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November 2006 Part B Medicare Bulletin

Posted November 6, 2006

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2006 - 2007 Influenza (FLU) Season Resources for Health Care Professionals


Provider Types Affected
All Medicare fee-for-service (FFS) physicians, non-physician practitioners, providers, suppliers, and other health care professionals who bill Medicare carriers/Medicare Administrative Contractors (MAC) or fiscal intermediaries (FI) for flu vaccines and vaccine administration provided to Medicare beneficiaries.

Provider Action Needed

INTRODUCTION
On average, 36,000 people in the United States die each year from influenza and complications arising from influenza. Greater than 90% of deaths occur in persons 65 years of age and older. Individuals with chronic medical conditions such as diabetes and heart disease are particularly at risk of influenza infection, as are people in nursing, convalescent, or other institutional settings.

Historically, the flu vaccine has been an under-utilized benefit by Medicare beneficiaries. The Centers for Medicare & Medicaid Services (CMS) needs your help to ensure that Medicare beneficiaries are informed about this vaccine-preventable disease and get their flu shot this flu season. In addition, unvaccinated health care workers can spread influenza to patients, family, and friends. CMS encourages you and your staff to get vaccinated. Protect your patients, protect your family and friends, and protect yourself.

CMS has developed a variety of educational resources, listed in the next section, to ensure that Medicare FFS health care professionals have the information they need to bill Medicare correctly for the Medicare-covered vaccines and help promote increased awareness and utilization of the flu vaccine among beneficiaries, providers, and their staff.

PRODUCTS
The following products have been developed by CMS to be used by the Medicare FFS health care community and are not intended for distribution to Medicare beneficiaries.

MLN Matters Articles

The Centers for Medicare & Medicaid Services (CMS) has been reviewed and approved as an Authorized provider by the International Association for Continuing Education and Training (IACET), 1620 I Street, NW, Suite 615, Washington, DC 20006. The authors of the video program and Web-based training course have no conflicts of interest to disclose. The video program and Web-based training course was developed without any commercial support.

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2007 Annual Update of HCPCS Codes for Skilled Nursing Facility (SNF) Consolidated Billing (CB)

FLU SHOT REMINDER
Flu Season is upon us! Begin now to take advantage of each office visit as an opportunity to talk with your patients about the flu virus and their risks for complications associated with the flu, and encourage them to get their flu shot. It’s their best defense against combating the flu this season. (Medicare provides coverage of the flu vaccine without any out-of-pocket costs to the Medicare patient. No deductible or co-payment/coinsurance applies.) And don’t forget, health care professionals need to protect themselves also. Get Your Flu Shot. – Protect yourself, your patients, and your family and friends. Remember - Influenza vaccination is a covered Part B benefit. Note that influenza vaccine is NOT a Part D covered drug. For information about Medicare’s coverage of adult immunizations and educational resources, go to
(http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0667.pdf)

Provider Types Affected
Physicians, providers, and suppliers submitting claims to Medicare carriers, durable medical equipment regional carriers (DMERCs) or DME Medicare Administrative Contractors (DME MACs), and fiscal intermediaries (FIs) for services provided to Medicare beneficiaries in SNFs

Provider Action Needed

STOP – Impact to You
This article is based on Change Request (CR) 5283, which provides the 2007 annual update of HCPCS Codes for SNF CB and how the updates affect edits in Medicare claims processing systems.

CAUTION – What You Need to Know
CR5283 provides updated to HCPCS codes that will be used to revise CWF edits to allow carriers and FIs to make appropriate payments in accordance with policy for SNF CB in the Medicare Claims Processing Manual (Publication 100-04), Chapter 6, Section 110.4.1 for carriers and Chapter 6, Section 20.6 for FIs.

GO – What You Need to Do
See the Background and Additional Information sections of this article for further details regarding this update.

Background
Medicare’s claims processing systems currently have edits in place for claims received for beneficiaries in a Part A covered SNF stay as well as for beneficiaries in a non-covered stay. Changes to Healthcare Common Procedure Coding System (HCPCS) codes and Medicare Physician Fee Schedule designations are used to revise these edits to allow carriers, DMERCs/DME MACs, and FIs to make appropriate payments in accordance with policy for SNF CB contained in the Medicare Claims Processing Manual. These edits only allow services that are excluded from CB to be separately paid by carriers and\or FIs.

Note: It is important and necessary for the provider community to view the “General Explanation of the Major Categories” PDF file located at the bottom of each year’s FI update listed at http://www.cms.hhs.gov/SNFConsolidatedBilling/ on the CMS Web site in order to understand the Major Categories including additional exclusions not driven by HCPCS codes.

Implementation
The implementation date for CR5283 is January 2, 2007.

Additional Information
For complete details, please see the official instruction issued to your carrier, DMERC, DME MAC or intermediary regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R1068CP.pdf on the CMS Web site.

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

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Additional Requirements Necessary to Implement the Revised Health Insurance Claim Form CMS-1500

Do you have your NPI? National Provider Identifiers (Napes) will be required on claims sent on or after May 23, 2007. Every health care provider needs to get an NPI. Learn more about the NPI and how to apply for an NPI by visiting http://www.cms.hhs.gov/NationalProvIdentStand/ on the CMS Web site.

Note: This article was revised on September 18, 2006, to reflect that CR5060 was revised. The transmittal number, CR release date, and the Web address for accessing CR5060 were revised. All other information remains the same.

Provider Types Affected
Physicians and suppliers who bill Medicare carriers including durable medical equipment regional carriers (DMERCs) for their services using the Form CMS-1500.

Key Points

January 2, 2007 – March 30, 2007

Providers can use either the current Form CMS-1500 (12-90) version or the revised Form CMS-1500 (08-05) version. Note: Health plans, clearinghouses, and other information support vendors should be able to handle and accept the revised Form CMS-1500 (08-05) by January 2, 2007.
April 2, 2007 The current Form CMS-1500 (12-90) version of the claim form is discontinued; only the revised Form CMS-1500 (08-05) is to be used.
Note: All rebilling of claims should use the revised Form CMS-1500 (08-05) from this date forward, even though earlier submissions may have been on the current Form CMS-1500 (12-90).

Background
Form CMS-1500 is one of the basic forms prescribed by CMS for the Medicare program. It is only accepted from physicians and suppliers that are excluded from the mandatory electronic claims submission requirements set forth in the Administrative Simplification Compliance Act, Public Law 107-105 (ASCA), and the implementing regulation at 42 CFR 424.32. The CMS-1500 form is being revised to accommodate the reporting of the National Provider Identifier (NPI).


