Outpatient Services • Clinics and Hospitals
October 2008 • Bulletin 409
Contents
Medi-Cal Training Seminars
Outpatient and Medical Crossover
Claims Billing Update ......................1
Reimbursement for Second
Assistant Surgeon Update ..............1
Physician Assistant
Services Expanded..........................2
Abatacept Injection Policy Update .......2
Secretin Injection Update .....................2
Pediatric Combination Vaccine
New Benefit .....................................2
Outpatient and Medical Crossover Claims Billing Update
Variances in Medicare/Medi-Cal billing policy may cause hospital outpatient or
medical crossover claims for the same procedure code to deny as duplicate
billings. When a hospital or physician bills the professional component of a
pathology or radiology service with modifier 26, and bills the technical
component for the same code separately without modifier TC (blank modifier),
one of the claims will cross over to Medi-Cal and deny as a duplicate. A blank
modifier triggers a payment for the global service (both the professional and
technical components) in the Medi-Cal system. To prevent a denial, providers
must bill Medicare for the technical component with modifier TC. Providers with
denied technical component claims for duplicate services (Remittance Advice
Details [RAD] code 010) may resubmit the outpatient crossover claim by adding
modifier TC to the Medicare Remittance Advice (RA). Until a system solution
can be implemented, there is no similar workaround for denied professional
component claims billed by different providers. When a system solution is
implemented, EDS, an HP company, will automatically reprocess affected claims
for payment.
Rabies Biologics Update ......................3
Bortezomib (Velcade)
Policy Update ..................................3
Expanded Telemedicine Benefits.........3
Billing Code Changes for
Chemotherapy Drugs
Irinotecan and Leucovorin
Calcium............................................4
HCPCS code J9310
Requirements Update......................4
Cataract Postoperative Care
Billing Guidelines .............................5
“One Time Drug Fill” Language
Removed from Part 2 Manual..........5
Family PACT Provider Orientation
and Update Sessions ......................5
National Drug Code (NDC)
Reporting Requirements..................7
CCS Physician Services Supplemental
Rate Increase for Physician-Only
Service Components .....................11
Maximum Reimbursement Rates
for Pathology Codes ......................13
Reimbursement for Second Assistant Surgeon Update
Effective for dates of service on or after November 1, 2008, reimbursement for a
second assistant surgeon is allowed for the following CPT-4 codes.
Cardiopulmonary Surgery
32852, 32854 33031, 33120, 33251, 33259, 33261, 33305, 33315, 33321, 33322,
33332, 33335, 33400, 33403, 33405, 33406, 33410 – 33412, 33415 – 33417,
33422, 33425 – 33427, 33430, 33460, 33465, 33468, 33474, 33476, 33478,
33496, 33500, 33504, 33510 – 33514, 33516 – 33519, 33521 – 33523, 33530,
33533 – 33536, 33542, 33545, 33572, 33641, 33645, 33647, 33660, 33665,
33670, 33675 – 33677, 33681, 33684, 33688, 33692, 33694, 33702, 33710,
33720, 33724, 33726, 33730, 33736, 33774 – 33781, 33786, 33788, 33814,
33840, 33845, 33851 – 33853, 33860, 33861 33863, 33864, 33870, 33875,
33877, 33910, 33916, 33922, 33925, 33926, 33945, 35081, 35082, 35091, 35092,
35103, 35211, 35241, 35271, 35331, 35361, 35363, 35526, 35531, 35548, 35549,
35551, 35560, 35626, 35631, 35646, 35651
Urinary System Surgery
51590, 51595 – 51597, 59510, 59525
Providers must document in the Reserved for Local Use field (Box 19) of the claim
that the services were rendered by more than one assistant surgeon for the same surgery
on the same date.
This information is reflected on manual replacement pages surg cardio 8 (Part 2)
and surg urin 5 (Part 2).
Utilization of Zolpidem in
New Start Recipients .....................13
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Medi-Cal Update – Billing and Policy
October 2008
Physician Assistant Services Expanded
Effective retroactively for dates of service on or after January 1, 2008, the number of physician
assistants (PAs) that may be supervised by a physician and surgeon is expanded to four. In addition,
all services performed by a PA within his or her scope of practice may be reimbursed when the
service would be a covered benefit if performed by a physician and surgeon.
The supervising physician and surgeon shall review, countersign and date a sample consisting of, at
minimum, 5 percent of the medical records of patients treated by the PA functioning under the
protocols within 30 days of the date of treatment by the PA. If the PA ordered Schedule II drugs, the
supervising physician and surgeon must review, countersign and date the records within seven days.
When billing for assistant surgeon services performed by the PA, providers should bill with
modifier 99 (multiple modifiers). Modifier 99 = modifier 80 (assistant surgeon) + modifier AN (PA).
Modifier AS is no longer an approved modifier for these services.
Timeliness will be overridden until April 1, 2009.
This information is reflected on manual replacement pages modif app 4 (Part 2), non ph 1, 2, 3 and 5
(Part 2) and psych 1 (Part 2).
Abatacept Injection Policy Update
Effective for dates of service on or after November 1, 2008, policy for HCPCS code J0129 (injection,
abatacept, 10 mg) is revised. Documentation is required when requesting a Treatment Authorization
Request (TAR) or Service Authorization Request (SAR) if the patient had an inadequate response
after treatment with one of the following:
• One or more non-biologic Disease-Modifying Anti-Rheumatic Drugs (DMARDs), or
• At least one or more TNF antagonists (infliximab, etanercept or adalimumab), or the
interleukin-1 receptor antagonist anakinra
There is no age restriction or diagnosis restriction for abatacept. In addition, either of the following
dosing schedules may be used:
• Abatacept 10 mg/kg with a maximum dose of 1,000 mg, or
• According to body weight
This information is reflected on manual replacement pages inject 45 and 46 (Part 2).
Secretin Injection Update
Effective for dates of service on or after November 1, 2008, HCPCS code J2850 (injection, secretin,
synthetic, human, 1 mcg) is updated to remove the Treatment Authorization Request (TAR)
requirement, as well as the diagnosis restrictions.
