DEPARTMENT OF HEALTH AND HUMAN SERVICES 
Centers for Medicare & Medicaid Services 
7500 Security Boulevard, Mail Stop S2-26-12 
Baltimore, MD 21244-1850 
 
 
CMCS Informational Bulletin 
 
DATE:   April 08, 2016 
 
FROM:   Vikki Wachino, Director 
    Center for Medicaid and CHIP Services 
 
SUBJECT:   State Medicaid Payment Approaches to Improve Access to Long-Acting 
Reversible Contraception 
 
In July 2014, the Center for Medicaid and CHIP Services (CMCS) launched the Maternal and 
Infant Health Initiative to improve maternal and infant health outcomes.  The initiative has two 
primary goals: 1) increasing the rate and improving the content of postpartum visits; and 2) 
increasing access and use of effective methods of contraception.  Medicaid provides coverage for 
more than 70 percent of family planning services for low-income Americans.  Given this 
important role, CMCS sought to identify approaches to Medicaid reimbursement that promote 
the availability of effective contraception.1 This Informational Bulletin describes emerging 
payment approaches several state Medicaid agencies have used to optimize access and use of 
long-acting reversible contraception (LARC).   
 
Background 
 
Beyond preventing unplanned pregnancies, research indicates that effective contraception helps 
prevent poor birth spacing, thereby reducing the risk of low-weight and/or premature birth.2  It 
can also be essential to a womans long-term physical and emotional well-being. LARCs 
intrauterine devices (IUDs) and contraceptive implantsare highly effective methods of birth 
control that last between 3 and 10 years (depending on the method) without requiring daily, 
weekly, or monthly user effort.3  The Centers for Disease Control and Prevention has identified 
LARCs as among the most effective family planning methods with a pregnancy rate of less than 
1 pregnancy per 100 women in the first year.  For comparison, the contraceptive pill has a rate of 
9 pregnancies per 100 women in the first year, while the male condom has rate of 18 pregnancies 
per 100 women in the first year.4  While Medicaid agencies typically reimburse for multiple 
types of contraception, LARCs possess a number of advantages: they are cost-effective, have 
                                                 
1 Sonfield A and Gold RB. (2012). Public Funding for Family Planning, Sterilization and Abortion Services, FY 
19802010, New York: Guttmacher Institute, <http://www.guttmacher.org/pubs/Public-Funding-FP-2010.pdf>. 
2 Agustin Conde-Agudelo, MD, MPH; Anyeli Rosas-Bermudez, MPH; Ana Cecilia Kafury-Goeta, MD (2006). 
Birth Spacing and Risk of Adverse Perinatal Outcomes: A Meta-analysis. JAMA 295 (15): 1809-1823. 
3 Trussell J. Contraceptive efficacy. In: Hatcher R, Trussell J, Nelson A, Cates W, Kowal D, Policar M, eds. 
Contraceptive Technology. 20th ed. New York, NY: Ardent Media; 2011:779863. 
4 U.S. Centers for Disease Control. Effectiveness of Family Planning Methods. 
http://www.cdc.gov/reproductivehealth/unintendedpregnancy/pdf/contraceptive_methods_508.pdf. Accessed March 
28, 2016.   CMCS Informational Bulletin Page 2 
high efficacy and continuation rates, require minimal maintenance, and are rated highest in 
patient satisfaction.5  
 
Despite these known advantages, LARC utilization in the U.S. remains relatively low when 
compared to rates in other countries.  As of 2009, LARC utilization rates among contraception 
users in the U.S. are higher for women covered by Medicaid (11.5 percent) than the national rate 
(8.5 percent).6  But more can be done to increase the use of this form of contraception.  Two 
reasons cited for the low utilization of LARCs in the U.S. are (1) administrative and 
reimbursement barriers that result in high upfront costs for devices and (2) payment policies that 
reduce (or do not provide) reimbursement for devices or placement.7,8  States have flexibility in 
how they reimburse for LARC, and by promoting access to contraceptive methods of choice
and the support necessary to use chosen methods effectivelystates can support not only the 
health of women and their children, but also reduce the number of unintended pregnancies.    
 
LARC Utilization and Medicaid Reimbursement  
 
Payment challenges related to LARC utilization exist in both fee-for-service (FFS) and managed 
care environments, as well as in inpatient and outpatient settings (primary, specialty, or other 
ambulatory care).   
 
In the inpatient setting, for example, the use of a single prospective payment for labor and 
delivery services may not sufficiently address the additional costs associated with the provision 
of LARC. There are significant advantages to providing LARC immediately after delivery while 
the woman is still under hospital care.9  But many states do not provide additional payment for 
the cost of LARC, and do not provide additional payment to either the hospital or the practitioner 
for placement or insertion services. 
 
In outpatient settings, payment rates may be insufficient for LARC devices and/or for placement 
services. LARC placement may require significant up-front costs to providers, primarily costs to 
obtain devices prior to placement. For devices covered through a patients pharmacy benefit, and 
in the absence of prior arrangements (or state policy), providers may not be able to return a 
dispensed device if it is not used for the specific patient for whom it was dispensed; these 
devices must then be discarded at a financial loss to the provider.  
 
If states limit provider payment to an initial LARC placement, but do not provide payment for 
replacement or reinsertion when necessary, providers may face further disincentives. 
                                                 
5 Peipert JF, Zhao Q, Allsworth JE, Petrosky E, Madden T, Eisenberg D, Secura G.(2011) Continuation and 
satisfaction of reversible contraception. Obstet Gynecol.  117(5):1105-13. 
6 Finer LB, Jerman J, Kavanaugh ML. (2012). Changes in use of long-acting contraceptive methods in the United 
States, 2007-2009. Fertility and Sterility 98(4), 893-89 
7 Committee Opinion No. 615. American College of Obstetricians and Gynecologists. 2015. Access to 
contraception. Obstet Gynecol: 125: 250-5. 
8 Rodriguez, MI, Evans, M, Espey, E. (2014). Advocating for immediate postpartum LARC: increasing access, 
improving outcomes, and decreasing cost. Contraception. 90, 468-471. 
9 Long-acting reversible contraception: implants and intrauterine devices. Practice Bulletin No. 121. American 
College of Obstetricians and Gynecologists. Obstet Gynecol 2011; 118:18496.  CMCS Informational Bulletin Page 3 
Additionally, providers may be hesitant to insert LARC devices for women when continued 
coverage for individuals is uncertain in the event there is later need for removal of the LARC.  
 
