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Inpatient Hospital Services

Revised: 10-19-2017

  • Eligible Recipients
  • Eligible Providers
  • Additional Services
  • Coverage Limitations
  • Copay Billing Policies
  • Covered Services
  • Inpatient Only Procedures
  • Noncovered Services
  • Billing
  • MHCP Coverage Ended During Inpatient Stay
  • MHCP Eligibility Beginning After the Date of Inpatient Admission
  • Inpatient Hospital Services when First Date of Eligibility is Discharge Date
  • Inpatient Admission Following Outpatient Services for Discharge Date Prior to October 1, 2015
  • Inpatient Admission Following Outpatient Services for Discharge Date on or after October 1, 2015
  • Inpatient Hospital Services when Inpatient Authorization is Denied
  • Trauma Response Team Associated with Hospital Critical Care Services
  • Interim Billing
  • Inpatient Stays that exceed 180 Days
  • Deliveries and Births
  • Birth Weight Requirement
  • Physical Rehabilitation
  • Medicare Exhausted Benefits for Recipients with Dual Eligibility
  • Spenddown
  • Inpatient CRNA
  • MinnesotaCare
  • Extended Inpatient Psychiatric Services Under Contract with DHS
  • Forms and Resources
  • Definitions
  • Legal References
  • Hospital Services Home Page
    Critical Access Hospital (CAH) Services

    Hospital In-reach Service Coordination (IRSC)

    Inpatient Hospital Authorization

    Outpatient Hospital Services

    Eligible Recipients

    All MHCP recipients are eligible to receive inpatient and outpatient hospital services.

    A person residing in a correctional facility in Minnesota is eligible only for inpatient hospital services under Medical Assistance (MA).

    Eligible Providers

    An eligible facility, meeting the definition of and licensed as a hospital, is certified to participate in Medicare, including a hospital that is part of the Indian Health Service (IHS), and designated by the federal government to provide acute care.

    Provider Type Home Page Links
    Review related Web pages for the latest news and additions, forms, and quick links.

    Additional Services

    Professional services (for example, anesthesiologist and physician) are covered in addition to outpatient or inpatient hospital services. Other services, such as lab, radiology, supplies and injectable drugs may also be separately covered services when outpatient hospital services are provided. Refer to the specific service sections of this manual for coverage and billing policy.

    Coverage Limitations

    Services provided in an outpatient or inpatient hospital setting are subject to the same requirements that apply to services by other providers, including:

  • • Requests for authorization (refer to Authorization): Submit transplant prior authorization requests to the Authorization Medical Review Agent by the physician’s office rather than the transplant facility. The transplant facility can request verification of prior authorization before the surgery by contacting the physician or by calling the MHCP Provider Call Center. This also applies to Emergency Medical Assistance (EMA) coverage of kidney transplants.
  • Inpatient Hospital Authorization (IHA) for admissions to hospitals located outside the local trade area, Medicare designated rehabilitation units, long term acute care hospitals, recipients under 21 years old at the time of admission to an IMD, recipients admitted to Extended Inpatient Psychiatric Services under contract with the Mental Health Division and EMA coverage of kidney transplants.
  • • Consent forms or statements of acknowledgment for hysterectomies, voluntary sterilizations and therapeutic abortions (refer to Reproductive Health).
  • See the Critical Access Hospital (CAH) Services section for billing instructions for critical access hospitals.

    Copay Billing Policies

    Copays apply to some services provided to MA recipients. Copay guidelines are listed in the Billing the Recipient section under Copays and Family Deductible.

    Covered Services

    Inpatient hospital services are covered if determined medically necessary (refer to Inpatient Hospital Authorization). Inpatient services provided by the same hospital on two separate patient care units by two medical services are billed as one continuous admission under MHCP. This includes patients transferred between acute general medical or surgical services to or from general psychiatric services. Do not follow Medicare billing guidelines for transfers between these services.

    Inpatient admission for detoxification is covered when certain medical criteria are met (refer to Guidelines for Inpatient Hospital Detoxification). Inpatient hospitalization may be medically necessary due to conditions resulting from withdrawal or conditions occurring in addition to withdrawal and the conditions require constant availability of a physician and registered nurse or complex medical equipment found only in an inpatient hospital setting.

