Knowledge Base Article

The hardest part of Medicare’s new guidance is understanding all of the details and nuances of the rules. For example, there were some surprising guidelines in the temporary instructions for the implementation of the final rule for Part A to B billing of denied hospital inpatient claims that could have a financial impact on hospitals. Drug administrations and nebulizer treatments are some of the more frequent Part B services provided to inpatients and now Medicare is saying these services are not billable on a Part B inpatient claim. I understand these services are included in the room and board charge for inpatients, but how is a hospital to recoup the cost of these services when billing under Part B if these services are not separately billable and there is no inpatient Part A payment?

The temporary instructions were published September 16th in MLN Matters article (SE1333).   A lot of the guidance in this article simply reaffirms the instructions from the final rule. MMP presented that information several weeks ago in an article titled “If ‘A’ Doesn’t Work, Try ‘B’”. 

As a reminder, the basic rule for admissions on or after October 1, 2013 is:

“When an inpatient admission is found to be not reasonable and necessary, the Centers for Medicare & Medicaid Services (CMS) will allow payment of all hospital services that were furnished and would have been reasonable and necessary if the beneficiary had been treated as an outpatient, rather than admitted to the hospital as an inpatient, except for those services that specifically require an outpatient status such as outpatient visits, emergency department visits, and observation services, that are, by definition, provided to hospital outpatients and not inpatients.”

So this week, I would like to point out a few items from the temporary instructions that are new or clarified guidance.

• One of the most significant clarifications concerns the billing of infusions and injections and nebulizer treatments on the Part B inpatient claim. The article clarifies that routine services generally captured in the room and board rate are not separately billable Inpatient Part B services. This includes IV infusions and injections, blood administrations, and nebulizer treatments provided by the floor nurse.
• In the case of UR self-audit determination that the stay was not medically necessary, the hospital must submit a no-pay, provider liable Part A claim and receive a denial before submitting the Part B inpatient claim (12x type of bill). Provider liability is indicated by the inclusion of Occurrence Span Code “M1” and the inpatient admission Dates of Service on the no-pay inpatient claim. If a Part A claim for payment has already been submitted, the hospital must cancel that claim, submit the no-pay claim, and receive a denial prior to billing Part B.
• Services provided prior to the admission order are billed on a 13x outpatient claim; services provided after the admission order are billed on the 12x Part B inpatient claim. This means “inpatient-only” services (such as procedures on the inpatient only list) provided prior to the admission may not be reported on the inpatient claim even though they are not payable on the outpatient claim. Also if observation services are continued after the admission order is written, they are not billable on the inpatient claim since they are exclusively “outpatient” services.
• The article includes a listing of revenue codes not covered under inpatient Part B medical necessity denials. However, note that when a revenue code can be sometimes covered and sometimes not covered, providers should use the HCPCS code to determine if the service is covered.
• The article encourages providers to remember the medical necessity requirements for outpatient services, specifically those outlined in local coverage determinations (LCDs), and to include all diagnosis codes to support these medical necessity requirements on both the Part B inpatient and outpatient claims.
• Billing of limited Part B services still applies when there is no Part A payment because the beneficiary is not entitled to Part A benefits or has exhausted Part A benefits.

Please refer to the article for complete information including the specific claim requirements for the Part A provider liable claim and the Part B inpatient claim.