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July 2006 Part B Medicare Bulletin

Posted July 5, 2006

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Table of Contents

• Additional $50 Payment for New Technology Intraocular Lenses (NTIOLs) Furnished in Ambulatory Surgical Centers (ASCs)
• Additional Clarification of CR 3816 Business Requirements - Low Vision Rehabilitation Demonstration
• Additional Requirements for the Competitive Acquisition Program (CAP) for Part B Drugs and Biologicals - MMA
• Ambulatory Surgical Center (ASC) Claims Processing Manual Clarification
• Announcing the Release of the Revised CMS-855 Medicare Enrollment Applications
• Announcing the Revised Medicare Physician Guide
• Bariatric Surgery for Morbid Obesity
• Changes Conforming to Change Request 3648 (CR3648) for Therapy Services
• Changes to the Laboratory National Coverage Determination (NCD) Edit Software for July 2006

• Collection of Fee-for-Service Payments Made During Periods of Managed Care Enrollment (Previously CR2801 Program Memorandum Transmittal AB-03-101) MANUALIZATION

• Competitive Acquisition Program (CAP) for Part B Drugs - Coding, Testing, and Implementation - MMA
• Competitive Acquisition Program (CAP) for Part B Drugs Physician Election - MMA
• Competitive Acquisition Program (CAP) Update
• Correct Reporting of Diagnosis Codes on Screening Mammography Claims
• Coverage of Prescription Niacin Products Under Part D for 2006
• Diagnostic and Therapeutic Esophagogastroduodenoscopy and Gastrointestinal Endoscopy - North Carolina/Tennessee and Idaho - LCD Revsions
• Diagnostic Nasal and Sinus Endoscopy - LCD Revision
• Drug Administration Coding and Payment Policy - Update to Pub. 100-04 Medicare Claims Processing Manual
• Electronic Submission of Initial Medicare Claims vs. Paper Submission of Non-Initial Claims
• Enrollment Changes Effective May 1, 2006
• Facilitating Your Medicare Enrollment
• Full Replacement of CR4349, Hold on Medicare Payments. CR4349 Is Rescinded
• Information on NPI and the Revised CMS 855 Medicare Provider Enrollment Applications
• IVR Enhancement
• July Quarterly Update for 2006 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Fee Schedule
• July Update to the 2006 Medicare Physician Fee Schedule Database
• Medical Review Frequently Asked Questions
• Medicare Policy Regarding Collection of Fee-for-Service Payments Made During Periods of Managed Care Enrollment
• Medicare Provides Coverage for Many Preventive Services and Screenings
• Medicare Remit Easy Print (MREP) Update
• Medicare Remit Easy Print (MREP) Version 1.7
• Medicare to Stop Mailing Standard Paper Remittance (SPR) for Those Providers/Suppliers Also Receiving the Electronic Remittance Advice (ERA)
• Nesiritide for Treatment of Heart Failure Patients
• New Requirements for Low Vision Rehabilitation Demonstration Billing
• NPI Information
• Pancreas Transplants Alone (PA)
• Payment for Carotid Artery Stenting (CAS) Post Approval Extension Studies
• Payment for Evaluation and Management Services Provided During Global Period of Surgery
• Payment for Positron Emission Tomography Scans in CMS-Approved Clinical Trials and Coverage with Evidence Development - Use of QR and QV Modifiers
• Quarterly Medicare Summary Notice (MSN) Printing Cycle
• Quarterly Provider Update
• Quarterly Update to Correct Coding Initiative (CCI) Edits, Version 12.2, Effective July 1, 2006
• Reminder to Enumerate; Countdown Has Begun
• Reporting of Diagnosis Code V06.6 on Influenza Virus and/or Pneumococcal Pneumonia Virus (PPV) Vaccine Claims and Acceptance of Current Procedural Terminology (CPT) Code 90660 for the Reporting of the Influenza Virus Vaccine
• Section 1011: Federal Reimbursement of Emergency Health Services Furnished to Undocumented Aliens - An Update
• The Medicare Therapy Cap Exception Request Form - Revision

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Collection of Fee-for-Service Payments Made During Periods of Managed Care Enrollment (Previously CR2801 Program Memorandum Transmittal AB-03-101) - MANUALIZATION

Provider Types Affected
Physicians, providers, and suppliers submitting fee-for-service claims to Medicare carriers, durable medical equipment regional carriers (DMERCs), fiscal intermediaries (FIs), and/or regional home health intermediaries (RHHIs) for services furnished to Medicare beneficiaries enrolled in Medicare Advantage (MA) Organizations.

Impact on Providers
This article is based on Change Request (CR) 5105, which was issued to manualize the process that ensures that any duplicate payments for services rendered to Medicare beneficiaries are collected. CR5105 ensures that any fee-for-service claims that were approved for payment during a period when the beneficiary was enrolled in a MA Organization are submitted to the normal collection process used by the Medicare contractors (carriers/DMERCs/FIs) for overpayments.

Background
The Centers for Medicare & Medicaid Services (CMS) pays for a beneficiary's medical services more than once when a specific set of circumstances occurs. When CMS data systems recognize a beneficiary has enrolled in a MA Organization, the MA Organization receives capitation payments for the Medicare beneficiary. In some cases, enrollments with retroactive payments are processed.

The result is that Medicare may pay for the services rendered during a specific period twice:

• First, for the specific service which was paid by the fee-for-service Medicare contractor to the provider; and
• Second, by the MA Payment Systems in the monthly capitation rate paid to the MA plan for the beneficiary.

Overview of the MA plan Enrollment Process when an MA plan enrollment is processed retroactively:

• Fee-for-service claims with dates of service that fall under the MA plan enrollment period are identified by Medicare's Common Working File (CWF); and
• An Informational Unsolicited Response (IUR) record is created.

In essence, the retroactive enrollment triggers a search for fee-for-service claims that were incorrectly paid for services rendered when the beneficiary was covered by the MA plan. If such claims are found, the system generates an adjustment and initiation by Medicare systems of overpayment recovery procedures. The current policy/procedures, as outlined in CR 2801 (Transmittal AB-03-101, dated July 18, 2003) and CR 5105, dictates that:

• Claims paid in error (due to enrollment or disenrollment corrections) will be adjusted, and
• Medicare contractors will initiate overpayment recovery procedures.

Note: CR 2801 (Transmittal AB-03-101, dated July 18, 2003) can be found at http://www.cms.hhs.gov/Transmittals/Downloads/AB03101.pdf on the CMS Web site:

Because of the inherent retroactivity in the enrollment process, (e.g., beneficiaries can enroll in plans up to the last day of the month, and the effective date would be the first of the following month), the CWF may receive this information after the enrollment is effective. For this reason, these kinds of adjustments occur routinely.

A variety of the CMS systems issues over the past 18 months have prompted CMS to recently synchronize MA enrollment and disenrollment information for the period September 2003 to April 2006. As a result, providers may have claims that were affected by this synchronization. To see details of the impact of this synchronization on providers, please see MLN Matters article, SE0638, which is available at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0638.pdf on the CMS Web site.

When claims are identified as needing payment recovery, the related remittance advice for the claim adjustment will indicate Reason Code 24, which states: "Payment for charges adjusted. Charges are covered under a capitation agreement/managed care plan." Upon receipt, providers are to contact the MA plan for payment. Providers who bill carriers will be alerted by their carrier (via letter or alternate method) of the following:

• That the beneficiary was in a MA plan on the date of service;
• That the provider should bill the managed care plan;
• What the plan identification number is; and
• Where to find the plan name and address associated with the plan number on the CMS Web site.
• For providers who bill FIs, the adjustment will occur automatically and information on which plan to contact must be determined through an eligibility inquiry or by contacting the beneficiary directly.

Note: To associate plan identification numbers with the plan name, go to http://www.cms.hhs.gov/HealthPlansGenInfo/claims_processing_20060120.asp#TopOfPage on the CMS Web site. In summary, CMS issued CR5105 to:

• Ensure that any fee-for-service claims that were approved for payment erroneously are submitted to the normal collection process used by the Medicare contractors (carriers, DMERCs, FIs, and RHHIs) for overpayments; and
• Instruct Medicare contractors to follow the instructions outlined in the Medicare Financial Management Manual (Pub.100-06, Ch. 3, Section 190), which is included as part of CR5105. Instructions for accessing CR5105 are in the Additional Information section of this article.

Implementation
The implementation date for the instruction is June 26, 2006.

Additional Information
For complete details, please see the official instruction issued to your carrier, DMERC, intermediary, or RHHI regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R97FM.pdf on the CMS Web site.

Also, if you have any questions, please contact your carrier/DMERC/intermediary/RHHI at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site

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Medicare Policy Regarding Collection of Fee-for-Service Payments Made During Periods of Managed Care Enrollment

Provider Types Affected
Physicians, providers, and suppliers submitting fee-for-service claims to Medicare carriers, durable medical equipment regional carriers (DMERCs), fiscal intermediaries (FIs), and/or regional home health intermediaries (RHHIs) for services furnished to Medicare beneficiaries enrolled in Medicare Advantage (MA) organizations.

