The ordinary process of transferring a Medicare inpatient to another hospital is drawing an inordinate amount of attention from HHS' inspector general's office as a source of potential Medicare overpayments to hospitals.
The agency's heightened interest in patient transfers was revealed in its recently released fiscal 2000 workplan. The 88-page workplan makes public the agency's investigative and enforcement priorities for 2000 (Oct. 11, p. 28).
"The inspector general's office is identifying a whole host of (prospective payment system) issues of interest to them," said Gary Eiland, a healthcare lawyer with the Houston office of Vinson & Elkins.
Of the 22 hospital-related issues the agency said it will investigate this fiscal year, five address patient transfers under the Medicare PPS.
At issue is whether Medicare is paying more than once for the same episode of patient care, or paying at higher rates, because of incorrectly reported PPS transfers.
Under HCFA rules, a transferring hospital is allowed to bill Medicare for only a daily rate based on a patient's length of stay. The receiving hospital can bill for the more generous DRG rate, which recognizes an entire stay for a particular illness.
The inspector general said incorrectly reported transfers can allow both hospitals to claim the maximum DRG reimbursement.
Specifically, the inspector general's office will look into:
* Patient transfers between hospitals owned by the same hospital chain, with both hospitals billing for the higher DRG payment for the same patient.
* Patient transfers following hospital mergers, when newly issued provider numbers for acquired hospitals can lead to duplicate payments for transfers that never occurred.
* Discharges from and readmissions to the same hospitals on the same day, which could result in double payments for the same episode of care.
Improper billings for transfers from the country's 4,874 PPS hospitals cost Medicare an estimated $202 million in annual overpayments, according to the inspector general's semiannual report released in March.
The inspector general's office, which has listed PPS transfers as a workplan objective since 1996, will take a multifaceted approach to investigating suspect patient transfers. The agency will:
* Assist the U.S. Justice Department in its national investigation of patient transfers.
* Issue a report recommending recovery of overpayments from hospitals that aren't covered by the Justice Department's project.
* Review the transfer practices of all hospitals within selected chains at the request of the Justice Department or the inspector general's office of investigations.
* Prepare an advisory report to HCFA about questionable transfer patterns.
* Work with HCFA and Medicare fiscal intermediaries to administratively recover overpayments from incorrectly reported patient transfers.
* Draft with HCFA new instructions for Medicare contractors.
* Review readmission procedures at selected hospitals, fiscal intermediaries and peer review organizations to determine whether claims were appropriately paid.
Inspector general spokeswoman Alwyn Cassil said the agency's interest in Medicare inpatient transfers dates back to a series of audits beginning in 1986 and is similar to the approach the agency took with its so-called "72-hour window" investigation. That national investigation, which arose from audits conducted in the late-1980s and began producing settlements in 1995, looked at how hospitals bill Medicare for diagnostic tests taken within 72 hours of a patient admission.
Cassil said there were at least two inspector general audit reports issued before 1992 that put the provider community on notice even before the November 1996 Justice Department memorandum announcing it was investigating PPS transfers and seeking recoveries from 1992 through 1995.
"At some point this moves from being erroneous to being abusive," she said.
In response to the heightened scrutiny, hospitals should review the agency's workplan and adjust their internal Medicare and Medicaid billing compliance programs accordingly, recommended Eiland.
Alice Gosfield, a healthcare lawyer with Gosfield and Associates in Philadelphia, said, "The inspector general's office has been making noises about this for some time. They must have specific information about a PPS transfer problem by the variety in both scope and depth of the workplan entries."