(Medicare Claims Processing Manual)

In setting a contractor established payment rate for the specific device, the contractor takes into account the cost information available at the time the payment rate is established.  This information may include, but is not limited to, the amount of devi ce cost that would be removed from an applicable APC payment for implantation of the device if the provider received a device without cost or a full credit for the cost of the device.   If the contractor chooses to use this amount, see www.cms.hhs.gov/HospitalOutpatientPPS/ for the amount of reduction to the APC payment that would apply in these cases.  From the OPPS webpage, select Device, Radiolabeled Product, and Procedure Edits from  the list on the left side of the page.  Open the file Procedure to Device edits to determine the HCPCS code that best describes the procedure in which the device would be used.  Then identify the APC to which that procedure code maps from the most recent Addenda B on the OPPS webpage and open the file FB/FC Modifier Procedures and Devices.  Select the applicable years file of APCs subject to full and partial credit reductions (for example: CY 2008 APCs Subject to Full and Partial Credit Reduction Policy).  Select the Full offset reduction amount that pertains to the APC that is most applicable to the device described by C9899.  It would be reasonable to set this amount as payment for the device.  For example, if C9899 is reporting insertion of a single chamber pacemaker (C1786 or equivalent narrative description on the claim in remarks) the file of procedure to device edits shows that a single chamber pacemaker is the dominant device for APC 0090 (APC 0089 is for insertion of both pacemaker and electrodes and therefore would not apply if electrodes are not also billed).  The table of offset reduction amounts for CY 2008 shows that the estimated cost of a single chamber pacemaker for APC 0090 is $4881.77.  It would therefore be reasonable for the contractor/MAC to set the payment rate for a single chamber pacemaker to $4881.77. In this case the coinsurance would be $936.75 (20 percent of $4881.77, which is less than the inpatient deductible).   The beneficiary coinsurance is 20 percent of the payment amount for the device (i.e. the pass through payment amount, the DMEPOS fee schedule amount, the contractor established amount, or the actual charge if less than the DMEPOS fee schedule amount or the contractor established amount for the specific device), not to exceed the Medicare inpatient deductible that is applicable to the year in which the implanted prosthetic device is furnished.  When a hospital that is not paid under the OPPS furnishes an implantable prosthetic device other than dental), which replaces all or part of an internal body organ (including colostomy bags and supplies directly related to colostomy care), including replac ement of such a device, to an inpatient who has coverage under Part B but does not have Part A coverage, and the primary procedure is not a payable Part B inpatient service under Pub. 100-02, Medicare Benefit Policy Manual, chapter 6, 10.2 (Other Circums tances in Which Payment Cannot Be Made under Part A), payment for the implantable prosthetic device is made under the payment mechanism that applies to other hospital outpatient services (e.g., reasonable cost, all inclusive rate, waiver).   240.4 - Indian Health Service/Tribal Hospital Inpatient Social Admissions (Rev. 2877, Issued: 02- 07-14, Effective: 10 -01-13, Implementation: 04- 07-14)  There may be situations when an American Indian/Alaskan Native (AI/AN) beneficiary is admitted to an IHS/Tribal facility for social reasons. These social admissions are for patient and family convenience and are not billable to Medicare.  There are also occasions where IHS/Tribal hospitals elect to admit patients prior to a scheduled day of surgery, or place a patient in a room after an inpatient discharge. These services are also considered to be social admissions as well.  For patients in a social admission status requiring outpatient services at another facility, Medicare disallows payment for inpatient Part B ancillary services, Type of Bill (TOB) 12X during a social admission stay when there is another bill from a differe nt facility for an outpatient service, TOB 13X or 72X. The Common Working File (CWF) returns an A/B crossover edit and creates an unsolicited response (IUR) in this situation.  The CWF also creates an IUR when a line item date of service on TOB 12X is equal to or one day following the discharge date on TOB 11X for the same provider.   The CWF bypasses both of these edits when the beneficiary is not entitled to Medicare Part A at the time the services on TOB 12X are rendered.   240.5 - Payment of Part B Services in the Payment Window for Outpatient Services Treated as Inpatient Services When Payment Cannot Be Made Under Part A  (Rev. 2877, Issued: 02- 07-14, Effective: 10 -01-13, Implementation: 04- 07-14)  See Pub. 100- 02, Medicare Benefit Policy Manual, Chapter 6, 10 (Medical and Other Health Services Furnished to Inpatients of Participating Hospitals) and Pub 100- 04, Medicare Claims Processing Manual, Chapter 4,  10.12 (Payment Window for Outpatient Services Treated as Inpatient Services) regarding  services bundled into the original Part A claim under the 3 -day (1 -day for non- IPPS hospitals) payment window prior to the inpatient admission, that may be billed to Part B when Part A payment cannot be made.  