Corporate Compliance

Advice for billing inpatient admission in error

Compliance Monitor, August 12, 2005

QUESTION: Are any services billable when they're rendered during an admission deemed by hospital utilization review to be an "admission denial," particularly to Medicare? Can the ancillary services be billed as "outpatient"? I would appreciate an answer including, if possible, where this is documented in the CMS manual or transmittals.

ANSWER: When a hospital admits a patient in error, and wishes to submit the claim for payment, it has two options:

1. Submit the claim as an inpatient claim. The hospital's quality improvement organization may deny the claim, however. In this instance, the hospital is submitting a claim when it has already determined the inpatient stay does not meet criteria.

2. Submit the claim as an outpatient claim with a remark in the remarks field such as, "This inpatient claim is being billed as an outpatient service because although the services furnished were medically necessary, the admission itself did not meet medical necessity guidelines for inpatient admission."

Hospitals essentially "self deny" one-day inpatient stays and submit the claims to their FI requesting OPPS payment. FIs have discretion under 42 CFR 421.100 to pay for these services under OPPS. Some hospitals have worked this process out with their FIs, and it's in your best interests to do the same in advance of actually having the billing issue.

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