This information is reflected on manual replacement page inject 57 (Part 2).
Pediatric Combination Vaccine a New Benefit
Effective retroactively to August 15, 2008, the Pentacel pediatric combination vaccine, CPT-4 code
90698 (diphtheria, tetanus toxoids, acellular pertussis vaccine, haemophilus influenza Type B, and
poliovirus vaccine, inactivated [DTaP-Hib-IPV] for intramuscular use) is a new Vaccines For
Children (VFC) program benefit for infants and children as an alternative to pre-existing vaccines
already approved for pediatric immunization.
Please see Vaccine, page 3
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October 2008
Vaccine (continued)
The Pentacel vaccine is indicated for active immunization against diphtheria, tetanus, pertussis,
poliomyelitis and invasive disease due to haemophilus influenza Type B. Pentacel is contraindicated
in children with histories of severe allergic reaction (for example, anaphylaxis) to a previous dose of
the Pentacel vaccine or its ingredients, or any other tetanus toxoid, diphtheria toxoid,
pertussis-containing vaccine, inactivated poliovirus vaccine and hemophilic influenza Type B
vaccine.
Pentacel is billed with CPT-4 code 90698 and modifier SL (state-supplied vaccine). It is reimbursable
for children 6 months through 4 years of age.
This information is reflected on manual replacement pages inject 23 (Part 2), inject vacc 1 (Part 2)
and vaccine 3 and 9 (Part 2).
Rabies Biologics Update
Effective for dates of service on or after November 1, 2008, rabies biologics for the pre-exposure and
post-exposure prophylaxis of rabies are updated as follows:
• CPT-4 codes 90375 (rabies immune globulin [RIg], human, for intramuscular use) and
90376 (rabies immune globulin, heat-treated [RIg-HT], human, for intramuscular and/or
subcutaneous use) are Medi-Cal benefits for the post-exposure prophylaxis of rabies and
must be billed with diagnosis code V01.5.
• CPT-4 code 90675 (rabies vaccine, for intramuscular use) no longer requires an invoice,
but must still be billed with the SK modifier.
• CPT-4 code 90676 (rabies vaccine, for intradermal use) is no longer a Medi-Cal benefit.
This information is reflected on manual replacement pages inject 2 and 5 (Part 2), inject vacc 1
(Part 2), modif used 4 (Part 2) and non ph 11 (Part 2).
Bortezomib (Velcade®) Policy Update
Effective for dates of service on or after November 1, 2008, diagnosis restrictions for bortezomib
(Velcade) are updated as follows:
• Bortezomib (HCPCS code J9041 [injection, bortezomib, 0.1 mg]) must be billed
with ICD-9-CM codes 203.00 – 203.02 (multiple myeloma) and 200.40 – 200.48
(mantle cell lymphoma).
• Bortezomib is no longer reimbursable when billed in conjunction with ICD-9-CM
code 202.80 (other lymphomas).
Dosage limitations for bortezomib are also updated.
The updated information is reflected on manual replacement pages chemo 26 and 27 (Part 2).
Expanded Telemedicine Benefits
Effective retroactively to July 1, 2008, telemedicine services have been expanded. An originating site
facility fee is reimbursable when billed with code Q3014 (telehealth originating site facility fee).
Transmission costs incurred from providing telemedicine services via audio/video communication is
reimbursable when billed with code T1014 (telehealth transmission, per minute, professional services
bill separately). The timeliness for these claims will be overridden through April 16, 2009.
Please see Telemedicine, page 4
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Telemedicine (continued)
Restrictions for billing transmission costs are as follows:
HCPCS Code
Q3014
T1014
Transmission Site
Originating site
Originating site and
distant site
Frequency Limit
Once per day
Maximum of
90 minutes per day
(1 unit = 1 minute)
Rate
$22.94
24 cents
per minut
Transmission Sites
These services provide expanded coverage to improve access to specialty care for Medi-Cal
recipients where the transmission site of a practitioner and patient differs from the site of a consulting
practitioner. Interactive telemedicine consists of audio/video equipment with live or “real time”
transmission between a practitioner and patient at the “originating site” and a consulting practitioner
at a “distant site.”
An “originating site” is the location of an eligible recipient at the time service is furnished via
telecommunications. Originating sites authorized by law are as follows:
• Offices of physicians or practitioners
• Critical access hospitals
• Rural health clinics
• Federally Qualified Health Center
A “distant site” is the location from where a physician or practitioner provides professional services
via telecommunications.
This information is reflected on manual replacement pages medne tele 1 thru 4 and 8 (Part 2).
Billing Code Changes for Chemotherapy Drugs Irinotecan and Leucovorin Calcium
Effective for dates of service on or after November 1, 2008, chemotherapy drugs irinotecan and
leucovorin calcium will be billed with national HCPCS Level II codes, as follows.
New
HCPCS Code
J0640
J9206
Description
Calcium leucovorin, 50 mg
Irinotecan, 20 mg
Previous Code/Strength
X6446/10 mg/ml
X7636/100 mg
There is no change in policy. Claims billed for HCPCS codes X6446 and X7636 for dates of service
on or after November 1, 2008 will be denied.
This information is reflected on manual replacement pages chemo 3 and 14 (Part 2) and
inject list 9 and 10 (Part 2).
HCPCS code J9310 Requirements Update
Effective for dates of service on or after November 1, 2008, the policy and restrictions for HCPCS
code J9310 (rituximab [Rituxan®]), when used for rheumatoid arthritis and other inflammatory
polyarthropathies, have been updated. Rituximab does not require a Treatment Authorization Request
(TAR) and the age restriction no longer applies. However, providers must document the requirements
in the Remarks field (Box 80) of the UB-04 claim form or the Reserved for Local Use field (Box 19)
of the CMS-1500 claim form, or on an attachment to the claim, all of the following:
• A diagnosis of ICD-9-CM code 714.0 – 714.9
• Documentation that the patient has had an inadequate response after treatment with one or
more non-biologic Disease-Modifying Anti-Rheumatic Drugs (DMARDs) and at least one or
more tumor necrosis factor (TNF) antagonists (infliximab, etanercept or adalimumab) or the
interleukin-1 receptor antagonist anakinra.