Finally, some states or Managed Care Organizations (MCOs) require prior authorization and, as 
part of the prior authorization, may question medical necessity absent failure using another birth 
control method (sometimes called step therapy). 
 
State Medicaid Payment Strategies to Optimize LARC Utilization 
 
To assist states in optimizing the existing statutory flexibilities in this area, this Informational 
Bulletin identifies LARC reimbursement strategies implemented by states. Information on 
challenges and opportunities were obtained through several sources, including a September 2014 
Technical Review Panel on Contraceptive Services in Medicaid and the Childrens Health 
Insurance Program (CHIP) and a scan of state policies and interviews with several state 
Medicaid officials.  Emerging approaches to mitigate challenges in fourteen states, identified as 
of March 2015, involve a combination of contractual, payment strategies, and policy guidance.  
Additional states may also use similar strategies which fall into five broad categories: 
 
1.  Provide timely, patient centered comprehensive coverage for the provision of 
contraceptive services (e.g., contraception counseling; insertion, removal, replacement, or 
reinsertion of LARC or other contraceptive devices) for women of child-bearing age. 
2.  Raising payment rates to providers for LARC or other contraceptive devices in order to 
ensure that providers offer the full range of contraceptive methods.  
3.  Reimbursing for immediate postpartum insertion of LARC by unbundling payment for 
LARC from other labor and delivery services. 
4.  Removing logistical barriers for supply management of LARC devices (e.g., addressing 
supply chain, acquisition, stocking cost and disposal cost issues). 
5.  Removing administrative barriers for provision of LARC (e.g., allowing for billing office 
visits and LARC procedures on the same day; removing preauthorization requirements). 
 
The following table summarizes state efforts to optimize LARC utilization, followed by a 
detailed summary of the approaches three states use.  CMS is available to provide technical 
assistance to states who are interested in reviewing options for modifying LARC policies.  For 
additional information on this Informational Bulletin, please contact Karen Matsuoka at 
karen.matsuoka@cms.hhs.gov or 410-786-9726.  
 
 
 
 
  CMCS Informational Bulletin Page 4 
 
Table 1. State Medicaid Payment Strategies to Optimize Long-Acting Reversible Contraception (LARC) 
Utilization in 14 States 
 
A scan of state reimbursement policies on LARC was conducted in 2014, resulting in the identification of payment practices in 14 
states.  This table describes the payment strategies that these 14 states used to optimize LARC utilization.  The payment strategy noted 
for each state is intended to be a short title, while the policy description provides an overview of the key components of the state 
Medicaid policy that supports the strategy.  The implementation considerations are specific details about how the state implements the 
payment strategy while maintaining compliance with the state policy. 
 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
Alabama  Reimbursement of LARC  1.  Covers the cost of the LARC  1.  Inpatient: the hospital must use an 
April 2014  insertion immediately  device/drug implant as part of the  International Classification of Diseases (ICD-
postpartum in the  hospitals cost, and the insertion of  9) delivery diagnosis code within the range 
inpatient hospital setting  the device/drug implant is billable  630  67914 and must use the ICD-9 surgical 
or outpatient practice  to Medicaid when the insertion  code 69.7 (insertion contraceptive device) to 
setting.  occurs immediately after a delivery  document LARC services provided after the 
before discharge from an inpatient  Delivery. 
setting.   
  2.  Postpartum LARC in the outpatient 
2.  Covers the cost of the LARC  hospital setting immediately after discharge 
device/drug implant as part of the  from inpatient settings, should be billed on a 
hospitals cost, and insertion is  UB-04 claim form using one code from each 
billable to Medicaid when the  of the following with family planning 
insertion is provided in an  modifier (FP):  
outpatient setting after delivery and    58300 Insertion of IUD 
immediately after discharge from    11981-FP Insertion, non-biodegradable 
an inpatient setting.  drug delivery implant 
    11983-FP Removal with reinsertion 
        ICD-9 diagnosis codes: 
    V255 Encounter for contraceptive 
 
management, insertion of implantable 
As of March 2015  CMCS Informational Bulletin Page 5 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
  subdermal contraceptive 
    V2511 Insertion of intrauterine 
  contraceptive device 
    V2502 Initiate contraceptive NEC 
  V251 Insertion of IUD  
 
Physician bill on CMS 1500 form using the 
same coding as above and also indicate Place 
of Service: 
  21 Inpatient hospital setting 
  22 Outpatient hospital setting 
California  Reimbursement of LARC  General acute care hospitals may  Hospital LARC claims should be billed  
July 1, 2015  submit claims for the long-acting  using the following Healthcare Common 
reversible contraceptive methods  Procedure Coding System (HCPCS) codes: 
on an outpatient claim, even when    J7300 
treatment is provided on an    J7301 
inpatient basis    J7302 
  J7307 
Colorado  Temporary system work- Medicaid Management Information  1.  To receive a LARC payment in addition 
October 2013  around for  System (MMIS) was scheduled for  to the APR DRG, the hospital must include 
reimbursement of LARC  an update to the APR DRG1, in  the ICD-9 and Current Procedural 
insertion immediately  January 2014 to automatically  Terminology (CPT) codes that are included 
postpartum in the  report if a claim includes LARC  in the Colorado Medical Assistance Program 
inpatient hospital setting.  insertion. For a temporary system  Revenue Codes UB04/institutional billing 
  work around:  form on the same claim as the hospital stay. 
    The insertion will be   
  reimbursed and paid  2.  The trigger for LARC payment will be 
  separately from the global  the inclusion of these codes: 
                                                 
1 3MTM All Patient Refined Diagnosis-Related Group (APR DRG) Classification System for adjusting data for severity of illness (SOI) and risk of mortality 
(ROM).  CMCS Informational Bulletin Page 6 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
  obstetric fee code.    V25.11  encounter for insertion of 
    State will cover two LARC  intrauterine contraceptive device; 
  devices every five years.  and/or 
      V25.13  encounter for removal and 
    reinsertion of intrauterine 
    contraceptive device. 
     
     
Reimbursements for  RHCs may receive reimbursement  1. For devices purchased under the 340B 
LARCs outside of the  for IUDs and implants used for  Program, individual providers and RHCs 
normal encounter (per  contraceptive purposes in addition  must bill the actual acquisition cost for the 
visit) rate for Rural  to their normal encounter rate  device. 
Health Centers (RHCs)  reimbursements.   
  2.  Reimbursement will be based on the 
Federally Qualified Health Centers  actual 340B acquisition cost. For devices not 
(FQHC) do not receive an  purchased through the 340B program, 
additional payment for LARCs  reimbursements are the lower of the 
since the FQHC encounter payment  providers charges or the rate on the 
rates are based on full-cost  Departments practitioner fee schedule, 
reimbursement calculations.  whichever is applicable. 
 
