HCFA issues final three-day payment window rule - Health Care Financing Administration

Healthcare Financial Management, May, 1998 by Richard L. Gundling

Policy: No. The payment window rule does not apply to situations in which the admitting hospital is not the sole owner or operator of the entity performing the preadmission testing.

Arrangement: Hospital A is owned by Corporations Y and Z in a joint venture. Corporation Z is the sole owner of Hospital B. Does the payment window rule apply when one of these hospitals furnishes preadmission services and the patient is admitted to the other hospital?

Policy: No. As noted above, the payment window rule does not apply to situations in which both the admitting hospital and the entity that furnishes the preadmission services are owned or operated by a third entity.

Arrangement: A clinic is solely owned by Corporation Z and is jointly operated by Corporation Z and Hospital A. Does the payment window rule apply if preadmission services are furnished by the clinic and the patient is subsequently admitted to Hospital A?

Policy: No. The payment window rule does not apply because Hospital A is neither the sole owner nor the operator of the clinic.

Conclusion

The preadmission services payment window rule provides important guidance for hospitals and other entities to comply with HCFA's bundling requirements. The rule clarifies which requirements. It also spells out what HCFA's definition of services "related to the admission" are and how to apply those definitions to a variety of operations. Significantly, the rule gives concrete examples of the application of the bundling requirements by entities "wholly owned and operated" by a hospital. Financial managers should ensure that their clinical and administrative staffs understand this important rule and comply with it.

Richard L. Gundling, FHFMA, CMA, is technical director, HFMA Washington, D.C., office group.