After being transferred from Community Hospital to Big Medical Center, how will Medicare reimburse Community Hospital for the two-day stay?

The correct approach to reimbursement in this scenario is that Community Hospital will receive a per diem rate for the patient's two-day stay. This method reflects how Medicare handles situations involving transfer cases. When patients are admitted to a hospital and then transferred to another facility, Medicare applies the per diem reimbursement rate to cover the specific costs associated with each day of the patient's stay up until the transfer.

In cases of transfers, hospitals do not receive a complete Diagnosis Related Group (DRG) payment, which would apply if the patient remained for the entire stay under that DRG classification. Rather, the per diem rate accounts for the operational costs incurred during the actual time the patient was treated, ensuring that the transferring hospital is compensated appropriately for the days they provided care prior to the transfer.

Understanding this reimbursement method is crucial for effective revenue cycle management, as it guides financial planning and expectations for hospital administrators.