DOH Medicaid Update March 2001 Vol.16, No.3

Office of Medicaid Management
DOH Medicaid Update
March 2001 Vol.16, No.3

State of New York
George E. Pataki, Governor

Department of Health
Antonia C. Novello, M.D., M.P.H., Dr. P.H.

Medicaid Update
is a monthly publication of the
New York State Department of Health,
Office of Medicaid Management,
14th Floor, Room 1466,
Corning Tower, Albany,
New York 12237

Welcome to HIPAA News!
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The March 2001 edition of the Medicaid Update includes the first installment of a new regular feature, HIPAA News. This new feature is dedicated to providing you with pertinent information relating to the Medicaid program's efforts to comply with the provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). HIPAA requirements apply to all payors of medical services. We urge all providers, and their staff, who have not already done so, to become familiar with the various provisions of HIPAA, specifically the administrative simplification provision.

This new feature of the Medicaid Update is being created for the provider community, and will be used by the Medicaid program as a main source of provider information and notification for all of our HIPAA activities. We will regularly share with you pertinent HIPAA-related information we have available to keep you abreast of the potential impact HIPAA may have on New York's Medicaid program and your billing systems. This initial installment of HIPAA News provides general background information on the HIPAA legislation and focuses on the administrative simplification provisions, including the Transactions and Code Sets standard. Subsequent HIPAA News articles will focus on specific activities and processes being undertaken by the Department of Health to achieve HIPAA compliance by the October 16, 2002 effective date.


The Health Insurance Portability and Accountability Act of 1996 was signed into law on August 12, 1996. The law is comprised of two legislative actions - health insurance reform and administrative simplification. The administrative simplification provisions in HIPAA impact the Medicaid program most significantly. HIPAA requires national standards for automated transfer of certain health care data between payers, plans and providers. The law is intended to simplify and encourage the electronic transfer of administrative and financial health care data, by replacing the many non-standard formats now being used nationally with a single set of electronic standards to be used by the entire health care industry, including the Medicaid program.


The administrative simplification provisions in HIPAA include a number of national standards for which proposed federal regulations have been published - Transactions and Code Sets, National Provider Identifier, National Employer Identifier, Privacy and Security. Other standards are under development. The Transactions and Code Sets standard was published on August 17, 2000 and will have a significant impact on the Medicaid program. The standard specifies national transaction standards for health/encounter claims, enrollment, eligibility, health plan premium payments, remittances, claim status, coordination of benefits, attachments, etc. Implementation Guides have been developed for each published transaction and detail how transactions are to be implemented, including required data elements, code sets and format, fields size and conditions. The standards apply to all covered entities including health plans, health care clearinghouses and health care providers who submit administrative and financial health information in electronic format.

Additional information on HIPAA and administrative simplification may be accessed at the Health Care Financing Administration (HCFA) website at Other HIPAA related websites which provide valuable information are listed below. We urge you to access these websites because HIPAA impacts the entire health care industry and has implications for provider business processes.

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The mandated implementation of the Transactions and Code Sets standards by October 16, 2002 presents the NYS Medicaid Program and the provider community with a challenge. The compliance time frame is extremely tight and requires a serious commitment from the entire Medicaid community. The elimination of data elements used in the current MMIS claims processing system requires that the State Medicaid program undertake assessments, system analyses, mapping and gap analyses activities. We will be required to re-define certain internal and proprietary coding structures and processes and develop a best approach to assure compliance.

Computer Sciences Corporation (CSC), our Medicaid fiscal agent, will be providing instructional materials and/or training sessions, as needed, to bring providers up to date on billing system changes. When possible, CSC will schedule notification and training with sufficient lead-time to allow providers to make necessary changes in advance.

Further details relating to billing requirement changes, provider notification and training will be provided in future issues of the Medicaid Update. Please direct questions concerning current billing requirements to CSC's Provider Relations staff at the following numbers:

Practitioner Services (800) 522-5518 or (518) 447-9860
Institutional Services (800) 522-1892 or (518) 447-9810
Professional Services (800) 522-5535 or (518) 447-9830

For specific HIPAA related questions, please contact Mr. Mario Tedesco, the Medicaid program HIPAA Coordinator, at (518) 257-4496.

