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In This Issue……

All Providers:

• A Reminder About Preadmission Screening and Annual Resident Reviews
• Medicaid Contact Information
• Medical Coverage Policies
• Proposed Medical Coverage Policies
• Tax Identification Information
• W-9 Form
• Checkwrite Schedule
• Electronic Cut-off Schedule
• Holiday Observance

Adult Care Home Providers:

• Personal Care Service Rate Increase

Area Mental Health Centers:

• Correction to Billing Unit for HCPCS Code H0040
• Criterion #5 Services – Authorization Process
• Out-of-State Youth Residential Placements

Carolina ACCESS Primary Care Providers:

• Carolina ACCESS Web-Based Reports

Community Alternatives Program Case Managers:

• Automated Voice Response System Changes

Community Alternatives Program Services for Children:

• HCPCS Code Change

Durable Medical Equipment Providers:

• Change in Code for Durable Medical Equipment Repairs
• Conversions to National Miscellaneous Codes

Health Check Providers:

• Laboratory Tests are Not Payable on Same Day as Health Check Screening

Home Infusion Therapy:

• HCPCS Code Change

Hospice Providers:

• Reimbursement Rate Increase for Hospice Providers

Hospitals:

• Criterion #5 Services – Authorization Process
• Delivery Services and Sterilization Procedures for Undocumented Aliens
• Update to the Change to Medicare Part B Pricing Policy

Laboratory Services:

• Laboratory Tests are Not Payable on Same Day as Health Check Screening

Nursing Facility Providers:

• New Reimbursement Methodology for Nursing Facilities

OB/GYN Providers:

• Delivery Services and Sterilization Procedures for Undocumented Aliens

Pharmacists:

• Coverage of Over-the-Counter Medications

Prescribers:

• Coverage of Over-the-Counter Medications

Residential Child Care Treatment Facilities Levels II-IV:

• Correction to Billing Unit for HCPCS Code H0040

Attention: All Providers

A Reminder about Preadmission Screening and Annual Resident Reviews

The Preadmission Screening and Annual Resident Review (PASARR) is a federal requirement for every individual who applies to or resides in a Medicaid certified nursing facility (NF), regardless of the source of payment for NF services (42 CFR 483).

The Division of Medical Assistance contracts with First Health Services Corporation to manage the Level I and Level II evaluations in North Carolina. Level II face-to-face, in-depth screens are federally mandated to be performed onsite and prior to admission for all mentally ill (MI), mentally retarded (MR), and related condition (RC) applicants to Medicaid-certified nursing facilities (preadmission screen). Subsequent assessments, known as Annual Resident Reviews (ARRs), are conducted annually thereafter for MI, MC, and RC recipients.

The onsite evaluator schedules an appointment for the evaluation at a time and location that is convenient to both the individual referral source and the evaluator. On the day of the scheduled evaluation, the evaluator contacts the referral source to verify that the time and location is convenient for all participating parties.

The evaluator presents an authorization letter to the referral source at the beginning of the evaluation and explains the evaluation process. In order for the evaluator to complete the evaluation, he/she has the authority to obtain collaborative information by interviewing the recipient; conferring with all available resources such as family, friends, and staff; and reviewing the recipient’s medical records. A copy of the recipient’s history and physical or other information can be prepared ahead of time as this documentation is part of the screening process.

Linda Perry, RN, Long-Term Care Consultant, Medical Policy Section
Deborah Ireland, RNC, Long-Term Care Consultant, Medical Policy Section
DMA, 919-857-4020

Attention: All Providers

Proposed Medical Coverage Policies

In accordance with Session Law 2003-284, proposed new or amended Medicaid medical coverage policies are available for review and comment on DMA’s website. To submit a comment related to a policy, refer to the instructions on the website. Providers without Internet access can submit written comments to the address listed below.

Darlene Creech
Medical Policy Section
Division of Medical Assistance
2501 Mail Service Center
Raleigh, NC 27699-2501

The initial comment period for each proposed policy is 45 days. An additional 15-day comment period will follow if a proposed policy is revised as a result of the initial comment period.

