(Medicare Claims Processing Manual)

The technical portion of any admission- related outpatient nondiagnostic service rendered to a beneficiary at a hospital-owned or hospital-operated physician clinic or practice during the payment window is subject to the 3-day (or 1-day) payment window policy (see MCPM, chapter 12, sections 90.7 and 90.7.1).  The 3 -day (or 1 -day) payment window policy does not apply to outpatient nondiagnostic services that are included in the rural health clinic (RHC) or Federally qualified health center (FQHC) all -inclusive rate (see MCPM, chapter 19, section 20.1).  Outpatient nondiagnostic services furnished to a beneficiary more than 3 days (for a non-subsection (d) hospital, more than 1 day) preceding the date of the beneficiarys admission to the hospital, by law, are not part of the payment window and must not be bundled on the inpatient bill with other outpatient services that were furnished during the span of the 3- day (or 1 -day) payment window, even when all of the outpatient services were furnished during a single, continuous outpatient encounter.  Instead, the outpatient nondiagnostic services that were furnished prior to the span of the payment window may be separately billed to Part B.   An entity is considered to be "wholly owned or operated" by the hospital if the hospital is the sole owner or operator.  A hospital need not exercise administrative control over a facility in order to operate it.  A hospital is considered the sole operator of the facility if the hospital has exclusive responsibility for implementing facility policies (i.e ., conducting or overseeing the facility's routine operations), regardless of whether it also has the authority to make the policies.  For purposes of the 3- day (or 1 -day) payment window policy, a sponsorship is treated the same as an ownership, and a non-profit or not- for-profit entity is treated the same as a for -profit entity.  Thus, admission -related outpatient nondiagnostic services provided by the admitting not- for-profit hospital, or by an entity that is wholly sponsored or operated by the admitting not- for-profit hospital, to a beneficiary during the 3 days (or 1 day) immediately preceding and including the date of the be neficiarys inpatient admission are deemed to be inpatient services and must be bundled on the claim for the beneficiarys inpatient stay at the not-for-profit hospital.   Hospitals in Maryland that are under the jurisdiction of the Health Services Cost Review Commission are subject to the 3-day payment window.  Effective for dates of service on or after July 1, 2008 and before June 25, 2010, CWF will reject claims for nondiagnostic services when the following is met:  1) There is an exact match (for all digits) between the principal diagnosis code assigned for both the preadmission services and the inpatient stay, and   2) The line item date of service (LIDOS) falls on the day of admission or any of the 3 days immediately prior to an admission to an IPPS hospital (or on the day of admission or one day prior to admission for hospitals excluded from IPPS).  D. - Other Preadmission Services  (Effective for Services Furnished On or After  June 25, 2010)  Beginning on or after June 25, 2010, the definition of other services related to the admission (i.e., admission -related outpatient nondiagnostic services) is revised for purposes of the 3-day (or 1-day) payment window policy.  Except for the following changes, the other requirements in section 40.3.C continue to be applicable.   For outpatient nondiagnostic services furnished on or after June 25, 2010, all outpatient nondiagnostic services, other than ambulance and maintenance renal dialysis services, provided by the hospital (or an entity wholly owned or wholly operated by the hospital) on the date of a beneficiarys inpatient admission are deemed related to the admission, and thus, must be billed with the inpatient stay.  Also, outpatient nondiagnostic services, other than ambulance and maintenance renal dialysis services, provided by the hospital (or an entity wholly owned or wholly operated by the hospital) on the first, second, and third calendar days for a subsection (d) hospital paid under the IPPS (first calendar day for non-subsection (d) hospitals) preceding the date of a beneficiarys inpatient admission are deemed related to the admission, and thus, must be billed with the inpatient stay, unless the hospital attests to specific nondiagnostic services as being unrelated to the hospital claim (that is, the preadmission nondiagnostic services are clinically distinct or independent from the reason for the beneficiarys admission) by adding a condition code 51 (definition 51 - Attestation of Unrelated Outpatient Non-diagnostic Services) to the separately billed outpatient non-diagnostic services claim .  Beginning on or after April 1, 2011, providers  may submit outpatient claims with condition code 51 for outpatient claims that have a date of service on or after June 25, 2010.   Hospitals must include on a Medicare claim for a beneficiarys inpatient stay the diagnoses, procedures, and charges for all preadmission outpatient diagnostic services and all preadmission outpatient nondiagnostic services that meet the above requirements.  For purposes of the Present on Admission Indicator (POA), even if the outpatient services are bundled with the inpatient claim, hospitals shall code any conditions the patient has at the time of the order to admit as an inpatient as POA irrespective of whether or not the patient had the condition at the time of being registered as a hospital outpatient.  In combining on the inpatient bill the diagnoses, procedures, and charges for the outpatient services, a hospital must convert CPT codes to ICD procedure codes and must only include outpatient diagnostic and admission- related nondiagnostic services that span the period of the payment window.   Outpatient nondiagnostic services provided during the payment window that are unrelated to the admission and are covered by Part B may be separately billed to Part B.  Hospitals must maintain documentation in the beneficiarys medical record to support their claim that the preadmission outpatient nondiagnostic services are unrelated to the beneficiarys inpatient admission.  