The Record

Here’s what you need to know about DRG readmission processing and how to provide input

Blue Cross Blue Shield of Michigan is proposing an enhancement to DRG readmission processing. This improvement is scheduled for implementation on March 1, 2022, for Blue Cross commercial members. The program update will identify inpatient readmission claims prior to payment.

Current DRG readmissions process

Proposed DRG readmissions process

Inpatient claims are received by Blue Cross Blue Shield of Michigan and are paid.
Readmission claims are identified by Blue Cross’ clinical editing program and are audited post-payment.
If the audit indicates a readmission occurred, then the claim is denied post-payment and reimbursement is requested.
This process allows for up-front payment of claims that are non-reimbursable and requires additional administrative burden on the providers to provide medical records.
A claim can take up to six months to finalize, depending on which appeals are filed.

Inpatient claims received will review against member claim history for a prior related admission.
Inpatient claims with no prior related admission will be paid through existing processes.
Inpatient claims with prior related admission that meet the readmission criteria listed below will deny without payment:

The voucher will indicate that the claim is a readmission.
The facility should rebill the original paid claim, combining the readmission services as noted in the online provider manual.
Providers may send an appeal through normal processes if they believe, and can support, that the rejected claim should have been billed and reimbursed separately.
Providers have the opportunity to acknowledge the readmission before payment is required.

Currently, readmissions are identified by our clinical editing program and result in post-pay audits. This new process will eliminate the need for post-pay readmission audits.

What this means to hospitals

If a facility recognizes a readmission claim prior to billing Blue Cross for the second admission, it can rebill the first admission, including the services provided in the second admission, as noted in the online provider manual. This would eliminate the need for Blue Cross to deny the second admission.

If a claim qualifies as a readmission, based on the criteria outlined below, it will be denied, with further instructions. The provider will have the opportunity to resubmit all services from the original inpatient claim, along with services from the second claim.

If the facility disputes the determination that the readmission criteria was met, a level one appeal can be submitted. The appeal must include medical documentation that supports the rationale for payment of the denied claim. It’s the facility’s responsibility to rebill the original paid claim, combining the readmission services as outlined in the online provider manual.

When a patient is readmitted within 14 days, the following criteria will be used to determine if the first and second admissions match:

Provider PIN

Member ID

Patient date of birth

The same or similar DRG

The following services will be excluded from the first and second claims when a patient is readmitted within 14 days, based on guidelines from the Centers for Medicare & Medicaid Services:

Chemo/immunotherapy procedure codes

Discharge reason codes where patient left against medical advice

Admissions to inpatient psychiatric, substance abuse, inpatient/outpatient rehabilitation and skilled nursing facilities

For more details, see our Blue Cross Commercial Provider Manual, which you can access through web-DENIS.

How to provide input

According to the Contract Administration Process — part of the Participating Hospital Agreement that went into effect July 1, 2021 — we will allow non-binding input from participating hospitals about this proposal.
Input from facilities is requested by Dec. 31, 2021. Send any input you may have to Liz Bowman at ebowman@bcbsm.com.

After input is received, Blue Cross has 30 calendar days to respond.

No portion of this publication may be copied without the express written permission of Blue Cross Blue Shield of Michigan, except that BCBSM participating health care providers may make copies for their personal use. In no event may any portion of this publication be copied or reprinted and used for commercial purposes by any party other than BCBSM.

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