3. Reimbursement is separate from any 
encounter payment the RHC may receive for 
implanting the device. 
 
4. When a LARC is inserted, removed, or 
reinserted during a visit, the practitioner must 
use the appropriate diagnostic code, such as, 
V25.11 or V25.5, and use the family 
planning modifier (FP) on the claim form. 
  CMCS Informational Bulletin Page 7 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
 
 
 
Georgia  Reimbursement of LARC  1.  Reimburses hospitals and  1.  LARC insertion is considered an add-on 
April 2014  insertion immediately  practitioners the cost of the LARC  benefit and is not included in the DRG 
for practitioner  postpartum in the  device outside of the global  reimbursement process. 
reimbursement;  inpatient hospital setting.  obstetric fee for delivery.   
    2.  Practitioners receive additional 
Hospital  2.  Georgia policy, regardless of  reimbursement when one of the following 
reimbursement  delivery system (FFS or Managed  four devices, indicated by their respective J 
to begin in 2016  Care Organization (MCO)) defines  code, is inserted within ten minutes of birth: 
immediate postpartum as within    J7300 
ten minutes of birth.    J7301 
    J7302 
3.  Devices should be available in    J7307 
the birthing suite to ensure timely 
insertion. 
Illinois  Contraceptive Devices in  FQHCs and RHCs may receive  1. For devices purchased under the 340B 
October 2012  FQHCs and RHCs  reimbursement for LARC devices  Program, the FQHC or RHC must bill the 
    (IUDs and single rod implantable  actual acquisition cost for the device. 
    devices) for contraceptive   
    purposes.  2.  Reimbursement will be based on the 
      actual 340B acquisition costs and must 
      include modifier UD in conjunction with 
    340B providers may receive a  the appropriate procedure code. For devices 
July 2014  Dispensing Fee Incentive  dispensing fee add-on when  not purchased through the 340B program, 
    dispensing highly-effective  reimbursements are the lower of the 
    contraceptives  providers charges or the rate on the 
      Departments practitioner fee schedule, 
      whichever is applicable. 
        CMCS Informational Bulletin Page 8 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
      3. Reimbursement is separate from any 
      encounter payment the FQHC or RHC may 
      receive for implanting the device. 
       
October 2014  Increased reimbursement     
  for insertion and removal  1.  Increased reimbursement rate  1.  When a LARC is inserted, removed, or 
  of LARC in the  for insertion/removal procedures of  reinserted during a visit, the practitioner uses 
  outpatient setting.  LARC.  a modifier V25 on the claim along with the 
      type of visit: 
  Allowed reimbursement  2.  Provide reimbursement for    Postpartum visit (CPT 59430) 
  for office visit along with  evaluation/management (E/M)    Initial or annual preventive visit (CPT 
  LARC insertion/removal  visits, where a practitioner and  99381-99397) 
  procedure on the same  beneficiary discuss contraceptive   
  day.  options, in addition to same day  2.  A practitioner must order the device and 
    LARC insertion or removal  document the insertion procedure in both the 
  Outpatient provider  procedures.    hospitals and the practitioners medical 
  office stocking.    record:  
    3.  Pilot program to ensure   
    practitioners have sufficient   
    devices stocked, with automatic re- 3.  The hospital must use its fee-for-service 
July 1, 2015    supply as needed.  National Provider Identifier (NPI) to bill the 
    appropriate device or implant (by specific 
    National Drug Code (NDC) on the claim. 
Reimbursement of LARC     
insertion immediately  Medicaid allows hospitals separate  The hospital must use the appropriate family 
postpartum in the  reimbursement for the LARC  planning ICD-9-CM diagnosis code (or upon 
inpatient setting.  device provided immediately  implementation, ICD-10-CM) on the claim.  
postpartum in the inpatient hospital 
setting. 
Iowa  Reimbursement of LARC  1.  Medicaid allows the insertion of  1.  Practitioners may bill for the professional 
March 2014  insertion immediately  IUDs and other LARC devices  service associated with insertion of the  CMCS Informational Bulletin Page 9 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
postpartum in the  before the beneficiary leaves the  LARC with the appropriate CPT code. 
hospital setting.  hospital following delivery.   
  2.  If a practitioner supplies the LARC, the 
2.  Payment for these services is  practitioner may also bill for the device(s). 
allowed for both practitioners and   
hospitals.  3.  When hospitals provide the LARC 
services, the claim must be submitted as an 
outpatient claim, separate from the inpatient 
DRG claim for the delivery.  The outpatient 
claim will be based on the fee schedule for 
the HCPCS Level II procedure code billed.  
Louisiana  Reimbursement of LARC  1.  Hospitals and practitioners are  1.  In FFS: Hospitals use the appropriate 
June 2014  insertion immediately  reimbursed for LARCs as an add- LARC J-code on their hospital stay claim. 
postpartum in the  on service in addition to their daily    On a paper claim (CMS 1500) 
inpatient hospital setting.  per diem rate for the inpatient  DME must be written in bold, black 
hospital stay (DRG rate) or  print on the top of the form. 
professional services rate,    If the hospital bills electronically, the 
respectively.  837P must be used with the Durable 
  Medical Equipment (DME) file 
2.  Reimbursement amount is  extension. 
determined by:  2.  Payment for the LARC is equal to the 
  LARC service provided  DME fee schedule, and added to the amount 
(insertion or reinsertion)  of the hospitals per diem payment. 
  IUD or non-biodegradable   
drug delivery implant  3.  If a LARC device is expelled after 
  The beneficiarys age (0   insertion, the state applies a pre- determined 
15 years or 16+ years)  cost of reinsertion and replacement device to 
  the standard 
  DRG or professional services rates. 
3.  Medical management, including   
prior authorization and step  4.  MCO contracts with the state prohibit  CMCS Informational Bulletin Page 10 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
therapy, are prohibited for LARC  prior authorization for LARC devices or 
devices and procedures.  procedures. Further, MCO contracts require 
  hospital and practitioner reimbursement for 
  LARC devices and procedures at a minimum 
  of the FFS fee schedules for the same DME 
or CPT codes, respectively.   
Maryland  Contraceptive Devices in  FQHCs are reimbursed for an  Practitioners receive reimbursement for one 
July 2013  FQHCs  office visit and the acquisition cost  of the three devices, as indicated by their 
    for one (1) of the three (3) covered   respective J code: 
    LARC procedures devices.     J7300 
        J7302 
        J7307 
       
