Revenue Cycle

Hospitals face three-day payment window changes

Recovery Auditor Report, July 8, 2010

Hospitals clamoring for guidance from CMS about the three-day payment window must now grapple with legislative changes to the requirements that carry significant revenue implications and could potentially affect the national recovery audit contractor (RAC) program.

President Obama on June 25 signed the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 , which contains a section to clarify the three-day payment window, or three-day rule. The three-day rule previously stipulated that hospitals must bill as part of an inpatient stay all diagnostic services provided within three days of admission, as well as all nondiagnostic services related to the inpatient admission. CMS had previously defined "related" to be an exact diagnosis code match between the inpatient admission and the outpatient therapeutic services. Hospitals had struggled to correctly apply the rule in their billing operations.

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