Qualifying stay edit C7123
When the three-day qualifying stay criteria is not met or is not reported appropriately, you will receive edit C7123. A Medicare beneficiary must have a covered three-day qualifying stay in an eligible hospital to qualify for coverage.
Skilled nursing facilities/swing-bed must report the qualifying stay on their claim with occurrence span code (OSC) 70 and the associated dates. An appropriate point of origin/source code is also required.
Claims will receive edit C7123 for the following reasons:
- Qualifying stay is incorrect or is not a valid three day stay
- Qualifying stays that happen prior to entitlement; or
- Qualifying stay reported with an incorrect point of origin/source code on SNF and SB claims
Qualifying stays prior to entitlement
CMS clarified that as long as a beneficiary becomes entitled to Medicare on the date of discharge or before and as long as the patient has a three-day inpatient hospital stay, the stay is considered a qualifying stay for the purposes of SNF and SB coverage.
Example:
The beneficiary’s Medicare entitlement began on July 1, 2023. The beneficiary was hospitalized from June 11, 2023, through July 2, 2023. While it was a three-day stay, Medicare only covered one day due to the beneficiary’s Medicare entitlement date. The inpatient hospital claim processed and paid based on a three-day stay with one Medicare-covered day. The subsequent SNF claim would also be covered.
SNF and SB providers may adjust claims they believe received edit C7123 in error.
Qualifying stay reported with an incorrect point of origin/source code on SNF and SB claims
SNF and SB claims that contain an incorrect point of origin/source code will reject. You will need to correct and submit a new claim. Please do not correct and return (F9) the claim.
Prior to claim submission, please verify:
- Three-day qualifying stay (three consecutive calendar days of a covered inpatient hospital stay) reported with OSC 70
- Admission date (date admitted into SNF or SB)
- Point of origin code (source of referral for admission)
| Point of origin | Definition | Explanation |
|---|---|---|
| 1 | Non-healthcare facility point of origin | The patient was admitted to this facility. |
| 2 | Clinic or physician’s office | The patient was admitted to this facility. |
| 4 | Transfer from a hospital (different facility) | The patient was admitted to this facility as a hospital transfer from an acute care facility where he or she was an inpatient or an outpatient. |
| 5 | Transfer from a SNF or ICF (Intermediate care facility) | The patient was admitted to this facility as a transfer from a SNF or ICF where he or she was a resident. |
| 6 | Transfer from another healthcare facility | The patient was admitted to this facility as a transfer from another type of healthcare facility not defined elsewhere in this code list. |
| 9 | Information not available | The means by which the patient was admitted to this facility is not known. |
| D | Transfer from hospital inpatient in the same facility resulting in a separate claim to the payer | The patient was admitted to this facility as a transfer from hospital inpatient within this facility resulting in a separate claim to the payer. |