Background
Once a Centers for Medicare & Medicaid Services (CMS) data system recognizes a beneficiary has enrolled in a MA Organization, the MA organization receives capitation payments for the beneficiary. In some cases, enrollments with retroactive dates are processed. The result is that Medicare may pay for the services rendered during a specific period twice; once for the specific service which was paid by the fee-for-service Medicare contractor and secondly by the MA Payment systems in the monthly capitation rate to the plan. Change Request 5105 and MLN Matters 5105 (see http://www.cms.hhs.gov/MLNArticles/downloads/MM5105.pdf) describe how CMS ensures that any fee-for-service claims that are approved for payment erroneously are adjusted and overpayments recovered by Medicare carriers and/or FIs.

A variety of CMS systems issues over the past 18 months prompted CMS to recently synchronize Medicare Advantage enrollment and disenrollment information. As a result, providers may have claims that were affected by this synchronization in one of two ways, both of which are addressed below.

Scenario 1. Claims Paid in Error
About 386,000 claims for about 100,000 beneficiaries enrolled in MA organizations have been identified as having been paid on a fee-for-service basis by FIs or carriers during this time. FIs and carriers will, over the next 6 months, adjust these claims and seek overpayments.

Where such an overpayment is recovered from a provider, the related remittance advice for the claim adjustment will indicate Reason Code 24 which states: "Payment for charges adjusted. Charges are covered under a capitation agreement/managed care plan". Upon receipt, providers are to contact the MA plan for payment.

Providers who bill carriers:
The carrier will alert you via letter or alternate method of the following:

• The beneficiary was in a MA plan on the date of service;
• You should bill the managed care plan;
• The plan identification number; and
• Where to find the plan name and address associated with the plan number on the CMS internet site.

Providers who bill FIs:
The adjustment will occur automatically, and information on which plan to contact must be determined through an eligibility inquiry or by contacting the beneficiary directly. To associate plan identification numbers with the plan name, go to http://www.cms.hhs.gov/HealthPlansGenInfo/claims_processing_20060120.asp#TopOfPage on the CMS Web site.

The number that will appear on the contractor notices will begin with ‘H'. For the following 11 plans, the alpha prefix is actually an ‘R'. A technical correction will be made in CMS systems in October 2006. Prior to October, when using the Web page look up tool, make sure to replace the ‘H' with an ‘R'. The 11 plans are:
• R3175
• R5287
• R5342
• R5553
• R5566
• R5595
• R5674
• R5826
• R5863
• R5941
• R9943

MA Plans have been notified:
MA plans know that the resynchronization may result in an increase in payment requests from providers who had claims previously paid, but subsequently overturned by fee-for-service FIs and carriers. Whenever CMS reverses fee-for-service payments as a result of confirmed retro-active enrollment in an MA plan, the provider must bill the MA plan. The plan adjudicates the claim and pays the claim at the plan's rate (if the provider is part of the network) or pays the provider at the fee-for-service rate if the provider is not part of the network. If the plan denies payment then the provider may bill the beneficiary. The Medicare beneficiary call center representatives at 1.800.MEDICARE have been trained to answer beneficiary inquiries that may arise in these situations.

Scenario 2. Claims Denied in Error
Because CMS has synchronized Medicare Advantage enrollment and disenrollment information, it is possible that fee-for-service claims were previously denied because the beneficiary was incorrectly identified as being a member of an MA plan. If a provider believes past claims have been denied in
error due to problems in enrollment and disenrollment information, those claims can now be resubmitted. For any Part B services, the 10% reduction for timely filing will be waived.

Additional Information
For more information regarding the manualization of this policy, see the MLN Matters article at
http://www.cms.hhs.gov/MLNArticles/downloads/MM5105.pdf on the CMS Web site.

If you have questions regarding this issue, contact your carrier/FI at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the
CMS Web site.

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Additional $50 Payment for New Technology Intraocular Lenses (NTIOLs) Furnished in Ambulatory Surgical Centers (ASCs)

Note: This article was revised on May 4, 2006, to correct the citation to the SSA law applicable to this> change. Also, language was added to show that any subsequent IOLs recognized by CMS as being a member of the reduced spherical aberration subset will receive the same payment adjustment effective upon CMS recognition and continuing for the balance of the 5-year period.

Provider Types Affected
Approved Ambulatory Surgery Centers (ASC) that bill Medicare for the insertion of new technology intraocular lenses (NTIOLs)

Provider Action Needed

STOP - Impact to You
Effective for dates of service on and after February 27, 2006, through February 26, 2011, Medicare will pay you an additional $50 for NTIOLs that the Centers for Medicare & Medicaid Services (CMS) recognizes as Category 3 (Reduced Spherical Aberration).

CAUTION - What You Need to Know
Your carrier will pay you an additional $50 for the insertion of NTIOL Category 3; Advanced Medical Optics (AMO) Tecnis® IOL, model numbers Z9000, Z9001, and ZA9003 (characteristic: improved contrast sensitivity). In addition, any subsequent IOLs recognized by CMS as being a member of the reduced spherical aberration subset will receive the same payment adjustment effective upon CMS recognition and continuing for the balance of the 5-year period. Effective for all NTIOL Category 3 claims with dates of service on and after February 27, 2006, through February 26, 2011, Medicare-approved ASCs are eligible for the additional $50 when billed using HCPCS code Q1003 along with procedure codes 66982, 66983, 66984, 66985, or 66986.

GO - What You Need to Do
Make sure that your billing staffs are aware of this additional NTIOL payment and the required HCPCS code Q1003.

Background
Section141(b) of the Social Security Act Amendments of 1994 (SSAA 1994) requires that CMS establish a process for designating particular IOLs as "new technology," and therefore eligible for additional payment. A final rule, published in the Federal Register (FR) on June 16, 1999 (64 FR 32198), established: (1) the process for adjusting payment amounts for NTIOLS that ASCs furnish; (2) an initial flat rate payment adjustment of $50; and, (3) a 5-year payment adjustment period beginning when CMS recognizes the first of a new IOL subset or class.

CR4361, from which this article is taken, announces the approval of NTIOL Category 3 (as defined in the FR at 71 FR 4586, dated January 27, 2006) which applies to Advanced Medical Optics (AMO); Tecnis® IOL model numbers Z9000, Z9001, and ZA9003 (characteristic: improved contrast sensitivity). Additionally, any subsequent IOLs having the same characteristics as the first IOL recognized for payment will receive the same adjustment for the remainder of the 5-year period. This category and the associated $50 NTIOL Medicare payment adjustment will expire on February 26, 2011.

The payment adjustment is allowed when Medicare-approved ASCs (place of service 24) insert a Category 3 NTIOLs and submit HCPCS code Q1003 (created for this purpose) on the same claim as the surgical insertion procedure (66982, 66983, 66984, 66985, or 66986). HCPCS code Q1003 is already established and listed in the HCPCS file, and the Medicare Claims Processing Manual, chapter 14, Sections 10.2 & 40.3, have been updated to reflect this change.

Additional Information
Please be aware that carriers will deny payment for Q1003 when submitted by ASCs not approved by Medicare. If denied, the carrier will use MSN 16.2 (This service cannot be paid when provided in this location/facility) and Claims Adjustment Reason Code 58 (Payment adjusted because treatment was deemed by the payer to have been rendered in an inappropriate or invalid place of service).

Carriers will return as unprocessable claims for NTIOLs with Q1003 alone or with a procedure code other than 66982, 66983, 66984, 66985, or 66986. When such claims are returned, use claim adjustment reason code 16 (Claim/service lacks information needed for adjudication. Additional information is supplied using remittance advice codes whenever appropriate), remittance advice remark code M67 (Missing/Incomplete/Invalid other procedure codes) and remark code MA130 (Your claim contains incomplete and/or invalid information, and no appeal rights are afforded because the claim is unprocessable. Please submit a new claim with the complete/correct information).

Further, they will deny payment if submitted for services rendered after the discontinued date (February 26, 2011). If denied, they will use MSN 21.11 (This service was not covered by Medicare at the time you received it) and Claims Adjustment Reason Code 27 (Expenses incurred after coverage terminated).

Lastly, contractors need not search their files to either retract payment for claims already paid or to retroactively pay claims. However, contractors shall adjust claims brought to their attention with dates of service on and after February 27, 2006.

You can find more information about approval of the $50 additional payment for NTIOL Category 3 by reviewing CR4361, which is available at http://www.cms.hhs.gov/Transmittals/downloads/R914CP.pdf on the CMS Web site. The revised Medicare Claims Processing Manual, Chapter 14 (Ambulatory Surgical Centers), Sections 10.2 (10.2 - Ambulatory Surgical Center Services on ASC List) and 40.3 (Payment for Intraocular Lens (IOL)) are attached to CR4361.

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

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Additional Clarification of CR 3816 Business Requirements - Low Vision Rehabilitation Demonstration

Provider Types Affected
Physicians and providers billing Medicare carriers and/or fiscal intermediaries (FIs) for treatment provided to beneficiaries under the Low Vision Rehabilitation Demonstration Project

Providers Action Needed
This article is based on Change Request (CR) 5023 and this article actually revises the article for CR3816 by providing specific information clarifying billing instructions as directed in the Administrative Simplification Compliance Act (ASCA). Be aware that:

• National Provider Identification numbers (NPI) replace physician UPIN numbers by May 23, 2007.
• CR3816 for the Low Vision Rehabilitation Demonstration states that providers are to document the plan of care by indicating the date the plan was developed or reviewed in Block 19 (Reserved for Local Use) of the CMS-1500 or its electronic equivalent.
• This is no longer necessary for claims submission for the Low Vision Rehabilitation Demonstration.
• Facilities must document the date the plan of care was established or reviewed using occurrence code 17 on CMS-1450 or its electronic equivalent.
• This is no longer necessary for claims submission for the Low Vision Rehabilitation Demonstration.

