Medicare Claims Processing Manual 
Chapter 1 - General Billing Requirements 
 
Table of Contents 
(Rev. 12107, 06-29-23) 
 
 
 
Transmittals for Chapter 1 
01 - Foreword 
01.1 - Remittance Advice Coding Used in this Manual 
02 - Formats for Submitting Claims to Medicare 
02.1 - Electronic Submission Requirements 
02.1.1 - HIPAA Standards for Claims 
02.1.2 - Where to Purchase HIPAA Standard Implementation Guides 
02.2 - Paper Claims 
02.2.1 - Paper Formats for Institutional Claims 
02.2.2 - Paper Formats for Professional and Supplier Claims 
02.3 - Remittance Advices 
10 - Jurisdiction for Claims 
10.1 - A/B MACs (Part B) and DME MACs Jurisdiction of Requests for Payment 
10.1.1 - Payment Jurisdictions Among A/B MACs (B) for Services Paid 
Under the Physician Fee Schedule and Anesthesia Services 
10.1.1.1 - Claims Processing Instructions for Payment Jurisdiction 
10.1.1.2 - Payment Jurisdiction for Services Subject to the Anti-Markup 
Payment Limitation 
10.1.1.3 - Payment Jurisdiction for Reassigned Services 
10.1.3 - Exceptions to Jurisdictional Payment 
10.1.5 - Domestic Claims Processing Jurisdictions 
10.1.5.1 - Suppliers of Durable Medical Equipment, Prosthetics, Orthotics, 
Supplies, Parental and Enteral Nutrition (PEN) 
10.1.5.2 - Supplier of Portable X-Ray, EKG, or Similar Portable Services 
10.1.5.3 - Ambulance Services Submitted to Carriers 
10.1.5.4 - Independent Laboratories 
10.1.5.4.1 - Cases Involving Referral Laboratory Services 
10.1.6 - Railroad Retirement Beneficiary Carrier 
10.1.7 - Welfare Carriers 
10.1.9 - Disposition of Misdirected Claims to the B/MAC/Carrier/DME MAC 
10.1.9.1 - An A/B MAC (B) Receives a Claim for Services that are in  Another A/B MAC (B)s Payment Jurisdiction 
10.1.9.2  An A/B MAC (B) Receives a Claim for Services that are in a 
DME MACs Payment Jurisdiction 
10.1.9.3  A DME MAC Receives a Claim for Services that are in A 
Local B/MAC/Carriers Payment Jurisdiction 
10.1.9.4 - An A/B MAC (B) Receives a Claim for an RRB Beneficiary 
10.1.9.5 - An A/B MAC (B) or DME MAC Receives a Claim for a 
UMWA Beneficiary 
10.1.9.6 - Medicare Carrier or RRB-Named Carrier to Welfare Carrier 
10.1.9.7 - Protests Concerning Transfer of Requests for Payment to 
Carrier 
10.1.9.8 - Transfer of Claims Material Between Carrier and Intermediary 
(FI) 
10.1.9.9 - A DME MAC receives a Paper Claim with Items or Services 
that are in Another DME MAC's Payment Jurisdiction 
10.2 - FI Jurisdiction of Requests for Payment 
10.2.1 - FI Payment for Emergency and Foreign Hospital Services 
10.3 - Payments Under Part B for Services Furnished by Suppliers of Services to 
Patients of a Provider 
10.4 - Claims Submitted for Items or Services Furnished to Medicare 
Beneficiaries in State or Local Custody Under a Penal Authority 
10.5  Claims Processing Requirements for Deported Beneficiaries 
10.5.1  Implementation of Payment Policy for Deported Beneficiaries 
20 - Provider Assignment to FIs and MACs 
20.1 - FI Service to HHAs and Hospices 
20.2 - Provider Change of Ownership (CHOW) 
20.3 - CMS No Longer Accepts Provider Requests to Change Their FI 
30 - Provider Participation 
30.1 - Content and Terms of Provider Participation Agreements 
30.1.1 - Provider Charges to Beneficiaries 
30.1.1.1 - Charges to Hold a Bed During SNF Absence 
30.1.2 - Provider Refunds to Beneficiaries 
30.1.3 - Provider Treatment of Beneficiaries 
30.2 - Assignment of Providers Right to Payment 
30.2.1 - Exceptions to Assignment of Providers Right to Payment - 
Claims Submitted to A/B MACs 
30.2.2 - Background and Purpose of Reassignment Rules - Claims 
Submitted to B/MACs 
30.2.2.1 - Reassignments by Nonphysician Suppliers - Claims 
Submitted to FIs  30.2.3 - Effect of Payment to Ineligible Recipient 
30.2.4 - Payment to Agent - Claims Submitted to Carriers 
30.2.5 - Payment to Bank 
30.2.6 - Payment to Employer of Physician - Carrier Claims Only 
30.2.7 - Payment for Services Provided Under a Contractual Arrangement 
- Carrier Claims Only 
30.2.8.2 - University-Affiliated Medical Faculty Practice Plans - 
Claims Submitted to Carriers 
30.2.8.3 - Indirect Payment Procedure (IPP) - Payment to Entities 
that Provide Coverage Complementary to Medicare Part B 
30.2.9 - Payment to Physician or Other Supplier for Purchased Diagnostic 
Tests Subject to the Anti-Markup Payment Limitation-Claims Submitted 
to A/B MACs (Part B) 
30.2.10 -  Payment Under Reciprocal Billing Arrangements - Claims 
Submitted to A/B MACs Part B  
30.2.11 -  Payment Under Fee-For-Time Compensation Arrangements 
(formerly referred to as Locum Tenens Arrangements) - Claims Submitted 
to A/B MACs Part B  
30.2.12 - Establishing That a Person or Entity Qualifies to Receive 
Payment on Basis of Reassignment - for Carrier Processed Claims 
30.2.13 - Billing Procedures for Entities Qualified to Receive Payment on 
Basis of Reassignment - for A/B MAC Part B Processed Claims  
30.2.14 - Correcting Unacceptable Payment Arrangements 
30.2.14.1 - Questionable Payment Arrangements 
30.2.15 - Sanctions for Prohibited Payment Arrangement 
30.2.16 - Prohibition of Assignments by Beneficiaries 
30.3 - Physician/Practitioner/Supplier Participation Agreement and Assignment - 
Carrier Claims 
30.3.1 - Mandatory Assignment on Carrier Claims 
30.3.1.1 - Processing Claims for Services of Participating 
Physicians or Suppliers 
30.3.2 - Nature and Effect of Assignment on Carrier Claims 
30.3.3 - Physicians Right to Collect From Enrollee on Assigned Claim 
Submitted to Carriers 
30.3.4 - Effect of Assignment Upon Rental or Purchase of Durable 
Medical Equipment on Claims Submitted to Carriers 
30.3.5 - Effect of Assignment Upon Purchase of Cataract Glasses From 
Participating Physician or Supplier on Claims Submitted to Carriers 
30.3.6 - Mandatory Assignment Requirement for Physician Office 
Laboratories on Claims Submitted to Carriers 
30.3.7 - Billing for Diagnostic Tests (Other Than Clinical Diagnostic  Laboratory Tests) Subject to the Anti-Markup Payment Limitation - 
Claims Submitted to A/B MACs (B) 
30.3.8 - Mandatory Assignment and Other Requirements for Home 
Dialysis Supplies and Equipment Paid Under Method II on Claims 
Submitted to Carriers 
30.3.9 - Filing Claims to a Carrier for Nonassigned Services 
30.3.10 - Carrier Submitted Bills by Beneficiary 
30.3.11 - Carrier Receipted Bill - Definition 
30.3.12 - Carrier Annual Participation Program 
30.3.12.1 - Annual Open Participation Enrollment Process 
30.3.12.1.2 - Annual Medicare Physician Fee Schedule File 
Information 
30.3.12.2 - Carrier/MACs Participation Agreement 
30.3.12.3 - Carrier Rules for Limiting Charge 
30.3.13 - Charges for Missed Appointments 
40 - Termination of Provider Agreement 
40.1 - Voluntary Termination 
40.1.1 - Close of Business 
40.1.2 - Change of Ownership 
40.1.3 - Expiration and Renewal-Nonrenewal of SNF Term Agreements 
40.2 - Involuntary Terminations 
40.2.1 - Processing Involuntary Terminations 
40.2.2 - FI Report on Provider Deficiencies 
40.2.2.1 - Subsequent Communications With Provider 
40.3 - Readmission to Medicare Program After Involuntary Termination 
40.3.1 - Effective Date of Provider Agreement 
40.3.2 - Fiscal Considerations in Provider Readmission to Medicare 
Program After Involuntary Termination 
40.4 - Payment for Services Furnished After Termination, Expiration, or 
Cancellation of Provider Agreement 
40.4.1 - Reviewing Inpatient Bills for Services After Suspension, 
Termination, Expiration, or Cancellation of Provider Agreement, or After 
a SNF is Denied Payment for New Admissions 
40.4.2 - Status of Hospital or SNF After Termination, Expiration, or 
Cancellation of Its Agreement 
40.5 - FI/Carrier/DMERC Responsibilities for Informing Providers of Changes 
50 - Filing a Request for Payment With the Carrier or FI 
50.1 - Request for Payment From the Carrier or FI 
50.1.1 - Billing Form as Request for Payment 
50.1.2 - Beneficiary Request for Payment on Provider Record - ASC X12  837 Institutional Claim Format and Form CMS-1450 
50.1.3 - Signature on the Request for Payment by Someone Other Than 
the Patient 
50.1.4 - Request for Payment as a Claim for HI Entitlement 
50.1.5 - Refusal by Patient to Request Payment Under the Program 
50.1.6 - When Beneficiary Statement is Not Required for 
Physician/Supplier Claim 
50.1.7 - Definition of a Claim for Payment 
50.1.8 - Establishing Date of Filing - Postmark Date - Carriers 
50.2 - Frequency of Billing for Providers 
50.2.1 - Inpatient Billing From Hospitals and SNFs 
50.2.2 - Frequency of Billing for Providers Submitting Institutional 
Claims With Outpatient Services 
50.2.3 - Submitting Bills In Sequence for a Continuous Inpatient Stay or 
Course of Treatment 
50.2.4 - Reprocess Inpatient or Hospice Claims in Sequence 
50.3 - When an Inpatient Admission May Be Changed to Outpatient Status 
50.3.1 - Background 
50.3.2 - Policy and Billing Instructions for Condition Code 44 
60  Provider Billing of Non-covered Charges on Institutional Claims 
60.1 - General Information on Non-covered Charges on Institutional Claims 
60.1.1 - Basic Payment Liability Conditions 
60.1.2 - Billing Services Excluded by Statute 
60.1.3 - Claims with Condition Code 21 
60.1.3.1  Provider-liable Fully Noncovered Outpatient Claims 
60.2 - Noncovered Charges on Inpatient Bills 
60.2.1  Billing for Noncovered Procedures in an Inpatient Stay 
60.3 - Noncovered Charges on Institutional Demand Bills 
60.3.1 - Background on Institutional Demand Bills (Condition Code 20) 
60.3.2 - Inpatient and Outpatient Demand Billing Instructions 
60.4 - Noncovered Charges on Outpatient Bills 
60.4.1 - Outpatient Billing With an ABN (Occurrence Code 32) 
60.4.2 -  Line-Item Modifiers Related to Reporting of Non-covered 
Charges When Covered and Non-covered Services Are on the Same 
Outpatient Claim 
60.4.3  Liability Considerations for Bundled Services 
60.5 - Coding That Results from Processing Noncovered Charges 
70 - Time Limitations for Filing Part A and Part B Claims 
70.1 - Determining Start Date of Timely Filing Period--Date of Service  70.2 - Definition of a Claim for Payment 
70.2.1 - Appropriate Medicare Contractor 
70.2.2 - Form Prescribed by CMS 
70.2.3 - In Accordance with CMS Instructions 
70.2.3.1 - Incomplete or Invalid Submissions 
70.2.3.2 - Handling Incomplete or Invalid Submissions 
70.3 - Determining End Date of Timely Filing PeriodReceipt Date 
70.4 - Determination of Untimely Filing and Resulting Actions 
70.5 - Application to Special Claim Types 
70.6 - Filing Claim Where General Time Limit Has Expired 
70.7 - Exceptions Allowing Extension of Time Limit 
70.7.1 - Administrative Error 
70.7.2  Retroactive Medicare Entitlement 
70.7.3  Retroactive Medicare Entitlement Involving State Medicaid 
Agencies 
70.7.4 - Retroactive Disenrollment from a Medicare Advantage Plan or 
Program of All-Inclusive Care for the Elderly (PACE) Provider 
Organization 
70.8 - Filing Request for Payment to CarriersMedicare Part B 
70.8.1 - Splitting Claims for Processing 
70.8.2 - Replicating Claims for Processing 
70.8.3 - Methods of Claiming Benefits for Services by Physicians and 
Suppliers 
70.8.4 - Claims Forms CMS-1490S and CMS-1500 
70.8.5 - Photocopies 
70.8.6 - Penalty for Filing Claims after One Year 
70.8.8 - Penalty for Filing Claims after One Year 
70.8.8.6  Monitoring Claims Submission Violations 
70.8.8.7  Notification Letters 
70.8.8.8  Violations That Are Not Developed For Referral 
80 - Carrier and FI Claims Processing Timeliness 
80.1 - Control and Counting Claims 
80.2 - Definition of Clean Claim 
80.2.1 - Receipt Date 
80.2.1.1 - Payment Ceiling Standards 
80.2.1.2 - Payment Floor Standards 
80.2.2 - Interest Payment on Clean Non-PIP Claims Not Paid Timely 
80.2.2.1 - Determining and Paying Interest 
80.2.2.2 - Preparation of IRS Form 1099-INT  80.3 - Other Claims (other than clean) 
80.3.1 - Incomplete or Invalid Claims Processing Terminology 
80.3.2 - Handling Incomplete or Invalid Claims 
80.3.2.1.1 - A/B MAC (B) Data Element Requirements 
80.3.2.1.2 - Conditional Data Element Requirements for A/B 
MACs (B) and DME MACs 
80.3.2.1.3 - A/B MAC (B) Specific Requirements for Certain 
Specialties/Services 
80.3.2.2 - Consistency Edits for Institutional Claims 
80.3.3  Timeliness Standards for Processing Other-Than-Clean Claims 
80.4 - Enforcement of Provider Billing Timelines and Accuracy Standard to 
Continue PIP (Periodic Interim Payment) 
80.5 - Do Not Forward Initiative (DNF) 
80.5.1 - Carrier DNF Requirements 
80.5.1.1 - Reporting Requirements - Carriers 
80.6 - Processing All Diagnosis Codes Reported on Claims Submitted to Carriers 
90 - Patient Is a Member of a Medicare Advantage (MA) Organization for Only a Portion 
of the Billing Period 
91 - Moral and Religious Fee for Service Claims for Medicare Beneficiaries Enrolled in 
Certain Medicare Advantage (MA) Plans 
100 - Medicare as a Secondary Payer 
110 - Provider Retention of Health Insurance Records 
110.1 - Categories of Health Insurance Records to Be Retained 
110.2 - Microfilming Records 
110.3 - Retention Period 
110.4 - Destruction of Records 
120 - Detection of Duplicate Claims 
120.1 - Overview 
120.2 - Exact Duplicates 
120.3 - Suspect Duplicates 
130 - Adjustments and Late Charges 
130.1 - General Rules for Submitting Adjustment Requests 
130.1.1 - Adjustment Bills Involving Time Limitation for Filing Claims 
130.1.2 - Claim Change Reasons 
130.1.2.1 - Claim Change Reason Codes 
130.1.2.2 - Edits on Claim Change Reason Codes 
130.1.2.3 - Additional Edits 
130.1.3 - Late Charges 
130.2 - Inpatient Part A Hospital Adjustment Bills  130.2.1 - Tolerance Guidelines for Submitting Inpatient Part A Hospital 
Adjustment Requests 
130.3 - SNF Part A Adjustments 
130.3.1 - Tolerance Guides for Submitting SNF Inpatient Adjustment 
Requests 
130.3.2 - SNF Inpatient Claim Adjustment Instructions 
130.3.3 - Patient Does Not Return From SNF Leave of Absence, and Last 
Bill Reported Patient Status as Still Patient (30) 
130.4 - Hospital and SNF Part B Adjustment Requests 
130.4.1 - Guidelines for Submitting Adjustment Requests 
130.5 - Home Health Adjustments 
130.5.1 - Submitting Adjustment Requests 
130.6 - Adjustments to Reprocess Certain Claims Denied Due to an Open 
Common Working File (CWF) Medicare Secondary Payer (MSP) Group Health 
Plan (GHP) Record Where the GHP Record Was Subsequently Deleted or 
Terminated 
130.7 - MAC Guidance Related to Use of Adjustment Codes on Adjustment 
Claims 
140  Fiscal Intermediary (FI) Edits Affecting Multiple Bill Types 
140.1 - Threshold Edit for Outpatient and Inpatient Part B Claims 
140.2  Systematic Validation of Claims Information Using Patient Assessments 
140.3 - Verification Edit for Claims with OPPS Payments 
150  Limitation of Liability Notification and Coordination With Quality Improvement 
Organizations (QIOs) 
150.1 - Limitation on Liability - Overview 
150.2  Hospital Claims Subject to Hospital Issued Notices of Noncoverage 
150.2.1  Scope of Issuance of Hospital Issued Notices of Noncoverage 
(HINNs) 
150.2.2 - General Responsibilities of QIOs and Fiscal Intermediaries (FIs) 
Related to HINNs 
150.2.3  Billing and Claims Processing Requirements Related to HINNs 
150.3 Skilled Nursing Facility (SNF), Home Health Agency (HHA), Hospice 
and Comprehensive Outpatient Rehabilitation Facility (CORF) Claims 
Subject to Expedited Determinations 
150.3.1  Scope of Issuance of Expedited Determination Notices 
150.3.2 - General Responsibilities of QIOs and FIs Related to Expedited 
Determinations 
150.3.3  Billing and Claims Processing Requirements Related to 
Expedited Determinations 
160 - Identifying Institutional Providers 
160.1 - Reporting of Taxonomy Codes (Institutional Providers)  170 - Payment Bases for Institutional Claims 
170.1 - Services Paid on the Medicare Physician Fee Schedule (MPFS) 
170.1.1 - Payments on the MPFS for Providers With Multiple Service 
Locations 
180 - Denial of Claims Due to Violations of Physician Self-Referral Prohibition 
180.1 - Background and Policy 
180.2 - Denial Code 
190  Payer Only Codes Utilized by Medicare 
200 - Qualified Medicare Beneficiary (QMB)  01 - Foreword 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
Generally, this chapter describes policy applicable to Medicare fee-for-service claims, or 
what is known as the original or traditional Medicare program.  See the Medicare 
Managed Care Manual for services to enrollees in managed care plans. 
 
Unless specified otherwise the instructions in this chapter apply to both providers and 
suppliers, and to the contractors that process their claims. 
 
In this chapter the terms provider and supplier are used as defined in 42 CFR 400.202. 
 
  Provider means a hospital, a CAH, a skilled nursing facility, a comprehensive 
outpatient rehabilitation facility, a home health agency, or a hospice that has in 
effect an agreement to participate in Medicare, or a clinic, a rehabilitation agency, 
or a public health agency that has in effect a similar agreement but only to furnish 
outpatient physical therapy or speech-language pathology services, or a 
community mental health center that has in effect a similar agreement but only to 
furnish partial hospitalization services. 
 
  Supplier means a physician or other practitioner, or an entity other than a provider 
that furnishes health care services under Medicare.  A supplier must meet certain 
requirements and enroll as described in Chapter 10 of the Medicare Program 
Integrity Manual.  A provider that meets the applicable conditions may also enroll 
as a supplier of a particular service and may bill separately for that service where 
Medicare payment policy allows separate payment for the service. 
 
In this chapter and in subsequent chapters of Pub. 100-04, the terms institutional claim 
and professional claim are defined by the submission format of the claim. 
 
  Institutional claim means any claim submitted using the Health Insurance 
Portability and Accountability Act (HIPAA) mandated transaction ASC X12 837  
institutional claim or the paper Form CMS-1450. 
 
  Professional claim means any claim submitted using the HIPAA mandated 
transaction ASC X12 837 professional claim or the CMS-1500 paper claim form. 
 
01.1  Remittance Advice Coding Used in this Manual 
(Rev. 10236, Issued: 07-31-2020, Effective: 08-31-2020, Implementation: 08-31-2020) 
 
When Medicare denies coverage or adjusts the payment amount for items or services, 
these actions are documented using codes reported on the providers remittance advice.  
Medicare, like all other health insurance payers, uses remittance advice codes in 
combination to create one message.  This combination includes a Claim Adjustment  Group Code (Group Code) and a Claim Adjustment Reason Code (CARC).  Frequently, 
payers also use one or more Remittance Advice Remark Codes (RARC) to add additional 
detail.  RARC coding is optional unless the CARC definition requires an accompanying 
RARC, so RARCs may not appear on all remittance advice messages. 
 
Each of the codes in the message communicates different information: 
 
  Group Codes assign financial responsibility to the provider or the beneficiary 
 
  CARCs communicate the general reason why the payment is different from the 
billed amount 
 
  RARCs, when used in combination with CARCs,  provide additional or more 
specific payment adjustment information 
 
In certain cases, RARCs may also be used alone to provide information unrelated to the 
difference between the amount billed and the amount paid.  In these cases, the RARC 
definition always begins with the word Alert. 
 
Remittance advice codes are identified in standard code sets that are used by all payers, 
as required by HIPAA.  Since the definitions of the codes are an industry standard, the 
instructions in this manual refer only to the code values.  Providers and contractors can 
access the definitions of the codes at the official Washington Publishing Company 
website.  
 
Section 1171 of the Social Security Act requires a standard set of operating rules to 
regulate the health insurance industrys use of electronic data interchange (EDI) 
transactions.  Operating Rule 360: Uniform Use of CARCs and RARCs, regulates the 
way in which group codes, CARCs and RARCs may be used.  The rule requires specific 
codes which are to be used in combination with one another if one of the named business 
scenarios applies.  This rule is authored by the Council for Affordable Quality Healthcare 
(CAQH) Committee on Operating Rules for Information Exchange (CORE). 
 
Medicare and all other payers must comply with the CAQH CORE-developed code 
combinations. The business scenario for each payment adjustment must be defined, if 
applicable, and a valid code combination selected for all remittance advice messages.  
Providers and contractors can access the business scenarios and code combinations at: 
caqh.org/CORECodeCombinations.php.  When remittance advice messages are used to 
explain payments to providers, Medicare Summary Notice (MSN) messages are used to 
explain payments to beneficiaries. 
 
In order to provide remittance advice codes and MSN messages consistently throughout 
the Medicare Claims Processing Manual, the one of the following standard language 
statements will be included as necessary. 
    If the CARC/RARC being reported is included in the CAQH CORE list of valid 
combinations: 
 
The contractor shall use the following remittance advice messages and 
associated codes when rejecting/denying claims under this policy.  This 
CARC/RARC combination is compliant with CAQH CORE Business Scenario 
[Insert Business Scenario number]. 
 
Group Code: [Insert Group Code] 
CARC: [Insert CARC number or N/A if the RARC is an Alert message] 
RARC: [Insert RARC number(s) or N/A if a RARC is not needed] 
MSN: [Insert MSN message number(s)] 
 
  If the CARC is not included in the CAQH CORE publication and therefore, 
standard business scenarios do not apply: 
 
The contractor shall use the following remittance advice messages and 
associated codes when rejecting/denying claims under this policy.  The CARC 
below is not included in the CAQH CORE Business Scenarios. 
 
Group Code: [Insert Group Code] 
CARC: [Insert CARC number or N/A if the RARC is an Alert message] 
RARC: [Insert RARC number(s) or N/A if a RARC is not needed] 
MSN: [Insert MSN message number(s)] 
 
 
02.1.1 - HIPAA Standards for Claims 
(Rev. 10236, Issued: 07-31-2020, Effective: 08-31-2020, Implementation: 08-31-2020) 
 
The standards adopted under HIPAA include both a transaction standard and an 
implementation guide.  The following are the claims transactions and the implementation 
guides adopted as standards under HIPAA: 
 
Standard Claim  Short Reference  Implementation Guide  Type of Claim 
Transaction 
ASC X12 Health Care  ASC X12 837   ASC X12 Standards for  Professional 
Claim:  professional  Electronic Data Interchange  services and 
Professional (837)   claim  Technical Report Type 3  supplies, including  
Health Care Claim:  retail pharmacy 
Professional (837) 
 
ASC X12 Health Care  ASC X12 837   ASC X12 Standards for  Institutional 
Claim:  institutional  Electronic Data Interchange 
Institutional (837)   claim  Technical Report Type 3 
Health Care Claim: 
Institutional (837) 
  Standard Claim  Short Reference  Implementation Guide  Type of Claim 
Transaction 
Telecommunication  Depending upon  Telecommunication  Retail pharmacy 
Standard,  context: NCPDP  Standard Implementation  professional 
National Council for  claim; NCPDP  Guide and equivalent Batch  services and 
Prescription Drug  transaction;  Standard   supplies; retail 
Programs and equivalent  NCPDP batch  Implementation Guide,  pharmacy drugs  
Batch Standard, National  transaction;  National Council for 
Council for Prescription  NCPDP batch  Prescription Drug 
Drug Programs  claim  Programs. 
 
 
Claims sent electronically to Medicare must abide by the HIPAA standards listed above.  
The current versions of these HIPAA standards are listed in chapter 24 of this manual.  
More information about HIPAA can be found at www.cms.gov, under the Regulations 
and Guidance tab.  More information about these transactions and implementation 
guides can be found, as appropriate, at the official ASC X12 website and 
www.NCPDP.org. 
 
In addition, chapter 24 of this manual provides more information regarding Medicares 
requirements for electronic data interchange (EDI), such as EDI enrollment and trading 
partner agreements. 
 
Note that HIPAA standard implementation guides provide comprehensive directions 
regarding how to submit a claim on the transactions they support.  Therefore, there is no 
separate guidance in this claim processing manual as to how to submit a claim using 
these transactions.  However, there may be situations where the Medicare requirements 
require additional clarification, description, or guidance. In such cases, there will be 
additional instructions in the appropriate subject area section.  
 
02 - Formats for Submitting Claims to Medicare 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
02.1 - Electronic Submission Requirements 
(Rev. 10236, Issued: 07-31-2020, Effective: 08-31-2020, Implementation: 08-31-2020) 
 
The standards adopted under HIPAA include both a transaction standard and an 
implementation guide.  The following are the claims transactions and the implementation 
guides adopted as standards under HIPAA: 
 
Standard Claim  Short Reference  Implementation Guide  Type of Claim 
Transaction 
ASC X12 Health Care  ASC X12 837   ASC X12 Standards for  Professional 
Claim:  professional  Electronic Data Interchange  services and 
Professional (837)   claim  Technical Report Type 3  supplies, including   Standard Claim  Short Reference  Implementation Guide  Type of Claim 
Transaction 
Health Care Claim:  retail pharmacy 
Professional (837) 
 
ASC X12 Health Care  ASC X12 837   ASC X12 Standards for  Institutional 
Claim:  institutional  Electronic Data Interchange 
Institutional (837)   claim  Technical Report Type 3 
Health Care Claim: 
Institutional (837) 
 
Telecommunication  Depending upon  Telecommunication  Retail pharmacy 
Standard,  context: NCPDP  Standard Implementation  professional 
National Council for  claim; NCPDP  Guide and equivalent Batch  services and 
Prescription Drug  transaction;  Standard   supplies; retail 
Programs and equivalent  NCPDP batch  Implementation Guide,  pharmacy drugs  
Batch Standard, National  transaction;  National Council for 
Council for Prescription  NCPDP batch  Prescription Drug 
Drug Programs  claim  Programs. 
 
 
Claims sent electronically to Medicare must abide by the HIPAA standards listed above.  
The current versions of these HIPAA standards are listed in chapter 24 of this manual.  
More information about HIPAA can be found at www.cms.gov, under the Regulations 
and Guidance tab.  More information about these transactions and implementation 
guides can be found, as appropriate, at the official ASC X12 website and 
www.NCPDP.org. 
 
In addition, chapter 24 of this manual provides more information regarding Medicares 
requirements for electronic data interchange (EDI), such as EDI enrollment and trading 
partner agreements. 
 
Note that HIPAA standard implementation guides provide comprehensive directions 
regarding how to submit a claim on the transactions they support.  Therefore, there is no 
separate guidance in this claim processing manual as to how to submit a claim using 
these transactions.  However, there may be situations where the Medicare requirements 
require additional clarification, description, or guidance. In such cases, there will be 
additional instructions in the appropriate subject area section.  
 
02.1.2 - Where to Purchase HIPAA Standard Implementation Guides 
(Rev. 10236, Issued: 07-31-2020, Effective: 08-31-2020, Implementation: 08-31-2020) 
 
ASC X12 implementation guides (technical report 3s) may be purchased from the official 
Washington Publishing Company website.   NCPDP implementation guides may be 
purchased from the NCPDP at www.NCPDP.org 
 
  02.2 - Paper Claims 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
The ASCA law allows for there to be exceptions for which a provider, or other claim 
submitter, is permitted to send his/her claims to Medicare on paper.  Refer to Chapter 24 
90-90.5.4 for more information regarding ASCA exceptions. 
 
02.2.1 - Paper Formats for Institutional Claims 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
The required format for submitting institutional claims to Medicare on paper is the CMS- 
1450 form.  Refer to chapter 25 for more information, including how to complete this 
form.  In addition, where needed, additional instruction is provided throughout this 
manual for submitting paper claims. 
 
02.2.2 - Paper Formats for Professional and Supplier Claims 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
The required format for submitting professional and supplier claims to Medicare on paper 
is the CMS-1500 claim form.  Refer to chapter 26 for more information, including how to 
complete this form.  In addition, where needed, additional instruction is provided 
throughout this manual for submitting paper claims. 
 
02.3 - Remittance Advices 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
Another of the electronic health care transactions for which HIPAA requires the 
Secretary to adopt a standard is the remittance advice.  The standard adopted is the ASC 
X12 Health Care Claim Payment/Advice (835).  The current HIPAA version, including 
the implementation guide, is listed in Chapter 24.  Throughout this manual, you may see 
references to this standards short form, ASC X12 835 remittance advice.  More 
information about this transaction and its implementation guide can be found in chapters 
22 and 24. 
 
10 - Jurisdiction for Claims 
(Rev. 1, 10-01-03) 
  In general FIs have jurisdiction for providers and institutional suppliers. Examples of 
institutional suppliers are renal dialysis facilities, comprehensive outpatient rehabilitation 
facilities, rural health clinics, and federally qualified health centers.  In general, carriers 
have jurisdiction for physicians and other individual practitioners, and for labs that are 
not a part of hospital, ambulance suppliers, ASCs, DME suppliers, and IDTFs. 
 
See 10.1 - 10.2 for more detail. 
 
10.1 - A/B MACs (Part B) and DME MAC Jurisdiction of Requests for 
Payment 
(Rev. 10840; Issued: 06-11-21; Effective: 07-12-21; Implementation: 07-12-21) 
 
B3-3100 
 
A/B MACs (Part B) have jurisdiction for all claims from the following: 
 
  Physicians;  
  Other individual practitioners; 
  Groups of physicians or practitioners;  
  Labs not part of a hospital;  
  Ambulance claims submitted by ambulance companies under their own Medicare 
number (hospitals may operate ambulances as part of the hospital and bill the A/B 
MAC (Part A);  
  Ambulatory surgical centers (ASCs); and  
  Independent diagnostic testing facilities (IDTFs).  
 
Durable Medical Equipment Medicare Administrative Contractors (DME MACs) have 
jurisdiction for claims from the following: 
 
  Nonimplantable durable medical equipment, prosthetics, orthotics, and 
supplies (DMEPOS) (including home use);  
 
  Suppliers of enteral and parenteral products other than to inpatients covered 
under Part A;  
 
  Oral drugs billed by pharmacies; and  
 
  Method II home dialysis (for dates of service prior to January 1, 2011).  Note:  
Please refer to Section 30.3.8 for information regarding the elimination of 
Method II home dialysis for dates of service on and after January 1, 2011. 
 
The CMS maintains a list of which HCPCS codes are under DME MAC only jurisdiction 
or dual DME MAC/Part B MAC jurisdiction and issues updates to DME MACs and A/B 
MACs (Part B) as needed (Usually quarterly). Any other codes not listed as DME MAC  only or dual DME MAC/Part B MAC jurisdiction shall be A/B MAC (Part B) only 
jurisdiction.   
 
There are four DME MACs each of which is assigned specific States. 
 
A/B MACs (Part B) typically process Part B fee-for-service claims for services furnished 
in specific geographic areas (e.g., a State). However, a single A/B MAC (Part B) 
processes all physician/supplier claims for railroad retirement beneficiaries. (See 10.1.3 
for claims for Part B medical services performed outside the U.S. for individuals who 
reside in the U.S.).  
 
The rules for determining jurisdiction are the same whether a claim is assigned or 
nonassigned (see 30.3 for assignment rules).  
 
Further information on A/B MACs (Part B) and DME MACs for specific geographic 
areas is available on the CMS Web site at https://www.cms.gov/Medicare/Medicare-
Contracting/Medicare-Administrative-Contractors/Who-are-the-MACs . 
 
Most skilled nursing facilities submit claims to the A/B MACs (Part A). However, a 
nonparticipating skilled nursing facility (SNF) is considered a supplier and its claims are 
submitted to the appropriate A/B MACs (Part B) under its own Medicare supplier 
number. 
 
10.1.1 - Payment Jurisdiction among A/B MACs (Part B) for Services 
Paid Under the Physician Fee Schedule and Anesthesia Services 
 (Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20) 
 
The jurisdiction for processing a request for payment for services paid under the 
Medicare Physician Fee Schedule (MPFS) and for anesthesia services is governed by the 
payment locality where the service is furnished and will be based on the ZIP code. 
Though a number of additional services appear on the MPFS database, these payment 
jurisdiction rules apply only to those services actually paid under the MPFS and to 
anesthesia services.  (For example, it does not apply to clinical lab, ambulance or drug 
claims.) 
 
Effective for claims received on or after April 1, 2004, A/B MACs (Part B) must use the 
ZIP code of the location where the service was rendered to determine A/B MACs (Part 
B) jurisdiction over the claim and the correct payment locality.  Effective for dates of 
service on or after October 1, 2007, except for services provided in POS Home, if they 
are not already doing so, A/B MACs (Part B) shall use the CMS ZIP code file along with 
the ZIP code submitted on the claim with the address that represents where the service 
was performed to determine the correct payment locality.  (See section 10.1.1B for 
instructions on processing services rendered in POS Home -12 and section 10.1.1.1 for 
instructions on when a 9-digit ZIP code is required.) 
  When a physician, practitioner, or supplier furnishes physician fee schedule or anesthesia 
services in payment localities that span more than one A/B MAC (Part B)s service area 
(e.g., provider has separate offices in multiple localities and/or multiple A/B MACs (Part 
B)), separate claims must be submitted to the appropriate area A/B MACs (Part B) for 
processing. For example, when a physician with an office in Illinois furnishes services 
outside the office setting (e.g., home, hospital, SNF visits) and that out-of-office service 
location is in another A/B MAC (Part B)s service area (e.g., Indiana), the A/B MAC 
(Part B) which processes claims for the payment locality where the out of office service 
was furnished has jurisdiction for that service.  It is the A/B MAC (Part B) with the 
correct physician fee schedule pricing data for the location where the service was 
furnished. In the majority of cases, the physician fee schedule or anesthesia services 
provided by physicians are within the same A/B MAC (Part B) jurisdiction that the 
physicians office(s) is/are located. 
 
Although pricing rules for services paid under the MPFS remain in effect, effective for 
claims with dates of service on or after January 25, 2005, suppliers (including 
laboratories, physicians, and independent diagnostic testing facilities (IDTFs) must bill 
their A/B MAC (Part B) for the technical component and professional component of 
diagnostic tests that are subject to the anti-markup payment limitation, regardless of the 
location where the service was furnished.  Beginning in 2005, and in each subsequent 
calendar year (CY) through 2013, CMS provided A/B MACs (Part B) with a national 
abstract file containing Healthcare Common Procedural Coding System (HCPCS) codes 
that are payable under the MPFS as anti-markup tests for the year.  In addition, CMS 
made quarterly updates to the abstract file to add and/or delete codes, as needed, in 
conjunction with the MPFSDB quarterly updates.   Beginning in 2014, CMS adopted a 
more streamlined approach to providing the A/B MACs with the HCPCS codes payable 
under the MPFS as anti-markup tests for the year.  The national abstract file was 
discontinued and an Anti-markup (formerly Purchased Diagnostic) Test Indicator, to 
identify HCPCS codes payable under the MPFS as anti-markup tests for the year, was 
added to the MPFS payment file.  Quarterly updates to the Anti-Markup Test Indicator 
are made directly to the MPFS Payment file. As with all other services payable under the 
MPFS, the ZIP code of the locality in which the service was furnished determines the 
payment amount.  Refer to 30.2.9 of this chapter for information on the anti-markup 
payment limitation as it applies to supplier billing requirements.  
 
A.  Multiple Offices 
 
In states with multiple physician fee schedule pricing localities or where a provider has 
multiple offices located in two or more states, or there is more than one A/B MAC (Part 
B) servicing a particular state, physicians, suppliers and group practices with multiple 
offices in such areas must identify the specific location where office-based services were 
performed. This is to insure correct claim processing jurisdiction and/or correct pricing of 
MPFS and anesthesia services. The A/B MAC (Part B) must ensure that multiple office 
situations are cross-referenced within its system. If a physician/group with offices in 
more than one MPFS pricing locality or a multi-contractor state fails to specify the  location where an office-based service was furnished, the A/B MAC (Part B) will 
return/reject the claim as unprocessable. 
 
Physicians, suppliers, and group practices that furnish physician fee schedule services at 
more than one office/practice location may submit their claims through one office to the 
A/B MAC (Part B) for processing. However, the specific location where the services 
were furnished must be entered on the claim so the A/B MAC (Part B) has the ZIP code, 
can determine the correct claims processing jurisdiction, and can apply the correct 
physician fee schedule amount. 
 
B.  Service Provided at a Place of Service Other than Home-12 or Office-11 
 
For claims submitted prior to April 1, 2004, in order to determine claims jurisdiction, 
Medicare approved charges, Medicare payment amounts, Medicare limiting charges and 
beneficiary liability, Part B fee-for-service claims for services furnished in other than in 
an office setting or a beneficiarys home must include information specifying where the 
service was provided. 
 
Effective for claims received on or after April 1, 2004, claims for services furnished in all 
places of service other than a beneficiarys home must include information specifying 
where the service was provided.  A/B MACs (Part B) must use the address on the 
beneficiary files when place of service (POS) is home - 12, or any other mechanism 
currently in place to determine pricing locality when POS is home  12.  A/B MACs 
(Part B) shall take this same action for any other POS codes they currently treat as POS 
home. 
 
Effective for claims processed on or after October 5, 2009, for services rendered in POS 
home -12, or for any other POS the contractor currently treats as POS home, when alerted 
by the shared system that a 9-digit ZIP code is required according to the CMS ZIP Code 
file, and a 9-digit ZIP code is not available on the beneficiary file, the contractor shall 
determine that ZIP code by using the United States Postal Service Web site.  They shall 
use that ZIP code to determine the correct payment locality for the claim for pricing 
purposes. 
 
A/B MACs (Part B) processing these claims shall take necessary steps to ensure that the 
claims for services rendered in the physical location for which they are the MAC are 
priced and processed correctly applying appropriate edits as necessary. 
 
Effective January 1, 2011, for claims processed on or after January 1, 2011, using the 
5010 version of the ASC X12 837 professional claim format, submission of the complete 
address of where the service was performed is required regardless of where the service 
was performed.  This information should be entered on the claim per the Implementation 
Guide for the current version.  Contractors shall use that ZIP code to determine correct 
payment locality. 
  Effective January 1, 2011 for claims processed on or after January 1, 2011 on paper 
claims submitted on the CMS-1500 form, submission of the ZIP code of where the 
service was provided will also be required for all POS code and contractors shall use that 
ZIP code to determine correct payment locality. 
 
For paper and electronic claims, when a global diagnostic service code is billed (e.g. no 
modifier TC and no modifier 26), the address where the technical component was 
performed shall be reported on the claim (this only applies to global services with 
separate technical component/professional component). Global billing does not apply to 
anti-markup tests because the technical and professional component must be billed 
separately when the anti-markup payment limitation applies.  
 
Refer to Pub 100-04, Chapter 35, Section 10.2.1 and 10.2.2 for more information on 
global billing and separate technical and professional billing. 
 
Contractors shall make no changes for claims submitted on the 4010A1 format as they 
pertain to POS Home and determining pricing locality. 
 
Contractors shall require the submission of the 9-digit ZIP code when required per the 
CMS ZIP Code file. 
 
C.  Outside A/B MAC (Part B) Jurisdiction 
 
If A/B MACs (Part B) receive claims outside of their jurisdiction, they must follow 
resolution procedures in accordance with the instructions in 10.1.9. If they receive a 
significant volume or experiences repeated incidences of misdirected Medicare Physician 
Fee Schedule or anesthesia services from a particular provider, an educational contact 
may be warranted. 
 
D.  HMO Claims 
 
For services that HMOs are not required to furnish, A/B MACs (Part B) process claims 
for items or services provided to an HMO member over which they have jurisdiction in 
the same manner as they process other Part B claims for items or services provided by 
physicians or suppliers. Generally, the physician/supplier who provides in-plan services 
to its HMO members submits a bill directly to the HMO for payment and normally does 
not get involved in processing the claim. However, in some cases, claims for services to 
HMO members are also submitted to A/B MACs (Part B), e.g., where claims are received 
from physicians for dialysis and related services provided through a related dialysis 
facility. 
 
10.1.1.1 - Claims Processing Instructions for Payment Jurisdiction 
(Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20) 
 
A. Instructions for the 4010/4010A1 Version of the ASC X12 837 Professional 
Electronic Claim (for Claims Processed Before Implementation of Version 5010)   
Note that the following instructions do not apply to services rendered at POS home -12. 
For services rendered at POS home  12, use the address on the beneficiary file for the 
beneficiarys home (or wherever else the beneficiary information is currently being 
stored) to determine pricing locality.  (See 10.1.1 for changes to processing for services 
rendered at POS home  12.) 
 
For pricing purpose, contractors shall use the ZIP code of where the service was 
performed.  Contractors shall locate that information according to the Implementation 
Guide of the 4010/4010A1 version of the ASC X12 837 professional claim format. 
 
EXCEPTION:  For DME MAC claims - Effective for claims received on or after 1/1/05, 
the Standard System shall not evaluate the 2010AA loop for a valid place of service. If 
there is no entry in the 2420C loop or the 2310D loop, the claim shall be returned as 
unprocessable. 
 
  If the Pay-To Provider Name and Address loop 2010AB is not the same as the 
Billing Provider, both will be entered. If the Service Facility Location loop 2310D 
is not the same as the Billing Provider or the Pay-To Provider, the Service Facility 
Location loop 2310D (claim level) will be entered. Price the service based on the 
ZIP code in Service Facility Location loop 2310D, unless the 2420C (line level) is 
also entered. In that case, price the service based on the ZIP code in the Service 
Facility Location loop 2420C (line level) for that line. 
 
If the POS code is the same for all services, but the services were provided at different 
addresses, each service shall be submitted with the appropriate address information for 
each service.  This will provide a ZIP code to price each service on the claim. 
 
B. Entering the Address of Where a Service was Performed on the 5010 Version of 
the ASC X12 837 Professional Claim 
 
Following the requirements of the implementation guide of the 5010 version of the ASC 
X12 837professional claim, the complete address of where a service was performed shall 
be entered.  Pay the service based on the ZIP code of the address of where the service 
was performed based on the appropriate entry on the claim. 
 
See 30.2.9 and Chapter 12 for information on anti-markup tests. 
 
C.  Paper Claims Submitted on the Form CMS-1500 
 
Note that for claims processed on the Form CMS-1500 prior to January 1, 2011, the 
following instructions do not apply to services rendered at POS home  12 or any other 
places of service contractors consider to be home. (See 10.1.1.1) 
 
It is acceptable for claims to contain POS home and an additional POS code. No service 
address for POS home needs to be entered for the service rendered at POS home in this  situation as the address will be drawn from the beneficiary file (or wherever else the A/B 
MAC (Part B) is currently storing the beneficiary information) and the information on the 
claim will apply to the other POS. 
 
Except for the situation described above, the provider shall submit separate claims for 
each POS.  The specific location where the services were furnished shall be entered on 
the claim.  Use the ZIP code of the address entered in Item 32 to price the claim.  If 
multiple POS codes are submitted on the same claim, treat the claim as unprocessable 
and follow the instructions in 80.3.1. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: M77 
MSN: 9.2 
 
Effective January 1, 2011, for claims processed on or after January 1, 2011, submitted on 
the Form CMS-1500 paper claim, it will no longer be acceptable for the claim to have 
more than one POS.  Separate claims must be submitted for each POS.  Contractors shall 
treat claims submitted with more than one POS as unprocessable and follow the 
instructions in 80.3.2.1.1. 
 
If the contractor receives a fee-for-service claim containing one or more services for 
which the MPFS payment locality is in another A/B MAC (Part B)s jurisdiction, handle 
in accordance with the instructions in 10.1.9.  If you receive a significant volume or 
experience repeated incidences of misdirected Medicare Physician Fee Schedule 
claims/services from a particular provider, an educational contact may be warranted. 
Handle misdirected claims/services for HMO enrollees in accordance with 10.1.1.C and 
D. 
 
D. Determining the Correct Payment Locality for Services Paid Under the Medicare 
Physician Fee Schedule (MPFS) and Anesthesia Services When Rendered in a 
Payment Locality that Crosses ZIP Code Areas 
 
Per the instructions above, Medicare A/B MACs (Part B) have been directed to determine 
the payment locality for services paid under the MPFS and anesthesia services by using 
the ZIP code on the claim of where the service was performed.  It has come to the 
attention of CMS that some ZIP codes fall into more than one payment locality.  The 
CMS ZIP Code file uses the convention of the United States Postal Service, which 
assigns these ZIP codes into dominant counties.  In some cases, though the service may 
actually be rendered in one county, per the ZIP code it is assigned into a different county.  
This causes a payment issue when each of the counties has a different payment locality 
and therefore a different payment amount.  Note that as the for services which have the  Anti-markup Test Indicator on the MPFS, the 9-digit ZIP code requirements will also 
apply to those codes. 
 
Effective for dates of service on or after October 1, 2007, CMS shall provide a list of the 
ZIP codes that cross localities as well as provide quarterly updates when necessary.  The 
CMS ZIP Code file shall be revised to two files:  one for 5-digit ZIP codes (ZIP5) and 
one for 9-digit ZIP codes (ZIP9).  Providers performing services paid under the MPFS, 
anesthesia services, or any other services as described above, in those ZIP codes that 
cross payment localities shall be required to submit the 9-digit ZIP codes on the claim for 
where the service was rendered.  Claims for services payable under the MPFS and 
anesthesia services that are NOT performed in one of the ZIP code areas that cross 
localities may continue to be submitted with 5-digit ZIP codes.  Claims for services other 
than those payable under the MPFS or anesthesia services may continue to be submitted 
with 5-digit ZIP codes. 
 
Beginning in 2009, contractors shall maintain separate ZIP code files for each year which 
will be updated on a quarterly basis.  Claims shall be processed using the correct ZIP 
code file based on the date of service submitted on the claim. 
 
It should be noted that though some states consist of a single pricing locality, ZIP codes 
can overlap states thus necessitating the submission of the 9-digit ZIP code in order to 
allow the process to identify the correct pricing locality. 
 
Claims received with a 5-digit ZIP code that is one of the ZIP codes that cross localities 
and therefore requires a 9-digit ZIP code to be processed shall be treated as 
unprocessable. 
 
For claims received that require a 9-digit ZIP code with a 4-digit extension that does not 
match a 4-digit extension on file, manually verify the 4-digit extension to identify a 
potential coding error on the claim or a new 4-digit extension established by the U.S. 
Postal Service (USPS).  ZIP code and county information may be found at the USPS Web 
site at http://www.usps.com/, or other commercially available sources of ZIP code 
information may be consulted.  If this process validates the ZIP code, the claim may be 
processed.  The Revision to Payment Policies under the Physician Fee Schedule that is 
published annually in the Federal Register, or any other available resource, may be used 
to determine the appropriate payment locality for the ZIP code with the new 4-digit 
extension.  If this process does not validate the ZIP code, the claim shall be treated as 
unprocessable. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: MA114  MSN: N/A  
 
Should a service be performed in a ZIP code area that does not require the submission of 
the 9-digit ZIP code, but the 4-digit extension has been included anyway, A/B MACs 
(Part B) shall price the claim using the A/B MAC (Part B) locality on the ZIP5 file and 
ignore the 4-digit extension. 
 
Effective for claims processed on or after July 6, 2009, the standard system shall make 
revisions to allow contractors to add valid 4-digit extensions not included on the current 
quarters 9-digit ZIP Code file until they appear on a quarterly file. 
 
Contractors shall reprocess claims brought to their attention if the next CMS quarterly 
file is received and the locality determination on a new 4-digit extension is different than 
that made manually by the contractor thus having inadvertently caused incorrect 
payment. 
 
E.  ZIP9 Code to Locality Record Layout 
 
Below is the ZIP9 Code to locality file layout.  Information on the naming conventions, 
availability, how to download the ZIP5 and ZIP9 files, and the ZIP5 layout can be found 
in Pub. 100-04, Chapter 15, section 20.1.6. 
 
ZIP9 Code to Locality Record Layout 
(Effective for dates of service on or after October 1, 2007.) 
 
Field Name  Beg. Position  End Position  Length  Comments 
State  1  2  2   
ZIP Code  3  7  5   
A/B MAC (B)  8  12  5   
Pricing Locality  13  14  2   
Rural Indicator      15  15  1  Blank=urban 
R=rural 
B=super rural 
Filler    16  20  5   
Plus Four Flag  21  21  1  0=no+4 extension 
1=+4 extension 
Plus Four  22  25  4   
 
10.1.1.2 - Payment Jurisdiction for Services Subject to the Anti-Markup 
Payment Limitation 
(Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20)   
Diagnostic tests and their interpretations are paid on the MPFS.  Therefore, they are 
subject to the same payment rules as all other services paid on the MPFS.  Additional 
explanation is provided here due to general confusion concerning these services when 
they are performed or supervised by a physician or other supplier who does not meet the 
criteria for sharing a practice with the billing physician or other supplier, rather than 
rendered and billed by the billing entity.  (See 30.2.9 for additional information on 
sharing a practice.)  Physicians and other suppliers must meet the current enrollment 
criteria stated in chapter 15, of the Program Integrity Manual, in order to be able to bill 
for anti-markup tests.  That these services are billed by an entity that does not share a 
practice with the performing physician or other supplier does not negate the need for the 
performing physician or other supplier to follow appropriate enrollment procedures with 
the A/B MAC (Part B) that has jurisdiction over the geographic area where the services 
were rendered. 
 
The A/B MAC (Part B) must accept and process claims for services subject to the anti-
markup payment limitation when billed by physicians or other suppliers enrolled in the 
A/B MAC (Part B)s jurisdiction, regardless of the location where the services were 
furnished. 
 
Effective for claims processed on or after April 1, 2004, in order to allow the A/B MAC 
(Part B) to determine jurisdiction and apply the anti-markup payment limitation correctly, 
global billing will not be accepted on electronic or paper claims when billing anti-markup 
tests. Claims received with global billings in this situation will be treated as 
unprocessable per 80.3. 
 
Effective for claims submitted with a receipt date on and after October 1, 2015, billing 
physicians and suppliers must report the name, address, and NPI of the performing 
physician or supplier on all anti-markup and reference laboratory claims, even if the 
performing physician or supplier is enrolled in a different contractors jurisdiction.  
Contractors shall return as unprocessable any anti-markup or reference laboratory claim 
with an NPI in Item 32a (or its electronic equivalent) that belongs to the billing 
physician/supplier, or that cannot be verified as a valid, Medicare enrolled entity. 
 
A.  Payment Jurisdiction for Suppliers of Diagnostic Tests and Interpretations 
Performed by Other Suppliers under Contract 
 
Effective for claims with dates of service on or after January 25, 2005, laboratories, 
physicians, and IDTFs must submit all claims for anti-markup tests to their local A/B 
MAC (Part B).  A/B MAC (Part B) must accept and process claims for services subject to 
the anti-markup payment limitation when billed by suppliers enrolled in the A/B MAC 
(Part B) jurisdiction, regardless of the location where the services were furnished.  A/B 
MAC (Part B) should allow claims submitted by an IDTF for anti-markup tests if the 
IDTF has previously enrolled to bill for anti-markup test components they perform. 
  Effective April 1, 2005, A/B MAC (Part B) must price anti-markup tests billed by 
laboratories and IDTFs based on the ZIP code of the location where the diagnostic test 
was rendered. 
 
Effective for claims with dates of service on or after October 1, 2007 through 2013, A/B 
MAC (Part B) must use the national abstract file to price all claims for anti-markup tests 
for all supplier specialty types (including physicians), based on the ZIP code of the 
location where the service was rendered. Beginning in 2014, A/B MAC (Part B) must 
refer to an Anti-markup Test Indicator, to identify HCPCS codes payable under the 
MPFS as anti-markup tests for the year. 
 
10.1.1.3 - Payment Jurisdiction for Reassigned Services 
(Rev. 1987, Issued: 06-11-10, Effective: 08-12-10, Implementation: 08-12-10) 
 
Though a supplier or provider may reassign payment for his services to another entity, 
suppliers are still required to bill the correct B/MAC for reassigned services when they 
are paid under the MPFS. The billing entity must submit claims to the B/MAC that has 
jurisdiction over the geographic area where the services were rendered.  Suppliers and 
providers must also meet current enrollment criteria stated in chapter 10 of the Program 
Integrity Manual in order to be able to bill for reassigned services. 
 
10.1.3 - Exceptions to Jurisdictional Payment 
(Rev. 1, 10-01-03) 
B3-3100.6, R1813B3 
 
Exceptions to billing the area carrier are: 
 
  A claim for covered services performed in the United States by a legally 
authorized Canadian or Mexican physician is within the jurisdiction of the carrier 
servicing the location where the services were rendered. 
 
  Because coverage of Part B services furnished in Canada or Mexico is contingent 
upon coverage of related inpatient hospital services, carriers designated to process 
foreign claims identified in 10.1.4.2 will receive such claims from the FI 
servicing the foreign hospital only after the FI has determined that the Part A 
services are covered. (If the request is for payment of medical services performed 
outside the United States by a physician or supplier whose office is located in the 
United States, the carrier servicing the physicians or suppliers office has 
jurisdiction. This carrier issues the denial determination and handles any resultant 
appeal.) 
 
  If a claim by an individual who resides outside the United States involves both 
medical services performed within the United States and medical services 
performed outside the United States the carrier will process both segments of the 
claim. 
  10.1.5 - Domestic Claims Processing Jurisdictions 
(Rev. 1, 10-01-03) 
B3-3102, B3-3116 
 
10.1.5.1 - Suppliers of Durable Medical Equipment, Prosthetics, 
Orthotics, Supplies, Parental and Enteral Nutrition (PEN) 
(Rev. 2487, Issued: 06-08-12, Effective: 01-01-11, Implementation: 06-19-12) 
 
B3-3116, B-3102 
 
Claims for DMEPOS submitted by suppliers for durable medical equipment, prosthetics, 
orthotics, and supplies (DMEPOS) are handled by Durable Medical Equipment Medicare 
Administrative Contractors (DME MACs).  
 
To determine which services are processed by DME MACs vs. local carriers, CMS 
maintains and updates a table of services by HCPCS code that indicates who to bill for 
which services. The CMS updates this list by a special One-Time Special Notification as 
needed. In general, claims for DMEPOS, other than implanted durable medical 
equipment and implanted prosthetic devices, are processed by the appropriate DME 
MAC. The appropriate A/B MAC processes claims for implanted durable medical 
equipment and implanted prosthetic devices, as well as DMEPOS items incident to a 
physicians service.  
 
Note that surgical procedures for implantable DME or for prosthetic devices, performed 
in an inpatient or outpatient hospital setting include the cost of the device in the 
Diagnosis Related Group (DRG) or Ambulatory Payment Classification (APC) rate. 
However, there are some implantable devices that are eligible for separate pass through 
under Outpatient Prospective Payment System (OPPS). DME MACs do not process 
claims for DMEPOS items that are subject to consolidated billing or bundled payment 
under Prospective Payment System (PPS) or in a DRG.  
 
Claims from parenteral and enteral nutrition (PEN) suppliers are processed by the DME 
MAC. 
 
Method II ESRD claims for dates of service prior to January 1, 2011, are also processed 
by the DME MAC.  For dates of service on and after January 1, 2011, refer to Section 
30.3.8 for information regarding the elimination of Method II home dialysis. 
 
The claims processing jurisdiction among DME MACs is determined by the beneficiarys 
permanent address. A beneficiarys permanent address is determined by where the 
beneficiary resides for more than six months of a year. See the CMS Web site at 
http://www.cms.hhs.gov/contacts/incardir.asp for a list of State jurisdictions by DME 
MAC. 
 
10.1.5.2 - Supplier of Portable X-Ray, EKG, or Similar Portable 
Services  (Rev. 1, 10-01-03) 
 
If a supplier operates mobile units in geographic areas served by more than one carrier, 
the carrier serving the area where the service was performed must process the claims. 
 
10.1.5.3 - Ambulance Services Submitted to Carriers 
(Rev. 1, 10-01-03) 
 
Jurisdiction of the claim is based on whether only one ambulance vehicle or multiple 
vehicles were used. 
 
A.  One Ambulance Vehicle Used 
 
If only one vehicle is used to transport the patient from the point of initial pickup to the 
final destination, jurisdiction is with the carrier serving the point of origin, i.e., home 
station of the vehicle. This carrier has qualification information on the ambulance 
supplier and in most cases all other pertinent details necessary to adjudicate a claim. 
 
EXAMPLE:  A patient is picked up at the Johns Hopkins Hospital in Baltimore, 
Maryland and transported to his home in West Virginia by an ambulance dispatched from 
the area of the patients home.  The carrier serving the point of origin of the ambulance, 
Nationwide Mutual Insurance Company, Part B carrier for the State of West Virginia, has 
jurisdiction of any claim filed.  In this case Nationwide should have all the data necessary 
to make proper payment, i.e., certification of the ambulance company, price information 
and data pertaining to the nearest appropriate company, price information and data 
pertaining to the nearest appropriate facility. Had an ambulance whose home station was 
in Baltimore been used, the carrier servicing Baltimore, Maryland would have had 
jurisdiction. The Baltimore carrier would then have had to obtain data concerning the 
nearest appropriate facility to the patients home from Nationwide 
 
B.  More Than One Vehicle Used 
 
If more than one vehicle is used in transporting the patient to their destination, 
jurisdiction of the claim lies with: 
  The carrier serving the home base of the ambulance taking the patient on the first 
leg of the trip, on a trip to a distant institution more remote than the nearest 
appropriate facility; or 
 
  The carrier serving the home base of the ambulance taking the patient on the final 
leg of the trip home, on a trip from an institution more remote than the nearest 
appropriate facility. 
 
  If there is no claim for the final leg of the trip, the carrier serving the patients 
home area handles any resulting claims or disallowance actions. 
  EXAMPLE:  A patient is transported by ambulance from a hospital in Miami Beach, 
Florida to Miami International Airport and from there by air ambulance to LaGuardia 
Airport in Queens, New York City. At the airport he is picked up by an ambulance (based 
in Yonkers, New York) and taken to his home in Yonkers, New York. The carrier that 
handles the adjudication is the carrier whose area of responsibility includes Yonkers, 
New York, since partial reimbursement is based upon the nearest appropriate facility to 
his residence when he is being returned home from a distant institution. 
 
In rules A and B above, the principle followed is that the carrier having the information 
to determine the nearest appropriate facility is the one to adjudicate the claim. In any 
event, before any partial reimbursement can be made, the carriers as designated in rules 
A and B, must have all the information concerning the patients transportation, from 
initial pickup to final destination. 
 
10.1.5.4 - Independent Laboratories 
(Rev. 1, 10-01-03) 
 
Jurisdiction of claims for laboratory services furnished by an independent laboratory 
normally lies with the carrier serving the area in which the laboratory test is performed. 
However, there are some situations where a regional or national lab chain jurisdiction is 
with a single carrier. 
 
10.1.5.4.1 - Cases Involving Referral Laboratory Services 
(Rev. 1, 10-01-03) 
 
If the specimen is drawn or received by an independent laboratory approved under the 
Medicare program that performs a covered test, but the lab refers the specimen to another 
laboratory in a different carrier jurisdiction for additional tests, the carrier servicing the 
referring laboratory retains jurisdiction for services performed by the other laboratory. 
 
Examples of Independent Laboratory Jurisdiction 
 
EXAMPLE 1: 
 
An independent laboratory located in Oregon performs laboratory services for physicians 
whose offices are located in several neighboring States.  A physician from Nevada sends 
specimens to the Oregon laboratory.  If the laboratory sends the results to the physician 
and accepts assignment, the carrier in Oregon has jurisdiction. 
 
EXAMPLE 2: 
 
American Laboratories, Inc., is an independent laboratory company with branch 
laboratories located in Philadelphia, Pennsylvania, and Wilmington, Delaware, as well as 
regional laboratories located in Millville, New Jersey, and Boston, Massachusetts. 
  The Philadelphia laboratory receives a blood sample from a patient whose physician 
ordered a complete blood count, an SMAC T-4, and a B12 and folate. The Philadelphia 
lab performs the complete blood count, but the SMAC T-4 is performed at the Millville 
lab, while the B12 and folate is performed at the Boston Lab. The Pennsylvania carrier 
retains jurisdiction for processing the claims if they have certification information and 
the appropriate fee schedule allowance in house. Otherwise, the local carrier servicing 
Boston and/or Millville has jurisdiction for processing their claims. 
 
The Wilmington laboratory draws a blood specimen from a patient whose physician has 
ordered a blood culture. The Wilmington lab then sends the specimen to the Boston 
laboratory, which performs the required test. American Laboratories accepts an 
assignment for the service. 
 
If the Delaware carrier has the capability of comparing the Wilmington labs charge for 
the blood culture against the appropriate reasonable charge screens for the Boston lab, the 
Delaware carrier will retain jurisdiction for processing the claim. If the Delaware carrier 
does not have this capability, the claim should be transferred to the Massachusetts carrier 
for processing. 
 
10.1.6 - Railroad Retirement Beneficiary Carrier 
(Rev. 142, 04-16-04) 
B3-3103 
 
Carrier jurisdiction claims for individuals who are QRRBs, including those who are 
entitled to both social security and railroad retirement benefits, are handled by the 
Palmetto Government Benefits Administrators (GBA) LLC, a subsidiary of Blue Cross 
and Blue Shield of South Carolina, with the following exceptions: 
 
  The services are furnished by a M+C organization which deals directly with CMS 
on a cost basis; 
 
  The QRRB is enrolled under a buy-in agreement involving a State agency that has 
entered into an agreement to act as a carrier with respect to such individuals; or; 
 
  The medical services were provided outside the United States, in which case the 
RRB handles the claim.  (See 10.1.4.6 for handling claims for services in 
Mexico.) 
 
If a claim involves medical services provided both within and outside the United States, 
Palmetto GBA processes the claim for the medical services provided within the United 
States.  If the claimant raises a question as to why the medical services provided outside 
the United States were not paid, Palmetto GBA directs the claimant to contact the RRB 
and forwards the claims to them at: 
 
Railroad Retirement Board 
Division of Disability and Health Insurance  844 Rush St. 
Chicago, IL 60611 
 
10.1.7 - Welfare Carriers 
(Rev. 1, 10-01-03) 
B3-3104, B3-3060 for buy-in definition 
 
Section 1843(f) of Title XVIII permits a State agency that administers a plan under Titles 
I, XVI, or XIX to become the carrier for individuals enrolled in the States Buy In 
agreement. Currently there are no State agencies that are serving as carriers. 
 
10.1.9 - Disposition of Misdirected Claims to the B/MAC/Carrier/DME 
MAC 
(Rev. 2474, Issued: 05-18-12, Effective: 07-20-12, Implementation;-7-20-12) 
 
A misdirected claim is a claim that has been submitted to the wrong place.  This 
section summarizes the disposition of misdirected claims by B MACs, carriers, and DME 
MACs. 
 
Each fee-for-service claims administration contractor is assigned a specific geographic 
and subject matter jurisdiction for claims processing.   Physicians and other suppliers are 
required to submit claims to the contractor having the appropriate jurisdiction.  
Jurisdictional rules are specified in this Chapter at Section 10. 
 
A contractor may not knowingly adjudicate a misdirected claim and, as such, upon 
receipt of such a claim, must dispose of the claim in accordance with the specifications of 
this section or other relevant instructions. 
 
This section addresses the following types of misdirected claims: 
 
1. a CMS-1500 or electronic claim submitted to the wrong local contractor (Part B 
MAC or carrier); 
 
2. a CMS-1500 or electronic claim submitted to a local contractor (Part B MAC or 
carrier) that should have been submitted to a DME MAC; 
 
3. a CMS-1500 or electronic claim submitted to a DME MAC that should have been 
submitted to a local contractor (Part B MAC or carrier); 
 
4. a CMS-1500 or electronic claim submitted to a local contractor (Part B MAC or 
carrier) that should have been submitted to the Railroad Retirement Board 
(RRB); 
 
5. a CMS-1500 or electronic claim submitted to a DME MAC or a local contractor 
(Part B MAC or carrier) that should have been submitted the United Mine 
Workers of America (UMWA);   
6. a CMS-1500 claim that should be submitted to a DME MAC that is submitted to 
the wrong DME MAC, and 
 
This subsection does not apply to: 
 
1.  misdirected beneficiary-submitted claims.  See Section 80.3.2 of this Chapter 
regarding handling of such claims; 
 
2.  electronic claims for durable medical equipment, prosthetics, orthotics, or 
supplies (DMEPOS) that are submitted to the incorrect DME MAC (misdirected 
DMEPOS claims are automatically routed to the appropriate DME MAC 
jurisdiction for processing); 
 
3.  a claim submitted to the wrong Part A MAC or fiscal intermediary (FI), including 
a regional home health intermediary (RHHI). 
 
10.1.9.1  An A/B MAC (B) Receives a Claim for Services that are in 
Another A/B MAC (B)s Payment Jurisdiction 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a local contractor (Part B MAC or carrier) receives a CMS-1500 or electronic 
claim for Medicare payment for items/services furnished outside of its payment 
jurisdiction, the claim shall be returned as unprocessable. 
 
NOTE: This instruction also applies to claims for DMEPOS items/services that are 
appropriately billed to the B MAC/carrier, but are billed to the wrong B MAC/carrier 
payment jurisdiction. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.   This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N104 
MSN: N/A 
 
10.1.9.2 - An A/B MAC (B) Receives a Claim for Services that are in a 
DME MACs Payment Jurisdiction 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a local contractor (Part B MAC or carrier) receives a CMS-1500 or electronic 
claim for Medicare payment for items/services that are in a DME MACs payment 
jurisdiction, the claim shall be returned as unprocessable. 
  The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N104   
MSN: N/A 
 
10.1.9.3 - A DME MAC Receives a Claim for Services that are in an A/B 
MAC (B)s Payment Jurisdiction  
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a local DME MAC receives a CMS-1500 or electronic claim for Medicare 
payment for items/services that are in a Part B MAC or carriers payment jurisdiction, the 
claim shall be returned as unprocessable. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N104 
MSN: N/A 
 
10.1.9.4 - An A/B MAC (B) Receives a Claim for an RRB Beneficiary 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a local contractor (Part B MAC or carrier) receives a Form CMS-1500 or 
electronic claim that is identified as a RRB claim for Medicare payment that should be 
processed by the RRB contractor, the claim shall be returned as unprocessable. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N105 
MSN: N/A 
 
NOTE:  CMS requests that when RRB receives a claim that is not for an RRB 
beneficiary that they return the claim to the sender and notify them that the claim must be 
submitted to the local contractor (Part B MAC or carrier) or DME MAC for processing. 
  10.1.9.5 - An A/B MAC (B) or DME MAC Receives a Claim for a 
UMWA Beneficiary 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a local contractor (Part B MAC or carrier/DME MAC) receives a Form CMS-1500 
or electronic claim that is identified as a UMWA claim for Medicare payment that should 
be processed by the UMWA, the claim shall be returned as unprocessable. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N127 
MSN: N/A 
 
10.1.9.6 - Medicare Carrier or RRB-Named Carrier to Welfare Carrier 
(Rev. 2474, Issued: 05-18-12, Effective: 07-20-12, Implementation;-7-20-12) 
 
When a Medicare carrier or RRB-named carrier receives a query reply from CMS that 
includes a disposition code 46 and a welfare administration carrier number, it transfers 
the claim to the welfare carrier and notifies the beneficiary. Any pertinent information 
received or developed is transferred with the claim. 
 
This occurs only if there is a State welfare carrier and the individual is identified in the 
beneficiary master record as a State buy-in enrollee for that State.  For more information 
on the definition of a welfare carrier, refer to Pub. 100-04, Chapter 1, section 10.1.7. 
 
10.1.9.7 - Protests Concerning Transfer of Requests for Payment to 
Carrier 
(Rev. 2474, Issued: 05-18-12, Effective: 07-20-12, Implementation;-7-20-12) 
 
If Palmetto GBA receives a protest concerning the transfer of a request for Medicare 
payment to the carrier, the protest, including pertinent name and claim number(s) 
information, is forwarded to: 
 
Railroad Retirement Board 
Medicare Section 
844 Rush Street 
Chicago, IL 60611 
 
10.1.9.8 - Transfer of Claims Material Between Carrier and 
Intermediary (FI) 
(Rev. 2474, Issued: 05-18-12, Effective: 07-20-12, Implementation;-7-20-12)   
If a beneficiary erroneously submits a Form CMS-1490 (beneficiary-filed claim form) to 
a carrier with an itemized bill for services that must be paid by the FI, the carrier 
forwards such claims to the FI for the necessary action. The FI will inform the provider to 
submit a claim once the information is received from the carrier. 
 
If the claim covers a combination of services both within and outside the carriers 
jurisdiction the carrier should retain the Form CMS-1490 and any claims material needed 
for processing and forward a photocopy of the Form CMS-1490 and other claims 
materials to the other involved carrier(s) or FI(s). The carrier should notify the 
beneficiary when it transfers the claim. 
 
The patients signature on the Form CMS-1490 satisfied the signature requirement and 
protects the filing date for the provider billings. (See 70.1 for time limitations for filing 
claims). 
 
10.1.9.9 - A DME MAC receives a Paper Claim with Items or Services 
that are in Another DME MAC's Payment Jurisdiction 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
When a DME MAC receives a claim submitted on the Form CMS-1500 for Medicare 
payment that should be processed by a DME MAC but was sent to the wrong DME MAC, 
the claim shall be returned as unprocessable. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 109 
RARC: N104 
MSN: N/A  
 
DME MACs shall continue to follow existing procedures for misdirected beneficiary-
submitted claims and electronic claims. 
 
10.2 - FI Jurisdiction of Requests for Payment 
(Rev. 1, 10-01-03) 
 
The FIs have jurisdiction for the following: 
 
  All Part A services (hospital, SNF, HHA, and hospice); 
 
  Most Part B services from providers that furnish Part A services; and 
    Part B facility services from CORFs, Renal; Dialysis Facilities, Rural Health 
Clinics, Religious Nonmedical Institutions, Outpatient Physical Therapy Centers, 
Federally Qualified Health Centers, and Community Mental Health Centers.  For 
example, rural health clinics may bill physician services to carriers under 
applicable physician provider numbers on carrier-compliant claim formats. Also, 
some DMEPOS may be billed by home health agencies on claims sent to RHHIs, 
and some physician, lab and ambulance services may be billed by some types of 
providers submitting claims to FIs. 
 
Within this general framework, specific jurisdiction among FIs is determined by which FI 
has received the official tie-in notice from the CMS RO. See 20 for procedures for 
provider nomination of its FI. Once an FI is assigned, that FI has jurisdiction for all 
services furnished by the provider or supplier, except those service outside the 
provider/suppliers scope of service. See the Medicare Claims Processing Manual chapters 
relating to the service for a description of who may bill the individual service, e.g. lab 
(Chapter 17) or DME (Chapter 20). 
 
The RHHIs have jurisdiction for HHA and Hospice claims. 
 
There is a national single FI for FQHCs.  United Government Systems processes all 
claims from independent FQHCs. 
 
Regional RHC FIs have jurisdiction for claims from freestanding RHCs. See 
http://www.cms.hhs.gov/contacts/incardir.asp for a listing of RHC regional FIs. The host 
providers area FI has jurisdiction for provider based RHCs and FQHCs. 
 
In addition some provider chains may elect a single FI for all providers in the chain. 
 
A complete list of FIs and carriers and their service areas may be viewed at: 
http://www.cms.hhs.gov/contacts/incardir.asp. 
 
Note that some providers and supplier under FI claims jurisdiction may also provide 
covered services outside the scope of the facility service, and may bill these services to 
the carrier. 
 
Claims sent to the incorrect FI are returned to the provider with an instruction to bill the 
correct FI. 
 
10.2.1 - FI Payment for Emergency and Foreign Hospital Services 
(Rev. 1, 10-01-03) 
 
A.  Beneficiary Services Outside United States - Emergency Hospital Admissions 
 
See chapter 3, for detailed information concerning beneficiary services outside the United 
States.  Generally, payment is made for emergency inpatient hospital services in qualified 
Canadian or Mexican hospitals in the following circumstances:   
  A Medicare beneficiary is in the United States when an emergency occurs, and a 
Canadian or Mexican hospital is closer to, or more accessible from, the site of the 
emergency than the nearest adequately equipped United States hospital that can 
provide emergency services, or 
 
  The emergency occurred in Canada while the beneficiary is traveling between 
Alaska and another State without unreasonable delay and by the most direct route, 
and a Canadian hospital is closer to, or more accessible from, the site of the 
emergency than the nearest United States hospital.  For this purpose, an 
emergency occurring within the Canadian inland waterway between the States of 
Washington and Alaska is considered to have occurred in Canada. 
 
The term United States means the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, the Virgin Islands, Guam, Northern Mariana Islands, 
American Samoa and, for purposes of services furnished on a ship, the territorial waters 
adjoining the land areas of the U.S. 
 
A hospital that is not physically situated in one of the above jurisdictions is considered to 
be outside the United States, even if it is owned or operated by the United States 
Government. 
 
B.  Nonemergency Inpatient Services Furnished in Foreign Hospitals 
 
If the beneficiary resides in the United States, and a Canadian or Mexican hospital is 
closer to, or more accessible from, the beneficiarys home than the nearest adequately 
equipped United States hospital, Medicare will pay for covered services regardless of 
whether an emergency exists.   Residence means the place in the U.S. where a person has 
a fixed and permanent home to which he intends to return whenever he is away.  At the 
time such services are furnished, the Canadian or Mexican hospital must be accredited by 
the JCAH or by a hospital approval program of the country in which it is located having 
standards essentially equivalent to those of the JCAHO. 
 
10.3 - Payments Under Part B for Services Furnished by Suppliers of 
Services to Patients of a Provider 
(Rev. 1, 10-01-03) 
B3-3115 
 
Section 1861(w)(1) of the Act permits a hospital, critical access hospital, skilled nursing 
facility, home health agency, or hospice to obtain under arrangement, services for which 
an individual is entitled to under Medicare. Doing so discharges the liability of such 
individual or any other person to pay for the services.  This is required in specified 
situations where the provider is paid under a PPS system. 
 
Examples of this include: 
    While a patient is under a home health plan of care, the HHA must provide all 
covered and medically reasonable home health services and certain supplies 
(subject to consolidated billing) either directly or under arrangement. 
 
  Where a patient is a SNF inpatient, the SNF must furnish all services within the 
scope of the SNH benefit. 
 
  Where a patient is a hospital inpatient, the hospital must furnish certain inpatient 
services. 
 
  Certain services are considered included in the rural health clinic or federally 
funded health clinic visit. 
 
In such cases, the supplier must look to the provider for payment and the provider will 
bill the FI. 
 
In some cases, the hospital, SNF, or HHA may also choose not to arrange for additional 
services in this and bill for them. In some cases the provider may instead arrange for the 
supplier to furnish the test and to bill the carrier.  The provider may make different 
arrangements with different suppliers.  For example a provider may arrange with a lab 
supplier for the lab to bill for all outpatient lab services and make arrangements with an 
x-ray supplier for the provider to bill for all x ray services to inpatients and outpatients. 
 
Similarly the supplier may make different arrangements for services to beneficiaries for 
whom only Part B benefits are payable, from arrangements for beneficiaries for whom 
Part A benefits are payable under a PPS system. 
 
The FIs notify carriers of contracts that the hospital, critical access hospital, skilled 
nursing facility, home health agency, or hospice have reported with their suppliers. The 
carrier should confirm the suppliers understanding of the arrangements to assure that the 
supplier does not bill inappropriately. 
 
A description of basic services for each benefit type is in the Medicare Benefit Policy 
Manual and also in the Medicare Claims Processing Manual chapter specific to the 
provider. 
 
10.4  Claims Submitted for Items or Services Furnished to Medicare 
Beneficiaries in State or Local Custody Under a Penal Authority 
(Rev. 3537, Issued: 06-08-16, Effective: 08-08-16, Implementation: 08-08-16) 
 
Under Section 1862(a)(2) of the Social Security Act (the Act), the Medicare program 
does not pay for services if the beneficiary has no legal obligation to pay for the services 
and no other person or organization has a legal obligation to provide or pay for that 
service.  Also, under Section 1862(a)(3) of the Act, if services are paid for directly or 
indirectly by a governmental entity, Medicare does not pay for the services.  These  provisions are implemented by regulations 42 C.F.R. 411.4, 411.6, and 411.8, 
respectively. 
 
The regulation at 42 CFR 411.4(b) states:  
 
Individuals who are in custody include, but are not limited to, individuals who are under 
arrest, incarcerated, imprisoned, escaped from confinement, under supervised release, on 
medical furlough, required to reside in mental health facilities, required to reside in 
halfway houses, required to live under home detention, or confined completely or 
partially in any way under a penal statute or rule.  
 
Moreover, 72 FR 47405 states further that the  
...definition of custody is in accordance with how custody is defined by Federal 
courts for purposes of the habeas corpus protections of the Constitution.  For example, 
the term custody is not limited solely to physical confinement. (Sanders v. Freeman, 
221F.3d 846, 850-851 (6PthP Cir. 2000).) Individuals on parole, probation, bail, or 
supervised release may be in custody.  
 
42 CFR 411.4(b) goes on to describe the special conditions that must be met in order for 
Medicare to make payment for individuals who are in custody, 42 CFR 411.4(b) states:  
 
Payment may be made for services furnished to individuals or groups of individuals who 
are in the custody of the police or other penal authorities or in the custody of a 
government agency under a penal statute only if the following conditions are met: (1) 
State or local law requires those individuals or groups of individuals to repay the cost of 
medical services they receive while in custody. (2) The State or local government entity 
enforces the requirement to pay by billing all such individuals, whether or not covered by 
Medicare or any other health insurance, and by pursuing the collection of the amounts 
they owe in the same way and with the same vigor that it pursues the collection of other 
debts. 
 
Exclusion from Coverage: 
 
In accordance with the foregoing statutory and regulatory provisions, Medicare excludes 
from coverage items and services furnished to beneficiaries in State or local government 
custody under a penal statute, unless, it is determined that the State or local government 
enforces a legal requirement that all prisoners/patients repay the cost of all healthcare 
items and services rendered while in such custody and also pursues collection efforts 
against such individuals in the same way, and with the same vigor, as it pursues other 
debts.  CMS presumes that a State or local government that has custody of a Medicare 
beneficiary under a penal statute has a financial obligation to pay for the cost of 
healthcare items and services.  Therefore, Medicares policy is to deny payment for items 
and services furnished to beneficiaries in State or local government custody.  
 
Implementation 
  CMS has established claim level editing to implement this policy using data received 
from the Social Security Administration (SSA).  Specifically, the data contain the names 
of the Medicare beneficiaries and time periods when the beneficiary is in such State or 
local custody.  These data will be compared to the data on the incoming claims.  CWF 
will reject claims where the dates from the SSA file and the dates of service on the claim 
overlap. Any claims rejected by CWF will contain a trailer to the Medicare contractor 
indicating the date span covered. Contractors will, in turn, deny payment of such claims. 
 
However, providers and suppliers that render services or items to a prisoner or patient in 
a jurisdiction that meets the conditions of 42 CFR 411.4(b) should indicate this fact with 
the use of modifier QJ (for A/B MAC (B) or DME MAC processed claims or for 
outpatient claims processed by A/B MAC (A). 
 
Appeals: 
 
A party to a claim denied in whole or in part under this policy may appeal the initial 
determination on the basis that, on the date of service, (1) the conditions of  411.4(b) 
were met, or (2) the beneficiary was not, in fact, in the custody of a State or local 
government under authority of a penal statute.  
 
A/B MAC (A)/RHHI Claims Processing Procedures 
 
A/B MACs (A) must deny claims for items and services rendered to beneficiaries under 
State or local government custody when CWF rejects the claim.  Provide appeal rights as 
specified above.  
 
