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Hospital Outpatient Services Manual

Hospital Outpatient Services Manual

Hospital Outpatient Services Manual

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Hospital Outpatient Services Manual

Updated 06/05/2018

This manual was updated Updated 06/05/2018

Update Log

Update Log

 

Publication History

This publication supersedes all previous Hospital Outpatient Services handbooks. Published by the Montana Department of Public Health & Human Services, January 2005.

 Updated September 2004, December 2005, April 2011, January 2012, June 2012, July 2013, June 2015, November 2015, December 2015, October 2017 and June 2018.

CPT codes, descriptions and other data only are copyright 2014 American Medical Association (or such other date of publication of CPT). All Rights reserved. Applicable FARS/DFARS Apply.

Update Log

06/05/2018
The Covered Services, Billing Procedures, How Payment is Calculated, and Table of Contents chapters were revised.

10/16/2017
Hospital Outpatient Services Manual converted to an HTML format and adapted to 508 Accessibility Standards.
The Billing Procedures Chapter added Billing Unlisted Services or Procedures and Billing Electronically with paper attachment sections and added new revenue code directions and campus language. The How Payment is Calculated Chapter added a new Outpatient Clinic and Provider-Based Services section.  The Covered Services Chapter added a Change to Medicaid Outpatient Laboratory Billing section. The Prior Authorization Chapter added a time limits for submission for emergency inpatient admissions.

12/31/2015
Hospital Outpatient Services, January 2016: HELP Plan-Related Updates and Others

11/17/2015
Hospital Outpatient Services, November 2015: Billing Procedures, Revenue Codes 25X and 27X

06/22/2015
Hospital Outpatient Services, May 2015: Entire Manual

07/05/2013
Hospital Outpatient Services, July 2013: Definitions and Index

06/27/2012
Hospital Outpatient Services, June 2012: Covered Services, Billing Procedures, How Payment Is Calculated

01/12/2012
Hospital Outpatient Services, December 2011: Hospital Outpatient Services

04/29/2011
Hospital Outpatient Services, April 2011: How Payment Is Calculated

12/16/2005
Hospital Outpatient Services, October 2005: New Instructions on Completing Medicaid Hysterectomy Acknowledgement Form

09/22/2004
Hospital Outpatient Services, August 2004: Team Care Added, Clarification on Sterilizations, Hysterectomies, Abortions, and MPQHF Phone Number Change

 

End of Update Log Chapter

Table of Contents

Key Contacts and Key Websites

Introduction

Introduction

Thank you for your willingness to serve members of the Montana Medicaid program and other medical assistance programs administered by the Department of Public Health and Human Services.

Manual Organization

This manual provides information specifically for outpatient hospital services. Other essential information for providers is contained in the separate General Information for Providers manual. Providers are responsible for reviewing both manuals.

A table of contents and an index allow you to quickly find answers to most questions. The margins contain important notes with extra space for writing notes. There is a list of contacts and websites on the Contact Us page on the Provider Information website. There is also space on the inside of the front cover to record your NPI for quick reference when calling Provider Relations.

Manual Maintenance

Manuals must be kept current. Changes to manuals are provided through provider notices and replacement pages. When replacing a page in a paper manual, file the old pages and provider notices in the back of the manual for use with claims that originated under the old policy. Remember to keep old policy pages when you add replacement pages to refer to for older claims.

Rule References

Providers must be familiar with all current rules and regulations governing the Montana Medicaid program. Provider manuals are to assist providers in billing Medicaid; they do not contain all Medicaid rules and regulations. Rule citations in the text are a reference tool; they are not a summary of the entire rule. In the event that a manual conflicts with a rule, the rule prevails. Links to rules are available on the Provider Information website. Paper copies of rules are available through the Secretary of State’s office. See the Contact Us link in the left menu on the Provider Information website.

Providers are responsible for knowing and following current Medicaid rules and regulations.

In addition to the general Medicaid rules outlined in the General Information for Providers manual, the following rules and regulations are also applicable to the outpatient hospital program:

  • Code of Federal Regulations (CFR)
    • 42 CFR 419 Prospective Payment System for Hospital Outpatient Department Services
  • Montana Code Annotated (MCA)
    • MCA 50-5-101 through MCA 50-5-1205 Hospitals and Related Facilities
  • Administrative Rules of Montana (ARM)
    • ARM 37.86.2801 and ARM 37.86.3001–ARM 37.86.3109 Outpatient Hospital Services

Claims Review (MCA 53-6-111 and ARM 37.85.406)

The Department is committed to paying Medicaid providers’ claims as quickly as possible. Medicaid claims are electronically processed and usually are not reviewed by medical experts prior to payment to determine if the services provided were appropriately billed. Although the computerized system can detect and deny some erroneous claims, there are many erroneous claims which it cannot detect. For this reason, payment of a claim does not mean that the service was correctly billed or the payment made to the provider was correct. Periodic retrospective reviews are performed which may lead to the discovery of incorrect billing or incorrect payment. If a claim is paid and the Department later discovers that the service was incorrectly billed or paid or the claim was erroneous in some other way, the Department is required by Federal regulation to recover any overpayment, regardless of whether the incorrect payment was the result of Department or provider error or other cause.

Getting Questions Answered

The provider manuals are designed to answer most questions; however, questions may arise that require a call to a specific group (such as a program officer, Provider Relations, or a prior authorization unit). Medicaid manuals, provider notices, replacement pages, fee schedules, forms, and much more are available on the Provider Information website.

 

End of Introduction Chapter

Covered Services

Covered Services

General Coverage Principles

Medicaid covers almost all outpatient hospital services when they are medically necessary. This chapter provides covered services information that applies specifically to outpatient hospital services. Healthcare services received by Medicaid members must also meet the general requirements listed in the Provider Requirements chapter of the General Information for Providers manual.

Hospital Outpatient Services (ARM 37.86.3001)
Outpatient hospital services are provided to members whose expected hospital stay is less than 24 hours. Outpatient services include preventive, diagnostic, therapeutic, rehabilitative, and palliative care provided by or under the direction of a physician, dentist, or other practitioner as permitted by federal law. Hospitals must meet all of the following criteria:

  • Be licensed or formally approved as a hospital by the officially designated authority in the state where the institution is located
  • Meet the requirements for participation in Medicare as a hospital

Services for Children (ARM 37.86.2201–2235)
The Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) Services program is a comprehensive approach to healthcare for Medicaid members ages 20 and under. It is designed to prevent, identify, and then treat health problems before they become disabling. Under EPSDT, Medicaid eligible children may receive any medically necessary covered service, including all outpatient hospital services described in this manual. All applicable Passport to Health and prior authorization requirements apply.

Non-Covered Services (ARM 37.85.207 and ARM 37.86.3003)
Items or medical services not specifically included within these rules as covered benefits of the Montana Medicaid program are not reimbursable.

The following medical and nonmedical services, except as otherwise specified in program-specific rules as a waiver service or an EPSDT service, are explicitly excluded from the Montana Medicaid program, except for those services specifically available as listed in ARM 37.40.1406 and ARM 37.90.402, and Title 37, Chapter 34, Subchapter 9, to persons eligible for home and community-based services, and except for those Medicaid-covered services as listed in ARM 37.83.812 to qualified Medicare beneficiaries for whom the Montana Medicaid program pays the Medicare premiums, deductible, and coinsurance.

  • Acupuncture services
  • Autopsies
  • Chiropractic services
  • Circumcisions not authorized by the Department as medically necessary
  • Dietician services (some services covered per ARM 37.86.3002)
  • Delivery services not provided in a licensed healthcare facility or nationally accredited birthing center unless as an emergency service. Delivery service means services necessary to protect the health and safety of the woman and fetus from the onset of labor through delivery. Emergency service is defined in ARM 37.82.102.
  • Dietary supplements
  • Donor search expenses
  • Erectile dysfunction products, including but not limited to injections, devices, and oral medications used to treat impotence
  • Experimental services, or services that are generally regarded by the medical profession as unacceptable treatment not medically necessary for purposes of the Montana Medicaid program.
  • Homemaker services
  • Independent exercise programs, such as pool therapy, swim groups, or health club memberships
  • Invasive medical procedures undertaken for the purpose of weight reduction such as gastric bypass, gastric banding, or bariatric surgery, including all revisions
  • Masseur/Masseuse services
  • Medical services furnished to Medicaid-eligible members who are absent from the state, including a child residing in another state for whom Montana makes adoption assistance or foster care maintenance payments, are covered as in each program-specific rule and subject to the applicable conditions of those rules.
  • Naturopathic services
  • Nutritional services
  • Outpatient hospital services provided outside the borders of the United States.
  • Outpatient physical therapy, occupational therapy, and speech therapy services that are primarily maintenance therapy as defined in ARM 37.86.601
  • Physical therapy aide services, except as provided in ARM 37.86.601, ARM 37.86.605, ARM 37.86.606, and ARM 37.86.610.
  • Services that do not comply with national standards of medical practice, non-FDA approved drugs, biologicals, and devices and clinical trials are excluded from coverage.
  • Services that are not medically necessary. The Department may review for medical necessity at any time before or after payment. The Medicaid member is financially responsible for these services and the Department recommends the member agree in writing before the services are provided. See When to Bill a Medicaid Member in the Billing Procedures chapter of the General Information for Providers manual.
  • Sexual aids, including but not limited to devices, injections, and oral medications
  • Surgical technician services (technicians who are not physicians or mid-level practitioners)
  • Treatment services for infertility, including sterilization reversals
  • Medicaid does not cover services that are not direct patient care such as the following:
    • Missed or canceled appointments
    • Mileage and travel expenses for providers
    • Preparation of medical or insurance reports
    • Service charges or delinquent payment fees
    • Telephone services in home, remodeling of home, plumbing service, car repair, and/or modification of automobile

Use the fee schedule for your provider type to verify coverage for specific services.

