in uncovered and recouped underpayments over 5 years
in underpayments uncovered during audit and recovered within 2 weeks
When a secondary vendor casts doubt on this Midwest health system’s transfer DRG underpayment recovery process with eSolutions, the organization decides to run an independent audit.
A well-respected Midwest hospital and not-for-profit healthcare organization with more than 1,500 employees and 25 facilities in their 10-county service area.
In 2015, a director on staff decided to audit the performance of the health system’s current Medicare transfer Diagnosis Related Group (DRG) underpayment recovery process. The director suspected revenue slippage and chose to evaluate other vendors to help audit their process at the time.
Medicare underpayments can occur when a patient is discharged as a “transfer,” but there is no post-acute care (PAC) billing. This often happens when a patient decides to forego the recommended PAC after discharge. When a patient elects not to transfer to a post-acute care facility in accordance with CMS rules, the discharging hospital is entitled to the full DRG payment but will have only received partial payment. In these cases, the burden of recuperating the full payment due falls on the facilities.
The Centers for Medicare and Medicaid (CMS) allows for a four-year retrospective review from the current date. If reasonable evidence is found showing that a claim was billed with an incorrect discharge status code, CMS allows reopening of that claim to adjust the code with “good cause.” CMS will not perform underpayment reviews on a facility’s behalf; providers are responsible for performing transfer DRG reviews for their facilities.
eSolutions’ Transfer DRG identifies these claims, provides clear justification for the reopening of the claim, and makes the adjustments on the facility’s behalf.
eSolutions performed a secondary assessment that year and uncovered an additional $67,000 in revenue validating the existing vendor’s underperformance. After further analysis and research, the organization chose eSolutions’ service as the primary vendor for underpayment recovery.
During five years of service, eSolutions uncovered and recouped over $949,000 in Medicare transfer DRG underpayments for this organization.
The Current Issue
In the beginning of 2020, the organization made the decision to audit their Medicare transfer DRG recovery process again. A secondary vendor had raised concerns with the financial services team, claiming eSolutions was missing opportunities and leaving money on the table.
The organization chose to audit the performance of the two services – eSolutions and the other vendor – by comparing both vendors’ findings in reviewing the same DOS data over a period of seven months.
Within three days, eSolutions uncovered over $175,000. Invoices went out and reimbursements were recovered within two weeks.
The same DOS data was provided to the secondary vendor. After four months of review, the secondary vendor was finally able to report their findings to the organization. At that point, choosing to remain partnered with eSolutions as a primary vendor was a quick and easy decision for the financial services team.
What Does this Mean for My Organization?
The best way to protect your hospital’s bottom line is to work with a thorough, experienced transfer DRG partner who can help you detect and analyze any underpayments.
Transfer DRG is eSolutions’ proprietary software that allows us to conduct underpayment audits on behalf of your facility and ensure your reimbursement for those claims. Unless a specific underpayment audit is conducted for these cases, the revenue loss and the underpayments discovered will persist and continue to grow. Our automated processes require only a minimal data set to identify eligible claims, resulting in a fast turnaround.
Thanks to our Medicare connection and data capabilities, we’ve already identified millions of dollars in transfer DRG underpayments for our hospital and health system clients.