Medicare Prospective Payment System Transfers Reported as Left Against Medical Advice Hospital Discharges

This final report points out that Medicare paid 1,610 hospitals an additional $6.8 million because the hospitals reported patients as having left against medical advice (called LAMA discharges), when, in actuality, the patients were transferred or admitted to another hospital on the same day. As a result, these claims were paid at an amount higher than would have been paid had the LAMA discharges been treated as transfers. This problem occurred because LAMA discharges are not included in the computerized system edits designed to detect same day discharge and readmission to another hospital. In addition to the recovery of overpayments, we recommended that the Centers for Medicare & Medicaid Services (CMS):  (1) review the instructions for incorrect hospital coding of patient discharges in order to determine whether it should be revised to address transfers reported as LAMA discharges; and (2) develop adequate internal controls and monitoring safeguards at the fiscal intermediaries and peer review organizations to detect and address transfers reported as LAMA discharges.