March 10, 2010

CMS Updates Physician Supervision Rules have Physician Supervision Rules have changed in Final Rule for Ambulatory Surgery Centers 2010 Final Rule for Ambulatory Surgery Centers Review of Three Day Rule Review of Three Day Rule

CMS has responded to requests for clarification on whether non-diagnostic services that are unrelated to the inpatient admission must be billed separately as outpatient services.

 Diagnostic services are considered to be packaged into the inpatient payment when they are provided to a patient by the admitting hospital, or by an entity wholly owned or operated by the admitting hospital, within three days prior to and including the date of the patient’s admission.  To correctly apply the three-day rule, hospitals also need to understand the definition of “wholly owned or operated” by the hospital – that is, the hospital is the sole owner or operator of the facility providing the outpatient service and the hospital has exclusive responsibility for implementing that facility’s policies or overseeing that facility’s routine operations. The ownership, revenue codes, and sometimes the HCPCS codes clearly drive the application of the three-day rule for diagnostic services.

0254Drugs incident to other diagnostic services 0255Drugs incident to radiology 030XLaboratory 031XLaboratory pathological 032XRadiology diagnostic 0341, 0343Nuclear medicine, diagnostic/Diagnostic Radiopharmaceuticals 035XCT scan 0371Anesthesia incident to Radiology Codes provided from the Medicare Claims Processing Manual, Chapter 3, Section 40.3Medicare Claims Processing Manual, Chapter 3, Section 40.3

0372Anesthesia incident to other diagnostic services 040XOther imaging services 046XPulmonary function 0471Audiology diagnostic 0481, 0489Cardiology, Cardiac Catheter Lab/Other Cardiology with CPT codes 93501, 93503, 93505, 93508, 93510, 93526, 93541, 93542, 93543, 93544, 93556, 93561, or diagnostic 0482Cardiology, Stress Test 0483Cardiology, Echocardiology 053XOsteopathic services 061XMRT 062XMedical/surgical supplies, incident to radiology or other diagnostic services 073XEKG/ECG 074XEEG 0918Testing- Behavioral Health 092XOther diagnostic services

 Non-diagnostic outpatient services (those not identified by a diagnostic service revenue code) can also be packaged into the inpatient payment using the same definition of “wholly owned and operated” and if the services were provided within three days prior to and including the date of the patient’s admission. However, the difference is that the non-diagnostic services must be related to the admission.  If the services are not related to the admission, the hospital may separately bill the non-diagnostic preadmission services to Part B.

 By including unrelated non-diagnostic services on the inpatient claim, the hospital may be inappropriately eligible for an outlier payment.  According to CMS, hospitals must distinguish between the related and unrelated services to be included on the inpatient claim.  However, a hospital may choose not to bill Part B for the unrelated non-diagnostic services, since CMS has stated it is discretionary to do so; but, the hospital could be losing revenues for those separately reimbursable services and potentially creating an unforeseen inducement.

Hospitals face new physician supervision requirements in CMS has “clarified” the rules on physician supervision in hospital outpatient departments to require that a physician for whom “incident to” procedures are billed must be “immediately” ready to intervene and conduct or modify the procedure if necessary. The new rules have the potential to fundamentally alter the relationships among physicians and hospitals.

final-rule-for-ambulatory-surgery-centers-and-most- hospital-outpatient-departments/

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