CMS Pub. 100-10, ch. 7, § 7025

A. Purpose

Monitor the content of the HINN and the accuracy of the hospital's determination (see

Hospital Manual, §414.5).

 Upon a beneficiary's or a hospital's request for review, determine whether the

HINN is appropriate and accurate (See §§7005 and 7020).

 For HINNs (e.g., admission) that are issued and no request for review is made,

ensure no less than every 6 months a year that:

• The hospital followed the appropriate process;

• The content of the notice is accurate/appropriate; and

• The hospital's decision to issue the notice is correct.

 Monitor the hospital to ensure that it is issuing the Hospital Notice to Beneficiary

of QIO Review of Need for Continued Hospitalization timely to the beneficiary

when your review is requested (See Hospital Manual, §414.11, Exhibit 10).

B. Ongoing Monitoring

 Case Selection -- Conduct review of cases as follows:

• Cases selected monthly by CMS from the processed claims data where the

hospital has issued a HINN and there is beneficiary’s liability for payment.

• Cases you have selected (no more than 6 months basis) by using the copy

of the (preadmission, admission, or continued-stay) HINN submitted to

you by the facility within 3 working days of the HINN issuance.

NOTE: Hospitals are required to submit a bill for all inpatient stays, including those for

which no payment can be made. Although no monies are involved with "No-pay bills," a

claim is required because hospitalization could extend a Medicare beneficiary's benefit

period (see Hospital Manual, §411).

 Timing of Review -- For all cases selected for review, request medical records

and complete review according to the timeframes for retrospective review.

Reconcile the CMS selected claims data with copies of the HINN you received to

ensure that the hospital is notifying you of all notices issued.

If you identify a hospital's failure to submit no-pay claims to the intermediary, work with

the intermediary to establish a procedure to address/resolve the hospital's billing problem.

The procedure should specify that if after a reasonable period of time (e.g., 6 months or

longer) you are unable to reconcile the information between submission of the HINN and

the claim data, you notify the intermediary and the hospital of the problem. The

procedure must delineate the party (you or the intermediary) who is responsible for

sending the hospital formal notification of noncompliance with the billing instructions

(See Hospital Manual, §411). If the hospital does not submit a claim to the intermediary

(after the specified period of time), notify the respective CMS Regional Office (RO) to

take necessary action under its authority to bring the hospital into compliance with

program requirements.

 Review Process -- For cases involving preadmission, admission, and continued-stay notices, review:

• All notices received to determine whether the language content of the

HINN met the requirements (See Hospital Manual, §414.5);

• HINN cases selected by you (from “all notices“ received) to determine the

appropriateness of the notice (i.e., the care was not covered from the point

determined by the hospital and the content of the notice met the

requirements of §414.5 of the Hospital Manual);

• All cases selected by CMS where the beneficiary is liable for charges for

services furnished after notification (See §4230.D). Review these cases to

ensure that the beneficiary is not held liable for charges covered by

Medicare as specified at §7025;

• All cases involving admission and continued-stay notices identified from

processed claims data where the hospital failed to send you a copy.

Examine these cases to ensure that abuse is not involved (e.g., a hospital is

withholding copies of inaccurate notices to avoid QIO review);

• All cases where the medical information you used for approval was

received by telephone and the HINN issued significantly differs from the

claim submitted to the intermediary, or where the past history of the

facility indicates poor compliance; and

• All cases where you received a beneficiary complaint that was unrelated to

the issuance of a hospital notice. However, if during your review evidence

is found that a HINN was issued, you should review the HINN as well as

the complaint issue (e.g., cases received under Hospital Payment

Monitoring Program (HPMP)).

NOTE: For all continued-stay cases, determine the medical necessity and

appropriateness of the admission (see §7005.B.2).

 HINN in the Outpatient Setting -- Review notices issued to Medicare outpatients

undergoing surgery if the notice relates to denial of admission to the hospital.

Review these notices if the beneficiary or his/her representative bring the issue to

your attention or if the case is already under review.