Note that a provision in the HIPAA legislation allows for an additional year for small health plans to comply with NPI guidelines. Thus, small plans may need to receive legacy provider numbers on coordination of benefits (COB) transactions through May 23, 2008. CMS will issue requirements for reporting legacy numbers in COB transactions after May 22, 2007.

In a related Change Request, CR4023, CMS required submitters of the Form CMS-1500 (12-90 version) to continue to report Provider Identification Numbers (PINs) and Unique Physician Identification Numbers (UPINs) as applicable.

There were no fields on that version of the form for reporting of NPIs in addition to those legacy identifiers. Change Request 4293 provided guidance for implementing the revised Form CMS-1500 (08-05). This article, based on CR 5060, provides additional Form CMS-1500 (08-05) information for Medicare carriers and DMERCs, related to validation edits and requirements.

Billing Guidelines

Additional Information

When the NPI Number is Effective and Required (May 23, 2007)
To enable proper processing of Form CMS-1500 (08-05) claims and to avoid claim rejections, please be sure to enter the correct identifying information for any numbers entered on the claim.

Legacy identifiers are pre-NPI provider identifiers such as:


Additional NPI-Related Information
Additional NPI-related information can be found at http://www.cms.hhs.gov/NationalProvIdentStand/ on the CMS Web site.

The change log which lists the various changes made to the Form CMS-1500 (08-05) version can be viewed at the NUCC Web site at http://www.nucc.org/images/stories/PDF/change_log.pdf.

MLN Matters article MM4320, “Stage 1 Use and Editing of National Provider Identifier Numbers Received in Electronic Data Interchange Transactions via Direct Data Entry Screen, or Paper Claim Forms,” can be found at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4320.pdf on the CMS Web site.
CR4293, Transmittal Number 899, “Revised Health Insurance Claim Form CMS-1500,” provides contractor guidance for implementing the revised Form CMS-1500 (08-05). It can be found at http://www.cms.hhs.gov/transmittals/downloads/R899CP.pdf on the CMS Web site.

MLN Matters article MM4023, “Stage 2 Requirements for Use and Editing of National Provider Identifier (NPI) Numbers Received in Electronic Data Interchange (EDI) Transactions, via Direct Data Entry (DDE) Screens, or Paper Claim Forms,” can be found at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4023.pdf on the CMS Web site.

CR5060 is the official instruction issued to your carrier or DMERC regarding changes mentioned in this article, MM5060. CR 5060 may be found by going to
http://www.cms.hhs.gov/Transmittals/downloads/R1058CP.pdf on the CMS Web site.
Please refer to your local carrier or DMERC if you have questions about this issue. To find their toll- free phone number, please go to: http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Web site.

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Bariatric Surgery – LCD Draft

The draft LCD for Bariatric Surgery (Surgical Management of Morbid Obesity) has been published for all Part B states. NC (DL23540), ID (DL24055) and TN (DL24057). To view the policy, please visit the CMS Web site.

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CERT Fact Sheet Comprehensive Error Rate Testing Program

Currently, CMS (Centers for Medicare & Medicaid Services) calculates a national paid claims error rate, a contractor specific error rate, services processed error rate (which measures whether the Medicare contractor made appropriate payment decisions on claims) and a provider compliance error rate (which measures how well providers prepared claims for submission).

The CMS methodology includes:

What You Need to Do
Provide requested information

During a CERT review, you may be asked to provide more information related to a claim you submitted, such as medical records or certificates of medical necessity, so that the CERT review contractor can verify that billing was proper. Be assured that forwarding specifically requested records to the designated CERT contractor does not violate privacy provisions under the Health Insurance Portability and Accountability (HIPAA) law. Make sure your office staff is aware that this request for additional documentation must be answered.

Respond Promptly
If you receive a letter from CMS regarding a CERT request for medical documentation, you should respond promptly by submitting the requested supporting documentation within the time frame outlined in the request. Physicians, providers, and suppliers do not need to obtain additional beneficiary authorization to forward medical records to the designated CERT contractor.

Keep your enrollment information current.
It is vitally important for providers to keep enrollment information current. When providers change mailing address, phone numbers, practice location, etc., it is important to keep your Medicare contractor informed within 90 days of the change. Correct address information will help ensure that CERT documentation requests are received and will allow time for your response.

These changes must be done by completing the CMS 855I application (Individual) or CMS 855B application (Group or Organization) application to change your information. These forms and instructions can be found on our Web site at http://www.cignagovernmentservices.com under Provider Enrollment or on the CMS Web site at www.cms.hhs.gov. If you have additional questions after reviewing these resources, please call our Provider Enrollment Department at 866.520.4007 hours 9:00 am- 3:00 pm (CST).

Important Information
If you fail to submit the requested information in a timely fashion, an “error” is registered against both the Medicare contractor (CIGNA Government Services) and you as the Medicare provider. (At this point, the CERT review contractor has no choice but to register the claim submission as “erroneous” because there is insufficient supporting documentation to determine otherwise.) Treating these claims as errors will prompt the CERT reviewer to instruct CIGNA Government Services to send the providers overpayment letters. Also, these errors have a corresponding negative impact on the other error rates that are calculated under the CERT program.

More information can be found on the CIGNA Government Services Web site at:
http://www.cignagovernmentservices.com/partb/index.html#New

If you have questions or need assistance you can reach your CERT Coordinator, Julene Mull, at 615.782.4591 or julene.mull@cigna.com

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

Attention Providers!
Effective October 1, 2006, Medicare will only generate the Health Insurance Portability and Accountability Act (HIPAA) compliant remittance advice – transaction 835 version 004010A1 – to all electronic remittance advice receivers. For more details, see MLN Matters article SE0656 at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0656.pdf.

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) 5293, which announces the changes that will be included in the October 2006 release of the edit module for clinical diagnostic laboratory services.

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 23 national coverage determinations are listed below:

  1. Culture, Bacterial, Urine
  2. Human Immunodeficiency Virus Testing (Prognosis including monitoring)
  3. Human Immunodeficiency Virus Testing (Diagnosis)
  4. Blood Counts
  5. Partial Thromboplastin Time
  6. Prothrombin Time
  7. Serum Iron Studies
  8. Collagen Crosslinks, Any Method
  9. Blood Glucose Testing
  10. Glycated Hemoglobin/Glycated Protein
  11. Thyroid Testing
  12. Lipids
  13. Digoxin Therapeutic Drug Assay
  14. Alpha-fetoprotein
  15. Carcinoembryonic Antigen
  16. Human Chorionic Gonadotropin
  17. Tumor Antigen by Immunoassay - CA125
  18. Tumor Antigen by Immunoassay CA 15-3/CA 27.29
  19. Tumor Antigen by Immunoassay CA 19-9
  20. Prostate Specific Antigen
  21. Gamma Glutamyl Transferase
  22. Hepatitis Panel/Acute Hepatitis Panel
  23. Fecal Occult Blood


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). CR5293 informs your Medicare carrier and FI about changes in the laboratory NCD code lists for October, 2006, that require updating of the laboratory edit module. These changes become effective for services furnished on or after October 1, 2006.


