Comprehensive Error Rate Testing (CERT) May 2007 Report

One Top Reason for Errors: Services Incorrectly Coded

The May 2007 Comprehensive Error Rate Testing (CERT) Report was published on May 15, 2007 on the CERT Web site, www.cms.hhs.gov/cert/ indicating that the national paid claims error rate for this reporting period is 4.2%, which equates to $10.4B.

Services incorrectly coded stood out as one of the top reasons for CERT errors. Specifically, the majority of these incorrectly coded claims relate to incorrectly coded Evaluation and Management (E&M) services in which the level of E&M service billed is not supported by the documentation submitted pertaining to the patient's condition and the key components of the E&M service.

This high rate of incorrectly coded Evaluation and Management (E&M) services generally implies that providers may be in need of education or review on how to properly code an Evaluation and Management (E&M) visit. Selecting the appropriate Evaluation and Management (E&M) code should be based upon medical necessity and the content of the service provided to the patient which needs to be supported by documentation in the patient's medical record.

It is important to remember:

1. Documentation of the key components – the History, Physical Exam, and Medical Decision Making – should support the level of the E&M service billed.
2. Per the Medicare Claims Processing Manual, Chapter 12, the selection of the level of Evaluation and Management service may be based on the duration of Coordination of Care and/or Counseling. When counseling and/or coordination of care dominates (more than 50 percent) the face-to-face physician/patient encounter or the floor time (in the case of inpatient services), time is the key or controlling factor in selecting the level of service. The physician must document time spent with the patient in conjunction with the medical decision-making involved and a description of the coordination of care or counseling provided. Documentation must be in sufficient detail to support the claim.
3. All billed E&M services must be based only on activities that are reasonable and necessary for the diagnosis or treatment of illness or injury (SSA 1862(a) (1) (A). ". . . Documentation of History, Physical Examinations and Medical Decision Making, should not be performed or billed at levels greater than needed for the patient's condition."
4. As documented in the Medicare Claims Processing Manual, Chapter 12, Section 30.6.1, "Medical necessity of a service is the overarching criterion for payment in addition to the individual requirements of a CPT code. It would not be medically necessary or appropriate to bill a higher level of Evaluation and Management service when a lower level of service is warranted. The volume of documentation should not be the primary influence upon which a specific level of service is billed. Documentation should support the level of service reported. The service should be documented during, or as soon as practicable after it is provided in order to maintain an accurate medical record."

IT IS IMPORTANT TO NOTE:

• When reviewing an E&M service, the reviewer will first establish medical necessity, and then the level of service needed based on the documentation submitted.
• Legibility of the documentation may also affect how a reviewer is able to clearly interpret and define the level of the E&M code billed. If legibility is poor, E&M services may be down-coded whereas presentation in a readable format may not result in downcoding.

In summary, we recommend:

• Review the Medicare Claims Processing Manual, Chapter 12, section 30.6.1
• Review the 1995 and 1997 Evaluation and Management Guidelines, which may be found at www.cms.hhs.gov/MLNEdWebGuide/25_EMDOC.asp
• Review the CIGNA Government Services E&M Netcourse located at www.cignagovernmentservices.com/webtraining/Logon.asp

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Bone Mass Measurements (BMMs)

Note: This article was revised June 4, 2007 to clarify the Medicare Summary Notices on page 3. Essentially, MSN 16.10 will be issued with a denied claim as well as either MSN 36.1 or MSN 36.2, depending on if an ABN was issued. All other information remains the same.

Provider Types Affected

Physicians, practitioners and hospitals that bill Medicare contractors (carriers, fiscal intermediaries (FIs), or Part A/B Medicare administrative contractors (A/B MACs) for BMM services

Provider Action Needed

STOP – Impact to You
Effective for dates of service on or after January 1, 2007, Medicare will pay for BMM services for dual-energy x-ray absorptiometry (CPT code 77080) when this procedure is used to monitor osteoporosis drug therapy. In addition, new CPT were assigned to BMMs.

CAUTION – What You Need to Know
Medicare edits will deny claims that are not consistent with revised BMM policy and providers may be liable for noncovered BMMs unless they have issued an advanced beneficiary notice (ABN) as required. This article explains the changes as a result of the CY2007 Physician Fee Schedule Final Rule.

GO – What You Need to Do
See the remainder of this article for important information regarding billing Medicare for BMMs.

Background

This article and related Change Request (CR) 5521 wants providers to know that on June 24, 1998, the Centers for Medicare & Medicaid Services (CMS) published an Interim Final Rule with Comment Period (IFC) in the Federal Register entitled "Medicare Coverage of and Payment for Bone Mass Measurements." This IFC implemented section 4106 of the BBA by establishing 42 CFR 410.31, Bone Mass Measurement: Conditions for Coverage and Frequency Standards. This new regulation defined BMM and individuals qualified to receive a BMM, established conditions for coverage under the "reasonable and necessary" provisions of 1862(a)(1)(A) of the Act, and established frequency standards governing when qualified individuals would be eligible for a BMM.

On December 1, 2006, CMS published the CY 2007 Physician Fee Schedule final rule, which included changes to 42 CFR 410.31. These changes can be found in Chapter 15, Section 80.5 of the Medicare Benefit Policy Manual. and in Chapter 13, Section 140 of the Medicare Claims Processing Manual. The revised manual sections are attached to CR5221. The Web address for viewing CR5221 is available in the "Additional Information" section at the end of this article.

Key Points

Listed is a summary of the revisions and additions to Chapter 13 of the Medicare Claims Processing Manual and Chapter 15 of the Medicare Benefit Policy Manual.

CHAPTER 13

• Effective for dates of service on and after January 1, 2007, the CY 2007 Physician Fee Schedule final rule expanded the number of beneficiaries qualifying for BMM by reducing the dosage requirement for glucocorticoid (steroid) therapy from 7.5 mg of prednisone per day to 5.0 mg. It also changed the definition of BMM by removing coverage for a single-photon absorptiometry (SPA) as it is not considered reasonable and necessary under section 1862 (a)(1)(A) of the Act.
• Effective for dates of services on and after January 1, 2007, the following changes apply to BMM:
• New 2007 CPT bone mass codes have been assigned for BMM. The following codes will replace current codes, however the CPT descriptors for the services remain the same:
  

  77078 replaces 76070	77081 replaces 76076
  77079 replaces 76071	77083 replaces 76078
  77080 replaces 76075

• BMM is not covered when a procedure other than dual-energy x-ray absorptiometry is used to monitor osteoporosis drug therapy. Therefore, Medicare will not pay for procedure codes 76977, 77078, 77079, 77081, 77083 and G0130 when billed with the following ICD-9-CM diagnosis codes:
  

  733.00

  733.01

  733.02

  733.03

  733.09

  733.90

  255.0

• BMM is covered when dual-energy x-ray absorptiometry is used to monitor osteoporosis drug therapy. Therefore, Medicare will pay procedure code 77080 when billed with the following ICD-9-CM diagnosis codes or any of the other valid ICD-9-CM diagnoses that are recognized by Medicare contractors appropriate for bone mass measurements:
  

