Medi-Cal has tentatively scheduled the first implementation phase to become effective September 22, 2003. The following information provides more details about this first implementation of HIPAA standards.

Click on one of the following links to go directly to that section of this article:

• Transaction Standards Schedule
• Health Care Claims (ASC X12N 837)
• Retail Pharmacy Claims
• Remittance Advice (Health Care Claim Payment/Advice) for all Claim Types (ASC X12N 835)
• Health Care Eligibility Benefit Inquiry and Response (ASC X12N 270/271)
• Health Care Claim Status Inquiry and Response (ASC X12N 276/277)
• Health Care Services Review/Treatment Authorization Request (ASC X12N 278)
• Health Care Plan Payment (ASC X12N 820)
• Health Care Plan Enrollment (ASC X12N 834)
• Functional Acknowledgement (not mandated by HIPAA)
• Unsolicited Claim Status (not mandated by HIPAA)
• Other Non-Mandated Transactions
• Testing
• Technical Specifications/Companion Guides
• Frequently Asked Questions

Transaction Standards Schedule
Medi-Cal will implement the following standards:

* Accredited Standards Committee (ASC X12N)
** National Council for Prescription Drug Programs (NCPDP)

Health Care Claims (ASC X12N 837)
Medi-Cal will begin accepting the ASC X12N 837 standard transaction (including Addenda) formats for Professional (004010X098A1) and Institutional (004010X096A1) claims September 22, 2003. Non-standard and proprietary electronic claim formats will be phased out after October 2003. During this phase-out, it is anticipated that some field values of the non-standard and proprietary electronic claim formats will be modified. Revised non-standard and proprietary Computer Media Claims (CMC) technical specifications identifying these changes will be made available in a future Medi-Cal Update and on the Medi-Cal Web site.

Some functionality of the ASC X12N 837 standard transaction will be implemented after October 2003, such as claim replacement (adjustments/voids), increased claim line limits (up to 50 lines for Professional and up to 999 lines for Institutional), and provider-generated coordination of benefits for Medicare/Medi-Cal crossover claims and claims requiring attachments. Current Medi-Cal CMC specifications for electronic claim line limits, paper billing requirements and instructions for adjustments, voids and Medicare/Medi-Cal crossover claims will remain in effect.

HIPAA mandates the use of standard code sets for transactions. These standard code sets include national drug codes, ICD-9-CM codes, CPT-4 codes and HCPCS codes. HIPAA also mandates the standardization of internal (administrative) code sets, such as condition codes, revenue codes, Place of Service codes, delay reason codes, patient status codes, etc. State-only local codes currently applied within Medi-Cal will be phased out. The conversion of local codes for medical service codes and internal or administrative codes will be similar to the current annual HCPCS update process in which code application is effective based on the date of service.

Medi-Cal will adopt the HIPAA standards for the following code sets on both electronic and paper claim forms:

Medi-Cal will continue to phase in the conversion of all other local codes not identified above after October 2003. To ensure timely reimbursement, providers should continue to follow existing Medi-Cal billing instructions until otherwise instructed.

Provider feedback is critical to the success of code conversion. As Medi-Cal continues reviewing the correlation between local and national codes, providers, provider groups and associations will be encouraged to participate in feedback forums. Further details will be published as this effort progresses. Medi-Cal is planning to publish code conversion correlation tables early this summer to facilitate provider transition and preparedness.

Medi-Cal’s claims system is expanding to accommodate the use of up to four modifiers per claim line. However, the policy of multiple modifiers is still being evaluated and developed. As policies are defined for using multiple modifiers, billing instructions for both electronic and paper claim billing will be developed and released in a future Medi-Cal Update and on the Medi-Cal Web site.

Medi-Cal anticipates significant changes for both electronic and paper billing submission requirements over the course of the year. These changes will be communicated in Medi-Cal Updates, the Medi-Cal Web site and provider training sessions. Please check the Medi-Cal Web site and provider bulletins regularly for the latest information regarding these changes.

