Modifier needed for services performed before hospital admission

August 25, 2012

This month's question asks about the use of modifiers for services performed before a hospital admission. Find out the answer to this pressing coding question.

A: The Preservation of Access to Care for Medicare Beneficiaries and Pension Relief Act of 2010 outlines the Medicare payment policy for outpatient services performed on the day a patient is admitted to a hospital or for the 3 days before a patient is admitted to a hospital.

Let's clarify what the 3-day payment window is and to which entities it applies.

Medicare considers clinically related services preceding an inpatient admission to be part of the "operating costs of inpatient hospital services." Therefore, these services should be included in the hospital's bill for the patient's inpatient stay.

The technical component (TC) of all outpatient diagnostic services and admission-related, non-diagnostic services provided during the payment window must be included on the hospital's inpatient claim.

For entities that are wholly owned or operated by a hospital, Medicare will pay the professional component of services with payment rates that include a professional (modifier –26) and technical (modifier –TC) split and the facility rate for services that do not have a professional and technical split.

2. Services provided within the 3 days (or for psychiatric, inpatient rehabilitation, or long-term care hospitals, 1 day) preceding hospital admission.

This requirement includes services that occur the date of an inpatient admission or during the 3 days (or 1 day) immediately preceding the date of an inpatient admission.

3. Services rendered by an entity wholly owned or operated by the hospital to which the patient is admitted.

Wholly owned means an entity whose sole owner is the admitting hospital. Wholly operated means the hospital has the exclusive responsibility for conducting and overseeing the entity's routine operations, regardless of whether the hospital has policy-making authority over the entity.

The hospital is responsible for notifying the entity of an inpatient admission for a patient who received services in a wholly owned or wholly operated entity within the 3-day (or, when appropriate, 1-day) payment window before the inpatient stay. Correct billing is the responsibility of your practice, however, so coordination between the hospital and your billing staff is critical.

4. A condition clinically related to the reason for the inpatient stay.

Before this rule was enacted, the ICD-9-CM diagnosis codes had to match for the preadmission services to be included. Now the policy significantly broadens the definition of non-diagnostic services to include any that are clinically related to the reason for the patient's admission, regardless of whether the inpatient and outpatient diagnoses are the same.

This rule does not apply to services that are distinct or independent from the reason for the patient's inpatient admission. For these services, the professional portion of the service is covered under Medicare Part B, and the technical portion is covered under hospital billing. Additionally, this rule excludes ambulance and maintenance renal dialysis services the hospital provides.