Knowledge Base Article

Medicare’s Recovery Audit program affords a variety of ways for hospitals to lose money. But it makes it harder to accept when you don’t have a process to deal with the issues. In this article we look at an inpatient issue that offers such challenges.

When we think of Recovery Auditor reviews of hospital inpatient records, we normally think of DRG Validation reviews and the ever-so-popular Medical Necessity reviews. But the Recovery Auditors also review inpatient records for other issues.

The topic addressed here is actually several different issues, all dealing with the correct assignment of the patient’s discharge disposition status. These include:

• reviews of acute care hospital to hospital transfers receiving an overpayment due to the assignment of an incorrect discharge status code,
• reviews of overpayments when a patient receives post-acute care but is coded as a discharge to home, and
• underpayment reviews for patients coded as a transfer to a post-acute care setting who never actually receive post-acute care.

Some of the errors may be the result of an error in code assignment, but a lot of these are due to either incomplete documentation concerning the patient’s post-discharge plans or circumstances that change after the patient is discharged.

So what can a hospital do to prevent receiving an improper payment, either over or under? First make sure physicians, case managers and discharge planners document clearly in the medical record the plans for the patient post-discharge. Also develop an avenue for coders to follow up on discharge status if the documentation in the record is unclear or conflicting. Now the harder part is how to address those patients that do not end up where they were planned to go. Some hospitals have implemented systems to verify the actual post-discharge care the patient receives. Examples of this would be contacting patients scheduled to begin home health care after discharge to see if this actually occurred or contacting skilled nursing facility to see if the patient was actually admitted. Medicare recently addressed post-acute care transfer underpayments in an MLN Matters article, SE1317.

This can be a difficult issue and contains financial risks for hospitals. Hopefully, being aware of what the issues are, understanding the regulations and having a plan in place will help reduce risks for hospitals.

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.