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January 2005 Part B Medicare Bulletin

Posted January 4, 2005

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Drug Pricing Update—Payment Limit for J0207 (Amifostine)

Provider Types Affected
Physicians and providers billing Medicare carriers for Amifostine

Provider Action Needed
This article informs affected providers that Medicare will implement the Medicare Modernization Act of 2003 (MMA) payment limit for Amifostine (HCPCS drug code J0207) with the new rate listed in this article for dates of service starting April 1, 2004, through December 31, 2004.

Please note that this payment limit for Amifostine (J0207) supercedes the payment limit published in Change Request (CR) 3161, Transmittal 119, dated March 15, 2004, and any other publication published prior to this document.

Background
The MMA (Section 303(b)(2)) specifies that the Centers for Medicare & Medicaid Services (CMS) may adjust the percentage used in the calculation for pricing Medicare Part B drugs effective January 1, 2004, (based on data and information submitted by the manufacturer after October 15, 2003, and before January 1, 2004).

Therefore, based on information received by CMS, the payment limit for Amifostine (J0207) has been revised. From April 1, 2004, through December 31, 2004, the Medicare payment limit for the Healthcare Common Procedure Coding System (HCPCS) drug code J0207 applies when it is not paid on a cost or prospective payment basis. The old and revised payment limits are as follows:

Status HCPCS Short Description Average Wholesaleprice (AWP) % 2004 Payment Limit for Drugs (other than End Stage Renal Disease (ESRD) drugs separately billed by independent ESRD Facilities and drugs infused through Durable Medical Equipment (DME))
OLD J0207 Amifostine 85 $405.29
NEW J0207 Amifostine 89 $422.21

Note that the absence or presence of a HCPCS code and its associated payment limit does not indicate Medicare coverage of the drug.

Implementation
The implementation date for the instruction is December 6, 2004.

Additional Information
To view the official instruction issued to your carrier regarding this change, go to:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR3552 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Annual Update of HCPCS Codes Used for Home Health (HH) Consolidated Billing Enforcement

Provider Types Affected
Physicians, providers, home health agencies (HHAs), and suppliers

Provider Action Needed
The Centers for Medicare & Medicaid Services (CMS) periodically updates the lists of HCPCS codes subject to the consolidated billing provision of the Home Health Prospective Payment System (HH PPS). This article provides the annual HH consolidated billing update effective January 1, 2005. Affected providers should be aware of these changes.

Background
Section 1842(b)(6) of the Social Security Act (SSA) requires that payment for home health services provided under a home health plan of care be made to the HHA. As a result, billing for all such items and services is to be made by a single HHA overseeing that plan. This HHA is known as the primary agency for HH PPS for billing purposes.

With the exception of therapies performed by physicians, supplies incidental to physician services, and supplies used in institutional settings, services appearing on this list that are submitted on claims to Medicare contractors will not be paid separately 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 an HHA).

Medicare periodically publishes Routine Update Notifications, which contain updated lists of non-routine supply and therapy codes that must be included in HH consolidated billing. The lists are always updated annually, effective January 1, as a result of changes in HCPCS codes that Medicare also publishes annually. This list may also be updated as frequently as quarterly if required by the creation of new HCPCS codes during the year.

Additional Information
This notification provides the annual HH consolidated billing update effective January 1, 2005. The following table describes the HCPCS codes and the specific changes to each that this notification is implementing on January 3, 2005:

Code Description of Code Type of Change

Replacement
Code or Code Being Replaced
Non-Routine Supplies
A4347 Male external catheter Delete Replacement code: A4349
A4324 Male ext cathw/adh coating Delete Replacement code: A4349
A4325 Male ext cath w/adh strip Delete Replacement code: A4349
A4349 Male ext catheter, with our without adhesive, disposable, each Add Replaces codes: A4347, A4324, A4325
A7040 One way chest drain valve Add  
A7041 Water seal drainage container and tubing for use with
implanted chest tube 		Add  
A7045 Exhalation port with our without swivel used with
accessories for positive airway
devices, replacement only		 Add  
A7527 Tracheostomy/laryngectomy tubeplug/stop, each Add  
Therapies      
97601 Wound care selective Delete Replacement codes: 97597, 97598
97597 removal of devitalized tissue from wound(s), selective debridement; surface area less than or equial to 20 square centimeters Add Replaces code: 97601
97605 Negative pressure wound therapy (eg. Vacuum assisted drainage collection); total wound(s) surface area less than or equal to 50 square centimeters Add  
97606 Negative pressure wound therapy (eg.vaccuum assisted drainage collection); total wound(s) surface area greater than 50 square centimeters Add  

The last update to the HH consolidated billing was issued under Transmittal 226, CR 3350. This CR can be found at: http://www.cms.hhs.gov/manuals/pm_trans/R226CP.pdf

The official instruction issued to your carrier/intermediary (including Durable Medical Equipment Carriers (DMERCs) and Regional Home Health Intermediaries (RHHIs)) regarding this change may be found by going to: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3525 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions regarding this issue, please contact your carrier/intermediary at their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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2005 Annual Update for Clinical Laboratory Fee Schedule and Laboratory Services Subject to Reasonable Charge Payment

Provider Types Affected
Clinical Laboratories

Provider Action Needed
This article and related CR3526 contains important information regarding the 2005 annual updates to the clinical laboratory fee schedule and for laboratory costs related to services subject to reasonable charge payments. It is important that affected laboratories understand these changes to assure correct and accurate payments from Medicare.

Background
Update to Clinical Laboratory Fees
In accordance with §1833(h)(2)(A)(i) of the Social Security Act (the Act), as amended by Section 628 of the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003, the annual update to the local clinical laboratory fees for 2005 is zero (0) percent.

Section 1833(a)(1)(D) of the Act provides that payment for a clinical laboratory test is the lesser of the actual charge billed for the test, the local fee, or the National Limitation Amount (NLA). For a cervical or vaginal smear test (pap smear), §1833(h)(7) of the Act requires payment to be the lesser of the local fee or the NLA, but not less than a national minimum payment amount (described below). However, for a cervical or vaginal smear test (pap smear), payment may also not exceed the actual charge.

The Part B deductible and coinsurance do not apply for services paid under the clinical laboratory fee schedule.

National Minimum Payment Amounts
For a cervical or vaginal smear test (pap smear), §1833(h)(7) of the Act requires payment to be the lesser of the local fee or the NLA, but not less than a national minimum payment amount. Also, payment may not exceed the actual charge. The 2005 national minimum payment amount is $14.76 ($14.76 plus zero percent update for 2005). The affected codes for the national minimum payment amount include the following:

88142 88143 88147 88148 88150 88152
88153 88154 88164 88165 88166 88167
88174 88175 G0123 G0143 G0144 G0145
G0147 G0148 P3000      

National Limitation Amounts (Maximum)
For tests for which NLAs were established before January 1, 2001, the NLA is 74 percent of the median of the local fees. For tests for which NLAs are first established on or after January 1, 2001, the NLA is 100 percent of the median of the local fees in accordance with §1833(h)(4)(B)(viii) of the Act.

Access to 2005 Clinical Laboratory Fee Schedule
Internet access to the 2005 clinical laboratory fee schedule data file should be available after November 18, 2004, at: http://www.cms.hhs.gov/paymentsystems

Interested providers should use the Internet to retrieve the 2005 clinical laboratory fee schedule. It will be available in multiple formats: Excel, text, and comma delimited.

