In this episode, Mary Devine, BESLER’s Vice President of Revenue Integrity, provides us with a glimpse into BESLER’s next free live Webinar, The Importance of the Transfer Rule in Optimizing Hospital Revenue Cycle, presented live on Wednesday, February 19, at 1 PM ET.
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Learn how to listen to The Hospital Finance Podcast® on your mobile device.Highlights of this episode include:
- Transfer Rule changes for 2025
- How the transfer rule impacts reimbursement
- Discharge status codes that would cause change in reimbursement
- Impact to the revenue cycle
- What providers can do
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome back Mary Devine, BESLER’s Vice President of Revenue Integrity. In this episode, Mary will provide us with a glimpse into BESLER’s next free live Webinar, The Importance of the Transfer Rule in Optimizing Hospital Revenue Cycle, that she’s presenting live on Wednesday, February 19, at 1 PM Eastern Time. Welcome back and thank you for joining us, Mary.
Mary Devine: Thank you for having me.
Kelly: All right. Well, let’s go ahead and jump in. So, I know we’re going to talk about how the transfer rule impacts the revenue cycle, but can you let us know if there are any changes for 2025?
Mary : You know what? That’s a great question to start with because there are changes to the transfer rule for 2025 that went into effect back in October of ’24. And the changes were there were 2 DRGs that were deleted from the DRG listing. So they were, obviously, removed from the transfer rule. And then there were 5 new DRGs added to the transfer rule. They were new this year and they were added to the transfer rule. So, for 2025, currently there are 285 DRGs impacted by the rule. Last year there were 282. We removed 2 and added 5, which brings us to the 285 currently that are impacted by the transfer rule. And the additions were all related to the spinal fusions and they really updated them. So, it’d be a little bit more specific of the level of fusions that were done.
Kelly: Wow. Thank you for covering that for us. So would you mind refreshing us on exactly how the transfer rule impacts reimbursement?
Mary : Well, the short answer is the transfer rule reduces your reimbursement. Providers receive a premium payment up to the geometric mean length of stay. Once the length of stay reaches the geometric mean length of stay, the payment returns back to the full DRG. So if the DRG is one of those 285 DRGs that I talked about being impacted by the rule and the length of stay is below the geometric mean length of stay and, one more thing, the discharge status code indicates it’s transfer, the providers receive a per diem payment, again, up to that geometric mean length of stay, and then you’ll get the full DRG. So, in short, it reduces reimbursement.
Kelly: Okay. Thank you for that refresher. So, what were some of those discharge status codes that would cause the change in reimbursement?
Mary : That’s a great question. And there’s actually nine discharge status codes that would cause the change in reimbursement. Those nine would be: 02, which is an acute, 03 is sniff, 05 is a children’s cancer, IPPS, 06 is home health, 62 is rehab, 63 is long-term acute, and then the 50 and 51 are for hospice, and then 65 is psych. There’s one thing to note, that a discharge status code of an O2 causes all DRGs to be impacted by the rule, not just the 285. So, no matter the DRG, if you coded an 02, you will receive the per diem payment.
Kelly: Thank you for explaining that for us. So how would it impact the revenue cycle?
Mary : So, as I have mentioned above, it impacts the revenue cycle by decreasing your actual reimbursement, so your cash is reduced. And in addition to the reduction in your cash, it can cause denials and takebacks because the discharge status code on the claim was incorrect. And there are times where you don’t even know it’s incorrect. You think it’s correct, but something happens and the patient ends up receiving post-acute care. So, you’re going to get a denial or a take back because the discharge status code indicated a non-transfer and the patient was transferred. So, if you’re not working your RTPs and your rejections with Medicare, you will lose the full payment on that. So again, that would really impact your revenue cycle.
Kelly: Okay. That makes sense. So, is there anything providers can do to help with the impact?
Mary : I think the biggest thing that providers need to do is make sure they’re not leaving any of that cash behind. You want to make sure that you are reviewing your discharge status codes and they are in fact correct. I would recommend utilizing a post review after your claims are done a year from now. Make sure that your discharge status code is correct because we all know that patients don’t do everything they’re supposed to do when they go home. Maybe you coded an 06 and the patient refuses the home care. You would never know that unless you didn’t do a review. And there are some times where, from a denial perspective, there isn’t much you can do in the example of an 02. If you code it an 01 because you think that patient’s going home and they end up going to the hospital because of some other reason unrelated and they get admitted, that claim is going to reject. So again, you want to make sure you’re working your denials and your RTPs.
Kelly: All right. Well, thank you for that. And thank you so much for joining us today, Mary, and for sharing the sneak peek into your upcoming live webinar, The Importance of the Transfer Rule in Optimizing Hospital Revenue Cycle, that you’re presenting live on Wednesday, February 19, at 1 PM Eastern Time. And as a bonus, you can earn CPE. Thanks again, Mary.
Mary : Thank you.
Kelly: And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
[music] This concludes today’s episode of The Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.
If you have a topic that you’d like us to discuss on the Hospital Finance podcast or if you’d like to be a guest, drop us a line at update@besler.com.