Importance of Fee Schedules
The easiest way to verify coverage for a specific service is to check the Department’s fee schedule for your provider type. In addition to being listed on the fee schedule, all services provided must also meet the coverage criteria listed in the Provider Requirements chapter of the General Information for Providers manual and in this chapter. Use the fee schedule in conjunction with the more detailed coding descriptions listed in the current CPT, CDT, and HCPCS coding books. Take care to use the fee schedule and coding books that pertain to the date of service. Fee schedules are available on the provider type pages on the Provider Information website.

Coverage of Specific Services (ARM 37.86.3002)

The following are coverage rules for specific hospital outpatient services.

Abortions (ARM 37.86.104)
Abortions are covered when one of the following conditions is met:

  • The member’s life would be endangered if the fetus is carried to term.
  • The pregnancy is the result of rape or incest.
  • The abortion is determined by the attending physician to be medically necessary, even if the member’s life is not endangered if the fetus is carried to term.

A completed Physician Certification for Abortion Services (MA-37) form must be submitted with every abortion claim or payment will be denied. Complete only one section of this form. This is the only form Medicaid accepts for abortion services. (See the Forms page of the Provider Information website for the form and instructions.)

When using mifepristone (Mifeprex or RU 486) to terminate a pregnancy, it must be administered within 49 days from the beginning of the last menstrual period by or under the supervision of a physician who:

  • Can assess the duration of a pregnancy.
  • Can diagnose ectopic pregnancies.
  • Can provide surgical intervention in cases of incomplete abortion or severe bleeding, or can provide such care through other qualified physicians.
  • Can assure access to medical facilities equipped to provide blood transfusion and resuscitation.
  • Has read, understood and explained to the member the prescribing information for mifepristone.
  • Can assess for any possible adverse events.

Diabetes Education
Medicaid covers diabetes education services for members who have been newly diagnosed with diabetes and/or members with unstable diabetes (e.g., members with long-term diabetes experiencing management problems) in accordance with 42 CFR 410, Subpart H. The diabetes education protocol must meet the following Medicare Part A requirements:

  • The program must train and motivate members to self-manage their diabetes through proper diet and exercise, blood glucose self-monitoring, and insulin treatment.
  • The plan of treatment must include goals for the member and how they will be achieved, and the program duration must be sufficient to meet these goals.
  • The physician must refer only his/her members to the program.
  • The program must be provided under the physician’s order by the provider’s personnel and under medical staff supervision.
  • The education plan must be designed specifically for members to meet their individual needs. Structured education may be included in the plan, but not substituted for individual training.

Donor Transplants
Medicaid covers successful donor-related testing and services and organ acquisition services, which are bundled into the Medicaid member’s transplant hospitalization stay. Medicaid does not cover expenses associated with the donor search process.

Emergency Department Visits
Emergency medical services are those services required to screen, treat, and stabilize an emergency medical condition in an emergency room. Passport to Health provider referral is not required for emergency room visits. Inpatient services for members admitted through an emergency room (where the emergency room is billed on the inpatient claim) are also exempt from Passport requirements.

For emergency room visits, services are exempt from cost share.

For prospective payment hospitals, the two lowest level emergency room visits (CPT procedure codes 99281 and 99282) will be reimbursed based on the clinic visit APC rate.

Outpatient Clinic Services

The Department will pay for service provided in an outpatient clinic. Clinics that are within or outside the hospital walls are considered independent clinics by Montana Healthcare Programs. 

Clinic services provided by an individual physician or mid-level practitioner in the clinic must be billed on a CMS 1500 with place of service (POS) 11. 

For services that have both technical and professional components, physicians providing services in hospitals must bill only for the professional component if the hospital is going to bill Medicaid for the technical component. Refer to the Physician-Related Services manual and the Billing Procedures chapter in this manual for more information.
 

Partial Hospitalization

The partial hospitalization program is an active treatment program that offers therapeutically intensive, coordinated, structured clinical services. These services are provided only to members who are determined to have a serious emotional disturbance (SED) or a severe disabling mental illness (SDMI).

Definitions for SED and SDMI are on the Provider Information website under Definitions and Acronyms. Partial hospitalization services are time-limited and provided within either an acute level program or a sub-acute level program. Partial hospitalization services include day, evening, night, and weekend treatment programs that employ an integrated, comprehensive, and complementary schedule of recognized treatment or therapeutic activities. These services require prior authorization. See the Provider Information website for the mental health manual and prior authorization information.

Elective Deliveries

Effective July 1, 2014, all facilities must have a hard-stop policy in place regarding non-medically necessary inductions prior to 39 weeks and non-medically necessary Cesarean sections at any gestational age. The policy must contain the following:

  • No non-medically necessary inductions and Cesarean sections prior to 39 weeks and 0/7 days gestation, and no non-medically necessary Cesarean sections at any gestational age.
  • Confirmation of weeks gestation by ACOG guidelines (at least one of the following guidelines must be met to show gestational age):
    • Fetal heart tones have been documented for 20 weeks by non-electronic fetoscope or 30 weeks by Doppler;
    • 36 weeks since a positive serum or urine pregnancy test that was performed by a reliable laboratory; or
    • An ultrasound prior to 20 weeks that confirms the gestational age of at least 39 weeks.
  • If pregnancy care was not initiated prior to 20 weeks gestation, the gestational age may be documented from first day of the last menstrual period (LMP).
  • Policy must have a multistep review process prior to all inductions and Cesarean Sections including final decision being made by the Perinatology Chair/ Obstetrical Chair, OB Director, or Medical Director.

Effective October 1, 2014, Montana Medicaid will reduce reimbursement rates for non-medically necessary inductions prior to 39 weeks, and non-medically necessary Cesarean sections at any gestational age. All hospital claims with an admit date on or after October 1, 2014, will require coding changes to delivery claims. Hospital inpatient claims and birthing center claims will require the use of condition codes for all induction and Cesarean section deliveries. These claims will be reviewed for medical necessity based on an approved list of diagnosis codes. The condition codes are:

  • 81 – Cesarean section or induction performed at less than 39 weeks gestation for medical necessity.
  • 82 – Cesarean section or induction performed at less than 39 weeks gestation elective.
  • 83 – Cesarean section or induction performed at 39 weeks gestation or greater.

Outpatient Cardiac and Pulmonary Rehabilitation

Effective July 1, 2014, services for procedure codes G0423, and G0424 must be prior authorized by Mountain-Pacific Quality Health.

Coverage for outpatient cardiac and pulmonary rehabilitation services must be medically necessary.

Patients with one or more contraindications are not eligible for cardiac and pulmonary rehabilitation. The following conditions are contraindications to cardiac pulmonary rehabilitation.

  • Severe psychiatric disturbance including, but not limited to, dementia and organic brain syndrome; or
  • Significant or unstable medical conditions including, but not limited to, substance abuse, liver dysfunction, kidney dysfunction, and metastatic cancer.

Therapy Services

Physical, occupational, and speech/language therapy services are available to Montana Medicaid members. See the Therapy Services provider manual on the Provider Information website.

Change to Medicaid Outpatient Laboratory Billing


Effective January 1, 2017, modifier L1 associated with the reporting of conditionally packaged laboratory procedures will be deactivated.  The modifier will no longer override the packaging of laboratory codes that are billed with other payable Outpatient Prospective Payment System (OPPS) procedures.  Laboratory procedures are only payable under OPPS when the lab codes are the only payable codes on the claim, or when the Type of Bill (TOB) is 141 (Hospital, Other, Admit through Discharge) for non-patient laboratory tests.

Note:  Some lab codes (e.g., molecular pathology codes) are not subject to the conditional packaging logic.

End of Covered Services Chapter

Prior Authorization

Prior Authorization

What is Prior Authorization (ARM 37.86.2801)

Prior authorization is the approval process required before certain services are paid by Medicaid. If a service requires prior authorization, the requirement exists for all Medicaid members. When prior authorization is granted, the provider is issued a prior authorization number, which must be on the claim.

Distinct authorization numbers are issued for Passport approval and prior authorization, and both must be recorded on the claim in the appropriate location.

Prior authorization is not a guarantee of payment. When requesting prior authorization, keep in mind the following:

  • The referring provider should initiate all authorization requests.
  • For members with partial eligibility, request prior authorization from the first date the member was Medicaid-eligible, not from the first date of the member’s hospital stay.
  • Have all required documentation included in the packet before submitting a request for prior authorization. The Prior Authorization Information link on the Provider Information website lists some services that require prior authorization, who to contact, and specific documentation requirements. Also refer to the fee schedules.
  • Prior authorization must be obtained before a member receives services. See the fee schedules for procedure codes that have Y as the prior authorization indicator. Prior authorization is also required for:
    • All psych inpatient services except if patient has Medicare.
    • All out-of-state inpatient services except if the patient has Medicare and the only reason for prior authorization is for out-of-state services.
    • Interim claims for Prospective Payment System (PPS).
  • When prior authorization is granted, providers receive notification containing a prior authorization number, which must be included on the claim.

It is not the intent of the Montana Medicaid Program to interfere or delay a transfer when a physician has determined a situation to be emergent. Prior authorization is not required in emergency situations. Emergency inpatient admissions must be authorized within two working days (Monday–Friday) of admission to an out-of-state hospital.

Prior authorization is not required in emergency situations.

Retrospective authorization may be granted only under the following circumstances:

  • The Montana Medicaid member qualifies for retroactive eligibility for Montana Medicaid hospital benefits.
  • The hospital is retroactively enrolled as a Montana Medicaid provider during the dates of service for which authorization is requested.
  • The hospital can document that at the time of admission it did not know, or have any basis to assume that the member was a Montana Medicaid member.
  • Emergency inpatient admissions must be authorized within three working days (Monday–Friday) of admission to an out-of-state hospital.

For more information, see the Prior Authorization chapter in the General Information for Providers manual, fee schedules, and the Prior Authorization Information page on the Provider Information website.

 

End of Prior Authorization Chapter

Billing Procedures

Billing Procedures

Claim Forms

Services provided by the healthcare professionals covered in this manual must be billed either electronically or on a UB-04 claim form. UB-04 forms are available from various publishing companies; they are not available from the Department or Provider Relations.