Note: Claims without the required documentation listed above will be denied.
This information is reflected on manual replacement pages inject 46 thru 48 (Part 2).
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October 2008
Cataract Postoperative Care Billing Guidelines
Medi-Cal considers CPT-4 code 92015 (determination of refractive state) as typical postoperative
follow-up care included in the surgical package for cataract extraction surgeries. Therefore, effective
November 1, 2008, code 92015 is not reimbursable when billed in conjunction with or within the
90-day post follow-up period of CPT-4 codes 66840, 66850, 66852, 66920, 66930, 66940 and
66982 – 66985.
This information is reflected on manual replacement page ophthal 7 (Part 2).
“One Time Drug Fill” Language Removed from Part 2 Manual
Effective immediately, all language regarding percent variance applicability to one-time drug fills is
being removed from Part 2 manual sections related to Treatment Authorization Requests (TARs) for
Pharmacy.
This information has been removed from manual replacement page tar comp 9 (Part 2).
Provider Orientation and Update Session
Medi-Cal providers seeking enrollment in the Family PACT (Planning, Access, Care and Treatment)
Program are required to attend a Provider Orientation and Update Session. Dates for an upcoming
session is listed below. Registration opens at 8 a.m., with Session I beginning promptly at
8:30 a.m.
Individual and group providers wishing to enroll must send a physician-owner to the session.
Nonprofit and government clinics seeking to enroll must send their medical director, physician or
nurse practitioner who is responsible for oversight of medical services rendered at the service site
where the provider wants to enroll.
Office staff members, such as clinic managers, billing supervisors and client eligibility enrollment
supervisors, are encouraged to attend. However, these staff members are not eligible to receive a
Certificate of Attendance. Enrolled clinicians and staff members are encouraged to attend to remain
current with program policies and services.
New Session Format
Family PACT has created a new session format, which offers an option for currently enrolled
providers and staff to attend only the afternoon update session, along with either the clinical session
or the billing and coding session.
Session I – Overview of the Family PACT Program:
Start Time
8:30 a.m. to 2 p.m.
Instructions Attendance at this presentation is mandatory for clinician providers wishing to
enroll in Family PACT and is recommended for other staff who are new to the
program or need a refresher.
Note: The following afternoon sessions will run concurrently from 2 p.m. to 4 p.m.:
Session II – Clinical Practice Alerts:
Start Time
2 p.m. to 4 p.m.
Instructions Clinicians in attendance who wish to become Family PACT providers must also
attend this session. Free continuing education (CE) credit is available for Session II.
Providers must bring their medical license numbers if requesting CE credit; a
continuing education request form will be available during onsite registration. Other
interested clinical staff members are welcome to attend and may request free CE
credit for this session.
Please see Provider Orientation, page 6
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Provider Orientation (continued)
Session III – Tips for Successful Family PACT Administration:
Start Time
2 p.m. to 4 p.m.
Instructions Administrators and billers interested in Family PACT program administration and
billing information may attend.
Please note the upcoming Provider Orientation and Update Session below.
San Diego
December 4, 2008
8:30 a.m. – 4 p.m.
The Westgate Hotel
1055 2nd Avenue
San Diego, CA 92101
(619) 557-3713
For a map and directions to these locations, providers can go to the Family PACT Web site
(www.familypact.org) and click “Providers” at the top of the home page, then “Provider Training”
in the menu on the left-hand side, then “Orientation Sessions,” and finally, click “Directions and Map
of Location” for the appropriate session location.
Registration
To register for an orientation and update session, providers should:
• Go to the Family PACT Web site (www.familypact.org) and click “Providers” at the top
of the home page, then “Provider Training” and “Click here to find out about upcoming
Orientation Sessions.” Identify the session you wish to attend and click “Registration”
next to the appropriate date and location.
• Print a copy of the registration form.
Fill out the form and fax it to the Office of Family Planning, ATTN: Darleen Kinner, at
(916) 650-0468.
If you do not have Internet access, you may request the registration form by calling
1-877-FAMPACT (1-877-326-7228). Providers must supply the following when registering:
• Name of the Medi-Cal provider or facility
• National Provider Identifier (NPI)
• Contact telephone number
• Anticipated number of people attending
Check-In
Check-in begins at 8 a.m. All orientation sessions start promptly at 8:30 a.m. and end by 4 p.m. At
the session, providers must present the following:
• NPI
• Medical license number
• Photo identification
Note: Individuals representing a clinic or physician group should use the clinic or group NPI,
not an individual NPI or license number.
Certificate of Attendance
Upon completion of the orientation session, each prospective new Family PACT medical provider
will receive a Certificate of Attendance. Providers should include the original copy of the Certificate
of Attendance when submitting the Family PACT application and agreement forms (available at the
session) to Family PACT Provider Enrollment. Providers arriving late or leaving early will not
receive a Certificate of Attendance. Currently enrolled Family PACT providers do not receive a
certificate.
Please see Provider Orientation, page 7
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Provider Orientation (continued)
Contact Information
For more information about the Family PACT Program, please call 1-877-FAMPACT
(1-877-326-7228) or visit the Family PACT Web site at www.familypact.org.
The Family PACT Program was established in January 1997 to expand access to comprehensive
family planning services for low-income California residents.
National Drug Code (NDC) Reporting Requirements
Beginning September 1, 2008, providers are encouraged to begin using the National Drug Code
(NDC) for physician-administered drugs, in conjunction with the customary Healthcare Common
Procedure Coding System (HCPCS) Level I, II or III code, on all Medi-Cal claims.
• Claims submitted for dates of service from September 1, 2008 through March 31, 2009
without an NDC will not be denied.
• Claims with dates of service on or after April 1, 2009 that do not meet the NDC reporting
requirements to include a valid NDC paired with a HCPCS code, will result in claims being
denied.
