Payment for Inpatient Services Furnished by a CAH

For cost reporting periods beginning after October 1, 1997, payment for inpatient services of a CAH is the reasonable cost of providing the services. Effective for cost reporting periods beginning after January 1, 2004, payment for inpatient services of a CAH is 101 percent of the reasonable cost of providing the services, as determined under applicable Medicare principles of reimbursement, except the following principles do not apply:

• The lesser of costs or charges (LCC) rule;

• Ceilings on hospital operating costs; 

• The reasonable compensation equivalent (RCE) limits for physician services to hospitals; and

• The payment window provisions for preadmission services treated as inpatient services under §40.3. (Because CAHs are exempt from the 1- and 3-day window provisions, services rendered by a CAH to a beneficiary who is an outpatient prior to that beneficiary’s admission to the CAH as an inpatient, are not bundled on the inpatient bill. Outpatient CAH services must be billed as such and on a separate bill (85x TOB) from inpatient services. CWF and the shared system shall bypass the CAH provider numbers when applying the edits that compare hospital outpatient and inpatient bills to apply the window provisions. Outpatient services rendered on the date of admission to an inpatient setting are still billed and paid separately as outpatient services in a CAH.)

Low Osmolar Contrast Material (LOCM) furnished as part of medically necessary imaging procedures for inpatients is paid for based on bill type 11X (for LOCM furnished during an inpatient stay covered under Part A), or 12X(for LOCM furnished to an inpatient where payment is under Part B because the stay is not covered under Part A). Bills must include revenue code 636 along with one of the following HCPCS codes as appropriate:

A4644 Supply of low osmolar contrast material (100 - 199 mgs of iodine); 

A4645 Supply of low osmolar contrast material (200 - 299 mgs of iodine); or 

A4646 Supply of low osmolar contrast material (300 - 399 mgs of iodine).

Payment for inpatient CAH services is subject to Part A deductible and coinsurance requirements. Inpatient services should be billed on an 11X type of bill.

Payment for Inpatient Services Furnished by an Indian Health Service (IHS) or Tribal CAH

Reimbursement to IHS or Tribal CAHs for covered inpatient services is based on a facility specific per diem rate that is established on a yearly basis from the most recently filed cost report information. 

Payment for inpatient IHS or Tribal CAH services is at 100% of the facility specific per diem rate less applicable deductible and coinsurance. Inpatient services should be billed on an 11X type of bill. 

Beginning January 1, 2004, IHS or Tribal CAHs are paid 101% of the facility specific per diem rate.

Payment for Post-Hospital SNF Care Furnished by a CAH

The SNF-level services provided by a CAH, are paid at 101% of reasonable cost. Since this is consistent with the reasonable cost principles, A/B MACs (A) will now pay for those services at 101% reasonable cost. 

Hospitals must follow the rules for payment in §60 for swing-bed services. Coinsurance and deductible are applicable for inpatient CAH payment. 

All items on the ASC X12 837 institutional claim format are completed in accord with the implementation guide applicable to the dates of the stay