Other HIPAA related websites:

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Section 18 NYCRR 360-7.5 (c) of the Department's regulations states that a provider may employ a business agent such as a billing service or an accounting firm. Agents may prepare and send bills and receive Medicaid payments made out in the name of the provider. However, it may do so only if compensation paid to the agent is: (1) reasonably related to the cost of the services; (2) unrelated, directly or indirectly, to the dollar amounts billed and collected; and (3) not dependent on actual collection of payment. Section 18 NYCRR 504.9 reiterates these rules and expands their coverage to those who verify client eligibility or obtain service authorization on behalf of a provider. Billing agents are prohibited from charging Medicaid providers a percentage of the amount claimed or collected. In addition, such payment arrangements, when entered into by a physician, may violate the Education Law and State Education Department's regulations on unlawful fee-splitting.

In recent months, the Medicaid program has been made aware of violation of the regulations concerning the permissible payment arrangement with business agents. Although we understand that these practices are very common when it comes to billing other third party health insurance programs, including the Medicare program, it is not an acceptable arrangement under the Medicaid program.

Please assure that your payment arrangements are in compliance with the regulations. If your billing agent is charging you fees that are contrary to the official rules and regulations of the Department, you may be required to refund the resulting Medicaid payments made to you.

Section 18 NYCRR 504.1(b) of the Department's regulations defines who must enroll in the Medicaid program. Billing agents are required to be enrolled in the Medicaid program. To obtain an application for enrollment, please contact the Bureau of Enrollment at (518) 486-9440. If you have any questions regarding the regulation regarding fees charged by your agent, please contact Ms. Janice Feaster, Bureau of Enrollment, at (518) 474-9238.

Attention: All Pharmacies
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As requested by the New York State Department of Health, eFunds Government Services (formerly Deluxe Electronic Payment Systems) has enhanced the Electronic Medicaid Eligibility Verification System (EMEVS) Drug Utilization and Review (DUR) process to further identify a duplicate claim transaction.

Currently, when a duplicate DUR transaction is submitted, the transaction is rejected for NCPDP (National Council for Prescription Drug Program) reject code 83 (duplicate claim). This will change with the installation of the enhancement on or after June 1, 2001.

The enhancement allows DUR transactions submitted using the NCPDP version 3.2 transaction formats to be processed according to NCPDP requirements for identifying duplicate claims. EMEVS processing requires all submitted transactions to use the variable "32" or fixed "3A" transaction formats. The NCPDP Telecommunications Specifications defines a duplicate claim as having the same Recipient, Provider, Date of Service, Drug (NDC Code), Prescription Number, and New/Refill Code. Once the enhancement is implemented, an accepted response for a duplicate claim transaction will contain a 'D' in NCPDP Field 501 (Claim Response Code) for both formats. The data that was returned in the original claim's response will also be returned. In rare instances, a reject code 83 may still be returned.

The expected installation date for this change is on or after June 1, 2001. This date was selected in order to give you sufficient time to update your software. The only change you need to prepare for is the "D" value in the Claim Response Code Field (NCPDP Field 501). Depending on your existing software, you may not require any changes. Please check with your software company.

If you have any questions, please call the eFunds Provider Relations staff at 1-800-343-9000.

Smoking Cessation--Dealing with Special Populations
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Pregnancy may present a motivational opportunity for women to quit smoking. Healthcare professionals can play a key role in motivating this special population by advising of, or reinforcing the risks of, smoking during pregnancy and in the postpartum period to both mother and child.

One over-riding issue relevant to all tobacco users considering a quit attempt is to ensure that all textual materials used (e.g., self-help brochures) are at an appropriate reading level. This is particularly important given epidemiological data showing that tobacco use rates are markedly higher among individuals of lower educational attainment.

The following interventions should guide the clinician treating the pregnant smoker.

Clinical practiceRationale
Assess pregnant woman's tobacco use status using a multiple-choice question to improve disclosure. Many pregnant women deny smoking, and the multiple-choice question format improves disclosure. For example: Which of the following statements best describes your cigarette smoking?
  • I smoke regularly now-about the same as before finding out I was pregnant.
  • I smoke regularly now, but I've cut down since I found out I was pregnant.
  • I smoke every once in a while.
  • I have quit smoking since finding out I was pregnant.
  • I wasn't smoking around the time I found out I was pregnant, and I don't currently smoke cigarettes.
Congratulate those smokers who have quit on their own. To encourage continued abstinence.
Motivate quit attempts by providing educational messages about the impact of smoking on both the woman's and the fetus' health. These are associated with higher quit rates.
Give clear, strong advice to quit as soon as possible. Quitting early in pregnancy provides the greatest benefit to the fetus.
Suggest the use of problem solving methods and provide social support and pregnancy-specific self-help materials. Reinforces pregnancy-specific benefits and ways to achieve cessation.
Arrange for follow-up assessments throughout pregnancy, including further encouragement of cessation. The woman and her fetus will benefit even when quitting occurs late in pregnancy.
In the early postpartum period, assess for relapse and use relapse prevention strategies recognizing that patients may minimize or deny. Postpartum relapse rates are high even if a woman maintains abstinence throughout pregnancy. Relapse prevention may start during pregnancy.

