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Liberty Place, Suite 700
325 Seventh Street, NW
Washington, DC 20004-2802
(202) 638-1100 Phone

Tuesday, July 2nd 2002

Thomas Scully, Administrator
Centers for Medicare & Medicaid Services
200 Independence Avenue, SW, Room 443-G
Hubert H. Humphrey Building
Washington, DC 20201

Dear Tom:

On behalf of our nearly 5,000 member hospitals, health systems, networks and other providers of care, the American Hospital Association (AHA) requests that the Centers for Medicare & Medicaid Services (CMS) address the issue of intermediaries changing discharge status codes from those reported by the provider without any verification or provider recourse.

We view this letter as part of the model practices initiative with CMS to identify acceptable practices for our members.  We would appreciate your response to the following:

Issue:  Section 3808 of the Intermediary Manual states that error code 7111 is used to indicate that an inpatient PPS bill is posted to the “Host” history, the “From” date on the posted bill is equal to the “Through” date on the incoming inpatient PPS bill, and that the patient discharge status is 01 – discharge to home or self care.  The intermediary uses this error code to identify transfers between PPS hospitals and to prevent incorrect DRG payments.  The manual instructs the intermediary to change the patient status code to 02 (transferred to another acute care facility) and then to reprocess the bill.

However, in instructions specific to a review of hospital transfers outlined in Transmittal A-01-113, and dated September 19, 2001, CMS states that when a provider can substantiate that its action in discharging the beneficiary was appropriate and that there was an intervening event that necessitated the same day admission to another hospital, a recovery will not be initiated for incorrectly reported transfers.  This step seems much more appropriate than arbitrarily changing a discharge status code without provider input or without reviewing the actual patient record to determine the accuracy of the original coding.

AHA Recommendation: The intermediaries should be required to contact providers prior to making arbitrary changes to discharge status codes.  If the provider indicates, and a review of the patient record substantiates, that a transfer did not occur, but that an intervening event resulted in the patient being hospitalized elsewhere, the claim should be appropriately reimbursed as a discharge.  Providers should not be forced to change the facts of a record nor should the intermediaries make these changes simply for processing convenience.

We look forward to your response.  Should you have any questions, please do not hesitate to contact Mary Beth Savary Taylor, AHA’s vice president for executive branch relations at 202-626-2270.


Rick Pollack

cc:  Tom Grissom, Director, Center for Medicare Management
      Tom Barker, Provider Liaison
      Leslie Norwalk, Counselor to the Administrator


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