Medi-Cal Update

Therapies | March 2011 | Bulletin 426

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1. E&M Observation Codes Clarification

Medi-Cal has never recognized outpatient observation as a legitimate status within the hospital. Therefore a patient ordered to “observation status” by Medi-Cal providers is determined to be admitted as “inpatient status” by Medi-Cal for purposes of reimbursement.

The 2011 CPT-4 code book lists outpatient observation services under Evaluation and Management (E&M) codes 99217 – 99220 and 99234 – 99236 as defined in the Medicare Intermediary Manual, Part 3, Claims Process, Section 3112.8. Since Medi-Cal does not recognize “observation status” outside of inpatient admission, the corresponding E&M observation care codes never should have been reimbursed as benefits of the program. As a result, providers were notified in the January 2011 Medi-Cal Update that E&M observation care codes were deleted as Medi-Cal benefits. Effective February 1, 2011, providers were appropriately denied for codes 99217 – 99220 and 99234 – 99236.

Inpatient E&M codes 99221 – 99223, 99231 – 99233, 99238, and 99239 remain benefits and may be billed when appropriate. Because “observation status” is considered by Medi-Cal to be “inpatient status,” the above E&M inpatient codes should be used whenever a patient is admitted to observation status.

 

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2. New Correct Coding Initiative Provider Manual Section

A new manual section, Correct Coding Initiative: National has been developed to help providers understand how the federally mandated National Correct Coding Initiative (NCCI) will impact claims processing and reimbursement.

Note:

The information in the provider manuals is a supplement only to information maintained at the Centers for Medicare & Medicaid Services (CMS) website ( NCCI Edits Overview ). Providers must use the CMS website as the primary source of NCCI information.

Effective March 28, 2011, claims processed with dates of service retroactive to October 1, 2010, will be subject to NCCI edits.

NCCI Impacts Use of Modifiers on TARs, SARs and Claims
NCCI impacts the use of modifiers on Treatment Authorization Requests (TARs), electronic Treatment Authorization Requests (eTARs), Service Authorization Requests (SARs) and claims. Multiple national modifiers noted in the table below may not be entered on the same service line of any TAR, eTAR, SAR or claim or it will be deferred or denied. (The impact to TARs, eTARs and SARs is expected to be minor.)

Modifier Description (see code book for full description)
Anatomical Modifiers
E1 – E4 Anatomic areas of the eye lid
F1 – F9, FA Hands and digits
LC, LD, RC Anatomic areas of the coronary arteries
LT, RT Left and right sides of the body
T1 – T9, TA Foot and toes
Global Surgery Modifiers
25 Separate Evaluation & Management (E&M) on the same day
58 Staged or related procedure by same physician during postop period
78 Unplanned return to the operating/procedure room
79 Unrelated procedure or service during postop period
Other Modifiers
59 Distinct procedural service
91 Repeat clinical diagnostic laboratory test

Effect on Claims for Multiple Births
With addition of NCCI edits to the claims processing system, claims for multiple and duplicate services will receive greater scrutiny. Claims submitted for multiple births billed under the mother’s Medi-Cal ID could be impacted. To avoid claim denial, providers should use NCCI-associated modifier 25 as illustrated in Figures 2 and 3 in the Pregnancy Examples: CMS-1500 section of the appropriate Part 2 manual.

Effect on Reimbursement
The Medi-Cal claims processing system already reviews claims for many of the same edits as NCCI. However, it is expected the NCCI edits will further impact reimbursement.

Claims Already Submitted
Claims with dates of service on or after October 1, 2010, which were processed prior to the implementation of NCCI on March 28, 2011, will not be reprocessed to enforce NCCI edits; however, claims processed or reprocessed on or after March 28, 2011, with dates of service on or after October 1, 2010, will be subject to NCCI claim edits.

Documentation for Medical Justification
NCCI does not require the submission of any additional documentation beyond what is currently required when providing justification for those services for which medical necessity is allowed to support the billing of a quantity above the usual practice. Existing documentation requirements will remain in order to allow for additional units of service to be paid for both the NCCI Medically Unlikely Edits (MUEs) and the Medi-Cal quantity limits.

Voiding of Previously Paid Column 2 Claims
When a column 1 claim is processed after a claim for column 2 services has already been paid, the claim for the column 1 service will be paid and the previously paid claim for the associated column 2 service will be voided.

Claim Denial and Appeal
Claims Inquiry Forms (CIFs) will not be accepted for claims denied as a result of NCCI edits. An appeal must be submitted for reconsideration of payment in excess of the normally allowed MUE amount and for reconsideration of claims denying for Column 1/Column 2 edits where an appropriate NCCI-associated modifier was not supplied.

Services Affected
NCCI edits will not be applied to every Medi-Cal service and claim. Only claims for the following services will be subject to NCCI edits:

Additional Information and Training
Providers may refer to the downloadable National Correct Coding Initiative Policy Manual for Medicaid Services for supplemental NCCI information. Additionally, information will be available from:

 This information is reflected in the following provider manual(s):

