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Bundling Non-Diagnostic Service
March 2010
Recently there has been much publicity regarding the bundling of non-diagnostic services by hospitals. Ohio hospitals received information on this from the Ohio Hospital Association and information has been printed in various publications on this issue.
As published in the Claims Processing Manual:
Chapter Three, Section 40.3, “Non-diagnostic outpatient services that are related to a patient’s hospital admission and that are provided by the hospital or by an entity wholly owned or wholly operated by the admitting hospital . . . to the patient during the 3 days immediately preceding and including the date of the patient’s admission are deemed to be inpatient services and are included in the inpatient payment . . . we defined non-diagnostic preadmission services as being related to the admission only when there is an exact match (for all digits) between the ICD-9-CM principal diagnosis code assigned for both the preadmission services and the inpatient stay.”
Hospitals should only bundle the non-diagnostic services if there is an exact, five-digit match between the principal diagnosis codes for the outpatient encounter (i.e. Emergency Department visit) and the inpatient stay.
Given that many hospitals have routinely bundled all services provided, hospitals are now reviewing their practices and even “looking back” at claims and re-billing as appropriate. Consultants are approaching hospitals to assist in this endeavor, on a contingency basis.
Diane Signoracci, a healthcare partner at Bricker & Eckler LLP, has suggested that, “when engaging consultants to identify additional reimbursement, the hospital has to be careful. The unbundling may generate both an outpatient claim and an inpatient downcode adjustment. Both must be reported appropriately. Contingency fees are not per se illegal, but if the advice given by the consultant is erroneous and results in an overpayment, then the contingency fee aspect of the arrangement may be considered evidence of intent to file a false claim.
If the hospital intends to go with a contingency fee, the hospital may want to calculate the fee based upon the “net” reimbursement effect, that is outpatient reimbursement received minus inpatient adjustment
offset.
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