July 2001 Medicaid Bulletin title image

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In This Issue..

All Providers: Adult Care Home Facilities: Area Mental Health Programs: Community Alternatives Program Providers: Cost Report Preparers: County Departments of Social Services: HMO Providers: Hospitals: ICF-I/DD Facilities: Nursing Facilities: Personal Care Services Providers: Physicians: Prescribers: Therapy Providers:

Attention: All Providers

Holiday Observance

The Division of Medical Assistance (DMA) and EDS will be closed on Wednesday, July 4, in observance of Independence Day.

EDS, 1-800-688-6696 or 919-851-8888

Attention: Nursing Facilities, ICF-I/DD Facilities, and Cost Report Preparers

Division of Medical Assistance Audit Section Website

The Division of Medical Assistance (DMA) is developing a website, which will allow providers to download Medicaid cost reporting software. A completed diskette must be mailed to DMA's Audit Section within the same timeframe as in the past. Software will not be mailed to providers effective with the 2001 cost reports. A transition period during the first year of implementation will allow DMA's Audit Section to mail the diskette and user manual upon request. A hard copy of the certification letter will continue to be a requirement. Providers and cost report preparers will be notified when development is completed and available for use.

Harold Wiggins, Audit Section Chief
DMA, 919-733-6390

Attention: All Providers Serving Medicaid Recipients in Guilford, Forsyth, Davidson, and Rockingham Counties

HMO Update

Effective July 1, 2001, United HealthCare of North Carolina, Inc. is no longer serving as an HMO to Medicaid recipients in Guilford, Forsyth, Davidson, and Rockingham counties. Therefore, HMO enrollment is not a Medicaid Managed Care option in these counties.

Julia McCollum, Managed Care Section
DMA, 919-857-4022

Attention: All Prescribers

Allowable Days Supply to Change on Prescriptions

Effective July 1, 2001, the maximum days supply for all drugs, except birth control pills, will be changed from a 100-day supply to a 34-day supply. Up to a 100-day supply (three packs) of birth control pills will still be allowed. All new prescriptions will need to be changed to reflect this quantity limitation.

Benny Ridout, Pharmacy Director
DMA, 919-857-4020

Attention: Medicaid HMOs and Therapy Providers who Serve Children Enrolled in a Medicaid HMO

Clarification Regarding Therapy Services Provided to Medicaid HMO Enrollees

Except for therapy services that are billed with the place of service "99," physical therapy (PT), occupational therapy (OT), and speech therapy (ST) services provided to HMO-enrolled Medicaid recipients under the age of 21 are included in the capitation rates paid to the HMOs. Therefore, the HMOs are responsible for payment of all therapy services that are rendered in an office or home setting which is not school-related. The Division of Medical Assistance's definition of place of service "99" includes schools, head start programs, developmental daycare centers, and regular daycare centers. Therapy providers serving HMO-enrolled children must contact the HMO for authorization to provide nonschool-related services.

Jency L. Abrams, RN, BSN, MS, Medical Policy Section
DMA, 919-857-4020

Anne B. Rogers, RN, Managed Care Section
DMA, 919-857-4022

Attention: All Providers

Information on the Health Insurance Portability and Accountability Act

What is HIPAA?
In response to the growing need for health care reform and cost reductions, on August 21, 1996, Congress enacted the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA's Administrative Simplification provisions address the need for consistency throughout the health care industry and require the U.S. Department of Health and Human Resources to establish national standards for electronic data exchange while protecting the security and privacy of health care information.

While electronic health care transactions can be a more efficient way to process claims and payment information, providers are faced with many different health plans, each of which may have different coding and data content requirements. HIPAA will improve administrative efficiency and reduce operating costs for all health care providers by standardizing the data elements, code sets, and identifiers used throughout the health care industry.

The federal regulation introducing electronic health transaction standards became effective on October 16, 2000. These standards apply to:

The use of electronic technology to transmit health information has also created a need to address security and privacy issues. HIPAA seeks to protect the confidentiality of individual medical information by addressing privacy standards not only for electronic transactions but for verbal and paper exchanges as well.

The federal regulation establishing standards for the privacy of individually identifiable health information became effective on April 14, 2001. The regulation establishes accountability and responsibility for the disclosure of health information where the information is used to protect public health, to conduct medical research, and to improve the quality of consumer health care. Any health information that can be used to identify a person is covered by this regulation.

