(Medicare Claims Processing Manual)

One of the requirements for the use of Condition Code 44 is concurrence by the practitioner who is responsible for the care of the patient with the determination that an inpatient admission does not meet the hospitals admission criteria and that the patie nt should have been registered as an outpatient. This prerequisite for use of Condition Code 44 is consistent with the requirements in the CoP in 482.30 (d) of the regulations. This paragraph provides that the practitioner or practitioners responsible for  the care of the patient must be consulted and allowed to present their views before the UR committee or QIO makes its determination that an admission is not medically necessary. It may also be appropriate to include the practitioner who admitted the patie nt if this is a different person than the practitioner responsible for the care of the patient.   If the conditions for use of Condition Code 44 are not met, the hospital may submit a 12x bill type for covered Part B Only services that were furnished to the inpatient. Medicare may still make payment for certain Part B services furnished to an inpatie nt of a hospital when payment cannot be made under Part A because an inpatient admission is determined not to be medically necessary. Information about Part B Only services is located in Pub. 100- 02, Medicare Benefit Policy Manual, chapter 6, section 10. Examples of such services include, but are not limited to, diagnostic x- ray tests, diagnostic laboratory tests, surgical dressings and splints, prosthetic devices, and certain other services. The Medicare Benefit Policy Manual includes a complete list of the payable Part B Only services.  See Pub. 100- 04, Medicare Claims Processing Manual, chapter 4, section 10.12 for a discussion of the billing and payment rules regarding services furnished within the payment window for outpatient services treated as inpatient services.   Entries in the medical record cannot be expunged or deleted and must be retained in their original form. Therefore, all orders and all entries related to the inpatient admission must be retained in the record in their original form. If a patients status changes in accordance with the requirements for use of Condition Code 44, the change must be fully documented in the medical record, complete with orders and notes that indicate why the change was made, the care that was furnished to the beneficiary, and the participants in making the decision to change the patients status.  When Condition Code 44 is appropriately used, the hospital reports on the outpatient bill the services that were ordered and provided to the patient for the entire patient encounter. However, in accordance with the general Medicare requirements for services furnished to beneficiaries and billed to Medicare, even in Condition Code 44 situations, hospitals may not report observation services using HCPCS code G0378 (Hospital observation service, per hour) for observation services furnished during a hospital encounter prior to a physician's order for observation services. Medicare does not permit retroactive orders or the inference of physician orders. Like all hospital outpatient services, observation services must be ordered by a physician. The clock time begi ns at the time that observation services are initiated in accordance with a physicians order.   While hospitals may not report observation services under HCPCS code G0378 for the time period during the hospital encounter prior to a physicians order for observation services, in Condition Code 44 situations, as for all other hospital outpatient encounters, hospitals may include charges on the outpatient claim for the costs of all hospital resources utilized in the care of the patient during the entire encounter. For example, a beneficiary is admitted as an inpatient and receives 12 hours of monitoring and nursing care, at which point the hospital changes the status of the beneficiary from inpatient to outpatient and the physician orders observation services, with all criteria for billing under Condition Code 44 being met. On the outpatient claim on an uncoded line with revenue code 0762, the hospital could bill for the 12 hours of monitoring and nursing care that were provided prior to the change in status and the physician order for observation services, in addition to billing HCPCS code G0378 for the observation services that followed the change in status and physician order for observation services. For other rules related to billing and payment of observation services, see chapter 4, section 290 of this manual, and Pub.100- 02, Medicare Benefit Policy Manual, chapter 6, Section 20.6.  60  Provider Billing of Non -covered Charges on Institutional Claims  (Rev. 1921, Issued: 02- 19-10, Effective: 04 -01-10, Implementation: 04- 05-10)  60.1 - General Information on Non -covered Charges on Institutional Claims (Rev. 3086, Issued: 10- 03-14, Effective:  ICD -10: Upon Implementation of ICD -10, ASC X12: January 1, 2012, Implementation  ICD- 10: Upon Implementation of ICD -10; ASC X12: November 4, 2014)   Charges are tied to items or services described by coding on a line of a claim where they appear together.  The institutional claim formats (the ASC X12 837 institutional claim transaction and the Form CMS -1450 paper claim) provide separate fields for the submission of total charges and non- covered charges.   When billing, claims submitters make a choice between submitting charges as covered, or as non- covered.  When total charges are submitted and non- covered charges are not submitted, the charges for the claim line are submitted as covered.  When a claim line is submitted with covered charges, the provider is seeking payment for that line.  When total charges and non- covered charges submitted on a claim line are equal, the charges for that claim line are submitted as non -covered.  When a claim line is submitted with non- covered charges, the provider is not seeking payment for that line and the line is denied payment by Medicare systems.  Therefore, Medicare accepts any National Uniform Billing Committee -approved revenue codes when they are submitted with non-covered charges, without regard to whether these revenue codes would be valid for Medi care billing if submitted seeking payment.   Lines submitted with covered and non -covered charges can appear together on a single Medicare claim.  In rare instances, covered and non -covered charges can appear on the same line.  In these cases, the total charge amount is greater than the non -covered charge amount on the line.  Even when Medicare payment is not requested, there can be Medicare notice requirements that establish financial liability between beneficiaries and their providers.  These liability notices, such as Advance Beneficiary Notices of Noncoverage (ABNs), serve to ensure that providers can shift the  financial liability for items and services to their Medicare patients, consistent with 1862(a)(1) and 1879 of the Social Security Act (i.e., the Act).  