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Part B Medicare Report - Novitas Solutions_ Inc

VIEWS: 23 PAGES: 76

									For: March 2011


Coding instruCtions - PneumoCoCCal VaCCine

Highmark Medicare Services has identified coding errors when billing
for pneumococcal vaccine. It is important to ensure the correct code for
pneumococcal vaccine is being billed based on the code description. Billing the                                INSIDE
correct pneumococcal vaccine code will ensure correct reimbursement.
Currently, there are three possible codes for billing the pneumococcal vaccine.              Medical Director Column .................. 3
    •	   90669 – Pneumococcal conjugate vaccine, 7 valent, for intramuscular                 General News ..................................... 4
         use
                                                                                             Specialty News
    •	   90670 – Pneumococcal conjugate vaccine, 13 valent, for intramuscular
         use                                                                                       Amubulance .............................. 23

    •	   90732 – Pneumococcal polysaccharide vaccine, 23 valent, adult or                          ASC........................................... 25
         immunosuppressed patient dosage, when administered to individuals 2                       Clinical Laboratory ................... 28
         years or older, for subcutaneous or intramuscular use
                                                                                                   DMEPOS .................................. 32
In addition to the vaccine code, G0009 should be used to bill the administration.
                                                                                                   ESRD ........................................ 35
2011 medPard direCtory                                                                             Therapy/Rehab .......................... 37
                                                                                             Reimbursement ................................ 38
The 2011 MEDPARD directory became available on our web site on January                       Coding Guidelines/Clm Reporting .. 52
31, 2011. As in the past, there will be no hardcopy distributions. Beneficiaries
can use the Internet or contact 1-800-MEDICARE for assistance in locating a                  Coverage Issues ............................... 64
participating supplier near their home. Also, the beneficiary’s local Social Security        Medical Policy ................................. 68
Office(s), the Area Administration on Aging office(s), and other beneficiary
advocacy organizations may be able to assist them as well.                                   Education & Training Feedback
To view the 2011 MEDPARD:                                                                       Form .......................................... 71

    1. Enter https://www.highmarkmedicareservices.com/bene/medpar.html                       Request for Education ...................... 73
       on your browser’s navigational window;                                                Join Our Electronic Mailing List ..... 74
    2. Use the arrows/pull-down windows to select a specific county and
       specialty; and
    3. Click “Submit” and the supplier choices will display in alphabetical order




                                                                                             www.highmarkmedicareservices.com


 This bulletin should be shared with all health care practitioners and managerial members of the physician/supplier staff. Medicare
       Reports are available from our website at https://www.highmarkmedicareservices.com/partb/med-reports/index.html.
Medicare Report                    Medical Director Message ...................................... 3            Edit to Deny Payment to Physicians and Other
March 2011                         General News............................................................ 3      Suppliers for the TC of Pathology Services
                                   2010 - 2011 Seasonal Influenza Resources for                                    Furnished on Same Date as Inpatient and
The Medicare Report is                Health Care Professionals .............................3                     Outpatient Services and Implements New
published quarterly as an                                                                                          Messages ..................................................... 31
                                   Specialty Code for Advanced Diagnostic Imag
informational reference               ing Services ................................................... 6        Calendar Year 2011 Update for DMEPOS Fee
source by Highmark Medicare                                                                                        Schedule ...................................................... 32
                                   Indian Health Service Facilities and Tribal
Services for health care              Provider’s Use of the Internet-based                                      ESRD Home Dialysis Monthly Capitation
professionals in Pennsylvania,        PECOS .........................................................6             Payment ..................................................... 35
Maryland, New Jersey,                                                                                           Reporting of Service Units with HCPCS .........37
Delaware and the District          Expansion of Medicare Telehealth Services for
of Columbia Metropolitan
                                      Calendar Year 2011 ....................................... 7              Pharmacy Billing for Drugs Provided “Incident
Area. This material is             Quarterly Update to CCI Edits, Version 17.0,                                    to” a Physician’s Service ............................ 37
intended to compliment                effective January 1, 2011 .............................. 9                Reimbursement
and not replace Medicare           Update to Medicare Deductible, Coinsurance and                               Influenza Vaccine Payment Allowances - Annual
program requirements as set           Premium Rates for 2011 .............................10                        Update for 2010-2011 Season..................... 38
forth in statue, regulations       Incentive Payment Program for Primary Care                                   Annual Clotting Factor Furnishing Fee Update
and manual instructions. It           Services, Section 5501(a) of The Affordable                                   2011 ............................................................ 39
is the responsibility of each         Care Act ...................................................... 11        Payment for Certified Nurse-Midwife Srvcs ...39
healthcare professional/
                                   New Physician Specialty Codes for Cardiac                                    Multiple Procedure Payment Reduction for Se
supplier submitting claims            Electrophysiology and Sports Medicine .....13
to Highmark Medicare
                                                                                                                    lected Therapy Services ..............................41
Services to familiarize            Outpatient Therapy Cap Values for CY 2011 ..14                               Reasonable Charge Update for 2011 for Splints,
themselves with Medicare           Section 5501(b) Incentive Payment Program for                                    Casts, and Certain Intraocular Lenses ........42
coverage requirements.                Major Surgical Procedures Furnished in                                    Multiple Procedure Payment Reduction on the
Highmark Medicare Services            Health Professional Shortage Areas under the                                  TC of Certain Diagnostic Imaging
makes efforts to ensure the           Affordable Care Act ...................................15                     Procedures................................................... 43
information contained in this      Waiver of Coinsurance and Deductible for Pre                                 Clinical Laboratory Fee Schedule – Medicare
publication is accurate and           ventive Services, Section 4104 of The Afford                                  Travel Allowance Fees for Collection of
current. However, because             able Care Act, Removal of Barriers to Preven                                  Specimens ................................................... 44
the Medicare program is               tive Services in Medicare............................16
                                                                                                                Emergency Update to the CY 2011 MPFS DB 45
constantly changing, it is the     Annual Wellness Visit Including Personalized
responsibility of each provider/      Prevention Plan Services ...........................17                    Summary of Policies in the CY 2011 MPFS and
supplier to remain abreast
                                                                                                                    the Telehealth Originating Site Facility Fee
                                   CWF Unsolicited Response Adjustments for Cer                                     Payment Amount ........................................48
of the Medicare program               tain Claims Denied Due to an Open MSP
requirements. Questions               GHP Record Where the GHP Record was                                       April 2011 Quarterly Average Sales Price Medi
concerning this publication or        Subsequent ly Deleted or Terminated .........20                               care Part B Drug Pricing Files and Revisions
its contents may be directed in                                                                                     to Prior Quarterly Pricing Files................... 51
                                   Face Validity Assessment of ABN for Complex
writing to:                           Medical Record Review ............................. 20                    Coding Guidelines and Claim Reporting .........52
                                   2011 DMEPOS HCPCS Code Jurisdiction                                          American Recovery and Reinvestment Act of
Outreach & Education                                                                                                2009 EHR Incentive Program: HCPCS Modi
                                      List .............................................................. 21
Highmark Medicare Services                                                                                          fier for the EHR Incentive Program ............ 52
PO Box 890089                      Changes to the Laboratory NCD Edit Software
                                      for January 2011 ......................................... 21             ESRD PPS and CB for Limited Part B Srvcs ..53
Camp Hill, PA 17089-0089
                                                                                                                National Modifier and Condition Code to Identify
                                   Changes to the Laboratory NCD Edit Software                                     Items or Services Related to the 2010 Oil Spill in
CPT codes, descriptors, and           for April 2011.............................................. 22              the Gulf of Mexico ..............................................57
other data only are copyright      Specialty News
                                                                                                                Billing Clarification for (NaF-18) PET for Iden
2010 American Medical              Air Ambulance Services .................................. 23                    tifying Bone Metastasis of Cancer in the
Association. All Rights                                                                                            Context of a Clinical Trial .......................... 58
                                   Ambulance Inflation Factor for CY 2011 and
Reserved. Applicable FARS/
                                      Productivity Adjustment ............................. 23                  New HCPCS Q-codes for 2010-2011 Seasonal
DFARS apply
                                   Updates to the Medicare Claims Processing                                       Influenza Vaccines ......................................59
                                      Manual to Correct Claims Billing                                          Payment for 510k Post-Approval Extension
                                      Instructions as Well as to Update Fee Sched                                  Studies Using 510k-Cleared Embolic Pro-
   Customer Services/IVR              ule Payment Rates Mandated by the Afford                                     tection Devices during Carotid Artery Stent
   1-877-235-8073                     able Care Act of 2010 ................................. 24                   ing (CAS) Procedures .................................61
   Telephone Appeals
                                   January 2011 Update of the AS C Payment                                      New Waived Tests ............................................62
   1-866-488-0551
                                      System......................................................... 25        Coverage Issues
                                   Fractional Mileage Amounts Submitted on                                      Dermal Injections for Treatment of Facial
   EDI Services                       Ambulance Claims...................................... 27                   LDS .............................................................64
   1-866-488-0546
                                   Calendar Year 2011 Annual Update for                                         Ventricular Assist Devices (VADs) as Destination
   Telecommunication
                                      Clinical Laboratory Fee Schedule and Labora                                  Therapy ...............................................................66
   Devices for the Deaf               tory Services Subject to Reasonable Charge                                Medical Policy ..........................................................68
   1-877-235-8074                     Payment ...................................................... 28



Page 2                                                                                                                                    Medicare Report: March 2011
Medical Director Message
I would like to take this opportunity to introduce myself as the new Vice President of Clinical Affairs and Medical Director
of Highmark Medicare Services (HMS). I previously held this position from 1996 to 1999 before leaving to serve as
Pennsylvania’s Physician General (1999-2004). Most recently, I was a Senior Medical Director for Highmark Blue Cross
Blue Shield where I worked with companies throughout the Unites States, helping them develop programs that controlled
costs while at the same time improved the health of their employees.
As a family physician, I am acutely aware of how Medicare policies and guidelines can impact providers and their
practices. I know that frequent Medicare Program updates and changes represent challenges to everyone involved in
providing care to Medicare Beneficiaries, including hospitals, physician offices and other healthcare facilities.
As a Medicare Contractor, Highmark Medicare Services has a responsibility to meet the requirements that are set forth in
our contract with the Centers for Medicare and Medicaid Services (CMS). At the same time, I recognize that we have a
responsibility to work closely with those individuals who provide care and other services to Medicare Beneficiaries. Such
cooperation is essential on issues such as Local Coverage Determinations (Medical Policies), Scope of Practice, and
clarification of program procedures and guidelines.
Working closely requires effective communication. I am committed to making sure that Highmark Medicare Services
does all it can to provide you with timely and accurate information. In addition, I welcome your input, not just on the issues
listed above, but on other issues that impact you, your practices and ultimately your patients.
Robert S. Muscalus, D.O.
Vice President of Clinical Affairs and Contractor Medical Director
Highmark Medicare Services
(717) 302-3030
robert.muscalus@highmarkmedicareservices.com

General News

2010 - 2011 seasonal influenza (flu) resourCes for HealtH Care Professionals

MLN Matters Number: SE1031 Revised
Related Change Request (CR) #: N/A
Related CR Release Date: N/A
Effective Date: N/A
Related CR Transmittal #: N/A
Implementation Date: N/A
Note: This article was revised on November 29, 2010, to include a reference to MLN Matters® article MM7234 (New
HCPCS Q-codes for 2010-2011 Seasonal Influenza Vaccines). All other information is the same.
Provider TyPes AffecTed
All Medicare fee-for-service (FFS) physicians, non-physician practitioners, providers, suppliers, and other health care
professionals who order, refer, or provide seasonal flu vaccines and vaccine administration provided to Medicare
beneficiaries
Provider AcTion needed
    •	   Keep this Special Edition MLN Matters article and refer to it throughout the 2010 - 2011 flu season.
    •	   Take advantage of each office visit as an opportunity to encourage your patients to protect themselves from the
         seasonal flu and serious complications by getting a seasonal flu shot.
    •	   Continue to provide the seasonal flu shot as long as you have vaccine available, even after the new year.
    •	   Don’t forget to immunize yourself and your staff.
inTroducTion
Annual outbreaks of seasonal flu typically occur from the late fall through early spring. Typically, 5 to 20 percent of
Americans catch the seasonal flu, with about 36,000 people dying from flu-related causes.1 Complications of flu can
include pneumonia, ear infections, sinus infections, dehydration, and even death.
The Centers for Medicare & Medicaid Services (CMS) reminds health care professionals that Medicare Part B reimburses
health care providers for seasonal flu vaccines and their administration. (Medicare provides coverage of the seasonal flu
vaccine without any out-of-pocket costs to the Medicare patient. No deductible or copayment/coinsurance applies.) All
adults 65 and older should get seasonal flu vaccine. People with Medicare who are under 65 but have chronic illness,
including heart disease, lung disease, diabetes or end-stage renal disease should get a seasonal flu shot.
Get the Flu Vaccine, Not the Flu!

Medicare Report: March 2011                                                                                           Page 3
Unlike last flu season patients needed to get both a seasonal vaccine and a separate vaccine for the H1N1 virus, this
season, a single seasonal flu vaccine will protect your patients, your staff, and yourself.
The seasonal flu vaccine continues to be the most effective method for preventing flu virus infection and its potentially
severe complications. You can help your Medicare patients reduce their risk for contracting seasonal flu and serious
complications by using every office visit as an opportunity to recommend they take advantage of the annual seasonal flu
shot benefit covered by Medicare. And don’t forget, health care providers and their staff can spread the highly contagious
flu virus to their patients. Don’t forget to immunize yourself and your staff.
The following educational products have been developed by CMS to be used by Medicare FFS health care
professionals and are not intended for distribution to Medicare beneficiaries.
educATionAl ProducTs for HeAlTH cAre ProfessionAls
CMS has developed a variety of educational resources to help Medicare FFS health care professionals understanding
coverage, coding, billing, and reimbursement guidelines for seasonal flu vaccines and their administration.
    1. MLN Matters Seasonal Influenza Articles
            •	   MM7120: Influenza Vaccine Payment Allowances - Annual Update for 2010-2011 Season at http://www.
                 cms.gov/MLNMattersArticles/downloads/MM7120.pdf on the CMS website.
            •	   SE1026: Important News About Flu Shot Frequency for Medicare Beneficiaries at http://www.cms.gov/
                 MLNMattersArticles/downloads/SE1026.pdf on the CMS website.
            •	   MM7124: 2010 Reminder for Roster Billing and Centralized Billing for Influenza and Pneumococcal
                 Vaccinations at http://www.cms.gov/MLNMattersArticles/downloads/MM7124.pdf on the CMS website.
            •	   MM6608: Influenza Vaccine Payment Allowances – Annual Update for 2009-2010 Season at http://www.
                 cms.gov/MLNMattersArticles/downloads/MM6608.pdf on the CMS website.
            •	   MM5511: Update to Medicare Claims Processing Manual, Chapter 18, Section 10 for Part B Influenza
                 Billing at http://www.cms.gov/MLNMattersArticles/downloads/MM5511.pdf on the CMS website.
            •	   MM4240: Guidelines for Payment of Vaccine (Pneumococcal Pneumonia Virus, Influenza Virus, and
                 Hepatitis B Virus) Administration at http://www.cms.gov/MLNMattersArticles/downloads/MM4240.pdf on
                 the CMS website.
            •	   MM5037: Reporting of Diagnosis Code V06.6 on Influenza Virus and/or Pneumococcal Pneumonia Virus
                 (PPV) Vaccine Claims and Acceptance of Current Procedural Terminology (CPT) Code 90660 for the
                 Reporting of the Influenza Virus Vaccine at http://www.cms.gov/MLNMattersArticles/downloads/MM5037.
                 pdf on the CMS website.
            •	   MM7234: New HCPCS Q-codes for 2010-2011 Seasonal Influenza Vaccines at http://www.cms.gov/
                 MLNMattersArticles/downloads/MM7234.pdf on the CMS website.
    2. MLN Seasonal Influenza Related Products for Health Care Professionals
            •	   Quick Reference Information: Medicare Part B Immunization Billing - This two-sided laminated
                 chart provides Medicare FFS physicians, providers, suppliers, and other health care professionals with
                 quick information to assist with filing claims for the seasonal influenza, pneumococcal, and hepatitis B
                 vaccines and their administration. Available in print and as a downloadable PDF at http://www.cms.gov/
                 MLNProducts/downloads/qr_immun_bill.pdf on the CMS website.
            •	   The Guide to Medicare Preventive Services for Physicians, Providers, Suppliers, and Other Health
                 Care Professionals, Third Edition - This updated comprehensive guide to Medicare-covered preventive
                 services and screenings provides Medicare FFS physicians, providers, suppliers, and other health care
                 professionals information on coverage, coding, billing, and reimbursement guidelines of preventive
                 services and screenings covered by Medicare. The guide includes a chapter on seasonal influenza,
                 pneumococcal, and hepatitis B vaccines and their administration. Also includes suggestions for planning
                 a flu clinic and information for mass immunizers and roster billers. Available as a downloadable PDF file
                 at http://www.cms.gov/MLNProducts/downloads/mps_guide_web-061305.pdf on the CMS website.
            •	   The Medicare Preventive Services Series Part 1 Web-Based Training Course (WBT) – This WBT
                 contains lessons Medicare-covered preventive vaccinations, including the seasonal influenza vaccine.
                 To take the course, visit the Medicare Preventive Services Educational Products page at http://www.cms.
                 gov/MLNProducts/35_PreventiveServices.asp on the internet. Scroll down to “Related Links Inside CMS”
                 and choose “Web-Based Training (WBT) Modules”.
            •	   Medicare Preventive Services Adult Immunizations Brochure - This two-sided tri-fold brochure
                 provides health care professionals with an overview of Medicare’s coverage of influenza, pneumococcal,
                 and hepatitis B vaccines and their administration. Available as a downloadable PDF file at http://www.
                 cms.gov/MLNProducts/downloads/Adult_Immunization.pdf on the CMS website.
            •	   Quick Reference Information: Medicare Preventive Services - This two-sided laminated chart gives

Page 4                                                                                    Medicare Report: March 2011
                 Medicare FFS physicians, providers, suppliers, and other health care professionals a quick reference
                 to Medicare’s preventive services and screenings, identifying coding requirements, eligibility, frequency
                 parameters, and copayment/coinsurance and deductible information for each benefit. This chart includes
                 seasonal influenza, pneumococcal, and hepatitis B vaccines. Available in print or as a downloadable
                 PDF file at http://www.cms.gov/MLNProducts/downloads/MPS_QuickReferenceChart_1.pdf on the CMS
                 website.
            •	   MLN Preventive Services Educational Products Web Page - This Medicare Learning Network (MLN)
                 web page provides descriptions of all MLN preventive services related educational products and resources
                 designed specifically for use by Medicare FFS health care professionals. PDF files provide product
                 ordering information and links to all downloadable products, including those related to the seasonal
                 influenza vaccine and its administration. This web page is updated as new product information becomes
                 available. Bookmark http://www.cms.gov/MLNProducts/35_PreventiveServices.asp for easy access.
    3. Other CMS Resources
            •	   CMS Adult Immunizations Web Page is at http://www.cms.gov/AdultImmunizations/ on the CMS
                 website.
            •	   CMS Frequently Asked Questions are available at http://questions.cms.hhs.gov/ on the CMS website.
            •	   Medicare Benefit Policy Manual - Chapter 15, Section 50.4.4.2 – Immunizations available at http://www.
                 cms.gov/manuals/downloads/bp102c15.pdf on the CMS website.
            •	   Medicare Claims Processing Manual – Chapter 18, Preventive and Screening Services available at
                 http://www.cms.gov/manuals/downloads/clm104c18.pdf on the internet.
            •	   Medicare Part B Drug Average Sales Price Payment Amounts
                 Influenza and Pneumococcal Vaccines Pricing found at http://www.cms.gov/
                 McrPartBDrugAvgSalesPrice/01_overview.asp on the CMS website.
    4. Other Resources
       The following non-CMS resources are just a few of the many available in which clinicians may find useful
       information and tools to help increase seasonal flu vaccine awareness and utilization during the 2009 – 2010 flu
       season:
            •	   Advisory Committee on Immunization Practices are at http://www.cdc.gov/vaccines/recs/acip/default.
                 htm on the Internet.
            •	   American Lung Association’s Influenza (Flu) Center is at http://www.lungusa.org on the Internet. This
                 website provides a flu clinic locator at http://www.flucliniclocator.org on the Internet. Individuals can
                 enter their zip code to find a flu clinic in their area. Providers can also obtain information on how to add
                 their flu clinic to this site.
            •	   Other sites with helpful information include:
            •	   Centers for Disease Control and Prevention - http://www.cdc.gov/flu;
            •	   Flu.gov - http://www.flu.gov;
            •	   Food and Drug Administration - http://www.fda.gov;
            •	   Immunization Action Coalition - http://www.immunize.org;
            •	   Indian Health Services - http://www.ihs.gov/;
            •	   National Alliance for Hispanic Health - http://www.hispanichealth.org;
            •	   National Foundation For Infectious Diseases - http://www.nfid.org/influenza;
            •	   National Library of Medicine and NIH Medline Plus - http://www.nlm.nih.gov/medlineplus/immunization.
                 html;
            •	   National Network for Immunization Information - http:/www.immunizationinfo.org;
            •	   National Vaccine Program - http://www.hhs.gov/nvpo;
            •	   Office of Disease Prevention and Promotion - http://odphp.osophs.dhhs.gov;
            •	   Partnership for Prevention - http://www.prevent.org; and
            •	   World Health Organization - http://www.who.int/en on the Internet.
BeneficiAry informATion
For information to share with your Medicare patients, please visit http://www.medicare.gov on the Internet.




Medicare Report: March 2011                                                                                          Page 5
sPeCialty Code for adVanCed diagnostiC imaging serViCes

MLN Matters® Number: MM7175 Revised
Related Change Request (CR) #: 7175
Related CR Release Date: October 29, 2010
Effective Date: April 1, 2011
Related CR Transmittal #: R2079CP
Implementation Date: April 4, 2011
Note: This article was revised on November 4, 2010, to remove unnecessary language that had inadvertently referred to
the specialty code as a “DMEPOS” code. All other information is the same.
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers who submit claims to Medicare carriers, Fiscal Intermediaries (FI),
or Medicare Administrative Contractors (A/B MAC) for providing diagnostic imaging services to Medicare beneficiaries.
WHAT you need To KnoW
Change Request (CR) 7175, from which this article is taken announces that (effective April 1, 2011) the Centers for
Medicare & Medicaid Services (CMS) will establish a new specialty code (specialty code 95) for Advanced Diagnostic
Imaging (ADI) Accreditation. (Note: Previously, CMS had designated this specialty code for the Competitive Acquisition
Program for drugs project, the code will now be used for ADI accreditation.)
You should ensure that your billing staffs are aware of this new specialty code for Advanced Diagnostic Imaging
Accreditation.
AddiTionAl informATion
The official instruction, CR 7175, issued to your carrier, FI, or A/B MAC regarding this change may be viewed at http://
www.cms.gov/Transmittals/downloads/R2079CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

indian HealtH serViCe (iHs) faCilities and tribal ProVider’s use of tHe internet-based
ProVider enrollment, CHain and ownersHiP system (PeCos)

MLN Matters® Number: MM7174 Revised
Related Change Request (CR) #: 7174
Related CR Release Date: October 28, 2010
Effective Date: November 29, 2010
Related CR Transmittal #: R358PI
Implementation Date: November 29, 2010
Note: MLN Matters® article MM7174 was revised on November 30, 2010, to add references to SE0914, which is available
at http://www.cms.gov/MLNMattersArticles/downloads/SE0914.pdf, and MM6231, which is available at http://www.cms.
gov/MLNMattersArticles/downloads/MM6231.pdf, for further information on using Internet-based PECOS.
Provider TyPes AffecTed
Tribal or Indian Health Service (IHS) providers wanting to enroll or who are currently enrolled in the Medicare program.
Provider AcTion needed
This article is based on Change Request (CR) 7174, which informs Indian Health Service (IHS) facilities and Tribal
providers initially enrolling in the Medicare program or submitting changes of enrollment information that they may use the
Internet-based Provider Enrollment, Chain and Ownership System (PECOS) to do so.
BAcKground
Currently, Indian Health Service (IHS) facilities and Tribal providers are permitted to enroll in Medicare Part A and B using
the paper enrollment process only. The Internet-based Provider Enrollment, Chain and Ownership System (PECOS)
routes enrollment applications to the correct Medicare contractor based on the provider/supplier type and their practice
location, but it is not currently designed to route IHS and tribal enrollment applications to Trailblazer Health Enterprises,
LLC (TrailBlazer), the single designated Medicare contractor responsible for enrolling this provider type. For this reason,
IHS facilities and tribal providers have not been able to use Internet-based PECOS.
Change Request (CR) 7174 is establishing an interim process to allow IHS facilities and tribal providers to use Internet-
based PECOS to initially enroll in the Medicare program or submit changes of information.
If IHS facilities or tribal providers choose to use Internet-based PECOS, they will be responsible for mailing to TrailBlazer
the following as part of the interim process:
    1. A cover letter to indicate they are seeking to enroll as an IHS facility or tribal provider or updating their current

Page 6                                                                                      Medicare Report: March 2011
         enrollment information;
    2. The Internet-based PECOS certification statement; and
    3. Any other applicable supporting documentation.
The Trailblazers addresses are as follows:
Part A
Part A Provider Enrollment
TrailBlazer Health Enterprises, LLC
Provider Enrollment
P.O. Box 650458
Dallas, TX 75265-0458

Part B
Part B Provider Enrollment
TrailBlazer Health Enterprises, LLC
Provider Enrollment
P.O. Box 650544
Dallas, TX 75265-0544
This interim process shall remain in effect until PECOS system changes are implemented to route all electronic enrollment
applications received from IHS facilities and tribal providers directly to Trailblazers.
AddiTionAl informATion
The official instruction, CR 7174, issued to your carriers, Fiscal Intermediaries (FIs), and Part A/Part B Medicare
Administrative Contractors (A/B MACs) regarding this change may be viewed at http://www.cms.gov/Transmittals/
downloads/R358PI.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

exPansion of mediCare teleHealtH serViCes for Calendar year (Cy) 2011

MLN Matters® Number: MM7049
Related Change Request (CR) #: 7049
Related CR Release Date: August 20, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2032CP and R131BP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians, non-physician practitioners (NPP), hospitals, and skilled nursing facilities (SNFs) submitting
claims to Medicare contractors (carriers, Fiscal Intermediaries (FIs), and/or Part A/B Medicare Administrative Contractors
(A/B MACs)) for telehealth services provided to Medicare beneficiaries.
Provider AcTion needed
The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 7049 to alert providers that 14
Healthcare Common Procedure Coding System (HCPCS) codes were added to the list of Medicare telehealth services
for:
    •	   Individual and group kidney disease education (KDE) services;
    •	   Individual and group diabetes self-management training (DSMT) services;
    •	   Group medical nutrition therapy (MNT) services;
    •	   Group health and behavior assessment and intervention (HBAI) services; and
    •	   Subsequent hospital care and nursing facility care services.
Make sure your billing staffs are aware of these changes.
BAcKground
As noted in the 2011 Medicare Physician Fee Schedule Final Rule published on November 29, 2010, CMS is adding14
codes to the list of Medicare distant site telehealth services for individual and group KDE services, individual and group
DSMT services, group MNT services, group HBAI services, and subsequent hospital care and nursing facility care services.
Payment for these services will be made at the applicable physician fee schedule (PFS) payment amount for the service
of the physician or practitioner. CR 7049 adds the relevant policy instructions to the Medicare Claims Processing Manual
and the Medicare Benefit Policy Manual and those changes may be reviewed by consulting CR 7049 at http://www.cms.