Public Comments
On July 26, 2004, the Centers for Medicare & Medicaid Services (CMS) hosted a public meeting to solicit input on the payment relationship between 2004 codes and new 2005 Current Procedural Terminology (CPT) codes. The meeting announcement was published in the Federal Register on May 28, 2004, pages 30658-30659, and on the CMS Web site at http://www.cms.hhs.gov.

Recommendations were received from many attendees, including individuals representing laboratories, manufacturers, and medical societies. CMS posted a summary of the meeting and the tentative payment determinations on its Web site at http://www.cms.hhs.gov/paymentsystems. Additional written comments from the public were accepted until September 24, 2004.

Comments after the release of the 2005 laboratory fee schedule can be submitted to the following address, so that CMS may consider them for the development of the 2006 laboratory fee schedule.

Centers for Medicare & Medicaid Services (CMS) Center for Medicare Management
Division of Ambulatory Services
Mailstop: C4-07-07
7500 Security Boulevard
Baltimore, Maryland 21244-1850

A comment should be in written format and include clinical, coding, and costing information. To make it possible for CMS and its contractors to meet a January 3, 2006, implementation date, comments must be submitted before August 1, 2005.

Additional Pricing Information
The 2005 laboratory fee schedule includes separately payable fees for certain specimen collection methods (codes 36415, P9612, and P9615). For dates of service January 1, 2005, through December 31, 2005, the personnel payment is $.45 per mile. For dates of service January 1, 2005, through December 31, 2005, the standard mileage rate for transportation costs is $.385. The 2005 payment for code P9603 is $.835 and for code P9604 it is $8.35.

The 2005 laboratory fee schedule also includes codes that have a “QW” modifier to both identify codes and determine payment for tests performed by a laboratory registered with only a certificate of waiver under the Clinical Laboratory Improvement Amendments of 1988 (CLIA).

CPT code 36415 for Collection of venous blood by venipuncture is now payable by Medicare, but code 36416 Collection of capillary blood specimen (e.g., finger, heel, ear stick) remains as not payable by Medicare as a separate service.

Organ or Disease Oriented Panel Codes
Similar to prior years, the 2005 pricing amounts for certain organ or disease panel codes and evocative/suppression test codes were determined by Medicare by summing the lower of the fee schedule amount or the NLA for each individual test code included in the panel code.

Mapping Information for New and Revised Codes

New Code: Is Priced at the same rate as:
82045 83880
82656 83516
83009 83013
83630 83516
84163 84702
84166 the sum of 84165 and 87015
84450QW 84450
86064 86359
86335 the sum of 86334 and 87015
86379 86359
86587 86359
87807 87804

Laboratory Costs Subject to Reasonable Charge Payment in 2005
For outpatients, the codes in the following tables are paid under a reasonable charge basis. In accordance with §42 CFR 405.502 – 405.508, the reasonable charge may not exceed the lowest of the actual charge or the customary or prevailing charge for the previous 12-month period ending June 30, updated by the inflation-indexed update.

The inflation-indexed update for year 2005 is 3.3 percent.
Manual instructions for determining the reasonable charge payment can be found in the Medicare Claims Processing Manual, Pub. 100-04, chapter 23, §80-80.8. (The Web address for this manual is provided in the “Additional Information” section below.) If there is insufficient charge data for a code, the instructions permit considering charges for other similar services and price lists.

When these services are performed for independent dialysis facility patients, Medicare Claims Processing Manual, Pub. 100-04, chapter 8, §60.3 instructs that the reasonable charge basis applies. However, when these services are performed for hospital based renal dialysis facility patients, payment is made on a reasonable cost basis.

Also, when these services are performed for hospital outpatients, payment is made under the hospital Outpatient Prospective Payment System (OPPS).

Blood Products
P9010 P9011 P9012 P9016 P9017 P9019 P9020 P9021 P9022 P9023 P9031 P9032 P9033 P9034 P9035 P9036 P9037 P9038 P9039 P9040 P9044 P9050 P9051 P9052 P9053 P9054 P9055 P9056 P9057 P9058 P9059 P9060

Also, the following codes should be applied to the blood deductible as instructed Pub. 100-01, Chapter 3, §20.5-20.54:
P9010 P9016 P9021 P9022 P9038 P9039 P9040 P9051 P9054 P9056 P9057 P9058

Note: Biologic products not paid on a cost or prospective payment basis are paid based on §1842(o) of the Act. The payment limits based on section 1842(o), including the payment limits for codes P9041 P9043 P9045 P9046 P9047 P9048, should be obtained from the Medicare Part B Drug Pricing Files.

Transfusion Medicine
86850 86860 86870 86880 86885 86886 86890 86891 86900 86901 86903 86904 86905 86906 86920 86921 86922 86927 86930 86931 86932 86945 86950 86965 86970 86971 86972 86975 86976 86977 86978 86985 G0267

Reproductive Medicine Procedures
89250 89251 89253 89254 89255 89257 89258 89259 89260 89261 89264 89268 89272 89280 89281 89290 89291 89335 89342 89343 89344 89346 89352 89353 89354 89356

Implementation
The changes for 2005 will be implemented on January 3, 2005.

Additional Information
Instructions for calculating reasonable charges are located in the Medicare Claims Processing Manual (Pub. 100-04) chapter 23, sections 80-80.8. at: http://www.cms.hhs.gov/manuals/104_claims/clm104index.asp

The official instruction issued to your carrier/intermediary regarding this change may be found by going to: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR3526 in the CR NUM column on the right, and click on the file for the desired CR.

For additional information relating to this issue, please contact your carrier or intermediary on their toll free phone number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf.

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Reminder Notice of the Implementation of the Ambulance Transition Schedule

Provider Types Affected
Ambulance providers and suppliers

Provider Action Needed

STOP – Impact to You
During the current calendar year (CY) 2004, year three of a five-year transition to the ambulance fee schedule implementation ,payment for ambulance services is based on a blend of 60 percent of the fee schedule amount plus 40 percent of the provider’s reasonable cost or the supplier’s reasonable charge for the service. As of January 1, 2005, the amounts payable under the ambulance fee schedule for CY2005 will consist of 80 percent of the fee schedule amount and 20 percent of providers’ reasonable cost or suppliers’ reasonable charge amount for the service.

CAUTION – What You Need to Know
The fee schedule applies to ALL ambulance services furnished as a benefit under Medicare Part B. Ambulance providers and suppliers are required to accept assignment, and therefore must accept Medicare allowed charges as payment in full.

They may not bill or collect from the beneficiary any amount other than an unmet Part B deductible and the Part B coinsurance amounts.

GO – What You Need to Do
Be aware that the next phase of the fee schedule payment process goes into effect on January 1, 2005, and adjust accounts receivable processes as necessary.

Background
Section 4531(b)(2) of the Balanced Budget Act (BBA) of 1997 added a new section 1834(l) to the Social Security Act, which mandates implementation of a national fee schedule for ambulance services furnished as a benefit under Medicare Part B. On April 1, 2002, CMS implemented a new fee schedule that applies to all ambulance services. The schedule applies to all ambulance services: volunteer, municipal, private, independent, as well as institutional providers, i.e., hospitals and skilled nursing facilities. The fee schedule will be phased in over a five-year transition period, during which time the amounts payable for services provided will be a blend of fee schedule amount and the provider’s reasonable cost or supplier’s reasonable charge amount. (Ambulance services covered under Medicare will be paid based on the lower of the actual billed amount or the ambulance fee schedule amount.)

Ambulance providers and suppliers are currently paid a blended rate, consisting of 60 percent of the fee schedule amount and 40 percent of the provider’s reasonable cost amount or the supplier’s reasonable charge amount.

Providers and suppliers are reminded that the ambulance fee schedule is being implemented on a five-year transition period as follows:

Year Fee Schedule Percentage Cost/Charge Percentage
Year 1 20% 80%
(4/1/02-12/31/02)*
Year 2 (CY 2003)* 40% 60%
Year 3 (CY 2004)* 60% 40%
Year 4 (CY 2005) 80% 20%
Year 5 100% 0%
(CY 2006 and thereafter)

*Previous and current year percentages

Section 1834 (l) also requires mandatory assignment for all ambulance services. Ambulance providers and suppliers must accept the Medicare allowed charge as payment in full and not bill or collect from the beneficiary any amount other than any unmet Part B deductible and the Part B coinsurance amounts.

Implementation
Implementation of the next phase of the fee schedule will begin on January 3, 2005.

Related Instructions
Providers should note when billing ambulance services to intermediaries that all ancillary services and supplies provided are considered part of the base rate and are not separately billable under the ambulance fee schedule. For Part B suppliers billing Medicare carriers for ambulance services, separately billable supplies may be billed, depending on the supplier’s billing method.

Suppliers should also note that Medicare carriers will deny claims for separately billed supplies and ancillary services furnished during an ambulance transport on or after January 1, 2006.

The payment increases for ambulance transports available under Section 414 of the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) effective July 1, 2004, have been implemented. No additional changes are required to implement this MMA provision. Please refer to Change Request 3099, Transmittals 88 and 220 for details.

Additional Information
The official instruction issued to your carrier regarding this change may be found by going to:
http://www.cms.hhs.gov/manuals/transmittals.comm_date_dsc.asp

From that Web page, look for CR 3473 in the CR NUM column on the right, and click on the file for the desired CR.

For additional information relating to this issue, please refer to your local carrier/intermediary. To find that toll free phone number, go to: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Provider Call Center Teletypewriter TTY Fiscal Year FY 2005 Budget and Performance Requirement BPR

All CMS call center contractors are required to have TTY capability available to providers by December 1, 2004. Call centers currently having the ability to provide this service for beneficiary callers may use the same equipment, but not the same inbound lines. You shall begin reporting the number of call attempts and the number of failed attempts in the Customer Service Assessment and Management System (CSAMS) for the month of December 2004, however, there are currently no performance requirements. You shall publish your TTY number on your Web site as soon as possible.

The TN/ID TTY/TDD toll-free number is 1.866.879.2705.

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Progressive Corrective Action Review - Chelation Therapy

The following information is based on a Tennessee specific probe but is being published in the General Release of the Bulletin for the benefit of Idaho and North Carolina providers as well. Progressive Corrective Action (PCA) was developed by the Centers for Medicare & Medicaid Services (CMS) to conduct medical review through sampled claims to validate potential errors and to educate providers concerning the errors. The goal of PCA is to lower the error rate.

Forty claims were selected. The major finding of the review was the absence of documentation to support medical necessity for using edetate calcium disodium (HCPCS code J0600). Inference of heavy metal toxicity was made without appropriate evaluation and documentation of this condition.

What the providers must know:

Regulatory documents in support of this article:
National Coverage Determination (NCD) on Chelation Therapy for Treatment of Atherosclerosis;
National Coverage Determination (NCD) on Ethylenediamine-Tetra-Acetic (EDTA) Chelation Therapy for Treatment of Atherosclerosis);
Title XVIII of the Social Security Act, Section 1862 (a)(7);
Title XVIII of the Social Security Act, Section 1862 (a)(1)(A);
Medicare Benefit Policy Manual, CMS Publication 100-2, Chapter 16, Section 180).

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Payment Amounts for the Influenza Virus Vaccine (CPT 90658) and the Pneumoccocal Vaccine (CPT 90732) When Payment is Based on 95 Percent of the Average Wholesale Price (AWP)

Provider Types Affected
Physicians, non-physician practitioners, providers, and suppliers

Provider Action Needed

STOP – Impact to You
Effective September 1, 2004, the Medicare Part B payment allowance for the Influenza Virus Vaccine [CPT 90658] is $10.10 and for the Pneumoccocal Vaccine [CPT 90732] is $23.28 (when payment is based on 95 percent of the AWP).

CAUTION – What You Need to Know
Annual Part B deductible and coinsurance amounts do not apply

GO – What You Need to Do
Please take note of this pricing information to ensure accurate claims processing. Your carrier or fiscal intermediary will not search their files to adjust claims that were processed prior to the October 1, 2004, implementation date unless you bring such claims to their attention.

Additional Information
The official instruction issued regarding this change can be found online, referenced via CR 3490, at:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

On the above online page, scroll down while referring to the CR column on the right to find the link for CR 3490. Click on the link to open and view the file for the CR.

If you have questions regarding this issue, you may also contact your carrier or fiscal intermediary on their toll free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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New Medicare-Approved Drug Discount Cards and Transitional Assistance Program: A Summary for Physicians and Other Health Care Professionals

Note: This article was revised on November 8 to correct the Web address for State Health Insurance Counseling and Assistance Programs.

Provider Types Affected
Physicians and other health care professionals

Provider Action Needed
Understand the Medicare-Approved Drug Discount Cards and Transitional Assistance Program that begins in 2004 to help Medicare beneficiaries save on prescription drugs.

Background
As part of the Medicare Modernization Act of 2003 (MMA), the Medicare-Approved Drug Discount Cards and Transitional Assistance Program begins in 2004 to help Medicare beneficiaries save on prescription drugs. Medicare will contract with private companies to offer new drug discount cards until a Medicare prescription drug benefit starts in 2006. A discount card with Medicare’s seal of approval can help Medicare beneficiaries save on prescription drug costs.

This article is designed to give an overview of the new Medicare-Approved Drug Discount Cards and
Transitional Assistance Program. It will also explain where you may refer Medicare patients for information on selecting and enrolling in the drug discount card that best suits their needs.

Medicare-Approved Drug Discount Cards

Transitional Assistance Program
Beneficiaries with the greatest need will have the greatest help available to them. Individuals with an annual income in 2004 of no more than $12,569 if single or $16,862 if married, and individuals receiving help from their state in paying their Medicare premiums or cost sharing, may qualify for a $600 credit on their discount card to help pay for prescription drugs. These income limits change every year. Residents of Puerto Rico or a U.S. territory are not eligible for the $600 credit from Medicare. However, they may be eligible for similar assistance provided by the territory in which they reside. Beneficiaries cannot qualify for the $600 if they already have outpatient prescription drug coverage from certain other sources.

Where Do I Refer Medicare Beneficiaries for Information on Prescription Drug Discount Programs?
In addition to the Medicare-approved drug discount cards, there are other programs available that provide assistance in paying for prescription drugs. Alternatives such as individual state pharmacy assistance programs and manufacturers’ discount programs may be a better fit for certain individuals.

