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Provider Manual

Reimbursement for inappropriate discharge and readmission

Last Updated on May 27, 2025

For hospitals that are reimbursed using inpatient Diagnostic Related Groups (DRG) methodology and for provider organizations providing professional services during the inpatient readmission, if Security Health Plan deems a readmission as inappropriate or preventable, the authorization for the readmission will be denied.

A denied authorization for the readmission will result in the following claim denials:

  • For claims with date of service 12/31/24 or before, both facility and professional services will be denied. 
  • For claims with date of service 01/01/2025 and after, Security Health Plan will amend its policy to deny the inpatient facility claim only. 

In this situation, Security Health Plan will deny claims using ANSI 249 – This claim has been identified as a readmission. Claim denials for inappropriate or preventable readmissions will be denied to the provider as contractual obligation (CO). These amounts cannot be billed to the patient.

For additional information see the following:

  • All-cause Readmission Payment Policy Review for Circumvention of Prospective Payment System Medical Policy under the Provider/Medical Policies section of the Security Health Plan website:   Medical Policies | Security Health Plan
  • Utilization Management – Inappropriate Discharge and Readmission section in the Provider Manual