Medicare Report: March 2011                                                                                          Page 7
gov/Transmittals/downloads/R2032CP.pdf and http://www.cms.gov/Transmittals/downloads/R131BP.pdf, respectively, on
the CMS website.
Key PoinTs of cr 7049
CMS is adding the following requested services to the list of Medicare telehealth services for CY 2011:
             o   Individual and group KDE services:HCPCS code G0420 (Face-to-face educational services related to the
                 care of chronic kidney disease; individual, per session, per one hour); and
             o   HCPCS code G0421 (Face-to-face educational services related to the care of chronic kidney disease;
                 group, per session, per one hour).
    •	   Individual and group DSMT services (with a minimum of 1 hour of in-person instruction to be furnished in the initial
         year training period to ensure effective injection training):
             o   HCPCS code G0108 (Diabetes outpatient self-management training services, individual, per 30
                 minutes); and
             o   HCPCS code G0109 (Diabetes outpatient self-management training services, group session (2 or more)
                 per 30 minutes).
    •	   Group MNT and HBAI services, Current Procedural Terminology (CPT) codes: 97804 (Medical nutrition therapy;
         group (2 or more individual(s)), each 30 minutes), 96153 (Health and behavior intervention, each 15 minutes,
         face-to-face; group (2 or more patients), and 96154 (Health and behavior intervention, each 15 minutes, face-to-
         face; family (with the patient present));
    •	   Subsequent hospital care services, with the limitation of one telehealth visit every 3 days; CPT codes:
             o   99231 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires
                 at least 2 of these 3 key components: A problem focused interval history; A problem focused examination;
                 Medical decision making that is straightforward or of low complexity. Counseling and/or coordination of
                 care with other providers or agencies are provided consistent with the nature of the problem(s) and the
                 patient’s and/or family’s needs. Usually, the patient is stable, recovering or improving. Physicians typically
                 spend 15 minutes at the bedside and on the patient’s hospital floor or unit),
             o   99232 (Subsequent hospital care, per day, for the evaluation and management of a patient, which requires
                 at least 2 of these 3 key components: An expanded problem focused interval history; An expanded problem
                 focused examination; Medical decision making of moderate complexity. Counseling and/or coordination
                 of care with other providers or agencies are provided consistent with the nature of the problem(s) and
                 the patient’s and/or family’s needs. Usually, the patient is responding inadequately to therapy or has
                 developed a minor complication), and
             o   99233(Subsequent hospital care, per day, for the evaluation and management of a patient, which requires
                 at least 2 of these 3 key components: A detailed interval history; A detailed examination; Medical decision
                 making of high complexity. Counseling and/or coordination of care with other providers or agencies are
                 provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs. Usually, the
                 patient is unstable or has developed a significant complication or a significant new problem. Physicians
                 typically spend 35 minutes at the bedside and on the patient’s hospital floor or unit); and
    •	   Subsequent nursing facility care services, with the limitation of one telehealth visit every 30 days, CPT codes:
             o   99307 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which
                 requires at least 2 of these 3 key components: A problem focused interval history; A problem focused
                 examination; Straightforward medical decision making. Counseling and/or coordination of care with other
                 providers or agencies are provided consistent with the nature of the problem(s) and the patient’s and/
                 or family’s needs. Usually, the patient is stable, recovering, or improving. Physicians typically spend 10
                 minutes at the bedside and on the patient’s facility floor or unit),
             o   99308 (Subsequent nursing facility care, per day, for the evaluation and management of a patient,
                 which requires at least 2 of these 3 key components: An expanded problem focused interval history; An
                 expanded problem focused examination; Medical decision making of low complexity. Counseling and/
                 or coordination of care with other providers or agencies are provided consistent with the nature of the
                 problem(s) and the patient’s and/or family’s needs. Usually, the patient is responding inadequately to
                 therapy or has developed a minor complication. Physicians typically spend 15 minutes at the bedside and
                 on the patient’s facility floor or unit),
             o   99309 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which
                 requires at least 2 of these 3 key components: A detailed interval history; A detailed examination; Medical
                 decision making of moderate complexity. Counseling and/or coordination of care with other providers or
                 agencies are provided consistent with the nature of the problem(s) and the patient’s and/or family’s needs.
                 Usually, the patient has developed a significant complication or a significant new problem. Physicians
                 typically spend 25 minutes at the bedside and on the patient’s facility floor or unit), and
             o   99310 (Subsequent nursing facility care, per day, for the evaluation and management of a patient, which
Page 8                                                                                        Medicare Report: March 2011
                 requires at least 2 of these 3 key components: A comprehensive interval history; A comprehensive
                 examination; Medical decision making of high complexity. Counseling and/or coordination of care with
                 other providers or agencies are provided consistent with the nature of the problem(s) and the patient’s
                 and/or family’s needs. The patient may be unstable or may have developed a significant new problem
                 requiring immediate physician attention. Physicians typically spend 35 minutes at the bedside and on the
                 patient’s facility floor or unit.
Note: The frequency limitations on subsequent hospital care and subsequent nursing facility care delivered
through telehealth do not apply to inpatient telehealth consultations. Consulting practitioners should continue
to use the inpatient telehealth consultation HCPCS codes (G0406, G0407, G0408, G0425, G0426, or G0427) when
reporting consultations furnished via telehealth.
Inpatient telehealth consultations are furnished to beneficiaries in hospitals or skilled nursing facilities via
telehealth at the request of the physician of record, the attending physician, or another appropriate source. The
physician or practitioner who furnishes the initial inpatient consultation via telehealth cannot be the physician or
practitioner of record or the attending physician or practitioner, and the initial inpatient telehealth consultation
would be distinct from the care provided by the physician or practitioner of record or the attending physician or
practitioner.
    •	   For dates of service (DOS) on or after January 1, 2011, Medicare contractors will accept and pay the added codes
         according to the appropriate physician or practitioner fee schedule amount when submitted with a GQ or GT
         modifier.
    •	   For dates of service on or after January 1, 2011, Medicare contractors will accept and pay the added codes
         according to the appropriate physician or practitioner fee schedule amount when submitted with a GQ or GT
         modifier by Critical Access Hospitals (CAHs) that have elected Method II on TOB 85X.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Quarterly uPdate to CorreCt Coding initiatiVe (CCi) edits, Version 17.0, effeCtiVe January
1, 2011

MLN Matters® Number: MM7210
Related Change Request (CR) #: 7210
Related CR Release Date: November 19, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2097CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians and providers submitting claims to Medicare Carriers and/or Part A/B Medicare Administrative Contractors
(A/B MACs) for services provided to Medicare beneficiaries are impacted by this issue.
Provider AcTion needed
This article is based on Change Request (CR) 7210, which provides a reminder for physicians to take note of the quarterly
updates to Correct Coding Initiative (CCI) edits. The last quarterly release of the edit module was issued in October 2010.
BAcKground
The Centers for Medicare & Medicaid Services (CMS) developed the National Correct Coding Initiative (CCI) to promote
national correct coding methodologies and to control improper coding that leads to inappropriate payment in Part B claims.
The coding policies developed are based on coding conventions defined in the:
    •	   American Medical Association’s (AMA’s) Current Procedural Terminology (CPT) Manual,
    •	   National and local policies and edits,
    •	   Coding guidelines developed by national societies,
    •	   Analysis of standard medical and surgical practice, and by
    •	   Review of current coding practice.
The latest package of CCI edits, Version 17.0, is effective January 1, 2011, and includes all previous versions and updates
from January 1, 1996, to the present. It will be organized in the following two tables:
    •	   Column 1/ Column 2 Correct Coding Edits, and
    •	   Mutually Exclusive Code (MEC) Edits.
Additional information about CCI, including the current CCI and MEC edits, is available at http://www.cms.gov/

Medicare Report: March 2011                                                                                       Page 9
NationalCorrectCodInitEd on the CMS website.
AddiTionAl informATion
The CCI and MEC file formats are defined in the Medicare Claims Processing Manual, Chapter 23, Section 20.9, which
is available at http://www.cms.gov/manuals/downloads/clm104c23.pdf on the CMS website. The official instruction (CR
7081) issued to your carrier or A/B MAC regarding this change is at http://www.cms.gov/Transmittals/downloads/R2097CP.
pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

uPdate to mediCare deduCtible, CoinsuranCe and Premium rates for 2011

MLN Matters® Number: MM7224
Related Change Request (CR) #: 7224
Related CR Release Date: November 19, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R65GI
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Durable Medical Equipment
Medicare Administrative Contractors (DME MACs), Fiscal Intermediaries (FIs), A/B Medicare Administrative Contractors
(A/B MACs), and/or Regional Home Health Intermediaries (RHHIs)) for services provided to Medicare beneficiaries.
imPAcT on Providers
This article is based on Change Request (CR) 7224 which provides the Medicare rates for deductible, coinsurance, and
premium payment amounts for Calendar Year (CY) 2011.
BAcKground
2011 Part A - Hospital Insurance (HI)
A beneficiary is responsible for an inpatient hospital deductible amount, which is deducted from the amount payable by
the Medicare program to the hospital for inpatient hospital services furnished in a spell of illness.
When a beneficiary receives such services for more than 60 days during a spell of illness, he or she is responsible for a
coinsurance amount that is equal to one-fourth of the inpatient hospital deductible per-day for the 61st-90th day spent in
the hospital.
Note: An individual has 60 lifetime reserve days of coverage, which they may elect to use after the 90th day in a spell of
illness. The coinsurance amount for these days is equal to one-half of the inpatient hospital deductible.
In addition, a beneficiary is responsible for a coinsurance amount equal to one-eighth of the inpatient hospital deductible
per day for the 21st through the 100th day of Skilled Nursing Facility (SNF) services furnished during a spell of illness .
The 2011 inpatient deductible is $1,132.00. The coinsurance amounts are shown below in the following table:

          Hospital Coinsurance                 Skilled Nursing
                                             Facility Coinsurance
 Days 61-90       Days 91-150 (Lifetime           Days 21-100
                     Reserve Days)

   $283.00                $566.00                   $141.50
Most individuals age 65 and older (and many disabled individuals under age 65) are insured for Health Insurance (HI)
benefits without a premium payment. In addition, The Social Security Act provides that certain aged and disabled persons
who are not insured may voluntarily enroll, but are subject to the payment of a monthly Part A premium. Since 1994,
voluntary enrollees may qualify for a reduced Part A premium if they have 30-39 quarters of covered employment. When
voluntary enrollment takes place more than 12 months after a person’s initial enrollment period, a 2-year 10% penalty
is assessed for every year they had the opportunity to (but failed to) enroll in Part A. The 2011 Part A premiums are as
follows:

             Voluntary Enrollees Part A Premium Schedule for 2011
Base Premium (BP)                        $450.00 per month
Base Premium with 10% Surcharge          $495.00 per month


Page 10                                                                                    Medicare Report: March 2011
Base premium with 45% Reduction (for $248.00 (for those who have 30-39 quarters
those with 30-39 quarters of coverage)    of coverage)
Base premium with 45% Reduction and $272.80 per mont
10% surcharge
2011 Part B - Supplementary Medical Insurance (SMI)
Under Part B, the Supplementary Medical Insurance (SMI) program, all enrollees are subject to a monthly premium. In
addition, most SMI services are subject to an annual deductible and coinsurance (percent of costs that the enrollee must
pay), which are set by statute. Further, when Part B enrollment takes place more than 12 months after a person’s initial
enrollment period, there is a permanent 10% increase in the premium for each year the beneficiary had the opportunity
to (but failed to) enroll.
For 2011, the standard premium for SMI services is $115.40 a month; the deductible is $162.00 a year; and the
coinsurance is 20%. The Part B premium is influenced by the beneficiary’s income and can be substantially higher based
on income. The higher premium amounts and relative income levels for those amounts are contained in CR 7224, which is
available at http://www.cms.hhs.gov/Transmittals/downloads/R65GI.pdf on the Centers for Medicare & Medicaid Services
(CMS) website.
AddiTionAl informATion
The official instruction, CR 7224, issued to your carriers, DME MACs, FIs, A/B MACs, and RHHIs regarding this change
may be viewed at http://www.cms.gov/Transmittals/downloads/R65GI.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

inCentiVe Payment Program for Primary Care serViCes, seCtion 5501(a) of tHe affordable
Care aCt

MLN Matters® Number: MM7060
Related Change Request (CR) #: 7060
Related CR Release Date: August 27, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2039CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians and non-physician practitioners submitting claims to Medicare carriers and Part A/B Medicare Administrative
Contractors (A/B MAC) for primary care services provided to Medicare beneficiaries are affected.
WHAT you need To KnoW
This article, based on Change Request (CR) 7060, explains that Section 5501(a) of The Affordable Care Act provides
for an incentive payment for primary care services furnished on or after January 1, 2011 and before January 1, 2016 by
a primary care practitioner. The incentive payment will be paid on a monthly or quarterly basis in an amount equal to 10
percent of the payment amount for such services under Part B. See the Background and Additional Information Section
of this article for further details regarding these changes.
Security Act by adding new paragraph (x), “Incentive Payments for Primary Care Services.” Section 1833(x) of the Social
Security Act states that, in the case of primary care services furnished on or after January 1, 2011 and before January 1,
2016 by a primary care practitioner, there also will be paid on a monthly or quarterly basis an amount equal to 10 percent
of the payment amount for such services under Part B.
Specifically, the incentive payments will be made on a quarterly basis and will equal 10 percent of the amount paid for
primary care services under the Medicare Physician Fee Schedule for those services furnished during the bonus payment
year. (For bonus payments to Critical Access Hospitals paid under the optional method, see Chapter 4, Section 250.12
of the Medicare Claims Processing Manual at http://www.cms.gov/manuals/downloads/clm104c04.pdf on the Centers for
Medicare & Medicaid Services (CMS) website.)
NOTE: The new Health Professional Shortage Area (HPSA) Surgical Incentive Payment Program (HSIP) and the new
Primary Care Incentive Payment Program (PCIP) will be implemented in conjunction with one another for CY 2011. A
separate article will be available at http://www.cms.gov/MLNMattersArticles/downloads/MM7063.pdf upon release of CR
7063 CR for HSIP. The former “special HPSA remittance” will now be known as the “special incentive remittance”. This
change is necessary as the PCIP is open to all eligible primary care providers regardless of the geographic location in
which the primary care services are being furnished.




Medicare Report: March 2011                                                                                     Page 11
Primary Care Practitioner Defined
Section 5501(a)(2)(A) of The Affordable Care Act defines a primary care practitioner as:
    •	    A physician who has a primary specialty designation of family medicine, internal medicine, geriatric medicine, or
          pediatric medicine; or
    •	    A nurse practitioner, clinical nurse specialist, or physician assistant for whom primary care services accounted for
          at least 60 percent of the allowed charges under the Physician Fee Schedule (PFS) for the practitioner in a prior
          period as determined appropriate by the Secretary of Health and Human services.
Primary Care Services Defined
Section 5501(a)(2)(B) of The Affordable Care Act defines primary care services as those services identified by the following
Current Procedure Terminology (CPT) codes as of January 1, 2009 (and as subsequently modified by the Secretary of
Health and Human Services, as applicable):
    •	    99201 through 99215 for new and established patient office or other outpatient Evaluation and Management
          (E/M) visits;
    •	    99304 through 99340 for initial, subsequent, discharge, and other nursing facility E/M services; new and
          established patient domiciliary, rest home (e.g., boarding home), or custodial care E/M services; and domiciliary,
          rest home (e.g., assisted living facility), or home care plan oversight services; and
    •	    99341 through 99350 for new and established patient home E/M visits.
These codes are displayed in the following table. All of these codes remain active in Calendar Year (CY) 2011 and there
are no other codes used to describe these services.
Primary Care Services Eligible for Primary Care Incentive Payments in CY 2011

CPT Codes        Description
99201            Level 1 new patient office or other outpatient visit
99202            Level 2 new patient office or other outpatient visit
99203            Level 3 new patient office or other outpatient visit
99204            Level 4 new patient office or other outpatient visit
99205            Level 5 new patient office or other outpatient visit
99211            Level 1 established patient office or other outpatient visit
99212            Level 2 established patient office or other outpatient visit
99213            Level 3 established patient office or other outpatient visit
99214            Level 4 established patient office or other outpatient visit
99215            Level 5 established patient office or other outpatient visit
99304            Level 1 initial nursing facility care
99305            Level 2 initial nursing facility care
99306            Level 3 initial nursing facility care
99307            Level 1 subsequent nursing facility care
99308            Level 2 subsequent nursing facility care
99309            Level 3 subsequent nursing facility care
99310            Level 4 subsequent nursing facility care
99315            Nursing facility discharge day management; 30 minutes
99316            Nursing facility discharge day management; more than 30 minutes
99318            Other nursing facility services; evaluation and management of a patient
                 involving an annual nursing facility assessment
99324            Level 1 new patient domiciliary, rest home, or custodial care visit
99325            Level 2 new patient domiciliary, rest home, or custodial care visit
99326            Level 3 new patient domiciliary, rest home, or custodial care visit
99327            Level 4 new patient domiciliary, rest home, or custodial care visit
99328            Level 5 new patient domiciliary, rest home, or custodial care visit
99334            Level 1 established patient domiciliary, rest home, or custodial care visit
99335            Level 2 established patient domiciliary, rest home, or custodial care visit
99336            Level 3 established patient domiciliary, rest home, or custodial care visit
99337            Level 4 established patient domiciliary, rest home, or custodial care visit
99339            Individual physician supervision of a patient in home, domiciliary or rest
                 home recurring complex and multidisciplinary care modalities; 30 minutes
99340            Individual physician supervision of a patient in home, domiciliary or rest
                 home recurring complex and multidisciplinary care modalities; 30 minutes or
                 more

Page 12                                                                                      Medicare Report: March 2011
CPT Codes Description
99341         Level 1 new patient home visit
99342         Level 2 new patient home visit
99343         Level 3 new patient home visit
99344         Level 4 new patient home visit
99345         Level 5 new patient home visit
99347         Level 1 established patient home visit
99348         Level 2 established patient home visit
99349         Level 3 established patient home visit
99350         Level 4 established patient home visit
Primary Care Incentive Payment Program (PCIP)
For primary care services furnished on or after January 1, 2011 and before January 1, 2016, a 10 percent incentive
payment will be provided to primary care practitioners, identified as: (1) in the case of physicians, enrolled in Medicare
with a primary specialty designation of 08-family practice, 11-internal medicine, 37-pediatrics, or 38-geriatrics; or (2) in the
case of non-physician practitioners, enrolled in Medicare with a primary care specialty designation of 50-Nurse
Practitioner, 89-certified Clinical Nurse Specialist, or 97-Physician Assistant; and (3) for whom the primary care services
displayed in the above table accounted for at least 60 percent of the allowed charges under the PFS for such practitioner
during the time period that has been specified by the Secretary.
CMS will provide Medicare contractors with a list of the National Provider Identifiers (NPIs) of the primary care practitioners
eligible to receive the incentive payments.
Eligible practitioners would be identified on a claim based on the NPI of the rendering practitioner. If the claim is submitted
by a practitioner or group practice, the rendering practitioner’s NPI must be included on the line-item for the primary care
service (identified in the above table) in order for a determination to be made regarding whether or not the service is
eligible for payment under the PCIP. In order to be eligible for the PCIP, Physician Assistants, Clinical Nurse Specialists,
and Nurse Practitioners must be billing for their services under their own NPI and not furnishing services incident to
physicians’ services. Regardless of the specialty area in which they may be practicing, these specific non-physician
practitioners are eligible for the PCIP based on their profession and historical percentage of allowed charges as primary
care services that equals or exceeds the 60 percent threshold.
Beginning in CY 2011, primary care practitioners will be identified based on their primary specialty of enrollment in
Medicare and percentage of allowed charges for primary care services that equals or exceeds the 60 percent threshold
from Medicare claims data 2 years prior to the bonus payment year. A provision to accommodate newly enrolled Medicare
providers will be released in 2011.
Coordination with Other Payments
Section 5501(a)(3) of The Affordable Care Act provides payment under the PCIP as an additional payment amount for
specified primary care services without regard to any additional payment for the service under section 1833(m) of The
Social Security Act. Therefore, an eligible primary care physician furnishing a primary care service in a HPSA may receive
both a HPSA physician bonus payment under the established program and a PCIP payment under the new program
beginning in CY 2011.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
The official instruction, CR 7060, issued to your Medicare carrier and/or MAC regarding this change may be viewed at
http://www.cms.gov/Transmittals/downloads/R2039CP.pdf on the CMS website.

new PHysiCian sPeCialty Codes for CardiaC eleCtroPHysiology and sPorts mediCine

MLN Matters® Number: MM7209
Related Change Request (CR) #: 7209
Related CR Release Date: November 19, 2010
Effective Date: April 1, 2011
Related CR Transmittal #: R2098
Implementation Date: April 4, 2011
Provider TyPes AffecTed
This article is for physicians and non-physician practitioners who bill Medicare carriers and Medicare Administrative
Contractors (A/B MAC) for providing cardiac electrophysiology and sports medicine services to Medicare beneficiaries.
WHAT you need To KnoW
Medicare physician and non-physician practitioner specialty codes describe the specific/unique types of medicine that
physicians and non-physician practitioners (and certain other suppliers) practice. Specialty codes are used by the Centers
Medicare Report: March 2011                                                                                           Page 13
for Medicare & Medicaid Services (CMS) for programmatic and claims processing purposes, each code becoming
associated with the claims that a physician or non-physician practitioner submits.
NOTE: Physicians, who enroll in Medicare, self-designate their Medicare physician specialty on the Medicare enrollment
application (CMS-855I) or Internet-based Provider Enrollment, Chain and Ownership System; however, non-physician
practitioners are assigned a Medicare specialty code when they enroll.
CR 7209, from which this article is taken, announces that (effective April 1, 2011) CMS will establish new physician
specialty codes for Cardiac Electrophysiology and Sports Medicine. These codes are:
    •	    Cardiac Electrophysiology – 21; and
    •	    Sports Medicine – 23.
You should ensure that your billing staffs are aware of these new physician specialty codes.
AddiTionAl informATion
You can find CR 7209, located at http://www.cms.gov/Transmittals/downloads/R2098CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

outPatient tHeraPy CaP Values for Cy 2011

MLN Matters® Number: MM7107
Related Change Request (CR) #: 7107
Related CR Release Date: October 22, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2073CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Medicare Administrative
Contractors (MACs), Fiscal Intermediaries (FIs), and/or Regional Home Health Intermediaries (RHHIs)) for therapy
services provided to Medicare beneficiaries.
Provider AcTion needed
This article is based on Change Request (CR) 7107, which describes the Centers for Medicare & Medicaid Services
(CMS) policy for outpatient therapy caps for Calendar Year (CY) 2011. No change to the exceptions process is anticipated,
if it should be extended into 2011. Be sure billing staff is aware of the updates.
BAcKground
The Balanced Budget Act of 1997 set therapy caps, which change annually, for Part B Medicare patients. The Deficit
Reduction Act of 2005 allowed CMS to establish a process for exceptions to therapy caps for medically necessary services.
The Affordable Care Act extended exceptions to therapy caps through December 31, 2010.
Therapy caps for 2011 will be $1870. The exceptions process will continue unchanged for the time frame directed by the
Congress.
Note that the limitations apply to outpatient services and do not apply to Skilled Nursing Facility (SNF) residents in a
covered Part A stay, including swing beds. Rehabilitation services are included within the global Part A per diem payment
that the SNF receives under the prospective payment system (PPS) for the covered stay. Also, limitations do not apply
to any therapy services billed under the Home Health PPS, inpatient hospitals or the outpatient department of hospitals,
including critical access hospitals.
AddiTionAl informATion
The official instruction, CR 7170, issued to your FI, carrier, A/B MAC, or RHHI regarding this change may be viewed at
http://www.cms.gov/Transmittals/downloads/R2073CP.pdf on the CMS website.
Additional information concerning outpatient therapy services may be found at http://www.cms.hhs.gov/therapyservices
on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.




Page 14                                                                                  Medicare Report: March 2011
seCtion 5501(b) inCentiVe Payment Program for maJor surgiCal ProCedures furnisHed in
HealtH Professional sHortage areas under tHe affordable Care aCt (tHe affordable Care
aCt)

MLN Matters® Number: MM7063
Related Change Request (CR) #: 7063
Related CR Release Date: August 27, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2040CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This program is for general surgeons submitting claims to Medicare contractors (carriers and Medicare Administrative
Contractors (MAC)) for major surgical procedures furnished in Health Professional Shortage Areas (HPSAs) to Medicare
beneficiaries.
Provider AcTion needed
STOP – Impact to You
This article, based on change request (CR) 7063, explains that Section 5501(b) of the Affordable Care Act (ACA) revises
section 1833(m) of the Social Security Act, referred to as the Act, and authorizes an incentive payment program for major
surgical services furnished by general surgeons in Health Professional Shortage Areas (HPSAs). This section of the ACA
provides for payments on a monthly or quarterly basis in an amount equal to 10 percent of the payment for physicians’
professional services under Medicare Part B.
CAUTION – What You Need to Know
This new program will be known as the HPSA Surgical Incentive Payment Program (HSIP). The incentive payment applies
to major surgical procedures, defined as 10-day and 90-day global procedures, under the Physician Fee Schedule (PFS)
and furnished on or after January 1, 2011, and before January 1, 2016, by a general surgeon with a primary specialty code
of 02 (General Surgery) in an area designated under section 332(a)(1)(A) of the Public Health Service Act as a HPSA.
Section 5501(b)(4) of the ACA provides payment under the HSIP as an additional payment amount for specified surgical
services without regard to any additional payment for the service under section 1833(m) of the Act. Therefore, a general
surgeon may receive both a HPSA physician bonus payment under the established program and an HSIP payment under
the new program beginning in CY 2011.
GO – What You Need to Do
Modifier AQ is to be used to denote claims that were furnished in HPSAs approved by December 31 of the preceding
calendar year, but that are not recognized for automatic payment. The modifier must be appended to the surgical procedure
for the service to be eligible for the 10 percent additional HSIP payment, unless the services are provided in a ZIP code
on the list of HPSA ZIP codes where automatic incentive payments are made. The list of these ZIP codes is available
at http://www.cms.gov/HPSAPSAPhysicianBonuses/01_overview.asp on the Centers for Medicare & Medicaid Services
(CMS) website. Please ensure that your billing staffs of aware of this change.
BAcKground
Section 5501(b) of the Affordable Care Act revises section 1833(m) of the Act and authorizes an incentive payment
program for major surgical services furnished by general surgeons in Health Professional Shortage Areas (HPSAs). The
section indicates that there also shall be paid (on a monthly or quarterly basis) an amount equal to 10 percent of the
payment for physicians’ professional services under Part B.
Note: The new HPSA Surgical Incentive Payment Program (HSIP) and the new Primary Care Incentive Payment Program
(PCIP) will be implemented in conjunction with one another for CY 2011. CMS issued CR 7060 with requirements specific
to the PCIP. (The MLN Matters® article related to CR 7060 is available at http://www.cms.gov/MLNMattersArticles/
downloads/MM7060.pdf on the CMS website.) The former “special HPSA remittance” will now be known as the “special
incentive remittance.”
The incentive payment applies to major surgical procedures, defined as 10-day and 90-day global procedures, under the
PFS and furnished on or after January 1, 2011, and before January 1, 2016, by a general surgeon in an area designated
under section 332(a)(1)(A) of the Public Health Service Act as a HPSA.
HPSA Surgical Incentive Payment Program (HSIP)
For services furnished on or after January 1, 2011 and before January 1, 2016, a 10 percent incentive payment will be
paid to general surgeons, identified by their enrollment in Medicare with a primary specialty code of 02 (General Surgery),
in addition to the amount they would otherwise be paid for their professional services under Part B, when they furnish a
major surgical procedure in an area designated by the Secretary of Health and Human Services, as of December 31 of
the prior year as a HPSA.

Medicare Report: March 2011                                                                                      Page 15
To be consistent with the original Medicare HPSA physician bonus program, HSIP payments will be calculated by Medicare
contractors based on the identification criteria for payment discussed below and paid on a quarterly basis on behalf of
the qualifying general surgeon, for the qualifying major surgical procedures. The surgeon’s professional services are paid
under the PFS based on a claim for professional services.
Identification
Qualifying general surgeons would be identified on a claim in the incentive payment program year for a major surgical
procedure based on the primary specialty of 02 of the rendering physician, identified by his or her National Provider
Identifier (NPI). If the claim is submitted by a physician group or practice, the rendering physician’s NPI must be included
on the line-item for the major surgical procedure in order for a determination to be made regarding whether or not the
procedure is eligible for payment under the HSIP.
Each year, a list of ZIP codes eligible for automatic payment for the established HPSA bonus is published. This list of ZIP
codes will be utilized for automatic payments of the incentive payment for eligible services furnished by general surgeons.
Modifier AQ is used to identify circumstances when general surgeons furnish services in areas that are designated as
HPSAs as of December 31 of the prior year, but that are not on the list of ZIP codes eligible for automatic payment.
Modifier AQ should be appended to the major surgical procedure on claims submitted for payment, similar to the current
process for payment of the original Medicare HPSA physician bonus when the HPSA is not a HPSA identified for automatic
payment.
CMS is defining major surgical procedures as those for which a 10-day or 90-day global period is used for payment under
the PFS.
Computation of Payment
Medicare contractors will compute the payment and pay general surgeons an additional incentive payment 10 percent of
the amount actually paid for the service, not the Medicare approved payment amount. Claim adjustment reason code LE
will identify the incentive payment as noted on the special remittance generated with the incentive payment.
AddiTionAl informATion
The official instruction, CR 7063, issued to your Medicare carrier and/or MAC regarding this incentive program may be
viewed at http://www.cms.gov/Transmittals/downloads/R2040CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

waiVer of CoinsuranCe and deduCtible for PreVentiVe serViCes, seCtion 4104 of tHe
affordable Care aCt, remoVal of barriers to PreVentiVe serViCes in mediCare

MLN Matters® Number: MM7012
Related Change Request (CR) #: 7012
Related CR Release Date: July 30, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R739OTN
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians, hospitals, and other providers who submit claims to Medicare Fiscal Intermediaries (FI),
carriers, or Medicare Administrative Contractors (A/B MAC) for providing preventive services to Medicare beneficiaries.
WHAT you need To KnoW
Change Request (CR) 7012, from which this article is taken, implements the changes in Section 4104 of The Affordable
Care Act. The CR announces that (effective for dates of service on or after January 1, 2011) Medicare will provide 100
percent payment (in other words, will waive any coinsurance or copayment) for the Initial Preventive Physical Examination
(IPPE), the Annual Wellness Visit (AWV), and for those preventive services that: 1) Are identified with a grade of A or B
by the United States Preventive Services Task Force (USPSTF) for any indication or population; and 2) Are appropriate
for the individual.
BAcKground
Sections of The Affordable Care Act amend sections of The Social Security Act to require changes in payment (with
respect to deductible and coinsurance/copayment) for identified preventive services: In addition, The Affordable Care Act
waives the deductible and coinsurance/copayment for the IPPE and the AWV. The changes apply in all settings in which
the services are furnished.
The following preventive services are covered by Medicare:
    •	    Pneumococcal, influenza, and hepatitis B vaccine and administration;
    •	    Screening mammography;
    •	    Screening pap smear and screening pelvic examination;
Page 16                                                                                    Medicare Report: March 2011
    •	   Prostate cancer screening tests;
    •	   Colorectal cancer screening tests;
    •	   Diabetes Outpatient Self-Management Training (DSMT);
    •	   Bone mass measurement;
    •	   Screening for glaucoma;
    •	   Medical Nutrition Therapy (MNT) services;
    •	   Cardiovascular screening blood test;
    •	   Diabetes screening tests;
    •	   Ultrasound screening for Abdominal Aortic Aneurysm (AAA); and
    •	   Additional preventive services (identified for coverage through the National Coverage Determination (NCD)
         process. Currently, these are limited to Human Immunodeficiency Virus (HIV) testing).
Preventive Services That Do Not Have a USPSTF Grade A or B
The Affordable Care Act waives the deductible and coinsurance/copayment for many of the preventive services listed
above because those services have a recommendation grade of A or B by the USPSTF. In other cases, the deductible
and coinsurance are waived because the preventive services are clinical laboratory tests to which the deductible and
coinsurance do not apply according to another section of the statute.
Several preventive services covered by Medicare do not have a USPSTF recommendation grade of A or B. These include
digital rectal examinations provided as prostate screening tests; glaucoma screening; DSMT services; and barium enemas
provided as colorectal cancer screening tests. In the case of a screening barium enema, the deductible is waived under
another section of the statute. The deductible continues to apply to the other services and coinsurance/copayment also
continue to apply to all of them.
The table in CR7012 provides a complete list of the Healthcare Common Procedure Coding System (HCPCS) codes
that are defined as preventive services under Medicare and also identifies the HCPCS codes for the IPPE and the
AWV. CR7012 is available at http://www.cms.gov/Transmittals/downloads/R739OTN.pdf Centers for Medicare & Medicaid
Services (CMS) website.
Extension of Waiver of Deductible to Services Furnished in Connection with or in Relation to a Colorectal
Screening Test that Becomes Diagnostic or Therapeutic
The Affordable Care Act waives the Part B deductible for colorectal cancer screening tests that become diagnostic. The
Medicare policy is that the deductible is waived for all surgical procedures (Current Procedural Terminology (CPT) code
range of 10000 to 69999) furnished on the same date and in the same encounter as a colonoscopy, flexible sigmoidoscopy,
or barium enema that were initiated as colorectal cancer screening services. Modifier “PT” has been created effective
January 1, 2011 and providers and practitioners should append the modifier “PT” to a least one CPT code in the surgical
range of 10000 to 69999 on a claim for services furnished in this scenario.
AddiTionAl informATion
You can find more information about the waiver of coinsurance and deductible for preventive services by going to CR7012,
located at http://www.cms.gov/Transmittals/downloads/R739OTN.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

annual wellness Visit (awV), inCluding Personalized PreVention Plan serViCes (PPPs)

MLN Matters® Number: MM7079 Revised
Related Change Request (CR) #: 7079
Related CR Release Date: December 3, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R134BP and R2109CP
Implementation Date: April 4, 2011
Note: This article was revised on December 22, 2010, to correct a typo in the next to last paragraph on page 5. In that
paragraph, a code of G0439 was inadvertently referenced as G0429. All other information is the same.
Provider TyPes AffecTed
This article is for physicians, non-physician practitioners, and providers submitting claims to Medicare contractors (carriers,
Medicare Administrative Contractors (MACs), and/or Fiscal Intermediaries (FIs) for services provided to Medicare
beneficiaries.
Provider AcTion needed
The Affordable Care Act provides for an Annual Wellness Visit (AWV), including Personalized Prevention Plan Services

Medicare Report: March 2011                                                                                          Page 17
(PPPS) for Medicare beneficiaries as of January 1, 2011. CR 7079 provides the requirements for the AWV, which are
summarized in this article. Make sure billing staff are aware of these services and how to bill for them.
BAcKground
Pursuant to section 4103 of the Affordable Care Act of 2010 , the Centers for Medicare & Medicaid Services (CMS)
amended sections 411.15(a)(1) and 411.15 (k)(15) of 42 CFR (list of examples of routine physical examinations excluded
from coverage) effective for services furnished on or after January 1, 2011. This amendment’s expanded coverage is
subject to certain eligibility and other limitations that allow payment for an AWV, including PPPS, for an individual who is
no longer within 12 months after the effective date of his or her first Medicare Part B coverage period and has not received
either an initial preventive physical examination (IPPE) or an AWV within the past 12 months. Medicare coinsurance
and Part B deductibles do not apply to the AWV. The AWV will include the establishment of, or update to, the individual’s
medical and family history, measurement of his or her height, weight, body-mass index (BMI) or waist circumference,
and blood pressure (BP), with the goal of health promotion and disease detection and fostering the coordination of the
screening and preventive services that may already be covered and paid for under Medicare Part B.
Who is Eligible to Provide the AWV with PPPS?
    •	    A physician who is a doctor of medicine or osteopathy (as defined in section 1861(r)(1) of the Social Security Act
          (the Act); or,
    •	    A physician assistant, nurse practitioner, or clinical nurse specialist (as defined in section 1861(aa)(5) of the Act);
          or,
    •	    A medical professional (including a health educator, registered dietitian, or nutrition professional or other licensed
          practitioner) or a team of such medical professionals, working under the direct supervision (as defined in CFR
          410.32(b)(3)(ii)) of a physician as defined in the first bullet point of this section.
What is Included in an Initial AWV with PPPS?
The initial AWV providing PPPS provides for the following services to an eligible beneficiary by a health professional:
    •	    Establishment of an individual’s medical/family history.
    •	    Establishment of a list of current providers and suppliers that are regularly involved in providing medical care to
          the individual.
    •	    Measurement of an individual’s height, weight, BMI (or waist circumference, if appropriate), BP, and other routine
          measurements as deemed appropriate, based on the beneficiary’s medical/family history.
    •	    Detection of any cognitive impairment that the individual may have as defined in this section.
    •	    Review of the individual’s potential (risk factors) for depression, including current or past experiences with
          depression or other mood disorders, based on the use of an appropriate screening instrument for persons without
          a current diagnosis of depression, which the health professional may select from various available standardized
          screening tests designed for this purpose and recognized by national medical professional organizations.
    •	    Review of the individual’s functional ability and level of safety based on direct observation, or the use of
          appropriate screening questions or a screening questionnaire, which the health professional may select from
          various available screening questions or standardized questionnaires designed for this purpose and recognized
          by national professional medical organizations.
    •	    Establishment of a written screening schedule for the individual, such as a checklist for the next 5 to 10 years, as
          appropriate, based on recommendations of the United States Preventive Services Task Force (USPSTF) and the
          Advisory Committee on Immunization Practices (ACIP), as well as the individual’s health status, screening history,
          and age-appropriate preventive services covered by Medicare.
    •	    Establishment of a list of risk factors and conditions for which primary, secondary, or tertiary interventions are
          recommended or are underway for the individual, including any mental health conditions or any such risk factors
          or conditions that have been identified through an IPPE, and a list of treatment options and their associated risks
          and benefits.
    •	    Furnishing of personalized health advice to the individual and a referral, as appropriate, to health education
          or preventive counseling services or programs aimed at reducing identified risk factors and improving self-
          management, or community-based lifestyle interventions to reduce health risks and promote self-management
          and wellness, including weight loss, physical activity, smoking cessation, fall prevention, and nutrition.
    •	    Voluntary advance care planning (as defined in this section) upon agreement with the individual.
    •	    Any other element(s) determined appropriate by the Secretary of Health and Human Services through the National
          Coverage Determination (NCD) process.
What would be Included in a Subsequent AWV/PPPS?
In subsequent AWVs, the following services would be provided to an eligible beneficiary by a health professional:
    •	    An update of the individual’s medical/family history.

