(Medicare Claims Processing Manual)

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.    All charges must be submitted as non- covered;   No modifiers signifying beneficiary or provider liability are necessary;   Frequency code 0 (zero) must be used in the third position of TOB of the claim, though the frequency codes 7 and 8 may be used when appropriate for provider- submitted claim adjustments/cancellations;   Total charges must equal the sum of non- covered charges;   Basic required claim elements must be completed; and   Statement dates should conform to simultaneous claims for payment, if any.   Non-covered charges billed on these claims, when not rejected, will be denied.  Medicare beneficiaries will always be liable for these claims. Such denials can only be overturned on appeal.  If claims do not conform to these requirements, they will be returned to providers for correction and resubmission.  However, in the case of claims with statement dates that overlap with other claims, the incoming overlapping claim using condition code 21 will be processed to completion as a rejection, with a unique reason code explaining the reason for the rejection. Providers can then correct and re- submit the claim assuming the overlap in periods was a billing error.  60.1.3.1  Provider -liable Fully Noncovered Outpatient Claims  (Rev. 1921, Issued: 02- 19-10, Effective: 04-01-10, Implementation: 04-05-10)  Originally with the creation of the ability of outpatient institutional providers to submit non-covered charges, only two types of fully non- covered claims were permitted: (1) No payment claims using condition code 21, or (2) Demand bills (see 60.3 below in this chapter).   However, based on input from both Medicare contractors and providers, CMS recognized the need for entirely non- covered claims that were provider -liable.  This meant a new billing method was necessary, as no payment claims with condition code 21 are never provider liable, and liability on demand bills cannot be assured until after review/adjudication by Medicare. A primary example of this need is a case in which a provider has failed to provide an ABN when required under payment condition 2, and chooses to a ccept all liability for services billed as non -covered.   Therefore, entirely non-covered outpatient claims are also allowed when billed with all non-covered charges, as long as either:   (1) There are no indicators of liability on the claim at the claim or line level preventing the shared system from defaulting to hold providers liable on all denied line items; or   (2) All indicators at the claim or line level show provider, not beneficiary, liability.   An example of such an indicator is the -GZ modifier, which is often used in the case where a provider fails to give an ABN.  In both cases, these line items, all submitted as non-covered, will be denied as provider liable.  60.2 - Noncovered Charges on Inpatient Bills  (Rev. 1921, Issued: 02- 19-10, Effective: 04-01-10, Implementation: 04-05-10)  No Payment Inpatient Hospital and SNF Claims .  Where stays begin with a non-covered level of care and end with a covered level (within the same month for SNF billing), only one claim is required for both the non-covered and covered period, which must be billed in keeping with other billing frequency guidance (i.e., SNFs are required to bill monthly). However, SNFs and inpatient hospitals are required to submit discharge bills in cases of no payment. These bills must correctly reflect provider and beneficiary liability (see Chapter 6, 40.6.4 of this manual)  For inpatient hospital PPS claims that cannot be split into covered and non -covered periods, hospital providers can submit occurrence span code 77 to represent provider -liable non- covered periods, and occurrence span code 76 for beneficiary- liable non-covered periods.   These procedures must be followed for Part A inpatient services (TOBs: 11x (hospital), 18x (swing bed), 21x (SNF), 41x (religious non- medical health care institutions RNHCI)), but the list that follows is not required for inpatient Part B claims:   All charges  submitted as non-covered;   Frequency code 0  (zero) must be used in the third position of the type of bill  (TOB) form locator of the original claim (i.e., not adjustment or cancellation)   NOTE :  If providers do not submit no payment claims with this frequency code, the shared systems may already act to change the frequency code to 0 or return the claim to the provider.    Total charges must equal the sum of non- covered charges;   Basic required claim elements must be completed;  NOTE:   Units are not required when reporting non- covered days on SNF claims or Inpatient Rehabilitation claims.   Claims that do not conform to these requirements will be returned to providers.  For SNFs, occurrence code 22 should also be used on benefits exhaust claims when SNF care is reduced to a non -covered level and benefits had previously been exhausted (see Chapter 6, section 40.7 in this manual).  Current instructions for inpatient no payment claims are found in the following locations:   TABLE 4:  BENEFIT  INTERNET ON -LINE MANUAL  Inpatient Hospital  100-02, Benefit Policy, Chapter 1   100-04, Claims Processing, Chapter 3, 40.4, Chapter 3 (Inpatient Hospital) on no payment claims  SNF (Paid from Part A) 100-02, Benefit Policy, Chapter 8   100-04, Claims Processing, Chapter 6, 40.8, Chapter 6 (Inpatient SNF) on no payment claims   60.2.1  Billing for Non -covered Procedures in an Inpatient Stay  (Rev. 1895, Issued: 01- 15-10, Effective: 04 -01-10, Implementation: 04- 05-10)  As described in Section 1862 of the Social Security Act, providers are not to seek reimbursement for non -covered services/items.  