Q&A: TOB 131, TOB 121, and the 72-hour rule

Q: How does TOB 131 bump against TOB 121 in regard to the 72-hour rule?

A: The 72-hour rule is more appropriately called the three-day payment window because it actually extends all the way to three full calendar days. The rule only applies when there is a payable DRG because it is part of the definition of the costs of inpatient services covered by the inpatient prospective payment system (IPPS) as defined in the Social Security Act. As designed, the IPPS DRG payment pays for the costs of care while the patient is an inpatient as well as the costs of certain outpatient services delivered in the three calendar days before their admission. Because it is a part of the definition of the DRG payment, when there is no DRG payable, there is no three-day payment window. There is sometimes confusion that the three-day window applies to all inpatient admission rather than just DRG payable inpatient admission, and this leads to concern about how to bill the inpatient Part B cases with TOB 121. In fact, because the case is not covered under Part A and we are billing Part B for payment under the outpatient prospective payment system rather than DRG payment under the IPPS, the rule would never be applicable to cases billed as inpatient Part B.

This leads to a different format for billing an encounter that includes non-covered inpatient services. Normally, for a covered inpatient case, because of the three-day window, we would include all services from the outpatient portion of the stay (i.e., emergency department or observation services) on the inpatient claim. Because of this, most hospitals only have one registration and bill all the care together without really thinking of why the outpatient is being included on the inpatient claim. It is only being included because of the three-day window that applies when a DRG is payable.

Therefore, in the situations where we have determined that a Part A DRG is not payable and we are billing to inpatient Part B, we would have to have a separate claim for those outpatient services. Essentially, we have set our systems up with the outpatient already on the inpatient claim by using just one registration, because this is the most common situation. Doing it this way avoids having to do more work later combining the outpatient to the inpatient. But if the inpatient case is not covered and we don't have a Part A DRG payable, we have to then separate those two portions of the stay and put all care up to the inpatient order on a regular outpatient Part B claim, and only the care after the inpatient order on the inpatient Part B claim.

One further note: Initially the MACs had some problems with this in 2013. Billing it correctly as discussed above would result in two claims on a single day, one for the outpatient care up to the inpatient order on a TOB 131 and one for the inpatient care after the order on a TOB 121. Initially, some of the MACs built an edit returning claims to providers saying this is an overlap. This was an error, and CMS issued instructions to the MACs to fix this, as well as ensuring the Common Working File would also allow these claims to go through the system. However, providers, following the instructions CMS had provided, initially got some overlap claims, and some interpreted this to mean you couldn't split off the outpatient services. All those initial errors are fixed now, and both claims will now go through the system.

This Q&A was answered by Kimberly Anderwood Hoy Baker, JD, CPC, regulatory specialist for HCPro.