Q&A: Submitting a Part A noncovered claim

Q: What is the process for submitting a claim for an inpatient hospitalization when our utilization review committee determined after discharge that the inpatient admission was not medically necessary?

A: If the inpatient Part A claim has not already been denied, the provider must first submit a Part A noncovered claim, also known as a “provider liable” claim, on TOB 0110 confirming the hospital will not seek Part A payment for the admission. The inpatient Part A claim must be processed and the remittance advice must be issued prior to billing for inpatient Part B payment. The provider must report the Occurrence Span Code M1 to indicate the period of noncovered care on the Part A claim. The provider must refund any inpatient deductible or copayments to the patient.

Services prior to the noncovered inpatient order for admission are considered outpatient services and should be submitted by the hospital on an outpatient Part B claim on TOB 013X. Normally, the hospital would have billed these services on the inpatient Part A claim for payment under the DRG because of the three-day payment window. However, when the inpatient admission is not covered and no DRG payment is applicable, the three-day window is also not applicable and the outpatient services should be billed separately. The hospital may submit the outpatient Part B claim at the same time as the inpatient Part A noncovered claim.

For more information, see the Patient Status Training Toolkit for Medicare Utilization Review, Second Edition.