ModifiedEmblemHealthPolicy RPC20260028
Facility Transfer - (Commercial)
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Governs payment rules for transfers between acute care hospitals and ER transfers between outpatient facilities for EmblemHealth Commercial products (excluding Essential Plans).
Policy Summary
PayerEmblemHealth
PolicyFacility Transfer - (Commercial)
Policy CodePolicy RPC20260028
Change TypeNew policy effective 7/15/2026
Effective DateJul 15, 2026
Next Review Date
Key ActionInclude Condition Code 40 and an appropriate patient status code on claims for same-day transfers or the claim will be denied.
SourceLink
POLICY UPDATE CHANGES
New Policy effective 7/15/2026
1 ER visitER transfers reimbursed as single episode
2x2x per diem first day
noneNo payment for transfer day
full DRGFull DRG to discharging hospital
~20Discharge status codes listed
CommercialCommercial scope
Facility Transfer Payment Rules (Commercial)
Facility transfer payment criteria
Payment rules when an applicable transfer occurs (Commercial products):
Emergency room transfers between outpatient facilities are treated as a single episode of care; only the final discharging facility is eligible for reimbursement (one ER visit).
When a transferring inpatient hospital is paid under DRG methodology and the patient is transferred to another inpatient hospital, the transferring hospital is paid a graduated per diem instead of the full DRG if the actual length of stay (ActLOS) is less than the MS‑DRG geometric mean length of stay (GMLOS).
Per‑diem calculation: divide the appropriate DRG rate by the GMLOS for the specific DRG; payment is 2x the per‑diem for day 1 and 1x per‑diem for each subsequent day, not to exceed the full DRG allowable amount. No outlier is added to the transferring hospital per‑diem methodology.
If ActLOS is equal to or exceeds the GMLOS for the DRG, the standard full DRG payment applies to the transferring hospital (i.e., no per‑diem methodology).
No payment is made for the day of discharge/transfer. Same‑day transfers (transfers occurring within 24 hours) receive no payment for the transfer day.
The final Discharging (Receiving) Hospital receives the applicable full MS‑DRG payment when the patient is discharged to home or a lower level of care and is not readmitted to an acute care hospital within 24 hours. The applicable DRG will be determined by EmblemHealth during adjudication and/or review.
EmblemHealth will not consider transfers that are based solely on patient or family preference to be valid transfers; non‑emergent acute‑to‑acute transfers will be considered for medical necessity only.
Claims for same‑day transfers must include Condition Code 40 and an appropriate patient discharge/status code; claims missing these elements may be denied and require corrected claim submission.
This policy applies to EmblemHealth Commercial contracts only (excluding Essential Plans); Medicare/Medicaid follow separate facility transfer policies.
Facility transfer and discharge criteria
Defines the reimbursement‑relevant status and treatment of transfer and discharge events for commercial facility inpatient claims.
ALL of the following
- Discharge: member has received complete acute care treatment and leaves an acute care hospital for home or a lower level of treatment; leaves AMA and is not readmitted within 24 hours; or dies in the hospital.
- Discharge Hospital: the facility from which the member is discharged to a lower level of care and is not readmitted to any acute care hospital within 24 hours of discharge (or the facility at which the member dies).
- Receiving Hospital: becomes the Discharge Hospital only if the member is discharged to home or lower level of care and is not readmitted within 24 hours; if the member is readmitted or transferred again within 24 hours, the Receiving Hospital may be treated as a Transfer Hospital and subject to transfer rules.
- Transfer, acute care: occurs when a member is transferred to another acute care hospital for related care; leaves AMA and is admitted to another acute care hospital within 24 hours; or is discharged then readmitted within 24 hours to another acute care hospital (unless the readmission is unrelated).
- Transfer Hospital: the facility from which the member is transferred to another acute care hospital, leaves AMA and is subsequently admitted within 24 hours, or is discharged to a lower level of care but is subsequently readmitted to the same or another acute care hospital within 24 hours.
ALL of the following
- If the Receiving Hospital later becomes a Transfer Hospital due to a readmission within 24 hours, the Receiving Hospital's discharge claim may need reprocessing and adjustment under transfer rules once the readmission claim is received and processed.
- No payment is made for the day of discharge/transfer; payment methodology for transferring hospitals follows the per‑diem rules when ActLOS < GMLOS, or full DRG when ActLOS >= GMLOS.
Timing threshold: a 24‑hour readmission window is used to determine whether discharge versus transfer rules apply (readmission within 24 hours can change hospital role and payment treatment).