  733.00

  733.01

  733.02

  733.03

  733.09

  733.90

  255.0

• In informing beneficiaries about the denials of claims processed for BMMs, Medicare will use the following Medicare Summary Notice (MSN) Messages, effective for services on or after January 1, 2007:
  • MSN# 16.10: "Medicare does not pay for this item or service." (FIs should not include this MSN.)
  • If an Advance Beneficiary Notice (ABN) was issued, the following MSN will also follow:
    • MSN# 36.1: "Our records show that you were informed in writing, before receiving the service that Medicare would not pay. You are liable for this charge. If you do not agree with this statement, you may ask for a review."
  • If an ABN was not issued the following MSN will also follow:
    • MSN# 36.2: "It appears that you did not know that we would not pay for this service, so you are not liable. Do not pay your provider for this service. If you have paid your provider for this service, you should submit to this office three things: (1) a copy of this notice, (2) your provider's bill, and (3) a receipt or proof that you have paid the bill. You must file your written request for payment within 6 months of the date of this notice. Future services of this type provided to you will be your responsibility.

Note: Medicare will not cover single photon absorptiometry and procedure code 78350 will be denied (using MSN# 16.10) for services on or after January 1, 2007.

• Effective January 1, 2007 the following Remittance Advice (RA) Messages will be issued when Medicare denies BMM claims:
  • Claim adjustment reason code 50: "These are non-covered services because this is not deemed a "medical necessity" by the payer".
  • If an ABN was issued the RA issued is M38: "The patient is liable for the charges for this service as you informed the patient in writing before the service was furnished that we would not pay for it, and the patient agreed to pay."
  • If an ABN was not issued RA, remark code is M27: "The patient has been relieved of liability of payment of these items and services under the limitation of liability provision of the law. You, the provider, are ultimately liable for the patient's waived charges, including any charges for coinsurance, since the items or services were not reasonable and necessary or constituted custodial care, and you knew or could reasonably have been expected to know, that they were not covered. You may appeal this determination. You may ask for an appeal regarding both the coverage determination and the issue of whether you exercised due care. The appeal request must be filed within 120 days of the date you receive this notice. You must make the request through this office."
• Advance Beneficiary Notices (ABNs) physicians, practitioners and hospitals are liable for payment unless they issue an appropriate ABN. More information on ABNs may be found in Chapter 30, Sections 40.3-40.3.8 of the Medicare Claims Processing Manual, located at http://www.cms.hhs.gov/Manuals/IOM/list.asp#TopofPage on the CMS Web site.

CHAPTER 15

• Definition of BMM: a radiologic, radioisotopic, or other procedure that meets all of the following conditions:
  • Is performed to identify bone mass, detect bone loss, or determine bone quality.
  • Is performed with either a bone densitometer (other than single-photon or dual-photon absorptiometry) or a bone sonometer system that has been cleared for marketing for BMM by the Food and Drug Administration (FDA) under 21 CFR part 807, or approved for marketing under 21 CFR part 814.
  • Includes a physician's interpretation of the results.
• Conditions for Coverage
  • Medicare covers BMM if it is ordered by a qualified physician or non-physician practitioner, who is treating the beneficiary following an evaluation of the need for a BMM and the appropriate BMM to be used.
  • The BMM must be performed under the appropriate level of supervision as defined in 42 CFR 410.32(b).
  • The BMM must be reasonable and necessary for diagnosis and treatment of a beneficiary who meets at least one of the following conditions:
    • A woman who has been determined by the physician or qualified nonphysician practitioner treating her to be estrogen-deficient and at clinical risk for osteoporosis, based on her medical history and other findings.
      NOTE: Since not every woman who has been prescribed estrogen replacement therapy (ERT) may be receiving an "adequate" dose of the therapy, the fact that a woman is receiving ERT should not preclude her treating physician or other qualified treating nonphysician practitioner from ordering a bone mass measurement for her. If a BMM is ordered for a woman following a careful evaluation of her medical need, however, it is expected that the ordering treating physician (or other qualified treating nonphysician practitioner) will document in her medical record why he or she believes that the woman is estrogen-deficient and at clinical risk for osteoporosis.
    • An individual with vertebral abnormalities as demonstrated by an x-ray to be indicative of osteoporosis, osteopenia, or vertebral fracture.
    • An individual receiving (or expecting to receive) glucocorticoid (steroid) therapy equivalent to an average of 5.0 mg of prednisone, or greater, per day, for more than 3 months.
    • An individual with primary hyperparathyroidism.
    • An individual being monitored to assess the response to or efficacy of an FDA-approved osteoporosis drug therapy.
  • In the case of any individual who being monitored to assess the response to or efficacy of an FDA-approved osteoporosis drug therapy, the BMM must be performed with a dual-energy x-ray absorptiometry system (axial skeleton).
  • In the case of any individual who meets the above conditions and who has a confirmatory BMM, the BMM is performed by a dual-energy x-ray absorptiometry system (axial skeleton) if the initial BMM was not performed by a dual-energy x-ray absorptiometry system (axial skeleton). A confirmatory baseline BMM is not covered if the initial BMM was performed by a dual-energy x-ray absorptiometry system (axial skeleton).
• Frequency Standards
  • Medicare pays for a screening BMM once every 2 years
  • Medicare may pay for more frequent screenings when medically necessary. Examples include, but are not limited to, the following medical circumstances:
    • Monitoring beneficiaries on long-term glucocorticoid (steroid) therapy of more than 3 months.
    • Confirming baseline BMMs to permit monitoring of beneficiaries in the future.
• Noncovered BMMs occur when they are not considered reasonable and necessary under section 1862 (a) (1) (A) of the Act.
  • Single photon absorptiometry (effective January 1, 2007).
  • Dual photon absorptiometry (established in 1983).

Additional Information

For complete details regarding this Change Request (CR) please see the official instruction (CR5521) issued to your Medicare carrier, FI or A/B MAC. That instruction consists of 3 transmittals, i.e.:

• Transmittal 69, which contains the Medicare National Coverage Determination, which is at http://www.cms.hhs.gov/Transmittals/downloads/R69NCD.pdf on the CMS Web site;
• Transmittal 70, which contains the revised Medicare Benefit Policy Manual sections, is at http://www.cms.hhs.gov/Transmittals/downloads/R70BP.pdf on the CMS site; and
• Transmittal 1236 contains the Medicare Claims Processing Manual revisions and is at http://www.cms.hhs.gov/Transmittals/downloads/R1236CP.pdf on the CMS site.

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

A brochure outlining ‘Bone Mass Measurements' is available at http://www.cms.hhs.gov/MLNProducts/downloads/bone_mass_06-08-05.pdf.

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July, 2007 Quarterly Update to the HCPCS Codes for Albuterol, Levalbuterol, and Reclast®

Provider Types Affected

Physicians, providers, and suppliers who bill Medicare contractors (carriers, fiscal intermediaries (FI)(including Regional Home Health Intermediaries (RHHI)), Medicare Administrative Contractors (A/B MAC) and Durable Medical Equipment Medicare Administrative Contractors (DME MAC)) for providing Albuterol, Levalbuterol, Reclast®, and Zometa® to Medicare beneficiaries.

