Industry News

CMS Releases FAQs for the Billing under the Three- and One-Day Payment Windows

The Centers for Medicare & Medicaid Services (CMS) recently published Frequently Asked Questions (FAQs) regarding the three-day and one-day payment window policies.  The guidance explains that the three-day payment window applies to certain outpatient diagnostic services furnished within three days of a subsequent inpatient stay for related services.  CMS also notes that the following types of hospitals and hospital units are subject to the one-day payment window policy:

  • Psychiatric hospitals and units;
  • Inpatient rehabilitation hospitals and units;
  • Long-term care hospitals;
  • Childrens’ hospitals; and
  • Cancer hospitals.

In addition, CMS clarifies hospital billing procedures for services subject to the three-day payment window.  Specifically, if hospitals should bill services under the three-day payment window, hospitals and Part B facilities must append modifier PD to the applicable outpatient service.  Hospitals may use the CMS FAQs to educate billing staff on the payment window provisions.

The Special Edition Medicare Learning Network Matters article (SE1232) is available at:

Centers for Medicare & Medicaid Services.  “Frequently Asked Questions (FAQs) on the 3-Day Payment Window for Services Provided to Outpatients Who Later Are Admitted as Inpatients.” MLN Matters Number: SE1232.  9 November 2012.