CurrentSelectHealthPolicy 94

Inpatient Readmissions Billing and Reimbursement

Governs how SelectHealth handles inpatient readmissions (within 24 hours and within 30 days per CMS definitions) for SelectHealth Commercial, SelectHealth Advantage (Medicare), and SelectHealth Community Care (Medicaid/CHIP) plans; affects hospitals billing inpatient stays to SelectHealth.

Policy Summary

PayerSelectHealth

PolicyInpatient Readmissions Billing and Reimbursement

Policy CodePolicy 94

Change TypeNo material change

Effective DateSep 1, 2023

Next Review DateJun 6, 2024

Key ActionWhen both stays remain billed separately, Select Health will deny the subsequent claim for readmissions within 24 hours for same or related conditions.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

24 hoursreadmission window referenced for combining claims

30 daysCMS readmission definition timeframe mentioned in description

MSDRGfacility type specified

AlignedMedicare/Medicaid plans follow CMS guidelines

Readmission Coverage Rules

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Readmission handling rules

Policy treatment varies by plan type and clinical circumstance; SelectHealth Advantage and SelectHealth Community Care follow CMS-aligned guidance for readmissions within 24 hours. This policy does not apply to SelectHealth Commercial plans or CHIP.

SelectHealth Commercial plans and CHIP: this policy does not apply.

SelectHealth Advantage (Medicare): follows CMS guidelines for readmissions less than 24 hours and applies CMS criteria for claim combining and adjustments.

SelectHealth Community Care (Medicaid): follows the SelectHealth Advantage (Medicare) policy and CMS criteria for readmissions.

Readmissions within 24 hours for same or related condition(s)

Clinically related readmissions should be combined with the initial stay onto a single claim.
Emergent readmissions should be combined with the initial stay onto a single claim.
Planned readmissions or leave of absence should be combined with the initial stay onto a single claim.
Psychiatric readmissions should be combined with the initial stay onto a single claim.

When both stays remain billed separately for readmissions within 24 hours for the same or related condition(s), SelectHealth will deny the subsequent claim; SelectHealth may request medical records to ensure reimbursement guidelines have been followed.

Exceptions — situations where SelectHealth will NOT deny the subsequent admission

Transfer from one inpatient stay at an acute care hospital to an inpatient stay at another acute care hospital.
Planned repetitive treatments (for example: cancer chemotherapy, transfusion for chronic anemia, or similar repetitive treatments).
Patient discharged from the hospital against medical advice.
Readmission for an unrelated condition (bill using condition code B4 where appropriate).
Readmission for the medical treatment of rehabilitation care.
Readmission for pre-delivery obstetrical care.

Billing and Provider Instructions

Denial Risk

Claims adjustment and denial for 24-hour readmissions

When a patient is readmitted within 24 hours for the same or a related condition (including clinically related, emergent, planned readmissions or leave of absence, and psychiatric readmissions), Select Health will require the hospital to combine the initial and subsequent stay onto a single claim. If both stays remain billed separately, Select Health will deny the subsequent claim. Select Health may request medical records to verify that reimbursement guidelines consistent with CMS have been followed.

Applies to: clinically related, emergent, planned (including leave of absence), and psychiatric readmissions
Action: combine initial and subsequent stay onto a single claim
Denial: subsequent claim will be denied if stays billed separately
Documentation: medical records may be requested for review

Billing Rule

Use of condition code B4 for unrelated readmissions

For readmissions within 24 hours that are for an unrelated condition, hospitals should bill condition code B4 on the claim to indicate the readmission is unrelated to the prior stay. Proper use of condition code B4 helps ensure correct claim processing under Select Health’s alignment with CMS guidelines.

Use condition code B4 on the claim for unrelated readmissions within 24 hours
Ensures separate billing is appropriate when the readmission is truly unrelated

Key Definitions

inv-05: Readmission — definition describing when a readmission qualifies (discharge/transfer and readmit to same acute care PPS hospital).

DefinitionA readmission occurs when a patient is discharged or transferred from an acute care Prospective Payment System (PPS) hospital and is then readmitted to that same acute care PPS hospital within 30 days of discharge (applies to MSDRG facilities).

Facility scopeApplies only to acute care PPS hospitals operating under MSDRGs.

Governing guidelineDefinition and timeframe follow Centers for Medicare & Medicaid Services (CMS) guidelines.

inv-06: 24-hour readmission handling — definition noting clinically related, emergent, planned, or psychiatric readmissions within 24 hours are combined onto a single claim.

Combining rule within 24 hoursClinically related, emergent, planned (or leave of absence), and psychiatric readmissions that occur within 24 hours should be combined with the initial stay onto a single claim.

Denial if billed separatelyWhen both stays remain billed separately, Select Health will deny the subsequent claim for readmissions within 24 hours for same or related conditions.

Medical record reviewSelect Health may request medical records to ensure reimbursement guidelines have been followed; review is consistent with CMS guidelines.