On Wednesday, March 13, 2013, the Centers for Medicare and Medicaid Services (CMS) released a proposed rule that allows payment for additional hospital inpatient services under Medicare Part B.  The proposed rule affects all hospitals, including critical access hospitals. 

The proposed rule allows hospitals to submit a Part B inpatient claim when a Part A claim is denied as not reasonable and necessary because the beneficiary should have been treated as an outpatient. The proposed rule also allows hospitals to submit a Part B inpatient claim when the hospital determines post-discharge that the patient’s inpatient admission was not reasonable and necessary.  However, hospitals must rebill CMS within one year of the date of service in order to take advantage of this Part B inpatient rebilling option.

Once the rule is finalized, hospitals may bill Part B inpatient claims for all Part B services that are reasonable and necessary, except for services that require an outpatient status or in circumstances where there is no Part A payment.  This expands Part B billing options from the limited set of payable Part B inpatient services currently allowed under Medicare policy.

In such a case, hospitals are required to submit a provider-liable Part A claim to assist accurate financial and cost sharing data and to cancel any claim that may have been submitted under Part A. After submitting a provider-liable Part A claim, hospitals can then submit a Part B inpatient claim and can expect reimbursement so long as:

• The Part B inpatient claim has services that would have been reasonable and necessary if the beneficiary had been treated as an outpatient; and
• The Part B inpatient claim is submitted within 1 year after the date of service.

CMS also published a ruling (CMS-1455-R) outlining a process for handling pending appeals and billing for additional Part B inpatient services while the proposed rule makes its way through the rulemaking process.

Comments on the proposed rule are due by May 17, 2013.