Proposed Medical Coverage Policies

Darlene Creech, Medical Policy Section
DMA, 919-857-4020

Attention: All Providers

Medicaid Contact Information

To ensure that issues are handled effectively when calling Medicaid, refer to the following list for the contact source and telephone number related to your question.

Telephone Contact List

To ensure that correspondence and documents are processed in a timely manner, refer to the following list of mailing addresses for the Medicaid program.

• EDS Address List
• DMA Address List

The Automated Attendant Telephone line (1-800-688-6696 or 919-851-8888) can be used to access the EDS Provider Services unit, Prior Approval unit or the Electronic Commerce Services (ECS) unit.

Instructions for Using the Automated Attendant Telephone Line

The Automated Voice Response (AVR) system allows enrolled providers to readily access detailed information pertaining to the North Carolina Medicaid program. AVR is available 24 hours per day (except 1:00 a.m. to 5:00 a.m. on the 1^st, 2^nd, 4^th, & 5^th Sunday, and 1:00 a.m. to 7:00 a.m. on the 3^rd Sunday) by calling 1-800-723-4337.

Instructions for Using the AVR System

Refer to the July 2001 Special Bulletin II, Automated Voice Response System Provider Inquiry Instructions for more detailed instructions on using the AVR system.

Gina Rutherford, Provider Services
DMA, 919-857-4017

Attention: All Providers

Medical Coverage Policies

The following new or amended medical coverage policies are now available on DMA’s website.

• A2 - Over-the-Counter Medications
  
• 1A1 - Compression Garments
  
• 1A2 - Preventive Medicine Annual Health Assessment
  
• 1A3 - Noninvasive Pulse Oximetry
  
• 1A5 - Case Conference for Sexually Abused Children
  
• 1A8 - Hyperbaric Oxygenation Therapy
  
• 1A9 - Blepharoplasty/Blepharoptosis Eyelid Repair
  
• 1D1 - Refugee Health Assessments Provided in Health Departments
  
• 1D2 - Sexually Transmitted Disease Treatment Provided in Health Department
  
• 1D3 - TB Control and Treatment Provided in Health Department
  
• 8F - Outpatient Specialized Therapies
  
• 8G - Independent Practitioners
  
• 8H - Local Education Agencies
  
• 8I - Psychological Services Provided by Health Departments to the Under 21 Population and Psychological Services Provided in School-Based Health Centers Sponsored by Health Departments to the Under 21 Population
  
• 8J -Children’s Development Service Agencies

These policies supersede previously published policies and procedures. Providers may contact EDS at 1-800-688-6696 or 919-851-8888 with billing questions.

Medicaid Medical Coverage Policies

Darlene Creech, Medical Policy Section
DMA, 919-857-4020

Attention: All Providers

Tax Identification Information

Alert – Tax Update Requested
The N.C. Medicaid program must have the correct tax information on file for all providers. This ensures that 1099 MISC forms are issued correctly each year and that correct tax information is provided to the IRS. Incorrect information on file with Medicaid can result in the IRS withholding 28 percent of a provider’s Medicaid payments. The individual responsible for maintenance of tax information must receive the information contained in this article.

How to Verify Tax Information
The last page of the Medicaid Remittance and Status Report (RA) indicates the tax name and number on file with Medicaid for the provider number listed. Review the Medicaid RA throughout the year to ensure that the correct tax information is on file for each provider number. If you do not have access to a Medicaid RA, call EDS Provider Services at 919-851-8888 or 1-800-688-6696 to verify the tax information on file for each provider.

The tax information listed for a group practice is as follows:

1. group tax name and group tax number

2. attending Medicaid provider number in the group

How to Correct Tax Information
All providers are required to complete a W-9 form for each provider number with incorrect information on file. Correct information must be received by December 15, 2003. The procedure for submitting corrected tax information to the Medicaid program is determined by the provider type.