Coding Tips

Standard use of medical coding conventions is required when billing Medicaid. Provider Relations or the Department cannot suggest specific codes to be used in billing for services. For coding assistance and resources, see the table of Coding Resources in the General Information for Providers manual. The following suggestions may help reduce coding errors and unnecessary claim denials:

  • Use applicable CPT, CDT, HCPCS, and ICD coding books.
  • Always read the complete description and guidelines in the coding books. Relying on short descriptions can result in inappropriate billing.
  • Attend classes on coding offered by certified coding specialists.
  • Use specific codes rather than unlisted codes. For example, do not use Code 53899 unlisted procedure of the urinary system when a more specific code is available.
  • Bill for the appropriate level of service provided. Evaluation and management services have 3 to 5 levels. See your CPT manual for instructions on determining appropriate levels of service.
  • CPT codes that are billed based on the amount of time spent with the member must be billed with the code that is closest to but not over the time spent. For example, a provider spends 60 minutes with the member. The code choices are 45 to 50 minutes or 76 to 80 minutes. The provider must bill the code for 45 to 50 minutes.
  • Revenue Codes 25X are required to have valid and rebateable National Drug Codes (NDCs) on each line to be paid.
  • Revenue code 260 should be billed with either an NDC or a valid procedure code.
  • Revenue code 636 is required to have valid and rebateable an NDC in addition to the appropriate procedure code.
  • Revenue Codes 27X do not require CPT or HCPCS codes; however, providers are advised to place appropriate NDC, CPT, and/or HCPCS codes on each line. Providers are paid based on the presence of line item CPT and HCPCS codes. If these codes are omitted, hospitals may be underpaid.
  • Take care to use the correct units measurement. In general, Medicaid follows the definitions in the CPT and HCPCS billing manuals. Unless otherwise specified, one unit equals one visit or one procedure. For specific codes, however, one unit may be “each 15 minutes.” Always check the long text of the code description published in the CPT or HCPCS coding books.

Span Bills

Outpatient hospital providers may include services for more than one day on a single claim, so long as the service is paid by fee schedule (e.g., partial hospitalization, therapies) and the date is shown on the line. However, the Outpatient Code Editor (OCE) will not price APC procedures when more than one date of service appears at the line level, so we recommend billing for only one date at a time when APC services are involved.

Reporting Service Dates

All line items must have a valid date of service in form locator (FL) 45. The following revenue codes require a separate line for each date of service and a valid CPT or HCPCS code.

Revenue Codes That Require a Separate Line for Each Date of Service and a Valid CPT or HCPCS Code

26X IV Therapy
28X Oncology
30X Laboratory
31X Laboratory Pathological
32X Radiology – Diagnostic
33X Radiology – Therapeutic
34X Nuclear Medicine
35X Computed Tomographic (CT) Scan
36X Operating Room Services
38X Blood
39X Blood Storage and Processing
40X Other Imaging Services
41X Respiratory Services
42X Physical Therapy
43X Occupational Therapy
44X Speech-Language Pathology
45X Emergency Department
46X Pulmonary Function
47X Audiology
48X Cardiology
49X Ambulatory Surgical Care
51X Clinic
52X Free-Standing Clinic
61X Magnetic Resonance Imaging (MRI)
63X Drugs Requiring Specific Identification
70X Cast Room
72X Labor Room/Delivery
73X Electrocardiogram (EKG/ECG)
74X Electroencephalogram (EEG)
75X Gastro-Intestinal Services
76X Treatment or Observation Room
77X Preventive Care Services
79X Lithotripsy
82X Hemodialysis – Outpatient or Home
83X Peritoneal Dialysis – Outpatient or Home
84X Continuous Ambulatory Peritoneal Dialysis (CAPD) – Outpatient
85X Continuous Cycling Peritoneal Dialysis (CCPD) – Outpatient
88X Miscellaneous Dialysis
90X Psychiatric/Psychological Treatments
91X Psychiatric/Psychological Services
92X Other Diagnostic Services
94X Other Therapeutic Services

 

Using Modifiers

Review the guidelines for using modifiers in the most current CPT book, HCPCS book, and other helpful resources (e.g., CPT Assistant, APC Answer Letter and others).

Always read the complete description for each modifier; some modifiers are described in the CPT manual while others are in the HCPCS book.

Medicaid accepts most of the same modifiers as Medicare, but not all.

The Medicaid claims processing system recognizes only one modifier. The modifier must be added to the CPT/HCPCS code without a space or hyphen.

Since the Medicaid claims processing system can read only one modifier per line, it is important to report the most important modifier first. In this case, the most important modifiers for Medicaid are those that affect pricing. Discontinued or reduced service modifiers must be listed before other pricing modifiers. For a list of modifiers that change pricing, see the How Payment Is Calculated chapter in this manual.

Billing Tips for Specific Services

Prior authorization is required for some outpatient hospital services. Passport and prior authorization are different, and some services may require both. Different numbers are issued for each type of approval and must be included on the claim form.

Abortions
A completed Physician Certification for Abortion Services (MA-37) form must be attached to every abortion claim or payment will be denied. Complete only one section of this form. This is the only form Medicaid accepts for abortions.

Drugs and Biologicals
While most drugs are bundled, there are some items that have a fixed payment amount and some that are designated as transitional pass-through items. (See Pass-Through Payments in the How Payment Is Calculated chapter in this manual.)

Bundled drugs and biologicals have their costs included as part of the service with which they are billed.

The following drugs may generate additional payment:

  • Vaccines, antigens, and immunizations
  • Chemotherapeutic agents and the supported and adjunctive drugs used with them
  • Immunosuppressive drugs
  • Orphan drugs
  • Radiopharmaceuticals
  • Certain other drugs, such as those provided in an emergency department for heart attacks

Lab Services
If all tests that make up an organ or disease organ panel are performed, the panel code should be billed instead of the individual tests.

Some panel codes are made up of the same test or tests performed multiple times. When billing one unit of these panels, bill one line with the panel code and one unit. When billing multiple units of a panel (the same test is performed more than once on the same day) bill the panel code with units corresponding to the number of times the panel was performed.

Partial Hospitalization
Partial hospitalization services must be billed with the national code for partial hospitalization, the appropriate modifier, and the prior authorization code.

Current Payment Rates for Partial Hospitalization

Code  Modifier    Service Level

H0035   --    Partial hospitalization, subacute, half day
H0035  U6   Partial hospitalization, subacute, full day
H0035  U7   Partial hospitalization, acute, half day
H0035  U8   Partial hospitalization, acute, full day

Payment Rate

Check current fee schedule for current payment rates.

 

Sterilization

  • For elective sterilizations, a completed Informed Consent to Sterilization (MA-38) form must be attached to the claim for each provider involved or payment will be denied. This form must be legible, complete, and accurate. It is the provider’s responsibility to obtain a copy of the form from the primary or attending physician.
  • For medically necessary sterilizations, including hysterectomies, oophorectomies, salpingectomies, and orchiectomies, one of the following must be attached to the claim, or payment will be denied:
    • A completed Medicaid Hysterectomy Acknowledgement (MA-39) form for each provider submitting a claim. It is the provider’s responsibility to obtain a copy of the form from the primary or attending physician. Complete only one section of this form. When no prior sterility (Section B) or life-threatening emergency (Section C) exists, the member (or representative, if any) and physician must sign and date Section A of this form prior to the procedure (see 42 CFR 441.250 for the federal policy on hysterectomies and sterilizations). Also, for Section A, signatures dated after the surgery date require manual review of medical records by the Department. The Department must verify that the member (and representative, if any) was informed orally and in writing, prior to the surgery, that the procedure would render the member permanently incapable of reproducing. The member does not need to sign this form when Sections B or C are used.
  • For members who have become retroactively eligible for Medicaid, the physician must certify in writing that the surgery was performed for medical reasons and must document one of the following:
    • The individual was informed prior to the hysterectomy that the operation would render the member permanently incapable of reproducing.
    • The reason for the hysterectomy was a life-threatening emergency.
    • The member was already sterile at the time of the hysterectomy and the reason for prior sterility.

When submitting claims for retroactively eligible members, attach a copy of the 160-M (eligibility determination letter) to the claim if the date of service is more than 12 months earlier than the date the claim is submitted. For more information on sterilizations, see the Covered Services chapter in this manual.

Supplies
Supplies are generally bundled, so they usually do not need to be billed individually. A few supplies are paid separately by Medicaid. The fee schedule on the website lists the supply codes that may be separately payable.

Billing Unlisted Services or Procedures

Providers should use the most specific HCPCS code when billing a service or procedure to enable proper reimbursement. In the event an unlisted service or procedure code must be used, Montana Medicaid urges providers to send medical records with the claim. Reviewing the medical records with the claim allows the claims processing personnel to understand the situation and apply appropriate reimbursement, as well as decreases claims processing time.  Medical records can be sent with electronic claims through the use of the paperwork attachment.

Billing Electronically with Paper Attachments


When submitting claims that require additional supporting documentation, the Attachment Control Number field must be populated with an identifier. Identifier formats can be designed by software vendors or clearinghouses, but the preferred method is the provider's Medicaid ID number followed by the member's ID number and the date of service, each separated by a dash.

Attachment Control Number Format

The supporting documentation must be submitted with a Paperwork Attachment Cover Sheet. The number in the paper Attachment Control Number field must match the number on the cover sheet.
CMS provides the following guidance regarding reimbursement for unlisted services or procedures:

  • Under the OPPS, CMS generally assigns the unlisted service or procedure codes to the lowest level APC within the most appropriate clinically related series of APCs. Payment for items reported with unlisted codes is often packaged.