Page 18                                                                                        Medicare Report: March 2011
    •	   An update of the list of current providers and suppliers that are regularly involved in providing medical care to the
         individual, as that list was developed for the first AWV providing PPPS.
    •	   Measurement of an individual’s weight (or waist circumference), BP, and other routine measurements as deemed
         appropriate, based on the individual’s medical/family history.
    •	   Detection of any cognitive impairment that the individual may have as defined in this section.
    •	   An update to the written screening schedule for the individual as that schedule is defined in this section, that was
         developed at the first AWV providing PPPS.
    •	   An update to the list of risk factors and conditions for which primary, secondary, or tertiary interventions are
         recommended or are under way for the individual, as that list was developed at the first AWV providing PPPS.
    •	   Furnishing of personalized health advice to the individual and a referral, as appropriate, to health education or
         preventive counseling services or programs.
    •	   Voluntary advance care planning (as defined in this section) upon agreement with the individual.
    •	   Any other element(s) determined by the Secretary through the NCD process.
Note: Voluntary Advanced Care Planning refers to verbal or written information regarding an individual’s ability to prepare
an advance directive in the case where an injury or illness causes the individual to be unable to make health care
decisions and whether or not the physician is willing to follow the individual’s wishes as expressed in an advance directive.
Billing Requirements
Two new HCPCS codes, G0438 - Annual wellness visit, includes a personalized prevention plan of service (PPPS), first
visit, (Short descriptor – Annual wellness first) and G0439 - Annual wellness visit, includes a personalized prevention plan
of service (PPPS), subsequent visit, (Short descriptor – Annual wellness subseq) will be implemented January 1, 2011,
through the Medicare Physician Fee Schedule Database (MPFSDB) and Integrated Outpatient Code Editor (IOCE).
Effective for services on or after January 1, 2011, Medicare contractors will pay claims containing these codes provided
the requirements for coverage and eligibility are met. Institutional providers need to submit these claims via Types of Bill
(TOB) 12X, 13X, 22X, 23X, 71X, 77X, or 85X. Institutional providers will be paid as follows:
    •	   For services performed on a 12X TOB and 13X TOB, hospital inpatient Part B and hospital outpatient, payment
         shall be made under the MPFS.
    •	   For TOBs 22X and 23X, skilled nursing facilities will be paid based on the MPFS.
    •	   Rural Health Clinics (TOB 71X) and Federally Qualified Health Centers (TOB 77X) will be paid based on the all-
         inclusive rate.
    •	   For services performed on an 85X TOB, Critical Access Hospital (CAH), pay based on reasonable cost.
    •	   CAHs claims (submitted on TOB 85X with revenue codes 096X, 097X, and 098X) will be paid based on MPFS.
    •	   For inpatient or outpatient services in hospitals in Maryland, make payment according to the Health Services Cost
         Review Commission.
Other Billing Requirements
Remember that G0438 is for the first AWV only. Thus, submission of G0438 for a beneficiary for whom a claim with code
G0438 has already been paid will result in a denial of the later G0438 with a Claim Adjustment Reason Code (CARC) of
149 (Lifetime benefit maximum has been reached for the service/benefit category.) and a Remittance Advice Remarks
Code (RARC) of N117 (This service is paid only once in a patient’s lifetime.).
Remember also that the G0438 or G0439 must not be billed within 12 months of a previous billing of a G0402 (IPPE),
G0438, or G0439 for the same beneficiary. Such subsequent claims will be denied with a CARC of 119 (Benefit maximum
for this time period or occurrence has been reached) and a RARC of N130 (Consult plan benefit documents/guidelines for
information about restrictions for this service).
If a claim for a G0438 or G0439 is submitted within the first 12 months after the effective date of the beneficiary’s first
Medicare Part B coverage, it will also be denied as that beneficiary is eligible for the IPPE or “Welcome to Medicare”
physical. Such claims with G0438 or G0439 will be denied with a CARC of 26 (Expenses incurred prior to coverage) and
a RARC of N130.
AddiTionAl informATion
The official instruction, CR 7079, was issued to your carrier, FI, or A/B MAC via two transmittals. The first modified the
Medicare Claims Processing Manual and it is available at http://www.cms.gov/Transmittals/downloads/R2109CP.pdf on
the CMS website. The second transmittal updates the Medicare Benefit Policy Manual, which is at http://www.cms.gov/
Transmittals/downloads/R134BP.pdf on the CMS website. See these two transmittals for more complete details regarding
this benefit.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.



Medicare Report: March 2011                                                                                         Page 19
Common working file (Cwf) unsoliCited resPonse adJustments for Certain Claims denied
due to an oPen mediCare seCondary Payer (msP) grouP HealtH Plan (gHP) reCord wHere
tHe gHP reCord was subseQuently deleted or terminated


MLN Matters® Number: MM6625 Revised
Related Change Request (CR) #: 6625
Related CR Release Date: December 3, 2010
Effective Date: April 1, 2011
Related CR Transmittal #: R2112CP
Implementation Date: July 5, 2011
Note: This article was revised on December 6, 2010, to reflect a revision to CR 6625. The implementation date has been
changed to July 5, 2011. The CR release date, transmittal number, and the Web address for accessing CR 6625 has been
revised. All other information is the same.
Provider TyPes AffecTed
Physicians, providers, and suppliers who bill Medicare contractors (fiscal intermediaries (FI), Regional Home Health
Intermediaries (RHHI), carriers, Medicare Administrative Contractors (A/B MAC), or Durable Medical Equipment
Contractors (DME MAC) for services provided, or supplied, to Medicare beneficiaries.
WHAT you need To KnoW
CR 6625, from which this article is taken, instructs Medicare contractors (FIs, RHHIs, carriers, A/B MACS, and DME
MACs) and shared system maintainers (SSM) to implement (effective April 1, 2011) an automated process to reopen
Group Health Plan (GHP) Medicare Secondary Payer (MSP) claims when related MSP data is deleted or terminated after
claims were processed subject to the beneficiary record on Medicare’s database. Make sure that your billing staffs are
aware of these new Medicare contractor instructions. Please see the Background section, below, for more details.
BAcKground
MSP GHP claims were not automatically reprocessed in situations where Medicare became the primary payer after an
MSP GHP record had been deleted or when an MSP GHP record was terminated after claims were processed subject to
MSP data in Medicare files. It was the responsibility of the beneficiary, provider, physician or other suppliers to contact the
Medicare contractor and request that the denied claims be reprocessed when reprocessing was warranted. However, this
process places a burden on the beneficiary, physician, or other supplier and CR 6625 eliminates this burden. As a result
of CR 6625, Medicare will implement an automated process to:
    1) Reopen certain MSP claims when certain MSP records are deleted, or
    2) Under some circumstances when certain MSP records are terminated and claims are denied due to MSP or
       Medicare made a secondary payment before the termination date is accreted.
Basically, where Medicare learns, retroactively, that Medicare Secondary Payer data for a beneficiary is no longer
applicable, Medicare will require its systems to search claims history for claims with dates of service within 180 days of a
MSP GHP deletion date or the date the MSP GHP termination was applied, which were processed for secondary payment
or were denied (rejected for Part A only claims). If claims were processed, the Medicare contractors will reprocess them
in view of the more current MSP GHP information and make any claims adjustments that are appropriate. If providers,
physicians or other suppliers believe some claim adjustments were missed please contact your Medicare contractor
regarding those missing adjustments.
AddiTionAl informATion
You can find the official instruction, CR6625, issued to your FI, RHHI, carrier, A/B MAC, or DME MAC by visiting http://
www.cms.gov/Transmittals/downloads/R2112CP.pdf on the Centers for Medicare & Medicaid Services (CMS) website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

faCe Validity assessment of adVanCe benefiCiary notiCe (abn) for ComPlex mediCal reCord
reView

MLN Matters® Number: MM6988
Related Change Request (CR) #: 6988
Related CR Release Date: December 10, 2010
Effective Date: January 12, 2011
Related CR Transmittal #: R361PI
Implementation Date: January 12, 2011
Provider TyPes AffecTed
All providers submitting claims to Medicare contractors (Carriers, Fiscal Intermediaries (FIs), Regional Home Health

Page 20                                                                                       Medicare Report: March 2011
Intermediaries (RHHIs), Part A/B Medicare Administrative Contractors (A/B MACs) and Durable Medical Equipment
(DME) MACs) for services provided to Medicare beneficiaries are affected.
Provider AcTion needed
This article is based on Change Request (CR) 6988. This CR advises contractors about the addition of Section 3.15,
ABN and Complex Medical Record Review, to Chapter 3 of the Medicare Program Integrity Manual (PIM). This addition
directs contractors to request, as part of the Additional Documentation Requests (ADRs), required ABNs when performing
a complex medical record review on all claims. Please ensure that your staffs are aware of this change.
BAcKground
Requesting required ABNs on all claims undergoing complex medical record reviews and conducting face validity
assessments of mandatory ABNs will assist in ensuring that liability is assigned appropriately in accordance with the
Limitation on Liability Provisions of section 1879 of the Social Security Act.
The instructions in the Medicare Claims Processing Manual Chapter 30 Section 50.6.3 address how to complete an ABN.
In CR 6563, Healthcare Common Procedure Coding System (HCPCS) level 2 modifiers have been updated in order to
distinguish between voluntary and required uses of liability notices. The MLN Matters® article related to CR 6563 may
be viewed at http://www.cms.gov/MLNMattersArticles/downloads/MM6563.pdf on the Centers for Medicare & Medicaid
Services (CMS) website.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
The official instruction, CR 6988, issued to your Medicare carrier and/or MAC regarding this change may be viewed at
http://www.cms.gov/Transmittals/downloads/R361PI.pdf on the CMS website.

2011 durable mediCal eQuiPment ProstHetiCs, ortHotiCs, and suPPly (dmePos) HealtHCare
Common ProCedure Coding system (HCPCs) Code JurisdiCtion list

MLN Matters® Number: MM7257
Related Change Request (CR) #:7257
Related CR Release Date: January 14, 2011
Effective Date: January 1, 2011
Related CR Transmittal #: R2132CP
Implementation Date: February 15, 2011
Provider TyPes AffecTed
Suppliers submitting claims to Medicare contractors (DME Medicare Administrative Contractors (DME MACs), Part B
Carriers, and Medicare Administrative Contractors (A/B MACs)) for DMEPOS services provided to Medicare beneficiaries
are affected.
Provider AcTion needed
This article is informational and based on Change Request (CR) 7257 that notifies providers that the spreadsheet containing
an updated list of the Healthcare Common Procedure Coding System (HCPCS) codes for DME MAC, Part B carrier, or
A/B MAC jurisdictions is updated annually to reflect codes that have been added or discontinued (deleted) each year. The
spreadsheet is helpful to billing staff by showing the appropriate Medicare contractor to be billed for HCPCS appearing
on the spreadsheet. The spreadsheet for the 2011 Jurisdiction List is an Excel® spreadsheet and is available under the
Coding Category at http://www.cms.gov/center/dme.asp on the Centers for Medicare & Medicaid Services (CMS) website.
AddiTionAl informATion
The official instruction, CR7257, issued to your Medicare A/B MAC, carrier and DME/MAC regarding this change may be
viewed at http://www.cms.gov/Transmittals/downloads/R2132CP.pdf on the CMS website. The 2011 Jurisdiction List is
also attached to CR7257.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

CHanges to tHe laboratory national CoVerage determination (nCd) edit software for
January 2011

MLN Matters® Number: MM7204
Related Change Request (CR) #: 7204
Related CR Release Date: October 29, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2080CP
Implementation Date: January 3, 2011

Medicare Report: March 2011                                                                                      Page 21
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers submitting claims to Medicare carriers, Fiscal Intermediaries (FIs), or
Part A/B Medicare Administrative Contractors (A/B MACs) for clinical diagnostic laboratory services provided for Medicare
beneficiaries.
WHAT you need To KnoW
This article is based on Change Request (CR) 7204, which announces the changes that will be included in the January
2011 release of Medicare’s edit module for clinical diagnostic laboratory National Coverage Determinations (NCDs). The
last quarterly release of the edit module was issued in October 2010.
These changes become effective for services furnished on or after January 1, 2011. The changes that are effective for
dates of service on and after January 1, 2011 are as follows:
For Thyroid Testing:
          ICD-9-CM code 780.66 is added to the list of covered ICD-9-CM codes for the Thyroid Testing (190.22) NCD.
For Gamma Glutamyl Transferase:
          ICD-9-CM code 780.66 is deleted from the list of covered ICD-9-CM codes for the Gamma Glutamyl Transferase
          (190.32) NCD
Please ensure that your billing staffs are aware of these changes.
BAcKground
The NCDs for clinical diagnostic laboratory services were developed by the laboratory negotiated rulemaking committee
and published in a final rule on November 23, 2001. Nationally uniform software was developed and incorporated in
Medicare’s systems so that laboratory claims subject to one of the 23 NCDs were processed uniformly throughout the
nation effective July 1, 2003. In accordance with the Medicare Claims Processing Manual, Chapter 16, Section 120.2,
available at http://www.cms.gov/manuals/downloads/clm104c16.pdf on the Centers for Medicare & Medicaid Services
(CMS) website, the laboratory edit module is updated quarterly (as necessary) to reflect ministerial coding updates and
substantive changes to the NCDs developed through the NCD process.
AddiTionAl informATion
The official instruction, CR 7204 issued to your carrier, FI or A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2080CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

CHanges to tHe laboratory national CoVerage determination (nCd) edit software for aPril
2011

MLN Matters® Number: MM7290
Related Change Request (CR) #: 7290
Related CR Release Date: January 14, 2011
Effective Date: April 1, 2011
Related CR Transmittal #: R2133CP
Implementation Date: April 4, 2011
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers submitting claims to Medicare carriers, Fiscal Intermediaries (FIs), or
Part A/B Medicare Administrative Contractors (A/B MACs) for clinical diagnostic laboratory services provided for Medicare
beneficiaries.
WHAT you need To KnoW
This article is based on Change Request (CR) 7290, which announces the changes that will be included in the April 2011
release of Medicare’s edit module for clinical diagnostic laboratory National Coverage Determinations (NCDs).
The change that is effective for dates of service on and after April 1, 2011, is as follows:
For Blood Counts--ICD-9-CM code V49.87 will be added to the list of “Do Not Support Medical Necessity” ICD-9-CM
codes for the Blood Counts (190.15) NCD.
Please ensure that your billing staffs are aware of these changes.
BAcKground
NCDs for clinical diagnostic laboratory services were developed by the laboratory negotiated rulemaking committee and
the final rule was published on November 23, 2001. Nationally uniform software was developed and incorporated in the
shared systems so that laboratory claims subject to one of the 23 NCDs were processed uniformly throughout the nation.
In accordance with the Medicare Claims Processing Manual, Chapter 16, Section 120.2, available at http://www.cms.gov/

Page 22                                                                                        Medicare Report: March 2011
manuals/downloads/clm104c16.pdf on the Centers for Medicare & Medicaid Services (CMS) website, the laboratory edit
module is updated quarterly (as necessary) to reflect ministerial coding updates and substantive changes to the NCDs
developed through the NCD process.
AddiTionAl informATion
The official instruction, CR7290, issued to your FI, carrier and A/B MAC regarding this change, may be viewed at http://
www.cms.gov/Transmittals/downloads/R2133CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Specialty News
ambulanCe

air ambulanCe serViCes

MLN Matters® Number: MM7161
Related Change Request (CR) #: 7161
Related CR Release Date: October 22, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R133BP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Air ambulance providers submitting claims to Fiscal Intermediaries (FI), carriers, and Part A/B Medicare Administrative
Contractors (MAC) are affected.
Provider AcTion needed
This article is based on Change Request (CR) 7161, which updates Chapter 10, Section 10.4.6 of the Medicare Benefit
Policy manual to better describe special payment limitations for air ambulance services. No new policy is announced by
CR 7161. Please ensure that your staffs are aware of this clarification.
BAcKground
Section 10.4.6, Special Payment Limitations, of the Medicare Benefit Policy Manual has been updated and states that:
“If a determination is made to order transport by air ambulance, but ground ambulance service would have sufficed,
payment for the air ambulance service is based on the amount payable for ground transport.
If the air transport was medically appropriate (that is, ground transportation was contraindicated, and the beneficiary
required air transport to a hospital), but the beneficiary could have been treated at a nearer hospital than the one to which
they were transported, the air transport payment is limited to the rate for the distance from the point of pickup to that nearer
hospital.”
AddiTionAl informATion
The official instruction, CR 7161, issued to your FI, carrier, and A/B MAC regarding this change may be viewed at http://
www.cms.gov/Transmittals/downloads/R133BP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

ambulanCe inflation faCtor (aif) for Cy 2011 and ProduCtiVity adJustment

MLN Matters® Number: MM7042
Related Change Request (CR) #: 7042
Related CR Release Date: November 19, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2104CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for providers and suppliers of ambulance services who bill Medicare carriers, fiscal intermediaries (FIs), or
Part A/B Medicare Administrative Contractors (A/B MACs) for those services.
Provider AcTion needed
Change Request (CR) 7042, from which this article is taken, provides the ambulance inflation factor (AIF) for CY 2011.
The AIF for CY 2011 is -0.1%. CR7042 also includes updates to Chapter 15, section 20.4 of the Medicare Benefit Policy
Manual to incorporate a multi-factor productivity adjustment. Be sure billing staff are aware of the changes.

Medicare Report: March 2011                                                                                           Page 23
BAcKground
Section 1834(l) (3) (B) of the Social Security Act (the Act) provides the basis for updating payment limits that carriers, FIs,
and A/B MACs use to determine how much to pay you for the claims that you submit for ambulance services. Remember
that Part B coinsurance and deductible requirements apply to these services.
Specifically, this section of the Act provides for a 2011 payment update that is equal to the percentage increase in the
urban consumer price index (CPI-U), for the 12-month period ending with June of the previous year. Section 3401 of the
Affordable Care Act (ACA) amended Section 1834(l)(3) of the Act to apply a productivity adjustment to this update equal
to the 10-year moving average of changes in economy-wide private nonfarm business multi-factor productivity beginning
January 1, 2011. The resulting update percentage is referred to as the AIF.
The following table displays the AIF for CY 2011 and for the previous 8 years.
  Ambulance Inflation Factor by CY
2011                -0.1%
2010                0.0%
2009                5.0%
2008                2.7%
2007                4.3%
2006                2.5%
2005                3.3%
2004                2.1%
2003                1.1%
AddiTionAl informATion
The official instruction, CR 7042, issued to your carrier, FI, and/or A/B MAC regarding this change may be viewed at http://
www.cms.gov/Transmittals/downloads/R2104CP.pdf on the Centers for Medicare & Medicaid Services (CMS) website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

uPdates to tHe mediCare Claims ProCessing manual (PubliCation 100-04, CHaPter 15
(ambulanCe)) to CorreCt Claims billing instruCtions as well as to uPdate fee sCHedule
Payment rates mandated by tHe affordable Care aCt of 2010

MLN Matters® Number: MM7018
Related Change Request (CR) #: 7018
Related CR Release Date: December 23, 2010
Effective Date: January 25, 2011
Related CR Transmittal #: R2124CP
Implementation Date: January 25, 2011
Provider TyPes AffecTed
Ambulance providers/suppliers submitting claims to Medicare contractors (carriers, Fiscal Intermediaries (FIs), and/or A/B
Medicare Administrative Contractors (A/B MACs)) for ambulance services provided to Medicare beneficiaries.
WHAT you need To KnoW
This article is based on Change Request (CR) 7018 which updates the Medicare Claims Processing Manual to note
provisions extending several ambulance payment rate increases that were recently enacted by the Affordable Care Act of
2010. Specifically, the Affordable Care Act extends the increases of 3% for rural services and 2% for urban services through
December 31, 2010. These increases had been initially required by the Medicare Modernization Act and were extended
by the Medicare Improvements for Patients and Providers Act of 2008. CR 7018 also corrects the same manual’s Chapter
15, Section 30.1.2 to specify that the correct field for reporting the ZIP Code of the point-of-pickup of an ambulance trip on
a CMS-1500 claim form is Item 23, instead of item 32 as previously mentioned in that manual section.
If entities billing for ambulance services choose to submit claims in the 5010 837P electronic claim format on or after
January 1, 2011, they must comply with the requirement that a diagnosis code be included on the claim. CMS will not
be capable of accepting claims submitted under the 5010 version of the 837P that do not comply with this requirement.
(See MLN Matters article SE1029, released September 24, 2010, at http://www.cms.gov/MLNMattersArticles/downloads/
SE1029.pdf for details.) In addition, the loaded ambulance trip’s destination information will be required on the 5010 837P
electronic claim format. CR 7018 amends chapter 15 to include these instructions.
AddiTionAl informATion
The official instruction, CR 7018, issued to your carrier, FI, and A/B MAC regarding this change may be viewed at http://
www.cms.gov/Transmittals/downloads/R2124CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Page 24                                                                                       Medicare Report: March 2011
ambulantory surgiCal Center (asC)

January 2011 uPdate of tHe ambulatory surgiCal Center (asC) Payment system

MLN Matters® Number: MM7275
Related Change Request (CR) #: 7275
Related CR Release Date: December 29, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2128CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article has information for Ambulatory Surgical Centers (ASC) submitting claims for Medicare beneficiaries to Carriers
and A/B Medicare Administrative Contractors (A/B MACs).
Provider AcTion needed
This article is based on Change Request (CR) 7275, which contains the Recurring Update Notification describing changes
to and billing instructions for various payment policies implemented in the January 2011 ASC update. Be sure to inform
your staff of these changes.
BAcKground
Included in CR7275 are updates to the Healthcare Common Procedure Coding System (HCPCS), Calendar Year (CY)
2011 payment rates for separately payable drugs and biologicals, including long descriptors for newly created Level II
HCPCS codes for drugs and biologicals (ASC DRUG files), and CY 2011 ASC payment rates for covered surgical and
ancillary services (ASCFS file). The updates are as follows:
Updated Core Based Statistical Areas (CBSA)
Table 1 below shows updates to three CBSAs recognized by CMS for ASC claims with dates of service on and after
January 1, 2011.
Table 1 - January 1, 2011 Core Based Statistical Area (CBSA) Changes

COUNTY/STATE                             2010 CBSA 2011 CBSA
Crestview-Fort Walton Beach-Destin, FL   23020        18880
North Port-Bradenton-Sarasota-Venice, FL 14600        35840
Steubenville-Weirton, OH-WV              48260        44600
Drugs and Biologicals with Payment Based on Average Sales Price (ASP) Effective January 1, 2011
Payments for separately payable drugs and biologicals based on the Average Sales Prices (ASPs) are updated on a
quarterly basis as later quarter ASP submissions become available. Effective January 1, 2011, payment rates for many
covered ancillary drugs and biologicals have changed from the values published in the CY 2011 Outpatient Prospective
Payment System /Ambulatory Surgical Center (OPPS/ASC) final rule with comment period as a result of the new ASP
calculations based on sales price submissions from the third quarter of CY 2010. In cases where adjustments to payment
rates are necessary, the updated payment rates will be incorporated in the January 2011 release of the ASC DRUG file.
The updated payment rates effective January 1, 2011 for covered ancillary drugs and biologicals can be found in the
January 2011 update of the ASC Addendum BB available at http://www.cms.gov/ASCPayment/11_Addenda_Updates.
asp on the CMS website.
Payment for Category 3 New Technology Intraoccular Lenses (NTIOLs); Q1003
Medicare pays an additional $50 for specified Category 3 NTIOLs (reduced spherical aberration) that are provided in
association with a covered ASC surgical procedure. This current active class of NTIOLs, reported using HCPCS code
Q1003, has expired for dates of service beginning on February 27, 2011. Upon expiration of this NTIOL class, Q1003
will be packaged (PI=N1) and no separate payment will be provided for the Intraoccular Lens (IOL) in addition to the IOL
insertion procedure (effective February 27, 2011).
CMS did not approve a new NTIOL class for CY 2011. Therefore, after the expiration of the Category 3 NTIOL class,
there are no active NTIOL classes. ASCs are reminded that Medicare beneficiaries cannot be billed for amounts above
the coinsurance payment in order to mitigate any loss of the $50 Medicare payment associated with the expiration of the
Category 3 NTIOL class.
New HCPCS Codes for Drugs and Biologicals that are Separately Payable under the ASC Payment System as of
January 1, 2011
For CY 2011, thirty of the new Level II HCPCS codes for reporting drugs and biologicals are separately payable to ASCs
for dates of service on or after January 1, 2011. The new Level II HCPCS codes, their payment indicators, and short
descriptors are displayed in Table 2 below and are included in the January 2011 ASC DRUG file.

Medicare Report: March 2011                                                                                      Page 25
                          Table 2 - New Level II HCPCS Codes for Drugs and Biologicals
                         Separately Payable under the ASC Payment System for CY 2011

CY 2011       CY 2011 Payment       Short Descriptor
HCPCS Code Indicator
C9274         K2                    Crotalidae Poly Immune Fab
C9275         K2                    Hexaminolevulinate HCl
C9276         K2                    Cabazitaxel injection
C9277         K2                    Lumizyme, 1 mg
C9278         K2                    Incobotulinumtoxin A
C9279         K2                    Injection, ibuprofen
J0597         K2                    C-1 esterase, berinert
J0638         K2                    Canakinumab injection
J0775         K2                    Collagenase, clost hist inj
J1290         K2                    Ecallantide injection
J1559         K2                    Hizentra injection
J1786         K2                    Imuglucerase injection
J2358         K2                    Olanzapine long-acting inj
J2426         K2                    Paliperidone palmitate inj
J3095         K2                    Televancin injection
J3262         K2                    Tocilizumab injection
J3357         K2                    Ustekinumab injection
J3385         K2                    Velaglucerase alfa
J7184         K2                    Wilate injection
J7196         K2                    Antithrombin recombinant
J7309         K2                    Methyl aminolevulinate, top
J7312         K2                    Dexamethasone intra implant
J7335         K2                    Capsaicin 8% patch
J8562         K2                    Oral fludarabine phosphate
J9302         K2                    Ofatumumab injection
J9307         K2                    Pralatrexate injection
J9315         K2                    Romidepsin injection
J9351         K2                    Topotecan injection
Q4118         K2                    Matristem micromatrix
Q4121         K2                    Theraskin
Updated Payment Rates for Certain HCPCS Codes Effective July 1, 2010 through September 30, 2010
The payment rates for fourteen HCPCS codes were incorrect in the July 2010 ASC DRUG file. The corrected payment
rates are listed in Table 3 below and have been included in the revised July 2010 ASC DRUG file effective for services
furnished on July 1, 2010, through implementation of the October 2010 update. Suppliers who think they may have
received an incorrect payment from July 1, 2010, through September 30, 2010, may request their Medicare contractor to
adjust the previously processed claims.
Table 3 - Updated Payment Rates for Certain HCPCS Codes
Effective July 1, 2010, through September 30, 2010

HCPCS Code       Short Descriptor                  Corrected Payment Rate
J0150            Injection adenosine 6 MG          $13.74
J0641            Levoleucovorin injection          $0.73
J2430            Pamidronate disodium /30 MG       $15.61
J2850            Inj secretin synthetic human      $26.97
J9065            Inj cladribine per 1 MG           $24.12
J9178            Inj, epirubicin hcl, 2 mg         $2.06
J9185            Fludarabine phosphate inj         $112.61
J9200            Floxuridine injection             $42.31
J9206            Irinotecan injection              $4.23
J9208            Ifosfomide injection              $30.95
J9209            Mesna injection                   $4.96
J9211            Idarubicin hcl injection          $40.09
J9263            Oxaliplatin                       $4.37
J9293            Mitoxantrone hydrochl / 5 MG      $44.07

Page 26                                                                                Medicare Report: March 2011
Waiver of Cost- Sharing for Preventive Services
The Affordable Care Act waives any copayment and deductible that would otherwise apply for the defined set of preventive
services to which the U.S. Preventive Services Task Force (USPSTF) has given a grade of A or B, including copayment
for screening colonoscopies and screening flexible sigmoidoscopies, effective for services furnished on and after January
1, 2011. Further information on the implementation of waiver of cost- sharing for preventive services as prescribed by the
Affordable Care Act will be included in a separate article that will be released shortly.
Payment When a Device is Furnished With No Cost or With Full or Partial Credit
For CY 2011, CMS updated the list of ASC covered device intensive procedures and devices that are subject to the no
cost/full credit and partial credit device adjustment policy. Medicare contractors will reduce the payment for the device
implantation procedures listed in Attachment B of CR 7275. (CR 7275 is available at http://www.cms.gov/Transmittals/
downloads/R2128CP.pdf on the CMS website.) ASCs must append the modifier “FB” to the HCPCS procedure code when
the device furnished without cost or with full credit is listed in Attachment C of CR 7275.and the associated implantation
procedure code is listed in Attachment B of that CR. In addition, Medicare contractors will reduce the payment for
implantation procedures listed in Attachment B by one half of the device offset amount that would be applied if a device
were provided at no cost or with full credit, if the credit to the ASC is 50 percent or more of the device cost. If the ASC
receives a partial credit of 50 percent or more of the cost of a device listed in Attachment C, the ASC must append the
modifier “FC” to the associated implantation procedure code if the procedure is listed in Attachment B. A single procedure
code should not be submitted with both modifiers “FB” and “FC.”
More information regarding billing for procedures involving no cost/full credit and partial credit devices is available in the
Medicare Claims Processing Manual, Pub 100-04, Chapter 14, Section 40.8, available at http://www.cms.gov/manuals/
downloads/clm104c14.pdf on the CMS website.
Newly Covered Surgical Procedures and Ancillary Service for CY 2011
Attachment C of CR 7275 lists the surgical procedures and ancillary services that are newly payable in the ASC setting
as of January 1, 2011.
AddiTionAl informATion
The official instruction, CR7275, issued to your Carrier or A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2128CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

fraCtional mileage amounts submitted on ambulanCe Claims

MLN Matters® Number: MM7065
Related Change Request (CR) #: 7065
Related CR Release Date: November 19, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2103CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for providers and suppliers of ambulance services who bill Medicare contractors (carriers, fiscal intermediaries
(FIs), or Part A/B Medicare Administrative Contractors (A/B MACs)) for those services.
WHAT you need To KnoW
Change Request (CR) 7065, from which this article is taken, provides a new procedure for reporting fractional mileage
amounts on ambulance claims, effective for claims for dates of service on or after January 1, 2011. Prior to that date,
mileage is reported by rounding the total mileage up to the nearest whole mile. Be sure billing personnel are aware of this
change that requires ambulance providers and suppliers to report to the nearest tenth of a mile for total mileage of less
than 100 miles on ambulance claims as of January 1, 2011.
BAcKground
Currently, the Medicare Claims Processing Manual, Chapter 15, Sections 30.1.2 and 30.2.1 require that ambulance
providers and suppliers submitting claims to
Medicare contractors use the appropriate Healthcare Common Procedure Coding System (HCPCS) code for ambulance
mileage to report the number of miles traveled during a Medicare-reimbursable trip for the purpose of determining payment
for mileage. According to these instructions from the Centers for Medicare & Medicaid Services (CMS), providers and
suppliers are required to round the total mileage up to the nearest whole mile, including trips of less than one whole
mile. For example, if the total number of round trip miles traveled equals 9.5 miles, the provider or supplier enters 10
units on the claim form or the corresponding loop and segment of the ANSI X12N 837 electronic claim. For ambulance
suppliers submitting claims to the Medicare carriers or A/B MACs, the Medicare Claims Processing Manual, Chapter 26,
Section10.4 additionally states that at least one (1) unit must be billed in Item 24G on the CMS-1500 claim form or the

Medicare Report: March 2011                                                                                           Page 27
corresponding loop and segment of the ANSI X12N 837P electronic claim. Therefore, if a supplier travels less than one
mile during a covered trip, the supplier would enter 1 unit on the claim form with the appropriate HCPCS code for mileage.
In the CY 2011 Medicare Physician Fee Schedule (MPFS) final rule, CMS established a new procedure for reporting
fractional mileage amounts on ambulance claims to improve reporting and payment accuracy. The final rule requires that,
effective January 1, 2011, all Medicare ambulance providers and suppliers bill mileage that is accurate to a tenth of a mile.
NOTE: Currently the hardcopy UB-04 form cannot accommodate fractional billing, therefore, hardcopy billers will continue
to use previous ambulance billing instructions provided in effect prior to January 1, 2011, that is, providers that are
permitted to file paper UB-04 claims will continue to round up to the nearest whole mile until further notice from CMS.
Effective for claims with dates of service on and after January 1, 2011, ambulance providers and suppliers must report
mileage units rounded up to the nearest tenth of a mile for all claims (except hard copy billers that use the UB-04) for
mileage totaling less than 100 covered miles. Providers and suppliers must submit fractional mileage using a decimal in
the appropriate place (e.g., 99.9). Medicare contractors will truncate mileage units with fractional amounts reported to
greater than one decimal place (e.g., 99.99 will become 99.9 after truncating the hundredths place).
For trips totaling 100 miles and greater, suppliers must continue to report mileage rounded up to the nearest whole
number mile (e.g., 999). Medicare contractors will truncate mileage units totaling 100 and greater that are reported with
fractional mileage; (e.g., 100.99 will become 100 after truncating the decimal places).
For mileage totaling less than 1 mile, providers and suppliers must include a “0” prior to the decimal point (e.g., 0.9). For
ambulance mileage HCPCS only,
Medicare contractors will automatically default “0.1” unit when the total mileage units are missing in Item 24G of the CMS-
1500 claim form.
AddiTionAl informATion
The official instruction, CR 7065, issued to your Medicare contractor regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2103CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
CliniCal lab

Calendar year (Cy) 2011 annual uPdate for CliniCal laboratory fee sCHedule and
laboratory serViCes subJeCt to reasonable CHarge Payment

MLN Matters® Number: MM6991 Revised
Related Change Request (CR) #: 6991
Related CR Release Date: November 24, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2106CP
Implementation Date: January 3, 2011
Note: This article was revised on December 1, 2010, to correct the annual update percentage shown on page 2 for
laboratory tests paid on a reasonable charge basis. All other information is the same.
Provider TyPes AffecTed
Clinical laboratories billing Medicare Carriers, Fiscal Intermediaries (FIs), or Part A/B Medicare Administrative Contractors
(A/B MACs) are affected.
imPAcT on Providers
The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 6991 which provides instructions
for the Calendar Year (CY) 2011 clinical laboratory fee schedule, mapping for new codes for clinical laboratory tests, and
updates for laboratory costs subject to the reasonable charge payment.
BAcKground
In accordance with the Social Security Act (Section 1833(h)(2)(A)(i); see http://www.ssa.gov/OP_Home/ssact/title18/1833.
htm on the Internet), and further amended by Section 3401 of the Affordable Care Act, the annual update to the local
clinical laboratory fees for CY 2011 is -1.75 percent. The annual update to local clinical laboratory fees for CY 2011 reflects
an additional multi-factor productivity adjustment as described by the Affordable Care Act. The annual update to payments
made on a reasonable charge basis for all other laboratory services for CY 2011 is 1.1 percent (See 42 CFR 405.509(b)
(1)). Section 1833(a)(1)(D) of the Social Security Act (the Act) provides that payment for a clinical laboratory test is the
lesser of:
    •	    The actual charge billed for the test;
    •	    The local fee; or
    •	    The national limitation amount (NLA).