• Physicians must submit completed and signed W-9 forms to their Blue Cross Blue Shield of North Carolina (BCBSNC) representative
• Other providers, including Managed Care providers, must submit completed and signed W-9 forms along with a completed and signed Notification of Change in Provider Status form to the Division of Medical Assistance (DMA) Provider Services Unit at the address listed below.
• Carolina ACCESS (CA) providers must also submit a Carolina ACCESS Provider Information Change form to DMA Provider Services at the address listed below.

Provider Services
Division of Medical Assistance
2501 Mail Service Center
Raleigh, NC 27699-2501

Refer to the following instructions for completing the W-9. Additional instructions can be found on the IRS website at http://www.irs.gov under the link "Forms and Pubs."

• List the N.C. Medicaid provider number in the block titled "List account number(s) here."
• List the N.C. Medicaid provider name in the block titled "Business Name." It should appear EXACTLY as the IRS has on file.
• Indicate the appropriate type of business.
• Fill in either a social security number OR a tax identification number. Indicate the number EXACTLY as the IRS has on file for the provider’s business. Do not insert a social security number unless the business is a sole proprietorship or individually owned and operated.
• An authorized person MUST sign and date this form or it will be returned as incomplete and the tax information on file with Medicaid will not be updated.

Change of Ownership

• Physicians must contact BCBSNC to report all changes in business ownership.
• All other providers, including Managed Care providers, must report changes to DMA Provider Services using the Notification of Change in Provider Status form.
• CA providers must also report changes to DMA Provider Services using the Carolina ACCESS Provider Information Change form.

DMA Provider Services will assign a new Medicaid provider number if necessary and will ensure the correct tax information is on file for Medicaid payments.

If DMA is not contacted and the incorrect tax identification number is used, that provider will be liable for taxes on income not necessarily received by the provider’s business. DMA will assume no responsibility for penalties assessed by the IRS or for misrouted payments prior to written receipt of notification of ownership changes.

Physician Group Practice Changes
When a physician leaves or a physician is added to a group practice, contact BCBSNC to update Medicaid enrollment and tax information. CA providers must also report changes to DMA Provider Services using the Carolina ACCESS Provider Information Change form.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Area Mental Health Centers/Local Management Entities and Hospitals

Criterion #5 Services – Authorization Process

Effective December 1, 2003, ValueOptions is responsible for authorizing Criterion #5 services. ValueOptions follows the same procedure that is currently in place for authorizing Criterion #5 services. To request authorization, please contact Tania Walker, ValueOptions, at 919-941-6126 or through the customer service telephone line at 1-888-510-1150, ext. 6126.

Criterion #5 services can only be provided if community placement is not available at the discharge date and both the hospital and the Area Mental Health Center/Local Management Entity are actively working on discharge planning.

To qualify for Medicaid coverage for continued post-acute stay in an inpatient psychiatric facility, a patient must meet all of the conditions specified in Item (5), (a-d), of the N.C. Medicaid Criteria for Continued Acute Stay in an Inpatient Psychiatric Facility (N.C. Administrative Code 10A: 22O.0113).

Note: The references in this rule to HRI-R High and authorization by the Child and Family Services Section of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services are being revised to reflect current language and status.

Carolyn Wiser, Behavioral Health Services
DMA, 919-857-4040

Attention: Community Alternatives Program Case Managers

Automated Voice Response System Changes

As a result of the implementation of population groups (pop groups) for recipients enrolled in the Community Alternatives Programs (CAP), the Automated Voice Response (AVR) system (1-800-723-4337) was updated effective October 29, 2003. There are two specific options that have changed: eligibility and pricing.

• When verifying eligibility (option 6), AVR now identifies the specific pop group in which the recipient is enrolled (i.e., CAP/DA, CAP/C, CAP/MR-DD or CAP/AIDS). Previously, AVR only acknowledged that the recipient was enrolled in CAP, but did not specify in which CAP program.
• When verifying the rate (option 4) for a specific CAP code, AVR prompts the provider to specify the CAP program for which the service code rate is being verified. It is important to listen to all of the sub-options for the pricing option on the main menu when verifying rates for CAP service codes. An additional sub-option has been added to request rate information for CAP service codes.

