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Review of the Medicare DRG Window Policy

Outpatient services directly related to an inpatient admission are considered part of the inpatient payment and are not separately payable by Medicare. The diagnosis-related group (DRG) window policy defines when CMS considers outpatient services to be an extension of inpatient admissions, and generally includes services that are (1) provided within the 3 days immediately preceding an inpatient admission to an acute-care hospital, (2) diagnostic services or admission-related nondiagnostic services, and (3) provided by the admitting hospital or by an entity wholly owned or operated by the admitting hospital. Building on previous OIG work, we will determine the number of admission-related outpatient services that were not covered by the DRG window policy in 2018, including services that were provided prior to the start of the DRG window and services that were provided at hospitals that shared a common owner. We will also determine the amounts that Medicare and beneficiaries would have saved in 2018 if the DRG window policy had been updated to include more days and other hospital ownership structures. In addition, we will interview CMS staff to identify other payment models that CMS could use to pay for outpatient services related to inpatient admissions.

Announced or Revised Agency Title Office of Evaluation and Inspections Report Number(s) Expected Issue Date (FY)
August 2019 Centers for Medicare & Medicaid Services Review of the Medicare DRG Window Policy Office of Evaluation and Inspections OEI-05-19-00380 FY 2020