In alignment with industry standards, inpatient readmissions for Medicare plans are now determined after the claim is submitted, rather than at the time of authorization review. This went into effect in Mar. 2026, supported by our billing policy #029 - Readmissions Reimbursement.
Readmission criteria remain the same – just the timing of review and the dispute process have changed.
Why did we make this change?
Our Utilization Management (UM) team’s focus is on determining medical necessity, not making payment decisions. Whether an inpatient admission qualifies as a readmission under our billing policy is a payment decision. While this change only applies to Medicare plans currently, it will be applied to commercial and Medicaid plans in the future.
How does this change affect you?
Because our UM team is focusing solely on medical necessity, you may get an authorization approval for an inpatient admission but later see the claim denied due to readmission reimbursement rules. Authorization does not guarantee payment.
If the claim is denied before payment, you’ll see the denial code and a brief explanation on the remittance advice (i.e., u98 – Claim identified as readmission within 15 or 30 days).
If the claim payment is recouped through the post-pay audit process, you’ll get an audit findings letter from the vendor that identifies the correlating claim and the reason for the finding.
How can you dispute the decision?
If you don’t agree with the claim denial after reviewing the previous admission in your patient’s medical record, the appropriate dispute process depends on when the denial happened:
- Before payment: Follow the claim dispute process
- Post-pay audit: Appeal directly to the vendor within 30 days of the audit findings letter, before the claim is sent to Priority Health for adjustment