72 Hour Rule and Medicare

72 Hour Rule

To crack down on fraud as part of the False Claims Act, the government is increasingly looking at the 72 hour rule and Medicare. This rule can be a headache for hospital administrators because it is easy to accidentally violate the rules when submitting bills for reimbursement.

72 Hour Rule and Medicare

The 72 hour rule is part of the Medicare Prospective Payment System (PPS). The rule states that any outpatient diagnostic or other medical services performed within 72 hours prior to being admitted to the hospital must be bundled into one bill. Another way of wording the rule is that outpatient services performed within 72 hours of inpatient services are considered one claim and must be billed together rather than separately.

Examples of diagnostic services that are covered in the 72 Hour Rule include:

  • Lab work
  • Radiology
  • Nuclear medicine
  • CT scans
  • Anesthesia
  • Cardiology
  • Osteopathic services
  • EKG
  • EEG

Unrelated Diagnostic Services are Included

One of the more confusing aspects of the 72 hour rule is that unrelated outpatient services can be bundled with the inpatient surgery.

For example, let's say a patient goes to the hospital's outpatient center and has an x-ray performed on her leg. She has been feeling pains in the leg and needs to have it evaluated. This would seem like it would be billed on its own, separate from any other claims. However, if the same patient checks into the hospital within 72 hours for a previously scheduled inpatient surgery, then the leg x-ray is billed together with the surgery. The surgery doesn't even have to be on her leg. It could be a completely unrelated procedure, such as heart surgery. The important part in this scenario is that the x-ray was a diagnostic service.

Other Services Can Be Excluded

The distinction between "diagnostic services" and "other services" is key to understanding how the 72 hour rule and Medicare works. Let's look at another scenario to see the difference between the two. The same patient as above, after finding she has arthritis in her leg, comes back the next day to the outpatient center for a physical therapy session. Since the physical therapy on her leg is unrelated to her previously scheduled heart surgery, the physical therapy can be billed separately from the heart surgery.

There is an exception to this rule, however. If the physical therapy is related to a surgery she has within 72 hours, then the physical therapy is bundled with the inpatient surgery since they are related. Using our same patient as an example, the therapy would be bundled if she had emergency leg surgery since the therapy was performed on the leg that was operated on.

Recordkeeping

To make sure bills are processed (and paid) properly, the hospital must keep proper records. This is a so that Medicare can classify each patient into a Diagnostic Related Group (DRG). Each medical bill must include the following information to meet the requirements:

  • Diagnosis (the main reason the patient was admitted to the hospital)
  • Complications and Comorbidities (secondary diagnosis)
  • Procedures performed
  • Age of the patient
  • Gender
  • Discharge disposition (was it routine or was the patient transferred, etc.?)

Staying Compliant

As you can see, it's very easy to mistakenly double-bill Medicare. If a hospital is caught doing this, they are subject to large penalties. To help stay compliant with the law, some hospitals are turning to computer assisted audit techniques (CAATs) to help spot separate bills that should really be bundled.

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72 Hour Rule and Medicare