Leco & Associates

				Helping hospitals achieve fiscal fitness.

Medicare Transfer DRG's

Each year, hospitals lose significant revenue from underpayment of Medicare claims due to revisions in the transfer DRG rules.

Medicare transfer DRGs have been around since 1998 and initially affected only 10 DRG categories. In 2003, CMS expanded them to cover 29 DRGs. In 2005, they further expanded them to cover 182 DRGs – and last year they increased it to 273 DRGs.

The number of errors made in payment of these transfer DRGs can be significant.

While they still identify overpayments, CMS does not inform hospitals of any underpayment identifications, and many hospitals are unaware they are losing money on transfer DRG payments.

When a hospital treats a Medicare patient, it is entitled to the full DRG payment after it discharges that patient. However, if the hospital sends the patient to another facility excluded from the prospective payment system, a skilled nursing facility, or sends the patient home with a written home health care plan, those cases are considered “transfers” not “discharges.” On transfers, the hospital gets paid a per-diem rate for each day of the patient’s stay not to exceed the DRG rate. Often, this amounts to large discounts below the full DRG rate.

Unfortunately, some patients are misclassified as transfers when they were actually discharges. This means a loss of legitimate revenue for the hospital.

Our Findings

On average, 50% of Medicare inpatient discharges have a designated Transfer DRG. Of the 50% of total Medicare inpatient discharges, two to four percent are reimbursed incorrectly. This can represent a significant loss of revenue to the hospital.

M. Leco & Associates has the software tools and the expertise to recover this revenue for you.

We successfully recover most of the incorrectly paid claims. Our findings typically amount to 1% to 2% of our client’s 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.

What We Do

Use our proprietary software to identify all accounts paid at a transfer rate (less than the full DRG rate).
Verify billing and payment information from post-acute care providers in the Medicare Common Working File.
Contact the post acute care facility to verify their records confirm the findings with the hospital’s medical record and the CWF.
Provide the hospital with written treatment and billing verification for the patient’s permanent record

Leco’s Medicare Transfer DRG Recovery Service includes:

A thorough review
Full documentation of all cases of incorrect billing
Comprehensive Reporting Package
Preparation of all necessary paper work for submitting to Medicare
Defense of any inquiries that may result from our audit efforts
Reimbursement sent directly to the hospital from Medicare

This is a contingency based service. We do not receive any compensation until you have recovered your full payment from Medicare.

Act Now!

Time is limited to collect all monies rightfully due you