    The medical records of recipients admitted for detoxification are subject to retrospective review by the medical review agent. Bill inpatient medical detoxification and treatment of sequelae resulting from drug or alcohol ingestion as any other acute inpatient admission. Do not use Basic Billing Instructions for Chemical Dependency Services designated for admissions covered under CCDTF.

    Medical Assistance (MA) will cover inpatient hospital care for eligible people who are incarcerated and are then admitted to an inpatient hospital. Professional or dental service claims associated with the covered inpatient hospital stay are eligible for payment. Refer to the Outpatient Hospital Services Billing section for more information on billing these services.

    Work with the correctional facility to complete the application process after the patient is discharged from an inpatient hospital stay. The correctional facility must initiate and facilitate the application process, help the incarcerated person to apply for MA, and provide all the necessary forms. MHCP has notified the Minnesota Department of Corrections and County Detention facilities of this process.

    Effective for discharges on or after Jan. 1, 2016, when an incarcerated person presents at a hospital and is discharged on the same date, no room and board day will be allowed. For these stays, and all other outpatient stays, submit the charges incurred on the discharge day as outpatient claims via an outpatient claim form to the Department of Corrections or the responsible city or county correctional authority. Continue to bill the correctional facility for all outpatient services.

    Inpatient-Only Procedures

    Medicare identifies procedures that should be performed only in an inpatient setting. MCHP follows Medicare guidelines for payment for inpatient-only procedures; MHCP will pay for these procedures only on inpatient claims.

    Medicaid Recipients with TPL
    Follow the place of service rule of the primary payer. MHCP will not make payment if a provider does not follow the place of service rule of the primary payer.

    Noncovered Services

    The following inpatient hospital services are not covered:

  • • Leave days, leaves of absence and reserve beds
  • • Inpatient chemical dependency treatment (covered under the CCDTF and administered at the county or tribal level)
  • • Hospitalizations designated as noncovered services in statutes or rules
  • • Charges related to hospital care for investigative services, plastic surgery or cosmetic surgery, which are not covered unless determined medically necessary through the medical review authorization process, and services designated as noncovered in statutes or rules. A physician may donate his or her services to perform a noncovered service, but MHCP does not cover facility fees, ancillary charges and other procedure or service charges related to performing the noncovered services
  • • Outpatient claims for a person incarcerated in a state or local correctional facility are the responsibility of the Department of Corrections, or other local corrections authority
  • Billing

    MHCP Coverage Ended During Inpatient Stay

    MHCP recipient eligibility is generally approved on a monthly basis. If a recipient’s MHCP coverage ends during his or her inpatient stay, bill:

  • • TOB 111
  • • Eligible day(s) in the Statement Covers Period
  • • Occurrence code 25 and date coverage is no longer available
  • • Occurrence code 42 and date of discharge
  • • Patient status 30
  • If the patient later becomes retroactively eligible for the entire inpatient stay, replace the claim, entering the Statement Covers Period dates as the entire inpatient stay.

    MHCP Eligibility Begins After the Date of Inpatient Admission

    If a recipient’s MHCP eligibility begins during an inpatient hospitalization and the person’s discharge date is not the same day as the admit date, use the following instructions for payment:

  • • Admission Date: enter the actual date of hospital admission
  • • From/To Date: enter the date eligibility began through the discharge date or final billing date
  • • Remove all procedure codes that occurred before eligibility began
  • • Remove all revenue codes and charges that were incurred before the eligibility date
  • Inpatient Hospital Services when First Date of Eligibility is Discharge Date

    Effective for discharges on or after Jan 1, 2016, when a recipient is admitted to a hospital as an inpatient and the first day of eligibility is the discharge date, no room and board day will be allowed. For these stays, submit the charges incurred on the discharge day as an 837I outpatient claim. Do not claim reimbursement for service prior to eligibility.

