In a twist of irony only to be expected in the Recovery Audit program, the Medicare Administrative Contractor (MAC) for six Midwest states is not prepared to accept Part A-to-Part B re-bills.

As reported to RACmonitor last week by McLaren Greater Lansing Hospital Compliance Audit Coordinator Sandra Palmer, Wisconsin Physicians Service (WPS), the MAC for J5 (including Iowa, Kansas, Missouri, and Nebraska) as well as J8 (including Indiana and Michigan) is the unprepared party.

On March 13, the Centers for Medicare & Medicaid Services (CMS) issued Ruling 1455-R, which establishes an interim process for hospitals to bill Medicare for Part B services following a denial of a claim for an inpatient admission deemed not reasonable and/or necessary. 

“A few weeks later, CMS issued temporary instructions for both the Part B types of Bills (TOB), TOB 12x and TOB 13x that can be found at the … link (titled) ‘Ruling 1455-R Billing Instructions,’” Palmer wrote in an email to RACmonitor. “The temporary instructions gave directions for (codes) including code SPN65 in a particular field on the claim, as well as the original, denied inpatient claim number and the most recent adjudication date in the billing notes.”

According to Palmer, not all MACs have made the necessary changes to their claims processing software to allow acceptance of the SPN65 code. 

“According to the WPS customer service representatives, they are unable to give any estimate of when or if their systems will be updated in order to accept the SPN65 code, and hospitals are advised that any claims that they submit at this time will be rejected,” Palmer wrote. “I was told by one WPS customer service representative that they will be ready to accept Part A-to-Part B re-bills when the final rule, CMS 1455-P, goes into effect.” 

To Palmer, this situation is “very concerning to hospitals in the J5 and J8 regions, as it means that they may not be able to take advantage of the interim rule, which temporarily lifts the timely filing requirements.” Palmer also reports that WPS has scheduled a teleconference for June 19 on the topic of Part A-to-Part B re-billing of denied hospital inpatient claims. 

“We do not know when the final rule, CMS 1455-P, will go into effect, but it appears that hospitals in the J5 and J8 regions may have a very short window, if any window at all, to submit Part A-to-Part B claims for cases that have exceeded the timely filing period (one calendar year after the date of service),” Palmer wrote. “In the meantime, the time clock for the 180 days from the date of receipt of the final or binding appeal decision to submit Part B claims keeps ticking.”

When asked about this situation, healthcare attorney and Wachler and Associates principal Andrew Wachler said it would be “unconscionable if, in fact, ALJs (administrative law judges) were precluded from ordering Part B payments on the premise that hospitals could re-bill these services and no present ability to re-bill Part B services exists.”

Wachler went on to explain that ALJs should be able to order Part B payment — at least until all systems are in place.

“Fundamental fairness would suggest that the ALJs retain their authority to order Part B payment at least until the systems necessary to bill Part B are in place and tested,” he wrote in an email to RACmonitor.

“We have recommended to clients that they submit several Part B claims to evaluate the process before dismissing any appeals,” Wachler added. “In the interim, I would try to use this information to persuade an ALJ that the only fair result on any close case is to issue a fully favorable ruling, as there is no current ability for the judge to order Part B payment (when) the systems are not currently in place for the hospital to bill Part B.”

In explaining a possible reason why WPS does not have systems in place to accept Part B re-billing, J. Paul Spencer, the compliance officer for Fi-Med Management, noted that the contractor lost a protest of the MAC award for Jurisdiction 6 to NGS. NGS is scheduled to take over as the Part B MAC for that area in mid-September.

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Chuck Buck is the publisher of RACmonitor.

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