Blue Cross Newsletter

November 23, 1993                       1993 BLUE CROSS NEWSLETTER
                                        **************************

TO:         ALL BLUE CROSS PSYCHIATRIC HOSPITALS AND
            FREESTANDING SUBSTANCE ABUSE FACILITIES

FROM:       Donna Bartee, Communications Coordinator
            Provider Relations Department

SUBJECT:    PAYMENT OF ANCILLARY SERVICES WHEN AN INPATIENT STAY IS
            NOT MEDICALLY NECESSARY
            *******************************************************

When an inpatient stay is not considered medically necessary, it is
the intent of our 'Insureds Contract' to provide eligible benefits
for the ancillary services as if they had been provided as an
outpatient service.  This process is fairly easy for Blue Cross to
accomplish when the provider is a hospital  because their claim
itemizes the ancillary charges.

You as a per diem paid provider are required to submit your
inpatient charges using only one revenue code which is code 100.
Therefore, when an inpatient claim is denied as not medically
necessary, we cannot automatically process the ancillaries as
outpatient.  What's going to occur is, the inpatient claim will be
returned to you requesting that the ancillary services be rebilled
to Blue Cross as outpatient.  When received, we will process the
charges as outpatient according to the contractual terms of the
Insureds Contract and subject to any outpatient payment limitations
if applicable.

This change is effective October 1, 1993, and is applicable to
Insureds Contract underwritten by Blue Cross and Blue Shield of
Kansas.

If you have any questions, contact your provider consultant:

        Steve Dean          (913) 291-8227
        Angie Martin        (316) 269-1602

jw