Health Information Management

Healthcare News: CMS adds modifier -PD for clinics

JustCoding News: Outpatient, November 30, 2011

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Coders in a physician practice that is wholly owned or operated by a hospital must append new modifier -PD to Part B claims lines where applicable to identify them as meeting the three-day payment window in a freestanding clinic. CMS announced the new modifier as part of the Medicare Physician Fee Schedule (MPFS) final rule.

Modifier -PD (diagnostic or related nondiagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within three days or one day) can be used starting January 1, 2012, but CMS is delaying implementation until July 2, 2012, to allow facilities and clinics to coordinate their billing.

CMS considers a freestanding clinic to be a wholly owned and operated entity if the hospital has “exclusive responsibility for conducting and overseeing the entity’s routine operations.” When this is the case, the freestanding clinic is subject to the three-day payment window and CMS will bundle the technical component of the services provided at that clinic into the inpatient claim.

Under the three-day rule, billers must include the following on the inpatient claim:

  • All outpatient services provided on the date of admission
  • Any outpatient diagnostic services (identified by the revenue code) provided within three days of the admission

Coders should only include nondiagnostic services provided up to three days prior to the admission on the inpatient claim if they are “clinically related” to the admission.

When a patient receives services in the freestanding clinic on the day he or she is admitted to the hospital, billers must report the technical component of all of those services on the inpatient claim.
When a patient is admitted within three days of the outpatient visit, billers must include the costs/charges of the technical component portion of all diagnostics and the clinically related nondiagnostic services on the inpatient claim.

For more information, review pp. 654–679 of the MPFS final rule display copy.

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