Who Must Comply with HIPAA?
All health plan providers, payers, and clearinghouses that process health data electronically must comply with the national standards for electronic data transactions by October 16, 2002. Business associates who are contracted to perform a function on behalf of these entities must also comply with HIPAA regulations. Small health plans - those with less than $5 million in annual receipts - have an additional 12 months to comply with the regulation.

HIPAA also requires health care plans, providers, clearinghouses, and contracted business associates to implement the provisions of the privacy regulation by April 13, 2003. Small plan providers have an additional 12 months to comply with the regulation.

What is the N.C. Medicaid Program Doing to Comply with HIPAA?
The N.C. Medicaid program is committed to implementing HIPAA regulations in a timely manner without disruption to the day-to-day business of providers enrolled with Medicaid or to the delivery of services to the citizens of North Carolina. Medicaid providers, as well as recipients, will benefit from the Division of Medical Assistance's enhanced ability to monitor utilization, costs, fraud, and the coordination of care.

As part of the process to implement HIPAA standards, the Division of Medical Assistance (DMA) is evaluating and will convert state-created codes to the standard national data sets listed below. Providers will be alerted to code conversions through articles in the monthly Medicaid bulletin.

Diagnosis codes - International Classification of Disease, Ninth Edition, Clinical Modification (ICD-9-CM)
Medical procedure codes - Health Care Procedural Coding System (HCPCS) and Current Procedural Terminology, Fourth Edition (CPT-4)
Dental codes - Current Dental Terminology (CDT-3)
Drug codes - National Drug Codes (NDC)

DMA staff have also completed an assessment of HIPAA's impact to the business units within DMA, and are working on the business and technical design in order to move forward with a plan to implement HIPAA standards. Once the conversion has been completed, DMA will be capable of receiving, processing, and sending standard transactions in accordance with HIPAA standards.

What Should Providers Do to Ensure HIPAA Compliance?
Providers are urged to begin evaluating their billing systems and privacy policies to ensure that they are in compliance with HIPAA for electronic transaction standards and privacy regulations by the implementation deadline dates of October 16, 2002 and April 13, 2003, respectively. Providers may want to begin or expand their use of electronic data interchange (EDI) as part of the evaluation process. The following guidelines will help providers begin the process of HIPAA implementation.

Education - Determine what type of training your staff need to facilitate changes to your business practices.

Privacy and Security - Designate a privacy officer for your organization.

Documentation - Evaluate and document policies and procedures related to the protection of health care information within your organization, including procedures for disaster recovery, facility security, workstation security, and access controls. Develop a notice of information practice.

Individual Rights - Allow individuals to inspect, copy, correct, and amend their protected health information.

Disclosure - Implement measures to account for disclosure of information for purposes other than treatment, payment or health care administration.

Business Systems - Evaluate your billing system for compliance.

Electronic Data Interchange (EDI) - Evaluate the benefits of using or expanding the use of EDI for business transactions.

How to Get More Information
Additional information on HIPAA regulations, transaction standards, and privacy and security issues can be found on the Health Care Financing Administration (HCFA) website or the U.S. Department of Health and Human Service's website at http://aspe.hhs.gov/admnsimp/

Information on EDI vendors can be obtained from the Electronic Commerce Unit at EDS by calling 1-800-688-6696 or 919-851-8888.

Tom Lambert, HIPAA Coordinator
DMA, 919-857-4013

Attention: All Prescribers

Quantity Limits Put in Place for Oxycontin

Effective July 1, 2001, Medicaid will pay for a maximum of six tablets per day for all strengths of Oxycontin. Under the new 34-day supply limit, this means that a maximum of 204 tablets per month will be allowed.

Only in extreme cases will exceptions to this limit be approved. The prescriber will be required to submit a request for prior approval accompanied by documentation of medical necessity for this drug. This request must be signed by the prescriber and sent to the following address:

Benny Ridout, R.Ph Pharmacy Director
Division of Medical Assistance
2511 Mail Service Center
Raleigh, NC 27699-2511
FAX: 919-733-2796
An authorization code will be assigned to all prior authorizations that are approved. This code must be included on the prescription to notify the pharmacist that the prescription has been approved for dispensing.

