CMS Pub. 100-04, ch. 3, § 10.3

A3-3622

The A/B MAC (A) or (HHH) makes spell of illness determinations in accordance with the

Medicare Benefit Policy Manual, Chapter 3, and these special instructions.

A. - Beginning a Spell of Illness in Nonparticipating Provider

The noncovered services furnished by a nonparticipating provider can begin a spell of illness

only if the provider is a qualified provider. A qualified provider is a hospital (including a

psychiatric hospital) or an SNF that meets all requirements in the definition of such an

institution even though it may not be participating.

It is most unlikely that a nonparticipating hospital that is not accredited by JCAHO or a

nonparticipating SNF satisfies the conditions of participation, particularly with regard to

utilization review. Therefore, for spell of illness purposes, the A/B MAC (A) or (HHH)

assumes that nonparticipating providers are not qualified providers in the absence of

evidence to the contrary. Situations that might constitute such contrary evidence include

cases where the provider recently dropped out of the program or, after a survey by the State

agency, decided not to participate even though the conditions of participation were met.

Hospitals accredited by JCAHO are deemed to meet all requirements except utilization

review. For such a hospital, the A/B MAC (A) determines through the RO whether the

hospital has a utilization review plan in effect.

B. - Continuing a Spell of Illness

1. Hospital Services

For purposes of continuing a spell of illness in a hospital, the hospital in which the stay

occurs need not meet all requirements that are necessary for starting a spell of illness. If

there has been a stay in a hospital that might continue the spell of illness and the A/B MAC

(A) cannot ascertain its status, the A/B MAC (A) contacts the RO, which maintains a list of

all medical facilities and their status.

2. SNF Services

For purposes of continuing a spell of illness in a SNF the spell of illness ends when the

beneficiary no longer needs or receives a Medicare covered level of care.

The A/B MAC (A) uses the following seven presumptions to determine whether the skilled

level of care standards were met during a prior SNF stay. If the information upon which to

base a presumption is not readily available, the A/B MAC (A) may, at its discretion, review

the beneficiary's medical records to determine whether the beneficiary was an inpatient of an

SNF for purposes of ending a spell of illness.

These special rules for determining whether a beneficiary in a SNF is an inpatient for benefit

period purposes is applicable in all cases where a prior SNF stay affects benefit period status,

not only when a beneficiary is seeking to continue a benefit period, but also where it results

in the beneficiary starting a new benefit period. If the applicable skilled level of care

standards were met during a prior SNF stay, the spell of illness is continued with current

utilization available to the beneficiary. If the applicable skilled level of care standards were

not met during a prior SNF stay, the spell of illness is not continued. A new spell of illness

restores full utilization and imposes a cash deductible.

Presumptions:

Presumption 1: A beneficiary's care in a SNF met the skilled level of care standards if a

Medicare SNF claim was paid for the care, unless such payment was made under limitation

of liability rules.

Presumption 2: A beneficiary's care in a SNF met the skilled level of care standards if a

SNF claim was paid for the services provided in the SNF under the special Medicare

limitation on liability rules pursuant to placement in a noncertified bed. See Chapter 30.

Presumption 3: A beneficiary's care in a SNF did not meet the skilled level of care

standards if a claim was paid for the services provided in the SNF pursuant to the general

Medicare limitation on liability rules in Chapter 30. (This presumption does not apply to

placement in a noncertified bed. For claims paid under these special provisions, see

Presumption 2.)

Presumption 4: A beneficiary's care in a Medicaid nursing facility (NF) did not meet the

skilled level of care standards if a Medicaid claim for the services provided in the NF was

denied on the grounds that the services received were not at the NF level of care (even if paid

under applicable Medicaid administratively necessary days provisions which result in

payment for care not meeting the NF level of care requirements).

Presumption 5: A beneficiary's care in an SNF met the skilled level of care standards if a

Medicare SNF claim for the services provided in the SNF was denied on grounds other than

that the services were not at the skilled level of care.

Presumption 6: A beneficiary's care in an SNF did not meet the skilled level of care

standards if a Medicare claim for the services provided in the SNF was denied on the

grounds that the services were not at the skilled level of care and no limitation of liability

payment was made.

