(1) This rule states the billing requirements applicable to inpatient hospital readmissions and transfers. Sections (2) and (3) apply to DRG hospitals only unless otherwise noted. Sections (4) and (5) apply to DRG, out-of-state and border hospitals.

(2) All readmissions occurring within 30 days will be subject to review to determine whether additional payment as a new DRG or as an outlier is warranted. As a result of the readmission review, the following payment changes will be made:

(a) If it is determined that complications have arisen because of premature discharge and/or other treatment errors, then the DRG payment for the first admission must be altered by combining the two admissions into one for payment purposes; or

(b) If it is determined that the readmission is for the treatment of conditions that could or should have been treated during the previous admission, the department will combine the two admissions into one for payment purposes.

(c) A patient readmission occurring in an inpatient rehabilitation hospital within 72 hours of discharge must be combined into one admission for payment purposes, with the exception of discharge to an acute care hospital for surgical DRGs.

(d) All diagnostic services are included in the DRG payment. Diagnostic services that are performed at a second hospital because the services are not available at the first hospital (e.g., a CT scan) are included in the first hospital's DRG payment. This includes transportation to the second hospital and back to the first hospital. Arrangement for payment to the transportation provider and the second hospital where the services were actually performed must be between the first and second hospital and the transportation provider.

(3) A transfer, for the purpose of this rule, is limited to those instances in which a patient is transferred for continuation of medical treatment between two hospitals, one of which is paid under the Montana Medicaid prospective payment system.

(a) A transferring hospital reimbursed under the DRG prospective payment system is paid for the services and items provided to the transferred recipient, the lesser of:

(i) a per diem rate of two times the average per diem amount for the first inpatient day plus one per diem payment for each subsequent day of inpatient care determined by dividing the sum of the DRG payment for the case as computed in ARM 37.86.2907 and the appropriate outlier, capital, medical education, and DSH add-ons as computed in ARM 37.86.2912, 37.86.2914, 37.86.2916, and 37.86.2925, if any, by the statewide average length of stay for the DRG; or

(ii) the sum of the DRG payment for the case as computed in ARM 37.86.2907 and the appropriate outlier, capital, medical education, and DSH add-ons as computed in ARM 37.86.2912, 37.86.2914, 37.86.2916, and 37.86.2925, if any.

(b) A discharging hospital (i.e., the hospital to which the recipient is transferred) reimbursed under ARM 37.86.2907 is paid the full DRG payment plus any appropriate outliers, capital, medical education, and DSH add-ons, if any.

(4) Outpatient hospital services, including provider based entity hospital outpatient services, other than diagnostic services that are provided within the 24 hours preceding the inpatient hospital admission must be bundled into the inpatient claim.

(5) Diagnostic services (including clinical diagnostic laboratory tests) provided in any outpatient hospital setting including provider based entities within 72 hours prior to the date of admission are deemed to be inpatient services and must be bundled into the inpatient claim.