Benny Ridout, Pharmacy Director
DMA, 919-857-4020

Attention: Hospitals, Nursing Facilities, Physicians, Community Alternatives Program Providers, Area Mental Health Programs, ICF-I/DD Facilities, County Departments of Social Services, and Adult Care Home Facilities

Change in FL2 and MR2 Process

Effective July 1, 2001, FL2 forms requesting prior approval for nursing facility level of care and MR2 forms requesting prior approval for ICF-MR level of care will no longer be routed initially through the recipient's county department of social services (DSS). The signed FL2 or MR2 and any necessary attachments should be forwarded directly to EDS. The new procedures are outlined below:

1. Prior Approval for Level of Care

2. Level of Care Change Outside The Resident's Utilization Review Schedule
Nursing facilities requesting a level of care change outside the resident's regular utilization review schedule must send the signed and dated FL2 directly to EDS.
The original copy of the signed and dated FL2 or MR2 must be mailed to EDS at the address listed below within ten days of telephone or fax prior approval.
Attn: Prior Approval
P.O. Box 31188
Raleigh, NC 27622
EDS will continue the current practice of sending the stamped pink and blue copies of reviewed FL2s and MR2s to the county department of social services (DSS) in which eligibility is maintained. Each DSS will continue forwarding these stamped FL2s and MR2s to the appropriate facility or CAP case manager.

These changes do not affect the current telephone or fax prior approval processes. FL2s may still be telephoned in to EDS for preliminary approval. EDS will continue to accept MR2s only by fax or mail.

These changes do not affect FL2s needed for admission to adult care homes. Completed FL2s for adult care home admission do not need to be approved by EDS and will continue to go directly to the county DSS.

For instructions on completing an FL2, refer to pages 6-4 through 6-6 of the N.C. Medicaid Nursing Facility Manual, June 2000 update. CAP program case managers may refer to the instructions on completing an FL2 in the CAP/AIDS, CAP/C or CAP/DA manuals and instructions for completing an MR2 in the CAP/MR-DD manual.

EDS, 1-800-688-6696 or 919-851-8888

Attention: All Providers

Index to General and Special Medicaid Bulletins for January 2001 through June 2001

All Providers Adult Care Home Providers Ambulance Services Providers Area Mental Health Centers Carolina ACCESS PCPs Community Alternatives Program Providers Dental Providers and Dental Health Department Clinics Developmental Evaluation Centers Durable Medical Equipment Providers Federally Qualified Health Centers Health Check Providers Health Departments Home Health Providers Hospice Providers Hospital Providers ICF-MR Group Home and CAP-MR/DD Providers Laboratory Services Mental Health Providers Nursing Facilities Nurse Practitioners and Physician Assistants Personal Care Services Providers Physicians Prescribers Providers Serving Gaston County Medicaid Recipients Psychiatric Providers Rural Health Clinics
  • Use of Codes Y2351 and Y2041, 06/01, pg. 3
  • Ventilator Long-term Care Providers

    EDS, 1-800-688-6696 or 919-851-8888

    Attention: All Providers

    Publication Request Form

    Manuals and Handouts
    The Publication Request form lists bulletins, manuals, and handouts that are available for purchase from EDS. Please note that prices are subject to change. Some manuals (as indicated by an asterisk) can be downloaded at no charge from the Division of Medical Assistance's website at www.dhhs.state.nc.us/dma.

    Please note that past issues of the general Medicaid bulletin, beginning with January 2000, as well as special Medicaid bulletins, can be downloaded at no charge from the Division of Medical Assistance's website at www.dhhs.state.nc.us/dma. Printed versions of most bulletins are available through EDS Provider Enrollment. All bulletins are $1.00 each, with the exception of the Special Medicaid Bulletin II, Modifiers, April 1999, which is $4.00. If you would like to order a copy of a past bulletin, please complete and return the form below.  Please note that not all past issues of the bulletin may be available.

