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HIPAA: Hospice Care Services Code Conversion

HIPAA-mandated changes to the billing requirements for the hospice code conversion are effective for dates of service on or after June 1, 2016. These changes include the use of revenue codes and/or HCPCS Level II national codes. The following FAQs provide an overview of the conversion to revenue codes and/or HCPCS Level II codes and point to resources for additional information.

  1. What does the conversion from HCPCS Level III codes to revenue codes and/or HCPCS Level II codes mean?

    The conversion means that any provider submitting HCPCS Level III codes for hospice services will be required to submit claims using the specified revenue codes and/or HCPCS Level II codes for dates of service on or after June 1, 2016.

  2. What is HIPAA and how does it relate to HCPCS Level II codes?

    HIPAA is the acronym for the Health Insurance Portability and Accountability Act that was passed by Congress in 1996. HIPAA does the following:

    • Provides the ability to transfer and continue health insurance coverage for millions of American workers and their families when they change or lose their jobs
    • Reduces health care fraud and abuse
    • Mandates industry-wide standards for health care information on electronic billing and other processes
    • Requires the protection and confidential handling of protected health information
  3. Why is the conversion happening?

    California has historically used thousands of HCPCS Level III or local (also known as interim) codes for billing and reimbursement of services and supplies. National codes, such as Current Procedural Terminology (CPT) codes and Healthcare Common Procedural Coding System (HCPCS) codes, are typically more general in comparison to local codes. Using CPT-4, revenue and/or HCPCS Level II codes will:

    • Simplify processes and decrease the costs associated with payment for health care services
    • Improve the efficiency and effectiveness of the health care system and decrease administrative burdens on providers (that is, medical practices, hospitals and health care plans)
    • Provide standardization and consistency in medical service coding
    • Characterize a general administrative situation, rather than a medical condition or service, by using non-clinical or non-medical code sets
  4. When will this conversion take place?

    The effective date of service for the conversion from HCPCS Level III codes to revenue codes and/or HCPCS Level II codes is on or after June 1, 2016.

  5. What is a revenue code and why is it used?

    Revenue codes are codes that identify specific accommodations, ancillary services, unique billing calculations or arrangements. These codes permit facilities to bill for facility usage and services rendered. Many of these services do not have corresponding procedure codes. HIPAA requires that payers (including Medi-Cal) accept revenue codes and utilize them in claim adjudication.

  6. Who is affected by the conversion?

    Any provider submitting hospice claims with dates of service on or after June 1, 2016, or Treatment Authorization Requests (TARs) with dates of service on or after June, 1, 2016, will be required to use revenue codes and/or HCPCS Level II codes identified in the Hospice Care Services Code Conversion and Billing Instructions.

  7. How will the conversion impact my TARs on or after the effective date?

    Effective for dates of service on or after June 1, 2016, TARs submitted with HCPCS Level III local hospice codes will no longer be accepted. All TARs submitted with dates of service on or after June 1, 2016, will require HCPCS Level II national codes.

  8. Will TARs need to be submitted with revenue codes on or after the effective date?

    TARs should only be submitted with revenue code 0656 in combination with HCPCS code T2045 (general inpatient care [no respite]/hospice general care) for dates of service on or after June 1, 2016. TARs should not include any other revenue codes for dates of service on or after June 1, 2016.

  9. What happens if a revenue code is not included on the hospice claim after the effective date?

    Hospice claims submitted without a revenue code for dates of service on or after June 1, 2016, will be denied.

  10. What happens if a revenue code is included on the hospice claim prior to the effective date?

    Hospice claims submitted with a revenue code prior to June 1, 2016, will be denied.

  11. How will the conversion impact claims billed with dates of service on or after the effective date?

    Effective for dates of service on or after June 1, 2016, all claims billed with HCPCS Level III hospice codes will no longer be eligible for reimbursement.

    All TARs with HCPCS Level III local hospice codes, regardless of status (approved, retroactive or deferred), will be end-dated for dates of service on or after June 1, 2016. Providers are encouraged to submit new TARs or electronic TARs (eTARs) with the appropriate HCPCS Level II national code(s), prior to June 1, 2016.

    Providers should refer to the Hospice Care Services Code Conversion: TAR Policy Update article for additional information.

  12. If I submit a new TAR on or after the effective date, should I use HCPCS Level II or Level III codes?

    Providers submitting new TARs for service periods on or after June 1, 2016, should no longer use the discontinued HCPCS Level III codes for hospice services. New TARs must be submitted with HCPCS Level II national codes for service periods on or after June, 1, 2016.

  13. What billing policy changes should I expect to see with HCPCS Level II codes on or after June 1, 2016?

    For dates of service on or after June 1, 2016, hospice care billing policy will be updated to accommodate the following revenue codes and/or HCPCS Level II codes:

    Revenue Code/
    HCPCS Level II Codes
    Revenue Code/
    HCPCS Level II Code Descriptions
    Authorization
    0651 Routine home care TAR is not required
    0652 Continuous home care TAR is not required
    0655 Inpatient respite care TAR is not required
    0656/T2045 General inpatient care
    (no respite)/hospice general care
    TAR is required
    0657 Physician’s services TAR is not required
  14. Will the hospice code conversion impact current hospice rates?

    Rates will not be updated as a result of this code conversion.

  15. Will CA-MMIS accept claims submitted with revenue codes prior to the effective date?

    Claims submitted with revenue codes in the Revenue Code claim field for dates of service prior to June 1, 2016, will not be reimbursed.

  16. Will this code conversion project address the separate rates for Routine Home Care (RHC) as well as the Service Intensity Add-On (SIA)?

    The changes required to comply with CMS-1629-F, FY 2016 Hospice Wage Index and Payment Rate Update and Hospice Quality Reporting Requirements, will not be addressed with this project. A subsequent project is underway to address this issue.

  17. What frequency limitations will be applied to hospice revenue codes after the effective date?

    The following frequency limitations will be applied to the revenue codes on or after the effective date:

    Revenue Code/
    HCPCS Level II Codes
    Revenue Code/
    HCPCS Level II Code Descriptions
    Frequency Limitations
    0651 Routine home care One unit per claim line, per day
    0652 Continuous home care Minimum of eight hours (units)

    Maximum of 24 hours (units) per claim line/per day
    0655 Inpatient respite care One unit per claim line, per day and limit of five days for each episode (stay)

    Note: Services billed beyond five days for each episode will be paid at the routine home care rate (revenue code 0651) for additional days
    0656/T2045 General inpatient care (no respite)/hospice general care One unit per claim line, per day
    0657 Physician’s services One unit per claim line, per day
  18. What happens if a claim is billed with revenue code 0656 on or after the effective date, but it doesn't include a procedure code? What if it includes an incorrect procedure code?

    For dates of service on or after June 1, 2016, hospice claims billed with revenue code 0656 without a corresponding procedure code will be denied. For the same dates of service, hospice claims billed with revenue code 0656 and an incorrect procedure code will also be denied. Claims submitted with revenue code 0656 must include procedure code T2045 and a TAR.

  19. Where do I find more information related to the hospice code conversion from HCPCS Level III codes to revenue codes and/or HCPCS Level II codes?

    Providers may request additional onsite or telephone support via the Telephone Service Center (TSC) at 1-800-541-5555, available 8 a.m. to 5 p.m., Monday through Friday.

    For additional information, providers may also:

    Providers who would like to receive monthly email notification for newly published Medi-Cal Update bulletins should complete the MCSS Subscriber Form.