Medicare recognizes that physicians and other health care professionals have limited time available to counsel patients. The following resources are available to help individuals with questions about the
Medicare-approved drug discount cards:

The 1.800.MEDICARE (1.800.633.4227) Toll-Free Call Center
This Call Center is available 24 hours per day and 7 days per week. It connects beneficiaries with
customer service representatives who can answer questions and perform price comparisons for discount cards and other assistance programs. Beneficiaries should prepare a list of current prescription drugs and dosages prior to contacting the Call Center. Beneficiaries may request a copy of their individualized price comparison results. TTY users should call 1.877.486.2048.

The Prescription Drug and Other Assistance Programs Web site at Medicare.gov
http://www.medicare.gov/AssistancePrograms/home.asp

For beneficiaries who use the Internet, this site features eligibility, enrollment, and price comparison
information for each available discount card in a particular area, as well as their state pharmacy assistance programs. It also has a tool that helps beneficiaries determine the best savings program based on their prescription drug needs.

Medicare’s Guide to Choosing a Medicare-Approved Drug Discount Card http://www.medicare.gov

This resource provides beneficiaries with information on choosing a card, enrolling, and submitting
complaints. This guide also features sample enrollment forms and worksheets to assist beneficiaries in selecting the discount card that is right for them.

State Health Insurance Counseling and Assistance Programs (SHIP)
Beneficiaries may also contact their SHIP counselor for information on prescription drug cost assistance programs. To find the telephone number for the nearest SHIP, call 1.800.MEDICARE (1.800.633.4227) or visit: http://www.medicare.gov/contacts/Static/SHIPs.asp?dest=NAV

Information Resources for Physicians and Other Health Care Professionals

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North Carolina TTY Phone Number

In accordance with Section 508 of the Rehabilitation Act of 1973 and the Workforce Investment Act of 1998, all CMS call center contractors are required to have TTY capability available to providers by December 1, 2004.

Effective December 1, 2004, the Provider Teletypewriter(TTY) toll-free number for North Carolina is 1.866.785.6667.

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January 2005 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing File, Effective January 1, 2005

Provider Types Affected
All providers

Provider Action Needed
No provider action is necessary. This article is informational only and explains how Medicare pays for certain drugs that are not paid on a cost or prospective payment basis, effective January 1, 2005.

Background
According to Section 303 of the Medicare Modernization Act of 2003 (MMA), beginning January 1, 2005, drugs and biologicals not paid on a cost or prospective payment basis will be paid based on the Average Sales Price (ASP) plus six (6) percent. The Centers for Medicare & Medicaid Services CMS) will supply its carriers/intermediaries with the ASP drug pricing file for Medicare Part B drugs. The ASP is based on quarterly drug information supplied to CMS by drug manufacturers.

Thus, beginning January 1, 2005, the payment allowance limits for Medicare Part B drugs and biologicals that are not paid on a cost or prospective payment basis are 106 percent of the ASP. CMS will update the payment allowance limits quarterly.

Exceptions
There are exceptions to this general rule, as summarized below:

  1. The payment allowance limits for blood and blood products, with certain exceptions such as blood clotting factors, are determined in the same manner the payment allowance limits were determined on October 1, 2003. Specifically, the payment allowance limits for blood and products are 95 percent of the average wholesale price (AWP) as reflected in the published compendia. The payment allowance limits will be updated on a quarterly basis.
  2. The payment allowance limits for infusion drugs furnished through a covered item of durable medical equipment on or after January 1, 2005, will continue to be 95 percent of the AWP reflected in the published compendia as of October 1, 2003, regardless of whether or not the durable medical equipment is implanted. The payment allowance limits will not be updated in 2005.
  3. The payment allowance limits for influenza, pneumococcal and hepatitis B vaccines are 95 percent of the AWP as reflected in the published compendia. The payment allowance limits will be updated on a quarterly basis.
  4. The payment allowance limits for drugs not included in the ASP Medicare Part B Drug Pricing File are based on the published wholesale acquisition cost (WAC) or invoice pricing.

Note that the absence or presence of a HCPCS code and its associated payment limit in the ASP files does not indicate Medicare coverage of the drug. Similarly, the inclusion of a payment limit within a specific column does not indicate Medicare coverage of the drug in that specific category. The local Medicare contractor processing the claim will make these determinations.

Implementation
The implementation date is January 3, 2005.

Additional Information
The official instruction issued to your carrier/intermediary regarding this change may be found at:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3539 in the CR NUM column on the right and click on the file for that CR.

If you have any questions, please contact your carrier/intermediary at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Instructions for Pricing Treprostinil (Q4077)

Provider Types Affected
All Durable Medical Equipment (DME) suppliers

Provider Action Needed

STOP – Impact to You
Medicare’s Durable Medical Equipment Regional Carriers (DMERCs) will use the specific payment for Healthcare Common Procedure Coding System (HCPCS) drug code Q4077 (Treprostinil) located in the 2004 MMA Payment Limits Pricing File.

CAUTION – What You Need to Know
The 2004 pricing allowance for Q4077 is $61.75.

GO – What You Need to Do
Make sure that your billing offices are aware of this instruction.

Background
This article and the related change request advise suppliers that the DMERCs will use the 2004 MMA Payment Limits Pricing File when pricing the drug Treprostinil (Q4077). That 2004 pricing allowance for Q4077 is $61.75 and is effective for claims with dates of service on or after January 1, 2004.

This change will ensure consistency among the four regional DMERCs and continuity of care for Medicare beneficiaries requiring Treprostinil.

NOTE: The DMERCs will not search their files to either retract payment for claims already paid or to retroactively pay claims. However, contractors will adjust claims brought to their attention.

Implementation
The implementation date is November 29, 2004.

Related Instructions
The 2004 MMA Payment Limits Pricing File is available at: http://www.cms.hhs.gov/providers/drugs/default.asp

Additional Information
The official instruction issued to your DMERC regarding this change may be found at:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3533 in the CR NUM column on the right and click on the file for that CR.

If you have any questions, please contact your DMERC at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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“Incident to” Services - Revised

Note: This article was revised on November 1, 2004, to correct the spelling of physician assistants in the background section.

Provider Types Affected
All Medicare providers of professional services

Provider Action Needed
None. This article is for your information only. It clarifies when and how to bill for services “incident to” professional services.

Background
The intent of this article is to clarify “incident to” services billed by physicians and non-physician practitioners to carriers. “Incident to” services are defined as those services that are furnished incident to physician professional services in the physician’s office (whether located in a separate office suite or within an institution) or in a patient’s home.

These services are billed as Part B services to your carrier as if you personally provided them, and are paid under the physician fee schedule.

Note: “Incident to” services are also relevant to services supervised by certain non-physician practitioners such as physician assistants, nurse practitioners, clinical nurse specialists, nurse midwives, or clinical psychologists. These services are subject to the same requirements as physician-supervised services. Remember that “incident services” supervised by non-physician practitioners are reimbursed at 85% of the physician fee schedule. For clarity’s sake, this article will refer to “physician” services as inclusive of nonphysician practitioners.

To qualify as “incident to,” services must be part of your patient’s normal course of treatment, during which a physician personally performed an initial service and remains actively involved in the course of treatment.

You do not have to be physically present in the patient’s treatment room while these services are provided, but you must provide direct supervision, that is, you must be present in the office suite to render assistance, if necessary. The patient record should document the essential requirements for incident to service.

More specifically, these services must be all of the following:

Examples of qualifying “incident to” services include cardiac rehabilitation, providing non-self-administrable drugs and other biologicals, and supplies usually furnished by the physician in the course of performing his/her services, e.g., gauze, ointments, bandages, and oxygen.

The following paragraphs discuss the various care settings, which are important to note because the processes for billing vary somewhat depending on the care site.

Your Office
In your office, qualifying “incident to” services must be provided by a caregiver whom you directly supervise, and who represents a direct financial expense to you (such as a “W-2” or leased employee, or an independent contractor).

You do not have to be physically present in the treatment room while the service is being provided, but you must be present in the immediate office suite to render assistance if needed. If you are a solo practitioner, you must directly supervise the care. If you are in a group, any physician member of the group may be present in the office to supervise.

Hospital or SNF
For inpatient or outpatient hospital services and services to residents in a Part A covered stay in a SNF the unbundling provision (1862 (a)(14) provides that payment for all services are made to the hospital or SNF by a Medicare intermediary (except for certain professional services personally performed by physicians and other allied health professionals). Therefore, incident to services are not separately billable to the carrier or payable under the physician fee schedule.

Offices in Institutions
In institutions including SNF, your office must be confined to a separately identifiable part of the facility and cannot be construed to extend throughout the entire facility. Your staff may provide service incident to your service in the office to outpatients, to patients who are not in a Medicare covered stay or in a Medicare certified part of a SNF.

If your employee (or contractor) provides services outside of your “office” area, these services would not qualify as “incident to” unless you are physically present where the service is being provided. One exception is that certain chemotherapy “incident to” services are excluded from the bundled SNF payments and may be separately billable to the carrier.

In Patients’ Homes
In general, you must be present in the patient’s home for the service to qualify as an “incident to” service.

There are some exceptions to this direct supervision requirement that apply to homebound patients in medically underserved areas where there are no available home health services only for certain limited services found in Pub 100-02, Chapter 15 Section 60.4 (B).

In this instance, you need not be physically present in the home when the service is performed, although general supervision of the service is required. You must order the services, maintain contact with the nurse or other employee, and retain professional responsibility for the service. All other incident to requirements must be met. A second exception applies when the service at home is an individual or intermittent service performed by personnel meeting pertinent state requirements (e.g., nurse, technician, or physician extender), and is an integral part of the physician’s services to the patient.

Ambulance Service
Neither ambulance services nor EMT services performed under your telephone supervision are billable as “incident to” services.

Additional Information
To provide additional clarity, we present the following scenarios:

Must a supervising physician be physically present when flu shots, EKGs, Laboratory tests, or Xrays are performed in an office setting in order to be billed as “incident to” services?
“These services have their own statutory benefit categories and are subject to the rules applicable to their specific category. They are not “incident to” services and the “incident to” rules do not apply.”

Can anti-coagulation monitoring be provided “incident to” a physician’s services in an office?
Yes, if the requirements are met, i.e., the services are part of a course of treatment during which the physician personally performs the initial service and is actively involved in the course of treatment, is physically present in the immediate office when services are rendered by the employee, and the service represents an expense to the physician or other legal entity that bills for the service.

If the treating physician (Doctor X) refers a patient to an anti-coagulation monitoring clinic, can Doctor X bill these services as “incident to?”
No, because the services are not being provided by an employee under supervision of Doctor X.

Can the supervising physician (Doctor Y) at the anti-coagulation monitoring clinic (a physician
group) bill the services as “incident to” if Doctor Y directly supervises those services at the clinic?
No, because Doctor Y is not treating the patient for the underlying condition. However, if Doctor Y receives a referral from Dr. X, and Dr. Y performs an initial evaluation of the patient and then orders and supervises the services, they may be billed by Doctor Y incident to her initial service.

If you have further questions regarding this issue, please contact your carrier at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Inappropriate Access to or Use of Electronic Data Interchange (EDI) Transaction Data by Third Party Entities

Provider Types Affected
All physicians, suppliers, and providers.

Provider Action Needed

STOP – Impact to You
Failure to abide by Medicare security requirements for EDI access could lead to suspension of EDI capabilities.

CAUTION – What You Need to Know
This article clarifies and reminds affected physicians, providers, and suppliers of existing Medicare requirements and prohibitions concerning use of EDI numbers and passwords.

GO – What You Need to Do
Be sure you and your third party partners are aware of and abide by these requirements to protect your EDI access and to maintain your ability to submit timely claims to Medicare.

Background
Medicare contractors (carriers and intermediaries) support electronic data interchange (EDI) to enable providers, either directly or through third party agents to:

It is important to note that these functions are the only functions for which a provider or a third party entity is entitled to send EDI transactions directly to Medicare contractors (carriers, DMERCs, or fiscal intermediaries) or receive EDI transactions directly from Medicare contractors.

Third-party entities that request permission to access Medicare EDI records directly generally fall into one of the following categories:

  1. A clearinghouse as defined by the Health Insurance Portability and Accountability Act (HIPAA) that transfers and may translate claim, eligibility, claim status, and/or payment and remittance advice data for EDI transactions being transmitted between providers and one or more Medicare contractors;
  2. An agent a provider has hired to prepare claims and possibly other EDI transactions for submission to one or more Medicare contractors, and possible posting to patient records/provider accounts of eligibility, claim status, and adjudication/payment data issued by one or more Medicare contractors;
  3. A clearinghouse as in #1 above that also performs agent services as in #2 above; and
  4. A third party that does not perform clearinghouse or agent services as described in #1-3, but that may want direct access to outbound Medicare EDI transactions for alternate functions. Entities included in this category include collection agents in pursuit of delinquent beneficiary payments to providers and vendors that market payment data analysis services to providers that serve Medicare patients.

Third parties in categories 1, 2, and 3 perform functions that qualify them for direct access to Medicare contractor EDI systems. If a provider elects to use the services of a third party to perform permitted Medicare EDI functions, the provider must complete an EDI Agreement and furnish the Medicare contractor with a signed authorization specifying the EDI services each third party may perform on their behalf. The third party must comply with existing requirements to obtain their own EDI number and password from the Medicare contractor that services each provider being represented.

Medicare contractors can issue EDI numbers and passwords to category 1, 2, and 3 entities and permit them to submit and/or obtain EDI data directly to/from the Medicare contractor EDI systems. Third parties in category 4 do not perform functions that qualify them for direct access to Medicare systems, and may not be issued EDI numbers or passwords.

Medicare requires that providers and third party entities to which EDI numbers and passwords are issued protect the security of those numbers and passwords to prevent use by unauthorized individuals.

Furthermore, providers and third party entities of any category are prohibited from accessing Medicare systems using an EDI number or password not directly issued to them by a Medicare contractor.

This instruction is being issued to clarify and remind affected parties of existing CMS requirements and prohibitions concerning access to and use of EDI numbers and passwords.

Issues
Although they may qualify for direct access to Medicare contractor EDI systems, the read, write and use rights vary for entities in categories 1, 2, and 3. Third parties in categories 2 or 3 are allowed to review data within transactions, whereas category 1 entities are limited to review of “electronic envelope” data that contains routing information for the transactions. Some category 1 entities may be confused regarding this limitation.

The Centers for Medicare & Medicaid Services (CMS) recently discovered that at least one third-party
entity in category 4 has been using EDI numbers and passwords furnished them by providers to download electronic remittance advice (ERA) transactions for those providers. The data was not being used to post adjudication and payment data to patient accounts, but was being used solely for automated analysis to detect information such as payment patterns and to generate reports. The providers were using the paper remittance advice notices they received, and not the ERAs, to post their accounts. CMS has been advised that other companies may also be marketing similar services and may be using EDI numbers and passwords issued to providers to obtain outbound EDI transactions from Medicare contractor systems for use in ways other than intended by Medicare.

CMS Policy
The following manual instructions contain CMS requirements that apply to these issues:

This can be accessed at: http://www.cms.hhs.gov/manuals/104_claims/clm104c24.pdf

These password requirements apply to entities to which Medicare contractors issue passwords, as well as to Medicare contractors themselves.

In regard to access policies for entities in categories 1-4:

As stated in the CSRs in BPSSM section 2.9.10, passwords (1) are “unique for specific individuals,” (2) must be “controlled by the assigned user and [are] not subject to disclosure.”

Contractor Actions if Improper Access is Identified
In the event a Medicare contractor becomes aware that improper access has been given, appropriate
termination of EDI capabilities and notification must occur. For example:

During this contact, and while the EDI number and password are disabled, the Medicare contractor
will remind the provider that:

Additional Information
Providers can review appropriate requirements by checking the Web sites mentioned above.

Remember: The law requires most providers to bill Medicare electronically and EDI access is crucial to that process. Protect your access and protect your patients’ confidentiality by abiding by Medicare’s privacy and security requirements.

If you have any questions regarding this issue, contact the EDI department of your carrier/intermediary at their toll-free number. If you bill for Medicare Part A services, including outpatient hospital services, that number may be found at:
http://www.cms.hhs.gov/providers/edi/anum.asp

If you bill for Medicare Part B services, that number may be found at: http://www.cms.hhs.gov/providers/edi/bnum.asp

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Implementation of the Medicare Physician Fee Schedule (MPFS) National Abstract File for Purchased Diagnostic Tests and Interpretations

Provider Types Affected
Physicians, laboratories, and independent diagnostic testing facilities.

Provider Action Needed
This instruction implements a national abstract file of the Medicare Physician Fee Schedule (MPFS) containing Healthcare Common Procedural Coding System (HCPCS) codes billable as purchased diagnostic tests and interpretations, for every locality throughout the country.

Effective April 1, 2005, suppliers, including laboratories, physicians, and independent diagnostic testing facilities, must bill their local carrier for purchased diagnostics tests and interpretations, regardless of the location where the service was furnished. The Centers for Medicare & Medicaid Services (CMS) recognizes that the abstract file for purchased diagnostic tests/interpretations may not include all diagnostic services that may be purchased. Suppliers may request to add other HCPCS codes that are billable as purchased services to this file by sending a note to CMS at the following address:

Centers for Medicare & Medicaid Services
Centers for Medicare Management/Provider Billing Group/Division of Supplier Claims Processing
7500 Security Blvd.
Baltimore, MD 21244

CMS will review these requests periodically to determine whether code additions or deletions are needed, and will make updates to the abstract file in conjunction with the MPFS quarterly releases.

The billing physicians/suppliers should be aware that they are responsible for ensuring that the physician or supplier that furnished the purchased test/interpretation is enrolled with Medicare and is in good standing (i.e., the physician/supplier is not sanctioned, barred, or otherwise excluded from participating in the Medicare program).

The Office of Inspector General (OIG) maintains a database of information concerning parties that are excluded from participation in the Medicare, Medicaid, or other Federal health programs. The OIG exclusions database is available to the public on the OIG Web site at the following address: http://www.oig.hhs.gov/fraud/exclusions.html

Suppliers may access this database, or use another available source, to determine whether a physician/supplier is eligible to participate with Medicare prior to billing for a purchased diagnostic test or interpretation.

Background
CR 3481 implements a national abstract file of the MPFS containing HCPCS codes billable as a purchased diagnostic test/interpretation, for every locality throughout the country. Effective with the implementation of the abstract file on April 4, 2005, carrier jurisdiction rules for purchased diagnostic tests/interpretations will be changed to allow suppliers to bill their local carriers for these services and receive the correct payment amount, regardless of the location where the service was performed.

Carrier jurisdictional pricing rules for all other services payable under the MPFS will remain in effect.

Implementation
The implementation date for this instruction is April 4, 2005.

Additional Information
The revised portions of the Medicare Claims Processing Manual related to this change are attached to the official instruction issued to your carrier. That instruction may be found at: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

Once at that site, look for CR 3481 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier at their toll-free number, which can be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Hospice Care

Medicare beneficiaries entitled to hospital insurance (Part A) who have a terminal illness with a life expectancy of six months or less have the option of electing hospice coverage in lieu of the standard Medicare coverage for treatment and management of their terminal condition. Only care provided by a Medicare certified hospice is covered under the hospice benefits provisions.

Hospice care is available for two 90-day periods and an unlimited number of 60-day periods during the remainder of the hospice patient’s lifetime. However, a beneficiary may voluntarily terminate their hospice election period.

If the attending physician, who may be a nurse practitioner, is an employee of the designated hospice, he/she may not receive compensation from the hospice for those services under Part B. These physician professional services are billed to Medicare Part A by the hospice.

To be covered, hospice services must be reasonable and necessary for the palliation or management of the terminal illness and related conditions. The individual must elect hospice care and a certification that the individual is terminally ill must be completed by the patient’s attending physician (if there is one), and the Medical Director (or the physician member of the Interdisciplinary Group (IDG)). Nurse practitioners serving as the attending physician may not certify or re-certify the terminal illness. A plan of care must be established before services are provided. To be covered, services must be consistent with the plan of care. Certification of terminal illness is based on the physician’s or medical director’s clinical judgment regarding the normal course of an individual’s illness. It should be noted that predicting life expectancy is not always exact.

Where the service is considered a hospice service (i.e., a service related to the hospice patient’s terminal illness that was furnished by someone other than the designated “attending physician” [or a physician substituting for the attending physician]) the physician or other provider must look to the hospice for payment.

Attending Physician Services
When hospice coverage is elected, the beneficiary waives all rights to Medicare Part B payments for professional services that are related to the treatment and management of his/her terminal illness during any period his/her hospice benefit election is in force, except for professional services of an “attending physician,” whom is not an employee of the designated hospice nor receives compensation from the hospice for those services. For purposes of administering the hospice benefit provisions, an “attending physician” means an individual who:

Professional services related to the hospice patient’s terminal condition that were furnished by the “attending physician,” who may be a nurse practitioner, are billed to the Medicare Part B carrier.

When the attending physician furnishes a terminal illness related service that includes both a professional and technical component (e.g., x-rays), he/she bills the professional component of such services to the Medicare Part B carrier and looks to the hospice for payment for the technical component. Likewise, the attending physician, who may be a nurse practitioner, would look to the hospice for payment for terminal illness related services furnished that have no professional component (e.g., clinical lab tests).

