Responding to a proposed rule setting the fiscal 2014 inpatient prospective payment system, the Premier provider alliance is urging the Centers for Medicare and Medicaid Services to set a new payment policy for certain patients being held for observation.

“Specifically, CMS could establish a payment policy whereby a patient would be deemed an inpatient, even though a physician order is not on file, after 72 hours of observation services,” Premier suggests in an 83-page comment letter. “CMS would then pay hospitals a diagnosis related group payment for these ‘deemed-admitted’ patients and the inpatient deductible could apply to the patients. This is consistent with the existing policy whereby payments to hospitals for outpatient services provided within 72 hours of an admission are bundled into the DRG payment.”

Premier notes that as the patients are treated in the same setting at the same level of care, deeming them inpatients after the fact should not raise concerns about the patients being treated differently. “In fact, this retrospective time-based method should give us more confidence that the payment level matches the services received.”

Among other issues raised in the comment letter, Premier also asks CMS to consider certifying medical necessity software vendors so hospitals could rely on the software programs in making admission decisions. The comment letter is available here.

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