Followup Review of Inpatient Claims Under the Post-Acute-Care Transfer Policy (PACT)

Medicare makes the full Medicare Severity Diagnosis-Related Group (MS-DRG) payment to a hospital that discharges an inpatient beneficiary "to home." However, for certain qualifying MS-DRGs under the post-acute-care transfer policy, Medicare pays hospitals a per diem rate when an inpatient beneficiary is transferred to post-acute care. The per diem payment cannot exceed the full payment that would have been made if the beneficiary had been discharged to home. A prior OIG review identified Medicare overpayments to hospitals that did not comply with the post-acute-care transfer policy (42 CFR § 412.4(c)). OIG's review found that the CMS Common Working File (CWF) edits that detected inpatient claims under the post-acute care transfer policy were working appropriately. However, some Medicare contractors did not receive automatic notifications of improperly billed claims or did not act to adjust those claims. As a result, OIG recommended that CMS recover the identified overpayments in line with its policies and procedures and ensure that the Medicare contractors are receiving the notifications and are acting to recover the overpayments. CMS concurred with all OIG recommendations and detailed how they were addressed. This followup audit will determine whether CMS's CWF edits are working properly in detecting inpatient claims under the post-acute-care transfer policy and are automatically recovering overpayments, and whether Medicare contractors are receiving the automatic notifications and acting to recover overpayments.

Announced or Revised	Agency	Title	Component	Report Number(s)	Expected Issue Date (FY)
Completed (partial)	Centers for Medicare and Medicaid Services	Followup Review of Inpatient Claims Under the Post-Acute-Care Transfer Policy (PACT)	Office of Audit Services	W-00-23-35885; A-09-23-03016	2024