September 2014  Reimbursement of LARC    1. Maryland Medicaid reimburses for all 
insertion immediately  LARC devices and insertion  LARCs, including those placed immediately 
postpartum in the  procedures are reimbursable and  postpartum without preauthorization. 
inpatient setting  are separate from the delivery fee   
(Maryland Medicaid does not  2.  Hospitals include the LARC invoice 
reimburse physicians for global  separately from the inpatient labor and 
maternity care services; deliveries  delivery claim using the appropriate claims 
are billed separately from prenatal  using the appropriate codes and modifiers. 
care).   
Massachusetts  Reimbursement of LARC  1.  Hospitals are reimbursed for the  1.  MassHealth payment methodology 
October 2014  insertion immediately  provision of the LARC device. The  recently adopted the APR DRG model by 3M 
postpartum in the  insertion procedure is reimbursed  Health Information Systems, which weights 
inpatient hospital setting.  directly through the claim payment,  every service that is entered on the claim. 
  while the device is reimbursed  The device is accounted for on the annual 
Comprehensive LARC  indirectly as part of the hospitals  hospital cost report, and these costs are 
coverage for outpatient  base rate. The device is reported on  incorporated into the hospitals overall 
practice settings such as  the annual cost report as a supply,  provider base rate. 
hospital outpatient  and those costs are incorporated    CMCS Informational Bulletin Page 11 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
departments or family  into the hospitals provider base  2.  Family planning agencies that participate 
planning agencies.  rate calculation.  in MassHealth are reimbursed for the LARC 
    device and insertion when billed with the 
  2. Hospital-based practitioners bill  appropriate code:  
the professional claim for surgical   
procedure through the hospital. The  11981 - Insertion, non-biodegradable drug 
professional claim for hospital- delivery implant 
11983 - Removal with reinsertion, 
based providers does not include 
nonbiodegradable drug delivery implant 
the device. 
58300 - Insertion of intrauterine device (IUD) 
 
J7301 Levonorgestrel-releasing intrauterine 
 
contraceptive system, 13.5 mg  
3. Community-based practitioners 
J7302 Levonorgestrel-releasing intrauterine 
are reimbursed separately for the 
contraceptive system, 52 mg  
professional service of inserting the  S4989 Contraceptive intrauterine device, 
device as well as the device itself  including implants and supplies 
(if supplied by the physician) on  3.  The community based practitioner is 
the claim.  reimbursed separately for the professional 
service of inserting the device as well as for 
the device itself if supplied by the physician.  
Billing is done on a professional claim and 
paid according to a fee schedule. 
 
4.   Regular HCPCS updates to capture new 
device availability  
Montana  Reimbursement of LARC  LARCs inserted at the time of  These services can now be billed as an 
January 2015  insertion immediately  delivery are excluded from the PPS  outpatient service on a 13X type of bill, and 
postpartum in the  inpatient APR-DRG group.   will be paid at the OPPS rates. The following 
inpatient hospital setting.  Montana Medicaid is allowing PPS  HCPCS/CPT codes are allowed: 
hospitals to unbundle the LARC    J7300  
device and the insertion from the    J7301  
inpatient delivery claim.    J7302   CMCS Informational Bulletin Page 12 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
  J7307 
  11981 
  58300  
New Mexico  Reimbursement of LARC  1. Practitioners receive  1.  Hospitals are reimbursed for the device if: 
2014  insertion immediately  reimbursement for insertion in the    The facility is enrolled in the New 
postpartum in the  hospital and for the device if the  Mexico Medicaid program as a 
inpatient hospital setting.  practitioner supplied it.  medical supplier (provider type 414); 
  a separate NPI is not required. 
2. Hospitals are reimbursed for the    Date of service is the same as the 
device as a medical supply  DRG date of service. 
company.    Hospitals professional claim (837P 
  electronic claim or CMS-1500 form) 
3. Insertion within the same  is submitted as a medical supply 
surgery as a Cesarean section is  company. 
considered incidental to the    Claim includes the appropriate 
surgery, and therefore not 
HCPCS procedure code and NDC 
reimbursed.  However, the 
number for the device. 
practitioner will still be reimbursed 
  Place of service (POS) code is 21 
for the device. 
(inpatient hospital). 
  The billing taxonomy number for a 
medical supplier appears on the claim 
(typically 332BOOOOOX). 
 
 
2.  Practitioners are reimbursed for the device 
and insertion if: 
  Billed on the same professional claim 
(837P electronic or CMS-1500 paper) 
as the delivery procedure. 
  Claim indicates the device HCPCS 
code and NDC number.  CMCS Informational Bulletin Page 13 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
  Claim indicates procedure CPT codes 
(most likely 58300 or 11981). 
  Claim indicates the POS as 21 
(inpatient hospital). 
New York  Reimbursement of LARC  1.  Reimbursement provided for the  1.  Hospitals include the LARC invoice 
April 2014  insertion immediately  LARC device and insertion during  separately from the inpatient labor and 
postpartum in the  postpartum inpatient hospital stay.  delivery claim. 
inpatient hospital setting.     
2.  Medicaid will reimburse for the  2.  Physicians, midwives, and nurse 
replacement of IUDs once every  practitioners may submit a separate claim to 
five years (Skyla every three years)  FFS Medicaid for their professional services. 
per manufacturer 
recommendations. Reimbursement 
will be provided for an IUD sooner 
than five years if medically 
necessary.  CMCS Informational Bulletin Page 14 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
South Carolina  Reimbursement of LARC  1.  Allows reimbursement to the  1.  Inpatient reimbursement guidelines for the 
March 2012  insertion immediately  practitioner and hospital for  cost of the LARC in addition to the DRG for 
postpartum in the  delivery and all costs associated  labor and delivery: 
inpatient hospital setting.  with LARC.    Using the HCPCS code. 
      Using device J-codes. 
Outpatient procedure  2.  In the outpatient setting,    Using a family planning modifier on 
using specialty  practitioners may order a LARC  the physician claim when billing for 
pharmacy.  device for delivery to the  insertion 
practitioners office by a specialty   
pharmacy.  2.  Hospitals are reimbursed for the device  
  by submitting: 
3.  Increased LARC reimbursement    The ICD-9 Surgical Code 
rate to cover slightly more than the 
  The ICD-9 Diagnosis Codes 
practitioners cost to purchase 
  A UB-04 or Institutional Claim so 
LARC devices to stock in their 
that a gross-level credit adjustment 
office. 
can be generated. 
 
