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Administrative Manual

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Inpatient Hospital Guidelines

An inpatient hospital is a facility, other than psychiatric, which primarily provides diagnostic, therapeutic (both surgical and non-surgical) and rehabilitation services by or under the supervision of physicians, to patients admitted for a variety of medical conditions.

Inpatient hospital claims are submitted electronically or on an UB-04 claim form and exclude all professional components and air ambulance. Inpatient hospital claims must include the appropriate room and board revenue codes.

An outpatient facility is that portion of a hospital which provides the following to sick or injured persons who do not require hospitalization.

  • Rehabilitation services
  • Diagnostic, therapeutic (both surgical and no-surgical) services
  • May perform laboratory tests that are billed by the hospital
  • May provide services in an emergency room or outpatient clinic
  • May offer ambulatory surgical procedures and/or medical supplies

Billing Inpatient versus Outpatient Stays
Regence uses the MCG (formerly Milliman Care Guidelines) to determine appropriate level of care. Inpatient hospital claims must include the appropriate room and board revenue codes. The total units billed on the room and board revenue codes should match the length of stay as calculated as discharge date less admit date plus one. 

Hospital observation is intended to allow a physician an opportunity to monitor and observe a patient and make a decision about on-going care. Regence will reimburse for up to 48 hours of observation, if clinically appropriate, per the outpatient reimbursement terms. Observation stays beyond 48 hours will only be reimbursed if the stay meets the qualifications of an inpatient level of care. Such stays will be paid per the inpatient reimbursement terms.

If inpatient level of care is not met, reimbursement will be made for up to 48 hours per outpatient reimbursement terms. Covered charges, generally billed under Revenue Code 0760 or 0762 will be for the number of hours a patient is in observation, up to 48 hours. Charges for any 24 hour period of observation cannot exceed the hospital/providers usual semi-private room rate.

Regence uses MCG to determine appropriate level of care. In addition, Regence follows Centers for Medicare & Medicaid Services (CMS) guidelines regarding proper documentation of observation stays.

Note: BlueCard claims must follow the member’s home benefit plan. 

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Hospital-based physician services
To the extent your hospital and/or provider agreement does not address hospital-based physician services, the following guidelines will apply:

Professional fees for covered services rendered to members by hospital-based physicians during a covered inpatient hospital stay, are not included in the hospital Maximum Allowable. Professional services should be submitted on a CMS-1500 form.

Pre-Admission Services
Pre-admission services are considered:

  • Outpatient hospital services rendered two calendar days prior to an inpatient admission
  • Diagnostic services (including clinical diagnostic laboratory tests) provided to a patient by the hospital and/or provider, or by an entity wholly owned or wholly operated by the hospital and/or provider (or by another entity under arrangements with the hospital and/or provider), within two days prior to and including the date of the patient’s admission are deemed to be inpatient hospital services and included in the inpatient payment.

Hospital Readmission Review
All hospital readmissions for the same, similar or related condition which occur within 48 hours of the original discharge from hospital/facility or as defined in the Hospital Provider Contract is considered a continuation of initial treatment.

For Medicare Advantage products, all hospital readmissions for the same, similar or related conditions which occur the same day of the original discharge from the hospital/facility are considered a continuation of initial treatment.

The two hospital stays will be consolidated into one, combining all necessary codes, billed charges and the length of stay. The maximum allowable for Covered Services will be recalculated per the reimbursement terms of hospital/facility contract so that reimbursement is for a single, per case reimbursement.

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Inpatient Billing Guidelines
Room and Board definition
To the extent your hospital and/or provider agreement does not define room and board, the following definition will apply:

Room and board includes but is not limited to:

  • Recreation therapy
  • Postpartum services
  • All equipment to weigh a patient
  • Room and complete linen service
  • Administration of medications including IV’s
  • Dietary service including all meals, therapeutic diets, required nourishment’s, dietary supplements and dietary consultation
  • Thermometers, blood pressure apparatus, gloves, tongue blades, cotton balls and other common items used in the examination of a patient
  • All general nursing services including but not limited to coordinating the delivery of care, supervising the performance of other staff members who have delegated member care and member education
  • Routine supplies provided as part of routine care, including, but not limited to: drugs, wipes, swabs, scales, bed pan, bedside commode, breast pump, and personal care items (e.g., lotion, shampoo, soap and patient gowns)

As used here, “Postpartum services” refers to medical and nursing care for mother and baby provided within 48 hours after delivery including:

  • Breastfeeding support
  • Postpartum comfort measures
  • Guidance in infant care techniques
  • Physical, emotional and information support
  • Providing information on postpartum restoration)
  • Family and patient emotional assistance through major transition

When the above services are separately coded and submitted under the respective revenue codes, the charges will be denied as provider write-off and are not eligible for separate reimbursement.

Submission of Maternity/Newborn Claims
Separate claims must be submitted for the mother and newborn services. Claims that reflect both maternity and newborn charges on the same claim form will be returned to the hospital and/or provider for correct billing.

Interim Billing
For interim claims paid on a per case basis, payment will be based on the full case allowance on the initial claim received. All remaining interim claims will be denied, pending the final claim. Once the final claim is received, we will review the total claim and make any necessary adjustment of the initial payment should the final diagnosis change the per case allowance or if there are charge outliers. Please do not bill the patient until the final Regence payment is issued.

Late Charges
In general, late submissions are not accepted. Late charges are defined as Type of Bill (TOB) code 115 and are not reimbursable. The hospital and/or provider must submit a corrected billing of the entire claim with TOB code 117 to receive reimbursement for charges not included when the original bill was submitted.

Hospital corrected billings and/or adjustments
Corrected claims must be submitted using TOB code 117. All claims must contain all pertinent information including all applicable International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) diagnosis and procedure codes, present on admission (POA) flags and discharge status. Charges included on previously submitted claims, whether billed as interim or complete claims, must be included on the corrected claim. Itemizations or records may be requested to re-adjudicate the corrected claim.

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Inpatient Reimbursement Guidelines
Grouper use
To determine the Diagnosis Related Group (DRG) for an inpatient stay, Regence BCBSO uses the grouper version in effect on the date of admission. The Grouper used for reimbursement purposes is the DRG Grouper version as defined in the Inpatient Reimbursement Schedule found in your hospital and/or provider agreement and shall also be based on the date of admission. 

Ungroupable DRGs
MS DRG 998 and 999 are defined as ungroupable DRGs.

Any claim which groups to an ungroupable DRG will be returned to the provider for correction of coding or claim errors.

Member Deductible and Coinsurance Calculation
Member deductible and coinsurance amounts will be calculated based on the Billed Charges or Maximum Allowable, whichever is less.

DRG Reimbursement
Inpatient-type institutional services provided to the patient from the  admission date to the discharge date (including pre-admit and emergency room work-up) will be covered as part of the DRG payment, case rate and percent.

Inpatient hospital claims that are paid using DRG methodology are billed on an UB-04 claim form and should not include any professional components or air ambulance charges.

DRG Methodology
The following charges and fees are included in the DRG reimbursement:
  • Room and board, including services and supplies
  • Late discharge
  • Emergency or after-hours admission
  • Observational/outpatient
  • Medical transportation (excluding air ambulance)
  • Diagnostic laboratory services
  • Admission or utilization review paperwork
  • Discharge (take home) prescription drugs
  • Pre-admission services two days prior to admission and one day post discharge
  • Emergency room, if the patient is admitted

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Facility rebilling after inpatient level of care denial
Type of Bill (TOB) 12X should be used when rebilling Regence MedAdvantage claims following an inpatient level of care denial.

Medicare reimburses Part B services only when an inpatient level of care is determined to be not medically necessary, according to Section 240.1 of the Medicare Claims Processing Manual, Chapter 4.

Once we receive a rebilling with a TOB 12X, we will reimburse for physician services, non-physician medical and other health services listed in Section 240 of the Medicare Claims Processing Manual, Chapter 4.

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Facility Pre-authorization List requirements

Please note facility pre-authorization is required for:

  • Rehabilitation
  • Skilled Nursing Facility (SNF)
  • Long Term Acute Care Facility (LTAC)
  • Residential treatment for mental health and chemical dependency

View our pre-authorization requirements and contact information.

Admission and discharge notification requirements
All facility admissions require notification be received within 24 hours after the actual weekday admission (or by 5:00 p.m. local time on the next business day, if 24 hour notification would require notification on a weekend or a federal holiday).

Admission notification includes:

  • All inpatient hospice admissions
  • Chemical dependency detoxification
  • All unplanned acute care admissions
  • All planned and elective acute care admissions
  • All admissions that follow an outpatient surgery
  • All admissions that follow outpatient observation
  • Intensive outpatient admissions for chemical dependency
  • All newborns who are admitted to the neonatal intensive care unit
  • All newborns who remain hospitalized after the mother is discharged
  • Inpatient admissions or partial hospitalizations for mental health and chemical dependency

The Admission Notification requirements apply to all group and Individual members, including Regence MedAdvantage, Uniform Medical Group and FEP. Admission notification requirements will not apply to BlueCard.

  • Admission and effective August 1, 2013, discharge notification, must be made via fax to 1 (800) 453-4341 or by providing Regence access to the information via an electronic medical record application.
  • Admission notification by the facility is required even if a pre-authorization was completed by the physician or other health care professional and a pre-authorization approval is on file with Regence.
  • Receipt of an admission notification does not guarantee or authorize payment. Payment of covered services is contingent upon coverage within an individual Regence member’s benefit plan, the facility being eligible for payment, any claim processing requirements, and the facility’s participation agreement with Regence.
  • Admission notifications must contain the following details regarding the admission:
    • Member/patient’s full name, date of birth and member number
    • Facility name and TIN or NPI
    • Actual admission date and anticipated discharge date
    • Admitting/attending physician full name and TIN or NPI
    • Description for admitting diagnosis or ICD-9-CM diagnosis code
  • Discharge Notifications must also contain the following on related to patient discharge:
    • Member/patient’s full name, date of birth and member number
    • Primary diagnosis
    • Discharge disposition
    • Date of actual discharge,
    • Facility name and TIN or NPI

Receive a fax of all hospital admissions
We can send our contracted hospitals a fax of all hospital admissions we have received from your facility each week. Contact your provider relations representative and provide the name or department where the report should be sent along with a secure fax number and we will begin faxing this to you weekly.

