Find-A-Code Focus Newsletter

Medicare Three Day Payment Window

By Bonnie Schreck
March 07, 2016

In 2010, Medicare's policy for payment of outpatient services provided on either the date of a beneficiary's admission or during the three calendar days immediately preceding the date of a beneficiary's inpatient admission to a “subsection (d) hospital” subject to the inpatient prospective payment system, “IPPS” (or during the one calendar day immediately preceding the date of a beneficiary's inpatient admission to a non-subsection (d) hospital) became effective.   A Medicare Subsection D (d) hospital is an acute care, short-term hospital. The Social Security Act explains what a Medicare Subsection (d) Hospital is not:

1) Psychiatric hospital

2) Rehabilitation hospital

3) Pediatric hospital: patients - predominantly under 18 years of age

4) Long term care hospital 

5) Cancer hospital

Note: There are many exceptions this list, such as a critical access hospital (CAH); what is listed is a briefly identifies may be included in this policy.

Also known as the ‘3-day (1-day) payment window’ policy, a hospital (or an entity that is wholly owned or wholly operated by the hospital) must include on the claim the diagnoses, procedures, and charges for all outpatient diagnostic services and admission-related outpatient non-diagnostic services that are furnished to the beneficiary during the 3-day (1-day) payment window for the inpatient stay. This law makes the policy associated with admission-related outpatient non-diagnostic services more consistent with common hospital billing practices.

For more information on the 3-day payment window, visit the CMS website


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