CMS Pub. 100-04, ch. 10, § 50

Demand billing is a procedure through which beneficiaries can request Medicare

payment for services that: (1) their HHAs advised them were not medically reasonable

and necessary, or that (2) they failed to meet the homebound, intermittent or noncustodial

care requirements, and therefore would not be reimbursed if billed. The HHA must

inform the beneficiary of this assessment in an Advance Beneficiary Notice of

Noncoverage (ABN), which also must be signed by the beneficiary or appropriate

representative. Instructions for the ABN are found in chapter 30 of this manual.

Beneficiaries pay out of pocket or third party payers cover the services in question, but

HHAs in return, upon request of the beneficiary, are required to bill Medicare for the

disputed services. If, after its review, Medicare decides some or all the disputed services

received on the “demand bill” are covered and pays for them, the HHA would refund the

previously collected funds for these services. If the Medicare determination upholds the

HHA’s judgment that the services were not medically reasonable and necessary, or that

the beneficiary failed to meet the homebound or intermittent care requirements, the HHA

keeps the funds collected, unless the A/B MAC (HHH) determines the ABN notification

was not properly executed, or some other factor changed liability for payment of the

disputed services back to the HHA.

A. Interval of Billing

The Medicare payment unit for home care under the home health prospective payment

system (HH PPS) is a period of care, usually 30 days in length. A Notice of Admission

(NOA) must be submitted for a beneficiary before any claims can be processed. A claim

is submitted for every 30 days of HH services. This does not change in demand bill

situations.

B. Timeliness of Billing

Medicare requests that HHAs submit demand bills promptly. Timely filing requirements

apply to HH PPS claims in the same manner as other claims (see chapter 1 for

information on timely filing). Medicare has defined “promptly” for HH PPS to mean

submission at the end of the period of care in question. The beneficiary must also be

given either a copy of the claim or a written statement of the date the claim was

submitted.

C. Claim Requirements

HH PPS claims, including demand bills, are submitted with TOB 0329, and provide all

other information required on that claim for the HH PPS period of care, including all

visit-specific detail. The HHA must NOT use TOB 0320 when submitting a demand bill.

The HHA must report condition code “20” and the services in dispute shown as

noncovered line items. Demand bills may be submitted with all noncovered charges.

Provision of this additional information assures medical review of the demand bill.

Cases may arise in which the services in dispute are visits for which an HHA has

physician’s orders, but the duration of the visits exceeds Medicare coverage limits.

However, the portion of these visits that is not covered by Medicare may be covered by

another payer (e.g., an 8-hour home health aide visit in which the first 2 hours may be

covered by Medicare and the remaining 6 hours may be covered by other insurance). In

such cases, HHAs must submit these visits on demand bills as two line items. One line

will represent the portion potentially covered by Medicare with a covered charge amount

and units reporting the Medicare-covered visit time. The second line will represent the

portion to be submitted for consideration by other insurance with a noncovered charge

amount and units reporting non-Medicare visit time.

Cases may also arise in which a State Medicaid program requests the demand bill on the

beneficiary’s behalf regarding services which have been billed to Medicaid. In these

cases, the dates of service for which the State requests the demand bill may not

correspond exactly to the periods billed to Medicare. These cases require special

instructions:

Requests regarding services not expected to be billed to Medicare:

A Medicare-Medicaid dually-eligible patient may be admitted to home care with the

expectation that no services will be billed to Medicare. Later, the State may request

demand bills beginning during the course of that care. This may occur when requests

correspond to a calendar year. For example, the patient may be admitted in December

and the request for demand bills is effective January 1. In this case, the HHA should

submit a demand bill to Medicare with period of care dates that began in December. All

services should be submitted as non-covered line items. As with any demand bill,

condition code 20 should be reported on this claim.

Request applies to services immediately following Medicare discharge:

A dually-eligible patient may be discharged from Medicare home health services before

the end of a 30-day period of care due to the patient meeting their treatment goals. The

patient may remain under the care of the HHA receiving services billed to Medicaid.

States may vary in their requirements for a new Start of Care OASIS assessment in these

cases.

If the State requesting a demand bill for the services within the original 30-day period of

care does not require a new OASIS assessment, the HHA should submit an adjustment to

their previously paid Medicare claim, using TOB 0327. The HHA should add condition

code 20 to the adjustment claim, change the statement “Through” date to reflect the full

30-day period and add the services provided during the demand bill request period as

non-covered line items. The HHA should then submit claims with condition code 20 and

all non-covered line items for any periods of continuous care within the demand bill

request period.

