Blog, Revenue Cycle, The Hospital Finance Podcast®

Discharge status codes and their effect on hospital reimbursement [PODCAST]

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The Hospital Finance Podcast

In this episode, Olga Barone-Allan, Client Relations Manager at BESLER, discusses discharge status codes and their effect on hospital reimbursement.

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Incorrect patient discharge status codes can result in lost revenue. BESLER’s Transfer DRG Revenue Recovery service may be able to help you identify otherwise lost revenue.

Mike Passanante: Hi, this is Mike Passanante. And welcome back to the Hospital Finance Podcast.

Today, I am joined by Olga Barone-Allan who is the Client Relations Manager here at BESLER. And Olga is going to speak with us about discharge status codes and their effect on hospital reimbursement. Olga, welcome to the program.

Olga Barone-Allan: Thank you, Mike. And thank you for inviting me.

Mike: Olga, why don’t you start out by telling us what a discharge status code is.

Olga: Assigning a discharge status code seems to be pretty straightforward. However, when a patient is discharged from a hospital, they are being transferred to another location to continue their care or to their home. It’s very important for a hospital to code the UB-04 in the proper manner to get full reimbursement. If that is not the case, a hospital can be underpaid and result in less reimbursement being collected.

Mike: So, knowing where that patient is going to once they leave the hospital is important because it will affect the DRG that the hospital can get reimbursed on, correct?

Olga: Correct! And so the collaboration between the discharge planner is very, very important. The documentation that the discharge planner places on the chart when the patient is discharged is the key for the biller and the coder to make sure that it is representative on the UB.

However, there are cases where when the patient leaves and the discharge planner is under the impression that the patient may be going home or to a skilled nursing facility, the patient or the family member may decide that that is not where the patient is going. And there could be a change. And that is the key, that gap. Unfortunately, Medicare does not do any retro review on any of those cases. So, it is up to the hospital to be able to create a great alliance with home health agencies and to follow up with patients within 30 days of the patient’s discharge to ensure that the discharge code or discharge information that the discharge planner had at the time is accurate.

Mike: So, we’re going to unpack this in a little bit more detail. So next, let’s talk about what can go wrong when recording discharge status codes.

Olga: What can go wrong is discharge planner, at the time of the patient being discharged, is informed, is able to coordinate the next level of care for the patient’s continued care. However, that change could occur. It could occur between the family member or the patient themselves.

For example, the patient may be going to a skilled nursing facility at the time of discharge. And the discharge planner has already coordinated a transfer for the patient. However, the patient never made it to the skilled nursing facility. And the family member decided to bring the patient home and set up home health.

There is no way that the hospital knows that information, nor does Medicare know that information. So at the time of the bill being dropped and submitted to Medicare, the bill is indicating that the patient is being transferred to skilled nursing facility. That could impact the hospital’s reimbursement rate.

Mike: And as you mentioned before, discharge status codes are recorded on the UB-04. Explain how a hospital goes about properly recording them.

Olga: Okay! So again, discharge planner documents the chart. The chart goes to HIM or medical records. Medical records will update their system. And the code appropriately, according to the transfer location, will be placed on a UB-04 in fields locator 17.

The UB-04 is a standardized, universal claim form which is created by the National Uniform Building Committee (NUBC). This field, field #17, indicates the location where the patient is going. It’s a two-digit code. Sometimes, there could be multiple codes that the discharge planner indicates in the chart. The HIM or medical records department should be coding it to the highest level using one code for that field.

Mike: Can adjustments be made to the UB-04 once it’s submitted?

Olga: This is key. This is where the collaboration between the hospital staff, mostly PFS and case management, building a relationship with the home health agencies, skilled nursing facilities, and with the patient post-discharge is—because it is important that within 30 days of the patient’s discharge, they follow up to ensure that the patient was discharged to the transfer location that was indicated in the original bill.

If it is found out that the location was changed and the continuation of care is made at a different location, an adjustment is needed. Medicare does allow providers to send in an adjusted claim where you would indicate the new code accordingly.

Mike: And as you’ve alluded to here, keeping up with post-discharge status of patients can be pretty cumbersome. What are some ways hospitals can do this effectively?

Olga: With the tight budgets that hospitals have today, it’s very difficult. There would need to be constant follow-up as indicated before either by case management or PFS or someone from a team liaison between the two departments that would follow up. And unfortunately, it would be followed up with calls to skilled nursing facilities within the area, home health agencies, patients at home (or family members) to ensure that the discharge plan that was made originally from the chart is in fact the corrected location.

As indicated before, unfortunately, Medicare does not do any retrospective review. Therefore, their eligibility screen will not reflect the new change. It’s up to the hospital staff to make those changes to get that additional reimbursement.

And not in all cases will it result in an additional reimbursement. However, the quality and the compliance representing where the patient does obtain their continued care is extremely important.

Mike: And for an expanded discussion on this topic, you can visit Just go over to our blog and look for the revenue cycle section.

Olga, thanks for joining us today on the Hospital Finance Podcast.

Olga:    Thank you, Mike. I appreciate your time.


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