 

Submitting a Claim

Paper Claims
Unless otherwise stated, all paper claims must be mailed to:

Claims Processing
P.O. Box 8000
Helena, MT 59604

Electronic Claims
Providers who submit claims electronically experience fewer errors and quicker payment. Claims may be submitted electronically by the following methods:

  • WINASAP 5010. Free software that providers can use to create and submit claims for Montana Medicaid, MHSP, HMK (dental and eyeglasses) and FQHC/RHC. It does not support submissions to Medicare or other payers. This software creates an 837 transaction, but does not accept an 835 transaction back from the Department.
  • Montana Access to Health (MATH) web portal. A secure website on which providers can view members’ medical history, verify member eligibility, submit electronic claims to Medicaid via HIPAA-compliant X12 837 file; check the status of the claim, verify the status of a warrant, and download electronic remittance advice reports.
  • Conduent EDI Solutions. Providers can send claims to EDI Solutions in X12 837 format using a dial-up connection. Electronic submitters are required to certify their 837 transactions as HIPAA-compliant before sending their transactions through EDI Solutions. EDIFECS certifies the 837 HIPAA transactions at no cost to the provider. EDIFECS certification is completed through EDI Solutions.
  • Clearinghouses. Providers can contract with a clearinghouse to send the claims in whatever format the clearinghouse accepts. The provider’s clearinghouse then sends the claim to Conduent in the X12 837 format. The provider’s clearinghouse also needs to have their 837 transactions certified through EDIFECS before submitting claims. EDIFECS certification is completed through EDI Solutions.B2B Gateway SFTP/FTPS site. Providers can use this method to send electronic transactions through this secure FTP process. This is typically encountered with high volume/high frequency submitters.
  • MOVEit DMZ. This secure transmission protocol and secure storage landing zone (intermediate storage) for the exchange of files between trading partners and Conduent, and is intended for those who submit more than physical files per day or whose file sizes regularly exceed 2 MB.

For more information on electronic claims submission options, contact Provider Relations and follow prompts for EDI.

The services described in this manual are billed on UB-04 claim forms. Use this chapter with the UB-04 claim instructions on the Provider Information website. For more information on submitting HIPAA-compliant 837 transactions, refer to the HIPAA 5010 page on the Provider Information website and the HIPAA EDI Implementation Guides on the EDI Solutions website.

Claims submitted with all of the necessary information are referred to as “clean” and are usually paid in a timely manner. See the Billing Procedures chapter in this manual.

Passport and Cost Sharing Indicators

Passport to Health Indicators

Code  - Used When Providing
 FPS   - Family planning services
 OBS  - Obstetrical services
 TCM  - Targeted case management services

Cost Sharing Indicators

Code - Used When Providing
 C     - Services to a child or EPSDT Exempt.
 E     - Emergency services.
 F     - Family planning services
 I      - Services to any IHS referral
 P     - Services to pregnant women
 N     - Services to nursing facility residents.

 

 

End of Billing Procedures Chapter

How Payment Is Calculated

How Payment Is Calculated

Overview

Although providers do not need the information in this chapter to submit claims to Montana Medicaid, the information allows providers to understand how payment is calculated and to predict approximate payment for particular claims.

CAHs are reimbursed for their costs of providing care, as determined through the annual cost settlement process. In the interim, these hospitals are paid a hospital-specific percentage of their charges. The percentage equals the hospital’s estimated cost-to-charge ratio as determined from time-to-time by the Department. The percentage includes payments for medical education and capital expenses.

Charge Cap

For services covered in the hospital setting, Medicaid pays a cost to charge ratio, not the lower of the Medicaid fee or the provider’s charge. The charge cap is not applied.

Status Indicator Codes

The code set used by DPHHS is based on the code set used by Medicare but with several additions. See the following table of status indicator codes.

Status Indicator Codes Used by DPHHS

 

Code - Description - Origin

W - Excluded service - DPHHS
G  - Drug/biological under trans. pass-through - Medicare
H  - Device under trans. pass-through - Medicare
J  - New drug/biological under trans. pass-through - Medicare
N - Incidental services (bundled) - Medicare
T - Surgical services - Medicare
C - Inpatient services - Medicare
K - Non-pass-through drugs and biologicals - Medicare
S - Significant procedures - Medicare
X - Ancillary service - Medicare
V - Medical visit
B - Services not paid under OPPS - Medicare
P - Partial hospitalization - Medicare
Q - Clinical lab - DPHHS
Y - Therapy - DPHHS
M - Misc. codes - DPHHS

 

Payment for Specific Services

Immunizations
If the member is under 19 years old and the vaccine is available to providers for free under the Vaccines for Children program, then the payment to the hospital is zero. Immunization administration is considered an incidental service. The claims processing system bundles immunization administration with other services on the claim and pays it at zero.

Transfers
When a member is transferred between two hospitals, the transferring and/or discharging hospitals are paid a hospital-specific cost to charge ratio for their services if they are CAHs.

Occasionally, a member is transferred from one hospital to another and then back to the original hospital when the condition causing the transfer is alleviated. Thus a hospital can be a transferring and discharging hospital. The discharging hospital should submit separate claims, one for the original admission and transfer and a second for the final discharge.

Observation Services (ARM 37.86.3020)
DPHHS follows the Medicare program, with the exception of obstetric complications, in making separate payment for observation care procedure codes if the following criteria are met.

  • Observation time must be documented in the medical record.
  • The number of units reported must equal or exceed eight hours.

In addition, the claim for observation must include one of the following services to the reported observation:

  • High level emergency department visit; or
  • High level clinic visit; or
  • High level critical care; or
  • Direct admit for observation care after being seen by a healthcare provider on the same date of service as the date reported for observation services.

The Department will also pay for observation care in a case with the potential obstetric complications if the following criteria are met:

  • Must have a qualifying diagnosis; and
  • Must be at least one hour in length of service.

If an observation service does not meet the criteria according to the above, then payment for observation care is considered bundled into the payment for other services.

Outpatient Clinic Services

Clinic services provided by an individual physician or mid-level practitioner in the outpatient clinic must be billed on a CMS-1500 with place of service (POS) 11. 

Pass-Through Payments
Payments for certain drugs, devices and supplies are designated as pass-through and paid a hospital-specific cost-to-charge ratio.

Procedures Considered Inpatient Only by Medicare
Medicare has designated some procedures as inpatient-only. Medicaid has also adopted that designation. When these procedures are performed in the outpatient hospital setting, the claim is denied. Hospitals may appeal the denial to the Department. If the service is approved, the claim will be paid.

Calculating Payment

The sections below explain how to calculate payment for claims involving Medicare or third party liability.

How Payment Is Calculated on TPL Claims
When a member has coverage from both Medicaid and another insurance company, the other insurance company is often referred to as third party liability (TPL). In these cases, the other insurance is the primary payer, and Medicaid makes a payment as the secondary payer. Medicaid will make a payment only when the TPL payment is less than the Medicaid allowed amount. See the When a Member Has TPL section in the General Information for Providers manual.

How Payment Is Calculated on Medicare Crossover Claims
When a member has coverage from both Medicare and Medicaid, Medicare is the primary payer. Medicaid will pay the coinsurance and deductible, less any TPL or incurment, on hospital claims for these dually eligible individuals.

Payment Examples for Dually Eligible Members
Member has Medicare and Medicaid coverage. A provider submits an inpatient hospital claim for a member with Medicare and Medicaid. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. Medicaid will pay this amount ($250.00) as long as no TPL or incurment amounts are applicable.

Member has Medicare, Medicaid, and TPL. A provider submits an inpatient hospital claim for a member with Medicare, Medicaid, and TPL. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. The other insurance company paid $225.00. This amount is subtracted from the Medicaid allowed amount leaving $25.00. Medicaid pays $25.00 for this claim. If the TPL payment had been $250.00 or more, this claim would have paid at $0.00.

Member has Medicare, Medicaid, and Medicaid Incurment. A provider submits an inpatient hospital claim for a member with Medicare, Medicaid, and a Medicaid incurment. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. The member owes $150 for his Medicaid incurment, so this amount is subtracted from the $250.00. Medicaid will pay the provider $100.00 for this claim.

Other Programs

This chapter does not apply to members who are enrolled in the Mental Health Services Plan (MHSP). Providers will find more information on mental health services in the mental health manual available on the Provider Information website.

The information in this chapter does not apply to members enrolled in Healthy Montana Kids (HMK). The HMK medical manual is available through Blue Cross and Blue Shield of Montana (BCBSMT) at 1-800-447-7828. Additional information about HMK is available on the HMK website.

 

End of How Payment Is Calculated Chapter

Definitions and Acronyms

Index

Index

Previous editions of this manual contained an index.

This edition has three search options.

1.Search the whole manual. Open the Complete Manual pane.  From your keyboard press the Ctrl and F keys at the same time.  A search box will appear.  Type in a descriptive or key word (for example "Denials". The search box will show all locations where denials discussed in the manual.

2.Search by Chapter. Open any Chapter tab (for example the "Billing Procedures" tab).  From your keyboard press the Ctrl and F keys at the same time.  A search box will appear.  Type in a descriptive or key word (for example "Denials". The search box will show where denials discussed in just that chapter.

3.Site Search.  Search the manual as well as other documents related to a particular search term on the Montana Healthcare Programs Site Specific Search page.

 

End of Index Chapter

End of Hospital Outpatient Services Manual

Complete Hospital Outpatient Services Manual

Hospital Outpatient Services Manual

To print this manual, right click your mouse and choose "print".  Printing the manual material found at this website for long-term use is not advisable. Department Policy material is updated periodically and it is the responsibility of the users to check and make sure that the policy they are researching or applying has the correct effective date for their circumstances.

Update Log

Publication History

This publication supersedes all previous Hospital Outpatient Services handbooks. Published by the Montana Department of Public Health & Human Services, January 2005.

 Updated September 2004, December 2005, April 2011, January 2012, June 2012, July 2013, June 2015, November 2015, December 2015, and 2017 and June 2018.

CPT codes, descriptions and other data only are copyright 2014 American Medical Association (or such other date of publication of CPT). All Rights reserved. Applicable FARS/DFARS Apply.