Changes are being made to the NCD code lists for services furnished on or after October 1, 2006, are as follows:

190.12 - Urine Culture, Bacterial
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Urine Culture, Bacterial (190.12) NCD:

The following ICD-9-CM codes are being deleted from the list of ICD-9-CM codes covered by Medicare for the Urine Culture, Bacterial (190.12) NCD:

190.14 - Human Immunodeficiency Vrus (HIV) Testing (Diagnosis)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Human Immunodeficiency Virus (HIV) Testing (Diagnosis) (190.14) NCD:

The following ICD-9-CM code is being deleted from the list of ICD-9-CM codes covered by Medicare for the Human Immunodeficiency Virus (HIV) Testing (Diagnosis) (190.14) NCD:

190.15 - Blood Counts
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes that do not support medical necessity for the Blood Counts (190.15) NCD:

190.16 - Partial Thromboplastin Time (PTT)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Partial Thromboplastin Time (PTT)(190.16) NCD:

The following ICD-9-CM codes are being deleted from the list of ICD-9-CM codes covered by Medicare for the Partial Thromboplastin Time (PTT)(190.16) NCD:

190.17 - Prothrombin Time (PT)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Prothrombin Time (PT) (190.17) NCD:

The following ICD-9-CM codes are being deleted from the list of ICD-9-CM codes covered by Medicare for the Prothrombin Time (PT) (190.17) NCD:

190.18 - Serum Iron Studies
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Serum Iron Studies (190.18) NCD:

190.20 - Blood Glucose Testing
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Blood Glucose Testing (190.20) NCD:

The following ICD-9-CM code is being deleted from the list of ICD-9-CM codes covered by Medicare for the Blood Glucose Testing (190.20) NCD:
• ICD-9-CM code 528.0.

190.22 - Thyroid Testing
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Thyroid Testing (190.22) NCD:

190.23 - Lipids Testing
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Lipids Testing (190.23) NCD:

190.24 - Digoxin Therapeutic Drug Assay
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Digoxin Therapeutic Drug Assay (190.24) NCD:

190.25 - Alpha-fetoprotein
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Alpha-fetoprotein (190.25) NCD:

190.26 - Carcinoembryonic Antigen
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Carcinoembryonic Antigen (190.26) NCD:

190.27 - Human Chorionic Gonadotropin
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Human Chorionic Gonadotropin (190.27) NCD:

190.28 - Tumor Antigen by Immunoassay CA 125
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Tumor Antigen by Immunoassay CA 125 (190.28) NCD:

190.29 - Tumor Antigen by Immunoassay CA 15-3/CA27.29
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Tumor Antigen by Immunoassay CA 15-3/CA27.29 (190.29) NCD:

190.30 - Tumor Antigen by Immunoassay CA 19.9
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Tumor Antigen by Immunoassay CA 19.9 (190.30) NCD:

190.31 - Prostate Specific Antigen (PSA)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Prostate Specific Antigen (PSA) (190.31) NCD:

190.32 - Gamma Glutamyl Transferase (GGT)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Gamma Glutamyl Transferase (GGT) (190.32) NCD:

The following ICD-9-CM codes are being deleted from the list of ICD-9-CM codes covered by Medicare for the Gamma Glutamyl Transferase (GGT) (190.32) NCD:

190.33 - Hepatitis Panel/Acute Hepatitis Panel
The following ICD-9-CM code of 780.32 is being added to the list of ICD-9-CM codes covered by Medicare for the Hepatitis Panel/Acute Hepatitis Panel (190.33) NCD.

190.34 - Fecal Occult Blood Test (FOBT)
The following ICD-9-CM codes are being added to the list of ICD-9-CM codes covered by Medicare for the Fecal Occult Blood Test (FOBT) (190.34) NCD:

The following ICD-9-CM codes are being deleted from the list of ICD-9-CM codes covered by Medicare for the Fecal Occult Blood Test (FOBT) (190.34) NCD:

The following ICD-9-CM codes are being added to the list of denied ICD-9-CM codes for all NCDs:

ICD-9-CM code V18.5 is deleted from the list of denied ICD-9-CM codes for all NCDs.

Implementation
The implementation date for CR5293 is October 2, 2006.

Additional Information
To see the official instruction issued to your carrier/intermediary regarding this change. That instruction may be viewed at http://www.cms.hhs.gov/Transmittals/downloads/R1050CP.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.zip on the CMS Web site.

Flu Shot Reminder
September is the perfect time to start talking with your patients about getting the flu shot. Medicare provides coverage for the flu vaccine and its administration. Please encourage your Medicare patients to take advantage of this vital benefit. And don’t forget – health care professionals and their staff benefit from the flu vaccine also. Protect Yourself. Protect Your Patients. Get Your Flu Shot.

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CMS Announces Part D Low Income Subsidy (LIS) Redetermination Information

Attention Physicians and Providers!
Effective October 1, 2006, Medicare will only generate the Health Insurance Portability and Accountability Act (HIPAA) compliant remittance advice – transaction 835 version 004010A1 – to all electronic remittance advice receivers. For more details, see MLN Matters article SE0656 at http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0656.pdf.

Provider Types Affected
Physicians, suppliers, providers, and their staff who serve Medicare beneficiaries.

Background
The purpose of this Special Edition (SE) article is to alert providers that Medicare and Social Security are making decisions about whether some people who qualify for extra help (also referred to as the low-income subsidy) in 2006 will continue to qualify in 2007. People affected by these changes will receive information from Medicare or Social Security. The information provided in this SE is intended to help you counsel your patients affected by these changes and help them understand their options for getting help paying for Medicare prescription drug coverage.

Key Points
CHANGES IN QUALIFYING FOR EXTRA HELP IN 2007
A person will no longer automatically qualify for extra help in 2007 if he or she no longer:

People who will no longer automatically qualify for extra help in 2007 will receive a notice and an application for extra help in the mail from Medicare by the end of September.

If in the coming months a person’s situation changes so that they again automatically qualify for extra help, Medicare will send them another notice letting them know that they qualify.

