Revision Date: October 31, 2007

Purpose: The purpose of this bulletin is to provide education to the Skilled Nursing Facility provider community regarding the adjustment to Health Insurance Prospective Payment System (HIPPS) Codes beyond 120 days of the “through” date on the bill.

Effective for services provided on and after June 1, 2000, Skilled Nursing Facilities (SNF) must submit adjustment requests to reflect corrections to the RAI that result in changes to the RUG-III code (i.e., the first three digits of the HIPPS code).  Adjustment requests must be submitted if the RAI correction results in a HIPPS code that is different from that already billed and paid.  The adjustment requests is retroactive to the first date payment was made using the original (but incorrect) HIPPS rate code. 

Adjustment requests based upon corrected assessments must be submitted within 120 days of the service “through” date.  The “through” date will be used to calculate the period during which adjustment requests may be submitted based on corrected RAI assessments.  The “through” date indicates the last day of the billing period for which the HIPPS code is billed.  Adjustment requests based on corrected assessments must be submitted within 120 days of the “through” date of the bill.  An edit was recently put in place, identified as 31258, to limit the time for submitting this type of adjustment request to 120 days from the service “through” date. 

If an adjustment of the SNF claim is made to change the previously billed HIPPS code and the “through date” is outside of the 120 day window we encourage you to place remarks on that claim indicting the purpose of such change.  Those SNF claims that edit for reason code 31258 will suspend to status location S MRUGS, at which time a dedicated claims analyst will look for and review remarks.  If it determined there is justification the edit will be overridden and the adjustment will finalize.  Examples of such justification would be; when the RUGS/HIPPS code on the adjustment results in a lower payment than the original paid claim or when the RUGS/HIPPS code is being changed to the default code of AAA00, (the lowest paid RUGS code).  If the RUGS/HIPPS code on the adjustment is the same pricing as the original paid claim or if remarks do not indicate reason for change to the RUGS/HIPPS code, or any other situation, claims will return to provider. 

However, the requirement that providers may not knowingly over bill the Medicare program remains in effect.  Skilled Nursing Facilities that identify patterns of errors that result in overpayments must report them to the FI, and these overpayments must be recouped.  Over payments must be reported on the 838/credit balance report. 

The SNF must document the reason for an RAI correction and certify to the accuracy of the correction.  This documentation must be kept in the medical record.  Review of this documentation must be incorporated into the FI medical review process.  

Note: All Medicare adjustments require an adjustment condition code along with the claims adjustment code.  The most appropriate adjustment condition code for changes to the RUGS/HIPPS code is D2, if D9 is present remarks must appear on your adjusted Medicare claim.

Reference: CMS IOM Publication 100-04, Chapter 6, Sections 30.5-30.5.1