Update Log

06/05/2018

The Covered Services, Billing Procedures, How Payment is Calculated, and Table of Contents chapters were revised.

10/16/2017
Hospital Outpatient Services Manual converted to an HTML format and adapted to 508 Accessibility Standards.
The Billing Procedures Chapter added Billing Unlisted Services or Procedures and Billing Electronically with paper attachment sections and added new revenue code directions and campus language. The How Payment is Calculated Chapter added a new Outpatient Clinic and Provider-Based Services section.  The Covered Services Chapter added a Change to Medicaid Outpatient Laboratory Billing section. The Prior Authorization Chapter added a time limits for submission for emergency inpatient admissions.

12/31/2015
Hospital Outpatient Services, January 2016: HELP Plan-Related Updates and Others

11/17/2015
Hospital Outpatient Services, November 2015: Billing Procedures, Revenue Codes 25X and 27X

06/22/2015
Hospital Outpatient Services, May 2015: Entire Manual

07/05/2013
Hospital Outpatient Services, July 2013: Definitions and Index

06/27/2012
Hospital Outpatient Services, June 2012: Covered Services, Billing Procedures, How Payment Is Calculated

01/12/2012
Hospital Outpatient Services, December 2011: Hospital Outpatient Services

04/29/2011
Hospital Outpatient Services, April 2011: How Payment Is Calculated

12/16/2005
Hospital Outpatient Services, October 2005: New Instructions on Completing Medicaid Hysterectomy Acknowledgement Form

09/22/2004
Hospital Outpatient Services, August 2004: Team Care Added, Clarification on Sterilizations, Hysterectomies, Abortions, and MPQHF Phone Number Change

End of Update Log Chapter

Table of Contents

Key Contacts and Key Websites

Introduction

Manual Organization

Manual Maintenance

Rule References

Claims Review (MCA 53-6-111 and ARM 37.85.3002)

Getting Questions Answered

Covered Services

General Coverage Principles

Coverage of Specific Services (ARM 37.86.3002)

Outpatient Clinic Services

Partial Hospitalization

Elective Deliveries

Outpatient Cardiac and Pulmonary Rehabilitation

Therapy Services

Change to Medicaid Outpatient Laboratory Billing

Prior Authorization

What is Prior Authorization (ARM 37.86.2801)

Billing Procedures

Claim Forms

Coding Tips

Span Bills

Reporting Service Dates

Using Modifiers

Billing Tips for Specific Services

Billing Unlisted Services or Procedures

Billing Electronically with Paper Attachments

Submitting a Claim

How Payment Is Calculated

Overview

Critical Access Hospitals

The Outpatient Prospective Payment System

Other Issues

Modifiers

Medicaid Outpatient Laboratory Billing

How Payment Is Calculated on Medicare Crossover Claims

Payment Examples for Dually Eligible Members

Other Programs

Definitions and Acronyms

Index

End of Table of Contents Chapter

Key Contacts and Key Websites

For contacts and websites, see the Contact Us link in the left menu on the Montana Healthcare Programs Provider Information website.

End Key Contacts and Key Websites Chapter

Introduction

Thank you for your willingness to serve members of the Montana Medicaid program and other medical assistance programs administered by the Department of Public Health and Human Services.

Manual Organization

This manual provides information specifically for outpatient hospital services. Other essential information for providers is contained in the separate General Information for Providers manual. Providers are responsible for reviewing both manuals.

A table of contents and an index allow you to quickly find answers to most questions. The margins contain important notes with extra space for writing notes. There is a list of contacts and websites on the Contact Us page on the Provider Information website. There is also space on the inside of the front cover to record your NPI for quick reference when calling Provider Relations.

Manual Maintenance

Manuals must be kept current. Changes to manuals are provided through provider notices and replacement pages. When replacing a page in a paper manual, file the old pages and provider notices in the back of the manual for use with claims that originated under the old policy. Remember to keep old policy pages when you add replacement pages to refer to for older claims.

Rule References

Providers must be familiar with all current rules and regulations governing the Montana Medicaid program. Provider manuals are to assist providers in billing Medicaid; they do not contain all Medicaid rules and regulations. Rule citations in the text are a reference tool; they are not a summary of the entire rule. In the event that a manual conflicts with a rule, the rule prevails. Links to rules are available on the Provider Information website. Paper copies of rules are available through the Secretary of State’s office. See the Contact Us link in the left menu on the Provider Information website.

Providers are responsible for knowing and following current Medicaid rules and regulations.

In addition to the general Medicaid rules outlined in the General Information for Providers manual, the following rules and regulations are also applicable to the outpatient hospital program:

  • Code of Federal Regulations (CFR)
    • 42 CFR 419 Prospective Payment System for Hospital Outpatient Department Services
  • Montana Code Annotated (MCA)
    • MCA 50-5-101 through MCA 50-5-1205 Hospitals and Related Facilities
  • Administrative Rules of Montana (ARM)
    • ARM 37.86.2801 and ARM 37.86.3001–ARM 37.86.3109 Outpatient Hospital Services

Claims Review (MCA 53-6-111 and ARM 37.85.406)

The Department is committed to paying Medicaid providers’ claims as quickly as possible. Medicaid claims are electronically processed and usually are not reviewed by medical experts prior to payment to determine if the services provided were appropriately billed. Although the computerized system can detect and deny some erroneous claims, there are many erroneous claims which it cannot detect. For this reason, payment of a claim does not mean that the service was correctly billed or the payment made to the provider was correct. Periodic retrospective reviews are performed which may lead to the discovery of incorrect billing or incorrect payment. If a claim is paid and the Department later discovers that the service was incorrectly billed or paid or the claim was erroneous in some other way, the Department is required by Federal regulation to recover any overpayment, regardless of whether the incorrect payment was the result of Department or provider error or other cause.

Getting Questions Answered

The provider manuals are designed to answer most questions; however, questions may arise that require a call to a specific group (such as a program officer, Provider Relations, or a prior authorization unit). Medicaid manuals, provider notices, replacement pages, fee schedules, forms, and much more are available on the Provider Information website.

End of Introduction Chapter

Covered Services

General Coverage Principles

Medicaid covers almost all outpatient hospital services when they are medically necessary. This chapter provides covered services information that applies specifically to outpatient hospital services. Healthcare services received by Medicaid members must also meet the general requirements listed in the Provider Requirements chapter of the General Information for Providers manual.

Hospital Outpatient Services (ARM 37.86.3001)
Outpatient hospital services are provided to members whose expected hospital stay is less than 24 hours. Outpatient services include preventive, diagnostic, therapeutic, rehabilitative, and palliative care provided by or under the direction of a physician, dentist, or other practitioner as permitted by federal law. Hospitals must meet all of the following criteria:

  • Be licensed or formally approved as a hospital by the officially designated authority in the state where the institution is located
  • Meet the requirements for participation in Medicare as a hospital

Services for Children (ARM 37.86.2201–2235)
The Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) Services program is a comprehensive approach to healthcare for Medicaid members ages 20 and under. It is designed to prevent, identify, and then treat health problems before they become disabling. Under EPSDT, Medicaid eligible children may receive any medically necessary covered service, including all outpatient hospital services described in this manual. All applicable Passport to Health and prior authorization requirements apply.

Non-Covered Services (ARM 37.85.207 and ARM 37.86.3003)
Items or medical services not specifically included within these rules as covered benefits of the Montana Medicaid program are not reimbursable.

The following medical and nonmedical services, except as otherwise specified in program-specific rules as a waiver service or an EPSDT service, are explicitly excluded from the Montana Medicaid program, except for those services specifically available as listed in ARM 37.40.1406 and ARM 37.90.402, and Title 37, Chapter 34, Subchapter 9, to persons eligible for home and community-based services, and except for those Medicaid-covered services as listed in ARM 37.83.812 to qualified Medicare beneficiaries for whom the Montana Medicaid program pays the Medicare premiums, deductible, and coinsurance.

  • Acupuncture services
  • Autopsies
  • Chiropractic services
  • Circumcisions not authorized by the Department as medically necessary
  • Dietician services (some services covered per ARM 37.86.3002)
  • Delivery services not provided in a licensed healthcare facility or nationally accredited birthing center unless as an emergency service. Delivery service means services necessary to protect the health and safety of the woman and fetus from the onset of labor through delivery. Emergency service is defined in ARM 37.82.102.
  • Dietary supplements
  • Donor search expenses
  • Erectile dysfunction products, including but not limited to injections, devices, and oral medications used to treat impotence
  • Experimental services, or services that are generally regarded by the medical profession as unacceptable treatment not medically necessary for purposes of the Montana Medicaid program.
  • Homemaker services
  • Independent exercise programs, such as pool therapy, swim groups, or health club memberships
  • Invasive medical procedures undertaken for the purpose of weight reduction such as gastric bypass, gastric banding, or bariatric surgery, including all revisions
  • Masseur/Masseuse services
  • Medical services furnished to Medicaid-eligible members who are absent from the state, including a child residing in another state for whom Montana makes adoption assistance or foster care maintenance payments, are covered as in each program-specific rule and subject to the applicable conditions of those rules.
  • Naturopathic services
  • Nutritional services
  • Outpatient hospital services provided outside the borders of the United States.
  • Outpatient physical therapy, occupational therapy, and speech therapy services that are primarily maintenance therapy as defined in ARM 37.86.601
  • Physical therapy aide services, except as provided in ARM 37.86.601, ARM 37.86.605, ARM 37.86.606, and ARM 37.86.610.
  • Services that do not comply with national standards of medical practice, non-FDA approved drugs, biologicals, and devices and clinical trials are excluded from coverage.
  • Services that are not medically necessary. The Department may review for medical necessity at any time before or after payment. The Medicaid member is financially responsible for these services and the Department recommends the member agree in writing before the services are provided. See When to Bill a Medicaid Member in the Billing Procedures chapter of the General Information for Providers manual.
  • Sexual aids, including but not limited to devices, injections, and oral medications
  • Surgical technician services (technicians who are not physicians or mid-level practitioners)
  • Treatment services for infertility, including sterilization reversals
  • Medicaid does not cover services that are not direct patient care such as the following:
    • Missed or canceled appointments
    • Mileage and travel expenses for providers
    • Preparation of medical or insurance reports
    • Service charges or delinquent payment fees
    • Telephone services in home, remodeling of home, plumbing service, car repair, and/or modification of automobile

Use the fee schedule for your provider type to verify coverage for specific services.

