(Medicare Claims Processing Manual)

MSN 16.36 (English):  If you have already paid it, you are entitled to a refund from this provider.   MSN 16.36 (Spanish):  Si usted ya lo ha pagado, tiene derecho a un reembolso de su proveedor.   If a supplier submits an unassigned claim with a date of service on or after February 1, 2001, to the DME MAC for a drug or biological, the DME MAC must process the claim as though the supplier accepted assignment.  It is possible that a supplier may bill drugs and other items on the same claim, which would result in a claim with some assigned and some nonassigned items.  In the event that a supplier bills an unassigned claim to a DME MAC that contains both codes for drugs or biologicals and codes for other items, the DME MACs must replicate the claim.  This will result in two claims in the DME MAC system: an unassigned cla im for items other than drugs or biologicals, and an assigned claim for drugs and biologicals furnished on or after February 1, 2001.  When a DME MAC changes an unassigned drug claim to an assigned claim, the contractor shall use the following remittance advice messages and associated codes when adjusting payment under this policy. The RARC below is not included in the CAQH CORE Business Scenarios   Group Code: N/A  CARC: N/A  RARC: MA72  MSN:  N/A  Suppliers that bill the DME MACs for drugs for use with DMEPOS must have a pharmacy license to dispense drugs.  When a DME MAC denies a claim for a drug because the National Supplier Clearing House (NSC) records do not show that the supplier has a pharmacy license, the DME MAC must also deny any equipment, accessories, and supplies related to the drug, when the supplier bills the drug on the same claim as the equipment.  (Suppliers should bill drugs for use with DMEPOS on the same claim as the equipment itself, if they are also providing and billing for the equipment.)  In situations when a supplier bills unassigned drugs and equipment, ac cessories, or supplies on the same claim, the DME MAC and VMS Shared System Maintainer must ensure that they apply nonlicensed pharmacy equipment, accessory and supply edits and denials before they replicate the claim.  Even if the system denies a line due  to the nonlicensed pharmacy edit prior to replicating the claim, the system must still replicate any unassigned claims for drugs and biologicals and change the assignment indicator.    The contractor shall use the following remittance advice messages and associated codes when adjusting payment under this policy. The RARC below is not included in the CAQH CORE Business Scenarios.  Group Code: N/A  CARC: N/A  RARC: MA72  MSN:  N/A  OR  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: B7  RARC: M143  MSN: N/A  Or   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: 107  RARC: N/A  MSN: N/A  The DME MACs must work together to create and maintain a list of HCPCS drug codes that suppliers must bill on an assigned basis.  This will enable VMS shared system maintainer and the DME MACs to implement the necessary edits in their systems.  Finally, th e four DME MACs must work together to create a list of drug and equipment codes to which the nonlicensed pharmacy edit would apply in this situation.  For this second list, the DME MACs need add only drugs that are used with equipment, and the equipment, a nd related supplies and accessories, that use those drugs, as opposed to all drugs that are subjected to the licensure edit.  The DME MACs must share these lists with VMS shared system maintainer and CMS Central Office.   60 - DMEPOS Suppliers Require a License to Dispense Drugs  (Rev. 1, 10- 01-03)  Regulations at 42 CFR 424.57(b)(4)  (supplier standards) state that a supplier that furnishes a drug used as a Medicare -covered supply with durable medical equipment or prosthetic devices must be licensed by the State to dispense drugs.  (A supplier of drugs must bill and receive payment f or the drug in its own name.  A physician, who is enrolled as a DMEPOS supplier, may dispense, and bill for, drugs under this standard if authorized by the State as part of the physicians license.)   Therefore, suppliers may not bill the DME MACs for any Medicare -covered drugs unless they have a State license to dispense the drugs, regardless of whether or not the drugs require a prescription.  Similarly, a physician may not dispense Medicare -covered p rescription or nonprescription drugs unless he or she is authorized by the State to dispense such drugs as part of his or her physicians license.   The DME MACs must deny claims for prescription drugs, and related equipment when billed on the same claim, if the National Supplier Clearinghouses (NSC) records show the supplier was not licensed to dispense the drug on the DOS (date of service).   In effect, for DOS on or after December 11, 2000, the DME MACs must deny claims for all Medicare - covered drugs dispensed by a supplier or physician who is not licensed to dispense the drug.  If the DME MACs feel that it is necessary, they may coordinate t o develop a list of drugs and related equipment that should be subjected to the licensure edit.  Note that these provisions do not apply to EPO.  Method I beneficiaries must obtain their EPO through their dialysis facilities, and Method II beneficiaries must receive EPO from the same supplier that provides all their other dialysis supplies.  60.1 - Prescription Drugs Billed by Suppliers Not Licensed to Dispense Them  (Rev. 3721, Issued: 02- 24-17, Effective: 05 -25-17, Implementation: 05- 25-17)  Medicare does not cover a drug used as a supply with DME or a prosthetic device if the drug is dispensed by an entity that is not licensed to dispense the drug.  