Background
According to CR3816, the date the plan of care was established was to be placed in Block 19 of the CMS 1500 form. However, there is no place for this information in the electronic claims form. Therefore, this requirement has been removed whether submitting a paper claim or an electronic claim by providers or facilities.

In addition, although the business requirements in CR3816 mention use of remittance advice messages, and the background makes reference to using the most appropriate Medicare summary notice (MSN) messages unless specified otherwise in the business requirements, there is no corresponding reference to the remittance advice message in the background.

Please note that your carrier/FI will use the most appropriate remittance advice and remark codes when denying a claim unless otherwise specified in CR3816.

Implementation
The implementation date for the instruction is July 28, 2006.

Additional Information
For details of enforcement of the ASCA, please see related MLN Matters article MM3440, "Administrative Simplification Compliance Act (ASCA) Enforcement of Mandatory Electronic Submission of Medicare Claims," at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM3440.pdf on the CMS Web site.

To view the MLN Matters article related to CR3816, go to http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM3816.pdf on the CMS Web site.
The official instructions issued to your intermediary or carrier regarding this change can be found at
http://www.cms.hhs.gov/Transmittals/downloads/R46DEMO.pdf on the CMS Web site.

If you have questions, please contact your Medicare intermediary or carrier at their toll-free number which may be found at on the CMS Web site.http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.pdf

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Additional Requirements for the Competitive Acquisition Program (CAP) for Part B Drugs and Biologicals - MMA

Note: This article was revised on May 8, 2006, to show that the 2006 election period runs from May 8, 2006, to June 2, 2006.

Provider Types Affected
Physicians and suppliers billing Medicare carriers for Part B drugs and biologicals not paid on a cost or prospective payment system basis

Provider Action Needed

STOP - Impact to You
This article is based on Change Request (CR) 4309, which provides additional requirement for the CAP for Part B drugs and biologicals.

CAUTION - What You Need to Know
CR4309 provides additional instructions for the implementation of the CAP program. It builds on CR4064 through business requirements that were identified through the implementation process of CR4064 and the development of the final CAP rule published on November 21, 2005.

GO - What You Need to Do
See the Background section of this article for further details regarding these additional requirements.

Background
Change Request (CR) 4309 provides new requirements that were identified both during the coding process of CR4064 (http://new.cms.hhs.gov/transmittals/downloads/R777CP.pdf) and the publication of the final rule for the CAP for Medicare Part B drugs. It provides additional instructions for the implementation of the CAP program as outlined in CR4064, and it is tied to the business requirements in CR4064. CR4309 is not a stand-alone CR and needs to be understood in conjunction with CR4064.

The Competitive Acquisition Program (CAP) for Drugs and Biologicals Not Paid on a Cost or Prospective Payment Basis

The Medicare Prescription Improvement and Modernization Act of 2003 (MMA, Section 303 (d)), requires the implementation of a CAP for Medicare Part B drugs and biologicals not paid on a cost or prospective payment system (PPS) basis. Beginning with drugs administered on or after July 1, 2006, physicians will be given a choice between buying and billing these drugs under the average sales price (ASP) system, or obtaining these drugs from vendors selected in a competitive bidding process. For a complete overview of the program, see the MLN Matters article at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4064.pdf on the CMS Web site.

Note: For 2006, the first CAP year will run from July 1, 2006, through December 31, 2006. In subsequent years, it will run annually on a calendar year basis.

MMA, Section 303 (d) may be found at http://www.cms.hhs.gov/MMAUpdate/ on the CMS Web site. Social Security Act, Section 1861(s) is available at http://www.ssa.gov/OP_Home/ssact/title18/1861.htm. The Centers for Medicare & Medicaid Services (CMS) may exclude drugs from the CAP if competitive pricing will not result in significant savings, or is likely to have an adverse impact on access to such drugs.

Note: Physicians will still be able to continue to purchase and bill Medicare under the Average Sales Price (ASP) system for those drugs that are covered under Medicare Part B but whose HCPCS codes are not provided by the chosen approved CAP vendor.

Providing a Drug from Physician's Stock
Under emergency situations, the CAP will allow a participating CAP physician to provide a drug to a Medicare beneficiary from his or her own stock and obtain the replacement drug from the approved CAP vendor when certain conditions are met. The local carrier will monitor drugs ordered under the emergency replacement provision to ensure that the participating CAP physician is complying with Medicare payment rules.

Physician Election and Information Transfer between Carriers and the Designated Carrier for CAP Claims

For this first CAP year, by May 1, 2006, CMS will post on its Web site:

• A list of the vendors that have been selected to participate in the CAP for 2006 and their Web sites,
• The categories of drugs they will be providing, and
• The geographic areas within which each vendor will operate.

Physicians can then elect the vendors and the categories of drugs they choose to receive drugs from under the CAP program. For this first CAP cycle, there will be one category of drugs and one geographic area.

In subsequent years, the CAP election will take place in the fall of each year and CMS will post on its Web site the updated list of vendor information. The election process will end each year approximately 45 days after the list of vendors is posted on the CMS Web site.

Additional Requirements Regarding the CAP
Additional instructions and more complete details about the CAP requirements for Part B Drugs can be found in Change Request (CR) 4309 and its attachments. Some of these important requirements to remember are as follows:

• The CAP is only available to physicians billing Medicare on a fee-for-service basis and is not applicable to United Mine Worker, Railroad Retirement Board, or Medicare Advantage beneficiaries;
• Vendors can only submit claims for drugs provided by physicians who selected that vendor;
• Every claim from a vendor will indicate that all appeals on CAP claims must be adjudicated by the physician's carrier;
• Members of a group must elect to participate in the CAP as a whole group when billing as a group;
• Only members of a group who have prescriptive authority are eligible to participate in the CAP;
• Any carrier that is currently applying a local billing policy for unused drug (waste) that requires a separate detail line with the unused drug modifier (JW) may continue to apply that policy under the CAP, but they must require the addition of the CAP modifier to the line;
• Claims that include the no-pay, restocking, or furnished as written modifier (as noted in CR4064) will be treated as unprocessable if they contain one of the following invalid modifier combinations:
  
  • J1 and J3
  • J2 without J1
  • J2 and J3
• The J1 modifier must be on every physician claim for a CAP drug;
• Vendors may petition CMS to add new drugs to their vendor specific drug list on a quarterly basis;
• The UPIN (or NPI) of the ordering physician must be entered on every vendor claim and match the UPIN (or NPI) of a physician that has elected that vendor; and
• All HCPCS codes for the administration of CAP drugs must be billed as assigned.

When physicians or practitioners submit a paper claim with a no-pay modifier on a line, but without a prescription number on that line, the claim will be rejected and returned with remittance advice remark code MA130, indicating "Your claim contains incomplete information, and no appeals rights are afforded because the claim is unprocessable. Please submit a new claim with the complete/correct information."

Implementation
The implementation date for this instruction is July 3, 2006, except where otherwise indicated in this article.

Additional Information
For complete details, please see the official instruction issued to your carrier regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R866CP.pdf on the CMS
Web site.

In addition, you may wish to review CR4064 at http://www.cms.hhs.gov/Transmittals/downloads/R777CP.pdf and its related article at
http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4064.pdf on the CMS site.

If you have any questions, please contact your carrier at their toll-free number, which may be found at http://www.cms.hhs.gov/apps/contacts/ on the CMS Web site.

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Ambulatory Surgical Center (ASC) Claims Processing Manual Clarification

Provider Types Affected
Providers and suppliers of ambulatory surgical center (ASC) services

Provider Action Needed
This article is for informational purposes. CR5026 revises the Medicare Claims Processing Manual, Chapter 14 (Ambulatory Surgical Centers), Sections 10.3 (Services Furnished in ASCs Which Are Not ASC Facility Services) and 10.4 (Coverage of Services in ASCs Which Are Not ASC Facility Services) to clarify policy regarding the provision, coverage, and payment of services furnished in an ASC.

Background
Medicare conventionally reimburses ASCs in the form of a single payment that includes all "facility services" that the ASC furnishes in connection with a covered procedure. However, an ASC (perhaps as part of a medical complex that may include other entities, such as an independent laboratory, supplier of durable medical equipment, or a physician's office) may also furnish a number of covered items and services that are not considered facility services.

You should be aware that such entities, which are separate from the ASC, are covered separately under Part B. Further, in general, the items or services that these entities provide are not considered ASC services, and are therefore not included in the ASC payment, but are rather covered and paid for under the applicable Part B provisions.

Examples of such services include:

• Physicians' services;
• Durable medical equipment (DME);
• Implantable DME;
• Prosthetic devices;
• Ambulance services;
• Leg, arm, back and neck braces;
• Artificial legs, arms and eyes; and
• Services of an independent laboratory.

More detail about each of these services can be seen in Table 1, below.