Coding Guidelines for Attending Physician Services Related to Hospice Condition

The attending physician is the only physician who can be reimbursed by the Medicare Part B Carrier for palliative evaluation and management treatment related to the terminal illness. The attending physician codes services with the “GV” modifier on claims submitted to the Part B carrier for services provided to a hospice patient:

“Modifier GV: “Attending physician not employed or paid under agreement by the patient’s hospice provider”

If another physician covers for a hospice patient’s designated attending physician, the the designated attending physician bills services of the substituting physician under the reciprocal or locum tenens billing instructions. In such instances, the attending physician bills using the “GV” modifier in conjunction with either the “Q5” or the “Q6” modifier. For additional information on reciprocal and locum tenens billing, you may refer to the July/August ’98, Medicare Bulletin.

When the designated attending physician who may be a nurse practitioner furnishes services related to a hospice patient’s terminal condition under a payment arrangement with the hospice, the physician must look to the hospice for payment. In this situation, the physicians’ services are hospice services and are billed by the hospice to its FI.

Carriers must process and pay for covered, medically necessary Part B services that physicians furnish to patients after their hospice benefits are revoked even if the patient remains under the care of the hospice. Such services are billed without the “GV” or “GW” modifiers. Payment will be based on applicable Medicare payment and deductible rules for each covered service even if the beneficiary continues to be treated by the hospice after hospice benefits are revoked.

Other Physicians
Medicare Part B coverage is not allowed for services related to the terminal illness when rendered by a physician other than the designated attending physician. If physicians provide services unrelated to the terminal condition, the following modifier should be applied to these claims:

“Modifier GW: Services unrelated to the hospice condition”

Durable Medical Equipment, Oxygen, Etc.
The hospice pays for all durable medical equipment (DME), prosthetics, orthotics, and supplies while the patient is in the hospice program. Medicare Part B is responsible only if the item was prescribed for a diagnosis completely unrelated to the terminal illness. This is true even when the patient was renting equipment or purchasing supplies prior to the hospice coverage.

Ambulance
The hospice covers ambulance services if they made the arrangements. Medicare Part B does not cover ambulance services related to the hospice condition.

Hospice vs. Part B
When treating a patient with a terminal illness, ask if they have elected to receive hospice care. In addition to the regular Medicare card, each hospice patient is issued a card with the hospice name and entitlement period. When undecided about whether to bill the hospice or Medicare Part B, bill the hospice first. If the hospice rejects the claim, file the claim and the hospice denial with the Medicare Part B carrier.

Additional Resources:
For additional information on hospice claims, please access the CMS Manual System, Pub 100-4, Medicare Claims Processing (includes appeals, contractor interface with CWF, and MSN), Chapter 11, Sections 10-120, (http://www.cms.hhs.gov/manuals/104_claims/clm104c11.pdf).

For additional general information about the Hospice benefit, you may access the CMS Manual System, Pub 100-2, Medicare Benefit Policy, Chapter 9: http://www.cms.hhs.gov/manuals/102_policy/bp102c09.pdf

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Guidance Regarding Elimination of Standard Paper Remittance (SPR) Advice Notices in the Old Format

Note: This article was revised on November 19, 2004, to correct a typographical error in the third line of the Background section. Specifically, the phrase “date elements” was corrected to read “data elements.”

Provider Types Affected
All Medicare physicians, providers, and suppliers

Provider Action Needed
Be advised that only the most recent version of the Standard Paper Remittance (SPR) Advices will be
used. The 835 version 4010A1 flat file is the appropriate format to produce SPRs. Also, no data may be included in paper remittance advices that are not included in an Electronic Remittance Advice (ERA).

Background
The Centers for Medicare & Medicaid Services (CMS) prohibits the inclusion of data in paper remittance advice notices that is not included in the ERA transactions. The most recent version of the SPR Advice and the ERA contain the same information in the comparable fields and data elements, including the same codes. The same flat file should be used to produce both the SPR and 835 version 4010A1 ERA.

CMS has issued a memorandum to all Medicare carriers and fiscal intermediaries, including Durable
Medical Equipment Carriers (DMERCs) and Regional Home Health Intermediaries (RHHIs), stating that effective January 1, 2005, only the 835 version 4010A1 flat file is to be used to produce the SPRs; no other format for SPRs will be used.

Additional Information
Refer to Chapter 22 of the Medicare Claims Processing Manual, Publication 100-4, which can be found online at: http://www.cms.hhs.gov/manuals/104_claims/clm104c22.pdf

Additional information regarding the Fiscal Intermediary Part A 835 flat file, including a sample of the most recent SPR format, is available in CR 3344. You may view that CR at:
http://www.cms.hhs.gov/manuals/pm_trans/R252CP.pdf

If you have any questions regarding receipt of or conversion to ERAs, please contact your carrier/intermediary. If you bill an intermediary, their number may be found at:
http://www.cms.hhs.gov/providers/edi/anum.asp

If you bill a carrier, their number may be found at: http://www.cms.hhs.gov/providers/edi/bnum.asp

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Drugs Paid by Average Selling Price Beginning January 1, 2005

Provider Types Affected
Physicians, suppliers, and providers

Provider Action Needed
Physicians, suppliers, and providers should note that beginning January 1, 2005, the payment limit for Part B drugs and biologicals, not paid on a cost or prospective payment basis, will be paid based on the Average Sales Price (ASP) plus 6 percent. Drugs will be paid based on date of service and the lower of:

  1. The submitted charge; or
  2. The ASP plus 6 percent

Background
According to the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA), beginning January 1, 2004, through December 31, 2004, drugs and biologicals not paid on a cost or prospective payment basis are paid based on various standards specified in the statute, although the default payment limit standard is 85 percent of Average Wholesale Price (AWP).

This instruction notifies contractors (Part B Local Carriers and Durable Medical Equipment Carriers (DMERCs)) that the MMA mandates that drugs and biologicals not paid on a cost or prospective payment basis are to be paid based on the ASP beginning January 1, 2005.

Therefore, beginning January 1, 2005, the Centers for Medicare & Medicaid Services (CMS) will:

Finally, contractors will:

Implementation
The implementation date for this instruction is January 1, 2005.

Related Instructions
The Medicare Internet Only Manual (IOM) has been edited with revised and new sections to reflect changes implemented with this instruction. These revised and new sections include the following:

The Medicare Claims Processing Manual (Pub. 100-4), Chapter 17 (Drugs and Biologicals):

These revised and new sections of the Medicare Claims Processing Manual are included in the actual instruction (CR 3232) issued to your carrier or DMERC.

Additional Information
The official instruction issued to your carrier regarding this change may be found by going to:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3232 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier/intermediary at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Modifiers for Transportation of Portable X-Rays (R0075) - Clarification

Note: This article was revised on November 15, 2004 to show the correct effective date for the modifiers reportable for R0075.

Provider Types Affected
Providers billing Medicare carriers for portable x-rays

Provider Action Needed

STOP – Impact to You
This instruction provides further clarification on the use and processing of the five portable x-ray Level II Healthcare Common Procedure Coding System (HCPCS) modifiers reportable with HCPCS code R0075 that were made effective January 1, 2004.