The drug is not considered to be reasonable and necessary because CMS cannot be assured of its  safety and effectiveness unless it is dispensed by an entity that has a State license that qualifies it to dispense the drug.  The equipment used with the drugs dispensed by a nonlicensed entity is also considered to be not reasonable and necessary becaus e of the related safety and efficacy concerns.  Physicians are considered to have been deemed the right to dispense prescription drugs, and therefore do not require a pharmacy license.   The DME MACs should deny claims for a prescription drug (and related equipment when billed on the same claim as the drug) when the National Supplier Clearinghouses (NSCs) files show the supplier is or was not licensed to dispense the drugs on the date of  service (DOS).   An exception to this general policy is oxygen claims.  Messages for Assigned Claims:   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: B7  RARC: M143  MSN: 8.50  Messages for Nonassigned Claims:   MSN:  This item or service is not covered when performed or ordered by this provider.  (MSN #12.18)   Appeals should be addressed according to the instructions in Chapter 29.   70 - Claims Processing Requirements  General  (Rev. 11427; Issued: 05- 20-22; Effective: 01 -01-23; Implementation: 01 -03-23) NOTE: CMS seeks to reduce burden and modernize processes to ensure a reduction in improper payments and an increase in customer satisfaction. The Certificate of Medical Necessity (CMN) form and DME Information Form (DIF) were originally required to help document the medical necessity and other coverage criteria for selected Durable Medical Equipment, Prosthetics, Orthotics , and Supplies (DMEPOS) items. In the past, a supplier received a signed CMN from the treating physician or created and signed a DIF to submit with the claim. Due to improvements in claims processing and medical records management, the information found on CMNs or DIFs is available either on the claim or in the medical record and is redundant. Therefore, to reduce burden and increase customer satisfaction, providers and suppliers no longer need to submit these forms for services rendered after January 1, 2023.  For claims with dates of service on or after January 1, 2023  providers and suppliers no longer need to submit CMNs or DIFs with claims. Due to electronic filing requirements, claims received with these forms attached will be rejected and returned to the provider or supplier.   For claims with dates of service prior to January 1, 2023  processes will not change and if the CMN or DIF is required, it will still need to be submitted with the claim, or be on file with a previous claim.  This statement applies throughout the Program Integrity Manual wherever CMNs and DIFs are mentioned.  A/B MACs (B) are billed with the ASC X12 837 professional claim format or, if approved, with the paper form CMS -1500.  A/B MACs (A) are billed with the ASC X12 837 institutional claim format or, if approved, with the paper Form CMS -1450.  See Chapters 24, 25 and 26 for detailed claims processing requirements, including forms, data elements, and formats.  See Chapters 21 and 22 for MSN and remittance record requirements.  See the official Washington Publishing Company web site for information about ASC X12 formats and related training material.   In addition to requirements applicable to all claims the following apply to drug claims.    On claims to A/B MACs (A) the drug is identified by the appropriate HCPCS code for the drug administered and billed under revenue code 0636 unless specific instruction states otherwise;    On claims to A/B MACs (B) the drug is identified by HCPCS code;    All drugs, including Prodrugs, are reported to DME MACs by National Drug Code (see 80.1.2);    Where HCPCS is required, units are entered in multiples of the units shown in the HCPCS narrative description.  For example, if the description for the code is 50 mg, and 200 mg are provided, units are shown as 4; See examples below.   Where the NDC is required units are entered in multiples of the units shown in the NDC label description.  For example, if the description for the code is 50 mg., and 200 mg are provided, units are shown as 4;    If the units provided exceed the size of the units field, or require more characters to report than spaces available in the format, repeat the HCPCS or NDC code on multiple lines until all units can be reported;    Covered administration codes for injections may be billed to the A/B MAC (B) and A/B MAC (A) in addition to billing for the drug.  The drug maximum payment allowance is for the drug alone.  However, if payment is under a PPS, such as OPPS, the injection would be included in the APC rate.   The examples below include the HCPCS code and indicate the dosage amount specified in the descriptor of that code.  Facilities use the units field as a multiplier to arrive at the total dosage amount.   EXAMPLE 1  HCPCS  J7189  Drug  Factor VIIa  Dosage  1 mcg  Actual dosage:  13,365 mcg  On the bill, the facility shows J7189 and 13,365 in the units field (13,365 mcg divided by 1 mcg = 13,365 units).  NOTE:   The process for dealing with one international unit (IU) is the same as the process of dealing with one microgram.   EXAMPLE 2  HCPCS  J9355  Drug  Trastuzumab  Dosage  10 mg   Actual dosage:  140 mg   On the bill, the facility shows J9355 and 14 in the units field (140 mg divided by 10mg = 14 units).  When the dosage amount is greater than the amount indicated for the HCPCS code, the facility rounds up to determine units.  When the dosage amount is less than the amount indicated for the HCPCS code, use 1 as the unit of measure.   EXAMPLE 3  HCPCS  J3100  Drug  Tenecteplase  Dosage  50 mg   Actual Dosage:  40 mg  The provider would bill for 1 unit, even though less than 1 full unit was furnished.  See 10 for a description of drug payment rules.