.
I learned much about this when I recently asked Chat GPT to write long detailed essays on the history of each rule, 3-day and 14-day.
Since I first worked as a CMS medical director in 2004–2008, I have been familiar with Medicare date-of-service rules and their interaction with hospital billing. For inpatient admissions, Medicare generally bundles related hospital services, and all diagnostic services, furnished in the three days before admission into the inpatient DRG payment. This is the familiar three-day rule. Separately, since 2007, Medicare has applied a special laboratory 14-day rule, under which certain lab tests can be pulled back to the hospital episode based on the date of specimen collection.
- I recently learned much more about these policies by asking ChatGPT to generate long, detailed essays on the history of both rules: the three-day rule and the 14-day laboratory rule.
The two rules have very different origins. The three-day rule is longstanding Medicare law, grounded directly in statute. The statute uses relatively straightforward language: diagnostic services furnished within three days before admission, and certain “related” other services furnished by the same hospital or hospital system, are treated as part of the inpatient stay and bundled into the DRG payment. It is plain English and, conceptually, simple English.
 |
| click to enlarge |
The 14-day rule is different. It emerged from a 1998 statute requiring CMS to work with the laboratory industry through negotiated rulemaking to create greater national uniformity in laboratory billing. This was especially important for laboratories operating across all 50 states. As part of that process, about 20 uniform laboratory NCDs were developed. The topics are revealing: urine culture, HIV testing, thyroid testing, glucose testing, digoxin testing, lipid testing, and similar routine tests. There was no genomic testing in this framework, because for Medicare purposes in 1998, modern genomics essentially “didn’t exist.” See page 3 here.
Against this background, CMS also defined the date of service for laboratory tests as the date of biopsy, blood draw, or other specimen collection. In ordinary cases, this means the laboratory date of service falls a day or two before the actual date of test performance and reporting.
The problem became clearer in 2006, when CMS elevated the date-of-service definition from manual guidance into regulation. CMS stated that when a specimen was collected from a hospital inpatient or outpatient, the date of service fell on a hospital day. Therefore, CMS treated the test as a hospital service, billable only by the hospital, even if the actual laboratory work was performed far away and weeks later.
That is the strange part.
The date of service for an appendectomy is the date the appendectomy is performed. The date of service for an MRI is the date the MRI is performed. The date of service for a drug injection or flu shot is the date the injection is given.
But for a laboratory test, the “date of service” and, in effect, the associated place of service can be pushed weeks into the past and thousands of miles away from where the service was actually performed. That is a bizarre and tortured redefinition of an otherwise plain-English term: date of service.
CMS appears to achieve this only through regulation, and apparently needed this awkward legal construction to make the 14-day laboratory rule work. By contrast, the three-day rule rests on much simpler statutory language. Congress could simply say that tests and related services furnished in the three days before admission are bundled into the DRG. No metaphysical redefinition of “date of service” was required.
###
From my 3-day and 14-day recent blog artices.
The pre-admission three-day rule, which bundles services up to 3 days prior to a hospital admission, does not require the legal fiction used in the 14 day post-admission rule. The latter conjectures that due to its date of service, a test run in California July 10 was actually run at the local hospital on July 1 (the date of inpatient biopsy, date of service).
The three day rule we discuss in this article does not require those verbal and legal gymnastics (or fantasies) because it is based on statute at 1886(a)(4) from OBRA 1990 and subsequent regulation at 42 CFR 412.2(c)(5). (See also Claims, 100-04, Ch 3, 20A & 40.3, currently p 106-111.)
"Section 4003 of OBRA of 1990 (P.L. 101-508) expands the definition of inpatient operating costs to include certain preadmission services..."