    Use the following instructions for payment:

  • • From/To Date: enter the date eligibility began which is also the discharge date and final billing date
  • • Remove all procedure codes that occurred before eligibility began
  • • Remove all revenue codes and charges that were incurred before the eligibility date
  • Inpatient Admission Following Outpatient Services—for Discharge Date Prior to October 1, 2015

    If a recipient is admitted as an inpatient immediately following outpatient services (for example, emergency department, ambulatory surgery, radiology or observation status) at the same hospital, submit information in the following fields using these guidelines:

  • • Statement Covers Period:
  • • Report the “From” date using the date outpatient services began
  • • Report the “Through” date using the date service ended for the period reflected on the bill
  • • Covered Days and Noncovered Days:
  • • “Covered Days” includes both inpatient and outpatient service dates, whether or not a bed was used
  • • Do not count the day of discharge unless the patient is still a patient
  • • Report “Noncovered Days” as the number of days of care not covered (for example, leave of absence days)
  • • Covered days plus noncovered days must equal the “Statement Covers Period”
  • • Admission Date:
  • • Report the actual admission date
  • • Admission date can be before or after the “From” date
  • • Procedure Codes: Use ICD-9-CM procedure code(s) for the date service was rendered
  • Inpatient Admission Following Outpatient Services—for Discharge Date on or after October 1, 2015

    Include outpatient services provided immediately before an inpatient admission on the inpatient claim regardless of discharge date; however, the definition of covered days changed as of October 1, 2015.

    Covered days are equivalent to the room and board days. Report covered days with value code 80 regardless of the date of discharge. Outpatient services were and continue to be included on the inpatient claim when outpatient services occur prior to admission.

    Use the following information to report inpatient admission following outpatient services date for discharge date on or after October 1, 2015:

  • • Outpatient days are no longer included in the covered days when the admitting hospital delivers outpatient services immediately prior to the inpatient admission
  • • Covered Days and Noncovered Days:
  • • Include outpatient services on the inpatient claim when outpatient services occur prior to admission
  • • Do not count the day of discharge
  • • Do not include the outpatient days in the covered days count
  • • Covered days are equivalent to room and board days
  • • Admission Date: Report the actual admission date
  • • Procedure codes: Use ICD10-CM procedure codes for the date service was rendered
  • Inpatient Hospital Services when Inpatient Authorization is Denied

    When a recipient is admitted to a hospital as an inpatient and Inpatient Hospital Authorization (IHA) is denied, or the recipient does not meet inpatient criteria, MHCP may cover services provided in the hospital when billed as outpatient hospital services if the following apply:

  • • The recipient was in the hospital for less than 48 hours (total), or up to 72 hours with documentation
  • • The stay was not billed as an inpatient stay
  • • The claim indicates admission hour and discharge hour (code 99, hour unknown) is not acceptable
  • Trauma Response Team Associated with Hospital Critical Care Services

    If a trauma response team is activated, as described by the NUBC guidelines, and the hospital provides at least 30 minutes of critical care for which CPT code 99291 is reported, then:

  • • Bill using code G0390
  • • Only one unit per day is payable
  • • Trauma activation is a one-time occurrence
  • If the hospital provides less than 30 minutes of critical care, you cannot report HCPCS G0390.

    Interim Billing

    Do not submit inpatient hospital billing until the recipient is discharged. However, for lengths of stay over 30 days, hospitals may submit replacement claims each month after the initial bill incorporating the previously billed or paid stay. Interim bills must include Patient Discharge Status Code 30 (still an inpatient). If one or more interim payments have already been made, the payer claim number (PCN) of the claim being replaced must be included in the Original Reference Number field on the Claim Information tab in MN–ITS Interactive or in the REF02 Loop 2300 in MN–ITS Batch.

    Inpatient Stays that Exceed 180 Days (admission dates between Nov. 1, 2014, and June 30, 2017, only)

    Split bills for inpatient stays that exceed 180 days; different payment rates will be applied to each part of the claim. The first 180 days, including the 180th day, will be paid at the normal DRG-based prospective payment system (PPS) rate, including any cost outlier payments, when applicable. Days 181 and beyond will be paid a standard fixed percentage of the charges associated with these days 181. Claims that are not split at day 180 will be denied.