Instructions for Using the AVR System

Refer to the July 2001 Special Bulletin II, Automated Voice Response System Provider Inquiry Instructions for more detailed instructions on using the AVR system.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Area Mental Health Centers/Local Management Entities

Out-of-State Youth Residential Placements

Effective December 1, 2003, ValueOptions began evaluating and authorizing requests for out-of-state placement in residential facilities for Medicaid recipients under the age of 21 years who are residents of North Carolina.

ValueOptions will follow the current procedure and protocol established by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services (MH/DD/SAS). (Refer to the MH/DD/SAS website at http://www.dhhs.state.nc.us/mhddsas/ for more information.) Providers must contact Tania Walker, ValueOptions, at 919-941-6126 or through the customer service telephone line at 1-888-510-1150, ext. 6126 before considering out-of-state placement.

Carolyn Wiser, Behavioral Health Services
DMA, 919-857-4040

Attention: Adult Care Home Providers

Personal Care Service Rate Increase

A rate increase to the Basic ACH/PC has been calculated and approved for reimbursement of Personal Care Services provided on or after January 1, 2004. The reimbursement rates effective on January 1, 2004 are:

All "Enhanced ACH/PC" rates will remain at the rates published in the October 2003 general Medicaid bulletin. The transportation rate will remain at $0.60 per Medicaid resident per day.

Note: The "Enhanced ACH/PC Assessment Fee – Miscellaneous" is only valid for the Level I Mental Health Assessment completed prior to October 1, 2003.

Providers must bill their usual and customary charges. Adjustments will not be made to previously processed claims.

Adult Care Homes Personal Care Services Rate Increase, October 2003 Medicaid Bulletin

Bruce Habeck, Financial Operations
DMA, 919-857-4015

Attention: Area Mental Health Centers and Residential Child Care Treatment Facilities (Level II – IV)

Correction to Billing Unit for HCPCS Code H0040

The billing units listed for HCPCS code H0040, assertive community treatment program, per diem, was stated incorrectly in the November 2003 Special Bulletin IV, HIPAA Code Conversions. The correct billing unit for H0040 is:

1 unit = 1 day
(4 face-to-face contacts
per month minimum)

EDS, 1-800-688-6696 or 919-851-8888

Attention: Carolina ACCESS Primary Care Providers

Carolina ACCESS Web-Based Reports

Carolina ACCESS management reports will soon be available to providers online. PCPs will continue to receive paper copies of their reports during a transition period that will allow providers to become familiar with accessing reports via the web. PCPs will find this web access to be beneficial in the following ways:

• Reports will be available to the PCP immediately and not delayed because of printing or mailing problems.
• Providers can export data to a spreadsheet, which allows for sorting, comparing, and analyzing.
• Security is a primary concern and strict security measures have been taken to ensure the privacy of the health data.
• Reports can be accessed from any computer by using your user ID and password.
• The ability to archive reports on disk and therefore valuable space is not used for retention of reports.

An online tutorial will be available to walk PCPs through the process of accessing their reports.

To protect the identity of Medicaid recipient information and their health care information, a Provider Confidential Information and Security Agreement is now required for all PCPs. The security agreement can be found in the Carolina ACCESS Provider Application and Participation Agreement packet. Providers are being asked to designate a staff person to serve as the Security Contact Person and to supply the contact’s social security number in order to confirm the contacts identity. The sole purpose is to match a user name with a social security number and will not be used in any other manner. Information related to the social security number will not be accessible or stored on any web site or shared server. This process is being used to protect PHI system access as well as to protect the user.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Durable Medical Equipment Providers

Change in Code for Durable Medical Equipment Repairs

Effective with date of service January 1, 2004, HCPCS code E1340, "repair or non-routine service for durable medical equipment requiring the skill of a technician, labor component, per 15 minutes" will replace code W4005, "equipment service or repair." This change is being made to comply with the implementation of national codes mandated by the Health Insurance Portability and Accountability Act (HIPAA).

