CMS Pub. 100-04, ch. 4, § 240.1

Necessary Part A Hospital Inpatient Denials

(Rev.:11685, Issued:11-09-22, Effective: 07-01-22, Implementation: 12-12-22)

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 in Pub. 100-02, Medicare Benefit

Policy Manual, Chapter 6, §10.1, “Reasonable and Necessary Part A Hospital Inpatient

Claim Denials.”

A hospital may also be paid for Part B inpatient services if it determines under Medicare's

utilization review requirements that a beneficiary should have received hospital outpatient

rather than hospital inpatient services, and the beneficiary has already been discharged 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 would be required to adjust its Part

A claim (to make the provider liable) prior to submitting a claim for payment of Part B

inpatient services. Whether or not the hospital had submitted a claim to Part A for payment,

we require the hospital to submit a Part A claim indicating that the provider is liable under

section 1879 of the 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 beneficiary had been treated 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:

• A condition code “W2” attesting that this is a rebilling and no appeal is in process,

• “A/B REBILLING” in the treatment authorization field, and

• The original, denied inpatient claim (CCN/DCN/ICN) number.

NOTE: Providers submitting an 837I are instructed to place the appropriate Prior

Authorization code above into Loop 2300 REF02 (REF01 = G1) as follows: REF*G1*A/B

REBILLING~ For DDE or paper Claims, "A/B Rebilling" will be added in FL 63.

NOTE: Providers submitting an 837I are instructed to place the DCN in the Billing Notes

loop 2300/NTE in the format: NTE*ADD*ABREBILL12345678901234~ For DDE or paper

Claims, Providers are instructed to use the word "ABREBILL" plus the denied inpatient

DCN/CCN/ICN shall be added to the Remarks Field (form locator #80) on the claim using

the following format: "ABREBILL12345678901234". (The numeric string

(12345678901234) is meant to represent original claim DCN/ICN numbers from the inpatient

denial.)

Not Allowed Revenue Codes

The claims processing system shall set edits to prevent payment on Type of Bill 012x for

claims containing the revenue codes listed in the table below.

010x 011x 012x 013x 014x 015x 016x 017x

018x 019x 020x 021x 022x 023x 029x 0390

0399 045x 050x 051x 052x 054x 055x 056x

057x 058x 059x 060x 0630 0631 0632 0633

0637 064x 065x 066x 067x 068x 072x 0762

082x 083x 084x 085x 088x 089x 0905 0906

0907 0912 0913 093x 0941 0943 0944 0945

0946 0947 0948 095x 0960 0961 0962 0963

0964* 0969 097x 098x 099x 100x 210x 310x

* 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

CWF shall edit to ensure that DSMT services are not billed on a 012x claim.

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

ort HCPCS codes that identify the services rendered.