Billing for Hospital Part B Inpatient Services - Ancillary Services

Payment may be made under Part B for some medical and health services when furnished by a hospital (including critical access hospitals) to an inpatient of the hospital, but only if payment for these services cannot be made under Part A.

Hospitals must bill Part B inpatient services on a type of bill (TOB) 012X. Inpatient Part B services include inpatient ancillary services that do not require an outpatient status and are not strictly provided in an outpatient setting.

Services that require an outpatient status and are provided only in an outpatient setting are not payable inpatient Part B services, including clinic visits, emergency department visits, and observation services (this is not a complete listing). These outpatient services are billed separately on a 013X TOB.

Part B payment may be made for ancillary services if:

• The patient is not entitled to Medicare Part A.
• The admission was disapproved as not reasonable and necessary (and waiver of liability payment was not made).
• The day(s) of the otherwise covered stay during which the services were provided was not reasonable and necessary (and no payment was made under waiver of liability).
• No Part A payment is made at all for the inpatient stay because the patient’s benefits were exhausted before admission.

Billable Services

The following services are billable on a 012X inpatient Part B ancillary claim:

• Diagnostic X-ray tests, diagnostic laboratory and other diagnostic tests.
• X-ray, radium and radioactive isotope therapy, including materials and services of technicians.
• Acute dialysis of a hospital inpatient with or without end stage renal disease.
• Surgical dressings, splints, casts and other devices used for the reduction of fractures and dislocations.
• Prosthetic devices (other than dental) that replace all or part of an internal body organ (including contiguous tissue) or replace all or part of the functions of a permanently inoperative or malfunctioning internal body organ, including replacement or repair of such devices.
• Leg, arm, back and neck braces, trusses, and artificial legs, arms and eyes, including adjustments, repairs and replacements required because of breakage, wear, loss or change in the patient’s physical condition.
• Outpatient physical therapy, outpatient speech-language pathology services and outpatient occupational therapy.
• Ambulance services.
• Screening mammography services.
• Screening pap smear.
• Influenza, pneumococcal pneumonia and hepatitis B vaccines.
• Colorectal screening.
• Bone mass measurements.
• Diabetes self-management.
• Prostate screening.
• Hemophilia clotting factors (for hemophilia patients competent to use these factors without supervision).
• Immunosuppressive drugs.
• Oral anti-cancer drugs.
• Oral drug prescribed for use as an acute anti-emetic as part of an anti-cancer chemotherapeutic regimen.
• Epoetin Alfa (EPO).

Non-Billable Services

The revenue codes shown in the charts below represent services that are not billable as Part B inpatient services (ancillary services) and should not be submitted on a TOB 012X.

Editing of Hospital Part B Inpatient Services: Reasonable and Necessary Part A Hospital Inpatient Denials

When inpatient services are denied as not medically necessary or a provider submitted medical necessity denial utilizing occurrence span code M1, and the services are furnished by a participating hospital, Medicare pays under Part B for physician services and the non-physician medical and other health services provided under the Part B fee schedule.

A hospital may bill for Part B inpatient services if the hospital determines under Medicare's utilization review requirements that a beneficiary should have received hospital outpatient rather than hospital inpatient services, and the hospital already discharged the beneficiary from the hospital (commonly referred to as hospital self-audit). If the hospital already submitted a claim to Medicare for payment under Part A, the hospital must cancel its Part A claim prior to submitting a claim for payment of Part B inpatient services.

Whether or not the hospital submitted a claim to Part A for payment, Medicare requires the hospital to submit a Part A claim indicating that the provider is liable under Section 1879 of the Social Security Act for the cost of the Part A services. The hospital could then submit an inpatient claim for payment under Part B for all services that would have been reasonable and necessary if the hospital treated the beneficiary as a hospital outpatient rather than admitted as a hospital inpatient, except where those services specifically require an outpatient status.

A hospital Part B inpatient services claim billed when a reasonable and necessary Part A hospital inpatient was denied must be billed with:

• Condition code “W2” attesting that this is a rebilling and no appeal is in process,
• “A/B REBILLING” in the treatment authorization field, and
• 837I - report REF*G1*A/B REBILLING in Loop 2300 REF02 (REF01 = G1).
• Direct data entry (DDE) or paper claims - report "A/B Rebilling" in Form Locator (FL) 63.
• Original, denied inpatient claim document control number (DCN).
• 837I - report NTE*ADD*ABREBILL12345678901234 DCN in the Billing Notes Loop 2300/NTE.
• DDE or paper claims - report "ABREBILL" plus the denied inpatient DCN (ABREBILL12345678901234) in the Remarks Field (FL 80).
• 12345678901234 represents the DCN of the inpatient denial.

*In the case of revenue code 0964, this is used by hospitals that have a certified registered nurse anesthetist (CRNA) exception.

The Common Working File will edit to ensure that diabetic self-management training (DSMT) services are not billed on a 012X TOB.

The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three.

Group Code: PR

CARC: 96

RARC: M28

MSN: 21.21

Hospitals are required to report HCPCS codes that identify the services rendered.

Editing of Hospital Part B Inpatient Services: Other Circumstances in Which Payment Cannot Be Made Under Part A

Other circumstances include services furnished by a participating hospital to an inpatient of the hospital who is not entitled to benefits under Part A, has exhausted his or her Part A benefits, or receives services not covered under Part A.

*In the case of revenue code 0942, this is used by rural hospitals for kidney disease education (KDE) services.

*In the case of revenue code 0964, this is used by hospitals that have a CRNA exception.

The contractor shall use the following remittance advice messages and associated codes when rejecting/denying claims under this policy. This CARC/RARC combination is compliant with CAQH CORE Business Scenario Three.

Group Code: PR

CARC: 96

RARC: M28

MSN: 21.21

Hospitals are required to report HCPCS codes that identify the services rendered.

*Billed prior to admission or on the day of discharge.

* In the case of Revenue Code 0964, this is used by hospitals that have a CRNA exception.

* In the case of Revenue Code 0942, this is used by rural hospitals for kidney disease education (KDE) services.

Additional Allowed Services That Are to Be Identified by HCPCS, Not Identified By Revenue Codes

Other Diagnostic services: (A MAC maintained)

Preventive Services:

• COVID-19, influenza, pneumococcal pneumonia, and hepatitis B vaccines
• Colorectal screening
• Screening glaucoma services
• Bone mass measurements
• Prostate screening
• Covered drugs:
• Hemophilia clotting factors
• Immunosuppressive drugs
• Oral anti-cancer drugs
• Oral anti-emetic
• Non-ESRD Epoetin Alfa (EPO)

References

• CMS IOM Pub. 100-02, Medicare Benefit Policy Manual, Chapter 6, section 10.1
• CMS IOM Pub. 100-02, Medicare Benefit Policy Manual, Chapter 6, section 10.2
• CMS IOM Pub. 100-04, Medicare Claims Processing Manual, Chapter 4, section 240
• Guidelines for Billing Acute Inpatient Noncovered Days