Inpatient DRG Claims for Patients Transferred Early Will Be Paid According to CMS’ Transfer Policy Effective Dec. 4

Posted 9/1/2023 
Updated 9/29/2023

What’s changing: Effective Dec. 4, 2023, Blue Cross and Blue Shield of New Mexico (BCBSNM) will have the functionality to follow the Centers for Medicare and Medicaid Services’ (CMS) transfer rules when paying inpatient claims that use the Medicare Severity Diagnostic Related Group (DRG) claims methodology.

This means that if a member’s hospital stay is shorter than the average length of stay because the member is transferred to another facility, the DRG claim could be prorated for the length of the stay based on provider contract. These rules apply:

• to all inpatient DRG claims for acute care transfers to another acute care setting. It also applies to claims (when the transfer is made to a post-acute setting) with eligible DRG codes -- see the list in Table 5 of the applicable fiscal year Medicare hospital inpatient prospective payment systems (IPPS) Federal Register for the list of qualifying post-acute services.
  
• when a member is moved from an acute care facility to another acute care, rehabilitation, or inpatient psychiatric facility, or is sent home with home health services as denoted by the Patient Discharge Status Code (PDSC):
  • Transfers between acute care hospitals
    • Transfers to another acute care hospital or unit for related care (PDSC 02 or 82)
  • Transfers from acute care hospital to a post-acute setting.
    • Transfer to an inpatient rehabilitation facility or unit (PDSC 62 or 90)
    • Transfer to long term acute care facility (PDSC 63 or 91)
    • Transfer to a psychiatric care facility (PDSC 65 or 93)
    • Transfer to a children’s hospital, cancer hospital (PDSC 05 or 85)
    • Transfer to a skilled nursing facility (PDSC 03 or 83)
    • Transfer to Hospice care (PDSC 50 or 51)
    • Transfer to Critical Access (PDSC 66 or 94)
    • Transfer to home under a written plan of care for the provision of home health services from a home health agency (PDSC 06 or 86) except when Condition Code 42 or 43 is on the transferring hospital’s claim.
      

Why change: This helps the member avoid paying double for services. For example, if an average length of stay is seven days, but the member is discharged from acute care and admitted to a skilled nursing facility on day five, without these adjustments, the member would pay twice for days five, six and seven – once at the acute care facility and once at the skilled nursing facility.

More information: see 42 Code of Federal Regulations 412.4(a) and (b) and the Medicare Claims Processing Manual Pub. 100-04, Chapter 3, Section 40.2.4