(Medicare Claims Processing Manual)

For a provider, business associate, or other trading partner to engage in EDI with Medicare FFS, it must first establish an EDI agreement with Medicare.   There are two ways to do this:  1) complete and submit paper CMS Form 855, or 2) submit an Internet based application  via the Provider Enrollment, Chain and Ownership System (PECOS) system.  More information on enrolling in the Medicare Program can be found at http://www.cms.gov/Medicare/Provider-Enrollment- and-Certification/MedicareProviderSupEnroll/index.html?redirect=/medicareprovidersupenroll  10.2 - Audience for this Chapter  (Rev. 2803, Issued: 10- 28-13, Effective: 09-17-13, Implementation: 09-17-13)  The information contained in this chapter will be of interest to Medicare providers, business associates or other trading partners, as well as others interested in how Medicare has structured its EDI policies.  Other Medicare FFS and CMS partners as well as general audiences may use this as a source of information to determine Medicare FFS EDI practices.  Primarily however, this chapter, and related chapters, are used by Medicare contractors for descriptive guidance t o contractual responsibilities they have to CMS.   Therefore, the instructions within this chapter are primarily directed to Medicare Administrative Contractors (MACs), Durable Medical Equipment Medicare Administrative Contractors (DME MACs), the Common Ele ctronic Data Interchange (CEDI) contractor for DME MACs, and their shared systems, and are in reference to Medicare requirements for their implementation of the current HIPAA compliant version of the Accredited Standards Committee (ASC) X12 Technical Report Type 3 (TR3) also known as an ASC X12 Implementation Guide (IG) and NCPDP Telecommunication Implementation Guide, as well as all Medicare and contractor EDI activities related to these transactions.   In order to implement the HIPAA administrative simplification provisions, specific ASC X12 and NCPDP transactions have been named under part 162 of title 45 of the Code of Federal Regulations as electronic data interchange (EDI) standards for Health Care.  All other EDI formats for health care became obsolete on October 16, 2003.  The Final Rule for Health Insurance Reform: Modifications to the Health Insurance Portability and Accountability Act (HIPAA) Electronic Transaction Standards published in the https://www.federalregister.gov/articles/2009/01/16/E9-740/health-insurance- reform -modifications -to-the- health -insurance- portability -and-accou ntability -act, adopted updated versions of HIPAA mandated electronic transactions.  Furthermore, the Final Rule conveys inclusion of errata documents to the transaction standard(s).  Medicare FFS therefore incorporates by reference any errata documents by the original mandated regulation compliance date through the Federal Register notice(s).  Moving forward, all newly adopted errata documents are to be accepted and integrated as part of the EDI transaction(s).  Medicare FFS further adopts the Accredited Standards Committee (ASC) X12 and National Council for Prescription Drug Programs (NCPDP) transaction standards as part of its EDI Acknowledgment Model.  10.3 - Scope of this Chapter  (Rev. 2803, Issued: 10- 28-13, Effective: 09-17-13, Implementation: 09-17-13)  This chapter will provide an overall description of EDI operations, requirements, roles and responsibilities for Medicare FFS.  Medicare FFS is utilizing the following EDI transactions:  Transactions (Required Under HIPAA Unless Otherwise Noted)  Current Version  Short Reference  ASC X12 Health Care Eligibility Benefit Inquiry and Response (270/271)  005010X279A1  ASC X12 270/271 eligibility transaction  ASC X12 Health Care Claim:  Professional (837)  005010X222A1  ASC X12 837  professional claim  ASC X12 Health Care Claim:   Institutional (837)  005010X223A2  ASC X12 837  institutional claim  ASC X12 Interchange Acknowledgment, TA1(not required under HIPAA)  005010X231A1  ASC X12 TA1 interchange acknowledgment  ASC X12 -Implementation Acknowledgment For Health Care Insurance (999) (not required under HIPAA)  005010X231A1  ASC X12 999 implementation acknowledgment  ASC X12 Health Care Claim Payment/Advice (835)  005010X221A1  ASC X12 835 remittance advice  ASC X12 Health Care Claim  Status Request and Response (276/277)  005010X212  ASC X12 276/277 claim status; ASC X12 276/277 claim status request and response; ASC X12 276 