(Medicare Claims Processing Manual)

An adjustment is CWF -generated if the A/B MAC (A) receives a CWF alert or a CMS -L1002.  The A/B MAC (A) prepares an adjustment if instructed by CO or RO to make a change.  Typically, the A/B MAC (A) receives such direction from CMS when it decides to retroactively change payment for a class or other group of bills.  Occasionally, CMS will dis cover an error in the processing of a single bill and direct the A/B MAC (A) to correct it.   If the A/B MAC (A) furnished the A/B MAC (B) a copy of the original bill which is being adjusted, it must furnish them a copy of the adjusted bill.  If adjustment bills are rejected by CWF for additional corrections, they need to be corrected and resubmitted.  Even if the adjustment action is requested by letter from CMS, the A/B MAC (A) must submit the adjustment bill in its CWF record.  If a rejected  adjustment bill is determined to be unnecessary, the A/B MAC (A) stops the adjustment action upon receipt of correction.   Where an adjustment bill changes subsequent utilization, the A/B MAC (A) notes this and processes adjustments to subsequent bills if it services the provider.  If the A/B MAC (A) does not service the provider, CMS will contact the A/B MACs (A), which submitted bills with subsequent billing dates that are affected by the adjustments via an SSA -L389 or SSA -L1001 upon receipt of the adjusted bills in CWF.  (An indic ator is set by CMS on its records upon advising an A/B MAC (A) of the appropriate adjustment actions.)   B. - Adjustment Bills Involving Time Limitation for Filing Claims   If a provider fails to include a particular item or service on its initial bill, an adjustment bill(s) to include such an item(s) or service(s) is not permitted after the expiration of the time limitation for filing a claim.  However, to the extent that an  adjustment bill otherwise corrects or supplements information previously submitted on a timely claim about specified services or items furnished to a specified individual, it is subject to the rules governing administrative finality, rather than the time limitation for filing.   Under prospective payment, adjustment requests are required from the hospital where errors occur in diagnoses and procedure coding that change the DRG, or where the deductible or utilization is affected.  A hospital is allowed 60 days from the date of the A/B MAC (A) payment notice for adjustment bills where diagnostic or procedure coding was in error.  Adjustments reported by the QIO have no corresponding time limit and are adjusted automatically by the A/B MAC (A) without requiring the hospital to submit an adjustment bill.  However, if diagnostic and procedure coding errors have no effect on the DRG, adjustment bills are not required.   Under PPS, for long- stay cases, hospitals may bill 60 days after an admission and every 60 days thereafter if they choose.  The A/B MAC (A) processes the initial bill through Grouper and Pricer.  The provider must submit an adjustment to cancel the origina l interim bill(s) and rebill the stay from the admission date through the discharge date.  When the adjustment bill is received, it processes it as an adjustment.  In this case, the 60-day requirement for correction does not apply.   Where payment is handled through cost reporting and settlement processes, the provider accumulates a log for those items not requiring an adjustment bill.  Maryland inpatient hospital providers also keep a log of late charges when the amount is under $500.  They submit the  log with their cost reports.  After cost reports are filed, the A/B MAC (A) makes a lump sum payment to cover these charges as shown on the summary log.  The provider uses the summary log for late charges only under cost settlement (outpatient hospital), except in Maryland.   Maryland and cost providers are required to meet the 27- month timeframe for timely filing of claims, including late charges.   NOTE:  Providers in Maryland which are not paid under PPS or cost reports, submit an adjustment bill for inpatient care of $500 or more, and submit a log for the lesser amounts.  50.1 - Tolerance Guidelines for Submitting Adjustment Requests  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD -10: Upon Implementation of ICD- 10, Implementation: ICD -10: Upon Implementation of ICD -10, ASC X12: September, 23 2014)   When a bill is submitted and the hospital or the A/B MAC (A) discovers an error, the hospital submits an adjustment request using the ASC X12 837 institutional claim format or the Form CMS -1450, if the error is a change in the:    Number of inpatient days (including a change in the length of stay, or a different allocation of covered/non -covered days;    Blood deductible;    Inpatient cash deductible of more than $1;    Servicing provider;    Discharge status in a PPS hospital;    Diagnosis or Procedures that impact the assigned DRG code; or    Outlier payment amount.   The provider submits most adjustment requests as debits, using bill type XX7.  Also, it submits a debit- only adjustment request to the A/B MAC (A) if the hospital previously submitted an interim bill for a PPS hospital stay or wishes to change the number of days in any inpatient stay.  The A/B MAC (A) then submits the adjustment to CWF.  An adjustment from the QIO for any of the above also requires a submission to CMS via CWF.  If PPS is involved and the DRG has been changed as a result of medical review after an original bill has been forwarded to CMS, adjustment debit/credit bills are required.  The corrected bill must be an exact duplicate of the original, except for any changed fields including diagnostic and procedure codes.   