Corporate Compliance

Note from the instructor: Details released on Part A to B rebilling ruling

Medicare Insider, March 26, 2013

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Editor’s note: Kimberly Anderwood Hoy, JD, CPC, director of Medicare and compliance for HCPro, Inc., is the author of this week’s note from the instructor.

Providers were glad to see CMS’ ruling (CMS-1455-R) released on March 13 (published in the Federal Register on March 18) which allows full Part B payment for inpatient stays that had been denied as not reasonable and necessary.  The ruling had very few details on how the process would work, but on March 22 CMS published a transmittal R1203OTN instructing contractors and providers on the details.

Inpatient cases that have been denied as not reasonable and necessary, including those where the provider has pending appeals, are rebilled on at least two and possibly three separate claims depending on when the services are rendered. First, the provider will submit a type of bill (TOB) 11X (presumably TOB 110) no pay inpatient claim (sometimes referred to as a “provider liable” claim). Then services after the inpatient order, which continue to be considered inpatient services, are billable on a TOB 12X Part B inpatient claim. Services prior to the inpatient order, included on the original Part A claim because of the three day window, are billable on a TOB 13X Part B outpatient claim as standard outpatient services.

Denials subject to the ruling

The ruling only applies to Part A claims denied as not reasonable and necessary by a contractor:

  • After March 13th
  • Prior to March 13th, but the timeframe for appeal has not expired
  • Prior to March 13th and an appeal is pending

The transmittal further notes that the ruling will only apply to denials while the ruling is in effect. Along with the ruling, CMS simultaneously published a proposed rule that once finalized would limit some of the policies in the ruling – most notably the exception from timely filing. Providers should expedite their rebilling under this ruling if they have denials subject to the ruling for which the original date of service is more than one year ago.  To avoid processing problems, however, providers should wait until at least the implementation date of the transmittal (July 1, 2013) or they receive instructions from their contractor that systems are ready to receive, process and properly pay claims.

While timely filing exceptions are not proposed to be extended under the proposed rule on rebilling, CMS did propose to expand the policy to provider self-audit denials. This will emphasize the importance of providers conducting utilization review even after discharge to ensure the correct Part of Medicare (A or B) is billed prior to timely filing expiring.

Timeframe for rebilling

The Part B inpatient and Part B outpatient claims will be considered “timely” if the original Part A inpatient claim was timely. However, the Part B claims must be submitted within 180 days from the applicable denial, or in the case of an appeal, 180 days from the unfavorable appeal decision or order of dismissal if the provider elects to withdraw their appeal.

The timeframe will be counted from the date of the denial, decision or order and will be presumed to have been received by the provider five days following the date of each. The provider will report this date as noted below so that the system can determine they met the 180-day requirement under this policy.

Special considerations for pending appeals

The Office of Medicare Hearings and Appeals has information on their website about the ruling, as well as a form and instructions for providers wishing to request to withdraw a pending appeal. CMS has determined that appeals contractors and administrative law judges (ALJs) may only consider the originally billed Part A claim and may not consider potential coverage and payment under Part B. This will mean that rebilling under the ruling is currently the only way a provider can receive Part B payment for a denied Part A stay. Appeal contractors and ALJs will no longer be able to award payment based on the amount that might have been payable under Part B if the provider had billed a Part B claim.

Format of rebilling

According to the transmittal, providers must use a condition code and special remarks when rebilling under this ruling. CMS is requiring providers submit condition code W2 (“Duplicate of original bill”) on both the TOB 12X and 13X claims indicating they are a duplicate of the original Part A claim. By billing with condition code W2, the provider is attesting there is no pending Part A appeal (because of final determination or dismissal), that the Part A claim is not payable and they have refunded deductibles and coinsurance amounts to the beneficiary. Contractor will return to provider (RTP) any claims under the ruling without condition code W2.

Additionally, a “treatment authorization code” in the format of “ABREBILL” followed by the document control number (DCN) followed by the date of last adjudication will be required. This will be reported on the 837I in loop 2300 (as detailed in the transmittal) and in the direct data entry (DDE) system at 5/MAP1715. On paper claims its unclear if the entry will be in the FL 63 treatment authorization or FL 80 remarks. More detailed instructions or clarifications should follow, although paper claims are rarely used.

The fiscal intermediary shared system (FISS) will search the DCN reported to ensure that the Part A claim has been denied. If the denied claim can’t be found, the TOB 12X or 13X claim will be RTP’d to the provider. Additionally, contractors have been instructed not to pay the Part B claims if there is a pending Part A claim appeal.

The Part B inpatient claim should report all procedures as HCPCS codes using the standard revenue code assignments. The limitation on reportable revenue codes on a TOB 12X claim do not apply. Room and board charges should not be “converted” to observation hours because CMS has stated that inherently outpatient services such as clinic, ED and observation services may not be billed on the Part B inpatient claim.

The Part B outpatient claim should include all outpatient services originally “moved” to and billed on the Part A inpatient claim, including everything before the inpatient order. This would include any clinic, ED or observation hours. Although CMS notes these can’t be billed on the Part B inpatient claim, they are appropriate on the Part B outpatient claim. Additionally, the provider would not include condition code 51 (“Attestation of unrelated outpatient nondiagnostic service”) because there is no covered Part A stay to trigger the three-day window which would require this condition code.

Rebilling under the new ruling is complex, but providers should take advantage of the exception from timely filing to file Part B claims where appropriate while the exception exists because CMS has proposed not to continue this policy once their final rule on this topic is published – which could be within 60-90 days.  This is especially true for any appeal where the provider appealed with the hope of getting Part B payment if they did not succeed with the appeal of the Part A claim.



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