 
Provider Manual(s) Page(s) Updated
Part 1 cif (1); remit cd500 (3); remit cd9000 (55); remit elect corr500 (4); remit elect corr9900 (4); remit elect corr hcrc (1, 2, 4)
Adult Day Health Care appeal form (7); cif co (1, 2); correct (1–6); remit adv (3); remit pay (3)
AIDS Waiver Program appeal form (7); cif co (1, 2); correct (1–6); modif (2); modif app (1–5, 7, 8, 11, 14–16); remit adv (3); remit pay (3)
Audiology and Hearing Aids Durable Medical Equipment and Medical Supplies Therapies appeal form (7); cif co (1, 2); cms comp (17); correct (1–6); modif app (1–5, 7, 8, 11, 14–16); remit adv (3); remit pay (3)
Chronic Dialysis Clinics appeal form (7); cif co (1–2); correct (1–6); modif (2); modif app (1–5, 7, 8, 11, 14–16); modif used (2); path bil (13); path bil ub (2, 4); remit adv (3); remit pay (3)
Clinics and Hospitals appeal form (7); cif co (1–2); correct (1–6); modif (2); modif app (1–5, 7, 8, 11, 14–16); modif used (2); path bil (13); path bil ub (2, 4); preg early (12); radi dia (1–2); radi dia ult (3); radi nuc (4); radi onc (1, 4–5); remit adv (3); remit pay (3); surg bil mod (5)
Expanded Access to Primary Care Program appeal form (7); cif co (1–2); correct (1–6); modif app (1–5, 7, 8, 11, 14–16); remit adv (3); remit pay (3)
General Medicine Obstetrics appeal form (7); cif co (1–2); cms comp (17); correct (1–6); modif (2); modif app (1–5, 7, 8, 11, 14–16); modif used (2); path bil (13); preg early (12); preg ex cms (4–7); radi dia (1–2); radi dia ult (3); radi nuc (4); radi onc (1, 4–5); remit adv (3); remit pay (3); surg bil mod (5)
Heroin Detoxification Multipurpose Senior Services Program appeal form (7); cif co (1–2); correct (1–6); remit adv (3); remit pay (3)
Orthotics and Prosthetics appeal form (7); cif co (1–2); cms comp (17); correct (1–6); modif app (1–5, 7, 8, 11, 14–16); ortho (3, 7, 17); ortho ex (6–7); remit adv (3); remit pay (3)
Psychological Services appeal form (7); cif co (1–2); cms comp (17); correct (1–6); remit adv (3); remit pay (3)
Rehabilitation Clinics appeal form (7); cif co (1–2); correct (1–6); modif (2); modif app (1–5, 7, 8, 11, 14–16); modif used (2); remit adv (3); remit pay (3)
Vision Care appeal form (7); cif co (1–2); cms comp (17); correct (1–6); modif app (1–5, 7, 8, 11, 14–16); modif used vc (2–3); remit adv (3); remit pay (3)
Family PACT claim cms (1); claim ub (1)

 

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3. CCS Service Code Groupings Update

The following codes will be added/end-dated to/from the California Children’s Services (CCS) Service Code Groupings (SCGs):

Added Code(s)
Effective Date Code SCGs
March 1, 2011 HCPCS codes C9277, J0775, J3385 and J7312 01, 02, 03 and 07
March 1, 2011 HCPCS code J0690 01, 02, 03, 07 and 12

End-Dated Code(s)
Effective Date Code SCGs
March 1, 2011 HCPCS codes C9256 and J0220 01, 02, 03 and 07
March 1, 2011 HCPCS codes X5602, X5604, X5606, X5608, X5610, X5612 and X5614 01, 02, 03, 07 and 12

Reminder:

SCG 02 includes all the codes in SCG 01, plus additional codes applicable only to SCG 02. SCG 03 includes all the codes in SCG 01 and SCG 02, plus additional codes applicable only to SCG 03. SCG 07 includes all the codes in SCG 01 plus additional codes applicable only to SCG 07.

This information is reflected in the following provider manual(s):

Provider Manual(s) Page(s) Updated
Audiology and Hearing
Aids Chronic Dialysis Clinics
Clinics and Hospitals
Durable Medical Equipment and Medical Supplies
General Medicine
Home Health Agencies/Home and Community-Based Services
Inpatient Services
Local Educational Agency
Medical Transportation
Obstetrics
Orthotics and Prosthetics
Pharmacy
Psychological Services
Rehabilitation Clinics
Therapies
Vision Care
cal child ser (1, 2, 4, 12, 17, 22, 24)
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4. ACS Scheduled to Begin Official Medi-Cal Operations

Affiliated Computer Services (ACS) is scheduled to begin official operations as the contracted Fiscal Intermediary (FI) for the Medi-Cal program in the fall of 2011. Its responsibilities will include the management and maintenance of claims processing systems and operations for Medi-Cal and other affiliated state health care programs. ACS will conduct and provide each of the following:

  • Receive and process all claims submitted by eligible providers
  • Update and maintain all Medi-Cal, Family PACT (Planning, Access, Care and Treatment) and Child Health and Disability Prevention (CHDP) program provider manuals
  • Update and maintain the Medi-Cal website
  • Publish monthly provider notifications regarding policy changes that affect the Medi-Cal, Family PACT and CHDP programs
  • Provide information and support for providers via the Telephone Service Center (TSC)
  • Conduct training seminars, onsite visits and Claims Assistance for providers regarding eligibility, billing and other critical subjects

In addition, ACS will implement certain services to providers using different timelines. These enhancements include the following:

  • Provider Incentive Program (PIP)
  • Enhanced telephone solution with evaluation survey for providers
  • Increased number of Regional Field Representatives responsible for conducting seminars and onsite trainings
  • Web-based learning options for provider training
  • HIPAA Version 5010 and NCPDP D.0 and 1.2 implementation (effective January 1, 2012)

Transition activities have been underway since May 2010 and will continue through completion of the Assumption of Operations (AOO) by ACS.

Regular updates regarding transition activities and impacts to providers, beneficiaries, billing agents and clearinghouses will be published over the coming months on the Medi-Cal website.

 

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5. Provider Manual Revisions

Pages updated due to ongoing provider manual revisions:

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