Importance of Fee Schedules
The easiest way to verify coverage for a specific service is to check the Department’s fee schedule for your provider type. In addition to being listed on the fee schedule, all services provided must also meet the coverage criteria listed in the Provider Requirements chapter of the General Information for Providers manual and in this chapter. Use the fee schedule in conjunction with the more detailed coding descriptions listed in the current CPT, CDT, and HCPCS coding books. Take care to use the fee schedule and coding books that pertain to the date of service. Fee schedules are available on the provider type pages on the Provider Information website.

Coverage of Specific Services (ARM 37.86.3002)

The following are coverage rules for specific hospital outpatient services.

Abortions (ARM 37.86.104)
Abortions are covered when one of the following conditions is met:

  • The member’s life would be endangered if the fetus is carried to term.
  • The pregnancy is the result of rape or incest.
  • The abortion is determined by the attending physician to be medically necessary, even if the member’s life is not endangered if the fetus is carried to term.

A completed Physician Certification for Abortion Services (MA-37) form must be submitted with every abortion claim or payment will be denied. Complete only one section of this form. This is the only form Medicaid accepts for abortion services. (See the Forms page of the Provider Information website for the form and instructions.)

When using mifepristone (Mifeprex or RU 486) to terminate a pregnancy, it must be administered within 49 days from the beginning of the last menstrual period by or under the supervision of a physician who:

  • Can assess the duration of a pregnancy.
  • Can diagnose ectopic pregnancies.
  • Can provide surgical intervention in cases of incomplete abortion or severe bleeding, or can provide such care through other qualified physicians.
  • Can assure access to medical facilities equipped to provide blood transfusion and resuscitation.
  • Has read, understood and explained to the member the prescribing information for mifepristone.
  • Can assess for any possible adverse events.

Diabetes Education
Medicaid covers diabetes education services for members who have been newly diagnosed with diabetes and/or members with unstable diabetes (e.g., members with long-term diabetes experiencing management problems) in accordance with 42 CFR 410, Subpart H. The diabetes education protocol must meet the following Medicare Part A requirements:

  • The program must train and motivate members to self-manage their diabetes through proper diet and exercise, blood glucose self-monitoring, and insulin treatment.
  • The plan of treatment must include goals for the member and how they will be achieved, and the program duration must be sufficient to meet these goals.
  • The physician must refer only his/her members to the program.
  • The program must be provided under the physician’s order by the provider’s personnel and under medical staff supervision.
  • The education plan must be designed specifically for members to meet their individual needs. Structured education may be included in the plan, but not substituted for individual training.

Donor Transplants
Medicaid covers successful donor-related testing and services and organ acquisition services, which are bundled into the Medicaid member’s transplant hospitalization stay. Medicaid does not cover expenses associated with the donor search process.

Emergency Department Visits
Emergency medical services are those services required to screen, treat, and stabilize an emergency medical condition in an emergency room. Passport to Health provider referral is not required for emergency room visits. Inpatient services for members admitted through an emergency room (where the emergency room is billed on the inpatient claim) are also exempt from Passport requirements.

For emergency room visits, services are exempt from cost share.

For prospective payment hospitals, the two lowest level emergency room visits (CPT procedure codes 99281 and 99282) will be reimbursed based on the clinic visit APC rate.

Outpatient Clinic Services

The Department will pay for service provided in an outpatient clinic. Clinics that are within or outside the hospital walls are considered independent clinics by Montana Healthcare Programs. 

Clinic services provided by an individual physician or mid-level practitioner in the clinic must be billed on a CMS 1500 with place of service (POS) 11. 

For services that have both technical and professional components, physicians providing services in hospitals must bill only for the professional component if the hospital is going to bill Medicaid for the technical component. Refer to the Physician-Related Services manual and the Billing Procedures chapter in this manual for more information.
 

Partial Hospitalization

The partial hospitalization program is an active treatment program that offers therapeutically intensive, coordinated, structured clinical services. These services are provided only to members who are determined to have a serious emotional disturbance (SED) or a severe disabling mental illness (SDMI).

Definitions for SED and SDMI are on the Provider Information website under Definitions and Acronyms. Partial hospitalization services are time-limited and provided within either an acute level program or a sub-acute level program. Partial hospitalization services include day, evening, night, and weekend treatment programs that employ an integrated, comprehensive, and complementary schedule of recognized treatment or therapeutic activities. These services require prior authorization. See the Provider Information website for the mental health manual and prior authorization information.

Elective Deliveries

Effective July 1, 2014, all facilities must have a hard-stop policy in place regarding non-medically necessary inductions prior to 39 weeks and non-medically necessary Cesarean sections at any gestational age. The policy must contain the following:

  • No non-medically necessary inductions and Cesarean sections prior to 39 weeks and 0/7 days gestation, and no non-medically necessary Cesarean sections at any gestational age.
  • Confirmation of weeks gestation by ACOG guidelines (at least one of the following guidelines must be met to show gestational age):
    • Fetal heart tones have been documented for 20 weeks by non-electronic fetoscope or 30 weeks by Doppler;
    • 36 weeks since a positive serum or urine pregnancy test that was performed by a reliable laboratory; or
    • An ultrasound prior to 20 weeks that confirms the gestational age of at least 39 weeks.
  • If pregnancy care was not initiated prior to 20 weeks gestation, the gestational age may be documented from first day of the last menstrual period (LMP).
  • Policy must have a multistep review process prior to all inductions and Cesarean Sections including final decision being made by the Perinatology Chair/ Obstetrical Chair, OB Director, or Medical Director.

Effective October 1, 2014, Montana Medicaid will reduce reimbursement rates for non-medically necessary inductions prior to 39 weeks, and non-medically necessary Cesarean sections at any gestational age. All hospital claims with an admit date on or after October 1, 2014, will require coding changes to delivery claims. Hospital inpatient claims and birthing center claims will require the use of condition codes for all induction and Cesarean section deliveries. These claims will be reviewed for medical necessity based on an approved list of diagnosis codes. The condition codes are:

  • 81 – Cesarean section or induction performed at less than 39 weeks gestation for medical necessity.
  • 82 – Cesarean section or induction performed at less than 39 weeks gestation elective.
  • 83 – Cesarean section or induction performed at 39 weeks gestation or greater.

Outpatient Cardiac and Pulmonary Rehabilitation

Effective July 1, 2014, services for procedure codes G0423, and G0424 must be prior authorized by Mountain-Pacific Quality Health.

Coverage for outpatient cardiac and pulmonary rehabilitation services must be medically necessary.

Patients with one or more contraindications are not eligible for cardiac and pulmonary rehabilitation. The following conditions are contraindications to cardiac pulmonary rehabilitation.

  • Severe psychiatric disturbance including, but not limited to, dementia and organic brain syndrome; or
  • Significant or unstable medical conditions including, but not limited to, substance abuse, liver dysfunction, kidney dysfunction, and metastatic cancer.

Therapy Services

Physical, occupational, and speech/language therapy services are available to Montana Medicaid members. See the Therapy Services provider manual on the Provider Information website.

Change to Medicaid Outpatient Laboratory Billing


Effective January 1, 2017, modifier L1 associated with the reporting of conditionally packaged laboratory procedures will be deactivated.  The modifier will no longer override the packaging of laboratory codes that are billed with other payable Outpatient Prospective Payment System (OPPS) procedures.  Laboratory procedures are only payable under OPPS when the lab codes are the only payable codes on the claim, or when the Type of Bill (TOB) is 141 (Hospital, Other, Admit through Discharge) for non-patient laboratory tests.

Note:  Some lab codes (e.g., molecular pathology codes) are not subject to the conditional packaging logic.

End of Covered Services Chapter

Prior Authorization

What is Prior Authorization (ARM 37.86.2801)

Prior authorization is the approval process required before certain services are paid by Medicaid. If a service requires prior authorization, the requirement exists for all Medicaid members. When prior authorization is granted, the provider is issued a prior authorization number, which must be on the claim.

Distinct authorization numbers are issued for Passport approval and prior authorization, and both must be recorded on the claim in the appropriate location.

Prior authorization is not a guarantee of payment. When requesting prior authorization, keep in mind the following:

  • The referring provider should initiate all authorization requests.
  • For members with partial eligibility, request prior authorization from the first date the member was Medicaid-eligible, not from the first date of the member’s hospital stay.
  • Have all required documentation included in the packet before submitting a request for prior authorization. The Prior Authorization Information link on the Provider Information website lists some services that require prior authorization, who to contact, and specific documentation requirements. Also refer to the fee schedules.
  • Prior authorization must be obtained before a member receives services. See the fee schedules for procedure codes that have Y as the prior authorization indicator. Prior authorization is also required for:
    • All psych inpatient services except if patient has Medicare.
    • All out-of-state inpatient services except if the patient has Medicare and the only reason for prior authorization is for out-of-state services.
    • Interim claims for Prospective Payment System (PPS).
  • When prior authorization is granted, providers receive notification containing a prior authorization number, which must be included on the claim.

It is not the intent of the Montana Medicaid Program to interfere or delay a transfer when a physician has determined a situation to be emergent. Prior authorization is not required in emergency situations. Emergency inpatient admissions must be authorized within two working days (Monday–Friday) of admission to an out-of-state hospital.

Prior authorization is not required in emergency situations.

