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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 when Part A payment cannot be made for a hospital inpatient admission and the hospital, not 
the beneficiary, is liable under section 1879 of the Act for the cost of the Part A items and services, the hospital 
must submit a provider-liable no pay Part A claim (110 type of bill (TOB)) (see chapter 3 Section 40.2.2, 
Charges to Beneficiaries for Part A Services of this manual). Submission of this claim cancels any claim that 
may have already been submitted by the hospital for payment under Part A. When a Medicare review 
contractor denies a Part A claim for medical necessity, the claims system converts the originally submitted 11X 
claim to a 110 TOB on behalf of the hospital. 
 
When the hospital and not the beneficiary is liable for the cost of the Part A services (pursuant to the limitation 
on liability provision in Section 1879 of the Social Security Act), the beneficiary is not responsible for paying 
the deductible and coinsurance charges related to the denied Part A claim and the beneficiarys Medicare 
utilization record is not charged for the services and items furnished. The hospital must refund any payments 
(including coinsurance and deductible) made by the beneficiary or third party for a denied Part A claim when 
the provider is held financially liable for that denial (see section 1879(b) of the Act; 42 CFR Section 411.402; 
and chapter 30 Section 30.1.2, Beneficiary Determined to Be Without Liability and 30.2.2,  
Provider/Practitioner/Supplier is Determined to Be Liable of this manual). 
 
Medicare beneficiaries are liable for their usual Part B financial liability for services covered under Part B 
when Part A payment cannot be made, including Part B copayments for each payable Part B inpatient or Part B 
outpatient service. The beneficiary is also liable for the cost of services not covered under Part B. You can find 
this information in the Medicare Claims Processing Manual, Chapter 4, 240.6 - Submitting Provider-Liable 
No-Pay Part A Claims and Beneficiary Liability. 
 
 
 The rules say that the A/B MACs (A) must provide a listing of the required data elements, including a brief 
explanation to providers and suppliers. A/B Medicare Administrative Contractors (MACs) (A) must educate 
providers regarding the distinction between submissions which are not considered claims, but which are 
returned to provider (RTP) and submissions which are accepted by Medicare as claims for processing but are 
not paid. Claims may be accepted as filed by Medicare systems but may be rejected or denied. Unlike RTPs, 
rejections and denials are reflected on RAs. Denials are subject to appeal since a denial is a payment 
determination. Rejections may be corrected and re-submitted. You can find this information in the Medicare 
Claims Processing Manual, Chapter 1 - General Billing Requirements 70.2.3.2  Handling Incomplete or 
Invalid Submissions. 
 
If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.