claim status request; ASC X12 277 claim status response  Transactions (Required Under HIPAA Unless Otherwise Noted)  Current Version  Short Reference  ASC X12 Health Care Claim  Acknowledgment (277) (not required under HIPAA)  005010X214  ASC X12 277CA claim acknowledgment  Telecommunication Standard,  National Council for Prescription Drug Programs  D.0  Depending upon context: NCPDP claim; NCPDP transaction; other functional NCPDP designation  Batch Standard, National Council for  Prescription Drug Programs  1.2 Depending upon context: NCPDP claim; NCPDP batch transaction; NCPDP transaction; other functional NCPDP designation   These administrative transactions require detailed instructions and specifications.  General instructions for the institutional and professional claim transactions, the NCPDP transaction, as well as the error handling/acknowledgment transactions are provided within this chapter.  All other transactions have separate chapters dedicated to them.  The following IOM Publication 100-04, chapters provide more specific information on the remaining electronic transactions.  References to these chapters are provided below.  They can be accessed by going to  http://www.cms.gov/Regulations- and-Guidance/Guidance/Manuals/Internet- Only -Manuals -IOMs.html  and selecting Publication # 100-04.   1. Chapter 22 - ASC X1 2 835 remittance advice (includes information for paper remittance advices)   2. Chapter 31 -ASC X12 270/271 eligibility benefit inquiry and response and ASC X12 276/277 claim status request and response  Two other related IOM chapters include:  Chapter 25 - Completing and Processing the Form CMS -1450 Data Set (includes information related to ASC X12 837 institutional claims)   Chapter 26 - Completing and Processing the Form CMS -1500 Data Set (related to ASC X12 837 professional claims)  Other sources of detailed information for each of these transactions are the Medicare FFS Companion Guide documents and Medicare FFS edits documentation which can be found at http://www.cms.gov/ ElectronicBillingEDITrans/.  10.4 - Acronyms and Definitions  (Rev. 3346, Issued: 09- 04-15, Effective: 10- 06-15, Implementation: 10- 06-15)  The following is a list of terms and acronyms if assistance is needed to understand the terminology used in this chapter.    EDI  Electronic Data Interchange -  the process of using nationally established standards to exchange electronic information between business entities.    HIPAA  Health Insurance Portability and Accountability Act of 1996  legislation that manda ted that the healthcare industry use standard formats for electronic claims and claims related transactions.    MAC  Medicare Administrative Contractor  Section 911 of the Medicare Modernization Act of 2003 mandated that the Secretary for Health & Human Services replaced the contractors administering the Medicare Part A or Part B fee-for-service programs with Medicare Administrative Contractors (MACs).   Part A/Part B Medicare Administrative Contractors (MACs) replaced the fiscal intermediaries and carriers and handle administration of both the Medicare Part A and Part B programs in specified geographic regions. For more information, please see the CMS overview of Medicare Contra cting Reform .   A/B M AC  Medicare Administrative Contractor servicing both Part A and Part B lines of business.   DME MAC  Durable Medical Equipment Medicare Administrative Contractor    CEDI - Common Electronic Data Interchange  Common front end for DME MACs   Trading Partner  one of two or more participants  in an ongoing business  relationship   (e.g., provider, billing service, software vendor, employer group, financial institution, etc.).    Submitter  an entity that owns the healthcare data being submitted. It is most likely the provider, hospital, clinic, etc. A submitter is directly linked to each billing NPI.    EDI Enrollment  establishes documentation specifying type of transactions and transmission methods to be used in the exchange of electronic administrative transactions.    EDI Registration  designates the Medicare contractor as the entity they agree to engage with for EDI and ensures agreement between parties to implement standard policies and practices to ensure the security and integrity of information exchanged.    Tradin g Partner Agreement  ensure the integrity of the electronic transaction process. The Trading Partner Agreement is related to the electronic exchange of information, whether the agreement is an entity or a part of a larger agreement, between each party to the agreement.    