Revenue Cycle

Three-day rule clarification issued in IPPS proposed rule

Recovery Auditor Report, May 19, 2011

Editor's note: This article is the first in a series of three IPPS-related updates.

 On April 19, CMS released the inpatient prospective payment system proposed rule for 2012, which contained a vast assortment of inpatient proposals and clarifications for finance and accounting departments, coders and billers, and quality departments among others. This series of articles will cover three of the most significant clarifications, beginning with CMS’ three-day payment window rule.

The three-day rule, which was significantly amended in 2010, defines certain preadmission services as inpatient operating costs, meaning they are bundled and billed as part of the inpatient claim and payment is made as part of the applicable DRG payment for the case. While it sounds clear, the rule was widely misunderstood by providers leading to last year’s clarifying amendments.

The most recent clarification in the IPPS proposed rule deals with guidance given by CMS in an October 2010 hospital open door forum conference call. During the call, a listener questioned whether different taxpayer identification numbers will have any bearing on whether a physician practice group is wholly owned, and if the three-day payment window applies.

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