Page 28                                                                                       Medicare Report: March 2011
For a cervical or vaginal smear test (pap smear), Section 1833(h)(7) of the Act requires payment to be the lesser of the
local fee or the NLA, but not less than a national minimum payment amount (described below). However, for a cervical or
vaginal smear test (pap smear), payment may also not exceed the actual charge.
Note: The Part B deductible and coinsurance do not apply for services paid under the clinical laboratory fee schedule.
National Minimum Payment Amounts
For a cervical or vaginal smear test (Pap smear), the Social Security Act (Section 1833(h)(7)) requires payment to be the
lesser of the local fee or the NLA, but not less than a national minimum payment amount. Also, payment may not exceed
the actual charge. The CY 2011 national minimum payment amount is $14.87 percent ($15.13 minus the 1.75 percent
update for CY 2011). The affected codes for the national minimum payment amount are shown in the following table:

88142      88143      88147      88148      88150      88152
88153      88154      88164      88165      88166      88167
88174      88175      G0123      G0144      G0145      G0147
G0148      P3000
National Limitation Amounts (Maximum)
For tests for which NLAs were established before January 1, 2001, the NLA is 74 percent of the median of the local fees.
For tests for which the NLAs are first established on or after January 1, 2001, the NLA is 100 percent of the median of the
local fees in accordance with Section 1833(h)(4)(B)(viii) of the Act.
Access to Data File
Internet access to the CY 2011 clinical laboratory fee schedule data file will be available after November 19, 2010, at
http://www.cms.hhs.gov/ClinicalLabFeeSched on the CMS website. Other interested parties, such as the Medicaid State
agencies, the Indian Health Service, the United Mine Workers, and the Railroad Retirement Board, should use the Internet
to retrieve the CY 2011 clinical laboratory fee schedule. It will be available in multiple formats: Excel, text, and comma
delimited.
Public Comments
On July 22, 2010, CMS hosted a public meeting to solicit input on the payment relationship between CY 2010 codes and
new CY 2011 Current Procedural Terminology (CPT) codes. CMS posted a summary of the meeting and the tentative
payment determinations at http://www.cms.hhs.gov/ClinicalLabFeeSched on the CMS website. Additional written
comments from the public were accepted until October 29, 2010 and a summary of the public comments and the rationale
for the final payment determinations are posted on the same CMS website.
Pricing Information
The CY 2011 clinical laboratory fee schedule includes separately payable fees for certain specimen collection methods
(codes 36415, P9612, and P9615). The fees have been established in accordance with Section 1833(h)(4)(B) of the Act.
The fees for clinical laboratory travel codes P9603 and P9604 are updated on an annual basis. The clinical laboratory
travel codes are billable only for traveling to perform a specimen collection for either a nursing home or homebound
patient. If there is a revision to the standard mileage rate for CY 2011, CMS will issue a separate instruction on the clinical
laboratory travel fees.
The CY 2011 clinical laboratory fee schedule also includes codes that have a “QW” modifier to both identify codes and
determine payment for tests performed by a laboratory having only a certificate of waiver under the Clinical Laboratory
Improvement Amendments (CLIA).
Organ or Disease Oriented Panel Codes
Similar to prior years, the CY 2011 pricing amounts for certain organ or disease panel codes and evocative/suppression
test codes were derived by summing the lower of the clinical laboratory fee schedule amount or the NLA for each individual
test code included in the panel code. The NLA field on the data file is zero-filled.
Mapping Information
    •	   New code 82930 is priced at the same rate as code 82926.
    •	   New code 83861 is priced at the same rate as code 83909.
    •	   New code 84112 is priced at the same rate as code 82731.
    •	   New code 85598 is priced at the same rate as code 85597.
    •	   New code 86481 is priced at the same rate as code 86480.
    •	   New code 86902 is priced at the same rate as code 86905.
    •	   New code 87501 is priced at the sum of the rates of codes 87521 and 83902.
    •	   New code 87502 is priced at the sum of the rates of codes 87801 and 83902.


Medicare Report: March 2011                                                                                          Page 29
    •	    New code 87503 is priced at the sum of the rates of codes 83901 and 83896.
    •	    New code 87906 is priced at half of code 87901.
    •	    Healthcare Common Procedure Coding System (HCPCS) Code G0434 is priced at the same rate as code G0430.
    •	    HCPCS Code G9143 is priced at the sum of the rates of codes 83891, 83900, 83901, 83912, three times the rate
          of code 83896, and three times the rate of code 83908. A two-character modifier indicates that this test’s use is
          limited to a Coverage with Evidence Development (CED) study.
    •	    HCPCS Code G0432 is priced at the same rate as code 86703.
    •	    HCPCS Code G0433 is priced at the same rate as code 86703.
    •	    HCPCS Code G0435 is priced at the same rate as code 87804.
    •	    Reconsidered code 84145 is priced at the same rate as code 82308.
    •	    Reconsidered code 84431 is priced at the same rate as code 84443.
    •	    Reconsidered code 86352 is priced at twice the sum of the rates of codes 86353 and 82397.
    •	    HCPCS Code G0430 is deleted beginning January 1, 2011.
    •	    HCPCS Code G0431 is priced at five times the rate of HCPCS Code G0430.
    •	    New Code 84155QW is priced at the same rate as code 84155 beginning January 1, 2010.
    •	    New Code 87809QW is priced at the same rate as code 87809 beginning January 1, 2008.
For CY 2011, there are no new test codes that need to be gap-filled.
Laboratory Costs Subject to Reasonable Charge Payment in CY 2011
For outpatients, the following codes are paid under a reasonable charge basis (See Section 1842(b)(3) of the
Act). In accordance with 42 CFR 405.502 through 42 CFR 405.508, (see http://www.access.gpo.gov/nara/cfr/
waisidx_01/42cfr405_01.html on the Internet) the reasonable charge may not exceed the lowest of the actual charge or
the customary or prevailing charge for the previous 12-month period ending June 30, updated by the inflation-indexed
update. The inflation-indexed update is calculated using the change in the applicable Consumer Price Index for the
12-month period ending June 30 of each year as set forth in 42 CFR 405.509(b)(1)(see http://www.ssa.gov/OP_Home/
ssact/title18/1842.htm on the Internet). The inflation-indexed update for CY 2011 is 1.1 percent.
Manual instructions for determining the reasonable charge payment can be found in the Medicare Claims Processing
Manual, Chapter 23, section 80 through 80.8 (see http://www.cms.gov/manuals/downloads/clm104c23.pdf on the
CMS website). If there is sufficient charge data for a code, the instructions permit considering charges for other similar
services and price lists. When these services are performed for independent dialysis facility patients, the Medicare Claims
Processing Manual (Chapter 8, Section 60.3; see http://www.cms.gov/manuals/downloads/clm104c08.pdf ) instructs that
the reasonable charge basis applies. However, when these services are performed for hospital-based renal dialysis facility
patients, payment is made on a reasonable cost basis. Also, when these services are performed for hospital outpatients,
payment is made under the hospital outpatient prospective payment system.
Blood Products

P9010       P9011      P9012     P9016     P9017      P9019
P9020       P9021      P9022     P9023     P9031      P9032
P9033       P9034      P9035     P9036     P9037      P9038
P9039       P9040      P9044     P9050     P9051      P9052
P9053       P9054      P9055     P9056     P9057      P9058
P9059       P9060
Also, the following codes should be applied to the blood deductible as instructed in the Medicare General Information,
Eligibility and Entitlement Manual (Chapter 3, Section 20.5 through 20.54; see http://www.cms.hhs.gov/Manuals/IOM/list.
asp#TopOfPage on the CMS website):

 P9010    P9016     P9021    P9022      P9038    P9039
 P9040    P9051     P9054    P9056      P9057    P9058
NOTE: Biologic products not paid on a cost or prospective payment basis are paid based on the Social Security Act
(Section 1842(o)). The payment limits based on that provision, including the payment limits for codes P9041, P9043,
P9046, P9047 and P9048, should be obtained from the Medicare Part B drug pricing files.
Transfusion Medicine
86850      86860     86870     86880     86885     86886
86890      86891     86900     86901     86903     86904


Page 30                                                                                    Medicare Report: March 2011
86905    86906      86920     86921      86922     86923
86927    86930      86931     86932      86945     86950
86960    86965      86970     86971      86972     86975
86976    86977      86978     86985
Reproductive Medicine Procedures
89250            89251             89253              89254             89255              89257              89258
89259            89260             89261              89264             89268              89272              89280
89281            89290             89291              89335             89342              89343              89344
89346            89352             89353              89354             89356
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
The official instruction associated with this CR6991, issued to your Medicare A/B MAC, and/or FI regarding this change
may be viewed at http://www.cms.gov/Transmittals/downloads/R2106CP.pdf on the CMS website.

edit to deny Payment to PHysiCians and otHer suPPliers for tHe teCHniCal ComPonent (tC)
of PatHology serViCes furnisHed on same date as inPatient and outPatient serViCes and
imPlements new messages

MLN Matters Number: MM7061
Related Change Request (CR) #: 7061
Related CR Release Date: October 29, 2010
Effective Date: April 1, 2011
Related CR Transmittal #: R795OTN
Implementation Date: April 4, 2011
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers billing Medicare contractors (carriers and Part A/B Medicare
Administrative Contractors (A/B MACs)) for services provided to Medicare beneficiaries.
WHAT you need To KnoW
CR7061, from which this article is taken, instructs your carriers and A/B MACs to modify previously implemented edits
that prevent payments to physicians, practitioners, Independent Diagnostic Testing Facilities (IDTFs) and independent
laboratories for the Technical Component (TC) portion of the radiology and pathology services furnished to an inpatient or
outpatient of a hospital. The CR also revises certain Claim Adjustment Reason Code (CARC), Remittance Advice Remark
Code (RARC), and Medicare Summary Notice messages for both radiology and pathology because the current codes
listed are obsolete. Make sure your billing staff is aware of these changes.
BAcKground
CR7061 amends CR5347, issued on April 18, 2007, (see the related MLN Matters® article at http://www.cms.gov/
MLNMattersArticles/downloads/MM5347.pdf), which implemented edits to prevent payments to physicians, practitioners,
IDTFs and independent laboratories for the TC portion of the radiology and pathology services furnished to a hospital
inpatient or outpatient. Payment for the TC of physician pathology services provided to a hospital inpatient or outpatient
is included in the bundled payment to the hospital. The only exception to this policy is that independent laboratories may
bill for the TC of pathology services to an inpatient or outpatient of a hospital according to Section 3104 of the Affordable
Care Act.
CR7061 also implements an edit to prevent payments for the TC of pathology services billed by any entity other than an
independent laboratory for dates of service coincident with hospital inpatient and outpatient services.
The Centers for Medicare & Medicaid Services (CMS) will provide your contractors with a file containing physician
pathology Healthcare Common Procedure Coding System (HCPCS) codes that are subject to the edit. In addition, CMS
will make updates to the file to add and/or delete codes, as needed, in conjunction with the Medicare Physician Fee
Schedule Database (MPFSDB) quarterly updates.
Payments for independent laboratories are not affected by CR 7061.
Your Medicare contractor will deny the TC or globally billed physician pathology service line items that should be bundled
to the hospital. The denied services are the TC or globally billed radiology and physician pathology service line items that
fall within the admission and discharge dates, inclusive, of a covered hospital inpatient stay or outpatient service billed on
type of bill 11X, 12X, 13X, or 85X (except those billed by specialty code 69 (independent laboratory)). Appeal rights are
offered on all denials.


Medicare Report: March 2011                                                                                         Page 31
When denying these services/line items, Medicare will use a CARC of 96 (Non-covered Charge(s)) and a RARC of N70
(Consolidated Billing and Payment Applies).
AddiTionAl informATion
For complete details regarding this Change Request (CR) please see the official instruction (CR 7061) issued to your
Medicare carrier or A/B MAC. That instruction may be viewed by going to http://www.cms.gov/Transmittals/downloads/
R795OTN.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
dmePos

Calendar year (Cy) 2011 uPdate for durable mediCal eQuiPment, ProstHetiCs, ortHotiCs
and suPPlies (dmePos) fee sCHedule


MLN Matters® Number: MM7248 Revised
Related Change Request (CR) #:7248
Related CR Release Date: January 24, 2011
Effective Date: January 1, 2011
Related CR Transmittal #: R2142CP
Implementation Date: January 3, 2011
Note: This article was revised on January 25, 2011, to make the following changes (in bold): On page 4, codes L3660,
L3670 and L3675 were removed from the list of codes deleted from the HCPCS file; On page 5, the purchase fee
schedule calculation for complex rehabilitation power wheelchairs was added to the Power-Driven Wheelchairs section;
and On page 6, the language was clarified under the CY 2011 Fee Schedule Update Factor section. The transmittal
number, CR date and link for viewing the CR was also changed. All other information remains the same.
Provider TyPes AffecTed
Providers and suppliers submitting claims to Medicare contractors (carriers, DME Medicare Administrative Contractors
(DME MACs), Fiscal Intermediaries (FIs), Medicare Administrative Contractors (MACs), and/or Regional Home Health
Intermediaries (RHHIs)) for DMEPOS items or services paid under the DMEPOS fee schedule need to be aware of this
article.
Provider AcTion needed
This article, based on Change Request (CR) 7248, advises you of the CY 2011 annual update for the Medicare DMEPOS
fee schedule. The instructions include information on the data files, update factors, and other information related to the
update of the DMEPOS fee schedule. The annual update process for the DMEPOS fee schedule is documented in the
Medicare Claims Processing Manual, Chapter 23, Section 60 at http://www.cms.gov/manuals/downloads/clm104c23.pdf
on the Centers for Medicare & Medicaid Services (CMS) website. Key points about these changes are summarized in the
Background section below. These changes are effective for DMEPOS provided on or after January 1, 2011. Be sure your
billing staffs are aware of these changes.
BAcKground And Key PoinTs of cr7248
The DMEPOS fee schedule file is available for State Medicaid Agencies, managed care organizations, and other interested
parties at http://www.cms.hhs.gov/DMEPOSFeeSched/ on the CMS website.
2011 Update to Labor Payment Rates
2011 Fees for Healthcare Common Procedure Coding System (HCPCS) labor payment codes K0739, L4205, L7520 are
increased by 1.1 percent effective for dates of service on or after January 1, 2011 through December 31, 2011, and those
rates are as follows:

STATE       K0739        L4205   L7520     STATE      K0739      L4205     L7520
AK          25.55        29.11   34.25     NC         13.56      20.21     27.44
AL          13.56        20.21   27.44     ND         16.90      29.05     34.25
AR          13.56        20.21   27.44     NE         13.56      20.19     38.26
AZ          16.77        20.19   33.76     NH         14.56      20.19     27.44
CA          20.81        33.19   38.68     NJ         18.30      20.19     27.44
CO          13.56        20.21   27.44     NM         13.56      20.21     27.44
CT          22.65        20.67   27.44     NV         21.61      20.19     37.40
DC          13.56        20.19   27.44     NY         24.98      20.21     27.44
DE          24.98        20.19   27.44     OH         13.56      20.19     27.44
FL          13.56        20.21   27.44     OK         13.56      20.21     27.44
GA          13.56        20.21   27.44     OR         13.56      20.19     39.46

Page 32                                                                                   Medicare Report: March 2011
STATE       K0739     L4205      L7520      STATE     K0739      L4205      L7520
HI          16.77     29.11      34.25      PA        14.56      20.79      27.44
IA          13.56     20.19      32.85      PR        13.56      20.21      27.44
ID          13.56     20.19      27.44      RI        16.17      20.81      27.44
IL          13.56     20.19      27.44      SC        13.56      20.21      27.44
IN          13.56     20.19      27.44      SD        15.15      20.19      36.68
KS          13.56     20.19      34.25      TN        13.56      20.21      27.44
KY          13.56     25.88      35.09      TX        13.56      20.21      27.44
LA          13.56     20.21      27.44      UT        13.60      20.19      42.73
MA          22.65     20.19      27.44      VA        13.56      20.19      27.44
MD          13.56     20.19      27.44      VI        13.56      20.21      27.44
ME          22.65     20.19      27.44      VT        14.56      20.19      27.44
MI          13.56     20.19      27.44      WA        21.61      29.62      35.18
MN          13.56     20.19      27.44      WI        13.56      20.19      27.44
MO          13.56     20.19      27.44      WV        13.56      20.19      27.44
MS          13.56     20.21      27.44      WY        18.91      26.94      38.26
MT          13.5      20.19      34.25

HCPCS Code Updates
The following new codes are effective as of January 1, 2011:
    •	   A4566, A9273, and EO446 all of which have no assigned payment category;
    •	   A7020,E2622, E2623, E2624, and E2625 in the inexpensive/routinely purchased (DME) payment category:
    •	   E1831 in the capped rental payment category (DME);
    •	   L3674, L4631, L5961, L8693, Q0478, and Q0479, in the prosthetics/orthotics payment category.
The fee schedule amounts for the above new codes will be established as part of the July 2011 DMEPOS Fee Schedule
Update, when applicable. The DME MACs will establish local fee schedule amounts to pay claims for the new codes,
where applicable, from January 1, 2011 through June 30, 2011. The new codes are not to be used for billing purposes until
they are effective on January 1, 2011.
The following codes are being deleted from the HCPCS effective January 1, 2011, and are therefore being removed from
the DMEPOS fee schedule files:
    •	   E0220, E0230, and E0238
    •	   K0734, K0735, K0736, and K0737
    •	   L3672 and L3673.
For gap-filling purposes, the 2010 deflation factors by payment category are listed as follows:

Factor                                   Category
0.502                                    Oxygen
0.506                                    Capped Rental
0.507                                    Prosthetics and Orthotics
0.643                                    Surgical Dressings
0.700                                    Parenteral and Enteral Nutrition
Specific Coding and Pricing Issues
Therapeutic shoes and insert fee schedule amounts were implemented as part of the January 2005 Fee Schedule Update
as described in Change Request 3574 (Transmittal 369) which may be reviewed at http://www.cms.gov/transmittals/
Downloads/R369CP.pdf on the CMS website. The payment amounts for shoe modification codes A5503 through A5507
were established in a manner that prevented a net increase in expenditures when substituting these items for therapeutic
shoe insert codes (A5512 or A5513). The fees for codes A5512 and A5513 were weighted based on the approximate total
allowed services for each code for items furnished during the second quarter of calendar year 2004.
As part of this update, CMS is revising the weighted average insert fees used to establish the fee schedule amounts for
the shoe modification codes with more current allowed service data for each insert code as follows:
    •	   Fees for A5512 and A5513 will be weighted based on the approximate total allowed services for each code for
         items furnished during the Calendar Year 2009;
    •	   The fee schedules for codes A5503 through A5507 are being revised effective January 1, 2011, to reflect this
         change.


Medicare Report: March 2011                                                                                    Page 33
Power-Driven Wheelchairs
In accordance with section 3136(a)(1) of The Affordable Care Act of 2010, effective for claims with dates of service
on or after January 1, 2011, payment for power-driven wheelchairs under the DMEPOS fee schedule for power-driven
wheelchairs furnished on or after January 1, 2011, is revised to pay 15 percent (instead of 10 percent) of the purchase
price for the first three months under the monthly rental method and 6 percent (instead of 7.5 percent) for each of the
remaining rental months 4 through 13. The purchase fee schedule amount for complex rehabilitation power wheelchairs
is equal to the rental fee (for months 1-3) divided by 0.15. Payment amounts will be based on the lower of the supplier’s
actual charge and the fee schedule amount. As part of this update, the CY 2011 rental fees for power-driven wheelchairs
included in the 2011 DMEPOS Fee Schedule Part B file have been revised to represent 15 percent of the purchase price
amount. The current HCPCS codes identifying power-driven wheelchairs are listed in Attachment B of CR7248, which is
at http://www.cms.gov/Transmittals/downloads/R2118CP.pdf on the CMS website. This attachment identifies those codes
where payment, when applicable, will be made at 15 percent of the purchase price for months 1 through 3 and 6 percent
of the purchase price for months 4 through 13.
These changes do not apply to rented power-driven wheelchairs for which the date of service for the initial rental month
is prior to January 1, 2011. For these items, payment for rental claims with dates of service on or after January 1, 2011,
will continue to be based on 10 percent of the purchase price for rental months 2 and 3 and 7.5 percent of the purchase
price for rental months 4 through 13.
Also, section 3136(c)(2) of The Affordable Care Act specifies that these changes do not apply to power-driven wheelchairs
furnished pursuant to contracts entered into prior to January 1, 2011, as part of Round 1 of the Medicare DMEPOS
Competitive Bidding Program. MLN Matters® article MM7181 at http://www.cms.gov/MLNMattersArticles/downloads/
MM7181.pdf discusses these changes.
For power-driven wheelchairs furnished on a rental basis with dates of service prior to January 1, 2006, for which the
beneficiary did not elect the purchase option in month 10 and continues to use, contractors shall continue to pay the
maintenance and servicing payment amount at 10% of the purchase price. In these instances, suppliers should continue
to use the following HCPCS codes, with the MS modifier, for billing maintenance and servicing, as appropriate:
    •	    K0010 Standard- Weight Frame Motorized/Power Wheelchair
    •	    K0011 Standard- Weight Frame Motorized/Power Wheelchair with Programmable Control Parameters for Speed
          Adjustment, Tremor Dampening, Acceleration Control and Braking
    •	    K0012 Lightweight Portable Motorized/Power Wheelchair
    •	    K0014 Other Motorized/Power Wheelchair Base
The rental fee schedule payment amounts for codes K0010, K0011 and K0012 will continue to reflect 10 percent of the
wheelchair’s purchase price.
CY 2011 Fee Schedule Update Factor
The DMEPOS fee schedule amounts are to be updated for 2011 by the percentage increase in the Consumer Price Index
(CPI) for all urban consumers (United States city average) or CPI-U for the 12-month period ending with June of 2010.
Also beginning with CY 2011, Section 3401 of The Affordable Care Act requires that the increase in the CPI-U be adjusted
by changes in the economy-wide productivity equal to the 10-year moving average of changes in annual economy-wide
private non-farm business Multi-Factor Productivity (MFP). The amendment specifies the application of the MFP may
result in an update “being less than 0.0 for a year, and may result in payment rates being less than such payment rates
for the preceding year”. For CY 2011, the MFP adjustment is 1.2 percent and the CPI-U percentage increase is 1.1
percent. Therefore, the 1.1 percent increase in the CPI-U is reduced by the 1.2 percent increase in the MFP, resulting in
a net reduction of 0.1 percent for the MFP-adjusted update factor. In other words, the MFP-adjusted update factor of -0.1
percent is applied to the applicable CY 2010 DMEPOS fee schedule amounts.
2011 National Monthly Payment Amounts for Stationary Oxygen Equipment
CMS will also implement the 2011 national monthly payment rates for stationary oxygen equipment (HCPCS codes
E0424, E0439, E1390 and E1391), effective for claims with dates of service on or after January 1, 2011. The fee schedule
file is being revised to include the new national 2011 monthly payment rate of $173.31 for stationary oxygen equipment.
The payment rates are being adjusted on an annual basis, as necessary, to ensure budget neutrality of the addition of the
new Oxygen Generating Portable Equipment (OGPE) class. The revised 2011 monthly payment rate of $173.31 includes
the -0.1 percent MFP-adjusted update factor. The budget neutrality adjustment and the MFP-adjusted covered item
update factor for 2011 caused the 2010 rate to change from $173.17 to $173.31.
When updating the stationary oxygen equipment fees, corresponding updates are made to the fee schedule amounts for
HCPCS codes E1405 and E1406 for oxygen and water vapor enriching systems. Since 1989, the fees for codes E1405
and E1406 have been established based on a combination of the Medicare payment amounts for stationary oxygen
equipment and nebulizer codes E0585 and E0570, respectively.
2011 Maintenance and Service Payment Amount for Certain Oxygen Equipment
Payment for maintenance and servicing of certain oxygen equipment can occur every 6 months beginning 6 months after
the end of the 36th month of continuous use or end of the supplier’s or manufacturer’s warranty, whichever is later for

Page 34                                                                                   Medicare Report: March 2011
either HCPCS code E1390, E1391, E0433 or K0738, billed with the “MS” modifier. Payment cannot occur more than once
per beneficiary, regardless of the combination of oxygen concentrator equipment and/or transfilling equipment used by the
beneficiary, for any 6-month period.
The 2010 maintenance and servicing fee for certain oxygen equipment was based on 10 percent of the average price
of an oxygen concentrator which resulted in a payment of $66 for CY 2010. For CY 2011 and subsequent years, the
maintenance and servicing fee is adjusted by the covered item update for DME as set forth in section 1834(a)(14) of
the Social Security Act. The 2010 maintenance and servicing fee is adjusted by the -0.1 percent MFP-adjusted covered
item update factor to yield a CY 2011 maintenance and servicing fee of $65.93 for oxygen concentrators and transfilling
equipment.
Specific Billing Issues
Effective January 1, 2011, the payment category for code E0575 (Nebulizer, Ultrasonic, Large Volume) is being revised to
move the nebulizer from the DME payment category for frequent and substantial servicing to the DME payment category
for capped rental items. The first claim received for each beneficiary for this code with a date of service on or after January
1, 2011 will be counted as the first rental month in the cap rental period.
Code A7020 (Interface for Cough Stimulating Device, Includes All Components, Replacement Only) is added to the HCPCS
file effective January 1, 2011. Items coded under this code are accessories used with the capped rental Durable Medical
Equipment cough stimulating device coded at E0482. Section 110.3, Chapter 15 of the Medicare Benefit Policy Manual at
at http://www.cms.gov/Manuals/downloads/bp102c15.pdf provides that reimbursement may be made for replacement of
essential accessories such as hoses, tubes, mouthpieces for necessary Durable Medical Equipment only if the beneficiary
owns or is purchasing the equipment. Therefore, separate payment will not be made for the replacement of accessories
described by code A7020 until after the 13-month rental cap has been reached for capped rental code E0482.
The following new codes are being added to the HCPCS file, effective January 1, 2011, to describe replacement accessories
for Ventricular Assist Devices (VADs):
    •	   Q0478 (Power Adaptor for Use with Electric or Electric/Pneumatic Ventricular Assist Device, Vehicle Type); and
    •	   Q0479 (Power Module for Use With Electric/Pneumatic Ventricular Assist Device, Replacement Only).
Similar to the other VAD supplies and accessories coded at Q0480 thru Q0496, Q0497 thru Q0502, Q0504 and Q0505,
CMS has determined the reasonable useful lifetime for codes Q0478 and Q0479 to be one year. CMS is establishing edits
to deny claims before the lifetime of these items has expired. Suppliers and providers will need to add HCPCS modifier
RA to claims for codes Q0478 and Q0479 in cases where the battery is being replaced because it was lost, stolen, or
irreparably damaged.
Additionally, code Q0489 (Power Pack Base for Use With Electric/Pneumatic Ventricular Assist Device, Replacement
Only) should not be used to bill separately for a VAD replacement power module or a battery charger in instances where
the power module and battery charger are not integral and are furnished as separate components.
AddiTionAl informATion
The official instruction, CR7248, issued to your carrier, FI, RHHI, A/B MAC, and DME/MAC regarding this change may be
viewed at http://www.cms.gov/Transmittals/downloads/R2142CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
end stage renal disease (esrd)

end stage renal disease (esrd) Home dialysis montHly CaPitation Payment (mCP)

MLN Matters® Number: MM7003
Related Change Request (CR) #: 7003
Related CR Release Date: July 9, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R1999CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians and providers submitting claims to Medicare contractors (carriers and/or A/B Medicare
Administrative Contractors (A/B MACs)) for home dialysis MCP services provided to Medicare ESRD beneficiaries.
Provider AcTion needed
STOP – Impact to You
This article is based on Change Request (CR) 7003 which instructs that, effective January 1, 2011, the monthly capitation
payment (MCP) physician (or practitioner) must furnish at least one face-to-face patient visit per month for the home
dialysis MCP service as described by Current Procedure Terminology (CPT) codes 90963, 90964, 90965, and 90966.