If the State requesting a demand bill for the services within the 30-day period of care

requires a new OASIS assessment, the HHA should submit an NOA and submit claims

with condition code 20 as they would for any other demand bill situation. When

Medicare receives the NOA for the demand billed episode it will cause a partial period

payment adjustment to apply to the prior period. Medicare cannot presume that the

demand billed period will or will not be covered based on the NOA. If the claim for the

demand billed period is later reviewed and found to be entirely non-covered, Medicare

systems will automatically adjust the prior period to restore the appropriate full episode

payment.

D. Favorable Determinations and Medicare Payment

Results of Medicare determinations favorable to the party requesting the demand bill will

not necessarily result in increased Medicare payment. In such cases, and even if a

favorable determination is made but payment does not change, HHAs will still refund any

monies collected from beneficiaries or other payers for services previously thought not

medically necessary under Medicare. Medicare payment will change only with the

addition of covered visits if one or more of the following conditions apply:

• An increase in the number of overall visits that either:

1. Changes payment from a low-utilization payment adjustment to a full

period payment; or

2. Results in the period of care meeting the threshold for outlier payment.

• A favorable ruling on a demand bill adds days to a claim paid a partial period

payment adjustment.

If a favorable determination is made, A/B MACs (HHH) will assure pricing of the claim

occurs after medical review so that claims also serving as demand bills receive

appropriate payment.

E. Appeals

Appeal of Medicare determinations made on HH PPS claims also serving as demand bills

is accomplished by appealing the HH PPS claim. Such appeals are done in accordance

with regulations stipulating appeals rights for Medicare home health claims.

F. Specific Demand Billing Scenarios

1. Independent Assessment -- Billing questions relative to the ABN and home health

assessments. With regard to payment liability for the assessment itself, the assessment is

a non-covered service that is not a Medicare benefit and is never separately payable by

Medicare. In all such cases, a choice remains: The provider may or may not decide to

hold the beneficiary liable, and Medicare cannot specify which is appropriate because the

service at issue is outside Medicare's scope.

If a decision is made to hold a beneficiary liable for just the assessment, Medicare

providers must be in compliance with the home health Conditions of Participation

(COPs), as follows:

42 CFR 484.10.e (1) The patient has the right to be advised, before care is

initiated, of the extent to which payment for the HHA services may be expected

from Medicare or other sources, and the extent to which payment may be required

from the patient. Before care is initiated, the HHA must inform the patient, orally

and in writing, of: (i) The extent to which payment may be expected from

Medicare, Medicaid or any other Federally funded or aided program known to the

HHA; (ii) The charges for services that will not be covered by Medicare; and (iii)

The charges that the individual has to pay.

Therefore, while no notice may be required if the provider chooses to be liable, the

conditions state a notice is required if the beneficiary is to be held liable, and must be

delivered prior to the service in question. ABNs can be used for this purpose.

2. Billing in Excess of the Benefit. In some states, the Medicaid program will cover more

hours of care in a week than the Medicare benefit. Therefore, an HHA may be billing

hours/visits in excess of the benefit during a Medicare home health period of care for a

dually eligible beneficiary. Since the care delivered in excess of the benefit is not part of

the benefit, and does not affect the amount of Medicare’s prospectively set payment,

there is no dispute as to liability, and an ABN is not required unless a triggering event

occurs; that is, care in excess of the benefit is not a triggering event in and of itself

requiring an ABN. Billing services in excess of the benefit is discussed in C in this

section.

3. One-Visit Periods. Since intermittent skilled nursing care is a requirement of the

Medicare home health benefit, questions often arise as to the billing of one-visit periods

of care. Medicare claims systems will process such billings, but these billings should

only be done when some factor potentially justifies the medical necessity of the service

relative to the benefit.

Many of these cases do not even need to be demand billed, because coverage is not in

doubt, since physician orders called for delivery of the benefit. When the beneficiary

dies after only one visit is a clear-cut example. When physician orders called for

additional services, but the beneficiary died before more services could be delivered, the

delivery of only one visit is covered. The death is indicated on the claim with use of

patient status code 20. Other cases in which orders called for additional services, but

circumstances prevented delivery of more than one service by the HHA, are also

appropriately billed to Medicare in the same fashion.

There may be rare cases where, even though orders do not clearly indicate the need for

additional services, the HHA feels delivery of the service is medically justified by

Medicare’s standard, and should be covered. In such situations, when doubt exists, an

HHA should still give the beneficiary an ABN if a triggering event has occurred,

explaining Medicare may not cover the service, and then demand bill the service in

question.

No billing is required when there is no dispute that the one service called for on the order

does not meet the requirements for the Medicare home health benefit, or is not medically

necessary. However, there are options for billing these non-covered services as discussed

in chapter 1, section 60 of this manual. Note the COPs may require notification in this

situation if the beneficiary is to be held liable, as discussed in number 1, immediately

above.