The maximum reimbursement rate for code E1340 is $11.25 per 15 minutes. Providers must bill their usual and customary rate.

Code E1340 will require prior approval. The coverage policy is as follows:

• Rental DME: Service and repairs are provided as part of the rental arrangement with no additional charge to Medicaid.
• Purchased DME – Warranty: Service and repairs are handled under any warranty coverage an item may have.
• Purchased DME – Non-Warranty: Service or repair is covered only if the equipment is owned by the patient and if the repair is not covered under the warranty. A repair estimate must be provided. The estimate must show a breakdown of the number of hours of labor and the hourly rate. No charge is allowed for pick-up or delivery or for the assembly of parts or for freight or the provider’s travel time or expenses. The following information must be entered in block 25 of the CMN/PA form:

  1. The description and HCPCS code of the item being serviced or repaired.

  2. The age of the item.

  3. The number of times it has previously been repaired.

  4. The current replacement cost.

Providers who obtained prior approvals for code W4005 for dates of service spanning on or after January 1, 2004 are required to send a copy of the approved Certificate of Medical Necessity and Prior Approval form to EDS requesting a change in the system to code E1340. The requests must be sent to:

Prior Approval Requests
EDS
PO Box 31188
Raleigh, NC 27622

Melody B. Yeargan, P.T., Medical Policy Section
DMA, 919-857-4020

Attention: Durable Medical Equipment Providers

Conversions to National Miscellaneous Codes

Effective with date of service January 1, 2004, national miscellaneous HCPCS codes will replace state-created codes as indicated below. The change is being made to comply with the implementation of standard national codes mandated by the Health Insurance Portability and Accountability Act (HIPAA).

An electronic prior authorization system will be implemented in Spring 2004. Until then, the following interim prior approval and claims submission procedures must be followed.

Prior Approval
All of these national miscellaneous HCPCS codes will require prior approval. Requests for prior approvals to purchase equipment must be submitted on a Certificate of Medical Necessity and Prior Approval (CMN/PA) form separately from requests for rental equipment. Both the national miscellaneous HCPCS code and the state-created code must be indicated on the form.

For example, if providing a "Basic head/neck support w/ hardware (ea)" and a "Solid back equipment with hardware (ea)," indicate that you are requesting prior approval for rental of K0108 for W4131, "Basic head/neck support w/ hardware (ea)" and W4128, "Solid back equipment with hardware (ea)." Include the "from" and "to" dates for which the equipment is needed. If using ProviderLink’s electronic request form, enter K0108 in the HCPCS code field and W4131 and W4128 in the description field. All existing documentation requirements remain the same. Please note that prior approval for state-created codes listed under national miscellaneous HCPCS code A9900 and B9998 will be given for a year if the prescribing physician, physician’s assistant or nurse practitioner deems them medically necessary for a year.

Claim Submission
When submitting a claim, providers must enter the service request number (SRN) from the approved CMN/PA form in block 23 of the CMS-1500 claim form. This differs from how providers have billed in the past. If the SRN is not included on the claim, the claim cannot be processed for payment.

Services approved under the same SRN must be billed together. Electronic claims can continue to be billed if all approved services are billed for the date of service or date of service range. If only part of the approved items are billed, a paper claim must be submitted with a description on the claim of the item that is being dispensed.

Example:

The coverage criteria for these items will not change. Refer to Medical Coverage Policy #5, Durable Medical Equipment for detailed coverage information.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Health Check Providers and Laboratory Services

Laboratory Tests are Not Payable on Same Day as Health Check Screening

Health Check screenings require several age-appropriate laboratory tests during a physical examination.

Reimbursement for the laboratory tests is included in the fees paid for the preventive medicine CPT codes for the Health Check screening. The laboratory tests included in the Health Check reimbursement include hemoglobin or hematocrit, lead screening, sickle cell, tuberculin skin test, and urinalysis.

