Background

10 - Background (Rev. 3288, Issued: 07-02-15, Effective: 08-03-15, Implementation: 08-03-15) The A/B Medicare Administrative Contractors (A/B MACs), and Durable Medical Equipment Medicare Administrative Contractors (DME MACs) send to providers, physicians, and suppliers, as a companion to claim payments, a notice of payment, referred to as the Remittance Advice (RA). RAs explain the payment and any adjustment(s) made during claim adjudication. For each claim or line item payment, and/or adjustment, there is an associated remittance advice item. Adjustment is defined as: • denied • zero payment • partial payment • reduced payment • penalty applied • additional payment • supplemental payment Payments and/or adjustments for multiple claims can be reported on one transmission of the remittance advice. RA notices can be produced and transferred in either paper or electronic format. The A/B MACs and DME MACs also send informational RAs to nonparticipating physicians, suppliers, and non-physician practitioners billing non-assigned claims (billing and receiving payments from beneficiaries instead of accepting direct Medicare payments), unless the beneficiary or the provider requests that the remittance advice be suppressed. An informational RA is identical to other RAs, but must carry a standard message to notify providers that they do not have appeal rights beyond those afforded when limitation on liability (rules regulating the amount of liability that an entity can accrue because of medical services which are not covered by Medicare (see Pub. 100-04, chapter 30) applies. The MACs are allowed to charge up to a maximum of $25 for generating and mailing, if applicable, duplicate remittance advice (both electronic and paper) to recoup costs when generated at the request of a provider or any entity working on behalf of the provider. Under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) administrative provisions, the Secretary of Health and Human Services has adopted ASC X12 Health Care Claim Payment/Advice (835) version 5010A1 to be the standard effective from January 1, 2012. The CMS has implemented the new HIPAA standard following the ASC X12 Technical Report 3 (TR3) for transaction 835 version 5010A1, and requires the use of this format exclusively for Electronic Remittance Advices (ERAs) on or after full implementation. CMS has also established a policy that the paper formats shall mirror the ERAs as much as possible, and all MACs shall use the paper formats – Standard Paper Remit or SPR - established by CMS. Provider Identification: Medicare requires claims to contain National Provider Identifiers (NPIs) to be accepted for adjudication. NPIs received on the claims are cross walked to Medicare assigned legacy numbers for adjudication. Adjudication is based on each unique combination of NPI/legacy number if there is no one-to-one relationship between the two. Any ERA or SPR sent after version 5010A1 has been implemented will have one of the three provider identifications: (1)Federal Taxpayer’s Identification Number; (2) Centers for Medicare and Medicaid Services PlanID; or (3) Centers for Medicare & Medicaid Services National Provider Identifier (NPI) as the provider ID instead of any Medicare assigned provider number at the provider level. NPIs will be sent as the provider identification at the claim level. As the Rendering Provider Identifier at the service line level, any one of the following identifiers: (1) Centers for Medicare & Medicaid Services National Provider Identifier; (2) Social Security Number; (3) Federal Tax Payer’s Identification Number; or (4) Medicare Provider Number; – will be sent.