Industry News

CMS Issues a Ruling and Proposed Rule on Medicare Part B Billing Policies for Hospital Outpatient Services

The Centers for Medicare & Medicaid Services (CMS) recently issued a proposed rule authorizing Medicare Part B payment following a denial of a Part A hospital inpatient admission claim due to medical necessity. CMS also released a ruling on March 13 meant to compliment the proposed rule’s policy.

Under both the ruling and proposed rule, when a claim for inpatient services under Part A is denied, Medicare will allow hospitals to resubmit those denied claims under Part B where the services would have been reasonable and necessary had the hospital treated the beneficiary as an outpatient. CMS will only allow claims for inpatient services to be resubmitted; hospitals cannot resubmit claims for services that explicitly require outpatient status for payment. Additionally, hospitals must bill separately for outpatient services provided in the three-day payment window (or one-day payment window for hospitals not subject to the Inpatient Prospective Payment System).

The policy went into effect on March 13, 2013 pursuant to the CMS ruling. The proposed rule, while issued concurrently with the ruling, will not be effective until finalized.

The CMS ruling is available at:

The proposed rule is available at:

Medicare Hospital Insurance (Part A) and Medicare Supplementary Medical Insurance (Part B); Ruling CMS-1455-R, 78 Fed. Reg. 6614 (March 18, 2013).

Medicare Program; Part B Inpatient Billing in Hospitals; Proposed Rule, 78 Fed. Reg. 16632 (March 18, 2013).