Blog, Revenue Cycle, The Hospital Finance Podcast®

IME Shadow Billing [PODCAST]

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In this episode, Vinny Farina, Senior Manager in the Revenue Cycle team at BESLER Consulting, walks you through various aspects of IME shadow billing and how that entire process works within your hospital.

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There are two types of additional payments from Medicare through the Part A Program that teaching hospitals receive from Medicare Advantage acute inpatient discharges – Indirect Medical Education (IME) and Direct Graduate Medical Education (DGME).

Teaching facilities are entitled to both IME and DGME for the Medicare Advantage Part C patients they treat for the Medicare Part A program since the IME component is excluded from the Medicare Advantage DRG payment.

Shadow billing is synonymous with no-pay or information-only claims. Both are unofficial terms that refer to the process wherein hospitals submit claims to their MAC, Medicare Administrative Contractor, for inpatient services provided to Medicare beneficiaries who are enrolled in a Medicare Advantage Plan Part C.

Shadow claims are used by acute care inpatient facilities and non-IPPS hospitals like long-term care, rehabilitation, psychiatric, children and cancer facilities that have teaching programs.

Non-teaching hospitals are required to submit shadow bills for purposes of accumulating Medicare Advantage patient days for inclusion in the DSH SSI ratio.

Unlike other billing submission processes, a shadow claim is sent to Medicare Part A in addition to the claim submitted to the Medicare Advantage Program. A shadow claim requires the patient’s HIC number, the health insurance claim number.

The number one reason that shadow bills are generally missed and non-payment occurs is because patient Medicare HIC numbers required for Medical Part A billing are not collected at the time of service. Other reasons include:

  • When systems do not recognize that the plan is a Medicare Advantage plan
  • When older systems require manual intervention to generate the shadow bill
  • Failure to adhere to the 12-month timely filing deadline

Resources related to this episode:


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