Medicare is also mailing notices to people who will continue to automatically qualify for extra help in 2007 but whose co-payment levels will change as of January 1, 2007. Medicare will mail these notices by early October to let people know their new co-payment level. A change in co-payment level could result when there is a change in someone’s Medicaid eligibility.

For example, if someone with both Medicare and Medicaid no longer resides in a nursing home, then he or she will no longer qualify for a $0 co-payment effective January 1, 2007.

People with no changes who continue to automatically qualify for extra help as of January 1, 2007, will not receive a notice.

Beneficiaries Might Still Save On Their Medicare Prescription Drug Coverage Costs Even If They Don’t Qualify For Extra Help
The good news is, even if a person no longer automatically qualifies for extra help, they may still be able to save on Medicare prescription drug coverage costs. A person who no longer automatically qualifies may still qualify for extra help based on their income and resources, but will need to apply to Social Security or their State Medical Assistance (Medicaid) office to find out. Applying early is important so their extra help can be effective as early as January 1, 2007. Social Security’s application for extra help and a self-addressed postage free envelope will be included in the mailing they receive. And if they don’t qualify, there are still other ways to save on drug costs, as mentioned below.

A person should apply and qualify for extra help if

The above amounts are for 2006 and may change in 2007. If a beneficiary lives in Alaska or Hawaii, or pay at least half of the living expenses of dependent family members, income limits are higher.

HOW TO APPLY FOR EXTRA HELP
Use the Web, phone, mail, or in person but apply as soon as possible:

If patients still don’t qualify for extra help, encourage them to review the following options for lowering prescription drug coverage costs:

Encourage patients to enroll early. If they’re switching plans, joining the new Medicare drug plan as soon as possible gives the plan time to mail a membership card, acknowledgement letter, and welcome package before the new coverage becomes effective.

People who applied and qualified for extra help in 2006
The Social Security Administration (SSA) is reviewing the eligibility of people who applied and qualified for extra help prior to May 2006. This review will ensure these people are still eligible and receiving the appropriate amount of extra help. SSA mailed these individuals a letter at the end of August telling them what Social Security’s records show for their income, resources, and household size. A cost of living increase in their Social Security benefit will not be considered a change in their situation.

SSA will also send the eligibility review form (1026B) directly to some people to complete because SSA already has information about a change in their income, resources, or household composition. The Medicare beneficiary needs to return that form to the SSA within 30 days.

SSA will review the eligibility review form (1026B) and send the person a letter explaining its decision. SSA may decide a person:


If a beneficiary believes that SSA’s decision is incorrect, they have the right to appeal it. The decision
letter will explain their appeal rights. The following Web links at the SSA Web site provide more information:

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

The bulletins and sample notices that will be sent to Medicare beneficiaries can be reviewed by looking at the following documents at:
Changes in Qualifying for Extra Help in 2007:Materials for Partners and People with Medicare [PDF, 47KB] on the CMS Web site. Re-deeming Notice: Loss of (Extra Help) Status Version [PDF, 58KB] on the CMS Web site.

Re-deeming Notice: Change in (Extra Help) Copayment Level Version [PDF, 55KB] on the CMS Web site.
Information Partners Can Use on: Changes in Qualifying for Extra Help in 2007 [PDF, 48KB] on the CMS Web site.


You might still save on your Medicare prescription drug coverage costs even if you don’t automatically qualify for extra help [PDF, 427KB]

Flu Shot Reminder
September is the perfect time to start talking with your patients about getting the flu shot. Medicare provides coverage for the flu vaccine and its administration. Please encourage your Medicare patients to take advantage of this vital benefit. And don’t forget – health care professionals and their staff benefit from the flu vaccine also. Protect Yourself. Protect Your Patients. Get Your Flu Shot.

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Communications Infrastructure Testing

The Centers for Medicare & Medicaid Services (CMS) is working to ensure that its communications infrastructure can reach providers in the event of a regional or national disaster. It is important that at such times CMS can reach providers with critical information in a timely fashion. CIGNA Government Services is working closely with CMS to ensure that our customers receive emergency communication as quickly and efficiently as possible. CIGNA Government Services will use our ListServ as a primary communication tool as well as timely posting of critical information to our Web site to reach you in the event of an emergency.

All providers are encouraged to subscribe to the ListServ so you will receive urgent information in a timely manner. It is highly recommended that providers identify an alternate contact to also subscribe to the ListServ as a backup. To subscribe to the CIGNA Government Services ListServ, (http://www.cignagovernmentservices.com/medicare_dynamic/mailer/reminder.asp).

CIGNA Government Services will continue to work work closely with CMS so that our emergency communications infrastructure supports prompt communication of critical information to our customers.

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Competitive Acquisition Program (CAP) - Creation of Automated Tables for Provider Information, Expansion of CAP Fee Schedule File Layout, and Additional Instructions for Claims Received from Railroad Retirement Board Beneficiaries

Note: This article was revised on September 12, 2006, to reflect changes made to CR5079. The CR release date, transmittal number (see above), and the Web address for accessing CR5079 were changed. All other information remains the same.

Attention Physicians!
Sign up now for the Physicians-L listserv at http://www.cms.hhs.gov/apps/mailinglists/.

Get your Medicare news as it happens!

Provider Types Affected
Physicians submitting claims to carriers for services to Medicare beneficiaries under the CAP

Impact on Providers
This article is based on Change Request (CR) 5079, which provides additional information and instructions for the implementation of the CAP pertaining to CAP drug categories and fee schedule as outlined in CR4064 (Transmittal 777, dated December 9, 2006).

Background
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA, Section 303 (d); http://www.cms.hhs.gov/MMAUpdate/) 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 basis. The Social Security Act (Section 1847B(a)(1)(B);
http://www.ssa.gov/OP_Home/ssact/title18/1847B.htm) states that for purposes of implementing the CAP:

‘‘The Secretary (of the Department of Health and Human Services) shall establish categories of competitively biddable drugs and biologicals. The Secretary shall phase in the program with respect to those categories beginning in 2006 in such manner as the Secretary determines to be appropriate. ”

In addition, the Social Security Act also permits the creation of appropriate geographic regions established by the secretary for contract award purposes.

The Centers for Medicare & Medicaid Services (CMS) will implement the CAP with one category of drugs and one geographic area. However, as the program evolves, additional geographic areas and additional drug categories may be created. Also, approved CAP vendors will be able to request approval for changes to the lists of drugs that they supply under the CAP.

