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3-Day Payment Window Regulations

The 3-Day Payment Window Rule arose from the contention by CMS that costs related to hospital pre-admission services were included in costs used to calculate the standardized inpatient payment amount and the DRG. Since 1994, Medicare requires that qualifying outpatient services provided to a patient three days prior to an inpatient admission must be bundled to the inpatient claim.

“Diagnostic services (including clinical diagnostic laboratory tests) provided to a beneficiary by the admitting hospital, or by an entity wholly owned or wholly operated by the admitting hospital (or by another entity under arrangements with the admitting hospital), within 3 days prior to and including the date of the beneficiary’s admission are deemed to be inpatient services and included in the inpatient payment, unless there is no Part A coverage.” Medicare Hospital Manual 100-4, Chapter 3, Section 40.3, B. Preadmission Diagnostic Services - http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf

In summary, according to the rule, all outpatient diagnostic and non-diagnostic services are qualifying outpatient services and must be bundled to an admission if the non-diagnostic charges are related to the reason for the inpatient admission, and both diagnostic and related non-diagnostic charges occur within three calendar days prior to and including the day of the inpatient admission.

Diagnostic services that are deemed to be IP services and should be included in the IP DRG payment are provided by the admitting hospital, or by an entity wholly owned or operated by the hospital, provided during the three days immediately preceding the date of the patient’s admission, and defined by the presence on the bill of any of the following revenue codes and/or CPT codes:

For hospitals that are paid under the Medicare IP prospective payment system, non-diagnosticservices that are deemed to be IP services and should be included in the inpatient DRG payment are related to a patient’s hospital admission and that are provided by the hospital, or by an entity wholly owned or operated by the hospital, to the patient during the three days immediately preceding the date of the patient’s admission. Conversely, however, OP services that are non-diagnostic and are not related to the reason for admission (i.e. the OP and IP principal diagnosis codes are not an exact match digit for digit,) may be billed separately to Part B (see CMS Manual 100-4, Chap 3, Sec 40.3).