Medicare Advantage Inpatient Shadow Billing Job Aid

Medicare Advantage Inpatient Days
Centers for Medicare & Medicaid Services (CMS) requires providers to submit "no pay" claims to the Medicare Administrator Contractors (MACs) to report the patient’s Medicare Advantage (MA) inpatient days, and bill certain inpatient claims for reimbursement through the Part A cost report.

The MACs reimburse for disproportionate share hospital (DSH), indirect medical education (IME), direct graduate medical education (DGME), and nursing allied health (N&AH). This type of duplicate billing is often referred to as “shadow billing” since claims are submitted to both the MA plan for payment and MAC as “no pay” or “information only” billing.

IPPS Hospitals with Disproportionate Share of Low-Income Patients
If a hospital meets the disproportionate share hospital (DSH) definition, an additional operating cost payment will be made.

Inpatient prospective payment system (IPPS) hospitals and inpatient rehabilitation facility (IRF) hospitals/units are required to submit informational only bills for purposes of capturing the MA patients inpatient days for inclusion in the Supplemental Security Income (SSI) ratio. This ratio is used in the DSH and low income patient (LIP) for the IRF’s PPS calculations. This also applies to long-term care hospitals (LTCHs) even though they do not directly receive DSH, as an estimate of what the facility would have received under DSH if they were an acute care facility becomes part of the LTCH outlier calculation.

Claim submission guidelines are as follows: 

Note: IRFs are required to include the discharge date in the service date field.

Approved Teaching IPPS Hospitals Indirect Medical Education (IME)
Approved teaching hospitals submit informational only bills for IME payment. The purpose is to capture the MA patients inpatient days for inclusion in the SSI ratio and the provider statistics & reimbursement report (PS&R) type 118.

Claim submission guidelines are as follows:

Hospitals and Units Excluded from IPPS for DGME and N&AH Education
Non-IPPS hospitals and units submit their MA claims to their respective MACs to be processed as no-pay bills, so the inpatient days can be reported on the patient’s record and PS&R type 118 for DGME payment purposes through the cost report. This applies to the rehabilitation, psychiatric, long-term care, children’s and cancer hospitals, plus rehabilitation and psychiatric units.

Claim submission guidelines are as follows:

Skilled Nursing Facilities (SNFs) and Swing Bed Units
SNF providers must submit bills for beneficiaries enrolled in MA plans and receiving skilled care in order to take benefit days from the beneficiary and/or update the beneficiary’s spell of illness in the Medicare’s common working file (CWF) system.

Claim submission guidelines are as follows:

Resources

• CMS IOM Pub. 100-04, Chapter 25 — Completing and Processing the Form CMS-1450 Data Set (PDF)
• CMS IOM Pub 100-04, Chapter 2 (PDF), Section 30.12; Chapter 3 (PDF), Section 20.3 and 20.8; Chapter 6 (PDF), Section 90