Table 1
Examples of Services Not Included in the ASC Facility Rate

Items or Services	Who Receives Payment	Submit Bills To
Physicians' services Physicians who perform covered services in ASCs receive separate payment under Part B. Such services include: Anesthesiologists administering or supervising the administration of anesthesia to ASC patients and the patients' recovery from the anesthesia; Routine pre- or post- operative services, such as office visits, consultations, diagnostic tests, suture removal, dressing changes, and other services which are usually included in the physician fee for a given surgical procedure.	Physician	Carrier
Non-implantable durable medical equipment (DME) to ASC patients for in home use. ASCs who sell, lease, or rent items of DME to patients, are treated as DME suppliers. All of the ordinary DME-applicable rules and conditions apply to the ASC, including obtaining a supplier number and billing the DMERC as required.	Supplier An ASC can be a supplier of DME if it has a DME supplier number from the National Supplier Clearinghouse.	DMERC
Implantable DME and accessories ASCs who furnish implantable DME items to patients, bill the local carrier for the surgical procedure and the implantable device.	ASC	Carrier
Non-implantable prosthetic devices ASCs who furnish non-implantable prosthetic devices to patients, are treated as suppliers, and all the ordinary DME-applicable rules and conditions apply to the ASC, including obtaining a supplier number and billing the DMERC as required.	Supplier An ASC can be a supplier of non-implantable prosthetics if it has a supplier number from the National Supplier Clearinghouse.	DMERC
Implantable prosthetic devices except intraocular lenses (IOLs and NTIOLs [new technology intraocular lenses]), and accessories ASCs may bill and receive separate payment for prosthetic devices (other than intraocular lenses [IOLs]) that are implanted, inserted, or otherwise applied by surgical procedures on the ASC list of approved procedures. The ASC bills the local Carrier and receives payment according to the DMEPOS fee schedule. An intraocular lens (IOL) inserted during or subsequent to cataract surgery in an ASC is included in the facility payment rate. ASCs may receive additional payment for approved NTIOLs that are furnished in an ASC during or subsequent to certain cataract procedures.	ASC	Carrier
Ambulance services ASCs who furnish ambulance services, may obtain approval as ambulance suppliers to bill covered ambulance services	Certified ambulance supplier	Carrier
Leg, arm, back, and neck braces These items of equipment are not included in the ASC facility payment amount, but are covered under Part B. ASCs who furnish these items to patients, are treated as suppliers, and all the rules and conditions ordinarily applicable to apply to the ASC, including obtaining a supplier number and billing the DMERC as required.	Supplier	DMERC
Artificial legs, arms, and eyes These items of equipment are not included in the ASC facility payment rate, but are covered under Part B. ASCs who furnish these items to patients, are treated as suppliers, and all the rules and conditions ordinarily applicable to suppliers apply to the ASC, including obtaining a supplier number and billing the DMERC as required.	Supplier	DMERC
Services furnished by an independent laboratory Only very limited numbers, and types, of diagnostic tests are considered ASC facility services and these are included in the ASC facility payment rate. Since coverage of diagnostic lab tests in facilities other than physicians' offices, rural health clinics or hospitals is limited to facilities that meet the statutory definition of an independent laboratory, in most cases, diagnostic tests performed directly by an ASC are not considered ASC facility services (in fact are usually not covered under Medicare). ASC laboratories must be CLIA certified and will need to enroll with the carrier as a laboratory. Otherwise, the ASC makes arrangements with a covered laboratory or laboratories for laboratory services. If the ASC has a certified independent laboratory, the laboratory itself bills the carrier.	Certified lab. ASCs can receive lab certification and a CLIA number.	Carrier
Procedures NOT on the ASC list Physicians bill the carrier for the procedures and any implantable prosthetics/DME, using the ASC as the place of service	Physician	Carrier

Additional Information
You can find more information about services not included in the ASC facility rate (and the coverage of such services) by reviewing CR5026, which is available at http://www.cms.hhs.gov/Transmittals/downloads/R942CP.pdf on the CMS Web site.

The revised Medicare Claims Processing Manual, Chapter 14 (Ambulatory Surgical Centers), Sections 10.3 (Services Furnished in ASCs Which Are Not ASC Facility Services) and 10.4 (Coverage of Services in ASCs Which Are Not ASC Facility Services) are attached to CR5026.

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

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Announcing the Release of the Revised CMS-855 Medicare Enrollment Applications

Provider Types Affected
All Medicare physicians, providers, and suppliers

Background
On May 1, 2006, the Centers for Medicare & Medicaid Services (CMS) issued the revised CMS-855 Medicare enrollment applications. Providers and suppliers should begin to use the new Medicare enrollment applications immediately. Initially, these applications will be available only from the CMS provider enrollment Web site. The link for that CMS Web site is listed in the Additional Information
section of this article.

Over the last year, CMS has received numerous comments and suggestions regarding the proposed revisions to the Medicare enrollment applications. CMS reviewed the comments and adopted many of the suggested revisions. Also, CMS incorporated a number of enhancements and changes (see Key Points below) to clarify the enrollment process and to reduce the burden imposed on the provider and supplier communities.

Key Points
This Special Edition outlines the significant revisions to the Medicare enrollment applications and they are as follows:

Enhancements

• Improved the application's aesthetics via a more visually appealing format, larger font, clarified headings, and the use of plain language;
• Revised cover page to include instructions that help applicants submit the correct enrollment application, inform applicants where to mail the application, and provide information on the documents that must be furnished with the enrollment application;
• Added tips on how to avoid delays in the enrollment process; and
• Redesigned Section 17 (Supporting Documentation) to make it easier for providers and suppliers to know which documents must be submitted with an enrollment application.

Significant Changes

• Require the submission of the National Provider Identifier (NPI) and a copy of the NPI notification furnished by the National Plan and Provider Enumeration System with each enrollment application;
• Require that providers and suppliers complete the Authorization Agreement for Electronic Funds Transfer (CMS-588) when initially enrolling or - if they are currently not receiving payments via EFT - making a change to their enrollment information; and,
• Removed Sections 9 (Electronic Claims Submission Information), 10 (Staffing Companies), and 11 (Surety Bonds) from the application. In addition, information regarding overpayments no longer must be submitted.

Application-Specific Changes for Physicians and Non-Physician Practitioners (CMS-855I)

• A sole proprietor who incorporates (and who is the sole owner of that business) only needs to complete the CMS 855I form. In the past, such suppliers had to complete the CMS 855B, CMS 855I and CMS 855R. However, the person will still need to report information about the practice, such as the legal business name and adverse legal history.

Application-Specific Changes for Clinics/Group Practices and Certain Other Suppliers (CMS-855B)

• Removed the requirement to collect crew member and certain vehicle information from ambulance companies in Attachment 1 of the application.
• Revised the Independent Diagnostic Testing Facility information contained in Attachment 2 of the application.

Application-Specific Changes for Institutional Providers (CMS-855A)

• Eliminated questions dealing with fiscal intermediary preferences. This change implements section 911(d) (2) (B) of the Medicare Modernization Act. See MLN Matters article SE0582 at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0582.pdf for further information.

Additional Information
For additional information regarding the Medicare enrollment process, including the mailing address and telephone number for the carrier or FI serving your area, visit http://www.cms.hhs.gov/MedicareProviderSupEnroll on the CMS Web site.

Special Edition article SE0612 contains helpful information about the Medicare enrollment process. You may review the article on the CMS Web site at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0612.pdf on the CMS site.

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Announcing the Revised Medicare Physician Guide

The revised (Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals) previously titled (Medicare Resident & New Physician Guide: Helping Health Care Professionals Navigate Medicare) is now available in downloadable format on the MLN Publication Page located at http://www.cms.hhs.gov/MLNProducts/MPUB/list.asp on the Centers for Medicare & Medicaid Services Web site. The guide will be available in print format in approximately six weeks.

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Bariatric Surgery for Morbid Obesity

Provider Types Affected
Physicians, suppliers, and providers billing Medicare carriers and/or fiscal intermediaries (FIs) for services related to bariatric surgery

Provider Action Needed

STOP - Impact to You
This article is based on Change Request (CR) 5013, which modifies the Medicare National Coverage Determination Manual (NCDM, Sections 40.5 and 100.1) and adds section 150 to Chapter 32 of the Medicare Claims Processing Manual to be consistent with the new Centers for Medicare & Medicaid Services (CMS) policy for bariatric surgery.

CAUTION - What You Need to Know
Effective for services on or after February 21, 2006, Medicare will cover open and laparoscopic Roux-en Y gastric bypass (RYGBP), laparoscopic adjustable gastric banding (LAGB) and open and laparoscopic biliopancreatic diversion with duodenal switch (BPD/DS) if certain criteria are met and the procedure is performed in an approved facility.

In addition, effective for services performed on or after February 21, 2006, Medicare has decided that open vertical banded gastroplasty, laparoscopic vertical banded gastroplasty, open sleeve gastrectomy, laparoscopic sleeve gastrectomy, and open adjustable gastric banding are nationally non-covered for Medicare.

GO - What You Need to Do
See the Background section of this article for further details regarding these changes.

Background
Bariatrics is the branch of medicine dealing with obesity, and bariatric surgery can be an effective treatment for patients who have been unsuccessful with diet and exercise and have comorbid conditions such as:

• Coronary artery disease;
• Diabetes; and
• Sleep apnea.

Bariatric surgery procedures are performed to treat many comorbid conditions associated with obesity, and two types of surgical procedures are employed:

• Malabsorptive surgical procedures divert food from the stomach to a lower part of the digestive tract where the normal mixing of digestive fluids and adsorption of nutrients cannot occur; and
• Restrictive surgical procedures restrict the size of the stomach and decrease intake.

Some surgeries combine both of these types of procedures, and brief descriptions of bariatric surgery procedures are included in the Additional Information section of this article. Also, see the Medicare National Coverage Determinations Manual (Pub. 100-03, Chapter 1, Part 2, Section 100.1 (Bariatric Surgery for Morbid Obesity (Effective February 21, 2006), Subsection A (General)), attached to CR5013.