Medicare Report: March 2011                                                                                          Page 35
CAUTION – What You Need to Know
Physicians and practitioners managing Medicare beneficiaries with ESRD who dialyze at home are paid a single monthly
rate based on the age of the beneficiary, and currently, the Centers for Medicare & Medicaid Services (CMS) does not
require a frequency of required visits for the home dialysis monthly capitation payment (MCP) service. CR 7003 instructs
that, effective January 1, 2011, the MCP physician (or practitioner) must furnish at least one face-to-face patient visit
per month for the home dialysis MCP service. In addition, documentation by the MCP physician (or practitioner) should
support at least one face-to-face encounter per month with the home dialysis patient. However, Medicare contractors may
waive the requirement for a monthly face-to-face visit for the home dialysis MCP service on a case by case basis; for
example, when the nephrologist’s notes indicate that the physician actively and adequately managed the care of the home
dialysis patient throughout the month. The management of home dialysis patients who remain a home dialysis patient the
entire month should be coded using the ESRD-related services for home dialysis patients Healthcare Common Procedure
Coding System (HCPCS) codes.
GO – What You Need to Do
See the Background and Additional Information Sections of this article for further details regarding these changes.
BAcKground
In the Calendar Year (CY) 2004 physician fee schedule (PFS) final rule (68 FR 63216, November 7, 2003; see http://
edocket.access.gpo.gov/2003/pdf/03-27639.pdf on the Internet), the CMS established new HCPCS G codes for end
stage renal disease (ESRD) monthly capitation payments (MCPs).
For center based patients, payment for the G codes varied based on the age of the beneficiary and the number of face-to-
face visits furnished each month (e.g. 1 visit, 2-3 visits and 4 or more visits). Under this methodology, the lowest payment
amount applies when a physician provides one visit per month; a higher payment is provided for two to three visits per
month. To receive the highest payment amount, a physician would have to provide at least four ESRD related visits per
month. However, payment for the home dialysis MCP only varied by the age of beneficiary. CMS stated that they “will not
specify the frequency of required visits at this time but expect physicians to provide clinically appropriate care to manage
the home dialysis patient.”
Effective January 1, 2009, the American Medical Association’s (AMA’s) Current Procedural Terminology (CPT) Editorial
Panel created CPT codes to replace the HCPCS G codes for monthly ESRD-related services, and CMS accepted these
new codes. The clinical vignettes used for the valuation of the home dialysis MCP services (as described by CPT codes
90963 through 90966) include scheduled (and unscheduled) examinations of the ESRD patient.
CR 7003 instructs that, effective January 1, 2011, the MCP physician (or practitioner) must furnish at least one face-
to-face patient visit per month for the home dialysis MCP service as described by CPT codes 90963, 90964, 90965,
and 90966 shown in the following table. Documentation by the MCP physician (or practitioner) should support at least
one face-to-face encounter per month with the home dialysis patient. However, Medicare contractors may waive the
requirement for a monthly face-to-face visit for the home dialysis MCP service on a case by case basis; for example, when
the nephrologist’s notes indicate that the physician actively and adequately managed the care of the home dialysis patient
throughout the month.

CPT Code       Descriptor
90963          End-stage renal disease (ESRD) related services for home dialysis per full month, for patients
               younger than 2 years of age to include monitoring for the adequacy of nutrition, assessment of
               growth and development, and counseling of parents
90964          End-stage renal disease (ESRD) related services for home dialysis per full month, for patients
               2-11 years of age to include monitoring for the adequacy of nutrition, assessment of growth and
               development, and counseling of parents
90965          End-stage renal disease (ESRD) related services for home dialysis per full month, for patients
               12-19 years of age to include monitoring for the adequacy of nutrition, assessment of growth and
               development, and counseling of parents
90966          End-stage renal disease (ESRD) related services for home dialysis per full month, for patients 20
               years of age and older
AddiTionAl informATion
The official instruction, CR 7003, issued to your carrier and A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R1999CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.




Page 36                                                                                    Medicare Report: March 2011
tHeraPy/reHab

rePorting of serViCe units witH HCPCs

MLN Matters® Number: MM7247
Related Change Request (CR) #: 7247
Related CR Release Date: December 17, 2010
Effective Date: March 21, 2011
Related CR Transmittal #: R2121CP
Implementation Date: March 21, 2011
Provider TyPes AffecTed
Providers submitting claims to Fiscal Intermediaries (FIs), Regional Home Health Intermediaries (RHHIs), and A/B
Medicare Administrative Contractors (A/B MACs) are affected by this article.
WHAT you need To KnoW
Change Request (CR) 7247 informs Medicare contractors that a table of Current Procedure Terminology (CPT) codes
indicating maximum unit limitations was inadvertently deleted from Chapter 5, Section 20, of the Medicare Claims
Processing Manual. CR 7247 reinserts that table. There are no changes to existing policy.
AddiTionAl informATion
The reinserted table is at the end of the revised manual chapter attached to CR 7247. That CR is available at http://www.
cms.gov/Transmittals/downloads/R2121CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

PHarmaCy billing for drugs ProVided “inCident to” a PHysiCian’s serViCe

MLN Matters® Number: MM7109
Related Change Request (CR) #: 7109
Related CR Release Date: December 10, 2010
Effective Date: March 14, 2011
Related CR Transmittal #: R2115CP
Implementation Date: March 14, 2011
Provider TyPes AffecTed
This article is for physicians, pharmacies, providers, and suppliers submitting claims to Medicare contractors (carriers, DME
Medicare Administrative Contractors (DME MACs), Fiscal Intermediaries (FIs), A/B Medicare Administrative Contractors
(A/B MACs), and/or Regional Home Health Intermediaries (RHHIs)) for services provided to Medicare beneficiaries.
Provider AcTion needed
This article is based on Change Request (CR) 7109 which clarifies the Centers for Medicare & Medicaid Services (CMS)
policy with respect to restrictions on pharmacies billing for drugs provided “incident to” a physician’s service. CR 7109 also
clarifies the CMS policy for the local determination of payment limits for drugs that are not nationally determined.
BAcKground
Pharmacies may bill Medicare for certain classes of drugs including:
    •	   Immunosuppressive drugs,
    •	   Oral anti-emetic drugs,
    •	   Oral anti-cancer drugs, and
    •	   Drugs administered through any piece of Durable Medicare Equipment (DME).
Claims for these drugs are generally submitted to the DME MAC, and the DME MAC makes payment for these drugs
(when deemed to be covered and reasonable and necessary) to the pharmacy. One exception is that claims for drugs
administered through implanted durable medical equipment such as an implanted infusion pump are submitted to the
A/B MAC or local carrier. All bills submitted to the DME MAC must be submitted on an assigned basis by the pharmacy.
(Medicare Claims Processing Manual (Chapter 17, Section 50.B; see http://www.cms.gov/manuals/downloads/clm104c17.
pdf on the CMS website).
Pharmacies, suppliers, and providers may not bill Medicare for drugs purchased directly by beneficiaries for administration
“incident to” a physician service. Medicare will deny such claims.(See the Medicare Claims Processing Manual, Chapter
17, Section 50.B at http://www.cms.gov/manuals/downloads/clm104c17.pdf on the CMS website.) Pharmacies also may
not bill for drugs purchased by a physician for administration to a Medicare beneficiary.These drugs are being furnished
“incident to” the physician’s service and as such must be billed by the physician. (See Medicare Benefit Policy Manual,

Medicare Report: March 2011                                                                                         Page 37
Chapter 15, Section 50.3; at http://www.cms.gov/manuals/Downloads/bp102c15.pdf on the CMS website).
The payment limits for drugs and biologicals that are not included in 1) the average sales price (ASP) Medicare Part B Drug
Pricing File or 2) the Not Otherwise Classified (NOC) Pricing File are based on the published Wholesale Acquisition Cost
(WAC) or invoice pricing except under Outpatient Prospective Payment System (OPPS) where the payment allowance
limit is 95 percent of the published average wholesale price (AWP). In determining the payment limit based on WAC, the
payment limit is 106 percent of the lesser of the lowest-priced brand or median generic WAC.
AddiTionAl informATion
The official instruction, CR 7109, issued to your carriers, DME MACs, FIs, A/B MACs, and/or RHHIs regarding this change
may be viewed at http://www.cms.gov/Transmittals/downloads/R2115CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Reimbursement

influenza VaCCine Payment allowanCes - annual uPdate for 2010-2011 season

MLN Matters® Number: MM7120 Revised
Related Change Request (CR) #: 7120
Related CR Release Date: October 22, 2010
Effective Date: September 1, 2010
Related CR Transmittal #: R2071CP
Implementation Date: November 24, 2010
Note: This article was revised on November 26, 2010, to reflect a correction to the payment rate for CPT 90655, as
announced in CR 7234, issued on November 19, 2010. The corrected payment rate for 90655, as of September 1, 2010,
is $14.858. All other information is the same.
Provider TyPes AffecTed
This article is for physicians and providers submitting claims to Medicare contractors (carriers, Fiscal Intermediaries
(FIs), and/or Part A/B Medicare Administrative Contractors (A/B MACs)) for influenza vaccines provided to Medicare
beneficiaries.
WHAT you need To KnoW
The Centers for Medicare & Medicaid Services (CMS) issued Change Request (CR) 7120 in order to update payment
allowances, effective September 1, 2010, for influenza vaccines when payment is based on 95 percent of the Average
Wholesale Price (AWP). CR 7120 refers only to the seasonal influenza vaccines. According to CR 6617, only the Level
II Healthcare Common Procedure Coding System code G9142 is used to identify the H1N1 vaccine on Medicare
claims. Therefore, Common Procedure Terminology (CPT) codes 90663, 90664, 90666, 90667, and 90668 will not be
recognized on Medicare claims for the H1N1 vaccine.
The Medicare Part B payment allowance limits for influenza and pneumococcal vaccines are 95 percent of the AWP
as reflected in the published compendia except where the vaccine is furnished in a hospital outpatient department,
Rural Health Clinic (RHC), or Federally Qualified Health Center (FQHC). Where the vaccine is furnished in the hospital
outpatient department, RHC, or FQHC, payment for the vaccine is based on reasonable cost.
CR 7120 provides the payment allowances for the following seasonal influenza virus vaccines: CPT codes 90655, 90656,
90657, 90658, 90660, and 90662 when payment is based on 95 percent of the AWP. The payment allowances for influenza
vaccines are updated on an annual basis effective September 1 of each year.
The Medicare Part B payment allowance in these situations for:
    •	    CPT 90655 is $14.858;
    •	    CPT 90656 is $12.375;
    •	    CPT 90657 is $6.297; and
    •	    CPT 90658 (for dates of service September 1, 2010 through December 31, 2010) is $11.368.
CPT 90660 (FluMist, a nasal influenza vaccine) or CPT 90662 (Fluzone High-Dose) may be covered if your Medicare
claims processing contractor determines the use is medically reasonable and necessary for the beneficiary. When payment
is based on 95 percent of the AWP, the Medicare Part B payment allowance effective September 1, 2010, for CPT 90660
is $22.316, and for CPT 90662 is $29.213.
Annual Part B deductible and coinsurance amounts do not apply. All physicians, non-physician practitioners and suppliers
who administer the influenza virus vaccination and the pneumococcal vaccination must take assignment on the claim for
the vaccine. The current payment allowances for pneumococcal vaccines can be found on the quarterly drug pricing files.
AddiTionAl informATion

Page 38                                                                                    Medicare Report: March 2011
Note that Medicare contractors will not search their files to adjust claims already processed prior to implementation of
CR7120. However they will adjust those claims that you bring to their attention.
The official instruction, CR 7120 issued to your carrier, FI, or A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2071CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

annual Clotting faCtor furnisHing fee uPdate 2011

MLN Matters® Number: MM7168
Related Change Request (CR) #: 7168
Related CR Release Date: October 15, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2068CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for providers billing Medicare carriers, fiscal intermediaries (FIs), Part A/B Medicare Administrative
Contractors (MAC), or Regional Home Health Intermediaries (RHHI) for services related to the administration of clotting
factors to Medicare beneficiaries.
WHAT you need To KnoW
CR 7168, from which this article is taken, announces that for calendar year 2011, the clotting factor furnishing fee of
$0.176 per unit is included in the published payment limit for clotting factors and will be added to the payment for a clotting
factor when no payment limit for the clotting factor is published either on the on the Average Sales Price (ASP) or Not
Otherwise Classified (NOC) drug. Please be sure your billing staffs are aware of this fee update.
AddiTionAl informATion
The official instruction, CR 7168 issued to your carrier, FI, A/B MAC, and RHHI regarding this change may be viewed
at http://www.cms.gov/Transmittals/downloads/R2068CP.pdf on the Centers for Medicare & Medicaid Services (CMS)
website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Payment for Certified nurse-midwife (Cnm) serViCes

MLN Matters® Number: MM7005
Related Change Request (CR) #: 7005
Related CR Release Date: August 6, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2024CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Certified nurse midwives (CNMs), submitting claims to Medicare contractors (carriers, Fiscal Intermediaries (FI), and Part
A/B Medicare Administrative Contractors (A/B MACs)) for Medicare Part B services provided to Medicare beneficiaries
are impacted by this article.
Provider AcTion needed
This article is based on Change Request (CR) 7005, which explains that, effective on or after January 1, 2011, Medicare
contractors will pay CNMs for their services at 80 percent of the lesser of the actual charge or 100 percent of the Medicare
Physician Fee Schedule (MPFS) amount that would be paid for the same service if furnished by a physician.
In addition, changes have been made regarding the services that CNMs furnish to patients in critical access hospitals
(CAHs) paid under the optional method. These changes reflect the increase in payment for CNM services effective
January 1, 2011, and specify the appropriate modifier that must be used when billing for CNM services furnished to
patients in this setting.
Please ensure that your billing staffs are aware of these payment changes.
BAcKground
Section 3114 of the Affordable Care Act of 2009, increased the amount of payment that the Medicare program will make
to CNMs for their personal professional services and for services furnished incident to their professional services. For
services on or after January 1, 1992, through December 31, 2010, Medicare payment has been made at 80 percent of
the lesser of the actual charge or 65 percent of the MPFS amount that would be paid for the same service furnished by
a physician.

Medicare Report: March 2011                                                                                          Page 39
To summarize, for services on or after January 1, 1992, through December 31, 2010:
    •	    Medicare contractors will pay CNMs for their services and services furnished incident to their professional services
          at 80 percent of the lesser of the actual charge or 65 percent of the physician fee schedule amount that would be
          paid to a physician for the same service.
    •	    Contractors will pay CNMs for their care in connection with a global service at 65 percent of what a physician
          would have been paid for the total global fee.
For services on or after January 1, 2011:
    •	    Medicare will pay CNMs for their services and services furnished incident to their professional services at 80
          percent of the lesser of the actual charge or 100 percent of the physician fee schedule amount that would be paid
          to a physician for the same service.
    •	    Medicare will pay CNMs for their care in connection with global services at 80 percent of the lesser of the actual
          charge or 100 percent of what a physician would have been paid for the total global fee.
    •	    Medicare will pay for CNM services furnished to CAH patients paid under the optional method on TOB 85X with
          revenue code 96X, 97X or 98X and modifier SB (Certified Nurse-Midwife) based on the lesser of the actual
          charge or 100 percent of the MPFS amount as follows: [(facility- specific MPFS amount) minus (deductible and
          coinsurance)] times 1.15.
Payment for CNM services is made directly to CNMs for their professional services and for services furnished incident to
their professional services. CNMs are required to accept assigned payment for their services. Accordingly, when CNMs
bill for their services under specialty code 42, billing does not have to flow through a physician or facility unless the CNM
reassigns their benefits to another billing entity. For reassigned CNM services, the entity bills for CNM services using the
specialty code 42 to signify that payment for CNM services is being claimed.
Payment for covered drugs and biologicals furnished incident to CNMs’ services is made according to the Part B drug/
biological payment methodology. Covered clinical diagnostic laboratory services furnished by CNMs are paid according
to the clinical diagnostic laboratory fee schedule.
When CNMs furnish outpatient treatment services for mental illnesses, these services could be subject to the outpatient
mental health treatment limitation (the limitation). The appropriate percentage payment reduction under the limitation
is applied first to the approved amount for the mental health treatment services before the actual payment amount is
determined for the CNMs’ services. Please refer to the Medicare Claims Processing Manual, Chapter12, Section 210,
available at http://www.cms.gov/manuals/downloads/clm104c12.pdf on the Centers for Medicare & Medicaid Services
(CMS) website, to determine the appropriate percentage payment reduction under the limitation.
When a certified nurse-midwife is providing most of the care to a Medicare beneficiary that is part of a global service and
a physician also provides a portion of the care for this same global service, the fee paid to the CNM for his or her care is
based on the portion of the global fee that would have been paid to the physician for the care provided by the CNM.
For example, a CNM requests that the physician examine the beneficiary prior to delivery. The CNM has furnished the
ante partum care and intends to perform the delivery and post partum care. The MPFS amount for the physician’s total
obstetrical care (global fee) is $1,000. The MPFS amount for the physician’s office visit is $30. The following calculation
shows the maximum allowance for the CNM’s service:
 MPFS amount for total obstetrical care                             $1,000.00
 MPFS amount for visit                                              - $30.00
 Result                                                             $ 970.00
 Fee schedule amount for certified nurse-midwife (65% x $970, $ 630.50
 effective 1/1/1992-12/31/2010)
Fee schedule amount for certified nurse-midwife (100% x 970, $ 970.00
effective 1/1/2011)
Therefore, the certified nurse-midwife would be paid no more than 80 percent of $630.50 or, 80 percent of $970.00 for
services furnished on or after 1/1/2011, for the care of the beneficiary. This calculation also applies when a physician
provides most of the services and calls in a certified nurse-midwife to provide a portion of the care.
Physicians and certified nurse midwives use reduced service modifiers to report that they have not provided all the
services covered by the global allowance.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073. The official instruction issued
to your Medicare carrier, FI, and/or A/B MAC regarding this change may be viewed at http://www.cms.gov/Transmittals/
downloads/R2024CP.pdf on the CMS website.




Page 40                                                                                      Medicare Report: March 2011
multiPle ProCedure Payment reduCtion (mPPr) for seleCted tHeraPy serViCes

MLN Matters® Number: MM7050 Revised
Related Change Request (CR) #: 7050
Related CR Release Date: December 21, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R826OTN
Implementation Date: January 3, 2011
Note: This article was revised on December 22, 2010, to reflect changes made to CR 7050 on December 21, 2010. The
CR 7050 was revised based on policy changes required by the Physician Payment and Therapy Relief Act of 2010, which
changed the multiple payment procedure reduction for therapy services in the office setting or a non-institutional setting
to 20 percent, instead of 25 percent. The CR release date, transmittal number, and Web address for accessing CR 7050
were also revised. All other information remains the same.
Provider TyPes AffecTed
Physicians, non-physician practitioners, and providers submitting claims to Medicare contractors (carriers, Fiscal
Intermediaries (FIs), and/or Part A/B Medicare Administrative Contractors (A/B MACs) for therapy services provided to
Medicare beneficiaries that are paid under the Medicare Physician Fee Schedule (MPFS).
Provider AcTion needed
This article is based on Change Request (CR) 7050, which announces that Medicare is applying a new Multiple Procedure
Payment Reduction (MPPR) to the Practice Expense (PE) component of payment of select therapy services paid under
the MPFS. Make sure your billing staff is aware of these payment reductions.
BAcKground
Section 3134 of The Affordable Care Act added section 1848(c)(2)(K) of The Social Security Act, which specifies that
the Secretary of Health and Human Services shall identify potentially misvalued codes by examining multiple codes that
are frequently billed in conjunction with furnishing a single service. As a step in implementing this provision, Medicare is
applying a new MPPR to the PE component of payment of select therapy services paid under the MPFS. The reduction
will be similar to that currently applied to multiple surgical procedures and to diagnostic imaging procedures. This policy
is discussed in the CY 2011 MPFS final rule.
Many therapy services are time-based codes, i.e., multiple units may be billed for a single procedure. The Centers for
Medicare & Medicaid Services (CMS) is applying a MPPR to the practice expense payment when more than one unit or
procedure is provided to the same patient on the same day, i.e., the MPPR applies to multiple units as well as multiple
procedures. Full payment is made for the unit or procedure with the highest PE payment. For subsequent units and
procedures, furnished to the same patient on the same day, full payment is made for work and malpractice and 80 percent
payment for the PE for services furnished in office settings and other non-institutional settings and at 75 percent payment
for the PE services furnished in institutional settings.
For therapy services furnished by a group practice or “incident to” a physician’s service, the MPPR applies to all services
furnished to a patient on the same day, regardless of whether the services are provided in one therapy discipline or
multiple disciplines; for example, physical therapy, occupational therapy, or speech-language pathology.
The reduction applies to the HCPCS codes contained on the list of “always therapy” services that are paid under the
MPFS, regardless of the type of provider or supplier that furnishes the services (e.g. hospitals, Home Health Agencies
(HHAs), and Comprehensive Outpatient Rehabilitation Facilities (CORFs), etc.). The MPPR applies to the codes on
the list of procedures included with CR7050 as Attachment 1. CR7050 is available at http://www.cms.gov/Transmittals/
downloads/R826OTN.pdf on the CMS website. Note that these services are paid with a non-facility PE. The current and
proposed payments are summarized below in the following example based on the 75 percent reduction for institutional
settings:

                  Procedure 1 Procedure 1 Procedure Current Total              Proposed
                     Unit 1      Unit 2       2      Payment                     Total Proposed Payment
                                                                               Payment     Calculation
 Work                  $7.00         $7.00        $11.00          $25.00       $25.00 No reduction
 PE                   $10.00        $10.00          $8.00         $28.00       $23.50 $10 + (.75 x $10) +
                                                                                      (.75 x $8)
 Malpractice           $1.00         $1.00          $1.00          $3.00        $3.00 No reduction
 Total                $18,00        $18.00        $20.00          $51.50       $51.50 $18 + ($18 - $10) +
                                                                                      (.75 x $10) + $20 -
                                                                                      $8) + (.75 x $8)
Where claims are impacted by the MPPR, Medicare will return a Claim Adjustment Reason Code of 45 (Charge exceeds
fee schedule/maximum allowable or contracted/legislated fee arrangement) and a Group Code of Contractual Obligation

Medicare Report: March 2011                                                                                       Page 41
(CO).
AddiTionAl informATion
The official instruction, CR7050, issued to your carrier, FI, or A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R826OTN.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

reasonable CHarge uPdate for 2011 for sPlints, Casts, and Certain intraoCular lenses

MLN Matters® Number: MM7225
Related Change Request (CR) #: 7225
Related CR Release Date: November 19, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2100CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers billing Medicare contractors (carriers, Fiscal Intermediaries, (FIs),
Medicare Administrative Contractors (MACs), and Durable Medical Equipment Medicare Administrative Contractors (DME
MACs)) for splints, casts, dialysis supplies, dialysis equipment, and certain intraocular lenses.
Provider AcTion needed
Change Request (CR) 7225, from which this article is taken, instructs your carriers, FIs, and MACs how to calculate
reasonable charges for the payment of claims for splints, casts, and intraocular lenses furnished in calendar year 2011.
Make sure your billing staff is aware of these changes.
BAcKground
Payment continues to be made on a reasonable charge basis for splints, casts, and for intraocular lenses implanted
(codes V2630, V2631, and V2632) in a physician’s office. For splints and casts, the Q-codes are to be used when supplies
are indicated for cast and splint purposes. This payment is in addition to the payment made under the Medicare physician
fee schedule for the procedure for applying the splint or cast.
Beginning January 1, 2011, reasonable charges will no longer be calculated for payment of home dialysis supplies and
equipment for Method II End Stage Renal Disease (ESRD) patients. Section 153 of Medicare Improvements for Patients
and Providers Act (MIPPA) amended section 1881(b) of the Act to require the implementation of an ESRD bundled
payment system effective January 1, 2011. The ESRD prospective payment will provide an all-inclusive single payment to
ESRD facilities (i.e. hospital-based providers of services and renal dialysis facilities) that will cover all the resources used
in providing outpatient dialysis treatment, including dialysis supplies and equipment that are currently separately payable
to Method II DME suppliers.
CR 7225 provides instructions regarding the calculation of reasonable charges for payment of claims for splints, casts,
and intraocular lenses furnished in calendar year 2011. Payment on a reasonable charge basis is required for these
items by regulations contained in 42 CFR 405.501. The Inflation Indexed Charge (IIC) is calculated using the lowest
of the reasonable charge screens from the previous year updated by an inflation adjustment factor or the percentage
change in the Consumer Price Index (CPI) for all urban consumers (United States city average) or CPI-U for the 12-month
period ending with June of 2010. The 2011 payment limits for splints and casts will be based on the 2010 limits that were
announced in CR 6691 last year, increased by 1.1 percent, the percentage change in the CPI-U for the 12-month period
ending June 30, 2010. The IIC update factor for 2011 is 1.1 percent.
A list of the 2011 payment limits for splints and casts are listed in the table that follows.

Code          Payment Limit
A4565         $7.84
Q4001         $44.60
Q4002         $168.58
Q4003         $32.04
Q4004         $110.92
Q4005         $11.81
Q4006         $26.62
Q4007         $5.92
Q4008         $13.31
Q4009         $7.89
Q4010         $17.75
Q4011         $3.94

Page 42                                                                                         Medicare Report: March 2011
Code          Payment Limit
Q4012         $8.88
Q4013         $14.36
Q4014         $24.21
Q4015         $7.18
Q4016         $12.10
Q4017         $8.30
Q4018         $13.23
Q4019         $4.16
Q4020         $6.62
Q4021         $6.14
Q4022         $11.08
Q4023         $3.09
Q4024         $5.54
Q4025         $34.44
Q4026         $107.54
Q4027         $17.23
Q4028         $53.78
Q4029         $26.34
Q4030         $69.33
Q4031         $13.17
Q4032         $34.66
Q4033         $24.57
Q4034         $61.10
Q4035         $12.28
Q4036         $30.56
Q4037         $14.99
Q4038         $37.55
Q4039         $7.51
Q4040         $18.76
Q4041         $18.22
Q4042         $31.11
Q4043         $9.12
Q4044         $15.56
Q4045         $10.58
Q4046         $17.02
Q4047         $5.28
Q4048         $8.51
Q4049         $1.93
AddiTionAl informATion
The official instruction, CR 7225 issued to your carrier, FI, A/B MAC, and DME/MAC regarding this change may be viewed
at http://www.cms.gov/Transmittals/downloads/R2100CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

multiPle ProCedure Payment reduCtion (mPPr) on tHe teCHniCal ComPonent (tC) of Certain
diagnostiC imaging ProCedures

MLN Matters® Number: MM6993
Related Change Request (CR) #: 6993
Related CR Release Date: July 30, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R738OTN
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians, clinical diagnostic laboratories, and other providers who bill Medicare contractors (carriers
or Medicare Administrative Contractors (A/B MAC)) for providing diagnostic imaging services to Medicare beneficiaries.
Provider AcTion needed

Medicare Report: March 2011                                                                                        Page 43
CR6993, from which this article is taken, announces that Medicare is changing the Multiple Procedure Payment Reduction
(MPPR) on the Technical Component (TC) of certain diagnostic imaging procedures. You should make sure that your
billing staffs are aware of these changes.
BAcKground
Currently, the Multiple Procedure Payment Reduction (MPPR) on diagnostic imaging services applies only to contiguous
body parts (that is, within a family of codes, not across families). For example, the reduction does not apply to an MRI of
the brain (CPT 70552) in code family 5, when performed during the same session, and on the same day, as an MRI of the
neck and spine (CPT 72142) in code family 6.
Effective January 1, 2011, the Centers for Medicare & Medicaid Services (CMS) is consolidating the existing 11 advanced
imaging families into a single family. This change applies: 1) When two or more services on the list are furnished to the
same patient in a single session; and 2) Only to the Technical Component (TC) portion of global services, not to the
Professional Component (PC). Medicare will continue to make the full TC payment for the procedure with the highest
priced TC, and at 50 percent each for the TC of each additional procedure on the same patient in the same session.
AddiTionAl informATion
You will find the complete list of codes subject to the MPPR on diagnostic imaging in Attachment 1 of CR6993, which
is the official instruction issued to your carrier or A/B MAC on this issue. CR6993 is available at http://www.cms.gov/
Transmittals/downloads/R738OTN.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

CliniCal laboratory fee sCHedule – mediCare traVel allowanCe fees for ColleCtion of
sPeCimens

MLN Matters® Number: MM7239
Related Change Request (CR) #:7239
Related CR Release Date: December 3, 2010
Effective Date: January 1, 2010
Related CR Transmittal #: R2110CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Clinical laboratories submitting claims to Medicare contractors (carriers, Fiscal Intermediaries (FIs), and/or Part A/B
Medicare Administrative Contractors (A/B MACs)) for clinical laboratory services provided to Medicare beneficiaries are
affected.
Provider AcTion needed
STOP – Impact to You
This article is based on Change Request (CR) 7239 which revises the payment of travel allowances, either on a per
mileage basis (P9603) or on a flat rate basis (P9604) for Calendar Year (CY) 2010.
CAUTION – What You Need to Know
Note that Medicare contractors will not re-process claims that were processed before the new rates were implemented
unless you bring such claims to their attention.
GO – What You Need to Do
See the Background and Additional Information Sections of this article for further details regarding these changes.
BAcKground
Medicare, under Part B, covers a specimen collection fee and travel allowance for a laboratory technician to draw a
specimen from either a nursing home patient or homebound patient. Also, the travel codes allow for payment of the
travel allowance either on a per mileage basis (P9603) or on a flat rate per trip basis (P9604), and payment of the travel
allowance is made only if a specimen collection fee is also payable.
Under either method, when one trip is made for multiple specimen collections (e.g., at a nursing home), the travel payment
component is prorated based on the number of specimens collected on that trip, for both Medicare and non-Medicare
patients, either at the time the claim is submitted by the laboratory or when the flat rate is set by the contractor.
The per flat rate trip basis travel allowance (P9604) for 2010 is $9.50. The per mile travel allowance (P9603) is $0.95 cents
per mile and is used in situations where the average trip to the patients’ home is longer than 20 miles round trip, and is to
be prorated in situations where specimens are drawn from non-Medicare patients in the same trip.
The allowance per mile was computed using the Federal mileage rate of $0.50 per mile plus an additional $0.45 per mile
to cover the technician’s time and travel costs. Medicare contractors have the option of establishing a higher per mile rate
in excess of the minimum $0.95 per mile if local conditions warrant it. At no time is a laboratory allowed to bill for more

Page 44                                                                                     Medicare Report: March 2011
miles than are reasonable or for miles that are not actually traveled by the laboratory technician.
The Centers for Medicare & Medicaid Services (CMS) reviews the minimum mileage rate and updates it in conjunction
with the Clinical Laboratory Fee Schedule (CLFS) as needed.
Note: Because of confusion that some laboratories have had regarding the per mile fee basis and the need to claim the
minimum distance necessary for a laboratory technician to travel for specimen collection, some Medicare contractors
have established local policy to pay based on a flat rate basis only.
AddiTionAl informATion
The official instruction, CR 7239 issued to your carrier, A/B MAC, or FI regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2110CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
To review examples of scenarios that further clarify the travel allowances you may go to http://www.cms.gov/
MLNMattersArticles/downloads/MM6195.pdf on the CMS website and read the Additional Information section of MM6195.

emergenCy uPdate to tHe Cy 2011 mediCare PHysiCian fee sCHedule database

MLN Matters® Number: MM7300
Related Change Request (CR) #:7300
Related CR Release Date: December 29, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R828OTN
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians and providers submitting claims to Medicare contractors (carriers, Fiscal Intermediaries (FIs),
Regional Home Health Intermediaries (RHHIs), Durable Medical Equipment Medicare Administrative Contractors (DME/
MACs) and/or Part A/B Medicare Administrative Contractors (A/B MACs)) for professional services provided to Medicare
beneficiaries that are paid under the Medicare Physician Fee Schedule (MPFS).
Provider AcTion needed
This article is based on Change Request (CR) 7300, which amends payment files that were issued to Medicare contractors
based on the 2011 MPFS Final Rule. This CR also reinstates three Durable Medical Equipment, Prosthetics, Orthotics,
and Supplies (DMEPOS) HCPCS L-codes, as described below. Be sure your billing staff is aware of these changes.
BAcKground
Payment files were issued based upon the Calendar Year (CY) 2011 MPFS Final Rule, issued on November 2, 2010, and
published in the “Federal Register” on November 29, 2010. CR 7300 amends those payment files to include MPFS policy
and payment indicator revisions described in the CY 2011
MPFS Final Rule Correction Notice, issued in December 30, 2010, (http://www.ofr.gov/(X(1)S(zj23h5e5vs3xn5y2yjsecx03))/
inspection.aspx?AspxAutoDetectCookieSupport=1 ) to be published in the “Federal Register” on January 11, 2011, as
well as relevant statutory changes applicable January 1, 2011. Therefore, new MPFS payment files have been created
and are available. CR 7300 also reinstates three DMEPOS Healthcare Common Procedure Coding System (HCPCS)
L-codes. Following is a summary of the changes as they impact providers:
Medicare Physician Fee Schedule Revisions and Updates
Some physician work, Practice Expense (PE) and Malpractice (MP) Relative Value Units (RVUs) published in the CY 2011
MPFS Final Rule have been revised to align their values with the CY 2011 MPFS Final Rule policies. These changes are
discussed in the CY 2011 MPFS Final Rule Correction Notice and revised RVU values will be found in Addendum B and
Addendum C of the CY 2011 MPFS Final Rule Correction Notice. In addition to RVU revisions, changes have been made
to some HCPCS code payment indicators in order to reflect the appropriate payment policy. Procedure status indicator
changes will also be reflected in Addendum B and Addendum C of the CY 2011 MPFS Final Rule Correction Notice. Other
payment indicator changes will be included, along with the RVU and procedure status indicator changes, in the CY 2011
MPFS Final Rule Correction Notice public use data files located at http://www.cms.gov/PhysicianFeeSched/PFSRVF/list.
asp on the Centers for Medicare & Medicaid Services (CMS) website. Changes to the physician work RVUs and payment
indicators can be found in the Attachment to CR 7300, which is available at http://www.cms.gov/Transmittals/downloads/
R828OTN.pdf on the CMS website.
Due to these revisions, the conversion factor (CF) associated with the CY 2011 MPFS Final Rule has been revised. This
CF will be published in the CY 2011 MPFS Final Rule Correction Notice.Legislative changes subsequent to issuance of
the CY 2011 MPFS Final Rule have led to the further revision of the values published in the CY 2011 MPFS Final Rule
Correction Notice, including a change to the conversion factor. As such, the MPFS database (MPFSDB) has been revised
to include MPFS policy and payment indicator revisions described above, as well as relevant statutory changes applicable
January 1, 2011. A new MPFSDB reflecting payment policy as of January 1, 2011, has been created and made available.

