Fact Sheets

STATUTORY PROVISION ON 3-DAY PAYMENT WINDOW

On June 25, 2010, President Obama signed into law the “Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.”  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 3-day payment window). 

The new law clarifies Medicare’s policy to be consistent with how hospitals have largely been billing the program as far back as 1991.  Under this policy, a hospital (or an entity wholly owned or operated by the hospital) includes, in its charges for the inpatient hospital stay, charges for all diagnostic services and non-diagnostic services “related” to the inpatient stay that are provided during the 3 day payment window. 

The new statute clarifies that the term “other services related to the admission” includes “all services that are not diagnostic services (other than ambulance and maintenance renal dialysis services) for which payment may be made by” Medicare that are provided by a hospital to a patient: (1) on the date of the patient’s inpatient admission, or (2) during the 3 days (or in the case of a hospital that is not a subsection (d) hospital, during the 1 day) immediately preceding the date of admission unless “the hospital demonstrates (in a form and manner, and at a time, specified by the Secretary) that such services are not related to such admission.” The statute makes no changes to the billing of diagnostic services. 

The provision is effective for services furnished on or after June 25, 2010, the date of enactment of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010.  The provision also prohibits Medicare from reopening, adjusting or making payments when hospitals submit new claims or adjustment claims for services that were provided prior to the date of enactment in order to separately bill outpatient non-diagnostic services.

In the very near future, CMS expects to provide instructions to the hospital community through its contractors advising them how to bill for related therapeutic services provided during the 3- or 1-day payment window.  Until the instruction is issued, hospitals should include charges for all diagnostic services and all non-diagnostic services that it believes meet the requirements of this provision.  If a hospital believes that a non-diagnostic service is truly distinct from and unrelated to the inpatient stay, the hospital may separately bill for the service provided that it has documentation to support that the service is unrelated to the admission, consistent with the new provision.  Such separately billed service may be subject to subsequent review. 

Hospitals may continue to bill Medicare separately for services provided prior to June 25, 2010 that are unrelated to an inpatient stay provided that such a claim meets all applicable filing deadlines and the hospital has supporting documentation that the service is truly unrelated to an inpatient stay.