In Section 102 of the Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010, Congress expanded Medicare's three-day payment window policy to apply to certain therapeutic services furnished by physician practices and other Part B entities that previously had not been subject to the rule. Subsequently, in the 2012 Medicare Physician Fee Schedule Final Rule, published November 28, 2011, CMS detailed its policies regarding the three-day payment window's application and then issued implementing manual instructions, which were published on December 21, 2011 (C.R. 7502) [PDF]. Finally, in mid- June of 2012, CMS issued Frequently Asked Questions (FAQs) [PDF] to address common questions regarding the application of the three-day window payment policy. As a consequence, providers should now be aware of the policy and the need to conform to the policy.
Background - Medicare has long required that most pre-admission services furnished prior to a beneficiary's inpatient admission to be hospital be “bundled” into the hospital's inpatient prospective payment (IPPS) rate if both (i) the entity furnishing the preadmission services is wholly owned or wholly operated by the admitting hospital and (ii) the service is furnished within three days of the inpatient admission (or one day in the case of hospitals excluded from IPPS). The “bundled” services subject to the three-day window include all pre-admission diagnostic services and most nondiagnostic services.
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