What Providers Need to Know

CR 5645, from which this article is taken, implements the July 2007 quarterly update to the HCPCS Codes for Albuterol, Levalbuterol, and Reclast®.

Effective for dates of service on or after July 1, 2007, the following HCPCS codes are no longer payable by Medicare: J7611, J7612, J7613, and J7614; and the following are payable by Medicare: Q4093, Q4094, and Q4095. Code J3487 continues in use for Zometa®.

You should make sure that your billing staffs are aware of these HCPCS code changes.

Background

CR 5645, from which this article is taken, implements the July, 2007 quarterly update to the HCPCS Codes for Albuterol, Levalbuterol, and Reclast®.

Effective July 1, 2007, the Health Care Procedure Code System (HCPCS) codes in table 1 will no longer be payable for Medicare.

Table 1
HCPCS Codes Not Payable for Dates of Service on or after July 1, 2007

HCPCS Code	Short Description	Long Description
J7611	Albuterol non-comp con	Albuterol, inhalation solution, FDA-approved final product, non-compounded, administered through DME, concentrated form, 1 mg
J7612	Levalbuterol non-comp con	Levalbuterol, inhalation solution, FDA-approved final product, non-compounded, administered through DME, concentrated form, 0.5 mg
J7613	Albuterol non-comp unit	Albuterol, inhalation solution, FDA-approved final product, non-compounded, administered through DME, unit dose, 1 mg
J7614	Levalbuterol non-comp unit	Levalbuterol, inhalation solution, FDA-approved final product, non-compounded, administered through DME, unit dose, 0.5 mg

In place of the Table 1 codes, the HCPCS codes displayed in Table 2 will be payable, effective July 1, 2007.

Table 2
HCPCS Codes Payable for Services on or After July 1, 2007

HCPCS Code	Short Description	Long Description
Q4093	Albuterol inh non-comp con	Albuterol, all formulations including separated isomers, inhalation solution, FDA-approved final product, non-compounded, administered through DME, concentrated form, per 1 mg (Albuterol) or per 0.5 mg (Levalbuterol)
Q4094	Albuterol inh non-comp u d	Albuterol, all formulations including separated isomers, inhalation solution, FDA-approved final product, non-compounded, administered through DME, unit dose, per 1 mg (Albuterol) or per 0.5 mg (Levalbuterol)

In addition, a new code, Q4095 (in Table 3) will be effective July 1, 2007, for Reclast®.

Table 3
HCPCS Q4095 Payable for Services on or after July 1, 2007

HCPCS Code	Short Description	Long Description
Q4095	Reclast injection	Injection, zoledronic acid (Reclast), 1 mg

Also, please note the following:

• Currently, Reclast® 5 mg/100 ml bottle (NDC 0078-0435-61) is the only product that should be billed using code Q4095. If other products under the FDA's approval for Reclast® become available, code Q4095 would be used to bill for such products.
• HCPCS code J3487 (short description: Zoledronic acid; long description: Injection, zoledronic acid, 1 mg) is used to bill for products under the FDA's approval for Zometa® or such therapeutically equivalent products that may become available as identified in the FDA's Orange Book.
• Payment limits for the new Q codes will be included in the July 2007 quarterly Average Sales Price payment file, when those files are posted at http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a_2007aspfiles.asp#TopOfPage.
• Payment information for the new Q codes under the Hospital Outpatient Prospective Payment System (OPPS) can be found in the July 2007 update of OPPS Addendum A and Addendum B when those addendums are added to the hospital outpatient Web site at:
  http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage/.

Additional Information

You can find the official instruction, CR 5645, issued to your carrier, FI (including RHHI), A/B MAC or DME MAC by visiting http://www.cms.hhs.gov/Transmittals/downloads/R1260CP.pdf on the CMS Web site

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

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Revised HCPCS Codes Relating to Immune Globulin

 PQRI Information Available

A new CMS Web page dedicated to providing information on the Physician Quality Reporting Initiative (PQRI) is now available.

On December 20, 2006 , the President signed the Tax Relief and Health Care Act of 2006 (TRHCA). Section 101 under Title I authorizes the establishment of a physician quality reporting system for eligible professionals by CMS. CMS has titled the statutory program the Physician Quality Reporting Initiative. For more information, visit http://www.cms.hhs.gov/pqri on the CMS Web site.

Provider Types Affected

Physicians, providers and suppliers who bill Medicare contractors (carriers; Fiscal Intermediaries (FI), including Regional Home Health intermediaries (RHHIs); Medicare Administrative Contractors (A/B MACs); and Durable Medical Equipment Medicare Administrative Contractors (DME MACs)) for Immune Globulin

What You Need to Know

CR 5635, from which this article is taken, implements HCPCS coding changes for Immune Globulin. On and after July 1, 2007 :

• HCPCS code J1567 (injection, immune globulin, intravenous, non-lyophilized (e.g. liquid), 500 mg)) will no longer be payable by Medicare.
• In its place, the following HCPCS codes are payable: Q4087 (Octagam Injection), Q4088 (Gammagard Liquid Injection), Q4091 (Flebogamma Injection), and Q4092 (Gamunex Injection);
• In addition, for services on or after July 1, 2007 , two new codes are payable:
  • Q4089 (Rhophylac injection). Note that currently, Rhophylac® is the only product that should be billed using code Q4089. If other products under the Food and Drug Administration's (FDA) approval for Rhophylac® become available, code Q4089 would be used to bill for such products.
  • Q4090(HepaGam B injection). Note that currently, HepaGam BTM, when given intramuscularly, is the only product that should be billed using code Q4090. If other products under the FDA's approval for HepaGam BTM IM become available, code Q4090 would be used to bill for such products. HepaGam BTM when given intravenously should be billed using an appropriate Not Otherwise Classified code in the absence of a specific HCPCS code.

For institutional claims, revenue code 0636 should be used for billing codes Q4087, Q4088, Q4089, Q4090, Q4091, and Q4092.

As described in CR 5428, Medicare contractors will pay for pre-administration-related services (G0332) associated with intravenous Immune Globulin administration when Q4087, Q4088, Q4091, or Q4092 is billed in lieu of J1567.

Make sure that your billing staffs are aware of these Immune Globulin HCPCS code changes.

Background

CR 5635, from which this article is taken, implements HCPCS Coding Changes for Immune Globulin, Effective for services on or after July 1, 2007 . See Table 1, below, for details.

