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Problem

Solution

Claim Charges at Hospitals with no DRG Payment Schedule Denied

Claims at Hospitals with no DRG Payment Method are Reimbursed

A few years ago, reinsurers may have understood that all HMOs, when contracting with hospitals for Medicare members, would only pay using DRGs, but this is not always the case. Therefore, reinsurers interpreted that DRGs are applied to “All Facilities” regardless of a DRG being in place or not. On the contrary, the client’s understanding was to apply the DRG when and where they have a DRG. This resulted in all claims not paid on a DRG basis being denied.

On behalf of the client, U.S. Advisors contested this issue stating that it was not about strict application of the policy but rather the actual intent and client understands of it applying DRGs when and where they have a contract. We reminded them that this is the reason the industry uses an ADM for those cases that are not reimbursed on a DRG basis. The whole issue was discussed in context of the evolution of the reinsurers’ DRG policy language and it became clear that the intent of the Provider Contract was to include all payment methods. Result: Reinsurer reimbursed the claims that were not paid on a DRG basis.

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