    Billing for days one through 180
    Refer to the following when billing for days one through 180:

  • • Submit an initial claim (type of bill 112) and then subsequent replacement claims (type of bill 117) until the 180th day is reached
  • • Procedure and diagnosis codes must pertain to the “Statement Covers” period on the claim
  • • Use the actual admission date
  • • Include the birth weight for babies on the claim
  • • Once the stay reaches the 181st day, the claim must be split and any additional days after the 180th day should not be included on this claim
  • • You may choose to wait the full 180 days to bill the claim
  • Billing for day 181 and beyond
    The process for billing for days 181 and beyond can be done one of two ways:

  • 1. Hospitals may bill days 181 through discharge as a single claim
  • 2. If the stay is significantly longer than 181 days, hospitals may bill the stay in monthly increments. Use bill type 113 and 114, as appropriate
  • For either of the two ways of billing:

  • • Claims can be replaced if necessary, but the days prior to and including day 180, and days 181 and beyond must continue to be billed separately
  • • Birth weight may be included, but is not required after day 180
  • • Use the actual admission date and diagnosis codes that pertain to the entire stay
  • • Charges and procedure codes must pertain only to the “Statement Covers” period on the claim
  • The differential billing requirement for inpatient stays over 180 days ends for admissions on or after July 1, 2017.

    Deliveries and Births

    Submit separate claims for a mother and her newborn. A newborn whose mother is enrolled in a health plan at the time of birth will be retroactively enrolled in the same health plan for the birth month, unless the newborn meets an exclusion. Refer to Prepaid Health Care Programs, Excluded Recipients section. Use admission Type ‘4’ only for the baby and only for the admission when the birth occurred. See Laboratory-Pathology Services for MDH Newborn Metabolic Disorder Screening.

    Birth Weight Requirement

    With the implementation of the APR-DRG grouper on Oct. 1, 2015, MHCP now requires that all claims for babies less than 29 days old include a birth weight. MHCP will deny claims that do not contain a valid birth weight.

    Include Value Code 54 (Newborn Birthweight in Grams) on all claims for babies under 29 days at time of admission. This is regardless of whether the baby was born inside or outside the hospital, and of whether the newborn was transferred to or from the hospital. If an ICD-10 diagnosis code indicating birth weight is reported on the claim, the birth weight must correlate to the weight reported with Value Code 54.

    Physical Rehabilitation

    Submit separate claims for recipients with admissions to a Medicare designated rehabilitation unit using the rehabilitation unit’s NPI. The hospital must seek IHA for rehabilitation admissions. If a recipient is transferred between acute inpatient care and inpatient rehabilitation, each rehabilitation admission requires a different IHA number, unless the rehabilitation admissions are to be combined.

    If the admissions to a Medicare designated rehabilitation unit are not issued separate IHA numbers by the medical review agent, indicate the days in the acute inpatient setting as leave of absence days. Similarly, if the admissions to acute inpatient do not meet criteria for separate payment (refer to Inpatient Hospital Authorization), indicate the days in the rehabilitation setting as leave of absence days.

    For example, a recipient is admitted to an acute inpatient hospital, transferred to the rehabilitation distinct unit, readmitted into the acute inpatient hospital, and a few days later is readmitted into the inpatient rehabilitation unit.

    If the admissions meet criteria for two acute inpatient payments, the provider must bill separate claims for each acute inpatient hospitalization with each hospital's NPI.

    If the medical review agent did not issue a new IHA number for the second admission to the inpatient rehabilitation unit and the provider did not appeal the denial of a second IHA, the provider must submit one claim for both inpatient rehabilitation hospitalizations. The claim must indicate dates of the second acute inpatient hospitalization as leave days (refer to the NUBC website for the leave of absence span code), with its own IHA number, and with the hospital's inpatient rehabilitation NPI.