CAUTION – What You Need to Know
The five new modifiers for HCPCS code R0075 will be used to report the number of patients served during a single trip that the portable x-ray supplier makes to a particular location.

GO – What You Need to Do
Refer to the Background and Additional Information sections of this instruction for further details regarding these changes.

Background
Previously, information on five new Level II HCPCS modifiers reportable with HCPCS code R0075 was provided by Change Request (CR) 2856, Transmittal 14. Additional questions received by the Centers for Medicare & Medicaid Services (CMS) Regional Office indicated that there was confusion about the appropriate use of these new HCPCS modifiers.

This instruction is being issued to help answer these questions and provide further clarification on the processing of the five portable x-ray Level II HCPCS modifiers reportable with HCPCS R0075 that were made effective January 1, 2004.

Determining Single Payments
Medicare allows a single transportation payment for each trip that the portable x-ray supplier makes to a particular location. When more than one Medicare patient is x-rayed at the same location, the single fee schedule transportation payment is prorated among all the patients receiving the services.

Some contractors currently use the units field of the Medicare claim form to prorate the services to determine the appropriate single payment.

This results in inconsistencies in the reporting of these services among providers and carriers, and inflates the national frequency data based on the units field for these services.

Therefore, effective upon implementation of this instruction, the five (5) new modifiers (previously implemented for HCPCS Code R0075 in CR 2856, Transmittal 14) will be used to report the number of patients served during a single trip.

New Modifiers
HCPCS code R0075 must be billed in conjunction with the Current Procedural Terminology (CPT) radiology codes (7000 series) and only when the x-ray equipment used was actually transported to the location where the x-ray was taken. R0075 would not apply to the x-ray equipment stored in the location where the x-ray was done (e.g., a nursing home), for use as needed.

Below are the definitions for each modifier that must be reported, and only one of these five modifiers can be reported with HCPCS Code R0075:

Implementation
The implementation date for this instruction is April 4, 2005.

Related Instructions
The Medicare Claims Processing Manual, Pub. 100-04, Chapter 13 (Radiology Services and Other Diagnostic Procedures), Section 90.3, can be reviewed at the following CMS Web site: http://www.cms.hhs.gov/manuals/104_claims/clm104c13.pdf

CR 2856, Transmittal 14, October 24, 2003, can be found at the following CMS Web site: http://www.cms.hhs.gov/manuals/pm_trans/R14CP.pdf

Additional Information
For further information on prorating portable x-ray transportation services, please refer to Section 90.3 in Chapter 13 of the Medicare Claims Processing Manual. The revised section is attached to the CR that was issued by CMS to your carrier.

That official instruction may be found by going to:
http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR3280 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

In addition, a comprehensive overview of the HCPCS can be found at the following CMS Web site:
http://www.cms.hhs.gov/medicare/hcpcs/codpayproc.asp

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Changes to the Laboratory National Coverage Determination (NCD) Edit Software for January 2005

Provider Types Affected
Clinical diagnostic laboratories

Provider Action Needed
CR 3429 announces changes to the list of codes associated with the 23 negotiated laboratory National Coverage Determinations (NCDs). These changes are:

Background
The NCDs for clinical diagnostic laboratory services were developed by the laboratory negotiated rulemaking committee and published as a final rule on November 23, 2001. Also, nationally uniform software was developed by Computer Sciences Corporation and incorporated into the shared systems so that laboratory claims subject to any of the 23 NCDs are processed uniformly throughout the nation, effective January 1, 2003.

In addition, the laboratory edit module for the NCDs is updated quarterly as necessary to reflect ministerial coding updates and substantive changes to the NCDs developed through the NCD process. (See the Medicare Claims Processing Manual, Pub. 100-4, Chapter 16, Section 120.2.)

CR 3429 announces changes that will be included in the January 2005 release of the edit module for clinical diagnostic laboratory services.

In accordance with the coding analysis published on the coverage Internet site on July 26, 2004, CMS is implementing the following:

Coverage for this code will terminate for services furnished on or after January 1, 2005. See:
http://cms.hhs.gov/mcd/viewdecisionmemo.asp?id=127

In accordance with the coding analysis published on the coverage Internet site on July 27, 2004, CMS is implementing the following changes:

Coverage for these codes will begin for services furnished on or after January 1, 2005. See: http://cms.hhs.gov/mcd/viewdecisionmemo.asp?id=132

In accordance with the coding analysis published on the coverage Internet site on July 28, 2004, CMS is implementing the following change:

Coverage for this code will terminate for services furnished on or after January 1. See:
http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=131

To accommodate the new cardiovascular and diabetes screening benefits that were added to Medicare by the MMA, CMS is removing the following ICD-9-CM codes from the list of ICD-9-CM codes not covered by Medicare:

In order to implement the new cardiovascular and diabetes screening benefits that were added to Medicare by the MMA, CMS is making the following changes.

The lipid NCD edit is being subdivided into two parts:

  1. For Current Procedural Terminology (CPT) codes 80061 (Lipid panel), 82465 (Cholesterol, serum total), 83718 (Lipoprotein, direct, HDL), and 84478 (Triglycerides), CMS is adding the following ICD- 9-CM diagnosis codes to the list of ICD-9-CM Codes covered by Medicare:

• V81.0 (Screening for Ischemic Heart Disease);
• V81.1 (Screening for Hypertension); and
• V81.2 (Screening for Other Unspecified Cardiovascular Conditions).

  1. The covered codes list for the remaining CPT codes in the lipid NCD (83715 [Lipoprotein, blood: electrophoretic separation and quantitation]), 83716 (High resolution fractionation and quantitation of lipoprotein cholesterols), and 83721 (Direct measurement, LDL cholesterol)) remain unchanged.

For the diabetes benefit, the blood glucose NCD edit is being subdivided into two parts.

  1. For CPT code 82947, CMS is adding the following ICD-9-CM diagnosis code to the list of ICD-9- CM Diagnosis Codes covered by Medicare: V77.1 (Screening for Diabetes Mellitus).
  2. The covered codes for the remaining CPT codes in the blood glucose NCD (82948 (Glucose, blood, strip) and 82962 (Glucose (monitors)) remain unchanged.

Please note that, effective October 1, 2003, all claims for clinical diagnostic laboratory services submitted to Medicare must include ICD-9-CM diagnosis codes. Coding Guideline #1 of the laboratory NCDs has been amended to reflect this requirement and the guideline now states that “Any claim for a clinical diagnostic laboratory service must be submitted with an ICD-9-CM diagnosis code. Codes that describe symptoms and signs, as opposed to diagnosis, should be provided for reporting purposes when a diagnosis has not been established by the physician.”

Implementation
The implementation date for this instruction is January 3, 2005.

Additional Information
For complete details, please see the official instruction issued to your carrier/fiscal intermediary regarding this change. It may be viewed at: http://www.cms.hhs.gov/manuals/transmittals/comm_date_dsc.asp

From that Web page, look for CR 3429 in the CR NUM column on the right, and click on the file for that CR.

If you have any questions, please contact your carrier/intermediary at their toll-free number, which may be found at: http://www.cms.hhs.gov/MedlearnProducts/downloads/CallCenterTollNumDirectory.pdf

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Carrier and DMERC 835 Flat File Change and Replacement of Deactivated Reason Code A2

Provider Types Affected
All