PURPOSE
To provide proper billing instructions for using condition code 20 (Beneficiary requested billing) and condition code 21 (Billing for denial notice) and to clarify requirements for the submission of non-covered charges.

TEXT

Condition Code 20:
Condition Code 20 is reported when the provider has notified the beneficiary, in writing, that a service is not reasonable and necessary and the beneficiary does not agree with the provider's medical decision. The provider is required to submit a demand bill on behalf of the beneficiary. Demand bills apply to medical denials not technical denials and must be submitted upon the request of the beneficiary or his/her authorized representative. All demand bills must be submitted on a hard-copy HCFA-1450 (UB-92) claim form along with the denial letter signed and dated by the beneficiary or authorized representative and all pertinent medical documentation.

The following UB-92 locators highlight billing instructions for demand bills:

• Locator 4, Type of BillXX0 (no payment)
• Locator 24-30, Condition Codes 20 (beneficiary requested billing)

Condition Code 21:
Condition Code 21 is reported when submitting Medicare claims in order to receive a formal denial for supplemental insurance billing purposes. The provider should indicate in 'remarks' that the claim is being submitted at the beneficiary's request and the reason why the service is non-covered. This does not eliminate the provider's responsibility to notify the beneficiary, in writing, that the service is non-covered and the reason why the service is non-covered.
 
The following UB-92 locators highlight billing instructions for a denial notice:

• Locator 4, Type of BillXX0 (no payment)
• Locator 24-30, Condition Codes 21 (billing for denial notice)

Submission of Non-Covered Charges:
When a provider has determined that a service or care ordered for a beneficiary is either not reasonable and necessary or non-covered (i.e., Program exclusion), the provider is required to notify the beneficiary or authorized representative, in writing, prior to or at the time of admission (or at any time the type of care changes during a stay) that the service or care is non-covered and that a claim would not be submitted for Medicare reimbursement. Although the Fiscal Intermediary Shared System (FISS) accepts non-covered charges, provider's are prohibited from knowingly submitting non-covered charges on a Medicare claim. However, if the beneficiary or authorized representative requests that a claim be submitted for Medicare determination, follow the instructions outlined above.

• If a Medicare beneficiary challenges a non-covered charge on a claim, and indicates the provider did not advise him/her the service is non-covered, Veritus Medicare Services (VMS) will contact the provider to determine why the service was non-covered and if the beneficiary was notified of the denial. If we determine that the beneficiary was not informed of the denial, we will advise the beneficiary to request that the provider submit a demand bill. VMS will maintain an audit trail that clearly indicates the beneficiary has been notified regarding the procedure. The case will be tracked to insure the beneficiary's appeal rights are not jeopardized.

• If the Medicare beneficiary challenges a non-covered charge because the provider billed a non-covered charge that was "bundled" from another service, this will be considered a Medicare Inquiry, not an appeal. VMS will contact the provider, conduct an educational outreach and request the provider submit an adjustment claim to correct the original bill. When the adjustment is processed, the beneficiary will receive a revised Medicare Summary Notice (MSN). The case will be tracked by VMS to insure the beneficiary's appeal rights are not jeopardized.

NOTE: A pattern of "unbundling" is considered to be an abberrant billing practice and further action could be taken.

Questions
If you have any questions regarding this bulletin, please contact the following: