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The purpose of this bulletin is to clarify inpatient billing for inpatient psychiatric, including IMD admissions eligible for Fee-for-Service (FFS) coverage, and inpatient rehabilitation services when members transition between FFS and Managed Care Organizations (MCO) during the inpatient hospitalization.  These services are reimbursed using a per-diem rate per day of eligibility.   

Per Diem Requirements

When the member is enrolled in FFS at admission and transitions to MCO enrollment, providers are to bill the appropriate entity (FFS/MCO) based on the member’s enrollment on the date(s) of service.  Enrollment transitions from FFS to managed care during the hospital admission will require the provider to bill FFS for the dates of service in which the member was covered by FFS and separately bill the MCO for the dates of service that covered the member under the MCO. Providers are also required to separately bill each MCO that covered the member for that timeframe during the hospital stay. 

Per Diem Billing Example:  

Scenario: A member is enrolled in FFS at the time they are admitted to inpatient psych on 8/17/24. The member remains admitted to the inpatient psych and is discharged on 10/12/24. The member is enrolled with an MCO during dates of service 9/1/24 – 10/12/24. 

Billing: The provider bills the FFS portion of the hospitalization from 8/17/24 - 9/01/24, with bill type 111 and discharge status of 01.  Since the member will transition from FFS to managed care on 9/1/24, 9/1/24 is the last bill date under FFS as this is considered the ‘discharge date’ for the FFS portion of the member’s stay to ensure the provider is paid through 8/31/24 under FFS. The provider bills the assigned MCO from 9/1/24 - 10/12/24.

Explanation: The last date on the claim is typically the discharge date. Providers are not paid a per diem for the member’s discharge day. In this example, the provider will bill FFS through 9/1/24 since that is the date the member transitions from FFS to managed care. This results in the provider being paid under FFS for 8/31/24 and under the MCO beginning 9/1/24. Claims must be billed this way to ensure correct reimbursement and to prevent the claims from suspending for edits. 

 Service Authorization 

When a provider submits a FFS service authorization (SA) request for a member who has a pre-assignment to an MCO and the requested dates of service span into the MCO assignment month, the FFS SA request and date span will authorize based on medical necessity. The resulting approved dates of service may include dates with FFS coverage and dates within the pending MCO coverage time period.  This will allow for continuity of care, which is a routine function, and it ensures that a member’s authorized services will be covered by both FFS and the members MCO when any member transfers benefit plans between FFS to MCO or during MCO to FFS transitions.

Continuity of Care and Existing Service Authorizations

To ensure continuity of care, Cardinal Care health plans will honor existing service authorizations for their enrolled members until the service authorization ends or for 30 days after the Member’s MCO enrollment begin date, whichever is sooner. Providers must contract with the member’s health plan or have a single case agreement in place in order to receive reimbursement for services rendered to Cardinal Care MCO enrolled members. The continuity of care period serves to ensure seamless and effective member transitions. Non-contracted providers should contact the plans to ensure that they have an out-of-network agreement in place for claim payment purposes. 

 Following this 30-day continuity of care period, health plans have the option of transitioning the member to a provider in their network or continuing to pay the provider on an out-of-network basis.  Contracting and credentialing contacts for each of the Cardinal Care health plans are available by region on the DMAS website, MCO Directories at: https://www.dmas.virginia.gov/for-providers/cardinal-care/provider-health-plan-resources/.

APR DRG Requirements

For APR-DRG billing requirements, please reference DMAS Medicaid Memo dated 10/17/2023. 

Eligibility at Time of Service

Effective on and after July 1, 2024, in accordance with federal policy guidance, DMAS will reimburse ONLY the portion of the per-diem payment hospitalization for which the member has been determined Medicaid/FAMIS eligible.

Verification of Member Eligibility and Managed Care Enrollment: 

DMAS provides multiple ways for providers to verify the Member’s eligibility and managed care enrollment, including through the automated phone system using MediCall (1-800-884-9730, or 804-965-9732), through the Virginia Medicaid provider portal (MES), or using the 270/271 electronic data interchange (EDI) transaction. For additional information, visit the MES Provider Resources web page.