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Hospitals around the country will soon be returning Medicare overpayments related to the post-acute care transfer (PACT) payment policy.
The HHS Office of Inspector General (OIG) said in a Nov. 6 audit report that Medicare improperly paid almost $54.4 million to acute-care hospitals for inpatient claims under the PACT transfer policy, and suggested that CMS recover the money. CMS said in a written response that it will direct Medicare administrative contractors (MACs) to get that money back and pursue overpayments hospitals received after the audit period.
According to the PACT payment policy, acute-care hospital patients who receive post-acute care are classified as transfers, not discharges, and hospitals are paid per diems instead of MS-DRGs up to the full amount of the MS-DRG. Post-acute care is defined as home health care provided within three days of discharge for a related diagnosis or condition, same-day admission to skilled nursing facilities and other hospital units that are not reimbursed under the inpatient prospective payment system (e.g., psych, inpatient rehab), and same-day hospice admissions. Hospitals are required to use discharge status codes on all Medicare claim forms, such as 06 for home health, which tells Medicare the PACT payment policy is in play.
When hospitals find out later that a patient was discharged to post-acute care rather than home, they are supposed to submit an adjusted bill to Medicare. The Common Working File has prepayment and postpayment edits that should prevent Medicare overpayments under the PACT policy.
OIG’s review covered $211 million in Medicare Part A payments for 18,647 inpatient claims with certain MS-DRGs where patients were transferred to post-acute care with dates of service from Jan. 1, 2016, through Dec. 31, 2018. The findings: none of the claims should have been paid the full MS-DRG payment under the PACT policy. Hospitals put the wrong patient discharge status codes on the claims, OIG said. Mostly, they coded the claims as discharged home rather than transfers to post-acute care. “The total overpayment amount represented the difference between the amount of the full MS-DRG payments that were made and the amount that would have been paid if the per diem rates had been applied,” OIG explained.
Process for Discharge Coding May Need Review
Also, there were some problems with the edits. For example, four Medicare administrative contractors reported they didn’t get the postpayment edit’s automatic notifications so they could act on the improperly billed claims, OIG said.
In light of the report, compliance officers may want to ask questions about their hospital’s process for assigning a discharge status code, says Stephen Gillis, director of compliance coding, billing and audit at Partners HealthCare in Boston. “Is it usually coding or case management? Or perhaps it’s admitting and registration, which is the least ideal scenario.” If there are errors in discharge status codes, it might indicate that “documentation in the medical record (i.e., discharge summary) could be lacking, and therefore the individual finalizing the discharge status code is relying on incomplete information,” Gillis says. “Sometimes, an initial discharge status code is entered at discharge and then is finalized by coding if clinical documentation suggests the need to make a change.”
Contact Gillis at firstname.lastname@example.org.