The 72-Hour Rule and Medicare: What You Need to Know

If you are a hospital administrator, you should know about Medicare's 72-hour rule.  The 72-hour rule treats outpatient services the same as inpatient services.  The rule states that all services provided for Medicare patients within 72 hours of the hospital admission are considered to be part of the inpatient services and are to be billed on one claim.

The 72-hour rule is part of Medicare's Prospective Payment System (PPS).  Under the PPS, Medicare pays hospitals a pre-determined rate for each hospital admission.  Clinical information is used to classify each patient into a Diagnosis Related Group (DRG).  Such information includes the principal diagnosis, complications and co-morbidities, surgical procedures, age, gender, and discharge disposition of the patient.  It is very important for hospital personnel to properly code the diagnoses and procedures, since that information is what determines what DRG Medicare assigns to the patient.  Incorrectly coded diagnoses and dramatically effect reimbursement, as rates are determined by the DRG.

Medicare pays the hospital a flat rate for each DRG, regardless of what services were actually provided.  Under this rule rule, payments for any diagnostic services provided within three days prior to hospital admission are considered covered by the DRG payment, even if they are unrelated to the admission.  Other services are only covered if they are related to the reason for admission. Diagnostic services covered under the PPS include but are not limited to laboratory work, radiology, nuclear medicine, CT scans, anesthesia, imaging services, cardiology, osteopathic services, EKG's, and EEG's.  Non-diagnostic services such as physical and speech therapy that are not related to the inpatient stay may be filed separately.

Acute care hospitals require the 72-hour rule.  Other facilities require the 24-hour rule, such as long-term care hospitals, rehab hospitals, and psychiatric hospitals.  Critical access hospitals are excluded from the 72-hour/24-hour provision.  As an administrator of a hospital covered under the 72-hour rule, you will need to make sure that hospital billing personnel properly code the patient information in order to ensure that Medicare pays for the correct DRG, and also that all services within 72 hours of the hospital stay are being billed on one claim.  Improper coding and billing can cause unnecessary hassles

Filed under: General-Medicare