Table 1
HCPCS Code Changes for Immune Globulin
Effective July 1, 2007

HCPCS Code	Short Description	Long Description
Status: Not Payable by Medicare on or after July 1, 2007
J1567	Immune globulin, liquid	Injection, immune globulin, intravenous, non-lyophilized (e.g. liquid), 500 mg
Status: Payable for services on or after July 1, 2007
Q4087	Octagam Injection	Injection, immune globulin (Octagam), intravenous, non-lyophilized (e.g. liquid), 500 mg
Q4088	Gammagard Liquid Injection	Injection, immune globulin (Gammagard Liquid), intravenous, non-lyophilized (e.g. liquid), 500 mg
Q0491	Flebogamma Injection	Injection, immune globulin (Flebogamma), intravenous, non-lyophilized(e.g. liquid), 500 mg
Q4092	Gamunex Injection	Injection, immune globulin (Gamunex), intravenous, non-lyophilized (e.g., liquid), 500 mg
Status: New/Payable for services on or after July 1, 2007
Q4089*	Rhophylac injection	Injection, Rho(D) immune globulin (human), (Rhophylac), intramuscular or intravenous, 100 iu
Q4090^	HepaGam B injection	Injection, hepatitis B immune globulin (HepaGam B), intramuscular, 0.5 ml

*Currently, Rhophylac® is the only product that should be billed using code Q4089. If other products under the FDA approval for Rhophylac® become available, code Q4089 would be used to bill for such products.

^Currently, HepaGam BTM, when given intramuscularly, is the only product that should be billed using code Q4090. If other products under the FDA's approval for HepaGam BTM IM become available, code Q4090 would be used to bill for such products. HepaGam BTM when given intravenously should be billed using an appropriate Not Otherwise Classified code in the absence of a specific HCPCS code.

Additional Information

You can find the official instruction issued to your Medicare contractor about the revised HCPCS codes relating to Immune Globulin by going to CR5635, located at http://www.cms.hhs.gov/Transmittals/downloads/R1261CP.pdf on the CMS Web site.

Payment limits for the new Q codes will be included in the July 2007 quarterly Average Sales Price payment file, which will be posted at http://www.cms.hhs.gov/McrPartBDrugAvgSalesPrice/01a_2007aspfiles.asp#TopOfPage. In addition, more information regarding the Outpatient Prospective Payment System (OPPS) and the new Q codes in the July update of OPPS Addendum A and Addendum B on the hospital outpatient Web site at http://www.cms.hhs.gov/HospitalOutpatientPPS/AU/list.asp#TopOfPage.

You might also want to look at CR 5428 (Medicare Payment for Pre-administration-Related Services Associated with IVIG Administration—Payment Extended through CY 2007). The MLN Matters article (MM5428) associated with that CR is available at http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM5428.pdf on the CMS Web site.

If you have any questions, please contact your carrier, FI, RHHI, A/B MAC, or DME MAC at their toll-free number, which may be found at http://www.cms.hhs.gov/MLNProducts/downloads/CallCenterTollNumDirectory.zip

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Foot Care Coverage Guidelines

Revised errata sheets and downloadable versions (April 2007) of the Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals and the Facilitator's Guide – Companion to Medicare Physician Guide: A Resource for Residents, Practicing Physicians, and Other Health Care Professionals have been posted on the CMS Medicare Learning Network. To access these publications, visit http://www.cms.hhs.gov/MLNProducts/MPUB/list.asp.

Provider Types Affected

This article is for informational purposes only for providers billing Medicare for foot care services. It is an overview of existing policy and no change in policy is being conveyed.

Medicare Podiatry Services

The scope of the practice for Podiatry is defined by state law and the individual state laws should be consulted in determining a specific podiatrist's (or doctor of podiatric medicine) scope of practice.

This article covers routine care of the foot as well as care related to underlying systemic conditions such as metabolic, neurologic or peripheral vascular disease, or injury, ulcers, wounds, and infections.

Medicare Covered Foot Care Services

According to the Medicare Benefit Policy Manual (MBPM), Chapter 15, Section 290, Medicare covered foot care services only include medically necessary and reasonable foot care. Any other foot care services that are offered would be considered routine care.

Please note that the treatment of warts (including plantar warts) on the foot is covered to the same extent as services provided for the treatment of warts located elsewhere on the body.

Exclusions from Coverage

Certain foot care related services are not generally covered by Medicare, (though there are some exceptions where certain services will be covered). In general, the following services, whether performed by a podiatrist, osteopath or doctor of medicine, and without regard to the difficulty or complexity of the procedure, are not covered by Medicare:

Podiatry Service Excluded	Exception To Exclusions (Covered by Medicare)
Routine Foot Care	The presence of a systemic condition – such as metabolic, neurologic, or peripheral vascular disease may require scrupulous foot care by a professional that in the absence of such condition(s) would be considered routine. Mycotic nails – In the absence of a systemic condition, treatment of mycotic nails may be covered when the physician attending the patient's mycotic condition documents that: There is clinical evidence of mycosis of the toenail, and The patient has marked limitation of ambulation, [for ambulatory patients] pain, or secondary infection resulting from the thickening and dystrophy of the infected toenail plate. Routine procedures are covered only if the patient is under the active care of a doctor of medicine or osteopathy who documents the condition for the following: Diabetes mellitus Chronic thrombophlebitis Peripheral neuropathies involving feet associated with: Malnutrition and vitamin deficiency such as malnutrition (general, pellagra), alcoholism, malabsorption (celiac disease, tropical sprue), and pernicious anemia Carcinoma Diabetes mellitus Drugs and toxins Multiple sclerosis Uremia (chronic renal disease). Although not intended as a comprehensive list, Chapter 15, Section 290 of the Medicare Benefit Policy Manual (Pub 100-2) lists some of the most commonly underlying conditions that might justify coverage for routine foot care.
Flat Foot	None
Subluxation of the Foot	Medical or surgical treatment of subluxation of the ankle joint (talo-crural joint). Reasonable and necessary medical or surgical services, diagnosis, or treatment for medical conditions that have resulted from or are associated with partial displacement of structures.
Supportive Devices for Feet	Orthotic shoes that are an integral part of a leg brace (the expense is included as part of the cost of the brace) Therapeutic shoes for diabetic beneficiaries
Therapeutic Shoes for Individuals with Diabetes	A narrow exception permits coverage of special shoes and inserts for certain patients with diabetes. (MBPM, chapter 15, section 140)

Presumption of Coverage for Routine Services

When evaluating whether the routine services can be reimbursed, a presumption of coverage may be made where the evidence available discloses certain physical and/or clinical findings consistent with the diagnosis and indicative of severe peripheral involvement. For the purposes of applying this presumption, please refer to the Medicare Benefit Policy Manual (MBPM), Chapter 15, Section 140.

When the routine services are rendered by a podiatrist, your Medicare carrier may deem the active care requirement met if the claim or other evidence available discloses that the patient has seen an M.D. or D.O. for treatment and/or evaluation of the complicating disease process during the six-month period prior to the rendition of the routine-type services.

The carrier may also accept the podiatrist's statement that the diagnosing and treating M.D. or D.O. also concurs with the podiatrist's findings as to the severity of the peripheral involvement indicated.

