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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. 
You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101. 
 
The rules say that "Inpatient only" services are generally, but not always, surgical services that require 
inpatient care because of the nature of the procedure, the typical underlying physical condition of patients who 
require the service, or the need for at least 24 hours of postoperative recovery time or monitoring before the 
patient can be safely discharged. An example of an "inpatient only" service is CPT code 33513, "Coronary 
artery bypass, vein only; four coronary venous grafts." The designation of services to be "inpatient-only" is 
open to public comment each year as part of the annual rulemaking process. Procedures removed from the 
"inpatient only" list may be appropriately furnished in either the inpatient or outpatient settings and such 
procedures continue to be payable when furnished in the inpatient setting. 
 
Excluding the handful of exceptions discussed below, CMS does not pay for an "inpatient-only" service 
furnished to a person who is registered in the hospital as an outpatient and reports the service on the outpatient 
hospital bill type (TOB 13X). CMS also does not pay for all other services on the same day as the "inpatient 
only" procedure. There are two exceptions to the policy of not paying for outpatient services furnished on the 
same day with an "inpatient-only" service that would be paid under the OPPS if the inpatient service had not 
been furnished:  
 
Exception 1: If the "inpatient-only" service is defined in CPT to be a "separate procedure" and the other 
services billed with the "inpatient-only" service contain a procedure that can be paid under the OPPS and that 
has an OPPS SI=T on the same date as the "inpatient-only" procedure or OPPS SI = J1 on the same claim as 
the "inpatient-only" procedure, then the "inpatient-only" service is denied but CMS makes payment for the 
separate procedure and any remaining payable OPPS services. The list of "separate procedures" is available 
with the Integrated Outpatient Code Editor (I/OCE) documentation. See 
http://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/.  Exception 2: If an "inpatient-only" service is furnished but the patient expires before inpatient admission or 
transfer to another hospital and the hospital reports the "inpatient only" service with modifier "CA", then CMS 
makes a single payment for all services reported on the claim, including the "inpatient only" procedure, 
through one unit of APC 5881, (Ancillary outpatient services when the patient dies.) Hospitals should report 
modifier CA on only one procedure.  
 
You can find more information at Centers for Medicare and Medicaid Services, Internet-Only Manual, 
Publication 100-04, Medicare Claims Processing Manual, Chapter 12, Section 180.7. 
 
The rules say that effective for claims with dates of service July 1, 2007 and after, the non-Outpatient 
Prospective Payment System (OPPS) Outpatient Code Editor (OCE) will be integrated into the OPPS OCE. 
This integration will result in the routing of all institutional outpatient claims, including non-OPPS hospital 
claims, through a single integrated OCE eliminating the need to update two separate OCE software packages 
on a quarterly basis. The integrated OCE does not change the current logic that is applied to outpatient bill 
types that already pass through the OPPS OCE software. It merely expands the software usage to include non-
OPPS hospitals. This new software product will be referred to as the Integrated OCE (I/OCE). The I/OCE 
instructions and specifications are provided via Recurring Update Notifications. They are also posted on the 
Web at the following address 
https://www.cms.gov/Medicare/Coding/OutpatientCodeEdit/OCEQtrReleaseSpecs. You can find this 
information in the Centers for Medicare and Medicaid Services, Internet-Only Manual, Publication 100-04, 
Medicare Claims Processing Manual, Chapter 4, Section 40.1. 
 
The rules also say that edit 18 will generate when a line has a C status indicator and is not on the 'separate 
procedure' list or A line has a C status indicator and is on the 'separate procedure' list, but there are no type T 
lines on the same day. In this case, other line items on the same day as the line with a C status indicator are 
denied and edit 49 is assigned on all line items. Note: This is the only edit that can cause one or more days of a 
multiple day claim to be denied, or single day claim with all lines denied. You can find this rule at  
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com. 
 
The Plan contract says that the Plan covers items and services in accordance with Medicare rules.