Medicaid will not reimburse separately for laboratory tests listed above on the same date of service as a Health Check screening.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Hospice Providers

Reimbursement Rate Increase for Hospice Services

Effective with date of service October 1, 2003, the maximum allowable rate for the following hospice services increased. The hospice rates are as follows:

Note: At this time, the rates for the following revenue codes have not changed:

Key to Hospice Rate Table

1. A minimum of eight hours of continuous home care per day must be provided.
2. There is a maximum of five consecutive days including the date of admission but not the date of discharge for inpatient respite care. Bill for the sixth and any subsequent days at the routine home care rate.
3. Payments to a hospice for inpatient care are limited in relation to all Medicaid payments to the agency for hospice care. During the 12-month period beginning November 1 of each year and ending October 31, the aggregate number of inpatient respite and general inpatient days may not exceed 20 percent of the aggregate total number of days of hospice care provided during the same time period for all the hospice’s Medicaid patients. Hospice care provided for patients with acquired immune deficiency syndrome (AIDS) is excluded in calculating the inpatient care limit. The hospice cap amount for both Medicare and Medicaid for the cap year ending October 31, 2003 is $18,661.29.
4. When a Medicare/Medicaid recipient is in a nursing facility, Medicare is billed for routine or continuous home care, as appropriate, and Medicaid is billed for the appropriate long-term care rate. When a Medicaid only hospice recipient is in a nursing facility, the hospice may bill for the appropriate long-term care (SNF/ICF) rate in addition to the home care rate provided in revenue code 651 or 652. See section 8.15.1, page 8-12, of the N.C. Medicaid Community Care Manual for details.
5. The hospice refunds any overpayments to Medicaid program.
6. Date of Discharge: For the day of discharge from an inpatient unit, the appropriate home care rate must be billed instead of the inpatient care rate unless the recipient expires while an inpatient. When the recipient is discharged as deceased, the inpatient rate (general or respite) is billed for the discharge date.

7. Providers must bill their usual and customary charges. Adjustments will not be accepted.

N.C. Medicaid Community Care Manual

Carolyn Brown, Financial Operations
DMA, 919-857-4015

Attention: Hospitals and OB/GYN Providers

Delivery Services and Sterilization Procedures for Undocumented Aliens

Undocumented (nonqualified) aliens are eligible to apply for Medicaid emergency medical services only. Section MA-3330, XI of the Family and Children’s Medicaid Eligibility manual defines emergency services as including vaginal or C-section deliveries. These deliveries are billed with either CPT code 59409 for vaginal delivery or 59514 for C-section delivery. Providers must not bill the following CPT codes for delivery because these codes include antenatal or postpartum services that are not covered by Medicaid for emergency services provided to undocumented aliens.

59400
59410
59510
59515

Undocumented aliens must apply for Medicaid emergency services through the county department of social services in the county where they reside. The application process often begins while the individual is still in the hospital. Eligibility must be approved prior to billing Medicaid for the service.

The N.C. Medicaid program does not include sterilization procedures in the definition of emergency services and, therefore, does not cover sterilizations for undocumented aliens.

Family and Children’s Medicaid Eligibility Manual

EDS, 1-800-688-6696 or 919-851-8888

Attention: Nursing Facility Providers

New Reimbursement Methodology for Nursing Facilities

The Division of Medical Assistance (DMA), upon federal approval, will be transitioning to a new reimbursement methodology for nursing facilities. The State has worked closely with industry representatives to design a reimbursement system that incorporates mutual goals while also providing greater program reimbursement. The new reimbursement system will be patient acuity-based and derived from the 34 RUG Grouper system utilizing the MDS quarterly reports.

Upon implementation of the new reimbursement system, facilities will bill with a single skilled provider number and receive an acuity-adjusted rate on a quarterly basis. The new system will also allow providers to calculate the Medicaid 34 RUG Grouper rate for all of their Medicaid residents.