Note: Bariatric surgery is recommended only for individuals with health concerns related to their obesity CMS has determined the evidence is adequate to conclude that:

• If a Medicare beneficiary has documented in their medical record that they:
  • Have a body-mass index (BMI) > 35, with at least one co-morbidity related to obesity; and
  • Have been previously unsuccessful with medical treatment for obesity;
• Then the following procedures (performed on or after February 21, 2006) are considered reasonable and necessary:
  • Open and laparoscopic Roux-en-Y gastric bypass (RYGBP);
  • Laparoscopic adjustable gastric banding (LAGB); and
  • Open and laparoscopic biliopancreatic diversion (BPD) with duodenal switch (DS).

Approved Facilities
In addition, CMS has determined that covered bariatric surgery procedures are reasonable and necessary only when performed at facilities certified by:

• The American College of Surgeons ((ACS) http://www.facs.org/cqi/bscn/)) as a Level 1 Bariatric Surgery Center (BSC; program standards and requirements in effect on February 15, 2006); or
• The American Society for Bariatric Surgery ((ASBS) http://www.asbs.org/)) as a Bariatric Surgery Center of Excellence (BSCOE; program standards and requirements in effect on February 15, 2006).

A list of approved facilities and their approval dates will be listed and maintained on the CMS coverage Web site at http://www.cms.hhs.gov/MedicareApprovedFacilitie/BSF/list.asp#TopOfPage. This information will also be published in the Federal Register.

When services are performed in an unapproved facility, Medicare will deny the claim with a claim reason adjustment code of 58. (Payment adjusted because treatment was deemed by the payer to have been rendered in an inappropriate or invalid place of service.)

For providers to avoid liability for charges when services are performed in an unapproved facility, physicians must have the beneficiary sign an Advanced Beneficiary Notice (ABN), and hospitals, including critical access hospitals, must have the beneficiary sign a Hospital Issued Notice of Non-coverage (HINN).

Non-Covered Procedures
The evidence is not adequate to conclude that the following bariatric surgery procedures are reasonable and necessary; therefore, the following procedures are non-covered for all Medicare beneficiaries:

• Open vertical banded gastroplasty
• Laparoscopic vertical banded gastroplasty
• Open sleeve gastrectomy
• Laparoscopic sleeve gastrectomy
• Open adjustable gastric banding.

Changes in Manuals
The Medicare Claims Processing Manual (Pub.100-04, Chapter 32 (Billing Requirements for Special Services), Section 150 (Billing Requirements for Bariatric Surgery for Morbid Obesity)) is being added to reflect the new coverage for bariatric surgery.

In addition, the Medicare National Coverage Determination Manual (NCDM, Pub. 100-03, Chapter I, Sections 40.5 and 100.1) are being modified to be consistent with the new CMS policy for bariatric surgery. These revisions are attached to CR5013.

The revision of the NCDM will include a reference to the covered surgical procedures, and revise the obesity policy with the final bariatric surgery policy. The modified obesity policy will read as follows (changes bolded and italicized):

"Obesity may be caused by medical conditions such as hypothyroidism, Cushing's disease, and hypothalamic lesions or can aggravate a number of cardiac and respiratory diseases as well as diabetes and hypertension. Non-surgical services in connection with the treatment of obesity are covered when such services are an integral and necessary part of a course of treatment for one of these medical conditions. Certain designated surgical services for the treatment of obesity are covered for Medicare beneficiaries who have a BMI ≥ 35, have at least one co-morbidity related to obesity and have been previously unsuccessful with the medical treatment of obesity."

Treatments for obesity alone remain non-covered, and the following noncoverage determinations in the National Coverage Determination Manual (NCDM, Chapter 1, Part 2; http://www.cms.hhs.gov/manuals/downloads/ncd103c1_Part2.pdf) remain unchanged:

• Section 100.8 (Intestinal Bypass Surgery); and
• Section 100.11 (Gastric Balloon for Treatment of Obesity).

Additional Instructions
CR5013 further instructs your carrier and/or fiscal intermediary to:

• Accept the following Healthcare Common Procedure Coding System (HCPCS) as of February 21, 2006:
• 43770 - Laparoscopy, surgical, gastric restrictive procedure; placement of adjustable gastric band (gastric band and subcutaneous port components)
• 43644 - Laparoscopy, surgical, gastric restrictive procedure; with gastric bypass and
  Roux-en-Y gastroenterostomy (roux limb 150 cm or less)
• 43645 - Laparoscopy with gastric bypass and small intestine reconstruction to limit
  absorption. (Do not report 43645 in conjunction with 49320, 43847.)
• 43845 - Gastric restrictive procedure with partial gastrectomy, pyloruspreserving duodenoileostomy and ileoieostomy (50 to 100 cm common channel) to limit absorption (biliopancreatic diversion with duodenal switch)
• 43846 - Gastric restrictive procedure, with gastric bypass for morbid obesity; with short
  limb (150 cm or less Roux-en-Y gastroenterostomy. ( For greater than 150 cm, use 43847)( For laparoscopic procedure, use 43644)
• 43847 - With small intestine reconstruction to limit absorption;
• Accept HCPCS codes 43770, 43644, 43645, 43845, 43846 and 43847 submitted with at least one of the following diagnosis codes: V85.35; V85.36; V85.37; V85.38; V85.39; V85.4; or 278.01. (Claims will be denied without an appropriate diagnosis code.);
• Accept International Classification of Diseases, Ninth Revision (ICD-9) procedure codes 44.38, 44.39, 44.95, 43.89, 45.51, and 45.91, when the following diagnosis codes are reported: V85.35; V85.36; V85.37; V85.38; V85.39; V85.4; and 278.01. (Claims will be denied without an appropriate diagnosis code and none of the V diagnosis codes for BMI ≥ 35 or 278.01 for morbid obesity can be the principal diagnosis on an inpatient Medicare claim); and
• Accept the following ICD-9 Procedure Codes as of February 21, 2006:
• 44.38 - Laparoscopic gastroenterostomy (laparoscopic Roux-en-Y);
• 44.39 - Other Gastroenterostomy (open Roux-en-Y); and
• 44.95 - Laparoscopic gastric restrictive procedure (laparoscipic adjustable gastric band and port insertion).

Important Note: There is not a distinction between laparoscopic and open biliopancreatic diversion (BPD) with duodenal switch (DS) for the inpatient setting. The codes would apply to the open approach as follows:

1. 43.89 Other partial gastrectomy;
2. 45.51 Isolation of segment of small intestine; and
3. 45.91 Small to small intestinal anastomosis.

Should claims be denied for failure to have the appropriate diagnosis code, the carrier/FI will use claim adjustment reason code #167 to denote "This/these diagnosis(es) is (are) not covered."

Note that 44.68 (Laparoscopic gastroplasty (vertical banded gastroplasty)) is noncovered for Medicare effective February 21, 2006.

Additional Fiscal Intermediary Billing Requirements
The FI will pay for Bariatric Surgery only when the services are submitted on type of bill (TOB) of 11X.
The type of facility and setting determines the basis of payment:

• For services performed in inpatient hospitals, TOB 11X, IPPS payment is based on the DRG.
• For services performed in CAH inpatient hospitals, TOB 11X, on 101% of facility specific per visit rate.
• For services performed in IHS inpatient hospitals TOB 11X under IPPS based DRG.
• For services performed in IHS critical access hospitals, TOB 11X, under 101% facility specific per diem rate.

Implementation
The implementation date for CR 5013 is May 30, 2006, for physician claims billed to Medicare carriers and October 2, 2006, for hospital claims billed to FIs.

Additional Information
For complete details, please see the official instruction, CR5013, issued to your carrier/intermediary regarding this change. There will be two parts to this CR, one for the NCD and one for the claims processing instruction. The NCD, which includes descriptions of the Bariatric Surgery procedures, is at http://www.cms.hhs.gov/Transmittals/downloads/R54NCD.pdf and the claims processing instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R931CP.pdf on the CMS Web site.

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/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site.

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Changes Conforming to Change Request 3648 (CR3648) for Therapy Services

Provider Types Affected
Physicians, suppliers, and providers billing Medicare carriers including durable medical equipment regional carriers (DMERCs) and/or fiscal intermediaries (FIs), including regional home health intermediaries (RHHIs), for therapy services

Provider Action Needed

STOP - Impact to You
This article is based on Change Request (CR) 4014, which updates language in the Medicare National Coverage Determinations Manual (Publication 100-03) and the Medicare Claims Processing Manual (Publication 100-04) by changing the term "speech therapy" to "speech-language pathology."

CAUTION - What You Need to Know
To conform to changes in CR3648, CR4014 removes from the Medicare Claims Processing Manual (Publication 100-04) the requirement to include the date last seen by a physician for outpatient services provided by a physical or occupational therapist or speech-language pathologist. Requirements for therapy services incident to a physician have not been changed.

GO - What You Need to Do
See the Background section of this article for further details regarding these changes.

