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CMS Reversal on Inpatient-Only Billing

Tucked into CMS transmittal 3238 for OPPS updates was a surprising reversal on long-standing policy of denying inpatient-only procedures billed in an outpatient setting – CMS no longer requires hospitals to secure an inpatient admission order from the physician before prior to performing a procedure listed as “inpatient-only”: We are revising our billing instructions to allow payment for inpatient only procedures that are provided to a patient in the outpatient setting on the date of the inpatient admission or during the 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission that would otherwise be deemed related to the admission to be bundled into billing of the inpatient admission, according to our policy for the payment window for outpatient services treated as inpatient services. Effective April 1, 2015, inpatient only procedures that are provided to a patient in the outpatient setting on the date of the inpatient admission or during the 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission that would otherwise be deemed related to the admission, according to our policy for the payment window for outpatient services treated as inpatient services will be covered by CMS and are eligible to be bundled into the billing of the inpatient admission. CMS is updating Pub. 100-04, Medicare Claims Processing Manual, chapter 4, sections 10.12 and 180.7 to reflect the revised impatient only payment policy. Although this reversal won’t impact hospitals that are already successfully following best practice – securing admission orders for inpatient-only surgeries beforehand (as well as verifying documentation of medical necessity) – many hospitals have struggled with consistent pre-op physician ordering. The new exception detailed in the transmittal is likely to give provider organizations some relief from Medicare inpatient-only surgery denials. Don’t forget:
  • Inpatient order must be received within 3 calendar days (or 1 calendar day for a non-subsection (d) hospital) preceding the date of the inpatient admission.
  • The patient must still be hospitalized when the inpatient order is secured.
  • Non-diagnostic outpatient services that are unrelated to the inpatient admission but occur during the 3-day window should still be billed separately to Part B.