The newest addition to this burgeoning collection is the Aug. 9 CMS memorandum titled “Implementation of New Statutory Previsions Pertaining to Medicare 3-day Payment Window – Outpatient Services Treated as Inpatient.”


Before you get too excited and start fist pumping, these are not the promised official, binding, updates to the Medicare regulations, which we are told will follow soon.  No, this memorandum is intended to provide notice of the implementation of the 3-day Payment Window Provision of the  “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010,” which is effective as of June 25, 2010, and also to offer some insight to the finer points of the provision and offer general instructions on proper billing.


Those finer points include:


  • Rebilling of previously bundled, non-diagnostic outpatient services that were submitted prior to June 25, 2010 will be processed;


  • Rebilling of previously bundled, non-diagnostic outpatient services that were submitted after June 25, 2010 will not be processed;


  • Rebilling of pre-June 25, 2010 non-diagnostic outpatient services that previously never have been bundled and submitted as part of an inpatient bill, and that meet the previous billing instructions (not an exact five-digit match with the inpatient diagnosis code) may be billed and paid if they meet timely filing requirements;


  • Ambulance and chronic maintenance renal dialysis services are excluded from the three-day payment window provision;


  • All diagnostic and non-diagnostic services provided the day of service (not 24 hours) will be included in the inpatient bill;


  • First-, second- and third-prior day non-diagnostic services must be included in the inpatient bill unless a hospital attests that the services were unrelated to the inpatient admission (no format for the attestation is mentioned or promised to be forthcoming);


  • Bills for non-diagnostic outpatient services that a provider attests are not related to the inpatient stay will use “a condition code, a modifier, or some other modifier” to be determined;


  • For purposes of Present On Admission (POA) coding, the POA condition must be coded as existing at the time of the admission even if it developed during the provision of outpatient services within the three days prior to admission.

Until CMS publishes the regulations that actually implement the 3-day Billing Window provision, hopefully clarifying the required content of the provider attestation and defining the condition code, occurrence code, or modifier for use, what is a provider to do regarding unrelated non-diagnostic outpatient services?


The memorandum advises hospitals to “maintain such documentation…to support its claim that the service is unrelated to the admission” because these services “may be subject to subsequent review by CMS or its representative.” It sounds to me as if it would be a good idea to contact your MAC to let them know you have one of these bills that you’d like them to pay, and see if they provide you with any “special-handling” instructions.


The MACs probably will come out with published instructions for submitting non-related, non-diagnostic outpatient services. The updated Medicare regulations also will be published soon. I’m sure more will be written on the RAC implications of surgeries followed by admissions resulting from complications for which the RAC determines that the surgical procedure should be unbundled from the inpatient stay.


I’m going to need another drawer to put all this stuff in or I’m going to have, y’ know … a Situation.


Greetings from the Jersey Shore.


About the Author


Dennis Jones is the director compliance services for CBIZ KA Consulting. While Dennis is recognized as a leading RAC issues expert, his expertise covers a wide variety of topics including Managed Care, Uncompensated Care, Medicare and Medicaid Compliance, HIPAA, and Process Improvement. As a result he has spoken previously for NJHA, World Research Group, and various state chapters of HFMA, AAHAM, and AHIMA. Dennis is a past-president of the New Jersey Chapter of AAHAM and has held senior management positions in provider, IT vendor and reimbursement consultant arenas. He is a graduate of the Pennsylvania State University with a degree in Health Planning and Administration and hopes to be able to afford season football tickets some day.


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