Background
The Centers for Medicare & Medicaid Services (CMS) is updating language in the Medicare National Coverage Determinations (NCD) Manual (Publication 100-03) and the Medicare Claims Processing Manual (Publication 100-04) as follows: The term "speech therapy" is being changed to "speech-language pathology." In addition, CMS is changing requirements in Chapter 1 of the Medicare Claims Processing Manual where therapists are to provide information on CMS-1500 (Health Insurance Claim Form) and the UB-92 claim form concerning the date last seen by the physician to conform with instructions in CR3648, Transmittal 36, dated June 24, 2005; subject: Publication 100-02, Chapter 15, Sections 220 and 230 Therapy Services. CR3648 can be found at http://www.cms.hhs.gov/Transmittals/downloads/R36BP.pdf on the CMS Web site.

Health Insurance Portability and Accountability Act (HIPAA) guidelines require the following information only when it impacts the payer's adjudication process:

• Date last seen; and
• The Unique Provider Identification Number (UPIN) of the physician.

Medicare payment is not impacted by this information except when the service is provided "incident to" the services of a physician's or non-physician practitioner's (NPP), in which case it is required. CR4014 updates instructions in CR3648 (related to claims for services "incident to" a physician's/NPP's service) by acknowledging that:

• The "incident to" service can be identified only on prepay or postpay review;
• Manual review of all therapy claims is not required; and
• "Incident to" policies have not changed and still apply to therapy services.

CR4014 also clarifies selected business requirements in CR3648 to indicate that some contractor actions:

• Will occur on prepay or postpay review. For example, compare the following:
• Business Rule (BR) 3648.8 - Contractors shall pay for therapy services only when the service qualifies as a therapy service and the service is furnished by qualified professionals, or qualified personnel as defined in the manuals; with BR 4014.8 - On prepay or post pay review of outpatient therapy claims for services provided on or after July 25, 2005, contractors shall pay for physical therapy and occupational therapy services only when the service is furnished by qualified professionals, or qualified personnel as defined in the appropriate Medicare manuals.
• Should not be applied to services "incident to." (e.g., BR 3648.3 - Medicare contractors shall not deny therapy claims based on missing documentation of a visit to the physician on prepay or postpay review).

CR3648 omitted the requirement for a physician visit when therapy services are billed. This change omits the requirement that the physician visit be documented on the claim. This change does not affect the requirements for services billed "incident to" a physician.

Therefore, when a therapy service is billed "incident to," the following requirements remain in effect because they are required by "incident to" policies:

• An initial physician visit (date last seen); and
• Identification of the ordering (and supervising) physicians/NPPs.

Implementation
The implementation date for this instruction is October 2, 2006.

Additional Information
CR3648 (Transmittal 36 dated June 24, 2005, subject Pub. 100-02, Chapter 15, Sections 220 and 230 Therapy Services) can be reviewed at
http://www.cms.hhs.gov/manuals/pm_trans/R36BP.pdf on the CMS Web site.

The MLN Matters article, MM3648 can be viewed at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM3648.pdf on the CMS Web site.

For complete details, please see the official instructions (CR4014) issued to your carrier/intermediary regarding this change. There are two transmittals for CR4014, the NCD, transmittal 55 is available at http://www.cms.hhs.gov/Transmittals/downloads/R55NCD.pdf. Transmittal 941 is the Medicare Claims Processing Manual update, which is available at http://www.cms.hhs.gov/Transmittals/downloads/R941CP.pdf on the CMS site.

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/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site.

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Changes to the Laboratory National Coverage Determination (NCD) Edit Software for July 2006

Provider Types Affected
Physicians, providers, and suppliers submitting claims to Medicare carriers and fiscal intermediaries (FIs) for clinical diagnostic laboratory services provided for Medicare beneficiaries.

Impact on Providers
This article is based on Change Request (CR) 5108, which communicates requirements to Medicare contractors (carriers and FIs) notifying them of changes to the laboratory edit module and to update the laboratory edit module for changes in laboratory NCD code lists for July 2006.

Background
The National Coverage Determinations (NCDs) for clinical diagnostic laboratory services were developed by the laboratory negotiated rulemaking committee and published as a final rule on November 23, 2001. Subsequently, the Centers for Medicare & Medicaid Services (CMS) contracted for nationally uniform software to be developed and incorporated into its shared systems so that laboratory claims subject to one of the 23 NCDs can be processed uniformly throughout the nation effective January 1, 2003.

The laboratory edit module for the NCDs is updated quarterly (as necessary) to reflect coding updates and substantive changes to the NCDs developed through the NCD process. (See the Medicare Claims Processing Manual (Pub.100-4), Chapter 16, §120.2; http://www.cms.hhs.gov/manuals/downloads/clm104c16.pdf). These changes are a result of coding analysis decisions developed under the procedures for maintenance of codes in the negotiated NCDs, and several of the listed changes correct Current Procedural Terminology (CPT) codes to reflect the current CPT update.

CR5108 informs your Medicare carrier and FI about changes in the laboratory NCD code lists for July 2006 that require updating of the laboratory edit module. The key change being made to the NCD code lists for July 2006 is that CPT code 83704 (Quantitation of lipoprotein particle numbers and lipoprotein particles subclasses) is being added to the list of HCPCS/CPT codes covered by Medicare for the Lipids Testing NCD.

Implementation
The implementation date for the instruction is July 3, 2006.

Additional Information
For complete details, please see the official instruction (CR5108) issued to your carrier/intermediary regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R959CP.pdf on the CMS Web site.

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/MLNProducts/downloads/CallCenterTollNumDirectory.pdf on the CMS Web site

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Competitive Acquisition Program (CAP) for Part B Drugs - Coding, Testing, and Implementation - MMA

Note: This article was revised on May 8, 2006, to reflect that the election period for physicians to participate in the CAP this year will run from May 8, 2006, to June 2, 2006.

Provider Types Affected
Physicians billing Medicare carriers for Part B drugs and approved CAP vendors billing the designated carrier

Provider Action Needed

STOP - Impact to You
From May 8, 2006 to June 2, 2006, Medicare physicians will be given the opportunity to elect to participate in the Competitive Acquisition Program (CAP) for claims paid on or after July 1, 2006. Participating CAP physicians will obtain Medicare Part B covered drugs from selected drug categories through the CAP. Until further notice, there is only one drug category in the CAP. (Note: Exact dates of the physician election period will be announced on the comp bid Web site (http://www.cms.hhs.gov/CompetitiveAcquisforBios) and via a list serv notice).

CAUTION - What You Need to Know
Participating CAP physicians will receive all of their Part B drugs from the approved CAP vendor for the drug category (ies) they have selected.

The only exception is the "furnish as written" situation, in which the participating CAP physician requires that, because of medical necessity, the beneficiary must have a certain brand of a drug or a particular product identified by the product's National Drug Code (NDC) and that specific drug is not available for the HCPCS code listed on the approved CAP vendor's drug list. This one exception will be identified with the use of the new CAP J3 modifier.

Physicians participating in the CAP program should pay particular attention to the discussion in this article concerning the CAP J1, J2, and J3 modifiers.

GO - What You Need to Do
By May 1, the Centers for Medicare & Medicaid Services (CMS) will post on its Web site a list of the CAP vendors and the drugs they will supply. Physicians wishing to participate in the CAP program in 2006 must elect to do so within 45 days of the date the election information is posted. The election agreement is effective on July 1, 2006. See the Background section of this article for further details regarding these changes.

Background
This article includes information from Change Request (CR) 4064, which provides instructions to Medicare carriers regarding the CAP program. This new CAP program applies to physician-injectable and infused drugs covered under Medicare's Supplemental Insurance (Part B) program that are commonly provided incident to a physician's service. This program does NOT apply to drugs included in the new Prescription Drug Benefit under Part D, which goes into effect on January 1, 2006.

Physicians (and other practitioners who provide physician services that include the authority to prescribe and order Medicare Part B drugs) wishing to participate in the CAP program in 2006 must elect to do within 45 days of the date that the election information is posted on the CMS Web site.

The election agreement is effective on July 1, 2006. Each subsequent year, the election period will be in the fall and physicians must make their participation decision within 45 days after CMS publishes the list of vendors and their drug list for the following year on the CMS Web site. Election decisions will take effect on the following January 1.

How Drugs Are Selected For CAP
The CMS may exclude drugs from the CAP if competitive pricing will not result in significant savings, or is likely to have an adverse impact on access to such drugs. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) gives CMS the authority to:

• Select drugs (or categories of drugs) that will be included in the CAP program,
• Establish geographic competitive acquisition areas, and
• Phase in these elements as appropriate.

How Approved CAP Vendors Are Selected
A competition will be held every three years to award contracts to vendors that will supply drugs and biologicals for the program. A three year contract will be awarded to qualified approved CAP vendors in each geographic area who have and maintain:

• Sufficient means to acquire and deliver competitively biddable drugs within the specified contract area;
• Arrangements in effect for shipping at least 5 days each week for the competitively biddable drugs under the contract and means to ship drugs in emergency situations;
• Quality, service, financial performance, and solvency standards; and
• A grievance and appeals process for dispute resolution.

Approved CAP vendors must qualify for enrollment as a Medicare supplier, and they will be enrolled as a new provider specialty type.

CMS will establish a single payment amount for each of the competitively bid drugs and areas. For this three year contract cycle there will be one drug category and one geographic area for CAP. After CAP drug prices are determined and vendor contracts are awarded, the information will be posted to a directory at http://www.cms.hhs.gov/CompetitiveAcquisforBios on the CMS Web site.

Obtaining Drugs in the CAP
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, Section 303 (d)) requires the implementation of a CAP for Medicare Part B drugs and biologicals not paid on a cost or Prospective Payment System basis. You can review the MMA, Section 303(d) at http://www.cms.hhs.gov/CompetitiveAcquisforBios/Downloads/303d.pdf on the CMS Web site.

