Inpatient Billing Guidelines: Here’s What You Need to Know

Inpatient Hospital Services means preventive, therapeutic, surgical, diagnostic, medical and rehabilitative services that are furnished by a hospital for the care and treatment of Inpatients and are provided in the hospital by or under the direction of a physician.

Inpatient means a person who is receiving professional services at a hospital, the services include a room and are provided on a continuous 24-hour-a-day basis. Generally, a person is considered an Inpatient by a physician’s order if formally admitted as an Inpatient with the expectation that the member will remain at least overnight and occupy a bed even though it later develops that the member can be discharged or transferred to another hospital and does not actually use a bed overnight. Let’s look into Inpatient Billing requirements and guidelines.

General Inpatient Billing Requirements:

The hospital may bill only for services provided. Failure to submit information necessary to support claims for services in an individual case will result in denial of the entire claim, the charging of utilization in inpatient cases to the beneficiary record, and a prohibition against the provider billing or collecting from the beneficiary or other person for any services on the claim.

If the provider fails to submit necessary information in connection with its claims will be subjected to termination of its participation in the program. Appropriate medical information includes the discharge summary, the physician’s medical orders, and a summary of departmental medical records.

It is very important to note here that the hospital must obtain the patient’s consent for the release of medical information as soon as the decision to transfer is made, unless a blanket authorization was obtained at admission.

General Inpatient Billing Procedures:

When calculating the number of days to be reported on a claim, Medicaid counts the date of admission, but not the date of discharge, transfer or death. The calculation of the number of days in the billing period is impacted by the status of the patient on the statement through date.

When the patient status is “30” – Still A Patient, the through date is included in the calculation of days. When the status is a “Discharged” on the through date of service, the through date is not included in the calculation of the number of days.

The maximum number of days cannot exceed 9999 on any inpatient claim. The sum of the days reported in the following fields must equal the days in the statement from-through period of the claim or one less day if the status is discharged as described above:

Medicare Full Days
• Medicaid Full Days
• Medicaid Non Covered Days and
• Other Insurance Covered Days

Types of Inpatient Hospital Claims:

The two basic types of inpatient hospital claims are Diagnosis-Related Group (DRG) and Non-DRG (DRG-exempt) claims. Diagnosis-Related Group (DRG) billing classifies inpatient hospital stays into one of approximately 800 groups, also referred to as DRGs.

A “grouper” program assigns a DRG by utilizing data submitted on the claim such as ICD-9-CM diagnoses, procedures, patient age, sex, and other information. Associated with each DRG is an average length of stay, high trim point (threshold), service intensity weight and low trim point.

For non-DRG claims the 90-day regulation applies to the statement through date entered on the claim. Non-DRG claims can be billed from admission to discharge or they can be billed as interim claims. If a Non-DRG claim is billed as an interim bill the patient status code submitted is 30 – Still A Patient, and no discharge date is entered on the claim.

Patient Status Codes:

01 Discharged to home or self-care (routine discharge)

02 Discharged/transferred to another short-term general hospital for inpatient care

03 Discharged/transferred to skilled nursing facility (SNF)

04 Discharged/transferred to an intermediate care facility (ICF)

05 Discharged/transferred to a non-Medicare PPS children’s hospital or non-Medicare

cancer hospital for inpatient care

06 Discharged/transferred to home under care of organized home health service


20 Expired

30 Still Patient

40 Expired at home

41 Expired in a medical facility (e.g. hospital, SNF, ICF or free standing hospice)

Inpatient Hospital Billing Guidelines

42 Expired place unknown

50 Hospice – Home

51 Hospice – Medical Facility

61 Discharged/Transferred within this institution to hospital-based Medicare approved

swing bed

62 Discharged/transferred to an inpatient rehabilitation facility (IRF) including

rehabilitation distinct part units of a hospital

63 Discharged/transferred to a Medicare certified long term care hospital (LTCH)

64 Discharged/transferred to a nursing facility certified under Medicaid but not certified

under Medicare

65 Discharged/transferred to a psychiatric hospital or psychiatric distinct part unit of a


66 Discharged/transferred to critical access hospital

Claim Formats:

A. Institutional Claim Formats

The ASC X12 837 institutional claim format, or where permissible, Form CMS-1450, Inpatient and/or Outpatient Billing, is used for all provider billing, except for the professional component of physicians services. (Refer to paragraph B for the appropriate professional claim formats.) The ASC X12 837 institutional claim format and Form CMS-1450 are processed by the provider’s A/B MAC (A). See Chapter 25 for instructions for hospital services.)

B. Professional Claim Formats

The ASC X12 837 professional claim format, or where permissible, Form CMS-1500 is the prescribed format for claims prepared by physicians and nonphysician practitioners whether or not the claims are assigned.
Institutional providers may use the ASC X12 837 professional claim format or the Form CMS-1500 to bill the A/B MAC (B) for the professional component of physicians’ services where applicable. (For more information about the CMS-1500 claim form, refer to Chapter 26. Information about billing for physician and
other supplier services can be found in this chapter as well as chapters throughout this manual relative to specific policies and topics.)

C. Form CMS-1490S Patient’s Request for Medicare Payment

Only beneficiaries (or their representatives) who complete and file their own claims use this form. Providers have no need for this form.

Note: Providers submitting claims on paper are responsible for purchasing their own paper forms.

Read full guidelines here.

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