The Deficit Reduction Act of 2005 (DRA) requires all state Medicaid agencies to collect rebates from
drug manufacturers for physician-administered or dispensed drugs. Only those products
manufactured by companies participating in the federal Medicaid rebate program are reimbursable
under Medi-Cal. A list of manufacturers participating in the rebate program, which changes
periodically, is available in the Part 2 manual section Drugs: Contract Drugs List Part 5 – Authorized
Manufacturer Labeler Codes.
National Drug Code Description
The NDC is a number that identifies a specific drug. The NDC number consists of 11 digits in a 5-4-2
format. NDCs printed on packages often have fewer than 11 digits, with hyphens (-) separating the
number into three segments. A complete 11-digit number must have five digits in the first segment,
four digits in the second segment, and two digits in the last segment. The first five digits of an NDC
identify the manufacturer of the drug and are assigned by the Food and Drug Administration (FDA).
The remaining digits are assigned by the manufacturer and identify the specific product and package
size. Leading zeros are added wherever they are needed to complete a segment with the correct
number of digits.
Example: 5-4-2 Format
Zero Fill
Package Number
1234-1234-12
(01234-1234-12)
12345-123-12
(12345-0123-12)
2-22-2
(00002-0022-02)
11-digit NDC
01234123412
12345012312
00002002202
The NDC is found on the drug container (vial, bottle or tube). The NDC submitted to Medi-Cal must
be the actual NDC number on the package or container from which the medication was administered.
Providers should not bill for one manufacturer’s product and dispense another. It is considered to be a
fraudulent billing practice to bill using an NDC other than the one administered.
Physician-Administered Drugs
A physician-administered drug includes any covered outpatient drug provided or administered to a
recipient, which is billed by a provider other than a pharmacy. Such providers would include, but not
be limited to, physician offices, clinics and hospitals. A covered outpatient drug is broadly defined as
a drug that may be dispensed only upon prescription and is approved for safety and effectiveness as a
prescription drug under the Federal Food, Drug and Cosmetic Act. Physician-administered drugs are
not restricted to injectable drugs only. Physician-administered drugs include any drug regardless of
the method of administration.
Please see NDC, page 8
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NDC (continued)
Drug Identification Guidelines
There are three items to look for that will identify whether or not a product is a drug:
1. NDC – The vial or box that held the drug would have an NDC on it that will be used for
claims.
2. Lot and Expiration Date – All drugs have both a lot number and expiration date on the vial or
box.
3. Legend – This refers to statements such as, “Caution: Federal law prohibits dispensing without
prescription,” “Rx only” or similar words. All prescription drugs have these types of
statements.
Claims Processing
Claims will continue to be priced based on the HCPCS code, with the NDC and corresponding units
being used for drug rebate processing. Medicare primary claims will also require NDCs with HCPCS
codes.
Quantity Reporting
Reporting instructions apply to both paper claims and electronic transactions. At this time, Medi-Cal
will use only the HCPCS quantities/units for payment and rebate purposes. Sometimes it may be
necessary for providers to bill multiple NDCs for a single procedure code. This may happen when
two different strengths of the same drug are needed in order to administer the appropriate dose. This
will also be necessary when multiple vials of the same drug are used to administer the appropriate
dose, and the vials are manufactured by different manufacturers. When a provider uses more than one
NDC for a drug, the provider must include all NDCs on the claim. The quantity for each NDC must
be reported separately by repeating the HCPCS code.
PAPER CLAIMS
CMS-1500 Claim Form
For paper claims submitted on the CMS-1500 claim form, the NDC is reported in the shaded area of
Box 24A.
• Box 24A (shaded area) – This area will have a combination of two values entered: Bytes 1
and 2 will include the Product ID Qualifier. This qualifier identifies the type of number that is
being provided, which is an NDC, with a qualifier of ‘N4’. Bytes 3 – 21 will consist of the
entry of the appropriate number for the qualifier entered in the first two digits. The length of
this additional information will vary depending on the type of number being provided
(as identified by the previous 2-byte Product ID Qualifier).
Example: N4 as the Product ID Qualifier, followed by the 11-digit
NDC – N412345678901
• Box 24D – The HCPCS code will continue to be entered in 24D, with the charges in
Box 24F and units in Box 24G.
Please see NDC, page 9
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NDC (continued)
• Box 24D (shaded area) – In this area, enter the NDC unit of measure (two positions)
immediately followed by the numeric quantity administered to the patient, which is a full
10-digit number. The 10 digits consist of seven digits for the whole number, followed by the
three-digit decimal portion of the number.
Note: The quantity field should be entered from left to right. Do not enter a decimal.
Valid Unit of Measurement Qualifiers are the following:
F2 = International Unit
GR = Gram
ML = Milliliter
UN = Unit
Examples: UN0000012000 for a quantity of 12 units
ML0000124540 for a quantity of 124.54 milliliters
UB-04 Claim Form
For paper claims submitted on the UB-04 claim form, the NDC is reported in the Description field
(Box 43).
• Box 43 – Enter the two-digit Product ID Qualifier ‘N4’ in the first two positions, immediately
followed by the 11-digit NDC (no hyphens). Directly following the last digit of the NDC
(no delimiter), enter the two-digit Unit of Measurement Qualifier as noted above.
Immediately following the Unit of Measurement Qualifier, enter the nine-digit quantity.
The nine digits consist of six digits for the whole number, followed by the three-digit decimal
portion of the number.
Note: The quantity field should be entered from left to right; do not enter a decimal.
The Description field on the UB-04 form is 24 characters in length.
Example: Unit quantity of 30 for NDC 12345678901: N412345678901UN000030000
• Box 44 – Using the HCPCS/RATE/HIPPS Code field, enter the five-character HCPCS code.
• Box 46 – Using the Serv. Units field, enter the corresponding service units for the HCPCS
reported.
Direct Data Entry
The Point of Service (POS) device and Internet Professional Claim Submission (IPCS) system have
not been updated yet.