Providers that render services or items to a prisoner or patient in a jurisdiction that meets 
the conditions of 42 CFR 411.4(b) should indicate this fact on the claim by billing as 
follows:  
 
For outpatient claims, providers shall append a HCPCS modifier QJ on all lines with a 
line item date of service during the incarceration period.  
 
For inpatient claims where the incarceration period spans only a portion of the stay, 
hospitals shall identify the incarceration period by billing as non-covered all days, 
services and charges that overlap the incarceration period.  Non-coverage billing 
guidelines can be found in Pub. 100-04, Chapter 1, Section 60.  
 
(NOTE: When the inpatient claim is correctly billed, the processing contractor will 
append the payer-only condition code 63, which will allow the claim to process for 
payment.  This condition code indicates that the provider has been instructed by the state 
or local government agency that requested the healthcare items or services provided to 
the patient of the State or local government entity that it pursues collection of debts 
incurred for furnishing such items or services with the same vigor and in the same 
manner as any other debt.)  
  A/B MAC (B)/DME MAC Claims Processing Procedures 
 
A/B MAC (B) and DME MACs must deny claims for items and services rendered to 
beneficiaries when rejected by CWF. Provide appeal rights as specified above. 
 
Physicians and other suppliers that render services to a prisoner or patient in a jurisdiction 
that meets the conditions of 42 CFR 411.4(b) should indicate this fact on the claim.  
Providers should use the QJ modifier. Language approved for QJ reads: 
 
Services/items provided to a prisoner or patient in State or local custody, however, the 
State or local government, as applicable, meets the requirements in 42 CFR 411.4(b).  
 
This modifier indicates that the physician or other supplier has been instructed by the 
state or local government agency that requested the healthcare items or services provided 
to the patient that State or local law makes the prisoner or patient responsible to repay the 
cost of Medical services and that it pursues collection of debts incurred for furnishing 
such items or services with the same vigor and in the same manner as any other debt. 
 
 
 
 
10.5 - Claims Processing Requirements for Deported Beneficiaries 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
Section 202(n) of the Social Security Act (the Act), requires the termination of Title II benefits 
upon deportation.  Moreover, Sections 226 and 226(A) of the Act provide that no payments may 
be made for benefits under Part A of Title XVIII of the Act if there is no monthly benefit 
payable under Title II.  Section 1836 of the Act limits Part B benefits to those who are either 
entitled to Part A benefits or who are age 65 and a United States (U.S.) resident, U.S. citizen, or 
a lawfully admitted alien residing permanently in the U.S.  Given that, a deported beneficiary is 
not allowed to enter the U.S. and cannot be lawfully present in the United States to receive 
Medicare-covered services, Medicare payment cannot be made for Part B Benefits. 
 
An audit of Medicare payments by the Office of Inspector General identified a vulnerability for 
the Medicare trust fund with respect to this issue.  The study identified improper payments for 
beneficiaries, who, on the date of service on the claim, had been deported.  To address this 
vulnerability, CMS is establishing claim level editing using data from the Social Security 
Administration (SSA).  Specifically, the data contains the name and Medicare beneficiary 
identifier of the Medicare beneficiary and the month the deportation is effective.  CWF will  reject claims where the effective date on the Master Beneficiary Record is equal to or greater 
than the date of service on the claim. All claims rejected by CWF shall be denied by the 
respective A/B MAC (B), DME MAC, A/B MAC (HHH) or A/B MAC (A) that submitted the 
claim to CWF. 
 
Policy: 
 
Medicare payment shall not be made for an item or service furnished to an individual that has 
been deported from the United States. 
 
Appeals: 
A party to a claim denied in whole or in part under this policy may appeal the initial 
determination on the basis of the deportation status at the time the item or service was 
furnished. 
      
10.5.1 - Implementation of Payment Policy for Deported Medicare 
Beneficiaries 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A.  CWF Editing of Claims 
 
1.  An auxiliary file shall be established in the Common Working File to contain 
deportation status. 
 
2.  This auxiliary file will be the basis for an edit that rejects claims submitted by 
Medicare contractors. 
 
3.  The edit will reject a claim where the Medicare beneficiary identifier on the 
claim matches the Medicare beneficiary identifier on the Master Beneficiary 
Record and the date of service is on or after the date of deportation. 
 
B.  Contractors Actions 
 
Medicare contractors shall deny claims for items and services when rejected by CWF.  
The contractor shall refer to the CWF documentation on this subject for the error code 
assigned to this editing.  All denials will provide appeal rights as specified in section 
10.5. 
  The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: PR 
CARC: 96 
RARC: N126  
MSN: 16.56 
 
20 - Provider Assignment to FIs and MACs 
(Rev. 1707; Issued:  03-27-09; Effective:  04-027-09; Implementation:  04-27-09)  
 
A.  The Process of Moving Providers from FIs to MACs 
 
  1.  The General Case 
 
An existing Medicare provider with a claims history will remain in its current workload 
assignment.   As each MAC contract is awarded, the new MAC will take over workload 
from the carriers and FIs that serviced the state(s) in the given MAC jurisdiction.  The 
Part A and Part B workload segments for each of the states in the given MAC jurisdiction 
will be moved one-by-one in the 12 months following the final award.  The specific 
requirements associated with workload transfers will be directed through formal CMS 
transmittals. 
 
A new provider (also known as an initial enrollment) will be assigned to the FI or 
MAC that covers the state where the provider is located, unless the assignment is directed 
to a non-geographic workload by 20B below. 
 
A special exception exists for a Multi-Provider Complex/Sub-Unit relationship (ref: 42 
CFR 483.5(b)).  An initial enrollment for a sub-unit will be assigned to the FI or MAC 
that currently serves the existing parent hospital  even if the parent hospital is not 
presently billing in accordance with the geographic assignment rule.  Each such case is 
fact-specific and will be treated on an individual basis. 
 
  2.  Out of Jurisdiction Providers 
 
An out-of-jurisdiction provider (OJP) is a provider that is not currently assigned to the 
A/B MAC or FI in accordance with B.1-5 below (including the geographic assignment 
rule.)  For example, an individual, freestanding provider located in Maine, but currently 
assigned to the Wisconsin FI, would be an OJP. 
 
Many legacy Part A workload segments may include a number of OJPs.  Examples of 
how an OJP may have been assigned to the given Part A segment include: 
 
a.  Individual provider nominations.  (Note MMA 911 repealed the 
provider nomination provisions of the Act.);    
b.  Chains being granted single FI status; and 
 
c.  Legacy-world regional and national FIs for specific provider types 
such as FQHCs, RHCs, and ESRD facilities. 
 
New MACs will initially service some OJPs until CMS undertakes the final reassignment 
of all OJPs to their destination MACs based on the geographic assignment rule and its 
exceptions. 
 
CMS will start the overall transfer of OJPs to their final destination MACs after all 15 
A/B MACs have been implemented.  Each move will be dependent on the then-current 
implementation status of the systems that support the cost report audit, claims processing, 
and provider enrollment functions at the departure and destination MACs. 
 
Some providers will need to submit or update their Medicare enrollment record before 
being reassigned. 
 
B.  The Settled MAC Environment 
 
The settled MAC environment refers to the period after all OJPs have been moved to 
their destination MACs. 
 
  1.  Home Health & Hospice 
 
All home health and hospice (HH&H) providers will be assigned to the MAC contracted 
by CMS to administer HH&H claims for the geographic locale in which the provider is 
physically located. 
 
  2.  Durable Medical Equipment 
 
Each supplier of durable medical equipment, prosthetics, orthotics, and supplies 
(DMEPOS) will submit claims to the DME MAC contracted by CMS to administer 
DMEPOS claims for the geographic locale in which the beneficiary permanently resides. 
 
  3.  Qualified Railroad Retirement Beneficiaries Entitled to Medicare 
 
Physicians and other suppliers (except for DMEPOS suppliers) will continue to enroll 
with and bill the contractor designated by the Railroad Retirement Board (under Section 
1842(g) of The Act) for Part B services furnished to these beneficiaries.  Suppliers of 
DMEPOS will bill the DME MACs. 
 
  4.  Specialty Providers and Demonstrations 
  Specialty providers, and providers involved with certain demonstrations, will submit 
claims to a specific MAC designated by CMS.  Examples of specialty providers and their 
corresponding MACs are: 
 
MAC 
Specialty Service 
Jurisdiction 
Centralized Billing for Mass Immunizers  4 
Indian Health Services/Federally Recognized Tribal 
Providers  4 
(Refer to Chapter 19 of this manual.) 
5, 10, 11, 13, and 
Low Vision Demonstration 
14 
Veterans Affairs Medicare Equivalent Remittance Advice 
4 
Project 
Home Health Third Party Liability Demonstration Project  14 
Independent Organ Procurement Organizations  10 
Religious Non-medical Health Care Institution (RNHCI)  10 
Histocompatibility Lab  10 
 
  5.  The Geographic-Assignment Rule 
 
Medicare providers, physicians, and suppliers will generally be assigned to the A/B MAC 
that covers the state where the provider is located.  This includes FQHCs, RHCs, and 
ESRD facilities. 
 
An exception exists for qualified chain providers (QCPs).  A QCP may request that its 
member providers be serviced by a single A/B MAC - specifically, the A/B MAC whose 
jurisdiction includes the QCPs home office.  See 42 CFR 421.404 for QCP criteria and 
additional information. 
 
A few providers that meet the provider-based criteria of 42 CFR 413.65 may present an 
additional exception to the geographic-assignment rule.  Provider-based entities (other 
than HH+H providers) will be assigned to the MAC contracted by CMS to administer 
claims for the Medicare benefit category applicable to the providers covered services for 
the geographic locale in which the main (parent) provider is physically located. 
 
20.1 - FI Service to HHAs and Hospices 
(Rev. 1, 10-01-03) 
A2-2807.B 
 
Under 42 CFR 421.117, CMS is authorized to designate RHHIs to service HHAs and 
hospices. This provision was implemented through the designation of regional FIs to 
service all HHAs and hospices. See http://www.cms.hhs.gov/contacts/incardir.asp for 
RHHI jurisdictions. 
  An HHA or hospice chain may request to be served under an arrangement involving a 
lead FI serving its home office and regional FIs serving the individual facilities of the 
chain.  Alternatively, a HHA or hospice chain may request to be served by a single 
designated regional intermediary.  In either case, CMS does not grant requests 
automatically but rather requires the provider to demonstrate that the requested 
arrangement would be consistent with effective and efficient administration of the 
Medicare program. 
 
For provider-based HHAs and hospices, audits, cost report settlements and other fiscal 
functions (such as setting interim payment rates) are performed by the FI serving the 
parent provider.  The claims processing activities are performed by the designated RHHI 
for the provider. 
 
20.2 - Provider Change of Ownership (CHOW) 
(Rev. 861, Issued:  02-17-06; Effective:  10-01-05; Implementation:  03-17-06) 
 
Providers (as defined in 1861(u) of the Act, and institutional suppliers such as RHCs) that 
undergo a change in their ownership structure are required to notify CMS concerning the 
identity of the old and new owners.  They are also required to inform CMS on how they 
will organize the new entity and when the change will take place.  A terminating cost 
report will be required from the seller owner in all CHOWs for certification purposes.  
There are five types of changes that can occur: 
 
1.   A CHOW in accordance with 42 CFR 489.18; 
 
2.   Changes in the ownership structure to an existing provider that do not constitute a 
CHOW;  
 
3.   A new owner who purchases a participating provider but elects not to accept the 
automatic assignment of the existing provider agreement, thus avoiding the old 
owners Medicare liabilities; 
 
4.   An existing provider who acquires another existing provider (acquisition/merger); 
and  
 
5.   Two or more existing providers who are totally reorganizing and becoming a new 
provider (consolidation). 
 
Providers that undergo a change of ownership will usually continue with the same FI that 
served the previous owner.  However, if the prospective owner does not wish to accept 
the automatic assignment of the existing provider agreement, this means that the existing 
provider agreement is terminated effective with the CHOW date.  The regional office 
must be notified in writing of the CHOW per instructions contained in section 3210.5 of 
the State Operations Manual. The prospective owner provides a notice 45 -days in 
advance of the CHOW to the CMS/RO to allow for the orderly transfer of any 
beneficiaries that are patients of the provider.  All reasonable steps must be taken to  ensure that beneficiaries under the care of the provider are aware of the prospective 
termination of the agreement.  There may be a period when the facility is not 
participating and beneficiaries must have sufficient time and opportunity to make other 
arrangement for care prior to the CHOW date. 
 
After the CHOW has taken place, the RO acknowledges the refusal to accept assignment 
in a letter to the new owner, with copies to the State Agency (SA) and the FI.  The RO 
completes a form CMS-2007 with the date the agreement is no longer in effect, noting 
that the termination is due to the new owners refusal to accept assignment of the 
provider agreement. 
 
If the new owner refuses to accept assignment and also wishes to participate in the 
Medicare program, the RO will first process the refusal as indicated above and then treat 
the new owner as it would any new applicant to the program.  The RO will obtain and 
process the application documents, have the SA perform an initial survey and if all the 
requirements for participation are met, assign an effective date of participation.  The 
earliest possible effective date for the applicant is the date that the RO determines that all 
Federal requirements are met.  Once this is completed, a new provider agreement with a 
new provider number will be issued to the new owner.  The provider will be assigned to 
the local FI. 
 
See chapter 10, of the Medicare Program Integrity Manual, for complete requirements for 
completion of Form CMS-855 in change of ownership situations. 
 
20.3 - CMS No Longer Accepts Provider Requests to Change Their FI 
(Rev. 2876, Issued: 02-07-14, Effective: 03-07-14, Implementation: 03-07-14) 
 
Medicare providers will no longer be able to request a change of FI, they must remain 
with the FI to which they have been assigned. 
 
30 - Provider Participation 
(Rev. 1, 10-01-03) 
A2-2810 
 
The RO uses the provider tie-in notice, Form CMS-2007 (see the CMS forms page at 
http://www.cms.hhs.gov/forms/), as an official notification to the FI of a change in its list 
of providers. The RO completes and transmits a Form CMS-2007 to the home office of 
the FI in each of the following circumstances: 
 
  A provider is certified for participation in the program, 
 
  A provider is issued a notice of termination, 
 
  A change of FI is authorized (including changes between Blue Cross plans or 
between FI processing facilities, i.e., any changes involving a change in the FI 
number), or   
  To correct information previously furnished the FI. 
 
Part I of the Form CMS-2007, Identifying Information, identifies the provider and is 
always completed. 
 
Part II, New Provider Certification, is completed where the provider is certified 
(including certifications required because of a change of ownership). 
 
Part III, Change of FI, is completed where a change of FI has been authorized. 
 
Part IV, Terminations, is completed in all termination actions. 
 
Part V, Remarks, will be used for additional clarifying information. 
 
The FI must promptly notify the RO of any information found to be incorrect. The RO 
will issue a corrected Form CMS-2007. 
 
30.1 - Content and Terms of Provider Participation Agreements 
(Rev. 1, 10-01-03) 
A2-2840, RHC-320 
 
In the agreement/attestation statement signed by a provider serviced by an FI, the 
provider agrees to maintain its compliance with all of the conditions for certification in 
42 CFR 491.  If a provider fails to maintain compliance with one or more of the 
conditions, it must promptly report this (usually within 30 days of the failure) to the 
responsible CMS office or official.  Failure to report promptly may be a cause for 
termination of the providers agreement. 
 
30.1.1 - Provider Charges to Beneficiaries 
(Rev. 2921, Issued: 04-04-14, Effective: 05-05-14, Implementation: 05-05-14) 
 
In the agreement/attestation statement signed by a provider, it agrees not to charge 
Medicare beneficiaries (or any other person acting on a beneficiarys behalf) for any 
service for which Medicare beneficiaries are entitled to have payment made on their 
behalf by the Medicare program. This includes items or services for which the 
beneficiary would have been entitled to have payment made had the provider filed a 
request for payment (see 50). 
 
The provider may bill the beneficiary for the following items: 
 
  Part A deductible; 
 
  Part B deductible; 
    First 3 pints of blood, which is called the blood deductible (if there is a charge for 
blood or the blood is not replaced); 
 
  Part B coinsurance; 
 
  Part A coinsurance; or 
 
  Services that are not Medicare covered services. See Chapter 30 for related 
requirements. 
 
SNFs may not require, request, or accept a deposit or other payment from a Medicare 
beneficiary as a condition for admission, continued care, or other provision of services, 
except as follows: 
 
  A SNF may request and accept payment for a Part A deductible and coinsurance 
amount on or after the day to which it applies. 
 
  A SNF may request and accept payment for a Part B deductible and coinsurance 
amount at the time of or after the provision of the service to which it applies. 
 
  A SNF may not request or accept advance payment of Medicare deductible and 
coinsurance amounts. 
 
  A SNF may require, request, or accept a deposit or other payment for services if it 
is clear that the services are not covered by Medicare and proper notice is 
provided. See Chapter 30 for instructions about ABNs and demand bills. 
 
  SNFs, but not hospitals, may bill the beneficiary for holding a bed during a leave 
of absence if the requirements in 30.1.1.1 are met. 
 
30.1.1.1 - Charges to Hold a Bed During SNF Absence 
(Rev. 4001, Issued: 03-16-18, Effective: 06- 19- 18, Implementation: 06-19-18) 
 
Charges to the beneficiary for admission or readmission are not allowable.  However, 
when temporarily leaving a SNF, a resident can choose to make bed-hold payments to the 
SNF. 
 
Bed-hold payments are readily distinguishable from payments made prior to initial 
admission, in that the absent individual has already been admitted to the facility and has 
established residence in a particular living space within it.  Similarly, bed-hold payments 
are distinguishable from payments for readmission, in that the latter compensate the 
facility merely for agreeing in advance to allow a departing resident to reenter the facility 
upon return, while bed-hold payments represent remuneration for the privilege of actually 
maintaining the residents personal effects in the particular living space that the resident 
has temporarily vacated. 
  One indicator that post-admission payments do, in fact, represent permissible bed-hold 
charges related to maintaining personal effects in a particular living space (rather than a 
prohibited charge for the act of readmission itself) would be that the charges are 
calculated on the basis of a per diem bed-hold payment rate multiplied by however many 
days the resident is absent, as opposed to assessing the resident a fixed sum at the time of 
departure from the facility. 
 
Under 1819(c)(1)(B)(iii) of the Act and 42 CFR 483.10(g)(17)-(18), the facility must 
inform residents in advance of their option to make bed-hold payments, as well as the 
amount of the facilitys charge.  For these optional payments, the facility should make 
clear that the resident must affirmatively elect to make them prior to being billed.  A 
facility cannot simply deem a resident to have opted to make such payments and then 
automatically bill for them upon the residents departure from the facility. 
 
30.1.2 - Provider Refunds to Beneficiaries 
(Rev. 1, 10-01-03) 
RHC-322 
 
In the agreement between CMS and a provider, the provider agrees to refund as promptly 
as possible any money incorrectly collected from Medicare beneficiaries or from 
someone on their behalf. 
 
Money incorrectly collected means any amount for covered services that is greater than 
the amount for which the beneficiary is liable because of the deductible and coinsurance 
requirements. 
 
Amounts are considered to have been incorrectly collected because the provider believed 
the beneficiary was not entitled to Medicare benefits but: 
 
  The beneficiary was later determined to have been entitled to Medicare benefits; 
 
  The beneficiarys entitlement period fell within the time the providers agreement 
with CMS was in effect; and 
 
  Such amounts exceed the beneficiarys deductible, coinsurance or non covered 
services liability. 
 
 
 
30.1.3 - Provider Treatment of Beneficiaries 
(Rev.4163, Issued: 11-02-18, Effective: 12-04-18, Implementation: 12-04-18) 
 
In the agreement between CMS and a provider, the provider agrees to accept Medicare 
beneficiaries for care and treatment.  The provider cannot impose any limitations with 
respect to care and treatment of Medicare beneficiaries that it does not also impose on all 
other persons seeking care and treatment.  If the provider does not furnish treatment for  certain illnesses and conditions to patients who are not Medicare beneficiaries, it need not 
furnish such treatment to Medicare beneficiaries in order to participate in the Medicare 
program.  It may not, however, refuse to furnish treatment for certain illnesses or 
conditions to Medicare beneficiaries if it furnishes such treatment to others.  Failure to 
abide by this rule is a cause for termination of the providers agreement to participate in 
the Medicare program (see the regulations at 42 CFR 489.53(a)(2), and also see Pub. 
100-01, Medicare General Information, Eligibility, and Entitlement Manual, chapter 5, 
10.2). 
 
30.2 - Assignment of Providers Right to Payment 
(Rev. 1, 10-01-03) 
A3-3488, A3-3703.1, B3-3060 
 
Except as provided in 30.2.1, FIs pay benefits due a provider only to the provider. 
 
Carriers may pay assigned benefits only to the physician, practitioner, or supplier who 
furnished the service.  They do not pay the benefits to any other person or organization 
under an assignment or reassignment, power of attorney, or under any other arrangement 
in which the other person or organization receives the payment directly.  For this purpose, 
assigned benefits include, in addition to the benefits usually encompassed by this term, 
benefits payable after the death of the enrollee to the physician or other supplier on the 
basis of his agreement to accept the reasonable charge as the full charge.  A power of 
attorney for this purpose means a written authorization by a principal to an agent: 
 
  To receive in the agents own name amounts due the principal; 
  To negotiate checks payable to the principal; or 
  To receive in any other manner direct payment of amounts due the principal. 
 
The prohibition against assignment of a providers benefits also applies to payment of 
benefits due a provider as a reassignee of the physician. 
 
Payment is considered to be made directly to an ineligible person or organization if that 
person or organization can convert the payment to its own use and control without the 
payment first passing through the control of the provider or other party eligible to receive 
the payment under the exceptions in 30.2.1. (For payment to a bank, see 30.2.5.) 
 
Forwarding of amounts due a provider to its home office is not affected by the 
prohibition described in this section. Reimbursement amounts for providers of a chain 
organization may be forwarded to a central location of the home office when it has set up 
a lock box or special bank account and the FI has secured a written assignment or other 
authorization from the respective provider(s) that payment may be sent to the home 
office.  The payments must be made out in the individual providers name and payment 
may be made by check or electronic funds transfer (EFT). 
 
Establishment of internal controls and other related administrative details necessary to 
effect these payments are left to the individual contractors involved.  However, FIs must  be sure that the individual signing the assignment can legally bind the provider. Payment 
under those procedures is payment to the provider. 
 
30.2.1 - Exceptions to Assignment of Providers Right to Payment  
Claims Submitted to A/B MACs 
(Rev. 3774, 05-12-17, Effective: 06-13-17, Implementation: 06-13-17) 
 
A.  Payment to Government Agency 
 
Medicare payment for the services of a provider is not made to a governmental agency or 
entity except when payment to the governmental agency or entity is permissible under the 
other listed reassignment exceptions, e.g., where the agency is the employer of the 
physician. 
 
B.  Payment Pursuant to Court Order 
 
The Medicare program may make payment in accordance with an assignment established 
by, or pursuant to the order of, a court of competent jurisdiction.  The assignment must 
satisfy the conditions set forth in 30.2. 
 
C.  Payment to Agent 
 
The Medicare program may make payment, in the name of the provider, to an agent who 
furnishes billing or collection services.  The payment arrangement must satisfy the 
conditions in 30.2.4. 
 
D.  Payment to Employer 
 
The A/B MAC Part B may pay the employer of the physician or other supplier if the 
physician or other supplier is required, as a condition of his employment, to turn over to 
his employer the fees for his services. (See 30.2.6.) 
 
E.  Payment for Services Provided Under a Contractual Arrangement 
 
The A/B MAC Part B may make payment to an entity enrolled in the Medicare program 
for services provided by a physician or other person under a contractual arrangement with 
that entity.  The services may be furnished on or off the premises of the entity submitting 
the claim.  Both, the entity submitting the claim and receiving payment and the physician 
or other person under contract are subject to certain program integrity requirements.  (See 
30.2.7.) 
 
F.  Payment for Anti-Markup Tests 
 
The A/B MAC Part B may pay a physician (or a physicians medical group) or other 
supplier for the TC or PC of diagnostic tests (other than clinical diagnostic laboratory 
tests) that the physician or other supplier contracts an independent physician, medical  group, or other supplier to perform.  The anti-markup payment limitation applies when 
the performing physician or other supplier does not meet the criteria for sharing a practice 
with the billing physician or other supplier.  The contracting physician, physicians 
group, or other supplier must accept as payment in full the lower of: (a) the acquisition 
price; (b) the submitted charge for the service; or (c) the fee schedule amount. (See 
30.2.9, of this chapter, for additional information on the anti-markup payment 
limitation.) 
 
G.  Payment Under Reciprocal Billing Arrangements 
 
The A/B MAC Part B may pay the patients regular physician for physicians services 
and services furnished incident to such services that are provided to the regular 
physicians patients by another physician on an occasional reciprocal basis and certain 
other requirements are met.  Also, in the case of outpatient physical therapy services 
furnished by physical therapists in a health professional shortage area (HPSA), a 
medically underserved area (MUA), or a rural area, the A/B MAC Part B may pay the 
patients regular physical therapist for such services that are provided to his/her patients 
by another physical therapist on an occasional reciprocal basis and certain other 
requirements are met.  (See 30.2.10.) 
 
H.  Payment Under Fee-For-Time Compensation Arrangements (formerly referred 
to as Locum Tenens Arrangements) 
 
The A/B MAC Part B may pay the patients regular physician for physicians' services 
and services furnished incident to such services that are provided by a substitute 
physician during the absence of the regular physician where the regular physician pays 
the substitute on a per diem or similar fee-for-time basis, and certain other requirements 
are met.  Also, in the case of outpatient physical therapy services furnished by physical 
therapists in a HPSA, a MUA, or a rural area, the A/B MAC Part B may pay the patients 
regular physical therapist for such services that are provided by a substitute physical 
therapist where the regular physical therapist pays the substitute on a per diem or similar 
fee-for-time basis, and certain other requirements are met.  (See 30.2.11.) 
 
30.2.2 - Background and Purpose of Reassignment Rules - Claims 
Submitted to B/MACs 
(Rev. 1931, Issued: 03-12-10, Effective: 06-14-10, Implementation: 06-14-10) 
 
In 1972, Congress acted to stop a practice under which some physicians and other 
suppliers providing covered services reassigned their Medicare and Medicaid receivables 
to other organizations and groups, which then claimed and received payment.  Often the 
organizations acquired the claims at a percentage of face value.  It had become apparent 
that such reassignments were a source of incorrect, inflated, and even fraudulent 
Medicare and Medicaid claims.  The Social Security Act Amendments of 1972, Public 
Law 92-603, enacted a prohibition against payment on a charge basis for covered services 
to anyone other than the patient, physician or other person who provided the service, with 
limited exceptions.   
Thereafter, some physicians and other suppliers circumvented the intent of the law by 
granting a power of attorney.  This allowed the factoring company or other person to 
receive the Medicare or Medicaid payments in the name of the physician or other 
supplier, thus permitting continuation of program abuses. 
 
Section 2(a) of Public Law 95-142, dated October 25, 1977, modified existing law to 
preclude the use of power of attorney as a device for reassignment of benefits under 
Medicare, subject to limited exceptions.  It also provides for a similar prohibition with 
respect to payment for care furnished by providers. 
 
These provisions preclude Medicare payment of amounts due a provider or other person 
to a person or entity furnishing financing to the provider, whether the provider sells the 
providers claims to that person or entity or pledges them to that person or entity as 
collateral on a loan. 
 
A.  Who is Supplier of Services 
 
The question of reassignment arises only when assigned payment is made to someone 
other than the physician or other practitioner or supplier that furnished the services. 
 
A supplier may be an individual, partnership, corporation, trust, or estate.  Any services 
furnished by an employee of the supplier are considered furnished by the supplier if those 
services are within the scope of the employment.  Where the supplier is a partnership, any 
services furnished by a partner are considered furnished by the supplier if those services 
are within the scope of the partnership agreement.  Therefore, issues of reassignment are 
limited to claims submitted to B/MACs. 
 
Services that one physician or other supplier purchases from another are not usually 
considered furnished by the purchasing supplier for purposes of the prohibition on 
reassignment.   
 
When one supplier purchases or rents items (as distinguished from services) from another 
supplier and resells or re-rents those items to the beneficiary, no reassignment issue 
arises.  The supplier that sells or rents the items to the beneficiary is considered to furnish 
them. 
 
In the case of drugs used in conjunction with durable medical equipment (DME) or 
prosthetic devices, the entity that dispenses the drug must furnish it directly to the patient 
for whom a prescription is written.  Therefore, those drugs cannot be purchased for resale 
to the beneficiary by any supplier that is not the entity that dispenses the drugs.  Such a 
supplier may only bill for the DME or prosthetic devices.  In order for prescription drugs 
that are used in conjunction with DME or prosthetic devices to be covered by Medicare, 
the entity that dispenses the drugs must have a Medicare supplier number, must be 
licensed to dispense the drug in the State in which the drug is dispensed, and must bill 
and receive payment in its own name.   
B.  Effect of Payment to Ineligible Recipient 
 
An otherwise correct Medicare payment made to an ineligible recipient under a 
reassignment or other authorization by the physician or other supplier does not constitute 
a program overpayment.  Sanctions may be invoked under 30.2.15 against a physician 
or other supplier to prevent him from executing or continuing in effect such an 
authorization in the future, but neither the physician nor other supplier nor the ineligible 
recipient is required to repay the Medicare payment.  See chapter 10 of the Medicare 
Program Integrity Manual for appeal rights of physicians and physician groups when 
billing numbers are revoked for non-compliance with the reassignment rules.  Appeal 
rights for prospective and existing providers can be found at 42 CFR 498 of the 
Medicare regulations. 
 
C.  Effect of Reassignment on Assignment Agreement 
 
An assignment is an agreement between a physician (or other supplier of services) and an 
enrollee where the enrollee transfers to the physician his/her right to benefits based on 
covered services specified on the assigned claim. The physician in return agrees to accept 
the approved charge determination by the B/MAC as his/her full charge for the items or 
services.  In effect, the physician who accepts assignment is precluded from charging the 
enrollee more than the deductible and coinsurance based upon the approved charge 
determination. 
 
When a qualified entity accepts assignment for a service furnished by a physician 
(thereby agreeing to collect no more than the Medicare deductible and coinsurance based 
on the allowed amount from the beneficiary), it is the entity and not the physician that is 
bound by the terms of the assignment. In this situation, the physician may accept from the 
entity a set fee or other payment that is greater than the reasonable charge, without 
violating the terms of the assignment.  If the entity pays the physician such amount, the 
entity must absorb any loss resulting from the excess of the payment to the physician 
over the reasonable charge.  An entity may accept assignment for a physicians services 
only if the employment or other contractual arrangement between the entity and the 
physician provides that it alone has the right to bill and receive the payment for the 
services.  The beneficiary is fully protected against any liability for the difference 
between the reasonable charge and any higher fee owed by the entity to the physician, 
since only the entity may collect from the beneficiary, and then only in the amount of the 
applicable deductible and coinsurance. 
 
When a physician or non-physician practitioner opts out of the Medicare program and is a 
member of a group practice or otherwise reassigns his or her right to bill and receive 
Medicare payment to an organization, the organization may no longer bill Medicare or 
receive Medicare payment for the services that the opt out physician or non-physician 
practitioner furnishes to Medicare beneficiaries.  However, if the opt out physician or 
non-physician practitioner continues to grant the organization with the right to bill and 
receive payment for the services he or she furnishes to patients, the organization may bill  and be paid by the beneficiary for the services that are provided under the private 
contract. In addition, the decision of a physician or non-physician practitioner to opt out 
of Medicare does not affect the ability of the group practice or organization to bill 
Medicare for the services of physicians and/or non-physician practitioners who have not 
opted out of Medicare. 
 
Suppliers not enrolled in Medicare may not receive payment. 
 
30.2.2.1 - Reassignments by Nonphysician Suppliers - Claims Submitted 
to FIs 
(Rev. 1, 10-01-03) 
 
Definition of Participating From MIM 3005 
 
Nonphysician suppliers may reassign benefits under conditions similar to those under 
which physicians reassign benefits.  Note, however, that when a supplier furnishes 
services to patients of a participating provider (e.g., a participating hospital or SNF) 
under arrangement (within the meaning of 1861(w) of the Act), the provider, not the 
supplier, is reimbursed by Medicare. No reassignment is involved since the provider is 
then responsible for paying subcontracting providers/suppliers under these payment 
structures. 
 
To be a participating provider under Medicare, a provider must be in compliance with 
the applicable provisions of title VI of the Civil Rights Act of 1964 and must enter into 
an agreement under 1866 of the Act which provides that it (1) will not charge any 
individual or other person for items and services covered by the health insurance program 
other than allowable charges and deductibles and coinsurance amounts; and (2) will 
return any money incorrectly collected from the individual or other person on his behalf 
or make such other disposition as described in 30.1 (See also 30.1 on participation 
agreements). 
 
30.2.3 - Effect of Payment to Ineligible Recipient 
(Rev. 1, 10-01-03) 
 
An otherwise correct Medicare payment made to an ineligible recipient under an 
assignment or other authorization by the provider does not constitute a program 
overpayment.  Sanctions may be invoked against a provider (see 30.2.15) to prevent it 
from executing or continuing in effect such an authorization in the future.  Neither the 
provider nor the ineligible recipient is required to repay the Medicare payment. 
 
30.2.4 - Payment to Agent - Claims Submitted to Carriers 
(Rev. 1, 10-01-03) 
A3-3488.1, B3-3060.10 
 
A.  Conditions 
  The FI or carrier makes payment in the name of the provider (Carriers additionally may 
pay in the name of supplier or employer, facility, or organized health care delivery 
system.) to an agent who furnishes billing or collection services if:  
 
  The agent receives the payment under an agreement between the provider and the 
agent; 
 
  The agents compensation is not related in any way to the dollar amount billed or 
collected; 
 
  The agents compensation is not dependent upon the actual collection of payment; 
 
  The agent acts under payment disposition instructions which the provider may 
modify or revoke at any time; and 
 
  In receiving the payment, the agent acts only on behalf of the provider (except 
insofar as the agent uses part of that payment to compensate the agent for the 
agents billing and collection services). 
 
For this purpose, an agency is an entity that provides computer and other billing services 
to prepare claims, and receive and process Medicare benefit checks for the provider, 
supplier, physician or other practitioner. 
 
B.  Background 
 
The primary purpose of this exception is to permit computer and other billing services to 
claim and receive Medicare payment on behalf of and in the name of the provider, 
supplier or eligible party).  The conditions for payment insure that the billing agent has 
no financial interest in how much is billed or collected and is not acting on behalf of 
someone who has such an interest, other than the provider/supplier itself. 
 
The conditions specified in subsection A do not apply if the agent merely prepares bills 
for the provider and does not receive and negotiate the checks payable to the 
provider/supplier. 
 
The conditions specified in subsection A also do not apply where the entity receiving 
payment in the name of the physician qualifies to receive payment for the physicians 
services by definition in law and regulations.  Thus, a hospital which is entitled to bill and 
receive payment in its name for a physicians service under 30.2.7 may bill and receive 
payment in the physicians name (negotiating the checks under a power of attorney) even 
though its compensation is related to the amount billed or collected or is dependent on 
collection. 
 
C.  Documentation 
  If payment is being made or requested to be made in the name of a provider to an agent, 
the contractor assumes that the conditions for such payment are met in the absence of 
evidence to the contrary. If there is evidence to the contrary, the agent must document the 
agreement by submitting to the contractor a copy of the written agreement.  The written 
agreement may be a formal legal document or merely an exchange of correspondence.  If 
there is no written agreement of either a formal or informal nature or all the required 
conditions for payment are not clear in the agreement, the contractor obtains a statement 
from the agent describing the pertinent terms of the agreement or of those provisions that 
need to be clarified.  The contractor verifies the agents allegations by obtaining 
statements from one or more providers/physicians/suppliers that have agreements with 
the agent.  See 30.2.14.1.D for reviewing endorsements on benefit checks. 
 
30.2.5 - Payment to Bank 
(Rev. 213, 06-25-04) 
A3-3488.2, B3-3060.11 
 
Medicare payments due a provider or supplier of services may be sent to a bank (or 
similar financial institution) for deposit in the provider/suppliers account so long as the 
following requirements are met: 
 
  The bank may provide financing to the provider/supplier, as long as the bank 
states in writing, in the loan agreement, that it waives its right of offset.  
Therefore,  the  bank  may  have  a  lending  relationship  with  the 
provider/supplier and may also be the depository for Medicare receivables; 
and 
 
  The account is in the provider/suppliers name only and only the 
provider/supplier may issue any instructions on that account.  The bank shall 
be bound by only the provider/suppliers instructions.  No other agreement 
that the provider/supplier has with a third party shall have any influence on 
the account.  In other words, if a bank is under a standing order from the 
provider/supplier to transfer funds from the provider/suppliers account to 
the account of a financing entity in the same or another bank and the 
provider/supplier rescinds that order, the bank honors this rescission 
notwithstanding the fact that it is a breach of the provider/suppliers 
agreement with the financing entity. 
 
Irrespective of the language in any agreement a provider/supplier has with a third 
party that is providing financing, that third party cannot purchase the 
provider/suppliers Medicare receivables. 
 
Subject to the above restrictions on the bank and to the banks meeting the 
conditions specified in 30.2.4, a bank which is the provider/suppliers billing agent 
pursuant to an agreement with the provider/supplier and receives and deposits in the 
provider/suppliers bank account the provider/suppliers Medicare payments may,  subject to instructions from the provider/supplier, draw on those funds to pay for its 
billing services. 
 
Subject to the above restrictions on the bank, the provider/suppliers billing agent, 
other than the bank, that meets the conditions specified in 30.2.4 and receives and 
deposits in the provider/suppliers bank account the provider/suppliers Medicare 
payments may, subject to instructions from the provider/supplier, draw on these 
funds to pay for its billing services. 
 
Notwithstanding the above restrictions, if a court of competent jurisdiction orders the 
assignment or reassignment of Medicare payments, Medicare will follow that order if, as 
stated in 42 C.F.R. 424.73(b)(2) and listed in 42 C.F.R. 424.90, a certified copy of the 
court order and of the executed assignment or reassignment (if it was necessary to 
execute one) is filed with the contractor responsible for processing the claim and the 
assignment or reassignment (1) applies to all Medicare benefits payable to a particular 
person or entity during a specified or indefinite time period; or, (2) specifies a particular 
amount of money, payable to a particular person or entity by the particular contractor.  In 
all other instances, the Medicare program will make payments subject to the restrictions 
listed above.  For example, even if a court order directed to a provider/supplier limits the 
provider/suppliers ability to breach its financial agreement with a third party, the bank is 
bound by instructions from the provider/supplier. 
 
30.2.6 - Payment to Employer of Physician - Carrier Claims Only 
(Rev. 1, 10-01-03) 
B3-3060.1 
 
The carrier may pay Part B benefits for covered physician services under an assignment 
or for enrollees that did not execute assignment before death to the physicians employer, 
provided that under the terms of the physicians employment, only the employer and not 
the physician has the right to charge or collect charges for the physicians services, and 
certain other conditions and limitations described below are met.  There must be an 
employer-employee relationship between the physician and the person or organization 
hiring the physician to perform services, and the terms of the employment must provide 
that the employer and not the physician has the right to receive the payment for all the 
latters services within the scope of the employment.  If the employer has the right, as a 
condition of employment, to fees for all professional services the physician renders, 
including those outside the scope of the employment, honor an assignment of benefits to 
the employer for all such services. 
 
An employer may establish that it qualifies to receive payment for the services of its 
physicians by submitting the Form CMS-855R. 
 
The employer must provide evidence that the employee is a valid employee by providing 
the carrier with a Form W-2 or other acceptable Internal Revenue Service documentation 
(a pay stub would suffice for new employees who do not yet have a Form W-2.). 
  30.2.7 - Payment for Services Provided Under a Contractual 
Arrangement - Carrier Claims Only 
(Rev. 472, Issued:  02-11-05, Effective:  01-01-05, Implementation:  03-15-05) 
 
A carrier may make payment to an entity (i.e., a person, group, or facility) enrolled in the 
Medicare program that submits a claim for services provided by a physician or other 
person under a contractual arrangement with that entity, regardless of where the service is 
furnished.  Thus, the service may be furnished on or off the premises of the entity 
submitting the bill and receiving payment.  The entity receiving payment and the 
physician or other person that furnished the service are both subject to the following 
program integrity safeguard requirements: 
 
1.  The entity receiving payment and the person that furnished the service are jointly 
and severally responsible for any Medicare overpayment to that entity; and, 
 
2.  The person furnishing the service has unrestricted access to claims submitted by 
an entity for services provided by that person. 
 
30.2.8.2 - University-Affiliated Medical Faculty Practice Plans - Claims 
Submitted to Carriers 
(Rev. 1, 10-01-03) 
B3-3060.3.D 
 
A carrier may make Part B payment to a university-affiliated medical faculty practice 
plan that has the following attributes: 
 
  There is a written agreement between the Governing Board of the University and 
the Governing Board of the Medical Faculty Practice Plan describing the 
relationship between both parties. 
 
  The Medical Faculty Practice Plan is a 501(c)(3) nonprofit tax-exempt 
organization, according to IRS regulations. 
 
  Physicians of the faculty practice plan are employees of the University and/or 
medical school.  The plan should furnish a copy of the employment agreement(s) 
between the faculty physician and the University. 
 
  Physicians are full or part-time faculty members of the Universitys School of 
Medicine, licensed to practice medicine in the State. 
 
  The faculty practice plan may only be affiliated with one University, and this 
relationship is described in the written agreement between the University and the 
Medical Faculty Practice Plan. 
 
  Members of the faculty practice plan are represented on the Governing Board of 
the practice plan.  The Board has the authority to make or delegate management  and operational decisions on behalf of the physicians participating in the practice 
plan. 
 
  Faculty practice plan physicians have unrestricted access to the billing records, 
medical documentation, and claims forms for services submitted on their behalf 
by the practice plan. The faculty practice plan provides documentation 
establishing the existence of this policy. 
 
  The physicians abide by the rules and regulations of the Medical Faculty Practice 
Plan. 
 
  The faculty practice plan is accountable to Medicare for any claims that are 
submitted on behalf of the plans physicians for services provided to Medicare 
beneficiaries.  Thus, the plan is responsible for refunding any overpayments to 
Medicare that are collected on behalf of the plans physicians. 
 
Both the Medical Faculty Practice Plan and the plans physicians must enroll in the 
Medicare program by completing the Form CMS-855B and Form CMS-855R (Medicare 
health care provider/supplier enrollment application forms).  Instructions for processing 
Form CMS-855B are referenced in Program Integrity Manual. 
 
For those entities that are part of the organizational structure of the University, see 
30.2.12, on payment to special accounts.  These entities may include departments, 
specialties, practice plans, or similar subdivisions of a university or medical school. 
 
30.2.8.3 - Indirect Payment Procedure (IPP) - Payment to Entities that Provide 
Coverage Complementary to Medicare Part B  
(Rev. 2896, Issued: 03-07-14, Effective: 06-06-14, Implementation: 06-06-14) 
 
Medicare Part B payment otherwise payable to a beneficiary for the services of a 
physician or supplier who charges on a fee-for-service basis may be paid to an entity 
using the indirect payment procedure (IPP).  Any entity registered in accordance with the 
instructions in Pub. 100-08, chapter 15, sections 15.7.9 through 15.7.9.7 and meets the 
following requirements can bill using the IPP: 
 
  Provides coverage of the service under a complementary health benefit plan (this 
is, the coverage that the plan provides is complementary to Medicare and covers 
only the amount by which the Part B payment falls short of the approved charge 
for the service under the plan). 
 
  Has paid the person who provided the service an amount (including the amount 
payable under the Medicare program) that the person accepts as full payment. 
 
  Has the written authorization of the beneficiary (or of a person authorized to sign 
claims on the beneficiarys behalf under 42 C.F.R. 424.36) to receive the Part B 
payment for the services for which the entity pays.   
  Relieves the beneficiary of liability for payment for the service and will not seek 
any reimbursement from the beneficiary, his or her survivors, or estate. 
 
  Submits any information CMS or the contractor may request, including an 
itemized physician or supplier bill, in order to apply the requirements under the 
Medicare program. 
 
  Identifies and excludes from its requests for payment all services for which 
Medicare is the secondary payer. 
 
Entities that satisfy all of the requirements above may include employers, unions, 
insurance companies, and retirement homes.  They also may include health care 
prepayment plans, health maintenance organizations (HMOs), competitive medical plans, 
and Medicare Advantage organizations.  The IPP permits a physician or supplier to file a 
single claim with the complementary insurer and receive full payment in a single 
payment, relieves the beneficiary of the need to file a claim, and protects the beneficiary 
against any financial liability for the service. 
 
Because section 1842(h)(1) of the Social Security Act only permits physicians and 
suppliers to enter into participation agreements and because IPP entities do not meet the 
definition of a supplier as described in 42 C.F.R. 400.202, IPP entities cannot enter 
into a participation agreement (Form CMS-460) with Medicare.  Therefore, IPP claims 
are paid at the non-participating physician/supplier rate, which is 95% of the physician 
fee schedule amount. 
 
Payment under the IPP can only be made for covered Part B services.  If an IPP entity 
submits a claim for a beneficiarys service that has already been billed to Medicare (for 
example, the claim was submitted by a physician before the IPP entity submitted its 
claim), then Medicare cannot make payment to the IPP entity for that same service.  
Conversely, if a physician or supplier submits a claim for a beneficiarys service that has 
already been billed to Medicare (for example, the claim was submitted by an IPP entity 
before the physician submitted his/her claim), then Medicare cannot make payment to the 
physician for that same service.  Medicare payment can only be made once for a 
beneficiarys specific service.  Therefore, claims for services that have already been 
billed to Medicare shall be denied (with appeal rights) by Medicares contractors.   
 
In addition, Medicare payment cannot be made under the IPP for services that are 
payable for a particular beneficiary under any other Part of Medicare.  For example, if a 
beneficiarys service is payable under Part C and a Medicare Advantage organization is 
also an IPP entity under 42 C.F.R. 424.66, then a Medicare Part B payment under the 
IPP cannot be made to that Medicare Advantage organization for that beneficiarys 
service.  In these types of dual or multiple enrollment situations, services that are payable 
under those other Parts of Medicare (e.g., Parts C or D) cannot also be billed and paid for 
under Part B.  Therefore, IPP entities that submit Part B claims for services that are  payable under another Part of Medicare (e.g., Part C or D) shall be denied (with appeal 
rights) by Medicares contractors. 
 
Payment for IPP claims by Medicare is conditioned upon the claim and the underlying 
transaction complying with the Medicare laws, regulations, and program instructions 
applicable to IPP entities, and on the IPP entitys continued compliance with the 
regulatory requirements described in 42 C.F.R. 424.66. 
 
30.2.9 Payment to Physician or Other Supplier for Diagnostic Tests 
Subject to the Anti-Markup Payment Limitation - Claims Submitted to 
A/B MACs (Part B) 
(Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20) 
 
A physician or other supplier may bill for the technical component and/or professional 
component of a diagnostic test that was ordered by the physician or other supplier (or 
ordered by a party related to the billing physician or other supplier through common 
ownership or control), subject to an anti-markup payment limitation, if the diagnostic test 
is performed by a physician who does not share a practice with the billing physician or 
other supplier.  (This claim and payment limitation does not apply to clinical diagnostic 
laboratory tests, which are paid under the Clinical Laboratory Fee Schedule.)  Under the 
anti-markup payment limitation, payment to the billing physician or other supplier (less 
the deductibles and coinsurance paid by the beneficiary or on behalf of the beneficiary) 
for the technical component or professional component of the diagnostic test may not 
exceed the lowest of the following amounts: 
 
(1) The performing physician/suppliers net charge to the billing physician or other 
supplier.* (With respect to the technical component, the performing supplier is the 
physician who supervised the test, and with respect to the professional component, the 
performing supplier is the physician who performed the professional component; 
 
(2) The billing physician or other suppliers actual charge; and 
 
(3) The fee schedule amount for the test that would be allowed if the performing 
physician or other supplier billed directly.  (See section 10.1.1.2 for information on 
payment jurisdiction for services subject to the anti-markup payment limitation.) 
 
* The net charge must be determined without regard to any charge that is intended to 
reflect the cost of equipment or space leased to the performing supplier by or through the 
billing physician or other supplier. 
 
Exception to the Anti-markup Payment Limitation 
 
If the performing physician is deemed to share a practice with the billing physician or 
other supplier (who ordered the test), the anti-markup payment limitation does not apply.  
A performing physician is considered to share a practice with the billing physician or 
other supplier if the performing physician furnishes substantially all (at least 75  percent) of his or her professional services through the billing physician or other supplier.  
The substantially all services requirement will be satisfied, if, at the time the billing 
physician or other supplier submits a claim for a service furnished by the performing 
physician, the billing physician or other supplier has a reasonable belief that:  (1) for the 
12 months prior to and including the month in which the service was performed, the 
performing physician furnished substantially all of his or her professional services 
through the billing physician or other supplier; or (2) the performing physician will 
furnish substantially all of his or her professional services through the billing physician or 
other supplier for the next 12 months (including the month in which the service is 
performed). 
 
If the performing physician does not meet the substantially all services test, the 
performing physician may be deemed to share a practice with the billing physician or 
other supplier if the arrangement complies with a site of service/same building test.  
This alternative approach requires the performing physician to be an owner, employer, or 
independent contractor of the billing physician or other supplier and requires that the 
technical component or professional component be performed in the office of the billing 
physician or other supplier.  The office of the billing physician or other supplier is any 
medical office space, regardless of the number of locations, in which the ordering 
physician or other supplier regularly furnishes patient care, and includes space where the 
billing physician or other supplier furnishes diagnostic testing services, if the space is 
located in the same building (as defined in 42 CFR 411.351 of the physician self-
referral rules) in which the ordering physician or other ordering supplier regularly 
furnishes patient care.  With respect to a billing physician or other supplier that is a 
physician organization (as defined in 42 CFR 411.351 of the physician self-referral 
rules), the office of the billing physician or other supplier is space in which the 
ordering physician provides substantially the full range of patient care services the 
ordering physician provides generally.  The performance of the technical component 
includes, both, the conducting of the technical component as well as the supervision of 
the technical component. 
 
The billing physician or other supplier must keep on file the name, the National Provider 
Identifier, and address of the performing physician.  The physician or other supplier 
furnishing the technical component or professional component of the diagnostic test must 
be enrolled in the Medicare program.  No formal reassignment is necessary. 
 
NOTE:  When billing for the technical component or professional component of a 
diagnostic test (other than a clinical diagnostic laboratory test) that is performed by 
another physician, the billing entity must indicate the name, address and NPI of the 
performing physician or other supplier in Item32 of the Form CMS-1500 claim form. 
 
Effective for claims submitted with a receipt date on and after October 1, 2015, for 
reference laboratory and anti-markup claims, the billing physician or supplier must report 
the name, address, and NPI of the performing physician or supplier in Item 32a of the 
CMS-1500 claim form (or its electronic equivalent), even if the performing physician or  supplier is enrolled in a different A/B MAC (Part B) jurisdiction.  See 10.1.1.2 for more 
information regarding claims filing jurisdiction. 
 
If the billing physician or other supplier performs only the technical component or the 
professional component and wants to bill for both components of the diagnostic test, the 
TC modifier and 26 modifier must be reported as separate line items if billing 
electronically (ASC X12 837 professional claim) or on separate claims if billing on paper 
(Form CMS-1500).  Global billing is not allowed unless the billing physician or other 
supplier performs both components. 
 
Effective for claims received on or after April 1, 2004: 
 
In order to have appropriate service facility location ZIP code and the acquired price of 
each test on the claim, when billing for anti-markup tests on the Form CMS-1500 paper 
claim form each test must be submitted on a separate claim form. Treat paper claims 
submitted with more than one anti-markup test as unprocessable per 80.3.2. 
 
More than one anti-markup test may be billed on the ASC X12 837 professional claim 
format. When more than one test is billed, the total acquired amount must be submitted 
for each service. Treat claims received with multiple anti-markup tests without line level 
total acquired amount information as unprocessable per 80.3.2. 
 
Treat paper claims submitted for anti-markup tests with both the technical component and 
the professional component on one claim as unprocessable per 80.3.2 unless the services 
are submitted with the same date of service and same place of service codes. When a 
claim is received that includes both services, and the date of service and place of service 
codes match, assume that the one address in Item 32 applies to both services. Effective 
for claims with dates of service on or after April 1, 2005, each component of the test must 
be submitted on a separate claim form. Treat paper claims with dates of service after 
March 31, 2005 submitted with more than one anti-markup test as unprocessable per 
80.3.2. 
 
ASC X12 837 professional electronic claims submitted for anti-markup tests with both 
the technical component and professional component on the same claim must be 
accepted. Assume that the claim level service facility location information applies to both 
services if line level information is not provided. 
 
In order to price claims correctly and apply anti-markup payment limitations, global 
billing is not acceptable for claims received on the Form CMS-1500 or on the ASC X12 
837 professional claim format. Each component must be billed as a separate line item (or 
on a separate claim per the limitations described above). Treat the claim as unprocessable 
per 80.3.2 when a global billing is received and there is information on the claim that 
indicates the test was acquired. 
 
Effective for claims with dates of service on or after January 25, 2005, A/B MAC (Part 
B) must accept and process claims for diagnostic tests subject to the anti-markup  payment limitation when billed by suppliers (including laboratories, physicians, and 
independent diagnostic testing facilities [IDTFs]) enrolled in the A/B MAC (Part B) 
jurisdiction, regardless of the location where the service was furnished. Effective April 1, 
2005, A/B MAC (Part B) must price anti-markup test claims based on the ZIP code of the 
location where the service was rendered when billed by a laboratory or an IDTF, using a 
CMS-supplied national abstract file of the MPFS containing the HCPCS codes that are 
payable under the MPFS as either a technical component or professional component of a 
diagnostic test subject to the anti-markup payment limitation for the calendar year. 
Effective for claims with dates of service on or after October 1, 2007 through 2013, A/B 
MAC (Part B) must use the national abstract file to price all claims for diagnostic tests 
subject to an anti-markup payment limitation, for all supplier specialty types (including 
physicians), based on the ZIP code of the location where the service was rendered, in 
accordance with the A/B MAC (Part B) jurisdictional pricing rules specified in 10.1.1.  
Beginning in 2014, A/B MAC (Part B) must refer to an Anti-markup Test Indicator 
linked to the HCPCS code on the MPFS to price all claims for diagnostic tests subject to 
an anti-markup payment limitation, for all supplier specialty types (including physicians), 
based on the ZIP code of the location where the service was rendered, in accordance with 
the A/B MAC (Part B) jurisdictional pricing rules specified in 10.1.1. 
 
NOTE: As with all services payable under the MPFS, the ZIP code is used to determine 
the appropriate payment locality and corresponding fee for the anti-markup test.  When a 
ZIP code crosses locality lines, CMS uses the dominant locality to determine the 
corresponding fee. 
lines, CMS uses the dominant locality to determine the corresponding fee. 
 
30.2.10 - Payment Under Reciprocal Billing Arrangements - Claims 
Submitted to A/B MACS Part B 
 (Rev. 3774, 05-12-17, Effective: 06-13-17, Implementation: 06-13-17) 
 
A.  General requirements applicable to all Reciprocal Billing Arrangements 
 
Under section 16006 of the 21st Century Cures Act, a Medicare-enrolled physical 
therapist may use a substitute physical therapist to furnish outpatient physical therapy 
services in a HPSA, a MUA, or a rural area under a reciprocal billing arrangement on or 
after June 13, 2017. 
 
The patients regular physician or physical therapist may submit the claim, and (if 
assignment is accepted) receive the Part B payment, for covered visit services which the 
regular physician or physical therapist arranges to be provided by a substitute physician 
or physical therapist on an occasional reciprocal basis, if: 
 
  The regular physician or physical therapist is unavailable to provide the services;   
 
  The Medicare patient has arranged or seeks to receive the services from the 
regular physician or physical therapist; 
    The substitute physician or physical therapist does not provide the services to 
Medicare patients over a continuous period of longer than 60 days subject to the 
following exception: A physician or physical therapist called to active duty in the 
Armed Forces may bill for services furnished under a reciprocal billing 
arrangement for longer than the 60-day limit; and 
 
  The regular physician or physical therapist indicates that the services were 
provided by a substitute physician or physical therapist under a reciprocal billing 
arrangement meeting the requirements of this section by entering in item 24d of 
Form CMS-1500 HCPCS code Q5 modifier (service furnished under a reciprocal 
billing arrangement by a substitute physician or by a substitute physical therapist 
furnishing outpatient physical therapy services in a health professional shortage 
area, a medically underserved area, or a rural area) after the procedure code.  The 
regular physician or physical therapist must keep on file a record of each service 
provided by the substitute physician or physical therapist along with the 
substitute physician or physical therapists NPI, and make this record available to 
the A/B MAC Part B upon request. 
 
If the only services a physician performs in connection with an operation are post-
operative services furnished during the period covered by the global fee, these services 
need not be identified on the claim as services furnished by a substitute physician. 
 
A physician or physical therapist may have reciprocal billing arrangements with more 
than one physician or physical therapist.  The arrangements need not be in writing.  
 
With respect to physicians, the term covered visit service includes not only those 
services ordinarily characterized as a covered physician visit, but also any other covered 
items and services furnished by the substitute physician or by others as incident to the 
physicians services.  
 
With respect to physical therapists, the term covered visit service means outpatient 
physical therapy services furnished in a HPSA, a MUA, or a rural area.  HPSAs and 
MUAs are designated by the Health Resources & Services Administration (HRSA).  To 
determine if an area is a HPSA or an MUA, visit HRSAs website at 
https://www.hrsa.gov.  A rural area is any area that is outside of a Metropolitan Statistical 
Area or a Metropolitan Division (in the case where a Metropolitan Statistical Area is 
divided into Metropolitan Divisions), as defined by the Executive Office of Management 
and Budget, or the following New England counties: Litchfield County, Connecticut; 
York County, Maine; Sagadahoc County, Maine; Merrimack County, New Hampshire; 
and Newport County, Rhode Island.  To determine if an area is rural, consult the 
Crosswalk of Counties to Core-Based Statistical Areas in the most current Inpatient 
Prospective Payment system final rule.  Any area that is not designated as urban in the 
crosswalk is rural. 
 
A continuous period of covered visit services begins with the first day on which the 
substitute physician or physical therapist provides covered visit services to Medicare Part  B patients of the regular physician or physical therapist, and ends with the last day the 
substitute physician or physical therapist provides services to such patients before the 
regular physician or physical therapist returns to work.  This period continues without 
interruption on days on which no covered visit services are provided to patients on behalf 
of the regular physician or physical therapist or are furnished by some other substitute 
physician or physical therapist on behalf of the regular physician or physical therapist.    
A new period of covered visit services can begin after the regular physician or physical 
therapist has returned to work.   
 
EXAMPLE:  The regular physician or physical therapist goes on vacation on June 30, 
and returns to work on September 4.  A substitute physician or physical therapist 
provides services to Medicare Part B patients of the regular physician or physical 
therapist on July 2, and at various times thereafter, including August 30 and September 2.  
The continuous period of covered visit services begins on July 2 and runs through 
September 2, a period of 63 days.  Since the September 2 services are furnished after the 
expiration of 60 days of the period, the regular physician or physical therapist is not 
entitled to bill and receive direct payment for the services furnished August 31 through 
September 2.  The substitute physician or physical therapist must either bill for the 
services furnished August 31 through September 2 in his/her own name and billing 
number or reassign payment to the person or group that bills for the services of the 
substitute physician or physical therapist.  The regular physician or physical therapist 
may, however, bill and receive payment for the services that the substitute physician or 
physical therapist provides on behalf of the regular physician or physical therapist in the 
period July 2 through August 30. 
 
The requirements for the submission of claims under reciprocal billing arrangements are 
the same for assigned and unassigned claims. 
 
A/B MACs Part B should inform physicians and physical therapists of the compliance 
requirements when billing for services of a substitute physician or physical therapist. The 
physician or physical therapist notification should state that, in entering the Q5 modifier, 
the regular physician or physical therapist (or the medical group or physical therapy 
group, where applicable) is certifying that the services are covered visit services 
furnished by the substitute physician or physical therapist identified in a record of the 
regular physician or physical therapist which is available for inspection, and are services 
for which the regular physician or physical therapist (or group) is entitled to submit the 
claim.  A/B MACs Part B should include in the notice that penalty for false certifications 
may include civil or criminal penalties for fraud, or administrative penalties including 
revocation of the physicians or physical therapists Medicare billing privileges, right to 
receive payment, or to submit claims or accept any assignments.  The revocation 
procedures are set forth under 42 CFR 424.535 and in the Medicare Program Integrity 
Manual (Pub. 100-8). 
 
If a line item includes the code Q5 certification, A/B MACs Part B assume that the claim 
meets the requirements of this section in the absence of evidence to the contrary.  A/B 
MACs Part B need not track the 60-day period or validate the billing arrangement on a  prepayment basis, absent postpayment findings that indicate that the Q5 certifications by 
a particular regular physician or physical therapist may not be valid. 
 
When A/B MACs Part B make Part B payment under this section, they determine the 
payment amount as though the regular physician or physical therapist provided the 
services.  The identification of the substitute physician or physical therapist is primarily 
for purposes of providing documentation to verify upon audit that the services were 
actually furnished, not for purposes of the payment or the limiting charge.  Also, notices 
of noncoverage are to be given in the name of the regular physician or physical therapist. 
 
B.  Requirements applicable to Physician Medical Group or Physical Therapy 
Group Claims Under Reciprocal Billing Arrangements 
 
In order for a medical group or physical therapy group to submit claims in the name of 
the regular physician or physical therapist for the services of a substitute physician or 
physical therapist, the substitute physician or physical therapist may not have reassigned 
his or her right to Medicare payment to the group through a CMS-855R reassignment 
enrollment form approved by the A/B MACs Part B and the following requirements must 
be met: 
 
  The regular physician or physical therapist is unavailable to provide the services;   
 
  The Medicare patient has arranged or seeks to receive the services from the 
regular physician or physical therapist; and 
 
  The substitute physician or physical therapist does not provide the services to 
Medicare patients over a continuous period of longer than 60 days subject to the 
following exception: A physician or physical therapist called to active duty in the 
Armed Forces may bill for services furnished under a reciprocal billing 
arrangement for longer than the 60-day limit.  
 
Services are billed for the entity as follows: 
 
  The medical group or physical therapy group must enter in item 24d of Form 
CMS-1500 the HCPCS code modifier Q5 after the procedure code. 
 
  The designated attending physician for a hospice patient (receiving services 
related to a terminal illness) bills the Q5 modifier in item 24 of Form CMS-1500 
when another group member covers for the attending physician. 
 
  A record of each service provided by the substitute physician or physical therapist 
must be kept on file along with the substitute physicians or physical therapists 
NPI.  This record must be made available to the A/B MAC Part B upon request. 
    In addition, the medical group physician or group physical therapist on whose 
behalf the services were furnished by a substitute must be identified by his/her 
NPI in block 24J of the appropriate line item. 
 
On claims submitted by a group, the group physician or group physical therapist who 
actually performed the service must be identified in the manner described in 30.2.13, 
with one exception.  When a group member provides services on behalf of another group 
member who is the designated attending physician for a hospice patient, the Q5 modifier 
may be used by the designated attending physician to bill for services related to a 
hospice patients terminal illness that were performed by another group member. 
 
30.2.11 - Payment Under Fee-For-Time Compensation Arrangements 
(formerly referred to as Locum Tenens Arrangements) - Claims 
Submitted to A/B MACs Part B 
(Rev. 3774, 05-12-17, Effective:06-13-17, Implementation: 06-13-17) 
 
A.  Background 
 
It is a longstanding practice for a physician to retain a substitute physician to take over 
his/her professional practice when the physician is absent for reasons such as illness, 
pregnancy, vacation, or continuing medical education, and for such physician (the regular 
physician) to bill and receive payment for the substitute physicians services as though 
he/she performed them.  The substitute physician often has no practice of his/her own and 
may move from area to area as needed.  The regular physician generally pays the 
substitute physician on a per diem or other fee-for-time compensation basis with the 
substitute physician having the status of an independent contractor, rather than of an 
employee, of the regular physician. 
 
A regular physician or physical therapist is the physician or physical therapist who is 
normally scheduled to see a patient.  A regular physician may include a physician 
specialist (such as a cardiologist, oncologist, urologist, hospitalist, etc.). 
 
Under section 16006 of the 21st Century Cures Act, a Medicare-enrolled physical 
therapist may use a substitute physical therapist to furnish outpatient physical therapy 
services in a HPSA, a MUA, or a rural area under a fee-for-time compensation 
arrangement on or after June 13, 2017. 
 
B.  General requirements applicable to all Fee-For-Time Compensation Arrangements  
 
A patients regular physician or physical therapist may submit the claim, and (if 
assignment is accepted) receive the Part B payment, for covered visit services of a 
substitute physician or physical therapist, if: 
 
  The regular physician or physical therapist is unavailable to provide the services; 
    The Medicare beneficiary has arranged or seeks to receive the services from the 
regular physician or physical therapist; 
 
  The regular physician or physical therapist pays the substitute for his/her services 
on a per diem or similar fee-for-time basis; 
 
  The substitute physician or physical therapist does not provide the services to 
Medicare patients over a continuous period of  longer than 60 days subject to the 
following exception:  A physician or physical therapist called to active duty in 
the Armed Forces may bill for services furnished under a fee-for-time 
compensation arrangement for longer than the 60-day limit; and 
 
  The regular physician or physical therapist indicates that the services were 
provided by a substitute physician or physical therapist under a fee-for-time 
compensation arrangement meeting the requirements of this section by entering 
HCPCS code modifier Q6 (service furnished under a fee-for-time compensation 
arrangement by a substitute physician or by a substitute physical therapist 
furnishing outpatient physical therapy services in a health professional shortage 
area, a medically underserved area, or a rural area) after the procedure code.  
 
If the only services a physician performs in connection with an operation are post-
operative services furnished during the period covered by the global fee, these services 
need not be identified on the claim as services furnished by a substitute physician. 
 
With respect to physicians, the term covered visit service includes not only those 
services ordinarily characterized as a covered physician visit, but also any other covered 
items and services furnished by the substitute physician or by others as incident to the 
physicians services.  
 
With respect to physical therapists, the term covered visit service means outpatient 
physical therapy services furnished in a HPSA, a MUA, or a rural area.  HPSAs and 
MUAs are designated by HRSA.  To determine if an area is a HPSA or an MUA, visit 
HRSAs website at https://www.hrsa.gov.  A rural area is any area that is outside of a 
Metropolitan Statistical Area or a Metropolitan Division (in the case where a 
Metropolitan Statistical Area is divided into Metropolitan Divisions), as defined by the 
Executive Office of Management and Budget, or the following New England counties: 
Litchfield County, Connecticut; York County, Maine; Sagadahoc County, Maine; 
Merrimack County, New Hampshire; and Newport County, Rhode Island.  To determine 
if an area is rural, consult the Crosswalk of Counties to Core-Based Statistical Areas in 
the most current Inpatient Prospective Payment system final rule.  Any area that is not 
designated as urban in the crosswalk is rural. 
 
A continuous period of covered visit services begins with the first day on which the 
substitute physician or physical therapist provides covered visit services to Medicare Part 
B patients of the regular physician or physical therapist, and ends with the last day the 
substitute physician or physical therapist provides services to such patients before the  regular physician or physical therapist returns to work.  This period continues without 
interruption on days on which no covered visit services are provided to patients on behalf 
of the regular physician or physical therapist or are furnished by some other substitute 
physician or physical therapist on behalf of the regular physician or physical therapist.  A 
new period of covered visit services can begin after the regular physician or physical 
therapist has returned to work.   
 
EXAMPLE:  The regular physician or physical therapist goes on vacation on June 30, 
and returns to work on September 4.  A substitute physician or physical therapist 
provides services to Medicare Part B patients of the regular physician or physical 
therapist on July 2, and at various times thereafter, including August 30 and September 2.  
The continuous period of covered visit services begins on July 2 and runs through 
September 2, a period of 63 days.  Since the September 2 services are furnished after the 
expiration of 60 days of the period, the regular physician or physical therapist is not 
entitled to bill and receive direct payment for the services furnished August 31 through 
September 2.  The substitute physician or physical therapist must either bill for the 
services furnished August 31 through September 2 in his/her own name and billing 
number or reassign payment to the person or group that bills for the services of the 
substitute physician or physical therapist.  The regular physician or physical therapist 
may, however, bill and receive payment for the services that the substitute physician or 
physical therapist provides on behalf of the regular physician or physical therapist in the 
period July 2 through August 30. 
 
The requirements for the submission of claims under fee-for-time compensation 
arrangements are the same for assigned and unassigned claims. 
 
A/B MACs Part B should inform physicians and physical therapists of the compliance 
requirements when billing for services of a substitute physician or physical therapist. The 
physician/physical therapist notification should state that, in entering the Q6 modifier, the 
regular physician or physical therapist (or the medical group or physical therapy group, 
where applicable) is certifying that the services are covered visit services furnished by the 
substitute physician or physical therapist identified in a record of the regular physician or 
physical therapist which is available for inspection, and are services for which the regular 
physician or physical therapist (or group) is entitled to submit the claim.  A/B MACs Part 
B should include in the notice that penalty for false certifications may include civil or 
criminal penalties for fraud, or administrative penalties including revocation of the 
physicians or physical therapists Medicare billing privileges, right to receive payment, 
or to submit claims or accept any assignments.  The revocation procedures are set forth 
under 42 CFR 424.535 and in the Medicare Program Integrity Manual (Pub. 100-8). 
 
If a line item includes the code Q6 certification, A/B MACs Part B assume that the claim 
meets the requirements of this section in the absence of evidence to the contrary.  A/B 
MACs Part B need not track the 60-day period or validate the billing arrangement on a 
prepayment basis, absent postpayment findings that indicate that the Q6 certifications by 
a particular regular physician or physical therapist may not be valid. 
  When A/B MACs Part B make Part B payment under this section, they determine the 
payment amount as though the regular physician or physical therapist provided the 
services.  The identification of the substitute physician or physical therapist is primarily 
for purposes of providing documentation to verify upon audit that the services were 
furnished, not for purposes of the payment or the limiting charge.  Also, notices of 
noncoverage are to be given in the name of the regular physician or physical therapist. 
 
C.  Requirements applicable to Physician Medical Group or Physical Therapy 
Group Claims Under Fee-For-Time Compensation Arrangements 
 
In order for a medical group or physical therapy group to submit claims in the name of 
the regular physician or physical therapist for the services of a substitute physician or 
physical therapist, the substitute physician or physical therapist may not have reassigned 
his or her right to Medicare payment to the group through a CMS-855R reassignment 
enrollment form approved by the A/B MACs Part B and the following requirements must 
be met: 
 
  The regular physician or physical therapist is unavailable to provide the services;   
 
  The Medicare patient has arranged or seeks to receive the services from the 
regular physician or physical therapist; and 
 
  The substitute physician or physical therapist does not provide the services to 
Medicare patients over a continuous period of longer than 60 days subject to the 
following exception: A physician or physical therapist called to active duty in the 
Armed Forces may bill for services furnished under a fee-for-time compensation 
arrangement for longer than the 60-day limit. 
 
For purposes of these requirements, per diem or similar fee-for-time compensation which 
the group pays the substitute is considered paid by the regular physician or physical 
therapist.  Also, a physician or physical therapist who has left the group and for whom the 
group has engaged a substitute as a temporary replacement may bill for the temporary 
physician or physical therapist for up to 60 days.  The term regular physician or physical 
therapist includes a physician or physical therapist who has left the group and for whom 
the group has hired the substitute as a replacement.   
 
Services are billed for the entity as follows: 
 
  The medical group or physical therapy group must enter in item 24d of Form 
CMS-1500 the HCPCS code modifier Q6 after the procedure code. 
 
  The designated attending physician for a hospice patient (receiving services 
related to a terminal illness) bills the Q6 modifier in item 24 of Form CMS-1500 
when another group member covers for the attending physician. 
    A record of each service provided by the substitute physician or physical therapist 
must be kept on file along with the substitute physicians or physical therapists 
NPI.  This record must be made available to the A/B MACs Part B upon request. 
 
  In addition, the medical group physician or group physical therapist on whose 
behalf the services were furnished by a substitute must be identified by his/her 
NPI in block 24J of the appropriate line item. 
 
30.2.12 - Establishing That a Person or Entity Qualifies to Receive 
Payment on Basis of Reassignment - for Carrier Processed Claims 
(Rev. 1, 10-01-03) 
B3-3060.8 
 
Any person or entity wishing to receive Part B payment as a reassignee of one or more 
physicians (or other practitioner or supplier), or as the supplier of the services, must 
furnish to the carrier sufficient information to establish clearly that it qualifies to receive 
payment for those services.  Where there is any doubt that the person or entity qualifies, 
the carrier must obtain additional evidence. 
 
In some cases, an entity may qualify to receive payment for the services of a physician on 
the basis of one or more of the exceptions listed in 30.2.  As soon as it is determined that 
an organization can qualify on any basis, no further development may be needed for that 
physician or for other physicians having the same status. However, where some other 
physicians have or appear to have different status, further development is required.  In 
some cases a determination is made that Part B payment can be made only to the 
physician. 
 
Subject to the provisions of 30, a reassignee assumes liability for any overpayments 
that it receives and should be so advised. 
 
A.  Payment to Special Accounts 
 
Sometimes a major institution, such as a medical school or university, may want the 
Medicare checks due it for physician services to go into particular specialty accounts (or 
funds, or so-called group practices) which are subdivisions of the institution, and may ask 
that these accounts be identified on their Medicare checks for internal accounting 
purposes. 
 
Ideally, to indicate the subordinate nature of the account in relation to the institution, 
carriers list the name of the institution first on the check, followed by the name of the 
appropriate account.  However, identifying the payee in this manner may cause serious 
claims processing difficulties, fostering confusion between various accounts of the same 
institution.  To avoid this problem, carriers may list the name of the account first, 
followed by the name of the institution, e.g., Radiology Fund or General Medical Center, 
if the institution submits a letter accepting responsibility for any claims submitted, and 
payments made, under the special designations.  The letter needs to describe the special  designations the institution wants on the checks for the various accounts and include a 
statement to the following effect: 
 
The (name of institution) accepts the same responsibility for the Medicare claims 
and payments made under these special designations as it would have if the 
payments were made by Medicare in the name of (name of institution) without 
these special designations. 
 
This statement is required in addition to the statement the institution submits to establish 
its right to receive payment for the physicians services. 
 
If the above procedure is used as a basis for Part B payments in the names of 
departments, specialties, or similar subdivisions of a university or medical school or an 
associated nonprofit foundation or teaching hospital, each subdivision may also execute, 
or refrain from executing, a participation agreement for physician services in that 
subdivision.  This is an exception to the rule that a participation agreement may only be 
executed by a person or legal entity.  This exception applies only in the medical school or 
university medical center context. 
 
30.2.13 - Billing Procedures for Entities Qualified to Receive Payment 
on Basis of Reassignment - for A/B MAC Part B Processed Claims 
(Rev. 3774, 05-12-17, Effective: 06-13-17, Implementation: 06-13-17) 
 
Except where otherwise noted, the following procedures apply to both assigned and 
unassigned claims submitted by medical groups and other entities entitled to bill and 
receive payment for physician services under 30.2-30.2.8.  They are used whether the 
charges are compensation related or non-compensation related. 
 
A General 
 
Chapter 26 contains general claims processing instructions. A medical group, or other 
entity entitled to bill and receive payment for physician services uses the current ASC 
X12 professional claim billing format or Form CMS-1500 to submit claims to Medicare 
A/B MACs Part B.  A single claim form may contain services furnished to the same 
patient by different physicians associated with the same entity.  The name and address of 
the entity is entered in block 33 of Form CMS-1500 or in the corresponding ASC X12 
837 location. For paper claims an authorized official of the entity signs in block 31.  This 
official need not be a physician.  For electronic claims a certification can be maintained 
on file. (See CMS EDI Web page (http://www.cms.hhs.gov/providers/edi/edi3.asp) for 
electronic billing formats.) 
 
B Provider Identification Numbers 
 
The entitys NPI, when required, is entered in block 33a.  Each physician who performs 
services for a patient must be identified on the Form CMS-1500 claim in block 24J for 
the appropriate line item in accordance with instructions in the Medicare Program  Integrity Manual.  (When an entity bills for an independent substitute physician or 
physical therapist under a reciprocal or fee-for-time compensation substitute billing 
arrangement, the performing physician or physical therapist identified on the claim 
form is the regular physician or regular physical therapist who is a member of the entity.) 
 
C Payment Records 
 
Where the charges by a hospital, medical group, or other entity differ depending on the 
individual treating physician, A/B MACs Part B transmit the performing physicians   
NPI when required on the Common Working File (CWF) claim record.  Where the 
charges by a hospital, medical group, or other entity are uniform regardless of the 
individual performing physician, claims records are prepared by entity and entity 
identification numbers rather than by individual physician and individual physician 
identification numbers.  Show code 70 as specialty code on claims records where such 
entitys physicians have mixed (more than one) specialties.  Where all the physicians 
associated with such entity have the same specialty, the code used reflects the specialty, 
e.g., code 30 for a group of radiologists, code 11 for a group of internists. 
 
D Outpatient Physical Therapy or Speech-Language Pathology Claims 
Clinics that have been certified to provide outpatient physical therapy or speech-language 
pathology services to outpatients also use the ASC X12 837 professional claim format, or 
the CMS-1500 claim form for billing the A/B MAC Part B. 
 
30.2.14 - Correcting Unacceptable Payment Arrangements 
(Rev. 3774, 05-12-17, Effective: 06-13-17, Implementation: 06-13-17) 
 
A.  Disseminating Information 
 
From time to time, A/B MACs must disseminate through professional relations media 
information regarding the prohibition in 30.2. 
 
A/B MACs Part A 
 
The following language may be used by A/B MACs Part A or adapted for this purpose: 
The Medicare law prohibits us from paying benefits due a provider to another person or 
organization under an assignment, power of attorney, or any other arrangement whereby 
that other person or organization receives those payments directly.  There are the 
following exceptions to this rule: 
 
 CMS may pay a providers benefits (in the providers name) to a 
billing or collection agent, if: 
 
o  The agent receives the payment under an agency agreement with the 
provider; 
o  The agents compensation is not related in any way 
to the dollar amounts billed or collected;  o  The agents compensation is not dependent upon 
the actual collection of payment; 
o  The agent acts under instructions which the 
provider may modify or revoke at any time; and 
o  The agent, in receiving payment, acts only in the 
providers behalf. 
 
 CMS may pay the providers benefits in accordance with an 
assignment established by, or pursuant to the order of, a court of 
competent jurisdiction. 
 
A provider should notify us immediately if: 
 
  CMS has been mailing its benefits to the address of another person or 
organization; 
 
 The provider has given that other person or organization power of 
attorney or other advance authority to negotiate its benefit checks; and 
 
  None of the above exceptions that would permit payment to 
another person or organization apply in the providers case. 
 
A provider which hereafter enters into or continues such a prohibited payment 
arrangement may have its participation in the program terminated and its right to receive 
assigned payment for physician services revoked. 
 
A/B MACs Part B and DME MACs 
 
An A/B MAC Part B and DME MAC may use or adapt the following language for 
notification: 
 
The Medicare law prohibits us from paying benefits due a physician or other supplier of 
health care items and services, to another person or organization, under a reassignment or 
power of attorney or under any other arrangement whereby that other person or 
organization receives those payments directly. There are the following exceptions to this 
rule: 
 
 CMS may pay a physicians or suppliers employer under the terms 
of his/her employment. 
 
 CMS may pay a hospital, clinic, or other facility for services 
furnished by the physician or supplier in the facility, in accordance with 
the physicians or suppliers agreement with the facility. 
 
  CMS may pay a group practice prepayment plan, prepaid health plan, or  
    HMO for services of physicians and suppliers associated with the plan. 
 
 CMS may pay a physician, medical group, or other supplier for the 
technical component (TC) or professional component (PC) of diagnostic 
tests (other than clinical diagnostic tests) that are subject to the anti-
markup payment limitation. 
 
 CMS may pay the patients regular physician or physical therapist 
for services provided to his/her patients by another physician or physical 
therapist on an occasional, reciprocal basis 
 
  CMS may pay the patients regular physician or physical therapist 
for services of a substitute physician or physical therapist during the 
absence of the regular physician or physical therapist where the regular 
physician or physical therapist pays the substitute on a per diem or similar 
fee-for-time basis. 
 
 CMS may pay a physicians or suppliers benefits in his/her name 
to a billing or collection agent, e.g., a medical bureau, if: 
 
o  The agent receives the payment under an agency 
agreement with the physician or supplier; 
o  The agents compensation is not related in any way 
to the dollar amounts billed or collected; 
o  The agents compensation is not dependent upon 
the actual collection of payment; 
o  The agent acts under instructions which the 
physician or supplier may modify or revoke at any time; and 
o  The agent, in receiving the payment, acts only on 
the physicians or suppliers behalf. 
 
 CMS may pay a physicians or suppliers benefits in accordance 
with a reassignment established by, or pursuant to the order of, a court of 
competent jurisdiction. 
 
A physician or supplier should notify us immediately if: 
 CMS has been mailing his/her benefits to the address of another 
person or organization; 
 
 The physician has given that other person or organization power of 
attorney or other advance authority to negotiate the physicians benefit 
checks; and 
 
 None of the above exceptions which would permit payment to 
another person or organization apply in his/her case. 
  A physician or other eligible recipient of assigned payment who hereafter enters 
into or continues such a prohibited payment arrangement may have the right to 
receive assigned payment revoked. 
 
