Recent Legislation Requires Refresher on Hospital Three-Day Payment Window: Part I

What outpatient services are treated as inpatient services?

For hospitals paid under the Medicare inpatient prospective payment system (IPPS), diagnostic services provided to a Medicare beneficiary by the admitting hospital, or by an entity wholly owned or operated by the hospital, within three days before the admission date, are deemed to be inpatient services and are included in the inpatient diagnosis-related group (DRG) payment.

Medicare has defined "diagnostic" as all charges on a claim with the following UB-04 revenue codes and Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes associated with that claim line.

Additional guidance on making the determination to roll outpatient services into an inpatient admission does not solely depend on the listing above. For example, when patients are treated in the emergency room (ER) (revenue code 045X) and then admitted, you would not combine the outpatient claim with the inpatient claim unless there is an exact match on all digits of the ICD-9-CM code for the principal diagnosis.

Guidance from the Centers for Medicare & Medicaid Services (CMS) states that each service provided in the ER needs to be identified, and the proper billing requirements must be followed. The ER visit alone does not automatically place all services under the non-diagnostic services umbrella.

Part II: Non-diagnostic or therapeutic services

About the Author

Randy Wiitala, BS, MT (ASCP) is a senior healthcare consultant with Medical Learning, Inc. (MedLearn), St. Paul, MN. MedLearn is a nationally recognized expert in healthcare compliance and reimbursement. Founded in 1991, MedLearn delivers actionable answers that will equip healthcare organizations with their coding, chargemaster, reimbursement management and RAC solutions.

Contact the Author

rwiitala@medlearn.com