Proper Billing for Various Medicare Advantage HMO Claims

As you may know, Medicare Part C (aka Medicare + Choice, Medicare Advantage, or Medicare HMO) is a payment system apart from the traditional Medicare that MACs work with (Medicare Parts A and B.) Even though it is separate, CMS policy requires MACs to reimburse certain HMO type items through the Medicare Part A cost report. The items that traditional Medicare Part A pays for include DSH, IME, GME, and NAH.

For the majority of their reimbursement, providers normally bill their HMO claims through their Medicare Advantage plan. However, in order to reimburse these additional items for the Medicare HMO claims, MACs need to have the providers also bill the claim through the FISS system, as they do their other claims for Medicare Part A. This duplicate billing is known as "shadow billing."

Over the years, there have been various Change Requests issued instructing contractors and providers on different ways to bill the HMO claims. As issues have been noted, system and instruction changes were necessary.

For a much more detailed history of the HMO billing issues, see the Audit Advisement Guidance Log dated 11/12/2009, under the "other" Key Issue. The summary reads "Proper Billing of HMO Claims in different situations"

Providers should review the listing below of various HMO scenarios and bill according to the instructions given. Note that you should follow the instructions based on the type of facility you are billing for. For example, if you have a Non-Teaching IRF Rehab unit of a Teaching Acute Care Hospital, you should follow the rule for Non-Teaching IRFs.

Scenario 1: Non "Teaching" Hospitals & IRF Hospitals or Units.

For the purposes of this instruction, "non-teaching" means that the provider does not have any graduate Medical Education programs (DGME or IME) and they do not have any Nursing and Allied Health Programs (NAH).

IPPS Hospitals & IRFs (Hospitals or Units) are required to submit informational only bills for purposes of accumulating the HMO information for inclusion in the SSI ratio. This ratio is used in the DSH (for IPPS) and LIP (for IRF PPS) calculations. This also applies to LTCHs even though they do not directly receive DSH, as an estimate of what the facility would have received under DSH if they were an Acute Care facility becomes part of the LTCH outlier calculation.

These scenario 1 HMO claims should be billed under a 111 TOB with covered days and charges, using condition code 04 (do not use condition code 69.) In addition, IRFs bill using CMS Revenue Code A9999.

See Change Requests 5647 (July 20, 2007) and 6329 (March 6, 2009) from CMS for more detail. Note that although these HMO claims will be included in the SSI ratio for all periods that they relate to, the claims will only be captured in the PS&R for Discharges on or after 7/1/2010.

Scenario 2: Graduate "Teaching" IPPS Hospitals

Graduate Teaching IPPS Hospitals are required to submit HMO bills for purposes of payment of IME on each claim, payment of GME on each claim, and accumulating the HMO information for inclusion in the SSI ratio. This ratio is used in the DSH (for IPPS) calculations.

These scenario 2 HMO claims should be billed under a 111 TOB with covered days and charges, using condition code 04 AND condition code 69.

See Change Request 332 (July 1998) from CMS for more detail.

Note that if these claims are billed using the instructions above, they will be included in the MEDPAR data that CMS uses to calculate the SSI ratio and the claims will also be captured in the PS&R Report Type 118 for all related periods.

Scenario 3: Non-IPPS Hospitals (LTCH, Rehab, Psych, Children's, Cancer) that have DGME and/or N&AH programs

These hospitals are reimbursed through their cost report for DGME and N&AH.

These scenario 3 HMO claims should be billed under a 110 TOB with non-covered days and charges, using condition code 04 AND condition code 69.

See Change Request 2476 (July 1, 2003) from CMS for more detail.

These claims are captured on the PS&R report type 118. Only the Rehabs and LTCHs should be captured in the SSI% for LIP/DSH. The others do not have a DSH type policy. Even though LTCHs do not directly receive DSH, an estimate of what the facility would have received under DSH if they were an Acute Care facility becomes part of the LTCH outlier calculation.

Scenario 4: IPPS and/or Non-IPPS Hospitals that only have a N&AH Program, with no Graduate Medical Education Programs (GME/IME)

Any hospital, IPPS or non-IPPS, that operates approved nursing or allied health education (NAH) programs AND treats Medicare Advantage (HMO) patients should submit the claims in order to receive add-on NAH payments. The information from these bills will be reported on report type 118 of the PS&R and it will also be used in the calculation of the SSI ratio for DSH/LIP purposes.

These scenario 4 HMO claims should be billed under a 110 TOB with non-covered days and charges, using condition code 04 AND condition code 69.

See Change Request 2476 (July 1, 2003) from CMS for more detail.

Note that if you receive a reason code 31023 upon billing, this simply means that the "no-pay" code on the claim needs to be populated with an "N." If you are unable to populate this field or if you get any other reason codes that you cannot interpret, please contact the claims customer service area based on your region for assistance.

Page Last Updated: Thursday, 15-Dec-2011 14:45:55 CST