30.2.14.1 - Questionable Payment Arrangements 
(Rev. 1, 10-01-03) 
 
A.  Developing Questionable Payment Arrangements 
 
Contractors (both FIs and Carriers) should assume that an arrangement in which 
Medicare payment is being sent or is to be sent to an address other than the physical 
location of the provider/supplier is consistent with the requirements of 30.2 in the 
absence of evidence to the contrary.  However, develop the facts of any case in which: 
 
  The contractor becomes aware that it is mailing or asked to mail the 
provider/suppliers payments to the address of another person or organization; 
and 
 
  It is likely the other person or organization is not qualified to receive payments 
under one of the exceptions in 30.2.1 or is a financial institution.  (See 30.2.5.) 
 
Contractors must develop the facts of the case, e.g., where it appears that the contractor is 
mailing or asked to mail the provider provider/suppliers payments to the address of a 
company known to be engaging in factoring. 
 
B.  How to Develop Questionable Payment Arrangements 
 
Discretion must be used in determining the procedure to follow in developing 
questionable payment arrangements.  Contractors should ascertain the reason for the 
special address.  Once it is determined that payments due the provider/supplier are being 
made to another party (although in the name of the provider), the contractor must 
ascertain whether any of the exceptions in 30.2.1 apply.  After initial contact with the 
provider/supplier, the contractor may find the other party to be the best source of 
information about the arrangement.  The contractor should establish the crucial elements 
of the arrangement by obtaining a copy of the formal agreement, if any, between the 
parties, copies of pertinent correspondence, and/or signed statements of the parties.  The 
failure of the provider/supplier to cooperate in furnishing the necessary information (or in 
giving any necessary authorization for others to furnish information) is grounds (see 
30.2.15) for terminating the provider/suppliers participation in the program and 
revoking its right to receive assigned payment. 
 
C.  Change of Address 
 
If the contractor determines that a person or organization is ineligible to receive payments 
due a provider/supplier, routinely mailing the provider/suppliers payments to that person  or organizations address should be discontinued.  However, such a mailing address is 
acceptable if: 
 
  The parties to the arrangement have given written assurances that the person or 
organization to whose address the check is mailed will not convert the check to its 
own use and control, or if the organization is a financial institution, that the 
requirements of 30.2.5 are met; and 
 
  The purpose of the arrangement makes the assurances credible. 
 
An acceptable mailing arrangement could exist, e.g., when the provider/supplier wants its 
checks mailed for bookkeeping purposes to a business agent who is ineligible to receive 
the payment, and both the agent and the provider state in writing that the agent will 
forward the checks to the providers bank for deposit in a business account from which 
the provider/supplier is free to withdraw any deposited funds. 
 
D.  Reviewing Endorsements on Checks 
 
In any case where the contractor, after developing the facts, continues to mail the 
providers payments to an address which may be that of another person, but still doubts 
that the arrangement is inconsistent with these instructions, review (after a reasonable 
interval) endorsements on the returned checks for indications that the checks are being 
negotiated under a power of attorney.  When someone negotiates a provider/suppliers 
checks under a power of attorney, the provider/suppliers name is typically printed on the 
back of the check with the endorsees signature below, followed by p.p. or p.p.a. or 
p.o.a (for per procuration, per power of attorney, or power of attorney). 
 
30.2.15 - Sanctions for Prohibited Payment Arrangement 
(Rev. 1, 10-01-03) 
A3-3488.4, B3-3060.13, B3-3060.14 
 
A.  Advice to Provider 
 
If the contractor finds that a provider (for Part B, physician or other supplier, or party 
eligible to receive the payment under 30.2 as an employer, facility or organization) has 
entered into, or is considering entering into, a payment arrangement prohibited by 30.2, 
the contractor must advise that provider in writing that the arrangement violates Medicare 
law and regulations and subjects the provider to the penalties described in subsections B 
and C.  When the improper payment arrangement is in effect, the contractor must require 
a change in the address to which the providers checks are sent.  For an exception, see 
30.2.14.1C. 
 
B.  Bases for Termination of a Providers Medicare Participation Agreement 
 
The CMS may terminate a providers Medicare participation agreement if the 
provider/physician:   
  Executes or continues an assignment or a power of attorney, or enters into or 
continues any other arrangement, that authorizes or permits Medicare cost-basis 
payments to be made contrary to 30.2, 42 CFR 405.1668, and 1815(c) of the 
Act after having been advised under subsection A above; or 
 
  Fails to furnish upon request by CMS or the contractor such information as CMS 
or the contractor finds necessary to establish compliance with the requirements of 
this section. 
 
The provider has the usual appeal rights applicable to agreement termination determina-
tions. 
 
C.  Bases for Revocation of Assignment Privilege 
 
The CMS may revoke the right of a provider to receive assigned payment for physician 
services if the provider: 
 
  Executes or continues a reassignment or power of attorney, or enters into or 
continues any other arrangement, that authorizes or permits Medicare charge basis 
payments to be made contrary to 30.2, 42 CFR 405.1680, and 1842(b)(6) of 
the Act, after CMS or the carrier gives the provider advice about such violation; 
 
  Fails to furnish upon request by CMS or the carrier evidence needed to establish 
compliance with the requirements of 30.2, 42 CFR 405.1680, and 1842(b)(6) 
of the Act; 
 
  Violates the terms of assigned payment; e.g., by collecting or attempting to collect 
more than the allowable amount, after CMS or the carrier gives the provider 
advice about such violations; or 
 
  Fails to desist from collection efforts already begun, or to refund monies 
incorrectly collected, in violation of the terms of assigned payment, after CMS or 
the carrier gives the provider instructions to cease to take such action. 
 
A special appeals procedure is provided within CMS when action is taken to revoke a 
providers right to accept assignment. 
 
The fact that a providers right to accept assignment is revoked does not preclude it from 
billing the beneficiary for the services or changing its arrangement with the physician to 
permit billing for rendered services, either on an assigned or unassigned basis.  On the 
other hand, a provider is not ordinarily precluded from accepting assignment from a 
beneficiary for the services of a physician whose assignment privilege has been revoked 
if the beneficiary has an agreement with the provider giving it the right to bill for services 
rendered.  There is an exception.  The revocation of a physicians assignment privilege 
automatically revokes the assignment privilege of any corporation, partnership, or other  entity in which the provider/supplier directly or indirectly has or obtains all or all but a 
nominal part of the financial interest.  Such entity may not accept assignment for the 
services of the physician or anyone else.  What is a nominal interest depends upon the 
circumstances.  The contractor may assume that an interest by other persons totaling at 
least five percent of the financial interest of the entity is more than nominal.  The term 
indirect interest refers to the situation where the entity billing for the physicians 
services is owned by another entity in which the physician has most of the financial 
interest. 
 
D.  Action When Violations Are Found 
 
When the contractor finds that the provider/supplier has, after warning to the contrary, 
entered into, or continued, a prohibited payment arrangement, failed to cooperate in 
furnishing the information necessary to resolve the issue, violated its assignment 
agreement or failed to correct a violation of its assignment agreement, the contractor 
forwards a copy of the file to the program integrity staff in the RO.  The RO considers 
whether further development of the facts or admonition of the provider will be useful 
before taking steps to terminate its participation agreement and/or to revoke its right to 
accept assignment. 
 
In imposing the administrative sanction of revocation of the assignment privilege, the RO 
notifies the provider/supplier of the proposed revocation of its right to receive assigned 
benefits and gives it 15 days in which to submit a statement, including any pertinent 
evidence, explaining why its right to payment should not be revoked.  After the statement 
has been submitted, or the 15-day period has expired without the filing of the statement, 
the RO determines whether to revoke the provider/suppliers right to receive assigned 
payment.  If its determination is to revoke, the RO notifies the contractor to suspend 
payment on all assigned claims submitted by the provider/supplier and received after the 
effective date of the revocation. It notifies the provider/supplier of the revocation and of 
its right to request a hearing on the revocation within 60 days.  (The RO may extend the 
period for requesting a hearing.) 
 
If the provider/supplier requests a formal hearing (to be conducted by a member of the 
hearings staff of CMS) and the hearing officer reverses the revocation determination, the 
RO instructs the carrier and FI to pay the provider/supplier s assigned claims (the 
physician component).  If the hearing officer upholds the revocation determination or if 
no request for a hearing is filed during the period allowed for this, the RO instructs the 
carrier and FI to make any assigned payments otherwise due the provider to the 
beneficiary who received the services, or another person or agency authorized under the 
law and regulations to receive the payments (e.g., the beneficiarys legal guardian or 
representative payee or, if the beneficiary is deceased, the person who paid the bill).  The 
revocation remains in effect until the RO finds that the reason for the revocation has been 
removed and that there is reasonable assurance that it will not recur.  The RO decision to 
continue the revocation in effect may not be appealed. 
  The law provides that any person who accepts assignment of benefits under Medicare and 
who knowingly, willfully, and repeatedly violates the assignment agreement shall be 
guilty of a misdemeanor and subject to a fine of not more than $2000 or imprisonment of 
not more than six months or both.  The RO may invoke the administrative sanction in 
appropriate cases to deny payment while criminal prosecution is being considered or in 
process, or, as an alternative, when prosecution is inappropriate or not feasible.  Since 
this sanction may in some cases interfere with effective prosecution, imposition of the 
sanction is discretionary rather than mandatory. 
 
30.2.16 - Prohibition of Assignments by Beneficiaries 
A3-3488.5, B3-3060.15, B3-7065 partial 
 
A.  Basic Prohibition 
 
Except as provided in subsection B, carriers pay only the beneficiary (or beneficiary legal 
representative or representative payee) benefits payable directly to the beneficiary FIs do 
not send money directly to beneficiaries, they must require providers they pay to refund 
monies to beneficiaries when circumstances so warrant (i.e., when a provider has 
collected money from a beneficiary for a demand-billed service that is later found to be 
covered by Medicare).  This prohibition does not, of course, apply to payment under an 
assignment of benefits by the beneficiary to the physician or other supplier who furnished 
the services or to a qualified reassignee, e.g., a hospital. 
 
B.  Exceptions 
 
  Payment to a Government Agency.  The law does not preclude the Medicare 
program from paying the benefits due a beneficiary to a governmental agency or 
entity. However, see 30.2.1 for the effect of the requirements of the Assignment 
of Claims Act. 
 
  Payment Pursuant to Court Order.  The Medicare program may make payment of 
amounts due a beneficiary, in accordance with an assignment established by, or 
pursuant to the order of, a court of competent jurisdiction.  The assignment must 
satisfy the conditions in 30.2. 
 
  Payment to Agent.  The Medicare program may make payment in the name of the 
provider to an agent who furnishes billing or collection services.  The payment 
arrangement between the provider and an agent must meet the same requirements 
as the payment arrangement between a physician and an agent.  (See 30.2.4 for 
payment to an agent of a physician.) 
 
  Indirect Payment.  A carrier may make payment of amounts due a beneficiary to 
an entity which: 
 
o  Provides coverage of the service under a health benefits plan but only to 
the extent that payment is not made under Part B (i.e., the coverage which  the plan provides is complementary to Medicare and covers only the 
amount by which the Part B payment falls short of the charge approved 
under the plan for the service); 
 
o  Pays the person who provided the service (or his/her reassignee under 
30.2.6 - 30.2.8) an amount (including the Part B benefit) which that 
person accepts as full payment; or 
 
o  Has the written authorization of the beneficiary (or beneficiary 
representative) to receive the Part B payment. 
 
30.3 - Physician/Practitioner/Supplier Participation Agreement and 
Assignment - Carrier Claims 
(Rev. 1035, Issued: 08-18-06, Effective: 07-01-06, Implementation: 09-18-06) 
 
Institutional providers (those that bill Fiscal Intermediaries (FIs)) are paid direct by the 
FI. In contrast, physicians, practitioners, and suppliers that bill the carrier may choose to 
enter into a participation agreement. 
 
Carrier Participating Providers are paid at 100 percent of the physician fee schedule 
and must accept assignment (must accept program payment as payment in full, except for 
any unmet deductible and coinsurance).  Non-participating providers are paid at 95 
percent of the physician fee schedule and may accept assignment on a claim-by-claim 
basis. 
 
Physicians and suppliers enrolled in the Medicare program under the Form CMS-855 
process do not have to sign a Medicare Participating Physician or Supplier Agreement 
in order to bill Medicare and receive payment. However, there is a 5 percent reduction in 
the Medicare approved amounts if the physician or his/her reassignee does not 
participate. Participation is an election that is optional to suppliers, even those that have 
to bill assigned. 
 
Also, regardless of participation, some suppliers and practitioner types are required to 
accept assignment. This is covered in the instructions in later chapters for each service 
type. 
 
30.3.1 - Mandatory Assignment on Carrier Claims 
(Rev. 2487, Issued: 06-08-12, Effective: 01-01-11, Implementation: 06-19-12) 
 
The following practitioners who provide services under the Medicare program are 
required to accept assignment for all Medicare claims for their services. This means that 
they must accept the Medicare allowed amount as payment in full for their practitioner 
services. The beneficiarys liability is limited to any applicable deductible plus the 20 
percent coinsurance. 
 
Assignment is mandated for the following claims:   
  Clinical diagnostic laboratory services and physician lab services;  
  Physician services to individuals dually entitled to Medicare and Medicaid; 
 
Services of physician assistants, nurse practitioners, clinical nurse specialists, nurse 
midwives, certified registered nurse anesthetists, clinical psychologists, clinical social 
workers, registered dietitians/nutritionists, anesthesiologist assistants, and mass 
immunization roster billers. 
 
NOTE: The provider type Mass Immunization Roster Biller can only bill for influenza 
and pneumococcal vaccinations and administrations. These services are not subject to the 
deductible or the 20 percent coinsurance.  
 
  Ambulatory surgical center services; (No deductible and 25% coinsurance for 
colorectal cancer screening colonoscopies {G0105 and G0121) and effective for 
dates of service on or after January 1, 2008 G0104 also applies);  
 
  Home dialysis supplies and equipment paid under Method II for dates of service 
prior to January 1, 2011.  Refer to Section 30.3.8 for information regarding the 
elimination of Method II home dialysis for dates of service on and after January 1, 
2011; 
 
  Drugs and biologicals; and,  
 
  Ambulance services  
 
When these claims are inadvertently submitted as unassigned, carriers process them as 
assigned. 
 
Note that, unlike physicians, practitioners, or suppliers bound by a participation 
agreement, practitioners/entities providing the services/supplies identified above are 
required to accept assignment only with respect to these services/supplies (unless they 
have signed participation agreements which blanket the full range of their services).  
 
The carrier system must be able to identify (and update) the codes for those services 
subject to the assignment mandate.  
 
For the practitioner services of physicians and independently practicing physical and 
occupational therapists, the acceptance of assignment is not mandatory. Nor is the 
acceptance of assignment mandatory for the suppliers of radiology services or diagnostic 
tests. However, these practitioners and suppliers may nevertheless voluntarily agree to 
participate to take advantage of the higher payment rate, in which case the participation 
status makes assignment mandatory for the term of the agreement. Such an agreement is 
known as the Medicare Participating Physician or Supplier Agreement. (See 30.3.12.2 
Carrier Participation Agreement.) Physicians, practitioners, and suppliers who sign this  agreement to participate are agreeing to accept assignment on all Medicare claims. The 
Medicare Participation Agreement and general instructions are on the CMS Web site.  
 
Future updates to this section will be communicated in a Recurring Update Notification. 
 
30.3.1.1 - Processing Claims for Services of Participating Physicians or 
Suppliers  
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
The participating physician or supplier submits any claims for services furnished by the 
physician or supplier, except in the limited circumstances specified in 30.2.8.3 or 
30.2.16.  (The exception concerns situations where the physician or supplier accepts, as 
full payment, payment by certain organizations.)  When an unassigned claim is received 
from a physician, the A/B MAC (B) must verify that the physician is participating.  The 
contractor processes the claim as assigned absent clear evidence of intent by the 
physician or beneficiary not to assign.  
 
Any Form CMS-1500 claim where the participating physician or supplier checks either 
the assignment or non-assignment block or fails to check either block, the A/B MAC (B) 
must treat it as assigned. 
 
Where there is evidence of clear intent not to assign, the A/B MAC (B) must deny the 
claim.  Use MSN 16.6. 
 
This item or service cannot be paid unless the provider accepts 
assignment. 
 
In Spanish: 
 
Este articulo o servicio no se pagara a menos de que el proveedor acepte 
asignacion. 
 
A/B MAC (B) must identify and track assignment violations in the event sanctions must 
be imposed. 
 
No Part B payment is made on a claim by a participating physician or supplier to anyone 
other than the physician or supplier (except in the case of court-ordered assignment to 
other parties under 30.2) even if the beneficiary has paid part of the bill.  However, if 
the physician or supplier collects any charges from the beneficiary before submitting the 
claim, he/she must show on the claim form the amount collected.  The carrier refunds 
directly to the beneficiary, to the extent feasible, any over collection of deductible and 
coinsurance.  The physician is responsible for refunding to the beneficiary any over 
collection not refunded by the carrier directly.  In these latter instances, the carrier 
advises the physician of his/her obligation to refund any over collections to the 
beneficiary.  Also, the carrier advises the beneficiary of the amount of any refund due 
from the physician.   
30.3.2 - Nature and Effect of Assignment on Carrier Claims 
(Rev. 643, Issued: 08-12-05, Effective: 01-01-05, Implementation: 11-14-05) 
 
Assignment is a written agreement between beneficiaries, their physicians or other 
suppliers, and Medicare.  The beneficiary agrees to let the physician or other supplier 
request direct payment from Medicare for covered Part B services, equipment, and 
supplies by assigning the claim to the physician or supplier.  The physician/supplier in 
return agrees to accept the Medicare allowed payment amount by the carrier as his/her 
full charge for the items or services.  A physician/supplier who agrees to accept 
assignment on all claims for Medicare services, rather than on a claim-by-claim basis is 
known as a participating physician/supplier.  See Publication 100-4, chapter 1, sections 
30.3 and 30.3.12.2 of the IOM.  In effect, the physician/supplier who accepts assignment 
on a claim-by-claim basis or who is a participating physician/supplier is precluded from 
charging the enrollee more than the deductible and coinsurance based upon the approved 
payment amount determination.  If dissatisfied with the amount of the Medicare allowed 
amount, a physician/supplier may follow the procedures for appeals of contractor initial 
determinations. 
 
In mandatory assignment situations, i.e., where payment under the Act can be made 
only on an assignment-related basis or where payment is for services furnished by a 
participating physician or supplier, the beneficiary (or the person authorized to request 
payment on the beneficiarys behalf) is not required to assign the claim to the physician 
or supplier in order for an assignment to be effective.  However, the beneficiary (or the 
person authorized to request payment on the beneficiarys behalf) must continue to 
authorize the release of medical or other information necessary to process the claim and 
request payment of Medicare benefits for the Medicare Part B covered services, 
equipment, or supplies pursuant to 42 C.F.R 424.32 and 424.36 (see also Pub. 100-04, ch. 
1, sect. 50.1).  Physicians or suppliers who agree to (or must by law) accept assignment 
from Medicare cannot attempt to collect more than the appropriate Medicare deductible 
and coinsurance amounts from the beneficiary, his/her other insurance, or anyone else. 
 
In situations where mandatory assignment is not applicable and a nonparticipating 
physician or supplier indicates on the claim that he/she accepts assignment, but the 
beneficiary does not assign the claim to that nonparticipating physician/supplier-- 
payment must be made on an unassigned basis (i.e., directly to the beneficiary). 
 
A violation of the assignment occurs if the physician/supplier collects (or attempts to 
collect) from the enrollee or anyone else any amount which, when added to the benefit, 
exceeds the Medicare allowed amount. A bill for assigned services is considered paid in 
full when the Medicare allowed amount is paid.  The carrier payment determination takes 
into account all of the services furnished by the physician/supplier in connection with the 
claim.  Therefore, a physician/supplier may not charge the enrollee for paperwork 
involved in filing an assigned claim. 
  If the enrollee has private insurance in addition to Medicare, the physician/supplier who 
has accepted assignment of SMI benefits is in violation of his/her assignment agreement 
if he/she bills or collects from the enrollee and/or the private insurer an amount which, 
when added to the Medicare benefit received, exceeds the Medicare allowed amount.  If 
it comes to a carriers attention that a physician/supplier has received an excessive 
amount, inform him/her to refund such amount to the appropriate party.  Where it is not 
clear as to who is entitled to receive the refund under the terms of the private insurance, 
any excess amount paid by the enrollee may be returned to the enrollee. 
 
A nonparticipating physician/supplier who accepts assignment for some Medicare 
covered services is not ordinarily precluded from billing the patient for other Medicare 
covered services for which the nonparticipating physician/supplier does not accept 
assignment, and is also not precluded from billing the patient for services that are not 
covered by Medicare.  However, a physician/supplier may not attempt to circumvent the 
Medicare allowed amount limitation by fragmenting his/her bills.  Bills are 
fragmented when a physician/supplier accepts assignment for some services, and 
claims payment from the enrollee for other services performed at the same place and on 
the same occasion.  When a carrier becomes aware that a physician/supplier is 
fragmenting his/her bills, it must inform him/her that this practice is unacceptable and 
that he/she must either accept assignment for, or bill the enrollee for, all services 
performed at the same place and on the same occasion. 
 
EXCEPTION:  In mandatory assignment situations, i.e., where a physician/supplier 
must accept assignment for certain services as a condition for any payment or for full 
payment to be made (e.g., clinical diagnostic laboratory tests, physician assistants), 
he/she may accept assignment for those services without accepting assignment for other 
services furnished by him/her for the same enrollee at the same place and on the same 
occasion. 
 
30.3.3 - Physicians Right to Collect From Enrollee on Assigned Claim 
Submitted to Carriers 
(Rev. 1, 10-01-03) 
B3-3045.2 
 
A.  Before the Claim is Submitted 
 
The provider (including physicians and suppliers) who is accepting assignment should 
not attempt to collect more than 20 percent of the charge from the enrollee when the 
deductible has been met.  He or she should, if the occasion arises, be advised not to do so. 
Any greater amount collected will: 
 
1.  Reduce the amount payable to him/her on the assigned claim, 
 
2.  Cause the enrollee unnecessary hardship in raising the excess amount, and  
  3.  Require extra work for the carrier in paying this excess to the enrollee instead of 
the physician. 
 
However, a provider (including physicians and suppliers) may accept assignment after 
having collected a part of his/her bill.  The fact that the enrollee has paid more than any 
deductible and coinsurance due does not invalidate the assignment. 
 
B.  Showing the Amount Collected on the Claims Form 
 
In submitting an assigned claim, the provider (including physicians and suppliers) must 
show on Form CMS-1500 any amount he/she has collected from the enrollee for these 
services.  This information is essential for correct payment of the benefits due; failure to 
show the amount paid is likely to result in excessive benefit payment to the provider 
(including physicians and suppliers) (i.e., a benefit payment which, when added to the 
amount already paid by the enrollee, will exceed the Medicare allowed amount). 
 
EXAMPLE:  The physician accepted assignment of a bill of $300 for covered services 
and collected $60 from the enrollee, but failed to show on the claim form that he/she had 
collected anything.  The carrier determined the Medicare allowed amount to be $250, and 
since the deductible had previously been met, made payment of $200 to the physician.  
Since the physician would have received $190 in benefit payments and the enrollee $10 if 
the amount collected had been shown on the claim form, the physician has been overpaid 
$10.  When this overpayment comes to light, e.g., by a complaint from the enrollee, the 
carrier will take necessary corrective action, e.g., advise the physician to refund the $10 
to the enrollee and if he/she fails to do so, pay the enrollee the $10 and recover the 
overpayment from the physician. 
 
C.  Physician Should Not Bill Enrollee After the Claim is Submitted 
 
After the provider (including physicians and suppliers) has accepted assignment he/she 
should not bill the enrollee or try to collect from him/her any additional part of the bill 
until he/she receives the carriers Medicare Summary Notice (MSN).  Where the provider 
(including physicians and suppliers) collects any substantial part of his/her bill from the 
enrollee after submitting his/her claim, such collection is likely to be an overcollection, 
and a violation of the assignment agreement.  Furthermore, the enrollee who receives a 
bill from the provider (including physicians and suppliers) may submit such bill to the 
carrier with his/her own claim for benefits, causing confusion, possible duplicate 
payment, or payment of benefits to the enrollee rather than the provider (including 
physicians and suppliers). 
 
EXAMPLE:  The physician accepted assignment of a bill of $300 for covered services, 
and collected $60 from the enrollee after the Form CMS-1500 had been filed with the 
carrier, but before receiving notice of the Medicare allowed amount.  The carrier 
determined that the Medicare allowed amount was $250, and since the Form CMS-1500 
did not show any payment made by the enrollee, paid the physician $200 (80 percent of  the $250 Medicare allowed amount).  The result is that the physician has overcollected 
from the enrollee by $10. 
 
When this overcollection came to light through a complaint from the enrollee, the carrier 
notified the physician that the $10 must be refunded to the enrollee.  Unlike the excess 
payment made because the physician fails to show the amount collected on the claims 
form (see the example in B above), this $10 does not constitute a program overpayment; 
the carrier should not apply recovery procedures applicable to overpayments, and should 
not pay the $10 to the patient unless the physician first refunds it to the carrier (in lieu 
of refunding it directly to the patient). 
 
If the physician, after submitting his/her claim, collects an additional amount on his/her 
bill, and the carrier learns of such collection before making SMI payment, the carrier 
should adjust its payments to the physician and enrollee accordingly.  However, even if 
the physician collected the entire bill, requiring that the full SMI benefit be paid to the 
enrollee, the Medicare allowed amount limitations of the assignment still apply. 
 
D.  Durable Medical Equipment Supplier Bills for Coinsurance at the Time Claim 
Submitted  
 
Notwithstanding the guideline in C above, a supplier of durable medical equipment may 
bill the beneficiary for 20 percent of the Medicare allowed amount at the same time it 
submits an assigned claim to the carrier for the items and services furnished.  The 
supplier must undertake: 
 
1.  To bill the beneficiary at the time it submits the claim only for 20 percent of the 
Medicare allowed amount; and 
 
2.  To inform the beneficiary prominently on its invoice that: 
 
a.  It has submitted a claim to the carrier for the items and services and he/she 
should not him/her self submit such a claim; and 
 
b.  The bill is for 20 percent of the Medicare allowable charge and is not covered 
by Medicare; and 
 
3.  To establish and maintain adequate procedures for refund of any over collections 
from the beneficiary that might result from the carrier approving a different 
Medicare allowed amount than that submitted. 
 
30.3.4 - Effect of Assignment Upon Rental or Purchase of Durable 
Medical Equipment on Claims Submitted to Carriers 
(Rev. 1, 10-01-03) 
B3-3045.3 
 
A.  Equipment More Expensive Than Standard Item    
An item of durable medical equipment may have certain convenience or luxury features 
that make it more expensive than a standard item, i.e., one which will adequately meet 
the medical needs of the patient.  The charge for the more expensive item cannot exceed 
the fee schedule amount for the item adequate for the patients medical needs.  Only if a 
more expensive item or model with special features is medically necessary for the 
beneficiary will the Medicare allowed amount be based on the more expensive model.  If 
the patient purchases or rents an item of durable medical equipment having more 
expensive features than his/her condition requires, the supplier accepting assignment on 
such an item cannot charge or collect any amount in excess of the Medicare allowed 
amount for the appliance adequate for the patients needs.  Acceptance of assignment 
binds the supplier to accept the Medicare allowed amount determined by the carrier, as 
the full charge for the item.  A supplier who wishes to charge and collect the full price for 
equipment more expensive than medically required by the patient need not accept 
assignment. 
 
Refer to chapter 30, for advance beneficiary notice (ABN) provisions. 
 
EXAMPLE:  An enrollee who needs a wheelchair is sold a motorized chair although a 
manually operated chair would meet his/her medical needs.  The Medicare allowed 
amount in this case is the Medicare allowed amount for a manually operated chair. 
Therefore, if the supplier accepts assignment, he/she cannot collect from the enrollee any 
amount in excess of the difference between the amounts of the SMI benefit paid to the 
supplier and the Medicare allowed amount for the manually-operated chair. 
 
B.  Equipment No Longer Medically Necessary 
 
In assignment cases, the beneficiary is responsible for paying the supplier the unpaid 
balance of the Medicare allowed amount when payments stop because his/her condition 
has changed and the equipment is no longer medically necessary.  Similarly, when 
payments stop because the beneficiary dies, his/her estate is responsible to the supplier 
for such unpaid balance. 
 
NOTE: Carriers should not get involved in issues relating to ownership or title to 
property. 
 
30.3.5 - Effect of Assignment Upon Purchase of Cataract Glasses From 
Participating Physician or Supplier on Claims Submitted to Carriers 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes.   
A pair of cataract glasses is comprised of two distinct products:  a professional product 
(the prescribed lenses) and a retail commercial product (the frames). The frames serve not 
only as a holder of lenses but also as an article of personal apparel. As such, they are 
usually selected on the basis of personal taste and style.  Although Medicare will pay 
only for standard frames, most patients want deluxe frames. Participating physicians and 
suppliers cannot profitably furnish such deluxe frames unless they can make an extra 
(noncovered) charge for the frames even though they accept assignment. 
 
Therefore, a participating physician or supplier (whether an ophthalmologist, optometrist, 
or optician) who accepts assignment on cataract glasses with deluxe frames may charge 
the Medicare patient the difference between his/her usual charge to private pay patients 
for glasses with standard frames and his/her usual charge to such patients for glasses with 
deluxe frames, in addition to the applicable deductible and coinsurance on glasses with 
standard frames, if all of the following requirements are met: 
 
A.  The participating physician or supplier has standard frames available, offers them 
for sale to the patient, and issues and ABN to the patient that explains the price and other 
differences between standard and deluxe frames. Refer to Chapter 30. 
 
B.  The participating physician or supplier obtains from the patient (or his/her 
representative) and keeps on file the following signed and dated statement: 
 
_____________________________________________ 
Name of Patient        Medicare beneficiary identifier  
Having been informed that an extra charge is being made by the physician or 
supplier for deluxe frames, that this extra charge is not covered by Medicare, 
and that standard frames are available for purchase from the physician or 
supplier at no extra charge, I have chosen to purchase deluxe frames.  
 
___________________  
Signature          Date  
 
C.  The participating physician or supplier itemizes on his/her claim his/her actual 
charge for the lenses, his/her actual charge for the standard frames, and his/her actual 
extra charge for the deluxe frames (charge differential). 
 
Once the assigned claim for deluxe frames has been processed, the carrier will follow the 
ABN instructions as described in 60. 
 
30.3.6 - Mandatory Assignment Requirement for Physician Office 
Laboratories on Claims Submitted to Carriers 
(Rev. 1, 10-01-03) 
B3-3045.5   
A.  General  
 
No payment may be made for clinical diagnostic laboratory tests furnished by a physician 
or medical group unless the physician or medical group accepts assignment or claims 
payment under the indirect payment procedure.  Carrier direct payment to a physician or 
group after the death of the beneficiary is considered assigned payment.  Assignment may 
be accepted for the entire claim.  See subsections B and C if a physician wishes to accept 
assignment only for laboratory services. 
 
B.  Submission of Non-EMC Claims 
 
A nonparticipating physician or medical group who furnishes clinical diagnostic 
laboratory tests and other services to a beneficiary and accepts assignment only for the 
laboratory tests may either submit a separate (assigned) claim for them or a single claim 
that includes both the assigned tests and the other unassigned services.  In the latter event, 
the claim must be annotated as unassigned in block 26 of the Form CMS-1500 and a 
special request for payment for the assigned tests written in block 25, as follows: 
 
I accept assignment for the clinical laboratory tests. 
 
C.  Submission of EMC Claims  
 
A nonparticipating EMC physician or medical group who furnishes clinical diagnostic 
laboratory tests and other services and accepts assignment only for the laboratory tests 
may either submit a separate (assigned) data set for the tests or a single data set that 
includes both the assigned tests and the unassigned other services.  In the latter event, the 
data set must include the unassigned indicator.  The physician or group must have filed a 
blanket statement agreeing to accept assignment on all clinical diagnostic laboratory tests, 
not withstanding the inclusion of the unassigned indicator on electronic data sets. 
 
D.  Processing Claims 
 
Carriers process as assigned all claims for clinical diagnostic laboratory tests as described 
above, including those submitted by a participating or non-participating physician or 
group either marked as unassigned or with no assignment option specified.  Where, 
however, evidence clearly shows that the beneficiary or provider refuses to assign the 
claim, carriers should deny it. They split a claim containing assigned laboratory tests and 
other unassigned services. 
 
E.  Public Information  
 
Carriers must inform all physicians and medical groups of this policy annually. 
  30.3.7 - Billing for Diagnostic Tests (Other Than Clinical Diagnostic 
Laboratory Tests) Subject to the Anti-Markup Payment Limitation - 
Claims Submitted to A/B/MACs 
(Rev. 10236, Issued: 07-31-2020, Effective: 08-31-2020, Implementation: 08-31-2020) 
 
 
A.  General  
 
A physician or other supplier may bill and receive payment for the technical component 
(TC) or professional component (PC) of a diagnostic test (other than clinical diagnostic 
laboratory test) that is performed by a physician or other supplier with whom the billing 
physician or other supplier does not share a practice.  Reimbursement for that service is 
subject to the anti-markup payment limitation.  If a physician or other suppliers bill or a 
request for payment includes a charge for a diagnostic test (other than a clinical 
diagnostic laboratory test) which the physician or other supplier did not personally 
perform or supervise, then payment for the test may not exceed the lesser of: 
 
  The performing physicians net charge to the billing physician or other supplier 
(net any discounts); 
 
  The billing physicians actual charge; or 
 
  The fee schedule amount that would be allowed for the test if the performing 
physician or other supplier billed directly. 
 
(See 30.2.9 of this chapter for additional information.) 
 
For payment to be made, the physician who acquires the TC or PC of a diagnostic test 
from an outside source must identify the performing physician or other supplier on the 
claim.  (The billing physician or other supplier should maintain a record of the 
performing physician or other suppliers NPI in the clinical record for auditing purposes.) 
 
The billing physician or other supplier must also indicate on the claim that the test is 
subject to the anti-markup payment limitation. 
 
See the guidelines at the official Washington Publishing Company website for how to 
show this on electronic claims. 
 
If using the CMS-1500 paper claim form: 
  In item 20 check "yes" to indicate the test is subject to the anti-markup payment 
limitation and enter the amount the performing physician or other supplier 
charged.  
  In item 32 enter the name, address, and NPI of the performing physician or 
supplier.  If the performing physician provides the service outside the A/B MAC 
(B) jurisdiction where the billing physician is located, the billing physician must  submit its own NPI with the name, address, and ZIP code of the performing 
physician or other supplier. 
 
No payment may be made to the physician without this information unless the statement 
No anti-markup tests are included is annotated on the claim. 
 
NOTE: If the billing physician performs only the TC or the PC and wants to bill for both 
components of the diagnostic test, the TC and PC must be reported as separate line items 
if billing electronically or on separate claims if billing on paper (CMS-1500).  Global 
billing is not allowed unless the billing physician or other supplier performs both 
components. 
 
Effective for claims submitted with a receipt date on and after October 1, 2015, the 
billing physician or supplier must report the name, address, and NPI of the performing 
physician or supplier in Item 32a of the CMS-1500 claim form (or its electronic 
equivalent) on anti-markup claims, even if the performing physician or supplier is 
enrolled in a different A/B MAC (B) jurisdiction.  (See 10.1.1.2 for more information 
regarding claims filing jurisdiction.) 
 
B.  Unassigned Claims with Required Documentation 
 
A physician or other supplier may not bill an individual an amount in excess of 
Medicares payment, except for any deductible and coinsurance, for the TC or PC of a 
diagnostic test that is subject to the anti-markup payment limitation.  A/B MACs (B) 
must notify physicians and other suppliers that they must indicate when a diagnostic test 
was acquired, identify the performing physician or other supplier, and show the amount 
the performing physician or other supplier charged.  The notification must inform 
physicians and other suppliers that they are prohibited by 1842(n)(3) of the Act from 
billing or collecting an amount in excess of Medicares payment, except for the 
deductible and coinsurance.  Excess amounts collected from the beneficiary must be 
repaid. 
 
C.  Unassigned Claims without Required Documentation  
 
A physician may not bill a beneficiary: 
 
  If the bill does not indicate who performed the test; and 
 
  If the bill indicates that a separate physician or other supplier performed the test, 
it does not identify the performing physician or other supplier or does not include the 
amount the performing physician or other supplier charged. 
 
The A/B MACs (B) notify the physician when a non-assigned claim for the TC or PC of 
a diagnostic test subject to the anti-markup payment limitation is received from either the 
physician or a beneficiary except when the physician submits an assigned claim and the 
beneficiary submits an unassigned duplicate claim.  They use the following sample letter.   
Dear Doctor: 
 
We have received an unassigned claim for diagnostic tests furnished to the 
patient (Beneficiary Name), on (Date of Service).  You are prohibited by 
1842(n)(3) of the Social Security Act from billing or collecting any 
amount unless you indicate that No anti-markup tests are included or, if 
the diagnostic test was acquired, you indicate who performed the test and 
what the physician or other supplier charged you.  Some or all of the 
required information is missing from your patients claim.  If you have 
collected any amount from your patient, it must be refunded.  This claim 
may be resubmitted if the required information is included. 
 
D.  Beneficiary Information Regarding Unassigned Claims  
 
The A/B MACs (B) must notify the beneficiary that the physician is prohibited from: 
 
  Billing the beneficiary when the necessary documentation is not supplied; and 
 
  Billing or collecting an amount in excess of Medicares payment, except 
for the deductible and coinsurance, when the required documentation is 
submitted. 
 
(See chapter 21 of this manual, for MSN messages.) 
 
30.3.8 - Mandatory Assignment and Other Requirements for Home 
Dialysis Supplies and Equipment Paid Under Method II on Claims 
Submitted to Carriers 
(Rev. 2487, Issued: 06-08-12, Effective: 01-01-11, Implementation: 06-19-12) 
 
B3-3045.7 
 
For services furnished prior to January 1, 2011, the DME MACs pay only on an 
assignment basis for home dialysis supplies and equipment furnished to a beneficiary 
who had selected Method II. 
 
Effective for dates of service on and after January 1, 2011, Section 153b of the Medicare 
Improvements for Patients and Providers Act (MIPPA) eliminated Method II home 
dialysis claims. All home dialysis claims must be billed by an ESRD facility and paid to 
the ESRD facility under the ESRD PPS. 
 
Refer to chapter 8 and chapter 20 for more information. 
 
30.3.9 - Filing Claims to a Carrier for Nonassigned Services 
(Rev. 702, Issued:  10-07-05; Effective/Implementation Dates:  N/A) 
  A  General 
 
Payment for Part B services furnished by a physician (or supplier) is made: 
 
  To the beneficiary on the basis of an itemized bill (nonassigned claims); or 
 
  To the physician (or supplier) who provided covered services on the basis of an 
assignment of benefit payments where the approved charge is the full charge for 
the services. 
 
NOTE: For services furnished on or after September 1, 1990, physicians and suppliers 
must complete and submit both assigned and nonassigned Part B claims for beneficiaries. 
 
B  Conflicting Claims 
 
Carriers must establish controls to detect and prevent payment for assigned and 
unassigned claims received for the same service (as well as duplicate assigned or 
duplicate unassigned claims. 
 
If an appropriate assigned claim is received after an unassigned claim has been paid, 
carriers do not pay the subsequent claims.  Where an enrollees claim based on an unpaid 
bill is received and benefits are payable, carriers make payment to him/her unless there is 
some definite basis for believing that payment has been assigned, e.g., the physician or 
supplier is a participating provider or the bill from a nonparticipating physician or 
supplier shows that assignment may have been made. 
 
Carriers are instructed to inform physicians that, if they wish to be sure of receiving Part 
B benefits, they should accept assignment at the time services are furnished and that their 
submission of claims to the carrier should not be unduly delayed. 
 
30.3.10 - Carrier Submitted Bills by Beneficiary 
(Rev. 1, 10-01-03) 
B3-3040.1 
 
Carriers do not make payment for non-receipted itemized bills without a Form 
CMS-1490S claim form signed by either the patient or his/her representative. 
 
Note that CMS does not accept beneficiary submitted claims for items subject to 
mandatory assignment. 
 
They also do not accept them for blood glucose test strips effective April 1, 2002. 
 
30.3.11 - Carrier Receipted Bill - Definition 
(Rev. 1, 10-01-03) 
B3-3040.2 
  A receipted bill is a written acknowledgment by a person or organization furnishing 
specified covered services, which states that payment has been made for all services on 
the bill. 
 
Where a receipted bill is submitted, benefits for the services shown on the bill should not 
be paid to the physician (or his/her supplier) since there can be no assignment.  (See 20) 
 
The bill itself bearing the words received payment, paid in full, paid, or a phrase 
with the same meaning, is the best evidence of payment if it is signed or initialed by the 
physician (or his/her employee, etc.) or by the person or organization furnishing supplies 
or services.  There will, however, be other evidence of payment that will be acceptable, 
such as machine-produced bills that clearly show the amount paid for each service.  A 
rubber-stamp imprint on the bill which includes the name of the physician or other 
supplier is acceptable, absent a reason to question it.  It is also reasonable to accept, as 
evidence of payment, a cancelled check that is related in time and amount to a doctors, 
or other Part B suppliers bill. 
 
A bill paid by promissory note is treated as a receipted bill unless the bill shows on its 
face that the note is not given and accepted unconditionally as payment of the bill. For 
example, a bill marked paid by promissory note or $25 paid in cash, balance paid by 
promissory note is treated as a receipted bill.  On the other hand, a bill marked paid 
subject to payment on promissory note, or which otherwise clearly indicates that the 
promissory note was not unconditionally accepted in payment of it, is not a receipted bill. 
 
30.3.12 - Carrier Annual Participation Program 
(Rev. 702, Issued:  10-07-05; Effective/Implementation Dates:  N/A) 
 
For providers (including physicians and suppliers) who have enrolled in Medicare, to 
sign a participation agreement (Form CMS-460) is to agree to accept assignment for all 
covered services that are provided to Medicare patients.  The benefits of signing a 
participation agreement include: 
 
  No 5 percent reduction in the Medicare approved amount. 
 
  Beneficiaries with Medigap coverage (private supplemental insurance) may 
assign the payment on the supplemental claim to the provider or supplier.  Under 
the current mandatory Medigap (claim-based) crossover process, beneficiaries 
must assign payment on their claims to a participating provider or supplier as a 
condition for their claims to be forwarded to their Medigap insurer for payment 
of all coinsurance and deductible amounts due under the Medigap policy.  The 
Medigap insurer, in turn, must pay the participating provider or supplier directly, 
thereby relieving the need of having to file a second claim.  (Refer to the 
Medicare Claims Processing Manual, Chapter 28, Section 70.6, for more 
information regarding the eligibility-file based crossover process.) 
    Listing in the Medicare Participation Physicians/Suppliers Directory 
(MEDPARD) that is posted on the carrier Web site. 
 
  Participants receive direct and timely reimbursement from Medicare. 
 
Refer to 30.3.1 for processing instructions for claims for practitioner services 
inadvertently submitted as unassigned. 
 
A  Eligibility 
 
All practitioners and suppliers eligible to receive payments under Part B of Medicare may 
choose to enter into a participation agreement. This includes practitioners whose services 
are subject to mandatory assignment. The reason why it could still be appropriate for 
such practitioners to enter into a participation agreement is because the mandatory 
assignment provisions apply only to the particular practitioner service benefit (e.g., nurse 
practitioner services). Thus, for example, if a nurse practitioner is eligible to bill for, and 
is indeed billing under, Part B for something other than a nurse practitioner service (e.g., 
an EKG tracing), the mandatory assignment provision of the law does not apply to that 
other service. However, if the nurse practitioner has entered into a participation 
agreement, that agreement requires that the nurse practitioner accept assignment for any 
service for which he or she submits a Medicare Part B claim. 
 
B  Participation Enrollment Period 
 
Carriers conduct an enrollment period on an annual basis in order to provide eligible 
practitioners and suppliers with the opportunity to enroll in or terminate enrollment in the 
participation program. They are given specific instructions each year regarding the dates 
during which the enrollment period is in effect. 
 
C  Circumstances in Which A Participating Physician or Supplier is Not Required 
to Accept Assignment for Covered Services 
 
A participating physician or supplier is not required to accept assignment for covered 
services when an entity (other than the beneficiary), which is eligible to request direct 
payment from the Medicare program for the services, pays the physician or supplier and 
the physician or supplier accepts that payment as full payment. 
 
For example, a private supplementary health benefits plan may pay the physician or 
supplier an amount, which the physician or supplier accepts as payment in full and then 
collect the Part B payment directly from the Medicare program. This procedure, called 
indirect payment or payment to organizations, permits a physician or supplier to submit a 
single claim for the Medicare and private plan benefits to the private health benefits plan. 
The physician or supplier may accept plan payment in excess of the Medicare approved 
charge. 
  The availability of this procedure depends on the extent to which health benefit plans are 
eligible and choose to use it. The indirect payment procedure is also available to 
nonparticipating physicians or suppliers. 
 
D  Entities Eligible to Enter Into Agreement to Be Participating Physicians or 
Suppliers 
 
Any person or organization that is authorized to accept assignment of Medicare benefits 
for covered services may enter into a participating physician agreement. This includes 
(but is not limited to): 
 
  Practitioners such as physicians, podiatrists, dentists, optometrists, and 
chiropractors; 
 
  Hospitals, medical groups, and other entities which are authorized to bill and to 
receive payment for physician services; 
 
  Organizations such as group practice prepayment plans, prepaid health plans, 
HMOs, and competitive medical plans which submit claims to Medicare carriers; 
and 
 
  Suppliers such as independent physical therapists, medical equipment supply 
companies, independent laboratories, ambulance services, and portable X-ray 
suppliers. 
 
E  Applicable Rules When Physicians Work for a Hospital or Medical Group 
The following rules apply when physicians work for (or are members of) a hospital, 
medical group, or other entity: 
 
  Except in the case of university medical centers, if a hospital, medical group, or 
other entity bills and receives payment for physician services in the name of the 
entity (rather than have the individual physicians bill and receive payment in 
their own names), one participation agreement by the entity binds all physicians 
with respect to any services furnished for the entity.  The individual physicians 
do not enter into participation agreements. 
 
NOTE:  In university medical centers, when individual departments bill 
under the name and provider identification number of the department, 
decisions for or against participation can be made on a departmental basis. 
 
  If a physician who is associated with a particular entity has an individual practice 
outside the scope of the practice for which the entity bills and receives payment, 
he or she may choose whether to participate with respect to his/her outside 
practice without regard to the participation status of the entity. 
    If individual physicians who work for an entity bill and receive payment in their 
own names for the services furnished for the entity, they make individual 
decisions as to whether to participate. These decisions apply both to the 
physicians services for the entity and to any outside practice. 
 
F  Services Subject to Agreement 
 
The participation agreement applies to items and services for which payment is made on 
a fee-for-service basis by Medicare Part B carriers. A participating agreement applies to 
all items and services in all localities and under all names and identification numbers 
under which the participant does business. 
 
The participant lists all names and identification numbers under which the participant 
submits claims to the carrier. This includes all names and numbers of the legal entity 
entering into the agreement, whether that entity is a sole proprietorship, partnership, or 
corporation. 
 
If the participant opens offices in another carrier jurisdiction during the term of the 
agreement, he or she must file a photocopy of the agreement with that carrier. 
 
G  Acknowledgment of Receipt 
 
Carriers acknowledge receipt of an agreement by sending the physician or supplier a 
photocopy of the agreement, which has been annotated with the effective date. 
 
H  Where to File Agreement 
 
An agreement is valid if it is filed with any Medicare carrier in a timely manner. 
 
A new participant must file an original agreement with the carrier in their region and a 
photocopy of the agreement by a date that CMS specifies on an annual basis with any 
other carriers which have assigned the participant a physician identification number and 
to which the participant submits claims. When submitting a photocopy of the agreement 
to a carrier, the new participant must identify in the letter transmitting the photocopy all 
names and identification numbers under which the participant submits claims to that 
carrier and indicate the name of the carrier to which the original agreement was mailed or 
delivered and the date it was mailed or delivered. 
 
If the new participant enters into a valid agreement but does not also timely file a 
photocopy of the agreement with another carrier with which the participant does 
business, it may be too late for the participant to be listed in that carriers directory of 
participating physicians. Nevertheless, the agreement is still binding, and it is important 
for the physician or supplier to submit a photocopy of the agreement to that carrier, even 
if late, because of advantages of the agreement, which are still available with late filing. 
  It is not necessary for the new participant to file a photocopy of the agreement with 
Palmetto GBA, the carrier for Railroad Retirement Board beneficiaries.  The new 
participants carrier will furnish Palmetto GBA with participating physician/suppler data 
(see Section 30.3.12.1.J. of this chapter). 
 
Note that for DMEPOS suppliers, the NSC handles the participation agreements. 
 
I  Duration of Agreement 
 
An agreement entered into, or continuing in effect, for a given year remains in effect 
through that year and may not be revoked during that period. 
 
The agreement is renewed automatically for each 12-month period thereafter unless, 
during the enrollment period provided near the end of the 12-month period, the 
participant gives proper written notice of a wish to terminate the agreement at the end of 
its current term. Proper written notice means written notice to all carriers with whom the 
participant has filed the agreement or a copy of the agreement. 
 
The CMS may terminate the agreement if it finds, after notice and opportunity for 
hearing, that the participant has substantially failed to comply with the agreement. There 
are also civil and criminal penalties, identical to those for assignment violations, which 
may be imposed for violation of the agreement. 
 
Note that for DMEPOS suppliers, the NSC handles the participation agreements. 
 
J  When New Physician or Supplier in Area May Enter Into Agreement 
 
A physician/supplier who has enrolled in the Medicare program and wishes to become a 
participating physician/supplier must file an agreement with a Medicare carrier within 90 
days after either of the following events: 
 
  The participant is newly licensed to practice medicine or another health care 
profession; or 
 
  The participant first opens offices for professional practice or other health care 
business in a particular carrier service area or locality (regardless of whether the 
participant previously had or retains offices elsewhere). 
 
If a physician has an arrangement with a hospital, medical group, or other entity under 
which the entity bills in its name for his/her services, changes that arrangement and then 
begins to bill in his/her own name, he/she is considered to be first opening offices, even 
though he/she practices in the same location. 
 
The participating enrollment package is included with the CMS-855 form for new 
enrollees.  Carriers must furnish a special participating agreement form for new  physicians or suppliers upon request or at the time you assign the new physician or 
supplier an identification number. 
 
When the agreement is filed on one of the above bases, it is effective on the date of filing, 
i.e., the date the participant mails (postmark date) the agreement to the carrier or delivers 
it to the carrier. The initial period of the agreement may be less than 12 months. 
Otherwise, the terms of the agreement are the same as those of an agreement entered into 
by other physicians or suppliers. The agreement applies to all services in all localities. 
The physician or supplier must submit the original agreement to the carrier in their region 
and photocopies to all carriers with whom he or she deals. 
 
If a physician or supplier first enters into an agreement after publication of your 
directory, his or her name is not included in the directory until subsequent publication. 
This may not occur until the next annual publication date. Carriers must make the names 
of those physicians or suppliers entering into agreements after the initial deadline 
available on the toll free telephone lines as each physician or supplier enters into an 
agreement. 
 
Note that for DMEPOS suppliers, the NSC handles the participation agreements. 
 
30.3.12.1 - Annual Open Participation Enrollment Process 
(Rev. 2221, Issued: 05-20-11, Effective: 05-20-11, Implementation: No later October 
31, 2011) 
 
A.  Participation Period 
 
The annual physician and supplier participation period begins January 1 of each year, and 
runs through December 31. The annual participation enrollment is scheduled to begin on 
November 15 of each year. Carriers will receive the participation enrollment material 
under separate cover. 
 
NOTE:  The dates listed for release of the participation enrollment/fee disclosure 
material are subject to publication of the Final Rule. 
 
B.  Participation Enrollment and Fee Disclosure Process Background 
 
Every year, contractors conduct an open participation enrollment period in order to 
provide eligible physicians, practitioners and suppliers with an opportunity to make their 
calendar year Medicare participation decision. The open enrollment period runs from 
November 15 to December 31. 
 
Until 2004, the Medicare contractors mailed each provider a hardcopy package which 
included enrollment materials, a paper copy of the Medicare Physician Fee Schedule 
(MPFS), an Announcement document, the Medicare Participating Physician or Supplier 
Agreement (Form CMS-460), and a variety of provider education material about the 
Medicare program. Beginning with the 2005 mailing, CMS directed Medicare contractors  to begin using a CD for the participation mailing because it was less expensive than 
mailing the hardcopy materials. 
 
Beginning with the 2006 mailing, contractors placed the new Medicare fees on their Web 
sites and did not include the fees on the CDs due to frequent last minute changes to the 
MPFS.  Removing the Medicare fees from the CD provided greater flexibility for updates 
late in the year due to legislative changes or CMS payment policy decisions. 
 
Since the fee schedules are no longer included on the CD, and the educational materials, 
as well as the Form CMS-460, are also posted on contractors Web sites, the value of the 
CD to the provider community has diminished.  Beginning 2011, CMS is directing 
contactors to produce a postcard mailing, instead of a CD, for eligible physicians, 
practitioners and suppliers.  
 
B1. Postcard Mailing 
 
No later than October 31st of each year, beginning in 2011, contactors should produce a 
postcard for the annual open participation enrollment period. Providers that do not have 
access to the internet must be educated to contact their local contractors to request a hard 
copy disclosure package. The annual post card will remind the Medicare health 
professional community to view their local contractors Web site regarding information 
for the upcoming open participation enrollment period. The postcard also will remind 
health professionals that the new MPFS update is posted on their local contractors Web 
site. 
 
Carriers/MACs must annotate the postcard with the following message: 
 
Medicare Participating Provider Program 
 
<Insert Upcoming Year> Participation Enrollment and Fee Disclosure 
Information 
This  is  a  reminder  that  the  <insert  upcoming  year>  Annual  Participation  Open 
Enrollment Period is approaching.  The open enrollment period runs mid-November 
through December 31.  Refer to your local Medicare contractors Web site at <insert 
the Medicare Participating Provider Web site> to obtain more specific information 
about the Annual Participation Open Enrollment Period.  Medicare Physician Fee 
Schedule for services rendered during <insert upcoming year> are also posted on your 
local Medicare contractors Web site. 
 
If you do not have internet access, contact your local Medicare Contractor at <insert 
contractors toll free number>to request a hardcopy Participation Enrollment and 
Information Package which includes the new Medicare fees. 
 
The carrier/MAC mails the participation enrollment postcard and/or hardcopy fee 
disclosure packages via first class or equivalent delivery service, and schedules the  release of material so that providers receive it no later than the date provided in the 
annual participation enrollment instruction. 
 
B2. Web site 
 
Each October, carriers/MACs should post a notice on their Web site regarding the 
upcoming participation enrollment period reminding physicians and practitioners that the 
upcoming MPFS will be published on the carriers/MACs Web site after the physician fee 
schedule regulation is put on display. 
 
Carriers/MACs must assure providers have access to specific information about the 
Annual Participation Open Enrollment Period via a single page on their Web site. 
Carriers/MACs must include the following information and/or links to following on this 
page: the Annual Announcement, the Medicare Participating Agreement (Form CMS-
460), the Medicare Physician Fee Schedule Fee Disclosure, detailed instructions for 
submitting the participation enrollment forms or disenrollment requests, and any 
supplemental educational information you see fit. Carriers/MACs need to include 
information regarding whom the provider can contact if assistance is required. Also, 
CMS may instruct all carriers/MACs to include a specific item(s) as part of the additional 
supplemental material on their Web site. (EXAMPLE:  A note from the administrator, a 
special file, etc.) 
 
Carriers/MACs must place the new fees and the anesthesia conversion factor(s) on their 
Web site after the final rule is placed on display.  The CMS transmits the Medicare 
Physician Fee Schedule Database electronically to carriers/MACs each year around late-
October.  CMS notifies the carrier/MACs that the annual MPFS files, including 
anesthesia, are available in an email notification.  The email notification also contains the 
file names. 
 
The CMS will furnish carriers/MACs, via a separate instruction, with the participation 
materials used for the annual participation open enrollment period, including the 
Announcement, which shall be displayed on contractors Web site.  Carriers/MACs must 
mail a postcard reminding providers to look at the contractors Web site for information 
regarding the annual open participation enrollment period. 
 
B3. Physicians/Practitioners/Suppliers 
The postcards are sent to the following physicians and suppliers in accordance with the 
following guidelines no later than November 15 of each year, subject to the publication 
of the Final Rule: 
 
  All physician specialties included in the 01-99 specialty range; 
 
  Independently practicing occupational and physical therapists (specialty 65 and 
67); 
 
  Suppliers of diagnostic tests;   
  Suppliers of radiology services (including portable x-ray suppliers-specialty 63); 
 
  Multi-specialty clinics (specialty 70); 
 
  Independent laboratories (specialty 69-since they can typically bill for anatomic 
pathology services paid under the Physician Fee Schedule); 
 
  Mammography Screening Centers (specialty 45); 
 
  Independent Diagnostic Testing Facilities (specialty 47); 
 
  Audiologists (specialty 64); and  
 
  Independently Billing Psychologists (specialty 62). 
 
NOTE:  Chiropractors and Mammography Screening Centers do not need to view the 
entire locality fee schedule report.  Therefore, carriers/MACs may add separate headings 
on their Web site listing the fee data for the procedure codes that they may receive 
payment. 
 
Carriers/MACs send an annual participation announcement and a blank participation 
agreement to the following non-participating suppliers: 
 
  Ambulatory Surgical Centers (ASCs) (specialty 49); (Although ASCs must 
accept assignment for ASC facility services, they may also provide and bill for 
non-ASC facility services, which do not have to be billed as assigned and which 
are therefore subject to a participation election); and, 
 
  Supplier specialties other than 51-58; (Supplier specialties 51-58 will receive a 
separate enrollment package from the National Supplier Clearinghouse). 
 
Carriers/MACs may create hard copy fee disclosure reports and send them to specialty 
49, and supplier specialties other than 51-58, if cost effective to do so (e.g., carriers 
determine that fee disclosure to suppliers will reduce the number of more costly supplier 
inquiries for fee data). To minimize report programming costs, carriers may use the same 
format as the physician fee disclosure report. If they use the physician fee disclosure 
report format for supplier fee disclosure, carriers include a disclaimer advising the 
supplier that the non-participating fee schedule amounts and limiting charges do not 
apply to services or supplies unless they are paid for under the Physician Fee Schedule. If 
carriers elect not to routinely disclose supplier fees with their participation enrollment 
packages, they must furnish suppliers with their applicable fee schedules or reasonable 
charge screens upon request. 
 
Instructions for completing the enrollment process for non-durable medical equipment, 
prosthetic, orthotic, and supplies (DMEPOS) suppliers will be issued under separate  cover.  Those instructions will address the responsibilities of durable medical equipment 
regional carriers (DMERCs) and the National Supplier Clearinghouse. 
 
C.  Minimum Requirements for Disclosure Reports for Posting on the Web and 
Hard Copies 
 
Carriers must place the following information on the web sites and also in their 
hard copy disclosure reports. 
 
  Carriers must use valid CPT and HCPCS codes for creating disclosure reports for 
physician fee schedule services when posting this information on the web.  CMS 
provides carriers with complete locality data for all procedure codes with a status 
indicator of A, T, and R (for which CMS has established the RVUs) on the 
Medicare Physician Fee Schedule Database (MPFSDB).  Included on the 
MPFSDB are payments for the technical portion of certain diagnostic imaging 
services (including the technical portion of global imaging services) that are 
capped at the Outpatient Prospective Payment System (OPPS) amount. Limiting 
charges are included on the annual disclosure reports of providers who may be 
subject to the nonparticipant fee schedule amount, if they elect not to participate 
for a calendar year. The limiting charge equals 115 percent of the nonparticipant 
fee schedule amount. 
 
For the facility setting differential, the limiting charge is 115 percent of the 
nonparticipant fee for the differential amount. 
 
The data for Locality Fee Schedule Reports are: 
 
  --Header Information  Locality identification (on each report page); 
 
  --Procedure Codes  Carriers must array all codes paid under the Physician Fee 
Schedule.  They include global, professional component and technical component entries 
where applicable: 
 
  --Par Amount (nonfacility); 
 
  --Par Amount (facility based); 
 
  --Non-par Amount (nonfacility); 
 
  --Limiting Charge (nonfacility): 
 
  --Non-par Amount (facility based); and 
 
  --Limiting Charge (facility based); 
    --Footer Information  The following must be included on the fee disclosure 
reports: 
 
  1.  The legend:  All Current Procedural Terminology (CPT) codes and 
descriptors are copyrighted (appropriate year) by the American Medical Association (on 
each report page). 
 
  NOTE:  The CMS has signed agreements with the American Medical 
Association regarding the use of CPT, and with the American Dental Association 
regarding the use of CDT, on Medicare contractor Web sites, bulletin boards and other 
contractor electronic communications.  If the carrier uses descriptors, it must use short 
descriptors.  The appropriate CPT copyright year must be inserted each year.  For 
example:  the 2006 CPT is copyrighted 2005; the 2007 CPT is copyrighted 2006; in each 
case, the appropriate year for the copyright is inserted by the contractor. 
 
2.  The legend:  These amounts apply when service is performed in a facility 
setting. 
 
3.  The legend:  The payment for the technical component is capped at the OPPS 
amount. 
 
For the disclosure reports, the carrier shall also provide the anesthesia conversion factors. 
 
In addition, the carrier includes language in a bulletin that provides an explanation of the 
facility-based fee concept (e.g., facility-based fees are linked to their own separate RVUs 
independent of the non facility RVUs). 
 
D.  Disclosure to Medical Societies and Other Parties 
 
Carriers send first class or equivalent (e.g. UPS), free of charge, a complete fee schedule 
for the entire State (or your service area if it is other than the entire State) to State 
medical societies and State beneficiary associations.  Carriers may negotiate with them as 
to the medium in which the information is to be furnished. 
 
Carriers send local medical societies and beneficiary organizations a free copy of their 
respective locality fee schedule. If a fee schedule for the entire service area is requested 
by a local medical society or beneficiary organization, furnish one free copy. If more than 
one copy of a complete fee schedule for the carrier service area is requested, carriers 
charge for extra copies in accordance with the Freedom of Information Act (FOIA) rules. 
If a provider requests a fee schedule for a locality in which he/she has no office, carriers 
may charge them in accordance with FOIA rules. 
 
E.  Practitioners Subject to Mandatory Assignment 
 
Some practitioners who provide services under the Medicare program are required to 
accept assignment for all Medicare claims for their services.  This means that they must  accept the Medicare allowed charge amount as payment in full for their practitioner 
services.  The beneficiarys liability is limited to any applicable deductible plus the 20 
percent coinsurance.  The following practitioners must accept assignment for all 
Medicare covered services they furnish, and carriers do not send a participation 
enrollment package to these practitioners: 
 
  Specialty 32 - Anesthesiologist assistants (AAs) 
 
  Specialty 42 - Certified nurse midwives 
 
  Specialty 43 - Certified registered nurse anesthetists (CRNAs) 
 
  Specialty 50 - Nurse practitioners 
 
  Specialty 68 - Clinical Psychologists 
 
  Specialty 71 - Registered dietitians/nutritionists 
 
  Specialty 73 - Mass Immunization Roster Billers 
 
  Specialty 80 - Clinical Social Workers 
 
  Specialty 89 - Clinical nurse specialists 
 
  Specialty 97 - Physician assistants 
 
NOTE:  The provider type Mass Immunization Biller (specialty 73) can bill only for 
influenza and pneumococcal vaccinations and administrations.  These services are not 
subject to the deductible or the 20 percent coinsurance. 
 
Although these practitioners will not be invited to officially enroll in the Medicare 
participation program, carriers treat them as participating practitioners for purposes of 
various benefits available under that program (See Section 30.3.12 in this Chapter). 
 
NOTE: Although these practitioners do not have to sign participation agreements, 
carriers must include them in the annual MEDPARD as participating. They also include 
Rural Health Centers. 
 
Carriers may create and send hardcopy fee disclosure reports to these practitioners if cost 
effective to do so (e.g., the carrier determines that fee disclosure to these practitioners 
will reduce or minimize the number of more costly inquiries it receives for fee data). To 
minimize report programming costs, carriers may use the same format as the physician 
fee disclosure report. If they use the physician fee disclosure report format for 
practitioner fee disclosure, carriers include a disclaimer advising the practitioner that the 
non-participating fee schedule amounts and limiting charges do not apply to services they  furnish. If carriers elect not to routinely disclose practitioner fees, they furnish applicable 
fees or reasonable charge screens upon request. 
 
The Medicare Participation Agreement and general instructions are on the CMS Web site 
at http://www.cms.hhs.gov/cmsforms/downloads/cms460.pdf. 
 
F.  Supplier Fee Schedule Data 
 
Refer to Chapter 23 for more information. 
 
Clinical Laboratory Fee Schedule 
 
Carriers must: 
 
  Publish clinical diagnostic lab fees in a regularly scheduled bulletin or 
newsletter. 
 
  Publish clinical laboratory fees in the following format: 
 
o  Header Information: Name of fee schedule and State or locality (if less 
than State-wide) on each report page: 
 
o  Procedure Code and Modifiers (Use procedure codes that are valid for 
appropriate year); 
 
o  Fee Schedule Amount; and  
 
o  Footer Information: The legend All Current Procedural Terminology 
(CPT) codes and descriptors are copyrighted (appropriate year) by the 
American Medical Association. (on each report page). 
 
Information regarding release of this data will be issued under separate cover. 
 
DMEPOS Fee Schedule: 
 
Instructions for furnishing DMEPOS fee schedule data will be issued annually by CMS. 
 
G.  Fee Schedule Printing Specifications 
 
Carriers are to produce hardcopy disclosure material for no more than two percent of 
their total number of providers.  Carriers have the discretion to produce either one or two 
percent hardcopy versions.  The hard copy fee schedules are to be mailed to providers 
who are unable to access the carrier Web site (i.e., do not have internet access). For those 
providers, carriers must print fee schedules on 8-1/2 by 11-inch paper, and use a print 
size that accommodates up to 15 characters per inch.  The CMS prior approval for  smaller print must be requested in writing from the RO. Requests are to be accompanied 
by print samples to assist the RO in assessing report readability. 
 
H.  Date of HCPCS Update 
 
The annual HCPCS update occurs on January 1 of each year. The annual HCPCS update 
file will be released electronically in October of each year. 
 
I.  Medicare Participation Physicians/Suppliers Directory (MEDPARD) 
 
Annually, within 30 days following the close of the annual participation enrollment 
process, carriers produce a directory listing only Medicare participating physicians and 
suppliers and post it on their Web site.  Carriers do not print hardcopy participation 
directories (i.e., MEDPARDs) without regional office prior authorization and advance 
approved funding for this purpose. Carriers load MEDPARD equivalent information on 
their Internet Web site. Carriers notify providers via regularly scheduled newsletter as to 
the availability of this information and how to access it electronically. Carriers also 
inform hospitals and other organizations (e.g., Social Security offices, area 
Administration on Aging offices, and other beneficiary advocacy organizations) how to 
access MEDPARD information on the carrier Web site. 
 
Carriers that receive MEDPARD inquires from beneficiaries who do not have access to 
their Web site will ascertain the nature and scope of each request and furnish the desired 
MEDPARD participation information via telephone or letter. 
 
(a).  Contents 
 
Each directory has two parts. Part I shows the correct Specialty, Name, Address and 
Telephone Number of each participating Physician, Supplier and Group by geographic 
area.  The address in the directory must be the address of the physician's/supplier's place 
of business and not a Post Office box number.  Part II includes only the name and 
telephone number of all Physicians, Suppliers and Groups contained in Part I listed in 
alphabetic sequence.  Telephone numbers may not be omitted.  Edit the listings to assure 
that everyone listed in Part I is also listed in Part II (multiple addresses may be included 
if appropriate); physicians are listed only once by name in Part II. 
 
When you have only the group name for participating group practices, you may list the 
names of physician(s) within the group, but only at the group's request.  For groups which 
so request, list the physicians under the group name in alphabetical sequence.  Indicate an 
individual physician's specialty if it differs from other specialties.  Show only the group 
address and telephone number. (NOTE:  A group practicing physician who also has solo 
practices may appear more than once if he is participating in more than on entity.) 
 
Do not list the names of hospital based physicians. 
  Where a beneficiary would not have personal choice access to a group, (e.g., the group 
accepts patients by referral only), list only the group name and address. Note that it 
accepts patients by referral only. 
 
If a physician or supplier has multiple service locations, accommodate this in the 
directories to the extent possible with the information on the provider file and 
information obtained during the participation enrollment process. 
 
List all independent RHCs in your area, not necessarily jurisdiction, in the MEDPARD. 
They are required to accept Medicare payment on claims as payment in full and, 
therefore, meet the acceptance criteria for a MEDPARD listing even though a 
participating agreement has not been signed.  Do not group independent RHCs with 
physicians in the directory.  List them separately on a full or partial page under the 
wording shown below.  Show the name, address and telephone number of each.  Treat the 
RHC as a group and list only the clinic name and telephone number in Part II of the 
MEDPARD (the alphabetical listing).  Use an indicator so the beneficiary can distinguish 
between a group and a RHC. 
 
The following wording must appear above the list of independent RHCs: 
 
Rural Health Clinics (RHCs) agree to accept payment by the Medicare program 
as full payment for their services, except for the applicable deductible and 
coinsurance amounts for which the beneficiary is responsible.  The independent 
RHCs in the area are listed below: 
 
(b).  Organization (Geographic, Physician/Supplier/Group, Alphabetic) 
 
Prepare a separate MEDPARD for each geographic area, e.g., depending upon size, one 
for each metropolitan area or one for each county or group of counties.  Your plan must 
be submitted to RO for approval prior to production.  Divide each MEDPARD into two 
parts. 
 
Divide Part I first alphabetically by geographical location. Within each location, list each 
specialty. Under the specialty, alphabetically list Physicians, Suppliers and Groups with 
their addresses and telephone numbers.  Include optometry and podiatry as specialties 
and not as suppliers.  Add lay terminology to all specialty headings, e.g., ophthalmology 
(eye disease), so that they are easily understood by the beneficiary.  Do not list any 
"miscellaneous" or "unknown" specialties.  These should default to "General Practice" or 
"Other." 
 
Part II is a straight alphabetical listing of all Physicians, Suppliers and Groups in the 
directory, with their telephone numbers.  If a physician's or supplier's name and address 
are the same and listed more than once in Part I, list that individual only once in Part II. 
 
(c).  Paper, Print, Binding 
  Carriers with regional office prior authorization and advanced funding can prepare the 
MEDPARD in hardcopy (booklet) form on white offset book paper. Size the directory by 
the number of participating physicians/suppliers in your area.  Do not exceed 8 1/2 by 11 
inches.  Use print comparable to 10 point type or larger which improves the readability of 
the directory.  Use type set print rather than computer listings.  Put all geographical 
location and specialty headings in bold, uppercase lettering. 
 
Bind the directory in an attractive and distinctive cover which displays the red, white and 
blue emblem of the Medicare participating physician.  This emblem must show 
association with U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services. clearly indicate on the front cover that this 
is a Medicare directory of participating physicians/suppliers.  Date the MEDPARD so 
that older editions will not be confused with subsequent ones. 
 
The back cover should function as an envelope for the directory.  Put your name and 
return address in the upper left corner.  Reserve the upper right corner for 3rd class 
postage.  Use address labels, generated from your records of directory requests, to make 
the directory a self-mailer. 
 
Carriers with regional office prior authorization and advanced funding for the 
MEDPARD in booklet form must produce it within 45 days following the close of the 
annual participation enrollment process. 
 
(d).  Interpretive Information 
 
Each directory must have a Table of Contents.  Include detailed instructions on the 
organization of the directory.  Place your name and toll-free telephone number at the 
bottom of the instructions in the front of the directory.  Include detailed instructions on 
"how to use the directory," i.e., to locate a participating physician or supplier in a specific 
area:  first, find the correct county in the table of contents; second, look below the county 
for the city name and find the city's page number; third, turn to the appropriate page and 
look for the physician or supplier specialty you need; fourth, look for the names of 
physicians or suppliers in that specialty.  At the top of the instruction page, include the 
statement:  This directory contains the names, addresses, telephone numbers, and 
specialties of MEDICARE PARTICIPATING physicians and suppliers.  MEDICARE 
PARTICIPATING physicians and suppliers have agreed to accept assignment on all 
Medicare claims for covered items and services. 
 
(e).  Dissemination of MEDPARD Information 
 
Within your Medicare service area, inform the following groups how to access the 
MEDPARD on the carrier Web site: 
 
  Beneficiaries who request to view the MEDPARD; and 
    Physicians, suppliers, groups, and clinics listed in the directory who request to 
view the MEDPARD. 
 
Within 30 days after the close of the annual participation enrollment period, carriers 
inform the following individuals/groups of the availability of their local MEDPARD on 
the carrier Web site: 
 
  Congressional offices; 
 
  Quality Improvement Organizations; 
 
  Senior citizen groups and other beneficiary advocacy organizations; 
 
  Social Security Offices; 
 
  State area agencies of the Administration on Aging; and 
 
  Hospitals. 
 
If you receive inquiries from a customer who does not have access to your Web site, 
ascertain the nature and scope of each request and furnish the desired MEDPARD 
participation information via telephone or letter. 
 
(f).  Alternative Method 
 
You may produce the MEDPARD on diskettes or transmit it electronically.  Send 
alternative mediums to those entities or individuals who wish to receive them in forms 
other than paper. 
 
Carriers add their local MEDPARDs to their Web sites and inform the various 
organizations who use the directory of its availability.  Publicize Web site MEDPARD 
access information at least annually in your regularly scheduled newsletters. 
 
(g).  Reporting Requirements 
 
Carriers with regional office prior authorization and advanced funding for the 
MEDPARD in hardcopy form must maintain a record of all hardcopy directories that 
were distributed.  Submit an initial printing/distribution/cost report within 90 days after 
the close of the annual participation enrollment period.  Send the report to your RO and 
copy CO at the following address: 
 
Director, Division of Practitioner Claims Processing 
Centers for Medicare & Medicaid Services 
7500 Security Blvd. 
Baltimore, MD 21244 
  Include the following information in your initial report: (1) the number of MEDPARDs 
initially printed; (2) the number of MEDPARDs distributed to each category in (e) above 
within 60 days after the close of the annual participation enrollment period; and (3) the 
cost per directory distributed (e.g., printing and distribution costs). 
 
Submit a year end report no later than 45 days after the end of the fiscal year.  On the 
year end report, include the actual number of MEDPARDs printed and the number of 
MEDPARDs distributed to each category during the fiscal year.  Include the cost per 
directory distributed on your initial report and include an explanation as to the reason for 
the adjusted year end cost figure. 
 
J.  Furnishing Participating Physician/Supplier Data to Railroad Retirement Board 
(RRB) 
 
(a).  Furnishing RRB with participating information for the general enrollment period: 
 
Within 30 days after the annual participation enrollment period has closed, all carriers 
must furnish their entire physician/supplier file.  The file is to be transmitted to RRB at 
the same time the MEDPARD is being posted on the carrier Web site.  Submit the file in 
the following format: 
 
1.  File Specifications 
 
Carriers send the Provider Participation File (PPF) via CD or cartridge to the RRB 
carrier.  Enter the external label for the file as follows: 
 
    FROM: 
    TO: 
    DATE: 
    DATA SET NAME:  Provider Participation File (PPF). 
 
A.  Header Type Specifications 
 
  Field  Position  Picture  Remarks/Field Value 
1.  Label  1-3  x (3)  "PPF" 
2.  Carrier No.  4-8  9 (5)  Carrier number assigned by CMS. 
3.  Date File  9-14  x (6)  MMDDYY 
Updated 
 
B.  Detail Record Specifications.-- 
 
  Field  Position  Picture  Remarks/Field Value 
1.  TIN/EIN  1-9  9 (9)  Tax identification number used to report 
income (1099). 
2.  UPIN  10-15  x (6)  Unique Physician Identification 
Number.  If not available or applicable, 
fill with spaces.  3.  Locality  16-17  x (2)  Locality or area designation associated 
with TIN/EIN. 
4.  Current Year Par  18  x (1)  Y = Par 
Indicator  N = Nonpar 
5.  Current Year of  19  9 (1)  1 = First year 
Practice  2 = Second year 
3 = Third year 
4 = Fourth year 
5 = Established Provider 
6.  Carrier PIN  20-29  x(10)  The provider's carrier-assigned provider 
identification number. 
7.  Physician/Supplier  30-54  x (25)  Last Name = 14 
Name  First Name = 10 
Middle Initial = 1 
    or 
Corporate Name = 25 
The format for provider name is a total 
of 25 bytes.  Individual providers must 
have a comma between last name, first 
name, and middle initial (i.e., Smith, 
John, M).  Space one position between 
multiple words in corporate names (i.e., 
Jones Medical Supply). 
8.  Physician/Supplier  55-110  x (56)  Street Address = 30 
Address  City = 15 
State Code = 2 
Zip Code = 9 
Space between numerics and words and 
space between multiple words.  Left 
justify ZIP Codes.  The first five ZIP 
Code spaces must be numeric and the 
last four spaces can either be numeric or 
spaces.  Separate street address, city and 
state with commas, e.g., "1234 Security 
Boulevard, Baltimore,MD,567891234" 
 
Carriers send the physician/supplier file to: 
Attn:  Manager, Provider Enrollment 
Palmetto GBA 
Railroad Retirement Board 
2743 Perimeter Pkwy 
Building 200, Suite 400 
Augusta, GA  30909 
 
(b).  Furnishing RRB with participating information for other than the general enrollment 
period:   
After furnishing an annual provider file, inform the RRB carrier, on a flow-basis, of all 
participating doctors, practitioners and suppliers who enroll after the annual general 
enrollment period.  Carriers send the RRB carrier copies of participation election forms 
received from physicians, practitioners and suppliers who enrolled after the annual 
enrollment and, therefore, were not included on the provider file transmitted to the RRB 
carrier.  Transmit copies of such participation enrollment forms via cover letter or fax.  
Include the following information in your cover letter or fax cover sheet: 
 
  Tax Identification (TIN) or Employer Identification Number (EIN); 
 
  UPIN or NPI when required; 
 
  Locality designation associated with the TIN/EIN; 
 
  Current Year of Practice; 
 
  Carrier PIN or NPI when required; and 
 
  Participation Effective Date. 
 
NOTE:  If any of the above information is entered/displayed on the participation 
agreement form being transmitted, you do not need to include that piece of information in 
your cover letter or you may state "see attached participation agreement" for that 
particular item of information. 
 
Carriers send photocopy participation agreements by mail to: 
 
Attn:  Manager, Provider Enrollment 
Palmetto GBA 
Railroad Retirement Board 
2743 Perimeter Pkwy 
Building 200, Suite 400 
Augusta, GA  30909 
 
For participation agreements transmitted via fax call (706) 855-3049. 
 
K.  Key Implementation Dates 
 
A detailed schedule of key implementation dates will be provided in an annual temporary 
instruction in advance of receiving the MPFS Database file. The following outlines 
significant disclosure activities and anticipated implementation dates. A detailed schedule 
is provided under separate cover by CMS. 
 
Carriers must: 
  October: 
 
  Download fee schedules 
  Download HCPCS 
November: 
 
  Release participation materials and disclosure reports; 
  Furnish yearly physician fee schedule amounts to CMS for carrier priced codes; 
December: 
 
  Furnish DMEPOS fee schedule and physician fee schedules to State Medicaid 
Agencies; 
  Furnish conversion factors and inflation indexed charge data to the carrier State 
Medicaid Agencies; 
  Process participation elections and withdrawals; and, 
  Send a complete fee schedule to the State medical societies and State beneficiary 
associations. 
January: 
 
  Implement annual fee schedule amounts; 
  Implement annual HCPCS update; 
  Send an updated provider file to the Railroad Retirement Board; and 
  Load MEDPARD equivalent information on the carrier Web site. 
 
February: 
 
  Submit participation counts to CMS Central Office via CROWD. 
 
30.3.12.1.2 - Annual Medicare Physician Fee Schedule File Information 
(Rev. 2799, Issued: 10-25-13, Effective: 01-01-14, Implementation: 01-06-14) 
 
The CMS transmits the annual Medicare Physician Fee Schedule (MPFS) file 
electronically for carriers/MACs to download each year around late-October.  The annual 
MPFS files (including anesthesia) are effective January 1st.  Carriers/MACs must 
implement these files each January, unless otherwise directed by CMS. 
 
NOTE:  There will be an annual recurring change request for the implementation of the 
yearly Medicare Physician Fee Schedule Files. 
 
The CMS will advise all contractors, via email notification, when annual MPFS files are 
available for download from the mainframe.  Carriers/MACs can retrieve the new files 
and begin the process of testing and loading the new fees into the system.  
Carriers/MACs must place the new fees, including the anesthesia conversion factor(s), on 
their Web site after the MPFS final rule is placed on display. (The CMS will send 
notification of when the MPFS final rule is put on display via email.) 
  In addition, there may be last minute corrections, therefore you may have to retrieve one 
or more MPFS corrected files. Notification of the availability of any correction files, 
including the file names, will be made via an email to Carriers and MACs. 
 
