Michigan Medicaid Pharmacy Claims Processing

From: First Health Services and Michigan Department of Community Health

Date: November 15th, 2005

Attention: Pharmacy Providers and Software Vendors

Subject: Important Bulletin: Changes to COB Processing

The Michigan Department of Community Health is making changes to the current Coordination of Benefits (COB) Processing Requirements. Phase 1 will be implemented prior to 01/01/2006 in order to prepare for the Medicare Part D implementation, Phase 2 will be coming first quarter 2006.

Phase 1 (Implementation 12/19/2005):

1. Changes to the Other Payer ID (NCPDP Field # 340-7C).

 Currently the Department uses a 5 digit Other Payer ID to identify the beneficiary’s Other Payer. They will be moving to an 8 digit Other Payer ID. You will be required to submit the full 8 digit Other Payer ID in NCPDP field 340-7C when submitting COB claims.  A full list of the new 8 digit Other Payer ID’s will be posted to the http://michigan.fhsc.com website.

2. Beneficiaries may have more than one Other Payer.

 In order to ensure Michigan Medicaid is the payer of last resort, all known other payers must be billed and reported in the COB segment of the claim.

 Currently, the POS edits validate a maximum of one other payer per beneficiary. With this implementation, the Department will require validation of all other payers.  To submit COB claims when a beneficiary has multiple other insurance carriers, you will be required to exhaust all other payers before billing Michigan Medicaid. When multiple carriers have been billed, you will be required to utilize the repeating fields in the COB segment (refer to COB segment of payer sheet below). Please contact your software vendor to insure that your software is configured to allow this functionality.

COB SEGMENT Segment REQUIRED for these transactions: B1 and B3 if there is OTHER PAYER information. Field Field Name Mandatory MICHIGAN MEDICAID Situational VALUES 111-AM SEGMENT IDENTIFICATION M Ø5 = Coordination of Benefits/ Other Payments Segment 337-4C COORDINATION OF BENEFITS/OTHER M PAYMENTS COUNT Max = 3

338-5C OTHER PAYER COVERAGE TYPE M***R*** Max = 3 339-6C OTHER PAYER ID QUALIFIER S***R*** 99 - Other Max = 3 34Ø-7C OTHER PAYER ID S***R*** This will be changing to the 8 digit code and is Max = 3 Required for COB claims. 443-E8 OTHER PAYER DATE R***R*** Required for this program. Max = 3 341-HB OTHER PAYER AMOUNT PAID COUNT RW Required when submitting Other Payer Amount Paid. 342-HC OTHER PAYER AMOUNT PAID QUALIFIER RW***R*** Required when submitting for this program. Max = 3 431-DV OTHER PAYER AMOUNT PAID RW***R*** Required for this program. Max = 3 471-5E OTHER PAYER REJECT COUNT O 472-6E OTHER PAYER REJECT CODE O

Phase 2 (Implementation being scheduled for 1st Quarter 2006)

As a result of internal auditing of pharmacy claims, the MDCH is planning major changes in the requirements for submission of COB claims and acceptable other coverage codes (NCPDP Field 308-C8).

Planned changes include,  restricted use of other coverage codes 0, 2, 5, 6 and 7,  use of other coverage code 8 for billing copayment, and  requirement to submit other payer reject codes (NCPDP Field 372-6E).

Providers need to contact their software vendors to prepare for the upcoming changes. As it becomes available, more information will be mailed out and posted to the First Health/Michigan Department of Community Health website, http://michigan.fhsc.com.