(Medicare Claims Processing Manual)

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.   These issues are discussed further in subsequent sections of this chapter. More information on each payment condition listed in the table above follows in this section.  Payment Condition 1. There is no required notice if beneficiaries elect to receive services that are excluded from Medicare by statute.  This is understood as:   not being part of a Medicare benefit, or   not covered for another reason that a provider can define, but that would not relate to potential denials under 1879 or 1862 (a) of the Act (listed above  in 60.1).  If written notification of potential liability for statutory exclusions is desired to aid beneficiaries, even though not required by Medicare, the ABN may be used for such voluntary notification purposes.  Explanation of this use can be found at the Center s for Medicare and Medicaid Services (CMS) Web site:    www.cms.hhs.gov/medicare/bni/ ; and   Chapter 30 of this manual, Financial Liability Protections.  Any other situations in which a patient is informed a service is not covered should also be documented in patient records, making clear the specific reason a beneficiary was told a service would be billed as non- covered.   Payment Condition 2.  Providers must  supply a liability notice if payment for services  delivered to a Medicare beneficiary are to be reduced or terminated following delivery of the same or similar covered services, and  those services are thought not to be covered at all specifically for one of the reasons listed under 1862 (a) of the Act.  Delivery of such notices can permit a shift of liability under 1879.  Providers must give these notices to beneficiaries before  services are delivered for which the beneficiary may be liable. Failure to provide such notices when required means a provider will not be able to shift liability to a beneficiary.  As a result, the liability must be assumed by the provider.  When a mandatory notice is given, patient records should be documented.  Aside from liability requirements of the Act, applicable Conditions of Participation (COPs) MAY also require a provider to inform a beneficiary of payment liability.  This must be done BEFORE delivering services not covered by Medicare, IF the provider intends to charge the beneficiary for such services.  This is the case with the COPs applicable to home health agencies.  In addition to what may be required by the COPs, providers are advised to respect Medicare beneficiaries right to information as described in Medicare publications targeted to beneficiaries (e.g. Medicare and You).  Required Notices for Condition 2 .  Over time, there have been different types of liability notices, used in different settings for specific types of services:  (1) Notices of Noncoverage have been given to eligible inpatients receiving, or those previously eligible for, non- hospice services covered under Medicare Part A (types of bill (TOB) 11x, 18x, 21x, and 41x) when services at issue no longer met coverage guidelines; for example, when exceeding the number of covered days allowed in a spell of illness for a specific Medicare benefit.   a. In hospitals, these notices have been known as Hospital Issued Notice of Non-coverage (HINNs) or hospital notices of non- coverage (in the past this hospital use was the exclusive use of the term notice of non-coverage), and   b. In Skilled Nursing Facilities (SNFs), they may have been known as Sarrassat notices, denial letters or the specific notice called SNFABN.   Current CMS policy on these benefits, and claims seeking payment for them, can also be found at:   TABLE 2:   BENEFIT  INTERNET ON -LINE MANUAL  Inpatient Hospital  100-02, Benefit Policy, Chapter 1,   100-04, Claims Processing, Chapter 3;  SNF. (Part A Paid)  100-02, Benefit Policy, Chapter 8,   100-04, Claims Processing, Chapter 6.    Overall, for these and other Original Medicare benefits, see Chapter 30 of this manual, 100-04, for information on financial liability notices.  All Medicare manual instructions are accessible at the following Web site:   www.cms.hhs.gov/manuals/  (2) ABNs, when:   (a) Overall medical necessity of a recognized Medicare benefit is in doubt, under 1879 and 1862 (a) of the Act, or   (b) Items and services that were previously covered are to be reduced in payment or terminated, creating financial liability, or   (c) The setting is a hospital or SNF, but their inpatient specific forms are not applicable: ABNs are used for certain outpatient services or services covered under Part B delivered in a SNF or hospital; also, HH not under a plan of care, or  (d) CORF, or   (e) Hospice services, which alone among services discussed here, are paid under Part A.  NOTE:  ABNs can refer to a specific notice format but here is used as a general term including notices used for other benefits such as HHABNs, which are used exclusively for home health.  Another form of notice, known as an expedited determination notice, can be simultaneously delivered with Medicare liability notices like ABNs, since both types of notices can be involved in terminations of services.  Expedited determination notices are primarily intended to convey information about impending discharge, or termination of services, not liability, which is the focus of notices like ABNs.  Expedited determination notices apply to the following Medicare providers:   Inpatient Hospital,   Skilled Nursing Facilities (SNFs),   Hospices,   Home Health Agencies, and   Comprehensive Outpatient Rehabilitation Facilities (CORFs).   These providers are required to give a specific type of notice when all services they are providing, or Medicare payment for those services, terminate.  