Temporary Change to Carrier Jurisdictional Pricing Rule for Referred Services

Effective for claims with dates of service on or after April 01, 2004, Medicare carriers must use the zip code of the location where the service was rendered to determine both the carrier jurisdiction for processing the claim and the correct payment locality for any service paid under the MPFS (see the Medicare Claims Processing Manual (Pub.100-04), Chapter 1, Section 10.1.1).

Since the implementation of carrier jurisdictional pricing edits on April 01, 2004, the Centers for Medicare & Medicaid Services (CMS) has received reports that, due to current enrollment restrictions, some physicians/suppliers purchasing diagnostic tests/interpretations are unable to receive reimbursement for these services when the services are performed outside of their local carrier’s jurisdiction.

This article and related CR3630 address these reported problems by temporarily changing the carrier jurisdictional pricing rules that apply when billing for an out-of-jurisdiction area purchased diagnostic service. Carrier jurisdictional pricing rules for all other services payable under the MPFS remain in effect.

Until further notice:

• Physicians/suppliers must bill their local carrier for all purchased diagnostic tests/interpretations, regardless of the location where the service was furnished
• The billing physician/supplier must:
• Ensure that the physician/supplier that furnished the purchased test/interpretation is enrolled with Medicare, and is in good standing (i.e., the physician/supplier is not sanctioned, barred, or otherwise excluded from participating in the Medicare program); and
• Be responsible for any existing billing arrangements between the purchasing entity and the entity providing the service.

When submitting paper claims (form CMS–1500), physicians/suppliers billing their local carrier for a purchased test/interpretation performed outside of the carrier’s jurisdiction must report their name and use their own PIN to bill both the purchased portion of the test and the portion of the test that they performed. When billing for a purchased interpretation, the billing physician/supplier should not report the PIN of the physician who performed the interpretation in item 19 of the claim. Instead, the billing physician/supplier must maintain a record of the name and address of the physician performing the purchased interpretation and supply it to the Medicare carrier upon request. In addition, when billing for the test/interpretation, the purchasing physician/supplier must enter the address of that portion of the service they actually performed as the address where the purchased service was performed in block 32 of the CNMS–1500 claim form.

When submitting a claim for a purchased service on the form CMS–1500, remember that the billing physician/supplier must check box 20 “Yes” or continue to bill for the technical and professional components on separate claim forms.

When using electronic claims submissions (ANSI X12 837, version 4010A) physicians/suppliers billing for the purchased test/interpretation performed outside their carrier’s jurisdiction must report their name and their PIN to bill for the purchased diagnostic service. The billing physician/supplier should continue to report the 1C qualifier (Medicare Provider Number) in the reference identification segment of the 2310C (Purchased Service Provider Secondary ID) loop.

When reporting the 2400 PS1 segment (Purchased Service Information) of the 837 format, billing physicians/suppliers must report their own PIN. The reference identifier entered in the REF02 segment of the 2310C loop must also be the PIN of the billing physician/supplier, not the PIN of the physician/supplier who actually performed the service.

In addition, the billing physician/supplier must enter as the service facility location the same address as the location where they performed the non–purchased portion of the test. Enter this address in the appropriate service facility location (Service Facility Location Loop 2310D for claim level or 2420C for the line level on the claim).

Also, a physician/supplier billing a carrier for a purchased diagnostic test must continue to report on the claim the amount that the physician/supplier charged, net of any discounts. (Independent laboratories are exempt from reporting the amount charged for purchased tests.)

When billing for a diagnostic service purchased within the local carrier’s geographical service area, the physician/supplier must continue to follow existing guidelines for reporting the location where the service was furnished.

Physicians/suppliers are advised that:

• They must bill their local carrier for purchased diagnostic tests/interpretations, and they may no longer use, effective 14 days after receiving notification from the carrier, PINs issued in out–of–jurisdiction carrier sites to bill for these services; and
• They will not be penalized when they change the service facility location on the claim (even if the location reported on the claim does not correspond with the location where the service was actually performed).