Office of Medicare Hearings and Appeals (OMHA)
Information on CMS Ruling 1455-R
(Part B billing options for denied Part A hospital claims)
The Centers for Medicare & Medicaid Services (CMS) issued CMS Ruling 1455-R (the “Ruling”) and the Part B inpatient billing proposed rule (the “proposed rule”) on March 13, 2013. 78 Fed. Reg. 16614 and 78 Fed. Reg. 16632 (Mar. 18, 2013). The Ruling established an interim process for rebilling Part A inpatient claims that were denied as not medically reasonable and necessary and the proposed rule announced policies for Part B inpatient billing following these types of denials.
On August 2, 2013, CMS issued the “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital Prospective Payment System and Fiscal Year 2014 Rates; Quality Reporting Requirements for Specific Providers; Hospital Conditions of Participation; Payment Policies Related to Patient Status” final rule (the “final rule”) (CMS-1599-F and CMS-1455-F), which adopted many of the policies included in the proposed rule and provided for broader application of the timeframes for rebilling claims than were established in the Ruling. 78 Fed. Reg. 50496 (Aug. 19, 2013). In particular, the final rule provides that CMS will permit hospitals to follow the Part B billing timeframes established in the Ruling after the effective date of the final rule, provided: (1) the Part A claim denial was one to which the Ruling originally applied;1 or (2) the Part A inpatient claim has a date of admission before October 1, 2013, and is denied after September 30, 2013, on the grounds that although the medical care was reasonable and necessary, the inpatient admission was not.
The final rule also permanently expands the scope of Part B inpatient services that a hospital may bill for when a Part A inpatient admission is denied by a Medicare review contractor as not reasonable and necessary. It also clarifies adjudicators’ scope of review and general claim submission rules.
CMS rulings are published under the authority of the CMS Administrator and are binding on all HHS components that adjudicate matters under the jurisdiction of CMS, including Administrative Law Judges and the Medicare Appeals Council. See 42 C.F.R. §§ 401.108, 405.1063(b). The Ruling supersedes any prior interpretations of Medicare payment policy.
The Ruling and final rule explain that adjudicators may only consider the originally billed Part A inpatient admission denial. Adjudicators may not consider potential coverage under Part B because hospitals are solely responsible for determining whether to bill for services under Part A or Part B, and submitting the appropriate claims. If no Part B claim was submitted by the hospital, there is no appealable initial determination on Part B services. Therefore, adjudicators cannot consider Part B coverage for the services furnished.
Pursuant to the Ruling and the final rule, Administrative Law Judges may only address the Part A claims that were submitted by the hospital. However, the Ruling allows hospitals to bill for certain outpatient and inpatient services under Part B when a Part A claim was denied on the grounds that although the medical care was reasonable and necessary, the inpatient admission was not. CMS will permit those Part B inpatient and Part B outpatient claims described above (those that were originally subject to the Ruling and those that are now subject to the Ruling’s timeframes pursuant to the final rule) to be re-billed outside of the one-year claim submission period, provided the denied Part A claim was timely filed. Generally, hospitals have 180 days from the date of receipt of an appeal dismissal notice or a binding decision on a Part A inpatient claim to file Part B claims. See the CMS Ruling and the final rule for important details on documentation requirements, what services may be claimed, and how to submit the Part B claims.
If a hospital wishes to submit claims for services under Part B, the CMS Ruling and final rule require that the Part A appeal be withdrawn (if it is pending before an adjudicator) or an appeal to a higher level is not pursued and becomes binding or final (including if a decision or dismissal has been made and not yet appealed to the next level). This is to avoid duplicate billing.
If an appeal is pending at OMHA, a request to withdraw the Part A appeal must be submitted to the assigned Administrative Law Judge or to the OMHA Central Operations Division if an Administrative Law Judge has not yet been assigned. Please see the CMS Ruling 1455-R Hospital Request for Withdrawal Instructions for comprehensive instructions on filing requests to withdraw and a recommended form to use so OMHA can process your request as quickly as possible.
1 The Ruling originally applied to Part A hospital inpatient claims that were denied by a Medicare review contractor because the inpatient admission was determined not reasonable and necessary, provided the denial was made: (1) while the Ruling is in effect (on and after March 13, 2013, through the effective date of the final rule, October 1, 2013); (2) prior to the effective date of the Ruling, but for which the timeframe to file an appeal has not expired; or (3) prior to the effective date of the Ruling, but for which an appeal is pending. See 78 Fed. Reg. at 16616.