Critical Path Network

Discharge disposition initiative increases reimbursement

LPN reviews discharges under transfer rule

By reviewing the discharge dispositions of patients whose hospital stay was covered by the Medicare post-acute transfer rule, Jupiter (FL) Medical Center in Florida was able to generate an additional $108,000 in reimbursement in just one year.

The review determines whether patients who were discharged for post-acute services before they met the geometric mean length of stay actually received the services that were documented in the chart.

Under the Inpatient Prospective Payment System (IPPS), if patients in certain DRGs are transferred to other providers of post-acute services before completing the geometric mean length of stay for that DRG, the hospital receives only a portion of the full reimbursement for that DRG.

The provision covers discharges to other hospitals that are reimbursed under the IPPS, to skilled nursing facilities, and for home health services provided by a home health agency if the services are provided within three days and are related to the reason for the hospitalization.

Reviewing Medicare discharge dispositions

At the advice of a consultant, the hospital reviewed Medicare discharge dispositions to determine how many errors there were and what it would mean to the bottom line, says Cathy J. Hamilton, RN, BA, MHS, CPUQ, CPUR, director of care management.

For instance, if a patient's DRG qualifies for the transfer rule and he or she is transferred for home health services before the geometric mean length of stay is completed, the hospital is paid a portion of the DRG reimbursement. But, if the home health services are not received within three days, the hospital gets the full amount.

A trial review that compared the actual discharge disposition with what was coded resulted in $57,000 in additional reimbursement when, for whatever reason, the patients didn't go to the final discharge disposition within the specified time period or the services were not related to the acute hospitalization, Hamilton says. For instance, in some instances, the home health agency didn't provide care for the patient until the fourth day or the family refused home health services. In other instances, the patient was transferred to a custodial bed at the receiving facility, rather than a skilled nursing bed.

The hospital created the position of case management LPN and hired Elaine Gamache, LPN, to conduct a concurrent review of the discharge dispositions.

Hamilton runs a monthly report of all Medicare patients who fall within the post-acute transfer rule DRGs and who did not meet the geometric mean length of stay for the DRG.

"Once Gamache has the report to work with, she is able to identify patients who received custodial vs. skilled post-acute care and those who did not receive home health within 72 hours," Hamilton says.

Gamache goes through the report and sorts the patients as to their discharge destination. For instance, she groups all patients who were receiving care from the same home care agency.

She contacts the home care agency and validates that the services were received and compares the diagnosis the home care agency is treating to the patient's hospital diagnosis. A patient may be hospitalized with the primary diagnosis of congestive heart failure but have diabetes with a wound as a comorbid condition. If the patient received home health services to treat the wound and the home health agency's billing diagnosis was a diabetic ulcer, the hospital is entitled to reimbursement because the post-acute services were not related to the reason for hospitalization.

When patients are transferred to other acute care facilities for a service that Jupiter Medical Center doesn't provide, the LPN checks on the admission status at the accepting facility.

"We transfer a lot of patients to other facilities for cardiac catherizations. If they are an inpatient at our hospital and the receiving facility admits them under observation status, that doesn't count as a transfer DRG," she says.

When Gamache identifies potential errors, she calls the hospital's fiscal intermediary and validates what diagnosis was on the bill to ensure that the hospital is rebilling appropriately.

"One of the keys to our success is that case managers put in the final disposition. It's critical that this information is accurate, otherwise it significantly increases the work when the LPN calls a facility and finds out that the patient never was transferred there," Hamilton says.

(Editor's note: For more information, contact Cathy J. Hamilton, RN, BA, MHS, CPUQ, CPUR, director of care management, Jupiter Medical Center, e-mail: