DMERC MEDICARE ADVISORY

Transcription

1 Palmetto GBA DMERC MEDICARE ADVISORY Durable Medical Equipment Regional Carrier PO Box Columbia SC Spring 2003 Issue 44 Page IN THIS ISSUE 2003 HCPCS Changes...40 ABN and Denials for Unassigned Claims...11 ABN: New Modifiers...10 EDI Remittance Advice Codes...20 Adjustment Reason Codes...24 E-MSNs Available...38 Fee Updates 2003 First Quarter Drug Fee Update First Quarter Oral Anti-Cancer April Quarterly DMEPOS Fee ScheduleUpdates...28 HIPAA ANSI 270/271 Eligibility Inquiry and Response...17 ANSI V4010A1 Approved...17 HIPAA-Ready Medicare Free Software to Be Distributed in April Home Health Consolidated Billing HCPCS Update...9 Interest Rate for Medicare Overpayments and Underpayments...33 Multiple Primary Payers on Electronic and Hardcopy Claims...12 Medical Affairs Bulletins CPAP and RAD - Apnea/Hypopnea Index...3 E Noncoverage Determination...4 External Infusion Pump Policy HCPCS Coding Changes...6 Functional Electrical Stimulation (FES) New Coverage and Coding...4 Home Promthrombin Noncoverage...8 Insulin for Use in DME New HCPCS Code...7 LMRP Revisions - Medical Policy Database...1 Physician Information Sheets (PHYISs) Eliminated...2 Tilt-In-Space and Pediatric Wheelchairs New HCPCS Codes...8 Ombudsmen Addresses & Territories...47 Online Event Enrollment...36 Online Workshop Schedule...38 Overpayment Appeals FAQs...25 Provider Communications (PCOM) Advisory Group...15 Region C Directory...48 Register on the Palmetto GBA Web Site...35 SNF Consolidated Billing - New DMEPOS Requirements...13 Standardizing Prices for Medicare-Covered Drugs...19 Telephone Service Improvements...34 UPIN Requirements...18 VMS To Process ICD-9 Codes Using Date of Service...9 Web-Based Tutorials...36 LOCAL MEDICARE REVIEW POLICY REVISIONS - MEDICARE POLICY DATABASE The Centers for Medicare & Medicaid Services (CMS) has mandated that the Local Medical Review Policies (LMRPs) for all contractors be put into a standard format that can be incorporated into a web-based national database. As a result, all of the DMERC policies have been revised and are replacing the existing policies. The newly revised policies will have an effective date of April 1, As part of this revision, additions, changes, and deletions of HCPCS codes and modifiers that were included in the 2003 HCPCS update have been incorporated into the policies. LMRP NATIONAL The changes made to each policy are indicated in a section titled Revision DATABASE History Explanation. This section provides detailed information on the changes that have been made. Suppliers are encouraged to review this section in each policy. MEDICARE Palmetto GBA cont. Alabama Arkansas Colorado Florida Georgia Kentucky Louisiana Mississippi New Mexico North Carolina Oklahoma Puerto Rico South Carolina Tennessee Texas Virgin Islands Comments and suggestions are welcome. Please direct them to Communications Specialists in the Professional Relations Department at the address listed above.

2 Page 2 LOCAL MEDICARE REVIEW POLICY REVISIONS - MEDICARE POLICY DATABASE cont. Spring 2003 DMERC Medicare Advisory Selected changes from some of the policies are presented in articles either in the Winter 2002, or this Advisory. Medical policies will continue to be posted on the Palmetto GBA DMERC Web site ( The Medicare National Coverage Database can be found at Included in this database are National Coverage Determinations, National Coverage Analyses, and Local Medical Review Policies from the DMERCs, local carriers, fiscal intermediaries, and Regional Home Health Intermediaries (RHHIs). A future enhancement will incorporate bulletin articles into this searchable database. When entering the geographical area of the search, selecting any state in Region C will result in the same policy being displayed. Users can search by HCPCS code or by key words in the title or the entire document. Users can also search by effective date of the policy. When searching by effective date, the only policies that are included in the database are the policies with effective dates of 4/1/03 and the policies which were in effect immediately prior to those revisions. PHYSICIAN INFORMATION SHEETS (PHYISS) ELIMINATED As a convenience to Region C suppliers, Palmetto GBA posts its Advisories, Supplier Manual revisions, and Local Medical Review Policies (LMRPs) on its Web site. Internet publication of these items has not only reduced administrative costs for Medicare, but has also made this information readily available to all Medicare stakeholders who wish to visit our Web site, including physicians who prescribe durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). As a result, Chapter 73 - Physician Information Sheets (PHYISs), has been eliminated from the Region C DMERC DMEPOS Supplier Manual. Physicians may now view the DMERC LMRPs directly via the Internet. This easy access will eliminate the extra cost and effort suppliers have experienced until now when distributing Region C's PHYISs to physicians in order to educate them about DMEPOS coverage criteria. Suppliers may now just instruct physicians to go to the Palmetto GBA Web site ( and under "Providers," choose "DMERC," then "Medical Policies." As LMRPs are frequently updated, they will remain the sole source of information on coverage criteria (important to physicians) without any competing sources (for example, PHYISs) which might cause confusion and represent repetitive information for the physician to read. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

3 Spring 2003 DMERC Medicare Advisory Page 3 CPAP AND RESPIRATORY ASSIST DEVICES - APNEA/HYPOPNEA INDEX Changes in the Continuous Positive Airway Pressure (CPAP) and Respiratory Assist Devices local medical review policies (LMRPs), effective July 1, 2002, represented significant liberalizations in the criteria for qualification for these devices when used in the treatment of obstructive sleep apnea. However, based upon inquiries from providers, there are several basic points that merit emphasis. The Apnea/Hypopnea Index (AHI) refers to the average number of apneas and hypopneas per hour and must be based on a minimum of two hours of sleep off a positive pressure device, recorded by polysomnography using actual recorded hours of sleep. The definitions for apnea and hypopnea are included in the policies. Leg movement, snoring, respiratory event related arousals (RERAs), and other sleep disturbances that may be included by some polysomnographic facilities are not considered to meet the AHI definition in the LMRPs. Some facilities use the term Respiratory Disturbance Index (RDI) to describe a calculation that includes these other sleep disturbances. For that reason, the term RDI is being removed from the two policies. Claims for items based upon an index that does not score apneas and hypopneas separately from other sleep disturbance events, will be denied as not medically necessary. Only an Apnea/Hypopnea Index as defined in the policy and that meets coverage criteria qualifies for use of a KX modifier. Polysomnography studies often take the form of split night studies in which a diagnostic portion of the study with the patient not on any device is followed by a therapeutic portion of the study in which a CPAP device is used to determine the response to treatment and to help select optimal pressure settings. Qualification for a CPAP device must be calculated based on a minimum of two hours of sleep without a device being worn. In other words, there must be a minimum of two hours of recorded sleep off CPAP in order to calculate the AHI and make the diagnosis of obstructive sleep apnea. The AHI may not be extrapolated or projected. If the date of service (DOS) is for the fourth month or after in the capped rental cycle, compliance information must be obtained. For CPAP devices, this requirement was effective with the effective date of the policy, July 1, 2002, and applies to all beneficiaries on a CPAP device as of that date. Should providers choose to obtain this information via telephone, providers must document, at a minimum, the date of the call and to whom they spoke. For respiratory assist devices (RADs), the compliance requirements differ significantly from those for CPAP devices. Refer to the RAD policy for information on coverage criteria and documentation requirements for those devices. Providers are reminded that polysomnographic studies must be performed in a facility based sleep study laboratory. These facilities must be qualified providers of Medicare services, or a hospital certified to do such tests and must comply with all applicable state regulatory requirements. Durable Medical Equipment providers may NOT perform the sleep studies. Bulletins issued after October 1, 1999 are available at no cost from our Web site at

4 Page 4 CMS ISSUES NONCOVERAGE DETERMINATION ON E0761 Spring 2003 DMERC Medicare Advisory The CMS has issued a national coverage decision in the Medicare Coverage Issues Manual (CIM), sections 60-9 ( Electrical Stimulation for Wounds) and ( stating that, effective for dates of service on or after April 1, 2003, electrical stimulation devices that are used for the treatment of wounds in the home setting and that are billed to the DMERC as DME will be denied as not medically necessary. Effective for dates of service on or after January 1, 2003, a new code was created for a particular type of electrical stimulation device used for wound healing. E0761 Non-thermal pulsed high frequency radiowaves, high peak power electromagnetic energy treatment device Diapulse is an example of a device described by this code. Manufacturers or suppliers should contact the SADMERC for guidance on whether other devices meet the definition of this code. Suppliers are reminded that the establishment of a unique code for a particular product does not necessarily indicate coverage. For dates of service prior to April 1, 2003, the DMERC will apply individual consideration to claims, based upon the national coverage decision (#CAG-00068N) which is posted at and which led to sections 60-9 and in the CIM. FUNCTIONAL ELECTRICAL STIMULATION (FES) - NEW COVERAGE AND HCPCS CODING Effective for dates of service on or after April 1, 2003, the Centers for Medicare & Medicaid Services (CMS) has issued a National Coverage Determination (NCD) establishing coverage for functional electrical stimulation (FES) to enable spinal cord injured (SCI) patients to walk. Coverage Issues Manual (CIM) Section has been revised to reflect the new NCD. Details of the NCD can be found at FES is a technique that uses electrical impulses to activate paralyzed or weak muscles in precise sequence. The FES device transmits these electrical impulses via surface electrodes in the same manner as neuromuscular electrical stimulation (NMES). For example, through selective and sequential stimulation of various lower extremity muscle groups, FES can enable spinal cord injured (SCI) patients to walk. Coverage of NMES (other than FES) to treat muscle atrophy is limited to the treatment of patients with disuse atrophy where the nerve supply to the muscle is intact, including brain, spinal cord and peripheral nerves and other non-neurological reasons for disuse atrophy. There has been no change in coverage criteria when NMES is used to treat disuse atrophy. Coverage of FES Medicare will consider coverage of FES for SCI patients who have completed a training program consisting of at least 32 physical therapy sessions with the device, over a period of three months. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

5 Spring 2003 DMERC Medicare Advisory Page 5 FUNCTIONAL ELECTRICAL STIMULATION (FES) - NEW COVERAGE AND HCPCS CODING cont. Coverage for FES to enhance walking will be limited to SCI patients with an ICD-9 diagnosis of (paraplegia - paralysis of both lower limbs) and with all of the following characteristics: 1) Persons with intact lower motor units (L1 and below) (both muscle and peripheral nerve); and, 2) Persons with muscle and joint stability for weight bearing at upper and lower extremities that can demonstrate balance and control to maintain an upright support posture independently; and, 3) Persons that demonstrate brisk muscle contraction to NMES and have sensory perception of electrical stimulation sufficient for muscle contraction; and, 4) Persons that possess high motivation, commitment and cognitive ability to use such devices for walking; and, 5) Persons that can transfer independently and can demonstrate standing independently for at least three minutes; and, 6) Persons that can demonstrate hand and finger function to manipulate controls; and, 7) Persons with at least six-month post recovery spinal cord injury and restorative surgery; and, 8) Persons without hip and knee degenerative disease and no history of long bone fracture secondary to osteoporosis; and, 9) Persons who have demonstrated a willingness to use the device long-term. FES to enhance walking for SCI patients will not be covered for SCI patients with any of the following: 1) presence of cardiac pacemakers; 2) severe scoliosis or severe osteoporosis; 3) irreversible contracture; 4) autonomic dysreflexia; or 5) skin disease or cancer at area of stimulation. Indications for FES other than to enable SCI patients to walk will be denied as not medically necessary. HCPCS Coding of FES For dates of service on or after April 1, 2003, a new HCPCS code must be used when billing for FES: K0600 Functional neuromuscular stimulator, transcutaneous stimulation of muscles of ambulation with computer control, used for walking by spinal cord injured, entire system, after completion of training program Note that HCPCS code K0600 represents the "entire system" for the FES device. Therefore, individual components such as walkers, crutches or other supplies must not be billed separately. Bulletins issued after October 1, 1999 are available at no cost from our Web site at

6 Page 6 FUNCTIONAL ELECTRICAL STIMULATION (FES) - NEW COVERAGE AND HCPCS CODING cont. Spring 2003 DMERC Medicare Advisory One such device meeting the definition of HCPCS code K0600 is the Parastep I System, manufactured by Sigmedics, Inc. Manufacturers or suppliers should contact the SADMERC for guidance on whether a particular device meets the definition of this HCPCS code. HCPCS code K0600 must not be used for dates of service prior to April 1, Use HCPCS code E1399 and submit documentation of the manufacturer, name, model and description of the device being billed, and how it is being used. Claims for FES for dates of service prior to April 1, 2003 will be denied as not medically necessary. Documentation of FES For this item to be covered by Medicare, a written signed and dated order must be received by the supplier before a claim is submitted to the DMERC. This order must be signed and dated by the treating physician, kept on file by the supplier, and made available to the DMERC upon request. If the supplier bills for this item without first receiving the completed order, the item will be denied as not medically necessary. Items billed to the DMERC before a signed and dated order has been received by the supplier must be submitted with an EY modifier (No physician or other health care provider order for this item or service) added to each affected HCPCS code. For dates of service on or after April 1, 2003, if all the above criteria for coverage are met, HCPCS code K0600 must be billed with a KX modifier (Specific required documentation on file). If ICD-9 diagnosis code is applicable, it must be added to the claim. If all the coverage criteria listed above are not present, a KX modifier must not be added to the code. Please refer to the DMEPOS Supplier Manual for more information on orders, medical records, and supplier documentation. EXTERNAL INFUSION PUMP POLICY HCPCS Coding Changes Effective for dates of service on or after April 1, 2003, the following HCPCS code changes are applicable to the External Infusion Pump local medical review policy (LMRP). HCPCS code A4232 (Syringe with needle for external insulin pump, sterile, 3 cc), will no longer be valid for claim submission to the DMERCs and will be replaced by a new HCPCS code, K0552 (Supplies for external infusion pump, syringe type cartridge, sterile, each). Under the standard grace period, HCPCS code A4232 will continue to be accepted on claims with dates of service on or after April 1, 2003 that are received by June 30, Claims for HCPCS code A4232 with dates of service on or after April 1, 2003 that are received on or after July 1, 2003 will be returned as unprocessable or denied for incorrect coding. HCPCS code K0455 is changed to read as follows: "Infusion pump used for uninterrupted parenteral administration of medication, epoprostenol or treprostinil." This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

7 Spring 2003 DMERC Medicare Advisory Page 7 EXTERNAL INFUSION PUMP POLICY - HCPCS CODING CHANGES cont. K0601 K0602 K0603 K0604 K0605 HCPCS code A4632 (Replacement battery for external infusion pump, any type, each), will no longer be valid for claim submission to the DMERCs. HCPCS Code A4632 will be replaced with the following HCPCS codes: Replacement battery for external infusion pump owned by patient, silver oxide, 1.5 volt, each Replacement battery for external infusion pump owned by patient, silver oxide, 3 volt, each Replacement battery for external infusion pump owned by patient, alkaline, 1.5 volt, each Replacement battery for external infusion pump owned by patient, lithium, 3.6 volt, each Replacement battery for external infusion pump owned by patient, lithium, 4.5 volt, each Under the standard grace period, HCPCS code A4632 will continue to be accepted on claims with dates of service on or after April 1, 2003 that are received by June 30, Claims for HCPCS code A4632 with dates of service on or after April 1, 2003 that are received on or after July 1, 2003 will be returned as unprocessable or denied for incorrect coding. Providers should refer to the External Infusion Pumps LMRP for additional information on the coverage, coding, and documentation requirements for these items. INSULIN FOR USE IN DURABLE MEDICAL EQUIPMENT New HCPCS Code Effective for dates of service on or after January 1, 2003, HCPCS code K0548 (Injection, insulin Lispro, up to 50 units) is being crosswalked to a permanent code established for insulin used in conjunction with durable medical equipment (e.g., an insulin infusion pump). J1817 Insulin for administration through DME (i.e., insulin pump) per 50 units Also effective for dates of service on or after January 1, 2003, HCPCS code J1820 (Injection, insulin, up to 100 units) is being discontinued and a new code created for self-administered insulin. J1815 Injection, insulin, per 5 units HCPCS code J1815 must not be used for insulin administered through DME. Suppliers should use the J code that corresponds to the specific route of administration being used. Claims submitted for HCPCS code J1815 when administered through DME will be denied as not reasonable and necessary. Under the standard grace period, HCPCS codes K0548 and J1820 will continue to be accepted on claims with dates of service on or after January 1, 2003 that are received by March 31, Claims with codes K0548 and J1820 with dates of service on or after January 1, 2003 that are received on or after April 1, 2003 will be returned as unprocessable or denied for incorrect coding. HCPCS codes K0548 Bulletins issued after October 1, 1999 are available at no cost from our Web site at

