CMS Resolution of a Widespread MAC Error

The American Health Care Association (AHCA) reports that there has been a problem, now resolved, involving a rash of novel hospital billing practices, arising apparently in reaction to RAC audits.  These practices involved the hospitals either after filing a claim or even before filing a claim of changing the patient status to other than inpatient.  This action(s) caused related SNF stays to be automatically denied or “rejected” due to a MAC misunderstanding of the import of certain edits.  The MACs refused to reverse the denials and rejections.   In fact, there should not have been any denials or “rejections.”  

The Center for Medicare and Medicaid Services (CMS) issued an eNotice online on July 9th announcing that MACs are instructed to adjust and pay.  The key text in the attachment is as follows:

On July 9, 2014 The Centers for Medicare and Medicaid services issued a Technical Direction Letter 9TDL)  to all Medicare Administrative Contractors designed to address inpatient SNF claims adversely affected by the qualifying stay edit.  All MACs are expected to post information on their websites about CMS’ update to the Common Working File (CWF) qualifying stay edit for inpatient SNF claims.  Once the MACs post the information, SNF providers that have received this error may adjust their affected claims or contact the MAC in order to have their claims adjusted.   

It is believed that CMS is struggling with the unintended consequences of RAC hospital audits, the new hospital two-midnight and rebilling regulations, and the hospital provider confusion that much of this has unintentionally caused.  And now this confusion on the part of both hospitals and MACs is indirectly hitting nursing facilities. Basically, the following should prevail:

  • A SNF stay should not be denied, if the related hospital stay is denied.
  • A SNF stay should not be denied or rejected, if the hospital rebills after it has submitted the inpatient claim.
  • A SNF stay should not be denied or rejected if the hospital, perhaps based on a UR review before filing the claim, decides not to file an inpatient claim for  a given discharge but, rather, file as something other than inpatient stay (perhaps ER and lots of Part B services).    

If you suspect that you are faced with the above discussed problems, please let your MAC know immediately.  The MAC as indicated above should correct the error.