Here’s how to handle reporting on claims when Medicare benefits are exhausted

We’re seeing an increase in the volume of incorrectly reported inpatient claims for admissions when a Medicare primary non-Federal Employee Program^® member has exhausted his or her Medicare benefits before, after or during an admission.

Hospitals are required to apply InterQual criteria and prenote in-patient admissions when a patient exhausts Medicare benefits, and Blue Cross Blue Shield of Michigan is billed in full after Medicare days are exhausted.
Here are two scenarios to keep in mind:

1. Medicare benefits are exhausted during an admission.

You’re required to report two separate claims:

• One for the balance after the Medicare payment (coinsurance, deductible and lifetime reserve days).
• One for the days not covered by Medicare.

On the first claim to Blue Cross, report the days you would’ve reported to Medicare for the deductible, coinsurance or lifetime reserve days.

On this second claim, report the days after Medicare is exhausted on the UB-04 as follows:

• Report type of bill as 0111 in form locator 4.
• Report in Statement Covers Period in form locator 6. This is the first day after Medicare is exhausted, through the end of the admission that you’re billing.
• Report the admission date in form locator 12. This is the date that should be the day after Medicare is exhausted.
• Report occurrence code A3 with the date Medicare benefits are exhausted in form locator 31.
• Report value code 01 with room rate and value code B3 with total charges in form locator 39-41.
• Report in form locator 50 with the appropriate Medicare payer code on line “A” and Blue Cross payer code on line “B”.
• Don’t report a Medicare payment in form locator 54.
• This admission must meet InterQual criteria and be prenoted beginning the first day Medicare benefits become exhausted.

2. Medicare benefits are exhausted before admission.

Only one claim is reported to Blue Cross. On this claim, report the entire admission as full days when Medicare is exhausted on the UB-04 as follows:

• Report type of bill as 0111 in form locator 4.
• Report in Statement Covers Period in form locator 6, the dates for the entire admission that you’re billing full days Medicare exhaust.
• Report the admission date in form locator 12. This date should be the day after Medicare is exhausted.
• Report occurrence code A3, with the date Medicare benefits were exhausted, in form Locator 31.
• Report value code 01, with room rate and value code B3 with total charges, in form locator 39-41.
• Report in form locator 50 the appropriate Medicare payer code on line “A” and Blue Cross payer code on line “B.”
• Don’t report a Medicare payment for locator 54.
• This admission must meet InterQual criteria and can be prenoted.

UB-04 claim examples and reporting instructions are available in the “Claims” chapter of the Hospital Inpatient online provider manual.

To access the "Claims" chapter of the online provider manual, log on to web-DENIS and then:

• Click on BCBSM Provider Publications and Resources.
• Click on Provider Manuals (you will connect to Benefit Explainer).
• Click on Provider Type (Inpatient Hospital).
• Choose the Claims Chapter.

For more information on completing the UB-04 claim, follow the instructions in the Uniform Billing Manual. If you don’t have a UB-04 Manual, you can get one through the National Uniform Billing Committee website at nubc.org**.

**Blue Cross Blue Shield of Michigan does not own or control the content of this website.