3.  Payments to hospitals through FFS: 
  DRG portion of the claim will be paid 
in the regular weekly claims payment 
cycle. 
  The LARC reimbursement will 
process as a gross level credit 
adjustment and will appear on a 
future remittance advice on a monthly 
quarterly basis. 
 
4.  Outpatient reimbursement guidelines for 
the cost of the device: 
  Device can be shipped for a specific 
patient overnight from specialty  CMCS Informational Bulletin Page 15 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
pharmacy. 
  Device billed directly to Medicaid 
FFS or the MCO. 
  The practitioners office has 30 days 
to return the unopened device to the 
specialty pharmacy if the device is 
not used for the specific patient for 
which it was ordered. The cost of the 
device is then credited back to 
Medicaid FFS or the MCO. 
 
5.  Reimbursement for LARC through 
MCOs: 
The LARC policy is a FFS benefit; however, 
provision of LARC is estimated and included 
in the MCOs per member per month 
(PMPM) rate.  Reimbursement methodology 
may differ between FFS and MCOs. The 
state currently includes coverage for the 
provision of LARCs in both its contractual 
language and its rate setting methodology 
with the MCOs. 
MCOs in the state individually contract with 
providers and negotiate their rates; claim 
filing procedures differ based on the MCO. 
Texas  Pharmacy reimbursement  1.  Texas Health and Human  1.  State currently contracts with two  CMCS Informational Bulletin Page 16 
State 
Payment Strategy  Policy Description  Implementation 
Effective Date 
August 2014  for LARC devices.  Services (HHS) allows providers  specialty pharmacies to deliver Mirena and 
the option to prescribe and obtain a  Skyla to practitioners (Walgreens Specialty 
limited number of LARC products  Pharmacy, LLC and CVS Caremark 
from specialty pharmacies and to  Specialty Pharmacy). 
return unused and unopened LARC   
products through a abandoned unit  2.  Practitioners continue to bill for the 
return program.  insertion of the LARC product. 
   
2.  Practitioners may continue to  3.  If the patient was eligible for Medicaid on 
obtain LARC products, then bill for  the date of service when the LARC product 
them when they are used under the  was prescribed and ordered, but the patient is 
medical benefit.  no longer eligible for Medicaid, when the 
  LARC product is inserted, Medicaid will 
  cover the device but will not reimburse for 
the insertion procedure claim. 
 
 
  CMCS Informational Bulletin Page 17 
 
Detailed Payment and Policy Approaches of Three Selected States 
 
 
Below is a more detailed description of the strategies used by three states (Illinois, Louisiana and 
South Carolina) to optimize LARC utilization and illustrate the range of approaches they have 
employed within existing state authorities.  
 
The states were selected based on the range of changes they have implemented and the length of 
experience they have had implementing these innovative approaches.  For example, the state of 
South Carolina was the first state to implement an immediate postpartum payment for LARC 
separate from the labor and delivery Diagnosis-Related Group (DRG) payment.  Since 
establishing the policy, the state has addressed implementation challenges and seen improvement 
in its rates.  These more detailed state examples provide greater insight for states considering 
which options may be most viable to address payment barriers for their Medicaid enrollees. 
 
 
  CMCS Informational Bulletin Page 18 
Illinois 
 
Long-Acting Reversible Contraception (LARC) Optimization Strategies 
 
SUMMARY 
 
This document describes payment strategies the Illinois Department of Healthcare and Family 
Services (HFS) incorporated into its Family Planning Action Plan to increase access to safe and 
effective LARC.   
 
BACKGROUND 
 
In 2014, HFS implemented the Family Planning Action Plan to increase access to family 
planning services for Medicaid beneficiaries by: 1) providing comprehensive and continuous 
coverage for family planning services; and 2) aligning policies and reimbursement to providers 
to promote provision of highly effective contraception.1 
 
  In 2010, 52 percent of all pregnancies (128,000) in Illinois were unintended.2 
  Its unintended birth rate was 57 per 1,000 women aged 15-44. 
  This same year, the reported public expenditures for family planning client services in 
Illinois totaled $57 million, of which $40.7 million was paid by Medicaid.3  
  Illinois has the 21st highest pregnancy rate in the nation among adolescents between ages 
15 and 19.   
 
To address the rate of unintended pregnancies, the state Medicaid agency implemented several 
payment strategies to increase access to safe and effective LARC, such as IUDs, in an effort to 
reduce the number of unintended pregnancies.  These strategies are: 1) increased provider 
reimbursement for insertion and removal of LARC in the outpatient practice setting; 2) provide 
reimbursement for an evaluation/management (E/M) visit on the same day as LARC insertion or 
removal procedures; 3) provision for reimbursement of actual LARC acquisition costs under the 
340B program to Federally Qualified Health Centers and Rural Health Centers; provision for 
hospital reimbursement of LARC in addition to the DRG reimbursement for labor and delivery; 
5) increased providers 340B federal drug pricing program dispensing fee to encourage providers 
to supply LARC and other highly effective methods; and 6) established statewide Medicaid 
policy for family planning and reproductive health services to improve access to LARC methods.   
 
ILLINOIS MEDICAID REIMBURSEMENT FOR LARC 
 
Effective July 1, 2015, HFS implemented a policy to allow hospitals to receive separate 
reimbursement for LARC devices provided immediately postpartum in the inpatient setting, in 
                                                 
1 Illinois Department of Healthcare and Family Services (2014). Important family planning policy change 
and payment increases. Retrieved from  http://hfs.illinois.gov/assets/101014n1.pdf.  
2 Guttmacher Institute (2014). State facts about unintended pregnancy: Illinois. Retrieved from 
http://www.guttmacher.org/statecenter/unintended-pregnancy/pdf/IL.pdf . 
3 Sonfield A and Gold RB, Public Funding for Family Planning Sterilization and Abortion Services, FY 19802010, 
New York: Guttmacher Institute, 2012, < https://www.guttmacher.org/pubs/Public-Funding-FP-2010.pdf >.  CMCS Informational Bulletin Page 19 
addition to the DRG reimbursement for labor and delivery.  Providers not employed by the 
hospital may bill the respective Current Procedural Terminology (CPT) code for LARC insertion 
in addition to the labor and delivery fee.4 
 
Illinois also implemented several other payment strategies that are intended to increase access to 
LARC placement in the outpatient practice setting. 
 