8 Page 8 INSULIN FOR USE IN DURABLE MEDICAL EQUIPMENT New HCPCS Code, cont. Spring 2003 DMERC Medicare Advisory and J1820 should continue to be used for claims with dates of service prior to January 1, 2003, regardless of the date of claim submission. For beneficiaries with a covered insulin pump and certificate of medical necessity (CMN) on file, no new CMN or revised CMN is required for this coding change. For more information on the coverage, coding, and documentation requirements for these codes, please refer to the External Infusion Pump local medical review policy in the DMEPOS Supplier Manual. REMINDER - HOME PROTHROMBIN TIME MONITORING FOR ANTICOAGULATION MANAGEMENT NOT COVERED BY THE DMERC Home Prothrombin Time International Normalized Ratio (INR) Monitoring for Anticoagulation Management has been added to the Diagnostic Services section of the Coverage Issues Manual ( as Section Use of the International Normalized Ratio (INR) allows physicians to determine the level of anticoagulation in a patient independent of the laboratory reagents used. This test is not covered as durable medical equipment; therefore, claims submitted to the DMERCs will be denied for incorrect jurisdiction. Contact your local Part B carrier for information about the coverage of this diagnostic service. TILT-IN-SPACE AND PEDIATRIC WHEELCHAIRS New HCPCS Codes Effective for dates of service on or after January 1, 2003, new HCPCS codes were established for adult manual tilt-in-space wheelchairs (HCPCS code E1161) and for pediatric manual wheelchairs (HCPCS codes E1231-E1238). Refer to the HCPCS chapter or to the April 2003 revision of the Manual Wheelchairs policy in the DMEPOS Supplier Manual for code descriptions. These items were previously billed with HCPCS code K0009. All of these HCPCS codes require use of the Manual Wheelchairs CMN, CMS Form 844. Codes for adult manual tilt-in-space wheelchairs (HCPCS code E1161) and for pediatric manual tilt-in-space wheelchairs (HCPCS codes E1231-E1234) are eligible for Advance Determination of Medicare Coverage (ADMC). Refer to the DMEPOS Supplier Manual for details of this process. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

9 Spring 2003 DMERC Medicare Advisory Page 9 VIPS MEDICARE SYSTEM (VMS) IMPLEMENTATION TO PROCESS ICD-9 CODES USING DATE OF SERVICE Program Memorandum (PM) B , Change Request 2209, dated October 11, 2002, required the VIPS System to process ICD-9 Codes using date of service and not date of receipt. This requirement is also a HIPAA requirement. Due to problems associated with processing these claims (obsolete ICD-9 codes on rental claims) and additional time needed to educate providers and work out problems, the effective date for turning the edits off is upon receipt of this instruction and the implementation date for turning the edits back on has changed from January 1, 2003 to April 1, 2003, for DMERCs. QUARTERLY UPDATE OF HCPCS CODES USED FOR HOME HEALTH CONSOLIDATED BILLING ENFORCEMENT In April 2001, CMS established via Program Memorandum (PM) the process of periodically updating the lists of Healthcare Common Procedure Coding System (HCPCS) codes that are subject to the consolidated billing provision of the Home Health Prospective Payment System (HH PPS). Services appearing on this list submitted on claims to both Medicare fiscal intermediaries (FIs) and carriers, including durable medical equipment regional carriers (DMERCs), will not be paid on dates when a beneficiary for whom such a service is being billed is in a home health episode (i.e., under a home health plan of care administered by a home health agency). Medicare will only directly reimburse the primary home health agencies that have opened such episodes during the episode periods. Note that items incidental to physician services, as well as supplies used in institutional settings, are not subject to HH consolidated billing. A subsequent PM, AB (Change Request 2247) published July 2, 2002, established that updates of the HH consolidated billing code list would occur as frequently as quarterly in order to reflect the creation of temporary HCPCS codes (e.g., 'K' codes). These temporary codes may describe services subject to consolidated billing in addition to the permanent list of HCPCS codes that is updated annually. This PM is the second quarterly HH consolidated billing update for calendar year 2003.This update adds a single non-routine supply code to the list of codes subject to consolidated billing. This code was identified through additional review of the annual HCPCS update that was reflected in the first quarterly update. However, it was identified too late for inclusion in Medicare systems changes for the January quarter. Other updates for the remaining quarters of the calendar year will occur as needed due to the creation of new temporary codes representing services subject to HH consolidated billing prior to the next annual update. The new HCPCS code to be added is: A Zinc Paste >=3" <5" w/roll The new coding identified in each update describes the same services that were used to determine the applicable HH PPS payment rates. No additional services will be added by these updates; that is, new updates are required by changes to the coding system, not because the services subject to HH consolidated billing are being redefined. Bulletins issued after October 1, 1999 are available at no cost from our Web site at

10 Page 10 ABN New Modifiers Spring 2003 DMERC Medicare Advisory The DMERC claims processing system accommodates up to four modifiers per line item. Because the DMERC recognizes there are some claim situations when more than four modifiers may be required on a given claim line, effective for claims processed on or after July 1, 2003, two new modifiers have been created and must be used according to the following instructions: Beneficiary-Requested DME Upgrade: Aside from modifiers required for proper billing, suppliers must also use two of three modifiers (either GZ or GA, and GK) with a beneficiary-requested DME upgrade. The following new modifier must be used when billing for a beneficiary-requested upgrade and more than four modifiers are necessary. KB Beneficiary requested upgrade for ABN, more than 4 modifiers identified on claim All Other Situations: For any other situation where more than four modifiers are needed, suppliers must use the following new modifier: 99 Modifier overflow Paper Claims For paper claims, when a supplier must use more than 4 modifiers, the supplier must add modifier KB or 99 to the HCPCS code following the required modifiers for the code. Example: Supplier needs to bill E0277RRKJKXBPGA On the claim line the supplier should enter E0277RRKJKXKB or K0001RRKJKX99 (whichever is applicable). Modifiers BP and GA should be entered in block 19 of the CMS-1500 claim form. Electronic Claims in National Standard Format (NSF) For electronic claims in the NSF format, when a supplier must use more than 4 modifiers, the supplier must add modifier KB or 99 to the HCPCS code following the required modifiers for the code. Example: Supplier needs to bill E0277RRKJKXBPGA On the claim line the supplier should enter E0277RRKJKXKB or E0277RRKJKX99 (whichever is applicable). Modifiers BP and GA should be entered in the HA0 record per claim line. Electronic Claims in ANSI X12N Format For electronic claims in the American National Standards Institute (ANSI) X12N format, when a supplier must use more than 4 modifiers, the supplier must append modifier KB or 99 to the HCPCS code following the required modifiers for the code. Example: Supplier needs to bill E0277RRKJKXBPGA On the claim line the supplier should enter E0277RRKJKXKB or E0277RRKJKX99 (whichever is applicable). Modifiers BP and GA should be entered in 2400-NTE02 (NTE01+ADD). This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

11 Spring 2003 DMERC Medicare Advisory Page 11 ABN AND DENIALS FOR UNASSIGNED CLAIMS In any unassigned claim for medical equipment and supplies furnished on or after January 1, 1995, in which payment is denied, the DMERC will send separate notices to both the beneficiary (a Medicare Summary Notice (MSN)) and the supplier (a remittance advice (RA)). Unassigned Claims Denied with an Advance Beneficiary Notice (ABN) For denied claims, if the beneficiary signed an ABN and the supplier included a GA modifier on the Form CMS-1500 to that effect, the DMERC will mail a standard denial MSN notice to the beneficiary. If the supplier submitted a GA modifier (signed ABN obtained), the DMERC will include in the RA to the supplier the following notice. (Remark Code N124) Payment has been (denied for the/made only for a less extensive) service/item because the information furnished does not substantiate the need for the (more extensive) service/item. The patient is liable for the charges for this service/item as you informed the patient in writing before the service/item was furnished that we would not pay for it, and the patient agreed to pay. Unassigned Claims Denied without an ABN If the beneficiary did not sign an ABN and the supplier included a GZ modifier on the Form CMS-1500 to that effect, the DMERC will include the following initial beneficiary notice in the MSN sent to the beneficiary: (MSN 8.54) If the supplier should have known that Medicare would not pay for the denied items or services and did not tell you in writing before providing them that Medicare probably would deny payment, you may be entitled to a refund of any amounts you paid. However, if the supplier requests a review of this claim within 30 days, a refund is not required until we complete our review. If you paid for this service and do not hear anything about a refund within the next 30 days, contact your supplier. In addition, in the case of a denial without an ABN indicated by a GZ modifier, the DMERC will send a notice to the supplier including the following information: The patient's name and health insurance claim number; A description of the item or service by procedure code, date and place of service, and amount of the charge; The same denial notice included on the beneficiary s MSN; and The following notice: (Remark Code N125) Payment has been (denied for the/made only for a less extensive) service/item because the information furnished does not substantiate the need for the (more extensive) service/item. If you have collected any amount from the patient, you must refund that amount to the patient within 30 days of receiving this notice. The law permits exceptions to this refund requirement in two cases: If you did not know, and could not have reasonably been expected to know, that Medicare would not pay for this service/item; or if you notified the beneficiary in writing before providing it that Medicare likely would deny the service/item, and the beneficiary signed a statement agreeing to pay. Bulletins issued after October 1, 1999 are available at no cost from our Web site at

12 Page 12 ABN AND DENIALS FOR UNASSIGNED CLAIMS cont. Spring 2003 DMERC Medicare Advisory If an exception applies to you, or you believe the carrier was wrong in denying payment, you should request review of this determination by the carrier within 30 days of receiving this notice. Your request for review should include any additional information necessary to support your position. If you request review within 30 days, you may delay refunding to the beneficiary until you receive the results of the review. If the review determination is favorable to you, you do not have to make any refund. If the review is unfavorable, you must make the refund within 15 days of receiving the unfavorable review decision. You may request review of the determination at any time within 120 days of receiving this notice. A review requested after the 30-day period does not permit you to delay making the refund. Regardless of when a review is requested, the patient will be notified that you have requested one, and will receive a copy of the determination. The patient has received a separate notice of this denial decision. The notice advises that he or she may be entitled to a refund of any amounts paid, if you should have known that Medicare would not pay and did not tell him or her. It also instructs the patient to contact your office if he or she does not hear anything about a refund within 30 days. The requirements for refund are in 1834(a)(18) of the Act (and in 1834(j)(4) and 1879(h) by cross-reference to 1834(a)(18)). Section 1834(a)(18)(B) of the Act specifies that suppliers which knowingly and willfully fail to make appropriate refunds may be subject to civil money penalties and/or exclusion from the Medicare program. If you have any questions about this notice, please contact Palmetto GBA at (866) MULTIPLE PRIMARY PAYERS ON ELECTRONIC AND HARDCOPY CLAIMS There are situations where more than one primary payer pays on a Medicare Part B claim and Medicare may still make a secondary payment on the claim. Physician and suppliers must comply with Section 1.4.2, titled "Coordination of Benefits," found in the 837 version 4010 Professional Implementation Guide regarding the submission of Medicare beneficiary claims to multiple payers for payment. Providers must follow model 1 in section that discusses the provider to payer to provider methodology of submitting electronic claims. When there are multiple primary payers to Medicare you must follow the instructions cited below when sending the claim to Medicare for secondary payment. Submission of Electronic MSP Claims With Multiple Primary Payers, but With Only One Insurance Type Code Where there is more than one primary payer on a MSP claim and the primary payers identify the same insurance type code (e.g., the claims show two employer group health plans made payment on the claim which is identified as insurance type code 12), physicians and suppliers can send these claims electronically using the 837 version 4010 This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

13 Spring 2003 DMERC Medicare Advisory Page 13 MULTIPLE PRIMARY PAYERS ON ELECTRONIC AND HARDCOPY CLAIMS cont. claim submission format. When sending these types of claims, you must do the following: Primary Payer Paid Amounts: For line level services claims, physicians and suppliers must add all primary payer paid amounts for that service line and put the total amount in loop ID 2430 SVD02 of the 837. If only claim level information is sent to Medicare, providers and suppliers must add all other payer paid amounts for that claim and place the total amount in loop ID 2320 AMT02 AMT01=D of the 837. Primary Payer Allowed Amount: For line level services, physicians and suppliers must take the higher of the allowed amount for that service line, or the total of the other payer paid amounts, whichever is higher, and put the amount in loop ID 2400 AMT02 segment with AAE as the qualifier in the 2400 AMT01 segment of the 837. If only claim level information is sent to Medicare, take the higher of the claim level allowed amount, or the total of the other payer paid amounts, whichever is higher, and put the amount in Loop ID 2320 AMT02 AMT01 = B6. Obligated to Accept as Payment in Full Amount (OTAF): For line level services, physicians and suppliers must take the lowest OTAF amount for that service line, which must be greater than zero, and put the amount in loop 2400 CN102 CN 101 = 09. If only claim level information is sent to Medicare, take the lowest claim level OTAF amount, which must be greater than zero, and put this information in loop 2300 CN102 CN101 = 9. Submission of Hardcopy MSP Claims With Multiple Primary Payers, but With More Than One Insurance Type Involvement There may be situations where two or more insurer types make payment on a claim; for example, an auto insurer makes a primary payment on a line of service and, subsequently, a group health plan also makes a primary payment for the same line of service. Claims with more than one insurance type involvement cannot be sent electronically to Medicare. A hardcopy claim must be submitted. Use the current Form CMS-1500 when submitting Part B hard copy claims. Physicians and suppliers must attach the other payers EOB, or remittance advice, to the incoming claim when sending it to Medicare for processing. SNF CONSOLIDATED BILLING - NEW DMEPOS REQUIREMENTS Medicare pays for durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) when it is medically necessary for use in a patient's home. A durable medical equipment (DME) supplier providing the DMEPOS submits a claim for payment to the Durable Medical Equipment Regional Carrier (DMERC), which processes the claim. For capped rental items of DME where the DME supplier submits a monthly bill, the date of delivery ("from" date) on the first claim must be the "from" or anniversary date on all subsequent claims for the item. For example, if the first claim for a wheelchair is dated September 15, all subsequent bills must be dated for the 15th of the following months (October 15, November 15, etc.) Bulletins issued after October 1, 1999 are available at no cost from our Web site at

14 Page 14 SNF CONSOLIDATED BILLING - NEW DMEPOS REQUIREMENTS cont. Spring 2003 DMERC Medicare Advisory The DMEPOS benefit is only meant for items a beneficiary is using in his or her home. For a beneficiary in a Part A stay, a SNF is not defined as a beneficiary's home for DMEPOS (except for Method II home dialysis equipment and supplies and certain customized prosthetics and orthotics), and so Medicare does not make separate payment for DMEPOS when a beneficiary is in a SNF. The SNF is expected to provide all medically necessary DMEPOS during a beneficiary's covered Part A stay. However, in accordance with DMEPOS payment policy, Medicare will make a separate payment for a full month for DMEPOS items, provided the beneficiary was in the home on the "from" date or anniversary date defined above. If a beneficiary using DMEPOS is at home on the "from" date or anniversary date, Medicare will make payment for the DMEPOS for the entire month, even if the "from" date is the date of discharge from the SNF. If a beneficiary using DMEPOS is in a covered Part A stay in a SNF for a full month, Medicare will not make payment for the DMEPOS for that month. For capped rental items, if the covered Part A SNF stay overlaps the anniversary date ("from" date on the claim) of the Certificate of Medical Necessity (CMN), and the beneficiary is not in the covered Part A SNF stay for the entire month, the date of discharge becomes the new anniversary date ("from" date on the claim) for subsequent claims. In this situation, the supplier must submit a new claim with the date of discharge as the new anniversary date upon the beneficiary's release from the SNF. Suppliers should annotate the HA0 record (Item 19 for paper claims) to indicate that the patient was in a SNF, resulting in the need to establish a new anniversary date. Example 1: A beneficiary rents a wheelchair beginning on January 1. The DMERC determines that the wheelchair is medically necessary and that the beneficiary meets all coverage criteria, and so begins to make payment on the wheelchair. The beneficiary enters a covered Part A stay in a SNF on February 15 and is discharged on April 5. In this example, Medicare will make payment for the entire month of February, because the patient was in the home for part of the month. However, the DMERC will deny the claim for March, because the patient was in a covered Part A stay in the SNF for the entire month. Because the anniversary date ("from" date) of the monthly bill was April 1, and the patient was still in the covered Part A stay in a SNF on that date, the DME supplier must not submit another claim until April 5 (the date of discharge). April 5 becomes the new anniversary date ("from" date) for billing purposes, so the supplier would now bill on the 5th of the month rather than the 1st of the month for the remainder of the capped rental period. The supplier should annotate the HA0 record (field 19 for paper claims) to indicate that the patient was in a SNF on the first claim with the new anniversary date. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

15 Spring 2003 DMERC Medicare Advisory Page 15 SNF CONSOLIDATED BILLING - NEW DMEPOS REQUIREMENTS cont. Example 2: A beneficiary receives oxygen on January 1. On February 28, the patient enters a covered Part A stay in a SNF and is discharged on March 15. In this example, the DMERC would deny a claim dated March 1. The supplier would submit a new claim dated March 15, which would then become the anniversary date for billing purposes. The supplier should annotate the HA0 record (field 19 for paper claims) to indicate that the patient was in a covered Part A stay in a SNF on the first claim with the new anniversary date. Example 3: A beneficiary rents a hospital bed beginning on January 1. On March 15, the patient enters a covered Part A stay in a SNF and is discharged on March 25. In this example, the DMERC will make payment for the entire month of March. NOTE: The changes in the general policy in this PM apply to all items of DMEPOS paid by the DMERCs. However, changes in the "anniversary date" billing requirement only apply to capped rental DME. REGION C DMERC PROVIDER COMMUNICATIONS (PCOM) ADVISORY GROUP Palmetto GBA is pleased to announce the implementation of the PCOM Advisory Group. The purpose of this group is to provide feedback regarding supplier education and training topics, as well as dissemination avenues and types and /or locations for educational forums. The PCOM Advisory Group will meet quarterly to solicit input and feedback regarding these issues. All meetings will be advertised on Palmetto GBA's Web site and will be open to state associations, suppliers, software vendors, billing companies, and other appropriate supplier entities. There is no membership roster. You can attend one or all of the meetings. The PCOM Advisory Group's quarterly sessions include two face-toface meetings at MedTrade conferences (medical equipment industry trade shows) and two electronic meetings via our online learning software. To ensure a diverse group of participants, we ask that no more than two attendees be from the same company. Attendance is limited to 50 people per session. For those of you who are new to our online sessions, following are the instructions to register: You must first register as a conference user (there are never any fees) and enroll in the PCOM session. Go to the Web site. Under the "Providers" heading, click on the words "Learning and Education." Select "Online Learning," then click on "Login." First time users should register by clicking "Click Here to Register a New User." The form will request some basic information. Bulletins issued after October 1, 1999 are available at no cost from our Web site at

16 Page 16 REGION C DMERC PROVIDER COMMUNICATIONS (PCOM) ADVISORY GROUP cont. Spring 2003 DMERC Medicare Advisory Once the account is created, log in using your new user name and password. Remember, your username and password are case-sensitive! You must type them in the way you created them. After you've logged in, you'll see your customized home page. This page gives you an introduction to the Knowledge Center on the Palmetto GBA Web site. By clicking the burgundy Catalog button at the top of the screen, you can find the event you are interested in. You may browse the catalog by type, group, category, or title. All of DMERC's online sessions and workshops will be listed as Symposium events under the "Browse By Type" section. Also, each workshop title will start with the word "DMERC" (example: DMERC Provider Communications (PCOM) Advisory Group). Choosing your online session: Click on the word "DMERC" under the heading "Browse By Category." Use your mouse to click on the box to the left of your choices. At the top right, click on the blue category button, "Add to My Learning." In the pop-up window that opens up, click on "Submit." The status bar will show "Added to My Learning" in green type. Click on the blue "Close" button to close the pop-up window. You now have a reserved seat in the session. At this point, you will want to test your system to make sure your computer can support the actual session. Click on the burgundy "My Learning" button at the top of the page. Toward the top right on the following screen, click on the "System Check" button (it looks like a computer) to test your system. The minimum system requirements are listed below: Windows 95, 98, Me, NT 4.0, 2000, XP Netscape 4.08 or later, Internet Explorer 4.01 or later (SSL events require IE 5.01 or later) 28.8 kbps or faster Internet connection P133+ MHz, 32+ MB memory 800x600 or higher display resolution Sound card, speakers/microphone or headset Follow the instructions in the System Check pop-up box. After completing the check, you may exit the Web site if you are registering in advance. When you are ready to attend the event, login and select "My Learning." From the gray box with the drop down lists, first select "Type" in the first box. In the second box, select "All Learning Resources," and then click on the blue "Search" button. You will see all events that you have registered for. Click "Attend" to join a session or workshop and click "Start" to print a handout or begin a tutorial. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.

17 Spring 2003 DMERC Medicare Advisory Page 17 HIPAA-READY MEDICARE FREE SOFTWARE TO BE DISTRIBUTED IN APRIL 2003 HIPAA The Centers for Medicare & Medicaid Services (CMS) has approved delayed distribution of Medicare contractors' free billing software until April 1, This delay correlates with CMS approval of Version 4010A1 (also referred to as "the Addenda") for all ANSI X12N electronic transactions as the exclusive version for use as of the compliance deadline of October 3, The software distribution delay will enable contractors to update their free billing software to version 4010A1 and preclude users from having to install HIPAA-compliant free software products twice (once in the 4010 version and again with the implementation of version 4010A1). Free billing software users may continue to submit claims via their current software until the 4010A1 compliant version of PC- ACE Pro 32, Palmetto GBA's new free billing software, is distributed. Further information regarding Palmetto GBA's free billing software and its distribution will be posted on the Palmetto GBA Web site, as it becomes available. ANSI V4010A1 APPROVED HIPAA The Centers for Medicare & Medicaid Services (CMS) has approved version 4010A1 (also referred to as "the Addenda") as the exclusive version for all ANSI X12N electronic transactions used by Medicare as of the compliance deadline of October 16, Information on version 4010A1 electronic transactions may be found at the Washington Publishing Company Web site at Palmetto GBA expects to begin testing and transitioning EDI trading partners to ANSI version 4010A1 transactions by April 1, We will post information on our ANSI v4010a1 Testing Schedule under the HIPAA/General Information sections on the Palmetto GBA Web site as soon as the information is finalized by CMS. ANSI 270/271 V4010 ELIGIBILITY INQUIRY AND RESPONSE Effective April 1, 2003 HIPAA Effective October 16, 2003, electronic requests for eligibility data submitted in a file format must be submitted via an ANSI 270 v4010 query. Each valid 270 will be issued a 271 v4010 response. Prior file formats for requesting eligibility information will be discontinued; however, eligibility information will still be available to Participating Providers via Claim Status Inquiry (CSI) and the Automated Response Unit (ARU). Access to eligibility information via the ANSI 270/271 transactions will be available through TCP/IP connection utilizing AT&T Global Network Services (AGNS), which will be available for these transactions April 1, Medicare-certified providers and their agents can access beneficiary eligibility data if an EDI Enrollment Form is on file for that entity. Network Service Vendors can access beneficiary eligibility information provided an EDI Enrollment Form and EDI Network Service Agreement is on file. For more information Bulletins issued after October 1, 1999 are available at no cost from our Web site at

18 Page 18 ANSI 270/271 V4010 ELIGIBILITY INQUIRY AND RESPONSE Effective April 1, 2003, cont. HIPAA Spring 2003 DMERC Medicare Advisory on these agreements please contact the Palmetto GBA Technology Support Center at (866) Palmetto GBA will be ready to begin testing electronic eligibility requests in the ANSI 270 v4010 format effective April 1, Please contact the Technology Support Center at (866) to begin testing. A provider who prefers to obtain eligibility data in an EDI format but does not want to use a 270/271 may contract with a clearinghouse to translate the information on its behalf; however, that provider would be liable for those clearinghouse costs. You can download a copy of the HIPAA 270/271 v4010 Implementation Guide through the Washington Publishing Company Web site at Providers who prefer to receive their eligibility information via CSI may continue to do so. Eligibility information will also continue to be available via the ARU, which is available by calling the Part B Provider Service Center at (866) Due to pending system enhancements related to the Health Insurance Portability and Accountability Act (HIPAA) of 1996, the eligibility function available through the online Claim Status Inquiry system has been temporarily disengaged and is scheduled to be reactivated in April. UPIN REQUIREMENTS As required by the Social Security Act, Section 1833(q), all physicians who meet the Section 1861(r) definition of a physician must have a Unique Physician Identification Number (UPIN). All claims for services ordered or referred by a physician must include the name and UPIN of the ordering/referring physician. Surrogate UPINS and When to Use: OTH000 RES000 VAD000 PHS000 RET000 Used when the ordering/referring physician has not yet been assigned and doesn't qualify for one of the other surrogate UPINs. Used by physicians meeting the description of "intern," "resident," or "fellow." Used by physicians serving on active duty in the United States military and those employed by the Department of Veterans Affairs. Used by physicians serving in the Public Health Service, including the Indian Health Service. Used by retired physicians who have not been issued a UPIN. (Retired physicians who have been assigned a UPIN must use the assigned UPIN.) NOTE: If the OTH000 surrogate is used too frequently, we will check the UPIN directory to determine whether a UPIN has been assigned to the ordering/referring physician. If a UPIN has been assigned, the physician will be notified of the correct UPIN. If it has not, the physician will be sent an application form. This bulletin should be shared with all health care practitioners and managerial members of the provider/supplier staff.