Knowledge Base Article

I love reading. And although people’s reading preferences vary, sometimes I read a book that is so well written and has such a great storyline that I have to recommend it to my friends. Unfortunately, a lot of my reading is not just for the fun of reading. I read numerous newsletters and government publications to stay current on the happenings of Medicare rules and regulations. Sometimes even this necessary reading leads to an article that I feel compelled to share with others because it clearly and thoroughly explains a Medicare issue. This week I must recommend the Palmetto GBA article on Resolution Tips for Overlapping Claims.

Overlapping claims can be sneaky. You don’t even know you have one until Medicare rejects your claim. This is because avoiding overlapping claims depends on the information you get from patients and other facilities or agencies and on correct billing by your facility as well as that of other Medicare providers. The basic rules are:

• A patient cannot be an inpatient in two different facilities at the same time,
• Outpatient services are included in inpatient stays with only a few exceptions,
• Some Medicare services (e.g. home health) include certain other outpatient services, and
• Hospice is responsible for all Medicare services related to the hospice condition except the professional services of the patient’s attending physician/practitioner.

The possibilities for overlapping claims is large – per the Palmetto article, “An overlapping situation may occur between hospitals for inpatient stays, which include [Inpatient Psychiatric Hospitals (IPH), Long Term Care Hospitals (LTCH), Inpatient Rehab Facilities (IRF), Critical Access Hospital (CAH)], hospitals for outpatient services, Skilled Nursing Facilities (SNFs), Home Health Agencies (HHAs), Hospice agencies, Outpatient Rehab Facilities (ORF), Comprehensive Outpatient Rehab Facilities (CORF), End Stage Renal Disease (ESRD) Facilities, or a combination of one provider type and another.”

Here are some tips I gleaned from this article specifically for hospitals on ways to avoid overlapping claims:

• Verify patient eligibility by questioning the patient/family carefully and by checking Medicare electronic eligibility systems.
• Establish a good relationship with the other providers in your area so that you can work together to resolve overlap situations.
• Ensure your discharge status code is correct. Coders need to accurately understand the discharge status codes and work with Case Managers if the record is unclear. Post-discharge follow-up with the patient may be required – did the patient start home health services as planned, was their nursing home stay approved as skilled, etc. Also understand that you will not always be aware of where the patient goes when they leave your hospital and will only find out when Medicare asks you to adjust your discharge status. It is appropriate to change your discharge status based on Medicare request, although I recommend keeping documentation of this in your medical record or independently verifying the patient’s post-discharge care.
• Know the billing rules when patients go from or to other inpatient facilities – when a patient is discharged and readmitted to an LTCH within 3 days, payment is made to the LTCH; IPFs and IRFs must use condition code 74 when a patient is admitted to a hospital but returns to their facility within 3 days.
• A patient cannot receive home health services or outpatient services during an inpatient stay. Any outpatient services provided to the patient during an inpatient admission must be bundled into the inpatient claim.
• Know and understand the 3-day payment window rule. All services the day of admission are bundled into the inpatient claim; all diagnostic services within 3 days of admission are bundled; and therapeutic services within 3 days of admission that are related to the reason for admission are bundled into the inpatient claim.
• Same-day readmissions to the same hospital are combined to one claim unless the reason for the second admission is unrelated to the reason for the first stay. In that case, you would report condition code B4 on the second inpatient claim.
• Understand consolidated billing rules for SNFs and home health agencies. Certain outpatient services are separately billable to Medicare when provided to a SNF or HH patient. See SNF Consolidated Billing and Home Health PPS for more information.
• Hospice overlaps can be especially challenging for hospitals. If your hospital has an outreach laboratory, testing on hospice patients should generally be billed back to the hospice. The Palmetto article offers the following guidance for all provider types overlapping hospice:

“Providers of all types whose claims are overlapping a hospice election should contact the Hospice agency to determine if the services are related to the terminal illness. If related, payment arrangements should be made with the hospice provider. Services that are not related to the terminal illness should be billed with a 07 Condition Code…. Providers who suspect that the hospice may no longer be in business and are unable to verify if their services are related, or if the hospice has failed to update the revocation indicator should contact their MAC for assistance.” 

Overlapping claims can be sneaky, challenging and frustrating. Again, I recommend this Palmetto article for more complete information. Being more informed and prepared will not remove all the challenges of overlapping claims but knowing what to expect and how best to respond may relieve some frustrations.