30.3.12.2 - Carrier/MACs Participation Agreement 
(Rev. 2221, Issued: 05-20-11, Effective: 05-20-11, Implementation: No later October 
31, 2011) 
 
 
MEDICARE 
PARTICIPATING PHYSICIAN OR SUPPLIER AGREEMENT 
 
Name(s) and Address of Participant*   National Provider Identifier (NPI)*  
 
 *List all names and the NPI under which the participant files claims with the Medicare 
Administrative Contractor (MAC)/carrier with whom this agreement is being filed. 
 
The above named person or organization, called the participant, hereby enters into an 
agreement with the Medicare program to accept assignment of the Medicare Part B 
payment for all services for which the participant is eligible to accept assignment under 
the Medicare law and regulations and which are furnished while this agreement is in 
effect. 
 
1.  Meaning of Assignment - For purposes of this agreement, accepting assignment of 
the Medicare Part B payment means requesting direct Part B payment from the Medicare 
program. Under an assignment, the approved charge, determined by the MAC/carrier, 
shall be the full charge for the service covered under Part B. The participant shall not 
collect from the beneficiary or other person or organization for covered services more 
than the applicable deductible and coinsurance. 
 
2.  Effective Date - If the participant files the agreement with any MAC/carrier during the 
enrollment period, the agreement becomes effective _____________________. 
 
3.  Term and Termination of Agreement - This agreement shall continue in effect 
through December 31 following the date the agreement becomes effective and shall be 
renewed automatically for each 12-month period January 1 through December 31 
thereafter unless one of the following occurs: 
 
a.  During the enrollment period provided near the end of any calendar year, the 
participant notifies in writing every MAC/carrier with whom the participant has 
filed the agreement or a copy of the agreement that the participant wishes to 
terminate the agreement at the end of the current term. In the event such 
notification is mailed or delivered during the enrollment period provided near the 
end of any calendar year, the agreement shall end on December 31 of that year. 
  b.  The Centers for Medicare & Medicaid Services may find, after notice to and 
opportunity for a hearing for the participant, that the participant has substantially 
failed to comply with the agreement. In the event such a finding is made, the 
Centers for Medicare & Medicaid Services will notify the participant in writing 
that the agreement will be terminated at a time designated in the notice. Civil and 
criminal penalties may also be imposed for violation of the agreement. 
 
__________________________  _________________________  _________ 
Signature of participant  Title   Date 
(or authorized representative  (if signer is authorized 
of participating organization)   representative of organization) 
 
Office phone number (including area code)_____________________ 
Received by    (name of carrier) 
Effective date _____________ 
Initials of carrier official__________ 
 
According to the Paperwork Reduction Act of 1995, no persons are required to respond to 
a collection of information unless it displays a valid OMB control number. The valid OMB 
control number for this information collection is 0938-0373. The time required to 
complete this information collection is estimated to average 15 minutes per response, 
including the time to review instructions, search existing data resources, gather the data 
needed and complete and review the information collection. If you have any comments 
concerning the accuracy of the time estimate(s) or suggestions for improving this form, 
please write to: CMS, 7500 Security Boulevard, Attn: PRA Reports Clearance Officer, 
Baltimore, Maryland 21244-1850. 
 
30.3.12.3 - Carrier Rules for Limiting Charge 
(Rev. 1, 10-01-03) 
B3-17002 
 
Effective January 1, 1991, the maximum allowable actual charge (MAAC) for non-
participating physicians is replaced by the limiting charge. The limiting charge is the 
maximum that the non-participating provider may charge the beneficiary.  It also 
effectively replaces the special charge limits for overpriced procedure, anesthesia 
associated with cataract and iridectomy surgery, A-mode ophthalmic ultrasound and 
intraocular lenses (IOLs, and designated specialty, because the limiting charge is always 
less than or equal to the special charge limits. 
 
The limiting charge applies to all of the following services/supplies, regardless of who 
provides or bills for them, if the services/supplies are covered by the Medicare program 
and are provided: 
 
  Physicians services; 
    Services and supplies furnished incident to a physicians services that are 
commonly furnished in a physicians office; 
 
  Outpatient physical therapy services furnished by an independently practicing 
physical therapist; 
 
  Outpatient occupational therapy services furnished by an independently practicing 
occupational therapist; 
 
  Diagnostic tests; and 
 
  Radiation therapy services (including x-ray, radium, and radioactive isotope 
therapy, and materials and services of technicians). 
 
NOTE: This means that, effective for services/supplies provided on or after January 1, 
1994, the limiting charge applies to drugs and biologicals provided incident to 
physicians services, to physical therapy services provided by independently practicing 
physical therapists, and to occupational therapy services provided by independently 
practicing occupational therapists. These changes are made because of provisions in 
OBRA 1993. OBRA 1993 expanded the limiting charge to apply to services/supplies 
which the law permits Medicare to pay for under the physician fee schedule methodology 
but which Medicare has chosen to pay for under some other method. Incident to drugs 
and biologicals, previously excluded from the limiting charge because of their exclusion 
from physician fee schedule payment, are, effective January 1, 1994, still excluded from 
physician fee schedule payment but subject to the limiting charge. Also, OBRA 1993 
applies the limiting charge to all of the above listed services/supplies, regardless of who 
provides or bills for the services/supplies. No longer are services of suppliers and other 
nonphysicians, such as physician assistants, nurse midwives, and independently 
practicing physical and occupational therapists, excluded from the limiting charge. 
 
Physicians, non-physician practitioners, and suppliers must take assignment on claims for 
drugs and biologicals furnished on or after February 1, 2001, under 114 of the Benefits 
Improvement and Protection Act (BIPA). 
 
Effective January 1, 1993, the limiting charge is 115 percent of the fee schedule amount 
for nonparticipating physicians. 
 
EXAMPLE: 
 
Participating fee schedule amount   $2000 
Nonparticipating fee schedule amount  $1900  (95% of $2000) 
Limiting charge   $2185  ($1900 times 1.15) 
  Charges to either a payer for whom Medicare is secondary or to a payer under the indirect 
payment procedure are not subject to the limiting charge if the physician accepts the 
payment received as full payment (i.e., if there is no payment by the beneficiary). 
 
The provider may round the limiting charge to the nearest dollar if they do so consistently 
for all services. 
 
30.3.13  Charges for Missed Appointments 
Charges for Missed Appointments 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
CMS's policy is to allow physicians and suppliers to charge Medicare beneficiaries for 
missed appointments, provided that they do not discriminate against Medicare 
beneficiaries but also charge non-Medicare patients for missed appointments.  The charge 
for a missed appointment is not a charge for a service itself (to which the assignment and 
limiting charge provisions apply), but rather is a charge for a missed business 
opportunity.  Therefore, if a physician's or supplier's missed appointment policy applies 
equally to all patients (Medicare and non-Medicare), then the Medicare law and 
regulations do not preclude the physician or supplier from charging the Medicare patient 
directly. 
 
The amount that the physician or supplier charges for the missed appointment must apply 
equally to all patients (Medicare and non-Medicare), in other words, the amount the 
physician/supplier charges Medicare beneficiaries for missed appointments must be the 
same as the amount that they charge non-Medicare patients (whatever amount that may 
be). 
 
With respect to Part A providers, in most instances a hospital outpatient department can 
charge a beneficiary a missed appointment charge without violating its provider 
agreement and 42 CFR 489.22.  Because 42 CFR 489.22 applies only to inpatient 
services, it does not restrict a hospital outpatient department from imposing charges for 
missed appointments by outpatients.  In the event, however, that a hospital inpatient 
misses an appointment in the hospital outpatient department, it would violate 42 CFR 
489.22 for the outpatient department to charge the beneficiary a missed appointment fee. 
 
Medicare does not make any payments for missed appointment fees/charges that are 
imposed by providers, physicians, or other suppliers.  Charges to beneficiaries for missed 
appointments should not be billed to Medicare. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: PR 
CARC: 204 
RARC: N/A  MSN: 16.59 
 
40 - Termination of Provider Agreement 
(Rev. 1, 10-01-03) 
A3-3008, A2-2800 
 
A provider as defined in Chapter 5 of the Medicare General Information, Eligibility, and 
Entitlement Manual, may voluntarily terminate its participation in the program or have it 
terminated by the Secretary for cause. 
 
40.1 - Voluntary Termination 
(Rev. 1, 10-01-03) 
A3-3008.1, A2-2800.1, RHC-330, Pub 9-124 
 
According to 42 CFR 489.52, a provider that wishes to terminate its agreement to 
participate in the Medicare program may do so by:  (1) filing with CMS a written notice 
stating its intention to terminate its agreement; and (2) informing CMS of the date upon 
which it wishes the termination to take effect.  The CMS may approve the date proposed 
by the provider or set a different date no later than six months after the date of the 
providers notice. 
 
The effective date of termination may be less than six months following CMS receipt of 
the providers notice of its intention to terminate if CMS determines that termination on 
that date would not: 
 
  Unduly disrupt the furnishing of services to the community; or 
 
  Otherwise interfere with the effective and efficient administration of the Medicare 
program. 
 
If a provider sends the FI a written notice of its intention to terminate its agreement, the 
FI should forward the notice to the CMS RO.  The date of receipt of the notice by the FI 
will be considered the date of filing in determining the date of termination. 
 
The RO promptly notifies the FI when it learns from other sources that a provider wishes 
to terminate its participation in the program, and keeps the FI informed of the status of 
the providers request. It is the responsibility of the FI, as necessary, to make preliminary 
arrangements for filing of the cost report, and to adjust any interim payments, accelerated 
payments, of current financing payments to avoid overpayments. Final notice of 
termination of the providers agreement is formally given to the FI by the RO via Form 
CMS-2007. 
 
As soon as the termination date is established, the RO instructs the provider to notify the 
public that it is voluntarily terminating its provider agreement. The public notice should 
be published in the local newspapers with the largest circulation, as soon as possible, but 
not less than l5 days before the effective termination date.  A provider that wishes to  terminate its provider agreement should also file a Form CMS-855A with the FI 
requesting a voluntary termination of its Medicare billing number. 
 
40.1.1 - Close of Business 
(Rev. 1, 10-01-03) 
A2-2800.2, RHC-330 
 
A provider may temporarily or permanently cease all business (Medicare and non-
Medicare), and not timely notify the RO that it is ceasing operations. The FI may be 
made aware very early of an impending closure due to its fiscal relationship with the 
provider. Where the FI learns that a provider is ceasing operations, the FI should 
immediately notify the RO and also take necessary action to avert an overpayment. 
 
A provider is considered to have voluntarily terminated its agreement if it ceases to 
furnish services to the community.  The termination is effective after the last day of 
business of the provider. 
 
40.1.2 - Change of Ownership 
(Rev. 1, 10-01-03) 
HHA-145, HO-145, SNF-145, RHC-331, RHC-332 
 
When an organization having a provider agreement undergoes a change of ownership in 
accordance with the principles articulated in 42 CFR Part 489 and 3210 of the State 
Operations Manual, the agreement with the existing provider is automatically assigned to 
the new owner so that there is no interruption in service.  However, a new agreement with 
updated information must subsequently be signed and a Form CMS-855A must be 
submitted by both the old and new owners.  Only if the provider, under the change of 
ownership, meets the applicable requirements for approval can the agreement be 
executed.  For FQHCs, these requirements include PHS approval. 
 
An organization that plans to change ownership must give advance notice of its intention 
so that a new agreement can be negotiated or so that the public may be given sufficient 
notice in the event that the new owners do not wish to participate in the Medicare 
program.  A provider that plans to enter into a lease arrangement (in whole or in part) 
should also give advance notice of its intention. 
 
A change of ownership occurs, for example, when: 
 
  A sole proprietor transfers title and property to another party; 
 
  In the case of a partnership, there is an addition, removal, or substitution of a 
partner unless the partners expressly agree otherwise; 
 
  An incorporated organization merges with an incorporated entity that is approved 
by the program and the latter entity is the surviving corporation.  It also occurs  when two or more corporate providers consolidate and the consolidation results in 
the creation of a new corporate entity; 
 
  An unincorporated organization (a sole proprietorship or partnership) becomes 
incorporated; or 
 
  The lease of all or part of an entity constitutes a change of ownership of the leased 
portion. 
 
When an organizations agreement is terminated, whether by the entity or by CMS, no 
payment is available to the provider for services it furnishes to Medicare beneficiaries on 
or after the effective date of the termination. 
 
40.1.3 - Expiration and Renewal-Nonrenewal of SNF Term Agreements 
(Rev. 1, 10-01-03) 
A3-3008.3, and Pub 100-1, Chapter 5 
 
All agreements with skilled nursing facilities must be for a specified term of up to 12 full 
calendar months with fixed expiration dates unless termination occurs according to 
40.1 and 40.2. The agreement expires at the close of the last day of its specified term 
and is not automatically renewable from term to term. When the term of an agreement is 
extended (see 40.3.1), the close of the last day of its specified term is the close of the 
day of the extension of the agreement. Thus, when the term of an agreement is extended, 
the providers participation in the program continues, and the agreement does not expire 
until the close of the last day to which it has been extended. 
 
Since an agreement with an SNF is not automatically renewable from term to term, each 
term agreement with an SNF requires that the SNF qualify for participation and that its 
agreement be accepted for filing. A participating SNF may, however, continue its 
participation under the agreement form previously accepted for filing provided the SNF 
continues to qualify for participation, and the agreement form is again accepted for filing 
and renewed for a term which begins on the date immediately following the close of the 
last day of the prior term of the agreement. When the requirements for participation 
continue to be met, there is no limit to the number of times that the SNFs agreement 
form may again be accepted and renewed for a specified term. 
 
When the time-limited agreement (including an agreement which has had its term 
extended) is renewed on the day immediately following the close of the last day of its 
term, the expiration of the agreement is not considered a termination of participation in 
the program. 
 
However, once an agreement with an SNF is (1) not renewed, or (2) voluntarily 
terminated by the SNF, or (3) involuntarily terminated (including cancellations) by the 
Secretary, the previously accepted agreement cannot again be accepted and renewed. In 
such cases, the SNF is required to execute and file a new agreement if it is again found 
eligible to participate in the Medicare program and must submit a Form CMS-855A as a  brand new provider. The effective date of the new agreement must be determined in 
accordance with regulatory provisions (42 CFR 489.13). 
 
The Secretarys determination not to accept and renew a SNF agreement is a 
determination relating to the qualifications of the SNF in the period immediately 
following the close of the SNFs existing agreement; and the SNF is entitled to request a 
reconsideration of the determination in accordance with the appeals procedure contained 
in 42 CFR Part 405 Subpart O. Such determinations involve a finding that: 
 
  Based on a State agency resurvey and recertification, the SNF will not be 
approved for a period of certification because it is out of compliance with one or 
more conditions of participation; 
 
  Based on a State agency resurvey and recertification, the SNF continues to be out 
of compliance with the same standard(s) in the conditions of participation as were 
found out of compliance during the term of the agreement and the facility will not 
be approved for a new period of certification; or 
 
  The SNF has violated the terms of its agreement or the provisions of title XVIII or 
regulations promulgated thereunder. 
 
In cases of nonrenewal by the Secretary, the FIs role is the same as for involuntary 
terminations. (See 40.2.1). 
 
40.2 - Involuntary Terminations 
(Rev. 1, 10-01-03) 
A3-3008.2, RHC-331 
 
The Secretary may terminate an agreement with a provider if it is determined that the 
provider: 
 
  Is not complying fully (or substantially in the case of SNFs) with the provisions of 
the agreement or with the applicable provisions of title XVIII of the Act and 
regulations; 
 
  No longer meets the appropriate conditions (requirements for SNFs) of 
participation; 
 
  Has failed to supply information which is necessary to determine whether 
payments are due or were due and the amounts of such payments; or 
 
  Refuses to permit examinations of fiscal and other records, including medical 
records. 
 
The cancellation of a SNF agreement is viewed as an involuntary termination of the 
agreement by the Secretary for cause.  Such actions involve a finding that the SNF has  not satisfactorily completed its written plan providing for the correction of deficiencies 
with respect to one or more of the standards in the applicable requirements of 
participation, or that the facility has not made substantial effort and progress in correcting 
such deficiencies. 
 
A provider which is dissatisfied with the Secretarys determination terminating its 
agreement is entitled to request a hearing thereon in accordance with the appeals 
procedures contained in 42 CFR Part 498. There is no reconsideration step before the 
opportunity for a hearing. 
 
For the FIs role in processing involuntary terminations, see 40.2.1. 
 
NOTE: The involuntary termination of a hospitals approval authorizing it to provide 
extended care services, i.e., to be a swing bed facility, (see Chapter 3) does not 
automatically result in the involuntary termination of the hospitals agreement relating to 
the provision of hospital services. 
 
40.2.1 - Processing Involuntary Terminations 
(Rev. 1, 10-01-03) 
A2-2800.3 
 
When there has been a determination by the RO that an institution or agency no longer 
qualifies as a provider of services, the RO notifies the provider in writing that termination 
of its agreement has been recommended. A copy of this notification is sent to the 
servicing FI so that it is aware of the potential termination. However, the FI should not 
divulge this information. 
 
If CMS central office decides that termination of the agreement is appropriate, it 
establishes the effective date of termination, notifies the provider in writing, and notifies 
the RO. The RO immediately arranges for publication of the required notice to the public 
and sends a formal notice of termination to the FI via Form CMS-2007 (see 40). 
 
40.2.2 - FI Report on Provider Deficiencies 
(Rev. 1, 10-01-03) 
A2-2801, A2-2801.1 
 
Most terminations of provider agreements are based primarily on health and safety 
factors, but fiscal considerations may also play an important role in the decision to 
terminate. The provider agreement and the Social Security Act impose certain obligations 
on the provider with respect to costs, charges, financial records, and related matters. 
 
Deficiencies in these areas may, of themselves, or in the combination with deficiencies in 
health and safety factors, constitute significant reasons for termination. 
 
Upon receipt of a State agency recommendation of termination, the RO notifies the 
servicing FI and requests a report concerning any reimbursement aspects that might  constitute additional grounds for termination. The FIs report should include such 
information as: cost reports not filed; cost reports past due and a description of the action 
taken; the providers refusal to permit the necessary examination of its fiscal records; 
status of any cost report settlements still pending; provisions for recoupment of current 
financing and accelerated payments; amount of unpaid billings for covered services 
rendered which may be used as an offset against any overpayment; and any potential 
overpayment in the current period. 
 
40.2.2.1 - Subsequent Communications With Provider 
(Rev. 1, 10-01-03) 
A2-2801.2 
 
Following release of the report to the RO, any communication between the provider and 
the FI related to reimbursement or other problems that could constitute grounds for 
termination should be immediately reported to the RO. The RO should also be informed 
in advance of any subsequent onsite visits to the provider regarding such matters. 
Unrecorded communications, visits, or correctional allegations that were not known and 
taken into consideration by CMS before final termination may cause embarrassment or 
even result in failure to sustain the termination action at later stages of the proceedings, 
particularly if the issue goes to a formal hearing. Even after final termination action, any 
such contacts with the provider may be pertinent to proper handling of the case by CMS, 
and therefore the FI must promptly forward the information to the RO. 
 
40.3 - Readmission to Medicare Program After Involuntary 
Termination 
(Rev. 1, 10-01-03) 
A2-2804 
 
After the involuntary termination of its agreements, a health facility cannot participate 
again as a provider unless: 
 
  The reasons for termination of the prior agreement have been removed, and  
 
  There is reasonable assurance that they will not recur. 
 
The RO makes the final decision as to whether the facility is eligible for readmission. In 
doing so, it reviews the case in its entirety and makes the final decision regarding the 
following: 
 
  Correction of deficiencies upon which the termination was based; 
 
  Reasonable assurance of continued compliance, and  
 
  Reasonable assurance of availability of information pertinent to reasonable cost 
reimbursement. 
  The RO will then process the case in the same way as an initial certification. 
 
40.3.1 - Effective Date of Provider Agreement 
(Rev. 1, 10-01-03) 
A2-2804.1 
 
Since one of the key issues is whether the facility has furnished reasonable assurance 
that the reasons for termination will not recur, the provider agreement cannot be effective 
before the date on which reasonable assurance is deemed to have been provided. 
 
Generally, a facility will be required to operate for a period of 60 days without recurrence 
of the deficiencies that were the basis for the termination. The provider agreement will be 
effective with the end of the 60-day period.  If corrections were made before filing the 
new request for participation, the period of compliance before filing the new request will 
be counted as part of the 60-day period; however, in no case can the effective date of the 
provider agreement be earlier than the date of the new request for participation. 
 
Exceptions to the 60-day period of compliance will be made where: 
 
  Structural changes have eliminated the reasons for termination. Reasonable 
assurance will be considered established as of the date such structural changes 
were completed. The effective date will be that date or the date of filing the new 
request to participate, whichever is later. 
 
  "Reasonable assurance is not established even after 60 days of compliance, 
because of the facilitys history of misrepresentation or of making temporary 
corrections and then relapsing into the old deficiencies that were the basis for 
termination. The effective date in such cases would be the earliest date after 60 
days at which reasonable assurance is deemed to have been established, or the 
filing date of the new request to participate, whichever is later. 
 
40.3.2 - Fiscal Considerations in Provider Readmission to Medicare 
Program After Involuntary Termination 
(Rev. 1, 10-01-03) 
A2-2805, RHC-334 
 
Upon being notified that a terminated provider has filed a request for participation, the 
RO telephones the FI which previously serviced the facility and requests information 
concerning any unresolved financial problems (e.g., an overpayment that must be 
recovered) so that the RO can determine whether such issues must be resolved before the 
facility is permitted to participate. 
 
The RO also contacts the FI that will service the facility upon readmission (this may be 
either the FI which previously serviced the facility or another FI) and asks it to make sure 
that the facility has made adequate provisions for furnishing the financial and accounting 
data required under the participation agreement. Where termination was based on fiscal  considerations, either entirely or in combination with deficiencies in health and safety 
factors, the FI will also be requested to check and report on whether the deficiencies have 
been corrected. This report should include: 
 
  The basis for believing that the deficiencies that led to termination of the provider 
agreement have (or have not) been corrected. 
 
  If corrected, a description of: 
 
o  When and how this was done; 
 
o  The evidence showing compliance has existed for a sufficient period of 
time; and  
 
o  The FIs reasons for concluding that the deficiencies will not recur. 
 
  A description of any other fiscal and reimbursement problems and the basis of 
believing these should (or should not) affect certification of the facility. 
 
40.4 - Payment for Services Furnished After Termination, Expiration, 
or Cancellation of Provider Agreement 
(Rev. 980, Issued: 06-14-06, Effective: 10-01-06, Implementation: 10-02-06) 
 
The CMS RO will inform the FI upon termination, expiration or cancellation of a 
provider agreement. 
 
Effective with the date a provider agreement under 1866 of the Act (or swing bed 
approval) terminates, expires, or is cancelled, no payment is made to the provider under 
such agreement for: 
 
A  Termination of Hospital Agreement 
 
Inpatient hospital services (including inpatient psychiatric hospital services) and swing 
bed extended care services furnished on or after the effective date of the hospitals 
termination, except that payment can continue to be made for up to 30 days of inpatient 
hospital services and/or swing bed extended care services (total of no more than 30 days) 
furnished on or after the termination date to beneficiaries who were admitted (at either 
the acute or extended care level) prior to the termination date. 
 
B  Termination of Swing Bed Approval 
 
Swing bed extended care services furnished on or after the effective date of the 
termination of the hospitals swing bed approval, except that payment can continue for up 
to 30 days of extended care services furnished on or after the termination date to 
beneficiaries who were admitted (at either the acute or extended care level) prior to the 
termination date.   
C  Skilled Nursing Facility Termination 
 
Posthospital extended care services furnished on or after the effective date of termination 
of the agreement, where such agreement has been voluntarily terminated by the provider 
(40.1) or involuntarily terminated by the Secretary for cause (40.2). However, payment 
can continue to be made for up to 30 days of posthospital extended care services 
furnished on and after the termination date to beneficiaries who were admitted prior to 
the termination date. 
 
D  Expiration SNF 
 
Posthospital extended care services furnished on or after the date which follows the last 
day of the specified term of the agreement, where such agreement has expired at the close 
of the last day of its specified term (40.3), except that where the agreement has not been 
renewed, payment can be made for up to 30 days of posthospital extended care services 
furnished on and after the date which follows the last day of the specified term of such 
agreement to beneficiaries who were admitted on or before such last day. 
 
E  HHA and Hospice 
 
Home health and hospice services furnished under a plan which is established on or after 
the termination date, except that if the plan was established before the termination date, 
payment is made for services for up to 30 days following the effective date of 
termination. 
 
F  Other 
Other items and services, including outpatient physical therapy or speech-language 
pathology and diagnostic services, furnished on or after the effective date of termination 
or, in the case of an expiration or cancellation of an SNF agreement, on or after the day 
following the close of such agreement. 
 
40.4.1 - Reviewing Inpatient Bills for Services After Suspension, 
Termination, Expiration, or Cancellation of Provider Agreement, or 
After a SNF is Denied Payment for New Admissions 
(Rev. 1, 10-01-03) 
A3-3600.3 
 
See 40.4 for provisions for payment following a termination or expiration of a provider 
agreement.  A SNF may be denied payment for new admissions, but not readmissions, as 
an option to termination of its provider agreement for noncompliance with one or more 
requirements of participation.  The SNF may only be reimbursed for covered services 
furnished on or after the effective date of denial of payments if such services were 
furnished to beneficiaries who were admitted to the SNF before the effective date of 
termination or expiration. 
  EXAMPLE: 
 
Effective date of denial of payment - 9-30 
 
Beneficiary admitted before 9-30 - pay for covered Part A or B services 
 
Beneficiary admitted on or after 9-30 - deny payment under Part A or B 
 
NOTE: An inpatient who goes on leave from the SNF before or after the effective date of 
denial of payments for new admissions is not considered a new admission when returning 
from leave. 
 
The contractor is notified of SNF payment denials through the Form CMS-2007.  It must 
install appropriate edits or other safeguards to prevent incorrect payments to the provider. 
 
The contractor obtains a list of Medicare inpatients when a SNF or hospital agreement is 
terminated, or after a SNF is denied payment for new admissions to assure that 
nonpayment spell of illness bills are filed. 
 
40.4.2 - Status of Hospital or SNF After Termination, Expiration, or 
Cancellation of Its Agreement 
(Rev. 1, 10-01-03) 
A3-3699.3.C 
 
Following termination, expiration, or cancellation of its agreement, a hospital or SNF is 
considered to be a nonparticipating provider.  An inpatient of such an institution who 
has Part B coverage, but for whom Part A benefits have been exhausted or otherwise not 
available, is entitled to reimbursement only for services that are covered in a 
nonparticipating institution.  A patient admitted to the SNF on or after the effective date 
of denial of payment who has Part B coverage is entitled to reimbursement for services 
covered in a nonparticipating institution.  Such services furnished on or after the effective 
date of termination, or in the case of expiration or cancellation of an SNF agreement, on 
or after the day following the close of such agreement, are billed on Form CMS-1500, 
Health Insurance Claim Form, and sent to the carrier. 
 
A terminated hospital may be certified to provide emergency services.  If it meets the 
criteria, it is assigned an emergency provider number (E suffix).  This procedure is not 
automatic, and hospitals terminated for Life Safety Code violations may not be able to 
qualify.  If a terminated hospital qualifies, the designated emergency FI handles billings 
as follows: 
 
Region I   Associated Hospital Services of Maine (dba, Maine Blue 
Cross and Blue Shield 
Region III   Veritus 
Region IV   First Coast Services 
Region VI   Trailblazers  Region VII   Blue Cross and Blue Shield of Nebraska 
Region IX   United Government Services  
Regions II, V, VIII, and X have no designated FI. 
 
Claims for services provided in a Religious Nonmedical Healthcare Institutions (domestic 
and foreign) are sent to Riverbend Government Benefits Administrator (GBA) in 
Tennessee. 
 
The following CMS Web address provides a complete list of addresses and phone 
numbers for FIs and carriers:  http://cms.hhs.gov/contacts/incardir.asp. 
 
In a no-payment situation, where the entire billing period represents charges for which no 
Part A payment can be made, it is not necessary for the provider to submit two bills.  The 
provider submits only a final no-payment bill, with a discharge date, under the former 
provider number. 
 
Services furnished during the no-payment period may subsequently be determined to 
be covered. Where such covered services were furnished before the date of change in 
provider number, the provider submits one corrected bill covering the entire period 
showing the former provider number. Where the services were furnished after the date of 
change in provider number or both before and after the date of change, the provider 
submits a corrected discharge bill. 
 
40.5 - FI/Carrier/DMERC Responsibilities for Informing Providers of 
Changes 
(Rev. 1, 10-01-03) 
A3-3600.7 
 
Contractors must inform providers in writing of changes in policy and procedures and the 
effective date before making changes.  They must send these notices at least thirty days 
before changes are put into effect to give providers time to adjust.  When a shorter 
implementation schedule is unavoidable, the contractor must provide the notice as soon 
as it is available. 
 
For electronic data interchange (EDI) instructions, the contractor must notify providers of 
changes at least 60 to 90 days in advance. 
 
Contractors must conduct provider training on an as needed basis and initiate regular 
contact with the provider community through organizations that represent them.  It must 
develop continuing staff contacts with these organizations to resolve issues of mutual 
concern. 
 
The contractor must provide adequate telephone service so that providers can receive 
prompt answers to claims status and processing questions.  It must implement procedures 
and training in telephone units to ensure that its employees furnish consistent and correct 
information and make appropriate referrals for specialized information.   
50 - Filing a Request for Payment With the Carrier or FI 
(Rev. 1, 10-01-03) 
A3-3301 
 
Except as provided in 50.1.2 and 50.1.6, payment may not be made for Medicare 
services furnished under Part A or Part B unless the beneficiary or a designated 
representative files a timely written request for payment and the provider files a timely 
claim.  (See 80 for an explanation of time limits.) 
 
If the beneficiary does not file a request upon admission or start of care, it may be filed 
later with the provider or (less preferably) with an FI or carrier or CMS. The provider still 
must file a claim for payment (billing). 
 
50.1 - Request for Payment From the Carrier or FI 
(Rev. 1, 10-01-03) 
A3-3302 
 
50.1.1 - Billing Form as Request for Payment 
(Rev.: 4388; Issued: 09-06-19; Effective: 10-07-19; Implementation: 10-07-19) 
 
Each of the paper billing forms--CMS-1500-- Health Insurance Claim Form; and  CMS-
1490S-- Patients Request for Medical Payment,)-- contains a patients signature line or 
reference to the patient signature incorporating the patients request for payment of 
benefits, authorization to release information, and assignment of benefits. When the 
billing form is used as the request for payment, there must be a signature, except when 
the provisions in 50.1.2 apply. 
 
The Medicare Uniform Institutional Provider Bill, Form CMS-1450, does not contain a 
line for the patients signature.  As a result, the billing form itself cannot be used as a 
request for payment.  Requests for payment must be obtained and retained in the 
providers records.  The institutional claim form contains a provider representative 
signature, which includes a certification that a request for payment has been obtained 
from the patient.  See 50.1.2 for requirements for providers. 
 
Electronic billing is required except when an exception is possible under ASCA.  See 2 
of this chapter for related information. 
 
50.1.2 - Beneficiary Request for Payment on Provider Record - ASC 
X12 837 Institutional Claims 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition  period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A participating provider (hospital, critical access hospital, skilled nursing facility, home 
health agency, outpatient physical therapy provider, or comprehensive outpatient 
rehabilitation facility), ESRD facility, Independent rural health clinic, freestanding 
Federally Qualified Health Clinic, Religious Nonmedical Health Care Institution, or 
Community Mental Health Centers must use a procedure under which the signature of the 
patient (or his representative) on its records will serve as a request for payment for 
services of the provider. 
 
To implement this procedure the provider must incorporate language to the following 
effect in its records: 
 
Request for Payment 
 
_______________________  _______________________ 
NAME OF BENEFICIARY  Medicare beneficiary identifier 
I request payment of authorized Medicare benefits to me or on my behalf for any 
services furnished me by or in (name of provider).  I authorize any holder of medical 
or other information about me to release to Medicare and its agents any information 
needed to determine these benefits or benefits for related services. 
 
For services furnished to inpatients of a hospital, or SNF, the request is effective for the 
period of confinement.  For services furnished by an HHA under a plan of treatment the 
request is effective for the plan of treatment. For other services the request is effective 
until revoked.  If a patient objects to part of the request for payment, the provider should 
annotate the statement accordingly. 
 
In using this procedure, the provider undertakes to make the patient signature files 
available for A/B MAC (A and B) inspection on request. 
 
The A/B MAC (A and B) must make periodic audits of signature files selected on a 
random basis. The A/B MAC (B) may arrange with the A/B MAC (A) for the latter to 
perform this function on its behalf for A/B MAC (B) claims submitted by providers. 
 
50.1.3 - Signature on the Request for Payment by Someone Other Than 
the Patient 
(Rev. 2984, Issued: 07-11-14, Effective: 08-12-14, Implementation: 08-12-14) 
 
General 
 
If at all practical the patient should sign the request on the providers records at the start 
of care, or upon admission for hospital or SNF admissions.  However, where a 
beneficiary is unable to execute a request for payment because of a mental or physical 
condition, the request may be executed on his/her behalf by a legal guardian,  representative payee (a person designated by the Social Security Administration or other 
governmental agency to receive an incompetent beneficiarys monthly cash benefits), 
relative, friend, representative of an institution providing him/her care or support, or of a 
governmental agency providing assistance.  A physician or supplier (or his/her employee) 
cannot request payment for services furnished except under circumstances fully 
documented to show that the enrollee is unable to sign and that there is no other person 
who could. 
 
For this purpose, an institution providing him/her care includes a long-term care 
facility, a hospital (whether psychiatric or general), a SNF, and a nursing home.  Only an 
employee of the institution or agency may be authorized to act as its representative to 
sign claims on behalf of incompetent patients. 
 
The name of the incompetent person should be shown on the signature line of the 
Request for Medicare Payment (or equivalent authorization retained in the file, followed 
by by and the signature of the requestor.  The requestor, other than a representative 
payee, should attach a statement to the Request for Medicare Payment explaining his/her 
relationship to the beneficiary and the reason the beneficiary cannot sign.  If such a 
statement is not submitted, A/B MACs must obtain an explanation if other development 
is needed or if the physician or supplier (or employee) has signed.  Except in such cases, 
A/B MACs should not delay processing the claim to obtain an explanation. 
 
A/B MACs are permitted to honor an otherwise properly completed and submitted claim 
signed by the administrator (or other authorized employee) of a nonprofit long-term care 
facility on behalf of a resident who has given the facility the necessary power of attorney 
(P/A).  (A long-term care facility, as distinguished from a nursing or other SNF, is an 
institution that contractually provides room, board, medical, and other necessary services 
to people who commonly enter and remain there for life, even when in good health.  It 
may include a skilled nursing unit.)  A/B MACs may assume that the facility has the 
necessary authority when the administrator enters in the signature space the residents 
name, followed by P/A, the administrators signature, his title, and the name of the 
home.  A signature on behalf of a competent enrollee based on a P/A granted to anyone 
other than an authorized official of a nonprofit long-term care facility is not acceptable. 
 
NOTE:  The fact that such a request may be honored does not mean that payment can be 
made to the requestor. 
 
In certain circumstances, it would be impracticable for an individual to sign the request 
for payment himself because when he is admitted to a hospital or skilled nursing facility 
or first receives outpatient or home health services, he is unconscious, incompetent, in 
great pain, or otherwise in such a condition that he should not be asked to transact any 
business.  In such a situation, his representative payee (i.e., a person designated by the 
Social Security Administration to receive monthly benefits on the patients behalf), a 
relative, legal guardian, or a representative of an institution (other than the provider) 
usually responsible for his care, or a representative of a governmental entity providing  welfare assistance, if present at time of admission, should be asked and permitted to sign 
on his behalf. 
 
A.  Provider Signs Request 
 
If, at the time of admission, the patient cannot be asked to sign the request for payment 
and there is no person present exercising responsibility for him, an authorized official of 
the provider may sign the request.  Except in the outpatient case described below, where 
the patient is not physically present, a provider should not routinely sign the request on 
behalf of any patient.  If experience reveals an unusual frequency of such provider-signed 
request from a particular provider, the matter will be subject to review by the A/B MAC 
(A). 
 
The hospital or SNF need not attempt to obtain the patients signature where the 
physician sends a specimen (e.g., blood or urine sample) to a laboratory of a participating 
hospital or SNF for analysis, the patient does not go to the hospital or SNF, but the tests 
are billed through that provider.  The hospital or SNF may sign on behalf of the patient 
and should note in its records Patient not physically present for tests.  This does not 
apply in cases in which the patient actually goes to the hospital or SNF laboratory for 
tests and the provider fails to obtain the patients signature while he is there. 
 
If it is impractical to obtain the patients signature because a home health agency does not 
make a visit to his home (e.g., the physician certifies that the patient needs a certain item 
of durable medical equipment but no visits are certified), the agency may furnish the 
equipment and need not obtain the patients signature.  An agency representative should 
sign on behalf of the patient and indicate in the provider record Patient not visited. 
 
B.  Patient Dies 
 
If the patient dies before the request for payment is signed, it may be signed by the legal 
representative of the estate, or by any of the persons or institutions (including an 
authorized official of the provider) who could have signed it had the patient been alive 
and incompetent. 
 
A request for payment for inpatient hospital services filed with the hospital may serve as 
an application for HI entitlement when filed by or on behalf of a live patient, but not 
when filed on behalf of a deceased patient.  See 50.1.4. 
 
C.  Need for Explanation of Signers Relationship to Patient 
 
When someone other than the patient signs the request for payment, the signer will 
submit a brief statement explaining the relationship to the patient and the circumstances 
which made it impracticable for the patient to sign.  The provider will retain the statement 
in its files.  The A/B MAC (A) will generally accept such a statement as representing the 
true facts of the case in the absence of evidence to the contrary.  If development is needed 
for some other reason, the A/B MAC (A) will ask the provider to furnish the explanation  of relationship and circumstances.  However, processing the claim should not ordinarily 
be delayed to obtain the explanation if nothing else prevents payment. 
 
50.1.4 - Request for Payment as a Claim for HI Entitlement 
(Rev. 1, 10-01-03) 
A3-3302.6 
 
To become entitled to hospital insurance, an individual must not only be eligible, but 
must also, prior to his death, apply for such entitlement (or for monthly social security 
benefits) with the Social Security Administration (SSA).  Even though an individual 
meets all eligibility requirements, if the necessary application is not filed before death, 
the individual cannot be entitled to Part A benefits and no payment can be made under 
the HI program for hospital services. 
 
Occasionally a patient aged 65 or over who is admitted to a hospital, though eligible, has 
never applied for monthly benefits and has no health insurance card.  In very rare 
instances the patient may have a card even though the necessary application has not been 
filed.  To protect the eligible patient, the estate, and the hospital against the possibility 
that timely application will not be filed with SSA, a written request for title XVIII 
payment filed with the hospital may serve as an application for hospital insurance 
entitlement filed with SSA.  The request must be filed with the hospital prior to the death 
of the patient.  A prescribed application form properly executed must be filed with SSA 
within six months of the date of SSAs written notice to a proper applicant of the need for 
such application.  Chapter 2 contains the details of this procedure. 
 
This function of the written request as an informal claim for HI entitlement under certain 
conditions is distinct from its far more general and basic function as a request that 
payment may be made on behalf of an entitled individual to the provider.  A request for 
payment in this latter sense can validly be executed after the death of the entitled 
individual. 
 
50.1.5 - Refusal by Patient to Request Payment Under the Program 
(Rev. 1, 10-01-03) 
A3-3302.7 
 
A patient on admission to a hospital or skilled nursing facility may refuse to request 
Medicare payment and agree to pay for the services out of their own funds or from other 
insurance.  Such patients may have a philosophical objection to Medicare or may feel that 
they will receive better care if they pay for services themselves or they are paid for under 
some other insurance policy.  The patients impression that another insurer will pay for 
the services may or may not be correct, as some contracts expressly disclaim liability for 
services covered under Medicare.  Where the patient refuses to request Medicare 
payment, the provider should obtain a signed statement of refusal wherever possible. If 
the patient (or his representative) is unwilling to sign, the provider should record that the 
patient refused to file a request for payment but was unwilling to sign the statement of 
refusal.   
In any event, there is no provision that requires a patient to have covered services paid for 
under Medicare if the patient refuses to request payment.  Therefore, a provider may bill 
an insured patient who positively and voluntarily declines to request Medicare payment.  
However, if such a person subsequently requests payment by Medicare (because another 
insurance will not pay or for another reason) and requests payment under the health 
insurance program within the prescribed time limit, the provider must submit a Medicare 
claim, and refund to the patient any amounts the beneficiary paid in excess of the 
permissible charges. 
 
Where a patient who has declined to request payment dies, the right to request payment 
may be exercised by the legal representative of the estate, by any of the persons or 
institutions mentioned in the second paragraph of 50.1.3, by a person or institution 
which paid part or all of the bill, or in the event a request could not otherwise be 
obtained, by an authorized official of the provider.  This permits payment to the provider 
for services that would not otherwise be paid for and allows a refund to the estate or to a 
person or institution that paid the bill on behalf of the deceased. 
 
See 70 for filing claims for payment and for associated time limits. 
 
The provider may charge the beneficiary for covered services where the beneficiary 
refuses to file. 
 
50.1.6 - When Beneficiary Statement is Not Required for 
Physician/Supplier Claim 
(Rev. 980, Issued: 06-14-06, Effective: 10-01-06, Implementation: 10-02-06) 
 
A.  Enrollee Signature Requirements 
 
A request for payment signed by the enrollee must be filed on or with each claim for 
charge basis reimbursement except as provided below.  All rules apply to both assigned 
and unassigned claims unless otherwise indicated. 
 
1.  When no enrollee signature required: 
 
a.  Claim submitted for diagnostic tests or test interpretations performed in a 
medical facility which has no contact with enrollee. 
 
b.  Unassigned claim submitted by a public welfare agency on a bill which is 
paid. 
 
c.  Enrollee deceased, bill unpaid and the physician or supplier agrees to 
accept Medicare approved amount as the full charge. 
 
2.  When signature by mark is permitted: The enrollee is unable to sign his name 
because of illiteracy or physical handicap.   
3.  When another person may sign on behalf of the enrollee: 
 
a.  Enrollee who is resident of a nonprofit retirement home gives power of 
attorney to the administrator of the home. 
 
b.  Enrollee physically or mentally unable to transact business:  The request 
may be signed by a representative payee, legal representative, relative, 
friend, representative of an institution providing the enrollee care or 
support, or of a governmental agency providing him/her assistance. 
 
c.  Enrollee physically or mentally unable to transact business and full 
documentation is supplied that the enrollee has no one else to sign on his 
behalf:  The physician, supplier, or clinic may sign. 
 
d.  Enrollee deceased and bill paid or liability assumed:  Person claiming 
payment should sign.  If Form CMS-1500 was signed before the enrollee 
dies, claimant should sign separate request for underpayment. 
 
4.  When request retained in file may cover extended future period: 
 
a.  Assignment in files of welfare agency covers all services furnished during 
the period when the enrollee is on medical assistance. 
 
b.  Authorization in files of organization approved under 30.2.8.3 covers all 
services paid for by that organization under that procedure. 
 
c.  Assignment in the files of group practice prepayment plan covers services 
furnished by the plan during the period of the enrollees membership. 
 
d.  Assignment in the files of a participating provider (hospital, SNF, home 
health agency, outpatient physical therapy or speech-language pathology 
provider or comprehensive rehabilitation facility) or ESRD facility covers 
physician services for which the provider or facility is authorized to bill, 
and may cover the physician services furnished in the provider or facility 
as follows: 
 
  Inpatient services - effective for period of confinement. 
  Outpatient services - effective indefinitely. 
 
e.  Assignment in files of individual physician, supplier (except in the case of 
unassigned claims for rental of durable medical equipment) or qualified 
reassignee under 30.2 is effective indefinitely. 
 
B.  Physician (Supplier) Signature Requirement 
  The rules below apply to both assigned and unassigned claims unless otherwise indicated. 
1.  In a claim for services furnished by an individual physician (or supplier), the 
physician may: 
 
a.  In an unassigned claim, provide an itemized bill on his own letterhead - no 
physician signature required.  A Form CMS-1500 on which the name or 
identification code of the physician has been stamped or preprinted in item 
31 is the equivalent of the physicians own letterhead. 
 
b.  Sign item 31 of Form CMS-1500. 
 
c.  Sign one time certification letter for machine-prepared claims submitted 
on other than paper vehicles. 
 
d.  Authorize an employee (e.g., nurse, secretary) to enter the physicians 
signature in item 31 of the Form CMS-1500. 
 
i.   Manually 
ii.  By stamp-facsimile or block letters 
iii. By computer 
 
e.  Authorize a nonemployee agent, e.g., billing service or association, to 
enter as in d. above, the physicians signature in item 31 of the Form 
CMS-1500, followed by the agents name, title, and organization (e.g., a 
billing agent might enter by stamp Dr. Tom Jones by Robert Smith, 
Secretary, Ajax Billing Service).  Alternatively, the agent may simply 
enter the physicians signature. 
 
2.  In a claim by a clinic, hospital, or other entity authorized to bill and receive 
payment in its name for the services of the physician, the entity may: 
 
a.  In an unassigned claim, provide an itemized bill on its letterhead-no 
signature necessary. A Form CMS-1500 on which the name or 
identification code of the billing entity has been stamped or preprinted in 
item 8 is the equivalent of the reassignees own letterhead. 
 
b.  Have authorized official sign in item 25 of the Form CMS-1500 (item 13 
of Form CMS-1554, item 6 of Form CMS-1556). 
 
c.  Have authorized official sign one-time certification letter for machine-
prepared claims submitted on other than paper vehicles. 
 
d.  Have authorized employee, e.g., a secretary, enter authorized officials 
signature in item 25 of the Form CMS-1500 (item 13 of Form CMS-1554, 
item 6 of Form CMS-1556) as in 1d. 
  e.  Have nonemployee agent enter authorized officials signature in item 25 
of the Form CMS-1500 (item 13 of Form CMS-1554, item 6 of Form 
CMS-1556) as in 1.e. 
 
50.1.7 - Definition of a Claim for Payment 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
For those billing A/B MACs (B) and DME MACs, a claim does not have to be on a form 
but may be any writing submitted by or on behalf of a claimant, which indicates a desire 
to claim payment from the Medicare program in connection with medical services of a 
specified nature furnished to an identified enrollee. It is not necessary that this 
submission be recorded on a CMS claim form, that the services be itemized or that the 
information submitted be complete (e.g., a note from the enrollees spouse, or a bill for 
ancillary services in a nonparticipating hospital, could count as a claim for payment). 
 
The writing must contain sufficient identifying information about the enrollee to permit 
the obtaining of any missing information through routine methods, e.g., file check, 
microfilm reference, mail or telephone contact based on an address or telephone number 
in file.  Where the writing is not submitted on a claims form, there must be enough 
information about the nature of the medical or other health service to enable the 
contractor with claims processing jurisdiction to determine that the service was 
apparently furnished by a physician or supplier. 
 
The definition of a part B claim for purposes of timely filing is any writing submitted by 
or on behalf of a claimant, which indicates a desire to claim payment from the Medicare 
program for medical services of a specified nature to an identified enrollee.  For example, 
a note from the enrollees spouse or a bill for ancillary services in a nonparticipating 
hospital could constitute a claim for payment. 
 
If such a claim is mailed or delivered to SSA, CMS or to any A/B MAC (A or B) within 
the time limit, the claim is filed timely provided the necessary claims information (e.g., 
Form CMS-1490S and itemized bill in the case of an enrollee-filed claim) is submitted 
within the time limit or, if later, within six months after the end of the month in which the 
claimant is advised to furnish it, e.g., if the notice is provided February 2, the claim must 
be filed by close of business August 31.  See Statement of Intent instructions in 70.7. 
 
Note that electronic claims must be in the appropriate HIPAA standard format.  Refer to 
section 2 of this chapter as well as chapters 24 and 25 for more information. 
 
50.1.8 - Establishing Date of Filing - Postmark Date - Carriers 
(Rev. 1, 10-01-03) 
A3-3305.2, A3-3305.3 
  Whenever the last day for timely filing of a claim falls on a Saturday, Sunday, legal 
holiday, or other day all or part of which is a non-work-day for Federal employees 
because of Federal statute or executive order, the claim will be considered timely if it is 
filed on the next workday. 
 
Where the claim is submitted to the carrier by mail, if it is material and to the advantage 
of the provider, the claim can be considered filed on the day the envelope was 
postmarked in the United States.  Thus, where an undated claim is received by the carrier 
in the mail early in the month after the filing date, the envelope should, if practical, be 
retained.  If, in such a case, an envelope with a legible postmark is not available, a 7-day 
tolerance will usually apply.  For example, a claim for services provided in May 2000 
received by a carrier on or before January 10, 2002, may be presumed by the carrier, in 
the absence of evidence to the contrary, to have been mailed on or before January 2, 
2002, (which is the date the time limit expires because it is the first Federal workday after 
Saturday, December 31).  This rule will be applicable where the claim was mailed within 
the contiguous 48 States and the District of Columbia and received by a carrier within 
such States.  In other cases, the reasonable tolerance may be longer and will depend on 
the usual mailing time under the particular circumstances. 
 
50.2 - Frequency of Billing for Providers 
(Rev. 1231; Issued:  04-27-07; Effective:  12-03-07; Implementation:  12-03-07) 
 
Different types of providers are paid based on different payment policies depending upon 
the circumstance of the provider.  These payment policies are described in detail in the 
chapters related to the provider type.  The following billing requirements are to strike a 
balance between program administration efficiency and maintaining cash flow for 
providers. 
 
Standard System Maintainer (SSM) shall ensure that providers adhere to these 
requirements. 
 
50.2.1  Inpatient Billing From Hospitals and SNFs 
(Rev. 1946; Issued: 04-15-10; Effective Date:  10-01-02; Implementation Date: 07-
06-10 for Analysis, Design and Coding and 10-04-10 for Testing and 
Implementation) 
 
Non PPS Hospitals and SNFs 
 
Inpatient services in TEFRA hospitals (i.e., hospitals excluded from inpatient prospective 
payment system (PPS), cancer and childrens hospitals) and SNFs are billed: 
 
  Upon discharge of the beneficiary; 
  When the beneficiary benefits are exhausted; 
  When the beneficiarys need for care changes; or  
  On a monthly basis. 
  Hospitals in Maryland that are under the jurisdiction of the Health Services Cost Review 
Commission are subject to monthly billing cycles. 
 
Providers shall submit a bill to the FI when a beneficiary in one of these hospitals ceases 
to need a hospital level of care (occurrence code 22).  FIs shall not separate the 
occurrence code 31 and occurrence span code 76 on two different bills.  Each bill must 
include all applicable diagnoses and procedures. However, interim bills are not to include 
charges billed on an earlier claim since the From date on the bill must be the day after 
the Thru date on the earlier bill. 
 
SNF providers shall follow the billing instructions provided in Chapter 6 (SNF Inpatient 
Part A Billing), Section 40.8 (Billing in Benefits Exhaust and No-Payment Situations) for 
proper billing in benefits exhaust and no-payment situations. 
 
PPS Hospitals 
 
Inpatient acute-care PPS hospitals, inpatient rehabilitation facilities (IRFs), long term 
care hospitals (LTCHs) and inpatient psychiatric facilities (IPFs) may interim bill in at 
least 60-day intervals. Subsequent bills must be in the adjustment bill format. Each bill 
must include all applicable diagnoses and procedures. 
 
All inpatient providers will also submit a bill when the beneficiarys benefits exhaust.  
This permits them to bill a secondary insurer when Medicare ceases to make payment.  
Initial inpatient acute care PPS hospital, IRF, IPF and a LTCH interim claims must have 
a patient status code of 30 (still patient).  When processing interim PPS hospital bills, 
providers use the bill designation of 112 (interim bill - first claim).  Upon receipt of a 
subsequent bill, the FI must cancel the prior bill and replace it with one of the following 
bill designations: 
 
  For subsequent interim bills, bill type 117 with a patient status of 30 (still patient); 
or 
 
  For subsequent discharge bills, bill type 117 with a patient status other than 30. 
(See Chapter 25 for a list of valid patient discharge status codes) 
 
All inpatient providers must submit bills when any of the following occur, regardless of 
the date of the prior bill (if any): 
 
  Benefits are exhausted; 
  The beneficiary ceases to need a hospital level of care (all hospitals); 
  The beneficiary falls below a skilled level of care (SNFs and hospital swing 
beds); or 
  The beneficiary is discharged. 
 
Effective December 3, 2007, when a beneficiarys Medicare benefits exhaust in an IPF or 
an LTCH, the hospital is allowed to submit a no pay bill (TOB 110) with a patient status  code 30 in 60 day increments until discharge.  They no longer have to continually adjust 
bills until physical discharge or death.  The last bill shall contain a discharge patient 
status code. 
 
These instructions for hospitals and SNFs apply to all providers, including those 
receiving Periodic Interim Payments (PIP).  Providers should continue to submit no-pay 
bills until discharge. 
 
NOTE:  For stays that necessitate the reporting of more than ten OSCs (i.e., more OSCs 
than the claim formats allow), Long Term Care Hospitals, Inpatient Psychiatric Facilities, 
and Inpatient Rehabilitation Facilities shall refer to instructions provided in Chapter 32, 
section 74.3 of this manual. 
 
50.2.2 - Frequency of Billing for Providers Submitting Institutional 
Claims with Outpatient Services 
(Rev. 2092, Issued: 11-12-10, Effective: 04-01-11, Implementation: 04-04-11) 
 
Repetitive Part B services furnished to a single individual by providers that bill 
institutional claims shall be billed monthly (or at the conclusion of treatment).  The 
instructions in this subsection also apply to hospice services billed under Part A, though 
they do not apply to home health services.  Consolidating repetitive services into a single 
monthly claim reduces CMS processing costs for relatively small claims and in instances 
where bills are held for monthly review.  Services repeated over a span of time and billed 
with the following revenue codes are defined as repetitive services: 
 
Type of Service  Revenue Code(s) 
DME Rental  0290  0299 
Respiratory Therapy  0410, 0412, 0419 
Physical Therapy  0420  0429 
Occupational Therapy  0430  0439 
Speech-Language Pathology  0440  0449 
Skilled Nursing  0550  0559 
Kidney Dialysis Treatments  0820  0859 
Cardiac Rehabilitation Services  0482, 0943 
Pulmonary Rehabilitation Services  0948 
 
Hospitals in Maryland that are under the jurisdiction of the Health Services Cost Review 
Commission are subject to monthly billing cycles. 
 
Where there is an inpatient stay, or outpatient surgery, or outpatient hospital services 
subject to OPPS, during a period of repetitive outpatient services, one bill for repetitive 
services shall nonetheless be submitted for the entire month as long as the provider uses 
an occurrence span code 74 on the monthly repetitive bill to encompass the inpatient stay, 
day of outpatient surgery, or outpatient hospital services subject to OPPS.  CWF and 
shared systems must read occurrence span 74 and recognize the beneficiary cannot 
receive non-repetitive services while receiving repetitive services, and consequently, is  on leave of absence from the repetitive services.  This permits submitting a single, 
monthly bill for repetitive services and simplifies Contractor review of these bills.  The 
following is an illustration explaining this scenario: 
 
Leave of Absence Carve-Out Example 
MONTHLY REPETITIVE BILL 
Statement Covers Period 
From     |    Through 
                7/01/05        7/31/05 
INPATIENT BILL 
Occurrence Span  Statement Covers Period 
Code   |     From    |    Through            From     |     Through 
         74           7/12/05       7/16//05            7/12/05        7/16/05 
Line Item Service Date 
1) 7/04/05 
2) 7/11/05 
3) 7/18/05 
4) 7/25/05 
 
 
 
Any items and/or services in support of the repetitive service shall be reported on the 
same claim even if the revenue code(s) reported with those supported services are not on 
the repetitive revenue code list (NOTE:  Supporting items and/or services are those in 
which are needed specifically in the performance of the repetitive service.  Examples may 
include disposable supplies, drugs or equipment used to furnish the repetitive service). 
 
However, to facilitate APC recalibration, do not report unrelated one-time, non-repetitive 
services that have the same date of service as a repetitive service (even if both the non-
repetitive service and the repetitive service are paid under OPPS).  If a non-repetitive 
OPPS service is provided on the same date as a repetitive service, report the non-
repetitive OPPS services, along with any packaged and/or services related to the non-
repetitive OPPS service, on a separate OPPS claim.  For example, if a chemotherapy drug 
is administered on a day a repetitive service is also rendered, report the chemotherapy 
drug, its administration, its related supplies, etcetera, on a separate claim from the  monthly repetitive services claim.  Similarly, as shown below in the illustration, 
Example: Monthly Repetitive Billing Procedure, a physical therapy treatment (which is 
a repetitive service because it is reported under a revenue code on the repetitive service 
list) is administered on the same day an outpatient consultation and a CT scan are 
furnished, report the physical therapy service on the claim with the other physical therapy 
services provided during the applicable month.  Report the visit for the consultation and 
the CT scan on a separate claim. 
Example: Monthly Repetitive Billing Procedure 
Monthly  Outpatient Bill 
Repetitive Bill 
1. Physical Therapy 
2. Outpatient Consultation 
Line Item Service Date  3. CT Scan  Line Item Service Date 
7/4/05      7/18/05 
7/11/05  7/18/05 
7/18/05 
 
 
Revenue codes usually reported for chemotherapy and radiation therapy are not on the 
list of revenue codes that may only be billed monthly.  Therefore, hospitals may bill 
chemotherapy or radiation therapy sessions on separate claims for each date of service.  
However, because it is common for these services to be furnished in multiple encounters 
that occur over several weeks or over the course of a month, hospitals have the option of 
reporting charges for those recurring services on a single bill, as though they were 
repetitive services.  If hospitals elect to report charges for recurring, non-repetitive 
services (such as chemotherapy or radiation therapy) on a single bill, they must also 
report all charges for services and supplies associated with the recurring service on the 
same bill.  The services may all be reported on the same claim or billed separately by date 
of service as illustrated below: 
  Billing Procedures for Recurring Services Not Defined as Repetitive 
1) Submit multiple bills for each  2) Submit a monthly bill for all line item 
date of service (include only the  dates of service (for the entire months 
OR 
recurring service and its related  recurring services with all services related 
services):  to the recurring services): 
7/1/05 
 7/8/05   7/1/05 
 7/8/05 
     7/22/05  7/22/05 
7/29/05 
  7/29/05 
 
 
Indian Health Service Hospitals, Maryland hospitals, as well as hospitals located in 
Saipan, Guam, American Samoa, and the Virgin Islands are not subject to OPPS.  In 
addition, hospitals that furnish only inpatient Part B services are also exempt from OPPS. 
Bills for ambulatory surgery in these hospitals shall contain on a single bill all services 
provided on the same day as the surgery except kidney dialysis services, which are billed 
on a 72X bill type.  Non-ASC services furnished on a day other than the day of surgery 
shall not be included on the outpatient surgical bill. 
 
See Chapter 16 for clinical diagnostic lab services paid under the fee schedule when 
included with outpatient bills for other services. 
 
Contractors periodically review bills from providers known to be furnishing repetitive 
services to determine if they are billing more frequently than proper.  Techniques that 
may be used are: 
 
  Sample review of bills to determine if most are for a monthly period (by using 
from and thru dates or number of services).  This may be done manually or 
electronically. Contractors may rely on informal communications from their 
medical review staff, and 
 
Contractors should educate providers that bill improperly. Contractors shall: 
 
  Return bills with an explanation and request proper billing to providers that 
continue to bill improperly. 
 
  Not return bills where the treatment plan is completed indicating discontinued 
services because the beneficiary dies or moves. 
  50.2.3 - Submitting Bills In Sequence for a Continuous Inpatient Stay or 
Course of Treatment 
(Rev. 2578, Issued: 11-01-12, Effective: 01-01-13, Implementation: 04-01-13) 
 
When a patient remains an inpatient of a SNF, TEFRA hospital or unit, swing-bed, or 
hospice beyond the end of a calendar month, providers must submit a bill for each 
calendar month. (See 50.2.1 for frequency of billing for inpatient services.) Claims for 
the beneficiary are to be submitted in service date sequence. The shared system must edit 
to prevent acceptance of a continuing stay claim or course of treatment claim until the 
prior bill has been processed. If the prior bill is not in history, the incoming bill will be 
returned to the provider with the appropriate error message. 
 
When an out-of-sequence claim for a continuous stay or outpatient course of treatment is 
received, FIs will search the claims history for the prior bill. They do not suspend the out-
of-sequence bill for manual review, but perform a history search for an adjudicated claim. 
For bills other than hospice bills, if the prior bill is not in the finalized claims history, 
they return to the provider the incoming bill with an error message requesting the prior 
bill be submitted first, if not already submitted. The returned bill may only be resubmitted 
after the provider receives notice of the adjudication of the prior bill. A typical error 
message would be as follows:  
 
Bills for a continuous stay or admission or for a continuous course of treatment must be 
submitted in the same sequence in which the services are furnished. If you have not 
already done so, please submit the prior bill. Then, resubmit this bill after you receive the 
remittance advice for the prior bill.  
 
For a partial hospitalization program claim to determine out-of-sequence claim 
submission for the outpatient course of treatment, providers must utilize the correct 
frequency digit in the type of bill as follows: 
 
If the from and through (FL6) dates on the claim being submitted include the 
dates for all services of the course of treatment, then the frequency digit in the type of 
bill will be a 1 [Admit through Discharge Claim]  (i.e., 131, 761, or 851).  The final 
Patient Discharge Status code (FL 17) will be entered. 
 
If the from and through dates (FL6) on the claim being submitted include the 
dates for services at the start of the course of treatment (first of a series of bills) and 
additional services are expected to be submitted on a subsequent bill, then the 
frequency digit in the type of bill will be a 2 [Interim  First Claim] (i.e., 132, 762, 
or 852).  The Patient Discharge Status code (FL 17) will be a 30. 
 
If the from and through dates (FL6) on the claim being submitted include the 
dates for services at the neither at the start or at the completion of the course of 
treatment and additional services are expected to be submitted on a subsequent bill, 
then the frequency digit in the type of bill will be a 3 [Interim  Continuing Claim] 
(i.e., 133, 763, or 853).  The Patient Discharge Status code (FL 17) will be a 30.   
If the from and through dates (FL6) on the claim being submitted include the 
dates for services at the completion of the course of treatment (last of a series of bills) 
and no additional services are expected to be submitted on a subsequent bill, then the 
frequency digit in the type of bill will be a 4 [Interim  Last Claim] (i.e., 134, 764, 
or 854).  The final Patient Discharge Status code (FL 17) will be entered. 
 
Leave of Absence Carve-Out process from 50.2.2 applies.  Providers may submit 
Interim Bills daily, weekly, or monthly as long as the claims are submitted with the 
correct frequency code in the type of bill and sequentially. 
 
For a hospice claim that is out of sequence, the FI searches their claims history. If the FI 
finds the prior claim has been received but has not been finalized (for instance, it has 
been suspended for additional development), they do not cause the out of sequence claim 
to be returned to the provider. Instead, they hold the out of sequence claim until the prior 
claim has been finalized and then process the out of sequence claim. If the prior hospice 
claim has not been received, the out of sequence hospice claim is returned to the provider 
with an error message as described above. FIs shall perform editing to ensure hospice 
claims are processed in sequence after any necessary medical review of the claims has 
been completed.  
 
Since hospice claims received out of sequence do not pass all required edits, they do not 
meet the definition of clean claims defined in 80.2 below. As a result, they are not 
subject to the mandated claims processing timeliness standard and are not subject to 
interest payments. FIs will enter condition code 64 on the out of sequence claims they are 
holding when awaiting the processing of the prior claims to indicate that they are not 
clean claims. 
 
50.2.4 - Reprocess Inpatient or Hospice Claims in Sequence 
(Rev. 1, 10-01-03) 
 
3-3603.2, definition of spell of illness from MIM 3035 
If a beneficiary, provider, or a secondary insurer notifies the FI that out-of-sequence 
processing increased the liability of the beneficiary or a secondary insurer, the FI confirm 
this through reviewing claims processed in its history and the Common Working File 
(CWF) records.  If liability is increased, FIs cancel the previously processed bills for that 
spell-of-illness and reprocess all bills in the spell-of-illness or benefit period in sequence.  
This may require coordination with another FI where the beneficiary was an inpatient in 
different hospitals with different FIs or received hospice services from separate hospices 
with different FIs.  The CWF utilization record must be corrected to properly allocate 
full, coinsurance, and lifetime reserve days, as applicable.  The CWF utilization record 
must also be corrected to reflect the correct hospice periods. 
 
This is an issue only when the beneficiary is an inpatient for more than 30 days (in the 
same or different facilities) during the spell of illness or benefit period. A spell of illness 
or benefit period is a period of time (consecutive days) during which covered services  furnished to a patient, up to certain specified maximum amounts, may be paid for by the 
hospital insurance plan.  This situation occurs most often when long-term care hospitals 
are involved.  For hospice claims, out of sequence processed claims must be reprocessed 
to maintain the integrity of hospice election periods.  If an FI is contacted by another FI 
or any regional office (RO), they cancel all affected claims and reprocess in accordance 
with the instructions from the lead FI or RO. 
 
The lead FI is the one contacted by a provider, beneficiary, or other insurer complaining 
of improper payment as result of out-of-sequence billing.  The lead FI will coordinate 
actions with any other FIs involved to cancel and reprocess the bills, as necessary.  For 
inpatient stays, the lead FI verifies that the provider, beneficiary, or other insurer was 
adversely affected and coordinates these actions directly with any other affected FI to 
cancel any out-of-sequence bills they processed and posted.  For hospice claims, the lead 
FI verifies an out-of-sequence claim(s) impacted the hospice election period. The lead FI 
coordinates actions to cancel any bills posted out-of-sequence directly with any other 
affected FI.  All FIs must reprocess all bills based on the actual sequence of the 
beneficiarys stays at the various providers or on the actual sequence of hospice services.  
The lead FI controls the sequence in which the bills are processed and posted to CWF. 
 
If the lead FI experiences any difficulty with another FI, they contact their RO to 
coordinate with any necessary ROs for other affected FIs bills. 
 
This approach is to be used only when the beneficiary, provider, or other insurer has 
increased liability as a result of out-of-sequence processing or when the hospice election 
periods are incorrect. It is not to be used if the liability stays the same, e.g., if deductible 
is applied on the second stay instead of the first, but there is no issue with regard to the 
effective date of supplementary coverage. 
 
50.3 - When an Inpatient Admission May Be Changed to Outpatient 
Status 
(Rev. 1760, Issued:  06-23-09; Effective Date:  07-01-09; Implementation Date:  07-
06-09) 
 
50.3.1 - Background 
(Rev. 2296, Issued: 09-02-11, Effective: 10-01-11, Implementation: 10-03-11) 
 
Payment is made under the hospital Outpatient Prospective Payment System (OPPS) for 
Medicare Part B services furnished by hospitals subject to the OPPS, and under the 
applicable other payment methodologies for hospitals not subject to the OPPS. 
Outpatient means a person who has not been admitted as an inpatient but who is 
registered on the hospital or critical access hospital (CAH) records as an outpatient and 
receives services (rather than supplies alone) directly from the hospital or CAH.  
 
Under the hospital Condition of Participation (CoP) at 42 C.F.R. 482.12(c), patients are 
admitted to the hospital or CAH as inpatients only on the recommendation of a physician 
or licensed practitioner permitted by the State to admit patients to a hospital.  In addition,  every Medicare patient must be under the care of a physician or other type of practitioner 
listed in the regulation (the practitioner responsible for care of the patient). In some 
instances, a practitioner may order a beneficiary to be admitted as an inpatient, but upon 
reviewing the case, the hospitals utilization review (UR) committee determines that an 
inpatient level of care is not medically necessary. 
 
Taking this into consideration, CMS obtained a condition code from the National 
Uniform Billing Committee (NUBC), effective April 1, 2004, that specifies:  
 
Condition Code 44--Inpatient admission changed to outpatient  For use on outpatient 
claims only, when the physician ordered inpatient services, but upon internal utilization 
review performed before the claim was originally submitted, the hospital determined that 
the services did not meet its inpatient criteria. 
 
The utilization review requirements for hospitals and CAH are found in their respective 
CoPs at 482.30 or 485.641. The hospital must ensure that all the UR activities, 
including the review of medical necessity of hospital admissions and continued stays 
required by 482.30(d), are fulfilled as described in the regulation.  Section 482.30(d) 
delineates requirements that hospitals must follow when making the determination as to 
whether an admission or discharge of a patient is or was medically necessary.  Review of 
admissions may be performed before, at, or after hospital admission. More information 
about the hospital CoP may be found in Pub.100-07, State Operations Manual, Appendix 
A - Survey Protocol, Regulations and Interpretive Guidelines for Hospitals.  Section 
485.641 requires CAHs to have a similar program for the evaluation of all services they 
furnish, including the quality and appropriateness of diagnoses and treatments furnished 
by their staff physician and non-physician practitioners.  If in addition to making a 
medical necessity determination (or evaluating the appropriateness of diagnosis and 
treatment in a CAH) a hospital or CAH wishes to change a patients status from inpatient 
to outpatient, the following requirements apply. 
CMS set the policy for the use of Condition Code 44 to address those relatively 
infrequent occasions, such as a late-night weekend admission when no case manager is 
on duty to offer guidance, when internal review subsequently determines that an inpatient 
admission does not meet hospital criteria and that the patient would have been registered 
as an outpatient under ordinary circumstances. The State Operations Manual states that in 
no case may a non-physician make a final determination that a patients stay is not 
medically necessary or appropriate (see Appendix A - Survey Protocol, Regulations and 
Interpretive Guidelines for Hospitals). However, CMS encourages and expects hospitals 
to employ case management staff to facilitate the application of hospital admission 
protocols and criteria, to facilitate communication between practitioners and the UR 
committee or Quality Improvement Organization (QIO), and to assist the UR committee 
in the decision-making process. Use of Condition Code 44 is not intended to serve as a 
substitute for adequate staffing of utilization management personnel or for continued 
education of physicians and hospital staff about each hospitals existing policies and 
admission protocols. As education and staffing efforts continue to progress, the need for 
hospitals to correct inappropriate admissions and to report Condition Code 44 should 
become increasingly rare.   
50.3.2 - Policy and Billing Instructions for Condition Code 44 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
In cases where a hospital or a CAHs UR committee determines that an inpatient 
admission does not meet the hospitals inpatient criteria, the hospital or CAH may change 
the beneficiarys status from inpatient to outpatient and submit an outpatient claim (bill 
type 13x or 85x) for medically necessary Medicare Part B services that were furnished to 
the beneficiary, provided all of the following conditions are met: 
 
1. The change in patient status from inpatient to outpatient is made prior to discharge or 
release, while the beneficiary is still a patient of the hospital; 
 
2. The hospital has not submitted a claim to Medicare for the inpatient admission; 
 
3. The practitioner responsible for the care of the patient and the UR committee concur 
with the decision; and  
 
4. The concurrence of the practitioner responsible for the care of the patient and the UR 
committee is documented in the patients medical record. 
 
While typically the full UR committee makes the decision for the committee that a 
change in patient status under Condition Code 44 is warranted, in accordance with 
482.30(d)(1) one physician member of the UR committee may make the decision for the 
committee, provided he or she is a different person from the concurring practitioner who 
is responsible for the care of the patient. 
 
When the hospital has determined that it may submit an outpatient claim according to the 
conditions described above, the entire episode of care should be billed as an outpatient 
episode of care on a 13x or 85x bill type and outpatient services that were ordered and 
furnished should be billed as appropriate. 
 
Refer to Pub. 100-04, Medicare Claims Processing Manual; Chapter 30, Financial 
Liability Protections; Section 20, Limitation On Liability (LOL) Under 1879 Where 
Medicare Claims Are Disallowed, for information regarding financial liability 
protections. 
 
When the hospital submits a 13x or 85x bill for services furnished to a beneficiary whose 
status was changed from inpatient to outpatient, the hospital is required to report 
Condition Code 44 on the outpatient claim in one of Form Locators 24-30, or in the ASC 
X12 837 institutional claim format in Loop 2300, HI segment, with qualifier BG, on the 
outpatient claim. Additional information may be found in Chapter 25 of this manual, 
(Completing and Processing the Form CMS-1450 Data Set). Condition Code 44 is used 
by CMS and QIOs to track and monitor these occurrences. The reporting of Condition  Code 44 on a claim does not affect the amount of hospital outpatient payment that would 
otherwise be made for a hospital outpatient claim that did not require the reporting 
Condition Code 44. 
 
One of the requirements for the use of Condition Code 44 is concurrence by the 
practitioner who is responsible for the care of the patient with the determination that an 
inpatient admission does not meet the hospitals admission criteria and that the patient 
should have been registered as an outpatient. This prerequisite for use of Condition Code 
44 is consistent with the requirements in the CoP in 482.30 (d) of the regulations. This 
paragraph provides that the practitioner or practitioners responsible for the care of the 
patient must be consulted and allowed to present their views before the UR committee or 
QIO makes its determination that an admission is not medically necessary. It may also be 
appropriate to include the practitioner who admitted the patient if this is a different 
person than the practitioner responsible for the care of the patient. 
 
If the conditions for use of Condition Code 44 are not met, the hospital may submit a 12x 
bill type for covered Part B Only services that were furnished to the inpatient. 
Medicare may still make payment for certain Part B services furnished to an inpatient of 
a hospital when payment cannot be made under Part A because an inpatient admission is 
determined not to be medically necessary. Information about Part B Only services is 
located in Pub. 100-02, Medicare Benefit Policy Manual, chapter 6, section 10. Examples 
of such services include, but are not limited to, diagnostic x-ray tests, diagnostic 
laboratory tests, surgical dressings and splints, prosthetic devices, and certain other 
services. The Medicare Benefit Policy Manual includes a complete list of the payable 
Part B Only services.  See Pub. 100-04, Medicare Claims Processing Manual, chapter 
4, section 10.12 for a discussion of the billing and payment rules regarding services 
furnished within the payment window for outpatient services treated as inpatient services. 
 
Entries in the medical record cannot be expunged or deleted and must be retained in their 
original form. Therefore, all orders and all entries related to the inpatient admission must 
be retained in the record in their original form. If a patients status changes in accordance 
with the requirements for use of Condition Code 44, the change must be fully 
documented in the medical record, complete with orders and notes that indicate why the 
change was made, the care that was furnished to the beneficiary, and the participants in 
making the decision to change the patients status. 
 
When Condition Code 44 is appropriately used, the hospital reports on the outpatient bill 
the services that were ordered and provided to the patient for the entire patient encounter. 
However, in accordance with the general Medicare requirements for services furnished to 
beneficiaries and billed to Medicare, even in Condition Code 44 situations, hospitals may 
not report observation services using HCPCS code G0378 (Hospital observation service, 
per hour) for observation services furnished during a hospital encounter prior to a 
physician's order for observation services. Medicare does not permit retroactive orders or 
the inference of physician orders. Like all hospital outpatient services, observation 
services must be ordered by a physician. The clock time begins at the time that 
observation services are initiated in accordance with a physicians order.   
While hospitals may not report observation services under HCPCS code G0378 for the 
time period during the hospital encounter prior to a physicians order for observation 
services, in Condition Code 44 situations, as for all other hospital outpatient encounters, 
hospitals may include charges on the outpatient claim for the costs of all hospital 
resources utilized in the care of the patient during the entire encounter. For example, a 
beneficiary is admitted as an inpatient and receives 12 hours of monitoring and nursing 
care, at which point the hospital changes the status of the beneficiary from inpatient to 
outpatient and the physician orders observation services, with all criteria for billing under 
Condition Code 44 being met. On the outpatient claim on an uncoded line with revenue 
code 0762, the hospital could bill for the 12 hours of monitoring and nursing care that 
were provided prior to the change in status and the physician order for observation 
services, in addition to billing HCPCS code G0378 for the observation services that 
followed the change in status and physician order for observation services. For other rules 
related to billing and payment of observation services, see chapter 4, section 290 of this 
manual, and Pub.100-02, Medicare Benefit Policy Manual, chapter 6, Section 20.6. 
 
60  Provider Billing of Non-covered Charges on Institutional Claims 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
60.1 - General Information on Non-covered Charges on Institutional 
Claims 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
Charges are tied to items or services described by coding on a line of a claim where they 
appear together.  The institutional claim formats (the ASC X12 837 institutional claim 
transaction and the Form CMS-1450 paper claim) provide separate fields for the 
submission of total charges and non-covered charges. 
 
When billing, claims submitters make a choice between submitting charges as covered, or 
as non-covered.  When total charges are submitted and non-covered charges are not 
submitted, the charges for the claim line are submitted as covered.  When a claim line is 
submitted with covered charges, the provider is seeking payment for that line. 
 
When total charges and non-covered charges submitted on a claim line are equal, the 
charges for that claim line are submitted as non-covered.  When a claim line is submitted 
with non-covered charges, the provider is not seeking payment for that line and the line is 
denied payment by Medicare systems.  Therefore, Medicare accepts any National 
Uniform Billing Committee-approved revenue codes when they are submitted with non-
covered charges, without regard to whether these revenue codes would be valid for 
Medicare billing if submitted seeking payment. 
 
Lines submitted with covered and non-covered charges can appear together on a single 
Medicare claim.  In rare instances, covered and non-covered charges can appear on the  same line.  In these cases, the total charge amount is greater than the non-covered charge 
amount on the line. 
 
Even when Medicare payment is not requested, there can be Medicare notice 
requirements that establish financial liability between beneficiaries and their providers.  
These liability notices, such as Advance Beneficiary Notices of Noncoverage (ABNs), 
serve to ensure that providers can shift the  financial liability for items and services to 
their Medicare patients, consistent with 1862(a)(1) and 1879 of the Social Security Act 
(i.e., the Act).  See Chapter 30 of this manual for more information on financial liability 
and related notices. 
 
NOTE:  In this section, the term provider may include institutional 
providers or suppliers and other comparable entities delivering 
medical items and services billed on institutional claims. 
 
This statutory ability to shift liability only applies when billing items and services usually 
covered as part of established Medicare benefits.  These benefits are described in law, in 
Title XVIII of the Act, which authorizes the Medicare Program.  Other benefits not 
addressed in Title XVIII are known as being statutorily excluded, meaning Medicare is 
not authorized to pay for them under the Act. 
 
Financial liability for an item or service that could be a Medicare benefit is codified in 
statute, along with the benefits themselves.  Liability occurs when such items or services 
are thought to be non-covered by the Program for specific reasons also given in the Act: 
 
  1862(a)(1) on services that otherwise could be covered  but which are not 
medically reasonable and necessary in the individual case at hand, 
 
  1862(a)(9) for custodial care which Medicare never covers, 
 
  1879(g)(1) for home care given to a beneficiary who is neither homebound nor 
needs intermittent skilled services at home,  or lastly, under 
 
  1879(g)(2) for hospice care given to someone not terminally ill. 
 
When one of these stipulated reasons will apply to a denial on an Original Medicare 
claim, the reason has to appear on a notice given in advance of delivery of services, and 
before preparation of a related claim.  These notices, like an ABN, give a level of detail 
that allows the involved beneficiary to understand why no coverage is likely to occur in 
that specific circumstance. 
 
The financial liability that remains when Medicare does not pay belongs to either 
providers or beneficiaries.  Such determinations are made by Medicare when processing 
related claims.  Sometimes, providers and beneficiaries make their own agreements on 
payment without billing Medicare, which Medicare allows them to do.  More often, 
Medicare is billed, since resulting denials of claims, even when submitted with non- covered charges, have appeal rights under Medicare over payment. See Chapter 29 of this 
manual for more information on such appeals. 
 
Appeals rights are not expected to be used for non-covered charges, certainly not with 
any frequency.  When no amounts are in dispute since no payment is sought, appeals tend 
not to occur.  Charges submitted as non-covered should indicate that there is an 
understanding shared by the involved beneficiary and provider that Medicare payment is 
not expected.  For example, non-covered charges could be used for cosmetic surgery 
because both parties know this surgery is never a Medicare benefit, or statutorily 
excluded.  The surgery may be billed to Medicare so that subsequent payers could see a 
Medicare denial when they require proof of denials by payers more primary in the 
sequence of coverage. 
 
Claims which are rejected by the Medicare contractor or are returned to the provider (or 
RTP'ed) can be corrected and re-submitted, permitting a payment determination to be 
made after resubmission.  In some cases, beneficiaries may appeal rejections, but they 
can NEVER appeal RTPed claims.  Rejections may be apparent on remittances for 
claims submitted with administrative errors, but beneficiaries cannot be held liable for 
items and services that were never properly billed to Medicare. 
 
In contrast, denied claims can never be resubmitted, since they are in fact the result of 
official payment determinations made by Medicare.  As mentioned, such determinations 
can be appealed. 
 
