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Mandatory Electronic Submission of Medicare Claims (GEN) - Revised 10-2-06
Posted October 2, 2006
Section 3 of the Administrative Simplification Compliance Act, Pub.L. 107-105 (ASCA) and the implementing regulation at 42 CFR 424.32 require that all initial claims for reimbursement under Medicare, except from small providers, be submitted electronically as of October 16, 2003, with limited exceptions. Initial claims are those claims submitted to a Medicare fee-for-service carrier, durable medical equipment regional carrier (DMERC), or intermediary for the first time, including resubmitted previously rejected claims, claims with paper attachments, demand bills, claims where Medicare is secondary and there is only one primary payer, and non-payment claims. Initial claims do not include adjustments submitted to intermediaries on previously submitted claims or appeal requests.
Medicare will not cover claims submitted on paper that do not meet the limited exception criteria. Claims denied for this reason will contain claim adjustment reason code 96 (Non-covered charge(s)) and remark code M117 (Not covered unless submitted via electronic claim).
Claims required to be submitted electronically effective October 16, 2003, and later must comply with the appropriate claim standards adopted for national use under the Health Insurance Portability and Accountability Act (HIPAA) or with standards supported under the Medicare HIPAA contingency plan during the period that plan is in effect. The mandatory electronic claim submission requirement does not apply to claims submitted by providers that only furnish services outside of the United States, claims submitted to Medicare managed care plans, or to health plans other than Medicare.
Small Provider Criteria
A “small provider” is defined at 42 CFR section 424.32(d)(1)(vii) to mean A) a provider of services (as that term is defined in section 1861(u) of the Social Security Act) with fewer than 25 full-time equivalent (FTE) employees; or B) a physician, practitioner, facility or supplier that is not otherwise a provider under section 1861(u) with fewer than 10 FTEs. To simplify implementation, Medicare will consider all providers that have fewer than 25 FTEs and that are required to bill a Medicare intermediary to be small; and will consider all physicians, practitioners, facilities, or suppliers with fewer than 10 FTEs and that are required to bill a Medicare carrier or DMERC to be small.
Providers that qualify as small automatically qualify for waiver of the requirement that their claims be submitted to Medicare electronically. Those providers are encouraged to submit their claims to Medicare electronically, but are not required to do so under the law. Small providers may elect to submit some of their claims to Medicare electronically, but not others. Submission of some claims electronically does not negate their small provider status nor obligate them to submit all of their claims electronically.
The small provider exception for submission of paper claims does not apply to health care claim clearinghouses that are agents for electronic claim submission for small providers. HIPAA defines a clearinghouse as an entity that translates data to or from a standard format for electronic transmission. As such, HIPAA requires that clearinghouses submit claims electronically effective October 16, 2003, without exception.
Full-Time Equivalent (FTE) Employee Assessments
The ASCA law and regulation do not modify pre-existing laws or employer policies defining full-time employment. Each employer has an established policy, subject to certain non-Medicare State and Federal regulations, that define the number of hours employees must work on average on a weekly, biweekly, monthly, or other basis to qualify for full-time benefits. Some employers do not grant full-time benefits until an employee works an average of 40 hours a week, whereas another employer might consider an employee who works an average of 32 hours a week to be eligible for full-time benefits. An employee who works an average of 40 hours a week would always be considered full-time, but employees who work a lesser number of hours weekly on average could also be considered full-time according to the policy of a specific employer.
Everyone on staff for whom a health care provider withholds taxes and files reports with the Internal Revenue Service (IRS) using an Employer Identification Number (EIN) is considered an employee, including, if applicable, a physician(s) who owns a practice and provides hands on services and those support staff who do not furnish health care services but do retain records of, perform billing for, order supplies related to, provide personnel services for, and otherwise perform support services to enable the provider to function. Unpaid volunteers are not employees. Individuals that perform services for a provider under contract, such as individuals employed by a billing agency or medical placement service, for whom a provider does not withhold taxes, are not considered members of a provider’s staff for FTE calculation purposes when determining whether a provider can be considered as small for electronic billing waiver purposes.
Medical staff sometimes works part-time, or may work full-time but their time is split among multiple providers. Part-time employee hours must also be counted when determining the number of FTEs employed by a provider. For example, if a provider has a policy that anyone who works at least 35 hours per week on average qualifies for full-time benefits, and has 5 full-time employees and 7 part-time employees, each of whom works 25 hours a week, that provider would have 10 FTEs (5+[7 x 25= 175 divided by 35= 5]).
In some cases, the EIN of a parent company may be used to file employee tax reports for multiple providers under multiple provider numbers. In that instance, it is acceptable to consider only those staff, or staff hours worked for a particular provider as identified by provider number, UPIN, or national provider identifier (NPI) when implemented to calculate the number of FTEs employed by that provider. For example, ABC Health Care Company owns hospital, home health agency (HHA), ambulatory surgical center (ASC), and durable medical equipment (DME) subsidiaries. Some of those providers bill intermediaries and some carriers. All have separate provider numbers, but the tax records for all employees are reported under the same EIN to the IRS. There is a company policy that staff must work an average of 40 hours a week to qualify for full-time benefits.
Some of the same staff split hours between the hospital and the ASC, or between the DME and HHA subsidiaries. To determine total FTEs by provider number, it is acceptable to base the calculation on the number of hours each staff member contributes to the support of each separate provider by provider number. First, each provider would need to determine the number of staff who work on a full-time basis under a single provider number only; do not count more than 40 hours a week for these employees. Then, each provider would need to determine the number of part-time hours a week worked on average by all staff who furnished services for the provider on a less than full-time basis. Divide that total by 40 hours to determine their full-time equivalent total. If certain staff members regularly work an average of 60 hours per week, but their time is divided 50 hours to the hospital and 10 hours to the ASC, for FTE calculation purposes, it is acceptable to consider the person as 1 FTE for the hospital and .25 FTE for the ASC.
In some cases, a single provider number and EIN may be assigned, but the entity’s primary mission is not as a health care provider. For instance, a grocery store’s primary role is the retail sale of groceries and ancillary items including over the counter medications, but the grocery store has a small pharmacy section that provides prescription drugs and some DME to Medicare beneficiaries. A large drug store has a pharmacy department that supplies prescriptions and DME to Medicare beneficiaries, but most of the store’s revenue and most of their employees are not involved with prescription drugs or DME and concentrate on non-related departments of the store, such as film development, cosmetics, electronics, cleaning supplies, etc. A county government uses the same EIN for all county employees, but their health care provider services are limited to furnishing of emergency medical care and ambulance transport to residents.
Legal issues regarding the definition of providers, particularly when multiple providers have data reported under the same EIN, will be addressed in the NPI regulation when published in the Federal Register in final. For FTE calculation purposes in the interim, it is acceptable to include only those staff of the grocery store, drug store, or county involved with or that support the provision of health care in the FTE count when assessing whether a small provider waiver may apply. This process will be modified if warranted by the definitions established in the NPI final rule. Support staff who should be included in the FTE calculation in these instances include but are not necessarily limited to those that restock the pharmacy or ambulance, order supplies, maintain patient records, or provide billing and personnel services for the pharmacy or emergency medical services department if under the same EIN, according to the number of hours on average that each staff member contributes to the department that furnishes the services or supplies for which the Medicare provider number was issued.
Exceptions
In some cases, it has been determined that due to limitations in the claims transaction formats adopted for national use under HIPAA, it would not be reasonable or possible to submit certain claims to Medicare electronically. Providers are to self-assess to determine if they meet these exceptions. At the present time, only the following claim types are considered to meet this condition:
- Roster billing of vaccinations covered by Medicare.
- Claims for payment under a Medicare demonstration project that specifies paper submission (the Upstate Medicare Division (UMD) currently is not conducting any type of demonstration projects).
- Medicare Secondary Payment Claims (MSP), where Medicare is tertiary.
- Claims submitted by Medicare beneficiaries.
Unusual Circumstance Waivers
Congress granted the Secretary considerable discretion to decide what other circumstances should qualify as “unusual circumstances” for which a waiver of the electronic claim submission requirement would be appropriate. The Secretary delegated that authority to CMS. In the event it is determined that enforcement of the electronic claim submission requirement would be against equity and good conscience as result of an “unusual circumstance,” CMS will waive the electronic claim submission requirement for temporary or extended periods. In those situations, providers are encouraged to file claims electronically where possible, but electronic filing is not required.
CMS has in turn delegated certain authority to the Medicare contractors (carrier, DMERC, or intermediary) to determine whether an “unusual circumstance” applies. Providers who feel they should qualify for a waiver as result of an “unusual circumstance” must submit their waiver requests to the Medicare carrier, DMERC, or intermediary to whom they submit their claims.
In some cases, an “unusual circumstance” or the applicability of one of the other exception criteria may be temporary, in which case, the related waiver would also be temporary. Once the criteria no longer applied, that provider would again be subject to the requirement that claims be submitted to Medicare electronically. Likewise, some exception and waiver criteria apply to only a specific type of claim, such as secondary claims when more than one other payer is primary. Other claim types not covered by an exception or waiver must still be submitted to Medicare electronically, unless the provider is small or meets other unusual circumstance criteria.
Waiver requests submitted by providers should include the provider’s name, address, contact person, the reason for the waiver, and why the provider considers enforcement of the electronic billing requirement to be against equity and good conscience. For UMD, requests should be submitted to: Electronic Data Interchange Services, Upstate Medicare Division, P.O. Box 5208, Binghamton, NY 13902-5208.
- Unusual Circumstance Waivers Subject to Provider Self-Assessment
The following circumstances always meet the criteria for waiver. Providers that experience one of the following are automatically waived from the electronic claim submission requirement. A provider is expected to self-assess when one of these circumstances applies, rather than apply for a waiver approval. A provider is not expected to pre-notify their Medicare contractor that one of the circumstances applies as a condition of paper submission. Under these conditions, providers do not have to submit a request for a waiver; they are automatically exempt.
