Reason Code 12505

Description
The average daily rate on a SNF or inpatient claim must be equal to or greater than the calculated coinsurance rate for each calendar year, unless an occurrence span code 77 is present on the claim. The average daily rate is computed as the total covered charges less non-covered charges divided by the number of covered days. The coinsurance rate is computed as the value code amount divided by the number of coinsurance days.

Example: value code 09 amount is divided by the number of first year coinsurance days. Value code 11 amount is divided by the number of second year coinsurance days.

Resolution
Please verify the information billed and submit a new claim, if appropriate. The new claim may be submitted through electronic media claims.

Resource
CMS Internet Only Manual (IOM), Publication 100-4, Medicare Claims Processing Manual.