60.1.1 - Basic Payment Liability Conditions 
(Rev. 2783, Issued: 09-10-13, Effective: 09-30-13, Implementation: 09-30-13) 
 
With any service delivered, providers must decide which one of the following three 
conditions apply in order both to properly inform Medicare beneficiaries of their potential 
liability for payment, and later to bill for this payment.  The concepts used in making 
these decisions are displayed in the following table 
 
TABLE 1:  
 
MEDICARE  Payment  Payment  Payment 
SCENARIO  CONDITION 1  CONDITION 2  CONDITION 3 
DESCRIPTION  Items and services  Items and services  Items or service is 
being billed are  being billed are either  presumed to be a 
statutorily  a reduction or  Medicare benefit 
excluded from  termination of  and can be paid. 
Original Medicare  Medicare coverage, or 
coverage, meaning  are otherwise 
it is not defined as  expected to be denied, 
a specific  leaving financial 
Medicare benefit  liability for a 
defined in the Act;  beneficiary or  therefore, it is  provider (see 
never paid.   applicable reasons in 
60.1 above).  
NOTIFICATION  Liability notices  Liability notices are  Liability notices, 
(Prior to billing)  are voluntary (i.e.,  required (i.e.,  mandatory or 
ABN); for  expedited  voluntary, are 
statutory  determination notice,  never used in 
exclusions, there  ABN).   advance of such 
are no required  billing. 
Medicare notices. 
BILLING  Items and services  Billing of such items  Items and services 
may be billed as  and services can vary,  are billed as 
non-covered on  and can depend on the  covered. 
Medicare claims.  ability to segregate its 
covered and non-
covered portions (if 
both exist).  
LIABILITY  Always denied in  For any services that  If Medicare doesnt 
(displayed on  Medicare claims  are not paid by  pay itself as 
MSNs or  processing;  Medicare itself,  expected, the 
remittances)  beneficiaries are  properly notified  specific reason for 
liable for these  beneficiaries are  rejection or denial 
denials unless  usually liable for  will determine 
providers code  resulting denials.  liability according 
their claims to  to established 
transfer liability to  Medicare policy.  
themselves. 
 
NOTE: Only one of these conditions can apply to a given item or service, or to a given 
line of a claim.  
 
To the extent possible in billing Medicare, providers should split claims so that one of 
these three conditions holds true for all items and services billed on a single claim. 
Consequently, no more than one type of beneficiary notice on liability would apply to a 
single claim. This approach should improve understanding of potential liability for all 
parties and speed processing of the majority of claims. 
 
EXCEPTION: Cases may occur where multiple conditions apply and multiple notices 
may be necessary: 
 
(A)  Claims paid under the outpatient prospective payment system 
(OPPS); the OPPS requires all services provided on the same day to 
be billed on the same claim (see 170 of Chapter 4 of this manual), 
with few exceptions as already given in OPPS instructions (i.e., 
claims using any of the following 3 condition codes: 21, 20, which 
are also discussed below in this chapter, and G0);   
Or:  
 
(B)  Claims using certain claim coding:  
  occurrence span codes on inpatient claims,  
  modifiers used to differentiate multiple conditions that apply to 
different lines on the same claim. 
 
These issues are discussed further in subsequent sections of this chapter. More 
information on each payment condition listed in the table above follows in this section. 
 
Payment Condition 1. There is no required notice if beneficiaries elect to receive 
services that are excluded from Medicare by statute.  This is understood as: 
 
  not being part of a Medicare benefit, or  
  not covered for another reason that a provider can define, but that would not relate 
to potential denials under 1879 or 1862 (a) of the Act (listed above  in 60.1). 
 
If written notification of potential liability for statutory exclusions is desired to aid 
beneficiaries, even though not required by Medicare, the ABN may be used for such 
voluntary notification purposes.  Explanation of this use can be found at the Centers for 
Medicare and Medicaid Services (CMS) Web site: 
 
  www.cms.hhs.gov/medicare/bni/; and 
  Chapter 30 of this manual, Financial Liability Protections. 
 
Any other situations in which a patient is informed a service is not covered should also be 
documented in patient records, making clear the specific reason a beneficiary was told a 
service would be billed as non-covered. 
 
Payment Condition 2.  Providers must supply a liability notice if payment for services 
delivered to a Medicare beneficiary are to be reduced or terminated following delivery of 
the same or similar covered services, and those services are thought not to be covered at 
all specifically for one of the reasons listed under 1862 (a) of the Act.  Delivery of such 
notices can permit a shift of liability under 1879.  Providers must give these notices to 
beneficiaries before services are delivered for which the beneficiary may be liable. 
Failure to provide such notices when required means a provider will not be able to shift 
liability to a beneficiary.  As a result, the liability must be assumed by the provider.  
When a mandatory notice is given, patient records should be documented. 
 
Aside from liability requirements of the Act, applicable Conditions of Participation 
(COPs) MAY also require a provider to inform a beneficiary of payment liability.  This 
must be done BEFORE delivering services not covered by Medicare, IF the provider 
intends to charge the beneficiary for such services.  This is the case with the COPs 
applicable to home health agencies.  In addition to what may be required by the COPs,  providers are advised to respect Medicare beneficiaries right to information as described 
in Medicare publications targeted to beneficiaries (e.g. Medicare and You). 
 
Required Notices for Condition 2.  Over time, there have been different types of 
liability notices, used in different settings for specific types of services: 
 
(1) Notices of Noncoverage have been given to eligible inpatients receiving, or 
those previously eligible for, non-hospice services covered under Medicare 
Part A (types of bill (TOB) 11x, 18x, 21x, and 41x) when services at issue no 
longer met coverage guidelines; for example, when exceeding the number of 
covered days allowed in a spell of illness for a specific Medicare benefit. 
 
a.  In hospitals, these notices have been known as Hospital Issued Notice 
of Non-coverage (HINNs) or hospital notices of non-coverage (in the 
past this hospital use was the exclusive use of the term notice of non-
coverage), and  
 
b.  In Skilled Nursing Facilities (SNFs), they may have been known as 
Sarrassat notices, denial letters or the specific notice called 
SNFABN. 
 
Current CMS policy on these benefits, and claims seeking payment for them, can 
also be found at: 
 
  TABLE 2: 
 
BENEFIT  INTERNET ON-LINE MANUAL 
Inpatient Hospital  100-02, Benefit Policy, Chapter 1, 
  100-04, Claims Processing, Chapter 3; 
SNF. (Part A Paid)  100-02, Benefit Policy, Chapter 8, 
  100-04, Claims Processing, Chapter 6. 
 
  Overall, for these and other Original Medicare benefits, see Chapter 30 of this 
manual, 100-04, for information on financial liability notices. 
  All Medicare manual instructions are accessible at the following Web site:  
 
www.cms.hhs.gov/manuals/ 
(2) ABNs, when:  
 
(a) Overall medical necessity of a recognized Medicare benefit is in doubt, 
under 1879 and 1862 (a) of the Act, or  
 
(b) Items and services that were previously covered are to be reduced in 
payment or terminated, creating financial liability, or  
  (c) The setting is a hospital or SNF, but their inpatient specific forms are 
not applicable: ABNs are used for certain outpatient services or services 
covered under Part B delivered in a SNF or hospital; also, HH not under a 
plan of care, or 
 
(d) CORF, or  
 
(e) Hospice services, which alone among services discussed here, are paid 
under Part A. 
 
NOTE:  ABNs can refer to a specific notice format but here is used as a 
general term including notices used for other benefits such as HHABNs, 
which are used exclusively for home health. 
 
Another form of notice, known as an expedited determination notice, can be 
simultaneously delivered with Medicare liability notices like ABNs, since both types of 
notices can be involved in terminations of services.  Expedited determination notices are 
primarily intended to convey information about impending discharge, or termination of 
services, not liability, which is the focus of notices like ABNs. 
 
Expedited determination notices apply to the following Medicare providers: 
 
  Inpatient Hospital, 
  Skilled Nursing Facilities (SNFs), 
  Hospices, 
  Home Health Agencies, and  
  Comprehensive Outpatient Rehabilitation Facilities (CORFs). 
 
These providers are required to give a specific type of notice when all services they are 
providing, or Medicare payment for those services, terminate.  These notices are 
described at the following locations: 
 
  www.cms.hhs.gov/medicare/bni/; and 
  2005 Transmittal R594CP, which will be placed in Chapter 30 of 
this manual, Financial Liability Protections, and in the interim is 
found at: 
 http://www.cms.hhs.gov/Transmittals/ . 
o
 
Payment Condition 3.  This condition occurs when providers are billing for what they 
believe to be covered services as covered services.  There are no notice requirements for 
this condition, and non-covered charges are not involved when submitting such claims, 
though denials may result from processing. 
 
Billing follows notification, so providers should remember that in all payment conditions 
the notices described above would be delivered to the beneficiary before a claim is 
submitted to Medicare.   
The following table summarizes and supplements the information in this subsection: 
 
 
TABLE 3: 
 
CONDITION  Type of Provider/Type of Bill  Liability Notice 
Payment  All providers when service  Voluntary notice ONLY, 
[Liability]  known not to be covered by  provider expects to receive no 
Condition 1, No  Medicare   Medicare payment. 
Medicare notice 
required and 
liability expected 
Payment  Inpatient only, Part A paid  Notice of Non-Coverage or 
[Liability]  (TOBs: 11x, 18x, 21x, 41x)  comparable form required.  
Condition 2, 
Medicare notice 
IS required and 
liability expected 
Payment  Home Health (HH) services  HHABNs (Form CMS-R-296) 
[Liability]  under a HH plan of care and  required.  
Condition 2,  paid through the HH 
Medicare notice  prospective payment system 
IS required and  (PPS) only (TOBs 32x and 
liability expected  33X) 
Payment  All providers and services IF,   ABN (Form CMS-R-131) 
[Liability]    Hospice  required. 
Condition 2,    Part B paid services not   
Medicare notice  previously listed above 
IS required and  for Condition 2; 
liability expected  includes laboratories or 
providers billing lab 
tests only (revenue 
codes 30x, 31x and 
92x) 
Payment  All providers  No notice requirement, 
[Liability]  provider expects to receive 
Condition 3, No  payment from Medicare. 
Medicare notice 
required and no 
liability expected 
 
Providers must decide which payment condition and notice requirement is appropriate to 
the billing situation in each case.   Based on this decision, providers will then apply 
certain billing instructions are that described in the remainder of this section. 
  60.1.2 - Billing Services Excluded by Statute  
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
The billing instructions in this subsection apply to payment condition 1.  
Medicare will not pay for services excluded by statute, meaning that Title XVIII of the 
SSA either: 
 
  does not describe the items and services in question as all or part of a covered 
Medicare benefit, or 
  describes, but excludes, such items and services from coverage. 
 
Examples of such services are given to beneficiaries in the Medicare and You 
handbook.  These services can be billed to Medicare as non-covered on institutional 
claims. 
 
Items and services excluded by statute cannot necessarily be recognized in specific 
procedure or diagnosis codes.  For example, in some cases, a given code may be covered 
as part of a given Medicare benefit, but under other cases, when no benefit exists, the 
same code would not be covered by Medicare.  For claims submitted to Medicare 
contractors, these services that are not Medicare benefits may be: 
 
(A) Not submitted to Medicare at all (see A, immediately below),  
(B) Submitted as non-covered line items, or  
(C) Submitted on entirely non-covered claims.  
 
A.  Medicare does not require procedures excluded by statute to be 
billed on institutional claims UNLESS:  
 
(1)  Established Medicare policy requires either all services in a 
certain period, covered or non-covered, be billed together so 
that all such services can be bundled for payment consideration 
(i.e., procedures provided on the same day to beneficiaries 
under OPPS), or  
 
(2)  Billing is required for reasons other than payment (i.e., when 
utilization days must be charged in inpatient settings where the 
benefit itself is limited in duration, such as the 100 day limit of 
Part A payment for a SNF stay); or  
 
(3)  A beneficiary requests Medicare be billed so that the item or 
service in question will be reviewed by Medicare to make an 
official payment determination (more on demand billing in 
60.3 in this chapter). 
  B.  To submit statutory exclusions as non-covered line items on claims 
with other covered services, modifiers like GY can be used on non-
covered line items. 
 
C.  To submit statutory exclusions on entirely non-covered claims, use 
condition code 21, a claim-level code, signifying all charges that are 
submitted on that claim are non-covered charges. 
 
60.1.3 - Claims with Condition Code 21 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
Condition code 21 can be employed to indicate no payment claims are being submitted 
for other reasons in addition to those mentioned in section 60.1.2. above:  
 
  At a beneficiarys, or other insurers, request, to obtain a denial from Medicare to 
facilitate payment by subsequent insurers (ex., statutory exclusions outside 
Original Medicare benefits, such as most self-administered drugs).  This is 
payment condition 1.  These claims are referred to as no-payment claims. 
 
  With an HHABN in special cases (see Chapter 10, 60, of this manual).  This is 
payment condition 2. 
 
General Billing Instructions for No Payment Claims with Condition Code 21 (Other 
than HH PPS).  
 
No payment claims are sometimes referred to as billing for denial.  They are submitted 
with condition code 21, which is defined by the National Uniform Billing Committee as 
billing for denial notice. 
 
The following instructions for use of condition code 21 are applicable to all bill types, 
other than HH PPS claims. 
 
  All charges must be submitted as non-covered;  
  No modifiers signifying beneficiary or provider liability are necessary;  
  Frequency code 0 (zero) must be used in the third position of TOB of the 
claim, though the frequency codes 7 and 8 may be used when appropriate for 
provider-submitted claim adjustments/cancellations;  
  Total charges must equal the sum of non-covered charges;  
  Basic required claim elements must be completed; and  
  Statement dates should conform to simultaneous claims for payment, if any.  
 
Non-covered charges billed on these claims, when not rejected, will be denied.  Medicare 
beneficiaries will always be liable for these claims. Such denials can only be overturned 
on appeal. 
  If claims do not conform to these requirements, they will be returned to providers for 
correction and resubmission.  However, in the case of claims with statement dates that 
overlap with other claims, the incoming overlapping claim using condition code 21 will 
be processed to completion as a rejection, with a unique reason code explaining the 
reason for the rejection. Providers can then correct and re-submit the claim assuming the 
overlap in periods was a billing error. 
 
60.1.3.1  Provider-liable Fully Noncovered Outpatient Claims 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
Originally with the creation of the ability of outpatient institutional providers to submit 
non-covered charges, only two types of fully non-covered claims were permitted: (1) No 
payment claims using condition code 21, or (2) Demand bills (see 60.3 below in this 
chapter). 
 
However, based on input from both Medicare contractors and providers, CMS recognized 
the need for entirely non-covered claims that were provider-liable.  This meant a new 
billing method was necessary, as no payment claims with condition code 21 are never 
provider liable, and liability on demand bills cannot be assured until after 
review/adjudication by Medicare. A primary example of this need is a case in which a 
provider has failed to provide an ABN when required under payment condition 2, and 
chooses to accept all liability for services billed as non-covered. 
 
Therefore, entirely non-covered outpatient claims are also allowed when billed with all 
non-covered charges, as long as either: 
 
(1) There are no indicators of liability on the claim at the claim or line level 
preventing the shared system from defaulting to hold providers liable on all 
denied line items; or  
 
(2) All indicators at the claim or line level show provider, not beneficiary, liability.  
 
An example of such an indicator is the -GZ modifier, which is often used in the case 
where a provider fails to give an ABN.  In both cases, these line items, all submitted as 
non-covered, will be denied as provider liable. 
 
60.2 - Noncovered Charges on Inpatient Bills 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
No Payment Inpatient Hospital and SNF Claims.  Where stays begin with a non-
covered level of care and end with a covered level (within the same month for SNF 
billing), only one claim is required for both the non-covered and covered period, which 
must be billed in keeping with other billing frequency guidance (i.e., SNFs are required 
to bill monthly). However, SNFs and inpatient hospitals are required to submit discharge 
bills in cases of no payment. These bills must correctly reflect provider and beneficiary 
liability (see Chapter 6, 40.6.4 of this manual)   
For inpatient hospital PPS claims that cannot be split into covered and non-covered 
periods, hospital providers can submit occurrence span code 77 to represent provider-
liable non-covered periods, and occurrence span code 76 for beneficiary-liable non-
covered periods. 
 
These procedures must be followed for Part A inpatient services (TOBs: 11x (hospital), 
18x (swing bed), 21x (SNF), 41x (religious non-medical health care institutions
RNHCI)), but the list that follows is not required for inpatient Part B claims: 
 
  All charges submitted as non-covered; 
  Frequency code 0 (zero) must be used in the third position of the type of bill 
(TOB) form locator of the original claim (i.e., not adjustment or cancellation)  
 
NOTE:  If providers do not submit no payment claims with this frequency code, the 
shared systems may already act to change the frequency code to 0 or return the claim 
to the provider. 
 
  Total charges must equal the sum of non-covered charges;  
  Basic required claim elements must be completed; 
 
NOTE:  Units are not required when reporting non-covered days on SNF claims or 
Inpatient Rehabilitation claims. 
 
Claims that do not conform to these requirements will be returned to providers.  For 
SNFs, occurrence code 22 should also be used on benefits exhaust claims when SNF care 
is reduced to a non-covered level and benefits had previously been exhausted (see 
Chapter 6, section 40.7 in this manual). 
 
Current instructions for inpatient no payment claims are found in the following locations:  
 
TABLE 4: 
BENEFIT  INTERNET ON-LINE MANUAL 
Inpatient Hospital  100-02, Benefit Policy, Chapter 1 
  100-04, Claims Processing, Chapter 3, 40.4, 
Chapter 3 (Inpatient Hospital) on no payment 
claims 
SNF (Paid from Part  100-02, Benefit Policy, Chapter 8 
A) 
  100-04, Claims Processing, Chapter 6, 40.8, 
Chapter 6 (Inpatient SNF) on no payment claims 
 
60.2.1  Billing for Non-covered Procedures in an Inpatient Stay 
(Rev. 1895, Issued: 01-15-10, Effective: 04-01-10, Implementation: 04-05-10) 
  As described in Section 1862 of the Social Security Act, providers are not to seek 
reimbursement for non-covered services/items.  However, when a non-covered procedure 
is provided during an inpatient stay where a covered procedure is also performed, the 
claims processing system is unable to decipher what procedure code(s) is/are non-
covered, so as to not consider such procedure(s) for payment (more specifically, to ignore 
non-covered procedures when grouping to the MS-DRG).  Therefore, effective for 
inpatient discharges April 1, 2010, hospitals must only seek payment for covered services 
by removing non-covered procedure codes and related charges from the payable Type of 
Bill (TOB) 11X. 
 
If a hospital wishes to bill non-covered procedure(s) and related non-covered charges for 
whatever reason (e.g., a Medicare denial), the hospital may submit such services/charges 
on a TOB 110 (no-pay claim).  The non-covered claim must be billed with the same 
Statement Covers Period (From and Through date) as the payable TOB 11X submitted 
for the same stay. 
 
60.3  Noncovered Charges on Institutional Demand Bills 
(Rev. 332, Issued:  10-22-04, Effective:  04-01-05, Implementation:  04-04-05) 
 
60.3.1 - Background on Institutional Demand Bills (Condition Code 20) 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
Demand bills are both a principle and a mechanism of Medicare.   The principle goes 
back to the founding of the Program, reflected in the protection of the rights of the 
Programs beneficiaries being among the first sections of Title XVIII.  The principle 
assures that beneficiaries have the right to demand that Medicare be billed for the 
services provided to them, whether or not that billing provides Medicare payment.  By 
assuring claims are sent to and processed by Medicare, permitting official payment 
decisions to be made, beneficiaries retain the right to appeal payment decisions made on 
those claims, when they believe need to use that right exists. 
 
The mechanism of demand billing is the process by which providers submit claims that 
beneficiaries have requested be sent to Medicare.   Specific procedures were developed 
over time to accomplish such billing, and these procedures also became known as 
demand billing. 
 
A.  Demand Billing Procedures 
 
Traditional demand bills is a term used to encompass the only administrative billing 
option that existed for demand bills before the ABN was used. These bills used condition 
code 20 to indicate a beneficiary has requested billing for a service, even though the 
provider of the service may have advised the beneficiary that Medicare was not likely to 
pay for this service. That is, there was some dispute as to whether a service was covered 
or not, leading for a need for Medicare to review the claim and make a formal payment 
decision.  If there was no dispute, billing a no payment claim or other options for non-
covered charges would be more efficient and appropriate.    
In the past, traditional demand billing was not always consistent or used by all providers. 
There was no uniform notice requirement across Medicare benefits.  Such instructions as 
existed required 100 percent of specific types of demand bills to be suspended for manual 
review (inpatient SNF/home health, TOBs 21x, 32x, 33x), and required the provider to 
submit additional documentation for development to determine the medical justification 
for the service(s) in question. 
 
B.  Advent of Liability Notices for Outpatient Benefits 
 
This changed once liability notices related to outpatient benefits, ABNs, were created.  If 
an ABN was given, special billing requirements applied, and traditional demand billing 
was NOT used.  Now, only in cases when the ABN is NOT given, services for which 
coverage is questioned are submitted as non-covered using traditional demand billing.  
This traditional demand billing process is now open to all provider types, inpatient and 
outpatient. 
 
Even though there are no notice requirements with traditional demand bills, providers are 
always encouraged to advise beneficiaries when they may be liable for payment before 
delivering such services, and may be required to do so by applicable COPs. In such cases, 
providers should also document their records that such advice has been given. 
 
Demand billing is resource intensive for the Medicare program, and affects the timeliness 
of payment determinations, which should prevent conscientious providers from abusing 
this mechanism when there is no true doubt as to coverage/payment. Routine billing of 
covered services and billing of non-covered charges should both be used as appropriate 
when coverage/payment is not believed to be in doubt instead of demand billing. Liability 
notices are not needed if a triggering event requiring their delivery, such as those for an 
ABN, does not occur. Beneficiaries retain appeal rights when these other billing 
mechanisms are used, even though no liability notice is delivered. 
 
60.3.2 - Inpatient and Outpatient Demand Billing Instructions  
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
A.  Scope of this Subsection 
 
The instructions in this subsection apply to demand bills other than for HH PPS and 
apply with some modification for Part A SNF services.  Demand bills for those services 
are subject to special instructions that are cited below. 
 
1. HH PPS Demand Bills. There are special instructions for HH PPS demand bills. Such 
special instructions must be followed if:  
 
(a) An HHABN is required, or   (b) If a beneficiary requests demand billing when receiving care from a home 
health agency (HHA) in an HH PPS episode. Instructions for such bills can be 
found at:  
 
  50 of Chapter 10 (Home Health) of the Medicare Claims Processing 
Manual; and  
  Note these HH PPS demand bills use frequency code 9.  
 
2. SNF Demand Bills. There are special instructions relating to collection of funds from 
patients for inpatient Part A SNF demand bills, which can be found in Chapter 30, 70 of 
the Medicare Claims Processing Manual.  In all other respects, the instructions below 
apply to SNF Part A services also. 
 
B.  General Instructions 
 
Inpatient and outpatient providers are required to submit demand bills using condition 
code 20 when requested by beneficiaries.  Billing with condition code 20 is ONLY in 
case when an ABN is not given/not appropriate for billing related to doubtful liability (for 
ABN instructions, see 60.4.1 below).  Medicare contractors perform review of demand 
bills with condition code 20, to assure compliance with codified Medicare medical 
necessity, coverage and payment liability policy. 
 
Other covered services may appear on demand bills, but not other non-covered charges, 
as all non-covered charges on demand bills will be considered in dispute and in need of 
review. Allowing covered and non-covered services to come in on demand bills will 
allow all services provided in the statement covers period to be billed simultaneously, 
though payment of the covered services will be delayed by the review and development 
of the non-covered charges when not split to a separate claim. For this reason, providers 
should break out demand billed services to separate claims for discrete time periods with 
all non-covered charges whenever possible.  Demand bills must contain at least one non-
covered charge, the coverage of which is at issue, when the Medicare contractor receives 
them from the provider, or claims with condition code 20 will be returned to the provider. 
 
No payment bills using condition code 21 are only used for services that are not in 
dispute, as opposed to non-covered charges on demand bills.  Therefore, Condition Code 
21 claims can be simultaneously submitted with such bills. 
 
No claims seeking payment and submitted with all covered charges may be submitted by 
the same provider simultaneously with a demand bill for the same beneficiary.  This 
restriction is required because some services on demand bills may be found covered upon 
review.  If such overlapping claims with covered services are received, the incoming 
claim will be processed to completion as a rejection, with a unique reason code 
explaining the reason for the rejection. Providers can then correct and re-submit the claim 
assuming the overlap in periods was a billing error. 
  Providers should be aware CMS may require development of any non-covered charge on 
traditional demand bills. Such services will then be paid, RTPed, rejected or denied in 
accordance with other instructions/edits applied in processing to completion. 
 
C.  Final Summary 
 
In summary, other general requirements for demand bills are:  
 
  Condition Code 20 must be used;  
  All charges associated with Condition Code 20 must be submitted as non-
covered;  
  All non-covered services on the demand bill must be in dispute;  
  At least one non-covered line must appear on the claim related to the services in 
dispute; 
  Unrelated covered charges are allowed on the same claim; 
  Unrelated non-covered charges not in dispute, if any, would be billed on a no 
payment claim using Condition Code 21;  
  Frequency code zero should be used if all services on the claim are non-covered;  
  Occurrence code 32 (i.e., ABN) is NEVER submitted on a claim using condition 
code 20; and  
  Basic required claim elements must be completed.  
 
Claims not meeting these requirements will be returned to providers. 
 
60.4 - Noncovered Charges on Outpatient Bills 
(Rev. 2694, Issued: 05-03-13, Effective: 10-01-13, Implementation: 10-07-13) 
 
The term outpatient is often used very generally.  In this section, the term outpatient 
uses the designation of types of bill as inpatient or outpatient as defined in the National 
Uniform Billing Committee. 
 
TABLE:  Original Medicare Types of Bill  Inpatient or Outpatient. 
 
Designation  Types of Bill Paid by Original  Medicare Trust Fund 
Medicare  Payment 
Inpatient  11x  Hospital  Part A 
18x  Swing Bed 
21x  Skilled Nursing Facility (SNF) 
41x  RNHCI  Religious Non-Medical 
Health Care Institution 
Outpatient  81x, 82x  Hospice  Part A 
32x,  Home Health (HH) Services  Part A and Part B 
under a Plan of Treatment  12x, 13x, 14x  Hospital  Part B 
22x, 23x  SNF 
34x  HH Services not under a Plan of 
Treatment 
71x  RHC  Rural Health Clinic 
72x  RDF  Renal Dialysis Facility 
74x  OPT  Outpatient Physical 
Therapy (Rehabilitation Agency) 
75x  CORF  Comprehensive 
Outpatient Rehabilitation Facility 
76x  CMHC  Community Mental 
Health Center 
77x  FQHC  Federally Qualified 
Health Center 
85x  Critical Access Hospital (CAH) 
 
Note that under these designations, types of bill 12X and 22X which are referred to as 
inpatient Part B, are designated as outpatient.  Also, hospice claims are designated as 
outpatient while they can report both inpatient and outpatient levels of care. 
 
60.4.1 - Outpatient Billing with an ABN (Occurrence Code 32) 
(Rev. 1921, Issued: 02-19-10, Effective: 04-01-10, Implementation: 04-05-10) 
 
The billing instructions in this subsection apply to payment condition 2. 
 
If an ABN is given, the billing procedures in this subsection must be used, rather than 
traditional demand billing.  Using an ABN is frequently required, and is also allowed on 
a voluntarily basis when a provider sees fit.  It is used more often than traditional demand 
billing. 
 
Claim level coding 
When a provider determines the beneficiarys services for certain benefits should be 
terminated, the provider must follow the ED instruction requirements located at section 
150.3 below.  If the beneficiary chooses to receive non-covered services after the date the 
provider believes covered services are terminated, the provider must also issue an ABN 
to the beneficiary. 
 
In using the ABN, beneficiaries select only one option on the ABN notice prior to billing, 
after they have been told that the provider anticipates Medicare will not cover a service.  
Claims, other than HHPPS claims, billed in association with an ABN never use condition 
code 20 or 21, and will be returned to providers if received with those codes. Instead, the 
claims: 
    Must use occurrence code 32 to signify all services on the claim are associated 
with one particular ABN given on a specific date, unless the use of modifiers 
makes clear that not every line on the claim is linked to the ABN; 
 
  Must provide the date the ABN was signed by the beneficiary in association with 
the occurrence code; 
 
  Must use occurrence code 32 and the accompanying date multiple times if more 
than one ABN is tied to a single claim for services that must be bundled/billed on 
the same claim; 
 
  Must submit all ABN-related services as covered charges (note GA modifier 
exception, below); and 
 
  Must complete all the same basic required claim elements as comparable claims 
for covered services. 
 
Providers should be aware CMS may require suspension of any claims using occurrence 
code 32 for medical review of covered charges associated with an ABN. 
 
If claims using occurrence code 32 remain covered, they will be paid, RTPed, rejected or 
denied in accordance with other instructions/edits applied in processing.  Denials made 
through automated medical review of service submitted as covered are still permitted 
after medical review, and the Medicare contractor will determine if additional 
documentation requests or manual development of these services are warranted. For all 
denials of services associated with the ABN, the beneficiary will be liable. 
 
Line level coding 
 
The GA modifier is used when provider must bill some services which are related and 
some which are not related to a ABN on the same claim.  The GA modifier is used when 
both covered and non-covered service appear on an ABN-related claim.  Occurrence code 
32 must still be used on claims using the GA modifier, so that these services can be 
linked to specific ABN(s). In such cases, only the line items using the GA modifier are 
considered related to the ABN and must be covered charges, other line items on the same 
claims may appear as covered or non-covered charges. 
 
60.4.2 - Line-Item Modifiers Related to Reporting of Non-covered 
Charges When Covered and Non-covered Services Are on the Same 
Outpatient Claim 
(Rev. 2783, Issued: 09-10-13, Effective: 09-30-13, Implementation: 09-30-13) 
 
Several Healthcare Common Procedural Coding System (HCPCS) modifiers are used to 
signify a specific line item is either not covered or not payable by Medicare, for many 
different reasons.  The chart immediately below lists those modifiers, many more 
commonly used on professional claims, for services not covered or not payable by  Medicare.  Modifiers not payable on professional claims are also not payable on 
institutional claims and will be denied if submitted on such claims.  Providers are liable 
for these denials, UNLESS a specific modifier (see second table in this section) or 
indicator on the claim (i.e., occurrence code 32) specifically assigns liability to the 
beneficiary. 
 
NOTE:  This table does not include ambulance origin and destination modifiers, which 
may fall into the ranges of modifiers values below, but are NOT non-covered by 
definition. 
    Source of the  Non-covered  Claims Processing  Definition Source 
Modifier List  Modifiers  Instructions 
HCPCS  -A1 through -A9,   Institutional standard  Use as defined by 
Modifiers Not  -GY, -GZ, -H9,   systems will deny all  publication of HCPCS 
Covered or Not  -HA through -HZ,   line items on all  codes by CMS 
Payable by  -SA through -SE,   TOBs using these 
Medicare by  -SH, -SJ, -SK, -SL,   modifiers in all cases 
HCPCS  -ST, -SU, -SV, -SY, - as part of processing 
Definition  TD through -TR,   - claims; provider 
(HCPCS  TT through -TW, -U1  liability is assumed 
Administrative  through -U9, -UA  EXCEPT when noted 
Instruction)  through UD, UF  as beneficiary liable 
through -UK  in accordance with 
the chart below (of 
the total set to the 
left:-GY) 
CPT/HCPCS  See current OPPS  Institutional standard  CPT numerical 
Modifiers  instructions   systems accept these  modifiers defined in 
Permitted on  modifiers for  publication of CPT 
OPPS Claims   processing on OPPS  Manual by the 
claims (TOBs: 12x,  American Medical 
13x, 14x) in  Association; HCPCS 
accordance with  codes as defined by 
HCPCS/CPT  publication of HCPCS 
definitions  codes by CMS 
Modifiers Used  -GY, -QL, -QM* or - Applicable TOBs for  See ambulance 
in Billing  QN*, -TQ, alpha  ambulance billing:  instructions and chart 
Ambulance  origin/destination  12x, 13x, 22x, 23x,  immediately below 
Non-covered  modifiers*  83x, 85x 
Charges  
Specific  -EY, -GA, -GK, -GL,  Institutional standard  See chart immediately 
HCPCS  -GY,  -GZ, -KB,   systems accept some  below  
Modifiers to  of these modifiers for 
Consider  processing as 
Related to Non- specified on the chart 
covered  below  
Charges or 
ABNs 
 
* These modifiers are not non-covered by definition, but rather are commonly used on 
non-covered lines 
 
In the past, modifiers were more frequently used to qualify procedure codes submitted on 
professional billing formats.  Use of modifiers has increased in institutional billing over  time, though institutional claims do not always require the use of procedure codes in 
addition to revenue codes. 
 
Institutional shared systems require procedure codes to be present any time a modifier is 
used, whether the line is covered or not.  Providers should use explicit procedure or 
HCPCS coding to describe services and items they deliver, even when submitting these 
items as non-covered.  In cases in which providers need to submit a non-covered service 
for which Medicare institutional claims have not required HCPCS coding in the past, 
such as with drugs or supplies, the following HCPCS code can be used with the 
appropriate revenue code in order to employ a modifier: 
 
A9270 Non-covered item or service 
 
Institutional shared systems will accept this code and it will be denied in all cases, since it 
is non-covered by Medicare by definition.  Liability will rest with the provider, unless a 
modifier is used to assign liability to the beneficiary (i.e., -GL,  -GY), when the 
beneficiary has been informed, prior to service delivery, that he/she may be liable for 
payment. Note GA or KB modifiers cannot be used with this code since they require 
covered charges. Modifiers most likely to be used with ABNs or non-covered charges or 
liability notices are listed below. 
 
Table:  Definition of Modifiers Related to Non-covered Charges/ABNs for Institutional 
Billing 
 
Modifier  HCPCS  HCPCS  Notice  Billing Use  Payment Result 
Modifier  Coverage/  Requirement/ 
Definition  Payment/  Liability 
Administrative 
Instruction 
EY  No  None  None, cannot  To signify a line- When orders 
Physician  be used when  item should not  required, line 
or Other  HHABN or  receive payment  item is submitted 
Licensed  ABN is  when Medicare  as non-covered 
Health  required,  requires orders to  and services will 
Care  recommend  support delivery of  be denied 
Provider  documenting  a item or service 
Order for  records;  (i.e., TOBs 21x, 
this Item  liability is  22x, 32x, 33x, 34x, 
or Service  provider unless  74x, 75x, 76x, 81x, 
other modifiers  82x, 85x) 
are used (-GL 
or -GY)  Modifier  HCPCS  HCPCS  Notice  Billing Use  Payment Result 
Modifier  Coverage/  Requirement/ 
Definition  Payment/  Liability 
Administrative 
Instruction 
GA  Waiver of  None  ABN required;  To signify a line  Line item must be 
Liability  beneficiary  item is linked to the  submitted as 
Statement  liable  mandatory use of  covered; 
Issued, as  an ABN when  Medicare makes a 
Required  charges both related  determination for 
by Payer  to and not related to  payment 
Policy  an ABN must be 
submitted on the 
same claim  
GK  Reasonabl None  ABN required  Not used on  Institutional 
e and  if GA is used;  institutional claims.  claims submitted 
Necessary  no liability  Use GA or GZ  using this 
Item/Servi assumption  modifier as  modifier are 
ce  since this  appropriate instead   returned to the 
Associate modifier  provider  
d with a   should not be 
GA or  used on 
GZ  institutional 
modifier  claims 
GL  Medically  None  Cant be used  Use only with  Lines submitted 
Unnecessa if  durable medical  as non-covered 
ry  ABN/HHABN  equipment (DME)  and will be 
Upgrade  is required,  items billed on  denied 
Provided  COPs may  home health claims 
instead of  require notice,  (TOBs: 32x, 33x, 
Non- recommend  34x) 
Upgraded  documenting 
Item, No  records; 
Charge,  beneficiary 
No ABN  liable 
GY  Item or  Non-covered by  Optional notice  Use on all types of  Lines submitted 
Service  Medicare Statute  only, unless  line items on  as non-covered 
Statutorily  (ex., service not  required by  provider claims.   and will be 
Excluded  part of  COPs;  May be used in  denied 
or Does  recognized  beneficiary  association with 
Not Meet  Medicare  liable  modifier GX. 
the  benefit) 
Definition 
of Any 
Medicare 
Benefit  Modifier  HCPCS  HCPCS  Notice  Billing Use  Payment Result 
Modifier  Coverage/  Requirement/ 
Definition  Payment/  Liability 
Administrative 
Instruction 
GZ  Item or  May be non- Cannot be used  Available for  Lines submitted 
Service  covered by  when ABN or  optional use on  as non-covered 
Expected  Medicare  HHABN is  demand bills NOT  and will be 
to Be  actually given,  related to an ABN  denied 
Denied as  recommend  by providers who 
Not  documenting  want to 
Reasonabl records;  acknowledge they 
e and  provider liable  didnt provided an 
Necessary  ABN for a specific 
line  
KB  Beneficiar None  ABN  Use only on line  Line item 
y  Required; if  items requiring  submitted as 
Requested  service denied  more than [2 or ] 4*  covered, claim 
Upgrade  in  modifiers on home  must suspend for 
for ABN,  development,  health DME claims  development  
more than  beneficiary  (TOBs 32x, 33x, 
4  assumed liable   34x)  
Modifiers 
on a 
Claim 
QL  Patient  None  None,  Use only for  Mileage lines 
pronounce recommend  ambulance services   submitted as non-
d dead  documenting  (TOBs: 12x, 13x,  covered and will 
after  records;  22x, 23x, 83x, 85x)  be denied; base 
ambulance  provider liable  rate line 
called  submitted 
covered 
TQ  Basic life  Not payable by  None,  Use only for  Lines submitted 
support  Medicare  recommend  ambulance services  as non-covered 
transport  documenting  (TOBs: 12x, 13x,  and will be 
by a  records;  22x, 23x, 83x, 85x)  denied 
volunteer  provider liable 
ambulance 
provider 
GX  Notice of  None  Used when a  Use on all types of  Lines submitted 
Liability  provider issued  provider claims  as non-covered 
Issued,  an ABN on a  when a voluntary  and will be 
Voluntary  voluntary  notice has been  denied 
Under  basis;  issued.  May be 
Payer  beneficiary  used in association 
Policy  liable  with modifiers GY 
or used separately.     
* NOTE: Many provider systems will not allow the submission of more than two 
modifiers.  In such cases, despite the official definition and the capacity of the Medicare 
systems to take in five modifiers on a line with direct EDI submission, contractors 
processing home health claims should educate that it is appropriate to use this modifier 
when three modifiers are needed if there is a two-modifier limit. 
 
All modifiers listed in the chart immediately above need to be used only when non-
covered services cannot be split to entirely non-covered claims.  Modifiers indicating 
provider liability cannot be used on entirely no payment claims for which the beneficiary 
has liability. Inappropriate use of these modifiers may result in entire claims being 
returned to providers. 
 
60.4.3  Liability Considerations for Bundled Services 
(Rev. 2783, Issued: 09-10-13, Effective: 09-30-13, Implementation: 09-30-13) 
 
Some Medicare payment policies, for outpatient services, group or bundle several items 
or services into a single unit for payment.  Questions arise in such cases, in terms of 
notifying beneficiaries of liability and billing, when some of the services in the bundle 
are thought to be covered, and some are not. 
 
Chapter 30 of this manual states in several sections that ABNs may not be used to shift 
liability to a beneficiary in the case of services or items for which full payment is bundled 
into other payments; that is, where the beneficiary would otherwise not be liable for 
payment for the service or item because bundled payment is made by Medicare.  Using 
an ABN to collect a charge for an individual items or service from a beneficiary where 
full payment is made for that and other care on a bundled basis constitutes double billing. 
 
As a result of this policy, an ABN has to apply to all of a bundled service, or none of it.  
This means all of a bundled service must be billed as noncovered, or none of it. 
Therefore, as long as part of a bundled service is certain to be covered or medically 
necessary, billing the entire bundled service as covered is appropriate. Medicare 
adjudication may still result in all, part or none of such services being paid, or something 
submitted as one type of bundled payment being re-grouped into another type of 
payment. 
 
If the entire bundle is certain to be non-covered, the service should be billed as 
noncovered.  If there is overall doubt as to the medical necessity of the bundle, such as 
when a Medicare benefit does not seem to be medically necessary, then the instructions 
for billing in association with an ABN or for demand billing would apply.  This is always 
true when necessity is in doubt relative to all services in the bundle, but may also be used 
if a provider is uncertain of necessity of the majority services, or if there is discomfort in 
billing the entire bundle as covered for a specific reason. 
 
60.5- Coding That Results from Processing Noncovered Charges 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16)   
Codes Returned to Providers and Beneficiaries 
 
After processing is complete, remittance advice notices are used to explain to providers 
the difference between the charges they submitted for payment and what Medicare paid 
on their claim.  The Medicare Summary Notice, or MSN, is used at the same time to 
inform beneficiaries about any payments made on their behalf. 
 
Liability for noncovered charges is communicated using the Group Code on the 
remittance advice.  When the beneficiary is liable, contractors use Group Code PR.  
When the provider is liable, contractors use Group Code CO. 
 
Contractors shall deny services that are submitted with modifier GZ. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 50 
RARC: N/A 
MSN: 8.81 
 
Contractors shall deny services that are submitted with modifier GY.  
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: PR 
CARC: 96 
RARC: N425 
MSN: 16.10 
 
Codes Used by Medicare Contractors 
 
Medicare contractors use nonpayment codes when transmitting institutional claims to 
CWF in cases where payment is not made.  Claims where partial payment is made do not 
require nonpayment codes. 
 
Both the shared system for institutional claims and CWF react to CMS-created non-
payment codes on entirely noncovered claims.  The standard system must enter the 
appropriate code in the "Non-payment Code" field of the CWF record if the non-payment 
situation applies to all services present on the claim.  It does not enter the nonpayment 
code when either partial payment is made, or payment is made in full by an insurer 
primary to Medicare.  These codes alert CWF to bypass edits in processing that are not  appropriate in nonpayment cases.  Nonpayment codes also alert CWF to update a 
beneficiarys utilization records (deductible, spell of illness, etc.) in certain situations.  
Nonpayment codes themselves do not assign liability to provider or beneficiary on 
Medicare claims. 
 
Medicare contractors and systems use the following nonpayment codes: 
 
Code  Contractor Uses  Effect on Processing 
B  Placed on Part B-paid inpatient claims when 
  Charges are 
prior to claim From date either: 
processed as 
  Benefit and/or lifetime reserve days are  noncovered; 
exhausted; 
  utilization not 
  Full day or coinsurance days are  chargeable;  
exhausted; 
  cost report days not 
  Beneficiaries elected not to use lifetime  applied. 
reserve days. 
R  Placed on claims when: 
  Charges are 
   SNF inpatient services are denied for  processed as 
reasons other than lack of medical  noncovered and 
necessity or care being custodial in  there is no payment;  
nature; 
  utilization is 
  Provider failed to file claims within  chargeable and 
timely filing limits;  some charges may 
go to CWF as 
  Beneficiary refused to request benefit 
covered to update 
on a claim. 
utilization correctly; 
  cost report days not 
applied. 
N  Placed on claims when the provider is liable and: 
  Charges are 
  The provider knew, or should have  processed as 
known, Medicare Part A or B would  noncovered;  
not pay; 
  utilization not 
  Care billed was not paid by Medicare  chargeable; 
because either custodial or not 
  cost report days are 
reasonable or necessary; 
applied. 
  Provider failed to submit requested 
documentation. 
N  Placed on claims when the beneficiary is liable 
  Charges are shown 
and: 
as noncovered ;  Code  Contractor Uses  Effect on Processing 
  neither utilization 
  Statutory exclusions (e.g., most dental 
nor cost report days 
care and cosmetic surgery that 
are reported. 
Medicare never covers); 
 
  Claims not filed within timely filing 
limits BUT provider not at fault; 
  Medicare decision find the beneficiary 
at fault under limitation of liability 
  Inpatient psychiatric reduction applies 
because days are used in advance of 
admission (see IOM Pub. 100-02, 
Chapter 4); 
  All services provided after date active 
care in psychiatric hospital ended; 
  Inpatient hospital or SNF benefit 
provided after date covered care ended; 
  MSP cost avoidance denials (see IOM 
Pub. 100-05). 
No  Despite no payment, no code is entered because:   
code 
  Deductible/coinsurance exceeds the 
entered 
payment amount; 
  Other payer paid for all Medicare 
covered care such as: EGHP; LGHP; 
auto, no-fault, WC or other liability 
insurance (including BL); NIH, PHS, 
VA or other governmental entity or 
liability insurance; 
  Care was provided to a MA (Medicare 
Part C) enrollee when that part of 
Medicare, not Original Medicare, has 
jurisdiction for payment. 
 
Other than the distinct codes used for Medicare Secondary Payer (MSP) cost-avoided 
claims, entirely noncovered outpatient claims use either an N or R nonpayment code.  
Generally, the R code should be used instead of the N code in all cases where a spell of 
illness must be updated. 
 
The HH spell of illness must be updated when processing noncovered HH PPS claims in 
certain situations.  Accordingly, the shared systems must update home health value codes 
62-65 when the R code is used, filling the values associated with the codes as zeros, since  these value codes are needed to effectuate information related to the A-B Shift in the 
home health spell.  CWF consistency edits related to the R nonpayment code will be 
bypassed in these cases.  The CWF will update the dates of earliest and latest billing 
activity (DOEBA and DOLBA) for the benefit period, but not for the episode 
 
70 - Time Limitations for Filing Part A and Part B Claims 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Medicare regulations at 42 CFR 424.44 define the timely filing period for Medicare fee 
for service claims. In general, such claims must be filed to the appropriate Medicare 
claims processing contractor no later than 12 months, or 1 calendar year, after the date 
the services were furnished. (See section 70.7 below for details of the exceptions to the 
12 month timely filing limit.) 
 
70.1 - Determining Start Date of Timely Filing Period -- Date of Service 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
In general, the start date for determining the 12 month timely filing period is the date of 
service or From date on the claim.  For institutional claims (Form CMS-1450, the UB-
04 and now the 837 I or its paper equivalent) that include span dates of service (i.e., a 
From and Through date span on the claim), the Through date on the claim is used 
for determining the date of service for claims filing timeliness.  Certain claims for 
services require the reporting of a line item date of service.  For professional claims 
(Form CMS-1500 and 837-P) submitted by physicians and other suppliers that include 
span dates of service, the line item From date is used for determining the date of 
service for claims filing timeliness.  (This includes DME supplies and rental items.)  If a 
line item From date is not timely but the To date is timely, contractors must split the 
line item and deny the untimely services as not timely filed.  Claims having a date of 
service on February 29 must be filed by February 28 of the following year to be 
considered timely filed.  What constitutes a claim is defined below. 
 
70.2 - Definition of a Claim for Payment 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Medicare regulations at 42 CFR 424.5 describe basic conditions for Medicare payment. 
These regulations at paragraphs (5) and (6) define a claim for payment as a request for 
payment from a provider, supplier, or beneficiary, and the provider, supplier, or 
beneficiary requesting payment must furnish the appropriate Medicare contractor with 
sufficient information to determine the amount of payment. Institutional claims are in all 
cases filings by the provider and issues of assigned or non-assigned claims do not apply. 
 
Medicare regulations at 42 CFR 424.32 describe the basic requirements for all claims. 
Specifically, 42 CFR 424.32 (a) (1) states, A claim must be filed with the appropriate 
intermediary or carrier on a form prescribed by CMS in accordance with CMS 
instructions. Therefore, this regulation sets out three distinct conditions that must be 
satisfied in order for a provider submission to be considered a claim   
  it must be filed with the appropriate Medicare contractor, 
 
  it must be filed on the prescribed form and  
 
  it must be filed in accordance with all pertinent CMS instructions. The sections 
below define each of these conditions in greater detail. 
 
70.2.1 - Appropriate Medicare Contractor 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Submissions for services must be filed with the appropriate Medicare contractor. It is the 
providers or suppliers responsibility to submit each claim to the appropriate contractor. 
Medicare contractors may attempt to re-route claims appropriately if they have enough 
information to do so. In the case of re-routed claims, services submitted for payment are 
not considered claims under Medicare regulations until received by the appropriate 
Medicare contractor. 
 
70.2.2 - Form Prescribed by CMS 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
Refer to section 2 for the acceptable claim formats.  As noted in section 2, ASCA law 
requires that claims sent to Medicare be sent electronically unless an exception is met. 
Claims submitted on paper forms are entered into Medicares electronic claims 
processing system and converted into electronic records in order to be processed. After 
the point of entry into the electronic system, handling of claims submitted on the 
prescribed electronic format and on its paper equivalent is identical with regard to 
determining timely filing.  Regulations at 42 CFR 424.32 (b) prescribe the claim forms to 
be used for a paper claim submission. 
 
70.2.3 - In Accordance with CMS Instructions 
(Rev. 3086, Issued: 10-03-14, Effective: ICD-10: Upon Implementation of ICD-10, 
ASC X12: January 1, 2012, Implementation ICD-10: Upon Implementation of ICD-
10; ASC X12: November 4, 2014) 
 
The CMS instructions for submitting institutional claims to Medicare are contained in 
this manual.  General instructions that reflect guidance on reporting institutional claim 
data are found in Chapter 25.  These instructions apply to all institutional claim types, 
whether paper or electronic.  Additional chapters in this manual supplement these general 
instructions.  For example, see instructions for inpatient hospital billing in Chapter 3, or 
inpatient skilled nursing billing in Chapter 6.  General information about billing for 
physician and other supplier services and about the CMS 1500 claim form can be found 
in Chapter 26, Completing and Processing Form CMS-1500 Data Set, as well as chapters 
throughout this manual relative to specific policies and topics.  For example see Chapter  12, Physicians/Nonphysician Practitioners, Chapter 13, Radiology Services and Other 
Diagnostic Services, or Chapter 16, Laboratory Services for detailed instructions for 
specific services.   
 
In order to constitute a Medicare claim, services submitted for payment must be 
submitted to the appropriate Medicare contractor (70.2.1), in a proper claim format 
(70.2.2), and in accordance with these CMS claim completion instructions.  Services 
submitted for payment in a manner not complete and consistent according to these 
instructions will not be accepted into Medicares electronic claims processing system and 
will not be considered filed for purposes of determining timely filing. 
 
70.2.3.1 - Incomplete or Invalid Submissions 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
Services not submitted in accordance with CMS instructions include: 
 
  Incomplete Submissions - Any submissions missing required information (e.g., no 
provider name). 
 
  Invalid submissions - Any submissions that contains complete and required 
information; however, the information is illogical or incorrect (e.g., incorrect 
Medicare beneficiary identifier, invalid procedure codes) or does not conform to 
required claim formats. 
 
The following definitions may be applied to determine whether submissions are 
incomplete or invalid: 
 
  Required - Any data element that is needed in order to process the submission (e.g., 
Provider Name). 
 
  Not Required - Any data element that is optional or is not needed in order to process 
the submission (e.g., Patients Marital Status). 
 
  Conditional - Any data element that must be completed if other conditions exist 
(e.g. if there is insurance primary to Medicare, then the primary insurers group 
name and number must be entered on a claim). If these conditions exist, the data 
element becomes required. 
  Submissions that are found to be incomplete or invalid are returned to the provider 
(RTP). The incomplete or invalid information is detected by the FIs claims processing 
system. The electronic submission is returned to the provider of service electronically, 
with notation explaining the error(s).  Assistance for making corrections is available in 
the on-line processing system (Direct Data Entry) or through the FI. In the limited cases 
where paper submission are applicable, paper submissions found to be incomplete or 
invalid prior to or during entry into the contractors claims processing system are 
returned to the provider of service by mail, with an attached form explaining the error(s). 
 
The electronic records of claims that are RTP are held in a temporary storage location in 
the FIs claims processing system. The records are held in this location for a period of 
time that may vary among FIs, typically 60 days or less. During this period, the provider 
may access the electronic record and correct it, enabling the submission to be processed 
by the FI. If the incomplete or invalid information is not corrected within the temporary 
storage period, the electronic record is purged by the FI. There is no subsequent audit 
trail or other record of the submission being received by Medicare. These submissions are 
never reflected on a RA. No permanent record is kept of the submissions because they are 
not considered claims under Medicare regulation. 
 
70.2.3.2 - Handling Incomplete or Invalid Submissions 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
The A/B MACs (A) should take the following actions upon receipt of incomplete or 
invalid submissions: 
 
  If a required data element is not accurately entered in the appropriate field, RTP the 
submission to the provider of service. 
 
  If a not required data element is accurately or inaccurately entered in the appropriate 
field, but the required data elements are entered accurately and appropriately, 
process the submission. 
 
  If a conditional data element (a data element which is required when certain 
conditions exist) is not accurately entered in the appropriate field, RTP the 
submission to the provider of service. 
 
  If a submission is RTP for incomplete or invalid information, at a minimum, notify 
the provider of service of the following information: 
  o  Beneficiarys Name; 
o  Medicare beneficiary identifier; 
o  Statement Covers Period (From-Through); 
o  Patient Control Number (only if submitted); 
o  Medical Record Number (only if submitted); and 
o  Explanation of Errors. 
 
NOTE: Some of the information listed above may in fact be the information missing 
from the submission. If this occurs, the A/B MAC (A) includes what is available. 
 
  If a submission is RTP for incomplete or invalid information, the A/B MAC (A) 
shall not report the submission on the MSN to the beneficiary. The notice must only 
be given to the provider or supplier. 
 
Refer to the implementation guide for the current ASC X12 837 institutional claim 
format for specifications.  If a claim fails edits for any one of the content or size 
requirements, the A/B MAC (A) will RTP the submission to the provider of service. 
 
NOTE:  The data element requirements in the implementation guide may be superseded 
by subsequent CMS instructions.  The CMS is continuously revising instructions to 
accommodate new data element requirements. 
 
The A/B MACs (A) must provide a listing of the required data elements, including a brief 
explanation to providers and suppliers.  A/B MACs (A) must educate providers regarding 
the distinction between submissions which are not considered claims, but which are 
returned to provider (RTP) and submissions which are accepted by Medicare as claims 
for processing but are not paid. Claims may be accepted as filed by Medicare systems but 
may be rejected or denied. Unlike RTPs, rejections and denials are reflected on RAs. 
Denials are subject to appeal, since a denial is a payment determination.  Rejections may 
be corrected and re-submitted. 
 
70.3 - Determining End Date of Timely Filing PeriodReceipt Date 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
A submission, as defined above, is considered to be a filed claim for purposes of 
determining timely filing on the date that the submission is received by the appropriate 
Medicare claims processing contractor.  At this point, the submission receives a 
permanent receipt date that remains part of the claim record.  Once a submission (or 
claim) passes edits for completeness and validity described in 70.2 above, it is accepted 
into the Medicare claims processing system. 
 
The receipt date has two functions. It is used for determining whether the claim was 
timely filed (see 70.4 below). The same date is also used as the receipt date for purposes 
of determining claims processing timeliness on the part of the intermediary. (See 80 for 
details on determining claims processing timeliness.) 
  70.4 - Determination of Untimely Filing and Resulting Actions 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Medicare denies a claim for untimely filing if the receipt date applied to the claim 
exceeds 12 months or 1 calendar year from the date the services were furnished (i.e., 
generally, the From date, with the exception of the Through date for institutional 
claims that have span dates of services, as specified in 70.1). When a claim is denied for 
having been filed after the timely filing period, such denial does not constitute an initial 
determination.  As such, the determination that a claim was not filed timely is not 
subject to appeal. 
 
Where the beneficiary request for payment was filed timely (or would have been filed the 
request timely had the provider taken action to obtain a request from the patient whom 
the provider knew or had reason to believe might be a beneficiary) but the provider is 
responsible for not filing a timely claim, the provider may not charge the beneficiary for 
the services except for such deductible and/or coinsurance amounts as would have been 
appropriate if Medicare payment had been made. In appropriate cases, such claims should 
be processed because of the spell-of-illness implications and/or in order to record the 
days, visits, cash and blood deductibles. The beneficiary is charged utilization days, if 
applicable for the type of services received. 
 
70.5 - Application to Special Claim Types 
(Rev. 3537, Issued: 06-08-16, Effective: 08-08-16, Implementation: 08-08-16) 
 
  Adjustments - If a provider fails to include a particular item or service on its 
initial claim, an adjustment submission to include such an item(s) or service(s) is 
not permitted after the expiration of the time limitation for filing of the initial 
claim.  There is no longer timely filing period for adjustments.  There are special 
timeliness requirements for filing adjustment requests for inpatient services 
subject to a prospective payment system, if the adjustment results in a change to a 
higher weighted DRG.  These adjustments must be submitted within 60 days of 
the date of the remittance for the original claim, or the adjustment will be rejected. 
 
  Reopenings - However, to the extent that an adjustment bill otherwise corrects or 
supplements information previously submitted on a timely claim about specified 
services or items furnished to a specified individual, it is subject to the rules 
governing administrative finality, rather than the time limitation for filing (see 
Chapter 34 on Re-openings).  These claims must be submitted with a Q in the 
4th position of the Type of Bill to identify them as a Reopening. 
 
  Emergency Hospital Services and Services Outside the United States - The time 
limit for claims for payment for emergency hospital services and hospital services 
outside the United States, whether or not the hospital has elected to bill the 
program, is the same as for participating hospitals.  (See 70.1 above.)  The claim  for emergency hospital services and other services outside the United States will 
be considered timely filed if filed with any A/B MAC (A) within the time limit.  
 
  Home health Requests for Anticipated Payment (RAPs) - Since by regulation 
RAPs are not claims for purposes of Title 18 of the Social Security Act, timely 
filing enforcement will be bypassed for any RAP for which the associated home 
health prospective payment system (HH PPS) claim could still be timely. RAPs 
for which the associated HH PPS claim could not still be timely will continue to 
be rejected, to prevent payment of RAP amounts that would be subject to 
recovery later. 
 
70.6 - Filing Claim Where General Time Limit Has Expired 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
As a general rule, where the contractor receives a late filed claim submitted by a provider 
or supplier with no explanation attached as to the circumstances surrounding the late 
filing, the contractor should assume that the provider or supplier accepts responsibility 
for the late filing. 
 
Where it comes to the attention of a provider or supplier that health services that are or 
may be covered were furnished to a beneficiary but that the general time limit (defined in 
70.1 above) on filing a claim for such services has expired, the provider or supplier 
should take the following action. 
 
  Where the provider or supplier accepts responsibility for late filing, it should file a 
no-payment claim. (See Chapter 3 for no-payment bill processing instructions.) 
Where the provider or supplier believes the beneficiary is responsible for late filing, 
it should contact the contractor and also file a no-payment claim and include a 
statement in the remarks field on the claim explaining the circumstances which led 
to the late filing and giving the reasons for believing that the beneficiary (or other 
person acting for him/her) is responsible for the late filing. If a paper claim is 
submitted, such a statement may be attached and, if practicable, may include the 
statement of the beneficiary as to the beneficiarys view on these circumstances. 
 
  Where the beneficiary does not agree with the determination that the claim was not 
filed timely or the determination that he/she is responsible for the late filing, the 
usual appeal rights are available to the beneficiary. Where the provider or supplier is 
protesting the denial of payment or the assignment of responsibility, no formal 
channels of appeal are available. However, the contractor may, at the request of the 
provider or supplier, informally review its initial determination. 
 
70.7 - Exceptions Allowing Extension of Time Limit 
(Rev. 2477, Issued: 05-25-12, Effective: 08-27-12 Implementation: 08-27-12) 
 
Medicare regulations at 42 C.F.R. 424.44(b) allow for the following exceptions to the 1 
calendar year time limit for filing fee for service claims:   
(1) Administrative error, if failure to meet the filing deadline was caused by error or 
misrepresentation of an employee, Medicare contractor, or agent of the Department that 
was performing Medicare functions and acting within the scope of its authority (See 
70.7.1). 
 
(2) Retroactive Medicare entitlement, where a beneficiary receives notification of 
Medicare entitlement retroactive to or before the date the service was furnished.  For 
example, at the time services were furnished the beneficiary was not entitled to Medicare.  
However, after the timely filing period has expired, the beneficiary subsequently receives 
notification of Medicare entitlement effective retroactively to or before the date of the 
furnished service (See 70.7.2). 
 
(3) Retroactive Medicare entitlement involving State Medicaid Agencies, where a State 
Medicaid Agency recoups payment from a provider or supplier 6 months or more after 
the date the service was furnished to a dually eligible beneficiary.  For example, at the 
time the service was furnished the beneficiary was only entitled to Medicaid and not to 
Medicare.  Subsequently, the beneficiary receives notification of Medicare entitlement 
effective retroactively to or before the date of the furnished service.  The State Medicaid 
Agency recoups its money from the provider or supplier and the provider or supplier 
cannot submit the claim to Medicare, because the the timely filing limit has expired (See 
70.7.3). 
 
(4) Retroactive disenrollment from a Medicare Advantage (MA) plan or Program of All-
inclusive Care of the Elderly (PACE) provider organization, where a beneficiary was 
enrolled in an MA plan or PACE provider organization, but later was disenrolled from 
the MA plan or PACE provider organization retroactive to or before the date the service 
was furnished, and the MA plan or PACE provider organization recoups it payment from 
a provider or supplier 6 months or more after the date the service was furnished (See 
70.7.4). 
 
The conditions for meeting each exception, and a description of how filing extensions 
will be calculated, are described in sections 70.7.1  70.7.4. 
 
Where the initial request for an exception to the timely filing limit is made by a provider 
or supplier, the Medicare contractor has responsibility for determining whether a late 
claim may be honored based on all pertinent documentation submitted by the provider or 
supplier, and for the exceptions described in sections 70.7.2 and 70.7.3, based on its 
review of the relevant information contained in the Common Working File (CWF) 
database.  As explained in sections 70.7.1  70.7.4, the contractor will determine if the 
requirements for a particular exception are met.  However, in certain circumstances, the 
contractor may contact the appropriate CMS regional office (RO) to ascertain whether it 
wants to participate in the review and decision-making of the specific exception request.  
In limited circumstances, the RO may conclude that the exception request should go to 
CMS Central Office for a final determination. 
  70.7.1 - Administrative Error 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Medicare regulations at 42 CFR 424.44 allow that where Medicare program error causes 
the failure of the provider or supplier to file a claim for payment within the time limit in 
70.1 above, the time limit will be extended through the last day of the 6th calendar 
month following the month in which the error is rectified by notification to either the 
provider, supplier, or beneficiary.  In order to avoid having two extension of time 
triggers, contractors must notify the beneficiary and the provider or supplier in writing 
about the correction of the error on the same day.  Administrative error may include 
misrepresentation, delay, mistake, or other action of Medicare, or its contractors.  
Contractors will not accept requests for extensions for such errors that extend beyond 4 
years from the date of service. 
 
The administrative error that prevents timely filing of the claim may affect the provider 
or supplier directly or indirectly, i.e., by preventing the beneficiary or his or her 
representative from filing a timely request for payment.  Situations in which failure to file 
within the usual time limit will be considered to have been caused by administrative error 
include but are not limited to the following: 
 
 
  The failure resulted from misinformation from an employee, Medicare contractor, 
or agent of the Department acting within the scope of its authority, e.g., that 
certain services were not covered under Part A or Part B, although in fact they 
were covered. 
 
  The failure resulted from excessive delay by Medicare, or the Medicare contractor 
in furnishing information necessary for the filing of the claim. 
 
  The failure resulted from advice by an employee, Medicare contractor, or agent of 
the Department acting within the scope of its authority that precluded the filing of 
a claim until the provider or supplier receives certain information from the 
Medicare contractor (e.g., a hospital following manual instructions does not file a 
billing for outpatient services where the services are expected to be paid for by 
workmens compensation; but the hospital learns after the expiration of the time 
limit of the ultimate denial of workmens compensation liability). 
 
  Any claim involving situations other than those listed above, where it appears that 
an extension of the time limit might be justified on the basis of administrative 
error, should be submitted by the appropriate Medicare claims processing 
contractor with a recommendation, before payment, to the appropriate CMS RO.  
Contractors should consult with the appropriate RO.  ROs may in turn consult 
with CMS Central Office.  
 
Where administrative error is alleged to be responsible for late filing, the necessary 
evidence would ordinarily include:   
  A statement from the beneficiary, his/her representative or the provider or 
supplier, depending on whom the error directly affected, as to how he/she learned 
of the error, and when it was corrected, and one of the following: 
 
  A written report by Medicare or the Medicare contractor describing how its 
error caused failure to file within the time limit; or 
 
  Copies of a CMS or Medicare contractor letter or other written notice 
reflecting the error, or 
 
  A written statement of an agency employee having personal knowledge of the 
error. 
 
However, the statement of the beneficiary, his/her representative, or the provider or 
supplier is not essential if the other evidence establishes that his/her failure to file within 
the usual time limit resulted from administrative error, and that he/she filed a claim 
within six months after the month in which he/she was notified that the error was 
corrected. There must be a clear and direct relationship between the administrative error 
and the late filing of the claim. Where the evidence is in the Medicare contractors own 
records, it should annotate the claims file to this effect. 
 
If the claims processing contractor determines that a late claim should be honored 
because the facts support that an error or misrepresentation has caused the claim to be 
late, the provider, supplier, or beneficiary will have until the end of the 6th calendar 
month from the month in which the provider, supplier, or beneficiary received 
notification that the error or misrepresentation has been corrected. 
 
70.7.2  Retroactive Medicare Entitlement 
(Rev. 2477, Issued: 05-25-12, Effective: 08-27-12 Implementation: 08-27-12) 
 
The time for filing a claim will be extended if CMS or one of its contractors determines 
that a failure to meet the filing deadline is caused by all of the following conditions: 
 
(a) At the time the service was furnished the beneficiary was not entitled to Medicare. 
 
(b) The beneficiary subsequently received notification of Medicare entitlement 
effective retroactively to or before the date of the furnished service. 
 
Thus, a provider or supplier may have furnished services to an individual who was not 
entitled to Medicare.  More than a year later, the individual receives notification from 
SSA that he or she is entitled to Medicare benefits retroactive to or before the date he or 
she received services from the provider or supplier.  In this situation, the provider or 
supplier may submit a request for a filing extension to the appropriate Medicare claims 
processing contractor, as long as the provider or supplier submits supporting 
documentation that verifies that the conditions above are met.   
If the beneficiary and the provider or supplier is notified on different days about the 
beneficiarys retroactive Medicare entitlement, there will be two extensions of time 
triggers.  One extension of time trigger is when the beneficiary is first notified about the 
beneficiarys retroactive Medicare entitlement and the other extension of time trigger is 
when the provider or supplier is the first party notified of the beneficiarys retroactive 
Medicare entitlement. If the beneficiary is submitting the claim, the time to file the claim 
is based on the day the beneficiary is first notified of the retroactive Medicare 
entitlement.  If the provider or supplier is submitting the claim, the time to file the claim 
is based on the day the provider or supplier is first notified of the retroactive Medicare 
entitlement. 
 
Where retroactive Medicare entitlement is alleged, the provider, supplier, or beneficiary 
will need to provide the contractor with the following information: 
 
  an official Social Security Administration (SSA) letter notifying the beneficiary of 
Medicare entitlement and the effective date of the entitlement; and, 
 
  documentation describing the service/s furnished to the beneficiary and the date 
of the furnished service/s. 
 
If the provider, supplier, or beneficiary is unable to provide the contractor with an official 
SSA letter, the Medicare contractor shall check the Common Working File (CWF) 
database and may interpret the CWF date of accretion and the CWF Medicare entitlement 
date for a beneficiary in order to verify a beneficiarys retroactive entitlement.  For 
example, if the CWF indicates a Medicare entitlement date of March 1, 2008 and a date 
of accretion of December 14, 2010, then the contractor may interpret the CWF data to 
mean that the beneficiary was retroactively entitled to Medicare as of March 1, 2008 and 
that this data was added to the CWF database on December 14, 2010.  If the contractor 
has any problems or concerns with respect to interpreting the CWF data, then the 
contractor should consult with the appropriate CMS regional office. 
 
If the contractor determines that both of the conditions for meeting this exception 
described above are met, the time to file a claim will be extended through the last day of 
the 6th calendar month following the month in which either the beneficiary or the 
provider or supplier received notification of Medicare entitlement effective retroactively 
to or before the date of the furnished service. 
 
70.7.3  Retroactive Medicare Entitlement Involving State Medicaid 
Agencies 
(Rev. 2477, Issued: 05-25-12, Effective: 08-27-12 Implementation: 08-27-12) 
 
The time for filing a claim will be extended if CMS or one of its contractors determines 
that failure to meet the filing deadline is caused by all of the following conditions: 
 
(a) At the time the service was furnished the beneficiary was not entitled to Medicare.   
(b) The beneficiary subsequently received notification of Medicare entitlement 
effective retroactively to or before the date of the furnished service. 
 
(c) A State Medicaid Agency recovered the Medicaid payment for the furnished 
service from a provider or supplier 6 months or more after the date of the 
furnished service. 
 
In these situations, at the time services were furnished the beneficiary was entitled to 
Medicaid but not to Medicare.  After the date of the furnished services, the beneficiary is 
then notified that he or she is entitled to Medicare.  Finally, sometime after the date of the 
furnished service, the State Medicaid Agency recoups the money it paid the provider or 
supplier.  If the State Medicaid Agency recoups the money it paid the provider or supplier 
6 months or more after the date the service was furnished, the provider or supplier may 
be given an extension to have those claims filed to Medicare. 
 
In order to qualify for this exception, the provider or supplier will need to provide the 
claims processing contractor with the following information:  
 
  documentation verifying the date that the State Medicaid Agency recouped money 
from the provider/supplier;  
 
  documentation verifying that the beneficiary was retroactively entitled to 
Medicare to or before the date of the furnished service (e.g., an official SSA letter 
to the beneficiary, or if an official SSA letter is not available, the contractor shall 
check the CWF database and may interpret the CWF date of accretion and the 
CWF Medicare entitlement date for a beneficiary in order to verify a beneficiarys 
retroactive entitlement; see the example in section 70.7.2 above concerning the 
CWF for additional details regarding this contractor verification process); and, 
 
  documentation verifying the service/s furnished to the beneficiary and the date of 
the furnished service/s. 
 
If the contractor determines that all of the conditions described above for meeting this 
exception are met, the contractor will notify the provider or supplier in writing that a 
filing extension will be allowed from the end of the 6th calendar month from the month in 
which the State Medicaid Agency recovered its money. 
 
70.7.4 - Retroactive Disenrollment from a Medicare Advantage plan or 
Program of All-inclusive Care for the Elderly (PACE) Provider 
Organization 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
The time for filing a claim will be extended if CMS or one of its contractors determines 
that a failure to meet the filing deadline is caused by all of the following conditions: 
  (a) At the time the service was furnished the beneficiary was enrolled in a Medicare 
Advantage (MA) plan or Program of All-inclusive Care for the Elderly (PACE) 
provider organization. 
(b) The beneficiary was subsequently disenrolled from the Medicare Advantage plan 
or Program of All-inclusive Care for the Elderly (PACE) provider organization 
effective retroactively to or before the date of the furnished service. 
(c) The Medicare Advantage plan or Program of All-inclusive Care for the Elderly 
(PACE) provider organization recovered its payment for the furnished service 
from a provider or supplier 6 months or more after the service was furnished. 
 
There may be situations where a beneficiary is enrolled in an MA plan or in a PACE 
provider organization, and later becomes disenrolled from the MA plan or PACE 
provider organization.  And, if the MA plan or the PACE provider organization recoups 
the money it paid the provider or supplier 6 months or more after the service was 
furnished, the provider or supplier may be granted an exception to have those claims filed 
with Medicare.   
 
In order to qualify for this exception, the provider or supplier will need to provide the 
claims processing contractor with information that verifies:  
 
  prior enrollment of the beneficiary in an MA plan or PACE provider organization;  
 
  the beneficiary, the provider, or supplier was notified that the beneficiary is no 
longer enrolled in the MA plan or PACE provider organization;  
 
  the effective date of the disenrollment; and,  
 
  the MA plan or PACE provider organization recouped money from the provider 
or supplier for services furnished to a disenrolled beneficiary. 
 
If the contractor determines that all of the conditions described above are satisfied, the 
contractor will notify the provider or supplier in writing that a filing extension will be 
allowed from the end of the 6th calendar month from the month in which the MA plan or 
PACE provider organization recouped its money from the provider or supplier. 
 
70.8 - Filing Request for Payment to CarriersMedicare Part B 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Medicare regulations at 42 CFR 424.44 define the timely filing period for Medicare fee-
for-service claims.  Such claims must be filed no later than 12 months (or 1 calendar 
year) after the date the services were furnished. 
 
70.8.1  Splitting Claims for Processing 
(Rev. 3389, Issued: 10-30-15, Effective: 01-01-14, Implementation: 04-04-16)  
  There are a number of prescribed situations where a claim is received for certain services 
that require the splitting of the single claim into one or more additional claims. The 
splitting of such a claim is necessary for various reasons such as proper recording of 
deductibles, separating expenses payable on a cost basis from those paid on a charge 
basis, or for accounting and statistical purposes. Split a claim for processing in the 
following situations:  
 
  Expenses incurred in different calendar years cannot be processed as a single 
claim. A separate claim is required for the expenses incurred in each calendar 
year; 
 
EXCEPTION FOR DURABLE MEDICAL EQUIPMENT REGIONAL CARRIERS 
(DMERCs):  
 
Expendable items (disposable items such as blood glucose test strips and PEN nutrients) 
that will be used in a time frame that spans two calendar years and are required to be 
billed with appropriately spanned from and to dates of service may be processed on a 
single claim line. For these types of items, DMERCs must base pricing and deductible 
calculations on the from date, since that is the date when the item was furnished. 
 
  A claim other than a DMERC claim that spans two calendar years where the 
from date of service is untimely but the to date of service is timely should be 
split and processed as follows:  
 
1.  Where the number of services on the claim is evenly divisible by the number 
of days spanned, assume that the number of services for each day is equal. 
Determine the number of services per day by dividing the number of services 
by the number of days spanned. Then split the claim into a timely claim and 
an untimely claim. Deny the untimely claim and process the timely claim.  
 
2.  Where the number of services on the claim is not evenly divisible by the 
number of days spanned and it is not otherwise possible to determine from the 
claim the dates of services, suspend and develop the claim in order to 
determine the dates of services. After determining the dates of services, split 
the claim accordingly into a timely claim and an untimely claim. Deny the 
untimely claim and process the timely claim.  
 
  A claim containing both assigned and unassigned charges. Split assigned and 
unassigned services from non-participating physicians/suppliers into separate 
assigned and unassigned claims for workload counts and processing;  
 
  Assigned claims from different physicians/suppliers (excluding group practices 
and persons or organizations to whom benefits may be reassigned). Process a 
separate claim for the services from each physician/supplier. Where the assigned 
claim is from a person or organization to which the physicians performing the  services have reassigned their benefits, process all of the services as a single 
claim;  
 
  A claim where there is more than one beneficiary on a single claim. There can 
only be one beneficiary per claim; and  
 
NOTE: Roster bills for covered immunization services furnished by mass immunizers 
may be submitted for multiple beneficiaries. You must create individual claims for each 
Medicare beneficiary based on the roster bill information.  
 
  Outpatient physical therapy services furnished on a cost basis by a physician-
directed clinic cannot be processed when combined on the same claim with other 
charge-related services by the clinic. Process the cost related services as a 
separate claim.  
 
  If an unassigned claim includes services by an independent physical therapist 
together with other physician services, process the physical therapy services as a 
separate claim. Process an assigned claim from an independent physical therapist 
as a single claim.  
 
  A claim that is a duplicate of a claim previously denied is treated as a new claim 
if there is no indication that the claim is a resubmittal of a previous claim with 
additional information, or there is no indication on the second claim that the 
beneficiary is protesting the previous determination.  
 
  In a claim containing services from physicians/suppliers covering more than one 
carrier jurisdiction, the carrier receiving the claim must split off the services to be 
forwarded to another contractor and count the material within the local 
jurisdiction as a claim. The carrier receiving the transferred material must also 
count it as a separate claim.  
 
  When services in a claim by the same physician/supplier can be identified as 
being both second/third opinion services and services not related to second/third 
opinion, the "opinion" services must be split off from the "non-opinion" services 
and counted as a separate claim. When one physician/supplier in an unassigned 
claim has provided the "opinion" service and another physician(s)/supplier(s) has 
provided the "non-opinion" services, the claim may not be split.  
 
  Claims containing any combination of the following types of services must be 
split to process each type of service as a separate claim. These services are:  
 
  --   Physical therapy by an independent practitioner, or 
    
  --   any services paid at l00 percent of reasonable charges.  
(Any of these types of services may be combined on the same claim with 
any other type of service.)    
Do not deviate from defining claims as described above. Split claims in accordance with 
the appropriate definition. Throughout the claims process count each of the separate 
claims, resulting from the split, as an individual claim. 
 
70.8.2 - Replicating Claims for Processing 
(Rev. 170, 05-07-04) 
 
There are no prescribed reasons other than those aforementioned for splitting claims and 
for counting additional claims into your workload.  However, claims are frequently split 
for other reasons that are dictated by the systems or the methods of processing them.  
Such additional claims are labeled "Replicate Claims."  Tally and report all replicate 
claims (other than those aforementioned) separately.  Identify replicate claims and report 
them in the appropriate categories for claims.  Some examples of replicate claims are: 
 
  Additional claims created because of a line item limitation (regardless of the 
methodology used for coding line items); 
 
  Extra claims created in making partial payments; 
 
  Claims created for carving out individual specialty types of services and 
 
  Extra claims created to apply special payment reductions (e.g., Gramm-
Rudmann-Hollings) efficiently for applicable dates of service. 
 
NOTE:  For budget requests and cost reports (CMS-l524, CMS-l528, CMS-l6l6, and 
CMS-2599), the workload must exclude the number of replicate claims 
produced. 
 
70.8.3 - Methods of Claiming Benefits for Services by Physicians and 
Suppliers 
(Rev. 170, 05-07-04) 
 
The method of claiming Part B benefits depends upon whether the patient is claiming 
payment or is assigning benefit payments to his/her source of medical treatment or 
services. 
 
As a rule, beneficiaries do not submit claims for reimbursement.  However, if there is 
reason for a beneficiary to submit a claim for reimbursement, the beneficiary uses the 
CMS-1490S.  For covered services furnished on or after September 1, 1990, physicians 
and suppliers must complete and submit in accordance with SSA 1848(g)(4)(A) all Part 
B claims whether assigned or unassigned for beneficiaries who desire Medicare benefit 
payment determinations. 
 
The physician/supplier (or the facility or organization to which the physician may 
reassign benefits, claims the payment.  The patient or his representative agrees to assign  the benefits and the physician/supplier agreeing to the assignment accepts the Medicare 
reasonable charge determination as the full charge for the services.  (See 3045ff. about 
specific assignment procedures and the nature and effect of assignments.) 
 
70.8.4 - Claims Forms CMS-1490S and CMS-1500 
(Rev.: 4388; Issued: 09-06-19; Effective: 10-07-19; Implementation: 10-07-19) 
 
A number of prescribed claims forms have been developed for use when requesting 
payment for Part B Medicare services.  Many are printed and distributed nationally free 
of cost through CMSs Printing and Publications Branch.  (See NOTE below for 
exception.) 
 
In order to maintain control over the content and format of the forms, private printing of a 
Government form is not routinely permitted.  However, if you or another organization 
wishes to independently print a prescribed claims form, the reproduction of a claims form 
must be in accordance with 422.527 of Title 20, Chapter III, Part 422 of the Code of 
Federal Regulations.  Obtain CMS approval for printing a prescribed form.  Route the 
written request for approval through the RO.  Include the following: 
 
  The reason or need for such reproduction; 
 
  The intended user of the form; 
 
  The proposed modifications or format changes, with printing or other 
specifications (such as realignment of data or line designations); 
 
  The type of automatic data processing machinery, if any, for which the form 
is designed; and 
 
  Estimates of printing quantity, cost per thousand, and annual usage. 
 
NOTE:  This procedure does not apply to the Form CMS-1500, Health Insurance Claim 
Form.  A/B MACs (B), physicians and suppliers are responsible for purchasing 
their own forms.  This form can be bought in single, multipart snap-out sets or 
in continuous pin-feed format.  Medicare accepts any version.  Forms can be 
obtained from local printers or printed in-house as long as it follows the CMS 
approved specifications developed by the National Uniform Claim Committee. 
 
The Form CMS-l490 was formerly the basic Part B claims form.  It was replaced by 
Form CMS-l500 for claims completed by physicians and suppliers (except ambulance 
suppliers), and Form CMS-l490S for claims from beneficiaries.  You must, however, 
continue to accept and process claims received on Form CMS-1490 form after conversion 
to Forms CMS-l500 and CMS-l490S. 
 
The Form CMS-1500 (Health Insurance Claim Form) is the prescribed form for claims 
prepared and submitted by physicians or suppliers (except for ambulance services),  whether or not the claims are assigned.  It can be purchased in any version required i.e., 
single sheet, snap-out, continuous, etc. 
 
The forms described below are printed and distributed to contractors by CMS and are 
available in single sheets, multipart snap-out sets, or in pin-feed format. 
 
The Form CMS-1490S (Patient's Request for Medical Payment) form is used only by 
beneficiaries (or their representatives) who complete and file their own claims.  It 
contains the patients comparable items of data that are on the Form CMS-1500.  When 
the Form CMS-1490S is used, an itemized bill must be submitted with the claim.  Social 
Security Offices use the Form CMS-1490S when assisting beneficiaries in filing Part B 
Medicare claims.  For Medicare covered services received on or after September 1, 1990, 
the Form CMS-1490S is used by beneficiaries to submit Part B claims only if the service 
provider refuses to do so.  Inasmuch as the Form CMS-1490S has no provision for a 
diagnosis code, the diagnosis code is not required at the time of claim submission. 
 
CMS implemented a new version of the Form CMS-1490S effective January 1, 2019. 
The revised form is version 01/18, OMB control number 0938-1197. The revised form 
will replace the previous version of the form 01/05, OMB control number 0938-0999.  
 
The term, Form CMS-1490S refers to the form generically, independent of a given 
version. 
 
