Cover: An Evaluation of Medicare Payments for Transfer Cases

An Evaluation of Medicare Payments for Transfer Cases

Published 1993

by Grace M. Carter, J. David Rumpel


Download eBook for Free

FormatFile SizeNotes
PDF file 1.6 MB

Use Adobe Acrobat Reader version 10 or higher for the best experience.


Purchase Print Copy

 Format Price
Add to Cart Paperback49 pages $13.00

The authors investigated how the costs of transfer cases are related to length of stay (LOS) and to the resource intensity of the DRG. The authors use this relationship to develop alternative payment formulas for transfer cases and evaluate the effect of these alternatives on the adequacy of payment for transfer cases, on hospitals that transfer a high proportion of their cases, and on the distribution of reimbursement and risk among groups of hospitals. The average daily cost of transfer cases declines with LOS, but at a decreasing rate. After controlling for LOS, the standardized cost of a case is approximately proportional to daily DRG weight and to the payment for a typical day in the DRG. These facts led the authors to develop a payment formula that results in a 30 percent improvement in the match of payment amounts to transfer care costs. The policy is similar to adding payment for one extra day to the current payment amount. It increases reimbursement to the ten percent of hospitals with the highest fraction of transfer cases by 1.5% and reduces their financial risk by 2%. The policy has very little effect on other hospitals. The authors also simulated a policy which increased outlier payments for transferring hospitalizations. This policy appears to have only a modest effect. A future report will examine the cost of care at the recipient hospital, total cost for the entire episode, and the care delivered during the episode.

This report is part of the RAND monograph report series. The monograph/report was a product of RAND from 1993 to 2003. RAND monograph/reports presented major research findings that addressed the challenges facing the public and private sectors. They included executive summaries, technical documentation, and synthesis pieces.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.