Inpatient admissions, Medicare

When coverage begins or ends during a hospital admission, plan responsibility is established by the Centers for Medicare & Medicaid Services (CMS) in chapter 4 of the Medicare Managed Care Manual, "Benefits and Beneficiary Protections." Priority Health Medicare administers coverage as follows.

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See: Medicare observation and Condition Code 44, and Authorization rules for urgent/emergent admissions

Inpatient facility charges

The plan in which a Medicare member is enrolled on the date of admission to the hospital is responsible for payment for inpatient hospital services from the point of admission to the point of discharge, even if the member changes to a different plan during the time he or she is in the hospital.

Covered inpatient services

For more information on coverage for inpatient services as defined by the Centers for Medicare & Medicaid Services (CMS), see the Medicare Benefit Policy Manual, section 1, chapter 1, Inpatient Hospital Services Covered Under Part A. Services include:

  • Bed and board
  • Nursing services and other related services
  • Use of hospital and CAH facilities
  • Medical social services
  • Drugs, biologicals, supplies, appliances and equipment
  • Certain other diagnostic or therapeutic services
  • Medical or surgical services provided by interns/residents-in-training
  • Transportation services, including transport by ambulance
  • Nonphysician services which must be provided directly or arranged by the hospital (See also Section 170, Chapter 16, Medicare Claims Processing Manual)

"2-Midnight Rule" for admissions and coverage

Final Rule takes effect Oct. 1, 2014:  On August 2, 2013, the Centers for Medicare and Medicaid Services (CMS) issued a final rule, CMS-1599-F, known as the "2-Midnight Rule." It:

  • Updates 2014 Medicare payment policies and rates under the Inpatient Prospective System (PPS) and the Long-Term Care Hospital Prospective Payment System (LTCH PPS)
  • Modifies and clarifies CMS' longstanding policy on how Medicare contractors review inpatient hospital and critical access hospital (CAH) admissions for payment purposes

Under this final rule, surgical procedures, diagnostic tests and other treatments (in addition to services designated as inpatient-only) are generally appropriate for inpatient hospital admission and payment under Medicare Part A when (1) the physician expects the beneficiary to require a stay that crosses at least two midnights and (2) admits the beneficiary to the hospital based upon that expectation. See updates at the CMS website.

However: Priority Health is a Medicare Advantage Organization (MAO), falling under Part C Medicare rules. MAOs "need not follow Original Medicare claims processing procedures ... [but] may create their own billing and payment procedures." (Medicare Managed Care Manual, Chapter 4.)

Therefore, for implementation of the 2-Midnight Rule, Priority Health will apply its utilization management rules to coordinating care and determining appropriateness of admissions, as follows:

  • Priority Health Medicare Care Management will continue to use clinical criteria to determine bed status.
  • The clock will be one determinant, but not the sole determinant.
  • We will partner with the facility UM team to discuss member inpatient vs observation status, using Medicare and InterQual® evidence-based standards of care to determine bed type.
  • We will support all of our inpatient partners to promote discharge to the most appropriate level of care.

Professional services charges

The plan in which the member is enrolled is responsible for payment of professional hospital services through the member's date of disenrollment (termination of coverage).

If the member has not yet been discharged and becomes covered by a new Medicare plan, the new plan is responsible for charges from the member's effective date of coverage to the point of discharge.

Covered professional services

Priority Health covers all professional services covered by Original Medicare as specified in the Medicare Benefit Policy Manual, section 10 et seq., chapter 6, "Other Circumstances in Which Payment Cannot Be Made Under Part A.

Inpatient acute rehabilitation

Priority Health Medicare follows InterQual®criteria for acute rehabilitation.

Program requirements for acute rehabilitation:

  1. The patient is expected to get comprehensive rehabilitation services at least 3 hours per day of skilled therapy at least 5 days per week.
  2. Rehabilitation medical practitioner with specialized training and experience in rehabilitation services provider admission approval, assessment of oversight, and program coordinator.
  3. Skilled rehabilitation nursing services on-site availability 24 hours/day.
  4. Preadmission screening assessment completed by rehabilitation professional.
  5. Treatment plan developed within 2 days of admission.
  6. Interdisciplinary and goal-oriented treatment by professional nursing, social worker, or case manager , and rehabilitation therapists with specialized training, education, and/or certification.
  7. Daily documentation of patient treatment interventions with weekly documentation of patient progress including evaluation of goal status, progress towards outcomes, and any modification to the treatment plan.
  8. Interdisciplinary team meeting weekly, inclusive of ongoing comprehensive discharge planning.
  9. Pharmacy and diagnostic services available.

The expectation and goal is home from an acute rehabilitation facility. If the patient is not improving to the level of expectation during the first three weeks, the acute rehabilitation facility will continue to provide skilled therapy 3 hours a day for at least 5 days a week for at least 3 weeks.

Medicare Advantage and Medicare Advantage with Prescription Drug (MAPD) may cover benefits, make authorizations and pay claims differently from Original Medicare.

An acute rehabilitation may not appeal on behalf of a member unless the acute rehabilitation facility is the members appointed representative ; proof may be required by QIO.