Medicare has a new modifier for hospital-run urgent cares. The new HCPCS Level II modifier PD is defined as “diagnostic or related non-diagnostic item or service provided in a wholly owned or wholly operated entity to a patient who is admitted as an inpatient within 3 days, or 1 day.”

This new modifier is being applied as a part of CMS’ expansion of the “three-day payment window” for outpatient services provided within 72 hours of an inpatient admission.

What this means is that Medicare pays a reduced fee for services that are:

1) Clinically-related to an inpatient admission

2) Occur within 72 hours of the admission

3) Are provided by a facility owned or operated by a hospital

The rule applies regardless of whether the diagnoses codes are the same or different. Although compliance with the Federal Rule is delayed until July 1, 2012, hospital-run urgent cares should begin using modifier PD on applicable claims now. CMS recommends that practices hold claims for at least three days prior to submission just in case the patient is admitted 72 hours later, which would necessitate the addition of modifier PD to the claim. Hospital-run urgent care centers will be reimbursed the full amount for services that are “unrelated” to the hospital admission, but CMS has not provided a definition for non-diagnostic services that are considered “clinically related,” claiming that they prefer to make that determination on a case-by-case basis. For this reason, many urgent care consultants are recommending that clinics document the reasons why those particular clinic visits are “not clinically related” to the patient’s hospital admission to ensure they receive full payment.For more information, see the November, 28, 2011 Federal Register.