    Medicare Exhausted Benefits for Recipients with Dual Eligibility

    If an MA recipient has dual eligibility with Medicare, and exhausts Medicare benefits during an admission, the hospital can be paid the greater of the Medicare payment including deductible and coinsurance (Medicare beneficiary responsibility is paid by MA) or the MA payment less Medicare payment, including deductible and coinsurance. When Medicare Part A benefits are exhausted:

  • • Submit the inpatient charges to MHCP as primary
  • • Follow the Electronic Claim Attachments instructions
  • • Attach the Medicare (Part A and Part B) EOB for date of services (DOS)
  • • Write “Medicare Part A Benefits Exhausted” on top of Medicare EOBs
  • Spenddown

    When recipients have a spenddown satisfaction date, inpatient claims must be submitted using the first date of eligibility (the spenddown satisfaction date) as the “from” date in the Statement Date field in MN–ITS Interactive or DTP Loop 2300 in MN–ITS Batch. The date of admission must contain the date of the recipient's admission to the inpatient hospital.

    Inpatient CRNA

    Hospitals must exclude certified registered nurse anesthetist (CRNA) charges from inpatient rates.

    Bill separately on the 837P for MHCP-enrolled CRNA services provided in an inpatient hospital setting by any of the following:

  • • A CRNA independent or employed by a physician
  • • A CRNA employed by a hospital
  • • An entity or group not enrolled as a hospital that is billing CRNA services
  • Refer to the MN–ITS User Guide for more detailed information on billing for CRNAs who are employees or independent CRNAs. Remove CRNA costs from the operating payment rate for inpatient rates.


    Bill inpatient hospital services provided to a MinnesotaCare enrollee to the enrollee’s health plan.

    For recipients enrolled in major program BB, submit inpatient facility claims with admission dates:

  • • Before Jan. 1, 2015, to MHCP fee-for-service (FFS)
  • • On or after Jan. 1, 2015, to the enrollee’s health plan
  • Follow MHCP billing requirements for inpatient billing and not the requirements of the health plan. For example, if the hospitalization includes acute care and Medicare distinct rehabilitation admission, submit separate claims to MHCP, because separate NPIs and payments apply.

    Extended Inpatient Psychiatric Services under Contract with DHS

    DHS contracts with county and private hospitals throughout Minnesota and South Dakota to provide extended inpatient hospital psychiatric treatment for MA fee-for-service eligible adults. The recipients are court committed or voluntarily admitted in lieu of commitment and are most often hospitalized on an acute psychiatric unit before admission to the contracted services. Payment is made at a negotiated rate per day.

    Before billing for these services, refer to the following:

  • • For patients admitted to an extended inpatient psychiatric program under contract with DHS directly from an acute care hospital, code the acute care hospital stay using patient discharge codes 02 or 65. Contracting hospitals – refer to the Extended Inpatient Psychiatric Services contract for limited medical services that are considered outside the contract per diem rate and can be submitted separately for outpatient payment.
  • • MA recipients admitted to Extended Inpatient Psychiatric Services require Inpatient Hospital Authorization (IHA).
  • Forms and Resources

  • Utilization Review Procedures for Medical Assistance Extended Psychiatric Inpatient Treatment Contract (DHS-4905A) (PDF)
  • Extended Psychiatric Inpatient Contract, Guidelines for Determination of Continued Stay (DHS-4905B) (PDF)
  • Extended Psychiatric Inpatient Contract – Initial Review (DHS-4905C) (PDF)
  • Extended Psychiatric Inpatient Contract – Weekly Bed Review Form (DHS-4905D) (PDF)
  • Extended Psychiatric Inpatient Contract – Discharge Summary Review (DHS-4905F) (PDF)
  • Definitions

    Refer to the Definitions section of Hospital Services home page.

    Legal References

    Minnesota Statutes 144.50 (Hospitals, Licenses; Definitions), subd.1 (Inpatient hospital services)
    Minnesota Statutes 245.4862
    (Mental health urgent care and psychiatric consultation)
    Minnesota Statutes 256B.0625
    , subd. 3g (Evidence-based childbirth program)
    Minnesota Statutes 256L.03
    , subd.3 (Inpatient hospital services)
    Minnesota Statutes 256.9686
    Minnesota Rules 9500.1090 to 9500.1140
    (Purpose and Scope)
    Minnesota Rules 9505.0300
    (Inpatient Hospital Services)
    Minnesota Rules 9505.0501 to 9505.0540
    42 CFR 440.10
    (Inpatient hospital services, other than services in an institution for mental diseases)

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