Medicare Report: March 2011                                                                                         Page 45
A summary of the recent statutory provisions included in the revised MPFS payment files is as follows.
    1. Physician Payment and Therapy Relief Act of 2010
          On November 30, 2010, President Obama signed into law the Physician Payment and Therapy Relief Act of 2010.
          As a result of the Physician Payment and Therapy Relief Act of 2010 a new reduced therapy fee schedule amount
          (20 percent reduction on the PE component of payment) will be added to the MPFS payment file. Per this Act, CMS
          will apply the CY 2011 MPFS Final Rule policy of a 25 percent Multiple Procedure Payment Reduction (MPPR)
          on the PE component of payment for therapy services furnished in the hospital outpatient department and other
          facility settings that are paid under Section 1834(k) of the Social Security Act, and a 20 percent therapy MPPR
          will apply to therapy services furnished in clinicians’ offices and other settings that are paid under section 1848
          of the Social Secrutiy Act. This change is detailed in recently released CR7050. CMS published MLN Matters®
          article 7050, related to CR 7050, which may be reviewed at http://www.cms.gov/MLNMattersArticles/downloads/
          MM7050.pdf on the CMS website. This Act also made the therapy MPPR not budget neutral under the Physician
          Fee Schedule (PFS) and, therefore, the redistribution to the PE RVUs for other services that would otherwise
          have occurred will not take place. The revised RVUs, in accordance with this new statutory requirement, are
          included in the revised CY 2011 MPFS payment files.
    2. Medicare and Medicaid Extenders Act (MMEA) of 2010
          On December 15, 2010, President Obama signed into law the Medicare and Medicaid Extenders Act (MMEA) of
          2010. This new legislation contains a number of Medicare provisions which change or extend current Medicare
          Fee-For-Service program policies. A summary of MPFS-related provisions follows.
          •	   Physician Payment Update
               Section 101 of the MMEA averts the negative update that would otherwise have taken effect on January 1,
               2011, in accordance with the CY 2011 MPFS Final Rule. The MMEA provides for a zero percent update to
               the MPFS for claims with dates of service January 1, 2011, through December 31, 2011. While the MPFS
               update will be zero percent, other changes to the RVUs (e.g., miss valued code initiative and rescaling of the
               RVUs to match the revised Medicare Economic Index weights) are budget neutral. To make those changes
               budget neutral, CMS must make an adjustment to the conversion factor so the conversion factor will not be
               unchanged in CY 2011 from CY 2010. The revised conversion factor to be used for physician payment as of
               January 1, 2011, is $33.9764.
               The calculation of the CY 2011 conversion factor is illustrated in the following table.

December 2010 Conversion Factor                                                          $36.8729
MMEA “Zero Percent Update”                    0.0 percent (1.000)
CY 2011 RVU Budget Neutrality                 0.4 percent (1.0043)
Adjustment
CY 2011 Rescaling to Match                    -8.3 percent (0.9175)
MEI Weights Budget Neutrality
Adjustment
CY 2011 Conversion Factor                                                                $33.9764
          The revised CY 2011 MPFS payment files will reflect this conversion factor.
          •	   Extension of Medicare Physician Work Geographic Adjustment Floor
          Current law requires the payment rates under the MPFS to be adjusted geographically for three factors to reflect
          differences in the cost of provider resources needed to furnish MPFS services: physician work, practice expense,
          and malpractice expense. Section 3102 of the Affordable Care Act extended the 1.0 floor on the physician work
          Geographic Practice Cost Index (GPCI) for services furnished though December 31, 2010. Section 103 of the
          MMEA extends the existing 1.0 floor on the physician work GPCI for services furnished through December 31,
          2011. Updated CY 2011 GPCIs can also be found in the attachment to CR 7300 as noted previously.
          •	   Extension of MPFS Mental Health Add-On
          Section 138 of the Medicare Improvements for Patients and Providers Act (MIPPA) of 2008 increased the Medicare
          payment amount for specific “Psychiatry” services by 5 percent, effective for dates of service July 1, 2008, through
          December 31, 2009. Section 3107 of the Affordable Care Act extended this provision retroactive to January 1,
          2010, through December 31, 2010. Section 107 of the Medicare & Medicaid Extenders Act (MMEA) extends the
          five percent increase in payments for these mental health services, through December 31, 2011. This five percent
          increase will be reflected in the revised CY 2011 MPFS payment files. A list of Psychiatry HCPCS codes that
          represent the specified services subject to this payment policy can also be found in the attachment to CR 7300.
          •	   Extension of Exceptions Process for Medicare Therapy Caps
          Under the Temporary Extension Act of 2010, the outpatient therapy caps exception process expired for therapy
          services on April 1, 2010. Section 3103 of the Affordable Care Act continued the exceptions process through

Page 46                                                                                        Medicare Report: March 2011
        December 31, 2010. Section 104 of the MMEA extends the exceptions process for outpatient therapy caps
        through December 31, 2011. Outpatient therapy service providers may continue to submit claims with the KX
        modifier, when an exception is appropriate, for services furnished on or after January 1, 2011, through December
        31, 2011.
        The therapy caps are determined on a calendar year basis, so all patients begin a new cap year on January 1,
        2011. For physical therapy and speech language pathology services combined, the limit on incurred expenses
        is $1,870. For occupational therapy services, the limit is $1,870. Deductible and coinsurance amounts applied to
        therapy services count toward the amount accrued before a cap is reached.
        •	   Extension of Moratorium That Allowed Independent Laboratories to Bill for the Technical Component
             (TC) of Physician Pathology Services Furnished to Hospital Patients
        Under previous law, a statutory moratorium allowed independent laboratories to bill a carrier or a MAC for the TC
        of physician pathology services furnished to hospital patients. This moratorium expired on December 31, 2009.
        Section 3104 of the Affordable Care Act extended the payment to independent laboratories for the TC of certain
        physician pathology services furnished to hospital patients retroactive to January 1, 2010, through December 31,
        2010. The MMEA restores the moratorium through CY 2011. Therefore, independent laboratories may continue to
        submit claims to Medicare for the TC of physician pathology services furnished to patients of a hospital, regardless
        of the beneficiary’s hospitalization status (inpatient or outpatient) on the date that the service was performed. This
        policy is effective for claims with dates of service on or after January 1, 2011, through December 31, 2011.
Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DEMPOS) Updates
The following HCPCS codes will not be discontinued as of December 31, 2010:
        •	   L3660 SHOULDER ORTHOSIS, FIGURE OF EIGHT DESIGN ABDUCTION RESTRAINER, CANVAS AND
             WEBBING, PREFABRICATED, INCLUDES FITTING AND ADJUSTMENT (SD: Abduct restrainer canvas
             &web);
        •	   L3670 SHOULDER ORTHOSIS, ACROMIO/CLAVICULAR (CANVAS AND WEBBING TYPE),
             PREFABRICATED, INCLUDES FITTING AND ADJUSTMENT (SD: Acromio/clavicular canvas & web); and
        •	   L3675 SHOULDER ORTHOSIS, VEST TYPE ABDUCTION RESTRAINER, CANVAS WEBBING TYPE OR
             EQUAL, and PREFABRICATED INCLUDES FITTING AND ADJUSTMENT (SD: Canvas vest SO).
These three “L” codes will continue to stay active codes for January 1, 2011. Instruction for billing and payment will remain
the same for these three “L” codes. Medicare contractors will pay for codes L3660, L3670, and L3675 with dates of service
on or after January 1, 2011, using the following 2011 DMEPOS fee schedule amounts:

        JURIS    CATG      L3660      L3670        L3675
AL      D        PO        $85.06     $118.57      $145.25
AR      D        PO        $85.06     $97.17       $145.24
AZ      D        PO        $100.69    $124.79      $141.00
CA      D        PO        $100.69    $124.79      $141.00
CO      D        PO        $111.02    $93.60       $146.04
CT      D        PO        $113.42    $93.60       $141.00
DC      D        PO        $85.06     $112.42      $141.00
DE      D        PO        $85.06     $112.42      $141.00
FL      D        PO        $85.06     $118.57      $145.25
GA      D        PO        $85.06     $118.57      $145.25
IA      D        PO        $106.53    $124.79      $143.74
ID      D        PO        $85.06     $97.28       $141.00
IL      D        PO        $85.06     $93.60       $144.48
IN      D        PO        $85.06     $93.60       $144.48
KS      D        PO        $106.53    $124.79      $143.74
KY      D        PO        $85.06     $118.57      $145.25
LA      D        PO        $85.06     $97.17       $145.24
MA      D        PO        $113.42    $93.60       $141.00
MD      D        PO        $85.06     $112.42      $141.00
ME      D        PO        $113.42    $93.60       $141.00
MI      D        PO        $85.06     $93.60       $144.48
MN      D        PO        $85.06     $93.60       $144.48
MO      D        PO        $106.53    $124.79      $143.74
MS      D        PO        $85.06     $118.57      $145.25
MT      D        PO        $111.02    $93.60       $146.04
NC      D        PO        $85.06     $118.57      $145.25

Medicare Report: March 2011                                                                                         Page 47
          JURIS   CATG    L3660      L3670       L3675
 ND    D        PO       $111.02 $93.60         $146.04
 NE    D        PO       $106.53 $124.79        $143.74
 NH    D        PO       $113.42 $93.60         $141.00
 NJ    D        PO       $87.06     $110.96     $141.00
 NM    D        PO       $85.06     $97.17      $145.24
 NV    D        PO       $100.69 $124.79        $141.00
 NY    D        PO       $87.06     $110.96     $141.00
 OH    D        PO       $85.06     $93.60      $144.48
 OK    D        PO       $85.06     $97.17      $145.24
 OR    D        PO       $85.06     $97.28      $141.00
 PA    D        PO       $85.06     $112.42     $141.00
 RI    D        PO       $113.42 $93.60         $141.00
 SC    D        PO       $85.06     $118.57     $145.25
 SD    D        PO       $111.02 $93.60         $146.04
 TN    D        PO       $85.06     $118.57     $145.25
 TX    D        PO       $85.06     $97.17      $145.24
 UT    D        PO       $111.02 $93.60         $146.04
 VA    D        PO       $85.06     $112.42     $141.00
 VT    D        PO       $113.42 $93.60         $141.00
 WA    D        PO       $85.06     $97.28      $141.00
 WI    D        PO       $85.06     $93.60      $144.48
 WV    D        PO       $85.06     $112.42     $141.00
 WY    D        PO       $111.02 $93.60         $146.04
 AK    D        PO       $100.22 $148.35        $141.00
 HI    D        PO       $107.12 $158.62        $141.00
 PR    D        PO       $82.83     $105.08     $169.21
 VI    D        PO       $87.06     $110.96     $169.21
In accordance with the statutory Section 1834(a)(14) of the Social Security Act, the above fee schedule amounts were
updated for CY 2011 by applying the CY 2011 -0.1 percent update factor to the CY 2010 fee schedule amounts. The CY
2011 payment amounts for codes L3660, L3670, and L3675 will be posted as a public use file at: http://www.cms.gov/
DMEPOSFeeSched/LSDMEPOSFEE/list.asp on the CMS website.
AddiTionAl informATion
The official instruction, CR7300, issued to your carrier, FI, RHHI, DME MAC, and A/B MAC regarding this change may be
viewed at http://www.cms.gov/Transmittals/downloads/R828OTN.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

summary of PoliCies in tHe Cy 2011 mediCare PHysiCian fee sCHedule (mPfs) and tHe
teleHealtH originating site faCility fee Payment amount

MLN Matters® Number: MM7264
Related Change Request (CR) #: 7264
Related CR Release Date: December 29, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2129CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians and nonphysician practitioners who submit claims to Fiscal Intermediaries (FI), Carriers, and A/B Medicare
Administrative Contractors (MACs) are affected by this article.
WHAT you need To KnoW
This article is based on Change Request (CR) 7264, which provides a summary of the policies in the CY 2011 Medicare
Physician Fee Schedule and announces the Telehealth Originating Site Facility Fee. Please ensure that your billing staffs
are aware of these changes.
BAcKground
The summary of changes is as follows:
Telehealth Services

Page 48                                                                                  Medicare Report: March 2011
Section 1834 (m) of the Social Security Act (the Act) established the payment amount for the Medicare telehealth
originating site facility fee for telehealth services provided from October 1, 2001, through December 31, 2002, at $20. For
telehealth services provided on or after January 1 of each subsequent calendar year, the telehealth originating site facility
fee is increased as of the first day of the year by the percentage increase in the Medicare Economic Index (MEI). The MEI
increase for CY 2011 is 0.4 percent.
For calendar year 2011, the payment amount for HCPCS code “Q3014, Telehealth originating site facility fee” is 80
percent of the lesser of the actual charge or $24.10. The beneficiary is responsible for any unmet deductible amount or
coinsurance.
For additional details regarding the expansion of telehealth services in 2011, see the article at http://www.cms.gov/
MLNMattersArticles/downloads/MM7049.pdf on the CMS website.
Summary of Policies in the CY 2011 MPFS
The Act requires the Secretary to establish by regulation before November 1 of each year, fee schedules that establish
payment amounts for physicians’ services for the subsequent year. Following is a summary of significant physician fee
schedule issues discussed in CMS-1503-FC, Medicare Program; Payment Policies under the Physician Fee Schedule
and other revisions to Part B for CY 2011.
Affordable Care Act Provisions:
Elimination of Deductible and Coinsurance for Most Preventive Services: Effective January 1, 2011, the Affordable
Care Act waives the Part B deductible and the 20 percent coinsurance that would otherwise apply to most preventive
services. Specifically, the provision waives both the deductible and coinsurance for Medicare-covered preventive services
that have been recommended with a grade of A (“strongly recommends”) or B (“recommends”) by the U.S. Preventive
Services Task Force, as well as the initial preventive physical examination and the new annual wellness visit. The
Affordable Care Act also waives the Part B deductible for tests that begin as colorectal cancer screening tests but, based
on findings during the test, become diagnostic or therapeutic services.
Coverage of Annual Wellness Visit (AWV) Providing a Personalized Prevention Plan: The Affordable Care Act extends
the preventive focus of Medicare coverage, which currently pays for a one-time initial preventive physical examination
(IPPE or the “Welcome to Medicare Visit”), to provide coverage for annual wellness visits in which beneficiaries will
receive personalized prevention plan services (PPPS). The law states that the AWV may include at least the following six
elements, as determined by the Secretary of Health and Human Services:
    •	   Establish or update the individual’s medical and family history;
    •	   List the individual’s current medical providers and suppliers and all prescribed medications;
    •	   Record measurements of height, weight, body mass index, blood pressure and other routine measurements;
    •	   Detect any cognitive impairment;
    •	   Establish or update a screening schedule for the next 5 to 10 years including screenings appropriate for the
         general population, and any additional screenings that may be appropriate because of the individual patient’s risk
         factors; and
    •	   Furnish personalized health advice and appropriate referrals to health education or preventive services.
CMS has developed two separate Level II HCPCS codes for the first annual wellness visit (G0438 - Annual wellness visit,
including personalized prevention plan services, first visit), to be paid at the rate of a level 4 office visit for a new patient
(similar to the IPPE), and for subsequent annual wellness visits (G0439 - Annual wellness visit, including personalized
prevention plan services, subsequent visit), to be paid at the rate of a level 4 office visit for an established patient.
For more details on the AWV, see the article at http://www.cms.gov/MLNMattersArticles/downloads/MM7079.pdf on the
CMS website.
Incentive Payments to Primary Care Practitioners for Primary Care Services: The Affordable Care Act provides for
incentive payments equal to 10 percent of a primary care practitioner’s allowed charges for primary care services under
Part B, furnished on or after January 1, 2011, and before January 1, 2016. Under the final policy, primary care practitioners
are: (1) physicians who have a primary specialty designation of family medicine, internal medicine, geriatric medicine, or
pediatric medicine; as well as nurse practitioners, clinical nurse specialists, and physician assistants; and (2) for whom
primary care services accounted for at least 60 percent of the practitioner’s MPFS allowed charges for a prior period as
determined by the Secretary of Health and Human Services. The law also defines primary care services as limited to new
and established patient office or other outpatient visits (CPT codes 99201 through 99215); nursing facility care visits, and
domiciliary, rest home, or home care plan oversight services (CPT codes 99304 through 99340); and patient home visits
(CPT codes 99341 through 99350).
In the final rule with comment period, CMS excluded consideration of allowed charges for hospital inpatient care and
emergency department visits in determining whether the 60 percent primary care threshold is met. These exclusions will
make it easier for practitioners of eligible specialties to become eligible for the payment incentive program. The incentive
payments will be made quarterly based on the primary care services furnished in CY 2011 by the primary care practitioner,
in addition to any physician bonus payments for services furnished in Health Professional Shortage Areas (HPSAs).

Medicare Report: March 2011                                                                                            Page 49
CMS will determine a practitioner’s eligibility for incentive payments in CY 2011 using claims data and the provider’s
specialty designation from CY 2009 for practitioners enrolled in CY 2009. For newly enrolled practitioners, CMS will use
claims data from CY 2010 to make an eligibility determination regarding CY 2011 incentive payments. For subsequent
years, CMS will revise the list of primary care practitioners on a yearly basis, based on updated data regarding an
individual’s specialty designation and percentage of allowed charges for primary care services.
For more details on this program, see the article at http://www.cms.gov/MLNMattersArticles/downloads/MM7060.pdf on
the CMS website. Also, the article at http://www.cms.gov/MLNMattersArticles/downloads/MM7115.pdf has details on this
program as they apply to Critical Access Hospitals.
Incentive Payments for Major Surgical Procedures in Health Professional Shortage Areas: The Affordable Care Act
also calls for a payment incentive program to improve access to major surgical procedures – defined as those with a 10-
day or 90-day global period under the MPFS – that are furnished by physicians in HPSAs on or after January 1, 2011, and
before January 1, 2016. To be eligible for the incentive payment, the physician must be enrolled in Medicare as a general
surgeon. The amount of the incentive payment is equal to 10 percent of the MPFS payment for the surgical services
furnished by the general surgeon. The incentive payments will be made quarterly to the general surgeon when the major
surgical procedure is furnished in a zip code that is located in a HPSA. CMS will use the same list of HPSAs that it has
used under the existing HPSA bonus program.
Further details on this program are in the MLN Matters® article at http://www.cms.gov/MLNMattersArticles/downloads/
MM7063.pdf on the CMS website.
Revisions to the Practice Expense Geographic Adjustment: As required by the Medicare law, CMS adjusts payments
under the MPFS to reflect local differences in practice costs. CMS assigns separate geographic practice cost indices
(GPCIs) to the work, practice expenses (PE), and malpractice insurance cost components of each of more than 7,000
types of physicians’ services. The final rule with comment period discusses CMS’ analysis of PE GPCI data and methods,
and incorporates new data as part of the sixth GPCI update, while maintaining the current GPCI cost share weights
pending the results of further CMS and Institute of Medicine studies.
The Affordable Care Act establishes a permanent 1.0 floor for the PE GPCI for frontier states (currently, Montana, Wyoming,
Nevada, North Dakota, and South Dakota). The Affordable Care Act limits recognition of local differences in employee
wages and office rents in the PE GPCIs for CYs 2011 and 2012 as compared to the national average. Localities are held
harmless for any decrease in CYs 2011 and 2012 in their PE GPCIs that would result from the limited recognition of cost
differences. CMS will continue to review the GPCIs in CY 2011, in accordance with the Affordable Care Act provision that
requires the Secretary of Health and Human Services to analyze current methods of establishing PE GPCIs in order to
make adjustments that fairly and reliably distinguish the costs of operating a medical practice in the different fee schedule
areas.
Payment for Bone Density Tests: The Affordable Care Act increases the payment for two dual-energy x-ray
absorptiometry (DXA) CPT codes for measuring bone density for CYs 2010 and 2011. This provision requires payments
for these preventive services to be based on 70 percent of their CY 2006 RVUs and the CY 2006 conversion factor, and
the current year geographic adjustment.
Improved Access to Certified Nurse-Midwife Services: The Affordable Care Act increases the Medicare payment for
certified nurse-midwife services from 65 percent of the PFS amount for the same service furnished by a physician to 100
percent of the PFS amount for the same service furnished by a physician (or 80 percent of the actual charge if that is less).
The increased payment amount is effective for services furnished on or after Jan. 1, 2011.
Misvalued Codes under the Physician Fee Schedule: The Affordable Care Act requires CMS to periodically review
and identify potentially misvalued codes and make appropriate adjustments to the relative values of the services that may
be misvalued. CMS has been engaged in a vigorous effort over the past several years to identify and revise potentially
misvalued codes. The final rule with comment period identifies additional categories of services that may be misvalued,
including codes with low work RVUs commonly billed in multiple units per single encounter and codes with high volume and
low work RVUs. The final rule also includes CMS’ response to recommendations from the American Medical Association
(AMA) Relative Value Update Committee (RUC) for CY 2011 regarding the work or direct practice expense inputs for 325
CPT codes.
Multiple Procedure Payment Reduction Policy for Therapy Services:
The Affordable Care Act requires CMS to identify and make adjustments to the relative values for multiple services that
are frequently billed together when a comprehensive service is furnished. CMS is adopting a multiple procedure payment
reduction (MPPR) policy for therapy services in order to more appropriately recognize the efficiencies when combinations
of therapy services are furnished together. The policy, as described in the CY 2011 MPFS final rule with comment period,
states that the MPPR for “always” therapy services will reduce by 25 percent the payment for the practice expense
component of the second and subsequent therapy services furnished by a single provider to a beneficiary on a single date
of service. This policy will apply to all outpatient therapy services paid under Part B, including those furnished in office
and facility settings.
Since publication of the CY 2011 MPFS final rule with comment period, this policy has been modified by the Physician
Payment and Therapy Relief Act of 2010. Per this Act, CMS will apply the CY 2011 MPFS final rule policy of a 25 percent
MPPR to therapy services furnished in the hospital outpatient department and other facility settings that are paid under

Page 50                                                                                     Medicare Report: March 2011
section 1834(k) of the Social Security Act, and a 20 percent therapy MPPR will apply to therapy services furnished in
clinicians’ offices and other settings that are paid under section 1848 of the Act.
For more details, see the MLN Matters® article at http://www.cms.gov/MLNMattersArticles/downloads/MM7050.pdf on
the CMS website.
Modification of Equipment Utilization Factor and Modification of Multiple Procedure Payment Policy for Advanced
Imaging Services: The Affordable Care Act adjusts the equipment utilization rate assumption for expensive diagnostic
imaging equipment. Effective January 1, 2011, CMS will assign a 75 percent equipment utilization rate assumption to
expensive diagnostic imaging equipment used in diagnostic computed tomography (CT) and magnetic resonance imaging
(MRI) services. In addition, beginning on July 1, 2010, the Affordable Care Act increased the established MPFS multiple
procedure payment reduction for the technical component of certain single-session imaging services to consecutive body
areas from 25 to 50 percent for the second and subsequent imaging procedures performed in the same session.
Medicare Economic Index (MEI):
The MEI is an inflation index for physician practice costs that is used as part of the formula to calculate annual updates
to MPFS rates. For CY 2011, CMS is rebasing and revising the MEI to use a 2006 base year in place of a 2000 base
year. Prior to the rebasing for CY 2011, CMS rebased the MEI in CY 2004. In addition, the final rule with comment
period announces CMS’ plans to convene a technical advisory panel to review all aspects of the MEI, including inputs,
input weights, price-measurement proxies, and productivity adjustment; and indicates that CMS will consider the panel’s
analysis and recommendations in future rulemaking.
New and Revised CPT Code Issues:
Establishment of Interim Final RVUs for CY 2011: On an annual basis, the AMA RUC provides CMS with recommendations
regarding physician work values for new, revised, and potentially misvalued codes. Typically, the relevant specialty
society surveys physicians to gather information regarding current medical practice that is then used by the AMA RUC
in developing recommendations for physician work values. CMS reviews the AMA RUC-recommended work RVUs on a
code-by-code basis. CMS then decides either to accept the AMA RUC-recommended work RVUs if CMS believes the
valuation is accurate, or determine an alternative value that better reflects our estimate of the physician work for the
service. CMS publishes these work RVUs in the PFS final rule as interim final values, subject to public comment.
Comprehensive Codes for a Bundle of Existing Component Services: A subset of AMA RUC work RVU
recommendations addressed valuing new CY 2011 CPT codes resulting from the bundling of two or more existing
component services performed together 95 percent or more of the time. CMS expects this bundling of component services
to continue over the next several years as the AMA RUC further recognizes the work efficiencies for services commonly
furnished together. Stakeholders should expect that increased bundling of services into fewer codes will generally result in
reduced MPFS payment for a comprehensive service by explicitly considering the efficiencies in work and/or PE that may
occur when component services are furnished together. For CY 2011, the AMA RUC provided CMS with recommendations
for several categories of new comprehensive services that historically have been reported under multiple component
codes. For CY 2011 the creation of comprehensive codes for a bundle of existing component services fall into three major
clinical categories: endovascular revascularization, computed tomography (CT), and diagnostic cardiac catheterization.
AddiTionAl informATion
The official instruction, CR 7264, issued to your FI, Carrier, or A/B MAC regarding this change, may be viewed at http://
www.cms.gov/Transmittals/downloads/R2129CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

aPril 2011 Quarterly aVerage sales PriCe (asP) mediCare Part b drug PriCing files and
reVisions to Prior Quarterly PriCing files

MLN Matters® Number: MM7298
Related Change Request (CR) #: 7298
Related CR Release Date: January 21, 2011
Effective Date: April 1, 2011
Related CR Transmittal #: R2135CP
Implementation Date: April 4, 2011
Provider TyPes AffecTed
This article is for all physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Durable
Medical Equipment Medicare Administrative Contractors (DME MACs), Fiscal Intermediaries (FIs), A/B Medicare
Administrative Contractors (A/B MACs), and/or Regional Home Health Intermediaries (RHHIs)) for services provided to
Medicare beneficiaries.
Provider AcTion needed
This article is based on Change Request (CR) 7298 which instructs your Medicare contractors to download and implement
the April 2011 Average Sales Price (ASP) Medicare Part B drug pricing file for Medicare Part B drugs and, if released by
Medicare Report: March 2011                                                                                       Page 51
the Centers for Medicare & Medicaid Services (CMS), also to download and implement the revised January 2011, October
2010, July 2010, and April 2010 files. Medicare will use these files to determine the payment limit for claims for separately
payable Medicare Part B drugs processed or reprocessed on or after April 4, 2011, with dates of service April 1, 2011,
through June 30, 2011. See the Background and Additional Information Sections of this article for further details regarding
these changes.
BAcKground
Section 1847A of The Medicare Modernization Act of 2003 (Section 303(c); see http://www.cms.gov/MMAUpdate/
downloads/PL108-173summary.pdf on the CMS website) revised the payment methodology for Part B covered drugs and
biologicals that are not paid on a cost or prospective payment basis.
The following table shows how the quarterly payment files will be applied:

Files                                         Effective for Dates of Service
April 2011 ASP and ASP NOC files              April 1, 2011, through June 30, 2011
January 2011 ASP and ASP NOC files            January 1, 2011, through March 31, 2011
October 2010 ASP and ASP NOC files            October 1, 2010, through December 31, 2010
July 2010 ASP and ASP NOC files               July 1, 2010, through September 30, 2010
April 2010 ASP and ASP NOC files              April 1, 2010, through June 30, 2010
AddiTionAl informATion
The official instruction, CR7298, issued to your carriers, DME MACs, FIs, A/B MACs, and RHHIs regarding this change
may be viewed at http://www.cms.gov/transmittals/downloads/R2135CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

Coding Guidelines and Claim Reporting

ameriCan reCoVery and reinVestment aCt of 2009 eleCtroniC HealtH reCord (eHr) inCentiVe
Program: HealtHCare Common ProCedure Coding system (HCPCs) modifier for tHe eHr
inCentiVe Program

MLN Matters Number: MM7035
Related Change Request (CR) #: 7035
Related CR Release Date: July 2, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R724OTN
Implementation Date: January 3, 2011
Provider TyPes AffecTed
Physicians, dentists, and other providers who participate in the Centers for Medicare & Medicaid Services (CMS) EHR
Incentive Program, and render services in a dental Health Professional Shortage Area (HPSA) should be aware of this
information.
Provider AcTion needed
Change Request (CR) 7035, from which this article is taken, announces that the Centers for Medicare & Medicaid Services
(CMS) has developed a new EHR HPSA Modifier AZ, which will allow eligible professionals (EP) to report claims rendered
in a dental HPSA when the ZIP code does not fully fall within that dental HPSA.
You should make sure that your billing staffs are aware of this new modifier. It is described in the Background section,
below.
BAcKground
The American Recovery and Reinvestment Act of 2009 (ARRA) (Pub. L. 111-5), which authorized the establishment of the
EHR incentive program, authorizes CMS to make EHR incentive payments for certain Medicare EPs who are meaningful
users of certified EHR technology.
EPs that are eligible to participate in the EHR incentive program include the following Medicare physicians:
    •	    Doctor of Medicine
    •	    Doctor of Osteopathy
    •	    Doctor of Podiatric Medicine
    •	    Doctor of Optometry
    •	    Doctor of Oral Surgery

Page 52                                                                                     Medicare Report: March 2011
    •	   Doctor of Dental Medicine
    •	   Doctor of Chiropractic.
Note: All publicly available information on the EHR Incentive Program (which will begin in calendar year 2011) can be
found at http://www.cms.hhs.gov/Recovery/11_HealthIT.asp on the CMS website, including a link to the proposed rule.
HPsA informATion
An EP who furnishes services predominately in a HPSA is eligible for a 10 percent increase in the maximum EHR incentive
payment amount, regardless of the type of HPSA in which the services were rendered. This means that any EP can
perform services in any type of HPSA (primary care, mental health, or dental) and receive the increase in the maximum
EHR HPSA incentive payment amount, as long as 50 percent or more of his/her services are performed in a HPSA.
Note: This definition of an EHR HPSA provider is different from the definition for Medicare Fee-For-Service (FFS) HPSA
bonus payments.
For purposes of the EHR incentive program, services rendered in a HPSA will be identified either through the ZIP code
on the claim, or through a modifier on the claim line. Providers currently reporting the non-dental HPSA modifier should
continue to do so; this modifier will also be read for purposes of the EHR incentive payment increase.
In order to allow EPs to report claims rendered in a dental HPSA when the ZIP code does not fully fall within that dental
HPSA, EPs must use the new EHR HPSA modifier, AZ (“PHYSICIAN PROVIDING A SERVICE IN A DENTAL HEALTH
PROFESSIONAL SHORTAGE AREA FOR THE PURPOSE OF AN ELECTRONIC HEALTH RECORD INCENTIVE
PAYMENT”), which is effective for dates of service on or after January 1, 2011. The new modifier will not affect the
payment or calculation of the FFS geographic quarterly HPSA bonus. The CMS will be responsible for determining which
EPs are due the EHR HPSA incentive payment increase and determining the amount of the payment.
AddiTionAl informATion
For complete details regarding this Change Request (CR) please see the official instruction (CR7035) issued to your
Medicare contractor. That instruction may be viewed by going to http://www.cms.gov/Transmittals/downloads/R724OTN.
pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

end stage renal disease (esrd) ProsPeCtiVe Payment system (PPs) and Consolidated
billing for limited Part b serViCes

MLN Matters® Number: MM7064 Revised
Related Change Request (CR) #: 7064
Related CR Release Date: January 14, 2011
Effective Date: January 1, 2011
Related CR Transmittal #: R2134CP
Implementation Date: January 3, 2011
Note: This article was revised on January 18, 2011. To reflect the revised CR 7064 that was issued on January 14, 2011.
In this article, the CR release date, transmittal number, and the Web address for accessing CR 7064 were revised. All
other information is the same.
Provider TyPes AffecTed
Physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, DME Medicare Administrative
Contractors (DME MACs), Fiscal Intermediaries (FIs), and/or A/B Medicare Administrative Contractors (A/B MACs)) for
ESRD services provided to Medicare beneficiaries.
Provider AcTion needed
STOP – Impact to You
This article is based on Change Request (CR) 7064 which announces the implementation of an End Stage Renal Disease
(ESRD) bundled prospective payment system (PPS) effective January 1, 2011.
CAUTION – What You Need to Know
Once implemented, the ESRD PPS will replace the current basic case-mix adjusted composite payment system and the
methodologies for the reimbursement of separately billable outpatient ESRD related items and services. The ESRD PPS
will provide a single payment to ESRD facilities, i.e., hospital-based providers of services and renal dialysis facilities, that
will cover all the resources used in providing an outpatient dialysis treatment, including supplies and equipment used to
administer dialysis in the ESRD facility or at a patient’s home, drugs, biologicals, laboratory tests, training, and support
services. The ESRD PPS provides ESRD facilities a 4-year phase-in (transition) period under which they would receive
a blend of the current payment methodology and the new ESRD PPS payment. In 2014, the payments will be based 100
percent on the ESRD PPS payment.


