What are Non-covered Charges in Medical Billing

Sometimes providers tend to bill insurance companies for medical services that are not covered by insurance companies. This may happen because the provider may have forgotten the covered services as per the patient’s insurance plan and billed the insurance carrier by mistake. However, the insurance company is free to reject the claims billing for non-covered services. Nevertheless, it is important to have a good understanding of non-covered charges to avoid billing mistakes in the future.

Definition of Non-covered Charges

In medical billing, the term non-covered charges refer to the billed amount/charges that are not paid by Medicare or any other insurance company for certain medical services depending on various conditions. Filing claims for non-covered charges are likely to result in denial of claims.

Understanding Medicare Non-covered Charges

The Medicare program divides non-covered charges for items and services into four categories (along with a few exceptions):

• Medically unreasonable and unnecessary services and supplies
• Non-covered items and services
• Services and supplies denied as bundled or included in the basic allowance of another service
• Items and services reimbursable by other organizations or furnished without charge

(https://www.cms.gov/outreach-and-education/medicare-learning-network-mln/mlnproducts/downloads/items-and-services-not-covered-under-medicare-booklet-icn906765.pdf)

As per the Centers for Medicare and Medicaid Services (CMS) “any item or service furnished directly or indirectly by an individual or entity excluded by the Office of Inspector General from participating in all Federal health care programs, is a non-covered item or service pursuant to Section 1862(e) of the Social Security Act.”

Out of these four categories “medically unreasonable and unnecessary services and supplies” and “non-covered items and services” play a huge role in a provider’s medical billing practice.

Medically unreasonable and unnecessary services and supplies

• Services that could have been furnished in a lower-cost setting like the beneficiary’s home or a nursing home
• Exceeding length-of-stay limitations
• E/M services exceeding those considered medically reasonable and necessary
• Excessive therapy or diagnostic procedures
• Unrelated screening tests, examinations, and therapies
• Unnecessary services based on the diagnosis like acupuncture and transcendental meditation
• Items and services administered to a beneficiary for assisted suicide
• Services like Medicare Preventive Services, Transitional Care Management, Chronic Care Management, Advance Care Planning are covered as exceptions

To make service reasonable and necessary the provider must Services must meet the criteria defined by National Coverage Determinations (NCDs) and Local Coverage Determinations (LCDs), and also must indicate the specific sign or symptom that the beneficiary is showing.

Non-covered items and services are divided into the following categories:

• Custodial Care (such as long-term care services and supports)
• Items and Services Furnished Outside the United States
• Items and Services Required as a Result of War
• Personal Comfort Items and Services
• Routine Physical Checkups; Certain Eye Examinations, Eyeglasses, and Lenses; Hearing Aids and Examinations; and Certain Immunizations
• Cosmetic Surgery
• Items and Services Furnished by the Beneficiary’s Immediate Relatives and Members of the Beneficiary’s Household
• Dental Services
• Inpatient Hospital or SNF Services Not Delivered Directly or Under Arrangement by the Provider
• Certain Foot Care Services and Supportive Devices for the Feet
• Investigational Devices
• Services Related to and Required as a Result of Services Not Covered