Hospitals Questioning Whether ‘Doc Fix’ Could Curb Facility Payments
Hospitals are seeking guidance from CMS regarding a recently enacted provision governing the first 72 hours of a patient admission, saying the measure will strain facility resources and reduce Medicare payments by more than $4 billion across a decade, CQ HealthBeat reports (Reichard, CQ HealthBeat, 6/28).
The provision is part of the stand-alone "doc fix" legislation President Obama signed into law on June 25 that will delay through November a 21% cut to physicians' Medicare reimbursements.
Under the legislation, hospitals will receive a single bundled payment for all outpatient services provided within the first three days of an inpatient admission, thereby preventing facilities from billing "retrospectively," according to AHA News Now (AHA News Now, 6/28).
Previous Billing Practices
Prior to the new law, hospitals were able to bill separately for diagnostic services and non-diagnostic services related to the inpatient stay provided within three days of admission.
To bill for these related services, hospitals had to exactly match diagnosis codes between inpatient admission and outpatient therapeutic services, which created confusion among facilities that had difficulty applying the rule to their billing operations.
New Provision Details
The new law attempts to eliminate this confusion by adopting a new definition for these related services. Specifically, the new measure will bar hospitals from billing separately and will require that facilities bill all non-diagnostic services provided on the day of admission, as well as those in the three days before admission, as part of the inpatient stay.
However, hospitals can bill separately if they demonstrate that non-diagnostic services are unrelated to the admission. The provision is effective for services provided on or after June 25.
Hospitals say the new measure will present an administrative burden and require facilities to review each service provided during the three-day window to ensure billing is correct (Iarrobino/Carroll, HealthLeaders Media, 6/28).
Hospitals also contend that the provision will slash payments by more than $4 billion across a decade, which adds to the billions of dollars in reductions they agreed to sustain in exchange for their support of the health care reform legislation (CQ HealthBeat, 6/28).
There also are other unanswered questions stemming from the new measure, such as how the law will affect the RAC program and billing for services rendered prior to June 25 (HealthLeaders Media, 6/28).
CMS announced that it soon will clarify the new rule and issue recommendations for hospital billing under the new 72-hour provision. Until the agency provides guidance, CMS instructs hospitals to "include charges for all diagnostic and all non-diagnostic services that it believes" meet the requirements of this provision (HFMA, 6/28).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.