Retrospective authorization may be granted only under the following circumstances:

  • The Montana Medicaid member qualifies for retroactive eligibility for Montana Medicaid hospital benefits.
  • The hospital is retroactively enrolled as a Montana Medicaid provider during the dates of service for which authorization is requested.
  • The hospital can document that at the time of admission it did not know, or have any basis to assume that the member was a Montana Medicaid member.
  • Emergency inpatient admissions must be authorized within three working days (Monday–Friday) of admission to an out-of-state hospital.

For more information, see the Prior Authorization chapter in the General Information for Providers manual, fee schedules, and the Prior Authorization Information page on the Provider Information website.

End of Prior Authorization Chapter

Billing Procedures

Claim Forms

Services provided by the healthcare professionals covered in this manual must be billed either electronically or on a UB-04 claim form. UB-04 forms are available from various publishing companies; they are not available from the Department or Provider Relations.

Coding Tips

Standard use of medical coding conventions is required when billing Medicaid. Provider Relations or the Department cannot suggest specific codes to be used in billing for services. For coding assistance and resources, see the table of Coding Resources in the General Information for Providers manual. The following suggestions may help reduce coding errors and unnecessary claim denials:

  • Use applicable CPT, CDT, HCPCS, and ICD coding books.
  • Always read the complete description and guidelines in the coding books. Relying on short descriptions can result in inappropriate billing.
  • Attend classes on coding offered by certified coding specialists.
  • Use specific codes rather than unlisted codes. For example, do not use Code 53899 unlisted procedure of the urinary system when a more specific code is available.
  • Bill for the appropriate level of service provided. Evaluation and management services have 3 to 5 levels. See your CPT manual for instructions on determining appropriate levels of service.
  • CPT codes that are billed based on the amount of time spent with the member must be billed with the code that is closest to but not over the time spent. For example, a provider spends 60 minutes with the member. The code choices are 45 to 50 minutes or 76 to 80 minutes. The provider must bill the code for 45 to 50 minutes.
  • Revenue Codes 25X are required to have valid and rebateable National Drug Codes (NDCs) on each line to be paid.
  • Revenue code 260 should be billed with either an NDC or a valid procedure code.
  • Revenue code 636 is required to have valid and rebateable an NDC in addition to the appropriate procedure code.
  • Revenue Codes 27X do not require CPT or HCPCS codes; however, providers are advised to place appropriate NDC, CPT, and/or HCPCS codes on each line. Providers are paid based on the presence of line item CPT and HCPCS codes. If these codes are omitted, hospitals may be underpaid.
  • Take care to use the correct units measurement. In general, Medicaid follows the definitions in the CPT and HCPCS billing manuals. Unless otherwise specified, one unit equals one visit or one procedure. For specific codes, however, one unit may be “each 15 minutes.” Always check the long text of the code description published in the CPT or HCPCS coding books.

Span Bills

Outpatient hospital providers may include services for more than one day on a single claim, so long as the service is paid by fee schedule (e.g., partial hospitalization, therapies) and the date is shown on the line. However, the Outpatient Code Editor (OCE) will not price APC procedures when more than one date of service appears at the line level, so we recommend billing for only one date at a time when APC services are involved.

Reporting Service Dates

All line items must have a valid date of service in form locator (FL) 45. The following revenue codes require a separate line for each date of service and a valid CPT or HCPCS code.

Revenue Codes That Require a Separate Line for Each Date of Service and a Valid CPT or HCPCS Code

26X IV Therapy
28X Oncology
30X Laboratory
31X Laboratory Pathological
32X Radiology – Diagnostic
33X Radiology – Therapeutic
34X Nuclear Medicine
35X Computed Tomographic (CT) Scan
36X Operating Room Services
38X Blood
39X Blood Storage and Processing
40X Other Imaging Services
41X Respiratory Services
42X Physical Therapy
43X Occupational Therapy
44X Speech-Language Pathology
45X Emergency Department
46X Pulmonary Function
47X Audiology
48X Cardiology
49X Ambulatory Surgical Care
51X Clinic
52X Free-Standing Clinic
61X Magnetic Resonance Imaging (MRI)
63X Drugs Requiring Specific Identification
70X Cast Room
72X Labor Room/Delivery
73X Electrocardiogram (EKG/ECG)
74X Electroencephalogram (EEG)
75X Gastro-Intestinal Services
76X Treatment or Observation Room
77X Preventive Care Services
79X Lithotripsy
82X Hemodialysis – Outpatient or Home
83X Peritoneal Dialysis – Outpatient or Home
84X Continuous Ambulatory Peritoneal Dialysis (CAPD) – Outpatient
85X Continuous Cycling Peritoneal Dialysis (CCPD) – Outpatient
88X Miscellaneous Dialysis
90X Psychiatric/Psychological Treatments
91X Psychiatric/Psychological Services
92X Other Diagnostic Services
94X Other Therapeutic Services

 

Using Modifiers

Review the guidelines for using modifiers in the most current CPT book, HCPCS book, and other helpful resources (e.g., CPT Assistant, APC Answer Letter and others).

Always read the complete description for each modifier; some modifiers are described in the CPT manual while others are in the HCPCS book.

Medicaid accepts most of the same modifiers as Medicare, but not all.

The Medicaid claims processing system recognizes only one modifier. The modifier must be added to the CPT/HCPCS code without a space or hyphen.

Since the Medicaid claims processing system can read only one modifier per line, it is important to report the most important modifier first. In this case, the most important modifiers for Medicaid are those that affect pricing. Discontinued or reduced service modifiers must be listed before other pricing modifiers. For a list of modifiers that change pricing, see the How Payment Is Calculated chapter in this manual.

Billing Tips for Specific Services

Prior authorization is required for some outpatient hospital services. Passport and prior authorization are different, and some services may require both. Different numbers are issued for each type of approval and must be included on the claim form.

Abortions
A completed Physician Certification for Abortion Services (MA-37) form must be attached to every abortion claim or payment will be denied. Complete only one section of this form. This is the only form Medicaid accepts for abortions.

Drugs and Biologicals
While most drugs are bundled, there are some items that have a fixed payment amount and some that are designated as transitional pass-through items. (See Pass-Through Payments in the How Payment Is Calculated chapter in this manual.)

Bundled drugs and biologicals have their costs included as part of the service with which they are billed.

The following drugs may generate additional payment:

  • Vaccines, antigens, and immunizations
  • Chemotherapeutic agents and the supported and adjunctive drugs used with them
  • Immunosuppressive drugs
  • Orphan drugs
  • Radiopharmaceuticals
  • Certain other drugs, such as those provided in an emergency department for heart attacks

Lab Services
If all tests that make up an organ or disease organ panel are performed, the panel code should be billed instead of the individual tests.

Some panel codes are made up of the same test or tests performed multiple times. When billing one unit of these panels, bill one line with the panel code and one unit. When billing multiple units of a panel (the same test is performed more than once on the same day) bill the panel code with units corresponding to the number of times the panel was performed.

Partial Hospitalization
Partial hospitalization services must be billed with the national code for partial hospitalization, the appropriate modifier, and the prior authorization code.

Current Payment Rates for Partial Hospitalization

Code  Modifier    Service Level

H0035   --    Partial hospitalization, subacute, half day
H0035  U6   Partial hospitalization, subacute, full day
H0035  U7   Partial hospitalization, acute, half day
H0035  U8   Partial hospitalization, acute, full day

Payment Rate

Check current fee schedule for current payment rates.

 

Sterilization

  • For elective sterilizations, a completed Informed Consent to Sterilization (MA-38) form must be attached to the claim for each provider involved or payment will be denied. This form must be legible, complete, and accurate. It is the provider’s responsibility to obtain a copy of the form from the primary or attending physician.
  • For medically necessary sterilizations, including hysterectomies, oophorectomies, salpingectomies, and orchiectomies, one of the following must be attached to the claim, or payment will be denied:
    • A completed Medicaid Hysterectomy Acknowledgement (MA-39) form for each provider submitting a claim. It is the provider’s responsibility to obtain a copy of the form from the primary or attending physician. Complete only one section of this form. When no prior sterility (Section B) or life-threatening emergency (Section C) exists, the member (or representative, if any) and physician must sign and date Section A of this form prior to the procedure (see 42 CFR 441.250 for the federal policy on hysterectomies and sterilizations). Also, for Section A, signatures dated after the surgery date require manual review of medical records by the Department. The Department must verify that the member (and representative, if any) was informed orally and in writing, prior to the surgery, that the procedure would render the member permanently incapable of reproducing. The member does not need to sign this form when Sections B or C are used.
  • For members who have become retroactively eligible for Medicaid, the physician must certify in writing that the surgery was performed for medical reasons and must document one of the following:
    • The individual was informed prior to the hysterectomy that the operation would render the member permanently incapable of reproducing.
    • The reason for the hysterectomy was a life-threatening emergency.
    • The member was already sterile at the time of the hysterectomy and the reason for prior sterility.

When submitting claims for retroactively eligible members, attach a copy of the 160-M (eligibility determination letter) to the claim if the date of service is more than 12 months earlier than the date the claim is submitted. For more information on sterilizations, see the Covered Services chapter in this manual.

Supplies
Supplies are generally bundled, so they usually do not need to be billed individually. A few supplies are paid separately by Medicaid. The fee schedule on the website lists the supply codes that may be separately payable.

Billing Unlisted Services or Procedures

Providers should use the most specific HCPCS code when billing a service or procedure to enable proper reimbursement. In the event an unlisted service or procedure code must be used, Montana Medicaid urges providers to send medical records with the claim. Reviewing the medical records with the claim allows the claims processing personnel to understand the situation and apply appropriate reimbursement, as well as decreases claims processing time.  Medical records can be sent with electronic claims through the use of the paperwork attachment.

Billing Electronically with Paper Attachments


When submitting claims that require additional supporting documentation, the Attachment Control Number field must be populated with an identifier. Identifier formats can be designed by software vendors or clearinghouses, but the preferred method is the provider's Medicaid ID number followed by the member's ID number and the date of service, each separated by a dash.