Foot Care for Patients with Chronic Disease

Loss of Protective Sensation (LOPS)

Effective for services furnished on or after July 1, 2002, Medicare covers an evaluation (examination and treatment) of the feet no more often than every six months for individuals with a documented diagnosis of diabetic sensory neuropathy and LOPS, as long as the beneficiary has not seen a foot care specialist for some other reason in the interim.

The diagnosis of diabetic sensory neuropathy with LOPS should be established and documented prior to coverage of foot care. Other causes of peripheral neuropathy should be considered and investigated by the primary care physician prior to initiating or referring for foot care for persons with LOPS.

Please refer to the National Coverage Determination Manual, Section 70.2.1, for additional information.

Treatments for Wound Care

Electrostimulation for Wounds (Claims submitted on or after 7/6/2004)

The Centers for Medicare & Medicaid Services (CMS) will allow for coverage for the use of electrical and electromagnetic stimulation for chronic Stage III and Stage IV pressure ulcers, arterial ulcers, diabetic ulcers, and venous stasis ulcers. All other uses of electrical and electromagnetic stimulation for the treatment of wounds are noncovered. Chronic ulcers are defined as ulcers that have not healed within 30 days of occurrence.

Please refer to the National Coverage Decision: NCA for Electrostimulation for Wounds (CAG-00068R) for additional information. National Coverage Decisions are available at http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=28 on the CMS Web site.

Hyperbaric Oxygen (HBO) Therapy for Hypoxic Wounds and Diabetic Wounds of the Lower Extremities (CAG-00060N)

For claims submitted on or after April 1, 2000, HBO therapy in the treatment of diabetic wounds of the lower extremities will be covered in patients who meet each of the following three criteria. Patient has:

• Type I or Type II Diabetes and has a lower extremity wound that is due to diabetes;
• A wound classified as Wagner grade III or higher; and has
• Failed an adequate course of standard wound therapy (defined below).

The use of HBO therapy will be covered as adjunctive therapy only after there are no measurable signs of healing for at least 30-days of treatment with standard wound therapy and must be used in addition to standard wound care.

Failure to respond to standard wound care occurs when there are no measurable signs of healing for at least 30 consecutive days. Wounds must be evaluated at least every 30 days during administration of HBO therapy. Continued treatment with HBO therapy is not covered if measurable signs of healing have not been demonstrated within any 30-day period of treatment.

For more information about HBO therapy for diabetic wounds of the lower extremities, please refer to the National Coverage Determination (CAG-00060N). That document is available at http://www.cms.hhs.gov/mcd/viewdecisionmemo.asp?id=37 on the CMS Web site.

Additional Billing Guidelines

Claims Involving Complicating Conditions

• When submitting claims for services furnished to Medicare beneficiaries who have complicating conditions, the name of the M.D. or D.O. who diagnosed the complicating condition must be submitted with the claim, along with the approximate date that the beneficiary was last seen by the indicated physician.
• Document carefully any convincing evidence showing that non-professional performance of a service would have been hazardous for the beneficiary because of an underlying systemic disease. Stating that the beneficiary has a complicating condition such as diabetes does not of itself indicate the severity of the condition.
• Exceptional situations include initial diagnostic services performed in connection with a specific symptom or complaint if it seems likely that its treatment would be covered even though the resulting diagnosis may be one requiring only noncovered care.
• The exclusion of foot care is determined by the nature of the service and not according to who provides the service. When an itemized bill shows both covered services and noncovered services that are not integrally related to the covered service, the portion of the charges that are attributable to the noncovered services should be denied.
• Sometimes payment is made for incidental noncovered services that are performed as a necessary and integral part of, and secondary to, a covered procedure. For example, if toenails must be trimmed in order to apply a cast to a fractured foot, then the charge for the trimming of nails would be covered.
• However, a separately itemized charge for this excluded service would not be allowed. Please refer to your Medicare contractor for questions about coverage that is "incident to" a covered procedure.
• Information about coverage Incident to Physician's Professional Services can also be found in the Medicare Benefit Policy Manual, Chapter 15, Covered Medical and Other Health Services, Section 60 – Services and Supplies.

Therapeutic Shoes for Individuals with Diabetes (MBPM, Chapter 15, Section 140 )

• Coverage of depth or custom-molded therapeutic shoes and inserts for individuals with diabetes is available as of May 1, 1993.
• These diabetic shoes are covered if the requirements specified in the Medicare Benefits Policy Manual, Chapter 15, Section 140, regarding certification and prescription are met.
• This benefit provides for a pair of diabetic shoes each equipped so that the affected limb, as well as the remaining limb, is protected, for both feet, even if only one foot suffers from diabetic foot disease.
• Claims for therapeutic shoes for diabetics are processed by the durable medical equipment regional carriers (DMERCs). Therapeutic shoes for diabetics are not DME and are not considered DME nor orthotics, but a separate category of coverage under Medicare Part B.

Related Links

Medicare Manuals

The Medicare Benefit Policy Manual, Publication 100-2, Chapter 15 can be found at http://www.cms.hhs.gov/manuals/Downloads/bp102c15.pdf on the CMS Web site.

The Medicare Program Integrity Manual can be found at http://www.cms.hhs.gov/manuals/downloads/pim83c05.pdf on the CMS Web site.

The Medicare Carrier Manual can be found at http://www.cms.hhs.gov/Manuals/PBM/itemdetail.asp?filterType=none&filterByDID=-99&sortByDID=1&sortOrder=ascending&itemID=CMS021921 on the CMS Web site.

The National Coverage Determination Manual can be found at http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp?filterType=keyword&filterValue=national&filterByDID=0&sortByDID=1&sortOrder=ascending&itemID=CMS014961 on the CMS Web site.

Local Coverage Decisions

The Medicare Coverage Database provides access to local coverage decision articles published for Medicare contractors. These articles can be found at http://www.cms.hhs.gov/mcd/index_local_alpha.asp?from=alphaarticle&letter=P on the CMS Web site.

Related Change Requests and MLN Matters Articles

Program Memorandum Transmittal AB-02-096, Change Request 2269, "Coverage and Billing of the Diagnosis and Treatment of Peripheral Neuropathy with Loss of Protective Sensation in People with Diabetes" can be found at http://www.cms.hhs.gov/Transmittals/downloads/AB02096.pdf on the CMS Web site.

Program Memorandum Transmittal AB-02-105, Change request 2272, "Medical Review of Medicare Payments for Nail Debridement Services," can be found at http://www.cms.hhs.gov/Transmittals/Downloads/AB02105.pdf on the CMS Web site.

MLN Matters article, MM3430, "Reasonable charge update for 2005 splints, casts, dialysis supplies, dialysis equipment, therapeutic shoes and certain intraocular lenses" can be found at http://www.cms.hhs.gov/MLNMattersArticles/downloads/mm3430.pdf on the CMS Web site.

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Implementation of the Carrier Jurisictional Pricing Rules for All Purchased Diagnostic Service Claims

I. SUMMARY OF CHANGES: This Change Request (CR) replaces the temporary physician billing instructions specified in CR 3630 (Transmittal 415, issued on December 23, 2004) with new billing procedures to allow all physicians/suppliers to receive the correct payment amount for purchased diagnostic services, based on the ZIP code of the location where the service was rendered, in accordance with the carrier jurisdictional pricing rules specified in Chapter 1, (Section) 10.1.1 of the Medicare Claims Processing Manual.