- Dental claims.
- Disruption in electricity or phone/communication service. In the event of a major storm or other disaster outside of the provider’s control, a provider could lose the ability to use personal computers or transmit data electronically. If such a disruption is expected to last more than 2 business days, all of the affected providers are automatically waived.
- A provider is not small based on FTEs, but submits fewer than 10 claims to Medicare per month on average (not more than 120 claims per year).
- Non-Medicare Managed Care Organizations that are able to bill Medicare for co-payments may continue to submit those claims on paper.
- Home oxygen therapy claims for which the CR5 segment is required in an X12 837 version 4010A1 claim but for which the requirement notes in either CR513, CR514 and/or CR515 do not apply, e.g., oxygen saturation is not greater than 88%, arterial PO2 is more than 60 mmHg but a combination of factors necessitates use of oxygen. Completion of these data elements as required in the 837-P version 4010A1 implementation guide is an assertion that the required condition for inclusion of these data elements is met. Non-completion of these data elements, however, cannot be interpreted as a statement that the required condition for inclusion of these data elements is not met. There is no means to answer “no,” enter the actual oxygen saturation rate, or the arterial PO2 measurement but not each of these conditions needs to be met for a patient to qualify for oxygen therapy. The X12 work group responsible for development of the version 4010A1 implementation guide recognizes that this is a deficiency in this implementation guide. This will be corrected in a later version of that implementation guide, but in the interim, covered entities are bound by the existing version 4010A1 requirements. As result, CMS will permit claims that meet this situation to be submitted on paper.
- Unusual Circumstance Waivers Subject to Medicare Approval
A provider may submit a waiver request to their Medicare contractor in the following unusual circumstances. It is the responsibility of the provider to self-assess and submit documentation appropriate to establish the validity of the waiver request in these situations. Requests received without documentation to fully explain and justify why enforcement of the requirement would be against equity and good conscience in these cases will be denied.
- Testing difficulties, or a similar short-term problem that the provider is making reasonable efforts to rectify.
We may approve a single waiver for up to 90 days after the date of the decision notice for a provider if we consider there to be “good cause” that prevents a provider from submitting claims electronically for a temporary period.
- Inability to submit certain primary or secondary claims to Medicare electronically as a result of the inability of their commercial HIPAA-compliant software.
We may approve a single waiver for up to 180 days after the date of the decision notice to allow adequate time for the provider to obtain and install an upgrade from their vendor, or to transition to software from another vendor that can submit these claims electronically.
- Unusual Circumstance Waivers Subject to Medicare Contractor and CMS Approval
A provider may submit a waiver request to their Medicare contractor claiming other types of “unusual circumstances” outside of their control prevent submission of electronic claims. It is the responsibility of the provider to submit documentation appropriate to establish the validity of a waiver request in this situation. Requests received without documentation to fully explain and justify why enforcement of the requirement would be against equity and good conscience in these cases will be denied.
Providers who feel they qualify for a waiver as a result of an “unusual circumstance” must submit their waiver requests to the Medicare carrier to whom they submit their claims.
CMS interprets an “unusual circumstance” to be a temporary or long-term situation outside of the provider’s control that precludes submission of claims electronically, such as:
- Provider alleges that the claim transaction implementation guides adopted under HIPAA do not support electronic submission of all data required for claims adjudication.
- A provider is not small, but all those employed by the provider have documented disabilities that would prevent their use of a personal computer for electronic submission of claims.
- Any other unusual situation that is documented by a provider to establish that enforcement of the electronic claim submission requirement would be against equity and good conscience.
Electronic and Paper Claims Implications of Mandatory Electronic Submission
Claims providers submit via a direct data entry screen maintained by a Medicare contractor or transmitted to a Medicare contractor using the free/low cost claims software issued by Medicare are considered electronic. When enforcing the electronic claim submission requirement, CMS will take into account those limited situations where a provider submitted paper claims because the free billing software they were issued was temporarily unable to accommodate submission of a secondary or other particular type of claim. Medicare contractors are prohibited from requiring submission of paper claims in any situations on or after October 16, 2003, except as specifically permitted by CMS.
Medicare carriers, DMERCs, and intermediaries are to assume for processing purposes that claims submitted by a provider on paper October 16, 2003, and later are submitted by providers that are small or that do meet exception criteria, barring information received from other sources to the contrary. Submission of paper claims October 16, 2003, or later, constitutes an attestation by a provider that at least one of the paper claim exception or waiver criteria applies at the time of submission. If it’s discovered that a particular provider does not meet any of the exception criteria, paper claims submitted by that provider may be rejected without entry of those claims. A rejection letter will be returned to the submitter, stating the reason for the rejection. Post-payment monitoring will take place to detect providers that submit unusually high numbers of paper claims for further investigation.
Submission of Claims with Attachments
Until further notice, for electronic claims, providers are to supply supporting claim documentation that they feel would be necessary for proper payment of their claim by using the appropriate capability of their electronic billing software. Otherwise, we will ask for any information that we need. |
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