Hospitals should use the following type of bill to report these services:    13X TOB (85X for a CAH) - Hospital outpatient services included in the payment window for outpatient services treated as inpatient services    14X TOB - Laboratory tests that are paid under the clinical laboratory fee schedule (see chapter 16, 40.3 of this manual), and included in the payment window for outpatient services treated as inpatient services   240.6 - Submitting Provider -Liable No- Pay Part A Claims and Beneficiary Liability (Rev. 2877, Issued: 02- 07-14, Effective: 10 -01-13, Implementation: 04 -07-14)  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 TOB) (see chapter 3 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 contra ctor 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 coinsur ance 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  411.402; and chapter 30  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.   250 - Special Rules for Critical Access Hospital Outpatient Billing  (Rev. 1111, Issued: 11- 09-06, Effective: 04 -01-07, Implementation: 04- 02-07)  For cost reporting periods beginning before October 1, 2000, a CAH will be paid for outpatient services under the method in 250.1.  The BIPA legislation on payment for professional services at 115 percent of what would otherwise be paid under the fee schedule is effective for services furnished on or after July 1, 2001.  This provision was implemented with respect to cost reporting periods starting on or after October 1, 2001.   For cost reporting period beginning on or after October 1, 2001, the CAH will be paid under the method in item 1 below unless it elects to be paid under the method in 250.1 of this manual.  If a CAH elects  payment under the elective method (cost -based facility payment plus fee schedule for professional services) for a cost reporting period, that election is effective for the entire cost reporting period to which it applies.  If the CAH wishes to make a new election or change a previous election, that election should be made in writing, made on an annual basis and delivered to the appropriate A/B MAC (A), at least 30 days in advance of the beginning of the affected cost reporting period.  All outpatient CAH services, other than pneumococcal pneumonia vaccines, influenza vaccines, administration of the vaccines, screening mammograms, and clinical diagnostic laboratory tests are subject to Part B deductible and coinsurance.  Regardless of the  payment method applicable for a period, payment for outpatient CAH services is not subject to the following payment principles:    Lesser of cost or charges,    Reasonable compensation equivalent (RCE) limits,    Any type of reduction to operating or capital costs under 42 CFR 413.124 or 413.30(j)(7) , or    Blended payment rates for ASC -type, radiology, and other diagnostic services.  See 250.4 below regarding payment for screening mammography services.   250.1 - Standard Method - Cost -Based Facility Services, With Billing of A/B MAC (B) for Professional Services  (Rev. 2581, Issued: 11- 02-12, Effective: 04 -01-13, Implementation: 04- 01-13)  Effective for cost reporting periods beginning on or after January 1, 2004, payment for outpatient CAH services under this method will be made for the lesser of: 1) 80 percent of 101 percent of the reasonable cost of the CAH in furnishing those services, or 2) 101 percent of the reasonable cost of the CAH in furnishing those services, less applicable Part B deductible and coinsurance amounts.   Payment for professional medical services furnished in a CAH to CAH outpatients is made by the A/B MAC (B)  on a fee schedule, charge, or other fee basis, as would apply if the services had been furnished in a hospital outpatient department. For purposes of CAH payment, professional medical services are defined as services provided by a physician or other pract itioner, e.g., a physician assistant that could be billed directly to a A/B MAC (B)  under Part B of Medicare or a nurse practitioner that could be bil led directly to a A/B MAC (B) under Part B of Medicare.   In general, payment for professional medical services, under the cost -based CAH payment plus professional services billed to the A/B MAC (B)  method should be made on the same basis as would apply if the services had been furnished in the outpatient department of a hospital.   Bill type 85X is used for all outpatient services including services approved as ASC services. Non-patient laboratory specimens (those not meeting the criteria for reasonable cost payment in 250.6) will be billed on a 14X type of bill.   (See Section 250.6 -  Clinical Diagnostic Laboratory Tests Furnished by CAHs.)   250.1.1 - Special Instructions for Non -covered Time Increments in Standard Method Critical Access Hospitals (CAHs)  (Rev. 1921, Issued: 02- 19-10, Effective: 04 -01-10, Implementation: 04- 05-10)  CAHs sometimes bill outpatient therapy services using HCPCS that by definition give specific time increments like those discussed in Chapter 5, sections 20 and 40.  However, standard method CAHs are not subject to payment on a fee basis under the Medicare Physician Fee Schedule, therefore these CAHs should follow the instructions below if there is a need to bill non- covered increments.