Reimbursement of LARC Procedures in the Outpatient Practice Setting 
 
In October 2014, HFS increased the reimbursement rate for the insertion, removal, and 
reinsertion of IUDs and implants in the outpatient practice setting.5  HFS increased the 
reimbursement rate for implant insertions by 20 percent and doubled the reimbursement rate for 
IUD insertions.  LARC insertion and removal procedures may be reimbursed on the same day as 
evaluation and management visits.  Physicians can receive the increased reimbursement for 
LARC insertion by including the LARC insertion CPT code on their billing form.  Physicians 
can also use the relevant CPT codes to bill for the removal and reinsertion of implants, and 
removal of IUDS. 
 
Federally Qualified Health Centers (FQHC) and Rural Health Center (RHC) 
 
Effective October 13, 2012, FQHCs and RHCs may elect to receive reimbursement for 
implantable contraceptive devices.  To the extent that the implantable contraceptive device was 
purchased under the 340B Drug Pricing Program, the FQHC or RHC must bill the actual 
acquisition cost for the device.  Reimbursement is made at the FQHC or RHCs actual 340B 
acquisition cost for implantable contraceptive devices purchased through the 340B program.  For 
implantable contraceptive devices not purchased through the 340B program, reimbursement is 
based on the lower of the providers charges or the rate on the Departments practitioner fee 
schedule, whichever is applicable.  Reimbursement for the device is separate from encounter 
payment for related procedures. 
 
Additional Dispensing Fees to Providers 
 
Effective July 2014, HFS increased the dispensing fee add-on payment to $35 for providers who 
dispense highly-effective contraceptives through the 340B federal drug pricing program.  In 
order to receive the additional fee, providers must identify 340B purchased drugs by reporting 
modifier "UD" in conjunction with the appropriate procedure code and actual acquisition cost for 
the birth control method on the claim form. 
 
 
 
 
                                                 
4 Illinois Department of Healthcare and Family Services (2015). Informational Notice: Hospital Billing and 
Reimbursement for Immediate Postpartum Long-Acting Reversible Contraceptives.  Retrieved from 
http://www.hfs.illinois.gov/html/063015n.html . 
5 Illinois Department of Healthcare and Family Services (2014). Important family planning policy change and 
payment increases. Retrieved from  http://hfs.illinois.gov/assets/101014n1.pdf.   CMCS Informational Bulletin Page 20 
Approaches for Managed Care Entities 
 
The states actuarially sound rates include reimbursement for LARC devices and clinical 
insertion.  The states external quality review organization (EQRO) has developed a family 
planning readiness review tool and reviews the plans family planning policies and procedures. 
Additionally, the MCO contract was revised to include language that provider policies/protocols 
shall not present barriers that delay or prevent access, such as prior authorizations or step-therapy 
failure requirements; and that clients should receive education and counseling on all FDA-
approved birth control methods from most effective to least effective, and have the option to 
choose the preferred birth control method that is most appropriate for them.6 
 
Pharmaceutical Pilot Programs in Outpatient Settings 
 
HFS is piloting a new program with Bayer HealthCare (Mirena and Skyla) and Teva 
Pharmaceuticals (Paragard) to make these products available in physician offices without upfront 
physician costs.  This will allow for an inventory of these LARC devices so that they are 
available when a patient returns for a postpartum visit, or at their annual reproductive health 
visit.  If the patient decides she wants to use this type of contraception, it can be inserted 
immediately and the patient will not have to return for a second visit.  This will improve the 
efficiency of this program and should lead to increased use of these devices.  If deemed 
successful, the pharmaceutical companies plan to scale the program to a national level.7 
 
OUTCOMES 
 
While the impact of these payment strategies have not yet been assessed, Illinois expects that 
improved access to contraceptive care for low-income women will result in savings due to a 
decrease in unintended pregnancies and the associated costs. 
   
                                                 
6 Wheal, L. (2015). Interview with Illinois Medicaid. 
7 Illinois Department of Healthcare and Family Services (2014). Family Planning and Reproductive Health Services. 
Retrieved from http://www.hfs.illinois.gov/assets/062614n1.pdf .  CMCS Informational Bulletin Page 21 
Louisiana 
 
Long-Acting Reversible Contraception (LARC) Optimization Strategies 
 
SUMMARY 
 
This document describes a payment strategy the Louisiana Medicaid agency implemented to 
increase access to safe and effective LARC.   
 
BACKGROUND 
 
Prior to June 2014, Louisiana covered LARC devices under the pharmacy benefit.  In the clinical 
setting, the pharmacy reimbursement rate for LARC devices was approximately $300 less than 
what the LARC devices cost; hence, physicians who provided LARC devices in the hospital 
setting suffered financial loss.8  Furthermore, physicians were not reimbursed for 30 percent of 
the LARC devices ordered at the time of consent in the hospital, due to the failure of the patients 
for whom the device was ordered to return for subsequent insertion in the office practice setting.9 
 
  In 2010, 60 percent of all pregnancies (53,000) in Louisiana were unintended. 
  That same year, the reported public expenditures for family planning client services in 
Louisiana totaled $39.3 million; this includes $34.5 million through Medicaid.10 
 
To address the high rate of unintended pregnancies, Louisiana Medicaid initiated a process to 
increase LARC utilization that included: 1) LARC reimbursement for insertion immediately after 
delivery in the inpatient hospital setting; 2) provider education; 3) adjustments in its State Plan 
Amendment (SPA) to allow more flexibility in inpatient and outpatient LARC reimbursement; 
and 4) the inclusion of LARC reimbursement requirements in its MCO contracts. 
 
LOUISIANA MEDICAID REIMBURSEMENT FOR LARC 
  
Effective June 2014, the Louisiana Department of Health and Hospitals implemented a LARC 
reimbursement policy as a central component to reducing the number of unintended pregnancies 
among low-income women.  This policy increases access to LARC placement in the inpatient 
hospital setting immediately after delivery and before the patient is discharged from the facility 
by: 
 
  Allowing hospitals to receive reimbursement for the full cost of five LARC devices 
(Skyla, ParaGard, Nexplanon, Merina, and Norplant) in addition to the DRG that is 
normally paid to hospital.11  Manufacturer wholesale prices are re-evaluated and re-
adjusted annually. 
                                                 