CR4064 (Transmittal 777, dated December 9, 2006) described requirements for carriers to develop provider files that list physicians who have enrolled with an approved CAP vendor and the category (or categories) of drugs that the CAP vendor will furnish under the CAP.

CMS is issuing CR5079 to automate the process of updating the list of drugs paid under the CAP. CR5079 provides additional information and instructions for the implementation of the CAP pertaining to the CAP drug categories and fee schedule as outlined in:

For the table defined in CR4064.1.1.2.1, when Medicare carriers receive election forms from providers, the carriers will indicate for each provider:

CAP Drugs and Drug Categories
Approved CAP vendors will be permitted to request certain changes to the list of drugs that they supply under the CAP. Beginning in July 2006 with changes to be effective October 1, 2006, approved CAP vendors may request that CMS (or its designee) approve the following types of changes:

As CMS continues to develop the CAP, additional geographical areas and additional drug categories may be created. If additional drug categories are created, certain drugs may appear in more than one drug category.

Changes to the Drug List
Written requests for changes to the approved CAP vendor’s drug list must be submitted to CMS and the CAP designated carrier. The requests must include a rationale for the proposed change, and a discussion of the impact on the CAP, including safety, waste, and potential for cost savings. If approved, changes will become effective at the beginning of the following quarter. CMS will post the changes on the CMS Web site (http://www.cms.hhs.gov/competitiveacquisforbios/) and notify the carriers and participating CAP physicians of any changes on a quarterly basis.

Participating CAP physicians will be notified of changes to their approved CAP vendor’s CAP drug list on a quarterly basis and at least 30 days before the approved changes are due to take effect. Physicians who participate in the CAP are required to obtain all CAP drugs, including those that have been added or otherwise updated, from the approved CAP vendor unless medical necessity requires the use of a formulation not supplied by the vendor. Please note that approved changes will apply only to the list of drugs supplied by the approved CAP vendor who submitted the request; therefore, each vendor’s drug list may contain different drugs after changes to the initial drug list are approved.

Payment Amount
The payment amount for new HCPCS codes added to an approved CAP drug vendor’s drug list will be Average Sales Price (ASP) plus six percent (ASP+ 6%).


Addition or substitution of NDC numbers under an existing HCPCS code supplied by an approved CAP vendor will not change the CAP single payment amount for that HCPCS code.

CMS will update the single payment amount based on the approved CAP vendor’s reported net acquisition costs for the category of drugs on an annual basis.

Disaster Contingency
Business requirements intended to cover situations where an approved CAP vendor is not able to fill CAP orders or is no longer able to supply drugs under the CAP have also been added. Physicians will be able to revert to the ASP (buy and bill) payment methodology.

Claims for Railroad Retirement Board (RRB) Beneficiaries
As claims for RRB beneficiaries cannot be paid under the CAP, physicians should not order drugs for RRB beneficiaries under the program. However, should this occur, and the claim is sent to the carrier that processes claims for RRB beneficiaries, that carrier will treat the claim as unprocessable. The physician will have to resubmit the claim as a non-CAP claim with the drugs billed as ASP. The vendor will then have to look to the physician for reimbursement of the drugs that were mistakenly ordered under CAP.

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

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/R1055CP.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.zip on the CMS Web site.

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Implementation of New Healthcare Common Procedure Coding System (HCPCS) Codes and Fee Schedule Amounts for Power Mobility Devices (PMDs)

A recurring update notification regarding the October quarterly update for the 2006 Durable Medical Equipment Prosthetic, Orthotics, and Supplies (DMEPOS) fee schedule was issued on August 25, 2006, (Transmittal 1037, Change Request 5255). This transmittal included instructions for implementation on October 1, 2006, of HCPCS codes K0800 thru K0812 for power operated vehicles and K0813 thru K0899 for power wheelchairs and corresponding fee schedule amounts if applicable. The effective date for implementation of these codes and fee schedule amounts is being changed to November 15, 2006, to allow additional time for suppliers to prepare for these changes. Therefore, the instructions below replace those instructions listed in the policy section and business requirements of transmittal 1037.

The following codes are being added to the HCPCS on November 15, 2006, and are effective for claims with dates of service on or after November 15, 2006:

POWER OPERATED VEHICLES

K0800 K0807 K0801 K0808
K0802 K0812 K0806  

POWER WHEELCHAIRS

K0813 K0841 K0870 K0814 K0842 K0871 K0815 K0843
K0821 K0850 K0880 K0822 K0851 K0884 K0823 K0852
K0826 K0855 K0891 K0827 K0856 K0898 K0828 K0857
K0835 K0861 K0836 K0862 K0837 K0863 K0838 K0864
K0877 K0816 K0848 K0878 K0820 K0849 K0879 K0869
K0885 K0824 K0853 K0886 K0825 K0854 K0890 K0868
K0899 K0829 K0858 K0830 K0859 K0831 K0860 K0840
K0839              

The Centers for Medicare & Medicaid Services (CMS) is in the process of calculating fee schedule amounts for the above codes, where applicable, and these fee schedule amounts will be transmitted to contractors in addendum DMEPOS fee schedule files in the near future.

Suppliers should use the above HCPCS codes for all new PMD claims with dates of service on or after November, 15, 2006. For power operated vehicles furnished on a rental basis with dates of service prior to November 15, 2006, suppliers should continue to use code E1230. For power wheelchairs furnished on a rental basis prior to November 15, 2006, suppliers should continue to use codes K0010 thru K0014, as appropriate.

Suppliers should be instructed to begin submitting HCPCS codes K0800 thru K0802, K0806 thru K0808, K0812 thru K0816, K0820 thru K0831, K0835 thru K0843, K0848 thru K0864, K0868 thru K0871, K0877 thru K0880, K0884 thru K0886, K0890, K0891, K0898 and K0899, as appropriate, for all Power Mobility Device claims with dates of service on or after November 15, 2006.

Power mobility device claims with dates of service prior to November 15, 2006, shall use E1230, K0010, K0011, K0012, and K0014 as appropriate.

DMERCs and DME MACs shall revise their claims processing systems to reject claims for E1230, K0010, K0011, K0012 and K0014 with dates of service on or after November 15, 2006, if the claims are for purchase or initial rental of the item.

