The Centers for Medicare & Medicaid Services’ (CMS) Transmittal 3217, released on March 13, 2015, has shaken up the compliance world. CMS is revising billing instructions to permit payment for “inpatient-only procedures” performed in the outpatient setting on the date of or up to three calendar days before the inpatient admission. Also, CMS no longer will require hospitals to obtain a physician order for an inpatient admission before an inpatient-only procedure is performed in the outpatient setting.
The inpatient-only list is a series of procedures for which Medicare will reimburse hospitals only if the procedures are provided in the inpatient setting. Typically, these are surgical services that require inpatient care due to the invasive nature of the procedure, the underlying physical condition of the patients who require the services, or the need for at least 24 hours of postoperative recovery time or monitoring before the patient can be safely discharged. Historically, if a hospital billed inpatient-only procedure was performed in an outpatient setting, Medicare would deny payment, regardless of whether the patient subsequently was admitted.
Effective April 1, inpatient-only procedures performed in the outpatient setting can be bundled into billing of the inpatient admission, in accordance with the three-day window policy for outpatient services treated as inpatient services when the reason for admission is related. With this policy change, a hospital now has the opportunity to bundle—and thus obtain additional reimbursement for—any inpatient-only procedures performed in the outpatient setting with the inpatient-related admission.
Under the three-day window policy, diagnostic services including non-patient laboratory tests and non-diagnostic services furnished by a hospital or a facility owned/operated by the hospital, on the date of inpatient admission or three calendar days prior to the date of admission, must be included on the Part A bill for the inpatient stay. However, if a hospital confirms that a non-diagnostic outpatient service is unrelated to the hospital inpatient admission, but occurs during the three-day window, the services may be billed separately to Medicare Part B.
Look for updates to the Medicare Claims Processing Manual, Chapter 4, Sections 10.12 and 180.7, to reflect the revised inpatient-only payment policy. For assistance with implementation of this policy or other hospital coding, documentation, and quality support, contact the experts listed below at PYA, (888) 420-9876.
