Department of Health and Human Services

"Review of Hospital Patient Transfers Paid as Discharges and Claimed Improperly Under the Indiana Medicaid Program," (A-05-02-00041)

January 22, 2003

Complete Text of Report is available in PDF format (375 kb). Copies can also be obtained by contacting the Office of Public Affairs at 202-619-1343.


The objective of this review was to determine whether inpatient hospital claims for patients transferred from one hospital and admitted to another hospital on the same day were properly coded and paid in accordance with Indiana's Medicaid reimbursement methodology.

The medical records confirmed that 97 of the 127 claims reviewed were transfers improperly coded as discharges.  Transferring hospitals are reimbursed a diagnosis related group (DRG) pro-rated daily rate for each day, not to exceed the full DRG amount.  The Office of Medicaid Policy and Planning (OMPP) claims processing system does not have edits to identify transfers between hospitals, which are erroneously coded as discharges and claimed for the full DRG payment.  Based on pricing data provided by OMPP, there were overpayments of $758,681 attributed to 92 of the hospital claims.  Although coded incorrectly as discharges, the payment methodology for the remaining 5 claims did not result in an overpayment.  Subsequently analysis performed by OMPP resulted in lowering the overpayment amount to $739,061.  We have reviewed the logical supporting the adjustments and concur with the revised results.