Medicare will conduct a dual-use period (January 1, 2019 through March 31, 2019) 
during which Beneficiaries (or their representatives) can send Medicare claims on either 
the old or the revised form. When the dual-use period is over, Medicare will accept 
beneficiary paper claims on only the revised Form CMS-1490S, version 01/18.  
 
The Form CMS-1556 (Prepayment Plan for Group Practices Dealing Through An A/B 
MAC (B)) is used by plans which, for Medicare purposes are, both Group Practice 
Prepayment Plans, and are paid on the basis of reasonable charges related to their costs 
for furnishing services to their subscribers. 
 
70.8.5  Photocopies 
(Rev. 170, 05-07-04) 
 
Some enrollees may want to keep the original itemized physician and supplier bills for 
income tax or complementary insurance purposes.  Photocopies of itemized bills are 
acceptable for Medicare deductible and payment purposes if there is no evidence of 
alteration. 
 
70.8.6  Penalty for Filing Claims after One Year 
(Rev. 2140, Issued: 01-21-11, Effective: 01-01-10, Implementation: 02-22-11) 
 
Section 1848(g)(4) of the Social Security Act (the Act) requires that physicians and 
suppliers complete and submit Part B claims for medical services, equipment and  supplies (furnished on or after September 1, 1990) within 12 months of the service date.  
Only assigned claims submitted more than 12 months after the service date will be 
subject to a 10 percent reduction of the amount that would otherwise have been paid.  
Payment on an assigned claim submitted by a physician or other supplier 12 months or 
longer after the service is furnished, shall be reduced by 10 percent from the amount that 
would have otherwise been paid.  On March 23, 2010, Congress passed the Patient 
Protection and Affordable Care Act (the Affordable Care Act).  Section 6404 of the 
Affordable Care Act amended sections 1814(a)(1), 1835(a)(1), and 1842(b)(3)(B) of the  
Act, by reducing the maximum time period for filing Medicare Part A and Part B claims 
to no more than 12 months after the date of service.  Therefore, this nullifies the 10 
percent reduction requirement on physician and supplier claims submitted after 12 
months from the date of service, because the claim will be denied as untimely filed; 
unless, an exception for the late filing is granted.  And, if an exception for late filing is 
granted, then the 10 percent penalty is waived. 
 
70.8.8  Penalty for Filing Claims after One Year 
(Rev. 170, 05-07-04) 
 
Section 1848(g)(4) of the Social Security Act requires that physicians and suppliers 
complete and submit Part B claims for medical services, equipment and supplies 
(furnished on or after September 1, 1990) within 12 months of the service date.  Only 
assigned claims submitted more than 12 months after the service date will be subject to a 
10 percent reduction of the amount that would otherwise have been paid.  Payment on an 
assigned claim submitted by a physician or other supplier 12 months or longer after the 
service is furnished, shall be reduced by 10 percent from the amount that would have 
otherwise been paid. 
 
70.8.8.6  Monitoring Claims Submission Violations 
(Rev.: 4388; Issued: 09-06-19; Effective: 10-07-19; Implementation: 10-07-19) 
 
A.  General 
 
Section 1848(g)(4) of the Social Security Act requires physicians and suppliers to submit 
claims to Medicare carriers for services furnished on or after September 1, 1990.  It also 
prohibits physicians and suppliers from imposing a charge for completing and submitting 
a claim.  Payment for assigned services not filed within 1 year (for services on or after 
9/1/90) are reduced 10 percent.  Physicians and suppliers who fail to submit a claim or 
who impose a charge for completing the claim are subject to sanctions. CMS is 
responsible for assessing sanctions and monetary penalties for noncompliance. 
 
Physicians and suppliers are not required to take assignment of Medicare benefits unless 
they are enrolled in the Medicare Participating Physician and Supplier Program or, in the 
case of physician services, the Medicare beneficiary is also a recipient of State medical 
assistance (Medicaid) or the service is otherwise subject to mandatory assignment. 
 
B.  Compliance Monitoring   
To ensure that providers and suppliers are enrolled in the Medicare program and submit 
claims in compliance with the mandatory claims submission requirements found in 
1848(g)(4) of the Social Security Act, contractors shall: 
 
1)  Process beneficiary claims submitted to A/B MACs or carriers for services that 
are not covered by Medicare (e.g., for hearing aids, cosmetic surgery, personal 
comfort services, etc.; see 42 CFR 411.15 for details), in accordance with its 
normal processing procedures; 
 
2)  Process beneficiary claims submitted to A/B MACs or carriers for services that 
are covered by Medicare and the beneficiary has submitted a complete and valid 
claim (Form CMS-1490S) and all supporting documentation associated with the 
claim, including an itemized bill with the following information:  
 
  Date of service,  
  Place of service,  
  Description of illness or injury,  
  Description of each surgical or medical service or supply furnished,  
  Charge for each service,  
  The doctors or suppliers name and address,  
  The provider or suppliers National Provider Identifier (NPI) 
  The ordering & referring providers legal name and address and the National 
Provider Identifier (NPI) if known when the itemized bill is from: 
A Clinical laboratory for ordered tests 
An independent diagnostic imaging center for ordered imaging procedures 
A supplier of Durable Medical Equipment, Prosthetics, Orthotics and 
Supplies (DMEPOS) for ordered DMEPOS 
 
If the beneficiary furnishes all other information but fails to supply the provider or 
suppliers NPI the contractor shall not return the claim but rather look up the 
provider or suppliers NPI using the NPI registry.  If the contractor determines 
that the provider or supplier was not a Medicare enrolled provider with a valid 
NPI, the contractor shall follow previously established procedures in order to 
process and adjudicate the claim.   
 
3)  Retain the Form-1490S and supporting documentation and manually return a copy 
to the beneficiary if it is for a Medicare-covered service and the claim is 
incomplete, does not include all required supporting documentation and/or 
contains invalid information.  Contractors shall also include an appropriate letter 
that specifically communicates all the items listed above which were missing or 
invalid.  In addition, the CMS-1490S and supporting documentation shall be 
maintained for purposes of the timely filing rules in the event that the beneficiary 
re-submits the claim. 
  If the Beneficiary submits a claim on the English or Spanish Form CMS-1490S 
(version 01/05) on or after April 1, 2019, manually return the Form CMS-1490S 
(version 01/05) claim to the beneficiary, and include a copy of the Form CMS-
1490S (version 01/18), along with a letter instructing the beneficiary to complete 
and return the Form CMS-1490S (version 01/18) for processing within the time 
period prescribed in 70.5.  
 
  If a beneficiary submits a claim on the Form CMS-1500, manually return the 
Form CMS-1500 claim to the beneficiary, and include a copy of the Form CMS-
1490S, along with a letter instructing the beneficiary to complete and return the 
Form CMS-1490S for processing within the time period prescribed in 70.5, 
above.  Include in the letter a description of missing, invalid or incomplete items 
required for the Form CMS-1490S that were not included with the submitted 
Form CMS-1500 or were invalid. 
 
4)  Retain Medicare claims records using the following disposition rules. 
 
DISPOSITION:  
 
1. Carriers who Microform Claims  
 
a)  Hardcopy Records - Cut off no later than the close of the calendar year (CY) in 
which paid. The hardcopy claim must be retained in accordance with the 
following:  
 
(1)  If a corresponding master microfilm has been made and verified, transfer to a 
Federally-approved records storage facility or hold onsite. Destroy after a total 
retention of 3 years after the close of the CY in which paid. 
 
(2)  If a corresponding master microform record has NOT been made and verified, 
transfer to a Federally-approved records storage facility or hold onsite. Destroy 
after a total retention of 6 years and 3 months after the close of the CY in which 
paid. 
 
b)  Microform Records  
 
The master microform record must be retained for a total retention of 6 years and 
3 months following the close of the calendar year in which paid. 
 
2. Carriers Who Do Not Microfilm Claims Records 
 
Cut off at the close of the calendar year (CY) in which paid, then transfer to a 
Federally-approved records storage facility. Destroy after a total retention of 6 
years and 3 months. Earlier cutoff and transfer is authorized. However, the 
records must be retained for a total retention of 6 years and 3 months following 
the close of the calendar year in which payment is made.   
a)  Hardcopy Records - The hardcopy must be retained onsite until the microform 
has been verified. Cut off at the close of the calendar year in which paid; transfer 
hardcopy to a Federally-approved records storage facility only if there is a 
corresponding master microfilm record that can be retained for the period 
indicated in b. below; otherwise, the hardcopy shall be retained until the 6 years 
and 3 months period is reached. Earlier cutoff and transfer is authorized.  
However, the hardcopy must be retained for a total retention of 3 years after the 
close of the calendar year in which paid. 
 
b)  Microform Records - The master microform records must be retained for a 
total retention of 6 years and 3 months following the close of the calendar year in 
which payment is made. 
 
When returning a beneficiary submitted claim, the contractor shall inform the beneficiary 
that the provider or supplier is required by law to submit a claim on behalf of the 
beneficiary (for services that would otherwise be payable), and that in order to submit the 
claim, the provider must enroll in the Medicare program.  In addition, contractors shall 
encourage beneficiaries to always seek non-emergency care from a provider or supplier 
that is enrolled in the Medicare program. 
 
If a beneficiary receives services from a provider or supplier that refuses to submit a 
claim to the A/B MAC or carrier, on the beneficiarys behalf, (for services that would 
otherwise be payable by Medicare), and/or refuses to enroll in the Medicare program, the 
beneficiary should: 
 
(1) Notify the contractor in writing that the provider or supplier refused to submit a 
claim to Medicare and/or refused to enroll in Medicare, and  
 
(2) Submit a complete Form CMS-1490S with all supporting documentation. 
 
The contractor shall process and pay the beneficiarys claim if it is for a service that 
would be payable by Medicare were it not for the provider or suppliers refusal or 
inability to submit the claim and/or enroll in Medicare.  Claims shall be adjudicated 
based on whether the service provided is covered or non-covered/excluded rather than on 
the providers enrollment status. If for a covered service, the claim shall be processed and 
the allowed amount reimbursed to the beneficiary, if appropriate. If for a non-
covered/excluded service, the claim shall be processed and denied with an appropriate 
MSN message.  For sanctioned/excluded and opt-out providers the following MSN 
messaging is recommended: 
 
Sanctioned/Excluded provider: 
 
A sanctioned or excluded provider is an individual or business excluded from 
participation in the Medicare program for a stated period of time as a result of fraudulent 
activity, program abuse, or impermissible conduct as determined by OIG.  CMS will pay 
the first claim submitted by a beneficiary for the services of a sanctioned/excluded  physician or practitioner and immediately notify the sanctioned/excluded physician or 
practitioner of the exclusion.   CMS will not pay a claim for sanctioned/excluded 
physician or practitioner services more than 15 days after the date on the notice to the 
physician or practitioner, or after the effective date of the exclusion, whichever is later.  
Under no circumstance may Medicare payment be made to any entity, including 
beneficiaries, for services rendered by such providers after the first claim is paid.  An 
example of language that may be considered: 
 
MSN Message 21.27 
 
English 
Services provided by a Medicare sanctioned/excluded provider.  No Medicare payment 
may be made. 
 
Spanish 
Los servicios fueron brindado por un proveedor excluido de Medicare, por lo tanto 
Medicare no pago por los servicios. 
 
Opt-Out physicians and practitioners: 
 
Medicare payment may be made for the claims submitted by a beneficiary for the 
services of an opt out physician or practitioner when the physician or practitioner did not 
privately contract with the beneficiary for services that were not emergency care services 
or urgent care services and that were furnished no later than 15 days after the date of a 
notice by the carrier that the physician or practitioner has opted out of Medicare (see 42 
C.F.R. 405.435(c)).  Therefore, if the beneficiary submits a claim for a service that was 
furnished by an opt out physician or practitioner, then the carrier must contact the opt out 
physician or practitioner in order to ascertain whether the beneficiary entered into a 
private contract with the opt out physician or practitioner. (Note: The carrier should 
obtain a copy of the private contract from the opt out physician/practitioner before 
denying the beneficiarys claim if the beneficiary did, in fact, enter into a private contract 
with the physician or practitioner.) If the beneficiary did not enter into a private contract 
with the physician or practitioner and the beneficiary did not receive notice from the 
carrier that the physician opted out of Medicare, then Medicare payment may be made to 
the beneficiary for the non-emergency and/or non-urgent care services (assuming that the 
services would otherwise be payable).  On the other hand, if the beneficiary did enter into 
a private contract with the physician or practitioner for the services or received services 
from the physician/practitioner 15 days after the date of a notice by the carrier that the 
physician or practitioner has opted out of Medicare, then no Medicare payment may be 
made. Medicare has instructed opt out physicians and practitioners that private contract 
language must include beneficiary instruction precluding the beneficiary from billing 
Medicare for these services.  An example of language that may be considered: 
 
MSN Message 21.26 
 
English  Claim denied because services were provided by an Opt-Out physician or practitioner. 
No Medicare payment may be made. 
 
Spanish 
La reclamacion fue denegada porque los servicios fueron brindados por un medico o 
proveedor que decidio no participar en Medicare, por lo tanto, Medicare no pago por los 
servicios. 
 
Contractors shall maintain documentation of beneficiary complaints involving violations 
of the mandatory claims submission policy and a list of the top 50 violators, by State, of 
the mandatory claim submission policy. 
 
Contractors are encouraged to educate providers and suppliers that they must be enrolled 
in the Medicare program before they submit claims for services furnished or supplied to 
any Medicare beneficiary. 
 
The above policy, including the NPI requirement, is not applicable for foreign beneficiary 
claims submitted for covered services.  These claims should be processed using 
guidelines for foreign claims. 
 
The above policy, including the NPI requirement, is not applicable to beneficiary claims 
submitted to DMEMACs for durable medical equipment, prosthetics, orthotics, and 
supplies.  These claims should be processed by DMEMACs using current procedures. 
 
C.  Exception When Physician, Other Practitioner, or Supplier Is Excluded From 
Participating in Medicare Program 
 
Section 1848(g)(4) of the Social Security Act requires physicians, other practitioners, or 
suppliers to submit claims to Medicare carriers for services furnished after September 1, 
1990.  This does not apply to physicians, other practitioners, or suppliers who have been 
excluded from participating in the Medicare program.  Physicians, other practitioners, 
and suppliers who have been excluded from the Medicare program are prohibited from 
submitting claims or causing claims to be submitted.  See the Medicare Program Integrity 
Manual for procedures concerning claims submitted by an excluded practitioner, his/her 
employer, or a beneficiary for services or items provided by an excluded physician, other 
practitioner, or supplier.  Carriers must maintain the systems capability to identify claims 
submitted by excluded physicians, other practitioners, or suppliers as well as items or 
services provided, ordered, prescribed, or referred by an excluded party. 
 
When an excluded physician, other practitioner, or supplier has not submitted a claim on 
behalf of the beneficiary and/or the beneficiary has submitted the claim themselves, do not 
send a notification letter to the physician, other practitioner, or supplier warning of civil 
monetary penalties due to noncompliance with 1848(g)(4)(A) of the Act.  Instead, follow 
the instructions in the Program Integrity Manual. 
 
70.8.8.7  Notification Letters 
(Rev. 1588; Issued:  09-05-08; Effective/Implementation Date:  08-18-08)   
A.  The letter sent to the beneficiary should explain why the claim is being returned 
including an explanation of the corrections needed in order to process the claim.  
Also, include an explanation of the statutory requirement that providers and suppliers 
must submit claims for all covered services provided to Medicare beneficiaries.  The 
letter should also provide the beneficiary with instructions on what should be done if 
the provider or supplier refuses to enroll with Medicare and/or submit the claim. 
 
B.  A letter shall also be sent to the provider or supplier explaining the statutory 
requirement for submitting claims for all services rendered to Medicare beneficiaries.  
The letter should explain to the provider or supplier that they are required to enroll with 
the Medicare program before a claim can be submitted.  Finally the letter should include 
language explaining the penalties for failure to comply with the mandatory claims 
submission requirements. 
 
70.8.8.8 - Violations That Are Not Developed For Referral 
(Rev. 420, Issued:  12-30-04, Effective:  01/31/05, Implementation:  01/31/05) 
 
Claim submission violations need not be developed on beneficiary-submitted Form CMS-
1490S claims that include approved charges for services performed on or after September 
1, 1990 in the following situations: 
 
o  Used DME purchases from private sources; 
 
o  Cases in which a physician/supplier does not possess information essential 
for filing a MSP claim.  Assume this is the case if the beneficiary files a MSP claim and 
encloses the primary insurer's payment determination notice and there is no indication that 
the service provider was asked to file but refused to do so; 
 
o  Services paid under the indirect payment procedure; 
o  Foreign claims; and 
o  Other unusual or unique situations that you evaluate on a case-by-case basis. 
 
NOTE:  It is unlikely that knowing, willful, and repeated noncompliance will apply in 
the above situations. 
 
80 - Carrier and FI Claims Processing Timeliness 
(Rev. 1, 10-01-03) 
A3-3600, A3-3600.1, B3-13306, HO-401, HO-401A, HH-462, B2-5240.11 
Carriers and FIs must establish control records for timely claims processing as described 
below. 
80.1 - Control and Counting Claims 
(Rev. 1, 10-01-03) 
The carrier or FI will consider claims as received for timely processing purposes from the 
date of their receipt.  Improperly completed claims that it returns are considered received 
for timely processing purposes when received again, properly completed.  A.  Provider Billing Via Terminal or Equivalent 
If the provider bills via remote terminal with on-site (in the provider) editing or if the 
carrier or FI otherwise can communicate edit results to it electronically, the carrier or FI 
establishes a control record when the bill passes its consistency edits. 
B.  Manual Hardcopy Claim/Bills and Electronic Claim/Bills 
The carrier or FI establishes a control record when it enters the initial claim into its 
system.  The claim is counted for administering timely billing and payment only if it 
passes carrier or FI edits to the extent a pending record can be established.  The date 
received is the date the carrier or FI received the claim properly completed, passing all 
carrier or FI edits, even if entered into its system on a later date. 
C.  Bills Returned to Provider 
If the carrier or FI returns the bill and retains a claim record to minimize data entry cost 
when returned, the receipt date is corrected when the bill is properly completed and 
passes carrier or FI edits. 
D.  Bills Requiring Medical Information 
When a carrier or FI requests medical documentation, it retains the bill as a pending 
record until it either pays, denies, or rejects (in the case of FIs) it.  Returning cases for 
review by the PRO is not a request for medical documentation.  Claims that fail initial 
carrier or FI edits because required medical reports or other required attachments are not 
included are also not requests for medical documentation. 
E.  Adjustment and Cancel Bills 
An adjustment request bill is a correction to a claim previously processed.  The carrier or 
FI establishes a control record for it. 
The carrier or FI counts adjustments as received and pending only when they pass carrier 
or FI edits.  The carrier or FI assigns the date received in its mailroom as the receipt date 
for hospital and MSP adjustment requests. 
The carrier or FI counts adjustment bills as processed when no further action by it is 
required.  The final action taken on the adjustment request bill depends upon the 
situation. 
80.2 - Definition of Clean Claim 
(Rev. 1, 10-01-03) 
HO-401.D, A3-3600.1, B2-5240.11.A 
A clean claim is one that does not require the carrier or FI to investigate or develop 
external to their Medicare operation on a prepayment basis.  Clean claims must be filed in 
the timely filing period. 
The following bullets are some examples of what are considered clean claims: 
  Pass all edits (contractor and Common Working File (CWF)) and are processed 
electronically); 
  Not require external development (i.e., are investigated within the claims, medical 
review, or payment office without the need to contact the provider, the 
beneficiary, or other outside source) (Note: these claims are not included in CPE 
scoring). 
  Claims not approved for payment by CWF within 7 days of the FIs original claim 
submittal for reasons beyond the carriers, FIs or providers control (e.g., CWF 
system/communication difficulties);    CWF out-of-service area (OSA) claims. These are claims where the beneficiary is 
not on the CWF host and CWF has to locate and identify where the beneficiary 
record resides; 
  Claims subject to medical review but complete medical evidence is attached by 
the provider or forwarded simultaneously with EMC records in accordance with 
the carriers or FIs instructions;  
  Are developed on a postpayment basis; and, 
  Have all basic information necessary to adjudicate the claim, and all required 
supporting documentation 
80.2.1 - Receipt Date 
(Rev. 273, Issued 08-13-04, Effective: 07-01-04, Implementation: 07-06-04) 
A3-3600.1-Item 7 
The receipt date of a claim is the date the contractor receives the claim (provided the 
filing is in a format and contains data sufficiently complete so that the filing qualifies as a 
claim).  The receipt date is used to: determine if the claim was timely filed (see 70.3), 
determine the payment floor for the claim (see 80.2.1.2), determine the payment 
ceiling on the claim (see 80.2.1.1) and, when applicable, to calculate interest payment 
due for a clean claim that is not timely processed, and to report to CMS statistical data on 
claims, such as in workload reports. 
A paper claim that is received by 5:00 p.m. on a business day, or by closing time if the 
contractor routinely ends its public business day between 4:00 p.m. and 5:00 p.m., must 
be considered as received on that date, even if the contractor does not open the envelope 
which contains the claim or does not enter the claims data into the claims processing 
system until a later date.  A paper claim that is received after 5:00 p.m., or after the 
contractors routine close of business between 4:00 p.m. and 5:00 p.m., is considered as 
received on the next business day. 
A paper claim is considered as received if it is delivered to the contractors place of 
business by the U.S. Postal Service, picked up from a P.O. box, or is otherwise delivered 
to the contractors place of business by its routine close of business time.  If the 
contractor uses a P.O. box for receipt of mailed claims, it must have its mail picked up 
from its box at least once per business day unless precluded on a particular day by the 
emergency closing of its place of business or that of its postal box site. 
As electronic claim tapes and diskettes that may be submitted by providers or their agents 
to an FI are also subject to manual delivery, rather than direct electronic transmission, the 
paper claim receipt rule also applies to establish the date of receipt of claims submitted 
on such manually delivered tapes and diskettes. 
Electronic claims transmitted directly to a contractor, or to a clearinghouse with which 
the contractor contracts as its representative for the receipt of its claims, by 5:00 p.m. in 
the contractors time zone, or by its closing time if it routinely closes between 4:00 p.m. 
and 5:00 p.m., must likewise be considered as received on that day even if the contractor 
does not upload or process the data until a later date.  NOTE: The differentiation 
between HIPAA-compliant and HIPAA-non-compliant electronic claims that is specified 
in 80.2.1.2 with respect to applying the payment floor, does not apply to establishing 
date of receipt.  Use the methodology described above to establish the date of receipt for 
all electronic claims.  Paper and electronic claims that do not meet the basic legibility, format, or completion 
requirements are not considered as received for claims processing and may be rejected 
from the claims processing system.  Rejected claims are not considered as received until 
resubmitted as corrected, complete claims.  The contractor may not use the data entry 
date, the date of passage of front-end edits, the date the document control number is 
assigned, or any date other than the actual calendar date of receipt as described above to 
establish the official receipt date of a claim. 
The following permissive exception applies to establishment of receipt date:  Where its 
system or hours of operation permit, a contractor may, at its option, classify a paper or 
electronic claim received between its closing time and midnight, or on a Saturday, 
Sunday, holiday, or during an emergency closing period as received on the actual 
calendar date of delivery or receipt.  Unless a contractor closes its place of business early 
in an isolated situation due to an emergency, the contractors cutoff time for establishing 
the receipt date may never be earlier than 4:00 p.m. 
A contractor may not make system changes, extend its hours of operation, or incur 
significant additional costs solely to begin to accommodate late receipt of claims if not 
already equipped to do so. 
The cutoff time for paper claims may not exceed the cutoff time for electronic claims. 
However, the cutoff time for electronic claims may exceed the cutoff time for paper 
claims and, indeed, carriers and FIs are encouraged to use this tool where their system 
and overnight batch run schedules permit.  Likewise, at a carrier or FIs option, it may 
consider electronic claims received on a weekend or holiday as received on the actual 
calendar date of receipt, even though paper claims received in a P.O. box on a weekend 
or holiday would not be considered received until the next business day. 
Where a carrier or FI prepares bills for payment for purchased DME because the $50 
tolerance is exceeded (see 40.4.1) it establishes any date consistent with its system 
processing requirements as the receipt date for the second and succeeding bills.  It uses 
the date as close to its payment as possible. 
80.2.1.1 - Payment Ceiling Standards 
(Rev. 454, Issued: 01-28-05, Effective: 04-01-05, Implementation: 04-04-05) 
Payment ceilings were implemented for clean claims received by the carrier or FI on or 
after April 1, 1987.  Clean claims must be paid or denied within the applicable number 
of days from their receipt date as follows: 
Time Period for Claims Received  Applicable Number of Calendar Days 
01-01-93 through 09-30-93  24 for EMC and 
27 for paper claims 
10-01-93 and later  30 
All claims (i.e., paid claims, partial and complete denials, no payment bills) including PIP 
and EMC claims are subject to the above requirements. 
Interest must be paid on claims that are not paid within the ceiling period. 
The count starts on the day after the receipt date and it ends on the date payment is made.  
For example, for clean claims received October 1, 1993, and later, if this span is 30 days 
or less, the requirement is met. 
The RAPs submitted by home health agencies under the HH PPS (records with type of 
bill 322 or 332 and dates of service on or after October 1, 2000) are not Medicare claims  as defined under the Social Security Act.  Since they are not considered claims, they 
(records with type of bill 322 or 332 and dates of service on or after October 1, 2000) are 
not subjected to payment ceiling standards and interest payment. 
See Chapter 24,  30.2 for definitions of electronic and paper claims for use in 
application of the Medicare payment floor.  See Chapter 1,  80.2.1.2 for differentiation 
between electronic claims that comply with the requirements of the standard 
implementation guides adopted for national use under HIPAA and those submitted 
electronically using pre-HIPAA formats supported by Medicare.  This HIPAA format 
differentiation applies to the payment floor, but not to the ceiling. 
 
80.2.1.2 - Payment Floor Standards 
(Rev. 1472, Issued: 03-06-08, Effective: 05-23-07, Implementation: 04-07-08) 
 
The payment floor establishes a waiting period during which time the contractor may 
not pay, issue, mail, or otherwise finalize the initial determination on a clean claim. The 
payment floor date is the earliest day after receipt of the clean claim that payment may 
be made. 
 
The payment floor date is determined by counting the number of days since the day the 
claim was received, i.e., the count begins the day after the day of receipt. 
 
There are different waiting periods, and thus different payment floor dates, for electronic 
claims and paper claims. The waiting periods are 13 days for electronic claims and 26 
days for paper claims. For the purpose of implementing the payment floor, the following 
definitions apply: 
 
An electronic claim is a claim submitted via central processing unit (CPU) to CPU 
transmission, tape, direct data entry, direct wire, or personal computer upload or 
download. A claim that is submitted via digital FAX/OCR, diskette, or touch-tone 
telephone is not considered as an electronic claim. 
 
A paper claim is submitted and received on paper, including fax print-outs. This also 
includes a claim that the contractor receives on paper and then reads electronically with 
OCR technology. 
 
Also, for the purpose of implementing the payment floor, effective 7/1/04 and for the 
duration of the HIPAA contingency plan implementation, an electronic claim that does 
not conform to the requirements of the standard implementation guides adopted for 
national use under HIPAA, including electronic claims submitted electronically using 
pre-HIPAA formats supported by Medicare, is considered to be a paper claim. 
 
Based on the waiting periods, the payment floor dates are as follows: 
 
Claim Receipt Date   Payment Floor Date  
10-01-93 through 6/30/04   th  th 
14 day for EMC 27 day for paper claims   07-01-04 and later   14th day for HIPAA-compliant EMC  
th 
27 day for paper and non-HIPAA EMC  
01/01/2006 and later  th 
29 day for paper 
 
Except as noted below, the payment floor applies to all claims. The payment floor does 
not apply to: no-payment claims, RAPs submitted by Home Health Agencies, and 
claims for PIP payments. 
 
NOTE:  The basis for treating a non-HIPAA-compliant electronic claim as a paper claim 
for the purpose of determining the applicable payment floor is as follows: Effective 
October 16, 2003, HIPAA requires that claims submitted to Medicare electronically 
comply with standard claim implementation guides adopted for national use under 
HIPAA. A claim submitted via direct data entry (DDE), if DDE is supported by the 
contractor is considered to be a HIPAA-compliant electronic claim. A contingency plan 
has been approved to enable claims to continue to be submitted temporarily after October 
15, 2003 in a pre-HIPAA electronic format supported by Medicare. Effective July 1, 
2004, the Medicare contingency plan is being modified to encourage migration to HIPAA 
formats. Effective July 1, 2004, for purposes of the payment floor, only those claims 
th 
submitted in a HIPAA-compliant format will be paid as early as the 14 day after the date 
of receipt. Claims submitted on paper after July 1, 2004 will not be eligible for payment 
th 
earlier than the 27 day after the date of receipt. All claims subject to the 27-day payment 
floor, including non-HIPAA electronically submitted claims, are to be reported in the 
paper claims category for workload reporting purposes. Effective January 1, 2006, paper 
claims will not be eligible for payment earlier than the 29th day after the date of receipt. 
 
This differentiation in treatment of HIPAA-compliant and non-HIPAA-compliant 
electronic claims does not apply to Contractor Performance Evaluation (CPE) reviews of 
carriers and FIs conducted by CMS. For CPE purposes, carriers and FIs must continue to 
process the CPE specified percentage of clean paper and clean electronic (HIPAA or non-
HIPAA) claims within the statutorily specified timeframes. Effective for claims received 
January 1, 2006 and later, clean paper claims will no longer be included in CPE scoring 
for claims processing timeliness. 
 
80.2.2 - Interest Payment on Clean Non-PIP Claims Not Paid Timely 
(Rev. 1771, Issued: 07-17-09, Effective: 08-17-09, Implementation: 08-17-09) 
 
Interest must be paid on clean claims if payment is not made within the applicable 
number of calendar days (i.e., 30 days) after the date of receipt as described above.  The 
applicable number of days is also known as the payment ceiling.  For example, a clean 
claim received on March 1, 2009, must have been paid before the end of business on 
March 31, 2009.  Interest is not paid on: 
    Claims requiring external investigation or development by the providers FI or 
carrier; 
  Claims on which no payment is due; 
  Full denials; 
  Claims for which the provider is receiving PIP; or 
  HH PPS RAPs 
 
Interest is paid at the rate used for 3902(a) of title 3l, U.S. Code (relating to interest 
penalties for failure to make prompt payments).  The interest rate is determined by the 
applicable rate on the day of payment. 
 
This rate is determined by the Treasury Department on a 6-month basis, effective every 
January and July 1.  Providers may access the Treasury Department Web page 
http://fms.treas.gov/prompt/rates.html for the correct rate. Medicare contractors shall 
include notification to providers of any change to the Treasury Department interest rate in 
their routine educational materials and/or website for providers. 
 
Interest is calculated using the following formula: 
 
Payment amount x rate x days divided by 365 (366 in a leap year) = interest payment 
 
The interest period begins on the day after payment is due and ends on the day of 
payment. 
 
NOTE:  The example below is for one 6-month period in which the interest rate was 
5.625 percent. 
 
Milestones  Clean Paper Claim   Clean Electronic Claim  
(in calendar days)  (in calendar days) 
Date Received  March 1, 2009  March 1, 2009 
Payment Due  March 31, 2009  March 31, 2009 
Payment Made  April 3, 2009  April 3, 2009 
Interest Begins  April 1, 2009  April 1, 2009 
Days for Which Interest is  3  3 
Due 
Amount of Payment  $100  $100 
Interest Rate  5.625%  5.625% 
 
See section 80.2.1.1 for the definition of EMC and paper claims. 
 
The following formula is used: 
  For the clean paper claim - $100 X .05625 X 3 divided by 365 = $.0462 or $.05 
when rounded to the nearest penny. 
 
For the clean electronic claim - $100 X .05625 X 3 divided by 365 = $.0462 or 
$.05 when rounded to the nearest penny. 
 
When interest payments are applicable, the Medicare contractor reports the amount of 
interest on each claim on the remittance record to the provider. 
 
PIP/Non-PIP: 
 
Under the periodic interim payment ("PIP) mechanism, a provider receives flat biweekly 
payments to approximate the average costs of covered inpatient services during a 2-week 
period.  Non-PIP claims are claims made by a provider not under the periodic interim 
payment mechanism. PIP on inpatient bills does not preclude interest payments on 
outpatient bills. Interest is paid on a per bill basis at the time of payment. 
 
80.2.2.1 - Determining and Paying Interest 
(Rev. 273, Issued 08-13-04, Effective: 07-01-04, Implementation: 07-06-04) 
 
The contractor must pay interest on clean, non-PIP (FIs) claims for which it does not 
make payment within the payment ceiling specified in  80.2.1.1, provided payment is 
due on such claim. The interest rate and formula for calculation are shown above. The 
interest rate is determined by the rate applicable on the carrier or FIs payment date. 
 
The contractor applies interest to the net payment amount after all applicable deductions 
are determined (e.g., deductible, copayment, and/or MSP).  Interest is rounded to the 
nearest penny. 
 
A.  Reporting Interest Payment on Remittance Record 
 
See 100-22 for remittance advice completion instructions. 
 
B.  Payment Made to Beneficiary 
 
If interest is paid on a claim for which payment is made directly to the beneficiary, the 
contractor adds the following messages on the beneficiary notice: 
 
Your payment includes interest since we were unable to process your claim timely. 
 
C.  Claims Paid Upon Appeal 
 
Interest payments are not payable on clean claims initially processed to denial and on 
which payment is made subsequent to the initial decision as a result of an appeal request.  
This applies to appeals where more than the applicable number of days elapsed before an  initial denial, but the claim was later paid upon appeal.  Where an appeal of a previously 
paid claim results in increased payment FIs follow the following section. 
 
D.  Interest on Postpayment Denials and Other Adjustments 
 
If a paid claim is later denied in full, the carrier or FI recovers any interest paid as well as 
the incorrect payment. It does not pay interest on the related no payment bill.  If the claim 
is partially denied, interest is payable on the reduced amount.  The FI recalculates the 
interest due based upon the new reimbursement amount.  It uses the rate of interest and 
elapsed days applicable to the original claim.  This can be accomplished by applying a 
ratio of the new reimbursement amount (from its debit action) to the reimbursement 
amount on the initial claim (from its credit action).  It multiplies the result by the interest 
amount paid on the initial claim. The result is the interest amount payable on its debit 
action.   The following formula is used to calculate interest: 
 
Interest =  Debit action reimbursement amount 
  Credit action reimbursement amount x original interest paid 
 
Use of the formula is preferable to expanding an FI system to handle multiple scheduled 
payment dates and calculation procedures. 
 
80.2.2.2 - Preparation of IRS Form 1099-INT 
(Rev. 1, 10-01-03) 
 
The IRS requires that interest paid in the course of a trade or business be reported if it 
totals at least $600 for any person. Interest payments a carrier or FI makes fall within the 
trade or business definition.  Therefore, FIs and carriers must prepare and file with the 
IRS, Form 1099-INT when interest payments for a calendar year to a beneficiary or 
provider total at least $600.  The carrier or FI uses the beneficiarys individual Social 
Security Number (SSN) to report interest paid to the beneficiary.  Individual SSNs are 
identified by the suffix A or M, J, T, or TA.  Other suffixes mean benefits are based upon 
a spouses, parents or childs (F1 thru 8) SSN.  If the spouses, parents or childs SSN is 
involved, the FI determines the individuals SSN to report interest.  If the individuals 
SSN is not present, the carrier or FI calls its Social Security Office contact for the 
information. 
 
80.3 - Other Claims (other than clean) 
(Rev. 1, 10-01-03) 
A3-3600.1 Item 4, HO-401.E, B2-5240.11.B 
 
Claims that do not meet the definition of clean claims are other claims.  Other 
claims require investigation or development external to the carrier or FIs Medicare 
operation on a prepayment basis.  Other claims are those that are not approved by CWF 
for payment that the FI identifies as requiring outside development.  Examples are claims 
on which the providers FI/carrier: 
    Requests additional information from the provider or another external source.  
This includes routine data omitted from the bill, medical information, or 
information to resolve discrepancies; 
 
  Requests information or assistance from another contractor.  This includes 
requests for charge data from the carrier, or any other request for information 
from the carrier; 
 
  Develops Medicare Secondary Payer (MSP) information; 
 
  Requests information necessary for a coverage determination; 
 
  Performs sequential processing when an earlier claim is in development; and 
 
  Performs outside development as a result of a CWF edit. 
 
80.3.1 - Incomplete or Invalid Claims Processing Terminology 
(Rev. 1588; Issued:  09-05-08; Effective/Implementation Date:  08-18-08) 
 
The following definitions apply to 80.3.2.  For carriers the requirements apply to Part B 
assigned and unassigned claims (Form CMS-1500) or electronic data interchange 
equivalent. 
 
Unprocessable Claim - Any claim with incomplete or missing, required information, or 
any claim that contains complete and necessary information; however, the information 
provided is invalid.  Such information may either be required for all claims or required 
conditionally. 
 
Incomplete Information - Missing, required or conditional information on a claim (e.g., 
no Unique Physician Identification Number (UPIN) / Provider Identification Number 
(PIN) or National Provider Identifier (NPI) when effective). 
 
Invalid Information - Complete required or conditional information on a claim that is 
illogical, or incorrect (e.g., incorrect UPIN/PIN or NPI when effective), or no longer in 
effect (e.g., an expired number). 
 
Required - Any data element that is needed in order to process a claim (e.g., Provider 
Name, Date of Service). 
 
Not Required - Any data element that is optional or is not needed by Medicare in order to 
process a claim (e.g., Patients Marital Status). 
 
Conditional - Any data element that must be completed if other conditions exist (e.g., if 
there is insurance primary to Medicare, then the primary insurers group name and 
number must be entered on a claim or if the insured is different from the patient, then the 
insureds name must be entered on a claim).   
Return as Unprocessable or Return to Provider (RTP)- Returning a claim as 
unprocessable to the provider (RTP) does not mean that the carrier or FI should 
physically return every claim it received with incomplete or invalid information.  The 
term return to provider is used to refer to the many processes utilized today for 
notifying the provider or supplier of service that their claim cannot be processed, and that 
it must be corrected or resubmitted.  Some (not all) of the various techniques for 
returning claims as unprocessable include: 
 
  Incomplete or invalid information is detected at the front-end of the carrier or FI 
claims processing system.  The claim is returned to the provider (RTPd) either 
electronically or in a hardcopy/checklist type form explaining the error(s) and 
how to correct the errors prior to resubmission.  Claim data are not retained in the 
system for these RTP'd claims.  No RA is issued. 
 
  Incomplete or invalid information is detected at the front-end of the claims 
processing system and is suspended and developed.  If requested corrections 
and/or medical documentation are submitted within a 45-day period, the claim is 
processed. Otherwise, the suspended portion is returned and the supplier or 
provider of service is notified by means of the RA. 
 
  Incomplete or invalid information is detected within the claims processing 
system and is rejected through the remittance process.  Suppliers or providers of 
service are notified of any error(s) through the remittance notice and how to 
correct prior to resubmission.  A record of the claim is retained in the system 
(NOTE:  This applies to carriers only.  FIs do not use the remittance advice 
process for return to provider (RTP)). 
 
A claim returned as unprocessable for incomplete or invalid information does not meet 
the criteria to be considered as a claim, is not denied, and, as such, is not afforded appeal 
rights. 
 
80.3.2 - Handling Incomplete or Invalid Claims 
(Rev.: 4388; Issued: 09-06-19; Effective: 10-07-19; Implementation: 10-07-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
Claims processing specifications describe whether a data element is required, not 
required, or conditional (a data element which is required when certain conditions exist).  
The status of these data elements will affect whether or not an incomplete or invalid 
claim (hardcopy or electronic) will be "returned as unprocessable" by the A/B MAC (B)  or returned to provider (RTP) by the A/B MAC (A).  The contractor shall not deny 
claims and afford appeal rights for incomplete or invalid information as specified in this 
instruction.  (See 80.3.1 for Definitions.) 
 
If a data element is required and it is not accurately entered in the appropriate field, the 
contractor returns the claim to the provider of service. 
 
  If a data element is required, or is conditional (a data element that is required 
when certain conditions exist) and the conditions of use apply) and is missing or 
not accurately entered in its appropriate field, the contractor shall return as 
unprocessable or RTP the claim to either the supplier or provider of service. 
 
NOTE:  Effective for claims with dates of service (DOS) on or after the implementation 
date of the ordering and referring phase 2 edits, Part B clinical lab and imaging technical 
or global component claims, Durable Medical Equipment, Prosthetics, claims and Home 
Health Agency (HHA) claims shall be denied, in accordance with CMS-6010-F final rule 
published on April 24, 2012, if the ordering or referring providers information is invalid 
or if the provider is not of a specialty that is eligible to order and refer. 
 
  If a claim must be returned as unprocessable or RTP for incomplete or invalid 
information, the contractor shall, at minimum, notify the provider of service of 
the following information: 
 
o  Beneficiarys Name; 
 
o  Medicare beneficiary identifier; 
 
o  Dates of Service (MMDDCCYY) (Eight-digit date format effective as of 
October 1, 1998); 
 
o  Patient Account or Control Number (only if submitted); 
 
o  Medical Record Number (FIs only, if submitted); and 
 
o  Explanation of Errors (e.g., Remittance Advice Reason and Remark 
Codes) 
 
NOTE:  Some of the information listed above may in fact be the information missing 
from the claim.  If this occurs, the contractor includes what is available. 
 
Depending upon the means of return of a claim, the supplier or provider of service has 
various options for correcting claims returned as unprocessable or RTP for incomplete or 
invalid information.  They may submit corrections either in writing, on-line, or via 
telephone when the claim was suspended for development, or submit as a corrected 
claim or as an entirely new claim if data from the original claim was not retained in the 
system, as with a front-end return, or if a remittance advice was used to return the claim.  The chosen mode of submission, however, must be currently supported and appropriate 
with the action taken on the claim. 
 
NOTE:  The supplier or provider of service must not be denied any services (e.g., modes 
of submission or customer service), other than a review, to which they would ordinarily 
have access. 
 
  If a claim or a portion of a claim is returned as unprocessable or RTP for 
incomplete or invalid information, the contractor does not generate an MSN to 
the beneficiary. 
 
  The notice to the provider or supplier will not contain the usual reconsideration 
notice, but will show each applicable error code or equivalent message. 
 
  If the contractor uses an electronic or paper remittance advice notice to return an 
unprocessable claim, or a portion of unprocessable claim: 
 
1.   The remittance advice must demonstrate all applicable error codes.  At a minimum 
there must be a CARC/RARC combination that is compliant with CAQH CORE 
Business Scenario Two. 
 
2.   The returned claim or portion must be stored and annotated, as such, in history, if 
applicable.  If contractors choose to suspend and develop claims, a mechanism must be in 
place where the contractor can re-activate the claim or portion for final adjudication. 
 
A.  Special Considerations 
 
  If a suspense system is used for incomplete or invalid claims, the contractor will 
not deny the claim with appeal rights if corrections are not received within the 
suspense period, or if corrections are inaccurate.  The contractor must return the 
unprocessable claim, without offering appeal rights, to the provider of service or 
supplier. 
 
  For assigned and unassigned claims submitted by beneficiaries (Form CMS-
1490S), that are incomplete or contain invalid information, contractors shall manually 
return the claims to the beneficiaries.  If the beneficiary furnishes all other information 
but fails to supply the provider or suppliers NPI, and the contractor can determine the 
NPI using the NPI registry, the contractor shall continue to process and adjudicate the 
claim.  If the contractor determines that the provider or supplier was not a Medicare 
enrolled provider with a valid NPI, the contractor shall follow previously established 
procedures in order to process and adjudicate the claim. 
 
Contractors shall send a letter to the beneficiary with information explaining which 
information is missing, incorrect or invalid; information explaining the mandatory claims 
filing requirements; instructions for resubmitting the claim if the provider or supplier 
refuses to file the claim, or enroll in Medicare, and shall include language encouraging  the beneficiary to seek non-emergency care from a provider or supplier that is enrolled in 
the Medicare program.  Contractors shall also notify the provider or supplier about 
his/her obligation to submit claims on behalf of Medicare beneficiaries and that providers 
and suppliers are required to enroll in the Medicare program to receive reimbursement. 
 
Contractors shall consider a complete claim to have all items on the Form CMS-1490S 
completed along with an itemized bill with the following information: date of service, 
place of service, description of each surgical or medical service or supply furnished; 
charge for each service; treating doctors or suppliers name and address; diagnosis code; 
procedure code and the provider or suppliers NPI. The ordering & referring providers 
legal name and address and the National Provider Identifier (NPI) if known must be 
included on the itemized bill if from a Clinical laboratory for ordered tests; an 
independent diagnostic imaging center for ordered imaging procedures or a supplier of 
Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) for ordered 
DMEPOS.  Required information on a claim must be valid for the claim to be considered 
as complete. 
 
If a beneficiary submits a claim on the Form CMS-1500, return the Form CMS-1500 
claim to the beneficiary, and include a copy of the Form CMS-1490S, along with a letter 
instructing the beneficiary to complete and return the Form CMS-1490S for processing 
within the time period prescribed in 70.5 above.  Include in the letter a description of 
missing, invalid or incomplete items required for the Form CMS-1490S that were not 
included with the submitted Form CMS-1500 or were invalid. 
 
NOTE:  Telephone inquiries are encouraged. 
 
  Contractors shall not return an unprocessable claim if the appropriate information 
for both required and conditional data element requirements other than an 
NPI when the NPI is effective is missing or inaccurate but can be supplied 
through internal files.  Contractors shall not search their internal files to correct 
missing or inaccurate required and conditional data elements required under 
Sections 80.3.2.1.1 through 80.3.2.1.3 and required for HIPAA compliance for 
claims governed by HIPAA. 
 
  For either a paper or electronic claim, if all required and conditional claim 
level information that applies is complete and entered accurately, but there are 
both clean and dirty service line items, then split the claim and process the 
clean service line item(s) to payment and return as unprocessable the dirty 
service line item(s) to the provider of service or supplier.  NOTE:  This 
requirement applies to carriers only. 
 
No workload count will be granted for the dirty service line portion of the claim 
returned as unprocessable.  The clean service line portion of the claim may be counted 
as workload only if it is processed through the remittance process.  Contractors must 
abide by the specifications written in the above instruction; return the dirty service line 
portion without offering appeal rights.   
  Workload will be counted for claims returned as unprocessable through the 
remittance process.  Under no circumstances should claims returned as 
unprocessable by means other than the remittance process (e.g., claims returned 
in the front-end) be reported in the workload reports submitted to CMS.  The 
contractor is also prohibited from moving or changing the action on an edit that 
will result in an unprocessable claim being returned through the remittance 
process.  If the current action on an edit is to suspend and develop, reject in the 
front or back-end, or return in the mailroom, the contractor must continue to do 
so.  Workload is only being granted to accommodate those who have edits which 
currently result in a denial.  As a result, workload reports should not deviate 
significantly from those reports prior to this instruction. 
 
NOTE:  Rejected claims are not counted as an appeal on resubmissions. 
 
B.  Special Reporting of Unprocessable Claims Rejected through the Remittance 
Process (Carriers Only): 
 
A/B MACs (B) must report claims returned as unprocessable on a remittance advice on 
line 15 (Total Claims Processed) and on line 14 (subcategory Non-CWF Claims Denied) 
of page one of your Form CMS-1565.  Although these claims are technically not denials, 
line 14 is the only suitable place to report them given the other alternatives.  In addition, 
these claims should be reported as processed not paid other claims on the appropriate 
pages (pages 2-9) of CROWD Form T for the reporting month in which the claims were 
returned as unprocessable through the remittance process.  Also, A/B MACs (B) report 
such claims on Form Y of the Contractor Reporting of Operational and Workload Data 
(CROWD) system.  They report the number of such claims returned during the month as 
unprocessable through the remittance process under Column 1 of Form Y on a line using 
code 0003 as the identifier. 
 
If a supplier, physician, or other practitioner chooses to provide missing or invalid 
information for a suspended claim by means of a telephone call or in writing (instead of 
submitting a new or corrected claim), A/B MACs (B) do not report this activity as a 
claim processed on Form CMS-1565/1566.  Instead, they subtract one claim count from 
line 3 of Form Y for the month in which this activity occurred. 
 
EXAMPLE:  Assume in the month of October 2001 the carrier returned to providers 100 
claims as unprocessable on remittance advices.  The carrier should have included these 
100 claims in lines 14 and 15 of page 1 of your October 2001 Form CMS-1565.  During 
this same month, assume the carrier received new or corrected claims for 80 of the 100 
claims returned during the month.  These 80 claims should have been counted as claims 
received in line 4 of your October 2001 Form CMS-1565 page one (and subsequently as 
processed claims for the reporting month when final determination was made). 
 
Also, during October 2001, in lieu of a corrected claim from providers, assume the carrier 
received missing information by means of a telephone call or in writing for 5 out of the  100 claims returned during October 2001.  This activity should not have been reported as 
new claims received (or subsequently as claims processed when adjustments are made) 
on Form CMS-1565.  On line 3 of Form Y for October 2001, the A/B MAC (B) should 
have reported the number 95 (From claims returned as unprocessable through the 
remittance process minus 5 claims for which the carrier received missing or invalid 
information by means of a telephone call or in writing. 
 
For the remaining 15 claims returned during October 2001 with no response from 
providers in that same month, the carrier should have reported on the Form CMS-1565 or 
Form Y, as appropriate, any subsequent activity in the reporting month that it occurred.  
For any of these returned claims submitted as new or corrected claims, the A/B MAC (B) 
should have reported their number as receipts on line 4 of page one of Form CMS-1565.  
For any of these returned claims where the supplier or provider of service chose to supply 
missing or invalid information by means of a telephone call or in writing, the A/B MAC 
(B) should not have counted them again on Form CMS-1565, but subtracted them from 
the count of returned claims reported on line 3 of Form Y for the month this activity 
occurred. 
 
C.  Exceptions (A/B MACs (B) Only) 
 
The following lists some exceptions when a claim may not be returned as 
unprocessable for incomplete or invalid information. 
 
A/B MACs (B) shall not return a claim as unprocessable: 
 
If a patient, individual, physician, supplier, or authorized persons signature is missing, 
but the signature is on file, or if the applicable signature requirements have been met, do 
not return a claim as unprocessable where an authorization is attached to the claim or if 
the signature field has any of the following statements (unless an appropriate validity edit 
fails): 
 
Acceptable Statements for Form CMS-1500: 
 
  For items 12, 13, and 31, Signature on File statement and/or a computer 
generated signature; 
 
  For items 12 and 13, Beneficiarys Name By Representatives Signature; 
 
For item 12, X with a witnessed name and address. (Chapter 26 for instructions.) 
 
D.  Misdirected Claims 
 
See 10.1.9 for instructions on handling claims that are submitted to the wrong 
contractor, or to the wrong payment jurisdiction. 
    80.3.2.1.1 - A/B MAC (B) Data Element Requirements 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A - Required Data Element Requirements 
 
1 - Paper Claims 
 
The following instruction describes certain data element formatting requirements to be 
followed when reporting the calendar year date for the identified items on the Form 
CMS-1500: 
 
  If birth dates are furnished in the items stipulated below, then these items must 
contain 8-digit birth dates (MMDDCCYY).  This includes 2-digit months (MM) 
and days (DD), and 4-digit years (CCYY). 
 
Form CMS-1500 Items Affected by These Reporting Requirements: 
 
Item 3 - Patients Birth Date 
 
Item 9b - Other Insureds Date of Birth 
 
Item 11a - Insureds Date of Birth 
 
Note that 8-digit birth dates, when provided, must be reported with a space between 
month, day, and year (i.e., MM_DD_CCYY).  On the Form CMS-1500, the space 
between month, day, and year is delineated by a dotted, vertical line. 
 
If a birth date is provided in items 3, 9b, or 11a, and is not in 8-digit format, carriers must 
return the claim as unprocessable.   
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: N329 
MSN: N/A 
  If carriers do not currently edit for birth date items because they obtain the information 
from other sources, they are not required to return these claims if a birth date is reported 
in items 3, 9b, or 11a. and the birth date is not in 8-digit format.  However, if carriers use 
date of birth information on the incoming claim for processing, they must edit and return 
claims that contain birth date(s) in any of these items that are not in 8-digit format. 
 
For certain other Form CMS-1500 conditional or required date items (items 11b, 14, 16, 
18, 19, or 24A.), when dates are provided, either a 6-digit date or 8-digit date may be 
provided. 
 
If 8-digit dates are furnished for any of items 11a., 14, 16, 18, 19, or 24A. (excluding 
items 12 and 31), carriers must note the following: 
 
  All completed date items, except item 24A., must be reported with a space 
between month, day, and year (i.e., MM_DD_CCYY).  On the Form CMS-1500, 
the space between month, day, and year is delineated by a dotted, vertical line; 
 
  Item 24A. must be reported as one continuous number (i.e., MMDDCCYY), 
without any spaces between month, day, and year.  By entering a continuous 
number, the date(s) in item 24A. will penetrate the dotted, vertical lines used to 
separate month, day, and year.  Carrier claims processing systems will be able to 
process the claim if the date penetrates these vertical lines.  However, all 8-digit 
dates reported must stay within the confines of item 24A; 
 
  Do not compress or change the font of the year item in item 24A. to keep the 
date within the confines of item 24A.  If a continuous number is furnished in 
item 24A. with no spaces between month, day, and year, you will not need to 
compress the year item to remain within the confines of item 24A.; 
 
  The from date in item 24A. must not run into the to date item, and the to 
date must not run into item 24B.; 
 
  Dates reported in item 24A. must not be reported with a slash between month, 
day, and year; and 
 
  If the provider of service or supplier decides to enter 8-digit dates for any of items 
11b, 14, 16, 18, 19, or 24A. (excluding items 12 and 31), an 8-digit date must be 
furnished for all completed items.  For instance, you cannot enter 8-digit dates 
for items 11b, 14, 16, 18, 19 (excluding items 12 or 31), and a 6-digit date for 
item 24A.  The same applies to those who wish to submit 6-digit dates for any of 
these items. 
 
A/B MACs (B) must return claims as unprocessable if they do not adhere to these 
requirements. 
 
2 - Electronic Claims   
A/B MACs (B) must return all electronic claims that do not include an 8-digit birth date 
(CCYYMMDD) when a date is reported.   
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: N329 
MSN: N/A 
 
If A/B MACs (B) do not currently edit for birth date items because they obtain the 
information from other sources, they are not required to return these claims if a birth date 
is reported in items 3, 9b., or 11a. and the birth date is not in 8-digit format.  However, if 
A/B MACs (B) do use date of birth information on the incoming claim for processing, 
they must edit and return claims that contain birth date(s) in any of these items that are 
not in 8-digit format. 
 
B - Required Data Element Requirements 
 
The following Medicare-specific, return as unprocessable requirements in this section 
and the following two sections are in addition to requirements established under the 
Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Regulations 
implementing HIPAA require the use of National Provider Identifiers (NPIs) by covered 
health care providers and health plans. Although not required by HIPAA, CMS is 
extending the requirement to include the NPI on electronic claims to paper claims 
submitted on the Form CMS-1500.  A/B MACs (B) are referred to the Health Care 
Claims Professional 837 Implementation guide for requirements for professional claims 
subject to HIPAA, including the NPI reporting requirements. 
 
A/B MACs (B) must return a claim as unprocessable to a provider of service or supplier 
and use the indicated remittance advice codes.  
 
Carriers shall return a claim as unprocessable: 
 
1.  If a claim lacks a valid Medicare beneficiary identifier in item 1a. or contains an 
invalid Medicare beneficiary identifier in item 1a.  
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16  RARC: N382 
MSN: N/A 
 
80.3.2.1.2 - Conditional Data Element Requirements for A/B MACs and 
DME MACs 
(Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20) 
 
A - Universal Requirements 
 
The following instruction describes conditional data element requirements, which are 
applicable to certain assigned A/B MAC (B) claims.  This instruction is minimal and 
does not include all conditional data element requirements, which are universal for 
processing claims.  
 
Items from the Form CMS-1500 claim form have been provided.  These items are 
referred to as fields in the instruction. 
 
A/B MACs (B) processing claims on the Form CMS-1500 shall return a claim as 
unprocessable to the supplier/provider of service in the following circumstances: 
 
1.   If a service was ordered or referred by a physician, physician assistant, nurse 
practitioner, or clinical nurse specialist (other than those services specified in Claim 
Specific Requirements) and his/her name is not present in item 17 or if the NPI is not 
entered in item 17b of the Form CMS-1500.  
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: N285 (for missing name) or N286 (for missing identifier) 
MSN: N/A 
 
 
2.   If a physician extender or other limited licensed practitioner refers a patient for 
consultative services, but the name and/or NPI required of the supervising physician 
is not entered in items 17 or if the NPI is not entered in item 17b of the Form CMS-
1500.  
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16  RARC: N269 (for missing name) or N270 (for missing identifier) 
MSN: N/A 
 
 
NOTE:  For item 80.3.2.1.2 -1 above, effective for claims with dates of service (DOS) on 
or after the implementation date of the Phase 2 ordering and referring denial edits, a Part 
B clinical lab and imaging technical or global component claim or Durable Medical 
Equipment, Prosthetics, and Orthotics Suppliers (DMEPOS) claim is denied when the 
ordering/referring provider not allowed to order/refer. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 183 
RARC: N574, MA13 
MSN: 21.6 
 
The claim is denied when the first four letters of the last name provided on the 
ordering/referring providers claim does not match what is listed in the providers record. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: N264, MA13, N575 
MSN: 21.6 
 
If the claim is submitted that lists an ordering/referring provider and the required 
matching NPI is not reported, then the claim shall be rejected. This is the only instance 
when a rejection is allowed. 
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: N265, MA13 
MSN: N/A 
 
For 3 through 12 below, the contractor shall use the following remittance advice 
messages and associated codes when rejecting/denying claims under these  policies.  These CARC/RARC combinations compliant with CAQH CORE Business 
Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: shown below.  
MSN: N/A 
 
3.   For the technical component and professional component of diagnostic tests subject 
to the anti-markup payment limitation: 
 
a.  If a YES or NO is not indicated in item 20 and no acquisition price is 
entered under the word $CHARGES.  A/B MACs (B) shall assume the 
service is not subject to the anti-markup payment limitation.  This claim shall 
not be returned as unprocessable for this reason only. 
 
b.  If a Yes or No is not indicated in item 20 and an acquisition price is 
entered under the word $CHARGES.  RARC: MA110  
 
c.  If the YES box is checked in item 20 and a required acquisition price is not 
entered under the word $CHARGES.  RARC: MA111 
 
d.  If the NO box is checked in item 20 and an acquisition price is entered 
under the word $CHARGES. RARC: MA110 
 
e.  If the YES box is checked in item 20 and the acquisition price is entered 
under $CHARGES", but the performing physician or other suppliers name, 
address, ZIP Code, and NPI is not entered into item 32a of the Form CMS-
1500 when billing for diagnostic services subject to the anti-markup payment 
limitation.  RARC: N294 
 
Entries f  k are effective for claims received on or after April 1, 2004: 
 
f.  On the Form CMS-1500, if the YES box is checked in Item 20, and more 
than one test is billed on the claim; 
 
g.  On the Form CMS-1500, if both the technical component and professional 
component are billed on the same claim and the dates of service and places of 
service do not match; 
 
h.  On the Form CMS-1500, if the YES box is checked in Item 20, both the 
technical component and professional component are submitted and the date 
of service and place of service codes do not match. 
 
i.  On the ASC X12 837 professional claim format, if there is an indication on 
the claim that a test is subject to the anti-markup payment limitation, more  than one test is billed on the claim, and line level information for each total 
acquisition amount is not submitted for each test. 
 
j.  On the Form CMS-1500 if the YES box is checked in Item 20 and on the 
ASC X12 837 professional claim format if there is an indication on the claim 
that a test is subject to the anti-markup payment limitation, and the service is 
billed using a global code rather than having each component billed as a 
separate line item. 
 
k.  If there is an indication on the claim that the test is subject to anti-markup and 
the NPI of the performing entity (in Item 32a of the CMS-1500 or its ASC 
X12 837 equivalent) belongs to the billing provider OR the performing entity 
is not a valid, Medicare enrolled entity. 
 
4.   If a provider of service or supplier is required to submit a diagnosis in item 21 and 
either the diagnosis code is missing, incorrect or truncated; or a narrative diagnosis 
was not provided on an attachment.  RARC: M76 
 
5.   For claims received on or after April 1, 2013, if a provider of service or supplier is 
required to submit a diagnosis in Item 21 of the Form CMS- 1500 and an ICD-9-CM 
E code (external causes of injury and poisoning) is reported in the first field of Item 
21. And, effective for dates of service on or after the effective date for ICD-10-CM 
codes, if an ICD-10-CM diagnosis code within the code range of V00 through Y99 is 
reported in the first field of Item 21. RARC: MA63 
 
For paper claims, ICD-10-CM codes can be reported only on the revised CMS-1500 
claim form version 02/12, but not before the effective date of ICD-10-CM.  The 
revised form (02/12) has the capacity to accept either ICD-9-CM or ICD-10-CM 
codes depending upon the effective date of the ICD code set.  The old form version 
(08/05) had only the capacity to accept ICD-9-CM codes.  Refer to chapter 26 for 
more information about the old and revised forms). 
 
6.   If a rendering physician, physician assistant, nurse practitioner, clinical nurse 
specialist, supplier/or other practitioner who is a sole practitioner or is a member of a 
group practice does not enter his/her NPI into item 24J of Form CMS-1500 except for 
influenza virus and pneumococcal vaccine claims submitted on roster bills that do not 
require a rendering provider NPI.  RARC: N290 
 
7.   If a primary insurer to Medicare is indicated in item 11, but items 4, 6, and 7 are 
incomplete.  Item 4: RARC: MA92.  Item 6: RARC: MA89.  Item 7: RARC: MA88. 
 
8.   If there is insurance primary to Medicare that is indicated in item 11 by either an 
insured/group policy number or the Federal Employee Compensation Act number, 
but a Payer or Plan identification number (use HPID when effective) is not entered in 
field 11C (RARC: MA92), or the primary payers program or plan name when a 
Payer or Plan ID (use HPID when effective) does not exist (RARC: N245).   
9.   If a HCPCS code modifier must be associated with a HCPCS procedure code or if the 
HCPCS code modifier is invalid or obsolete.  RARC: M20  
 
10.   If a date of service extends more than 1 day and a valid to date is not present in 
item 24A.  RARC: M59 
 
11.   If an unlisted procedure code or a not otherwise classified (NOC) code is 
indicated in item 24D, but an accompanying narrative is not present in item 19 or on 
an attachment.  RARC: M51 
 
12. If the name, address, and ZIP Code of the facility where the service was furnished in 
a hospital, clinic, laboratory, or facility other than the patients home or physicians 
office is not entered in item 32 (Remark code MA114 is used.)  Effective for claims 
received on or after April 1, 2004, the name, address, and ZIP Code of the service 
location for all services other than those furnished in place of service home  12 must 
be entered. RARC: MA114 
 
Effective for claims with dates of service on or after October 1, 2007, the name, 
address, and 9-digit ZIP Code of the service location for services paid under the 
Medicare Physician Fee Schedule and anesthesia services, other than those furnished 
in place of service home  12, and any other places of service A/B MACs treat as 
home, must be entered according to Pub. 100-04, Chapter 1, sections 10.1.1 and 
10.1.1.1.  RARC: MA114 
 
Effective for claims with dates of service on or after October 1, 2007, for claims 
received that require a 9-digit ZIP Code with a 4 digit extension, a 4-digit extension 
that matches one of the ZIP9 file or a 4-digit extension that can be verified according 
to Pub. 100-04, Chapter 1, sections 10.1.1 and 10.1.1.1 must be entered on the claim.  
RARC: MA114 
 
Effective January 1, 2011, for claims processed on or after January 1, 2011, on the 
Form CMS-1500, the name, address, and 5 or 9-digit ZIP code, as appropriate, of the 
location where the service was performed for services paid under the Medicare 
Physician Fee Schedule and anesthesia services, shall be entered according to Pub. 
100-04, Chapter 1, sections 10.1.1 and 10.1.1.1 for services provided in all places of 
service.  RARC: MA114 
 
Effective January 1, 2011, for claims processed on or after January 1, 2011, using the 
5010 version of the ASC X12 837 professional electronic claim format for services 
payable under the MPFS and anesthesia services when rendered in POS home (or any 
POS they consider home) if submitted without the service facility location.  RARC: 
MA114 
 
13. Effective for claims received on or after April 1, 2004, if more than one name, 
address, and ZIP Code is entered on the Form CMS-1500 in item 32.   
14. If any of the modifiers PA, PB, or PC are incorrectly associated with a service which 
is other than a wrong surgery on a patient, surgery on the wrong body part, surgery on 
the wrong patient or a service related to one of these surgical errors.  
 
The contractor shall use the following remittance advice messages and associated codes 
when rejecting/denying claims under this policy.  This CARC/RARC combination is 
compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 4 
RARC: N/A 
MSN: N/A 
 
80.3.2.1.3 - A/B MAC (B) Specific Requirements for Certain 
Specialties/Services 
(Rev. 3510, Issued: 04-29-16, Effective: 10-01-16, Implementation; 10-03-16) 
 
Unless otherwise specified, the contractor shall use the following remittance advice 
messages and associated codes when rejecting/denying claims under the policies in this 
section.  These CARC/RARC combinations compliant with CAQH CORE Business 
Scenario Two. 
 
Group Code: CO 
CARC: 16 
RARC: shown below.  
MSN: N/A 
 
 
A/B MACs (B) must return the following claim as unprocessable to the provider of 
service/supplier: 
 
A.   For chiropractor claims: 
 
1.   If the x-ray date is not entered in item 19 for claims with dates of service prior to 
January 1, 2000.  Entry of an x-ray date is not required for claims with dates of 
service on or after January 1, 2000. 
 
2.   If the initial date actual treatment occurred is not entered in item 14.  RARC: 
MA122 
 
B.   For certified registered nurse anesthetist (CRNA) and anesthesia assistant (AA) 
claims, if the CRNA or AA is employed by a group (such as a hospital, physician, or 
ASC) and the groups name, address, and ZIP Code is not entered in item 33 or if the NPI 
is not entered in item 33a of the Form CMS-1500, if their personal NPI is not entered in 
item 24J of the Form CMS-1500.  RARC: MA112    
C.   For durable medical, orthotic, and prosthetic claims, if the name, address, and ZIP 
Code of the location where the order was accepted were not entered in item 32.  RARC: 
MA114  
 
D.   For physicians who maintain dialysis patients and receive a monthly capitation 
payment: 
 
1.   If the physician is a member of a professional corporation, similar group, or 
clinic, and the NPI is not entered into item 24J of the Form CMS-1500.  RARC: N290  
 
2.   If the name, address, and ZIP Code of the facility other than the patients home or 
physicians office involved with the patients maintenance of care and training is not 
entered in item 32.  RARC: MA114.  Effective for claims received on or after April 1, 
2004, the name, address, and ZIP Code of the service location for all services other 
than those furnished in place of service home  12 must be entered. 
 
E.   For routine foot care claims, if the date the patient was last seen (RARC: N324) and 
the attending physicians NPI is not present in item 19 (RARC: N253).   
 
F.   For immunosuppressive drug claims, if a referring/ordering physician, physicians 
assistant, nurse practitioner, clinical nurse specialist was used and their name is not 
present in items 17 or 17a. (RARC: N264), or if the NPI is not entered in item 17b. of the 
Form CMS-1500 (RARC: N286). 
 
G.   For all laboratory services, if the services of a referring/ordering physician, 
physicians assistant, nurse practitioner, clinical nurse specialist are used and his or her 
name is not present in items 17 or in 17a. (RARC: N264) or if the NPI is not entered in 
item 17b. of the Form CMS-1500 (RARC: N286).   
 
H.   For laboratory services performed by a participating hospital-leased laboratory or 
independent laboratory in a hospital, clinic, laboratory, or facility other the patients 
home or physicians office (including services to a patient in an institution), if the name, 
address, and ZIP Code of the location where services were performed is not entered in 
item 32.  RARC: MA114  Effective for claims received on or after April 1, 2004, the 
name, address, and ZIP Code of the service location for all services other than those 
furnished in place of service home  12 must be entered. 
 
I.   For independent laboratory claims: 
 
1.   Involving EKG tracing and the procurement of specimen(s) from a patient at 
home or in an institution, if the claim does not contain a validation from the 
prescribing physician that any laboratory service(s) performed were conducted at 
home or in an institution by entering the appropriate annotation in item 19 (i.e., 
Homebound).  RARC: MA116 
  2.   If the name, address, and ZIP Code where the test was performed is not entered in 
item 32, if the services were performed in a location other than the patients home or 
physicians office.  RARC: MA114.  Effective for claims received on or after April 1, 
2004, the name, address, and ZIP Code of the service location for all services other 
than those furnished in place of service home  12 must be entered. 
 
3.   When a diagnostic service is billed as an anti-markup service and the service is 
purchased from another billing jurisdiction, the billing physician or supplier must 
submit the name, address, and ZIP Code of the performing physician or supplier in 
Item 32, and the NPI of the performing physician or supplier in Item 32a.  If Items 32 
and 32a are not entered. RARC: MA114  
 
J.   For mammography diagnostic and screening claims, if a qualified screening 
center does not accurately enter their 6-digit, FDA-approved certification number in item 
32 when billing the technical or global component.  RARC: MA128  
 
K.   For parenteral and enteral nutrition claims, if the services of an ordering/referring 
physician, physician assistant, nurse practitioner, clinical nurse specialist are used and 
their name is not present in item 17 (RARC: N264) or if the NPI is not entered in item 
17b. of the Form CMS-1500(RARC: N286).   
 
L.   For portable x-ray services claims, if the ordering physician, physician assistant, 
nurse practitioner, clinical nurse specialists name, and/or NPI is not entered in items 17  
(RARC: N264) or if the NPI is not entered in item 17b. of the Form CMS-1500 (RARC: 
N286).  
 
M.   For radiology and pathology claims for hospital inpatients, if the referring/ordering 
physician, physician assistant, nurse practitioner, or clinical nurse specialists name, if 
appropriate, is not entered in item 17 (RARC: N264) or if the NPI is not entered in item 
17b. of the Form CMS-1500 (RARC: N286).   
 
N.   Effective for claims with dates of service on or after October 1, 2012, all claims for 
physical therapy, occupational therapy, or speech-language pathology services, including 
those furnished incident to a physician or nonphysician practitioner (NPP) services, must 
have the name and NPI of the certifying physician or NPP of the therapy plan of care.  
For the purposes of processing professional claims, the certifying physician/NPP is 
considered a referring provider.  For paper billing, the certifying physician/NPP name 
and NPI is entered in Items 17 and 17b.  Providers and suppliers filing electronic claims 
are required to comply with applicable HIPAA ASC X12 837 claim completion 
requirements for reporting a referring provider.  (See Pub. 100-04, chapter 5, 20 and 
Pub. 100-02, chapter 15, 220 and 230 for therapy service policies.) 
 
NOTE:  For items 80.3.2.1.3 (g), (k), (l), (m),  and (n) above, effective for claims with 
dates of services (DOS) on or after the implementation date of the Phase 2 ordering and 
referring denial edits, the Part B clinical lab and imaging technical or global component  claim, or Durable Medical Equipment, Prosthetics, and Orthotics Suppliers (DMEPOS) 
claim is denied due to the ordering/referring provider not allowed to order/refer.  
 
For item N only: The contractor shall use the following remittance advice messages and 
associated codes when rejecting/denying claims under this policy.  This CARC/RARC 
combination is compliant with CAQH CORE Business Scenario Three. 
 
Group Code: CO 
CARC: 183 
RARC: N574  
MSN: N/A 
 
The claim is denied when the first four letters of the last name provided on the 
ordering/referring providers claim does not match what is listed in the providers record. 
RARC: N264 
 
If the claim is submitted that lists an ordering/referring provider and the required 
matching NPI is not reported, then the claim shall be rejected.  This is the only instance 
when a rejection is allowed.  RARC: N256. 
 
O.   For all laboratory work performed outside a physicians office, if the claim does not 
contain a name, address, and ZIP Code for where the laboratory services were performed 
in item 32 or if the NPI is not entered into item 32a of the Form CMS-1500 if the services 
were performed at a location other than the place of service home  12.  RARC: MA114 
 
P.   For all physician office laboratory claims, if a 10-digit CLIA laboratory identification 
number is not present in item 23.  This requirement applies to claims for services 
performed on or after January 1, 1998.  RARC: MA120 
 
Q.   For investigational devices billed in an FDA-approved clinical trial if an 
Investigational Device Exemption (IDE) number is not present in item 23, for dates of 
service through March 31, 2008.  RARC: MA50.  With the use of new modifier Q0, 
effective for dates of service on and after April 1, 2008, contractors will no longer be able 
to distinguish an IDE claim from other investigational clinical services.  Therefore this 
edit will no longer apply. 
 
R.   For physicians performing care plan oversight services if the 6-digit Medicare 
provider number of the home health agency (HHA) or hospice is not present in item 23.  
 
S.   For Competitive Acquisition Program drug and biological claims, in accordance with 
the instructions found in the Medicare Claims Processing Manual, chapter 17, section 
100.2.1  section 100.9. 
 
T.   For claims for artificial hearts covered by Medicare under an approved clinical trial, 
if procedure code 0051T is entered in Item 24D, and an 8-digit clinical trial number that 
matches an approved clinical trial listed at:   http://www.cms.hhs.gov/MedicareApprovedFacilitie/06_artificialhearts.asp#TopOfPage 
is not entered in Item 19; and the HCPCS modifier Q0 is not entered on the same line as 
the procedure code in Item 24D, and the diagnosis code V70.7 (if ICD-9-CM is 
applicable) or Z00.6 (if ICD-10-CM is applicable) is not entered in Item 21 and linked to 
the same procedure code.  
 
For item T only: The contractor shall use the following remittance advice messages and 
associated codes when rejecting/denying claims under this policy.  This CARC/RARC 
combination is compliant with CAQH CORE Business Scenario Two. 
 
Group Code: CO 
CARC: 4 
RARC: N/A 
MSN: N/A 
 
U.   For clinical trial claims processed after September 28, 2009, with dates of service 
on or after January 1, 2008, claims submitted with either the modifier QV or the modifier 
Q1, if the diagnosis code V70.7 (if ICD-9-CM is applicable) or Z00.6 (if ICD-10-CM is 
applicable) is not submitted with the claim. 
 
V.   For ambulance claims, claims submitted without the ZIP Code of the loaded 
ambulance trips point-of-pickup in Item 23 of the CMS-1500 Form. 
 
80.3.2.2 - Consistency Edits for Institutional Claims 
(Rev. 12107; Issued:06-29-23; Effective: 04-01-23; Implementation: 01-02-24) 
 
In order to be processed correctly and promptly, a bill must be completed accurately. 
Medicare contractors processing institutional claims edit all Medicare required fields as 
shown below. If a bill fails these edits, contractors return it to the provider for correction.  
If bill data is edited online, the edits are included in the software.  Depending upon 
special services billed, contractors may require additional edits. 
 
The following instructions follow the format of Form CMS-1450.  For instructions about 
the location of these data elements on the ASC X12 837 institutional claim transaction 
format see the related implementation guide. 
 
FL 4. Type of Bill 
 
a. Must not be spaces. 
 
b. Must be a valid code for billing.  Valid codes are: 
 
First Digit - Type of Facility: 
 
1 - Hospital 
  NOTE: Hospital-based multi-unit complexes may also have use for the 
following first digits when billing non-hospital services: 
 
2 - Skilled Nursing 
 
3 - Home Health 
 
4 - Religious Non-Medical (Hospital) 
 
7 - Clinic or Renal Dialysis Facility (requires special information in second 
digit below) 
 
8 - Special Facility or Hospital ASC Surgery (requires special information in 
second digit, see below) 
 
Second Digit - Classification (if first digit is 1-5): 
 
1 - Inpatient (Part A) 
 
2 - Hospital-Based or Inpatient (Part B) (includes HHA visits under a Part B 
plan of treatment) 
 
3 - Outpatient (includes HHA visits under a Part A plan of treatment and use 
of HHA DME under a Part A plan of treatment) 
 
4 - Other (Part B) (includes HHA medical and other health services not under 
a plan of treatment, hospital and SNF for diagnostic clinical laboratory 
services for nonpatients) 
 
8 - Swing bed (used to indicate billing for SNF level of care in a hospital with 
an approved swing bed agreement) 
 
Second Digit - Classification (first digit is 7): 
 
1 - Rural Health Clinic (RHC) 
 
2 - Hospital-Based or Independent Renal Dialysis Facility 
 
4 - Other Rehabilitation Facility (ORF) 
 
5 - Comprehensive Outpatient Rehabilitation Facility (CORF) 
 
6 - Community Mental Health Center (CMHC) 
 
7 - Free-Standing Provider-Based Federally Qualified Health Center (FQHC) 
  Second Digit - Classification (first digit is 8): 
 
1 - Hospice (Nonhospital-based) 
 
2 - Hospice (Hospital-based) 
 
5 - Critical Access Hospital (CAH) 
 
Third Digit - Frequency: 
 
A - Admission/Election Notice 
 
B - Hospice/Medicare Coordinated Care Demonstration/Religious Non-
Medical Health Care Institution-Termination/Revocation Notice 
 
C - Hospice Change of Provider 
 
D - Hospice/Medicare Coordinated Care Demonstration/Religious Non-
Medical Health Care Institution-Void/Cancel 
 
E - Hospice Change of Ownership 
 
F - Beneficiary Initiated Adjustment Claim (For A/B MAC (A) use only) 
 
G - CWF Initiated Adjustment Claim (For A/B MAC (A) use only) 
 
H - CMS initiated Adjustment Claim (For A/B MAC (A) use only) 
 
I - A/B MAC (A) Adjustment Claim (Other than QIO or Provider) (For A/B 
MAC (A) use only) 
 
J - Initiated Adjustment Claim-Other (For A/B MAC (A) use only) 
 
K - OIG Initiated Adjustment Claim (For A/B MAC (A) use only) 
 
M - MSP Initiated Adjustment Claim (For A/B MAC (A) use only) 
 
P - QIO Adjustment Claim (For A/B MAC (A) use only) 
 
Q  Claim Submitted for Reconsideration Outside of Timely Limits (For A/B 
MAC (A) use only) 
 
0 - Nonpayment/zero claims 
 
1 - Admit Through Discharge Claim 
  2 - Interim - First Claim 
 
3 - Interim  Continuing Claims (Not valid for PPS bills.  Exception:  SNF 
PPS bills) 
 
4 - Interim  Last Claim (Not valid for PPS bills. Exception:  SNF PPS bills) 
 
5 - Late charge 
 
7 - Correction 
 
8 - Void/Cancel 
 
9 - Final Claim for a Home Health PPS Episode 
 
FL 6. Statement Covers Period (From - Through) 
 
a. Cannot exceed eight positions in either From or Through portion allowing 
for separations (nonnumeric characters) in the third and sixth positions. 
 
b. The From date must be a valid date that is not later than the Through date. 
 
c. The Through date must be a valid date that is not later than the current date. 
 
d. With the exception of Home Health PPS claims, the statement covers period may 
not span 2 accounting years. 
 
FL 09. Patients Address 
 
a. The address of the patient must include: 
 
City 
State (P.O. Code) 
ZIP 
 
b. Valid ZIP Code must be present if the type of bill is 11X, 13X, 18X, or 83X or   
85X. 
 
c. Cannot exceed 62 positions. 
 
FL 10. Birthdate 
 
a. Must be valid if present. 
 
b. Cannot exceed 10 positions allowing for separations (nonnumeric characters) in 
the third and sixth positions.   
FL 11. Sex 
 
a. One alpha position. 
 
b. Valid characters are M or F. 
 
c. Must be present. 
 
FL 12. Admission Date 
 
a. Must be valid if present. 
 
b. Cannot exceed eight positions allowing for separations (nonnumeric characters) 
in the third and sixth positions. 
 
c. Present only if the type of bill is 11X, 12X, 18X, 21X, 22X,  32X, 33X, 41X, 
81X or 82X. 
 
 
FL 14. Priority (Type) of Admission or Visit 
 
a. One numeric position. 
 
b. Required only if the type of bill is 11X, 12X, 18X, 21X, 22X, or 41X. 
 
FL 15. Point of Origin for Admission or Visit. 
 
a. One numeric position 
 
b. Must be present 
 
FL 17. Patient Discharge Status. 
 
a. Two numeric positions 
 
b. Present on all Part A inpatient, SNF, hospice, home health agency, and outpatient 
hospital services.  Types of bill:  11X, 12X, 13X, 14X, 18X, 21X, 22X, 23X, 32X, 
33X, 34X, 41X, 71X, 73X, 74X, 75X, 76X, 81X, 82X, 83X, or 85X. 
 
FL 03b. Medical/Health Record Number 
 
a. If provided by the hospital, must be recorded by the A/B MAC (A) for the QIO. 
 
b. Must be left justified in CWF record for QIO. 
  FLs 18 thru 28. Condition Codes. 
 
a. Each code is two numeric digits. 
 
b. If code 07 is entered, type of bill must not be hospice 81X or 82X. 
 
c. If codes 36, 37, 38, or 39 are entered, the type of bill must be 11X and the 
provider must be a non-PPS hospital or exempt unit. 
 
d. If code 40 is entered, the From and Through dates in FL 6 must be equal, and 
there must be a 0 or 1 in FL 7 (Covered Days). 
 
e. Only one code 70, 71, 72, 73, 74, 75, or 76 can be on an ESRD claim. 
 
