General Surgery Coding Alert

Ownership is the key for general surgeons.

Did you know that one of the least publicized changes in the 2012 Medicare Physician Fee Schedule could be one of the costliest if it applies to you?

That's the word from Marc Hartstein, deputy director of the Hospital and Ambulatory Policy Group at CMS, who spoke about the "three-day payment window" during the CPT® 2012 Annual Symposium in Chicago on Nov. 16.

Hospital Ownership Triggers Rule

If a Medicare patient has services furnished in a facility wholly owned or operated by a hospital and then gets admitted to that hospital within three days, those prior services are bundled into the patient's hospital stay. This rule has been in place since June 2010 -- however, CMS tweaks the rule effective July 1, 2012, and now it may impact you more.

Here's why: If you're in a physician practice that's owned or operated by a hospital and you treat a patient who is subsequently admitted to the hospital within the next three days, you will collect for your service at the facility rate and not at the outpatient rate. This applies to you even if your practice is not located at the same site as the hospital. As long as it's wholly owned and operated by the hospital, the three-day payment window rule will apply.

Use this modifier: If your practice is owned and operated by a hospital and you treat a patient for a related problem within three days of her hospital admission, you should append modifier PD (Diagnostic or related nondiagnostic 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) to your claim to let the MAC know that your service is subject to the three-day payment rule, Hartstein said.

For example: A surgeon whose practice is owned and operated by Hospital A performs a fine needle aspiration (FNA) of a breast mass in his clinic. The surgeon should hold the FNA bill for three days until he finds out if the patient requires hospital admission. The pathology report indicates that excision is appropriate, and two days later, the patient is admitted to Hospital A for the procedure. The surgeon can bill the FNA (10021, Fine needle aspiration, without imaging guidance), and append modifier PD. The modifier effectively turns the clinic-based procedure into a facility-based procedure. That means the clinic cannot bill for the costs associated with the supplies or other practice expenses related to the FNA, which would result in significant loss of income.