 HINN Related to Exclusion and Coverage Issues -- The intermediary is

responsible for medical review of claims that involve general exclusion and

coverage issues, and review of HINNs associated with those denials. If the

intermediary refers a coverage issue case (e.g., dental or cosmetic surgery) to you

because a medical necessity review/determination is needed, then review the case

and the HINN, if applicable.

C. Notification of QIO Determination

Upon completion of notice review, take the following actions:

 Admission/Preadmission Notice of Non-coverage

• Issue a notice to all affected parties indicating either that the admission

was non-covered (i.e., the hospital was correct in issuing the notice) or

that the Medicare program would have covered the admission (i.e., the

hospital notice was not issued correctly).

• If Medicare should have covered the admission and the beneficiary was

admitted after receipt of notice, notify the hospital, attending physician,

beneficiary, and intermediary that the notice is invalid. Instruct the

hospital to refund any monies collected from the beneficiary except for the

applicable coinsurance and deductible amounts, personal convenience

services, and items not covered by Medicare. The hospital may then

submit a claim for Medicare payment, if appropriate.

 Continued-stay HINN

• For PPS cases, if there is a Diagnosis Related Group (DRG) change as a

result of DRG validation, issue the notice;

• If you concur with the hospital that continued inpatient hospital care was

not necessary from the point determined by the hospital, issue the denial

notice and inform the affected parties that you concur with the hospital's

decision (See §§7100-7115);

• If you determine that the hospital level of care ended earlier than

determined by the hospital and additional days of care or costs are denied

(non-PPS cases or PPS outlier cases), issue the denial notice (See §§7100-

7115);

• If you determine that the admission was not medically necessary or

appropriate, issue an admission denial and determine which party is liable;

or

• If you determine that the hospital's finding is invalid (i.e., the beneficiary

required continued inpatient care) and the beneficiary received services for

which he/she could be charged, notify the hospital, attending physician,

intermediary, and beneficiary. These HINNs are considered inappropriate

(See subsection D). Specify in your notice that the charges were invalid

and, to the extent collected, must be refunded by the hospital to the

beneficiary. The hospital may submit the claim for Medicare payment.

NOTE: Except for those cases reviewed at the beneficiary's or hospital's request, you do

not have to issue a denial notice in cases where you agree with the HINN and the

beneficiary was not liable for the charges.

D. Inappropriate HINN

An inappropriately issued HINN would be any case where:

 The hospital's finding is invalid (e.g., where the admission was covered (See

subsection C.1), and where continued acute care was medically necessary (See

subsection C.2));

 The content of the notice is not in compliance with §414.5 of the Hospital

Manual;

 The patient was charged for hospital services without a notice;

 The patient requires SNF care and there was no available SNF bed (See §7005);

 A continued-stay HINN is issued without your concurrence or the concurrence of

the attending physician (except in cases where the level of care changes from SNF

swing bed services to NF); and

 The beneficiary did not receive written notice when discharged from acute care

and admitted to SNF or NF swing bed services.

NOTE: In cases involving an admission HINN where you determine that the

beneficiary's condition changed from non-acute to acute, assign a deemed date of

admission. Because you agree that the HINN was not issued in error, do not count the

case against the hospital as long as the hospital did not charge the beneficiary for the

covered acute inpatient services.

E. Corrective Action

Take corrective action immediately. If, during the course of your review, you detect that

a particular hospital has issued an inappropriate notice, determine whether:

 The hospital issued a notice of non-coverage that could result in inappropriate

collection of monies from a beneficiary. For example:

• In a beneficiary request for an immediate review of a HINN with attending

physician concurrence, a hospital notice indicates that if you review the

case and deny the care, the beneficiary will be liable beginning the third

day after receipt of the notice; or

• A beneficiary complained that the hospital advised him/her that the care

was non-covered, but a written notice was never issued.

 The hospital issued a notice that the admission or continued inpatient hospital care

was non-covered, but a copy was not submitted to you and the case was identified

from the processed claim data (See §7025.B.1); or

 The notices are improper but do not transfer liability for payment to the

beneficiary (e.g., the HINN states that Medicare made the decision), and the

hospital refuses to change its notices to bring them into conformance with

requirements.

