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Medicare Update
July 25, 2008

J12 MAC Transition
The Medicare Fiscal Intermediary and Carrier have undergone significant changes with the advent of the Jurisdiction 12 Medicare Administrative Contractor (J12 MAC) transition. The process is intended to be seamless to providers, but changes have occurred and will continue to occur as implementation on Part A begins in August and Part B starts December 12. The Centers for Medicare and Medicaid Services (CMS) developed a fact sheet to highlight some of the changes (www.cms.hhs.gov/MedicareContractingReform/Downloads/MACJurisdictionFactSheet.pdf). Highmark Medicare Services developed the J12 Transition Newsletter, a newsletter to keep Part A and B providers informed of changes, including the timeline for transition and contact information (www.highmarkmedicareservices.com/transition/j12/pdf/jipp-newsletter-052308.pdf). The J12 Transition Newsletter–SIPP II is available to address concerns about Medicare Part A. Two editions have been issued to date (www.highmarkmedicareservices.com/transition/j12/pdf/transition-newsletter-sipp2-070108.pdf and www.highmarkmedicareservices.com/transition/j12/pdf/transition-newsletter-sipp2-071508.pdf). Part A dark days for transitioning are scheduled August 2 – 4. There will be no access to the Fiscal Intermediary Standard System (FISS) for claim entry or corrections, verification of eligibility, or claim status. More information on the J12 MAC transition is available on the Highmark Medicare Services web site (www.highmarkmedicareservices.com).

Medicare Physician Fee Schedule Payment Rates for 2008
The Medicare Improvements for Patients and Providers Act of 2008, enacted July 15, replaced the mid-year Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent with the January-June 0.5 percent update, retroactive to July 1. Physicians, non-physician practitioners, and other providers of services paid under the MPFS should begin to receive payment at the 0.5 percent update rates by July 31 or earlier as payment systems are updated. Medicare contractors will continue to process the claims that have been on hold on a first in/first out basis for payment at the -10.6 percent update level. After claims are paid at the new 0.5 percent rate the Medicare contractor will begin to automatically reprocess any claims paid at the lower rates. Medicare pays the lower of submitted charges or the Medicare fee schedule amount. Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1 - June 30 fee schedule amount will be automatically reprocessed. Smaller amounts will require providers to contact the contractor for direction on obtaining adjustments. Non-participating physicians who submitted unassigned claims at the reduced nonparticipation amount will also need to request an adjustment. The MPFS is available on the Highmark Medicare Services web site (www.highmarkmedicareservices.com/partb/reimbursement/feedb-2008.html).

Medicare DMEPOS Competitive Bidding Program Delayed
The competitive bidding program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) was delayed by the above act. CMS indicated that items that had been included in the first round of the DMEPOS Competitive Bidding Program can be furnished by any enrolled DMEPOS supplier in accordance with existing Medicare rules. Payment for these items will be made under the fee schedule. CMS will issue further guidance.

Part B Reference Manual Available
Highmark Medicare Services has made the Medicare Part B Reference Manual available on its web site (www.highmarkmedicareservices.com/partb/refman/index.html). The manual reflects changes due to the J12 MAC transition.

Inpatient Psychiatric Prospective Payment
MLN Matters (Number MM6077) Update-Inpatient Psychiatric Facilities Prospective Payment System (IPF PPS) Rate Year 2009, is available on the CMS web site
(www.cms.hhs.gov/MLNMattersArticles/downloads/MM6077.pdf) and addresses changes required for the annual inpatient psychiatric facility prospective payment system update.

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