Third Party Agreement - ensures the confidentiality, security, and integrity of Medicare data being shared by third party agents that represent providers, certain value -added networks, clearinghouses, and billing agents.  20 - General EDI  (Rev. 2803, Issued: 10- 28-13, Effective: 09- 17-13, Implementation: 09- 17-13)  EDI is the process of using nationally established standards to exchange electronic information between business entities.  These national standards are developed and maintained by  a group of standards development organizations (SDOs), such as the Accredited Standards Committee (ASC) X12 and the National Council of Prescription Drug Programs (NCPDP).  The Department of Health and Human Services (HHS) adopted certain electronic stand ards for use in health care under the Health Insurance Portability and Accountability Act of 1996 (HIPAA).  Medicare FFS is required, as are all payers in the US, to adopt the standards specified under HIPAA.  However, as part of Medicare FFS EDI Acknowledgement Model, three additional ASC X12 standards will be adopted for error handling (277CA claim acknowledgment, 999 implementation acknowledgment, and TA1 interchange acknowledgment) that are not mandated under HIPAA.  In addition, there will be one addi tional standard adopted for NCPDP error handling (transmission response) that is not mandated under HIPAA.   20.1 - Legislative Background  (Rev. 2803, Issued: 10- 28-13, Effective: 09- 17-13, Implementation: 09- 17-13)  EDI practices for healthcare business were embraced more than 20 years ago to standardize electronic formats throughout the healthcare industry.  Usage of EDI in Health care claim processing was initiated by the Health Insurance Portability and Accountability Act of 1996(HIPAA), Public Law 104,191.  Subtitle F of Title II of HIPAA, added to Title XI of the Social Security Act (the Act) a new part called section C, entitled Administrative Simplification and consists of sections 1171 through 1180. This Federal legislation adopted standards for el ectronic transactions under an Administrative Simplification subtitle.  HIPAA mandated the adoption of standards for electronically transmitting certain health care administrative transactions between all covered entities.   Sections 1171 through 1179 are described below:    Section 1171 of the Act, established definitions for the following: code sets, health care clearinghouses, health care provider, health information, health plan, individually identifiable health information, standard, and standard setting organizations (SSO) such as the American National Standards Institute (ANSI).    Section 1172 made any standard adopted applicable to covered entities that transmit health information in electronic formats.  Covered entities include the following:   1) health pl ans 2) health care clearinghouses  3) health care providers    Section 1173 required the adoption of standards for transactions, code sets, and unique health identifiers for each individual, employer, health plan, and health care provider.    Section 1174 required th e adoption of standards for designated transactions, except electronic attachments.    Section 1175 prohibited health plans from refusing to conduct a transaction as a standard transaction, and delaying the processing and or adversely affecting its processing.    Section 1176 established civil monetary penalties for violation of the provisions of Part C of Title XI.    Section 1177 established penalties for any person that knowingly misuses a unique health identifier, or obtains or discloses individually  identifiable health information.    Section 1178 indicated provisions of Part C of Title XI of the Act, as well as any standards or implementation specifications adopted under them generally supersede contrary provisions of State law.    Section 1179 makes these provisions of the Act inapplicable to financial institutions or anyone acting on behalf of a financial institution when authorizing, processing, clearing, selling, billing, transferring, reconciling, or collecting payments for financial institutions.   HIPAA mandates all covered entities to comply with the use and maintenance of certain standards.  More recently the passing of The America Reinvestment and Recovery Act (ARRA) has further enhanced the definitions and requirements mandated under HIPAA.