As anyone working in a hospital already knows, diagnostic related groupings, or DRGs, are immensely important to the process of reimbursement. As a result, many hospital employees are worried about a plan proposed by the Centers for Medicare and Medicaid Services (CMS) that would essentially cause a patient’s transition to hospice care to trigger a change in their DRG status.

Under CMS’ new rule, hospice care would fall into a lesser DRG “if their length of stay is less than the geometric mean minus one day.” Since this would result in a reduced overall payment for the hospital, there is a major incentive for them to keep patients for longer. Whether or not this is a good thing is up for interpretation and is largely dependent on the hospital’s quality of care in the first place.

Additionally, this change has triggered a debate about the purpose of hospice in the first place. As RACmonitor’s Marvin D. Mitchell writes, “Let’s ask ourselves why hospice referrals are made, for what purpose. Why a rush? If death is imminent, why refer to hospice at all?” While the answer is complicated, much of it seems to stem from a misunderstanding of how hospice is meant to be used. Mitchell argues that better palliative care in hospitals could go a long way toward bettering a patient’s overall treatment experience whether or not the transfer goes through.

If you work as a coder or biller for a hospital, expect to see these payment changes coming into effect soon. Because of this adjustment, you may very well see patients stay longer when they would have ordinarily transferred to hospice. As always, be sure to keep on top of these and other changes and to review any applicable codes so that you are able to keep everything running smoothly during these times of transition.