The DMERCs and DME MACs shall add the following Power Mobility Device HCPCS codes to their claims processing system, effective for claims with dates of service on or after November 15, 2006:

K0813 through K0816, K0820 through K0831, K0835 through K0843, K0848 through K0864, K0868 through K0871, K0877 through K0880, K0884 through K0886, K0890, K0891, K0898 and K0899
TOS=A,P,R
BETOS=DID
POS=04,12,13,14,33,54,55,56
Coverage=C
Pricing=36

The DMERCs and DME MACs shall add the following Power Operated Vehicle HCPCS codes to their claims processing system, effective for claims with dates of service on or after November 15, 2006:
K0800 through K0802, K0806 through K0808, and K0812
TOS=A,P,R
BETOS=DIE
POS=04,12,13,14,33,54,55,56
Coverage=C
Pricing=32

Contractors shall post the information provided in this Joint Signature Memorandum (JSM) on their Web site by September 27, 2006.

NOTE: MEDICARE ADMINISTRATIVE CONTRACTORS (MACs)

DME MAC Contract Numbers
Jurisdiction A ~ HHSM-500-2006-M0001Z
Jurisdiction B ~ HHSM-500-2006-M0002Z
Jurisdiction C ~ HHSM-500-2006-M0003Z
Jurisdiction D ~ HHSM-500-2006-M0004Z

A/B MAC Contract Numbers
Jurisdiction 3 ~ HHSM-500-2006-M0005Z

This Joint Signature Memorandum is being issued to you as technical direction under your MAC contract. This technical direction is not construed as a change or intent to change the scope of work under the contract and is to be acted upon only if sufficient funds are available.

In this regard, your attention is directed to the clause of the General Provisions of the contract entitled Limitation of Cost, FAR 52.232-20. If the Contractor considers anything contained herein to be outside of the current scope of the contract, or contrary to any of its terms or conditions, the Contractor shall immediately notify the Contracting Officer in writing as to the specific discrepancies and any proposed corrective action.

Should you require further technical clarification, you may contact your Project Officer. Contractual questions should be directed to your CMS Contracting Officer. Please copy the Project Officer and Contracting Officer on all electronic and/or written correspondence in relation to this technical direction letter.

If you are a Title XVIII contractor and have any questions, please contact Joel Kaiser on (410) 786.4499.

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Medical Review Frequently Asked Questions – Sept. 2006

The following represent a variety of questions the Medical Review department has received. CIGNA Government Services will address at least quarterly “Frequently Asked Questions” related to coverage and local medical review policy issues. Providers may submit questions to the Web site at
http://www.cignagovernmentservices.com/medicare_dynamic/customer_service/index.html

  1. Shingles Vaccination
    Q: Does Medicare cover Zostavax and its administration?
    A:     The vaccine for varicella-zoster was approved by the FDA in May 2006, but Medicare Part B will not be paying for this code under CPT code 90736 (or any other code) or for the associated administration fee. Likewise, providers should not bill an evaluation and management service when the patient is only receiving this injection. Providers may be able to be reimbursed by a patient’s Medicare Part D plan, but this would be subject to each individual plan’s guidelines and, again, is not a Part B paid service at this time.
  2. Moderate Sedation Codes
    Q: Does Medicare cover CPT codes 99143-99150 new for 2006?
    A:     Based on medical necessity for each individual patient’s circumstances and as documented in the medical record, CPT codes 99148-99150 (moderate sedation services provided by a physician other than the one performing the diagnostic or therapeutic service that the sedation supports, first 30 minutes and each additional 15 minutes) may be paid. In contrast, the codes for moderate sedation provided by the physician performing the diagnostic or therapeutic procedure will not be paid by Medicare Part B. Based on CMS Publication 100-4, the Medicare Claims Processing Manual, Chapter 12, Section 50. A, separate payment for anesthesia performed by the physician who also furnished the medical or surgical service is not allowed as it is considered component to/included in the payment for the medical or surgical service.
  3. Vitamin B-12
    Q: What are the coverage guidelines for B-12 injections?
    A:     CIGNA Government Services retired the Idaho, Tennessee, and North Carolina local coverage determinations for B-12 effective 090106. The Centers for Medicaid and Medicare Services still in CMS Publication 100-2, the Medicare Benefit Manual, Chapter 15, section 50 that the use of a drug or biological is “reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice.” Also, in the same chapter under section 50.4.3, it states “Medications given for a purpose other than the treatment of a particular condition, illness, or injury are not covered (except for certain immunizations). Charges for medications, e.g., vitamins, given simply for the general good and welfare of the patient and not as accepted therapies for a particular illness are excluded from coverage.” An example of accepted standard of practice and covered B-12 therapy would be the maintenance treatment of pernicious anemia via a monthly injection. The medical record would also need to support the diagnosis the drug administration and code for B-12 would be referenced to, and an evaluation and management visit would not be indicated unless it was necessary according to the patient’s need for the provider to perform a separately identifiable service beyond the assessment related to and customarily performed with the B-12 administration. See the above information through the following link: http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf
    4. Critical Care Denials
    Q: Why do some critical care visits deny?
    A:     If critical care is billed the same date of service as a procedure, the services represented by the critical care charges must go above and beyond any evaluation and management efforts normally included in the surgical procedure. When critical care exceeds the work included in the surgery and the patient is critically ill requiring the constant attendance of the physician, providers bill the critical care code(s) with modifier 25. Additionally, the Centers for Medicaid and Medicare Services specifically require that critical care has a diagnosis different from the diagnosis for a procedure done the same date. Therefore, without an appropriate modifier and different diagnosis reported on the initial claim submission, critical care charges the same date as a procedure will edit to deny. Coverage for critical care and a procedure sharing the same diagnosis might be allowed at the Appeals/Redeterminations level with appropriate documentation submitted.

A patient’s medical records should support the different diagnoses used for critical care and a procedure done on the same date of service.

See CMS Publication 100-4, the Medicare Claims Processing Manual, Chapter 12, Section 40.2, subsection A, #9 via the following link for the information cited above:
http://www.cms.hhs.gov/manuals/downloads/clm104c12.pdf

For critical care occurring postoperatively in the global period of a procedure, the same requirements apply except for the modifier to be used would be
modifier 24.

5. Cyberknife
Q: Does Medicare cover this service?
A: Medicare does cover treatment by cyberknife if medically necessary and within accepted standard of practice. Codes 0082T and 0083T were established to describe daily stereotactic body radiation delivery and treatment of localized tumors or lesions anywhere in the body. Code 0082T is reported for daily treatment delivery and 0083T is reported for daily treatment management. Stereotactic body radiation management will require additional and different work of the physician to evaluate and personally manage patients undergoing SBRT. This work includes the evaluating of the patient set-up, checking calculations against treatment plans, and managing the patient’s general condition before, during, and after SBRT.

