Taking an airplane flight involves getting you from one place to another, but where you sit and how much you pay widely varies these days. Some airlines offer first class, business class and coach, while others have only one kind of seating. The in-flight services you receive also vary. First class often receives complimentary drinks, food and other perks that the other sections do not. The overall result is you generally get what you pay for.
In receiving care at a hospital, one sometimes runs into a similar experience. Where you are treated influences the care you receive. If a patient presents in a hospital emergency room (E/R) and needs to have IV fluids infused over four hours, the cost of providing that service is different than if a patient had an IV fluid infusion in an inpatient room (I/P). In the E/R, you might be on a gurney with a curtain drawn around and a nurse gives you the infusion while also looking after four or five other patients. In an I/P room, you get a nice bed in a private room and the nurse may only have one to two other patients.
When the service gets billed to Medicare, there is no difference in how you get paid. But for some hospitals it is important to properly identify the costs on the Medicare cost report.
On the Medicare cost report, the B-2 post stepdown adjustment is designed to help CMS appropriately partition and understand the cost of providing care at a hospital, based on the acuity of the service provided, rather than the location.
Use a B-2 adjustment when outpatient ancillary services are provided in an inpatient area. (Pub. 15-2, §Section 4022)
Further guidance can be found on the Centers for Medicare and Medicaid Services (CMS) website.
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