Effective for dates of service on or after June 25, 2010, CWF will reject outpatient claims for nondiagnostic services when the following occurs:   1) Condition code 51 (definition 51 - Attestation of Unrelated Outpatient Non -diagnostic Services) is not included on the outpatient claim, and   2) The line item date of service (LIDOS) falls on the day of admission or any of the 3 days immediately prior to an admission to an IPPS hospital (or on the day of admission or one day prior to admission for hospitals excluded from IPPS).  40.3.1 - Billing Procedures to Avoid Duplicate Payments  (Rev. 1, 10- 01-03)  HO- 400H   The hospital must install adequate billing procedures to avoid submission of duplicate claims.  This includes duplicate claims for the same service and outpatient bills for nonphysician services considered included in the DRG for a related inpatient admission in the facility or in another hospital.   Where the hospital bills separately for nonphysician services provided to a patient either on the day before admission to a PPS hospital or during a patient's inpatient stay, the claim will be rejected by the A/B MAC (A) as a duplicate and the hospital may  be subject to sanction penalties per 1128A  of the Act.   50 - Adjustment Bills (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD -10: Upon Implementation of ICD - 10, Implementation: ICD - 10: Upon Implementation of ICD - 10, ASC X12: September, 23 2014)   Adjustment bills are the most common mechanism for changing a previously accepted bill.  They are required to reflect the results of A/B MAC (A)s medical review.  Adjustments may also be requested by CMS via CWF if it discovers that bills have been accept ed and posted in error other than the omission of a charge.  Adjustments may be initiated as a result of OIG and MSP requests.  The A/B MAC (A) will ask the provider to submit an adjustment request for certain situations.   For hard copy Form CMS -1450 adjustment requests, the provider places the ICN/DCN of the original bill for Payer A, B, or C.   Where payment is handled through the cost reporting and settlement processes, the provider accumulates a log for those items not requiring an adjustment bill.  For cost settlement, the A/B MAC (A) pays on the basis of the log.  This log must include:    Patient name;    HICN;    Dates of admission and discharge, or from and thru dates;    Adjustment in charges (broken out by ancillary or routine service); and    Any unique numbering or filing code necessary for the hospital to associate the adjustment charge with the original billing.   Providers in Maryland, which are not paid under PPS or cost reports, submit an adjustment bill for inpatient care of $500 or more, and keep a log as described above for lesser amounts.  Because there are no adjustment bills, the A/B MAC (A) enters the paym ent amounts from the summary log into the PPS waiver simulation and annually pays the items on the log after the cost report is filed.  NOTE:  Information regarding the claim form locators that correspond with these fields on the Form CMS -1450 is found in chapter 25.  An original bill does not have to be accepted by CMS prior to making related adjustments to the provider.  However, for all adjustments other than QIO adjustments (e.g., provider submitted and/or those the A/B MAC (A) initiates), the A/B MAC (A) submits an  adjustment bill to CWF following its acceptance of the initial bill.  To verify CMS' acceptance, it takes one or both of the following actions:   A. - General Rules for Submitting Adjustment Requests   Adjustment requests that only recoup or cancel a prior payment are "credits" and must match the original in the following fields:    A/B MAC (A) control number (ICN/DCN);    Surname;    HICN;   When a definite match cannot be made on the 3 fields above, the provider's A/B MAC (A) will use the fields below as needed.  Note that for older claims, ICN/DCN probably will not match.   Date of birth;    Admission date (Start of Care Date for Home Health), unless changed by this adjustment requests; and   From/thru dates (Date of First Visit/Date of Last Visit for Home Health), unless changed by this adjustment request.   Cancel -only adjustment requests must be submitted only in cases of incorrect provider identification numbers and incorrect HICNs.  After the cancel -only request for the incorrect bill is resolved, the provider must submit correct information as a new bill.   The provider must submit all other adjustment requests as debits only.  It shows the ICN/DCN of the bill to be adjusted as described above, with the bill type shown as XX7.  It submits adjustment requests to its A/B MAC (A) either electronically or on hard  copy.  Electronic submission is preferred.  The A/B MAC (A) must enter the following bill types that relate to the entity generating the adjustment request:   Bill Type  Description  XX7  Provider (debit)  XX8  Provider (cancel)  XXF  Beneficiary  XXG  CWF  XXH  CMS  XXI A/B MAC (A)  XXM  MSP  XXP  QIO/QIO  XXJ Other  XXK  OIG  The provider submits adjustment requests as bill type XX7 or XX8.  Since several different sources can initiate an adjustment for MSP purposes, the A/B MAC (A) will change the bill type to XXM, which takes priority over any other source of an adjustment except OIG.  These priorities refer only to the designation of the source of the adjustment.  The difference between CWF generating the adjustment request and CMS generating the request is:   An adjustment is CWF -generated if the A/B MAC (A) receives a CWF alert or a CMS -L1002.  The A/B MAC (A) prepares an adjustment if instructed by CO or RO to make a change.  Typically, the A/B MAC (A) receives such direction from CMS when it decides to retroactively change payment for a class or other group of bills.  Occasionally, CMS will dis cover an error in the processing of a single bill and direct the A/B MAC (A) to correct it.   If the A/B MAC (A) furnished the A/B MAC (B) a copy of the original bill which is being adjusted, it must furnish them a copy of the adjusted bill.  If adjustment bills are rejected by CWF for additional corrections, they need to be corrected and resubmitted.  Even if the adjustment action is requested by letter from CMS, the A/B MAC (A) must submit the adjustment bill in its CWF record.  If a rejected  adjustment bill is determined to be unnecessary, the A/B MAC (A) stops the adjustment action upon receipt of correction.