Beginning with Part B drugs administered on or after July 1, 2006 incident to a physician service, Medicare physicians will be given a choice between:

• Buying and billing these drugs under the Average Sales Price (ASP) system;
  or
• Obtaining these drugs from vendors selected in the CAP's competitive bidding process.

Physicians (and other practitioners who provide physician services that include the authority to prescribe and order Medicare Part B drugs) will be given the opportunity to participate in the CAP.

Approved CAP vendors will supply the drugs and biologicals for the participants of this program.

Physicians who elect to participate in CAP will continue to bill their local carrier for drug administration. Participating CAP physicians will receive all of their drugs from the approved CAP vendor for the drug categories they have selected, with only one exception:

The exception will be for "furnish as written" situations in which the participating CAP physician specifies that, because of medical necessity, the beneficiary must have a certain brand of a drug or a particular product defined by the product's National Drug Code (NDC) and that drug is not available for the HCPCS codes listed on the approved CAP vendor's drug list.

In those cases, the participating CAP physician may:

• Buy the drug;
• Administer it to the beneficiary; and
• Using the appropriate modifier (see below discussion of modifiers), bill Medicare using the average sales price (ASP) methodology.

In addition, under emergency situations, the CAP will allow a participating CAP physician to provide a drug to a Medicare beneficiary from his or her own stock and obtain the replacement drug from the approved CAP vendor under the emergency replacement provision when certain conditions are met as follows:

• The drug was required immediately;
• The need for the drug could not be anticipated;
• The CAP vendor could not deliver the drug in time;
• The drug was administered in an emergency situation; and
• Documentation is maintained on file to validate these conditions.

Note: Physicians will still be able to continue to purchase and bill Medicare under the Average Sales Price (ASP) system those drugs that are covered under Medicare Part B but whose HCPCS codes are not provided by the chosen approved CAP vendor.

Physician Billing
Physicians will be given the opportunity to participate in the CAP on an annual basis, and those who elect to participate in CAP will continue to bill their local carrier for the drug's administration. They will agree to submit a claim to Medicare within 14 days of the administration of the CAP drug. The carrier will deny any physician Part B claims for drugs included in the CAP unless the CAP modifier codes are appropriately included. CAP has three modifier codes that will need to be used when physicians submit claims to their carriers for the administration of CAP drugs. The new CAP modifier codes are:

• J1 - Competitive Acquisition Program, no-pay submission for a prescription number
• J2 - Competitive Acquisition Program (CAP), restocking of emergency drugs after emergency administration and a prescription number
• J3 - Competitive Acquisition Program (CAP), drug not available through CAP as written, reimbursed under average sales price (ASP) methodology.

Participating CAP physicians will also use a prescription/order number to identify each CAP drug administered. This number will be matched to the prescription/order number(s) on the approved CAP vendor's claim as verification that the beneficiary received the drug(s) and that the approved CAP vendor may now be paid by Medicare.

When physicians submit claims for the administration of CAP drug (s) to their carriers, they should include:

• A prescription/order number for each CAP drug administered;
• The HCPCS code for each CAP drug administered along with the new "J1" nopay modifier;
• The HCPCS code(s) that include the administration of each CAP drug on separate lines.

Note: On paper claims, the prescription numbers will be in Item 19.

When physicians submit claims for the administration of CAP drug(s) that have been administered in an emergency situation and required "emergency restocking" from the approved CAP vendor, the claim should be submitted with the:

• Prescription/order number for each CAP drug administered;
• HCPCS code for each administered CAP drug along with the new "J1" no-pay modifier and also on that same line, the new "J2" modifier denoting "Competitive Acquisition Program, (CAP) restocking of emergency drugs after emergency administration;" and
• HCPCS code(s) that include the administration of each CAP drug on separate lines.

When physicians submit claims for "furnish as written" drugs to be paid outside the CAP program:

• Physicians should use only the new "J3" modifier denoting "Competitive Acquisition Program (CAP), drug not available through CAP as written, reimbursed under the average sales price methodology."

Physicians who elect CAP should note:

• The administration services and the no-pay lines must be on the same claim or your carrier will return the claim as unprocessable and you will see a remittance advice reason code of 16 denoting claim lacks information which is needed for adjudication.
• The Medicare carrier will identify them as physicians who elected to participate in CAP and who will not be paid for the drugs obtained from the approved CAP vendor.Additionally, unless claims for CAP administration do not include the CAP drug no-pay, restocking, or "furnish as written" modifier, the claim will be denied and you will see a remittance advice, N348, stating that "You chose that this service/supply/drug be rendered/supplied and billed by a different
  practitioner/supplier."

Note: The physician's local carrier will monitor drugs that are:

• Obtained using the "furnish as written" provision to ensure that the participating CAP physician is complying with Medicare payment rules; and
• Ordered under the replacement provision to ensure that the participating CAP physician is complying with Medicare payment rules.

Vendor Billing
The approved CAP vendor will bill the:

• Medicare designated carrier for the drug; and
• Beneficiary for any applicable coinsurance and deductible.

The approved CAP vendor will also include a prescription/order number on the claim to identify each CAP drug administered.

Note: Payment to the approved CAP vendor for the drug is conditioned on verification that the drug was administered to the Medicare beneficiary.

Proof that the drug was administered shall be established by matching the participating CAP physician's claim for drug administration with the approved CAP vendor's claim for the drug in the Medicare claims processing system by means of a prescription number on both claims. When they are matched in the claims processing system, the approved CAP vendor will be paid in full.

Until drug administration is verified, the approved CAP vendor may not bill the beneficiary and/or his third party insurance for any applicable coinsurance and deductible.

Implementation
The implementation date for this instruction is July 3, 2006.

Additional Information
For complete details, please see the official instruction issued to your carrier regarding this change. That instruction may be viewed by going to http://www.cms.hhs.gov/Transmittals/downloads/R777CP.pdf on the CMS Web site.

Also, additional information on the CAP program is available at http://www.cms.hhs.gov/CompetitiveAcquisforBios/ on the CMS Web site.

If you have any questions, please contact your carrier at their toll-free number, which may be found at http://www.cms.hhs.gov/apps/contacts/ on the CMS Web site.

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Competitive Acquisition Program (CAP) for Part B Drugs Physician Election - MMA

Provider Types Affected
Physicians billing Medicare carriers for certain Part B drugs and biologicals under the Medicare CAP program

Provider Action Needed

STOP - Impact to You
This article is based on Change Request (CR) 4404, which provides instruction for physicians who wish to elect the CAP to obtain certain Medicare Part B drugs and biologicals.

CAUTION - What You Need to Know
Physicians will be given an opportunity to elect to participate in the CAP on an annual basis, and practitioners who elect to participate in the CAP will be required to remain in the program at least one calendar year except under certain circumstances.

Physicians who elect to participate in the CAP will be required to complete a CAP election agreement. In 2006, the election period will occur from May 8, 2006, to June 2, 2006, and the term of election will run from July 1 to December 31, 2006.

GO - What You Need to Do
See the Background Section of this article for further details regarding the physician election of the CAP program for Part B drugs and biologicals.

Background
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA, Section 303 (d) http://www.cms.hhs.gov/CompetitiveAcquisforBios/) requires the implementation of a competitive acquisition program (CAP) for Medicare Part B drugs and biologicals not paid on a cost or Prospective Payment System (PPS) basis.

Beginning with drugs administered on or after July 1, 2006, physicians will be given a choice between:

• Buying and billing these drugs under the average sales price (ASP) system; or
• Obtaining these drugs from CAP vendors selected in a competitive bidding process.
• For 2006 the CAP approved vendor is Bioscrip, Vendor Identification Number
  Q103. http://www.cms.hhs.gov/CompetitiveAcquisforBios/15_Approved_ Vendor.asp#TopOfPage

Note: For purposes of the CAP, a physician includes individuals defined under the Social Security Act (Section 1861(r); http://www.ssa.gov/OP_Home/ssact/title18/1861.htm) and other practitioners who are authorized to provide physician services under 1861(s) and who can, within their state's scope of practice, prescribe and order drugs covered under Medicare Part B.

This article is based on Change Request (CR) 4404, which in addition to including the final physician election agreement included as an attachment, provides information and instructions for the implementation of the CAP pertaining to the physician election process as outlined in: CR4064 (Transmittal 777, dated December 9, 2005; http://www.cms.hhs.gov/transmittals/downloads/R777CP.pdf); and CR4309 (Transmittal 839, dated February 6, 2006; http://www.cms.hhs.gov/transmittals/downloads/R839CP.pdf )

The MLN Matters article corresponding to CR4064 can be found at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4064.pdf; and the article corresponding to

CR4309 can be found at; http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4309.pdf on the CMS Web site.

In order to implement the annual physician election process, the Centers for Medicare & Medicaid Services (CMS) instructed your carrier in CR4064 to:

• Accept physician election applications immediately following the posting of approved CAP vendors on the CMS Web site;
• Create an initial list of all the physicians and practitioners who have elected to participate in CAP;
• Forward this information to the designated CAP vendor carrier Noridian; and
• Repeat this process annually.

