(Medicare Claims Processing Manual)

The A/B MAC (A) counts all days (including day of admission, but not the day of discharge or death, unless it is also the day of admission) as covered for cost report and Pricer purposes.  It does not count those medically unnecessary days for which the pr ovider meets notice requirements and other conditions for charging the beneficiary.  (See 40.2.2 C and D .)  It does not count those medically unnecessary days for cost report or Pricer purposes.  It counts the actual number of days available to the beneficiary for utilization.   2. Length of Stay Exceeds the Day Outlier Threshold (Day outliers discontinued after FY 97)   The A/B MAC (A) counts all days (including the day of admission, but not the day of discharge or death unless it is also the day of admission) in the stay for cost report and Pricer purposes except as follows:   a. Pre-entitlement Days   The A/B MAC (A) does not count pre -entitlement days for the cost report or for utilization in non- PPS hospitals, exempt units or SNFs.  For PPS hospitals, it does not count pre -entitlement days for utilization or for Pricer.  The number of days counted as noncovered for the cost report is limited to the number of days in the stay in excess of the day outlier threshold.  To determine which preentitlement days are counted as noncovered, the A/B MAC (A) begins at the end of the stay (the day before the day of discharge, death, etc.) and working backward, counts off days identified as pre -entitlement days until it has counted all preentitlement days or, until the number of days counted equals the total number of days in excess of the outlier threshold.  b. Post-Exhaustion of Benefit Days   The A/B MAC (A) treats post -exhaustion of benefit days exactly like pre -entitlement days.   To resolve any Medicare Secondary Payor (MSP) issues, see the Medicare Secondary Payer Manual.   40.2 - Determining Covered/Noncovered Days and Charges  (Rev. 1231; Issued:  04- 27-07; Effective:  12 -03-07; Implementation:  12 -03-07)  The CMS must record a day or charge as either covered or noncovered because of the following:   Beneficiary utilization is recorded based upon days during which the patient received hospital or SNF accommodations, including days paid by Medicare and days for which the provider was held liable for reasons other than medical necessity or custodial care .  Days denied as not medically necessary or as custodial care are not charged against a beneficiary's utilization record when the provider is determined to be liable.   The provider may claim credit on its cost report only for covered accommodations, days and charges for which actual payment is made, i.e., provider liable days and charges are not included.  Data from the bill payment process are used in preparing the cost  report.   The number of days and charges provided to the Pricer program affects the day and cost outlier determinations and the DRG payment amount.  Non- PPS provider days are excluded from Pricer consideration.  It is possible to use a different number of days on a single bill for each of the above purposes, although the same number of days will generally apply in actual practice.  For example, if the beneficiary had at least 1 day of eligibility remaining at admission, days that occur after benefits are exhausted up through the day outlier threshold for the applicable DRG are counted for cost reporting purposes under IPPS (see section190.12.1 for IPF and section 150.17 for LTCH benefits exhaust claims processing).   A. - General Rule on Counting of Days   These following are general rules for counting days.  However, these rules are also subject to special rules for determining day of admission, discharge, death, beginning a leave of absence, same day transfer, guarantee of payment days, provider liability issues and outlier days for PPS outliers.  See 40.1 and 40.1.G  for an explanation of these special rules.   The provider calculates and enters on the bill the number of claimable Medicare patient days on the cost report.  (Medicare patient days always refer to cost report days.)  For PPS facilities the A/B MAC (A) counts, for the cost report, utilization and Pricer purposes, all days for which Part A payment may be made to the hospital.  This includes days for which the provider is not liable under the limitation of liability provision.  It does not count days for which no Part A payment may be made for cost report, utilization or Pricer purposes.   For non- PPS providers, the A/B MAC (A) does not count the days for Pricer purposes, because DRG payment or outlier calculations are not made.  B. - Medically Unnecessary Days for Which the Provider May Charge the Beneficiary   Days on which the hospital furnished no covered Part A services are not charged to utilization and are not counted as Medicare patient days.   If the hospital or SNF stay includes any medically unnecessary days for which the provider has met the requirements of 40.2.2 C or D  for charging the beneficiary, the A/B MAC (A) counts those days as noncovered under Part A for cost report, utilization and Pricer purposes.   Since the provider may not be aware of the date benefits are exhausted or when the outlier threshold is reached, the A/B MAC (A) verifies the provider's counts.  If, for any reason, the A/B MAC (A) or the QIO determines fewer days are claimable (e.g., if t he A/B MAC (A) or the QIO indicates that benefits are exhausted), the A/B MAC (A) will adjust cost report days for its PS&R system.  If the A/B MAC (A) or the QIO determines fewer days are claimable for the cost report, it determines the proper number of d ays of utilization to charge the beneficiary and the proper number of days for the length of stay used by Pricer.  It uses the factors in 40.1 and 40.1G  to make these calculations.   C. - Medically Unnecessary Outlier Costs for Which the Hospital May Not Charge   If the hospital requests payment for cost outlier, and the Medicare covered charges converted to cost exceed the cost outlier threshold, the services which are not reasonable and necessary (or constitute custodial care) which are noncovered, but for which the hospital may not charge the beneficiary are determined as follows:    The hospital determines the lesser of the following:    The cost of the medically unnecessary services (converting the charges for the medically unnecessary services to cost); or    The amount by which the adjusted cost of the stay exceeds the cost outlier threshold.  Ancillary services, which are not required to be furnished on an inpatient basis, are treated as medically unnecessary, but nevertheless may be covered under Part B.    