Wednesday, July 27, 2016

Non-covered Charges on Institutional Ambulance Claims

Medicare law contains a restriction that miles beyond the closest available facility cannot be billed to Medicare. Non-covered miles beyond the closest facility are billed with HCPCS procedure code A0888 (“non-covered ambulance mileage per mile, e.g., for miles traveled beyond the closest appropriate facility”). These non-covered line items can be billed on claims also containing covered charges. Ambulance claims may use the –GY modifier on line items for such non-covered mileage, and liability for the service will be assigned correctly to the beneficiary.

The method of billing all miles for the same trip, with covered and non-covered portions, on the same claim is preferable in this scenario. However, billing the non-covered mileage using condition code 21 claims is also permitted, if desired, as long as all line items on the claims are non-covered and the beneficiary is liable. Additionally, unless requested by the beneficiary or required by specific Medicare policy, services excluded by statute do not have to be billed to Medicare.

When the scenario is point of pick up outside the United States, including U.S. territories but excepting some points in Canada and Mexico in some cases, mileage is also statutorily excluded from Medicare coverage. Such billings are more likely to be submitted on entirely non-covered claims using condition code 21. This scenario requires the use of a different message on the Medicare Summary Notice (MSN) sent to beneficiaries.

Another scenario in which billing non-covered mileage to Medicare may occur is when the beneficiary dies after the ambulance has been called but before the ambulance arrives. The –QL modifier should be used on the base rate line in this scenario, in place of origin and destination modifiers, and the line is submitted with covered charges. The –QL modifier should also be used on the accompanying mileage line, if submitted, with non-covered charges. Submitting this non-covered mileage line is optional for providers.

Non-covered charges may also apply is if there is a subsidy of mileage charges that are never charged to Medicare. Because there are no charges for Medicare to share in, the only billing option is to submit non-covered charges, if the provider bills Medicare at all (it is not required in such cases). These non-covered charges are unallowable, and should not be considered in settlement of cost reports. However, there is a difference in billing if such charges are subsidized, but otherwise would normally be charged to Medicare as the primary payer. In this latter case, CMS examination of existing rules relating to grants policy since October 1983, supported by
Federal regulations (42CFR 405.423), generally requires providers to reduce their costs by the amount of grants and gifts restricted to pay for such costs. Thereafter, section 405.423 was deleted from the regulations.

Thus, providers were no longer required to reduce their costs for restricted grants and gifts, and charges tied to such grants/gifts/subsidies should be submitted as covered charges. This is in keeping with Congress’s intent to encourage hospital philanthropy, allowing the provider receiving the subsidy to use it, and also requiring Medicare to share in the unreduced cost. Treatment of subsidized charges as non-covered Medicare charges serves to reduce Medicare payment on the Medicare cost report contrary to the 1983 change in policy.

Medicare requires the use of the –TQ modifier so that CMS can track the instances of the subsidy scenario for non-covered charges. The –TQ should be used whether the subsidizing entity is governmental or voluntary. The -TQ modifier is not required in the case of covered charges submitted when a subsidy has been made, but charges are still normally made to Medicare as the primary payer.

If providers believe they have been significantly or materially penalized in the past by the failure of their cost reports to consider covered charges occurring in the subsidy case, since Medicare had previous billing instructions that stated all charges in the case of a subsidy, not just charges when the entity providing the subsidy never charges another entity/primary payer, should be submitted as non-covered charges, they may contact their FI about reopening the reports in question for which the time period in 42 CFR 405.1885 has not expired. FIs have the discretion to determine if the amount in question warrants reopening. The CMS does not expect many such cases to occur.

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