New / Revised Material
Effective Date: October 1, 2007
Implementation Date: October 1, 2007

Disclaimer for manual changes only: The revision date and transmittal number apply only to red italicized material. Any other material was previously published and remains unchanged. However, if this revision contains a table of contents, you will receive the new/revised information only, and not the entire table of contents.

II. CHANGES IN MANUAL INSTRUCTIONS: (N/A if manual is not updated)
R=REVISED, N=NEW, D=DELETED-Only One Per Row.

R/N/D	Chapter / Section / Subsection / Title
R	1/30.2.9/Payment to Physician or Other Supplier for Purchased Diagnostic Tests - Claims Submitted to Carriers
R	1/30.2.9.1/Payment to Supplier of Diagnostic Tests for Purchased Interpretations

III. FUNDING:

No additional funding will be provided by CMS; Contractor activities are to be carried out within their FY 2007 operating budgets.

IV. ATTACHMENTS:

Business Requirements

Manual Instruction

*Unless otherwise specified, the effective date is the date of service.

Attachment - Business Requirements

Pub. 100-04

Transmittal: 1250

Date: May 25, 2007

Change Request: 5543

SUBJECT: Implementation of the Carrier Jurisdictional Pricing Rules for All Purchased Diagnostic Service Claims

Effective Date: October 1, 2007

Implementation Date: October 1, 2007

I. GENERAL INFORMATION

A. Background: In accordance with Change Request 3481 (Transmittal 341, issued on October 29, 2004),
the Centers for Medicare and Medicaid Services (CMS) implemented a national abstract file of the Medicare Physician Fee Schedule (MPFS) containing the Healthcare Common Procedural Coding System (HCPCS) codes billable as a purchased diagnostic test/interpretation, for every locality throughout the country. Effective with the implementation of the national abstract file on April 1, 2005, CMS changed the carrier jurisdictional pricing rules for purchased diagnostic services to allow suppliers (including laboratories, physicians, and independent diagnostic testing facilities) to bill their local carriers for these services, regardless of the location where the service was performed. (Carrier jurisdictional pricing rules for all other services payable under the MPFS have remained in effect.)

Prior to the implementation of the national abstract file, CMS became aware of a potential problem with reporting the locality data related to physician claims for purchased diagnostic tests/interpretations when these services are performed outside of the local carrier's jurisdiction. Therefore, CMS delayed the implementation of the billing instructions specified in CR 3481 when the claim is billed by a physician for purchased tests/interpretations performed outside of the carrier's geographical service area. In lieu of these instructions, CMS implemented a temporary change in the carrier jurisdictional pricing rules for purchased diagnostic services to allow physicians purchasing out-of-jurisdiction diagnostic tests/interpretations to bill their local carrier for these services and receive the local rate. (See CR 3630, Transmittal 415, issued on December 23, 2004 and CR 3694, Transmittal 464, issued on February 4, 2005.)

This CR replaces the temporary physician billing instructions specified in CR 3630 with new billing procedures to allow physicians/suppliers to receive the correct payment amount for all purchased diagnostic services, including those performed outside of their local carrier's/Medicare Administrative Contractor's (MAC) jurisdiction, based on the ZIP code of the location where the service was rendered, in accordance with the carrier jurisdictional pricing rules.

B. Policy: Effective for claims with dates of service on or after October 1, 2007, carriers/MACs shall use the
national abstract file for purchased diagnostic tests/interpretations to price all claims for purchased diagnostic services based on the ZIP code of the location where the service was rendered, in accordance with the carrier jurisdictional pricing rules specified in Chapter 1, §10.1.1 of the Medicare Claims Processing Manual. Carriers/MACs shall implement the revised billing procedures for physician claims included in this CR in accordance with the business requirements specified in CR 3481 (Transmittal 341, issued on October 29, 2004) and CR 3694 (Transmittal 464, issued on February 4, 2005) for the implementation of the MPFS national abstract file.

Carriers/MACs shall instruct physicians/suppliers to begin reporting the rendering physician's/supplier's information and the location where the service was rendered on all claims for purchased tests/interpretations with dates of services on or after October 1, 2007, including those for tests/interpretations performed outside of the local carrier's jurisdiction, following the instructions in Chapter 1, §10.1.1.2 and §30.2.9 of the Medicare Claims Processing Manual for submitting purchased diagnostic service claims. In accordance with these instructions, carriers/MACs shall also instruct physicians/suppliers not to report the National Provider Identifier (NPI)/Provider Identification Number (PIN) of the out-of-jurisdiction performing physician/supplier when submitting a claim for a diagnostic service purchased outside of their local carrier's/MACs jurisdiction. (Physicians/suppliers must maintain this information on file and provide it, upon request, to their local carrier/MAC.)

Carriers/MACs shall conduct provider education activities to remind physicians/suppliers that they may only submit claims for purchased tests/interpretations when these services are performed within the United States. (In this context, the term "United States" means the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. See Chapter 1, §10.1.4 of the Medicare Claims Processing Manual for additional information.)

II. BUSINESS REQUIREMENTS TABLE

Use"Shall" to denote a mandatory requirement

Number

Requirement

Responsibility (place an "X" in each applicable column)

A / B M A C

D M E M A C

F I

C A R R I E R

D M E R C

R H H I

Shared- System Maintainers F I S S M C S V M S C W F

OTH ER

5543.1

Effective for claims with dates of service on or after October 1, 2007, carriers/MACS shall use the national abstract file for purchased diagnostic tests/interpretations to price all claims for purchased diagnostic services based on the ZIP code of the location where the service was rendered, including those submitted by physicians for purchased diagnostic services performed outside of the local carrier's jurisdiction, in accordance with the carrier jurisdictional pricing rules specified in Chapter 1, §10.1.1 of the Medicare Claims Processing Manual.

X

X

5543.2

Carriers/MACs shall instruct physicians/suppliers to begin reporting the rendering physician's/supplier's information and the location where the service was rendered on all claims for purchased tests/interpretations with dates of services on or after October 1, 2007, including those for tests/interpretations performed outside of the local carrier's jurisdiction, following the instructions in Chapter 1, §10.1.1.2 and §30.2.9 of the Medicare Claims Processing Manual for submitting a purchased diagnostic service claim.

X

X

5543.2.1

Carriers/MACs shall instruct physicians/suppliers notto report the NPI/PIN of the out-of-jurisdiction physician/supplier when submitting a claim for a diagnostic service purchased outside of the local carrier's/MAC's jurisdiction, in accordance with the instructions for submitting a purchased diagnostic service claim.

X

X

III. PROVIDER EDUCATION TABLE

Number

Requirement

Responsibility (place an "X" in each applicable column)

A / B M A C

D M E M A C

F I

C A R R I E R

D M E R C

R H H I

Shared- System Maintainers F I S S M C S V M S C W F

OTH ER

5543.3

A provider education article related to this instruction will be available at http://www.cms.hhs.gov/MLNMattersArticles/ shortly after the CR is released. You will receive notification of the article release via the established "MLN Matters" listserv. Contractors shall post this article, or a direct link to this article, on their Web site and include information about it in a listserv message within one week of the availability of the provider education article. In addition, the provider education article shall be included in your next regularly scheduled bulletin. Contractors are free to supplement MLN Matters articles with localized information that would benefit their provider community in billing and administering the Medicare program correctly.

X

X

5543.4

Carriers/MACs shall conduct provider education activities to remind physicians/suppliers that they may only submit claims for purchased tests/interpretations when these services are provided within the United States (the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa).

X

X

IV. SUPPORTING INFORMATION

A. For any recommendations and supporting information associated with listed requirements, use the box below:
Use "Should" to denote a recommendation.

X-Ref Requirement Number	Recommendations or other supporting information:
5543.1-5543.2.1	Implement in accordance with the business requirements specified in CR 3481, Transmittal 341, issued on October 29, 2004 and CR 3694, Transmittal 464, issued on February 4, 2005.

B. For all other recommendations and supporting information, use this space: N/A

V. CONTACTS

Pre-Implementation Contact(s): Wendy Knarr, Contact Wendy by email Wendy.Knarr@cms.hhs.gov or by dialing National Relay at #711 and have relay agent dial (410) 786-0843.

Post-Implementation Contact(s): Contact the appropriate regional office.

VI. FUNDING

A. For Fiscal Intermediaries, Carriers, and the Durable Medical Equipment Regional Carrier (DMERC), use only one of the following statements:

No additional funding will be provided by CMS; contractor activities are to be carried out within their FY 2007 operating budgets.

B. For Medicare Administrative Contractors (MAC), use the following statement:

The contractor is hereby advised that this constitutes technical direction as defined in your contract. CMS does not construe this as a change to the Statement of Work (SOW). The contractor is not obligated to incur costs in excess of the amounts alloted in your contract unless and until specifically authorized by the Contracting Officer. If the contractor considers anything provided, as described above, to be outside the current scope of work, the contractor shall withhold performance on the part(s) in question and immediately notify the Contracting Officer, in writing or by e-mail, and request formal directions regarding continued performance requirements.

30.2.9 - Payment to Physician or Other Supplier for Purchased Diagnostic Tests - Claims Submitted to Carriers

(Rev. 1250, Issued: 05-25-07, Effective: 10-01-07, Implementation: 10-01-07)

A physician or a medical group may submit the claim and (if assignment is accepted) receive the Part B payment, for the technical component of diagnostic tests which the physician or group purchases from an independent physician, medical group, or other supplier. (This claim and payment procedure does not extend to clinical diagnostic laboratory tests.) The purchasing physician or group may be the same physician or group as ordered the tests or may be a different physician or group. An example of the latter situation is when the attending physician orders radiology tests from a radiologist and the radiologist purchases the tests from an imaging center. The purchasing physician or group may not markup the charge for a test from the purchase price and must accept the lowest of the fee schedule amount if the supplier had billed directly; the physician's actual charge; or the supplier's net charge to the purchasing physician or group, as full payment for the test even if assignment is not accepted. (See section 10.1.1.2 for additional information on purchased diagnostic tests.)

In order to purchase a diagnostic test, the purchaser must perform the interpretation. The physician or other supplier that furnished the technical component must be enrolled in the Medicare program. No formal reassignment is necessary.

Effective for claims received on or after April 1, 2004:

• In order to have appropriate service facility location ZIP code and the purchase price of each test on the claim, when billing for purchased tests on the Form CMS-1500 paper claim form each test must be submitted on a separate claim form. Treat paper claims submitted with more than one purchased test as unprocessable per §80.3.2.
• More than one purchased test may be billed on the ANSI X12N 837 electronic format. When more than one test is billed, the total purchased service amount must be submitted for each service. Treat claims received with multiple purchased tests without line level total purchased service amount information as unprocessable per §80.3.2.
• Treat paper claims submitted for purchased services with both the interpretation and the purchased test on one claim as unprocessable per §80.3.2 unless the services are submitted with the same date of service and same place of service codes. When a claim is received that includes both services, and the date of service and place of service codes match, assume that the one address in Item 32 applies to both services. Effective for claims with dates of service on or after April 1, 2005, each component of the test must be submitted on a separate claim form. Treat paper claims with dates of service after March 31, 2005 submitted with more than one purchased test as unprocessable per §80.3.2.
• ANSI X12N 837 electronic claims submitted for purchased services with both the interpretation and purchased test on the same claim must be accepted. Assume that the claim level service facility location information applies to both services if line level information is not provided.

In order to price claims correctly and apply purchase price limitations, global billing is not acceptable for claims received on the Form CMS-1500 or on the ANSI X12N 837 electronic format. Each component must be billed as a separate line item (or on a separate claim per the limitations described above). Treat the claim as unprocessable per §80.3.2 when a global billing is received and there is information on the claim that indicates the test was purchased.

Effective for claims with dates of service on or after January 25, 2005, carriers must accept and process claims for purchased diagnostic tests when billed by suppliers (including laboratories, physicians, and independent diagnostic testing facilities [IDTFs]) enrolled in the carrier's jurisdiction, regardless of the location where the service was furnished. Effective April 1, 2005, carriers must price purchased diagnostic test claims based on the ZIP code of the location where the service was rendered when billed by a laboratory or an IDTF, using a CMS-supplied national abstract file of the Medicare MPFS containing the HCPCS codes that are payable under the MPFS as either a purchased test or interpretation for the calendar year. Effective for claims with dates of service on or after October 1, 2007, carriers/Medicare Administrative Contractors (MACs) must use the national abstract file to price all claims for purchased diagnostic services, for all provider specialty types (including physicians), based on the ZIP code of the location where the service was rendered, in accordance with the carrier jurisdictional pricing rules specified in §10.1.1. (See IOM Publication 100-04, chapter 23, §30.6, and Addendum for record layouts and instructions for downloading the Abstract File for Purchased Diagnostic Tests/Interpretations.)

NOTE: As with all services payable under the MPFS, the ZIP code is used to determine the appropriate payment locality and corresponding fee for the purchased test/interpretation. When a ZIP code crosses locality lines, CMS uses the dominant locality to determine the corresponding fee.

30.2.9.1 - Payment to Supplier of Diagnostic Tests for Purchased Interpretations

(Rev. 1250, Issued: 05-25-07, Effective: 10-01-07, Implementation: 10-01-07)

A person or supplier that provides diagnostic tests may submit the claim, and (if assignment is accepted) receive the Part B payment, for diagnostic test interpretations which that person or entity purchases from an independent physician or medical group if:

• The tests are initiated by a physician or medical group which is independent of the person or entity providing the tests and of the physician or medical group providing the interpretations;
• The physician or medical group providing the interpretations does not see the patient; and
• The purchaser (or employee, partner, or owner of the purchaser) performs the technical component of the test. The interpreting physician must be enrolled in the Medicare program. No formal reassignment is necessary.

The purchaser must keep on file the name, the National Provider Identifier and the address of the interpreting physician. The rules permitting claims by a facility or clinic for services of an independent contractor physician on the physical premises of the facility or clinic are set forth in §§30.2.7 and 30.2.8.3.

NOTE: This change does not negate the requirement that when an entity either purchases an interpretation or a test, they themselves must perform the other component in order to be paid for the purchased component.

Effective for claims with dates of service on or after January 25, 2005, carriers must accept and process claims for purchased diagnostic interpretations billed by suppliers (including laboratories, physicians, and independent diagnostic testing facilities [IDTFs]) enrolled in the carrier's jurisdiction, for services furnished anywhere in the United States. Effective April 1, 2005, carriers must price claims for purchased interpretations based on the ZIP code of the location where the service was rendered when submitted by a laboratory or IDTF, using a CMS-supplied national abstract file of the MPFS containing the HCPCS codes that are payable under the MPFS as either a purchased test or interpretation for the calendar year. Effective for claims with dates of service on or after October 1, 2007, carriers/MACs must use the national abstract file to price all claims for purchased diagnostic interpretations, for all provider specialty types (including physicians), based on the ZIP code of the location where the service was rendered, in accordance with the carrier jurisdictional pricing rules specified in §10.1.1. (See IOM Publication 100-04, chapter 23, §30.6, and Addendum for record layouts and instructions for downloading the Abstract File for Purchased Diagnostic Tests/Interpretations.)

NOTE: As with all services payable under the MPFS, the ZIP code is used to determine the appropriate payment locality and corresponding fee for the purchased test/interpretation. When a ZIP code crosses county lines, CMS uses the dominant locality to determine the corresponding fee.

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New Durable Medical Equipment, Prosthetics, Orthotics & Supplies (DMEPOS) Certificates of Medical Necessity (CMNs) and DME Information Forms (DIFS) for Claims Processing

Note: This article was revised on May 8, 2007, to show that the effective dates refer to the dates the claims/forms are processed, as opposed to date of service. All other information remains the same.

The Medicare Durable Medical Equipment Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program Final Regulation is now available. CMS has also announced the first 10 metropolitan areas in which competition will occur as well as the first items to be competitively bid. Visit the CMS Web site at http://www.cms.hhs.gov/competitiveacqfordmepos/ to view the rule and get more information.

Provider Types Affected

Physicians (when ordering DMEPOS) and suppliers using CMNs and DIFs when billing to Medicare durable medical equipment regional carriers (DMERCs) or DME Medicare Administrative contractors (DME/MACs).

Provider Action Needed

STOP – Impact to You

The Centers for Medicaid & Medicare Services (CMS) has developed improved CMNs and DIFs that are consistent with current medical practices and conform to Medicare guidelines. Through this process, CMS revised several CMNs and replaced three CMNs with two DIFs. This information was previously communicated in MLN Matters article MM4296 (http://www.cms.hhs.gov/MLNMattersArticles/downloads/MM4296.pdf).

CAUTION – What You Need to Know

The transition period has been extended for claims processed from October 1, 2006, through June 30, 2007. During this transition period claims for items requiring a CMN or DIF will be accepted with either the old or the new form. For CMN/DIF forms processed on or after July 1, 2007, the old CMN/DIF forms will no longer be accepted.

GO – What You Need to Do

Be sure your staff are aware that the transition period for use of the new forms has been extended through June 30, 2007.

Background

CMNs provide a mechanism for suppliers of durable medical equipment, defined in 42 United States Code (U.S.C.) §1395x(n) and medical equipment and supplies defined in 42 U.S.C. §1395j(5), to demonstrate that the item they provide meets the minimal criteria for Medicare coverage.

CMNs contain section A through D. Sections A and C are completed by the supplier and Sections B and D are completed by the physician. A DME DIF is completed and signed by the supplier. It does not require a narrative description of equipment and cost or a physician signature. Contractors review the documentation provided on the CMNs and DIF.

Recap of MM4296 Information

As previously reported in MLN Matters article MM4296, the changes to the CMN forms have resulted in the following:

• Medicare Program Integrity Manual, Chapter 5, Items and Services Having Special DME Review Considerations, has been revised.
• The improved forms permit the use of a signature and date stamp that has resulted in revision of the Medicare Program Integrity Manual, Chapter 3, Section 3.4.1.1, Documentation Specifications for Areas Selected for Prepayment or Post Payment Medical Review.
• These new forms were approved by the Office of Management and Budget (OMB).
• For the CMS-484 form, the OMB # is 0938-0534.
• For the CMS forms 846, 847, 848, 849, 854, 10125 and 10126, the OMB # is 0938-0679.

Claims Accepted During Transition Period

The following table identifies the old versions of the CMNs, which are acceptable for claims processed during the transition period from October 1, 2006, through June 30, 2007. (For CMN/DIF forms processed on or after July 1, 2007, the old forms will no longer be accepted.)

DMERC FORM	CMS FORM	ITEMS ADDRESSED
484.2	484	Home Oxygen Therapy
01.02A	841	Hospital Beds
01.02B	842	Support Surfaces
04.03B	846	Lymphedema Pumps (Pneumatic Compression Devices)
04.03C	847	Osteogenesis Stimulators
06.02B	848	Transcutaneous Electrical Nerve Stimulators (TENS)
07.02A	849	Seat Lift Mechanisms
09.02	851	External Infusion Pumps
10.02A	852	Parenteral Nutrition
10.02B	853	Enteral Nutrition
11.01	854	Section C Continuation Form

Newly Revsed CMNs Accepted During Transiton Period

The following table identifies the newly revised CMNs that will be accepted for claims processed during the transition period for claims from October 1, 2006, through June 30, 2007. (These forms are available at http://www.cms.hhs.gov/CMSForms/CMSForms/list.asp#TopOfPage.) For forms processed on or after July 1, 2007, these forms will become effective for claims for items requiring a CMN.

Noteworthy changes include changing the title of CMS-484 from Home Oxygen Therapy to Oxygen. In addition, the title of CMS-846 was changed from Lymphedema Pumps to Pneumatic Compression Devices.

DME MAC FORM	CMS FORM	ITEMS ADDRESSED
484.03	484	Oxygen
04.04B	846	Pneumatic Compression Devices
04.04C	847	Osteogenesis Stimulators
06.03B	848	Transcutaneous Electrical Nerve Stimulators (TENS)
07.03A	849	Seat Lift Mechanisms
11.02	854	Section C Continuation Form

New DIFs Accepted During Transition Period

The following table identifies the new DIFs that will also be accepted during the transition period for claims processed from October 1, 2006, through June 30, 2007. (These forms are available at http://www.cms.hhs.gov/CMSForms/CMSForms/list.asp#TopOfPage.) For forms processed on or after July 1, 2007, the new forms will become effective for claims for items requiring a DIF.

Noteworthy changes include changing CMS-851 for Infusion Pump