Inpatient FAQ May 2018

on Wednesday, 16 May 2018. All News Items | FAQ

Post-acute Care Transfer Policy and Discharges to Hospice


Have there been any recent updates to the hospital Post-acute Care Transfer (PACT) Policy?


Yes. Transmittal 2055 added discharges to hospice care as a post-acute care setting that would invoke the payment adjustments of the Post-acute Care Transfer policy beginning FY 2019.

The transmittal summarizes the facts of Medicare’s transfer policies in the Background section:

“When a patient is transferred to another hospital and his or her length of stay is less than the geometric mean length of stay for the Medicare Severity Diagnosis-Related Group (MS–DRG), the transferring hospital would be paid based on a graduated per diem rate for each day of stay, not to exceed the full MS–DRG payment.  For discharges to certain post-acute care settings, this per diem-based payment adjustment is limited to discharges to certain MS-DRGs. Currently, the regulation limits post-acute care transfers to those where the patient is transferred to a distinct part hospital unit, a skilled nursing facility, or discharged with a written plan for home health services commencing within 3 days of discharge.”

The policy revision is based on the requirements of Section 53109 of the Bipartisan Budget Act of 2018. Beginning in FY 2019 (October 1, 2018), discharges to hospice care will also qualify as a post-acute care transfer and be subject to payment adjustments.

The post-acute care setting and discharge statuses to which the policy applies are:

  • Inpatient rehab facilities and units (discharge status code 63)
  • Long term care hospitals (code 62)
  • Psychiatric hospitals and units (code 65)
  • Children’s and Cancer hospitals (code 05)
  • Skilled nursing facilities (code 03)
  • Home with a home health plan of care that begins within 3 days (code 06)
  • Hospice care (code 50 or 51) – NEW for claims with through date on or after October 1, 2018

Here are some other facts about the post-acute care transfer policy from a prior Wednesday@One article.

  • PACT policy only applies to certain MS-DRGs. The list of MS-DRGs to which the policy applies is updated annually as Table 5 of the IPPS Final Rule.
  • PACT policy only applies when the patient is transferred to certain post-acute care settings – see list above
  • Medicare identifies transfers to the affected settings by the discharge status code on the claim. If Medicare receives a claim from a post-acute care provider for days immediately after discharge, they will ask the transferring hospital to adjust their discharge status code if needed.
  • Payment is reduced to the transferring hospital. A per diem rate is calculated by dividing the MS-DRG rate by the GMLOS. The transferring hospital is paid 2x the per diem rate for the first day and the per diem rate for subsequent days up to the full MS-DRG payment.
  • There are special pay MS-DRGs (also noted in Table 5) that are paid differently, with a higher payment percentage for the first day of hospitalization.
  • Transfer cases are eligible for outlier payments.

Article by Debbie Rubio

Debbie Rubio, BS, MT (ASCP), is the Manager of Regulatory Affairs and Compliance at Medical Management Plus, Inc.  Debbie has over twenty-seven years of experience in healthcare including nine years as the Clinical Compliance Coordinator at a large multi-facility health system.  In her current position, Debbie monitors, interprets and communicates current and upcoming regulatory and compliance issues as they relate to specific entities concerning Medicare and other payers.  You may contact Debbie at This email address is being protected from spambots. You need JavaScript enabled to view it..

This material was compiled to share information.  MMP, Inc. is not offering legal advice.  Every reasonable effort has been taken to ensure the information is accurate and useful.

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.