FLs 31, 32, 33, and 34. Occurrence Codes and Dates 
 
a. All dates must be valid. 
 
b. Each code must be accompanied by a date. 
 
c. All codes are two alphanumeric positions. 
 
d. If code 20 or 26 is entered, the type of bill must be 11X or 41X.  If code 21 or 22 
is entered, the type of bill must be 18X or 21X. 
 
e. If code 27 is entered, the type of bill must be 81X or 82X. 
 
f. If code 28 is entered, the first digit in FL 4 must be a 7 and the second digit a 
5. 
 
g. If code 42 is entered, the first digit in FL 4 must be 8 and the second digit 1 
or 2 and the third digit 1 or 4. 
 
h. If 01 - 04 is entered, Medicare cannot be the primary payer, i.e., Medicare-related 
entries cannot appear on the A lines of FLs 58-62. 
 
i. If code 20 is entered: 
 
  Must not be earlier than Admission date (FL 17) or later than 
Through date (FL 6). 
 
  Must be less than 13 days after the admission date (FL 17) if From 
date is equal to admission date (less than 14 days if billing dates cover 
the period December 24 through January 2). 
  j. If code 21 is entered: 
 
  Cannot be later than Statement Covers Period Through date; or  
 
  Cannot be more than 3 days prior to the Statement Covers Period 
From date. 
 
k. If code 22 is entered, the date must be within the billing period shown in FL 6. 
 
l. If code 31 is entered, the type of bill must be 11X, 21X, or 41X. 
 
m. If code 32 is entered, the type of bill must be 13X, 14X, 23X, 32X, 33X, 34X, 
71X, 72X, 73X, 74X, 75X, 81X, or 82X. 
 
FL 35 and 36. Occurrence Span Codes and Dates 
 
a. Dates must be valid. 
 
b. Code entry is two alphanumeric positions. 
 
c. Code must be accompanied by dates. 
 
d. If code 70 is entered, the type of bill must be 11X, 18X, 21X, or 41X. 
 
e. If code 71 is entered, the first digit of FL 4 must be 1, 2, or 4 and the 
second digit must be 1. 
 
f. If code 72 is entered, the type of bill must be 11X, 12X, 13X, 14X, 18X, 21X, 
22X, 23X, 32X, 34X, 71X, 72X, 73X, 74X, 75X, 76X, 77X, 81X, 82X, or 85X. 
 
g. If code 74 is entered, the type of bill must be 11X, 13X, 14X, 18X, 21X, 34X, 
41X, 71X, 72X, 74X, 75X, 81X, or 82X. 
 
h. If code 75 is entered, the first digit of FL 4 must be 1 or 4 and the second 
digit must be 1. 
 
i. If code 76 is entered, occurrence code 31 must be present (inpatient only). 
 
j. If code 76 is entered, occurrence code 32 must be present (outpatient only). 
 
k. If code 76, 77, or M1 is present, the bill type must be 11X, 13X, 14X, 18X, 21X, 
34X, 41X, 71X, 72X, 73X, 74X, 75X, 81X, 82X, or 85X. 
  l. Neither the From nor the Through portion can exceed eight positions 
allowing for separations (nonnumeric characters) in the third and sixth positions of 
each field. 
 
m. If code M2 is present, the bill type must be 81X or 82X. 
 
n. Code 79 is for payer use only.  Providers do not report this code. 
 
FLs 39, 40, and 41. Value Codes and Amounts. 
 
a. Each code must be accompanied by an amount. 
 
b. All codes are two alphanumeric digits. 
 
c. Amounts may be up to ten numeric positions. (00000000.00) 
 
d. If code 06 is entered, there must be an entry for code 37. 
 
e. If codes 08 and/or 10 are entered, there must be an entry in FL 10. 
 
f. If codes 09 and/or 11 are entered, there must be an entry in FL 9. 
 
g. If codes 12, 13, 14, 15, 41, 43, or 47 are entered as zeros, occurrence codes 01, 
02, 03, 04, or 24 must be present. 
 
h. Entries for codes 37, 38, and 39 cannot exceed three numeric positions. 
 
i. If the blood usage data is present, code 37 must be numeric and greater than zero. 
 
FL 42. Revenue Codes. 
 
a. Four numeric positions. 
 
b. Must be listed in ascending numeric sequence except for the final entry, which 
must be 0001 for hardcopy claims only. 
 
c. There must be a revenue code adjacent to each entry in FL 47. 
 
d. For bill types 32X and 33X the following revenue codes require a 5-position 
HCPCS code: 
 
0274, 029X, 042X, 043X, 044X, 055X, 056X, 057X, 0601, 0602, 0603, and 0604. 
 
e. For bill type 34X, the following revenue codes require a 5-position HCPCS   
code: 
  0271-0274, 42X, 43X, 44X, and 0601-0604. 
 
f. For bill type 21X, 32X, 33X, or 11X (IRF facilities) the following revenue codes 
require a 5-position HIPPS code: 
 
0022 (SNF only), 0023 (HH only), 0024 (IRFs only). 
 
FL 45. Service Date 
 
a. Six numeric positions, MMDDYY. 
 
b. A single line item date of service (LIDOS) is required on every revenue code 
present on types of bill 12X, 13X, 14X, 22X, 23X, 24X, 32X, 33X, 34X, 71X, 73X, 
74X, 75X, 76X, 81X, 82X, and 83X. 
 
Exception:  LIDOS are not required for CAHs, Indian Health Service hospitals, 
and hospitals located in American Samoa, Guam, and Saipan. 
 
c. When a particular service is rendered more than once during the billing period, 
the revenue code and HCPCS code must be entered separately for each service date. 
 
FL 46. Units of Service 
 
a. Up to seven numeric positions. 
 
b. Must be present for all services with the exception of the HIPPS line item 
service.  (Exception:  Units are required on the HIPPS line for SNF claims) 
 
c. Accommodation units must equal covered days with the exception of the R No-
Pay. 
 
FL 47. Total Charges 
 
a. Up to 10 numeric positions (00000000.00). 
 
b. There must be an entry adjacent to each entry in FL 42. 
 
c. The 0001 amount must be the sum of all the entries for hardcopy only. 
 
FLs 50A, B, and C. Payer Identification 
 
a. "Medicare must be entered on one of these lines depending upon whether it is 
the primary, secondary or tertiary payer. 
 
b. If value codes 12, 13, 14, 15, 16, 41, 42, 43, or 47 are present, data pertaining to 
Medicare cannot be entered in Line A of FLs 50-62.   
FL 56. National Provider Identifier  Billing Provider 
 
a. Effective May 23, 2007, providers are required to submit their NPI. 
 
b. Left justified. 
 
FLs 58A, B, and C. Insureds Name 
 
a. Must be present.  Cannot be all spaces. 
 
FLs 60A, B, and C. Certificate/Social Security Number/HI Claim/Identification Number 
 
a. Must be present. 
 
b. Must contain nine numeric characters and at least one alpha character as a suffix.  
The first alpha suffix is entered in position 10, the second in position 11, etc. The 
first three numbers must fall within the range of 001 through 680 or 700 through 
728. 
 
c. The alpha suffix must be A through F, H, J, K, M, T, or W.  Alpha suffixes A and 
T must not have a numeric subscript.  Alpha suffixes B, C, D, E, F, M, and W may 
or may not have a numeric subscript. 
 
d. If the alpha suffix is H, it must be followed by A, B or C in position eleven.  The 
numeric subscript (position twelve) must conform with the above for the A, B, or C 
suffix to be used. 
 
e. RRB claim numbers must contain either six or nine numeric characters, and must 
have one, two, or three-character alpha prefix. 
 
f. For prefixes H, MH, WH, WCH, PH and JA only a 6-digit numeric field is 
permissible.  For all other prefixes, a six or nine numeric field is permissible. 
 
g. Nine numeric character claim numbers must have the same ranges as the SSA 9-
position claim numbers. 
 
FL 67. Principal Diagnosis Code and Present on Admission Indicator. 
 
a. If ICD-9-CM, must be four or five positions left justified, with no decimal points.  
If ICD-10-CM, must be three to seven positions, left justified, with no decimal 
points. 
 
b. Must be valid ICD diagnosis code for date of service. 
 
c. POA is a one position field.   
FLs 67 A - Q.  Other Diagnosis Codes and Present on Admission Indicator. 
 
a. If present, for ICD-9-CM must be four or five positions, left justified, with no 
decimal points.  For ICD-10-CM must be three to seven positions, left justified, 
with no decimal points. 
 
b. POA is a one position field. 
 
FL 74. Principal Procedure Code and Date 
 
a. If present, must be valid procedure code for service date.  For ICD-9-CM must be 
3 - 5 characters; first character may be numeric or alpha, characters 2 -5 must be 
numeric.  For ICD-10-PCS must be 3 - 7 characters; first character must be alpha, 
second character must be numeric, characters 3  7 may be alpha or numeric. 
 
b. If code is present, date must be present and valid. 
 
c. Date must fall before the Through date in FL 6.  (In some cases it may be 
before the admission date, i.e., where complications and admission ensue from 
outpatient surgery.) 
 
FL 74 a-e. Other Procedure Codes and Dates. 
 
a. If present, apply edits for FL 74 
 
FL 76. Attending Provider Name and Identifiers. 
 
a. The UPIN must be present on inpatient Part A bills with a Through date of 
January 1, 1992, or later.  For outpatient and other Part B services, the UPIN 
must be present if the From date is January 1, 1992, or later.  This requirement 
applies to all provider types and all Part B bill types.  Effective May 23, 2007, 
providers are required to submit NPI. 
 
b. An institutional provider may not submit their own NPI, except for Institutional 
billing of COVID-19, influenza, and pneumococcal vaccinations and their 
administration as the only billed service on a claim, roster billing of COVID-19, 
influenza, and pneumococcal vaccinations and their administrations, self-referred 
screening mammography as the only billed service on a claim, HCPCS K1034 as 
the only billed service on a claim, or where the provider only has a type-1 NPI as 
a physician/practitioner owned sole-proprietor (i.e., RHC). 
 
c. An institutional provider may not submit an organizational type-2 NPI in the 
attending NPI field except as noted above in b. 
 
FL 77. Operating Physician Name and Identifiers   
a. Effective May 23, 2007, providers are required to submit NPI.  NPI must be 
present if: 
 
  Bill type is 11X and a procedure code is shown in FL 74; 
 
  Bill type is 83X or 13X and a HCPCS code is reported that is subject to 
the ASC payment limitation or is on the list of codes the QIO furnishes 
that require approval; or 
 
  Bill type is 85X and HCPCS code is in the range of 10000 through 69979. 
 
b. If required: 
 
  NPI, last name and first initial must be present; and 
 
  Left justified. 
 
80.3.3 - Timeliness Standards for Processing Other-Than-Clean Claims 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
The Social Security Act, at 1869(a)(2), mandates that Medicare process all other-than-
clean claims and notify the individual filing such claims of the determination within 45 
days of receiving such claims. 
 
Claims that do not meet the definition of clean claims are other-than-clean claims.  
Other-than-clean claims require investigation or development external to the 
contractors Medicare operation on a prepayment basis. 
 
The contractor shall process all other-than-clean claims and notify the provider and 
provider of the determination within 45 calendar days of receipt.  (See Pub100-4, Chapter 
1, 80.2.1 for the definition of receipt date and for timeliness standards for clean 
claims.)  However, when the contractor develops to the provider/supplier or beneficiary 
for additional information, the contractor shall cease counting the 45 calendar days on the 
day that the contractor sends the development letter.  Upon receiving the materials  requested in the development letter from the provider/supplier and/or beneficiary, the 
contractor shall resume counting the 45 calendar days. 
 
EXAMPLE: 
 
The contractor receives a claim on June 1st, but does not send a development letter to the 
provider/supplier/ and/or beneficiary until June 5th.  In this situation, 5 of the 45 allotted 
calendar days will have already passed before the contractor requested the additional 
information.  Upon receiving the information back from the provider/supplier and/or 
beneficiary, the contractor has 40 calendar days left to process the claim and notify the 
individual that filed the claim of the payment determination for that claim. 
 
Contractors shall follow existing procedures relative to both the length of time the 
provider/supplier and/or beneficiary is afforded to return information requested in the 
development letters and situations where the provider/supplier and or beneficiary does 
not respond. 
 
Contractors shall report the number of other-than-clean claims processed in 45 days or 
less on Form Y of the Contractor Reporting of Operational and Workload Data 
(CROWD) report.  Use identifier code 0005 in column 1 to report this information.  
Report the number of other-than-clean claims processed in 46 days or longer on Form Y 
of the CROWD system, under column 1 on a line using code 0006 as the identifier. 
 
The following types of claims do not apply to this instruction: 
 
  Claims where the Social Security Administration blocks a beneficiarys Medicare 
beneficiary identifier, 
 
  Claims the contractors are required to hold due to CMS instructions, 
 
  Translator rejects, 
 
  Claims where CWF is unable to process due to technical issues with the CWF 
beneficiary record or beneficiary identification issues, 
 
  Claims submitted by a hospice, and 
 
  Claims in development due to processing requirements (e.g. medical review), in 
Publication 100-8, the Medicare Program Integrity Manual. 
 
80.4 - Enforcement of Provider Billing Timelines and Accuracy 
Standard to Continue PIP (Periodic Interim Payment) 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare  beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A.  General 
To remain on PIP, providers, (with the exception of HHAs that do not receive PIP with 
the advent of PPS mandated by law on October 1, 2000), must submit 85 percent of their 
bills timely and accurately.  Timely and accurately means that 85 percent of its bills 
(excluding those listed below) are submitted within 30 days of discharge and pass front-
end edits for consistency and completeness.  A bill is not considered received unless it 
can pass FI edits.  FIs must accumulate statistics on inpatient and SNF billing 
performance for each PIP provider to monitor whether it meets this requirement. These 
instructions do not effect bi-weekly payments for pass-throughs (Medicare Provider 
Reimbursement Manual, (PRM) 2405.2) and for adjustments to indirect cost for medical 
education (PRM 2405.3). 
The evaluation for timeliness of billing should be consistent with the frequency for 
monitoring the payment amounts under the PIP program.  Thus, for non-PPS hospitals 
and SNFs the evaluation process is scheduled at 3-month intervals and PPS providers are 
evaluated every 4 months.  The evaluation includes data from the entire 3- or 4-month 
period.  In determining whether a provider submitted its bills within 30 days of discharge 
or through date on interim bills, count the date from Form CMS-1450 FL6 (through date) 
to the date received by the FI.  If the provider does not meet the criteria, discontinue PIP 
immediately.  The periodic performance report that is provided in accordance with 
subsection B will constitute advance notice before discontinuing PIP. 
Exclude the following: 
  MSP cases (value codes 12-16); 
  Any special situation identified by the provider or FI that is documented as 
beyond provider control.  Exclusions must be approved by the RO; and 
  Bills that have not passed FI front-end edits for acceptance.  (Such bills are 
counted only when acceptable to the shared system edit processes.) 
The FIs must accumulate statistics monthly and summarize them for the entire evaluation 
period. 
B.  Procedure for Measuring and Reporting to Hospitals and SNFs 
The FIs accumulate a record for each bill that passes front-end edits. Bills must be 
counted in the month received regardless of the discharge month.  No later than 10 work-
days after the end of the month, FIs furnish a report to each hospital/SNF. For the month 
indicating the following: 
  The total number of bills received; 
  The number not excluded as described in section A; 
  The number not excluded received in 30 days or less; 
  The percentage not excluded received in 30 days or less.  Also, for providers that fail to meet the standard, furnish individual case identification of 
claims that were not billed within 30 days of discharge.  List only claims that are not 
excluded and are identified in subsection A.  The report must be furnished in electronic 
media, unless the FI determines a paper listing would be cheaper to process.  If electronic 
media is used, use the following record format.  Determine the physical characteristics of 
the file. 
Fld  Description  Psn.  Picture  Just  From  Thru 
1  Provider Number  6  X(6)  L  001  006 
2  Blank  3  X(3)    007  009 
3  Blank  1  X    010   
4  Medicare beneficiary  12  X(12)  L  011  022 
identifier 
5  Blank  1  X    023   
6  Beneficiary Surname  6  X(6)  L  024  029 
7  Blank  1  X    030   
8  Patient Control Number  17  X(17)  L  031  047 
9  Blank  1  X    048   
10  From Date  6  9(6)    049  054 
11  Blank  1  X    055   
12  Discharge or Thru Date  6  9(6)    056  061 
13  Blank  1  X    062   
14  Date Bill Received  6  9(6)    063  068 
15  Blank  1  X    069   
16  Days Elapsed  4  9(4)  R  070  073 
If sub-provider identification is used, positions 7, 8, and 9 may be utilized. 
C.  Reinstatement of PIP 
Do not reinstate PIP for a provider until it meets all criteria in PRM 2405.1.B and 2407 
and has met the requirements in subsection A for timeliness and accuracy for six 
consecutive months. 
D.  New Request for PIP 
Evaluate new requests for PIP as in subsections A and B.  At least three months 
experience is required for new requests, (except for new providers with less experience). 
E.  Hospitals on 100 Percent PRO Prepayment Review 
The 30-day requirements for submitting bills to FIs are not applicable.  The RO makes 
determinations of timely and accurate bill submission by hospitals for which the PRO 
reviews 100 percent of the discharges before payment.  However, other standards remain 
applicable for retaining PIP in such cases.  See PRM 2405.1.B and 2407 for the 
requirements. 
 
80.5 - Do Not Forward Initiative (DNF) 
(Rev. 1, 10-01-03) 
 
80.5.1 - Carrier DNF Requirements 
(Rev. 1, 10-01-03) 
B3-4021, B-02-023  This initiative entails the use of Return Service Requested envelopes to preclude the 
forwarding of Medicare checks to locations other than those recorded on the Medicare 
provider files.  The use of these envelopes permit the U.S. Postal Service to return 
Medicare checks to local carriers and durable medical equipment regional carriers 
(DMERCs) free of charge, as the postal service has done for the DMERCs since February 
1997. 
A.  Returned Check Process for Carriers and DMERCs 
The CMS requires carriers and DMERCs to use Return Service Requested envelopes 
for all checks they mail to providers and suppliers.  In addition, carriers and DMERCs 
must use return service requested envelopes for hardcopy remittance advices, with 
respect to providers that have elected to receive hardcopy remittance advices. They do 
not use return service requested envelopes for beneficiary correspondence, such as 
Explanations of Benefits (EOB) or Medicare Summary Notices (MSNs), or for 
overpayment demand letters. 
Carriers and DMERCs must be in compliance with postal regulations when developing 
their DNF envelopes.  Carriers and DMERCs must sort outgoing mail to identify provider 
or supplier checks, and must only place these checks in Return Service Requested 
envelopes.  The postal service will forward remittance advice without checks and checks 
to beneficiaries. 
When the check is returned, if applicable, the postal service will provide the carrier or 
DMERC with a new address or reason for nondelivery.  If the postal service supplies a 
carrier or DMERC with a new address for the provider or supplier with the returned 
check or remittance, do not automatically change the address of the provider or supplier 
or re-mail the check/remittance.  (See the change of address process described below.) 
Once the post office returns an envelope, record the check number and any 
correspondence in the envelope, using normal procedures for incoming mail.  For 
example, microfiche, and photocopy the mail.  Contractors must also log and account for 
the checks, noting pertinent information, such as the provider or suppliers name and 
number, date of the check, the check number, the amount of the check, and the date the 
check was returned. 
The carriers or DMERCs financial staff must either reissue the check based upon 
receipt of an updated, verified address, or systematically cancel the returned check and 
notify the provider enrollment staff that a provider must be flagged DNF.  The provider 
enrollment staff must annotate the provider or suppliers file with a DNF flag, pending 
receipt of a verified address.  Carriers and DMERCs must process any subsequent claims 
a flagged provider or supplier submits through the Common Working File (CWF) to 
completion, but must not generate any additional check or checks for that provider or 
supplier until an authorized address correction is received and the flag removed. 
In addition, provider enrollment staff must alert the benefit integrity staff in the event that 
any investigations are currently taking place, which are affiliated with flagged providers 
or suppliers.  DMERCs must notify the National Supplier Clearing House (NSC).  All 
carriers must implement a standardized reporting format for this process. 
NOTE: Because some providers get paid through electronic funds transfer (EFT), there 
may be cases where a provider does not have a correct address on file, but the contractor 
continues to pay the provider through EFT.  This instruction applies to providers 
receiving paper.  B.  Change of Address Process for Local Carriers and DMERCs 
When a flagged provider or supplier notifies you that they have not received their checks, 
direct them to your provider enrollment staff.  The provider or supplier must complete a 
change of address Form CMS-855C, or other written notification.  The form or written 
notification must bear an original signature from an authorized representative of the 
entity that completed the original registration form.  No copies, faxes, or stamps are 
acceptable.  For purposes of this process, the most important address is the Pay To 
address.  If the provider or supplier did not furnish the Pay To address on Form CMS-
855C, or other written notification, return it to the provider or supplier. The provider or 
supplier must furnish the Pay To address.  Addresses may not be changed based on 
telephone calls. 
Although the Pay to Address is the most critical, CMS requires corrections to all 
addresses before the contractor can remove the DNF flag and begin paying the provider 
or supplier again.  Therefore, carriers may not release any payments to DNF providers 
until the provider enrollment area or the NSC has verified and updated all addresses for 
that providers location 
When a provider enrollment staff member verifies an address, the provider must update 
the address for the provider or supplier and remove the DNF flag. 
Provider enrollment staff must send a daily report to financial staff, advising which 
providers and suppliers are no longer flagged DNF.  Financial staff must generate all 
payment that is due the provider or supplier for claims that were adjudicated for the time 
period the provider or supplier was flagged. 
C.  Educational Requirements 
1.   Contractors must publish the requirement that providers must notify the Part B carrier 
or NSC of any changes of address, both on their Web sites and in their next regularly 
scheduled bulletins. 
2.   Contractors must continue to remind suppliers and providers of this requirement in 
their bulletins at least yearly thereafter. 
 
80.5.1.1 - Reporting Requirements - Carriers 
(Rev. 2228, Issued: 05-20-11, Effective:06-06-11, Implementation:06-06-11) 
 
A. Field Definitions for DNF Spreadsheet 
 
To be certain that all parties understand what information CMS needs to get from these 
reports, the following definitions have been created for each field. No rolling or annual 
totals should be included. 
 
Suppliers/Providers Flagged/Corrected  Definition  
Counts Field #  
1   New Flags: the number of all suppliers or 
providers the contractor flagged for DNF 
during the reporting quarter (regardless of 
whether or not they still have a flag, and 
regardless of whether the contractor 
flagged them due to a returned check or  returned remittance advice), that were not 
flagged at the end of the previous 
reporting quarter.  
2   Removed Flags: the number of all 
suppliers or providers who supplied a 
verified, correct address, causing the 
contractor to remove the DNF flag, during 
the reporting quarter.  
3   Total Flags: the total number of all 
suppliers or providers who still have a 
DNF flag on the last day of the reporting 
quarter, regardless of whether the 
contractor flagged them due to a returned 
check or returned remittance advice), 
including those the contractor flagged in a 
previous quarter who did not supply a 
verified, corrected address.  
 
Check Counts Field #   Definition  
4   Returned Checks: the total number of 
checks the post office returned to the 
contractor due to an incorrect address 
during the reporting quarter, regardless of 
whether or not the supplier provided a 
corrected address and may have been 
reissued the check during the quarter.  
5   Held Checks: the total number of all 
checks that contractors did not issue due 
to DNF flags in the system during the 
reporting quarter, regardless of whether or 
not the supplier provided a corrected 
address and was later paid.  
6   Reissued and Released Checks: the total 
number of all checks (both those the post 
office returned, and those the contractor 
had been holding due to a DNF flag in the 
system) the contractors reissued or 
released during the reporting quarter, to 
suppliers or providers who submitted a 
verified, correct address.  
 
Dollar Counts Field #   Definition  
7   Amount Returned: the total dollar amount 
of all checks the post office returned due 
to an incorrect address during the  reporting quarter, that you are still holding 
at the end of the reporting quarter.  
8   Amount Held: the total dollar amount of 
all checks the contractors did not issue 
due to DNF flags in the system during the 
reporting quarter, that you are still holding 
at the end of the reporting quarter. 
9   Amount Reissued/Released: the total 
dollar amount of all payments (both those 
the post office returned, and those the 
contractor had been holding due to a DNF 
flag in the system) the contractors 
reissued during the reporting quarter, to 
suppliers or providers who submitted a 
verified, correct address.  
10   Net Amount: the value in field 7 plus the 
value in field 8, minus the value in field 9 
- it is possible that this number will be a 
negative figure. 
 
NOTE A 
 
If a contractor flags a provider or supplier for DNF more than one time within a quarter, 
only count that supplier or provider once for fields 1, 2, and 3. 
 
NOTE B 
 
Multi-Carrier Systems contractors may use a claim count for items 4-6, 8, and 9, rather 
than a check count. 
 
B. Systems Requirements 
 
Carriers and DMERCs generate reports out of the shared systems and must be able to 
generate figures for each field in accordance with the above descriptions. 
 
Furthermore, shared systems must be certain that when the system calculates the totals, it 
includes the first returned check that prompted the DNF flag. The shared systems should 
program the reports so that the contractors may request monthly detail reports to verify 
the quarterly totals. However, carriers only send the quarterly reports to CMS central 
office (CO) and regional office (RO), not the monthly reports. 
 
C. Quarterly Reporting Requirements 
 
All contractors must submit their DNF reports by the fifteenth day of each month that 
follows the end of a quarter (i.e., January 15, April 15, July 15, and October 15). The 
instructions for the current process are defined in Section F, Deliverable Schedule, of  each individual contract.  Contractors (A/B MACs and DME MACs) must submit their 
DNF reports to CMS Automated Reporting Tracking System (CMS ARTs).  Legacy 
Contractors (Carriers) must submit their DNF reports to their appropriate CMS Central 
Office contact. 
 
D. Other Requirements 
 
Contractors must continue to follow all other aspects of the DNF reporting initiative (e.g., 
use of Return Service Requested envelopes, assignment of a DNF flag to appropriate 
providers/suppliers) as instructed in the 80.5. 
  E.  Examples - Blank Report 
DO NOT FORWARD PROJECT 
Activity for the _____ Quarter of FY _____  $$  Region  Medicare Contractor 
       
Suppliers/Providers Flagged/Correct Counts       
1.     # new supplier/providers flagged during the reporting quarter       
2.     # suppliers/providers whose flags were removed, end of the       
reporting quarter 
3.     # suppliers/providers flagged, end of the reporting quarter       
       
Check Counts       
4.     # new checks returned during the reporting quarter       
5.     # of checks held during the reporting quarter       
6.     # checks reissued during the reporting quarter       
       
Dollar Counts       
7.     $ amount of new checks returned during the reporting quarter       
8.     $ amount of checks held during the reporting quarter       
9.     $ amount reissued during the reporting quarter       
10.   $ amount returned to trust fund during the reporting quarter       
       
Report By:____________________________________       
Report Date:__________________________________        Sample Completed Report 
SAMPLE - DO NOT FORWARD PROJECT 
Activity for the 3RD Quarter of FY 2003  $$  Region  Medicare Contractor 
    Q  XYZ Contractor 
Suppliers/Providers Flagged/Correct Counts       
1.     # new supplier/providers flagged during the reporting quarter  125     
2.     # suppliers/providers whose flags were removed, end of the  30     
reporting quarter 
3.     # suppliers/providers flagged, end of the reporting quarter  117     
       
Check Counts       
4.     # new checks returned during the reporting quarter  40     
5.     # of checks held during the reporting quarter  100     
6.     # checks reissued during the reporting quarter  60     
       
Dollar Counts       
7.     $ amount of new checks returned during the reporting quarter  100,000     
8.     $ amount of checks held during the reporting quarter  600,000     
9.     $ amount reissued during the reporting quarter  500,000     
10.   $ amount returned to trust fund during the reporting quarter  200,000     
       
Report By:     ___Jane Doe______________________       
Report Date:  __April 02, 2003___________________       
   
80.6  Processing All Diagnosis Codes Reported on Claims Submitted to 
Carriers 
(Rev.735, Issued: 10-31-05, Effective: 04-01-06, Implementation: 04-03-06) 
Carrier standard systems shall capture and process all diagnosis codes reported on a claim 
(both paper and electronic) up to the maximum permitted under the format.  The CWF 
shall process and maintain all diagnosis codes reported to CWF on a carrier processed 
claim. 
 
90 - Patient Is a Member of a Medicare Advantage (MA) Organization 
for Only a Portion of the Billing Period 
(Rev. 11731, Issued: 12-09-22, Effective: 01-11-23, Implementation: 01-11-23) 
 
Where a patient either enrolls or disenrolls in an MA organization (See Pub. 100-01, the 
General Information, Eligibility, and Entitlement Manual, Chapter 5, 80 for definition) 
during a period of services, two factors determine whether the MA organization is liable 
for the payment. 
  Whether the provider is included in inpatient hospital or home health PPS, and 
  The date of enrollment. 
Hospital Services 
If the provider is an inpatient acute care hospital, inpatient rehabilitation facility or a long 
term care hospital, and the patient changes MA status during an inpatient stay for an 
inpatient institution, the patients status at admission or start of care determines liability. 
If the hospital inpatient was not an MA enrollee upon admission but enrolls before 
discharge, the MA organization is not responsible for payment. 
For hospitals exempt from PPS (childrens hospitals, cancer hospitals, CAHs and 
Maryland waiver hospitals), if the MA organization has processing jurisdiction for the 
MA involved portion of the bill, it will direct the provider to split the bill and send the 
appropriate portions to the appropriate FI or MA organization.  When forwarding a bill to 
an MA organization, the provider must also submit the necessary supporting documents. 
If the provider is not a PPS provider, the MA organization is responsible for payment for 
services on and after the day of enrollment up through the day that disenrollment is 
effective. 
Home Health 
If the patient was enrolled in the MA organization before start of care, the MA 
organization is liable until disenrollment. Upon disenrollment, an episode must be opened 
under home heath PPS for billing to the FI. 
If the beneficiary was not an MA enrollee upon admission but enrolls before discharge, 
the home health PPS episode will end as of the day before the MA enrollment.  The 
episode will be proportionately paid according to its shortened length (i.e., paid a partial 
episode payment [PEP] adjustment).  The MA organization is responsible for payment as 
of the MA enrollment date. 
 
  91 - Moral and Religious Fee for Service Claims for Medicare 
Beneficiaries Enrolled in Certain Medicare Advantage (MA) Plans 
 
100 - Medicare as a Secondary Payer 
(Rev. 1, 10-01-03) 
HO-301, HO-469, CFR 411.32 
The provider is required to determine whether Medicare is a primary or secondary payer 
for each inpatient admission of a Medicare beneficiary and outpatient encounter with a 
Medicare beneficiary.  Refer to the Medicare Secondary Payer Manual for specific MSP 
rules and for special admission and claims processing procedures for providers, suppliers, 
FIs, and carriers. 
Medicare benefits are secondary to benefits payable by a third party payer, even if State 
law or the third party payer states that its benefits are secondary to Medicare benefits or 
otherwise limits its payments to Medicare beneficiaries.  Medicare will make secondary 
payments except when the provider or supplier is either obligated to accept, or voluntarily 
accepts, as full payment, a third party payment that is less than its charges.  When a 
provider or supplier, or a beneficiary who is not physically or mentally incapacitated, 
receives a reduced third party payment because of failure to file a proper claim, the 
Medicare secondary payment may not exceed the amount that would have been payable 
if the third party payer had paid on the basis of a proper claim. 
The law mandates that Medicare is secondary payer for: 
  Claims involving Medicare beneficiaries age 65 or older who have GHP coverage 
based upon their own current employment status with an employer that has 20 or 
more employees, or that of their spouse of any age, or based upon coverage by a 
multiple employer, or multi-employer group health plan by virtue of their own, or 
a spouses, current employment status and the GHP covers at least one employer 
with 20 or more employees.  An individual has current employment status if the 
individual is actively working as an employee, is the employer (including a self-
employed person), or is associated with the employer in a business relationship; 
or is not actively working, but meets all of the following conditions: 
o     Retains employment rights in the industry; 
o     Has not had employment terminated by the employer, 
o     Is not receiving disability payments from an employer for more than six 
months; 
o     Is not receiving social security disability benefits; and  
o     Has group health plan (GHP) coverage based on employment that is not 
COBRA continuation coverage. 
Examples of individuals who fall in the second group are teachers, employees who are on 
furlough or sick leave, and active union members between jobs. 
  Claims involving beneficiaries eligible for or entitled to Medicare on the basis of 
end stage renal disease (ESRD) during a period of 30 months) except where an 
aged or disabled beneficiary had GHP or LGHP coverage which was secondary to 
Medicare at the time ESRD occurred;  NOTE: The Balanced Budget Act of 1997 extended the ESRD coordination period to 30 
months from 18 months for any individual whose coordination period began on or after 
March 1, 1996.  Individuals whose period began before that date have an 18-month 
coordination period.  This issue may need to be clarified with ESRD beneficiaries upon 
admission. 
  Claims involving automobile or non-automobile liability or no-fault insurance; 
  Claims involving government programs, e.g., Workers Compensation (WC), 
services authorized and paid for by the Department of Veterans Affairs (DVA), or 
Black Lung (BL) benefits; and 
  Claims involving Medicare beneficiaries under age 65 who are entitled to 
Medicare on the basis of disability and are covered by an LGHP (plans or 
employers, or employee organizations, with at least one participating employer 
that employs 100 or more employees) based upon the beneficiarys own current 
employment status or the current employment status of a family member. 
110 - Provider Retention of Health Insurance Records 
(Rev. 1, 10-01-03) 
HO-413, HH-480, SNF-545 
The provider must maintain health insurance materials related to services rendered under 
title XVIII for the retention periods outlined below unless State law stipulates a longer 
period.  It must keep them available for reference by CMS, carrier, or FI, DHHS audit, or 
specially designated components for bill review, audit, and other references. 
110.1 - Categories of Health Insurance Records to Be Retained 
(Rev. 1, 10-01-03) 
HO-413, HH-480, SNF-545.1 
Providers retain records in all categories as applicable: 
A.  Billing Material 
Provider copies of Form CMS-1450 and any other supporting documents, e.g., charge 
slips, daily patient census records, and other business and accounting records referring to 
specific claims. 
B.  Cost Report Material 
All data necessary to support the accuracy of the entries on the annual cost reports, 
including original invoices, cancelled checks, and provider copies of material used in 
preparing them.  Also include other similar cost reports, schedules, and related 
worksheets and contracts or records of dealings with outside sources of medical supplies 
and services or with related organizations. 
C.  Medical Record Material 
For hospitals, utilization review committee reports and discharge summaries.  For 
hospitals and home health agencies, physicians certifications, and recertifications, and 
clinical and other medical records relating to health insurance claims. 
D.  Provider Physician Materials 
Provider physician agreements upon which Part A and Part B allocations are based. 
After payment of the bill, the provider should not retain administrative and billing work 
records if the material does not represent critical detail in support of summaries related to 
these records.  These include punch cards, adding machine tapes, or other similar material 
not required for record retention.  110.2 - Microfilming Records 
(Rev. 1, 10-01-03) 
SNF-545.3, HO-413, HH-480 
The provider may microfilm all health insurance records. 
Billing material and related attachments that the provider furnished to the carrier or FI 
may be microfilmed providing the microfilm accurately reproduces all original 
documents. 
The provider must retain copies of all other categories of health insurance records in their 
original form.  If it microfilms them, it should store them in a low cost facility for the 
retention period described in 110.3. 
110.3 - Retention Period 
(Rev. 1, 10-01-03) 
The hospital must maintain a medical record for each inpatient and outpatient. Medical 
records must be accurately written, promptly completed, properly filed and retained, and 
accessible. The provider must use a system of author identification and record 
maintenance that ensures the integrity of the authentication and protects the security of all 
record entries. 
The provider (hospital, skilled nursing facility, and home health agency) must retain 
medical records in their original or legally reproduced form for a period of at least five 
years after it files with its FI the cost report to which the records apply, unless State law 
stipulates a longer period of time. 
After payment of the bill, the provider need not retain administrative and billing work 
records provided that, and only to the extent that, such material does not represent critical 
detail in support of summaries related to the records outlined in 110.2.  These records 
include punch cards, adding machine tapes, internal controls, or other similar material not 
required for record retention. 
Providers must retain clinical records as follows: 
  The period of time required by State law; 
  Five years from the date of discharge when there is no requirement in State law; 
or 
  For a minor, three years after a resident reaches legal age under State law. 
110.4 - Destruction of Records 
(Rev. 1, 10-01-03) 
HO-413.1, HH-480.1, SNF-545.4 
The provider may destroy material that no longer needs to be retained for title XVIII 
purposes, unless State law stipulates a longer period of retention. 
To insure the confidentiality of the records, they must be destroyed by shredding, 
mutilation or other protective measures.  The method of final disposition of the records 
may provide for their sale as salvage.  The provider must report monies received as an 
adjustment to expense in the cost report for the year sold. 
 
120 - Detection of Duplicate Claims 
(Rev. 2678, Issued: 03-29-13, Effective: 04-29-13, Implementation: 04-29-13) 
  120.1 - Overview 
(Rev. 2678, Issued: 03-29-13, Effective: 04-29-13, Implementation: 04-29-13) 
 
The claims processing systems contain edits which identify exact duplicate claims and 
suspect duplicate claims.  All exact duplicate claims or claim lines are auto-denied or 
rejected (absent appropriate modifiers). Suspect duplicate claims and claim lines are 
suspended and reviewed by the claims administration contractors to make a 
determination to pay or deny the claim or claim line. 
 
Some claims that appear to be duplicates are actually claims or claim lines that contain an 
item or service, or multiple instances of an item or service, for which Medicare payment 
may be made.  Correct coding rules applicable to all billers of health care claims 
encourage the appropriate use of condition codes or modifiers to identify claims that may 
appear to be duplicates, but, in fact, are not. 
 
For example, there are some HCPCS modifiers that are appropriate to be appended to 
some services and can indicate that a claim line is not a duplicate of a previous line on the 
claim. Level I modifiers would typically be used by a biller to indicate that a potential 
duplicate claim or claim line is not, in fact, a duplicate. Level II modifiers may also be 
used. The Level II modifiers RT and LT, for example, indicate that a service was 
performed on the right and left side of the body, respectively. 
 
However, not every HCPCS code has an associated modifier to indicate that a claim line 
is not a duplicate.  In that case, the claims and claim lines are reviewed by Medicare 
contactors local software modules for a determination or they suspend for contractor 
review. 
 
120.2 - Exact Duplicates 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
Exact duplicates are controlled by the claims processing system through hard coded 
edits, and may not be user-controlled.  In addition, Medicare contractors cannot override 
or bypass exact duplicate edits. 
 
A.  Submission of Institutional Claims 
 
Claims or claim lines that have been determined to be an exact duplicate are rejected and 
do not have appeal rights.  An exact duplicate for institutional claims is a claim or claim  line that exactly matches another claim or claim line with respect to the following 
elements: 
 
  Medicare beneficiary identifier;   
  Type of Bill;  
  Provider Identification Number;  
  From Date of Service;  
  Through Date of Service;  
  Total Charges (on the line or on the bill); and  
  HCPCS, CPT-4, or Procedure Code modifiers. 
 
Additional Instructions for Institutional Claims: 
 
Whenever any of the following claim situations occur, the MAC develops procedures to 
prevent duplicate payment of claims.  This includes, but is not limited to: 
 
  Outpatient payment is claimed where the date of service is totally within inpatient 
dates of service at the same or another provider. Do not consider outpatient 
services provided on the day of discharge within the inpatient dates of service. 
 
  Outpatient bill is submitted for services on the day of an inpatient admission or 
the day before the day of admission to the same hospital. 
 
  Outpatient bill overlaps an inpatient admission period. 
 
  Outpatient bill for services matches another outpatient bill with a service date for 
the same revenue code at the same provider or under a different provider number. 
 
1.  History File - Paid Claims 
 
The MACs and legacy claims administration contractors must maintain a history file 
containing information about each claim processed.  The file may consist of the claim or 
information from it.  It must contain the following minimum information: 
 
  Medicare beneficiary identifier; 
o
  Beneficiary name information; 
o
  Provider identification (name or number); and  
o
  Billing period from the claim. 
o
 
Claims or claims information in the history file may be transferred to inactive files.  
However, the MAC must have the facility to recall such claims or information if a claim 
for the beneficiary involving the same time period is received. 
 
2.  History File - Pending Claims 
  Contractors must have controls to prevent a duplicate claim from being paid while two 
claims are in the process within the system at the same time.  This may be accomplished 
through a special check of in-process claims or in the history file for paid claims.  The 
file should contain the same minimum information indicated in the subsections below.  
The check should be performed prior to sending the claim to CWF. 
 
3.  Analysis of Patterns of Duplicate Claims 
 
The contractors shall establish a system for continuing analysis of duplicate claims.  This 
includes the systematic evaluation of returned Medicare Summary Notices from 
beneficiaries and communications from providers indicating a duplicate payment has 
been made, as well as returned checks from any payee. 
 
The contractors system should provide for analyzing duplicate claim receipts to 
determine whether certain providers are responsible for duplicates and, if so, identify 
those providers.  The contractor should educate such providers to reduce the number of 
duplicates they submit.  Should those providers continue to submit duplicate claims, the 
MAC should initiate program integrity action. 
 
B.  Claims Submitted by Physicians, Practitioners, and other Suppliers (except 
DMEPOS Suppliers) 
 
Claims or claim lines that have been determined to be exact duplicates of another claim 
or claim line are denied.  However, such denials may be appealed.  An exact duplicate for 
physician and other supplier claims submitted to a MAC or carrier is a claim or claim line 
that exactly matches another claim or claim line with respect to the following elements: 
 
  Medicare beneficiary identifier;  
  Provider Number;  
  From Date of Service;  
  Through Date of Service;  
  Type of Service;  
  Procedure Code;  
  Place of Service; and  
  Billed Amount. 
 
C.  Claims Submitted by DMEPOS Suppliers 
 
Claims or claim lines that have been determined to be exact duplicates of another claim 
or claim line are denied.  Such denials may not be appealed.  An exact duplicate for 
DMEPOS supplier claims submitted to a DME MAC is a claim or claim line that exactly 
matches another claim or claim line with respect to the following elements: 
 
  Medicare beneficiary identifier;  
  From Date of Service;  
  Through Date of Service;     Place of service;  
  HCPCS code;  
  Type of Service; 
  Billed Amount; 
  Supplier 
 
D.  Claims Submitted by Multiple DMEPOS Suppliers 
 
When a second DMEPOS supplier or multiple DMEPOS suppliers submit a claim during 
a span date already approved for the same beneficiary for a different DMEPOS supplier, 
the DME MAC shall deny the second or subsequent DMEPOS suppliers claim as a 
duplicate not a suspect duplicate when the following conditions are met: 
 
  Same Beneficiary Medicare beneficiary identifier 
  Overlapping span Date of Service (DOS) (From DOS and Through DOS) 
  Same Healthcare Common Procedure Coding System (HCPCS) Code, 
  Same Type of Service on the incoming claim matches a previously approved 
claim in history, and 
  The item is a diabetic testing supply 
 
  Items Subject to Duplicate Editing 
 
1.  Diabetic Testing Supplies 
 
120.3 - Suspect Duplicates 
(Rev. 2678, Issued: 03-29-13, Effective: 04-29-13, Implementation: 04-29-13) 
 
Suspect duplicates are claims or claim lines that contain closely-aligned elements 
sufficient to suggest that duplication may be present and, as such, require that the suspect 
claim be reviewed.  Suspect duplicate edits can be hard coded in the system or local edits 
set up by Medicare contractors. 
 
A.  Criteria for Detecting Suspect Duplicates for Institutional Claims  
 
A suspect duplicate claim is a claim being processed which, when compared to the 
history or pending file, begins with these characteristics: 
 
  Match on the beneficiary information; 
  Match on provider identification, and 
  Same date of service or overlapping dates of service. 
 
The contractors examine and compare to the prior bill any bill that is identified as a 
suspect duplicate.  If the services (revenue or HCPCS codes) on a claim duplicate the 
services for the other, contractors should check the diagnosis.  If the diagnosis codes are 
duplicates, obtain an explanation from the provider before making payment.   
B.  Suspect Duplicate Claims Submitted by Physicians and other Suppliers 
(including DMEPOS Claims) 
 
The criteria for identifying suspect duplicate claims submitted by physicians and other 
suppliers are not published and vary according to the type of billing entity, type of item 
or service being billed, and other relevant criteria.  The denial of claim as a duplicate of 
another claim may be appealed when the denial is based on criteria other than those 
specified above for exact duplication. 
 
 A/B MACs, Part B legacy contractors, and DME MACs must add an informational 
indicator to the Common Working File (CWF) transaction record when, as a result of a 
contractor audit/edit or CWF reject, the contractor examines what appears to be a 
duplicate item or service and approves it for payment. 
 
130 - Adjustments and Late Charges 
(Rev. 1, 10-01-03) 
A3-3664, HO-411.1, HO-IM411.1, HH-445, A3-3610.8, HO-415.11 
 
130.1 - General Rules for Submitting Adjustment Requests 
(Rev.11794, Issued:01-19-23, Effective: 04-01-23, Implementation:04-03-23) 
 
Adjustment requests are the most common mechanism for changing a previously 
accepted bill.  They are required to reflect the results of QIO medical review.  CMS may 
also require adjustments if it discovers that bills have been accepted and posted in error to 
a particular record.  Adjustments that only recoup or cancel a prior payment are credits 
and must match the original in the following fields: 
  Intermediary control number (ICN/DCN); 
  Surname; 
  Medicare beneficiary identifier 
 
When a definite match cannot be made on the three fields above, the providers MAC 
will use the fields below as needed.  Note that for older claims, ICN/DCN probably will 
not match. 
 
  Date of birth; 
  Admission Date for inpatient, (Date of First Service for outpatient) unless 
changed by this adjustment requests; and 
  From/thru dates for inpatient, (Date of First Service/Date of Last Service for 
Outpatient), unless changed by this adjustment request. 
 
Cancel-only adjustment requests are not acceptable, except in cases of incorrect provider 
identification numbers and incorrect Medicare beneficiary identifier.  The provider must 
submit a corrected replacement bill (bill type xx1) to its MAC after submitting the 
cancel-only request for the incorrect bill. 
  The provider must submit all other adjustment requests as debits only.  It shows the 
ICN/DCN of the bill to be adjusted as described above, with the bill type shown as xx7.  
It submits adjustment requests to its MAC either electronically or on hard copy.  
Electronic submission is preferred.  The ICN/DCN of an associated claim shall only be 
reported on adjustments.  The MAC shall return to the provider any original claim 
reporting information in this field.  
 
The MAC must enter the following bill types that relate to the entity generating the 
adjustment request: 
 
xx7  Provider (debit) 
xx8  Provider (cancel) 
xxF  Beneficiary 
xxG  CWF 
xxH  CMS 
xxI  MAC 
xxM  MSP 
xxP  QIO 
xxJ  Other 
xxK  OIG/GAO 
 
The provider submits all adjustment requests as bill type xx7 or xx8.  Since several 
different sources can initiate an MSP adjustment (e.g., the provider, CWF, or the MAC), 
the MSP designation, xxM, takes priority over any other source of an adjustment except 
OIG/GAO.  When the provider submits an MSP adjustment request, the MAC will 
change the bill type to xxM.  These priorities refer only to the designation of the source 
of the adjustment.  The difference between CWF generating the adjustment request and 
CMS generating the adjustment request is: An adjustment request is CWF-generated if 
the MAC receives a CWF unsolicited response, alert or a CMS-L1002. 
 
The MAC prepares an adjustment if instructed by CMS CO or CMS RO to make a 
change.  Typically, such direction from CMS is to retroactively change payment for a 
class or other group of bills.  Occasionally, CMS will discover an error in the processing 
of a single bill and direct the MAC to correct it. 
 
If adjustments are rejected by CWF for additional corrections, they must be corrected and 
resubmitted.  Even if a letter from CMS requests the adjustment action, the MAC must 
submit the adjustment request in its CWF record.  If a rejected adjustment request is 
determined to be unnecessary, the MAC stops the adjustment action upon receipt of 
correction. 
 
Where an adjustment request changes subsequent utilization, the MAC notes this and 
processes adjustments to subsequent bills if it services the provider. 
 
130.1.1 - Adjustment Bills Involving Time Limitation for Filing Claims 
(Rev. 1, 10-01-03)  A3-3664.D 
If a provider fails to include a particular item or service on its initial bill, an adjustment 
request(s) to include such an item(s) or service(s) is not permitted after the expiration of 
the time limitation for filing a claim.  However, to the extent that an adjustment request 
otherwise corrects or supplements information previously submitted on a timely claim 
about specified services or items furnished to a specified individual, it is subject to the 
rules governing administrative finality, rather than the time limitation for filing. 
 
130.1.2 - Claim Change Reasons 
(Rev. 1, 10-01-03) 
HO-411.2, HO-IM411.2, HH-445 
 
130.1.2.1 - Claim Change Reason Codes 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
The provider submits one of the following claim change reason codes to its FI with each 
debit-only or cancel-only adjustment request: 
 
Bill  Reason 
Type  Code  Explanation 
Xx7  D0 (zero)  Change to service dates 
Xx7  D1  Change in charges 
Xx7  D2  Change in revenue codes/HCPCS - HIPPS 
Xx7  D3  Second or subsequent interim PPS bill - PPS inpatient hospital only 
Xx7  D4  Change in GROUPER input (diagnoses or procedures) - PPS 
inpatient hospital). 
Xx8  D5  Cancel-only to correct a Medicare beneficiary identifier or provider 
identification number 
Xx8  D6  Cancel-only to repay a duplicate payment or OIG overpayment 
(includes cancellation of an outpatient bill containing services 
required to be included on the inpatient bill.) 
Xx7  D7  Change to make Medicare the secondary payer 
Xx7  D8  Change to make Medicare the primary payer 
Xx7  D9  Any other change 
Xx7  E0 (zero)  Change in patient status 
 
The provider may not submit more than one claim change reason code per adjustment 
request.  It must choose the single reason that best describes the adjustment it is 
requesting.  It should use claim change reason code D1 only when the charges are the  only change on the claim.  Other claim change reasons frequently change charges, but the 
provider may not add reason code D1 when this occurs. 
 
The claim change reason code is entered as a condition code on the hard copy Form 
CMS-1450 or the electronic equivalent.  For reason codes D0-D4 and D7-D9, the biller 
submits a debit-only adjustment request, bill type xx7.  For reason codes D5 and D6, it 
submits a cancel-only adjustment request, bill type xx8. 
 
130.1.2.2 - Edits on Claim Change Reason Codes 
(Rev. 1, 10-01-03) 
The following edits are based on the claim change reason code.  The FI must apply them 
to each incoming adjustment request. 
  If the type of bill is equal to xx7 and the claim change reason code is not equal to 
D0-D4, D7-D9, or E0, the FI rejects the request back to the provider with the 
following error message, Claim change reason code must be present and equal to 
D0-D4, D7-D9, or E0 for a debit-only adjustment request. 
  If the type of bill is equal to xx8 and the claim change reason code is not equal to 
D5-D6, the FI rejects the request back to the provider with the following error 
message, Claim change reason code must be present and equal to D5-D6 for a 
cancel-only adjustment request. 
  If the type of bill is equal to xx7 or xx8 and the ICN/DCN of the claim being 
adjusted is not present, the FI rejects the request back to the provider with the 
following message,  ICN/DCN of the claim being adjusted is required for an 
adjustment request. 
  If more than one claim change reason code is present on the providers request, 
the FI rejects the request back to the provider with the following message; only 
one claim change reason code may apply to a single adjustment request from a 
provider.  The FI chooses the single claim change reason code that best describes 
the reason for the providers request and resubmit. 
  If the provider submits an adjustment request as type of bill not equal to xx7 or 
xx8, the FI rejects the request back to the provider with the message, Provider 
submitted adjustment request must use type of bill equal to xx7 or xx8. 
  If the claim change reason code is equal to D0, the FI compares the beginning and 
ending dates on the providers request to those on the claim to be adjusted on its 
history.  If these dates are the same, it rejects the request back to the provider with 
the message, Dates of service must change for claim change reason code D0. 
  If the claim change reason code is equal to D1, the FI compares the total and line 
item charges on the providers request to those on the claim to be adjusted on its 
history.  If these changes are the same, the FI rejects the request back to the 
provider with the message, Charges must be changed for claim change reason 
code D1. 
  If the claim change reason code is equal to D2 (revenue code/HCPCS or HIPPS), 
the FI compares revenue codes/HCPCS or HIPPS on the providers request to 
those on the claim to be adjusted on its history.  If these codes are the same, it 
rejects the request back to the provider with the message, Revenue 
codes/HCPCS or HIPPS must change for claim change reason code D2.    If the claim change reason code is equal to D3 (PPS inpatient hospital only), the 
FI compares the ending date on the hospitals request to that on the claim to be 
adjusted on its history.  If these dates are the same, it rejects the request back to 
the hospital with the message, Thru dates must change for the claim change 
reason code D3. 
  If the claim change reason code is equal to D4 (PPS inpatient hospital), the FI 
compares diagnosis and procedure codes on the providers request to those on the 
claim to be adjusted on its history.  If these codes are the same and are in the same 
sequence, it rejects the request back to the provider with the message, Diagnoses 
and/or procedures must change for claim change reason code D4. 
  If the claim change reason code is equal to D5 or D6, type of bill must be equal to 
xx8 on the providers request.  If type of bill is not equal to xx8, the FI rejects the 
request back to the provider with the message, Type of bill must be equal to xx8 
for claim change reason codes D5 or D6. 
  If the claim change reason code is equal to D7, an MSP value code (12-16, 41-43, 
or 47) must be present, if a value code, 12-16, 41-43, or 47, is not present, the FI 
rejects the request back to the provider with the message, An MSP value code 
(12-16, 41-43, or 47) must be present for claim change reason code D7. 
  If the claim change reason code is equal to D7, and one or more of value codes 
12-16, 41-43, and/or 47 is present but each value amount is equal to 0 (zero) or 
spaces, the FI rejects the request back to the provider with the message, invalid 
value amount for claim change reason code D7. 
  If the claim change reason code is equal to D8, and a value code 12-16, 41-43, or 
47 is present, the FI rejects the claim back to the provider with the message, 
Invalid value code for claim change reason D8. 
  If the claim change reason code is equal to E0, the FI compares patient status on 
the providers request to that on the claim to be adjusted.  If patient status is the 
same, the FI rejects the request back to the provider with the message, Patient 
status must change for claim change reason E0. 
The FI must suspend for investigation all adjustment requests with claim change reason 
codes D8, and D9.  Providers that consistently use D9 will be investigated and, if a 
pattern of abuse is evident, may be reported to the OIG. 
 
130.1.2.3 - Additional Edits 
(Rev. 1, 10-01-03) 
The FI must perform the following additional edits and investigate adjustment requests the 
provider submits: 
  A full denial once the bill is paid, except to accomplish retraction of a duplicate 
payment; 
  Inpatient Hospital Only - A change in DRG based on a change in age or sex; 
  A change in deductible; 
  An adjustment request that changes a previously submitted QIO adjustment 
request; 
  An adjustment of a bill due to a change in utilization or spell data on another bill; 
  A reopening to change a no-payment bill to a payment bill;    A reopening to pay a previously denied line item; 
  An adjustment request the provider initiates with a claim change reason code 
equal to D7, with the Medicare payment amount equal to or greater that the 
previously paid amount; or 
  An adjustment request with a claim change reason code equal to E0, and the claim 
is for an inpatient PPS hospital.  The FI must investigate if the change is from 
patient status 02, transferred to another acute care facility. 
130.1.3 - Late Charges 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
The provider submits late charges on bills to the FI as bill type xx5.  These bills contain 
only additional charges.  However, if the late charge is for: 
  Services on the same day as outpatient surgery subject to the ASC limit; 
Services on the same day as services subject to OPPS; 
  ESRD services paid under the composite rate; 
  Inpatient accommodation charges; 
  Services paid under HH PPS; and 
  Inpatient hospital or SNF PPS ancillaries. 
It must be submitted as an adjustment request. 
The provider may submit the following charges omitted from the original paid bill to the 
FI as late charges: 
  Any outpatient services other than the exceptions stated in this paragraph.  This 
includes late charges for non-HH PPS services under Part B, hospice services 
other than the services of hospice-employed attending physicians, hospital 
outpatient services except those on the day of ambulatory surgery subject to the 
ASC payment limitation or the day of outpatient services subject to OPPS, RHC 
services, OPT services, SNF outpatient services, CORF services, FQHC services, 
CMHC services, ESRD services not included in the composite rate; and 
  Any inpatient SNF ancillaries or inpatient hospital ancillaries other than from PPS 
providers.  The provider may not submit late charges (xx5) for inpatient hospital 
or SNF accommodations.  The provider must submit these as adjustments (bill 
type xx7). 
The FI has the capability to accept xx5 bill types electronically and process them as 
initial bills except as described in the following paragraph. 
The FI also performs the following edit routines on any xx5 type bills received: 
  Pass all initial bill edits, including duplicate checks. 
  Must not be for any of: Inpatient hospital or SNF PPS ancillaries, inpatient 
accommodations in any facility, services on the same day as outpatient surgery 
subject to the ASC payment limitation, services on the same day as services  subject to OPPS, or ESRD services included in the composite rate.  These are 
rejected back to the hospital with the message,  This change requires an xx7 
debit-only or xx8 cancel-only request from you.  Late charges are not acceptable 
for inpatient PPS ancillaries, inpatient accommodations in any facility, services on 
the same day as outpatient surgery subject to the ASC payment limitation, 
services on the same day as services subject to OPPS, or ESRD services included 
in the composite rate. 
  When an xx5 suspends as a duplicate, (dates of service equal or overlapping, 
provider ID equal, Medicare beneficiary identifier equal, and patient surname 
equal), the FI must determine the status of the original paid bill.  If it is denied, 
the FI must deny the late charge bill. 
  If an xx5 does not suspend as a potential duplicate, the FI rejects it back to the 
provider with the message, No original bill paid.  Please combine and submit a 
single original bill (xx1). 
  If the original bill was approved and paid, the FI compares the revenue codes on 
the original paid bill with the associated late charge bill: 
  For all providers (any bill type), if any are the same, and are revenue codes 
41x, 42x, 43x, 44x, 63x, 76x, or 91x, the FI rejects the bill back to the 
provider with the message,  You must submit an adjustment (xx7) to the 
original paid bill.  Revenue codes subject to utilization review are 
duplicated on the late charge bill. 
  For HHA services not under a plan of care (bill type 34x), the FI must 
apply the same logic for the following additional revenue codes.  If any 
are the same and are revenue codes 27x, 29x, 55x, 56x, 57x, 58x, 59x, 
60x, or 63x, the FI rejects the bill back to the provider with the message,  
You must submit an adjustment (xx7) to the original paid bill.  Revenue 
codes subject to utilization review are duplicated on the late charge bill. 
  For hospital outpatient services (bill type 13x only), the FI must apply the 
same logic for the following additional revenue codes.  If any are the same 
and are revenue codes 255, 32x, 33x, 34x, 35x, 40x, 62x, 73x, 74x, 92x, or 
943, the FI rejects the bill back to the hospital with the message,  You 
must submit an adjustment (xx7) to the original paid bill.  Revenue codes 
subject to utilization review are duplicated on the late charge bill. 
  For RDFs (bill type 72x or 73x), the FI must apply the same logic for the 
following additional revenue codes; if any are the same and are revenue 
codes 634, 635, 82x, 83x, 84x, 85x, or 88x, the FI rejects the bill back to 
the provider with the message, You must submit an adjustment (xx7) to 
the original paid bill.  Revenue codes subject to utilization review are 
duplicated on the late charge bill. 
  If the late charges bill relates to two or more original paid bills, and one of these 
is denied, the FI must suspend and investigate the late charge bill. 
  The FI must compare total charges on the original paid bill with those on the 
associated late charge bill, and suspend and investigate any xx5 bill type with 
total charges in excess of those on the original paid bill.  This edit suggests the 
provider may have rebilled the already paid services. 
The FI may decide to perform additional edits on late charge bills.   
130.2 - Inpatient Part A Hospital Adjustment Bills 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
For adjustment requests reported as a claim record, the hospital must report the ICN/DCN 
of the original bill.  See the ASC X12 Institutional Claim Implementation Guide for 
instructions for the electronic format and Chapter 25 for instructions for Form CMS-
1450.  Where payment is handled through the cost reporting and settlement processes, the 
hospital accumulates a log for those items not requiring an adjustment request.  For cost 
settlement, the A/B MAC (A) pays on the basis of the log.  This log must include: 
 
  Patient name; 
  Medicare beneficiary identifier; 
  Dates of admission and discharge, or from and thru dates; 
  Adjustment in charges (broken out by ancillary or routine service); and 
  Any unique numbering or filing code necessary for the hospital to associate the 
adjustment charge with the original billing. 
 
NOTE: Hospitals in Maryland, which are not paid under PPS or cost reports, submit an 
adjustment request for inpatient care of $500 or more, and keep a log as described above 
for lesser amounts.  Because there are no adjustment requests, the A/B MAC (A) enters 
the payment amounts from the summary log into the PPS waiver simulation and annually 
pays the items on the log after the cost report is filed. 
 
After cost reports are filed, the A/B MAC (A) makes a lump sum payment to cover these 
charges as shown on the summary log.  The hospital uses the summary log for late 
charges only under cost settlement (outpatient hospital), except in Maryland. 
 
Maryland and cost hospitals are required to meet the 12-month timeframe for timely 
filing of claims, including late charges. 
 
For all adjustments other than QIO adjustments (e.g., provider submitted adjustments 
and/or those the A/B MAC (A) initiates), the A/B MAC (A) submits an adjustment 
request to CWF following its acceptance of the initial bill.  To verify CMSs acceptance, 
the A/B MAC (A) can submit a status query. 
 
Under inpatient hospital prospective payment, adjustment requests are required from the 
hospital where errors occur in diagnosis and procedure coding that changes the DRG, or 
where the deductible or utilization is affected.  A hospital is allowed 60 days from the  date of the A/B MAC (A) payment notice (remittance advice) for adjustment requests 
where diagnostic or procedure coding was in error resulting in a change to a higher 
weighted DRG.  Adjustments reported by the QIO have no corresponding time limit and 
are adjusted automatically by the A/B MAC (A) without requiring the hospital to submit 
an adjustment request.  However, if diagnostic and procedure coding errors have no 
effect on the DRG, adjustment requests are not required. 
 
Under PPS, for long-stay cases, hospitals may bill 60 days after an admission and every 
60 days thereafter if they choose.  The A/B MAC (A) processes the initial bill through 
Grouper and PRICER.  When the adjustment request is received, it processes it as an 
adjustment.  In this case, the 60-day requirement for correction does not apply. 
 
130.2.1 - Tolerance Guidelines for Submitting Inpatient Part A Hospital 
Adjustment Requests 
(Rev. 1, 10-01-03) 
A3-3664.1.A 
When a bill is submitted and the hospital or the FI discovers an error, the hospital submits 
an adjustment request using the CMS-1450, if the error is a change in the: 
  Number of inpatient days (including a change in the length of stay, or a different 
allocation of covered/noncovered days); 
  Blood deductible; 
  Inpatient cash deductible of more than $1; 
  Servicing hospital; 
For inpatient hospital bills paid under PPS, CMS also requires an adjustment request for a 
change in: 
  Discharge status in a PPS hospital; 
  The DRG code; or 
  Outlier payment amount. 
The hospital submits most adjustment requests as debits, using bill type xx7. 
Also, it submits a debit-only adjustment request to the FI if it previously submitted an 
interim bill for a PPS hospital stay or wishes to change the number of days in any 
inpatient stay. 
The FI then submits the adjustment to CWF.  An adjustment from the QIO for any of the 
above also requires a submission to CMS via CWF. 
If an adjustment the hospital initiates results in a change to a higher weighted DRG, the 
FI edits the adjustment request to insure it was submitted within 60 days of the date of the 
remittance for the claim to be adjusted.  If it is, the FI processes the claim for payment.  If 
the remittance date is more than 60 days prior to the receipt date of the adjustment 
request and results in a change to a lower weighted DRG, the FI processes the claim for 
payment and forwards it to CWF. 
 
130.3 - SNF Part A Adjustments 
(Rev. 1, 10-01-03) 
 
  130.3.1 - Tolerance Guides for Submitting SNF Inpatient Adjustment 
Requests 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
SNF inpatient adjustment requests adhere to the same billing instructions as non-inpatient 
adjustment requests with the following changes.  When an initial bill has been submitted 
and the provider or FI discovers an error on the bill, an adjustment request is submitted if 
the change involves one of the following: 
 
  A change in the Part B cash deductible of more than $1.00 
  A change in the number of inpatient days; 
  A change in the blood deductible; 
  A change in provider number; 
  A change in coinsurance which involves an amount greater than $1.99; 
  A change in the HIPPS code to correct a data input error or, 
  Effective for changes for services June 1, 2000, change in HIPPS code due to an 
MDS correction.  (Such adjustments are required within 120 days of the through 
date on the initial bill.) NOTE:  See Chapter 6, Section 35 for information on 
submitting adjustments to HIPPS codes resulting from MDS corrections. 
 
Late charge billings (type of bill xx5) are not acceptable for SNF PPS Part A services. 
The reason for an adjustment (Claim Change Reasons) is reported in one of the condition 
code fields.  Claim Change Reason Codes applicable to SNFs are: 
 
D0  Changes to Service Dates  D6  Cancel only to repay a duplicate OIG 
payment 
D1  Changes to Charges  D7  Change to Make Medicare Secondary 
Payer 
D2  Changes in Revenue codes/ HCPCS -  D8  Change to Make Medicare Primary 
HIPPS  Payer 
D4  Changes in Grouper code   D9  Any Other Change 
D5  Cancel to correct Medicare  E0  Change in Patient Status 
beneficiary identifier or Provider ID 
 
The SNF selects the one code that best describes the change reason.  An adjustment may 
contain multiple changes even though only one reason code is reported. 
   
130.3.2 - SNF Inpatient Claim Adjustment Instructions 
(Rev. 1472, Issued: 03-06-08, Effective: 05-23-07, Implementation: 04-07-08) 
 
1.  Type of Bill is 217, (replacement bill). 
 
2.  Internal Control Number (ICN)/Document Control Number (DCN) Required.  All 
providers requesting an adjustment to a previously processed claim must insert the 
ICN/DCN of the claim to be adjusted.  Payer As ICN/DCN must be shown on line A.  
Similarly, the ICN/DCN for Payers B and C must be shown on lines B and C 
respectively. 
 
3.  Appropriate Claim Change Reason Code. 
 
4.  The provider must submit an entire replacement debit. 
 
Note:  Information regarding the form locator numbers that correspond to these data 
element names and a table to crosswalk UB-04 form locators to the 837 transaction is 
found in Chapter 25. 
 
130.3.3 - Patient Does Not Return From SNF Leave of Absence, and 
Last Bill Reported Patient Status as Still Patient (30) 
(Rev. 1472, Issued: 03-06-08, Effective: 05-23-07, Implementation: 04-07-08) 
 
Where the patient does not return from a leave of absence, regardless of the reason, the 
SNF must submit a discharge bill showing the date of discharge as the date the individual 
actually left.  If the patient status was reported as 30 (still patient) on an interim bill and 
the patient failed to return from a leave of absence within 30 days, including the day 
leave began, or has been admitted to another institution at any time during the leave of 
absence, the SNF must submit an adjustment request to correctly indicate the day the 
patient left as the date of discharge.  (A beneficiary cannot be an inpatient in two 
institutions at the same time.)  This closes the open admission on the patients utilization 
record. 
 
NOTE: Home health or outpatient services provided during a leave of absence do not 
affect the leave and no discharge bill is required. 
 
EXAMPLE l: 
 
The beneficiary goes on a leave of absence on January 3, expecting to return on January 
10.  On January 6, the SNF receives word that the patient died on January 5.  The SNF 
submits a discharge bill showing January 3 as the date of discharge. 
 
EXAMPLE 2: 
  The beneficiary goes on a leave of absence on February 6, expecting to return on 
February 12.  However, the beneficiary does not return on February 12 as expected and 
the SNF cannot determine whether the beneficiary will return.  The SNF submits a 
discharge bill showing February 6 as the date of discharge as soon as practical, or after 30 
days have elapsed from the day the leave began.  If an interim bill had been submitted 
showing the beneficiary in still patient status as of February 6 or later, the SNF submits 
an adjustment request showing February 6 as the discharge date.  The advantage of 
delaying the discharge bill for 30 days is that it will make unnecessary a new admission 
notice in the event the beneficiary returns before 30 days have elapsed. 
 
EXAMPLE 3: 
 
The beneficiary goes on a leave of absence on March 4, and is expecting to return April 1 
but does not.  The SNF submits a discharge bill showing March 4 as the date of discharge 
since the beneficiary did not return within the 30-day period. 
 
130.4 - Hospital and SNF Part B Adjustment Requests 
(Rev. 1, 10-01-03) 
130.4.1 - Guidelines for Submitting Adjustment Requests 
(Rev. 1, 10-01-03) 
SNF-562, SNF-562.A 
When an initial bill for outpatient services or inpatient Part B services has been submitted 
and the provider or the FI discovers an error, the provider submits an adjustment request 
to the FI.  The FI submits the adjustment to CMS if there is a change in: 
  The Part B cash deductible of more than $1; 
  Covered charges of more than $1 on bills for surgery or other outpatient procedures; 
  The servicing provider; 
  The Part B blood deductible; 
  The coinsurance amount greater than $1.99; or 
  Procedure codes. 
130.5 - Home Health Adjustments 
(Rev. 1, 10-01-03) 
 
130.5.1 - Submitting Adjustment Requests 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
A home health agency submits a corrected Form CMS-1450 if any of the following 
apply:    A change in provider number; 
  A change in coinsurance involves an amount greater than $1.99; or 
  A change in visits (decrease or increase). 
Where there are money adjustments other than a coinsurance amount greater than $1.99, 
the agency records the difference on a record sufficiently documented to establish an 
accounting data trail, including patients name and Medicare beneficiary identifier, first 
and last dates of services, and any unique numbering or filing code necessary to associate 
the adjustment charge with the original billing. 
A number of conditions can cause the episode payment to be adjusted.  Both RAPs and 
claims may be cancelled by HHAs if a mistake is made in billing (TOB 328), though 
episodes will be cancelled in CWF as well.  Adjustment claims may also be used to 
change information on a previously submitted claim (TOB 327), which may also change 
payment.  RAPs can only be cancelled, not adjusted, but may be re-billed after 
cancellation. 
 
130.6 - Adjustments to Reprocess Certain Claims Denied Due to an 
Open Common Working File (CWF) Medicare Secondary Payer (MSP) 
Group Health Plan (GHP) Record Where the GHP Record Was 
Subsequently Deleted or Terminated 
(Rev. 4201, Issued: 01-18-19, Effective: 02-19-19, Implementation: 02-19-19) 
 
The term Medicare beneficiary identifier (Mbi) is a general term describing a 
beneficiarys Medicare identification number. For purposes of this manual, Medicare 
beneficiary identifier references both the Health Insurance Claim Number (HICN) and 
the Medicare Beneficiary Identifier (MBI) during the new Medicare card transition 
period and after for certain business areas that will continue to use the HICN as part of 
their processes. 
 
Group Health Plan (GHP) Medicare Secondary Payer claims were not reprocessed 
automatically in situations where Medicare becomes the primary payer after an MSP 
GHP record was deleted, or when an MSP GHP record was terminated, after claims were 
processed subject to the CWF record. It was the responsibility of the beneficiary, 
provider, physician or other supplier to contact the Medicare contractor and request the 
denied claims be reopened when reopening was permitted. This was a burden on the 
beneficiary, physician, or other supplier. This instruction directs CWF to implement an 
automated process to reopen certain MSP claims when MSP GHP records were 1) 
deleted, or 2) under some circumstances, certain MSP GHP records were terminated and 
claims were denied (rejected for Part A claims) due to MSP or Medicare made a 
secondary payment before the termination date was accreted. 
 
The COBC currently identifies, deletes, and terminates MSP GHP records on the CWF 
when appropriate.  The 1-800 Medicare also applies simple terminations to MSP GHP 
working aged records only. Upon deletion of an MSP record, or where a termination 
dated added to an MSP GHP (MSP Codes 12, 13, 43) record, this instruction directs the 
CWF to search the claims history for claims, with dates of service within 180 days of the 
deletion date, or the date the termination date was applied, which were processed for  secondary payment or were denied because of the MSP edit as set forth in 42 CFR 405, 
subpart G, H and I. The Shared Systems shall reopen these claims, as necessary, 
including locating any claims billed to Medicare as primary, or secondary, and denied 
(rejected for Part A claims) on the basis of the subsequently deleted CWF MSP GHP 
record. Claims with added termination dates shall be reopened no earlier than the 
termination date applied to CWF. 
 
The CWF shall generate an unsolicited response W and send this response with the 24 
and 10 trailers containing the identifying information regarding any such claims found to 
the shared system.  The unsolicited response shall include all the necessary information to 
identify the claim(s), including the Document Control Number/Internal Control 
Number/Claim Control number, Medicare beneficiary identifier, beneficiary name, and 
date(s) of service.  The CWF electronically transmits this unsolicited response to the 
claims processing contractor(s) that originally processed the claim(s) or send the claim to 
the MAC contractor that assumed the workload for the original legacy contractor that 
processed the claim. The previously denied claim(s) (rejected for Part A) is not to be 
canceled and remains on the CWF claims history pending subsequent adjustment as 
warranted. 
 
Upon receipt of the unsolicited response, the shared system software reads the claim 
information in the trailer for each claim and performs an automated reopening to each 
claim.  The claim(s) must be reopened and adjusted as warranted for all non-
reimbursed/claim denials (part A rejections)/ where Medicare paid secondary or 
terminations that were based upon the MSP GHP record that was just deleted or 
terminated. The MSP unsolicited responses are reported with the current MSP responses 
when COB deletes an MSP record a 03 will be received. The shared systems release 
the adjusted claims. Adjustments are subject to all applicable edits as the original claim(s) 
and sent to the CWF so that the claim(s) on the CWF history are replaced with the 
adjusted claim(s) records. 
 
The automated MSP GHP reprocessing requirement allows CWF to alert the shared 
system when a MSP GHP record is deleted or a termination date added for specific 
beneficiaries. The shared systems and Medicare Contractors receive an IUR transaction 
response from CWF alerting the system to reprocess certain MSP GHP claims where the 
open GHP record was deleted /terminated by the Coordination of Benefits Contractor 
(COBC) or 1-800-Medicare.  This unsolicited transaction is sent to the contractors on 
record at CWF who had claim history for the associated beneficiary within the 180 day 
period.  The CWF system is already programmed to send an updated MSP transaction 
(HUSC transaction) any time a change is made to an MSP record and this process does 
not change. 
 
 
 
 
  130.7 - MAC Guidance Related to Use of Adjustment Codes on 
Adjustment Claims 
(Rev. 4415; Issued: 10-11-19; Effective: 01-01-20; Implementation: 01-06-20) 
 
The Centers for Medicare & Medicaid Services (CMS) is refining the claim adjustment 
reporting process to achieve better consistency in the reporting of claim adjustments 
across the Medicare Administrative Contractors (MACs) and is adding new codes to 
address gaps in the current list of codes available.   
The Shared Systems use different terminology for the adjustment codes. In FISS, the 
adjustment codes are called Claim Frequency Codes. In MCS, the adjustment codes are 
called Method of Discovery Codes.  In VMS, the adjustment codes are called Accounting 
Discovery Codes.  
CMS is directing the A/B MACs to use claim frequency code H when CMS initiates 
the Part A claim adjustment, such as a mass adjustment directed by CMS to address 
system issues, and claim frequency code I when the A/B MAC identifies and initiates 
the Part A claim adjustment.   
CMS is also creating a new method of discovery code 12 to identify Part B adjustments 
in MCS that were initiated by CMS, and a new method of discovery code 13 for MAC 
initiated Part B adjustments in MCS.  The A/B MACs should use method of discovery 
code 12 for CMS-directed adjustments that do not fall into the C - CMS Review 
category or other existing CMS-related method of discovery categories.  The A/B MACs 
should use method of discovery code 13 for MAC identified and initiated adjustments 
that do not fall into the existing method of discovery code categories, such as method of 
discovery code A.  The A/B MACs should use method of discovery code A for 
adjustments arising from MAC initiated internal review, such as adjustments to address 
errors the MAC identified while processing the claim or adjustments due to MAC 
internal quality reviews.   
For provider initiated adjustments, MACs should continue with their current method of 
reporting (claim frequency code 7 for Part A claims, method of discovery code P for 
Part B MCS claims, and accounting discovery code D for Part B DME claims). 
 
 
140 - Fiscal Intermediary (FI) Edits Affecting Multiple Bill Types 
(Rev. 620, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
 
140.1 - Threshold Edit for Outpatient and Inpatient Part B Claims 
(Rev. 620, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
Effective for claims received on or after January 1, 2006, intermediaries shall edit for 
outpatient and inpatient Part B claims that meet or exceed a reimbursement amount of 
$50,000.  The edit shall be applied to the following providers and bill types: 
Provider Type      Types of Bills    Hospitals                 
  12X, 13X, 14X 
  Skilled Nursing Facilities             22X, 
23X 
  Home Health Agencies           
  32X, 33X, 34X 
  Religious Nonmedical Health Care Institutions    43X 
  Rural Health Clinics             
  71X 
  Renal Dialysis Facilities           
  72X 
  Federally Qualified Health Centers        73X 
  Outpatient Rehabilitation Facilities        74X 
  Comprehensive Outpatient Rehabilitation Facilities 75X 
  Community Mental Health Centers        76X 
  Hospice Providers             
  81X, 82X 
  Non-OPPS Hospitals Ambulatory Surgery      83X 
  Critical Access Hospitals           
  85X 
The FIs shall suspend those claims receiving the threshold edit for development and 
contact providers to resolve billing errors.  If the FI determines that the reimbursement is 
excessive and claim corrections are required, the FI shall return the claim to the provider.  
If the FI determines that the billing is accurate and the reimbursement is not excessive, 
the FI shall override the edit and submit the claim to the Common Working File (CWF) 
 
140.2  Systematic Validation of Claims Information Using Patient 
Assessments 
(Rev. 3001, Issued: 08-01-14, Effective: 10-01-12, Implementation: 01-05-15) 
 
The case-mix groups used to determine payments under several Medicare prospective 
payment systems (PPS) are based on clinical assessments of the beneficiary.  Each 
payment system uses a different patient assessment tool: 
 
Payment System  Assessment Used 
Skilled Nursing Facility  SNF PPS  Minimum Data Set 
Home Health  HH PPS  Outcomes and Assessment Information 
Set 
Inpatient Rehabilitation Facility  IRF PPS  IRF Patient Assessment Instrument 
 
In all three payment systems, the assessments are entered into software at the provider 
site that encodes the data into a standard transmission format and transmits the 
assessments to quality improvement systems.  In addition, the software runs the data from 
the assessments through grouping software that generates a case-mix group to be used on  Medicare PPS claims.  These case mix groups are reported on claims using a Health 
Insurance PPS (HIPPS) code.  
 
CMS provides free grouping software to perform this function, but many providers create 
their own software due to their need to integrate these data entry and grouping functions 
with their own administrative systems.  In some cases, this results in HIPPS codes 
reported on claims that differ from the HIPPS code calculated by the assessment system.   
 
In the interest of payment accuracy, Medicare claims processing systems may 
temporarily hold Medicare PPS claims paid under these payment systems (Medicare 
Advantage claims are excluded), in order to validate the claim information against the 
assessment record.  If the information found in the assessment system differs from the 
claim information, the assessment information will be used to pay the claim.   This 
process will occur within the payment floor period.  
 
This process may be used for various purposes, including: 
 
  Validating the provider-submitted HIPPS code 
  Ensuring timely assessment submission requirements are met 
  Ensuring conditions of payment are met. 
 
140.3 - Verification Edit for Claims with OPPS Payments 
(Rev. 2463, Issued 05-04-12, Effective: 10-01-12, Implementation: 10-01-12) 
 
Effective for claims received on or after October 1, 2012, FISS shall install a verification 
edit for claims with OPPS payments that exceed a reimbursement amount greater than 
submitted charges. The edit shall be applied to the following providers and bill types: 
 
Provider Type             Types of Bills 
Hospitals              12X, 13X, 14X 
 
Contractors shall suspend those claims receiving the verification edit for development 
and contact providers to resolve billing errors. If the contractor determines that the 
reimbursement is excessive and claim corrections are required, the contractor shall return 
the claim to the provider. If the contractor determines that the billing is accurate and the 
reimbursement is not excessive, the contractor shall override the FISS edit and submit the 
claim to the Common Working File (CWF). 
 
150 - Limitation of Liability Notification and Coordination With 
Quality Improvement Organizations (QIOs) 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
 
The longstanding relationship between QIOs and fiscal intermediaries (FIs) is defined in 
regulations at 42 CFR 476.80.  Generally, these regulations require QIOs and FIs to have 
an agreement under which: 
    QIOs inform FIs of the results of DRG validation of hospital inpatient claims 
 
  QIOs inform FIs of initial determinations of cases subject to preadmission review 
and any changes to these determinations 
 
  FIs ensure they do not pay claims subject to initial determinations until they 
receive notice from the QIO 
 
  QIOs and FIs exchange data or information and otherwise coordinate to perform 
their functions. 
 
