CMS implements 2014 inpatient rule changes

You may have heard that the Centers for Medicare & Medicaid Services will be implementing new inpatient rule changes for 2014. After April 1, 2014, BCBSM will follow CMS’ lead in handling the 2014 inpatient rule changes as outlined in this article.

These changes do not affect current HealthDataInsights audit processes. Current HDI audits and processes will remain effective until April 1, 2014. These include:

• Two complex audit categories
• Diagnosis-related group validation
• Short-stay hospitalizations
• Two-step appeal process

Hospitals can rebill claims for certain Part B ancillary services. These must be billed with:

• Paper claims
• Type of bill 121
• Original claim number in the remarks box

Payment is made after the original claim is offset.

After April 1, 2014, BCBSM will follow CMS guidance for the following 2014 inpatient rule changes:

Two-midnight rule

• Bill reasonable and necessary hospital stays that include two or more midnights as inpatient stays.
• Bill hospital stays that include fewer than two midnights as outpatient stays. (There are some exceptions to this rule, which are listed in the CMS admission guidelines.)
• Continue to follow CMS admission guidelines, physician orders and documentation for hospital stays.

Hospital self-audits
BCBSM encourages hospitals to audit themselves and adjust claims according to  the new rules. If a hospital does adjust claims after a self-audit, it would be reimbursed for observation stays on any rebilled claims with dates of service after April 1, 2014.

Condition code 44
BCBSM will waive condition code 44 that requires hospitals to conduct a utilization committee review to convert short stay cases from inpatient to outpatient to ease the burden on our hospital partners. We will require use of condition code W2 on outpatient rebilled claims.

CMS-1455-R
BCBSM will allow for the billing of and payment for Part B observation services when an inpatient claim is denied. Prior to this, hospitals could only rebill for certain ancillary services when an inpatient claim was denied. Hospitals may continue to bill separately for the Part B outpatient services furnished during the three days prior to the inpatient admission.

Timely filing on rebilled claims
We’ll begin to implement timely filing limits in accordance with CMS guidelines, which is one year from the date of service. Hospitals can submit claims through EDI whenever the case is still within filing limits. This includes most Part B services when an admission is not reasonable or necessary (as determined by HDI or a hospital self-audit).

Hospitals must comply with all applicable CMS laws, regulations, program instructions and payment rules. For more information, please visit the CMS website** or call your provider consultant.

If CMS delays the implementation of any of these rules, BCBSM will also adjust its implementation timeline.

**BCBSM does not control this website or endorse its general content.