Please see NDC, page 10
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NDC (continued)
Direct Data Entry (continued)
In the interim, providers using these means of claims submission should continue to provide the
HCPCS code only. These applications will be remediated and HCPCS/NDC pairing will be required
beginning with dates of service on April 1, 2009 and after. Please watch for more detailed
information in future Medi-Cal Updates.
HIPAA 837 Institutional Transactions
For HIPAA-compliant ASC X12N 837 Institutional electronic claim transactions, the HCPCS code is
reported in Loop ID 2400.
Loop 2400:
Field SV201 – Enter the national code.
Field SV202-1 – Enter qualifier ‘HC’.
Field SV202-2 – Enter the HCPCS code.
Field SV202-3 – Enter the UD modifier if you obtained the drug under the 340B program.
Field SV204 – Enter qualifier ‘UN’.
Field SV205 – Enter the quantity.
Example: SV2*250*HC*Jxxxx**UN*1~
Loop 2410:
Field LIN02 – Enter qualifier ‘N4’.
Field LIN03 – Enter NDC without hyphens.
Example: LIN**N4*12345678901~
Field CTP04 – Enter quantity.
Field CTP05 – Enter unit of measure.
Example: CTP****2*ML~
For more detailed information, please refer to the 837 Transaction Companion Guides billing
instructions for electronic claim transactions on the Medi-Cal Web site (www.medi-cal.ca.gov).
From the home page, click the “References” tab, then “HIPAA Update, ” and finally the “ASC X12N
Version 4010A1 Companion Guides and NCPDP Technical Specifications” link.
SECTION 340B OF THE PUBLIC HEALTH SERVICE ACT
Background Information
The 340B Drug Pricing Program resulted from enactment of Public Law 102-585, the Veterans
Health Care Act of 1992, which is codified as Section 340B of the Public Health Service Act.
Section 340B limits the cost of covered outpatient drugs to certain federal grantees,
federally qualified health center look-alikes and qualified disproportionate share hospitals. Significant
savings on pharmaceuticals may be seen by those entities that participate in this program.
Section 340B of the Public Health Service Act provides that a manufacturer who sells covered
outpatient drugs to eligible entities must sign a pharmaceutical pricing agreement with the Secretary
of Health and Human Services, in which the manufacturer agrees to charge a price for covered
outpatient drugs that will not exceed the average manufacturer price (“AMP”) decreased by a rebate
percentage. Section 340B also requires eligible entities to charge the Medicaid program no more than
the actual acquisition cost of the drug plus the state allowed dispensing/administration fee, and to
require the state Medicaid program to exclude these claims from the collection of rebates.
340B Outpatient Drugs – UD Modifier
In order for providers to identify 340B outpatient drugs that have been dispensed, the National
Medicaid EDI Healthcare (NMEH) has recommended use of the ‘UD’ modifier. This will allow
Medicaid to identify those claims that are from 340B entities and exclude them from the rebate
collection process. The ‘UD’ modifier should be billed on the CMS-1500 & 837 Professional and the
UB-04 & 837 Institutional claim forms, associated with the applicable HCPCS code and NDC, to
properly identify 340B drugs. The UD modifier is to be used only in this circumstance. All non-340B
drugs are billed using the applicable HCPCS and NDC pair without a modifier.
This information is reflected on manual replacement pages blood 1 (Part 2),
fam planning 3 (Part 2), inject 1 (Part 2), modif app 6 (Part 2), physician ndc 1 and 2 (Part 2),
physician ndc ub 1 and 2 (Part 2) and ub comp op 15 (Part 2).
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CCS Physician Services Supplemental Rate Increase for Physician-Only
Service Components
Effective for dates of service on or after October 27, 2008, the Department of Health Care Services
(DHCS) has determined the following:
• For procedure codes that contain both a technical and a professional (physician)
component, the California Children’s Services (CCS) physician services supplemental rate
increase should only be applied to the professional component.
• For procedure codes that do not constitute a physician service, the supplemental
rate increase should not be applied.
Effective for dates of service on or after October 27, 2008, application of the supplemental rate
increase will be restricted as follows:
• Procedure codes billed with surgical supply modifiers ZM and ZN will not receive
the CCS increase, as these two modifiers are reimbursed for supply items and do not
constitute a physician service.
• Specific codes in the following table have no physician/professional component and will not
receive the CCS increase.
Procedure code
Description
77401
Radiation, treatment delivery, superficial and/or ortho voltage
77402
Radiation, treatment delivery, single treatment area, single port or parallel
opposed ports, simple blocks or no blocks; up to 5 MeV
77403
Radiation, treatment delivery, single treatment area, single port or parallel
opposed ports, simple blocks or no blocks; 6 – 10 MeV
77404
Radiation, treatment delivery, single treatment area, single port or parallel
opposed ports, simple blocks or no blocks; 11 – 19 MeV
77406
Radiation, treatment delivery, single treatment area, single port or parallel
opposed ports, simple blocks or no blocks; 20 MeV or greater
77407
Radiation, treatment delivery, two separate treatment areas, three or more
ports on a single treatment area, use of multiple blocks; up to 5 MeV
77408
Radiation, treatment delivery, two separate treatment areas, three or more
ports on a single treatment area, use of multiple blocks; 6 – 10 MeV
77409
Radiation, treatment delivery, two separate treatment areas, three or more
ports on a single treatment area, use of multiple blocks; 11 – 19 MeV
77411
Radiation, treatment delivery, two separate treatment areas, three or more
ports on a single treatment area, use of multiple blocks; 20 MeV or greater
77412
Radiation treatment delivery, three or more separate treatment areas, custom
blocking, targential ports, wedges, rotational beam, compensators, electron
beam; up to 5 MeV
77413
Radiation treatment delivery, three or more separate treatment areas, custom
blocking, targential ports, wedges, rotational beam, compensators, electron
beam; 6 – 10 MeV
77414
Radiation treatment delivery, three or more separate treatment areas, custom
blocking, targential ports, wedges, rotational beam, compensators, electron
beam; 11 – 19 MeV
77416
Radiation treatment delivery, three or more separate treatment areas, custom
blocking, targential ports, wedges, rotational beam, compensators, electron
beam; 20 MeV or greater
Please see Rate Increase, page 12
CAH
11
Medi-Cal Update – Billing and Policy
October 2008
Rate Increase (continued)
Procedure code
Description
77520
Proton treatment delivery; simple, without compensation
77522
Proton treatment delivery; simple, with compensation
77523
Proton treatment delivery; intermediate
77525
Proton treatment delivery; complex
81025
Urine pregnancy test, by visual color comparison methods
83013
Helicobacter pylori; breath test analysis for urease activity,
non-radioactive isotope
88184
Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical
component only; first marker
88185
Flow cytometry, cell surface, cytoplasmic, or nuclear marker, technical
component only; each additional marker
88400
Bilirubin, total, transcutaneous
89055
Leukocyte assessment, fecal, qualitative or semiquantitative
Note: Procedure codes 70000 – 89999 that have a professional component (physician) will
receive the CCS supplemental increase only for the professional (physician) component.