Codes, GMLOS, and Readmission Window
Patient status / discharge codes referencedmixed
| 02 | Patient discharge status code 02 — transfer to another acute care hospital |
| 07 | Patient discharge status code 07 — left against medical advice, admitted to same/another acute care hospital within 24 hours |
| 20 | Patient discharge status code 20 — expired (died in hospital) |
Condition codesmixed
| 40 | Condition Code 40 — Same day transfer |
Discharge status codesmixed
| 01 | Discharged to home or self-care (routine discharge) |
| 02 | Discharged/transferred to a short-term general hospital for inpatient care |
| 03 | Discharged/transferred to skilled nursing facility (SNF) with Medicare certification |
| 04 | Discharged/transferred to a facility that provides custodial or supportive care |
| 05 | Discharged/transferred to a designated cancer center or children's hospital |
| 06 | Discharged/transferred to home under care of organized home health service organization |
| 07 | Left against medical advice or discontinued care |
| 20 | Expired |
| 21 | Discharged/transferred to court/law enforcement |
| 30 | Still patient |
1–10 of 18
1/2
inv-05: Geometric mean length of stay (GMLOS)
DefinitionEach MS-DRG is assigned a geometric mean length of stay (GMLOS) published in the CMS MS-DRG table (Table 5) of the IPPS Final Rule.
PurposeGMLOS is used to calculate the correct DRG payment to the Transferring Hospital when a transfer occurs.
Calculation rolePer‑diem payment for transfers is determined by dividing the DRG rate by the GMLOS for the specific DRG.
inv-06: Readmission window
Window length24 hours
Applies toReadmission within 24 hours of discharge causes Receiving Hospital to become a Transfer Hospital (if related).
EffectReadmission within 24 hours can change hospital status and trigger transfer payment rules.
Billing & Claims Submission Requirements
Billing Rule
Claims submission requirement for same-day transfers
Claims for same-day transfers (transfers occurring within 24 hours) must include the correct condition and patient status codes. Claims submitted without Condition Code 40 (Same day transfer) and/or an appropriate Patient Status Code will be denied. Providers may submit a corrected claim if initially denied for missing these codes.
- Append Condition Code 40 for same-day transfers
- Include the appropriate Patient Status Code (e.g., discharge status code 02 for transfers, code 07 if patient left against medical advice and was readmitted within 24 hours, code 20 if the member died)
- Claims lacking Condition Code 40 and/or an appropriate Patient Status Code will be denied; corrected claims can be submitted
Note
Transfer and receiving hospital rules
Transfer and receiving hospital rules determine which facility's claim is processed under transfer rules and when adjustments may be required. A transfer (acute care) occurs when a member is moved from one inpatient acute care hospital to another for related care, leaves against medical advice and is admitted within 24 hours, or is discharged and then readmitted within 24 hours to another acute care hospital (unless unrelated). The facility that accepts the patient is the Receiving Hospital; the Sending facility is the Transfer Hospital. The Receiving Hospital becomes the Discharge Hospital only if the member is discharged to home or a lower level of care and is not readmitted to any acute care hospital within 24 hours. If the member is readmitted within 24 hours or transferred again, the Receiving Hospital is considered a Transfer Hospital and its discharge claim may need reprocessing under transfer rules.
- Transfer Hospital: facility from which the member is transferred to another acute care hospital, leaves against medical advice and is admitted within 24 hours, or is discharged then readmitted within 24 hours
- Receiving Hospital: becomes Discharge Hospital only if member is discharged to home or lower level of care and not readmitted within 24 hours; otherwise may be treated as a Transfer Hospital
- If readmission to a different acute-care hospital occurs within 24 hours, the Receiving Hospital's discharge claim may need to be reprocessed and adjusted once the readmission claim is received and processed
Key Definitions
inv-09: Discharge
DefinitionA discharge occurs when a member has received complete acute care treatment and leaves an acute care hospital for home or a lower level of treatment; leaves AMA and is not readmitted within 24 hours; or dies in the hospital.
Discharge HospitalThe facility from which the member is discharged to a lower level of care and is not readmitted within 24 hours (or the facility at which the member dies).
ImplicationFinal Discharging Hospital is eligible for full DRG payment when not readmitted within 24 hours.
inv-10: Acute care transfer
DefinitionAn acute care transfer occurs when a member is transferred to another acute care hospital for related care; leaves AMA and is admitted within 24 hours; or is discharged then readmitted within 24 hours (unless unrelated).
ConsequenceTransfers can cause the Transferring Hospital to be paid per diem or the Receiving Hospital to become a Transfer Hospital depending on readmission and LOS.
Provider actionTransfer status may be updated after receipt of readmission claim, requiring reprocessing of the discharge claim.
inv-11: GMLOS
RoleGMLOS is the CMS-determined expected length of stay for a DRG and is less sensitive to outliers than the arithmetic mean.