Attachment Control Number Format

The supporting documentation must be submitted with a Paperwork Attachment Cover Sheet. The number in the paper Attachment Control Number field must match the number on the cover sheet.
CMS provides the following guidance regarding reimbursement for unlisted services or procedures:

  • Under the OPPS, CMS generally assigns the unlisted service or procedure codes to the lowest level APC within the most appropriate clinically related series of APCs. Payment for items reported with unlisted codes is often packaged.

 

Submitting a Claim

Paper Claims
Unless otherwise stated, all paper claims must be mailed to:

Claims Processing
P.O. Box 8000
Helena, MT 59604

Electronic Claims
Providers who submit claims electronically experience fewer errors and quicker payment. Claims may be submitted electronically by the following methods:

  • WINASAP 5010. Free software that providers can use to create and submit claims for Montana Medicaid, MHSP, HMK (dental and eyeglasses) and FQHC/RHC. It does not support submissions to Medicare or other payers. This software creates an 837 transaction, but does not accept an 835 transaction back from the Department.
  • Montana Access to Health (MATH) web portal. A secure website on which providers can view members’ medical history, verify member eligibility, submit electronic claims to Medicaid via HIPAA-compliant X12 837 file; check the status of the claim, verify the status of a warrant, and download electronic remittance advice reports.
  • Conduent EDI Solutions. Providers can send claims to EDI Solutions in X12 837 format using a dial-up connection. Electronic submitters are required to certify their 837 transactions as HIPAA-compliant before sending their transactions through EDI Solutions. EDIFECS certifies the 837 HIPAA transactions at no cost to the provider. EDIFECS certification is completed through EDI Solutions.
  • Clearinghouses. Providers can contract with a clearinghouse to send the claims in whatever format the clearinghouse accepts. The provider’s clearinghouse then sends the claim to Conduent in the X12 837 format. The provider’s clearinghouse also needs to have their 837 transactions certified through EDIFECS before submitting claims. EDIFECS certification is completed through EDI Solutions.B2B Gateway SFTP/FTPS site. Providers can use this method to send electronic transactions through this secure FTP process. This is typically encountered with high volume/high frequency submitters.
  • MOVEit DMZ. This secure transmission protocol and secure storage landing zone (intermediate storage) for the exchange of files between trading partners and Conduent, and is intended for those who submit more than physical files per day or whose file sizes regularly exceed 2 MB.

For more information on electronic claims submission options, contact Provider Relations and follow prompts for EDI.

The services described in this manual are billed on UB-04 claim forms. Use this chapter with the UB-04 claim instructions on the Provider Information website. For more information on submitting HIPAA-compliant 837 transactions, refer to the HIPAA 5010 page on the Provider Information website and the HIPAA EDI Implementation Guides on the EDI Solutions website.

Claims submitted with all of the necessary information are referred to as “clean” and are usually paid in a timely manner. See the Billing Procedures chapter in this manual.

Passport and Cost Sharing Indicators

Passport to Health Indicators

Code  - Used When Providing
 FPS   - Family planning services
 OBS  - Obstetrical services
 TCM  - Targeted case management services

Cost Sharing Indicators

Code - Used When Providing
 C     - Services to a child or EPSDT Exempt.
 E     - Emergency services.
 F     - Family planning services
 I      - Services to any IHS referral
 P     - Services to pregnant women
 N     - Services to nursing facility residents.

 

 

End of Billing Procedures Chapter

How Payment Is Calculated

Overview

Although providers do not need the information in this chapter to submit claims to Montana Medicaid, the information allows providers to understand how payment is calculated and to predict approximate payment for particular claims.

CAHs are reimbursed for their costs of providing care, as determined through the annual cost settlement process. In the interim, these hospitals are paid a hospital-specific percentage of their charges. The percentage equals the hospital’s estimated cost-to-charge ratio as determined from time-to-time by the Department. The percentage includes payments for medical education and capital expenses.

Charge Cap

For services covered in the hospital setting, Medicaid pays a cost to charge ratio, not the lower of the Medicaid fee or the provider’s charge. The charge cap is not applied.

Status Indicator Codes

The code set used by DPHHS is based on the code set used by Medicare but with several additions. See the following table of status indicator codes.

Status Indicator Codes Used by DPHHS

 

Code - Description - Origin

W - Excluded service - DPHHS
G  - Drug/biological under trans. pass-through - Medicare
H  - Device under trans. pass-through - Medicare
J  - New drug/biological under trans. pass-through - Medicare
N - Incidental services (bundled) - Medicare
T - Surgical services - Medicare
C - Inpatient services - Medicare
K - Non-pass-through drugs and biologicals - Medicare
S - Significant procedures - Medicare
X - Ancillary service - Medicare
V - Medical visit
B - Services not paid under OPPS - Medicare
P - Partial hospitalization - Medicare
Q - Clinical lab - DPHHS
Y - Therapy - DPHHS
M - Misc. codes - DPHHS

 

Payment for Specific Services

Immunizations
If the member is under 19 years old and the vaccine is available to providers for free under the Vaccines for Children program, then the payment to the hospital is zero. Immunization administration is considered an incidental service. The claims processing system bundles immunization administration with other services on the claim and pays it at zero.

Transfers
When a member is transferred between two hospitals, the transferring and/or discharging hospitals are paid a hospital-specific cost to charge ratio for their services if they are CAHs.

Occasionally, a member is transferred from one hospital to another and then back to the original hospital when the condition causing the transfer is alleviated. Thus a hospital can be a transferring and discharging hospital. The discharging hospital should submit separate claims, one for the original admission and transfer and a second for the final discharge.

Observation Services (ARM 37.86.3020)
DPHHS follows the Medicare program, with the exception of obstetric complications, in making separate payment for observation care procedure codes if the following criteria are met.

  • Observation time must be documented in the medical record.
  • The number of units reported must equal or exceed eight hours.

In addition, the claim for observation must include one of the following services to the reported observation:

  • High level emergency department visit; or
  • High level clinic visit; or
  • High level critical care; or
  • Direct admit for observation care after being seen by a healthcare provider on the same date of service as the date reported for observation services.

The Department will also pay for observation care in a case with the potential obstetric complications if the following criteria are met:

  • Must have a qualifying diagnosis; and
  • Must be at least one hour in length of service.

If an observation service does not meet the criteria according to the above, then payment for observation care is considered bundled into the payment for other services.

Outpatient Clinic Services

Clinic services provided by an individual physician or mid-level practitioner in the outpatient clinic must be billed on a CMS-1500 with place of service (POS) 11. 

Pass-Through Payments
Payments for certain drugs, devices and supplies are designated as pass-through and paid a hospital-specific cost-to-charge ratio.

Procedures Considered Inpatient Only by Medicare
Medicare has designated some procedures as inpatient-only. Medicaid has also adopted that designation. When these procedures are performed in the outpatient hospital setting, the claim is denied. Hospitals may appeal the denial to the Department. If the service is approved, the claim will be paid.

Calculating Payment

The sections below explain how to calculate payment for claims involving Medicare or third party liability.

How Payment Is Calculated on TPL Claims
When a member has coverage from both Medicaid and another insurance company, the other insurance company is often referred to as third party liability (TPL). In these cases, the other insurance is the primary payer, and Medicaid makes a payment as the secondary payer. Medicaid will make a payment only when the TPL payment is less than the Medicaid allowed amount. See the When a Member Has TPL section in the General Information for Providers manual.

How Payment Is Calculated on Medicare Crossover Claims
When a member has coverage from both Medicare and Medicaid, Medicare is the primary payer. Medicaid will pay the coinsurance and deductible, less any TPL or incurment, on hospital claims for these dually eligible individuals.

Payment Examples for Dually Eligible Members
Member has Medicare and Medicaid coverage. A provider submits an inpatient hospital claim for a member with Medicare and Medicaid. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. Medicaid will pay this amount ($250.00) as long as no TPL or incurment amounts are applicable.

Member has Medicare, Medicaid, and TPL. A provider submits an inpatient hospital claim for a member with Medicare, Medicaid, and TPL. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. The other insurance company paid $225.00. This amount is subtracted from the Medicaid allowed amount leaving $25.00. Medicaid pays $25.00 for this claim. If the TPL payment had been $250.00 or more, this claim would have paid at $0.00.

Member has Medicare, Medicaid, and Medicaid Incurment. A provider submits an inpatient hospital claim for a member with Medicare, Medicaid, and a Medicaid incurment. The Medicare coinsurance and deductible are $65.00 and $185.00. This total ($250.00) becomes the Medicaid allowed amount. The member owes $150 for his Medicaid incurment, so this amount is subtracted from the $250.00. Medicaid will pay the provider $100.00 for this claim.

Other Programs

This chapter does not apply to members who are enrolled in the Mental Health Services Plan (MHSP). Providers will find more information on mental health services in the mental health manual available on the Provider Information website.

The information in this chapter does not apply to members enrolled in Healthy Montana Kids (HMK). The HMK medical manual is available through Blue Cross and Blue Shield of Montana (BCBSMT) at 1-800-447-7828. Additional information about HMK is available on the HMK website.

End of How Payment Is Calculated Chapter

Definitions and Acronyms

For definitions and acronyms, see the Definitions and Acronyms page of the Montana Healthcare Programs Provider Information website.

End of Definitions and Acronyms Chapter

Index

Previous editions of this manual contained an index.

This edition has three search options.

1.Search the whole manual. Open the Complete Manual pane.  From your keyboard press the Ctrl and F keys at the same time.  A search box will appear.  Type in a descriptive or key word (for example "Denials". The search box will show all locations where denials discussed in the manual.

2.Search by Chapter. Open any Chapter tab (for example the "Billing Procedures" tab).  From your keyboard press the Ctrl and F keys at the same time.  A search box will appear.  Type in a descriptive or key word (for example "Denials". The search box will show where denials discussed in just that chapter.

3.Site Search.  Search the manual as well as other documents related to a particular search term on the Montana Healthcare Programs Site Specific Search page.

End of Index Chapter

End of Hospital Outpatient Services Manual