Kevin Wellen

Many hospitals do not understand this requirement, and failure to comply can have significant repercussions.

Change Request 5647

On July 20, 2007, the Centers for Medicare & Medicaid Services (CMS) published Change Request 5647 (CR 5647), requiring all nonteaching hospitals paid under IPPS, IRFs and LTCHs to submit informational-only bills to their MAC for the MA beneficiaries they treat, so CMS could capture this data, particularly patient days, in the Medicare Provider Analysis and Review (MedPAR) file. CR 5647 was effective October 1, 2006, but implemented January 7, 2008. As of the implementation date, applicable providers are required to submit the MA informational-only bills.

CR 5647 stated that “hospitals may go back and submit claims with discharge dates on or after October 1, 2006 (fiscal year 2007), so that Supplemental Security Income (SSI) data for FY2007 and beyond will include MA patient days.” CMS intended that all applicable providers must bill MA claims with discharges on or after October 1, 2006, but many providers misinterpreted CR 5647 to be prospective only.

Change Request 6821

CMS published Change Request 6821 (CR 6821) on May 20, 2010, after determining many applicable providers failed to follow CR 5647 and had not billed any MA claims for federal FY2007 and FY2008. Consequently, CR 6821 gives the affected providers one last chance to comply and bill all MA claims from October 1, 2006, through September 30, 2008, to their MAC as informational-only claims by August 31, 2010. In addition, providers are now required to submit a signed attestation to their MAC stating they have billed all required MA claims, or that they had no MA claims, for each federal fiscal year by September 15, 2010. CR 6821 also includes real repercussions for providers that do not comply. CMS may instruct MACs to use an SSI ratio of zero percent to calculate Medicare disproportionate share hospital (DSH) payments or take other action that may affect payments for noncompliant providers.

CR 5647 was applicable to all nonteaching hospitals paid under IPPS, IRFs and LTCHs. CR 6821 grants these providers additional time to comply with CR 5647 for claims from October 1, 2006, through September 30, 2008. CMS, in an effort to be considerate to a small number of IPPS hospitals, stated that CR 6821 only applied to IPPS hospitals that “include an operating and/or capital DSH payment amount on their Medicare hospital cost report that uses the FY2007 or FY2008 SSI ratio.”

Many providers misinterpreted this provision to mean IPPS hospitals not receiving a capital or operating DSH payment are not required to submit these informational-only claims. This is patently false, as CMS was granting one-time-only retroactive relief to hospitals that did not receive any capital or operating DSH in 2007 or 2008, and as such, updating their SSI ratios would have no effect on their Medicare reimbursement.

Consequences of Noncompliance

CMS originally justified both change requests by stating it needs the MA days to include in the SSI ratios for hospitals that qualify for DSH payments, low income patient (LIP) payments for IRFs, the short-stay outlier payments for LTCHs and for evaluating compliance with the greater than 25-day average length-of-stay requirement for Medicare patients of LTCHs. However, in recent proposed and final regulations, CMS expanded the use of patient data from these informational-only claims to other payment areas.

Patient data from MA informational-only claims also will be used in the newly expanded low-volume payments for prospective payment system hospitals and to determine electronic health records (EHR) incentive payments.

In addition, while not a direct Medicare payment, any hospital that qualifies for the 340B discount drug program but fails to submit MA informational-only claims may no longer qualify for the 340B program if their SSI ratio is reduced to zero percent and, as a result, their DSH payment percentage falls below the qualifying criteria.

The newly revised Medicare cost report forms for hospitals, 2552-10, has expanded the lines on Worksheet S-3, Part I for reporting of Medicare HMO days. Clearly, CMS intends to use this data where and when they can and will provide real reimbursement disincentives for not complying with the informational-only billing requirement. As a result, all applicable hospitals should be certain they are submitting these bills.

Consult your BKD advisor for more information on this and related topics.