Use in payment determinationIf ActLOS < GMLOS, the Transferring Hospital is paid on a per‑diem basis (DRG rate ÷ GMLOS); if ActLOS ≥ GMLOS, standard DRG payment applies.
ActLOS calculation noteActLOS is calculated by subtracting day of admission from day of discharge; the discharge/transfer day is not counted (unless admitted and discharged/deceased same day).
inv-12: Hospital roles (Transferring / Receiving / Discharge)
Transferring HospitalFacility from which the member is transferred to another acute care hospital, leaves AMA and is readmitted within 24 hours, or is discharged but readmitted within 24 hours.
Receiving HospitalFacility that receives the transferred patient; becomes Discharge Hospital only if patient is discharged to home or lower level of care and not readmitted within 24 hours.
Discharge HospitalFacility from which the member is discharged to a lower level of care and is not readmitted within 24 hours (or the facility at which the member dies).
inv-13: Discharge (detailed)
When a discharge occursFinal Discharging Hospital receives applicable full DRG payment when member is discharged to home or lower level of care and not readmitted within 24 hours.
When discharge changes statusIf readmission or subsequent transfer occurs within 24 hours, the Receiving Hospital may become a Transfer Hospital and the discharge claim may need reprocessing.
Relation to per diemNo outlier payment is added to transferring hospital per‑diem methodology; day of discharge/transfer is not paid.
inv-14: Discharge Hospital
DefinitionDischarge Hospital: the facility from which the member is discharged to a lower level of care and is not readmitted within 24 hours, or the facility at which the member dies.
Payment implicationDischarge Hospital receives full DRG payment when criteria for discharge are met.
ReprocessingIf a readmission within 24 hours is later identified, the Discharge Hospital claim may be reprocessed under transfer rules.
inv-15: Geometric Mean Length of Stay (GMLOS) (definition)
DefinitionGeometric Mean Length of Stay (GMLOS) is the CMS-determined expected length of stay for a DRG; it is less sensitive to outliers than the arithmetic mean.
Published sourceGMLOS values are published in the MS-DRG table (Table 5) of the CMS IPPS Final Rule.
Payment useUsed to determine whether DRG or per‑diem payment applies when transfers occur (ActLOS compared to GMLOS).
inv-16: Length of stay (LOS)
DefinitionLength of stay (LOS) describes the duration of a single episode of care at a facility.
ActLOS calculationActLOS = day of discharge minus day of admission; discharge/transfer day not counted unless admitted and discharged/deceased same day.
Payment relevanceActLOS is compared to GMLOS to determine DRG vs per‑diem payment for transfers.
inv-17: Receiving Hospital
DefinitionReceiving Hospital: the facility that receives the transferred patient and becomes the Discharge Hospital only if the member is discharged to home or a lower level of care and not readmitted within 24 hours.
Status changeIf the member is transferred again or readmitted within 24 hours, the Receiving Hospital is also a Transfer Hospital and subject to transfer rules.
Claim processingReceiving Hospital's discharge claim may need reprocessing if a subsequent readmission claim indicates Transfer Hospital status.
inv-18: Transfer, acute care
DefinitionAn acute care transfer occurs when a member is transferred to another acute care hospital for related care, leaves AMA and is admitted within 24 hours, or is discharged then readmitted within 24 hours (unless unrelated).
ConsequenceWhen an acute care transfer occurs, transfer payment rules determine whether transferring hospital receives per‑diem (if ActLOS < GMLOS) or full DRG (if ActLOS ≥ GMLOS).
Documentation timingChange in transfer status may not be evident until readmission claim is received and processed, potentially requiring claim adjustments.
inv-19: Transfer Hospital
DefinitionTransfer Hospital: the facility from which the member is transferred to another acute care hospital, leaves AMA and is subsequently admitted within 24 hours, or is discharged to a lower level but is readmitted to the same or another acute care hospital within 24 hours.
Payment to transferring hospitalIf ActLOS < GMLOS the Transferring Hospital is paid per‑diem (DRG rate ÷ GMLOS); no payment is made for the day of discharge/transfer and no outlier is added.
Same‑day transfersNo payment is made for same‑day transfers (transfers occurring within 24 hours) unless appropriate claim coding is provided and processed per policy.
Policy Summary
PayerEmblemHealth
PolicyFacility Transfer - (Commercial)
Policy CodePolicy RPC20260028
Change TypeNew policy effective 7/15/2026
Effective DateJul 15, 2026
Next Review Date
Key ActionInclude Condition Code 40 and an appropriate patient status code on claims for same-day transfers or the claim will be denied.
SourceLink
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