Change to Medicare Severity Diagnosis Related Group Payment Methodology

Posted November 26, 2019

Consistent with Centers for Medicare & Medicaid Services (CMS) guidelines, beginning March 1, 2020, Blue Cross and Blue Shield of Illinois (BCBSIL) will review acute hospital claims to determine if such readmissions to the same facility within 30 days of discharge are related and may deny payment to the hospital for related admissions. These changes will help support quality of care improvements towards preventing inpatient hospital readmissions and streamlining acute care contracted facility claims processes and services for our Blue Cross Medicare Advantage (PPO)SM, Blue Cross Medicare Advantage (HMO)SM and Blue Cross Community MMAI (Medicare-Medicaid Plan)SM members.

What does this mean for you?

  • Beginning March 1, 2020, BCBSIL will review readmissions at facilities reimbursed under the Medicare Severity Diagnosis Related Group (MS-DRG) methodology.
  • BCBSIL will perform a clinical review of acute care hospital readmissions that occur within 30 days of discharge from the same facility. 
  • If BCBSIL determines that a provider has submitted a second MS-DRG after a patient has been discharged from an acute, inpatient stay, BCBSIL may request medical records from the provider.
  • Upon request, the hospital must forward any medical records and related documents involving the admissions.
  • Available clinical records and any requested medical records will be clinically reviewed to determine if readmissions within 30-days was clinically related.
  • If it is determined that the stays are clinically related, BCBSIL will deny payment for the readmission MS-DRG.
  • If the hospital has concerns with the determination, they may dispute through existing processes.  

Why is BCBSIL conducting these reviews?
Conducting readmission reviews will allow BCBSIL to align with CMS MS-DRG payment methodology for Medicare Advantage and supports the national goal of improving health care for Americans by linking payment to the quality of hospital care. Evaluating readmissions will help BCBSIL identify preventable readmissions, which are a key factor in evaluating the quality of care that our members are receiving.

If you have questions, contact your Provider Network Consultant.

It is important that providers use Availity® or their preferred vendor to obtain eligibility and benefits, check coverage, determine if you are in-network for the member's policy and determine whether prior authorization is required for the service. Refer to the BCBSIL Eligibility and Benefits page for more information on Availity.

Availity is a trademark of Availity, LLC, a separate company that operates a health information network to provide electronic information exchange services to medical professionals. Availity provides administrative services to BCBSIL. BCBSIL makes no endorsement, representations or warranties regarding any products or services provided by third party vendors such as Availity. If you have any questions about the products or services provided by the vendor, you should contact the vendor directly. Checking eligibility and/or benefit information and/or the fact that a service has been preauthorized/pre-notified is not a guarantee of payment. Benefits will be determined once a claim is received and will be based upon, among other things, the member’s eligibility and the terms of the member’s certificate of coverage applicable on the date services were rendered. If you have any questions, call the number on the member’s ID card.