Certified Inpatient Coding (CIC) Practice Exam

In which hospital setting does Medicare's 3-day payment window become a 1-day payment window?

1. Acute care hospital

2. Hospital day surgery unit

3. Psychiatric hospitals

4. Observation unit

The correct answer is: Psychiatric hospitals

The correct answer focuses on the specific rules surrounding Medicare's payment policies, particularly concerning the length of the payment window associated with pre-admission services. In a psychiatric hospital setting, services provided on the day of admission are included in the payment for the inpatient stay. Thus, the 3-day payment window, which typically includes outpatient services rendered up to three days prior to an inpatient admission, is compressed into a 1-day payment window. This means that only outpatient services provided on the day of admission are considered in the calculation of the hospital's payment for the inpatient stay. This distinction exists because psychiatric services have unique considerations in terms of their treatment approach and billing requirements under Medicare, differing from those in acute care or surgical units where the 3-day window applies more broadly. Understanding the varying payment windows is critical for coding professionals to ensure appropriate reimbursement and compliance with Medicare rules.