You’re an inpatient coder in a hospital. You’ve just coded a Medicare Part A record with a diagnosis related group (GRG) reimbursement of $12,000. You notice in the hospital’s computer billing system that the patient’s charges are $19,500. That’s $7,500 more than the hospital will be reimbursed. How does the difference between the charges and the DGR reimbursement become resolved?

The difference between the charges and the Diagnosis-Related Group (DRG) reimbursement in this case needs to be resolved through a process called "cost shifting" or "write-offs". Here's how it works:

1. Understanding DRG Reimbursement: Medicare Part A uses a system called Diagnosis-Related Groups (DRGs) to reimburse hospitals for inpatient services. Each DRG has a predetermined fixed payment amount that is based on the patient's diagnosis, procedure, and other factors.

2. Hospital Charges: The hospital charges represent the total amount billed to the patient or their insurance for the services provided. These charges are typically higher than the DRG reimbursement amount, as they aim to cover the hospital's costs and allow for some profit.

3. Negotiated Agreements: Hospitals often have contracts or negotiated agreements with insurance providers, including Medicare. These agreements establish the reimbursement rates for various services, including DRG reimbursements.

4. Difference Calculation: To determine the difference between charges and DRG reimbursement, subtract the DRG reimbursement amount ($12,000 in this case) from the charges ($19,500) to get $7,500. This represents the amount that the hospital will not be reimbursed.

5. Write-offs or Cost Shifting: To resolve the difference, hospitals typically write off the amount not covered by the DRG reimbursement. This means they consider the $7,500 as a loss or unrecoverable expense. The hospital absorbs this loss, and it may be accounted for in their financial statements.

6. Financial Implications: The hospital may try to offset these losses by shifting costs to other services or patients with higher reimbursement rates. This cost shifting strategy aims to make up for the shortfall in reimbursements and maintain profitability.

It's important to note that the specifics of how the difference between charges and DRG reimbursement is resolved can vary between hospitals and their contractual agreements with insurance providers. Factors such as hospital policies, negotiation power, and regional healthcare dynamics can impact the resolution process.