The Place of Service Guidelines which Medicare suggested for implementation on April 1, 2012 have been delayed to October 1, 2012 to permit a more in depth discussion of their impact, especially to those providers in hospital based specialties who do not have direct patient contact (e.g. pathology and radiology, in particular). At this point no changes have been made to the guidelines except for the effective date. In transmittal 2435 which announced the delay, CMS indicates that the additional time would be used to “address questions received and to make any necessary changes.”
The impact of the change can be quite dramatic. For example, independent laboratories would be required to indicate that a service was performed with a hospital place of service (21 for inpatient or 22 for outpatient) if the sample being analyzed was drawn while the patient was a hospital patient. Given the sunsetting of the TC grandfather, there would be no way for the laboratory to get a direct payment for its technical service, even in circumstances where the hospital involved does not have the service in place. For example, IHC stains are often sent out to reference laboratories. In those cases, the reference laboratory would have to submit the bills to the hospital for payment since they would be precluded from billing Medicare directly for the in or outpatient service. Many reference laboratories have already considered the impact this change will have on their financial performance and have begun conversations with their clients to determine if continuation of services is warranted after October 1st.
Note that the effects of this treatment go beyond the walls of the hospital as this rule will even apply to outpatient surgery centers which have their own compensation structure for technical services.
In addition, many organizations are also looking at the 14 day rule as it pertains to the bundling of services under the hospital place of service. The extension of the “hospital” treatment throughout the 14 day period can cause a considerable disruption if the initial service must be coded as a hospital stay.
Most professional fees, however, will be untouched by the change in the place of service guidelines as there is no reduction in hospital based physician payment based on place of service. Since the vast majority of services were already provided in the hospital setting, the rates have adequately taken that into consideration in the practice.
APS has been reviewing each client’s business to ensure that those services which may become subject to the current proposed guidelines are identified and any steps necessary to prepare for October 1, 2012 have been identified and pursued. If you have any questions about how this may impact your practice, please contact your practice manager at APS.
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