More recently, this relationship was expanded by regulations regarding expedited 
determinations, found in 42 CFR 405, sections 1200-1208.  The following subsections 
provide additional detail on the coordination between these parties.  They also describe 
how various Medicare provider types reflect decisions of QIOs on claims they submit to 
Medicare FIs and how these decisions may affect the liability of Medicare beneficiaries 
for payment. 
 
150.1 - Limitation on Liability - Overview 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
A3-3674.1 
HO-414.6 
 
Chapter 30, of this manual has a complete explanation of the limitation of liability 
provision. However, the basic premise of the limitation on liability provision (1879 of 
the Act) is that beneficiaries and providers who did not know, and could not reasonably 
have been expected to know, that payment would not be made for such items(s) or 
service(s) item(s) and/or service(s) are protected from liability.  Where the provider had 
such knowledge, such that the 1879 limitations on liability do not apply, liability falls 
upon the provider (i.e., the provider cannot charge the beneficiary for such services when 
aware no program payment will be made). 
 
Medicare requires providers to notify beneficiaries when they face financial liability, so 
they can make informed choices. 
 
150.2 - Hospital Claims Subject to Hospital Issued Notices of 
Noncoverage 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
 
Hospitals must issue the HINN for inpatient hospital services, form prior to delivering 
care, and must deliver the form properly, so that a beneficiary knowingly assumes 
liability.  Instructions for the HINN are found in CMS Transmittal 594, and apply in 
specific cases to Part A services furnished by hospitals. 
  150.2.1 - Scope of Issuance of Hospital Issued Notices of Noncoverage 
(HINNs) 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
HO-414.3, .4 
 
Inpatient hospitals are required to issue HINNs to beneficiaries in a variety of 
circumstances defined in Chapter 30 of this manual.  Hospitals should refer to section 80 
of that chapter for further instructions on HINNs. 
 
NOTE:  Hospitals submit bills for all inpatient stays, including those for which no 
payment can be made.  Although no monies are involved with no-payment bills, a claim 
is required because hospitalization could extend a Medicare beneficiary's benefit period, 
or coinsurance or deductible may be due.  The hospital is not required to issue a HINN 
when it does not plan to bill the beneficiary (or their representative) for item(s) or 
service(s).  However, applicable coinsurance and deductibles are always charged to the 
beneficiary when care is provided no matter what party is liable for payment, and no 
liability notification is required for these collections. 
 
150.2.2 - General Responsibilities of QIOs and Fiscal Intermediaries 
(FIs) Related to HINNs 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
A3-3674.2 
 
Publication 100-10, The Quality Improvement Organization Manual, Chapter 7, provides 
detailed instructions regarding QIO responsibilities and procedures related to HINNs. 
 
The FI is responsible for making liability determinations in other cases (e.g., eligibility 
and reductions of payment).  However, the FI adjudicates claims, makes payment and 
sends beneficiaries Medicare Summary Notices in all cases, reflecting both QIO and FI 
determinations on liability.  This joint responsibility requires that the QIO notify the FI of 
its denial determinations, all preadmission determinations, and diagnostic or procedural 
coding changes.  The FI does not issue a denial notice to the beneficiary or the hospital 
for cases that have been reviewed by the QIO.  The QIO notifies the beneficiary and 
hospital. 
 
NOTE:  QIO determinations are binding and cannot be reversed by the FI. 
 
150.2.3 - Billing and Claims Processing Requirements Related to HINNs 
(Rev. 1472, Issued: 03-06-08, Effective: 05-23-07, Implementation: 04-07-08) 
 
Where QIO review is done prior to billing (preadmission or admission HINN), the 
hospital reports the results of the QIO's review on the claim using special indicators.  A 
set of condition codes were created to reflect these reviews.  These codes, C1- C7, are 
known as the QIO approval indicator codes. Information regarding the form locator 
numbers that correspond to condition codes and a table to crosswalk UB-04 form locators 
to the 837 transaction is found in Chapter 25.   
The FI reviews these codes and makes determinations as follows: 
 
  Code C1, C3, or C6 - Pay as billed. 
  Code C4 - Do not pay, but process a no-payment bill. 
  Blank or Code C5 - Return the claim to the provider for QIO review, unless the 
FIs agreement with the QIO requires sending it directly to the QIO. 
 
Where the QIO review occurs after FI processing (postpayment review), the QIO reports 
adjustments to the FI.  Currently there is no approved electronic format for this report. 
 
150.3 - Skilled Nursing Facility (SNF), Home Health Agency (HHA), 
Hospice and Comprehensive Outpatient Rehabilitation Facility (CORF) 
Claims Subject to Expedited Determinations 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
 
In short, SNFs, HHAs, hospices and CORFs must give notice to Medicare beneficiaries 
of their right to expedited determinations when their period of covered care ends.  
Expedited determinations allow beneficiaries to challenge/appeal their providers 
decisions to discharge, whereas the standard appeal process available after a claim is 
adjudicated allows beneficiaries to dispute payment denials.  Detailed instructions 
regarding expedited determination notices are found in CMS Transmittal 594. 
 
150.3.1 - Scope of Issuance of Expedited Determination Notices 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
Expedited determination notices are required prior to discharge when Medicare covered 
care has been occurring for some type of duration, such as a stay in an inpatient facility, 
or a period of services delivered under a plan of care supported by a physician order.  
Generally, intermittent items or services covered under Part B do not trigger the right to 
expedited determinations, since there is no continuous care to end.  Expedited 
determinations are available to beneficiaries for each of the specified provider types as 
follows: 
HHAs:  Provider initiated discharges for coverage reasons from HH services under a 
home health plan of care (types of bill 32x and 33x) are subject to expedited 
determination notices.  Home health services billed on a 34x type of bill are included if 
there is a therapy plan of care, but not when the HHA is acting as a durable medical 
equipment supplier in one-time or sporadic delivery of equipment. 
SNFs:  Provider initiated discharges for coverage reasons associated with SNF and swing 
bed inpatient claims (types of bill 18x, 21x and 22x) are subject to expedited 
determination notices. 
Hospices:  Provider initiated discharges for coverage reasons from hospice services 
(types of bill 81x and 82x), whether in inpatient or home care settings, are subject to 
expedited determination notices.  Even though revocation represents an end of covered 
hospice care, it cannot trigger an expedited determination since it is the beneficiarys, not 
the providers, choice to revoke.  Hospice discharges related to qualification/coverage  specific to the benefit would be rare cases where a beneficiary previously certified as 
terminally ill is judged no longer to be terminal. 
CORFs:  Provider initiated terminations of all covered CORFs services (type of bill 75x) 
provided under a therapy plan of care are subject to expedited determination notices.  
CORF services not provided under a plan of care, such as injections, are not included.  
Therapy services provided by outpatient rehabilitation facilities (type of bill 74x) or 
therapy services in hospital outpatient departments are not included. 
Expedited determinations notices are not required when discharge is unrelated to 
coverage. 
150.3.2 - General Responsibilities of QIOs and FIs Related to Expedited 
Determinations 
(Rev. 632, Issued: 07-29-05, Effective: 01-03-06, Implementation: 01-03-06) 
A.  QIO Role 
QIOs review expedited determination notices providers give beneficiaries, both as part of 
making decisions relative to coverage and to assure providers have given valid notice.  
The QIO is responsible for establishing contact with the provider, so that the 
beneficiarys medical records can used in making a determination, although QIOs can 
still make such decisions even if records are not available.  The QIO makes a decision on 
coverage in answer to the beneficiarys request for review, relaying this decision back to 
the involved parties.  If the beneficiary does not accept the QIO determination, they may 
request a reconsideration from a Qualified Independent Contractor (QIC). 
B.  Intermediary Role 
Intermediaries support beneficiaries and providers through an awareness of the expedited 
determination process and by performing routine duties potentially affected by this 
process--liability notice oversight, claims processing and medical review.  In the initial 
implementation of expedited determinations, FIs need to coordinate with QIOs regarding 
the outcome of QIO reviews.  As providers begin reporting the outcomes of QIO reviews 
on claims, the need for this coordination will diminish. 
Intermediary medical review should never repeat or contradict the results of QIO review 
regarding coverage, since this would be duplicative and QIO decisions are binding, and 
QIOs are bound by the same coverage policy in making their determinations--even local 
policy.  But the scope of these QIO decisions is limited to discharge, and medical review 
examines a much broader range of potential issues and periods of care.  For example, a 
monthly SNF claim could include a discharge reviewed by a QIO, but it also contains 
other days of billing not related to dischargethe non-discharge period is not considered 
by the QIO, and would still be subject to medical review. 
 
150.3.3 - Billing and Claims Processing Requirements Related to 
Expedited Determinations 
(Rev. 1472, Issued: 03-06-08, Effective: 05-23-07, Implementation: 04-07-08) 
 
As noted above, the outcome of expedited determinations and reconsiderations will be 
reported on Medicare claims to assure intermediary adjudication of claims is consistent 
with QIO/QIC decisions.  Note that the expedited review process is always completed 
prior to billing, and therefore does not directly affect established billing procedures, even 
demand billing, other than the use of indicators described below.   
Special indicators are used on claims to reflect the outcome of QIO expedited 
determinations and QIC reconsiderations.  Before the creation of the expedited review 
process, QIO related determinations were reflected only on hospital claims.  A set of 
condition codes were used to reflect these determinations. These codes, C1- C7, are 
known as the QIO approval indicator codes. 
 
With the advent of the expedited determination process, these QIO approval indicators 
are relevant to types of bill other than inpatient hospital claims.  The QIO approval 
indicator codes described below are valid for Medicare billing on the following types of 
bill: 
18x, 21x, 22x, 23x, 32x, 33x, 34x, 75x, 81x, 82x. 
 
Since QIO expedited decisions and QIC reconsideration decisions have the same effect 
on providers and beneficiaries, the same QIO approval indicator codes will be used to 
report a decision by either entity.  Providers should note that no indicators are required on 
discharge claims in the case where a generic notice is provided and the beneficiary does 
not request an expedited determination. 
 
A  Reporting of QIO/QIC Decisions Upholding a Discharge 
 
Providers must also report indicators on claims when they receive notification of 
decisions which uphold the providers decision to discharge the beneficiary from 
Medicare covered care.  In these cases, providers submit a discharge claim for the billing 
period that precedes the determination according to all applicable claims instructions plus 
one additional data element. Providers must annotate these claims with condition code 
C4, defined as Services Denied. 
 
Beneficiaries are protected from liability for the period from the delivery of the expedited 
notice, usually two days before the end of coverage, to the end of the covered period 
written on the notice if the beneficiary requests an expedited determination timely.  If the 
beneficiary does not request the determination timely, or if the determination process at 
the QIO is delayed, the beneficiary may be liable for services provided from the day after 
the end of the covered period until the date of the actual discharge. 
 
In cases where the beneficiary may be liable, in addition to reporting condition code C4 
providers must also report occurrence span code 76, defined as patient liability period, 
along with the days of liability that have been incurred.  Line items with dates of service 
falling within this patient liability period are reported with noncovered charges and, if 
they require HCPCS coding, with modifier TS.  Intermediaries will deny these lines and 
hold the beneficiary liable. 
 
In certain cases, an Advance Beneficiary Notice (ABN) may be issued simultaneously or 
immediately following the issuance of an expedited determination notice.  These ABNs 
would pertain to continued services that the beneficiary wishes to receive despite the 
providers intent to discharge the beneficiary.  Any required physician orders continue to  be needed for the services to continue.  If these ABN situations result in a beneficiarys 
request for a demand bill to Medicare regarding continuing services after the QIO/QIC 
has upheld the discharge, providers must report condition code C4 on the demand bill.  
The demand bill must otherwise be prepared according to all other applicable 
instructions. 
 
B  Reporting of QIO/QIC Decisions Not Upholding a Discharge 
 
When providers are notified of QIO/QIC decisions that authorize continued Medicare 
coverage and do not specify a coverage ending date, they must submit a continuing claim 
for the current billing or certification period according to all claims instructions for the 
applicable type of bill, plus a single additional data element.  Providers must annotate 
these claims with condition code C7, which is defined QIO extended authorization. 
This indicator will alert FIs/RHHIs that coverage of the services on the claim has already 
been subject to review. 
 
In the circumstance, expected to be rare, when providers are notified of QIO/QIC 
decisions which authorize continued Medicare coverage only for a limited period of time, 
they must submit claims as follows: 
 
  If the time period of coverage specified by the QIO/QIC extends beyond the end of 
the normal billing or certification period for the applicable type of bill, providers 
submit a continuing claim for that period according to all applicable claims 
instructions plus two additional data elements.  Providers must annotate these claims 
with condition code C3, which is defined QIO partial approval and with occurrence 
span code M0, which is defined QIO approved stay dates, along with the following 
datesthe beginning date of the coverage period provided by the QIO/QIC, and the 
statement through date of the claim. 
 
  If the time period of coverage specified by the QIO/QIC does not extend to the end of 
the normal billing or certification period for the applicable type of bill, providers 
submit a discharge claim according to all applicable claims instructions plus two 
additional data elements.  Providers must annotate these claims with condition code 
C3, which is defined QIO partial approval and with occurrence span code M0, 
which is defined QIO approved stay dates and the dates provided by the QIO/QIC. 
 
NOTE:  Regarding any decision that does not uphold a discharge, QIO/QIC decisions 
authorizing extended coverage cannot authorize delivery of services if there are not also 
the required physician orders needed to authorize the care. 
 
C  Billing Beneficiaries in Cases Subject to Expedited Determinations 
 
Providers should note a significant difference between the use of expedited determination 
notices and the use of ABNs.  As described in Claims Processing Manual, Chapter 1, 
section 60.3.1, in ABN or HHABN situations, all providers other than SNFs can bill 
beneficiaries for services subject to a demand bill while awaiting a Medicare  determination on the coverage of the services.  The same is not true in expedited 
determination situations.  When a beneficiary requests an expedited determination timely, 
no funds may be collected until the provider receives notification of the QIO/QIC 
decision. 
 
D  Reporting Provider Liability Situations 
 
Providers may be liable as a result of two specific situations in the expedited review 
process: 
 
(1) if the provider is not timely in giving information to the QIO; and  
 
(2) if the provider does not give valid notice to the beneficiary. 
 
Since both these events occur after the point the provider has already determined 
discharge is imminent, there may be no actual liability, since there may be no medical 
need for additional care.  However if services are required, and either of these liability 
conditions apply, such services should be billed as noncovered line items using the GZ 
modifier, which indicates the provider is liable, consistent with Section 60.4.2 of this 
chapter. 
 
160 - Identifying Institutional Providers 
(Rev. 11794, Issued:01-19-23, Effective: 04-01-23, Implementation:04-03-23) 
 
Since May 23, 2007, Medicare institutional providers submit only the ten position 
numeric National Provider Identifier (NPI) as their provider identifier.   
 
References to the six position alpha-numeric CMS Certification Number (CCN) 
(previously called the OSCAR number) found throughout the chapters of the Medicare 
Claims Processing Manual, on an ongoing basis, are supplied only for the purpose of 
CMS internal processing.  Therefore, these references are documented as for CMS use 
only. 
 
160.1 - Reporting of Taxonomy Codes (Institutional Providers) 
(Rev.11794, Issued:01-19-23, Effective: 04-01-23, Implementation:04-03-23) 
 
Institutional providers may submit a taxonomy code on claims they submit to Medicare.  
Medicare does not use the taxonomy code for matching a providers NPI to the 
appropriate legacy identifier.  Medicare uses other claims data for this purpose.  Medicare 
does not use the taxonomy code for any other claims processing purpose.  Payers other 
than Medicare may have requirements for taxonomy codes.  Medicare will pass any 
taxonomy code submitted on a Medicare claim to our trading partners on crossover 
claims, to allow for the possibility that those payers may use it. 
  If an institutional provider chooses to submit taxonomy codes, the following table 
supplies the crosswalk from Medicares CMS Certification Number (CCN) to the 
appropriate taxonomy code based on the providers facility type: 
 
Provider Type  CCN Coding  Taxonomy Code 
Short-term (General and Specialty) 
0001-0879  *Positions 3-6  282N00000X 
Hospitals 
Critical Access Hospitals  1300-1399 *  282NC0060X 
Long-Term Care Hospitals   2000-2299 *  282E00000X 
Hospital Based Renal Dialysis 
2300-2499*  261QE0700X 
Facilities 
Independent Renal Dialysis 
2500-2899*  261QE0700X 
Facilities 
Rehabilitation Hospitals   3025-3099 *  283X00000X 
Childrens Hospitals   3300-3399 *  282NC2000X 
Type of Bill code 
72X + 
261QE0700X + 
different zip code 
Hospital Based Satellite Renal 
3500-3699  than any renal 
Dialysis Facilities 
dialysis facility 
that is located on 
that hospitals 
campus 
Psychiatric Hospitals   4000-4499 *  283Q00000X 
Organ Procurement Organization 
P in third Position  335U00000X 
(OPO) 
Psychiatric Unit  M or S in third Position  273R00000X 
Rehabilitation Unit  R or T in third Position  273Y00000X 
Swing-Bed Unit  U, W, Y, or Z in third  Type of Bill Code 
Position  X8X (swing bed) 
with one of the 
following 
taxonomy codes 
to define the type 
of facility in 
which the swing 
bed is located 
275N00000X if 
unit in a short-
term hospital (U),  282E00000X if 
unit in a long-
term care hospital 
(W), 
283X00000X if 
unit in a rehab 
facility (Y), 
282NC0060X if 
unit in a critical 
access hospital 
(Z) 
 
170 - Payment Bases for Institutional Claims 
(Rev. 1526, Issued: 05-30-08, Effective: 07-01-08, Implementation: 07-07-08) 
 
There are many different payment mechanisms that apply to institutional claims.  Among 
these are reasonable cost, prospective payment systems, all of which require at least some 
bundling of services, and various fee schedules.  170.1 - Services Paid on the Medicare Physician Fee Schedule (MPFS) 
(Rev. 1526, Issued: 05-30-08, Effective: 07-01-08, Implementation: 07-07-08) 
 
The following chart shows for selected Types of Bill (TOB) those revenue codes containing (some) services payable on the MPFS. 
 
Services Payable on the MPFS                           
TOB by Revenue Code                             
Rev codes                                              
IHS  IHS 
   12x  IHS 12x  13x  13x  22x  23x  34x  72x  74x  75x  76x  81x  82x  85x  85x 
030x              X                               
031x              X                               
032x              X  X                            
033x              X  X                            
034x              X  X                            
036x              X  X                            
0401, 0403  X     X     X  X                       X  X 
0410, 0412, 0419              X  X           X                
042x  X  X  X  X  X  X  X     X  X                
043x  X  X  X  X  X  X  X     X  X                
044x  X  X  X  X  X  X  X     X  X                
046x              X  X                            
471  X  X  X  X  X  X                            
048x              X  X                            
0550, 0559                             X                
056x                             X                
061x              X  X                            
657                                   X  X       
070x              X  X                            
073x              X  X                            
074x              X  X                            
075x              X  X                             771  X  X  X  X  X  X  X  X      X           X  X 
                                               
                                               
 
Services Payable on the MPFS                           
TOB by Revenue Code (continued)                           
IHS  HIS 
   12x  IHS 12x  13x  13x  22x  23x  34x  72x  74x  75x  76x  81x  82x  85x  85x 
078x  X  X  X  X                             X  X 
090x              X  X           X                
091x              X  X           X                
092x              X  X                            
0940, 0942, 0949              X  X           X                
096x                                         X  X 
097x                                         X  X 
098x                                         X  X 
 
  170.1.1  Payments on the MPFS for Providers With Multiple Service 
Locations 
(Rev. 3454, Issued: 02-04-16, Effective: 07-01-16, Implementation: 07-05-16) 
 
Services that are paid subject to the Medicare Physician Fee Schedule (MPFS) are adjusted based 
on the applicable payment locality.  Medicare systems determine which locality applies using 
ZIP codes.  In cases where the provider has only one service location, the payment locality used 
to calculate the fee amount is determined using the ZIP code of the master address contained in 
the Medicare contractors provider file. 
 
Increasingly, hospitals operate off-site outpatient facilities.  Other institutional outpatient service 
providers, including rehabilitation agencies and Comprehensive Outpatient Rehabilitation 
Facilities, may operate multiple sites.  In some cases, these additional locations are in a different 
payment locality than the parent provider.  In order for MPFS payments to be accurate, the nine-
digit ZIP code of the satellite facility is used to determine the locality in these cases. 
 
Medicare outpatient service providers report the nine-digit ZIP code of the service facility 
location in the 2310E loop of the 837 Institutional claim transaction.  Direct Data Entry 
submitters also are required to report the nine-digit ZIP code of the service facility location for 
off-site or multiple satellite office outpatient facilities.  Paper submitters report this information 
in Form Locator (FL) 01 on the paper claim form.  Medicare systems use this service facility ZIP 
code to determine the applicable payment locality whenever it is present. 
 
180  Denial of Claims Due to Violations of Physician Self-Referral 
Prohibition 
(Rev. 1578, Issued: 08-15-08, Effective: 01-01-09, Implementation: 01-05-09) 
 
180.1  Background and Policy 
(Rev. 1578, Issued: 08-15-08, Effective: 01-01-09, Implementation: 01-05-09) 
 
Under Section 1877 of the Social Security Act (the Act) (42 U.S.C. 1395nn), a physician may 
not refer a Medicare patient for certain designated health services (DHS) to an entity with which 
the physician (or an immediate family member of the physician) has a financial relationship, 
unless an exception applies.  Section 1877 of the Act also prohibits the DHS entity from 
submitting claims to Medicare, the beneficiary, or any entity for DHS that are furnished as a 
result of a prohibited referral.  The following services are DHS: clinical laboratory services; 
radiology and certain other imaging services (including MRIs, CT scans and ultrasound); 
radiation therapy services and supplies; durable medical equipment and supplies; orthotics, 
prosthetics, and prosthetic devices; parenteral and enteral nutrients, equipment and supplies; 
physical therapy, occupational therapy, speech-language pathology services; outpatient 
prescription drugs; home health services and supplies; and inpatient and outpatient hospital 
services.  A financial relationship includes both ownership/investment interests and 
compensation arrangements (for example, contractual arrangements between a hospital and a 
physician for physician services).  The statute and regulations enumerate various exceptions to 
the physician self-referral prohibition.  Violations of the statute are punishable by denial of 
payment for all DHS claims, refunds of amounts collected for DHS claims, and civil money 
penalties for knowing violations of the prohibition.  Applicable regulations are published at 42 
C.F.R. Part 411, Subpart J.   
180.2  Denial Code 
(Rev. 1578, Issued: 08-15-08, Effective: 01-01-09, Implementation: 01-05-09) 
 
Prior to the publication of the new CARC #213, there was no specific code to describe claims 
that are denied based on a violation of the physician self-referral statute at Section 1877 of the 
Act.  A specific code is appropriate so both the providers of DHS and the industry know that 
claims are being denied based on the non compliance with the physician self-referral 
prohibitions.  This code should be used any time a claim is denied because the physician (or an 
immediate family member of the physician) has a financial interest in a DHS provider and fails 
to meet one of the exceptions available in 42 C.F.R. 411.355-411.357. 
 
190  Payer Only Codes Utilized by Medicare 
(Rev. 11571, Issued:08-25-22, Effective: 09-27-22, Implementation: 09-27-22)  
This section contains the listing of payer codes designated by the National Uniform Billing 
Committee to be assigned by payers only. Providers shall not submit these codes on their claims 
forms. The definitions indicating Medicares usage for these systematically assigned codes are 
indicated next to each code value.  
Condition Codes  
12-14  Not currently used by Medicare.  
15  Clean claim is delayed in CMS Processing System.  
16  SNF Transition exception.   
62  PIP Bill.  
63  Bypass CWF edits for incarcerated beneficiaries. Indicates services rendered to a 
prisoner or a patient in State or local custody meets the requirement of 42 CFR 411.4(b) for 
payment.  
 
64  Other Than Clean Claim.  
65  Non-PPS Bill.  
98  Data Associated With DRG 468 Has Been Validated.  
EY  Lung Reduction Study Demonstration Claims.  
M0  All-Inclusive Rate for Outpatient -Used by a Critical Access Hospital electing to be 
paid an all-inclusive rate for outpatient services.  
 
M1  Roster Billed Influenza Virus Vaccine or Pneumococcal Pneumonia Vaccine (PPV). 
Code indicates the influenza virus vaccine or pneumonia vaccine (PPV) is being billed via 
the roster billing method by providers that mass immunize.   M2  Allows Home Health claims to process if provider reimbursement > $150,000.00. 
HHA Payment Significantly Exceeds Total Charges. Used when payment to an HHA is 
significantly in excess of covered billed charges.  
M3  SNF 3 Day stay bypass for NG/Pioneer ACO waiver.  
M4  Presence of infected wound or wound with morbid obesity 
 
M5  Not currently used by Medicare 
 
M6  PA Rural Health Model 
M7-M9  Not currently used by Medicare.  
MA  GI Bleed. (Bill Type 072x) 
MA  Managed Care Enrollee (Bill Type 012x, 013x, and 076x) 
MB  Pneumonia. (Bill Type 072x) 
MC  Pericarditis. (Bill Type 072x) 
MD  Myelodysplastic Syndrome. (Bill Type 072x) 
ME  Hereditary Hemolytic and Sickle Cell Anemia. (Bill Type 072x) 
MF  Monoclonal Gammopathy. (Bill Type 072x) 
MG  Grandfathered Tribal Federally Qualified Health Centers.  
MH-MN  Not currently used by Medicare.  
MO  MAC Override Appeal Timeliness.  
MP  PHP claim contains initial admit week 
MQ  PHP claim contains final discharge week 
MR-MU  Not currently used by Medicare.  
MV  20 hours for partial PHP subsequent week not met 
MW  20 hours for partial PHP initial week net met 
MX  Wrong Surgery on Patient (Inpatient) 
MY  Surgery Wrong Body Part (Inpatient) 
MY  Outlier Cap Bypass (CMHC)  MZ  Surgery Wrong Patient (Inpatient) 
MZ  IOCE error code bypass (Outpatient) 
UU  Not currently used by Medicare.  
 
Z0-Z9  Not currently used by Medicare. 
 
ZA  No Positive COVID-19 test result in M/R 
 
ZB  Expanded Access approval 
 
ZC  Clinical Trial of a different product 
 
ZD-ZZ  Not currently used by Medicare. 
 
Occurrence Codes  
23  Date of Cancellation of Hospice Election period.  
48  Not currently used by Medicare. 
49  Original Notice of Election (NOE) receipt date.  
 
AA-AZ  Not currently used by Medicare. 
Occurrence Span Codes  
79  Verified non-covered stay dates for which the provider is liable.  
Z0-Z9  Not currently used by Medicare. 
ZA-ZZ  Not currently used by Medicare. 
Value Codes  
17  Operating Outlier Amount  The A/B MAC (A) reports the amount of operating outlier 
payment amount made (either cost or day (day outliers have been obsolete since 1997)) in 
CWF with this code. It does not include any capital outlier payment in this entry.  
 
18  Operating Disproportionate Share Amount  The A/B MAC (A) REPORTS THE 
OPERATING DISPROPORTIONATE SHARES AMOUNT APPLICIALBE. It uses the 
amount provided by the disproportionate share field in PRICER. It does not include any PPS 
capital IME adjustment entry.   19  Outpatient Use.  The Medicare shared system will display this payer only code on the 
claim for low volume providers to identify the amount of the low volume adjustment being 
included in the providers reimbursement. This payer only code 19 is also used for IME on 
hospital claims. This instruction shall only apply to ESRD bill type 72x and must not impact 
any existing instructions for other bill types.  
19  Inpatient Use.  Operating Indirect Medical Education Amount  The A/B MAC (A) 
reports operating indirect medical education amount applicable. It uses the amount 
provided by the indirect medical education field in PRICER. It does not include any PPS 
capital IME adjustment in this entry.  
20  Total payment sent provider for capital under PPS, including HSP, FSP, outlier, old 
capital, DSH adjustment, IME adjustment, and any exception amount.  
62  On Type of Bill 032x: HH Visits -Part A -The number of visits determined by 
Medicare to be payable from the Part A trust fund to reflect the shift of payments from the 
Part A to the Part B Trust Fund as mandated by 1812(a)(3) of the Social Security Act. 
 
62  On Type of Bills 081x 0r 082x: Number of High Routine Home Care Days - Days that 
fall within the first 60 days of a routine home care hospice claim.   
63  On Type of Bill 032x: HH visits  Part B -The number of visits determined by Medicare 
to be payable from the Part B trust fund to reflect the shift of payments from the Part A to the 
Part B Trust Fund as mandated by 1812(a)(3) of the Social Security Act.  
 
63  On Type of Bills 081x 0r 082x: Number of Low Routine Home Care Days - Days that 
come after the first 60 days of a routine home care hospice claim. 
64  HH Reimbursement  Part A -The dollar amounts determined to be associated with the 
HH visits identified in a value code 62 amount. This Part A payment reflects the shift of 
payments from the Part A to the Part B Trust Fund as mandated by 1812(a)(3) of the 
Social Security Act.  
65  HH Reimbursement  Part B -The dollar amounts determined to be associated with the 
HH visits identified in a value code 63 amount. This Part B payment reflects the shift of 
payments from the Part A to the Part B Trust Fund as mandated by 1812(a)(3) of the 
Social Security Act.  
70  Interest Amount  The contractor reports the amount of interest applied to this 
Medicare claim.  
71  Funding of ESRD Networks -The A/B MAC (A) reports the amount the 
Medicare payment was reduced to help fund ESRD networks.  
72  Flat Rate Surgery Charge  The standard charge for outpatient surgery where the 
provider has such a charging structure.  
73  Sequestration adjustment amount.   74  Low volume hospital payment amount  
 
75  Prior covered days for an interrupted stay.  
 
76  Providers Interim Rate  Providers percentage of billed charges interim rate during 
this billing period. This applies to all outpatient hospital and skilled nursing facility (SNF) 
claims and home health agency (HHA) claims to which an interim rate is applicable. The 
contractor reports to the left of the dollar/cents delimiter. An interim rate of 50 percent is 
entered as follows: 50.00.  
 
77  Medicare New Technology Add-On Payment  Code indicates the amount of Medicare 
additional payment for new technology.  
 
78  Off-site Zip Code  When the facility zip (Loop 2310E N403 Segment) is present for 
the following bill types: 012X, 013X, 014X, 022X, 023X, 034X, 072X, 074X, 075X, 081X, 
082X, and 085X. The ZIP code is associated with this value and is used to price MPFS 
HCPCS and Anesthesia Services for CAH Method II.  
 
79  Total payments for services applicable to the ESRD  The Medicare shared system will 
display this payer only code on the claim. The value represents the dollar amount for 
Medicare allowed payments applicable for the calculation in determining an outlier payment.  
 
Q0  Pioneer Accountable Care Organization (ACO) non-model payment or Next Generation 
ACO non-model payment 
 
Q1  Pioneer ACO model payment amount including reduction or NG ACO payment amount 
including reduction 
 
Q2  Hospice claim paid from Part B Trust Fund  
 
Q3  Prior Authorization 25% Penalty  
 
Q4  PA Rural Model Exclusion - Physician Service Claim Reimbursement 
 
Q5  EHR  
 
Q6  PQRS  
 
Q7  Islet Isolation Add-on payment amount 
 
Q8  Transitional Drug Add-On Payment Adjustment 
 
Q9 - Medicare Performance Adjustment (MPA) 
 
QA  PHP partial week input 
 
QB  ESRD Treatment Choices (ETC) Model: Home Dialysis Payment Adjustment (HDPA) 
total bonus paid. 
  QC  OCM+ Adjustment 
 
QD  Device Credit  
 
QE  ET3 Model  ET3 15% bonus payment 
 
QF  HHA - LATE-SUB-PENALTY-AMT 
 
QG  ESRD  Total TPNIES Amount 
 
QH  ESRD - TPNIES capital related assets (CRA) 
 
QI  FQHC MDPCP DEMO 
 
QJ  ETC Model Facility PPA 
 
QK  Maryland Waiver Kidney Acquisition Payment 
 
QL  Not used by Medicare 
 
QM  MIPS adjustment amount 
 
QN  First APC pass-through device offset  
 
QO  Second APC pass-through device offset  
 
QP  Third APC pass-through device offset  
 
QQ  Terminated procedure with device offset  
 
QR  First APC pass-through drug or biological offset  
QS  Second APC pass-through drug or biological offset  
QT  Third APC pass-through drug or biological offset  
QU Device credit with device offset  
QV  Value-based purchasing adjustment amount  
QW  PHP partial week output 
 
QX-QZ  Not used by Medicare 
 
Z0-Z8  Not used by Medicare 
 
Z9  COVID-19 PHE End Date 
 
ZA-ZZ  Not used by Medicare  200 - Qualified Medicare Beneficiary (QMB) Program 
(Rev. 4332, Issued: 07-03-19, Effective: 10-01-19, Implementation: 10-07-19) 
 
The Qualified Medicare Beneficiary (QMB) Program is a Medicaid program that assists low-
income beneficiaries with Medicare premiums and cost-sharing. Federal law bars Medicare 
providers from billing an individual enrolled in QMB for Medicare Part A and Part B cost-
sharing for covered items and services. See section 1902(n)(3)(B) of the Social Security Act, as 
modified by section 4714 of the Balanced Budget Act of 1997.   
 
Providers and suppliers may bill State Medicaid agencies for Medicare cost-sharing amounts. 
However, as permitted by Federal law, States may limit Medicare cost-sharing payments, under 
certain circumstances. Regardless, persons enrolled in the QMB program have no legal liability 
to pay Medicare providers for Medicare Part A or Part B cost-sharing for covered items and 
services. 
 
Medicare providers who violate these billing prohibitions are violating their Medicare Provider 
Agreement and may be subject to sanctions. (See Sections 1902(n)(3)(C); 1905(p)(3); 
1866(a)(1)(A); 1848(g)(3)(A) of the Social Security Act.) 
 
Note: providers may seek reimbursement for unpaid Medicare deductible and coinsurance 
amounts as a Medicare bad debt.  Before a provider can be reimbursed for bad debts related to 
dual-eligible beneficiaries, Medicare policy under CMS Pub. 15-1, Chapter 3, Section 312 of the 
Provider Reimbursement Manual (PRM) requires a determination and documentation of the 
states liability for any cost sharing amounts.  To effectuate this, Medicare requires the provider 
to bill the state to determine that the state is not liable for payment, even if the Medicare provider 
is not enrolled or the service is not covered under the states Medicaid plan. 
 
To aid compliance with QMB billing prohibitions, the Medicare claims processing system will 
generate notifications to Medicare providers (via the Remittance Advice) and beneficiaries (via 
the Medicare Summary Notice) that indicate the beneficiarys QMB status and lack of liability 
for cost-sharing. The Medicare Claims Processing System will use the Common Working File 
(CWF) to receive QMB status via the Eligibility Database (EDB).  The QMB indicators will be 
transmitted to the shared systems with the applicable QMB START and END dates.  The two 
indicators that apply to QMB individuals are Dual Status Code 01 Qualified Medicare 
Beneficiaries without other Medicaid (QMB-only), and Dual Status Code 02 Qualified 
Medicare Beneficiaries plus full Medicaid (QMB-Plus). CWF will transmit the QMB indicator if 
the dates of service coincide with a QMB coverage period (one of the occurrences) for the 
following claim types:  Part B professional claims; Durable Medical Equipment, Prosthetics, 
Orthotics and Supplies (DMEPOS) claims; and outpatient institutional and Skilled Nursing 
Facility (SNF) claims.  CWF will transmit the QMB indicator if the discharge date falls within a 
QMB coverage period (one of the occurrences) for inpatient hospital claims.  
 
QMB indicators will initiate messages on the Remittance Advice that reflect the beneficiarys 
QMB status and lack of liability for Medicare cost-sharing with Remittance Advice Remark 
Codes (RARCs) that are specific to those enrolled in QMB.   
 
 
Effective July 2, 2018, for QMB claims the shared systems will use:    
  Group Code PR along with CARC 1 and/or 2, 66, as applicable, with monetary values 
expressed on outbound Medicare 835 Electronic Remittance Advices (ERAs) and on 
standard paper remittance advices (SPRs), as applicable.   
 
  Additionally, the shared systems shall include Alert Remittance Advice Remark Codes 
(RARC) on the ERA and SPR, as applicable, that designate that the beneficiary has QMB 
status and may not be billed for Medicare cost-sharing amounts.   
 
  N781 - Patient is a Medicaid/ Qualified Medicare Beneficiary. Review your 
o
records for any wrongfully collected deductible. This amount may be billed to 
subsequent payer. 
  N782  Patient is a Medicaid/ Qualified Medicare Beneficiary. Review your 
o
records for any wrongfully collected co-insurance. This amount may be billed to 
subsequent payer. 
 
Additionally, the Medicare Summary Notice (MSN) generated for all QMB individuals will 
include information regarding their QMB status and lack of liability for Medicare cost-sharing 
amounts for covered Parts A/B items and services.   
 
MSNs with QMB claims that are paid  
  If an MSN includes at least one detail line for a QMB that contains an allowed amount 
greater than zero, page one (the summary page), will use Message 62.0 to briefly explain 
the QMB billing protections (in the "Be Informed!" section). Also on page one, the 
patients total liability amount (in the Total You May Be billed field) will omit the 
deductible and coinsurance amounts for details lines that are for a QMB and include an 
allowed amount greater than zero.  
  In the claims detail section of the MSN, if the detail line is for a QMB and includes an 
allowed amount greater than zero, such detail line will reflect $0 (in the Maximum You 
May Be Billed field) and include message 62.1 that informs the beneficiary of her/his 
QMB status and billing protections. 
MSNs with QMB claims that are denied  
  In the claim detail pages of the MSN, if a detail line is flagged as QMB and contains an 
allowed amount of zero, the MSN will reflect the beneficiary's total liability amount in 
the Maximum You May Be Billed field and include new MSN 11.21 message to 
inform the beneficiary that even though Medicare has denied the claim, Medicaid may 
pay for care. 
 
Note: For claims processed by VIPS Medicare System (VMS), if a detail line is flagged as 
QMB and contains an allowed amount of zero, and the beneficiary has not signed an 
Advance Beneficiary Notice or is subject to Waiver of Liability which has not been attached, 
the contractor shall not print MSN message 11.21 
 
 
 
   
 
 
Transmittals Issued for this Chapter 
 
Rev #  Issue Date  Subject  Impl Date  CR# 
R12107CP 06/29/2023  New Fiscal Intermediary Shared System (FISS)  01/02/2024  13219 
Consistency Edit to Validate Attending Physician 
National Provider Identifier (NPI) - Phase 2 
R11794CP 01/19/2023  Preventing Submission of Cross-Reference  04/03/2023  13008 
Document Control Numbers on Original Claims 
R11633CP 10/06/2022  New Fiscal Intermediary Shared System (FISS)  04/03/2023  12889 
Consistency Edit to Validate Attending Physician 
National Provider Identifier (NPI) 
R11731CP 12/09/2022  Update to the Internet Only Manual (IOM)  01/11/2023  12992 
Publication (Pub.) 100-04, Chapter 1, Section 90, to 
include Critical Access Hospitals (CAHs) for a 
Portion of a Medicare Advantage (MA) Billing 
Period 
R11571CP 08/25/2022  Updates are Being Made to Chapter 1 of the  09/27/2022  12840 
Medicare Claims Processing Manual to Include 
Newly Created and Utilized Payer Only Codes 
R10840CP 06/11/2021  Updates to the Internet Only Publication 100-04,  07/12/21  12310 
Chapter 1, Section 10.1 and Chapter 20, Section 10 
 
R10236CP 07/31/2020  Update to the IOM Publication (Pub) 100-04,  08/31/2020  11857 
Medicare Claims Processing Manual, Chapters 1, 6, 
8, 17, 20, 22, 24, and 31 Referencing the Active 
Universal Resource Locators (URLs) for the 
Washington Publishing Company (WPC) and the 
ASC X12 Organizations, and Updates to the HIPAA 
Eligibility Transaction System (HETS) 
 
  12/06/2019  Update to Medicare Claims Processing Manual,  03/09/2020  10882 
Chapters 1, 23 and 35 
R4415CP  10/11/2019  Medicare Administrative Contractor (MAC)  01/06/2020  11113 
Guidance Related to Use of Adjustment Codes on 
Adjustment Claims 
R4388CP  09/06/2019  Manual Updates to Chapters 1, 22, 24, 26, and 31 in  10/01/2019  11331 
Publication (Pub.) 100-04 
 
R4381CP  08/30/2019  Updates to Chapter 1 Payer Only Codes in the  10/01/2019  11414 
Medicare Claims Processing Manual 
 
R4337CP  07/18/2019  Implementation of the Medicare Performance  07/01/2019  10971  Rev #  Issue Date  Subject  Impl Date  CR# 
Adjustment (MPA) for the Maryland Total Cost of 
Care (MD TCOC) Model 
 
R4332CP  07/03/2019  Medicare Summary Notice (MSN) Changes to Assist 10/07/2019  11230 
Beneficiaries Enrolled in the Qualified Medicare 
Beneficiary (QMB) Program 
R4308CP  05/16/2019  Implementation of the Medicare Performance  07/01/2019  10971 
Adjustment (MPA) for the Maryland Total Cost of   
Care (MD TCOC) Model- Rescinded and Replaced 
by Transmittal 4337 
 
R4290CP  05/03/2019  Medicare Summary Notice (MSN) Changes to Assist 10/07/2019  11230 
Beneficiaries Enrolled in the Qualified Medicare 
Beneficiary (QMB) Program - Rescinded and 
Replaced by Transmittal 4332 
 
 
R4271CP  03/29/2019  Update to the Internet-Only-Manual (IOM)  04/29/2019  11188 
Publication (Pub.) 100-04, Chapters 1 and 3 
R4257CP  03/14/2019  Implementation of the Medicare Performance  07/01/2019  10971 
Adjustment (MPA) for the Maryland Total Cost of 
Care (MD TCOC) Model- Rescinded and Replaced 
by Transmittal 4308 
R4230CP  02/01/2019  Implementation of the Medicare Performance  07/01/2019  10971 
Adjustment (MPA) for the Maryland Total Cost of   
Care (MD TCOC) Model- Rescinded and Replaced 
by Transmittal 4257 
R4201CP  01/18/2019  Update to Pub. 100-04 Chapter 1 to Provide  02/19/2019  10916 
Language-Only Changes for the New Medicare Card 
Project 
R4163CP  11/02/2018  Internet Only Manual Updates to Pub. 100-01, 100- 12/04/2018  11004 
02 and 100-04 to Correct Errors and Omissions 
(SNF) (2018 Q4) 
R4035CP  04/27/2018  Enhancements to Processing of Hospice Routine  10/01/2018  10573 
Home Care Payments 
R4047CP  05/11/2018  Updates to Publication 100-04, Chapters 1 and 27 to  08/13/2018  10619 
Replace Remittance Advice Remark Code (RARC) 
MA61 with N382 
R4001CP  03/16/2018  Internet Only Manual Updates to Pub. 100-01, 100- 06/19/2018  10512 
02 and 100-04 to Correct Errors and Omissions 
(SNF) (2018) 
R3993CP  03/06/2018  Reinstating the Qualified Medicare Beneficiary  07/02/2018  10433 
Indicator in the Medicare Fee-For-Service Claims 
Processing System from CR 9911  Rev #  Issue Date  Subject  Impl Date  CR# 
R3965CP  02/02/2018  Reinstating the Qualified Medicare Beneficiary  07/02/2018  10433 
Indicator in the Medicare Fee-For-Service Claims 
Processing System from CR 9911 Rescinded and 
Replaced by Transmittal 3993 
 
R3933CP  12/07/2017  Revisions to the Home Health Pricer to Support  01/02/2018  10167 
Value-Based Purchasing and Payment 
Standardization 
R3920CP  11/05/2017  Qualified Medicare Beneficiary Indicator in the  07/03/2017  9911 
Medicare Fee-For-Service Claims Processing System 
R3829CP  08/04/2017  Revisions to the Home Health Pricer to Support  01/02/2018  10167 
Value-Based Purchasing and Payment 
Standardization- Rescinded and Replaced by 
Transmittal 3933 
 
R3802CP  06/28/2017  Qualified Medicare Beneficiary Indicator in the  07/03/2017  9911 
Medicare Fee-For-Service Claims Processing 
System- Rescinded and Replaced by Transmittal 
3920 
R3774CP  05/12/2017  Changes to the Payment Policies for Reciprocal  06/13/2017  10090 
Billing Arrangements and Fee-For-Time 
Compensation Arrangements (formerly referred to as 
Locum Tenens Arrangements) 
R3764CP  04/28/2017  Qualified Medicare Beneficiary Indicator in the  07/03/2017  9911 
Medicare Fee-For-Service Claims Processing System 
R3715CP  02/02/2017  Qualified Medicare Beneficiary Indicator in the  07/03/2017  9911 
Medicare Fee-For-Service Claims Processing System 
R3537CP  06/08/2016  Corrections to Chapter 1 of the Medicare Claims  08/08/2016  9623 
Processing Manual 
R3519CP  05/06/2016  Corrections to Chapter 1 of the Medicare Claims  08/08/2016  9623 
Processing Manual - Rescinded and replaced by 
Transmittal 3537 
R3510CP  04/29/2016  Updates to Pub. 100-04, Chapters 1 and 16 to  10/03/2016  9578 
Correct Remittance Advice Messages 
R3503CP  04/28/2016  Billing of Vaccine Services on Hospice Claims   10/03/2016  9052 
Rescinded and replaced by Transmittal 3540 
R3475CP  03/04/2016  Updates to Pub. 100-04, Chapters 4 and 5 to Correct  06/06/2016  9424 
Remittance Advice Messages 
R3454CP  02/04/2016  Correction to Applying Therapy Caps to Maryland  07/05/2016  9489 
Hospitals and Billing Requirement for Rehabilitation 
Agencies and Comprehensive Outpatient 
Rehabilitation Facilities (CORFs)  Rev #  Issue Date  Subject  Impl Date  CR# 
R3415CP  11/23/2015  Payment for Grandfathered Tribal Federally  01/04/2016  9267 
Qualified Health Centers (FQHCs) that were 
Provider-Based Clinics on or Before April 7, 2000 
R3398CP  11/06/2015  Processing Hospice Denials When Face-to-Face  04/04/2016  9385 
Encounter is Not Received Timely 
R3389CP  10/30/2015  Outpatient Mental Health Treatment Limitation Split  04/04/2016  9306 
Claims Fix 
R3313CP  08/06/2015  Payment for Grandfathered Tribal Federally  01/04/2016  9267 
Qualified Health Centers (FQHCs) that were 
Provider-Based Clinics on or Before April 7, 2000 - 
Rescinded and replaced by Transmittal 3415 
R3287CP  06/30/2015  Revisions to Medicare Claims Processing Manual for 04/21/2015  8940 
Foreign, Emergency and Shipboard Claims 
R3262CP  05/15/2015  Manual Update to Pub. 100-04, Chapter 1, to include  07/06/2015  9079 
Claims Submitted by Multiple DMEPOS Suppliers 
R3255CP  05/08/2015  Correction to the Multi-Carrier System (MCS)  10/05/2015  9150 
Editing on the Service Location National Provider 
Identifier (NPI) Reported for Anti-Markup and 
Reference Laboratory Claims 
R3219CP  03/16/2015  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process 
R3199CP  02/20/2015  Revisions to Medicare Claims Processing Manual for 04/21/2015  8940 
Foreign, Emergency and Shipboard Claims  
Rescinded and replaced by Transmittal 3287 
R3203CP  02/20/2015  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process  Rescinded and replaced by Transmittal 
3219 
R3164CP  01/14/2015  Medicare Shared Systems Modifications Necessary  04/06/2015  8384 
to Capture Various HIPAA Compliant Fields 
R3154CP  12/19/2014  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process  Rescinded and replaced by Transmittal 
3203 
R3107CP  11/06/2014  Medicare Shared Systems Modifications Necessary  04/06/2015  8384 
to Capture Various HIPAA Compliant Fields  
Rescinded and replaced by Transmittal 3164 
R3103CP  11/03/2014  Reporting the Service Location National Provider  04/06/2015  8806 
Identifier (NPI) on Anti-Markup and Reference 
Laboratory Claims 
R3098CP  10/21/2014  Reporting the Service Location National Provider  04/05/2015  8806 
Identifier (NPI) on Anti-Markup and Reference 
Laboratory Claims  Rescinded and replaced by 
Transmittal 3103  Rev #  Issue Date  Subject  Impl Date  CR# 
R3086CP  10/03/2014  Update to Pub. 100-04, Chapter 1 to Provide  11/04/2013  8687 
Language-Only Changes for Updating ICD-10 and 
ASC X12 
R3060CP  09/03/2014  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process  Rescinded and replaced by Transmittal 
3154 
R3051CP  08/25/2014  Adjustment to Fiscal Intermediary Shared System  10/06/2014  8655 
(FISS) Consistency Edit to Implement National 
Uniform Billing Committee (NUBC) Revision to 
Occurrence Span Code (OSC) Definition for Code 
72 
R3047CP  08/22/2014  Reporting the Service Location National Provider  01/05/2014  8806 
Identifier (NPI) on Anti-Markup and Reference 
Laboratory Claims  Rescinded and replaced by 
Transmittal 3098 
R3022CP  08/08/2014  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process  Rescinded and replaced by Transmittal 
3060 
R3001CP  08/01/2014  Adjustment to Systematic Validation of Payment  01/05/2015  8654 
Group Codes for Prospective Payment Systems 
(PPS) Based on Patient Assessments 
R2984CP  07/11/2014  Beneficiary Signature Requirements for Ambulance  08/12/2014  8760 
Services 
R2950CP  05/08/2014  Adjustment to Fiscal Intermediary Shared System  10/06/2014  8655 
(FISS) Consistency Edit to Implement National 
Uniform Billing Committee (NUBC) Revision to 
Occurrence Span Code (OSC) Definition for Code 
72  Rescinded and replaced by Transmittal 3051 
R2944CP  05/02/2014  Automation of the Request for Reopening Claims  10/06/2014  8581 
Process  Rescinded and replaced by Transmittal 
3022 
R2921CP  04/04/2014  Internet Only Manual Updates to Pub. 100-01, 100- 05/05/2014  8669 
02 and 100-04 to Correct Errors and Omissions 
R2896CP  03/07/2014  Indirect Payment Procedure (IPP) - Payment to  06/06/2014  8638 
Entities that Provide Coverage Complementary to 
Medicare Part B 
R2876CP  02/07/2014  Update to Pub 100-04, Claims Processing Manual,  03/07/2014  8442 
Chapter One 
R2815CP  11/15/2013  Updates to the Medicare Claims Processing Internet- 03/18/2014  8490 
Only Manual (IOM) 
R2799CP  10/25/2013  Annual Medicare Physician Fee Schedule (MPFS)  01/06/2014  8462 
Files Delivery and Implementation  Rev #  Issue Date  Subject  Impl Date  CR# 
R2783CP  09/10/2013  Corrections to the Medicare Claims Processing  09/17/2013  8343 
Manual 
R2767CP  08/16/2013  Handling of Incomplete or Invalid Claims once the  01/06/2013  8356 
Phase 2 Ordering and Referring Edits are 
Implemented 
R2759CP  08/09/2013  Update to the Claims Processing Internet-Only  11/12/2013  8413 
Manual (IOM) to Add the National Uniform Billing 
Committee (NUBC) Payer Only Codes 
R2725CP  06/14/2013  Corrections to the Medicare Claims Processing  09/17/2013  8343 
Manual  Rescinded and replaced by Transmittal 
2783 
R2722CP  06/11/2013  Changes to Contractor Designation in Processing  01/29/2012  8103 
Foreign, Emergency and Shipboard Claims 
R2694CP  05/03/2013  Discontinuation of Home Health Type of Bill 33X  10/07/2013  8244 
R2678CP  03/26/2013  Clarification of Detection of Duplicate Claims  04/29/2013  8121 
Section of the CMS Internet Only Manual 
R2674CP  03/14/2013  Changes to Contractor Designation in Processing  01/29/2012  8103 
Foreign, Emergency and Shipboard Claims  
Rescinded and replaced by Transmittal 2722 
R2648CP  02/01/2013  Adjustment to Fiscal Intermediary Shared System  07/01/2013  8171 
(FISS) Consistency Edit to Validate Attending 
Physician NPI 
R2625CP  12/28/2012  Changes to Contractor Designation in Processing  01/29/2012  8103 
Foreign, Emergency and Shipboard Claims  
Rescinded and replaced by Transmittal 2674 
R2614CP  12/14/2012  Updated Billing Requirements for Outpatient  11/27/2012  8097 
Therapy Services -- Middle Class Tax Relief and 
Jobs Creation Act (MCTRJCA) of 2012 
R2578CP  11/01/2012  Enforcing Interim Billing for Partial Hospitalization  04/01/2013  8048 
Services 
R2571CP  10/26/2012  Updated Billing Requirements for Outpatient  11/27/2012  8097 
Therapy Services  Middle Class Tax Relief and 
Jobs Creation Act (MCTRJCA) of 2012  Rescinded 
and replaced by Transmittal 2614 
R2560CP  09/28/2012  New Fiscal Intermediary Shared System (FISS)  01/07/2013  7902 
Consistency Edit to Validate Attending Physician 
NPI 
R2519CP  08/17/2012  New Fiscal Intermediary Shared System (FISS)  01/07/2013  7902 
Consistency Edit to Validate Attending Physician 
NPI  Rescinded and replaced by Transmittal 2560 
R2515CP  08/08/2012  Handling Form CMS-1500 Hard Copy Claims  01/07/2013  7700 
Where and ICD-9-C< E Code or Where and ICD- Rev #  Issue Date  Subject  Impl Date  CR# 
10 V00-Y99 Code is Reported as the First Diagnosis 
on the Claim 
R2500CP  07/27/2012  Clarification of the Use of the Electronic Claim  08/27/2012  7871 
Format to Indicate Where a Service Was Performed 
R2495CP  07/18/2012  Systematic Validation of Payment Group Codes for  10/01/2012  7760 
Prospective Payment Systems (PPS) Based on 
Patient Assessments 
R2487CP  06/08/2012  Internet Only Manual (IOM) Update for Laboratory  06/19/2012  7749 
Services and Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies (DMEPOS) 
Claims Processed under the End Stage Renal Disease 
Prospective Payment System (ESRD PPS) 
R2477CP  05/25/2012  Modifying the Timely Filing Exceptions on  08/27/2012  7834 
Retroactive Medicare Entitlement and Retroactive 
Medicare Entitlement Involving State Medicaid 
Agencies 
R2475CP  05/18/2012  Internet Only Manual (IOM) Update for Laboratory  06/19/2012  7749 
Services and Durable Medical Equipment, 
Prosthetics, Orthotics, and Supplies (DMEPOS) 
Claims Processed under the End Stage Renal Disease 
Prospective Payment System (ESRD PPS) 
R2474CP  05/18/2012  Handling Misdirected Claims for Part B Items and  07/20/2012  7629 
Services 
R2463CP  05/04/2012  New Fiscal Intermediary Shared System (FISS) Edit  10/01/2012  7771 
to Review Medicare Outpatient Prospective Payment 
System (OPPS) Payments Exceeding Charges 
R2458CP  04/27/2012  Systematic Validation of Payment Group Codes for  10/01/2012  7760 
Prospective Payment Systems (PPS) Based on 
Patient Assessments  Rescinded and replaced by 
Transmittal 2495 
R2386CP  01/13/2012  January 2012 Update of the Hospital Outpatient  01/03/2012  7672 
Prospective Payment System (OPPS) 
R2376CP  12/29/2011  January 2012 Update of the Hospital Outpatient  01/03/2012  7672 
Prospective Payment System (OPPS)  Rescinded 
and replaced by Transmittal 2386 
R2342CP  11/04/2011  Annual Medicare Physician Fee Schedule Files  01/03/2012  7607 
Delivery and Implementation Manualization 
R2296CP  09/02/2011  October 2011 Update of the Hospital Outpatient  10/03/2011  7545 
Prospective Payment System (OPPS) 
R2291CP  08/26/2011  Fiscal Year (FY) 2012 Inpatient Prospective  10/03/2011  7508 
Payment System (IPPS), Long Term Care Hospital 
(LTCH) PPS, and Critical Access Hospital (CAH) 
Changes  Rev #  Issue Date  Subject  Impl Date  CR# 
R2228CP  05/20/2011  Manual Update for Quarterly Reporting  06/06/2011  7295 
Requirements for Do Not Forward Reports 
R2221CP  05/20/2011  Postcard Mailing for the Annual Participation Open  10/31/2011  7412 
Enrollment Period  Rescinded and replaced by 
Transmittal 2228 
R2208CP  05/06/2011  Manual Update for Quarterly Reporting  06/06/2011  7295 
Requirements for Do Not Forward Reports 
R2203CP  04/29/2011  Home Health Requests for Anticipated Payment and  10/03/2011  7396 
Timely Claims Filing 
R2162CP  02/22/2011  Updates to the Internet Only Manual Pub. 100-04,  03/21/2011  7018 
Chapter 1 - General Billing Requirements, Chapter 
15 - Ambulance, and Chapter 26 - Completing and 
Processing Form CMS-1500 Data Set 
R2140CP  01/21/2011  Changes to the Time Limits for Filing Medicare Fee- 02/22/2011  7270 
For-Service Claims 
R2124CP  12/23/2010  Updates to the Internet Only Manual Pub. 100-04,  01/25/2011  7018 
Chapter 1 - General Billing Requirements, Chapter 
15 - Ambulance, and Chapter 26 - Completing and 
Processing Form CMS-1500 Data Set - Rescinded 
and replaced by Transmittal 2162 
R2112CP  12/03/2010  Common Working File (CWF) Unsolicited Response 01/03/2011  6625 
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 
R2092CP  11/12/2010  Update to the Frequency Billing Requirements  04/04/2011  7163 
R2061CP  10/01/2010  October 2010 Update of the Hospital Outpatient  10/04/2010  7117 
Prospective Payment System (OPPS) 
R2050CP  09/17/2010  October 2010 Update of the Hospital Outpatient  10/04/2010  7117 
Prospective Payment System (OPPS)  Rescinded 
and replaced by Transmittal 2061 
R2041CP  08/31/2010  Revisions to Claims Processing Instructions for  01/03/2011  6947 
Services Rendered in Place of Service Home 
R2031CP  08/20/2010  Beneficiary-Submitted Claims  11/29/2010  6874 
R2015CP  07/30/2010  Revisions to Claims Processing Instructions for  01/03/2011  6947 
Services Rendered in Place of Service Home - 
Rescinded and replaced by Transmittal 2041 
R2014CP  07/30/2010  Common Working File (CWF) Unsolicited Response 01/03/2011  6625 
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  
Rescinded and replaced by Transmittal 2112  Rev #  Issue Date  Subject  Impl Date  CR# 
R1987CP  06/11/2010  Correction to the Claims Processing Internet Only  08/12/2010  6923 
Manual (IOM) to Reinstate Previous Instructions 
Regarding Payment Jurisdiction for Reassigned 
Services 
R1946CP  04/15/2010  Billing and Processing Claims with Unlimited  07/06/2010  6777 
Occurrence Span Codes (OSCs) 
R1944CP  04/09/2010  Claims Submitted for Items or Services Furnished to  07/09/2010  6880 
Medicare Beneficiaries in State or Local Custody 
Under a Penal Authority and Examples of 
Application of Government Entity Exclusion.  This 
CR rescinds and fully replaces CR 6544. 
R1934CP  03/19/2010  Billing and Processing Claims with Unlimited  07/06/2010  6777 
Occurrence Span Codes (OSCs)  Rescinded and 
replaced by Transmittal 1946 
R1931CP  03/12/2010  Revision of the Internet Only Manual (IOM) to  06/14/2010  6627 
Remove References to Purchased Diagnostic Test 
and Replace With Language Consistent With the 
Anti-Markup Rule 
R1928CP  03/05/2010  Correction to Processing of Non-Covered Revenue  07/06/2010  6774 
Codes 
R1921CP  02/19/2010  Billing for Services Related to Voluntary Uses of  04/05/2010  6563 
Advanced Beneficiary Notices of Noncoverage 
(ABNs) 
R1903CP  01/29/2010  Instructions for Processing Claims Containing Anti- 04/05/2010  6670 
Markup Services but with Partial Information 
Completed in Item 20 of the Form CMS-1500 
R1900CP  01/29/2010  Correction to Processing of Non-Covered Revenue  07/06/2010  6774 
Codes - Rescinded and replaced by Transmittal 1928 
R1895CP  01/15/2010  Processing of Non-Covered International  04/05/2010  6547 
Classification of Diseases, Ninth Revision, Clinical 
Modification (ICD-9-CM) Procedure Codes on 
Inpatient Hospital Claims 
R1894CP  01/15/2010  Billing for Services Related to Voluntary Uses of  04/05/2010  6563 
Advanced Beneficiary Notices of Noncoverage 
(ABNs)  Rescinded and replaced by Transmittal 
1921 
R1892CP  01/15/2010  Payment to Physician or Other Supplier for  03/15/2010  6733 
Diagnostic Tests Subject to the Anti-Markup 
Payment Limitation 
R1890CP  01/08/2010  Processing of Non-Covered International  04/05/2010  6547 
Classification of Diseases, Ninth Revision, Clinical 
Modification (ICD-9-CM) Procedure Codes on 
Inpatient Hospital Claims  Rescinded and replaced 
by Transmittal 1895  Rev #  Issue Date  Subject  Impl Date  CR# 
R1867CP  12/04/2009  Requirements to Prevent the Misuse of Modifiers  01/04/2010  6718 
PA, PB, and PC on Incoming Claims 
R1842CP  10/30/2009  Instructions for Processing Claims Containing Anti- 04/05/2010  6670 
Markup Services but with Partial Information 
Completed in Item 20 of the Form CMS-1500  
Rescinded and replaced by Transmittal 1903 
R1840CP  10/29/2009  Billing for Services Related to Voluntary Uses of  04/05/2010  6563 
Advanced Beneficiary Notices of Noncoverage 
(ABNs)  Rescinded and replaced by Transmittal 
1894 
R1838CP  10/28/2009  Processing of Non-Covered International  04/05/2010  6547 
Classification of Diseases, Ninth Revision, Clinical 
Modification (ICD-9-CM) Procedure Codes on 
Inpatient Hospital Claims  Rescinded and replaced 
by Transmittal 1890 
R1812CP  09/04/2009  Claims Submitted for Items or Services Furnished to  12/07/2009  6544 
Medicare Beneficiaries in State or Local Custody 
Under a Penal Authority and Examples of 
Application of Government Entity Exclusion - 
Rescinded and replaced by CR 6880, Transmittal 
1944 
R1803CP  08/28/2009  October 2009 Update of the Hospital Outpatient  10/05/2009  6626 
Prospective Payment System (OPPS) 
R1771CP  07/17/2009  Interest Payment on Clean Non-PIP Claims Not Paid  08/17/2009  6542 
Timely 
R1761CP  06/26/2009  Billing Routine Cost of Clinical Trials  09/28/2009  6431 
R1760CP  06/23/2009  July 2009 Update of the Hospital Outpatient  07/06/2009  6492 
Prospective Payment System (OPPS) 
R1747CP  05/22/2009  Beneficiary-Submitted Claims  06/23/2009  6434 
R1745CP  05/22/2009  July 2009 Update of the Hospital Outpatient  07/06/2009  6492 
Prospective Payment System (OPPS) - Rescinded 
and replaced by Transmittal 1760 
R1743CP  05/22/2009  Billing Routine Cost of Clinical Trials - Rescinded  07/10/2009  6431 
and replaced by Transmittal 1761 
R1733CP  05/08/2009  Manual Clarification for Skilled Nursing Facility  04/27/2009  6407 
(SNF) and Therapy Billing 
R1732CP  05/08/2009  Pricing Claims for Services Rendered in Place of  10/05/2009  6429 
Service Home 
R1721CP  04/29/2009  Billing Routine Cost of Clinical Trials - Rescinded  07/10/2009  6431 
and replaced by Transmittal 1743 
R1710CP  04/10/2009  Billing Routine Cost of Clinical Trials - Rescinded  07/10/2009  6431 
and replaced by Transmittal 1721  Rev #  Issue Date  Subject  Impl Date  CR# 
R1707CP  03/27/2009  Assignment of Initial Enrollment FQHCS, ESRD  04/27/2009  6207 
Facilities, and RHCs 
R1706CP  03/27/2009  Manual Clarification for Skilled Nursing Facility  04/27/2009  6407 
(SNF) and Therapy Billing  Rescinded and replaced 
by Transmittal 1733 
R1690CP  02/27/2009  Reporting the National Provider Identifier (NPI) on  03/27/2009  6362 
Claims for Reference Laboratory and Purchased 
Diagnostic Services Performed Outside the Billing 
Jurisdiction 
R1681CP  02/13/2009  Payments to Institutional Providers With Multiple  07/06/2009  6300 
Service Delivery Locations 
R1677CP  02/13/2009  Shipboard Services Billed to the Carrier and Services 03/13/209  6327 
Not Provided Within the United States.  Rescinds 
and fully replaces CR 6217. 
R1675CP  01/30/2009  Standard System Change to Allow Claims  07/06/2009  6293 
Processing Contractors Flexibility With 9-Digit ZIP 
Codes 
R1609CP  10/03/2008  Shipboard Services Billed to the Carrier and Services 01/05/2009  6217 
Not Provided Within the United States - Rescinded 
and replaced by CR 6327, Transmittal 1677 
R1591CP  09/09/2008  ZIP Code Files by Date of Service - Replaced by  07/07/2008  5881 
Transmittal 1591 
R1589CP  09/08/2008  Indicator for the Technical Component of Purchased  12/08/2008  6122 
Diagnostic Services 
R1588CP  09/05/2008  Beneficiary Submitted Claims  08/18/2008  5683 
R1586CP  09/05/2008  Pneumococcal Pneumonia, Influenza Virus, and  10/06/2008  6079 
Hepatitis B Vaccines 
R1583CP  08/29/2008  Artificial Hearts  10/06/2008  6185 
R1578CP  08/15/2008  Implementation of a New Claim Adjustment Reason  01/05/2009  6131 
Code (CARC) No. 213, Non-compliance with the 
Physician Self-referral Prohibition Legislation or 
Payer Policy 
R1557CP  07/18/2008  Beneficiary Submitted Claims - Rescinded and  08/18/2008  5683 
replaced by Transmittal 1588 
R1526CP  05/30/2008  Institutional Services Paid on the Medicare Physician 07/07/2008  5990 
Fee Schedule (MPFS) 
R1522CP  05/30/2008  Charges to Hold a Bed During SNF Absence  06/30/2008  6030 
R1486CP  04/04/2008  Exception to 60-Day Limit on Substitute Billing  05/05/2008  5985 
Arrangements for Physicians Called to Active Duty 
in the Armed Forces Reserves 
R1472CP  03/06/2008  Update of Institutional Claims References  04/07/2008  5893  Rev #  Issue Date  Subject  Impl Date  CR# 
R1463CP  02/22/2008  ZIP Code Files by Date of Service - Replaced by  07/07/2008  5881 
Transmittal 1591 
R1453CP  02/22/2008  Systems Changes for Prescription Order Numbers for 07/07/2008  5855 
the Competitive Acquisition Program (CAP) for Part 
B Drugs and Biologicals 
R1432CP  02/01/2008  Medicare Fee for Service Legacy Provider IDs  04/07/2008  5858 
Prohibited on Form CMS-1500 and Form CMS-1450 
(UB-04) Claims 
R1421CP  01/25/2008  Update of Institutional Claims References   04/07/2008  5893 
Rescinded and Replaced by Transmittal 1472 
R1418CP  01/18/2008  New HCPCS Modifiers When Billing for Patient  04/07/2008  5805 
Care in Clinical Research Studies 
R1361CP  11/02/2007  New Patient Status Discharge Code 70 to Define  04/07/2008  5764 
Discharges or Transfers to Other Types of Health 
Care Institutions not Defined Elsewhere in the UB-
04 (CMS-1450) Manual Code List 
R1335CP  09/14/2007  Updating the Internet Only Manual to Include  10/01/2007  5708 
Language or NPI When Required 
R1328CP  08/31/2007  Delete References to Reporting of the National  10/01/2007  5678 
Provider Identifier (NPI) on or after May 23, 2007, 
and Revise References to a When Required Date 
R1325CP  08/29/2007  Testing and Implementation of 2008 Ambulatory  01/07/2008  5680 
Surgical Center (ASC) Payment System Changes 
R1312CP  07/20/2007  Timeliness Standards for Processing Other-Than- 01/07/2008  5513 
Clean Claims 
R1308CP  07/20/2007  Testing and Implementation of 2008 Ambulatory  01/07/2008  5680 
Surgical Center (ASC) Payment System Changes  
Replaced by Transmittal 1325 
R1279CP  06/29/2007  Charges for Missed Appointments  10/01/2007  5613 
R1250CP  05/25/2007  Implementation of the Carrier Jurisdictional Pricing  10/01/2007  5543 
Rates for All Purchased Diagnostic Service Claims 
R1249CP  05/25/2007  Update to Publication 100-04, Chapters 1 and 15 for  10/01/2007  5578 
ZIP5 and ZIP9 Medicare Zip Code Files. 
R1231CP  04/27/2007  The Use of Benefit's Exhaust (BE) Day as the Day of 12/03/2007  5474 
Discharge for Payment Purposes for the Inpatient 
Psychiatric Facility Prospective Payment System 
(IPF PPS) and Clarification of Discharge for Long 
Term Care Hospitals (LTCH) and the Allowance of 
No-Pay Benefits Exhaust Bills (TOB 110) 
R1193CP  03/09/2007  Use of 9-Digit Zip Codes for Determining the  10/01/2007  5208 
Correct Payment Locality for Services Paid Under 
the Medicare Physician Fee Schedule (MPFS) and 
Anesthesia Services  Rev #  Issue Date  Subject  Impl Date  CR# 
R1187CP  02/23/2007  Revisions to Incomplete or Invalid Claims  05/23/2007  5391 
Instructions Necessary to Implement the Revised 
Health Insurance Form CMS-1500 (8/05) 
R1171CP  02/02/2007  Revisions to the Medicare Physician Fee Schedule  07/02/2007  5476 
(MPFS) Disclosure Format 
R1169CP  02/02/2007  Revision of Editing to Ensure Demand Bills Remain  07/02/2007  5248 
Identifiable in Claims History After Processing 
R1167CP  01/26/2007  Use of 9-Digit Zip Codes for Determining the  10/01/2007  5208 
Correct Payment Locality for Services Paid Under 
the Medicare Physician Fee Schedule (MPFS) and 
Anesthesia Services - Replaced by Transmittal 1193 
R1160CP  01/19/2007  Colorectal Cancer Screening Flexible  07/02/2007  5387 
Sigmoidoscopy and Colonoscopy Coinsurance 
Payment Change 
R1144CP  12/29/2006  Elimination of CMS-1491 and CMS-1490U Forms  04/02/2007  5390 
R1114CP  11/22/2006  Reporting of Taxonomy Codes to Identify Provider  01/02/2007  5243 
Subparts on Institutional Claims 
R1108CP  11/09/2006  Reporting of Taxonomy Codes to Identify Provider  01/02/2007  5243 
Subparts on Institutional Claims 
R1065CP  09/22/2006  Disabling the Revenue/HCPCS Consistency Edit  04/03/2006  4049 
Codes in the Fiscal Intermediary Shared System 
(FISS) 
R1054CP  09/08/2006  Reporting of Taxonomy Codes to Identify Provider  01/02/2007  5243 
Subparts on Institutional Claims 
R1035CP  08/18/2005  Updating Publication 100-04, Chapter 30 Regarding  09/18/2006  5214 
the CD ROM Initiative for the Annual Dear Doctor 
Mailing 
R1024CP  08/04/2006  Reporting of Taxonomy Codes to Identify Provider  01/02/2007  5243 
Subparts on Institutional Claims 
R989CP  06/23/2006  Correction to CR 4122: Correction of Typographical  10/02/2006  4394 
Error in the Do Not Forward (DNF) Reports 
R980CP  06/14/2006  Changes Conforming to CR 3648 Instructions for  10/02/2006  4014 
Therapy Services - Replaces Rev. 941 
R943CP  05/05/2006  Deported Medicare Beneficiaries  08/07/2006  5051 
R941CP  05/05/2006  Changes Conforming to CR 3648 Instructions for  10/02/2006  4014 
Therapy Services 
R930CP  04/28/2006  Benefits Exhaust and No-Payment Billing  10/02/2006  4292 
Instructions for Medicare Fiscal Intermediaries (FIs) 
and Skilled Nursing Facilities (SNFs) 
R883CP  03/10/2006  Claims Processing Requirements for Medicare  06/12/2006  4352 
Beneficiaries in State or Local Custody Under a 
Penal Authority  MANUALIZATION  Rev #  Issue Date  Subject  Impl Date  CR# 
R866CP  02/17/2006  Additional Requirements for the Competitive  07/03/2006  4309 
Acquisition Program for Part B Drugs 
R861CP  02/17/2006  Sunset of the Policies for Provider Nomination for an 03/17/2006  4286 
Intermediary and the Provider Requests for a Change 
of Intermediary  Revision to Publication 100-04, 
Chapter 1. Section 20 
R850CP  02/10/2006  Change Payment Floor Date for Paper Claims  03/13/2006  4284 
R839CP  02/06/2006  Additional Requirements for the Competitive  07/03/2006  4309 
Acquisition Program for Part B Drugs 
R830CP  02/02/2006  Denial of Claims Not Timely Filed  07/03/2006  4041 
R771CP  12/02/2005  Revisions to Pub. 100-04, Medicare Claims  01/03/2006  4181 
Processing Manual in Preparation for the National 
Provider Identifier (NPI) 
R763CP  11/25/2005  Update to Repetitive Billing -- Manualization  N/A  4047 
R735CP  10/31/2005  Processing All Diagnosis Codes Reported on Claims  04/03/2006  4097 
Submitted to Carriers 
R717CP  10/21/2005  Disabling the Revenue/HCPCS Consistency Edit  04/03/2006  4049 
Codes in the Fiscal Intermediary Shared System 
(FISS) 
R712CP  10/14/2005  Correction to Change Request 3949, Section 50.3.3  01/03/2006  4116 
in IOM to Add 23x Type of Bill 
R711CP  10/14/2005  Update to Repetitive Billing -- Manualization  N/A  4047 
R702CP  10/07/2005  Manualization for Physician/Practitioner/Supplier  N/A  4030 
Participation Agreement and Assignment Carrier 
Claims and Carrier Rules for Limiting Charge 
R686CP  09/23/2005  Common Working File (CWF) Unsolicited Response 01/03/2006  3916 
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 
R654CP  08/19/2005  Services Not Provided Within United States  11/17/2005  3781 
R643CP  08/12/2005  Nature and Effect of Assignment on Carrier Claims  11/14/2005  3897 
R632CP  07/29/2005  Billing and Claims Processing Instructions for  01/03/2006  3949 
Claims Subject to Expedited Determinations 
R624CP  07/29/2005  Common Working File (CWF) Unsolicited Response 01/03/2006  3916 
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 
R620CP  07/29/2005  New Fiscal Intermediary (FI) Edit to Identify  01/03/2006  3925 
Potentially Excessive Medicare Payments 
R593CP  06/24/2005  Disposition of Misdirected Claims to the Carrier  N/A  3838  Rev #  Issue Date  Subject  Impl Date  CR# 
R552CP  04/29/2005  Changing the Order of Medicare System Edits  10/03/2005  3825 
Affecting Hospice Claims 
R505CP  03/17/2005  Unprocessable Unassigned Form CMS-1500 Claims  07/05/2005  3500 
R493CP  03/04/2005  Revision to Chapter 1, and Removal of Section 70  04/04/2005  3671 
from Chapter 25 of the Medicare Claims Processing 
Manual 
R492CP  03/04/2005  Adding an Indicator to the National Claims History  07/05/2005  2965 
(NCH) to Indicate that DMERCs, Carriers, and FIs 
have Reviewed a Potentially Duplicate Claim 
R472CP  02/11/2005  Revisions to Payment for Services Provided Under a  03/15/2005  3628 
Contractual Arrangement - - Carrier Claims Only 
R464CP  02/04/2005  Implementation of the Abstract File for Purchased  04/04/2005  3694 
Diagnostic Tests/Interpretations (Supplemental to 
CR 3481) 
R454CP  01/28/2005  Definitions of Electronic and Paper Claims  04/04/2005  3653 
R443CP  01/21/2005  Unprocessable Unassigned Form CMS-1500 Claims  07/05/2005  3500 
R432CP  01/14/2005  Adding an Indicator to the National Claims History  07/05/2005  2965 
(NCH) to Indicate that DMERCs, Carriers, and FIs 
have Reviewed a Potentially Duplicate Claim 
R420CP  12/30/2004  Good Cause Waiver of Late Claim Filing Payment  01/31/2005  3549 
Reduction Penalty and Monitoring of Late Claims 
Submission. 
R416CP  12/23/2004  Interest Payment on Clean Claims Not Paid Timely  01/25/2005  3557 
R407CP  12/17/2004  Hospital Billing for Repetitive Services  01/03/2005  3633 
R357CP  11/05/2004  Implementation of Coverage of Religious  04/04/2005  3529 
Nonmedical Health Care Institution Items and 
Services Furnished in the Home, MMA section 706. 
R353CP  11/03/2004  DMERC - Revision to CR 2631 Requirements for  04/04/2005  3261 
DMERC claims 
R345CP  10/29/2004  DMERC  Revision to CR 2631 Requirements for  01/04/2005  3261 
DMERC claims 
R341CP  10/29/2004  Implementation of the Medicare Physician Fee  04/04/2005  3481 
Schedule (MPFS) National Abstract File for 
Purchased Diagnostic Tests and Interpretations 
R332CP  10/22/2004  New Policy and Refinements on Billing Noncovered  04/04/2005  3416 
Charges to Fiscal Intermediaries (FIs) 
R316CP  10/22/2004  Clarification of Messages in Chapter 1, Section  N/A  3462 
10.1.1.1 to Match Official Listing on the WPC-EDI 
Web Site 
R299CP  09/10/2004  Use of Condition Code 44, "Inpatient Admission  10/12/2004  3444 
Changed to Outpatient"  Rev #  Issue Date  Subject  Impl Date  CR# 
R296CP  09/03/2004  Payment Denial for Medicare Services Furnished to  N/A  2825 
Alien Beneficiaries Who Are Not Lawfully Present 
in the United States 
R282CP  08/20/2004  Good Cause Waiver of Late Claim Filing Payment  09/14/2004  3402 
Reduction Penalty 
R274CP  08/13/2004  Good Cause Waiver of Late Claim Filing Payment  09/14/2004  3042 
Reduction Penalty 
R273CP  08/13/2004  Modification of CMS's Medicare Contingency Plan  07/06/2004  2981 
for HIPAA Implementation 
R270CP  08/03/2004  Update to the Frequency of Billing  01/03/2005  3382 
R239CP  07/23/2004  Update to the Frequency of Billing  01/03/2005  3382 
R213CP  06/25/2004  Payment to Bank in the Name of a  07/25/2004  3079 
Provider/Physician/Supplier 
R211CP  06/18/2004  Elimination of Regulations for Written Statement of  07/19/2004  3310 
Intent (SOI) 
R207CP  06/18/2004  Expansion of Policy Where Patient is a Member of a  07/19/2004  3309 
Medicare Advantage (MA) Organization For Only a 
Portion of the Billing Period to Include Inpatient 
Rehabilitation Facilities (IRF) and Long Term Care 
Hospitals (LTCH) 
R196CP  06/04/2004  Payment Denial for Medicare Services Furnished to  N/A  2825 
Alien Beneficiaries Who Are Not Lawfully Present 
in the U. S. 
R170CP  05/07/2004  Filing Request for Payment-Medicare Part B  N/A  2815 
R169CP  05/07/2004  Claims Jurisdiction  N/A  2631 
R167CP  04/30/2004  Discontinued Use of Revenue Code 0910  10/04/2004  3194 
R156CP  04/30/2004  Clarification of payments and billing procedures for  10/04/2004  3200 
hospitals subject to the Maryland Waiver 
R145CP  04/23/2004  Data Element Requirements Matrix - Carrier  05/24/2004  3164 
R142CP  04/16/2004  Claims for RRB and UMWA Beneficiaries  N/A  2502 
R133CP  04/02/2004  Billing Non-covered Charges to FIs-Clarification to  04/16/2004  3115 
CR 2634 
R114CP  02/27/2004  Modification of CMS' Medicare Contingency Plan  07/06/2004  2981 
for HIPPA Implementation 
R111CP  02/27/2004  Payment For Services Provided Under a Contractual  03/12/2004  3083 
Agreement 
R091CP  02/06/2004  Revisions to Processing of Non-covered Charges on  07/06/2004  3077 
Certain Home Health Prospective Payment System 
Claims 
R072CP  01/23/2004  Update of Address for the Railroad Retirement  02/23/2004  3034 
Board (RRB)  Rev #  Issue Date  Subject  Impl Date  CR# 
R067CP  01/16/2004  Claims Processing Instructions for Payment  04/05/2004  3039 
Jurisdiction and Payment to Physician for Purchased 
Diagnostic Tests 
R047CP  12/19/2003  Carrier Data Element Requirements  01/20/2004  2956 
Billing Non-Covered Charges to Fiscal  04/05/2004  2634 
R025CP  10/31/2003 
Intermediaries Summary and New Instruction 
R001CP  10/01/2003  Initial Publication of Manual  NA  NA 
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