Health Information Management

CMS issues ruling, proposed rule on Part B rebilling

APCs Insider, March 15, 2013

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Successful appeals can actually lead to CMS policy changes. Facilities have been successfully appealing to receive Part B payments after a Medicare review contractor denied a Part A stay as not medically necessary. As a result, CMS is changing its policy on rebilling for Part B services.

CMS issued a ruling and a proposed rule March 13 outlining its new policy for Part B payments after Part A payment is denied as not reasonable and necessary.
 
Under the ruling, which became effect immediately, hospitals may submit a Part B inpatient claim for payment for the Part B services that would have been payable to the hospital had the beneficiary originally been treated as an outpatient rather than admitted as an inpatient. Again this only applies if the Part A claim was denied because the admission was not reasonable and necessary.
 
Facilities cannot rebill services that are specifically outpatient services, including:
  • Outpatient visits
  • Emergency department visits
  • Observation services
 
Why the change? Too many successful appeals.
 
Hospitals have appealed Part A inpatient claim denials to the Administrative Law Judges (ALJs) and the Medicare Appeals Council. The ALJs often upheld the Medicare review contractor's determination that the inpatient admission was not reasonable and necessary. However, the ALJs ordered CMS to pay for the services as if they were rendered at an outpatient or "observation level" of care.
 
As a result, Medicare then paid for all Part B services that would have been payable if the beneficiary had been treated as an outpatient. In the past, CMS only paid for a limited set of Part B inpatient services that are designated in the Medicare Benefits Policy Manual, Chapter 6, Section 10.
 
Although the ruling is currently in effect, CMS plans to replace it with a final rule. To that end, CMS released a proposed rule, "Medicare Program; Part B Inpatient Billing in Hospitals.” The proposed rule will be published in the Federal Register March 18. CMS is accepting comments on the proposed rule until May 17.



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