Q&A: Billing self-denied inpatient stays

Q: How do we bill for services when our utilization review (UR) team determines postdischarge that an inpatient admission was not medically necessary? Are these services billed as outpatient or inpatient?

A: If the determination that an admission is not medically necessary is made after the patient’s discharge (i.e., a self-denial), the patient’s status remains inpatient and the care is billed for Part B payment. Inpatient Part B payment is available if the following occurs:

• The inpatient admission is denied as not reasonable and necessary through contractor denial or self-denial under the CoPs for UR (42 CFR 485.30(d); and
• The services would have been reasonable and necessary as outpatient services; and
• The services meet all applicable Part B coverage and payment conditions.

Note that Medicare also makes limited inpatient Part B payment if the patient has no entitlement to Part A, the patient has exhausted their Part A benefits, or the services are only covered under Part B (i.e., preventative services). Inpatient Part B payment in these circumstance is beyond the scope of this handbook; however, more information can be found in the Medicare Claims Processing Manual, Chapter 4 §240.

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