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Upcoming Changes: HIPAA Code Conversion for Local Modifier ZS

August 16, 2013

As part of the continuing effort to comply with the federally mandated Health Insurance Portability and Accountability Act (HIPAA), the following change is slated to be effective for dates of service on or after December 1, 2013:

The Department of Health Care Services (DHCS) will discontinue use of local modifier ZS, which is used to bill for the full professional (26) and technical (TC) components of a procedure.
Claim Completion
Providers will be instructed to use one of the following scenarios when submitting a claim for split-billable procedures or services:
Scenario 1: The facility and physician each bill for their respective component of the service with modifiers 26 or TC.
Each provider/facility submits their own claim with one line of service and the appropriate modifier (26 or TC) designating the service they provided.

Scenario 2: Full Fee Billing – The physician bills for both the professional and technical components and subsequently reimburses the facility for the technical component, according to their mutual agreements.
The physician submits a CMS-1500 claim form and completes two separate claim lines as follows:
The first line contains the split-billable procedure code and one of the two modifiers (26 or TC). The second line contains the same procedure code and the corresponding modifier (26 or TC).

Scenario 3: Standard Billing – The facility bills for both the technical and professional components and reimburses the physician for the professional component, according to their mutual agreements.
The facility submits a UB-04 claim form and completes two separate claim lines as follows:
The first line contains the split-billable procedure code and one of the two modifiers (26 or TC). The second line contains the same procedure code and the corresponding modifier (26 or TC).

TAR Completion
Providers will be instructed to use one of the following scenarios when submitting a Treatment Authorization Request (TAR) for split-billable procedures or services:

Scenario 1: One TAR and one provider for both the professional (26) and technical (TC) components of service.
The TAR must be submitted with two lines of service. The first line must have the CPT-4 code and one of the two modifiers (26 or TC). The second line must have the same CPT-4 code and the corresponding modifier (26 and TC).

Scenario 2: One TAR and two different providers for the professional (26) and technical (TC) components of service.
One of the providers submits the TAR on behalf of both providers of the two components of service (26 and TC). Both providers use the same TAR for claim submission. The TAR is submitted with two lines of service. The first line must have the CPT-4 code and one of the two modifiers (26 or TC). The second line must have the same CPT-4 code and the corresponding modifier (26 and TC).

This is the preferred method for two different providers.

Scenario 3: Two TARs and two different providers for the professional (26) and technical (TC) components of service.
Each provider submits their own TAR with one line of service and the appropriate modifier designating the service (26 or TC) they provided or will provide.

Manual pages reflecting these changes will be released in a future Medi-Cal Update.