Funding for this new system is derived from federal matching funds realized through the collection of a provider assessment. A waiver is being reviewed by the Centers for Medicare and Medicaid Services (CMS) to approve the proposed assessment structure.

Once the waiver has been approved, providers will be notified by mail of the implementation date for the new reimbursement methodology. Until providers receive formal notification from DMA, the current reimbursement rates and procedures remain the same.

Changes to the State’s MDS database to accommodate the new reimbursement methodology will be completed by December 31, 2003. After that date, the MDS database will only accept transmissions from facilities with systems configured for the 34 RUG Grouper system. Providers may contact the Division of Facility Services (DFS) MDS database help desk at 919-715-1872, ext. 212 for additional information.

Carolyn Brown, Financial Operations
DMA, 919-857-4015

Attention: Home Infusion Therapy and Community Alternatives Program for Children Providers

HCPCS Code Change

Due to the implementation of national codes mandated by the Health Insurance Portability and Accountability Act (HIPAA), HCPCS code W9934, Enteral Formulae: Pediatric; Infant and Toddler, will be end-dated effective with date of service December 31, 2003. Please refer to the January 2004 general Medicaid bulletin for information on the replacement billing code and rate.

Beth Karr, Community Care Services
DMA, 919-857-4021

Attention: Pharmacists and Prescribers

Coverage of Over-the-Counter Medications

Effective with date of service October 1, 2003, the N.C. Medicaid program began covering selected over-the-counter (OTC) medications.

Criteria for OTC Drug Coverage

1. The national drug code (NDC) for the OTC medication must be on the North Carolina Division of Medical Assistance Covered Over-the-Counter Medications List;
2. The medication must be dispensed by a pharmacist in the manufacturer’s unopened container pursuant to a lawful prescription; and
3. The medication’s manufacturer must have a valid rebate agreement with the Centers for Medicaid and Medicare Services (CMS).

OTC medications are subject to the same restrictions and recommendations as any legend drug covered under the Outpatient Pharmacy program. (This decision to allow OTC coverage may provide cost-effective treatment alternatives to more expensive legend drugs covered under Medicaid.) The decision for coverage is based on analysis of the cost savings or potential cost benefit of coverage of the OTC medication and the recommendations of the N.C. Physician Advisory Group (NCPAG), who will continue to consider off-label indications using an evidence-based approach.

Candidate OTC Drug Identification
Drugs may be considered for Medicaid coverage when any of the following criteria are met:

1. A Medicaid covered legend drug is approved by the FDA as an OTC drug that results in a significant cost savings to Medicaid (i.e., OTC version of Prilosec,^® which is identical in strength and formulation).
2. An efficacious drug is available only as OTC and not legend, and all other legend treatments are significantly (i.e., >20%) more expensive without a significant increase in effectiveness (i.e., aspirin for cardiovascular disease or Tinactin^® or Lotrimin^® for ringworm).
3. Coverage for an OTC or a group of OTCs expands treatment options because they have been shown to decrease the total cost of care for certain conditions (i.e., allergy treatments).

Limited pilot studies may be conducted when the cost-saving and utilization effects of adding an OTC medication are uncertain. Monitoring will occur at least annually for each drug on the OTC list to assess total utilization and cost effectiveness. Medications may be removed from the list upon the advice of the NCPAG if an OTC product fails to meet criteria for continued coverage.

Refer to General Medical Coverage Policy #A-2, Over the Counter Medications for detailed information.

Sharman Leinwand, Medical Policy Section
DMA, 919-857-4020

Attention: Hospitals

Update to the Change to Medicare Part B Pricing Policy

In a letter dated September 22, 2003, the Division of Medical Assistance (DMA) provided guidance regarding the overpayments that have been occurring for Medicare primary claims for Part B services. The letter referenced a delay in the HIPAA implementation as a contributing factor to the decision not to change the October 1, 2002 pricing methodology.