See Chapter 30 of this manual for more information on financia l liability and related notices.   NOTE:  In this section, the term provider may include institutional providers or suppliers and other comparable entities delivering medical items and services billed on institutional claims.   This statutory ability to shift liability only applies when billing items and services usually covered as part of established Medicare benefits.  These benefits are described in law, in Title XVIII of the Act, which authorizes the Medicare Program.  Other benefits not addressed in Title XVIII are known as being statutorily excluded, meaning Medicare is not authorized to pay for them under the Act.   Financial liability for an item or service that could be a Medicare benefit is codified in statute, along with the benefits themselves.  Liability occurs when such items or services are thought to be non- covered by the Program for specific reasons also given in the Act:    1862(a)(1) on services that otherwise could be covered  but which are not medically reasonable and necessary in the individual case at hand,    1862(a)(9) for custodial care which Medicare never covers,    1879(g)(1) for home care given to a beneficiary who is neither homebound nor needs intermittent skilled services at home,  or lastly, under    1879(g)(2) for hospice care given to someone not terminally ill.   When one of these stipulated reasons will apply to a denial on an Original Medicare claim, the reason has to appear on a notice given in advance of delivery of services, and before preparation of a related claim.  These notices, like an ABN, give a level o f detail that allows the involved beneficiary to understand why no coverage is likely to occur in that specific circumstance.   The financial liability that remains when Medicare does not pay belongs to either providers or beneficiaries.  Such determinations are made by Medicare when processing related claims.  Sometimes, providers and beneficiaries make their own agreements on payment without billing Medicare, which Medicare allows them to do.  More often, Medicare is billed, since resulting denials of claims, even when submitted with non-covered charges, have appeal rights under Medicare over payment. See Chapter 29 of this manual for more information on such appeals.  Appeals rights are not expected to be used for non- covered charges, certainly not with any frequency.  When no amounts are in dispute since no payment is sought, appeals tend not to occur.  Charges submitted as non-covered should indicate that there is an understanding shared by the involved beneficiary and provider that Medicare payment is not expected.  For example, non-covered charges could be used for cosmetic surgery because both parties know this surgery is never a Medicare benefit, or statutorily excluded.  The surgery may be billed to Medicare so that subsequent payers could see a Medicare denial when they require proof of denials by payers more primary in the sequence of coverage.   Claims which are rejected by the Medicare contractor or are returned to the provider (or RTP'ed) can be corrected and re- submitted, permitting a payment determination to be made after resubmission.  In some cases, beneficiaries may appeal rejections, but they can NEVER appeal RTPed claims.  Rejections may be apparent on remittances for claims submitted with administrative errors, but beneficiaries cannot be held liable for items and services that were never properly billed to Medicare.   In contrast, denied claims can never be resubmitted, since they are in fact the result of official payment determinations made by Medicare.  As mentioned, such determinations can be appealed.   60.1.1 - Basic Payment Liability Conditions (Rev. 2783, Issued: 09- 10-13, Effective: 09-30-13, Implementation: 09-30-13)  With any service delivered, providers must decide which one of the following three conditions apply in order both to properly inform Medicare beneficiaries of their potential liability for payment, and later to bill for this payment.  The concepts used in making these decisions are displayed in the following table  TABLE 1:   MEDICARE SCENARIO  Payment  CONDITION 1  Payment CONDITION 2  Payment CONDITION 3  DESCRIPTION  Items and services being billed are statutorily excluded from Original Medicare coverage, meaning it is not defined as a specific Medicare benefit defined in the Act; Items and services being billed are either a reduction or termination of Medicare coverage, or are otherwise expected to be denied, leaving financial liability for a beneficiary or Items or service is presumed to be a Medicare benefit and can be paid.  therefore, it is never paid.  provider (see applicable reasons in 60.1 above).  NOTIFICATION  (Prior to billing ) Liability notices are voluntary (i.e., ABN); for statutory exclusions, there are no required Medicare notices.  Liability notices are required  (i.e., expedited determination notice, ABN).  Liability notices, mandatory or voluntary, are never used in advance of such billing.  BILLING  Items and services may be billed as non-covered on Medicare claims.  Billing of such  items and services  can vary, and can depend on the ability to segregate its covered and non-covered portions (if both exist).  Items and services are billed as covered.  LIABILITY (displayed on MSNs or remittances)  Always denied in Medicare claims processing; beneficiaries are liable for these denials unless providers code their claims to transfer liability to themselves.  For any services that are not paid by Medicare itself, properly notified beneficiaries are usually liable for resulting denials. If Medicare doesnt pay itself as expected, the specific reason for rejection or denial will determine liability according to established Medicare policy.   NOTE:  Only one of these conditions can apply to a given item or service, or to a given line of a claim.   To the extent possible in billing Medicare, providers should split claims so that one of these three conditions holds true for all items and services billed on a single claim. Consequently, no more than one type of beneficiary notice on liability would apply to a single claim. This approach should improve understanding of potential liability for all parties and speed processing of the majority of claims.  EXCEPTION:  Cases may occur where multiple conditions apply and multiple notices may be necessary:   (A) Claims paid under the outpatient prospective payment system (OPPS); the OPPS requires all services provided on the same day to be billed on the same claim (see 170 of Chapter 4 of this manual), with few exceptions as already given in OPPS instructions (i.e., claims using any of the following 3 condition codes: 21, 20, which are also discussed below in this chapter, and G0);  Or:   (B) Claims using certain claim coding:   occurrence span codes on inpatient claims,   modifiers used to differentiate multiple conditions that apply to different lines on the same claim.