Documentation must be complete and accurate
Executive Summary
If discharge documentation isn’t complete and accurate, coders may not use the correct discharge status code, which could affect a hospital’s reimbursement.
• Discharge status codes identify where patients go after discharge.
• If patients go to some settings before the geometric mean length of stay, a hospital may receive reduced reimbursement.
• The Centers for Medicare & Medicaid Services has also issued a new set of discharge status codes that indicate scheduled readmissions.
Hospital reimbursement may be affected
Case managers need to make sure their discharge documentation is accurate and complete in order for their hospitals to receive the reimbursement they are entitled to, says Deborah K. Hale, CCS, CCDS, president of Administrative Consultant Services, a Shawnee, OK-based healthcare consulting firm.
"The number-one reason for underpayment identified by the Recovery Auditors has been incorrect discharge status code assignment," she says.
A discharge status code is a two-digit code that identifies where a patient goes at the conclusion of the hospital stay. The hospital’s claim for payment must include a discharge status code for both data collection and certain payment reductions, Hale says.
CMS has selected 275 MS-DRGs for which reimbursement may be financially impacted based on where patients are transferred. "CMS felt the acute care facility should not be entitled to the full MS-DRG payment if the patient would require services from other agencies also paid by Medicare," Hale says.
When a patient is transferred to certain settings before the geometric mean length of stay, minus one day, the hospital receives reduced reimbursement. Discharge settings affected include a skilled nursing facility, rehabilitation hospital, cancer or children’s hospital, home with home health services, long-term care facility, psychiatric hospital, or critical access hospital, according to Hale.
If patients are transferred to another acute care hospital one day prior to the geometric mean length of stay, payments may be reduced for all MS-DRGs, she says.
Case managers need to make sure the discharge notes have complete information on the discharge destination so the coders can apply the correct discharge status codes, Hale says.
Coders use a two-digit code to indicate where a patient goes after a hospital stay. CMS requires patient discharge codes for inpatient hospital claims, skilled nursing claims, hospital outpatient claims, and home health and hospice claims. "The code the coder chooses depends on what the physician and the case manager documents. Sometimes coders have difficulty getting the information they need for the case management documentation," Hale says.
For instance, if the documentation says "discharged to XYZ" and the facility has skilled and non-skilled beds, the coder doesn’t know whether to use discharge status code 03 or 04, which can affect the payment the hospital receives, she says.
CMS recently issued a new set of 15 discharge status codes to indicate when patients have a planned acute care hospital readmission. Case managers should make sure that the planned readmission is noted on the discharge documentation, Hale says.
"Despite the addition of these discharge status codes for expected readmission, CMS has not yet verified that the planned readmission codes’ will be considered when calculating overall readmission rates. With accurate claims data, hospitals should expect CMS to further evaluate the impact of planned readmissions on the hospital’s overall readmission rate and adjust payments accordingly," Hale says.