8 Gee, R. (2014). Interview with Louisiana Medicaid Medical Director. 
9 Gee, R. (2015). Interview with Louisiana Medicaid Medical Director. 
10 Guttmacher Institute (2014). State facts about unintended pregnancy: Louisiana. Retrieved from 
http://www.guttmacher.org/statecenter/unintended-pregnancy/pdf/LA.pdf. 
11 Louisiana Medicaid Management Information System (2015). Louisiana Medicaid professional services 
fee schedule. Retrieved from http://www.lamedicaid.com/provweb1/fee_schedules/FEESCHED.pdf.   CMCS Informational Bulletin Page 22 
  Allowing hospitals or physicians receive additional fees for LARC insertion. 
  Eliminating the use of medical management activities, such as prior authorization or step 
therapy, for LARC devices or procedures.12 
 
Hospital Reimbursement of LARC Insertion Immediately Postpartum 
 
The recent changes in Louisiana Medicaid payment policies provide reimbursement to acute care 
hospitals for LARC devices inserted immediately postpartum and prior to discharge.13,14  The 
state is separately reimbursing the hospital both for the cost of the LARC device as well as its 
insertion procedure in order to clearly demonstrate to hospitals that they are fully reimbursed for 
LARC costs according to the Louisiana Medicaid fee schedule for durable medical equipment 
(DME).15 
 
Louisiana MCOs have also supported and willingly adopted coverage and the reimbursement 
policy for postpartum LARC insertion.  The hospital and the provider must submit their claims to 
the MCO for payment.  The reimbursement rates are established by the MCO.16 
 
Practitioner Reimbursement of LARC Insertion 
 
Practitioners who insert a LARC device immediately post-delivery receive separate 
reimbursement for this service as defined in the Professional Services Program.17  In the event 
that a LARC device is expelled after insertion, Louisiana factors the cost of the expulsion into 
the reimbursement and also pays for reinsertion of a new LARC.  Adding the LARC devices to 
the physician schedule rather than just the pharmacy schedule allows the physician to store the 
device in office and not have to provide it to a specific individual.18  
 
Capitated Managed Care Implementation 
 
Louisiana Medicaid is completing a three year transition from a FFS reimbursement model to 
mandatory managed care, which will account for 95 percent of all Medicaid enrollees by 
December 2015.  Based on retrospective data, Louisiana Medicaid negotiates blended capitated 
                                                 
12 Gee, R. (2015). Interview with Louisiana Medicaid Medical Director. 
13 Hospitals record the appropriate LARC J-code on the paper CMS1500 claim form with DME written in bold, 
black print on the top of the form when submitting their claim to the Fiscal Intermediary (FI). When the hospital 
bills electronically, the 837P must be used with the DME file extension. The Louisiana Medicaid DME fee Schedule 
J codes are only intended for use on Inpatient Claims. 
14 Foubister, V. (2013). Case study: Louisianas poor rankings make improving birth outcomes a state imperative. 
Quality Matters. Retrieved from http://www.commonwealthfund.org/publications/newsletters/quality-
matters/2013/february-march/case-study.  
15 Louisiana Department of Health and Hospitals (2014). Long acting reversible contraceptives (LARCs) 
for inpatient hospitals. Retrieved from 
http://dhh.louisiana.gov/assets/docs/BayouHealth/HealthPlanAdvisories/2014/HPA14-9.pdf.  
16 Gee, R. (2014). Interview with Louisiana Medicaid Medical Director. 
17 Practitioners include the LARC insertion code with the family planning modifier on their billing form 
(CMS 1500 or electronic equivalent). The reimbursement is dependent on the LARC service provided and the 
patients age. The global CPT codes include: 11981 - Insertion, non-biodegradable drug delivery implant; and 58300 
- Insertion of intrauterine device (IUD). 
18 Gee, R. (2015). Interview with Louisiana Medicaid Medical Director.  CMCS Informational Bulletin Page 23 
per member per month (PMPM) fees to account for projected LARC insertions.  MCO contracts 
require hospital and practitioner reimbursement for LARC devices and procedures at a minimum 
of the FFS fee schedules for the same DME or CPT codes, respectively.  In addition, the MCOs 
are not permitted to require prior authorization for LARC devices or procedures. 
 
All five Louisiana Medicaid MCOs voluntarily adopted the LARC reimbursement strategy.  The 
MCO contracts contain a requirement for developing birth outcomes quality improvement 
programs that align with the states goals, and a one percent withhold of MCO administrative 
fees to fund shared savings-based pay for performance (P4P) incentives.  These provide clear 
boundaries and predictable revenues that allow MCOs maximum flexibility in their interactions 
with their network providers and the incentives they offer providers and/or patients. 
 
The Louisiana Medicaid agency achieved the legal authority to require MCOs to fully participate 
in LARC quality improvement efforts in four phases: 
1.  Applied non-payment strategies such as provider and MCO education and outreach to 
establish expectations for MCO performance; 
2.  Presented a compelling case for the political support needed to establish birth outcomes 
as the states highest health priority; 
3.  Submitted a SPA to include LARC utilization payment policies as a strategy to improve 
birth outcomes; and 
4.  Aligned MCO contractual requirements with state Medicaid FFS payment strategies to 
increase LARC utilization.19 
 
ANTICIPATED OUTCOMES 
 
Changes to reimbursement of LARC devices and procedures in the hospital were initiated in 
2014.  The Louisiana Medicaid Medical Director reports that due to these payment policy 
changes, voluntary election of LARC insertions increased from nine percent (7,000) of all child-
bearing aged enrollees in 2013 to 11 percent (10,000) in 2014. 
 
 
                                                 
19 Gee, R. (2015). Interview with Louisiana Medicaid Medical Director.  CMCS Informational Bulletin Page 24 
South Carolina 
 
Long-Acting Reversible Contraception (LARC) Optimization Strategies 
 
SUMMARY 
 
The South Carolina Birth Outcomes Initiative (SCBOI) launched in July 2011 to improve 
maternal and infant health outcomes and to reduce Medicaid costs.  The SCBOI has supported 
the development and implementation of a LARC payment policy, which is a central component 
of South Carolinas effort to reduce the number of unintended pregnancies among low-income 
women and at-risk adolescents.  
 
BACKGROUND 
 
Low-income women of childbearing age who are sexually active with limited access to effective 
contraception and family planning services are likely to have unintended pregnancies and 
increase Medicaid spending.30   
 
  In 2010, public expenditures for family planning services in South Carolina totaled $33.7 
million, including $25 million paid by Medicaid.31 
  In 2011, South Carolina ranked as the 12th highest state in teen pregnancy.32 
  Only 50% of Medicaid-covered postpartum women in South Carolina attend the 
postpartum visit. 
To address this problem, South Carolina Department of Health and Human Services (SCDHHS) 
leveraged their Birth Outcome Initiative (BOI), an active collaborative of hospitals, providers, 
and policymakers, to increase LARC placements through changes to existing payment policies.  
Payment policy changes included 1) increased reimbursement for LARC devices; 2) 
reimbursement of LARC insertion immediately postpartum; and 3) supply management through 
the pharmacy benefit. 
 
