Inpatient-Only Procedures

Earlier this month, CMS quietly revised its billing policy related to inpatient-only procedures.  In a Transmittal issued on March 13, CMS included inpatient-only procedures provided in the outpatient setting as preadmission services subject to the Three-Day (One-Day) Payment Window Rule.  Effective April 1, hospitals can bill Medicare for inpatient-only procedures provided to an outpatient within three days (or one day for some non-IPPS hospitals) of a related inpatient admission.  The effect of the revised billing policy is that hospitals do not need to obtain an inpatient admission order prior to performing an inpatient-only procedure.  The order can be obtained after the procedure on the same day or within three days/one day of the procedure, and Medicare will cover the procedure under Part A as an inpatient service.  The Transmittal can be found here.

Enforcement Delay of Two-Midnight Rule. 

Further related to inpatient admissions, last week the House passed the Sustainable Growth Rate (“SGR”) replacement bill, which included an extension of the partial enforcement delay of Medicare’s two-midnight hospital inpatient admission policy.  As part of the last SGR patch, Congress included a measure to restrict CMS from using Recovery Audit Contractors to audit short hospital stays through March 2015.  The replacement bill, if passed, would extend the enforcement delay through the end of September 2015.  This provision allows CMS to continue the use of the Medicare Administrative Contractor “probe and educate” program to assess provider understanding and compliance with the two-midnight rule on a prepayment basis through September 30.