Timely Claim Filing Rules: Impact on Re-Billing Inpatient Ancillary Services

One of the more difficult issues facing hospitals today is related to the timely claim filing rules associated with re-billing ancillary charges for denied inpatient stays.

Under the RAC demonstration project, CMS allowed hospitals to re-bill their RAC denied inpatient short stay hospitalization cases as outpatient claims. The UB-04 claim type used to submit these claims for benefits was the traditional 13x; and Medicare Part B hospital benefit policies dictated coverage of services and payments.

Under the permanent RAC program hospitals are not afforded this option for recovering lost revenue; as a result there have been many inpatient claim denials. The permanent RAC program allows only specific ancillary charges to be re-billed under Part B using the Medicare claim type 12x. The 12x claim has limited and defined coverage and does not all inpatient ancillary services to be billed (see Medicare Benefit Policy Manual, Pub. 100-02, Chapter 6).

Although the re-billing of inpatient ancillary services under Part B can work fine when trying to capture some of the lost revenue created by the RAC denials; it will only be allowed if the claim dates of service fall within the claim timely filing parameters. Currently the timely filing rules limit claim submissions to 15-27 months from date of service. With the RAC look back date set at 10/1/2007, we will soon cross the calendar year into 2010; thus the ability to re-bill the ancillary charges for inpatient denied claims timely may be jeopardized. This issue is also a deciding factor for hospitals considering whether to appeal inpatient denials because the 12x re-bill cannot be filed if hospitals are filing for appeals.

I have heard thru the healthcare consulting grapevine that CMS is reviewing the claim filing policy as well as the demonstration project allowance to re-bill denied inpatient claims as outpatients.  Have any of you heard about the CMS review of these issues? If so, please comment as we should all be on alert for changes in either of these policies.

Written by Margaret Fortin, CPC, CPC-H