CMS Directs MACs to Correct Qualifying Stay Edits

Carl J. Pucci in Finance & Reimbursement

CMS has issued a technical bulletin which directs Medicare Administrative Contractors (MAC) to adjust affected claims to SNF providers.

Please see the AHCA bulletin below for further details:

To:  The State Execs, The AHCA Board of governors, the Reimbursement Cabinet, CPAC, Finance Committee, Legal Committee and Advocacy Department.

There has been a problem, now resolved, involving a rash of novel hospital billing practices, arising apparently in reaction to RAC audits.  These practices involved the hospitals either after filing a claim or even before filing a claim of changing the patient status to other than inpatient.  This action(s) caused related SNF stays to be automatically denied or “rejected” due to a MAC misunderstanding of the import of certain edits.  The MACs refused to reverse the denials and rejections.   In fact, there should not have been any denials or “rejections.”  We worked closely with the California, Utah and Arizona State Execs, a major provider in all three states, CMS staff in Region IX and ultimately CMS staff in Baltimore to get this matter investigated and corrected.

CMS will issue an E-notice on- line on Thursday, July 17 announcing that MACs will be instructed to adjust and pay.   However, late Friday night I received the attachment from CMS indicating that the MACs had been instructed on July 9 and that this correction information would be posted on July 17.   I checked with CMS over the weekend and got their OK to go ahead and inform our AHCA membership at this time. The key text in the attachment is as follows:  

On July 9, 2014 The Centers for Medicare and Medicaid services issued a Technical Direction Letter 9TDL)  to all Medicare Administrative Contractors designed to address inpatient SNF claims adversely affected by the qualifying stay edit.  By July 17th, all MACs are expected to post information on their websites about CMS’ update to the Common Working File (CWF) qualifying stay edit for inpatient SNF claims.  Once the MACs post the information, SNF providers that have received this error may adjust their affected claims or contact the MAC in order to have their claims adjusted. 

I believe that CMS is struggling with the unintended consequences of RAC hospital audits, the new hospital two-midnight and rebilling regulations, and the hospital provider confusion that much of this has unintentionally caused.  And now this confusion on the part of both hospitals and MACs is indirectly hitting us. Basically, the following should prevail:

  • A SNF stay should not be denied, if the related hospital stay is denied.
  • A SNF stay should not be denied or rejected, if the hospital rebills after it has submitted the inpatient claim.
  • A SNF stay should not be denied or rejected if the hospital, perhaps based on a UR review before filing the claim, decides not to file an inpatient claim for  a given discharge but, rather, file as something other than inpatient stay (perhaps ER and lots of Part B services).    

If you suspect that you are faced with the above discussed problems, please let your MAC know immediately.  The MAC as indicated above should correct the error. If you run into a problem, please let me know. 

Elise:  (202-898-6305,

Elise D. Smith, J.D.
Senior Fellow, Health Policy and Post-Acute Care American Health Care Association
1201 L Street, N.W.
Washington, DC  20005
Tel:  202-898-6305
Fax: 202-842-3860


Carl J. Pucci
Director, Finance & Reimbursement
518-462-4800 x36