Procedure codes billed with the modifiers in the following table will be priced as specified in the
table:
Modifier
CCS Increase Description
26 – Professional component
No impact: Claims will receive the full CCS
supplemental increase.
22 – Unusual Service
25 – Significantly separately identifiable
E&M – same provider and date of service
59 – Separately identifiable service
78 – Return to operating room
79 – Unrelated procedure or service
90 – Reference (outside) Laboratory
ET – Emergency Services
Claims will receive the CCS supplemental increase
on the physician/professional component of the
procedure only.
QW – CLIA waived test
SA – Nurse Practitioner
SC – Medically necessary service
ZS – Professional and Technical
Component
CAH
TC – Technical component
Claims will not receive the CCS supplemental
increase.
All other modifiers
No impact: Claims will receive the full CCS
supplemental increase.
12
Medi-Cal Update – Billing and Policy
October 2008
Maximum Reimbursement Rates for Pathology Codes
Effective for dates of service on or after October 27, 2008, Medi-Cal policy indicates that laboratory
services are paid at the least amount of the following:
• The amount billed
• The charge to the general public
• Medicare’s maximum allowance
• Medi-Cal’s maximum allowance
In some instances, California Children’s Services (CCS) and outpatient hospital claims for certain
laboratory services receive a payment increase resulting in a rate that exceeds the Medicare
maximum allowable amount. Current payments are limited to the Medicare maximum amount
regardless of the modifier billed. For dates of service on or after October 27, 2008, modifiers will be
used when determining the appropriate Medicare maximum allowable amount for the procedure
and/or modifier combination billed. Reimbursement for the professional component of such services
will continue to receive the CCS supplemental increase when appropriate. Claims that are not
split-billed will not be impacted.
Utilization of Zolpidem in New Start Recipients
DRUG USE REVIEW
Educational Information
Insomnia is one of the most common complaints brought to a physician’s office affecting
approximately one-third of the adult population in the United States.1 While there are a number of
pharmacologic treatment options available, many are associated with undesirable adverse effects such
as daytime drowsiness, memory and psychomotor impairment, orthostatic hypotension, and blurred
vision.2 Tolerance and dependency may also occur with prolonged use of some agents.3 Zolpidem
immediate release (IR) (Ambien®) and zolpidem extended-release (ER) (Ambien CR®) are among the
most utilized drugs for the management of insomnia. Their documented efficacy with minimal
residual effects, decreased risk of tolerance, and lowered potential for abuse are reasons for their
popularity.4 Pharmacy claims data for Medi-Cal fee-for-service (FFS) showed that since
January 2006, the total number of claims for zolpidem IR and zolpidem ER combined averaged
approximately 18,000 per month. To understand this utilization better, a retrospective analysis was
conducted to determine utilization characteristics of zolpidem among FFS recipients who were new
starts on zolpidem IR or zolpidem ER between June 1, 2007 and May 31, 2008.
3/01/07
6/01/07
90-Day Washout
5/31/08
Zolpidem New Start
3/01/07
5/31/08
Continuous Eligibility
We identified 19,488 FFS recipients who met the above criteria and included them in our analysis.
Table 1 presents our recipients by gender and age group. Many studies have found insomnia to be
more prevalent among females.5 It was therefore not unusual to see two-thirds of the recipients were
females. This increased prevalence may also be due to there being more female (60 percent) than
male recipients in the general FFS population. Insomnia also has greater prevalence among the
elderly population.6 Sixty-six percent of the recipients were between 40 – 64 years of age and 11
percent were 65+. The greater majority of recipients in the 40 – 64 age group may in part be due to
the greater number of recipients belonging to that age group in the general FFS population to begin
with. The 65+ age group may be under-represented in the analysis since the majority of patients who
are 65+ should have their prescription drugs covered under Medicare Part D. Significant changes in
zolpidem utilization under FFS occurred as a result of the implementation of Medicare Part D. In
2005, there were 137,605 zolpidem recipients with a total of 564,129 claims for zolpidem. In 2006
the number of zolpidem recipients decreased by over 50 percent to 68,238 and a total of 223,881
zolpidem claims.
Please see Zolpidem, page 14
CAH
13
Medi-Cal Update – Billing and Policy
October 2008
Zolpidem (continued)
Table 1: Zolpidem Recipient Population by Gender
and Age Group
Table 2: Recipient Population by Formulation of
Zolpidem Prescription
Gender
Immediate-Release
14,399 (73.9 %)
Extended-Release
4,000 (20.5 %)
Both
1,089 (5.6%)
• 706 (64.8 %) : IR Æ ER
• 381 (35%): ER Æ IR
• 2 (0.2%): IR + ER
Total
19,488 (100.0 %)
Male
6,601 (33.9%)
Female
12,887 (66.1%)
Total
19,488 (100%)
0 -12
52 (0.27%)
Age Group
13 - 18
364 (1.9%)
19 -39
4,011 (20.6%)
40 - 64
12,885 (66.1%)
65+
2,176 (11.2%)
Total
19,448 (100.0%)
During the 12-month period of our analysis, almost 75 percent of the recipients were on the IR
formulation of zolpidem and 20 percent were on the ER formulation (Table 2). The remaining
5 percent of the recipients had at least one claim for each formulation. Of the recipients that had been
on both, 65 percent started on the IR formulation before switching to the ER formulation. There were
two recipients who had a claim for both formulations on the same day. Approximately half of those
recipients who had switched from one formulation to another, made their switch within 90 days of
their initial zolpidem prescription.
