CMS Administrators recently announced a ruling and a proposed rule in regards to Part A to Part B rebilling in light of operational difficulties and the rising frustrations of providers.

Congress and the Centers for Medicare & Medicaid Services (CMS) have put an army of Medical claims review contactors between them and service providers to audit Medicare claims. As a likely result, Part A hospital inpatient claims are being denied in record numbers as not being reasonable or necessary. Providers across the country are appealing these denials all the way up to the Medicare Appeals Council and Administrative Law Judges (ALJs). In further misfortune for the provider, the ALJs have been rather inconsistent in the way they have addressed these adjudicated denials. Judges have been increasingly allowing hospitals to rebill for the services rendered under Part B as if the beneficiary had been admitted and treated as an outpatient. Then stunningly, some ALJs have held the position of CMS and refused payment under Medicare Part B for the treatment provided, citing untimely filing. CMS admitted that these inconsistencies have created “numerous operational difficulties.” Therefore, the ruling introduces guidelines for implementing these re-billing decisions (which CMS is not thrilled about) and addressing pending claims and appeals until CMS decides how to move forward with the issue.

Under the ruling, hospitals are allowed to submit a Part B inpatient claim for care that would have been approved had the beneficiary originally been admitted as an outpatient rather than an inpatient. However, hospitals cannot re-submit claims in this way for services that specifically require outpatient status, such as emergency department visits and observation services. To prevent duplicate payment in this instance, the rule states that a hospital may not have simultaneous pending claims under both Parts A and B for the same services rendered to the beneficiary. Hence, hospitals must choose either to withdraw any pending Part A appeal and submit a Part B claim OR to continue with an appeal of the Part A claim denial and likely relinquish the ability to re-bill under Part B.

Hospitals may continue to bill separately for any outpatient services furnished during the three-day payment window prior to the beneficiary being admitted as an inpatient, including observation and other services provided in accordance with Medicare’s requirements.Services rendered at facilities owned and operated solely by the hospital during what would have been the three-day payment window for the denied Part A claim may be billed separately as well.

Most importantly, claims re-submitted for Part B inpatient and outpatient services shall not be denied as untimely as long as the original Part A claim was filed on time. Specifically, if a hospital has an appeal pending for a Part A claim denial relative to this ruling and decides to withdraw the appeal, the hospital will have 180 days from the date the dismissal notice was received to file Part B claim(s). Additionally, if a hospital with a pending appeal for a Part A claim denial does not withdraw its appeal, it will have 180 days from the date it receives the final appeal decision to submit Part B claim(s).

This ruling applies only to denials that are made

  • While this ruling is in effect
  • Prior to the effective date of this ruling, but for which the timeframe to file an appeal has not expired
  • Prior to the effective date of this ruling, but for which an appeal is pending

Contrary to the ruling, CMS’s proposed rule states that claims will need to be filed within the one-year CMS timely filing requirements. In other words, CMS would not offer hospitals the opportunity to submit Part B claims within 180 days of the denial or final decision, which they say will save them $4.8 Billion over the next 5 years. Consequently, CMS has retracted its Part A to Part B Rebilling Demonstration.

For more information about Medicare claims and MBA’s medical billing services, contact us today to request a consultation.