6. Physical Therapy
Q: Are cosignatures by physical therapists required on each treatment note written by a physical therapy assistant?
A: No, notes written by the physical therapy assistant would not have to be cosigned by the physical therapist. Requirements for treatment encounter notes can be found in CMS Publication 100-2, the Medicare Benefit Policy Manual, Chapter 15, section 220.3.5,
subsection B.

See the above via the following link: http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf

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Medicare Provider Feedback Town Hall Meeting

Attention Physicians, Providers, and Suppliers!
Sign up now to the listserv appropriate for you at http://www.cms.hhs.gov/apps/mailinglists/.

Get your Medicare news as it happens!

Provider Types Affected
Physicians, suppliers, and providers billing Medicare carriers, fiscal intermediaries (FIs), durable medical equipment regional carriers (DMERCs), DME Medicare Administrative Contractors (DME MACs), and regional home health intermediaries (RHHIs), for services to Medicare beneficiaries

Background
The purpose of this Special Edition (SE) article is to alert individual Medicare Fee-for-Service (FFS) providers and suppliers that a town hall meeting soliciting their opinions is scheduled. CMS recognizes and values the importance of medical associations, individual provider and supplier perspectives and looks forward to providing this town hall meeting as a feedback venue.

Key Points

Additional Information
If you have questions, please contact your Medicare carrier, DMERC, DME MAC, FI, or RHHI at their toll-free number which may be found at: http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip on the CMS Web site.

Flu Shot Reminder
September is the perfect time to start talking with your patients about getting the flu shot. Medicare provides coverage for the flu vaccine and its administration. Please encourage your Medicare patients to take advantage of this vital benefit. And don’t forget – health care professionals and their staff benefit from the flu vaccine also. Protect Yourself. Protect Your Patients. Get Your Flu Shot.

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Message to Medicare Providers, Billers, Clearinghouse, and Vendors

As noted in previous announcements by the agency and our contractors, CMS plans to begin testing the new software that has been developed to use the National Provider Identifier (NPI) in the existing Medicare fee-for-service claims processing systems. Providers have until May 23, 2007, before you are required to submit claims with only an NPI.

Until testing is complete within the Medicare processing systems, CMS urges providers to continue submitting Medicare fee-for-service claims in one of two ways:

Use your legacy number, such as your Provider Identification Number (PIN), NSC number, OSCAR number, or UPIN; or use both your NPI and your legacy number.

Until testing of the new software that uses the NPI in the Medicare systems is complete and until further notice from CMS, the following may occur if you submit Medicare claims with only an NPI:

Claims may be processed and paid, or Claims for which Medicare systems are unable to properly match the incoming NPI with a legacy number (e.g., PIN, OSCAR number) may be rejected to the provider, and then you will need to resubmit the claim with the appropriate legacy number.

As always, more information and education on the NPI can be found at the CMS NPI page www.cms.hhs.gov/NationalProvIdentStand on the CMS Web site. Providers can apply for an NPI online at
https://nppes.cms.hhs.gov or can call the NPI enumerator to request a paper application at 1.800.465.3203.

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New Article Posted to MLN Matters (SE0672)

Subscribers’ Notes: Attention Pharmacists –– Did you know that the CMS Electronic Mailing Lists (listservs) can help you with your business? There are a multitude of listservs that you can subscribe to that can give you up-to-the-minute, accurate news regarding CMS activities. To subscribe to any of these mailing lists, visit the CMS Mailing Lists Web page at:
http://www.cms.hhs.gov/apps/mailinglists/ or for more details on CMS Mailing Lists, click here for a Fact Sheet on the subject: http://www.cms.hhs.gov/MLNProducts/downloads/MailingLists_FactSheet.pdf

New:
SE0672 - Clarification of the Requirements for the Competitive Acquisition Program (CAP) for Part B Drugs and Biologicals http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0672.pdf Please DO NOT respond to this email. This list is used as one way communication only and is NOT monitored. If you have questions/comments, please use the FEEDBACK form page at http://www.cms.hhs.gov/apps/feedback.asp; the Privacy Policy can be viewed at: http://www.cms.hhs.gov/AboutWebsite/02_Privacy%20Policy.asp and information on the Freedom of Information Act (FOIA) can be viewed at: http://www.cms.hhs.gov/AboutWebsite/04_FOIA.asp.

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New Schedule of CERT (Comprehensive Error Rate Testing) Documentation Contractor (CDC) Calls and Medical Request Letters

Beginning 11/01/2006 the schedule for sending requests for medical records process will be changed from 90 days to 75 days. Providers will be asked to submit their medical record documentation in accordance with the following new time standards.

Day 0: Initial Call/Letter
Day 30: Second Call/Letter
Day 45: Third Call/Letter
Day 60: OIG Letter
Day 76: Claim scored in error
Present Schedule  
Day 0 Initial Call/Letter
Day 30 Second Call/Letter
Day 50 Third Call
Day 60 Third Letter
Day 75 OIG Letter
Day 91 Claim scored in error
New Schedule on 11/01/2006  
Day 0 Initial Call/Letter
Day 30 Second Call/Letter
Day 45 Third Call/Letter
Day 60 OIG Letter
Day 76 Claim scored in error

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NPI Information Alert

Oct 2, 2006 - May 22, 2007:
CMS systems will accept an existing legacy Medicare billing number and/or an NPI on claims. If there is any issue with the provider’s NPI and no Medicare legacy identifier is submitted, the provider may not be paid for the claim.

Therefore, Medicare strongly recommends that providers, clearinghouses, and billing services continue to submit the Medicare legacy identifier as a secondary identifier.

This information can be found at: www.cms.hhs.gov/NationalProvIdentStand/06_implementation.asp#TopOfPage

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October 2006 Quarterly Average Sales Price (ASP) Medicare Part B Drug Pricing File, Effective October 1, 2006, and Revisions to April 2006 and July 2006 Quarterly ASP Medicare Part B Drug Pricing Files

Attention Providers!
Sign up now to the listserv appropriate for you http://www.cms.hhs.gov/apps/mailinglists/.

Get your Medicare news as it happens!

Note: This article was revised on September 25, 2006, to reflect changes to CR5270, which CMS re-issued on September 22, 2006. The article was revised, as was CR5270, to remove references to the revised January 2006 file. The CR transmittal number, release date, and Web address for accessing CR5270 were also changed. All other information remains the same.

Provider Types Affected
All Medicare providers who bill Medicare for Part B drugs

Provider Action Needed

STOP – Impact to You
Change Request (CR) 5270, upon which this article is based, provides notice of the updated payment allowance limits effective October 1, 2006, and revisions to the April 2006 and July 2006 quarterly drug pricing files.

