CurrentBlue Cross Blue Shield - New MexicoPolicy CPCPO38

Outpatient Services Prior to an Inpatient Admission

Governs reimbursement and billing for outpatient services rendered on the date of inpatient admission and up to three calendar days before admission for Blue Cross Blue Shield - New Mexico members and providers submitting claims to the Plan.

Policy Summary

PayerBlue Cross Blue Shield - New Mexico

PolicyOutpatient Services Prior to an Inpatient Admission

Policy CodePolicy CPCPO38

Change TypeNo material changes

Effective DateFeb 9, 2024

Next Review DateFeb 9, 2024

Key ActionAppend modifier PD to eligible physician preadmission diagnostic and admission-related nondiagnostic services to allow appropriate reimbursement.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

3-daypayment window

v2.0policy version

Feb 9, 2024approval date

2history versions

Three-day Payment Window Coverage

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Services rendered on the date of inpatient admission and up to three (3) calendar days preceding the date of admission are subject to this three-day payment window policy.

Inclusion vs Separate Reimbursement

If the admitting hospital renders related diagnostic or related non-diagnostic services within the three-day payment window (three days preceding and including the date of admission), these services are considered inpatient services and must be included in the inpatient reimbursement.
If outpatient diagnostic or non-diagnostic services provided within the three-day payment window are unrelated and clinically distinct from the reason for the inpatient admission, the hospital may be reimbursed separately for those unrelated outpatient services; such unrelated preadmission nondiagnostic services are not subject to the three-day payment window.

Technical component billing rule: The technical portion of nondiagnostic services provided by the hospital or facility within the same health system during the three-day payment window must be included on the inpatient bill unless those nondiagnostic services are unrelated and clinically distinct from the inpatient admission reason.

Billing responsibility during admission: Services provided during a member's inpatient admission that are reimbursed under an all-inclusive payment method should be billed by the facility; services billed and provided by a third party while the member is admitted are the facility's responsibility and should be included on the inpatient claim.

Exclusions (services and facility types)

The following services are excluded from this policy when performed within the designated period prior to an inpatient admission: ambulance; chemotherapy/cancer-related services (except when delivered on the same day as admission, in which case they must be included on the inpatient claim); home health agency; hospice; outpatient maintenance renal dialysis; rural health clinic; skilled nursing facility; therapies (cardiac, occupational, speech, physical, respiratory); and transplants.
The following hospitals and hospital units are excluded and follow a one (1) day payment window instead of the three-day window: cancer hospitals; children's hospitals; inpatient rehabilitation hospitals and units; long-term care hospitals; psychiatric/substance abuse hospitals and units.

Plan review and documentation: The Plan will review claims that fall under the three-day payment window, may request supporting documentation, and reserves the right to review claims case-by-case; providers and facilities are responsible for submitting appropriate codes and modifiers and for retaining documentation to demonstrate unrelatedness when applicable.

Modifiers, Condition Codes, and Payment Window

Modifiers and condition codes referencedModifier | mixed

PD	Modifier PD — preadmission and admission-related services professional component
Condition Code 51	Condition code indicating outpatient non-diagnostic services unrelated to subsequent inpatient admission

Modifier system splitModifier

PD	Modifier PD — preadmission and admission-related services professional component

Condition codesmixed

Condition Code 51

Condition code indicating outpatient non-diagnostic services unrelated to subsequent inpatient admission

Three-day payment window — application

Payment windowServices provided on the date of admission and up to three (3) calendar days preceding the date of admission are considered related to the admission and reviewed under the three-day payment window.

Scope of applicationApplies to outpatient services (e.g., ED, Observation, Pre-Admission Testing) rendered to a member who is later admitted as an inpatient; facilities and providers must submit appropriate codes/modifiers.

Inclusion ruleIf the admitting hospital renders related diagnostic or related non-diagnostic services within the three-day window, those services are considered inpatient and must be included in the inpatient reimbursement.

Separate reimbursement ruleIf outpatient services are unrelated and clinically distinct from the reason for inpatient admission, the hospital may be reimbursed separately for those outpatient services and they are not subject to the three-day window.

