Each year, hospitals lose significant revenue from underpayments of Medicare claims due to misapplication of the transfer DRG rules.

When a hospital discharges a Medicare patient, it is normally entitled to the full DRG payment. If the hospital sends the patient to another facility excluded from the prospective payment system, to a skilled nursing facility, or home with a written home health care plan, it is considered to be a “transfers” not a “discharge". For transfers, Medicare pays the hospital a per-diem rate for each day of the patient’s stay not to exceed the DRG rate. This usually amounts to a large discount below the full DRG rate.

Unfortunately, some patients are misclassified as transfers when they were actually discharges. Some transfers should be reclassified after discharge because the patient status has changed. Such discrepencies can result in the loss of legitimate revenue for the hospital.

We successfully recover nearly all of the incorrectly paid claims. Our findings typically amount to 1% to 2% of the total Medicare inpatient discharges with an average increase of $2,000 to $4,000 per account. For a hospital with 10,000 annual discharges, this could yield approximately $200,000 to $800,000 in additional revenue.