Presumption 7: A beneficiary's care in a SNF did not meet the skilled level of care

standards if no Medicare or Medicaid claim was submitted by the SNF.

Rebuttal of Presumptions

Presumptions 1 through 4 cannot be rebutted. Thus, prior Medicare and Medicaid claim

determinations that necessarily required a level of care determination for the time period

under consideration are binding for purposes of a later benefit period calculation. Although

Presumptions 1 through 4 are not in themselves rebuttable, a beneficiary may seek to reverse

a benefit period determination that was dictated by one of these presumptions by timely

appealing the prior Medicare or Medicaid claim determination which triggered the

presumption.

Presumptions 5 through 7 can be rebutted by beneficiary showings that the level of care

needed or received is other than that which the presumption dictates. Rebuttal showings are

permitted at both A/B MAC (A) determination levels under 42 CFR 405, Subpart G (i.e., a

rebuttal showing regarding the status of a prior SNF stay is made at the time that an inpatient

claim is submitted and/or at the reconsideration level). Evaluate rebuttal documentation even

if the presumption being rebutted was triggered by a Medicaid denial. Decisions under

presumptions 5 through 7 require the A/B MAC (A) to send a notice to advise the

beneficiary of the basis for the determination and the right to present evidence to rebut the

determination on reconsideration.

Presumption 6 can be rebutted because the Medicare skilled level of care definition for

coverage purposes is broader than the skilled level of care definition used here for benefit

period determinations. For example, prior hospital care related to the SNF care is included in

the Medicare SNF coverage requirements but is not included in the standard for benefit

period determinations. Therefore, Medicare payment could have been denied for an SNF

stay because of noncompliance with that requirement, even though skilled level of care

requirements for benefit period determinations were in fact met by the SNF stay.

Consequently, when Medicare SNF payment is denied, the beneficiary must be given the

opportunity to demonstrate that he/she still needed and received a skilled level of care for

purposes of benefit period determinations to extend a benefit period if this would be to the

beneficiary's advantage.

NOTE: Effective October 1, 1990, the levels of care that were previously covered

separately under the Medicaid SNF and intermediate care facility (ICF) benefits are

combined in a single Medicaid nursing facility (NF) benefit. Thus, the Medicaid NF benefit

includes essentially the same type of skilled care covered by Medicare's SNF benefit, but it

includes less intensive care as well. This means that when a person is found not to require at

least a Medicaid NF level of care (as under Presumption 4), it can be presumed that he or she

also does not meet the Medicare skilled level of care standards. However, since the NF

benefit can include care that is less intensive than Medicare SNF care, merely establishing

that a person does require NF level care does not necessarily mean that he or she also meets

the Medicare skilled level of care standards. Determining whether an individual who

requires NF level care also meets the Medicare skilled level of care standards requires an

actual examination of the medical evidence and cannot be accomplished through the simple

use of a presumption.

Medicare no payment bills submitted by an SNF result in Medicare program payment

determinations (i.e., denials). Therefore, such no payment bills trigger the appropriate

presumptions. This also applies in any State where the Medicaid program utilizes no

payment bills which lead to Medicaid program payment determinations. If an SNF

erroneously fails to submit a Medicare claim (albeit a no-pay claim) when Medicare rules

require such submission, request compliance. Once the no-pay bill is submitted and denied,

the applicable presumption (other than presumption 7) is triggered. If a patient is moving

from a SNF level of care to a non-SNF level of care in a facility certified to provide SNF

care, occurrence code 22 (date active care ended) is used to signify the beginning of the no-pay period on the bill and trigger the appropriate presumptions.

Some of the presumptions require knowledge of Medicaid's claims processing involvement

with the prior claim. The A/B MAC (A) uses current bill data, accompanying

documentation, bill history files, and telephone contacts with the prior stay facility and/or the

Medicaid agency to develop the Medicaid aspects. It does not continue Medicaid

development beyond a telephone contact. It concludes its consideration of the presumption

at this point based upon the Medicaid information available.