Home Health & Hospice Week

Learning the ins and outs of hospitals' post-acute care transfer policy may help you save your referrals.

For the affected diagnosis-related groups, the Centers for Medicare & Medicaid Services divides the total payment for the DRG by the mean length of stay to arrive at a per diem payment rate. When hospitals discharge patients to a home health agency, skilled nursing facility or another non-acute hospital earlier than the mean length of stay, they get paid the per diem rate instead of the full DRG amount. However, hospitals receive twice the per diem rate for the first day to make up for initial costs.

For 13 DRGs with very high front-end charges, hospitals receive a whole 50 percent of the DRG payment plus the single per diem for the first day. Those DRGs include hip and knee procedure DRGs 210 and 211, as well as DRGs 7, 8, 233, 234, 471, 497, 498, 544, 545, 549 and 550. Hospitals may be more willing to discharge these patients early to home care because they would recoup most of their costs up front anyway, experts predict.

The transfer policy proration kicks in only when the transfer to home health occurs within three days of the hospital discharge.

CMS proposes to review every five years the criteria for including DRGs in the transfer policy. 

Source: CMS IPPS final rule, www.cms.hhs.gov/providerupdate/regs/cms1500f.pdf.