Medicare Claims Processing Manual

1 Medicare Claims Processing Manual Chapter 3 - Inpatient Hospital Billing Table of Contents (Rev. 2026, 08-13-10) (Rev. 2057, 09-17-10) Transmittals for Chapter 3 Crosswalk to Old Manuals 10 - General Inpatient Requirements - Forms - Focused Medical Review (FMR) - Spell of Illness - Payment of Nonphysician Services for Inpatients - Hospital Inpatient Bundling 20 - Payment Under Prospective Payment System (PPS) Diagnosis Related Groups (DRGs) - Hospital Operating Payments Under PPS - Hospital Wage Index - Outliers - Cost to Charge Ratios - Statewide Average Cost to Charge Ratios - Threshold and Marginal Cost - Transfers - Reconciliation - Time Value of Money - Procedure for Fiscal Intermediaries to Perform and Record Outlier Reconciliation Adjustments - Specific Outlier Payments for Burn Cases - Medical Review and Adjustments - Return Codes for Pricer - Computer Programs Used to Support Prospective Payment System - Medicare Code Editor (MCE)

2 - Paying Claims Outside of the MCE - Late Charges 60 - Swing-Bed Services 70 - All-Inclusive Rate Providers - Providers Using All-Inclusive Rates for Inpatient Part A Charges 80 - Hospitals That Do Not Charge - Medicare Summary Notice (MSN) for Services in Hospitals That Do Not Charge 90 - Billing Transplant Services - Kidney Transplant - General - The Standard Kidney Acquisition Charge - Billing for Kidney Transplant and Acquisition Services - Heart Transplants - Artificial Hearts and Related Devices - Stem Cell Transplantation - Allogeneic Stem Cell Transplantation - Autologous Stem Cell Transplantation (AuSCT)

3 - Billing for Stem Cell Transplantation - Liver Transplants - Standard Liver Acquisition Charge - Billing for Liver Transplant and Acquisition Services - Pancreas Transplants With Kidney Transplants - Pancreas Transplants Alone (PA) - Intestinal and Multi-Visceral Transplants 100 - Billing Instructions for Specific Situations - Billing for Abortion Services - Payment for CRNA or AA Services - Resident and Interns Not Under Approved Teaching Programs - Billing for Services After Termination of Provider Agreement - Billing Procedures for a Provider Assigned Multiple Provider Numbers or a Change in Provider Number - Review of Hospital Admissions of Patients Who Have Elected Hospice Care - Inpatient Renal Services system until a human heart becomes available for transplant

4 (often referred to a "bridge to transplant"). Medicare does cover a Ventricular Assist Device (VAD). A VAD is used to assist a damaged or weakened heart in pumping blood. VADs are used as a bridge to a heart transplant, for support of blood circulation postcardiotomy or destination therapy. Refer to the NCD Manual , section for coverage criteria. The MCE creates a Limited Coverage edit for procedure code This procedure code has limited coverage due to the stringent conditions that must be met by hospitals. Where this procedure code is identified by MCE, the FI shall determine if coverage criteria is met and override the MCE if appropriate.

5 Effective for discharges on or after May 1, 2008, the use of artificial hearts will be covered by Medicare under Coverage with Evidence Development when beneficiaries are enrolled in a clinical study that meets all of the criteria listed in Pub. 100-03, Medicare NCD Manual , section - Stem Cell Transplantation (Rev. 1571; Issued: 08-07-08; Effective Date: 08-01-08; Implementation Date: 08-15-08) Stem cell transplantation is a process in which stem cells are harvested from either a patient's or donor's bone marrow or peripheral blood for intravenous infusion.

6 Autologous stem cell transplants (AuSCT) must be used to effect hematopoietic reconstitution following severely myelotoxic doses of chemotherapy (HDCT) and/or radiotherapy used to treat various malignancies. Allogeneic stem cell transplant may also be used to restore function in recipients having an inherited or acquired deficiency or defect. Bone marrow and peripheral blood stem cell transplantation is a process which includes mobilization, harvesting, and transplant of bone marrow or peripheral blood stem cells and the administration of high dose chemotherapy or radiotherapy prior to the actual transplant.

7 When bone marrow or peripheral blood stem cell transplantation is covered, all necessary steps are included in coverage. When bone marrow or peripheral blood stem cell transplantation is non-covered, none of the steps are covered. Allogeneic and autologous stem cell transplants are covered under Medicare for specific diagnoses. Effective October 1, 1990, these cases were assigned to MS-DRG 009, Bone Marrow Transplant. The FI's Medicare Code Editor (MCE) will edit stem cell transplant procedure codes 4101, 4102, 4103, 4104, 4105, 4107, 4108, and 4109 against diagnosis codes to determine which cases meet specified coverage criteria.

8 Cases with a diagnosis code for a covered condition will pass (as covered) the MCE noncovered procedure edit. When a stem cell transplant case is selected for review based on the random selection of beneficiaries, the QIO will review the case on a post-payment basis to assure proper coverage decisions. Procedure code (bone marrow transplant, not otherwise specified) will be classified as noncovered and the claim will be returned to the hospital for a more specific procedure code. The A/B MACs or the FI may choose to review if data analysis deems it a priority.

9 - Allogeneic Stem Cell Transplantation (Rev. 1, 10-01-03) , , , A. General Allogeneic stem cell transplantation (ICD-9-CM Procedure Codes , , , and , CPT-4 Code 38240) is a procedure in which a portion of a healthy donor's stem cells are obtained and prepared for intravenous infusion to restore normal hematopoietic function in recipients having an inherited or acquired hematopoietic deficiency or defect. See the National Coverage Determinations Manual for more information. Expenses incurred by a donor are a covered benefit to the recipient/beneficiary but, except for physician services, are not paid separately.

10 Services to the donor include physician services, hospital care in connection with screening the stem cell, and ordinary follow-up care. B. Covered Conditions 1. Effective for services performed on or after August 1, 1978: For the treatment of leukemia, leukemia in remission (ICD-9-CM codes through ), or aplastic anemia (ICD-9-CM codes through ) when it is reasonable and necessary; and 2. Effective for services performed on or after June 3, 1985: For the treatment of severe combined immunodeficiency disease (SCID) (ICD-9-CM code ), and for the treatment of Wiskott - Aldrich syndrome (ICD-9-CM ).