    EDS, 1-800-688-6696 or 919-851-8888

    Attention: Personal Care Services Providers (excluding Adult Care Home Providers Personal)

    Personal Care Services Seminar Schedule

    Seminars for Personal Care Services (PCS) providers are scheduled for August 2001. (PCS provider numbers range from 6600000 to 6601000.)  Note: This workshop is NOT for Adult Care Home Personal Care Services (ACH-PC). Each PCS provider is encouraged to send appropriate administrative, clinical, and clerical personnel. An overview of the criteria for PCS coverage, service limitation, and assessment process, including completion of the DMA-3000 PCS Physician Authorization and Plan of Care, will be discussed. In addition, procedures for filing PCS claims, common billing errors, and follow-up procedures will be reviewed.

    Note: Providers should bring their N.C. Community Care manual as a reference. Additional manuals will be available for purchase at the workshop for $20.00 each.

    Due to limited seating, preregistration is required. Unregistered providers are welcome to attend when reserved space is adequate to accommodate. Please select the most convenient site and return the completed registration form to EDS as soon as possible. Seminars begin at 10:00 a.m. and end at 1:00 p.m. Providers are encouraged to arrive by 9:45 a.m. to complete registration.

    Return the Personal Care Services Seminar Registration form to:

    Provider Services
    P.O. Box 300009
    Raleigh, N.C. 27622
    Travel directions to the sites
    Wednesday, August 1, 2001
    Martin Community College 
    Kehakee Park Road 
    Williamston, NC 
    Wednesday, August 8, 2001
    Ramada Inn Plaza 
    3050 University Parkway 
    Winston-Salem, NC 
    Wednesday, August 15, 2001
    Coast Line Convention Center 
    501 Nutt Street 
    Wilmington, NC 
    Wednesday, August 29, 2001
    Andrews Conference Center 
    (formerly the MEI Conference Center) 
    3000 New Bern Avenue 
    Raleigh, NC 


    Travel Directions to the Personal Care Services Seminar Schedule


    Highway 64 into Williamston. Martin Community College is approximately 1 to 2 miles west of Williamston. The Auditorium is located in Building 2.


    I-40 Business to Cherry Street exit. Continue on Cherry Street for approximately 2 to 3 miles. Turn left at the IHOP Restaurant. The Ramada Inn Plaza is located on the right.


    Take I-40 East into Wilmington to Highway 17 - just off I-40. Turn left onto Market Street. Travel approximately 4 or 5 miles to Water Street. Turn right onto Water Street. The Coast Line Inn is located one block from the Hilton on Nutt Street behind the Railroad Museum.


    Driving and Parking Directions
    Take the I-440 Raleigh Beltline to New Bern Avenue, exit 13A (New Bern Avenue, Downtown). Travel toward WakeMed. Turn left onto Sunnybrook Road.

    Parking is available at the former CCB Bank parking lot, a short walk to the conference facility. The entrance to the Conference Center is at the top of the stairs to WakeMed's Andrews Conference Center.

    Parking is also available on the top two levels of Parking Deck P3. To reach this deck, exit the I-440 Beltline, exit 13A. Proceed to the Emergency entrance of the hospital (on the left). Follow the access road up the hill to the gate for Parking Deck P3. After parking in P3, walk down the hill past the Medical Office Building and past the side of the Andrews Conference Center. Turn right at the front entrance of the building and follow the sidewalk to the Conference Center entrance.

    Illegally parked vehicles will be towed. Parking is not permitted at East Square Medical Plaza, Wake County Human Services, the P4 parking lot or in front of the Conference Center.

    Checkwrite Schedule

    July 10, 2001 
    August 7, 2001 
    September 5, 2001 
    July 17, 2001 
    August 14, 2001 
    September 11, 2001 
    July 26, 2001 
    August 23, 2001 
    September 18, 2001 
    September 27, 2001 


    Electronic Cut-Off Schedule

    July 6, 2001 
    August 3, 2001
    August 31, 2001 
    July 13, 2001 
    August 10, 2001
    September 7, 2001 
    July 20, 2001 
    August 17, 2001
    September 14, 2001 
    September 21, 2001 


    Electronic claims must be transmitted and completed by 5:00 p.m. on the cut-off date to be included in the next checkwrite. Any claims transmitted after 5:00 p.m. will be processed on the second checkwrite following the transmission date.

    ______________________ _______________________
    Paul R. Perruzzi, Director Ricky Pope
    Division of Medical Assitance Executive Director
    Department of Health and Human Services                                    EDS

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