On September 16, CMS released a Medicare Learning Network (MLN) article (SE 1333) detailing temporary instructions for the implementation of final rule 1599-FI relating to billing for Part B services that were provided during a hospital inpatient stay, for which Medicare denied payment. The final rule applies to admissions on or after October 1, 2013.

Under the final rule, when an inpatient admission is found to be not reasonable and necessary, 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—provided certain requirements are met—except for those services that specifically require outpatient status. A hospital may also be paid for certain Part B inpatient services if the hospital determines under Medicare’s utilization review requirements that a beneficiary should have received hospital outpatient rather than inpatient services and the beneficiary has already been discharged (i.e. self-audits). The MLN article provides that if the hospital already submitted a claim for payment under Part A, the hospital must cancel its Part A claim before it submits a claim for payment of Part B services. Any coinsurance or deductible collected for the Part A claim must be refunded. Beneficiaries are liable for their usual Part B financial obligations.

If a provider chooses to submit a Part B claim for payment following the denial of an inpatient admission on a Part A claim, the hospital cannot also maintain its request for payment for the same services on the Part A claim, including an appeal of the Part A claim. Accordingly, a hospital must ensure there is no pending appeal request on the Part A claim before submitting a Part B claim.

CMS reminds providers in the MLN article that claims filed beyond twelve months from the date of service will be rejected as untimely and will not be paid.

The MLN article also provides, among other things, billing tips for self-audit claims and for Part A inpatient admissions denied as not reasonable and necessary. In addition, the MLN article provides a list of the revenue codes not covered under inpatient Part B medical necessity denials and offers guidance regarding billing of implantable prosthetic devices.

To view the MLN article, click here.

Reporter, Lauren Slive, Atlanta, +1 404 572 3592, lslive@kslaw.com.