FROM:              PAUL SWATSENBARG, DEPUTY ADMINISTRATOR, DIVISION OF MEDICAID

On May 5, 2003, the Idaho Medicaid program will begin accepting pharmacy claims from retail pharmacies using NCPDP software Version 5.1 (which replaces the current versions ) or the new Idaho Medicaid billing software, PES (Provider Electronic Solutions).  This action is in response to requirements of the Administrative Simplification provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA, Title II).  Retail pharmacy claims submitted using any other format will be rejected.

A service interruption for electronic pharmacy claims will occur beginning May 2^nd and lasting until 7:00 AM MST Monday May 5, 2003.

• Interactive Pharmacy claims will not be accepted after 5:00 PM MST Saturday, May 3, 2003. 
• NCPDP 3.3 Batch Pharmacy claims will not be accepted after 5:00 PM MST on FRIDAY, May 2, 2003.

This interruption is due to the implementation of the HIPAA compliant NCPDP 5.1 pharmacy claims transaction.  

The eligibility verification transaction for HIPAA, (270/271), will also be implemented during this weekend.  On Saturday May 3, 2003 after 5:00 PM MST check eligibility by calling MAVIS (Medicaid Automated Voice Information Service) at (800) 685-3757, or 383-4310 if calling from the local Boise area. 

On Sunday, May 4, from 8:00 AM to 5:00 PM MST, check eligibility through MAVIS. If you have problems with eligibility and need to speak to a representative, say the word “AGENT.” During this weekend, MAVIS will only return information indicating whether or not an individual is eligible for Medicaid services.  No other information will be provided, including such information as program limitations, Healthy Connections, or Lock In.  Representatives will not be able to provide information on topics other than eligibility.   

An authorization number (or guarantee of eligibility) is provided when eligibility is verified and obtained through MAVIS.  This authorization does not guarantee payment, just client eligibility for the service. Please be aware there is no eligibility authorization number given by phone representatives.

For new prescriptions presented during this weekend, please reference the Medicaid Pharmacy web site at http://www2.state.id.us/dhw/medicaid/providers/pharmacy.htm for a listing of drugs that require prior authorization (PA ), as well as FUL and SMAC pricing lists.  A 72-hour emergency supply may be dispensed if PA coverage cannot be determined for new prescriptions that require prior authorization.

If you are currently using NCPDP software, but not Version 5.1, you should contact your software vendor immediately to obtain an upgrade for this software.  Pharmacies using Version 5.1 will be able to electronically bill compound drug claims, which have been required on paper in the past.  In April 2003 all providers will be receiving the newest Idaho Medicaid Billing software called PES free of charge, which mirrors the NCPDP format for drug claims. 

The following billing changes will affect both NCPDP 5.1 and PES software beginning May 5, 2003.

• All electronic compound claims will be processed and priced automatically by the system.  (Currently all compound drug claims are priced manually.) 
• Medicaid will pay the compounding fee based on route of administration, as well as the current dispensing fee. 
• Each ingredient will be checked for validity.  If you are submitting a claim for a compound you must submit a compound code of “2” indicating this claim is for a compound preparation.  A compound must have more than one ingredient to qualify. 
• If there is an ingredient within the compound that may not be an approved NDC for Idaho Medicaid, you may submit the claim with a submission clarification code of “8” (Process compound for approved ingredients) stating you are aware there may be an ingredient which is not an approved ingredient but that you would like the rest of the claim to be processed as usual.  If an ingredient is denied and later approved you may submit a reversal or an adjustment within the standard timeframe. 
• The over use (refill too soon)/under use (refill too late) DUR edit will only allow valid HIPAA codes as overrides. You will be required to use the intervention code M”0” (zero) along with the correct conflict and outcome codes.  Using M”O” (alpha) is not HIPAA compliant and will no longer be accepted.
• HIPAA introduces a new code set to pharmacy claims called Reject Reason Codes. These codes indicate the action taken by the primary carrier when processing the claim. They will be required when submitting other insurance information with your electronic claim.  A complete list of these codes will be supplied in the Provider Handbook.

Additionally, on May 5^th Medicaid pharmacy providers will be required to bill third party insurance coverage prior to billing Medicaid.  Medicaid is the payer of last resort.  In the past, pharmacies billed Medicaid who then pursued collection from third party payors.  This practice, known as Pay and Chase, was previously approved by the Centers for Medicare and Medicaid as a waiver from standard billing requirements based on its cost effectiveness.  Medicaid has been unable to demonstrate that this practice remains cost effective and must now comply with standard billing requirements. 

Detailed billing instructions will be available in the newest Idaho Medicaid Provider Handbook to be included on the CD with the new PES software.  The CD will be mailed mid-April, 2003.  An updated version of the Pharmacy Provider Billing Handbook can be located on the Idaho Medicaid website, www.idahohealth.org.

If you have questions regarding these processes or the NCPCP 5.1 software procedures, please call the HIPAA help line at 208-332-7322 or email HIPAAComm@idhw.state.id.us.  Thank you for your continued participation in the Idaho Medicaid program.