This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

Annual Physician Election Process
Physicians will be given an opportunity to elect to participate in the CAP on an annual basis, and practitioners who elect to participate in the CAP will be required to remain in the program at least one calendar year. The CAP physician election form is included with CR4404 and can be found online at
http://www.cms.hhs.gov/CompetitiveAcquisforBios/02_infophys.asp#TopOfPage
Participating physicians who wish to continue their participation in CAP for subsequent years would do so by submitting an abbreviated agreement, which would also permit the practitioners to change approved CAP vendor or CAP drug category.

CAP Participating Physician Requirements
Physicians who elect to participate in the CAP will be required to complete a CAP election agreement (final attached to CR4404) assuring full and continued compliance with the participating CAP physician requirements per Title 42 CFR (Code of Federal Regulations) Part 414 Section 908
(http://www.gpoaccess.gov/cfr/retrieve.html) of Medicare regulations.

If a physician makes the decision to participate in the CAP, payment for the administration of any CAP drug or biological may be made only on an assignmentrelated basis. Additional details are available in the Medicare Claims Processing Manual, Chapter 17, Sections 100-100.8.2, which are included in Attachment A of CR4404.

Application Process
Physicians who would like to participate in the program can obtain the following information at http://www.cms.hhs.gov/CompetitiveAcquisforBios/02_infophys.asp on the CMS site:

• The CAP physician election form;
• The list of the approved CAP vendors; and
• The specific National Drug Codes (NDCs) that the vendors will provide.

Once the election agreement is completed, it must be submitted to the practitioner's local Medicare carrier.

The physician election process for 2006 shall operate from May 8 to June 2.

For subsequent calendar years, CMS anticipates that the physician election process will be between October 4 and November 15 of each calendar year to meet operational timeframes for CAP vendors and claim processing contractors.

Note: The CAP election agreement must be postmarked by June 2 for 2006 election period.
The 2006 CAP operational period will be for July 1- December 31, 2006.

This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents.

Group Election
When members in a group practice bill Medicare using the group's PIN, they must commit as a group practice to elect to participate in the CAP.

In order for a physician to "buy and bill" separately from the group he or she must not have reassigned his or her benefits to the group, and must be billing using his or her individual PIN.

If a physician in that situation elects to participate in the CAP as an individual, he or she would complete the CAP physician election form with his or her individual PIN, and other requested information.

Mid-Year Changes
Physicians are permitted to select another approved CAP vendor or leave the CAP in mid-year if any one of the following occur:

• The approved CAP vendor selected by the physician leaves the program;
• The participating physician leaves a group practice, or a new physician enters a group practice that had selected the approved CAP vendor;
• The participating physician relocates to another competitive acquisition area (Although multiple CAP competitive areas are anticipated, there is one drug category and one geographic area for the 2006 through 2008 contract period.);
• The physician is newly enrolled in the Medicare program and elects to participate in the CAP within 90 days of enrollment; or
• The approved CAP vendor refuses to ship to the participating CAP physician because the conditions of 42 CFR § 414.914(h) were met, the physician may withdraw from the CAP category for the remainder of the year upon notice to CMS and the approved CAP vendor.

CAP Physician Election Agreement
The final CAP physician election agreement is included as an Attachment to CR 4404. Providers interested in participating in the CAP must download the form from the CAP Web site and complete pages 1, 5, and 6 of the agreement. If a physician has more than one practice location additional copies of page 6 must be submitted. For group practices all physician members who will be participating in the CAP and billing under the group PIN must be listed, however only one election agreement should be submitted for each group practice. An authorized representative must sign the form on behalf of the individual or group practice members on page 5. The authorized official must be the provider's general partner, chairman of the board, chief financial officer, chief executive officer, president, direct owner of 5% or more of the provider or must hold a position of similar status or authority within the provider's organization.

In summary, CR4404 instructs your carrier to receive the CAP physician election agreement forms submitted by physicians who wish to participate in the CAP in their area either during the annual election process or because of a mid-year change.

Please note that:

• Claims submitted by a physician for CAP drugs with a date of service after the effective date the
  physician disenrolled from the CAP will be processed as ASP claims.
• Claims submitted by the vendor for CAP drugs with a date of service prior to the effective date the physician disenrolled from the CAP will be processed as CAP claims.

Implementation
The implementation date for this instruction is May 30, 2006.

Additional Information
Attached to CR4404 is the Competitive Acquisition Program (CAP) Physical Election Agreement for Medicare Part B Drugs.

For complete details, please see CR4044 at
http://www.cms.hhs.gov/Transmittals/downloads/R932CP.pdf on the CMS Web site.

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

The list of CAP drugs can be found at http://www.cms.hhs.gov/CompetitiveAcquisforBios/15_Approved_Vendor.asp#TopOfPage

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Competitive Acquisition Program (CAP) Update

The Medicare Part B Drug Competitive Acquisition Program (CAP) Information for Physicians Web page
(http://www.cms.hhs.gov/CompetitiveAcquisforBios/02_infophys.asp#TopOfPage ) has been updated with the following:

An audio recording of the CAP Ask the Contractor Teleconference conducted on May 11, 2006, is
available in the Downloads section. The teleconference focused on CAP physician election. Links to Carrier addresses are available in the Downloads section. Physicians should use these addresses for returning signed and completed Physician Election Forms to their respective local carriers. Please remember that forms must be returned by mail and postmarked on or before June 2, 2006.

For more information on the Medicare Part B Drug CAP physician election, view Medicare Learning Network (MLN) Matters Article MM 4404 available at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4404.pdf

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Correct Reporting of Diagnosis Codes on Screening Mammography Claims

Provider Types Affected
All providers billing Medicare carriers and fiscal intermediaries (FIs) for screening mammography claims

Providers Action Needed
This article and Change Request (CR) 5050 provide specific information regarding the reporting of diagnostic codes on screening mammography claims. The following are the instructions:

• Continue reporting diagnosis codes V76.11 or V76.12 as the primary or principal diagnosis code (FL 67 of the CMS-1450 or in Loop 2300 of the ANSIX12 837) on claims that contain ONLY SCREENING mammography services.
• Report diagnosis codes V76.11 or V76.12 as a secondary or other diagnosis (FLs 68-75 of the CMS-1450 or Loop 2300 of the ANSI-X12 837 and field 21 of CMS-1500 or Loop 2300 of the ANSI-X12 837) on claims that contain OTHER services in addition to a screening mammography.

In addition, CR5050 updates Chapter 18, Section 20.4 of the Medicare Claims Processing Manual for FI processed claims as follows:

• It removes 12X type of bill (TOB) from the list of applicable TOBs for diagnostic mammography;
• It adds HCPCS code G0202 to the list of valid codes for the billing of screening mammography; and
• It adds HCPCS codes G0204 and G0206 to the list of valid codes for the billing of diagnostic mammographies.

Background
The Centers for Medicare & Medicaid Services (CMS) is clarifying its reporting requirements to allow other diagnosis codes and a screening mammography submitted on the same claim.

Currently, providers are required to report screening mammography diagnosis codes V76.11 or V76.12 as the primary diagnosis whenever a screening mammography is billed, regardless of whether other services are reported on the same claim. This CR adjusts that requirement.

Implementation
The implementation date for this instruction is October 2, 2006.

Additional Information
The official instructions issued to your Medicare carrier and intermediary regarding this change can be found at http://www.cms.hhs.gov/Transmittals/downloads/R916CP.pdf on the CMS Web site. The revised Section 20.4 of Chapter 18 of the Medicare Claims Processing Manual is attached to CR5050.

If you have questions, please contact your Medicare intermediary or carrier at their toll-free number which may be found at http://www.cms.hhs.gov/apps/contacts/ on the CMS Web site.

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Coverage of Prescription Niacin Products Under Part D for 2006

Provider Types Affected
Physicians and other providers who prescribe medications for Medicare patients under Medicare Part D

Key Points

• On April 11, 2006, the Centers for Medicare & Medicaid Services (CMS) informed Medicare Part D prescription drug coverage plans, via a memorandum titled "CMS Clarification of Coverage of Prescription Niacin Under Part D," that was issued over the Health Plan Management System (HPMS), that prescription Niacin products (Niaspan®, Niacor®) can be a covered Part D drug for treatment of dyslipidemic therapy and may be included on Medicare prescription drug plan formularies. Medicare prescription drug plans have the option of covering those drugs immediately.
• For the remainder of contract year 2006, Medicare Part D plans may put prescription Niacin products (Niaspan®, Niacor®) on their formularies, but they are not required to do so. As a result, enrollees may obtain coverage of prescription Niacin products either as a formulary drug or as a non-formulary drug through the exceptions process.
• For contract year 2007, prescription Niacin products (e.g., Niaspan® and Niacor®) used at dosages much higher than appropriate for nutritional supplementation should be considered for formulary inclusion similar to all other Medicare Part D drugs.
• Please refer to the Additional Information section of this Special Edition article for specific information regarding two methods for Part D Medicare beneficiary enrollees to obtain prescription Niacin products for the remainder of 2006.

Background
The prescription Niacin products are used therapeutically for the treatment of dyslipidemia at much higher dosages than are appropriate for nutritional supplementation. They do not serve as a nutritional supplement or to address a vitamin deficiency. For these reasons, CMS has decided that prescription Niacin products should not be considered a prescription vitamin for purposes of Medicare Part D coverage.

Prescription Niacin products are not universally excluded from coverage under the Medicare prescription drug program. This reverses an earlier February 3, 2006 decision by CMS that prescription Niacin products (Niaspan®, Niacor®) are prescription vitamins and therefore are excluded from the definition of a Medicare Part D drug under the statute.

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