However, when a non -covered procedure is provided during an inpatient stay where a covered procedure is also performed, the claims processing system is unable to decipher what procedure code(s) is/are non-covered, so as to not consider such procedure(s) for payment (more specifically, to ignore non-covered procedures when grouping to the MS -DRG).  Therefore, effective for inpatie nt discharges April 1, 2010, hospitals must only seek payment for covered services by removing non- covered procedure codes and related charges from the payable Type of Bill (TOB) 11X.   If a hospital wishes to bill non- covered procedure(s) and related non- covered charges for whatever reason (e.g., a Medicare denial), the hospital may submit such services/charges on a TOB 110 (no- pay claim).  The non- covered claim must be billed with the s ame Statement Covers Period (From and Through date) as the payable TOB 11X submitted for the same stay.   60.3  Noncovered Charges on Institutional Demand Bills  (Rev. 332, Issued:  10- 22-04, Effective:  04 -01-05, Implementation:  04- 04-05)  60.3.1 - Background on Institutional Demand Bills (Condition Code 20)  (Rev. 1921, Issued: 02- 19-10, Effective: 04 -01-10, Implementation: 04- 05-10)  Demand bills are both a principle and a mechanism of Medicare.   The principle goes back to the founding of the Program, reflected in the protection of the rights of the Programs beneficiaries being among the first sections of Title XVIII.  The principle assures that beneficiaries have the right to demand that Medicare be billed for the services provided to them, whether or not that billing provides Medicare payment.  By assuring claims are sent to and processed by Medicare, permitting official payment decisions to be made, beneficiaries retain the right to appeal payment decisions made on those claims, when they believe need to use that right exists.   The mechanism of demand billing is the process by which providers submit claims that beneficiaries have requested be sent to Medicare.   Specific procedures were developed over time to accomplish such billing, and these procedures also became known as demand billing.  A. Demand Billing Procedures   Traditional demand bills  is a term used  to encompass the only administrative  billing option that existed  for demand bills before the ABN was used. These bills used  condition code 20 to indicate a beneficiary has requested billing for a service, even though the provider of the service may have advised the beneficiary that  Medicare was not likely to pay for this service. That is, there was  some dispute as to whether a service was covered or not, leading for a need for Medicare to review the claim and make a formal payment decision.  If there was  no dispute, billing a no payment claim or other options for non-covered charges would be more efficient and  appropriate.    In the past, traditional demand billing was not always consistent or used by all providers. There was no uniform notice requirement across Medicare benefits.  Such instructions as existed  required 100 percent of specific types of demand bills to be suspended for manual review (inpatient SNF/home health, TOBs 21x, 32x, 33x), and required the provider to submit additional documentation for development to determine the medical justification for the service(s) in question.  B. Advent of Liability Notices for Outpatient Benefits   This changed once liability notices related to outpatient benefits, ABNs, were created.  If an ABN was  given, special billing requirements applied, and traditional demand billing was NOT used.  Now, only in cases when the ABN is NOT given, services for which coverage is questioned are submitted as non-covered using traditional demand billing.  This traditional demand billing process is now open to all provider types, inpatient and outpatient.  Even though there are no notice requirements with traditional demand bills, providers are always encouraged to advise beneficiaries when they may be liable for payment before delivering such services, and may be required to do so by applicable COPs. In such cases, providers should also document their records that suc h advice has been given.   Demand billing is resource intensive for the Medicare program, and affects the timeliness of payment determinations, which should prevent conscientious providers from abusing this mechanism when there is no true doubt as to coverage/payment. Routine billing of covered services and billing of non-covered charges should both be used as appropriate when coverage/payment is not believed to be in doubt instead of demand billing. Liability notices are not needed if a triggering event requiring their delivery, such as those for an ABN, does not occur. Beneficiaries retain appeal rights when these other billing mechanisms are used, even though no liability notice is delivered.  60.3.2 - Inpatient and Outpatient Demand Billing Instructions  (Rev. 1921, Issued: 02- 19-10, Effective: 04-01-10, Implementation: 04-05-10)  A.  Scope of this Subsection  The instructions in this subsection apply to demand bills other than for HH PPS and apply with some modification for Part A SNF services.  Demand bills for those services are subject to special instructions that are cited below.   1. HH PPS Demand Bills. There are special instructions for HH PPS demand bills. Such special instructions must be followed if:   (a) An HHABN is required, or  (b) If a beneficiary requests demand billing when receiving care from a home health agency (HHA) in an HH PPS episode. Instructions for such bills can be found at:    50 of Chapter 10 (Home Health) of the Medicare Claims Processing Manual; and   Note these HH PPS demand bills use frequency code 9.   2. SNF Demand Bills . There are special instructions relating to collection of funds from patients for inpatient Part A SNF demand bills, which can be found in Chapter 30, 70 of the Medicare Claims Processing Manual.  In all other respects, the instructions below apply to SNF Part A services also.   B.  General Instructions