CAUTION – What You Need to Know
Be aware that certain Medicare Part B drug payment limits have been revised and that CMS updates the payment allowance on a quarterly basis. The revised payment limits included in the revised ASP and Not Otherwise Classified (NOC) payment files supersede the payment limits for these codes in any publication published prior to this document.

GO – What You Need to Do
Make certain that your billing staffs are aware of these changes.

Background
CR5270, upon which this article is based, provides the quarterly average sales price (ASP) Medicare Part B drug pricing file update for October 1, 2006, and also provides revisions to the April 2006 and July 2006 quarterly files.


Section 303(c) of the Medicare Modernization Act of 2003 (MMA) revised the payment methodology for Part B covered drugs that are not paid on a cost or prospective payment basis; and mandated that since January 1, 2005, drugs and biologicals not paid on a cost or prospective payment basis be paid based on the average sales price (ASP) methodology.

In the same way in 2006, all ESRD drugs furnished by both independent and hospital-based ESRD facilities; specified, covered outpatient drugs; and drugs and biologicals with pass-through status under the OPPS will be paid according to this ASP methodology, which is based on quarterly data submitted to CMS by manufacturers.

Note that MMA also requires CMS to update the payment allowance limits quarterly, which CR5270 does. Beginning January 1, 2005, Part B drugs that are not paid on a cost or prospective payment basis) have been paid based on 106% of the average sales price (ASP). Additionally, Beginning January 1, 2006, the payment allowance limits for all ESRD drugs when separately billed by freestanding and hospital-based ESRD facilities, as well as specified covered outpatient drugs, and drugs and biologicals with pass-through status under the OPPS, will be paid based on 106% of the ASP.

There are exceptions to this general rule as summarized below.

  1. Blood and Blood Products
    Blood and blood products furnished in the hospital outpatient department are paid under the outpatient prospective payment system (OPPS) at the amount specified for the APC to which the product is assigned. Conversely, for blood and blood products, not paid on a prospective payment basis (with certain exceptions such as blood clotting factors), payment allowance limits are determined in the same manner used to determine them on October 1, 2003.
    The payment allowance limits for blood and blood products are 95% of the Average Wholesale Price (AWP) as reflected in the published compendia. These payment allowance limits will be updated on a quarterly basis, along with the others.
  2. Infusion Drugs
    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% of the AWP reflected in the published compendia as of October 1, 2003, unless the drug is compounded. The payment allowance limits were not updated in 2006.
    The payment allowance limits for infusion drugs (unless compounded), furnished through a covered item of durable medical equipment, that were not listed in the published compendia as of October 1, 2003, (i.e., new drugs) are 95% of the first published AWP.
  3. Influenza, Pneumococcal and Hepatitis B vaccines
    The payment allowance limits for influenza, Pneumococcal, and Hepatitis B vaccines are 95% of the AWP as reflected in the published compendia except where the vaccine is furnished in a hospital outpatient department. In this latter instance, the vaccine is paid at reasonable cost.
  4. Drugs not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File
    The payment allowance limits for drugs that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File (other than new drugs that are produced or distributed under a new drug application approved by the Food and Drug Administration) are based on the published wholesale acquisition cost (WAC) or invoice pricing.
    In determining the payment limit based on WAC, Medicare contractors (carriers, including durable medical equipment regional carriers (DMERCs), and fiscal intermediaries, including regional home health intermediaries (RHHIs)) follow the methodology in the Medicare Claims Processing Manual specified for calculating the AWP, but substitute WAC for AWP. (See Publication 100-04, Chapter 17, Drugs, and Biologicals at http://www.cms.hhs.gov/manuals/downloads/clm104c17.pdf on the CMS Web site.)
    The payment limit is 100% of the lesser of the lowest brand or median generic WAC. And note that for 2006, when the blood clotting factor is not included on the ASP file, the blood clotting furnishing factor of $0.146 per I.U. is added to the blood clotting factor payment amount.

Your Medicare contractor may, at their discretion, contact CMS to obtain payment limits for drugs not included in the quarterly ASP or NOC files. If available, CMS will provide the payment limits either directly to the requesting contractor or will post them in an MS Excel file on the CMS Web site. If the payment limit is available from CMS, contractors will substitute the CMS-provided payment limits for pricing based on WAC or invoice pricing.

  1. New Drugs
    The payment allowance limits for new drugs that are produced or distributed under a new drug application approved by the Food and Drug Administration and that are not included in the ASP Medicare Part B Drug Pricing File or Not Otherwise Classified (NOC) Pricing File are based on 106% of the WAC. This policy applies only to new drugs that were first sold on or after January 1, 2005. As mentioned above, for 2006, the blood clotting furnishing factor of $0.146 per I.U. is added to the payment amount for a new blood clotting factor when a new blood clotting factor is not included on the ASP file.
  2. Radiopharmaceuticals
    The payment allowance limits for radiopharmaceuticals are not subject to ASP. Radiopharmaceuticals furnished in the hospital outpatient department are paid charges reduced to cost by the hospital’s overall cost to charge ratio. And your carrier/FI will determine payment limits for radiopharmaceuticals not furnished in the hospital outpatient department based on the methodology in place as of November 2003.
  3. Drugs Furnished During Filling or Refilling an Implantable Pump or Reservoir
    CR 5270 clarifies that payment for drugs furnished incident to the filling or refilling of an implantable pump or reservoir is determined under the ASP methodology, as described above. Your carrier or FI will develop the pricing for compounded drugs.
    Physicians (or a practitioner described in Section 1842(b)(18)(C)) may be paid for filling or refilling an implantable pump or reservoir when it is medically necessary for them to perform the service. Your carrier/FI must find the use of the implantable pump or reservoir medically reasonable and necessary in order to allow payment for: 1) The professional service of filling or refilling the implantable pump or reservoir; and 2) For drugs furnished incident to the professional service.
    If a physician (or other practitioner) is prescribing medication for a patient with an implantable pump, a nurse may refill the pump if: 1) The medication administered is accepted as a safe and effective treatment of the patient’s illness or injury; 2) There is a medical reason that the medication cannot be taken orally; and 3) The nurse’s skills are needed to infuse the medication safely and effectively.

Here are some important things you should remember:

Note that:

Additional Information
You can find the official instructions issued to your carrier/FI/RHHI/DMERC regarding this change by going to CR5270, located at http://www.cms.hhs.gov/Transmittals/downloads/R1066CP.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.zip on the CMS Web site.


Flu Shot Reminder
September is the perfect time to start talking with your patients about getting the flu shot. Medicare provides coverage for the flu vaccine and its administ