HI 00601.015 Bed and Board

A. General

Effective for accounting periods beginning after December 31, 1971, CMS regulations provide for apportionment of routine service costs on the basis of average per diem cost under both the Departmental and the Combination methods of cost apportionment. Thus, the program will pay the same amount for routine services whether the patient has a private room not medically necessary, a private room medically necessary (Medicare does not pay for deluxe accommodations in any case), a semiprivate room (two, three, or four-bed accommodations), or ward accommodations, if its ward accommodations are consistent with program purposes (see C. below).

A provider having both private and semiprivate accommodations may nevertheless charge the patient a differential for a private room if:

  1. The private room is not medically necessary; and

  2. The patient (or relative or other person acting on his behalf) has requested the private room and the provider informs him at the time of the request of the amount of the charge.

The private room differential may not exceed the difference between the customary charge for the accommodations furnished and the most prevalent semiprivate accommodation rate at the time of the patient’s admission.

When the provider bills for a private room as a covered service, the intermediary deems the private room to have been medically necessary. When the provider shows a private room differential as a non-covered charge, the intermediary assumes that the private room was not medically necessary.

If the beneficiary (or his representative) protests a charge for the private room on the grounds that the privacy was medically necessary, or that the provider did not inform him of the charge, assist him in filing a reconsideration and forward it to the intermediary. The intermediary will develop the facts and make a specific determination regarding the medical necessity of the private room.

When it is necessary to develop the medical necessity of a private room, the guidelines in subsection B. apply.

B. Medical necessity

1. Need for isolation

A private room is medically necessary when isolation of a beneficiary is required to avoid jeopardizing his health or recovery, or that of other patients who are likely to be alarmed or disturbed by the beneficiary’s communicable disease. For example, communicable disease, heart attacks, cerebrovascular accidents, and psychotic episodes may require isolation of the patient for certain periods.

In establishing the medical necessity for isolation, the date of the physician’s written statement is not controlling, nor is the presence of a written statement. The crucial question is whether a private room was ordered by the physician because it was necessary for the health of the patient himself or of other patients.

2. Admission required and only private rooms available

A private room is considered to be medically necessary even though the beneficiary’s condition does not require isolation if he needs immediate hospitalization (i.e., his medical condition is such that hospitalization cannot be deferred) and the hospital has no semiprivate or ward accommodations available at the time of admission. Such beneficiary may not be charged for the private room while the other accommodations remain unavailable.

3. All-private room providers

If the patient is admitted to a provider which has only private accommodations, and no semiprivate or ward accommodations, medical necessity will be deemed to exist for the accommodations furnished. Beneficiaries are not to be subject to an extra charge for a private room in an all-private room provider.

4. Charges for deluxe private room

A beneficiary who needs a private room may be assigned to any of the provider’s private rooms.

Although he does not have the right to insist on the private room of his choice, his preferences are given the same consideration as if he were paying all provider charges himself. The program does not, under any circumstances, pay for personal comfort items. Thus, the program does not pay for deluxe accommodations and/or services; these include a suite, or a room substantially more spacious than is required for treatment, or specially equipped or decorated, or serviced for the comfort and convenience of persons willing to pay a differential for such amenities. If he (or his representative) requests such deluxe accommodations, the provider advises him that there will be a charge, not covered by Medicare, of a specified amount per day and may charge him that amount for each day he occupies the deluxe accommodations.

The beneficiary may not be charged such a differential in private room rates if that differential is based on factors other than personal comfort items. Such factors might include differences between older and newer wings, proximity to lounge, elevators or nursing stations, desirable view, etc. Such rooms are standard one-bed units and not deluxe room for purposes for these instructions, even though the provider may call them deluxe and have a higher customary charge for them. No additional charge may be imposed upon the beneficiary who is assigned to a room which may be somewhat more desirable because of these factors.

C. Wards

The law contemplates that Medicare patients should not be assigned to ward accommodations except at the patient’s request or for a reason consistent with the purposes of the health insurance program.

When ward accommodations are furnished at the patient’s request or for a reason determined to be consistent with the program’s purposes, payment is based on the average per diem cost of routine services (see A. above). Where ward accommodations are assigned for other reasons, the law provides what may be a substantial penalty. (See 2. below.)

1. Assignment consistent with program purposes

It is consistent with program purposes to assign the patient to ward accommodations if all semiprivate accommodations are occupied, or the facility has no semiprivate accommodations. However, the patient must be moved to semiprivate accommodations if they become available during his stay.

Some providers have a policy of placing in wards all patients who do not have private physicians. Such a practice may be consistent with the purposes of the program if the intermediary determines that the ward assignment insures to the benefit of the patient. In making this determination, the intermediary’s principal consideration is whether the assignment is likely to result in better medical treatment of the patient (e.g., it facilitates necessary medical and nursing supervision and treatment).

2. Assignment not consistent with program purposes

It is not consistent with the purposes of the law to assign a patient ward accommodations on the basis of his social or economic status, his national origin, race, or religion, or his entitlement to benefits as a Medicare patient, or any other such discriminatory reason. It is also inconsistent with the purposes of the law to assign patients to ward accommodations merely for the convenience or financial advantage of the institution.

If a ward assignment is made neither at the patient’s request nor for a reason consistent with the purpose of the program, the reimbursement to the provider for the routine services is decreased. The reduction in payment, when applicable, is made by the intermediary at the end-of-year settlement.

D. Special care units that provide general routine care

One of the requirements for recognition of a hospital special accommodation care unit is that it must be physically identifiable as separate from general accommodation care areas and it must normally render only special care. When a hospital places general care patients temporarily in special care units because all of the beds available for general care patients are occupied, Medicare still considers such special care units as meeting the program requirements of being physically separate. However, the hospital must be able to furnish sufficient documentation to satisfy the intermediary that only overflow general care patients are being placed in the special care units. The provider may not charge beneficiaries who are overflow from general care accommodations for care in special care units.


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HI 00601.015 - Bed and Board - 04/03/2015
Batch run: 04/03/2015
Rev:04/03/2015