Turning tides: Inpatient stays may lengthen

Transfer rule changes reimbursement

Last month was the deadline set by the Balanced Budget Act (BBA) of 1997 to implement changes in the ways some hospital discharges are viewed. Depending on whether a patient falls into the category of one of 10 pre-determined DRGs, what were once considered discharges will now be labeled transfers, and Medicare reimbursements will change accordingly. (For list of 10 predetermined DRGs, see box at right.)

Hospitals no longer will be reimbursed on a per-patient basis. Instead, Medicare will compensate hospitals on a per-diem basis, offering twice the going rate for the patient’s first day of hospital stay since that is where the lion’s share of costs are. Whereas until now, because hospitals were allowed to keep whatever portion of the Medicare reimbursement that didn’t go toward patient care, they had a strong incentive to discharge patients to post-hospital care facilities, including home health agencies, as quickly as possible.

The Department of Health and Human Services’ Office of the Inspector General (OIG) examined 120 hospitals and six DRGs, comparing average lengths of stays within each category. The results, which were released in August, show that hospitals owning home health agencies reported average lengths of patient stays to be six days, a day less than those reported by hospitals not owning a home health agency. These results were found to be true regardless of whether the hospital referred a patient to its own agency or an independent one. Moreover, within the DRGs examined by the OIG, patients who qualified as DRG 148 (bowel procedures), DRG 209 (joint replacements), and DRG 88 (chronic obstructive pulmonary disease) experienced significantly shorter stays — four days in the case of bowel procedures and one day for either of the latter two.

Under the new rules, hospitals will have less incentive to push patients out sooner, and that might not be bad, says Lorraine Waters, BSN, C, MA, director of Southern Home Care in Jeffer sonville, Indiana. In fact, it could give patients more time to recuperate and adjust, she says.

Under previous rules, says Waters, discharged patients couldn’t be seen by a home health care provider until three days after leaving the hospital in order to maintain the discharge status. That situation, she says, often failed the patient. Now, a decision as to whether a patient will receive home health care must be made within three days of admission.


Who Will Qualify?

o DRG 14. Specific Cerebrovascular Disorders, Except Transient Ischemic Attack.

o DRG 113. Amputation for Circulatory System Disorders, Excluding Upper Limb and Toe.

o DRG 209. Major Joint Limb Reattachment Procedures of Lower Extremity.

o DRG 210. Hip and Femur Procedures, Except Major Joint, Age >17 with CC.

o DRG 211. Hip and Femur Procedures, Except Major Joint, Age >17 without CC.

o DRG 236. Fractures of Hip and Pelvis.

o DRG 263. Skin Graft and/or Debridement for Skin Ulcer or Cellulitis with CC.

o DRG 264. Skin Graft and/or Debridement for Skin Ulcer or Cellulitis without CC.

o DRG 429. Organic Disturbances and Mental Retardation.

o DRG 483. Tracheostomy, Except for Face, Mouth and Neck Diagnoses.

Source: Health Care Financing Administration, Baltimore.