Transfer DRG

Medicare has established payment rules for certain DRGs associated with follow-up care in other facilities or by home health agencies. Medicare reduces hospital payments for these DRGs, assuming that this care will be delivered by a different provider. However, in many cases, the discharged patient does not receive follow-up care, and when that care is not delivered, the hospital is eligible to receive the full DRG payment.

In order for a hospital to collect this reimbursement, it must perform a post-acute care transfer review and internal audit, and adjust discharge disposition codes. These activities must be done while maintaining compliance with Medicare regulations and timely filing requirements for retrospective reviews.

STINGRAY™, Healthcare Payment Specialists’s (HPS) proprietary software platform, guides hospitals through the Transfer DRG process. STINGRAY identifies eligible claims by reviewing multiple data sources and matching discharges to the post-acute claim. HPS then re-bills eligible claims with documented findings to ensure that payments are received timely and accurately.


The STINGRAY Transfer DRG Module has been Peer Reviewed by HFMA, and Healthcare Payment Specialists is the only firm to receive HFMA Peer Reviewed Designation for Medicare Reimbursable Bad Debt Review.

HPS Solution

  • Identifies eligible claims by reviewing multiple hospital and Medicare data sources
  • Conducts reviews 3 to 4 times faster than in-house reviews
  • Verifies the patient “level of care”
  • Expedites the recovery process by leveraging long-standing relationships with Medicare Administrative Contractors
  • Delivered as either a consulting service (with HPS performing the analysis), or as a SaaS solution with HPS implementing STINGRAY for use by the hospital to perform its own analysis

Case Studies

300+ Bed Academic Medical Center — Recovered additional $1.6M

Leading academic medical center in the Northwest with more than 300 patient beds accounting for approximately 20,000 inpatient admissions per year. The hospital has received recognition as a leader in several areas, including trauma, burn treatment, neurology, rehabilitation, neurosurgery, and orthopedics.

Opportunity / Challenge

Because the client felt they had a strong internal reimbursement team, they were surprised that HPS’s assessment showed significant additional reimbursement opportunity in the areas of Indirect and Direct Medical Education (IME/GME) and for transfer patients (TDRG) and elected to hire HPS to perform a detailed review.

The internal staff had already reported and received significant IME/GME and TDRG reimbursement, and the timely filing deadline for submitting additional claims was 6 weeks away. HPS’s challenge was to quickly and efficiently review thousands of patient accounts to identify the missed opportunities, and guide the hospital through the rebill/audit process to maximize the recovery amount.


HPS used our proprietary software, STINGRAY™, to regressively screen 100% of the patient population that was subject to Medicare’s Post Acute Care Transfer Policy, and reconciled the patient encounter data with data in the Medicare Common Working File.

HPS has an aggressive system in place to locate every Medicare patient’s Healthcare Insurance Claim number (HIC #) and to track daily the disposition of every claim until the hospital receives payment. Specialists review any non-conforming claims to identify and resolve issues that may be delaying payment. These claims are tracked until the hospital receives 100% of the entitlement amount.


  • TDRG: Recovered additional $1.2M
  • IME/GME: Recovered additional $400K

Leading Not-for-profit Hospital — Recovered $2.1MM

Large Midwestern not-for-profit medical complex and one of America’s best hospitals by US News and World Report

Opportunity / Challenge

The system’s internal reimbursement team found that locating the transfer DRG (TDRG) reimbursement opportunities among their thousands of patient accounts could be quite challenging. These reimbursement opportunities arise when a patient goes to a different post-acute care facility than the physician intended.

This discrepancy between where the patient was referred to, versus where the patient actually went, resulted in a small error within the patient accounting system that led to significant underpayments or overpayments to the hospital. In cases where key patient account information was incomplete or incorrect, these claims became exceedingly difficult to identify. And, while CMS had closely reviewed their accounts for instances where these deviations resulted in overpayments, underpayments weren’t identified, so they chose HPS to review their patient accounts to make sure that every TDRG opportunity could be billed.


HPS used proprietary software to regressively screen 100% of the patient population that was subject to Medicare’s Post-Acute Care Transfer Policy and reconciled the patient encounter data with data in the Medicare common working file. HPS’s process combined the results of this regressive analysis with a thorough review by specialists trained to verify all non-conforming claims. Once HPS had identified a pool of claims that did not have evidence of post-acute care activity per the common working file, significant additional research was done with the provider’s fiscal intermediary and post-acute cares referral centers to make a final determination. Finally a dedicated Quality Control team performed independent checks to isolate any anomalies and ensure the completeness of HPS’s review.

The process was designed with checks and balances to ensure secure handling of all patient data, and process integrity. The process identified all non-conforming transfer claims, including those that have a positive net reimbursement impact, those that are incorrect with no net reimbursement impact and those with a negative net reimbursement impact, HPS then helped the internal team locate and fix any discrepancies in their patient billings to help ensure full compliance with Medicare’s compliance standards.

Because the review process made extensive use of HPS automation tools, the review was completed very quickly thereby minimizing revenue recovery time.


  • Recovered $2.1MM in TDRG claims over a five-year period
  • Client broadened the relationship to include Shadow Billing