DMA has been coordinating with the N.C. Hospital Association (NCHA). We have made the decision to move forward with the new pricing methodology with the December 16, 2003 checkwrite. The updated billing guidance given in the August 2003 and November 2003 general Medicaid bulletins will be effective for all claims filed to EDS for dates of service on or after October 1, 2002 that are entered on or after December 6, 2003.

Please note that this is a delay from the December 1, 2003 date given in the November 2003 general Medicaid bulletin. This delay was enacted to accommodate a request by the NCHA that as much time as possible be allowed for the providers and their software vendors to make necessary software modifications for those still utilizing the tape/CD Remittance Advice. The December 16, 2003 date was chosen to balance this request with the need to have the change in place prior to January 1, 2004. Note that this change to the Remittance Advice (RA) will impact all tape/CD RA providers. Technical specifications have been sent to the software vendors. Please coordinate with them on this to ensure a seamless transition.

In addition, N.C. Medicaid will report to providers a new differential field on the 835, defined as the difference between the Medicaid allowable and the Medicare coinsurance and deductible. Further details and specifications will be sent to all providers currently receiving the 835.

Claims filed to Medicaid when Medicare Part B has made a payment must have the sum of both the coinsurance and the deductible in form locator 55, estimated amount due. Medicaid will begin reimbursing providers the lesser of the coinsurance and deductible or the difference between the Medicaid allowable and the Medicare payment. This change only applies to dates of service on or after October 1, 2002. Providers should refer to the September 2002 Draft Special Bulletin VI (revised November 14, 2002) and the November 2003 general Medicaid bulletin for detailed billing instructions.

The letter from DMA dated September 22, 2003 also provided a timeline and schedule for the overpayment reporting. DMA has worked with the N.C. Hospital Association to determine a revised report schedule, which allows additional processing time for the claims analysis and repayment.

Enclosed in the September 22 letter was a CD that contained all outpatient Medicare Part B primary claims processed from October 1, 2002 to August 31, 2003. A fourth CD, containing claims data for September 1, 2003 through December 5, 2003 will be sent in late December. All guidance regarding the report format from the September 22 letter remains the same. Any questions about the report or reporting requirements should be directed to Christie Harris, EDS Provider Services Manager at 1-800-688-6696 or 919-851-8888.

Providers must notify EDS by the due date noted above with either an electronic or paper copy of the enclosed report with a refund check or a letter indicating that no money is owed to Medicaid. When the Medicare coinsurance and deducible is less than the Medicaid payment, providers need to refund the difference between the Medicaid payment indicated on the CD and the Medicare coinsurance and deductible in your records. Note that refund amounts must be indicated by each ICN. Refunds that have been submitted previously through the Credit Balance Report should not be noted on this report. When sending a refund in with the CD, please do not file adjustments. Letters indicating that no money is owed to Medicaid must include the facility name, provider number, contact name, telephone number, and a signed statement indicating that your facility was not overpaid.

Both reports and letters should be mailed to:

EDS
Attn: Cameron Gelfo/Part B Refunds
PO Box 300011
Raleigh, NC 27622

Any requests for exceptions must be sent in writing to:

Gé Brogden, Assistant Director for Budget Management
Division of Medical Assistance
2501 Mail Service Center
Raleigh, NC 27699-2501

• Medicare Part B Draft Billing Guidelines, Special Bulletin VI, September 2002 (revised November 14, 2002)
• Change to Medicare Part B, August 2003 Medicaid bulletin
• Change to Medicare Part B Pricing Policy, November 2003 Medicaid bulletin

EDS, 1-800-688-6696 or 919-851-8888

Holiday Closing

The Division of Medical Assistance (DMA) and EDS will be closed on December 24, 25, and 26 in observance of the Christmas holidays.

Checkwrite Schedule 2003

Checkwrite Schedule

Electronic Cut-Off Schedule

Electronic claims must be transmitted and completed by 5:00 p.m. on the cut-off date to be included in the next checkwrite. Any claims transmitted after 5:00 p.m. will be processed on the second checkwrite following the transmission date.