July 12, 2010

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

wiitalaR ED. NOTE:

On June 25, 2010, President Obama signed into law the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 (HR 3962). Among other provisions, this law clarifies Medicare's policy for payment of services provided in hospital outpatient departments on either the day of, or during the three days prior to, an inpatient admission (known as the three-day payment window and also the 72-hour rule). In this, the first of a two-part series, RACmonitor contributing editor Randy Wiitala offers additional insight.

With all that's been said and done, it's prudent for providers to re-familiarize themselves with the current CMS requirements related to the three-day payment window. The questions answered below may help.

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.

UB-04 REV Code	Description and Related HCPCS/CPT Codes
0254	Drugs incident to other diagnostic services
0255	Drugs incident to radiology
030X	Laboratory
031X	Laboratory pathological
032X	Radiology diagnostic
0341 and 0343	Nuclear medicine, diagnostic; diagnostic radiopharmaceuticals
035X	Computed tomography (CT) scan
0371	Anesthesia incident to radiology
0372	Anesthesia incident to other diagnostic services
040X	Other imaging services
046X	Pulmonary function
0471	Audiology diagnostic
0481 and 0489	Cardiology (cardiac catheterization lab and other cardiology services billed with CPT codes 93501, 93503, 93505, 93508,93510, 93526, 93541, 93542, 93543, 93544, 93556, 93561 or 93562)
0482	Cardiology stress test
0483	Cardiology echocardiology
053X	Osteopathic services
061X	Magnetic resonance tomography (MRT)
062X	Medical/surgical supplies, incident to radiology or other diagnostic services
073X	Electrocardiogram (EKG/ECG)
074X	Electroencephalogram (EEG)
0918	Testing, behavioral health
092X	Other diagnostic services

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.