These notices are described at the following locations:   www.cms.hhs.gov/medicare/bni/ ; and   2005 Transmittal R594CP, which will be placed in Chapter 30 of this manual, Financial Liability Protections, and in the interim is found at: o http://www.cms.hhs.gov/Transmittals/ .  Payment Condition 3.  This condition occurs when providers are billing for what they believe to be covered services as covered services.  There are no notice requirements for this condition, and non-covered charges are not involved when submitting such claims, though denials may result from processing.  Billing follows notification, so providers should remember that in all payment conditions the notices described above would be delivered to the beneficiary before a claim is submitted to Medicare.   The following table summarizes and supplements the information in this subsection:   TABLE 3:   CONDITION  Type of Provider/Type of Bill  Liability Notice  Payment [Liability]  Condition 1, No Medicare notice required and liability expected  All providers when service known not to be covered by Medicare  Voluntary notice ONLY, provider expects to receive no Medicare payment.  Payment [Liability]  Condition 2, Medicare notice IS required and liability expected  Inpatient only, Part A paid  (TOBs: 11x, 18x, 21x, 41x) Notice of Non -Coverage or comparable form required.  Payment [Liability] Condition 2, Medicare notice IS required  and liability expected  Home Health (HH) services under a HH plan of care and paid through the HH prospective payment system (PPS) only (TOBs 32x and 33X)  HHABNs (Form CMS -R-296) required.  Payment [Liability]  Condition 2, Medicare notice IS required and liability expected  All providers and services IF ,   Hospice  Part B paid services not previously listed above for Condition 2; inclu des laboratories or providers billing lab tests only (revenue codes 30x, 31x and 92x) ABN (Form CMS -R-131) required.  Payment [Liability]  Condition 3, No Medicare notice required and no liability expected  All providers  No notice requirement, provider expects to receive payment from Medicare.   Providers must decide which payment condition and notice requirement is appropriate to the billing situation in each case.   Based on this decision, providers will then apply certain billing instructions are that described in the remainder of this section.   60.1.2 - Billing Services Excluded by Statute  (Rev. 1921, Issued: 02- 19-10, Effective: 04 -01-10, Implementation: 04- 05-10)  The billing instructions in this subsection apply to payment condition 1.  Medicare will not pay for services excluded by statute, meaning that Title XVIII of the SSA either:    does not describe the items and services in question as all or part of a covered Medicare benefit, or   describes, but excludes, such items and services from coverage.   Examples of such services are given to beneficiaries in the Medicare and You handbook.  These services can be billed to Medicare as non- covered on institutional claims.   Items and services excluded by statute cannot necessarily be recognized in specific procedure or diagnosis codes.  For example, in some cases, a given code may be covered as part of a given Medicare benefit, but under other cases, when no benefit exists, the same code would not be covered by Medicare.  For claims submitted to Medicare contractors, these services that are not Medicare benefits may be:   (A) Not submitted to Medicare at all (see A, immediately below),   (B) Submitted as non- covered line items, or  (C) Submitted on entirely non- covered claims.   A. Medicare does not require procedures excluded by statute to be billed on institutional claims UNLESS :   (1) Established  Medicare policy requires  either all services in a certain period, covered or non- covered, be billed together so that all such services can be bundled for payment consideration (i.e., procedures provided on the same day to beneficiaries under OPPS), or   (2) Billing is required for reasons other than payment (i.e., when utilization days must be charged in inpatient settings where the benefit itself is limited in duration, such as the 100 day limit of Part A payment for a SNF stay); or   (3) A beneficiary requests  Medicare be billed so that the item or service in question will be reviewed by Medicare to make an official payment determination (more on demand billing in 60.3 in this chapter).   B. To submit statutory exclusions as non- covered line items on claims with other covered services, modifiers like GY can be used on non-covered line items.   C. To submit statutory exclusions on entirely non- covered claims,  use condition code 21, a claim-level code, signifying all charges that are submitted on that claim are non -covered charges.   60.1.3 - Claims with Condition Code 21  (Rev. 1921, Issued: 02- 19-10, Effective: 04-01-10, Implementation: 04-05-10)  Condition code 21 can be employed to indicate no payment claims are being submitted for other reasons in addition to those mentioned in section 60.1.2. above:    At a beneficiarys, or other insurers, request, to obtain a denial from Medicare to facilitate payment by subsequent insurers (ex., statutory exclusions outside Original Medicare benefits, such as most self -administered drugs).  This is payment condition 1.  These claims are referred to as no -payment claims.    With an HHABN in special cases (see Chapter 10, 60, of this manual).  This is payment condition 2.  General Billing Instructions for No Payment Claims with Condition Code 21 (Other than HH PPS).   No payment claims are sometimes referred to as billing for denial.  They are submitted with condition code 21, which is defined by the National Uniform Billing Committee as billing for denial notice.  The following instructions for use of condition code 21 are applicable to all bill types, other than HH PPS claims.