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Medicaid payment methodologies for hospital reimbursement related to transfers [PODCAST]

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The Hospital Finance Podcast

In this episode, we are joined by BESLER’s Mary Devine to discuss Medicaid payment methodologies for hospital reimbursement related to transfers.

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Is your hospital recovering all Transfer DRG overpayments and underpayments? For additional validation, contact BESLER about our Transfer DRG Recovery Service.

Highlights of this episode include:

  • Why Medicaid transfers are not discussed the same way as Medicare transfers
  • Contrast of similarities and differences between Medicaid and Medicare payment methodologies
  • Why Medicaid transfers should be reviewed more closely
  • The complexities of Medicaid billing codes and requirements across different states

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

Medicare transfer DRG recovery is something that we’re quite versed in here at BESLER. It’s something that we do regularly. But it’s something that perhaps doesn’t get talked about as much—Medicaid transfer recovery.

And so, to help sort that out and provide some additional detail around that, I’m joined by Mary Devine who is the Director of our Revenue Cycle Services here at BESLER. Mary, welcome back to the show.

Mary Devine: Thank you!

Mike: So, why is it that Medicaid transfer is not discussed in the same way that Medicare transfer is.

Mary: You know, Mike, that is such a good question. I really think that it is forgotten, and it shouldn’t be, because although states have the opportunity to reimburse Medicaid in any way they see fit, there are 21 states today that reimburse based on DRG, and the discharge status code and the transfer policy applies exactly the same way that it does for Medicare.

So, if you’re in a state that reimburses based on DRG for Medicaid, why you wouldn’t take that into account is questionable to me. I really don’t understand it. And especially, there are times where the Medicaid population or your percentage of Medicaid patients is equal to your Medicare population. So it certainly should receive the same type of focus.

Mike: So, let’s talk about those payment methodologies in a little bit more detail. And maybe we can contrast some of the similarities, maybe some of the differences between Medicare and Medicaid.

Mary: Sure! Unlike the Medicare program, the Medicaid program is dual, jointly administered. So the federal government has oversight.

But then the states, through their designated healthcare agencies, actually administer it to the individuals of their state if you will. And the Medicaid program is in fact funded by the federal agency by 57%. So the state picks up less than half of it.

So, CMS does have a large say over how the funds get reimbursed or sent to the states. And it’s generally based on your Medicaid population. And then, once it goes to the state, the state can say how it actually is divvied to the providers and how they get reimbursed.

So, for example, the 21 states that choose for the DRG reimbursement, there’s others that might do a per diem based on the length of stay. And then, there’s other that might go to a complete cost. So it just depends on the state and how they choose to administer to their recipients of it.

Mike: You’ve mentioned that Medicaid transfers should be reviewed more closely by just charge planning and case management departments. Can you tell us a little bit about your thoughts there?

Mary: Certainly. So, as we talk about the Medicare transfer rule, if you think about the Medicaid and the DRG reimbursement, it’s going to impact the reimbursement exactly as it would for Medicare.

So, if you code something a discharge status code of 02, indicating that the patient is going to an acute care facility for a Medicaid patient, and they end up not going to the other acute care facility, then you were short-paid because you didn’t get the full DRG, and you need to take special attention in looking at where these patients are going to ensure that you’re receiving the full reimbursement.

Now, not all Medicaid patients, but a significant amount of that population tends to be non-compliant. So potentially, you’re coding something as an 02, and the patient refuses to be treated at the next facility, and it should be an 01, or you recommend a patient to go home and receive home care, and when they get home, they are a non-compliant patient, and they end up not receiving the home care, but your DRG was short-paid by the per diem amount.

So you really need to, just as you would with Medicare, take a look at how the claims are being coded to make sure it’s appropriate.

Mike: And you mentioned a minute ago about how Medicaid is administered by the state, which we all know. But that adds some levels of complexity to it because Medicaid billing codes and requirements are not universal across each state, right?

Mary: Right, they are not. And so you would have to make sure that as you review your claims, that you understand the codes that you’re putting on that claim. You may think that a code for Medicare is exactly the same as the code for a Medicaid claim, and it might not be the case. And unfortunately, I think that’s why it somewhat gets forgotten because, as vendors look to do things globally, it’s really difficult unless you completely understand the regulations of that particular state.

Mike: Yeah, there are definitely some confusion there. Any additional thoughts on this topic, Mary?

Mary: My real thought on this don’t forget about the Medicaid DRG’s if your state is reimbursed that way. And if you don’t understand how it’s reimbursed, I would consider looking into it and understanding it before you start getting short-paid on your claims.

Mike: Indeed! And as I mentioned at the head of the podcast, BESLER’s got some expertise, if you will, in looking at transfer DRG revenue recovery across the spectrum.

So, if you’re unsure about where you are, you’d like us to give it a second look, please feel free to drop us a line, and you can find out all the details about transfer DRG revenue recovery on our website.

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

Mary:    Thank you for having me.


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