50.2 - Claim Change Reasons  (Rev. 3030, Issued: 08- 22-14, Effective: ASC X12: January 1, 2012, ICD -10: Upon Implementation of ICD- 10, Implementation: ICD -10: Upon Implementation of ICD -10, ASC X12: September, 23 2014)   A. - Claim Change Reason Codes   The provider submits one of the following claim change reason codes to its A/B MAC (A) with each debit -only or cancel -only adjustment request:   Bill Type  Reason Code  Explanation  XX7  D0 (zero)  Change to service dates  XX7  D1 Change in charges  XX7  D2 Change in revenue codes/HCPCS  XX7  D3 Second or subsequent interim PPS bill - inpatient only  XX7  D4 Change in GROUPER input (diagnoses or procedures) - inpatient only  XX8  D5 Cancel -only to correct a HICN or provider identification number  XX8  D6 Cancel -only to repay a duplicate payment or OIG overpayment (includes cancellation of an outpatient bill containing services required to be included on the inpatient bill.)  XX7  D7 Change to make Medicare the secondary payer  XX7  D8 Change to make Medicare the primary payer  XX7  D9 Any other change  XX7  E0 (zero)  Change in patient status   The provider may not submit more than one claim change reason code per adjustment request.  It must choose the single reason that best describes the adjustment it is requesting.  It should use claim change reason code D1 only when the charges are the only change on the claim.  Other claim change reasons frequently change charges, but the provider may not "add" reason code D1 when this occurs.   The claim change reason code is entered as a condition code on the ASC X12 837 institutional claim format or on the hard copy Form CMS -1450  For reason codes D0- D4 and D7- D9, submit a debit -only adjustment request, bill type XX7.  For reason codes D5 and D 6, submit a cancel -only adjustment request, bill type XX8.   B. - Edits on Claim Change Reason Codes   The following edits are based on the claim change reason code.  The A/B MAC (A) must apply them to each incoming adjustment request.   If the type of bill is equal to XX7 and the claim change reason code is not equal to D0- D4, D7 -D9, or E0, the A/B MAC (A) rejects the request back to the provider with the following error message, "Claim change reason code must be present and equal to D0- D4, D7- D9, or E0 for a debit -only adjustment request."    If the type of bill is equal to XX8 and the claim change reason code is not equal to D5- D6, the A/B MAC (A) rejects the request back to the provider with the following error message, "Claim change reason code must be present and equal to D5- D6 for a cancel -only adjustment request."    If the type of bill is equal to XX7 or XX8 and the ICN/DCN of the claim being adjusted is not present, the A/B MAC (A) rejects the request back to the provider with the following message, "ICN/DCN of the claim being adjusted is required for an adjustment r equest."    If more than one claim change reason code is present on the provider's request, the A/B MAC (A) rejects the request back to the provider with the following message, "only one claim change reason code may apply to a single adjustment request from a provider.  Choose the single claim change reason code that best describes the reason for the provider's request and resubmit."    If the provider submits an adjustment request as type of bill not equal to XX7 or XX8, the A/B MAC (A) rejects the request back to the provider with the message, "Provider submitted adjustment request must use type of bill equal to XX7 or XX8."    If the claim change reason code is equal to D0, the A/B MAC (A) compares the beginning and ending dates on the provider's request to those on the claim to be adjusted on its history.  If these dates are the same, it rejects the request back to the provider  with the message, "Dates of service must change for claim change reason code D0."    If the claim change reason code is equal to D1, the A/B MAC (A) compares the total and line item charges on the provider's request to those on the claim to be adjusted on its history.  If these changes are the same, the A/B MAC (A) rejects the request back  to the provider with the message, "Charges must be changed for claim change reason code D1."    If the claim change reason code is equal to D2, the A/B MAC (A) compares revenue codes/HCPCS on the provider's request to those on the claim to be adjusted on its history.  If these codes are the same, it rejects the request back to the provider with the m essage, "Revenue codes/HCPCS must change for claim change reason code D2."    If the claim change reason code is equal to D3, the A/B MAC (A) compares the ending date on the provider's request to that on the claim to be adjusted on its history.  If these dates are the same, it rejects the request back to the provider with the message, "Thr u dates must change for the claim change reason code D3."    If the claim change reason code is equal to D4, the A/B MAC (A) compares diagnosis and procedure codes on the provider's request to those on the claim to be adjusted on its history.  If these codes are the same and are in the same sequence, it rejects the request back to the provider with the message, "Diagnoses and/or procedures must change for claim change reason code D4."    If the claim change reason code is equal to D5 or D6, type of bill must be equal to XX8 on the provider's request.  If type of bill is not equal to XX8, the A/B MAC (A) rejects the request back to the provider with the message, "Type of bill must be equal to XX8 for claim change reason codes D5 or D6."    If the claim change reason code is equal to D7, an MSP value code (12 -16, 41- 43, or 47) must be present, if a value code, 12 -16, 41- 43, or 47, is not present, the A/B MAC (A) rejects the request back to the provider with the message, "An MSP value code (12- 16, 41 -43, or 47) must be present for claim change reason code D7."    If the claim change reason code is equal to D7, and one or more of value codes 12- 16, 41- 43, and/or 47 is present but each value amount is equal to 0 (zero) or spaces, the A/B MAC (A) rejects the request back to the provider with the message, "invalid value amount for claim change reason code D7."