SOUTH CAROLINA MEDICAID REIMBURSEMENT FOR LARC 
 
The selected payment strategies are intended to increase access to LARC placement in both the 
inpatient hospital setting as well as the outpatient practice setting.  Key elements of the 
reimbursement strategy include: 
 
  Funding the full costs of four LARC devices (Skyla, ParaGard, Nexplanon, and Mirena). 
 
                                                 
30 Guttmacher Institute (2014). State facts about unintended pregnancy: South Carolina. Retrieved from 
http://www.guttmacher.org/statecenter/unintended-pregnancy/SC.html.  
31 Sonfield A and Kost K, Public Costs from Unintended Pregnancies and the Role of Public Insurance Programs in 
Paying for Pregnancy-Related Care: National and State Estimates for 2010, New York: Guttmacher Institute, 2015, 
<http://www.guttmacher.org/pubs/public-costs-of-UP-2010.pdf>, 
32 U.S. Department of Health and Human Services Office of Adolescent Health (2014). South Carolina 
adolescent reproductive health facts. Retrieved from http://www.hhs.gov/ash/oah/adolescent-health-
topics/reproductive-health/states/sc.html#.   CMCS Informational Bulletin Page 25 
 
  Providing additional fees for insertion, device, and removal (if medically necessary) in 
addition to the DRG fee that is paid to hospital. 
  Eliminating prior-authorization or step therapy requirements for LARC procedures. 
 
Reimbursement of LARC Insertion Immediately Postpartum in the Hospital 
 
In March 2012, the South Carolina became the first state in the country to change its 
reimbursement policy in order to increase LARC placement immediately after delivery and prior 
to hospital discharge.33  Prior to that time, hospitals were not incentivized to perform this 
procedure due to the lack of payment for this activity (beyond the existing DRG payment).  
South Carolinas Medicaid program now reimburses hospitals the cost of the LARC device as 
well as payment to the physician for its insertion immediately post-delivery.  This LARC 
reimbursement is provided in addition to any other payments for maternity related services. 
 
Hospitals receive this increased payment through a quarterly adjustment for prior months claims 
(credit adjustment).  To receive reimbursement for the LARC device itself, hospitals must 
include on each Uniform Billing (UB-04) claim for delivery services the Healthcare Common 
Procedure Coding System (HCPCS) code that represents the device. As well as the International 
Classification of Diseases (ICD-9) Surgical and Diagnosis Codes that best describe the service 
delivered. 
 
Physicians may also receive reimbursement for immediate post-delivery LARC insertion by 
including on their billing form (CMS 1500 or electronic equivalent) the LARC insertion code 
with the family planning modifier. 
 
After the first year of implementation, South Carolina Medicaid learned that hospitals were not 
receiving the additional LARC payments; further implementation guidance and system changes 
were needed.  In the second year of implementation, all Medicaid providers received specific 
billing instructions identifying how to capture appropriate reimbursement for all fees covered by 
the payment policy.  By the third year of implementation, providers were receiving appropriate 
reimbursement, including retrospective payments that previously had not been billed or 
processed accurately.34 
 
These new payments reimburse all costs and clinical efforts associated with LARC placement 
and promote a highly cost-effective, preventive health practice.  However, payment alone is not 
sufficient to ensure LARC placements.  This strategy also requires continued collaboration with 
MCOs, hospitals, and physicians to ensure that all stakeholders understand the purpose of these 
increased payments and the impact LARC will have on reducing unintended pregnancies and 
Medicaid costs. 
 
Reimbursement of LARC Insertion in the Outpatient Practice Setting 
 
                                                 
33 Health Management Associates (2013). Medicaid reimbursement for immediate post-partum LARC. 
Retrieved from https://www.acog.org/~/media/Departments/LARC/HMAPostpartumReimbursmentResource.pdf.  
34 Giese, M. (2015). Interview with SCDHHS Director of Birth Outcomes Initiative.  CMCS Informational Bulletin Page 26 
 
SCDHHS also addressed the initial costs to providers for stocking LARC devices in its SCBOI 
specialty benefit in the spring of 2014.  The new payment policy allows a physician to order a  
LARC device for a specific Medicaid recipient which is shipped to the physicians office by a 
specialty pharmacy which is designated by either the state Medicaid agencys Pharmacy Benefit 
Manager or by the individual MCOs.  The device can be shipped overnight and is billed directly 
to Medicaid FFS or the MCO so that the physician does not incur the initial cost of the device.  
The physicians office has 30 days to insert the LARC for the specific patient for which it was 
ordered and bill Medicaid the insertion fee only, or to return the unopened device to the specialty 
pharmacy if the device is not used.  The cost of the device is then credited back to Medicaid or 
the MCO.   
 
Capitated Managed Care Implementation 
 
Managed care enrollment is mandatory in South Carolina.  As a result, approximately 90 percent 
of all Medicaid births are covered by the six fully capitated MCOs.  Although the Medicaid 
agency did not require its capitated MCOs to adopt this payment policy, all six of them did so 
voluntarily. 
 
In the first year of implementation of the policy, South Carolina did not develop a payment 
mechanism specifically for the MCOs to provide this service.  Instead, the additional fees 
associated with LARC payments were prospectively estimated and included in the actuarially 
sound MCO per member per month (PMPM) rate. The MCO then provides the additional 
payments to the clinicians in the MCOs network through their negotiated contractual rates.  It is 
not possible to compare the differences in LARC utilization between the MCO and FFS 
populations (90 percent and 10 percent, respectively). 
 
The MCOs use their regular claims processing cycles to pay for these LARC services and dont 
have a special process like FFS Medicaid, which was described earlier.  
 
OUTCOMES 
 
As noted above, South Carolina initiated changes to the reimbursement of LARC devices and 
procedures in the hospital setting in March 2012 and issued a clarification bulletin for billing in 
2013 which allowed for appropriate claims payment dating back to the inception of the policy.  
Although the impact of both of these policy changes has not yet been fully evaluated, South 
Carolina has documented that their rate of voluntary election of inpatient insertions has gone 
from approximately 0% to 16%.  South Carolina also has seen a 110% increase in inpatient 
LARC utilization between FY2013 through FY 2015.