Urology Coding Alert

Question: I keep hearing about some "three-day payment window" that will affect Medicare payments but I don't know what it is or if my urologists need to worry about it. Can you explain what it is?

Kentucky Subscriber

Answer: If a Medicare patient has services furnished in a facility wholly owned or operated by a hospital and then gets admitted to that hospital within three days, those prior services are bundled into the patient's hospital stay. This rule has been in place since June 2010 -- however, CMS tweaks the rule effective July 1, 2012, and now it may impact you more.

Here's why: If you're in a physician practice that's owned or operated by a hospital and you treat a patient who is subsequently admitted to the hospital within the next three days, you will collect for your service at the facility rate and not at the outpatient rate. This applies to you even if your practice is not located at the same site as the hospital. As long as it's wholly owned and operated by the hospital, the three-day payment window rule will apply.

Use this modifier: If your practice is owned and operated by a hospital and you treat a patient for a related problem within three days of her hospital admission, you should append modifier PD (Diagnostic or related nondiagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within 3 days, or 1 day) to your claim to let the MAC know that your service is subject to the three-day payment rule, said Marc Hartstein, deputy director of the Hospital and Ambulatory Policy Group at CMS, who spoke about the "three-day payment window" during the CPT® 2012 Annual Symposium in Chicago on Nov. 16.

For example: A urologist whose practice is owned and operated by Hospital A performs a fine needle aspiration (FNA) of a testicular mass in his clinic. The urologist should hold the FNA bill for three days until he finds out if the patient requires hospital admission. The pathology report indicates that excision is appropriate, and two days later, the patient is admitted to Hospital A for the procedure. The urologist can bill the FNA (10021, Fine needle aspiration, without imaging guidance), and append modifier PD. The modifier effectively turns the clinic-based procedure into a facility-based procedure. Therefore, the doctor will receive payment for his services at the facility rate rather than the outpatient fee schedule, and the clinic cannot bill for the costs associated with the supplies or other practice expenses related to the FNA, which would also result in significant loss of income.