Health Information Management

Tip: Understand the three-day rule

APCs Insider, January 6, 2012

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The three-day rule bundles certain outpatient preadmission services into the inpatient MS-DRG payment. This means they are billed as part of the inpatient claim, and payment is made as part of the applicable DRG for the case.

These three factors can help coders determine whether an outpatient service is subject to the three-day rule:

  • The relationship of the inpatient and outpatient providers—Outpatient services furnished by a hospital or an entity wholly owned or operated by the hospital are potentially subject to the three-day rule.
  • The nature of the service—CMS considers all nondiagnostic services occurring three calendar days prior to admission related. Coders may only separately bill for services when they are clinically unrelated to the admission and documentation supports this determination. Diagnostic services are defined by revenue codes and sometimes a HCPCS code. CMS considers surgical services, clinic and ED services, and observation nondiagnostic services, and it treats them differently than diagnostic services for purposes of the rule.
  • The date the outpatient service is rendered—The three-day rule applies to the day of admission and the three calendar days prior to admission. The rule is based on calendar days, not hours, even though the rule is sometimes referred to as the 72-hour rule.

The tip is adapted from “Report condition code 51 for nondiagnostic services unrelated to inpatient stay” in the December issue of Briefings on APCs.



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