Skip to main content
U.S. flag

An official website of the United States government

Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Impact of Expanding the Hospital Transfer Payment Policy for Early Discharges to Postacute Care

We will determine how the hospital transfer policy for early discharges to postacute care (PAC) would financially affect Medicare and hospitals if it were expanded to include all Medicare Severity Diagnosis-Related Groups (MS-DRGs). The transfer payment policy for discharges from hospitals to PAC facilities, such as a skilled nursing facility, applies to certain specified MS-DRGs. Analysis of Medicare claims data demonstrates significant occurrences of early discharges from hospitals to PAC facilities for MS-DRGs that are not currently subject to the PAC transfer payment policy. Medicare pays a full prospective payment system (PPS) rate to hospitals for these early discharges. In contrast, Medicare pays hospitals a reduced payment for shorter lengths of stay for certain MS-DRGs when beneficiaries are transferred to PAC settings (42 CFR § 412.4(f)). Our proposed audit would provide CMS with a more updated analysis of the financial impact that an expanded hospital-to-PAC transfer payment policy (i.e., all MS-DRGs) would have on Medicare and hospitals.

Announced or Revised Agency Title Component Report Number(s) Expected Issue Date (FY)
May 2021 Centers for Medicare and Medicaid Services Impact of Expanding the Hospital Transfer Payment Policy for Early Discharges to Postacute Care Office of Audit Services W-00-21-35871 2022