From the U.S. Department of Health and Human Services Public Health Service Clinical Practice Guideline: Treating Tobacco Use and Dependence, June 2000

An additional support available to healthcare providers and Medicaid recipients is a toll-free smoking help-line staffed by employees of the Roswell Park Cancer Institute. The Quitline offers smokers a confidential and convenient way to access immediate help when they are ready to stop smoking or need support to remain smoke-free.

Toll-Free NYS Smoker's Quitline 1-866-NYQUITS (1-866-697-8487)

Medicaid Managed Care Enrollees Cannot Be Billed
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This is a reminder to all hospitals, free-standing clinics, laboratories, and individual practitioners participating in the Medicaid program. Medicaid Managed Care enrollees cannot be billed for items or services rendered except in the single circumstance described below.

When a provider accepts a Medicaid Managed Care enrollee as a patient, the provider agrees to bill the Managed Care organization for the services provided in the benefit package, and to bill Medicaid fee-for-service for any Medicaid-covered services that are not covered in the Managed Care benefit package. Services covered by the Managed Care plan are identified when using the Electronic Medicaid Eligibility Verification System (EMEVS). The provider is prohibited from billing or requesting any compensation from the Medicaid Managed Care enrollee, just as providers are prohibited from billing Medicaid recipients not enrolled in Managed Care per 18 NYCRR 504.3(c) and (i), and 515.2(b)(8).

Further, a claim should not be referred to a collection agency nor should enrollees have legal suit brought against them for unpaid medical bills when the provider has accepted the individual as a Medicaid Managed Care enrollee.

The only circumstance in which a provider may bill a Medicaid Managed Care enrollee is a non-emergency situation in which the provider informs the enrollee prior to providing the service or item in question that the service or item is not covered under the enrollee's Managed Care plan and does not qualify for Medicaid reimbursement, that the Managed Care enrollee will be liable for payment for the service or item, and the enrollee consents. It is suggested that the provider obtain the patient's signed acknowledgement of the liability in this situation.

Please contact Ms. Gina Mitale, Office of Managed Care, at 518-473-4842 with questions relating to this article.

Attention Dental Providers
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All Medicaid Managed Care Enrollees Have Coverage For Dental Services

Some Managed Care Organizations (MCO) do not cover dental services. The Electronic Medicaid Eligibility Verification System (EMEVS) identifies plans that do not offer dental services. Enrollees in these plans do, however, have coverage for dental services under the Medicaid fee-for-service program. Dental providers participating in the Medicaid program providing services to Medicaid Managed Care enrollees whose MCO does not cover dental services should bill Medicaid fee-for-service. The Medicaid Managed Care enrollee should not be told that they are not covered, and should not be billed for services rendered. Some dental services need prior approval. Dental providers should consult their MMIS manual and follow proper approval procedures for those services.

If a Medicaid Managed Care enrollee is enrolled in an MCO that does cover dental services, they must receive services through the MCO's network of providers, and dental providers must adhere to the policies and procedures of the MCO.

Please contact Ms. Gina Mitale, Office of Managed Care, at 518-473-4842 with questions relating to this article.

March is National Kidney Month
Diabetes and Kidney Disease
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Diabetes is the leading cause of chronic kidney failure in the United States. Since a cure for diabetic kidney disease has not yet been found, treatment involves controlling the disorder and slowing its progression to kidney failure. Current research suggests that careful control of blood sugar levels is one of the key factors in slowing the disease. Here are the facts.

  • Diabetic kidney disease is more common among Native Americans, African Americans, and Hispanic Americans.
  • New evidence suggests that the incidence of irreversible kidney failure may be about the same in both in type 1 and type 2 diabetes.
  • Researchers believe the presence of high blood pressure may be the most important predictor of which diabetics develop kidney disease. Therefore, the detection and control of high blood pressure are very important in diabetic patients.
  • The risk of developing kidney disease increases with the length of time a patient is diabetic.