Between June 1, 2007 and May 31, 2008, there were a total of 56,751 claims for zolpidem (Table 3).
Almost 75 percent of these claims were for zolpidem IR. More than 50 percent of all zolpidem claims
(Table 3a) and 71 percent of claims for the IR formulation (Table 3b) were for the 10 mg strength.
Zolpidem IR is indicated for the “short-term treatment of insomnia characterized by difficulties with
sleep onset”; whereas zolpidem ER is indicated for “insomnia characterized by difficulties with sleep
onset and/or sleep maintenance.”7 - 8 The greater utilization of zolpidem IR over zolpidem ER may
indicate the majority of our recipients may have problems with initiating sleep rather than
maintaining sleep, or both. The recommended dose of zolpidem IR and zolpidem ER for adults is 10
mg and 12.5 mg, respectively.7 - 8 Patients who are elderly or debilitated may be especially sensitive
to the effects of zolpidem.7 - 8 Patients who have hepatic insufficiency do not clear zolpidem as
rapidly as normal patients.7 - 8 Therefore, the recommended zolpidem dose for both patient
populations is 5 mg for zolpidem IR and 6.25 mg for zolpidem ER.7 - 8 Since the majority of our
elderly patients 65+ would have their prescription drug coverage under Medicare Part D and because
the majority of our recipient population instead were adults 40 – 64 years of age, it was not unusual
to see a larger number of claims for the 10 mg and 12.5 mg strengths.
Table 3: Total Zolpidem Claims by Formulation
Immediate-release
Extended-release
42,228 (74.4%)
14,523 (25.6%)
56,751 (100.0%)
Table 3a: Total Zolpidem Claims by Strength
Immediate-Release
Extended-Release
5 mg
10 mg
6.25 mg
12.5 mg
12,217 (21.5%)
30,011 (52.9%)
3,110 (5.5%)
11,413 (20.1%)
56,751 (100.0%)
Table 3b: Total Zolpidem Claims by Strength Within Each Formulation
Immediate-Release
Extended-Release
5 mg
10 mg
6.25 mg
12.5 mg
12,217 (28.9%)
30,011 (71.1%)
3,110 (21.4%)
11,413 (78.6%)
42,228 (100.0%)
14,523 (100.0%)
Please see Zolpidem, page 15
CAH
14
Medi-Cal Update – Billing and Policy
October 2008
Zolpidem (continued)
Ninety-four percent of all claims for zolpidem were for a 30-day supply. The cumulative days supply
for all these claims during the 12-month period was generated for each recipient.
Chart 1 presents the percentage of recipients within each cumulative days supply range. The majority
of our recipients had a cumulative days supply between 1 – 90 days and 12 percent had more than
180 days supply. Graph 1 depicts the number of recipients within each cumulative days supply range.
The greater majority of our recipients had a cumulative days supply of 1 – 30 days. Although few,
some of our recipients had more than 360 days supply.
Graph 1 : Number of Recipients Within Each Cumulative Days Supply Range
Chart 1: Percentage of Recipients Within Each
Cumulative Days Supply Range
9,000
8,000
180+ Days:
12%
Number of Recipients
7,000
91 - 180 Days:
17%
6,000
5,000
4,000
3,000
2,000
1,000
1 - 90 Days:
71%
0
1 - 30
31 - 60
61 - 90
91 - 120
121 150
151 180
181 210
211 240
241 270
271 300
301 330
331 360
360+
Days Supply
Some commonly used drugs are known to disrupt normal sleep (Table 6). The claims history of our
recipient population was searched for these drugs. Fifty-three percent of our recipients had at least
one claim for one of the drugs listed. Each patient’s response to a drug is generally individualized,
but should always be considered as possible contributors when evaluating patients experiencing
insomnia.9
Table 6: Drugs with Insomnia as a Potential Side Effect*
Steroids
Thyroid Hormones
Bupropion
Oral Contraceptives
Quinidine
Caffeine and CaffeineContaining Products
MAOIs
Theophylline
Levodopa
CNS Stimulants
•Methylphenidate
•amphetamine
•Dextroamphetamine
•Modafinil
SSRIs
•Fluoxetine
•Sertraline
Decongestants
•Pseudoephedrine
•Phenylephrine
Antihypertensives
•Clonidine
•Propranolol
Antiepileptics
•Phenytoin
•Lamotrigine
*List of drugs is not all-inclusive. Adapted from references 3 and 9.
From the results of our analysis, a few areas of utilization stood out:
• More than 50 percent of our recipients had a claim for a drug that may have contributed to
their insomnia or can counter the effects of zolpidem. If a primary root cause for a patient’s
insomnia exists, whether it is a drug or medical condition, it is important that it be identified
and appropriately addressed to avoid treating insomnia as merely a symptom of that cause.
• The large majority of our recipients had a cumulative days supply of 1 – 30. The shorter
duration of use in these recipients may indicate the acute nature of their insomnia or it may
suggest the possible ineffectiveness of zolpidem, requiring a switch to an alternate
medication. A further analysis of this group of recipients found that 39 percent had a claim for
a possible sleep aid after they started taking zolpidem. However, since many drugs used to
treat insomnia are also used for other medical conditions, we were unable to distinguish
between a true switch versus a new treatment for a separate medical condition.
