Transfer DRG Solutions: Maximize Reimbursement & Avoid Underpayments With Analytics and Pricing Tools

https://www.youtube.com/watch?v=yG6wOABj66U

⚠️ Transfer DRG Pricing Errors: What Your Analytics Should Catch

In revenue cycle management, transfer DRG pricing presents a minefield for risk. While outright claim denials trigger more obvious alerts, transfer DRG underpayments can more easily go unnoticed. With transfer DRGs, modest lost revenue can quickly build up to thousands! Placing aside the potential for a costly audit, transfer DRG recovery is an expensive process in and of itself. Transfer DRG review often requires health system workers to take precious hours out of their workdays to redo complex work. So, how can better pricing and analytics protect your organization from DRG pricing errors?

📚 Understanding Transfer DRGs, Medicare, and Underpayments

To understand how analytics and pricing can adapt, it's vital to understand the basics of transfer DRGs. Under the Medicare Inpatient Prospective Payment System, or IPPS, hospitals receive the MS-DRG rate upon the patient's discharge. When a patient is transferred from one care facility to another, the revenue cycle process becomes more complex. This can occur when a patient transfers hospitals, or from a hospital to a post-acute care setting. In transfer situations, hospitals no longer receive a lump MS-DRG amount. Rather, they'll receive a graduated per diem rate. The final setting the patient stays in will receive the full DRG payment regardless of their length of stay. The current transfer DRG payment system was created to limit Medicare payments for incomplete treatment courses. The system is governed by CMS's Post-Acute Care Transfer (AKA PACT) rule. This system now includes 275 transfer DRGs that can lead to reduced payments.

💰 Transfer DRG Services Calculations

Transfer case per diem rates come from the assigned DRG. The calculation is as follows: Per Diem Rate = Full DRG Payment divided by Geometric Mean Length of Stay, or GMLOS Medicare then uses a graduated structure to decide the rate day to day. The total payment to the transferring hospital cannot exceed what would have been paid with a standard discharge, preventing overpayments from very short stays. Some DRGs are "special pay" DRGs, or higher complexity cases where regular per-diem methodology cannot cover the average costs. If a DRG is deemed special pay, it's important to monitor closely, as the pricing logic is different from the standard calculation.

⚙️ Transfer DRG Reimbursement and Underpayment Issues

If the DRG system sounds complicated, that's because it is! DRGs provide room for a lot of error throughout the revenue cycle. The per diem framework includes many compounding variables for reimbursement that must be calculated simultaneously. When these errors are processed, they often arrive as partial payments, not complete denials, so they're less likely to raise an immediate red flag. Grouping errors are unlikely to be discovered until claims have already been submitted. Sometimes, providers fail to resubmit claims at all because resubmission takes so much time and effort. If the sending and receiving hospitals file simultaneous incorrect claims, alerts may never be triggered at all. While some hospitals are successful in recovering underpaid DRGs, they'll often fail to identify all potential underpaid cases. If even a small percentage is underpaid, but the pay differential per case is thousands of dollars, those thousands add up.

📉 Potential Sources of Transfer DRG Underpayment

The complexity of transfer DRGs necessitates great claims pricing and revenue cycle analysis. When working through DRGs, your system may get tripped up in these potential ways:

Severity Underreporting from Incomplete Diagnosis Capture

It's vital that your claims pricer allows you to completely capture diagnoses. If secondary or tertiary diagnoses are not included in processing, thousands of dollars can be lost. Great claims pricers will allow you to capture large numbers of diagnosis codes, and strong analysis will help catch codes that are submitted incorrectly. Micro-Dyn's pricer tool allows for 25 diagnosis codes per case, creating a system where revenue is less likely to be lost.

Outdated Grouping Logic in Transfer DRG Claims

APR-DRG and MS-DRG groupers are updated regularly as guidelines change. Claims pricers need to rapidly update to reflect these guidelines. If the grouping logic used by the transferring and receiving facility are different, these can also create issues. Strong pricing tools can keep healthcare organizations current, and analysis can catch any potential outdated logic.

Mismatch Between Site-of-Service and Place-Of-Service

In Transfer DRGs, destination site codes can determine whether the PACT rule applies. If the code is wrong, the entire calculation can shift. Claims pricer and analysis tools can help you watch for these issues.

Missing or Incorrect Modifiers Throughout Revenue Cycle

Incorrect or missing modifiers can lead to claim denials or investigations of upcoding or non-compliance. For transfer DRGs, modifiers can cause incorrect per-diem calculations and trigger duplicate billing flags if the same episode appears on two facility claims. Great analysis can include modifier validation logic that helps you review your claim before you submit. Ideally, this is paired with strong pricing systems that allow you to include all necessary modifiers.

🏥 Protect Hospital Revenue with Current Transfer DRG Systems

Don't let your hospital lose revenue due to incorrectly processed transfer DRGs! Identify underpayments early with strong claims pricing systems and healthcare revenue cycle analysis. You can optimize your revenue cycle management with strong software. Micro-Dyn's software can help protect your organization from incorrect grouping logic, missing or incorrect modifiers, and underreporting of severity with strong pricing. Micro-Dyn's DRGActive IPPS Grouper and APR-DRG Active DLL tools can handle up to 25 diagnosis codes and 25 procedure codes. With complete coding tools, revenue is less likely to be lost from severity underreporting, missing modifiers, lack of CMS compliance, or outdated grouping logic. DRGActive enables precise Medicare grouping for complex hospital stays with accurate algorithms. Micro-Dyn also allows optional validation of diagnosis and procedure codes for extra peace of mind. When you invest in great software, you can prevent revenue loss, even in complex DRG situations. Improve Your Revenue Cycle with Micro-Dyn Here!