Retail Pharmacy Claims
Medi-Cal began accepting retail pharmacy drug claims in the National Council for Prescription Drug Programs (NCPDP) Version 5.1 (Telecommunication) and Version 1.1 (Batch) on April 29, 2002. Version 3.2 (Telecommunication) will be phased out. Computer Media Claims (CMC) Medi-Cal Proprietary Pharmacy Version (Batch) is no longer accepted. To correspond with the data element changes mandated by the NCPDP electronic standard, the paper Medi-Cal Pharmacy Claim Form (30-1) was modified. The previous version (Version 5) of the claim form was discontinued effective October 1, 2002.

Medi-Cal will begin accepting retail pharmacy compound drug claims in the NCPDP Version 5.1 (Telecommunication) standard September 22, 2003. Draft Technical Specifications will be posted to the Medi-Cal Web site later this spring. To correspond with the data element changes mandated by the NCPDP electronic standard for compound drugs, a new paper Medi-Cal Pharmacy Compound Drug Claim Form (30-4) will be implemented. Additional information regarding compound drug electronic submission, the new claim form and associated billing instructions will be communicated in future Medi-Cal Updates and on the Medi-Cal Web site. Please check the Medi-Cal Web site and provider bulletins regularly for the latest information regarding these changes.

At this time, Medi-Cal system modifications to accept NCPDP eligibility and prior authorization transactions are being evaluated. Implementation dates have not been scheduled.

Remittance Advice (Health Care Claim Payment/Advice) for all Claim Types (ASC X12N 835) Medi-Cal will begin generating the ASC X12N 835 004010X091A1 standard transaction (including Addenda) format for the claims remittance advice October 1, 2003 for claims adjudicated on or after September 22, 2003. Providers who elect to receive an electronic remittance advice in the 835 standard transaction format will be able to download the remittance advice from the Internet Bulletin Board System (IBBS) beginning October 1, 2003. In addition to the Adjustment Reason codes required in the standard transaction format, Medi-Cal has elected to provide the situational Health Care Remarks codes as well. The Health Care Remarks codes provide an additional level of detail not contained in the Adjustment Reason codes. Medi-Cal has begun correlating the Adjustment Reason codes and Remarks codes with the Remittance Advice Details (RAD) codes currently used on the paper remittance advice. It is not anticipated that all RAD code correlations to Remarks codes will be finalized by October 1, 2003. However, Medi-Cal plans to publish code conversion correlation tables this spring to facilitate provider transition and preparedness.

Providers who currently receive electronic remittance advice via the Automated Remittance Details Services (ARDS) may continue to do so. There will be modifications to ARDS after October 2003, which will be communicated in a future Medi-Cal Update and on the Medi-Cal Web site.

Health Care Eligibility Benefit Inquiry and Response (ASC X12N 270/271)
Medi-Cal will not implement the ASC X12N 270/271 standard transactions by October 2003. Medi-Cal currently uses the fields associated with the ASC X12N 270/271 standard transactions for processing eligibility information in real time. The current Medi-Cal system was developed using the ASC X12N 270/271 3070 version transaction standard. At a later date, the system will be updated to the 004010X092A1 implementation guide specifications and a new batch eligibility transaction will be developed.

No major changes will be made to the following interactive eligibility verification applications: Automated Eligibility Verification System (AEVS), Point of Service (POS) device and Web application. However, the Claims and Eligibility Real-Time System (CERTS) software will be phased out by October 2003.

Health Care Claim Status Inquiry and Response (ASC X12N 276/277)
Medi-Cal will not implement the ASC X12N 276/277 batch standard on the IBBS by October 2003. At a later date, the existing Automated Provider Services Web claims status application will be modified to accept the national claims status codes. Potential changes to the claim status transactions on the Provider Telecommunications Network (PTN) are being evaluated at this time.

Health Care Services Review/Treatment Authorization Request (ASC X12N 278)
Medi-Cal will not implement the ASC X12N 278 standard transaction by October 2003. Medi-Cal continues to develop and enhance the functionality of the Web-based electronic Treatment Authorization Request (eTAR). This application reflects format and content requirements of the ASC X12N 278 transaction standard, but it is not HIPAA-compliant. Medi-Cal will assess and evaluate the changes mandated in the Addenda for this transaction. Eventually, implementation of the ASC X12N 278 transaction will be available via the Internet and electronic batch transactions.

Health Care Plan Payment (ASC X12N 820)
Because Fee-For-Service Medi-Cal does not currently perform the business function defined in the federal regulation for the ASC X12N 820 standard transaction, it is not applicable to the EDS claims processing system and will not be implemented.

Health Care Plan Enrollment (ASC X12N 834)
Because Fee-For-Service Medi-Cal does not currently perform the business function defined in the federal regulation for the ASC X12N 834 standard transaction, it is not applicable to the EDS claims processing system and will not be implemented.

Functional Acknowledgement (not mandated by HIPAA)
Medi-Cal currently provides a proprietary acknowledgement for all electronic submissions that gives more information than the non-mandated standard 997 Functional Acknowledgement. Therefore, Medi-Cal has opted to continue use of the proprietary acknowledgement for all electronic transactions, including the new ASC X12N 837 version 4010A1.

Unsolicited Claim Status (not mandated by HIPAA)
Medi-Cal does not plan to use the ASC X12N 277 version 3070 Health Care Payer Unsolicited Claim Status to convey pended claim information in an unsolicited manner. Pended claim information can still be obtained from the paper RAD or from ARDS.

Other Non-Mandated Transactions
There are several other non-mandated transactions such as the ASC X12N 277 (Health Care Claim Acknowledgement) and the ASC X12N 824 (Implementation Reporting Guide) that HIPAA-covered entities may opt to implement to report various transaction level errors. Medi-Cal will not be adopting any of these non-mandated transactions at this time.

Testing
Medi-Cal is not currently prepared to accept or acknowledge test transactions from its trading partners. However, electronic billing activation and media testing for the ASC X12N 837 Professional (004010X098A1) and Institutional (004010X096A1) standard transactions will be required for all CMC submitters.

Medi-Cal will perform beta testing for transaction submission, system processing and remittance advice generation with a pre-determined select group of providers, submitters, vendors and clearinghouses. Beta tests are currently scheduled for mid-to-late summer for both the ASC X12N 835 and ASC X12N 837 transactions. More information regarding testing will be provided in future Medi-Cal Updates and on the Medi-Cal Web site.

Technical Specifications/Companion Guides
Medi-Cal is adopting the industry standard nomenclature for technical specifications. As a result, X12N-based specifications will now be referred to as Companion Guides. NCPDP-based specifications will continue to be referred to as Technical Specifications.

Currently, Medi-Cal draft Companion Guides are available on the Medi-Cal Web site under the HIPAA ASC X12N Technical Specifications link. Medi-Cal does not expect substantive changes to the draft specifications and encourages providers, submitters, vendors and clearinghouses to review them and prepare for internal testing based on these guides. These drafts will be finalized following the testing phase scheduled for June through September. The Companion Guides will be published in their final form by October 2003.

As stated earlier, Medi-Cal plans to post draft NCPDP Telecommunications 5.1 compound drug Technical Specifications to the Medi-Cal Web site later this spring. Similar to the Companion Guide schedule, the specifications will be finalized following the testing phase slated for late summer, and published in their final form by October 2003.

Medi-Cal is introducing a new protocol for communicating changes to draft Companion Guides and Technical Specifications. During the draft timeframe, corrections will be addressed on a monthly basis, as needed. A change log will also be included to identify at a glance which sections have been refreshed. Please check the Medi-Cal Web site regularly for the latest information regarding these publications.

Frequently Asked Questions
Medi-Cal has developed a Frequently Asked Questions section regarding HIPAA that can be accessed on the Medi-Cal Web site by clicking HIPAA Update and then HIPAA Frequently Asked Questions. Providers are encouraged to check the Web site for weekly updates. For more information about HIPAA and Medi-Cal’s implementation plan, call the Provider Support Center (PSC) at 1-800-541-5555 and select prompt option "4."