Gastroenterology Coding Alert

Question: Please explain to me when to use modifier PD. Does this apply to us when a patient comes in for an exam and is admitted to hospital within 3 days even though we are a freestanding facility and not operated by a hospital?

Minnesota Subscriber

Answer: If the entity you’re coding for is not wholly owned or operated by a hospital, then you don’t need to append modifier PD (Diagnostic or related nondiagnostic item or service provided in a wholly owned or operated entity to a patient who is admitted as an inpatient within 3 days).

On the other hand, those entities (practices, etc.) that are wholly owned or operated by a hospital and that provide any diagnostic or related non-diagnostic services to a patient who is admitted to that hospital within three days must append modifier PD to the codes for those services.

Practices self-designate during Medicare enrollment whether they’re owned or operated as a hospital. The hospital is responsible for alerting the practices they own or operate if the patient is admitted.

When practices append PD to a code that doesn’t have both professional and technical components, Medicare will pay for the service based on the facility rate (rather than the non-facility rate). If a code has both professional and technical components, modifier PD will trigger Medicare to pay the practice for only the professional component. The technical component will be considered a hospital cost.

Resource: You can learn more about modifier PD use at www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/MM7502.pdf. CMS posted FAQs on the payment window at http://cms.hhs.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Downloads/CR7502-FAQ.pdf.