FAPFS Sample Newsletter
CMS Revising Program Edits Related to Transfer Claims
The Office of Inspector General (OIG) has issued reports to the Centers for Medicare & Medicaid Services (CMS) that indicated that hospitals were incorrectly coding the patient status field in regards to transfers to post-acute care facilities. In some cases, this resulted in overpayments to the hospital. On January 1, 2004, CMS initiated Common Working File (CWF) edits to identify incorrectly coded hospital claims. CWF sent notification of these edits to the fiscal intermediaries, instructing them to automatically cancel hospital claims with an incorrect code in the patient status field.
Unfortunately, the edits were incorrect and the volume of cancellations across the country is causing financial difficulties for many providers. Many of the cancelled claims would not be subject to a reduction in payment even if incorrectly coded. Post-acute claims that might come in out of sequence have also caused some hospital claims to be inappropriately cancelled.
CMS expects to implement a revision to the Common Working file on March 15, 2004, that will reduce the number of claims hitting the transfer edit. This change is expected to result in cancellation of only those inpatient hospital PPS claims paid under one of the 29 post-acute DRGs, with an actual length of stay less than the average length of stay for the assigned DRG, and where CMS has an indication that the patient status code is incorrect. Currently, providers were seeing an inordinate number of cancelled claims that did not meet the criteria for reduced payment under the post-acute transfer provision. While this revision to the Common Working File edits is underway, CMS continues to stress that this measure may be temporary and that hospitals should focus their efforts to assure proper coding of the patient discharge status.
The following Q&A reflects the current status on the issue:
What is currently being done by CMS to remedy this problem?
The Medicare claims processing system has been modified to limit automatic cancellation of inpatient claims only to inpatient hospital claims with a patient status code indicating the patient was sent home upon receipt of a claim from another facility. We have also corrected the issue of canceling claims where a home health claim is received within three days and there may have been an intervening stay (e.g., SNF stay).What else will be done by CMS?
Is there a 14-day reference in the inpatient transfer
rule?
No. This reference was incorrectly communicated.
Has the CWF ever edited for the 14-day window for subsequent SNF
claims?
The CWF has never edited for such a rule. We only edited for
SNF claims if the patient was in a SNF on the same day as their discharge from a
hospital.
If the effective date is January 1, 2004, why are some claims that
were paid and/or processed prior to January 1, 2004, being
cancelled?
The effective date is not date of service specific. Any
incoming claim that enters the CWF, on or after the effective date, will
initiate a history search and potential cancellation of claims. The new edits
will only search for and cancel claims with discharges on or after October 1,
2003.
What hospitals are excluded from these edits?
Hospitals
outside the 50 states, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, and Maryland hospitals. CMS has also decided not to apply these
edits to inpatient rehabilitation facilities (IRFs), long-term care hospitals
(LTCHs), psychiatric hospitals or units, children's hospitals, or cancer
hospitals. Basically, we are going to bypass all 11X TOBs, except for acute care
hospitals under IPPS.
When will these edits take effect?
The expected date is
March 15, 2004.
Does CMS realize that hospitals are out of compliance if they change the patient status code on the claim to a transfer as directed by CMS, even if the medical records or hospital physician orders do not support this?
Families and personal physicians often place patients in post-acute settings without the hospital having any knowledge. CMS feels that if a patient is receiving post-acute care on the same day as discharge or within three days of discharge in the case of home health care, the post-acute admission is related to the inpatient stay. Physicians and coding staff must be educated on the impact of correct coding.