Please see Zolpidem, page 16
CAH
15
Medi-Cal Update – Billing and Policy
October 2008
Zolpidem (continued)
• Twelve percent of our recipients were on zolpidem for more than 180 days. This demonstrates
the possible chronic nature of insomnia. Patients often continue to report symptoms for many
years after the onset of their insomnia.10 This results in patients taking sedative hypnotics for
longer duration than is clinically evaluated and recommended.10 There is currently no
published data supporting the efficacy and safety of zolpidem beyond six months.10
In comparison to many other insomnia treatment medications, zolpidem may have improved safety
profiles. Despite this improvement, there are still risks associated with its use. A retrospective study
by Wang PS, et al. found the use of zolpidem by individuals 65 years of age and older was associated
with nearly twice the risk of hip fracture.11 There have been reports of hallucinations and sensory
distortions even at therapeutic doses of zolpidem.2 Behaviors such as sleep-driving, preparing and
eating food, making phone calls, or having sex have been reported with zolpidem with the patient
having no recollection of the event(s).7 - 8 There were also reports in the media on the use of zolpidem
possibly contributing to accidents on the road.12 Due to the lack of sufficient evidence supporting the
efficacy and safety of long-term use of zolpidem beyond six months, the risks of adverse effects from
the use of zolpidem may be under-recognized. It therefore remains essential that patients who receive
treatment for insomnia with zolpidem are informed of the possible risks associated with it, in addition
to receiving adequate follow-up care with their physicians to monitor for efficacy and safety.
References
1. American Academy of Sleep Medicine. Insomnia Fact Sheet.
http://www.aasmnet.org/resources/factsheets/insomnia.pdf. Accessed March 10, 2008.
2. Benca RM. Diagnosis and Treatment of Chronic Insomnia: A Review. Psychiatric Services.
2005; 56(3):332 – 343.
3. Ramakrishnan K and Scheid DC. Treatment Options for Insomnia. American Family Physician.
2007; 76: 517 – 526.
4. Jacobs GD, Pace-Schott EF, Stickgold R, Otto MW. Cognitive Behavior Therapy and
Pharmacotherapy for Insomnia. A Randomized Controlled Trial and Direct Comparison. Archives
of Internal Medicine. 2004; 164: 1888 – 1896.
5. National Institutes of Health. NIH State-of-the-Science Conference on Manifestations and
Management of Chronic Insomnia in Adults. National Institutes of Health
State-of-the-Science Conference Statement. June 13 – 15.
http://consensus.nih.gov/2005/2005InsomniaSOS026main.htm. Accessed
January 17, 2008.
6. Thorpy MJ, Lieberman JA, Roth T, Owens GS. Sleep Disorders and Excessive Sleepiness: Impact
on Quality of Life. Patient Identification. The American Journal of Managed Care.
2007; 13(6)(suppl):S132 – 139.
7. Ambien [Package Insert]. Sanofi-Aventis U.S. LLC, Bridgewater, NJ; February 2008.
http://products.sanofi-aventis.us/ambien/ambien.html. Accessed June 23, 2008.
8. Ambien CR [Package Insert]. Sanofi-Aventis U.S. LLC, Bridgewater, NJ; January 2008.
http://products.sanofi-aventis.us/ambien_cr/ambiencr.html. Accessed June 23, 2008.
9. Reeder CE, Franklin M, Bramley TJ. Management and Treatment of Insomnia and Its Impact on
Today’s Managed Care. Current Lanscape of Insomnia in Managed Care. The American Journal
of Managed Care. 2007; 13(5)(suppl):S112 – 116.
10. Krystal AD, Erman M, Zammit GK, Soubrane C, Roth T, on behalf of the ZOLONG
Study Group. Long-Term Efficacy and Safety of Zolpidem Extended-Release 12.5 mg,
Administered 3 to 7 Nights Per Week for 24 Weeks, in Patients With Chronic Primary Insomnia:
A 6-Month, Randomized, Double-Blind, Placebo-Controlled, Parallel-Group, Multicenter Study.
Sleep. 2008; 31(1):79 – 90.
11. Wang PS, Bohn RL, Glynn RJ, Mogun H, Avorn J. Zolpidem Use and Hip Fracture in Older
People. Journal of the American Geriatric Society. 2001; 49:1685 -1690.
12.CBS Broadcasting. Concern Over Ambien and Driving. CBS Evening News.
March 8, 2006. http://www.cbsnews.com/stories/2006/03/09/eveningnews/main1384884.shtml.
Accessed January 28, 2008.
Please refer to pages 36-55 thru 36-59 in the Medi-Cal Drug Use Review manual.
CAH
16
Instructions for Manual Replacement Pages
October 2008
Clinics and Hospitals Bulletin 409
Remove and replace:
Contents for Clinics and Hospitals Billing and Policy v/vi *
Remove and replace:
blood 1/2
chemo 3 thru 6, 9 thru 14, 19/20 *, 25 thru 32
fam planning 3/4
inject 1/2, 5/6, 23 thru 28, 39/40 *, 45 thru 50, 57/58
inject list 9/10
Remove:
Insert:
inject vacc 1
inject vacc 1/2
Remove and replace:
medne oto 1/2 *
Remove:
Insert:
medne tele 1 thru 7
medne tele 1 thru 9
Remove and replace:
modif app 1 thru 6
modif used 3/4
non ph 1 thru 6, 11/12
ophthal 7/8
ophthal cd 3/4 *
path chem 3/4 *
Insert new section
after page path urin 2:
physician ndc 1/2 (new)
Insert new section after
page physician ndc 2: physician ndc ub 1/2 (new)
Remove and replace:
preg early 7 thru 10 *
prescript 9 *
psych 1/2
radi dia 27/28 *
radi dia ult 1/2 *
surg 3 thru 6 *
surg cardio 7/8
surg urin 5
tar and non cd9 1/2 *
tar comp 9/10
ub comp op 15/16
Remove and replace:
vaccine 3/4
Insert after page
vaccine 8:
vaccine 9
DRUG USE REVIEW (DUR) MANUAL
Insert in the
Education section:
36-51 thru 36-59
* Pages updated due to ongoing provider manual revisions.
Part 2