrative Contractors [FIs/MACs]) to download the revised FY 2009 IPPS Pricer and to mass adjust claims that meet the following criteria:

• Have a discharge date on or after October 1, 2008;
• Were assigned to MS-DRG 956; and
• Were assigned a transfer Price Return Code of ‘10’.

MS-DRG 956 is one of 272 MS-DRGs in FY 2009 that may trigger the application of the post-acute transfer rules. The post-acute transfer rules apply when a qualifying MS-DRG is assigned to a case where an IPPS hospital inpatient is discharged to one of three post-acute settings:

• A non-IPPS hospital or a distinct non-IPPS unit (i.e., a hospital other than a short-term, acute care hospital, which includes inpatient rehabilitation facilities and units [Patient Status 62], long-term care hospitals [Patient Status 63], psychiatric hospitals and units [Patient Status 65], children’s hospitals [Patient Status 05], and cancer hospitals [Patient Status 05];
• A Medicare certified skilled nursing facility or SNF unit to receive skilled care in a Medicare certified skilled care bed [Patient Status 03]; or
• Home health care, beginning within 3 days of the discharge [Patient Status 06].

Most acute and post-acute transfer cases are paid under the same methodology. The contractor calculates a per diem rate, which is determined by dividing the full DRG payment by the geometric mean length of stay (GMLOS) for the discharge DRG. The hospital receives two per diems for the first day and one additional per diem for each additional day of that stay. If the patient’s length of stay is within one day of the GMLOS for the discharge DRG, the hospital will receive a full DRG payment.  If not, the hospital will receive something less than the full DRG payment.

Twenty-four post-acute MS-DRGs in FY 2009 have been designated to receive payment under a special payment methodology. This methodology results in the hospital receiving 50% of the total DRG payment plus one full per diem for the first day and .5 per diem for each additional day of that stay. Again, if the patient’s stay is long enough, the hospital will receive the full DRG payment.

Although the FY 2009 IPPS Rule designated MS-DRG 956 as a regular pay DRG, the FY 2009 IPPS Pricer continued to designate it as a special pay. This has resulted in overpayment to hospitals with post-acute cases assigned to MS-DRG 956 during the first part of FY 2009. Once the updated version of the Pricer has been installed, contractors have been instructed to mass adjust the relevant claims.

Proper payment under the acute and post-acute transfer rules is an ongoing focus of the OIG, as well as the RAC audits. Hospitals are advised to review their internal processes for reporting of appropriate Patient Status codes when these rules apply, and to assure that proper payment is received.