With the implementation of PPS in the mid-1980s and a single DRG payment for hospital inpatient stays, one of several critical components to the changes was the acute-to-acute transfer policy created to eliminate full DRG payment to both. Throughout the 1990s there was an increase in the number of post-acute care practices as well as a corresponding decline in acute-care length of stay. A new PACT (post-acute care transfer) policy went into effect on Oct. 1, 1998.


The new PACT policy was established to prevent potential financial incentives (and overpayments) to hospitals for certain DRGs for which discharges frequently resulted in the transfer of a patient to a post-acute care setting. The criteria for a DRG to be subject to the PACT policy were created during the2006 fiscal year and are reviewed annually. More than one-third of the current MS-DRGs for the 2012 fiscal year are subject to the PACT policy. This policy provides that, when a patient is transferred and his or her length of stay is shorter than the geometric mean length of stay for the MS-DRG to which the case is assigned, the transferring hospital generally is paid based on a graduated per diem rate for each day of the stay.


The discharge dispositions subject to the PACT payment policy are:


03 Skilled Nursing Facility;
05 Other Type Institution;
06 Home with Home Health;
62 Discharged/transferred to another inpatient rehab facility, including inpatient rehab distinct part units of hospitals;
63 Discharge/transfer to long-term hospital; and
65 Discharged/transferred to a psychiatric hospital or psychiatric distinct part unit of a Hospital.


Detecting Overpayments


CMS has claims processing edits to detect hospital claims that are assigned improperly, for example, when the discharge disposition of 01 (discharged to home) is assigned when the claim overlaps with a post-acute care claim (resulting in a reduced payment to the hospital). An example of an overpayment would be when a patient is discharged home per the discharge documentation, but then receives home care within three days. However, there are no CMS claims processing edits to detect when a hospital may have been underpaid.


An underpayment example would be when the hospital assigns a discharge disposition of 06 (home with home health) per the discharge documentation, but then the patient decides not to follow through with the home care.


Action Steps


Identify steps your organization can take to ensure accurate assignment of discharge dispositions and essential follow-up to reduce your compliance risk. Ensure accurate assignment of discharge disposition codes by achieving appropriate documentation and communication of discharge plans.


Both concurrent and retrospective reviews should be performed. Utilization of the Medicare Common Working File (CWF) will assist with the retrospective reviews to determine the nature of post-acute care claim activity. For concurrent reviews, communication is essential between the hospital and the discharged patient, as well as between the hospital and the post-acute providers.


Join Karen Youmans and RAC University on Thursday, June 14, 2012 for “Post-acute MS-DRG Transfers: Don’t Let Incomplete Information Transfer the Risk Back to You”. Learn the Post-Acute Care Transfer (PACT) transfer policy so you can identify steps your organization needs to take to ensure accurate assignment of discharge dispositions and reduce compliance risk and reimbursement loss.


Register Today!


About the Author


Karen G. Youmans, MPA, RHIA, CCS, is the President of YES HIM Consulting, Inc. Karen has more than 25 years’ experience in healthcare. She has served on the FHIMA and AHIMA Board of Directors. She obtained her MPA in Healthcare Administration from Golden Gate UniversityandBA in Health Information Administration from the College of St. Scholastica. She is an AHIMA-approved ICD-10-CM/PCS certified trainer.


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