Medicare Report: March 2011                                                                                           Page 53
GO – What You Need to Do
Since the ESRD PPS is effective for services on or after January 1, 2011, it is important that providers not submit claims
spanning dates of service in 2010 and 2011. ESRD facilities have the opportunity to make a one time election to be
excluded from the transition period and have their payment based entirely on the payment amount under the ESRD
PPS as of January 1, 2011. Facilities wishing to exercise this option must do so on or before November 1, 2010. See the
Background and Additional Information Sections of this article for further details regarding the ESRD PPS.
BAcKground
The Medicare Improvements for Patients and Providers Act (MIPPA); Section 153(b); see http://www.govtrack.us/
congress/billtext.xpd?bill=h110-6331 on the Internet) requires the Centers for Medicare & Medicaid services (CMS) to
implement an End Stage Renal Disease (ESRD) bundled prospective payment system (PPS) effective January 1, 2011.
Once implemented, the ESRD PPS will replace the current basic case-mix adjusted composite payment system and
methodologies for the reimbursement of separately billable outpatient ESRD related items and services.
Specifically, the ESRD PPS combines payments for composite rate and separately billable services into a single base
rate. The per dialysis treatment base rate for adult patients is subsequently adjusted to reflect differences in:
    •	    Wage levels among the areas in which ESRD facilities are located;
    •	    Patient-level adjustments for case-mix;
    •	    An outlier adjustment (if applicable);
    •	    Facility-level adjustments;
    •	    A training add-on (if applicable); and
    •	    A budget neutrality adjustment during the transition period through 2013.
Patient-level Adjustments
The patient-level adjustments are patient-specific case-mix adjusters that were developed from a two-equation regression
analysis that encompasses composite rate and separately billable items and services. Included in the case-mix adjusters
for adults are those variables that are currently used in basic case-mix adjusted composite payment system, that is, age,
body surface area (BSA), and low body mass index (BMI). In addition to those adjusters that are currently used, the ESRD
PPS will also incorporate adjustments for six co-morbidity categories and an adjustment for the onset of renal dialysis.
Outlier Adjustment
ESRD facilities that are treating patients with unusually high resource requirements, as measured through their utilization
of identified services beyond a specified threshold, will be entitled to outlier payments. Such payments are an additional
payment beyond the otherwise applicable case-mix adjusted prospective payment amount.
ESRD outlier services are the following items and services that are included in the ESRD PPS bundle:
    1. ESRD-related drugs and biologicals that were or would have been, prior to January 1, 2011, separately billable
       under Medicare Part B;
    2. ESRD-related laboratory tests that were or would have been, prior to January 1, 2011, separately billable under
       Medicare Part B;
    3. Medical/surgical supplies, including syringes, used to administer ESRD-related drugs that were or would have
       been, prior to January 1, 2011, separately billable under Medicare Part B; and
    4. Renal dialysis service drugs that were or would have been, prior to January 1, 2011, covered under Medicare
       Part D, notwithstanding the delayed implementation of ESRD-related oral-only drugs effective January 1, 2014.
Note: Services not included in the PPS that remain separately payable, including blood and blood processing,
preventive vaccines, and telehealth services, are not considered outlier services.
Facility-level Adjustments
The facility-level adjustments include adjusters to reflect urban and rural differences in area wage levels using an area
wage index developed from Core Based Statistical Areas (CBSAs). The facility-level adjustments also include an adjuster
for facilities treating a low-volume of dialysis treatments.
Training Add-On
Facilities that are certified to furnish training services will receive a training add-on payment amount of $33.44, which
is adjusted by the geographic area wage index to account for an hour of nursing time for each training treatment that is
furnished. The training add-on applies to both peritoneal dialysis (PD) and hemodialysis (HD) training treatments.
Adjustments Specific to Pediatric Patients
The pediatric model incorporates separate adjusters based on two age groups (<13, 13-17) and dialysis modality
(hemodialysis, peritoneal dialysis). The per-treatment base rate as it applies to pediatric patients is the same base rate that
applies for adult patients, which is also adjusted by the area wage index. However, due to the lack of statistical robustness,
the base rate for pediatric patients is not adjusted by the same patient-level case-mix adjusters as for adult patients.

Page 54                                                                                       Medicare Report: March 2011
Instead, the pediatric payment adjusters reflect the higher total payments for pediatric composite rate and separately
billable services, compared to that of adult patients.
Treatments furnished to pediatric patients:
    •	   Can qualify for a training add-on payment (when applicable), and
    •	   Are eligible for an outlier adjustment.
Note: Pediatric dialysis treatments are not eligible for the low-volume adjustment.
ESRD PPS 4-year Phase-in (Transition) Period
The ESRD PPS provides ESRD facilities with a 4-year transition period under which they would receive a blend of
payments under the prior case-mix adjusted composite payment system and the new ESRD PPS as noted in the following
table:
The ESRD PPS 4-year Transition Period Blended Rate Determination
Calendar Year     Blended Rate
         2011          75 percent of the old payment methodology, and
                       25 percent of new PPS payment
         2012          50 percent of the old payment methodology, and
                       50 percent of the new PPS payment
         2013          25 percent of the old payment methodology, and
                       75 percent of the new PPS payment
        2014         100 percent of the PPS payment
For Calendar Year (CY) 2011, CMS will continue to update the basic case-mix composite payment system for purposes of
determining the composite rate portion of the blended payment amount. CMS updated the composite payment rate, the
drug add-on adjustment to the composite rate, the wage index adjustment, and the budget neutrality adjustment.
The ESRD PPS base rate is $229.63, which is applicable for both adult and pediatric ESRD patients effective January 1,
2011. This base rate will be wage adjusted as mentioned above where
    •	   The labor-related share of the base rate from the ESRD PPS market basket is 0.41737, and
    •	   The non labor-related share of the base rate is $133.79 ((229.63 X (1 - 0.41737) = $133.79).
During the transition, the labor-related share of the case-mix adjusted composite payment system will remain 0.53711.
The payment rate for a dialysis treatment is determined by wage adjusting the base rate and then applying any applicable:
    •	   Patient-level adjustments;
    •	   Outlier adjustments;
    •	   Facility-level adjustments; and
    •	   Training add-on payments (adjusted for area wage levels)
Once the payment rate for the dialysis treatment is determined, the last item in the computation to determine the final
payment rate is the application of the transition budget neutrality factor of .969, that is, a 3.1 percent reduction.
The ESRD PRICER will provide the payment for existing composite rate, the new ESRD PPS payment rate, and the
outlier payment (when applicable). These reimbursement amounts must be blended during a transition period for all
ESRD facilities except those facilities opting out of the transition and electing to be paid 100 percent of the payment
amount under the new ESRD PPS.
Note: Providers wishing to opt out of the transition period blended rate must notify their Medicare Contractor on
or before November 1, 2010. Providers shall not submit claims spanning date of service in 2010 and 2011.
Three New Adjustments Applicable to the Adult Rate
    1. Comorbid Adjustments: The new ESRD PPS provides for 3 categories of chronic comorbid conditions and
       3 categories for acute comorbid conditions. A single adjustment will be made to claims containing one or
       more of the comorbid conditions. The highest comorbid adjustment applicable will be applied to the claim. The
       acute comorbid adjustment may be paid no greater than 4 consecutive months for any reported acute comorbid
       condition, unless there is a reoccurrence of the condition. The 3 chronic comorbid categories eligible for a
       payment adjustment are:
         •	   Hereditary hemolytic and sickle cell anemia;
         •	   Monoclonal gammopathy (in the absence of multiple myeloma); and
         •	   Myelodysplastic syndrome.
         The 3 acute comorbid categories eligible for a payment adjustment are:

Medicare Report: March 2011                                                                                    Page 55
          •	   Bacterial Pneumonia;
          •	   Gastrointestinal Bleeding; and
          •	   Pericarditis.
    2. Onset of Dialysis Adjustment: An adjustment will be made for patients that have Medicare ESRD coverage
       during their first 4 months of dialysis. This adjustment will be determined by the dialysis start date in Medicare’s
       Common Working File as provided on the CMS Form 2728, completed by the provider. When the onset of dialysis
       adjustment is provided, the claim is not entitled to a comorbid adjustment or a training adjustment.
    3. Low-Volume Facility Adjustment: Providers will receive an adjustment to their ESRD PPS rate when the facility
       furnished less than 4,000 treatments in each of the three years preceding the payment year and has not opened,
       closed, or received a new provider number due to a change in ownership during the three (3) years preceding the
       payment year. The 3 years preceding treatment data should be reflected on the last 2 settled cost reports and the
       most recent must be filed. The provider must notify their Medicare Contractor if they believe they are eligible for
       the low-volume adjustment.
Change in Processing Home Dialysis Claims
For claims with dates of service on or after January 1, 2011, the payment of home dialysis items and services furnished
under Method II, regardless of home treatment modality, are included in the ESRD PPS payment rate.
Therefore, all home dialysis claims:
    •	    Must be submitted by a renal dialysis facility and
    •	    Will be processed as Method I claims.
Note: CR 7064 instructs the DME MACs to stop separate payment to suppliers for Method II home dialysis items
and services for claims with dates of service on or after January 1, 2011. Medicare will, however, allow separate
billing for ESRD supply HCPCS codes (as shown on attachment 4 of CR 7064) by DME suppliers when submitted
for services not related to the beneficiary’s ESRD dialysis treatment and such services are billed with the AY
modifier.
Consolidated Billing
CR 7064 provides an ESRD consolidated billing requirement for limited Part B services included in the ESRD facility
bundled payment. Certain laboratory services and limited drugs and supplies will be subject to Part B consolidated billing
and will no longer be separately payable when provided for ESRD beneficiaries by providers other than the renal dialysis
facility. Should these lab services, and limited drugs be provided to a beneficiary, but are not related to the treatment for
ESRD, the claim lines must be submitted by the laboratory supplier or other provider with the new AY modifier to allow for
separate payment outside of ESRD PPS. ESRD facilities billing for any labs or drugs will be considered part of the bundled
PPS payment unless billed with the modifier AY. In addition, as noted above, Medicare will, however, allow separate billing
for ESRD supply HCPCS codes (as shown on attachment 4 of CR 7064) by DME suppliers when submitted for services
not related to the beneficiary’s ESRD dialysis treatment and such services are billed with the AY modifier.
Other Billing Reminders
    •	    Note that with the ESRD PPS changes, Medicare systems will also reject any lines reporting revenue code 0880
          as of January 1, 2011. These rejections will be made with remittance advice remark code (RARC) M81 (You are
          required to code to the highest level of specificity), and assign a group code of CO (provider liability) to such lines.
    •	    Medicare will return claims to the provider with dates of service spanning 2010 and 2011.
    •	    Telehealth services billed with HCPCS Q3014, preventive services covered by Medicare, and blood and blood
          services are exempt from the ESRD PPS and will be paid based on existing payment methodologies.
    •	    When claims are received without the AY modifier for items and services that are not separately payable due to the
          ESRD PPS consolidated billing process, the claims will be returned with claim adjustment reason code (CARC)
          109 (Claim not covered by this payer/contractor. You must send the claim to the correct payer/contractor.), RARC
          N538 (A facility is responsible for payment to outside providers who furnish these services/supplies/drugs to its
          patients/residents.), and assign Group code CO.
    •	    All 72X claims from Method II facilities with condition code 74 will be treated as Method I claims as of January 1,
          2011. Effective that same date, Medicare will no longer enter Method selection forms data into its systems.
    •	    Services included in the existing composite rate continue to not be reported on the claim unless they are clinical
          lab services subject to the 50/50 rule. The only additional data that must be reported on or after January 1, 2011
          are any oral and other equivalent forms of injectable drugs identified as outlier services. Oral and other equivalent
          forms of injectable drugs should be reported with the revenue code 0250. The drug NDC code must be reported
          with quantity field reflecting the smallest available unit.
    •	    Payment for ESRD-related Aranesp and ESRD-related Epoetin Alfa (EPO) is included in the ESRD PPS for
          claims with dates of service on or after January 1, 2011.
    •	    Effective January 1, 2011, section 153b of the MIPPA requires that all ESRD-related drugs and biologicals are

Page 56                                                                                         Medicare Report: March 2011
         included in the ESRD PPS and must be billed by the renal dialysis facility.
AddiTionAl informATion
The official instruction, CR 7064, issued to your carriers, DME MACs, FIs and/or A/B MACs regarding this change may be
viewed at http://www.cms.gov/Transmittals/downloads/R2134CP.pdf on the CMS website. Attached to CR 7064, you may
find the following documents to be helpful:
    •	   Attachment 3, which is a list of outlier services;
    •	   Attachment 4, which is a list of DME ESRD Supply HCPCS codes used in for ESRD PPS consolidated billing
         edits;
    •	   Attachment 5, which contains a list of DME ESRD Supply HCPCS codes that are NOT payable to DME suppliers;
    •	   Attachment 6, which is a list of laboratory CPT/HCPCS codes subject to ESRD consolidated billing;
    •	   Attachment 7, which lists the drug codes subject to ESRD consolidated billing; and
    •	   Attachment 8, which lists by ICD-9-CM codes, the comorbid categories and diagnosis codes.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

national modifier and Condition Code to identify items or serViCes related to tHe 2010 oil
sPill in tHe gulf of mexiCo

MLN Matters® Number: MM7087
Related Change Request (CR) #: 7087
Related CR Release Date: August 6, 2010
Effective Date: April 20, 2010
Related CR Transmittal #: R2021CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Fiscal
Intermediaries (FIs), and/or Part A/B Medicare Administrative Contractors (MACs)) for services provided to Medicare
beneficiaries related, in whole or in part, to the 2010 oil spill in the Gulf of Mexico.
Provider AcTion needed
This article is based on Change Request (CR) 7087 which identifies a new modifier and a new condition code that must
be used to identify items or services related to the 2010 oil spill in the Gulf of Mexico. Be sure your billing staff is aware
of these changes. You should begin to place the modifier or condition code on claims submitted as of January 3,
2011.
BAcKground
As a result of the oil spill in the Gulf of Mexico, the Centers for Medicare & Medicaid Services (CMS) plans to monitor
the potential health and cost impacts of the oil spill on Medicare beneficiaries, in both the short and long-term. In order to
ensure that such health care services and costs are properly identified, CMS is requiring that every Medicare Fee-For-
Service claim be specifically identified if it is for an item or service furnished to a Medicare beneficiary, where the provision
of such item or service is related, in whole or in part, to an illness, injury, or condition that was caused by or exacerbated
by the effects, direct or indirect, of the 2010 oil spill in the Gulf of Mexico (hereafter referred to as the “Gulf oil spill”) and/
or circumstances related to such oil spill, including but not limited to subsequent clean-up activities.
Claims from physicians, other practitioners, and suppliers must be annotated with the modifier “CS” for each line item
where the item or service is so related. Similarly, claims from institutional billers must be annotated with a condition code
of “BP” when the entire claim is so related or with the “CS” modifier for each relevant line item when only certain line items
are so related. The modifier and condition code are to be used for claims with dates of service on or after April 20, 2010.
The long description of the CS modifier is as follows: “Item or service related, in whole or in part, to an illness, injury, or
condition that was caused by or exacerbated by the effects, direct or indirect, of the 2010 oil spill in the Gulf of Mexico,
including but not limited to subsequent clean-up activities.”
The short description of the CS modifier is: “Gulf Oil Spill Related”.
The title of the BP condition code is “Gulf oil spill related” and its definition is as follows: “This code identifies claims where
the provision of all services on the claim are related, in whole or in part, to an illness, injury, or condition that was caused
by or exacerbated by the effects, direct or indirect, of the 2010 oil spill in the Gulf of Mexico and/or circumstances related
to such spill, including but not limited to subsequent clean-up activities.”
Note: CMS requests provider, physician and supplier assistance in identifying previously processed claims related to an
illness, injury or condition caused or exacerbated either directly or indirectly by the 2010 Gulf oil spill. CMS encourages
providers, physicians and suppliers to contact their Medicare contractor to identify services or claims – submitted and

Medicare Report: March 2011                                                                                              Page 57
processed prior to the creation of the Gulf oil spill modifier and condition code – that should have the CS modifier and/or
the BP condition code appended.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
The official instruction (CR7087) issued to your Medicare MAC, carrier and/or FI is available at http://www.cms.gov/
Transmittals/downloads/R2021CP.pdf on the CMS website.

billing ClarifiCation for Positron emission tomograPHy (naf-18) Pet for identifying bone
metastasis of CanCer in tHe Context of a CliniCal trial

MLN Matters® Number: MM7125
Related Change Request (CR) #: 7125
Related CR Release Date: November 19, 2010
Effective Date: February 26, 2010
Related CR Transmittal #: R2096CP
Implementation Date: February 22, 2011
Provider TyPes AffecTed
This article is for physicians, providers and suppliers who bill Medicare carriers, fiscal intermediaries (FIs), or Part A/B
Medicare Administrative Contractors (A/B MACs) for providing NaF-18 PET scans to identify bone metastasis of cancer
for Medicare beneficiaries.
Provider AcTion needed
This article is based on Change Request (CR) 7125, which is being issued to clarify a requirement in CR 6861 regarding
how these claims should be billed. Specifically, CR 7125 amends instructions for claims submitted for the professional
component (PC), technical (TC) or global components. This article explains the specific claims handling instructions for
claims submitted for each of these components. Please ensure that your billing staffs are aware of this clarification.
BAcKground
This article explains that CR 7125 clarifies the requirement originally discussed in MLN Matters® article MM6861,
which may be viewed at http://www.cms.gov/MLNMattersArticles/downloads/MM6861.pdf on the Centers for Medicare
& Medicaid Services (CMS) website. That requirement is being amended to state that only claims for the TC or global
service require the radioactive tracer, Healthcare Common Procedure Coding System (HCPCS) A9580. Claims for the PC
do not require HCPCS A9580, but must contain the appropriate –PI or –PS modifier, PET/CT HCPCS procedure code,
diagnosis code, and the Q0 modifier.
CR 7125 also corrects the list of applicable PET or PET with CT CPT codes that can be used for bone metastasis on the
claim and to remove HCPCS 78608 and t8459 as they cannot be paid for bone metastasis with NaF-18. Finally, modifier
KX (Requirements specified in the medical policy have been met) will be accepted for PC claims (modifier 26) for PET for
bone metastasis (PET NaF-18) to differentiate these claims from PET for FDG in the context of a clinical trial. This modifier
is not required on claims submitted to FIs, nor is it required on claims for the technical or global service.
Key PoinTs in cr 7125
    1. Effective for claims with dates of service on or after February 26, 2010, Positron Emission Tomography (NaF-18
       PET) oncologic claims billed with modifier TC or globally to inform the initial treatment strategy or subsequent
       treatment strategy for bone metastasis that MUST include ALL of the following:
          •	   -PI or –PS modifier AND
          •	   PET or PET/CT CPT code (78811, 78812, 78813, 78814, 78815, 78816) AND
          •	   ICD-9 cancer diagnosis code AND
          •	   Q0 modifier – Investigational clinical service provided in a clinical research study, are present on the claim.
    2. Effective for claims with dates of service on or after February 26, 2010, PET oncologic claims billed with modifier
       26 and modifier KX to inform the initial treatment strategy or strategy or subsequent treatment strategy for bone
       metastasis MUST include ALL of the following:
          •	   -PI or –PS modifier AND
          •	   PET or PET/CT CPT code (78811, 78812, 78813, 78814, 78815, 78816) AND
          •	   ICD-9 cancer diagnosis code AND
          •	   Q0 modifier – Investigational clinical service provided in a clinical research study, are present on the claim.
    3. Claims failing the requirements stated above will be returned as unprocessable with the following messages:
          •	   Claim Adjustment Reason Code 4 (The procedure code is inconsistent with the modifier used or a required

Page 58                                                                                        Medicare Report: March 2011
             modifier is missing.);
        •	   Remittance Advice Remark Code MA-130 (Your claim contains incomplete and/or invalid information, and no
             appeal rights are afforded because the claim is unprocessable. Submit a new claim with the complete/correct
             information.);
        •	   Remittance Advice Remark Code M16 (Alert: See our Web site, mailings, or bulletins for more details
             concerning this policy/procedure/decision.); and/or
        •	   Claim Adjustment Reason Code 167 (This (these) diagnosis(es) is (are) not covered.)
    4. Claims billed with modifiers 26 and KX to inform the initial treatment strategy or subsequent treatment strategy
       for bone metastasis billed with HCPCS A9580 will be returned as unprocessable using Claim Adjustment Reason
       Code 97 (The benefit for this service is included in the payment/allowance for another service/procedure that has
       already been adjudicated.).
AddiTionAl informATion
The official instruction, CR 7125, issued to your carrier, FI, or A/B MAC regarding this change, may be viewed at http://
www.cms.gov/Transmittals/downloads/R2096CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

new HCPCs Q-Codes for 2010-2011 seasonal influenza VaCCines

MLN Matters® Number: MM7234 Revised
Related Change Request (CR): 7234
Related CR Release Date: November 19, 2010
Effective Date: October 1, 2010 unless otherwise specified
Related CR Transmittal #: R815OTN
Implementation Date: January 3, 2011
Note: This article was revised on December 9, 2010, to correct the short descriptor for code Q2039 on page 2. All other
information is the same.
Provider TyPes AffecTed
This article is for physicians and providers submitting claims to Medicare contractors (carriers, Fiscal Intermediaries
(FIs), and/or Part A/B Medicare Administrative Contractors (A/B MACs)) for influenza vaccines provided to Medicare
beneficiaries.
Provider AcTion needed
The article is based on Change Request (CR) 7234 which establishes separate billing codes for each brand-name influenza
vaccine product under Common Procedure Terminology (CPT) code 90658 and describes the process for updating the
new specific Healthcare Common Procedure Coding System (HCPCS) codes and their payment allowances for Medicare
during the 2010-2011 influenza season.
BAcKground
CMS has created specific HCPCS codes and payment allowances to replace CPT code 90658 for Medicare billing
purposes for the 2010-2011 influenza season.
Key PoinTs of cr7234
The following describes the process for updating these specific HCPCS codes for Medicare payment effective for dates
of service on or after October 1, 2010.
Effective for claims with dates of service on or after January 1, 2011, the following CPT code will no longer be payable for
Medicare:

CPT Code           Short Description               Long Description
90658              Flu vaccine, 3 yrs & >, im      Influenza virus vaccine, split virus, when administered
                                                   to individuals 3 years of age and older, for intramuscular
                                                   use
Effective for claims with dates of service on or after October 1, 2010, the following HCPCS codes will be payable for
Medicare:
HCPCS Code Short Description                       Long Description
Q2035              Afluria vacc, 3 yrs & >, im     Influenza virus vaccine, split virus, when administered
                                                   to individuals 3 years of age and older, for intramuscular
                                                   use (Afluria)


Medicare Report: March 2011                                                                                       Page 59
HCPCS Code        Short Description                 Long Description
Q2036             Flulaval vacc, 3 yrs & >, im      Influenza virus vaccine, split virus, when administered
                                                    to individuals 3 years of age and older, for intramuscular
                                                    use (Flulaval)
 Q2037              Fluvirin vacc, 3 yrs & >, im    Influenza virus vaccine, split virus, when administered
                                                    to individuals 3 years of age and older, for intramuscular
                                                    use (Fluvirin)
 Q2038              Fluzone vacc, 3 yrs & >, im     Influenza virus vaccine, split virus, when administered
                                                    to individuals 3 years of age and older, for intramuscular
                                                    use (Fluzone)
 Q2039              NOS flu vacc, 3 yrs & >, im     Influenza virus vaccine, split virus, when administered
                                                    to individuals 3 years of age and older, for intramuscular
                                                    use (Not Otherwise Specified)
Take Note: CPT 90658 describes the regular dose vaccine that is supplied in a multi-dose vial for use in patients over 3
years of age. For dates of service on or after October 1, 2010, HCPCS codes Q2035, Q2036, Q2037, Q2038 and Q2039
(as listed in the table above) will replace the CPT code 90658 for Medicare payment purposes during the 2010 – 2011
influenza season. However, these HCPCS codes will not be recognized by the Medicare claims processing systems until
January 1, 2011, when CPT code 90658 will no longer be recognized.
This instruction does not affect any other CPT codes. It is very important to distinguish between the various CPT and
HCPCS codes which describe the different formulations of the influenza vaccines (i.e. pediatric dose, regular dose, high
dose, preservative free, etc.). As a reference, the quarterly Part B drug pricing files includes a set of National Drug Code
(NDC) to HCPCS crosswalks available online at http://www.cms.gov/McrPartBDrugAvgSalesPrice/ on the Centers for
Medicare & Medicaid Services (CMS) website.
Billing
In general, it is inappropriate for a provider to submit two claims for the same service on the same date. For dates of
service between October 1, 2010 and December 31, 2010, the CPT 90658 and the Q-codes will be valid for billing;
however, providers may not bill Medicare for both the CPT 90658 and any of the Q-codes for the same patient for the
same date of service. Thus, if a provider vaccinates a beneficiary on any date between October 1, 2010 and December
31, 2010, the provider may either bill Medicare immediately using CPT 90658, or hold the claim and wait until January 1,
2011 to bill Medicare using the most appropriate Q-code. If a claim has already been submitted and processed using CPT
90658, then there is no need to use the Q-code for that same service.
For dates of service on or after January 1, 2011, providers may only bill Medicare for one of the HCPCS codes that
appropriately describes the specific vaccine product administered.
Payment The Medicare Part B payment limits for influenza vaccines are 95 percent of the Average Wholesale Price
(AWP) except where the vaccine is furnished in a setting that follows a cost-based or prospective payment system under
Medicare. For example, where the vaccine is furnished in the hospital outpatient department, Rural Health Clinic (RHC),
or Federally Qualified Health Center (FQHC), payment for the vaccine is based on reasonable cost.
For dates of service on or after October 1, 2010, the Medicare Part B payment allowances in other situations are:

HCPCS Code          Allowance
Q2036               $7.439
Q2037               $13.253
Q2038               $12.593
No national payment limits are available for Q2035 and Q2039. The payment limits for these two codes will be determined
by the local claims processing contractor.
For dates of service on or after September 1, 2010, the corrected Medicare Part B payment allowance for CPT 90655 is
$14.858.
Important Notes:
Annual Part B deductible and coinsurance amounts do not apply to these vaccines. All physicians, non-physician
practitioners and suppliers who administer the influenza virus vaccination and the pneumococcal vaccination must take
assignment on the claim for the vaccine.
Be aware that Medicare contractors will not search their files to adjust payment on claims paid incorrectly prior to
implementing CR7324. However, they will adjust such claims that you bring to their attention.
AddiTionAl informATion
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.
For complete details regarding this CR please see the official instruction (CR7234) issued to your Medicare A/B MAC,
carrier or FI. That instruction may be viewed by going to http://www.cms.gov/Transmittals/downloads/R815OTN.pdf on

Page 60                                                                                    Medicare Report: March 2011
the CMS website.
CMS would like providers to be aware that educational products are available through the MLN Catalogue free of
charge. The MLN Catalogue is available at http://www.cms.gov/MLNProducts/downloads/MLNCatalog.pdf on the CMS
website. The specific products that may be of interest to providers who use the information in MM7234 are as follows:

Payment for 510k Post-aPProVal extension studies using 510k-Cleared emboliC ProteCtion
deViCes during Carotid artery stenting (Cas) ProCedures