Billing responsibilityTechnical portions of nondiagnostic services provided by the hospital or facility within the same health system during the three-day window must be included on the inpatient bill; third-party billed services during an admission are the facility's responsibility and should be included on the inpatient claim.

Billing, Documentation, and Modifier Requirements

Documentation Required

Documentation requests and claim review

The Plan may request supporting documentation to verify coding, medical necessity, and relation of services to an inpatient admission. Claims are subject to review against benefit terms, provider contract language, medical policies, clinical payment and coding policies, and automated coding edits. Providers must submit accurate, complete documentation and are urged to provide additional records upon request to avoid delays or adverse payment determinations.

Claims are subject to claim review and code edit protocols (e.g., UB, AMA, ICD-10, CMS/NCCI edits).
Submit additional documentation upon Plan request to support billed services.
Failure to adhere to coding and billing policies may impact claims processing and reimbursement.

Billing Rule

Condition Code 51 reporting

When outpatient non-diagnostic services provided prior to an inpatient admission are clinically unrelated to the reason for the admission, those services are not subject to the three-day payment window and should be billed separately. The hospital must report Condition Code 51 on the outpatient claim when the non-diagnostic outpatient services are unrelated to the subsequent inpatient admission. Documentation must support the clinical distinctness of the outpatient services.

Report Condition Code 51 on the outpatient claim when applicable.
Documentation must demonstrate the services are unrelated to the inpatient admission.
Related technical nondiagnostic services within the same health system during the three-day window must be included on the inpatient bill unless unrelated.

Billing Rule

Modifier PD requirements

Physician preadmission diagnostic and admission‑related nondiagnostic services that fall within the three‑day payment window must have modifier PD appended when reported with HCPCS/CPT codes subject to the window. When modifier PD is appended, reimbursement is limited to the Professional Component (PC) for TC/PC‑split codes provided in the three‑day window, and the facility rate for codes without a TC/PC split. Hospitals, facilities, and physician practices/clinics within the same health system should notify each other of a member's inpatient admission so claims across the system are billed correctly.

Append modifier PD to physician services subject to the three‑day payment window.
With modifier PD: reimburse only the PC for TC/PC‑split codes; facility rate applies for codes without TC/PC split.
Coordinate notifications across system providers to ensure correct billing.

Key Terms

Diagnostic Services — definition & examples

DefinitionDiagnostic Services are examinations or procedures performed on the patient or materials derived from outpatient services to obtain information to assess a medical condition or identify disease.

Common examplesDiagnostic laboratory services (hematology, chemistry), diagnostic X-rays and isotope studies, EKGs, pulmonary function studies, thyroid function tests.

PurposePerformed to obtain information to aid in assessment, determine nature and severity of an ailment or identify disease—used to determine relatedness to subsequent inpatient admission.

Non-diagnostic Services — definition & examples

DefinitionNon-diagnostic Services are services not identified by a diagnostic service revenue code or CPT code (for example, therapeutic services).

Technical portion billingThe technical portion of nondiagnostic services provided by the hospital or facility within the same health system during the three-day window is considered related to the admission and must be included on the inpatient bill unless clinically unrelated.

Separate reimbursement conditionIf preadmission nondiagnostic services are unrelated and clinically distinct from the reason for the inpatient admission, they are not subject to the three-day payment window and the hospital may bill separately.

Pre-Admission Testing (PAT) — definition & purpose

DefinitionPre-Admission Testing (PAT) is testing completed prior to scheduled procedures to ensure no surgical contraindications and to obtain the member's physiological baseline (e.g., blood/tissue analysis, radiological testing, cardiac diagnostics, respiratory status testing).

TimingPAT is completed prior to any scheduled procedure, including surgery or scheduled admissions; tests performed within the three-day window are reviewed under this policy to determine relatedness to admission.

Purpose for admission reviewUsed to confirm fitness for surgery and to provide baseline physiological data that may determine whether outpatient services are related to the subsequent inpatient admission.