The OIG states that a transfer to home with the provision of home health (HH) services is paid using a graduated per diem rate when the patient’s stay is assigned to a MS-DRG subject to the post-acute care transfer policy and the discharge is to home under a written plan of care for HH services provided within three days of discharge and the services are related to the hospital admission based on Section 1886(d)(5)(J) of the Social Security Act and 42 CFR 412.4(c)). As the OIG states, by applying an incorrect patient discharge status code, hospitals receive the full MS-DRG payment, instead of the graduated payment rate.

Medicare’s IPPS post-acute care transfer policy requires hospitals to apply the correct discharge status code to claims where patients receive HH services within three days of discharge. This includes the resumption of HH services in place prior to the inpatient stay.


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