(Medicare Claims Processing Manual)

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 hospitaliz ation 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, s o 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 cont ractors 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 t he 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 Transaction  Short Reference  Implementation Guide  Type of Claim  ASC X12 Health Care Claim:  Professional (837)  ASC X12 837  professional claim  ASC X12 Standards for Electronic Data Interchange Technical Report Type 3  Health Care Claim: Professional (837)   Professional services and supplies, including  retail pharmacy  ASC X12 Health Care Claim:  Institutional (837)  ASC X12 837  institutional claim  ASC X12 Standards for Electronic Data Interchange Technical Report Type 3  Health Care Claim: Institutional (837)   Institutional  Standard Claim Transaction  Short Reference  Implementation Guide  Type of Claim  Telecommunication Standard, National Council for Prescription Drug Programs and equivalent Batch Standard, National Council for Prescription Drug Programs Depending upon context: NCPDP claim; NCPDP transaction; NCPDP batch transaction; NCPDP batch claim  Telecommunication Standard Implementation Guide and equivalent Batch Standard  Implementation Guide, National Council for Prescription Drug Programs.  Retail pharmacy professional services and supplies; retail pharmacy drugs   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 Transaction  Short Reference  Implementation Guide  Type of Claim  ASC X12 Health Care Claim:  Professional (837)  ASC X12 837  professional claim  ASC X12 Standards for Electronic Data Interchange Technical Report Type 3  Professional services and supplies, including  Standard Claim Transaction  Short Reference  Implementation Guide  Type of Claim  Health Care Claim: Professional (837)  retail pharmacy  ASC X12 Health Care Claim:  Institutional (837)  ASC X12 837  institutional claim  ASC X12 Standards for Electronic Data Interchange Technical Report Type 3  Health Care Claim: Institutional (837)  Institutional  Telecommunication Standard, National Council for Prescription Drug Programs and equivalent Batch Standard, National Council for Prescription Drug Programs Depending upon context: NCPDP claim; NCPDP transaction; NCPDP batch transaction; NCPDP batch claim  Telecommunication Standard Implementation Guide and equivalent Batch Standard  Implementation Guide, National Council for Prescription Drug Programs.  Retail pharmacy professional services and supplies; retail pharmacy drugs   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)