The Medicaid program reimburses for medically necessary care, services, and supplies for the diagnosis and treatment of diabetes and kidney disease. For information regarding Medicaid payment of these services, please contact the Bureau of Program Guidance at (518) 474-9219.

For more information on diabetes, contact the Diabetes Control Program at (518) 474-1222 or the Department's web site at

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Providers were previously notified that the Office of Medicaid Management is implementing a series of license verification edits that will verify the validity of servicing and referring practitioner State Education Department license or MMIS ID numbers reported on claims. In order to allow you additional time to correct your claiming information, activation of these edits at Computer Sciences Corporation (CSC), the Medicaid program's Fiscal Intermediary, will be delayed until this summer.

For some clinics (e.g. clinics certified by OMRDD and OMH), bills can be submitted for services of qualified and appropriate staff who are not necessarily licensed. In response to questions from such facilities regarding unlicensed individuals who provide services to Medicaid recipients, it should be noted that for reporting purposes, the license number of the closest licensed individual in a direct line to the patient's treatment should be identified in the servicing provider field. This can include the license number of the certified individual's direct supervisor, or the licensed individual who signs and/or reviews the treatment plan. These instructions do not apply to Article 28 clinics where the services of unlicensed staff cannot be a basis for a claim.

Please note: This is not a ruling on the appropriateness of services provided to Medicaid recipients, or on billings submitted for payment. All policy questions should be directed to the Bureau of Program Guidance, Office of Medicaid Management, at (518) 474-9219. Also, until further notice, the requirement for reporting servicing providers will not be enforced for Early Intervention, Pre-School Supportive Health Services, and School Supportive Health Services programs.

Questions on license verification editing should be addressed to Mr. Sal Medak, Bureau of Performance Assessment and Reporting, at (518) 474-2239.

Schedule of Medicaid Seminars for New Providers
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Computer Sciences Corporation (CSC), the fiscal agent for the New York State Medicaid Management Information System (MMIS), announces the following schedule of Introductory Seminars. Topics will include:

  • Overview of MMIS
  • Explanation of MMIS Provider Manual
  • Discussion of Medicaid Managed Care
  • Overview of Billing Options
  • Explanation of 90-day Regulation
  • Explanation of Utilization Threshold Program

Please indicate the seminar(s) you wish to attend below:

May 30, 2001 . 10 AM
Dutchess County Dept. of Social Services
Market Street
Poughkeepsie, NY

June 25, 2001 . 10 AM
Computer Sciences Corporation
800 North Pearl Street, 3rd Floor
Albany, NY

June 7, 2001 . 10 AM
Clothier Building - Auditorium
3 North Erie Street
*Mayville, NY

July 10, 2001 . 10 AM
Ulster County Dept. of Social Services
Albany Avenue
Kingston, NY

June 20, 2001 . 10 AM
Suffern Free Library
210 Lafayette Avenue
Suffern, NY

August 9, 2001 . 10 AM
Westchester County Dept. of Social Services
85 Court Street
White Plains, NY

Additional seminars may be scheduled as new programs are implemented or changes to existing billing procedures are announced.

Please complete the following registration information:

Provider Name:___________________________________Provider ID:________________________

Provider Category of Service:________________________Number Attending:___________________

Contact Name:___________________________________Phone Number:______________________

If the seminar address is not listed above, a CSC representative will contact you at least two weeks prior to the seminar date to confirm attendance and provide seminar address information. Please register early to attend sites marked with (*) because seating is limited. Each seminar will last approximately two hours. Direct questions about these seminars to CSC as follows:

Practitioner Services   (800) 522-5518   (518) 447-9860
Institutional Services   (800) 522-1892   (518) 447-9810
Professional Services   (800) 522-5535   (518) 447-9830

To register, please mail this completed page to:

Computer Sciences Corporation
Attn.: Provider Outreach
800 North Pearl Street
Albany, NY 12204

Or, fax a copy of the completed page to: 518-447-9240

Note: Please keep a copy of your seminar choice for your records. No written confirmations will be sent.

The Medicaid Update: Your Window Into The Medicaid Program

The State Department of Health welcomes your comments or suggestions regarding the Medicaid Update.

Please send suggestions to the editor, Timothy Perry-Coon:

NYS Department of Health
Office of Medicaid Management
Bureau of Program Guidance
99 Washington Ave., Suite 720
Albany, NY 12210

The Medicaid Update, along with past issues of the Medicaid Update, can be accessed online at the New York State Department of Health web site: