Effective July 1, 2006, Medi-Cal implemented important changes to the Vision Care program to be in compliance with the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Several of these significant changes included:

• A “crosswalk” of all of Medi-Cal interim procedure and qualifying codes to National Healthcare Common Procedure Coding System (HCPCS) codes and modifiers.
• Replacing the Payment Request for Vision Care and Appliances (45-1) claim form with the CMS-1500 claim form.
• Creating a new Treatment Authorization Request system for medically necessary eye appliances.

Most of these changes implemented successfully on July 1, 2006 and significantly streamlined the processing of Vision claims.

One requirement that continues to cause erroneous claim denials since July 01, 2006 involves the claim form that is used by Institutional providers such as outpatient clinics, community clinics and hospitals to bill for vision services – excluding eye appliances and eyeglass dispensing.

Effective July 1, 2006, Medi-Cal required all providers that bill for Vision services to submit all claims on the CMS-1500 claim form or the ASC X12N 837 v.4010A1 Professional (837p) electronic transaction format. Institutional providers that adhered to these instructions did not experience erroneous denial of their claims.

Vision Claims Denials with RAD 139, 169 and 362
Institutional providers that billed for Vision services using the UB-04 claim or the ASC X12N 837 v.4010A1 Institutional (837i) electronic transaction format experienced claim denials with the Remittance Advice Details (RAD) code 139: Procedure/service is invalid for claim type on date of service.

To accommodate requests from Institutional providers to use of the UB-04 claim form or the 837i electronic transaction to bill for Vision services (excluding eye appliances and eyeglass dispensing), Medi-Cal changed its policy in January 2008. This change updated the claims processing system to allow these claims to process retroactively with Dates of Service (DOS) on or after July 01, 2006. Unfortunately, Institutional providers that followed the updated instructions continued to experience claim denials with RAD code 139.

Medi-Cal recently discovered that these updates caused a system error that also impacted the proper adjudication of non-institutional Vision claims. As a result, non-institutional Vision care providers such as optometrists, ophthalmologists and dispensing opticians recently experienced erroneous denials with the following RAD codes:

• RAD code169: This service is not payable when billed with this diagnosis.
• RAD code 362: Procedure number billed is not an authorized Medi-Cal procedure code.

Therefore, Medi-Cal regrets to inform Institutional providers that requests to adjudicate Vision claims on the UB-04 claim form or the 837i electronic transaction cannot be accommodated at this time.

To correct the system error, Medi-Cal will temporarily hold all Vision claims for both Institutional and non-institutional providers. Medi-Cal also requests that all Institutional providers do not submit additional claims for Vision services on the UB04 claim form or the 837i electronic format because these claims will not be paid.

For all claims to be adjudicated properly, Medi-Cal is instructing all Institutional providers to bill all claims on the CMS-1500 claim form or 837p electronic format effective immediately for all claims with a DOS on or after July 01, 2006.

Medi-Cal is working diligently to identify all claims billed since July 1, 2006 that were denied inappropriately due to the system error. When the system is finally updated, all claims on hold will be adjudicated and an Erroneous Payment Correction will be implemented to pay all claims that were previously denied erroneously with RAD codes 139, 169 or 362.

Medi-Cal is aware these denials have a serious negative fiscal impact to providers and is sensitive to “Access to Care” issues. Medi-Cal intends to work quickly to rectify all issues efficiently for all of its Vision care providers.