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Payment implications for failure to timely notify or pre-authorize services

Effective with admission dates of service on or after July 1, 2013, failure to provide notification of inpatient admission or secure approval for services subject to pre-authorization will result in claim non-payment and provider liability. Our members must be held harmless and cannot be balance billed.

Please note the following:

  • If the facility follows the inpatient admission and discharge notification requirement indicated above, they will not be subject to any pre-authorization penalties for failure by the physician or other health care professional to pre-authorize a service. We will review for medical necessity.
  • If the physician or other health care professional follows the pre-authorization requirements outlined on our pre-authorization lists, they will not be subject to any penalties for failure of the facility to provide the required inpatient admission and discharge notification. We will review for medical necessity.
  • The following are facility pre-authorization requirements prior to patient admission:
    • Inpatient rehabilitation
    • Skilled nursing facility (SNF) care
    • Long term acute care facility (LTAC) care
    • Residential treatment for mental health and chemical dependency
  • An inpatient admission and discharge notification or pre-authorization do not guarantee payment for requested services. Regence reimbursement policies may affect how claims are reimbursed and payment of benefits is subject to all plan provisions, including eligibility for benefits. Services must always be medically necessary.

Notification Timeframe Reimbursement
There will be four situations where exceptions to not obtaining a pre-authorization or failure to notify us of inpatient admissions may apply as part of our Administration Dispute Exception Criteria include:

  1. Member presented with an incorrect member card or member number.
  2. Natural disaster prevented the provider or facility from securing a pre-authorization or providing hospital admission notification.
  3. Member is unable to communicate (e.g., unconscious) medical insurance coverage. Neither family nor collateral support present are able to provide coverage information.
  4. Compelling evidence the provider or facility attempted to obtain pre-authorization or provide hospital admission notification. The evidence shall support the provider or facility followed our policy.

Note: A copy of the provider's or facility's fax cover sheet indicating the member health plan information and a fax confirmation from the fax machine showing the fax was successfully sent to the appropriate health plan fax number will be considered compelling evidence.

Learn how to appeal an administrative denial.

Pre-authorization requirements for BlueCard members
Effective July 1, 2014, contracted facilities are required to obtain pre-authorization or pre-certification for inpatient admissions for BlueCard members from his or her Home Plan in accordance with each member’s Plan requirements.

As of this date:

  • Pre-authorization or pre-certification must be received by the member’s Home Plan within 24 hours after the actual weekday admission (or by 5:00 p.m. local time on the next business day, if 24 hour notification would require notification on a weekend or a federal holiday).
  • The member’s Home Plan must be notified of any changes or modifications to a pre-service review for out-of-area BlueCard members within 48 hours or within 72 hours for emergent/urgent admissions.
  • Failure to obtain a pre-authorization or pre-certification for required inpatient admissions occurring on or after July 1 or failure to notify Home Plan of modifications to a pre-service review will result in claim non-payment for services provided by the facility and is a write-off.
  • The member must be held harmless and cannot be balance-billed if the above pre-authorization or pre-certification requirements have not been followed.

Note: Requirements outlined in the Admission and discharge notification requirements section of this manual do not apply to BlueCard members.

Determining pre-authorization or pre-certification requirements for BlueCard members
Pre-authorization or pre-certification contact information for a member’s Plan is provided on the BlueCard member’s identification card. Pre-authorization or pre-certification requirements for a particular member can be determined by:

  • Using the Electronic Provider Access (EPA) tool available in the Availity portal. With EPA, you can gain access to an out-of-area member’s Home Plan provider portal, through a secure routing mechanism and have access to electronic pre-service review capabilities.
  • Submitting an ANSI 278 electronic transaction to Regence or calling 1 (800) 676-BLUE
  • Using our online router tool (available for commercial members only) located in both the Care Management and BlueCard sections of our website under Pre-authorization

Inpatient concurrent review
Concurrent review process for all inpatient admissions will begin on day one of admission. Important facts to note:

  • Inpatient concurrent review will focus on:
    • Review of admissions that are not prescheduled
    • Concurrent review for high volume and/or high length of stay
    • Discharge planning and care management referral for targeted members
  • Patient admission and discharge dates should be verified with Regence
  • All reviews will be based on MCG Goal Length of Stay – national/industry standards
It is Regence’s intent to conduct post-payment reviews for medical necessity only when such reviews are not conducted concurrently. You may continue to receive some requests for post-payment review for short-stay claims.

Revised April 2014

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