MLN Matters® Number: MM7249
Related Change Request (CR) #: 7249
Related CR Release Date: December 10, 2010
Effective Date: October 22, 2010
Related CR Transmittal #: R2113CP
Implementation Date: January 12, 2011
Provider TyPes AffecTed
This article is for physicians, hospitals, or other providers who submit claims to Medicare Carriers, Fiscal Intermediaries
(FIs), or Medicare Administrative Contractors (A/B MACs) for providing Carotid Artery Stenting (CAS) procedures, in post
approval extension studies, using 510k-cleared embolic protection devices.
WHAT you need To KnoW
CR 7249, from which this article is taken, announces that, effective October 22, 2010, the Centers for Medicare & Medicaid
Services (CMS) has determined that all 510k post-approval extension studies must be reviewed by the Food and Drug
Administration (FDA) via its Pre-Investigational Device Exemption (IDE) process. It specifically discusses the coverage of
proximal embolic protection devices (EPDs) used in carotid artery stenting (CAS) procedures performed in FDA-approved
510K post-approval extension studies, announcing that these patients (similar to patients covered in traditional post-
approval extension studies) are eligible for coverage under the current coverage policy.
In order to receive Medicare coverage for patients participating in these 510k post-approval extension studies, you will
need to follow the same billing processes as explained in the Medicare Claims Processing Manual, Chapter 32 (Billing
Requirements for Special Services), Section 160.2.1 (CAS for Post-Approval Studies), except that you should report
510k-cleared devices with a pre-IDE number beginning with an “I”, instead of an IDE number beginning with a “P” (post-
market approval). You can find this manual section at http://www.cms.gov/manuals/downloads/clm104c32.pdf on the
CMS Website.
You should make sure that your billing staffs are aware of these coverage changes.
BAcKground
In 2004, CMS gave Medicare contractors instructions on processing claims for CAS procedures performed in FDA-
approved post-approval studies. (Please refer to MLN Matters® article MM3489, released on October 15, 2004, entitled
Percutaneous Transluminal Angioplasty (PTA), which you can find at http://www.cms.gov/MLNMattersArticles/downloads/
MM3489.pdf on the CMS Website).
As these post-approval studies began to end, CMS received requests to extend coverage for them. On May 12, 2006,
CMS released Change Request (CR) 5088 which updated the Claims Processing Manual and explained that patients
participating in post-approval extension studies are also included in the covered population of patients participating in
FDA-approved post-approval studies. CR 5088 also provided claims processing instructions specific to post approval
extension studies. (Please refer to MLN Matters® article MM5088 entitled Payment for Carotid Artery Stenting (CAS)
Post Approval Extension Studies, which you can find at http://www.cms.gov/MLNMattersArticles/downloads/MM5088.
pdf on the CMS Website and to the Medicare National Coverage Determinations (NCD) Manual, Chapter 1 (Coverage
Determinations), Section 20.7 (Percutaneous Transluminal Angioplasty (PTA)), which is available at http://www.cms.gov/
manuals/downloads/ncd103c1_Part1.pdf on the CMS Website.
Coverage of Proximal Embolic Protection Devices (EPDs) in Carotid Artery Stenting (CAS) Procedures
Recently, the FDA issued 510k approvals for proximal EPDs used in CAS procedures. However, while the NCD requires use
of an EPD, the 510k process (unlike traditional FDA marketing approval requirements) does not involve a post- approval
study requirement; and CMS received requests to include, under the current coverage policy, patients participating in
studies that followed FDA 510k approval of these devices.
In response, effective October 22, 2010. CMS determined that patients in these studies (similar to patients covered in
traditional post-approval extension studies as discussed above) are eligible for coverage under the current coverage
policy referenced in Section 20.7 in the NCD Manual referenced above.
Moreover, while the FDA does not require devices approved through the 510k process to undergo further study following
clearance (as such, these studies are neither required by, nor subject to, FDA approval), CMS has determined that the
FDA must review all 510k post-approval extension studies through its pre-IDE process. As a result of this process, each
study is assigned, and identified by, a single, 6-digit number preceded by the letter ‘I’ (i.e., I123456). (For example,
Medicare Report: March 2011                                                                                      Page 61
the FREEDOM study, examining the 510k-cleared Gore Flow Reversal System, was assigned I090962, and must be
identified as such on all claims.)
Notification Process
Following this review process, the FDA will issue CMS an acknowledgement letter stating that the extension study is
scientifically valid and will generate clinically relevant post-market data. CMS, upon receipt of this letter and review of the
510k post-approval extension study protocol, will issue a letter to the study sponsor indicating that Medicare will cover the
study under review.
Billing
Your carrier, FI, or A/B MAC will follow the same procedures for processing post-approval study devices that are currently
in place for Category B IDEs. In order to receive Medicare coverage for patients participating in 510k post-approval
extension studies, you will need to submit both the FDA acknowledgement letter and the CMS letter providing coverage for
the extension study to your contractor, and any other materials they might require for FDA-approved post-approval studies
or post-approval extension studies. Further, you should follow the process (as established in CR 3489) for informing them
of the patients’ participation in the studies, utilizing the most current and appropriate codes when submitting your claims.
This process is as follows:
    1. For billing carriers, you should:
          •	   Place the IDE number (that begins with an “I”) in either item 23 of the CMS-1500 paper claim format or in the
               2300 IDE Number Ref Segment, data element REF02 (REF01=LX) of the 837p claim format;
          •	   Use the Q0 modifier, instead of QA;
          •	   Use the most current ICD-9-CM procedure codes;
          •	   Use the most current ICD-9-CM diagnostic codes.
    2. For billing FIs, you should:
          •	   Use the most current ICD-9-CM procedure codes;
          •	   Place no more than one IDE number (that begins with an “I”) in form locator 43 of the CMS-1450 paper form
               or in 2300 IDE Number Ref Segment, data element REF02 (REF01=LX) of the 837i;
          •	   Use revenue code 0624 for post-approval study devices in form locator 42 of the CMS-1450 paper claim form
               or 2400 Institutional Service Line SV201 Segment, data element 234 of the 837i;
          •	   Use the most current ICD-9-CM diagnostic codes.
You should also be aware that your contractor is not required to mass-adjust claims for dates of service between the
October 22, 2010, effective date and this CR’s implementation date, but they may adjust claims that you bring to their
attention.
AddiTionAl informATion
You can find more information about payment for 510k Post-Approval Extension Studies using 510k-cleared EPDs during
CAS procedures by going to CR 7249, located at http://www.cms.hhs.gov/Transmittals/downloads/R2113CP.pdf on the
CMS Website.
You will find the updated Medicare Claims Processing Manual, Chapter 32 (Billing Requirements for Special Services),
Section160.4 (510k Post-Approval Studies using 510k-Cleared Embolic Protection Devices during Carotid Artery Stenting
(CAS) Procedures) as an attachment to that CR.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

new waiVed tests

MLN Matters® Number: MM7184
Related Change Request (CR) #: 7184
Related CR Release Date: November 5, 2010
Effective Date: January 1, 2011
Related CR Transmittal #: R2084CP
Implementation Date: January 3, 2011
Provider TyPes AffecTed
This article is for clinical diagnostic laboratories billing Medicare Carriers or Part A/B Medicare Administrative Contractors
(MACs) for laboratory tests.
Provider AcTion needed
STOP – Impact to You
If you do not have a valid, current, Clinical Laboratory Improvement Amendments of 1998 (CLIA) certificate and submit a

Page 62                                                                                       Medicare Report: March 2011
claim to your Medicare Carrier or A/B MAC for a Current Procedural Terminology (CPT) code that is considered to be a
laboratory test requiring a CLIA certificate, your Medicare payment may be impacted.
CAUTION – What You Need to Know
CLIA requires that for each test it performs, a laboratory facility must be appropriately certified. The CPT codes that
the Centers for Medicare & Medicaid Services (CMS) considers to be laboratory tests under CLIA (and thus requiring
certification) change each year. CR 7184, from which this article is taken, informs carriers and MACs about the latest new
CPT codes that are subject to CLIA edits.
GO – What You Need to Do
Make sure that your billing staffs are aware of these CLIA-related changes for 2010 and that you remain current with
certification requirements.
BAcKground
Listed below are the latest tests approved by the Food and Drug Administration as waived tests under CLIA. The tests
are valid as soon as they are approved. The CPT codes for the following new tests MUST have the modifier QW to be
recognized as a waived test. Note, however, that the tests mentioned on the first page of the list attached to CR 7184 (i.e.,
CPT codes 81002, 81025, 82270, 82272, 82962, 83026, 84830, 85013, and 85651) do not require a QW modifier to be
recognized as a waived test.

CPT Code                     Effective Date         Description
G0430QW                      January 1, 2010        American Screening Corporation OneScreen Drug Test Cups
84443QW                      March 2, 2010          Aventir Biotech LLC, Forsure TSH Test {Whole Blood}
84443QW                      March 4, 2010          BTNX, Inc Rapid Response Thyroid Stimulating Hormone
                                                    (TSH) Test Cassette
G0430QW                      April 21, 2010         CLIAwaived, Inc. Rapid Drug Test Cup {OTC}
G0430QW                      April 21, 2010         Millennium Laboratories Clinical Supply, Inc Multi-Drug Pain
                                                    Med Screen Cup
G0430QW                      May 10, 2010           US Diagnostics ProScreen Drugs of Abuse Cup {OTC}
G0430QW                      July 1, 2010           Ameditech, Inc ImmuTest Drug Screen Cup
G0430QW                      July 4, 2010           Quik Test USA, Inc. Multi-Drug of Abuse Urine Test
G0430QW                      July 4, 2010           Screen Tox Multi-Drug of Abuse Urine Test
82274QW, G0328QW             July 8, 2010           Consult Diagnostics Immunochemical Fecal Occult Blood Test
                                                    (iFOBT)
G0430QW                      July 19, 2010          Alfa Scientific Designs, Inc. Instant-View Drug of Abuse Urine
                                                    Cassette Test
G0430QW                      July 19, 2010          Alfa Scientific Designs, Inc. Instant-View Drug of Abuse Urine
                                                    Cup Test
G0430QW                      August 18, 2010        American Screening Corporation Reveal Multi-Drug Testing
                                                    Cups
87880QW                      August 18, 2010        PSS Consult Diagnostics Strep A Dipstick
AddiTionAl informATion
The official instruction, CR 7184 issued to your carrier or A/B MAC regarding this change may be viewed at http://www.
cms.gov/Transmittals/downloads/R2084CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.




Medicare Report: March 2011                                                                                        Page 63
Coverage Issues

dermal inJeCtions for treatment of faCial liPodystroPHy syndrome (lds)

MLN Matters® Number: MM6953 Revised
Related Change Request (CR) #: 6953
Related CR Release Date: November 24, 2010
Effective Date: March 23, 2010
Related CR Transmittal #: R122NCD and R2105CP
Implementation Date: July 6, 2010
Note: This article was revised on November 26, 2010, to reflect a revised CR 6953, which was issued on November 24,
2010. CR 6953 was revised to clarify billing procedures for services performed in the outpatient hospital setting and to
update the Claims Adjustment Reason Code for line item denials for relevant services performed prior to March 23, 2010.
This article was revised to reflect this clarification and update.
Provider TyPes AffecTed
This article is for physicians, hospitals, and other providers submitting claims to Medicare contractors (carriers, Fiscal
Intermediaries (FIs), and/or A/B Medicare Administrative Contractors (A/B MACs)) for Facial Lipodystrophy services
provided to Medicare beneficiaries.
WHAT you need To KnoW
This article is based on Change Request (CR) 6953 which informs Medicare contractors that, effective for claims with dates
of service on and after March 23, 2010, dermal injections for facial lipodystrophy syndrome (LDS) are only reasonable
and necessary using dermal fillers approved by the Food and Drug Administration (FDA) for this purpose, and then only in
human immunodeficiency virus (HIV)-infected Medicare beneficiaries who manifest depression secondary to the physical
stigma of HIV treatment.
BAcKground
The Centers for Medicare & Medicaid Services (CMS) received a request for national coverage of treatments for facial
lipodystrophy syndrome (LDS) for human immunodeficiency virus (HIV)-infected Medicare beneficiaries. LDS is often
characterized by a loss of fat that results in a facial abnormality such as severely sunken cheeks. This fat loss can arise as
a complication of HIV and/or highly active antiretroviral therapy (HAART). Due to their appearance, patients with LDS may
become depressed, socially isolated, and in some cases may stop their HIV treatments in an attempt to halt or reverse
this complication.
Nationally Covered Indications
Effective for claims with dates of service on and after March 23, 2010, dermal injections for LDS are only reasonable and
necessary using dermal fillers approved by the Food and Drug Administration (FDA) for this purpose, and then only in
HIV-infected beneficiaries who manifest depression secondary to the physical stigma of HIV treatment.
Nationally Non-Covered Indications
    •	    Dermal fillers that are not approved by the FDA for the treatment of LDS, and
    •	    Dermal fillers that are used for any indication other than LDS in HIV-infected individuals who manifest depression
          as a result of their antiretroviral HIV treatments.
Claims Coding/Pricing Information
Effective with the July 2010 Healthcare Common Procedure Coding System (HCPCS) update, the July Medicare Physician
Fee Schedule (MPFS), and the July Integrated Outpatient Code Editor (IOCE):
    •	    HCPCS codes Q2026, Q2027, and G0429 will be designated for dermal fillers Sculptra® and Radiesse®;
    •	    HCPCS codes Q2026, Q2027, and G0429 are effective for dates of service on or after March 23, 2010;
    •	    HCPCS codes Q2026 and Q2027 are contractor-priced under the July MPFS; and
    •	    HCPCS code G0429 is payable under the July MPFS.
However, because HCPCS Q2026, Q2027 and G0429 are not considered valid HCPCS until implementation of the
July 2010 HCPCS update, providers will not be able to bill and receive payment for these HCPCS codes prior to
July 6, 2010.
Therefore, included in the July 2010 HCPCS update and in the July IOCE is a temporary HCPCS code C9800, which was
created to describe both the injection procedure and the dermal filler product. This code provides a payment mechanism
to hospital outpatient prospective payment system (OPPS) and ambulatory surgery center (ASC) providers until Average
Sales Price (ASP) or Wholesale Acquisition Cost (WAC) pricing information becomes available. When ASP or WAC
pricing information becomes available, the temporary HCPCS code will be deleted and separate payment will be made
under the OPPS and ASC payment systems for HCPCS Q2026, Q2027, and G0429.

Page 64                                                                                      Medicare Report: March 2011
For institutional non-OPPS claims, Medicare contractors will use current payment methodologies for claims for dermal
injections for treatment of LDS.
Hospital and ASC Billing Instructions
For ASC claims, providers must bill covered dermal injections for treatment of LDS by having all the required elements
on the claim:
    •	   A line with HCPCS codes Q2026 or Q2027 with a Line Item Date of service (LIDOS) on or after March 23, 2010;
    •	   A line with HCPCS code G0429 with a LIDOS on or after March 23, 2010; and
    •	   ICD-9-CM diagnosis codes 042 (HIV) and 272.6 (Lipodystrophy).
Medicare will line item deny institutional claims where the LIDOS is prior to March 23, 2010.
Note to ASCs: For line item dates of service on or after March 23, 2010, and until pricing information is made available to
price OPPS claims, LDS claims shall contain the temporary HCPCS code C9800, instead of HCPCS G0429 and HCPCS
Q2026/Q2027, as shown above.
For outpatient facilities, hospitals should bill
    •	   HCPCS code G0429 with a date of service on or after March 23, 2010; and
    •	   ICD-9-CM diagnosis codes 042 (HIV) and 272.6 (Liposystophy).
Note on all hospital claims: An ICD-9-CM diagnosis code for a depression comorbidity may also be required for coverage
on an outpatient and/or inpatient basis as determined by the individual Medicare contractor’s policy.
Practitioner Billing Instructions
Practitioners must bill covered claims for dermal injections for treatment of LDS by having all the required elements on
the claim:
    •	   A date of service (LIDOS) on or after March 23, 2010;
    •	   HCPCS codes Q2026 or Q2027;
    •	   A line with HCPCS code G0429; and
    •	   ICD-9-CM diagnosis codes 042 (HIV) and 272.6 (Lipodystrophy).
NOTE: An ICD-9-CM diagnosis code for a depression comorbidity may also be required for coverage based on the
individual Medicare contractor’s policy.
Billing for Services Prior to Medicare Coverage
ASCs and practitioners billing for dermal injections for treatment of LDS prior to the coverage date of March 23, 2010, will
receive the following messages upon their Medicare denial:
    •	   Claim Adjustment Reason Code (CARC) 26: Expenses incurred prior to coverage.
    •	   Remittance Advice Remark Code (RARC) N386: This decision was based on a National Coverage Determination
         (NCD). An NCD provides a coverage determination as to whether a particular item or service is covered. A copy
         of this policy is available at http://www.cms.hhs.gov/mcd/search.asp on the CMS website. If you do not have web
         access, you may contact your local contractor to request a copy of the NCD.
    •	   Group Code: Contractual Obligation (CO)
Medicare beneficiaries whose provider bills Medicare for dermal injections for treatment of LDS prior to the coverage date
of March 23, 2010, will receive the following Medicare Summary Notice (MSN) message upon the Medicare denial:
    •	   21.11 - This service was not covered by Medicare at the time you received it.
Billing for Services Not Meeting Comorbidity Coverage Requirements
Hospitals and practitioners billing for dermal injections for treatment of LDS on patients that do not have on the claim both
ICD-9-CM diagnosis codes of 042 and 272.6, indicating HIV and lipodystrophy will receive the following messages upon
their Medicare claims denial:
    •	   CARC 50: These are non-covered services because this is not deemed a ‘medical necessity’ by the payer.
         Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF),
         if present.
    •	   RARC M386: This decision was based on a National Coverage Determination (NCD). An NCD provides a
         coverage determination as to whether a particular item or service is covered. A copy of this policy is available at
         http://www.cms.hhs.gov/mcd/search.asp on the CMS website. If you do not have web access, you may contact
         your local contractor to request a copy of the NCD.
    •	   Group Code: Contractual Obligation (CO)



Medicare Report: March 2011                                                                                        Page 65
Medicare beneficiaries who do not meet Medicare comorbidity requirements of HIV and lipodystrophy (or even depression
if deemed required by the Medicare contractor) and whose provider bills Medicare for dermal injections for treatment of
LDS will receive the following MSN message upon the Medicare denial:
   •	 15.4 - The information provided does not support the need for this service or item.
AddiTionAl informATion

The official instruction, CR 6953, issued to your carrier, FI, and A/B MAC regarding this change via two transmittals. The
first transmittal revised the Medicare NCD Manual and it may be viewed at http://www.cms.gov/Transmittals/downloads/
R122NCD.pdf on the CMS website. The second transmittal revises the Medicare Claims Processing Manual and it is at
http://www.cms.gov/Transmittals/downloads/R2105CP.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.

VentriCular assist deViCes (Vads) as destination tHeraPy

MLN Matters® Number: MM7220 Revised
Related Change Request (CR) #: 7220
Related CR Release Date: December 8, 2010
Effective Date: November 9, 2010
Related CR Transmittal #: R129NCD
Implementation Date: January 6, 2011
Note: This article was revised on December 9, 2010, to reflect the revised CR 7220 released on December 8, 2010. The
CR release date, transmittal number, and the Web address for accessing CR were revised. All other information is the
same.
Provider TyPes AffecTed
This article is for physicians, providers, and suppliers submitting claims to Medicare contractors (carriers, Fiscal
Intermediaries (FIs), and/or A/B Medicare Administrative Contractors (A/B MACs)) for Ventricular Assist Device (VAD)
implantation services provided to Medicare beneficiaries.
WHAT you need To KnoW
Effective for claims with dates of service on or after November 9, 2010, The Centers for Medicare & Medicaid Services
(CMS) has expanded coverage for VAD implantation as destination therapy as reasonable and necessary when the device
has received Food and Drug Administration (FDA) approval for a destination therapy indication and only for patients with
New York Heart Association (NYHA) Class IV end-stage ventricular heart failure who are not candidates for a heart
transplant and who meet all specific conditions as outlined in the revised Medicare National Coverage Determinations
(NCD) Manual (Chapter 1, Section 20.9).
BAcKground
A Ventricular Assist Device (VAD) or Left Ventricular Assist Device (LVAD) is surgically attached to one or both intact
ventricles and is used to assist a damaged or weakened native heart in pumping blood. Medicare currently covers these
devices for three general indications:
    1. Postcardiotomy,
    2. Bridge to transplantation, and
    3. Destination therapy.
Destination therapy is for patients who are not candidates for heart transplantation and require permanent mechanical
cardiac support. Coverage for destination therapy is currently restricted based on patient selection criteria including:
    •	    New York Heart Association (NYHA) class,
    •	    Time on optimal medical management,
    •	    Left ventricular ejection fraction, and
    •	    Peak oxygen consumption.
NOTE: VADs implanted for destination therapy are only covered when performed in a hospital that is Medicare approved
to provide this procedure.
CR 7220 instructs that, effective for claims with dates of service on and after November 9, 2010, CMS has determined
that the evidence is adequate to conclude that VAD implantation as destination therapy improves health outcomes and is
reasonable and necessary when:
    •	    The device has received FDA approval for a destination therapy indication, and only for patients with New York
          Heart Association (NYHA) Class IV end-stage ventricular heart failure who are not candidates for heart transplant,
          and

Page 66                                                                                     Medicare Report: March 2011
    •	   Who meet all of the following conditions:
         o   Have failed to respond to optimal medical management (including beta-blockers, and Antiotensin-Converting
             Enzyme (ACE) inhibitors if tolerated) for at least 45 of the last 60 days, or have been balloon pump-dependent
             for 7 days, or IV inotrope-dependent for 14 days;
         o   Have a Left Ventricular Ejection Fraction (LVEF) < 25%; and,
         o   Have demonstrated functional limitation with a peak oxygen consumption of ≤14 ml/kg/min unless balloon
             pump ot inotrope dependent or physicially unable to perform the test.
NOTE: There are no changes to existing claims processing requirements/editing for VADs as destination therapy.
AddiTionAl informATion
The official instruction, CR 7220, issued to your carriers, FIs, and A/B MACs regarding this change may be viewed at
http://www.cms.gov/Transmittals/downloads/R129NCD.pdf on the CMS website.
If you have any questions, please contact the Customer Contact Center at 1-877-235-8073.




Medicare Report: March 2011                                                                                       Page 67
Medical Policy

loCal CoVerage determination (lCd) and billing & Coding artiCle uPdates

Final, Effective LCDs
The following LCDs were presented at the October, 2010, J12 Contractor Advisory Committee (CAC) Meeting. They are
expected to be posted for notice as final on January 31st, 2011; and are expected to become effective on March 22nd,
2011.
L31470 – Aquapheresis for Management of Fluid Overload in Cardiac Disease
L30559 – B-type Natriuretic Peptide (BNP) Assays
L31481 – Cardiac Rehabilitation Program Services
L31468 – Hyperbaric Oxygen (HBO) Therapy
L31399 – Magnetic Resonance Angiography (MRA)
L31483 – Pulmonary Rehabilitation Program Services
Draft LCDs
The following draft LCDs will be presented at the February, 2011, J12 Contractor Advisory Committee (CAC) Meeting.
The LCDs will be posted for comment on January 25th, 2011; and the comment period will close March 16th, 2011.
DL31686 - Non-Covered Services
DL30271 - Non-Vascular Extremity Ultrasound
DL31683 - Non-Vascular Extremity Ultrasound for Guidance of Injection and Aspiration Procedures
DL27515 - Radiation Therapy Services
DL27520 - Real-Time, Outpatient Cardiac Monitoring
The next set of draft LCDs is expected to be posted for comment in late May, 2011.
Other LCD and Billing & Coding Updates
In addition to the items above, the following J12 LCDs and/or billing and coding articles were added, revised, or retired;
and were published on the Highmark Medicare Services website between 10/27/2010 and 01/18/2011. Please refer to
the specific LCD or article for the revision history information. The date listed is the LCD or article effective date; some
changes were retroactive.

                                                                 LCD                  Billing & Coding Article
                                                                      Added /                         Added /
                                                       Retired                        Retired
                                                                     Revised                          Revised
L27478 - Cardiovascular Stress Testing                             10/01/2010
L27480 - Chiropractic Services                                     10/01/2010
L27483 - Computed Tomographic Angiography                          10/01/2010
of the Chest
L30538 - Cytogenetic Analysis                                      10/01/2010
L27488 - Diagnostic Laryngoscopy                                   10/01/2010
L27490 - Electrocardiography                                       10/01/2010
L29547 - Electromyography (EMG) and Nerve                          10/01/2010
Conduction Studies
L27492 - Erythropoiesis Stimulating Agents                         10/01/2010
(ESAs)
L27509 - Extended Ophthalmoscopy                                   10/01/2010
L27489 - Monitored Anesthesia Care (MAC)                           10/01/2010
L27506 - Non-Invasive Peripheral Venous                            10/01/2010
Studies
L27513 - Physical Medicine & Rehabilitation                        10/01/2010
Services, PT and OT
L27515 - Radiation Therapy Services                                10/01/2010


Page 68                                                                                     Medicare Report: March 2011
                                                         LCD            Billing & Coding Article
                                                             Added /                   Added /
                                               Retired                  Retired
                                                            Revised                    Revised
L27514 - Psychiatric Therapeutic Procedures               10/01/2010
L27518 - Radiologic Examination of the Chest              10/01/2010
(CXR)
L27531 - Speech-Language Pathology (SLP)                  10/01/2010
Services: Communication Disorders
L27535 - Transesophageal Echocardiography                 10/01/2010
(TEE)
L27512 - Transforaminal Epidural,                         10/01/2010
Paravertebral Facet and Sacroiliac Joint
Injections
L27536 - Transthoracic Echocardiography                   10/01/2010
(TTE)
A50380 - Sleep Disorders Testing                                                    11/05/2010
L31187 - Cardiovascular Nuclear Medicine                  11/05/2010
L31165 - Continuous Glucose Monitoring                    11/05/2010
(CGM)
L31173 - Dynamic Electrocardiography                      11/05/2010
L31171 - Injectable Collagenase Clostridium               11/05/2010
Histolyticum for Dupuytren’s Contracture
L31144 - Loss-of-Heterozygosity Based                     11/05/2010
Topographic Genotyping with PathfinderTG®
L31161 - OVA-1 Assay                                      11/05/2010
L27530 - Sleep Disorders Testing                          11/05/2010
A47797 - Approved Drugs and Biologicals;                                            11/10/2010
Includes Cancer Chemotherapeutic Agents
L30538 - Cytogenetic Analysis                             11/10/2010
L29547 - Electromyography (EMG) and Nerve                 11/10/2010
Conduction Studies
L27549 - Human Skin Equivalents (HSE) - Use               11/10/2010
in the Treatment of Chronic Cutaneous Ulcer
Wounds
 L27504 - Non-Invasive Cerebrovascular                     11/10/2010
 Arterial Studies
A47789 - Serotypes A and B Botulinum Toxin                                          01/01/2011
Products
A50380 – Sleep Disorders Testing                                                    01/01/2011
A47793 – Wound Care                                                                 01/01/2011
L30538 – Cytogenetic Analysis                             01/01/2011
L31173 – Dynamic Electrocardiography                      01/01/2011
L27549 – Human Skin Equivalents (HSE) – Use               01/01/2011
in the Treatment of Chronic Cutaneous Ulcer
Wounds
L31171 – Injectable Collagenase Clostridium               01/01/2011
Histolyticum for Dupuytren’s Contracture
L27503 – Moh’s Micrographic Surgery                       01/01/2011
L30827 – Non-Invasive Peripheral Arterial                 01/01/2011
Studies
L30271 – Non-Vascular Extremity Ultrasound                01/01/2011
L29544 – Posterior Tibial Nerve Stimulation               01/01/2011
(PTNS)



Medicare Report: March 2011                                                                        Page 69
                                                          LCD           Billing & Coding Article
                                                              Added /                  Added /
                                                Retired                 Retired
                                                             Revised                   Revised
L30547 – Radiofrequency Treatment for Urinary              01/01/2011
Incontinence
L27520 – Real-Time, Outpatient Cardiac                     01/01/2011
Monitoring
L27529 – Scanning Computerized Ophthalmic                  01/01/2011
Diagnostic Imaging
L27476 – Serotypes A and B Botulinum Toxin                 01/01/2011
Products
L27530 – Sleep Disorders Testing                           01/01/2011
L27512 – Transforaminal Epidural,                          01/01/2011
Paravertebral Facet and Sacroiliac Joint
Injections
L27547 – Wound Care                                        01/01/2011
A47789 - Serotypes A and B Botulinum Toxin                                          01/12/2011
Products
A47549 - Use of Vaccines or Inoculations for                                        01/12/2011
Treatment of Injury or Exposure
L27476 - Serotypes A and B Botulinum Toxin                 01/12/2011
Products




Page 70                                                                       Medicare Report: March 2011
Education & Training Feedback Form
In order to determine the effectiveness of our efforts, we need feedback from you. Tell us how we are doing and what we
can do better. Your comments can make a difference in how we design our programs and publications. We would very
much appreciate you taking the time to answer a few questions to let us know how you really feel.

Medicare Report
1. Do you always read it?

        □ Always         □ Occasionally          □ Never
2. Do you read the paper copy or the electronic copy on our website?

        □ Paper          □ Website
3. How satisfied are you with the Medicare Report?

        □ Very□ Somewhat                □ Not at all
4. Are the articles clear and easy to read and understand?

        □ Mostly         □ Sometimes             □ Never
5. Which topics in the Medicare Report are the most important to you? (Check all that apply)

        □ Medical Director Column       □ General News       □ Specialty News
        □ Reimbursement News            □ Coding Guidelines/Claim Reporting
        □ Coverage Issues               □ EDI News           □ Medical Policy
6. What topics would you like to have included in the Medicare Report?




Educational Opportunities
1. How useful do you find our web-based training modules in developing a better understanding of that topic?

        □ Very□ Somewhat                □ Not at all
2. If you have attended any of our workshops, teleconferences or webinars, how helpful did you find them?

        □ Very helpful          □ Somewhat helpful              □ Not at all helpful
3. Who from your office generally attends our events?

        □ Healthcare Practitioner/Professional          □ Office Staff          □ Other ____________________
4. What other workshops, teleconferences, or webinar topics would you find helpful?




Medicare Report: March 2011                                                                                    Page 71
A/B Reference Manual
1. How often do you use the Medicare A/B Reference Manual?

          □ Often          □ Occasionally       □ Never
2. What information are you looking for when using the Medicare A/B Reference Manual?

          □ Appeals               □ Coding                    □ Completion of a Claim Form
          □ Coverage Issues       □ Diagnosis Coding          □ EDI Services
          □ Enrollment            □ Medigap                   □ Patient Eligibility
          □ Reimbursement         □ Secondary Payer           □ Other ________________
Specialty Guides
1. Do you refer to any of our online specialty guidelines?

          □ Yes            □ No
2. If yes, which guides do you utilize?

          □ Ambulance       □ ASC               □ Anesthesia       □ Clinical Lab
          □ Flu & Pneumonia □ Podiatry          □ Therapy Services
3. How helpful do you find the Specialty Guides?

          □ Very helpful          □ Somewhat helpful □ Not at all helpful
Please provide any additional comments and/or suggestions you have




Contact Information (This is optional)
 Name:                                                        PTAN:
 Practice Name:                                                      Phone #:
 Email Address:


                                          Please mail or fax this form to:
                                           Outreach & Education Dept;
                                      PO Box 890089; Camp Hill, PA 17089-0089
                                                  412-544-1971




Page 72                                                                             Medicare Report: March 2011
Request for Education Form
Training and education is paramount to the overall success of administering the Medicare program. Our objectives are
to inform and educate our customers through workshops, teleconferences, webinars and web based training modules.
We are committed to educating healthcare professionals and their staff about:
    •	   Comprehensive Error Rate Testing (CERT) Program
    •	   Fundamentals of E/M Coding
    •	   Coding of Consultation Services
    •	   Coding of Hospital Visits
    •	   Significant changes to the Medicare program


Highmark Medicare Services will bring the program to you!
An education specialist will bring the program to you when you provide the facility with at least 25 attendees. To request
such education, please complete the information below and mail or fax to:
                                              Highmark Medicare Services
                                                 Outreach & Education
                                                   PO Box 890089
                                               Camp Hill, PA 17089-0089
                                                  Fax: 717-302-3658
Name: _______________________________________________

Office Name: __________________________________________________________

PTAN: ________________________________ Phone #: ___________________________________

Email address (print clearly): ____________________________________________________

Topic Requested for Education: ______________________________________________________


You can also visit our website and send us your request electronically at https://www.highmarkmedicareservices.com/
partb/outreach/request-edu.html




Medicare Report: March 2011                                                                                     Page 73
Join our Electronic Mailing Lists
In these hectic times, it is tough enough to keep on top of all the changes taking place. Why not take advantage of
subscribing to our Electronic Mailing List? Subscribing will allow us to send emails to everyone who joins them. The
messages may be about things we need to tell you in a hurry (i.e., system outages, updates to an educational event you
might be attending that day, etc.) or just general updates to our website.
Partb-outreach subscribers will receive an email once a day (unless we need to send more than one). This gives us a way
to notify you of important changes to the Medicare Program.
Provide your email address and select the list(s) that you would like to join. You will receive a confirmation email asking
for you to reply to confirm your subscription.

                □ Part B General Education (receives all updates, except EDI)
                □ Part B Electronic Billers (EDI)
                □ Part A & B PC-ACE Pro32 Users (EDI)
  Email Address:

                                                  (Please PRINT Clearly)


                                                      Mail or Fax to:
                                             Highmark Medicare Services
                                                 Outreach & Education
                                                120 Fifth Avenue Place
                                                      Suite P5103
                                                 Pittsburgh, PA 15222
                                                  Fax: 412-544-1971


You can also visit our website and join our Electronic Mailing List electronically at https://www.highmarkmedicareservices.
com/mailinglists.html.




Page 74                                                                                    Medicare Report: March 2011
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                             PRSRT STD
                            U.S. POSTAGE
                                 PAID
                           HARRISBURG, PA
                            Permit No. 320
   P.O. Box 890089
Camp Hill, PA 17089-0089

								
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