Advise the hospital that issuing invalid notices that result in an improper collection of

monies from beneficiaries is a violation of the hospital's Medicare provider agreement.

The hospital must make immediate restitution except for the applicable deductible and

coinsurance amounts, and if applicable, report the refund (proof of payment) to you and

the intermediary.

The hospital's failure to correct its notices and bring them into conformance with the

requirements will lead to referral of the hospital to the regional Office of Investigations,

Office of Inspector General, Health & Human Services, for enforcement under

§1886(f)(2)(B) of the Act.

Other examples of inappropriate notices and corrective actions include, but are not

limited to:

 Cases, in which you initially concurred with the hospital on the issuance of the

notices but upon reconsideration or retrospective validation review (See

§7005.B.2) it is determined that in two or more cases the notices should not have

been given (e.g., pertinent information on the cases was not provided), perform

the notice review of cases where the attending physician and hospital do not

concur by requiring medical records on every request for review; and

 Cases, in which a pattern of abuse is identified (e.g., where you determine that

inpatient care was medically necessary but a notice of non-coverage was given)

that meets the definition of a substantial violation in a substantial number of cases

or a gross and flagrant violation, develop a sanction recommendation in

accordance with §§9000-9070.

7030 - Beneficiary Liability Related to Review of Hospital-Issued Notice

of Non-coverage - (Rev. 4, 07-18-03)

For beneficiary liability determination instructions, see §4230.D.

7035 - Provider Liability - (Rev. 4, 07-18-03)

A provider is considered to have knowledge as of the date of notice that furnished (or

proposed) services were non-covered if it issued a notice of non-coverage to the

beneficiary (See 42 CFR 411.406(d)).

7040 - Right to Reconsideration - (Rev. 4, 07-18-03)

A. You Disagree With the Hospital's Determination

If you disagree with the hospital's determination of non-coverage (i.e., you determine that

the care was covered), your decision is not subject to reconsideration as this is neither a

denial determination nor a QIO determination under §1154 of the Act.

B. You Agree With the Hospital's Determination

If you agree with the hospital's determination either prior to or after issuance of the

hospital's notice, issue a denial notice. Your determination is subject to reconsideration

in accordance with 42 CFR Part 478 and instructions found in §§7100-7115.

7045 - Notice of Discharge and Medicare Appeal Rights Citations and

Authority - (Rev. 4, 07-18-03)

Section 4001 of the Balanced Budget Act of 1997 (BBA) (Public Law 105-33) enacted

August 5, 1997, added §§1851 through 1859 to the Social Security Act (the Act) to

establish a new Part C of the Medicare program known as the Medicare + Choice (M+C)

Program. Medicare Part C establishes a new authority permitting contracts between CMS

and a variety of different managed care and fee-for-service entities (e.g., coordinated care

plans). Regulations require that each M+C enrollee must receive a Notice of Non-coverage (NONC) before being released from the hospital once it is determined that

inpatient hospital care is no longer necessary (See 42 CFR 422.620). The NONC is now

referred to as the Notice of Discharge and Medicare Appeal Rights (NODMAR). The

enrollee remains entitled to inpatient hospital care until he/she receives the NONC of that

care. An enrollee or his/her representative that disagree with the hospital or M+C

determination may only obtain QIO review of the NODMAR by requesting an immediate

QIO review (See 42 CFR 422.622).

Until January 1, 2003, existing cost-based contracts established under §1876 of the Act

are governed by regulatory provisions in 42 CFR Part 417 (See §1876(h)(5)(B)).

Included in that Part are two protections available to managed care enrollees who believe

they are being discharged prematurely from a hospital: immediate QIO review as

provided by 42 CFR 417.605 or expedited internal review by the HMO or CMP (See 42

CFR 417.609). The regulatory authority for these organizations to issue NODMARs is

found at 42 CFR 417.440(f).