Policy Overview
This Payment Policy outlines the reimbursement methodology for inpatient hospital readmissions occurring within 30 days following discharge from a prior inpatient admission.  The policy is intended to promote high-quality, coordinated care while ensuring members are held financially harmless for clinically related, same-condition, or preventable readmissions.

Reimbursement for inpatient readmissions will be rejected when the subsequent admission is determined to be clinically related to the initial hospitalization and potentially preventable. A readmission is clinically related when the diagnosis, procedure, or clinical presentation is the same as, similar to, or medically connected to the care provided during or immediately following the initial admission. A readmission is potentially preventable when, in the judgment of the health plan’s clinical reviewer, it could reasonably have been avoided through appropriate care during the initial admission or through appropriate discharge planning or transitional and post-discharge care.  For purposes of this policy, the day of discharge is not counted in the readmission window.

Member Liability
The member shall be held financially harmless for any payment denial made under this policy. Providers may not bill the member for amounts denied pursuant to this policy and must reimburse the member for any cost-sharing collected for the readmission.

Readmission Review and Reimbursement Determination
Readmissions may be reviewed when:

• The member was discharged from an inpatient hospital admission;
• The member was subsequently admitted as an inpatient within thirty calendar days following discharge;
• The readmission occurred at:
  • The same facility;
  • A facility within the same hospital system;
  • A facility sharing the same tax identification number (TIN); and
• The readmission diagnosis, procedure, complication, clinical presentation, or reason for admission appears to be the same as, similar to, or related to the initial hospitalization.

Readmissions may be reviewed using claims data, medical record documentation, coding information, utilization management criteria, quality standards, and clinical judgment.

The health plan reserves the right to request additional documentation necessary to support payment determination.

Determination of Clinical Relatedness
A readmission will be considered clinically related to the initial admission when one or more of the following apply:

• The readmission is for a continuation, recurrence, or exacerbation of the condition that prompted the initial admission;
• The readmission is for a condition closely related to the initial condition;
• The readmission is required to manage a complication arising from care (or lack of care) provided during the initial admission or immediately after discharge from the initial admission, including a direct surgical complication;
• The member was discharged before clinical stability was achieved, before discharge criteria were met, or with documented social or functional barriers (e.g., unsafe discharge environment) that were not addressed; or
• The readmission is for an acute exacerbation of a chronic condition that, while not the direct subject of the initial admission, is clinically related to care provided during or immediately after the initial admission.

Determination of Preventability
If a readmission is determined to be clinically related, the health plan’s clinical reviewer will evaluate whether the readmission was potentially preventable. In making this determination, the reviewer will evaluate factors relevant to the quality of the initial admission and the transition of care, including but not limited to the following factors:

• Whether the care provided during the initial admission was consistent with accepted clinical standards, including diagnostic work-up, treatment, monitoring, and management of complications.
• Whether the member met clinical discharge criteria and was clinically stable at the time of discharge;
• Whether medication reconciliation was performed and documented and whether the member or caregiver was educated on the appropriate use of all prescribed medications;
• Whether written discharge instructions were provided to and reviewed with the member or caregiver in a language and at a literacy level the member could reasonably be expected to understand;
• Whether durable medical equipment (DME), home health services, physical or occupational therapy, or other ordered post-acute services were arranged and confirmed, and whether the member or caregiver was educated on their use;
• Whether financial, transportation, housing, or other social barriers that could reasonably be expected to affect the member’s ability to follow the discharge plan were identified and addressed prior to discharge;
• Whether a clinically appropriate post-discharge follow-up appointment was scheduled (typically within seven (7) days of discharge for high-risk conditions, or within an otherwise appropriate timeframe); and
• Whether the receiving primary care, specialist, or post-acute provider was notified of the discharge and provided with relevant clinical information.

Same-Day Readmissions. A same-day readmission to the same facility or to a facility within the same hospital system for the same, similar, or related condition will be treated as a continuation of the initial admission, and both stays must be submitted on a single combined claim. Same-day readmissions for unrelated conditions may be submitted as separate claims when documentation supports that the readmission is unrelated to the prior discharge.

