Prepare Now for Modifier PD
By Barbara J. Cobuzzi, MBA, CPC, CPC-H, CPC-P, CPC-I, CHCC, CENTC
CMS is expanding the “three-day payment window” for outpatient services provided within 72 hours of an inpatient admission. As of July 1, 2012 the payment window will apply to both diagnostic and non-diagnostic services.
Medicare will pay a reduced fee for physicians’ services that are clinically related to an inpatient admission, occur within 72 hours of the admission, and are furnished by a physician practice wholly owned or wholly operated by a hospital. The rule applies whether the inpatient and outpatient diagnoses codes are the same or different.
There are two minor exceptions to the three-day window payment rule:
- The three-day payment window for non-diagnostic services does not apply to either rural health care (RHC) or federally qualified health care centers (FQHC). These organizations must follow the 72-hour rule for diagnostic services, however, if they are owned or controlled by a hospital.
- When the decision for surgery is made within the 72 hours prior to the surgery (i.e., when modifier 57 Decision for surgery is properly applied to an E/M service code), the physician services do receive payment based on non-facility fees.
New HCPCS Level II modifier PD Diagnostic or related non-diagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within 3 days, or 1 day should be appended to identify claims for related services provided within 72 hours of an inpatient admission. The modifier may be used beginning Jan. 1, and CMS recommends that practices “begin to append the modifier to claims subject to the 3-day payment window at that time.”
Claims provided by any physician practice owned or controlled by a hospital will have to be held for at least three days prior to submission: The practice does not want to submit a claim without modifier PD, and then discover that the patient was admitted within 72 hours. The hospital is responsible to notify the practice of related inpatient admissions.
If non-diagnostic services are not clinically related to an inpatient admission within 72 hours, the hospital or wholly owned or wholly operated physician practice should document the reason those services are not clinically related. In such a case, the practice should receive full payment.
For more information, see the November 28, 2011 Federal Register.