If the costs in excess of  the outlier threshold exceed the cost of the medically unnecessary services, the cost of all of the medically unnecessary services are treated as noncovered costs.  If these costs exceed the costs in excess of the cost outlier threshold, beginning with the cost of the last medically unnecessary service in the stay, the hospital must identify, and add on, in reverse order, the cost of other medically unnecessary services until the total cost of medically unnecessary services reaches the costs in excess of the cost outlier threshold.  If the cost of the last service to be added on in this manner brings the cost of medically unnecessary services over the amount of costs in excess of the cost outlier threshold, only the portion of the cost of that last medicall y unnecessary service (in the order of the addition) needed to bring the total of the medically unnecessary costs up to the costs in excess of the cost outlier threshold is added on.  In this case, the costs in excess of the cost outlier threshold are treated as the noncovered costs.   Once the costs of medically unnecessary services to be treated as noncovered are determined, convert them to charges for each applicable service/revenue category, e.g., accommodations, radiology, pharmacy, by dividing the costs treated as not medically nec essary in each category by 72 percent.  The medically unnecessary charges determined are treated as noncovered charges.  Days for which all costs are found to be noncovered are treated as noncovered days.    The hospital determines which medically unnecessary services and days treated as noncovered are services and days for which the beneficiary can be charged under 40.2.2C  or E.  The remainder of the services and days are the medically unnecessary services and days treated as noncovered even though the hospital may not charge the beneficiary.  However, the distinction between medically unnecessary services and days for which the hospital may charge, and those for which it may not, will not be reflected in the charges shown on the inpatient hospital billing.  Both are combined and shown as noncovered services and days.  The determination of medically unnecessary cost outliers is not affected by non- entitlement days or days after benefits are exhausted.  If the stay is covered or treated as covered, the beneficiary is treated as entitled to Part A, and as having benefits a vailable throughout the stay.  40.2.1 - Noncovered Admission Followed by Covered Level of Care  (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)   Where a beneficiary receives noncovered care at admission, and is notified as such, but subsequently is furnished covered level of care during the same hospital stay, the admission is deemed to have occurred when covered services became medically needed an d rendered.  This is applicable to PPS and non- PPS billings.   The following billing entries identify this situation:   Admission date (not the deemed date).    Occurrence code "31" and the date the hospital provided notice to the beneficiary.    Occurrence span code 76 indicates the noncovered span from admission date through the day before covered care started.    Value code 31 is used to indicate the amount which was charged the beneficiary for noncovered services.    Noncovered charges related to the noncovered services.   The principal diagnosis is shown as the diagnosis that caused the covered level of care.    Only procedures performed during the covered level of care are shown on the bill.  If a no payment bill for the noncovered level of care has been processed, the hospital prepares and forwards a new initial bill.   40.2.2 - Charges to Beneficiaries for Part A Services  (Rev. 1495; Issued:  05- 02-08; Effective Date:  10 -01-08; Implementation Date:  10- 06-08)  The hospital submits a bill even where the patient is responsible for a deductible which covers the entire amount of the charges for non- PPS hospitals, or in PPS hospitals, where the DRG payment amount will be less than the deductible.   A hospital receiving payment for a covered hospital stay (or PPS hospital that includes at least one covered day, or one treated as covered under guarantee of payment or limitation on liability) may charge the beneficiary, or other person, for items and se rvices furnished during the stay only as described in subsections A through H.  If limitation of liability applies, a beneficiary's liability for payment is governed by the limitation on liability notification rules in Chapter 30 of this manual.  For related notices for inpatient hospitals, see CMS Transmittal 594, Change Request3903, dated June 24, 2005.  A. - Deductible and Coinsurance   The hospital may charge the beneficiary or other person for applicable deductible and coinsurance amounts.  The deductible is satisfied only by charges for covered services.  The A/B MAC (A) deducts the deductible and coinsurance first from the PPS payment .  Where the deductible exceeds the PPS amount, the excess will be applied to a subsequent payment to the hospital.  (See Chapter 3 of the Medicare General Information, Eligibility, and Entitlement Manual for specific policies.)   B. - Blood Deductible   The Part A blood deductible provision applies to whole blood and red blood cells, and reporting of the number of pints is applicable to both PPS and non- PPS hospitals. (See Chapter 3 of the Medicare General Information, Eligibility, and Entitlement Manual for specific policies.)  Hospitals shall report charges for red blood cells using revenue code 381, and charges for whole blood using revenue code 382.  C. - Inpatient Care No Longer Required   The hospital may charge for services that are not reasonable and necessary or that constitute custodial care.  Notification may be required under limitation of liability.  See CMS Transmittal 594, Change Request3903, dated June 24, 2005, section V. of the attachment, for specific notification requirements.  Note this transmittal will be placed in Chapter 30 of this manual at a future point.  Chapter 1, section 150 of this manual also contains related billing information in addition to that provided below.  In general, after proper notification has occurred, and assuming an expedited decision is received from a Quality Improvement Organization (QIO), the following entries are required on the bill the hospital prepares:   Occurrence code 3l (and date) to indicate the date the hospital notified the patient in accordance with the first bullet above;