Patient Non-Compliance. A clinically related readmission will not be considered potentially preventable on the basis of patient non-compliance with the discharge plan when the medical record documents all of the following:

• The facility communicated discharge instructions, medication instructions, and follow-up instructions to the member or caregiver in a manner reasonably calculated to be understood;
• The member or caregiver was mentally competent and clinically capable of following the instructions.
• The member or caregiver made an informed decision not to follow the discharge plan;
• The facility identified and made reasonable efforts to address financial, social, transportation, or access-to-care barriers that may have affected adherence; and
• The non-compliance is documented in the medical record.

Provider Notice and Appeal. The health plan will provide written notification of any determination to deny payment under this policy, including the clinical rationale for the determination and the records reviewed. Providers may appeal a determination in accordance with the timeframes established in the provider agreement, applicable state law, or the health plan’s general provider appeals policy, whichever applies. The health plan’s standard request-for-medical-records and clinical review timeframes apply, except where overridden by state or contractual requirements.

Failure to comply with established billing, coding, or documentation requirements may result in claim rejection.  All diagnosis and procedure codes submitted must be fully supported by the medical record.

Exclusions
The following inpatient admissions are excluded from this policy and are not subject to readmission payment adjustments:

• Behavioral Health/Substance Use Disorder admissions as the index admission

A medical readmission following a behavioral health or substance use disorder index admission is subject to this policy where the medical readmission is otherwise clinically related and potentially preventable.

• Transplant services admissions
• Readmission following a discharge that was patient-initiated against medical advice (AMA), provided that the AMA discharge is documented in the medical record by physician notation and, where reasonably obtainable, member or caregiver signature
• Neonatal and obstetrical admissions
• Admissions for inpatient rehabilitation services, long-term care hospitals (LTCH), skilled nursing facilities (SNF), or hospice
• Observation stays which are excluded as the index event

Observation stays may be considered as the readmission event for purposes of this policy where other criteria are met,

• Admissions for treatment of major or metastatic malignancy, scheduled chemotherapy or radiation therapy, dialysis, and other repetitive treatment episodes
• Readmissions classified under a Major Diagnostic Category (MDC) unrelated to the initial admission (e.g., acute trauma, burns, or other unrelated acute events)
• Readmissions occurring after a discharge to a non-acute care setting (e.g., nursing home, SNF, hospice), where the intervening non-acute admission is not counted in the readmission window
• Transfers from one acute care hospital to another acute care hospital, including transfers initiated to provide a level of care or service not available at the index facility, which are treated as a continuation of the index admission, not a readmission
• Planned readmissions, including those identified under the most current version of the CMS Planned Readmission Algorithm, and otherwise including
  • Scheduled follow-up procedures
  • Approved leaves of absence
  • Admissions clearly documented as part of an established treatment plan

Readmission. A subsequent acute inpatient hospital admission following discharge from an index admission and meeting the criteria defined in the Readmission Review and Reimbursement Determination Section above.

Hospital System. Two or more acute care hospitals that share a common parent organization, operate under a common hospital agreement, or share the same TIN.

Clinically Related Readmission. A readmission with a clinical connection to the care rendered during or immediately following the index admission, as defined in the Determination of Clinical Relatedness section above.

Potentially Preventable Readmission. A clinically related readmission that, in the judgment of the health plan’s clinical reviewer, could reasonably have been avoided through appropriate care during the index admission, clinically appropriate discharge planning, or through appropriate transitional and post-discharge care, as defined in the Determination of Preventability section above.

Provider Responsibilities
Providers are responsible for:

• Submitting claims that accurately reflect services rendered;
• Ensuring all billed services are supported by complete and accurate medical record documentation;
• Complying with applicable coding guidelines, billing policies, and contractual requirements;
• Documenting transitional care activities in the medical record in sufficient detail to support clinical review under this policy, including medication reconciliation, follow-up appointment scheduling, DME and home health arrangement, and discharge education;
• Producing requested medical records within the timeframes established in the provider agreement or applicable law and submitting combined claims when required by this policy;
• Refraining from balance-billing the member for any portion of a denied readmission claim except as expressly permitted by the member’s benefit plan, provider agreement, and applicable law; and
• Reimbursing any member cost-sharing collected for the readmission

Clinical review determinations are based on the information submitted and do not replace the independent medical judgment of the treating provider.

• Inpatient Non-Reimbursable Charge/Unbundling Policy
• Claims Processing Policy
• Corporate Administrative/Medical Policy Guidelines (Medical Necessity, Investigational/Experimental) - CAM 138