Inpatient Part B benefit – limited services payable under Part B to hospital inpatients

Although there were several transmittals and other CMS issuances published during the past week, they were primarily technical in nature rather than of general interest.  Having just completed a Medicare Boot Camp (Hospital Version) course in Chicago, I was reminded of a topic that I have wanted to discuss for some time.   Although not new–that is, there have been no recent changes—there are several things that participants seem surprised about when we discuss them in class.  Under the limited inpatient Part B benefit, hospitals can bill Medicare for certain nonphysician services furnished by a hospital (directly or under arrangements) to an inpatient of the hospital when these services are not covered under Part A.

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In PPS hospitals, Medicare will pay for these limited inpatient services under Part B when any of the following apply:

• The patient has exhausted his Part A benefit days prior to that admission.
• That entire admission was disapproved as not reasonable and necessary;
• During an otherwise covered Part A stay, the days on which these services were furnished were disapproved as not reasonable and necessary;
• The patient was not otherwise eligible for, or entitled to, coverage under Part A.

The services that are included in the inpatient Part B benefit include the following:

• Diagnostic tests;
• Surgical dressings, and splints, casts and other devices for fractures;
• Prosthetic and orthotic devices;
• Outpatient therapy services;
• Certain screening and other preventive services otherwise covered under Part B;
• Ambulance services; and
• Certain drugs otherwise covered under Part B (e.g., blood clotting factors for hemophilia).  (See Medicare Benefit Policy Manual, Chapter 6, Section 10 for more details.)

Most of these services would be included in the patient’s coverage under Part A, if provided during an otherwise Part A covered stay.  The screening and other preventive services, however, are not covered under Part A, and the cost of those services is not included in the applicable DRG payment.  Therefore, even if provided during an otherwise Part A covered stay, the hospital must bill for the screening and other preventive services on a separate inpatient Part B (012X) claim.  Many hospitals have been unaware of this, and have not submitted a separate claim for these services.

The second thing that hospitals are often surprised about is that Medicare does not pay under the limited inpatient Part B benefit for some of the more expensive surgical and other procedures that would otherwise be covered under Part B if provided in the outpatient setting.

Finally, hospitals are often unaware of the fact that payment is generally not made under the limited inpatient Part B benefit for services provided on the non-covered days of a stay for which there was at least one covered day at the time of admission.  This is because Medicare is obligated to pay the entire DRG for that stay if there was at least one covered day at the time of admission.  It is not clear whether there would be payment under Part B for the screening and other preventive services furnished on non-covered days, since those services would not be included in the DRG payment.

Hospitals are encouraged to review their procedures for billing services under the limited inpatient Part B benefit.  Such services must be reported on a separate type of bill (012X) from that on which they generally bill their inpatient Part A covered services.

QUESTION: Has your hospital been billing for the screening and other preventive services provided during a covered inpatient Part A stay on a separate 012X claim? Click here to respond.