Modification to Accommodate the Acute Care Episode (ACE) Demonstration

from the CMS website: Pub 100-19 Demonstrations


The Centers for Medicare and Medicaid Services (CMS) issued change request (CR) 6001 on June 27, 2008 to implement the necessary requirements for the ACE demonstration project. Under the ACE demonstration, CMS is issuing a single global payment to an institution for both the hospital and physician components of the episode of care. CR 6001 stipulated that indirect medical education (IME) and disproportionate share hospital (DSH) payments would be processed in the same manner as for non-demonstration claims but failed to specify that capital, as well as operational IME and DSH payments, would be made in this manner. Therefore, only the operational IME and operational DSH payments are currently being made as part of the global payment.

Further, claims incurred on the day of admission or discharge but at a different location prior to that admission or after that discharge are to be processed outside the demonstration as a regular fee-for-service claim.

Click for the Transmittal (PDF format, 6 pgs, 89 KB)

How should the hospital report observation services when the patient’s status is changed from inpatient to outpatient using Condition Code 44? May the hospital report observation services from the beginning of the hospital outpatient encounter?


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