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Third Quarter 2013 

Countdown to ICD-10: Less Than a Year to Go

The October 1, 2014, deadline to transition to ICD-10 is now less than a year away. Professional providers, facilities, payers and health information technology vendors all must comply with the federal mandate. According to the Centers for Medicare & Medicaid Services (CMS), providers of all sizes should have already begun transition activities by January 2013.

BCBSMT has published articles in the Capsule News this year pointing to resources to help with preparation and implementation of ICD-10 transition plans. Read past articles about ICD-10 training resources, technology planning and more on our website at Provider Education.

If you’re just getting started with planning for ICD-10, visit the ICD-10 section of our website, located in the Provider Education section, and view the Provider Office Changes Map. The map will help you become familiar with the changes that will impact different areas of your practice due to the transition to ICD-10.

Visit the CMS website at for planning guides that can get your practice on track, no matter what size. Their ICD-10 Provider Resources page has implementation guides for small/medium provider practices, large provider practices and small hospitals.

Make sure you get your training and education program started in time to have your coders and other staff ready to use ICD-10 next year. The American Association of Professional Coders (AAPC) has recommended a five-phase approach to training, beginning with a review of anatomy and physiology. The AAPC website at has more information about how to get started with ICD-10 education programs.

If your transition plan is underway, and you’re either already in the testing phase or interested in starting testing with BCBSMT next year, complete our readiness survey online. The survey is one of the requirements for testing with BCBSMT, and it can help you determine whether your practice is prepared for the ICD-10 transition. Take the survey on the ICD-10 section of our website.

HMK (CHIP) and HMK Plus (Medicaid) And Payment Error Rate Measurement (PERM)

The Improper Payments Information Act (IPIA) of 2002 (amended in 2010 by the Improper Payments Elimination and Recovery Act or IPERA) requires the heads of Federal agencies to annually review programs they administer and identify those that may be susceptible to significant improper payments, to estimate the amount of improper payments, to submit those estimates to Congress, and to submit a report on actions the agency is taking to reduce the improper payments. The Office of Management and Budget (OMB) has identified Medicaid and the Children's Health Insurance Program (CHIP) as programs at risk for significant improper payments. As a result, the Centers for Medicaid and Medicare Services (CMS) developed the Payment Error Rate Measurement (PERM) program to comply with the IPIA and related guidance issued by OMB.

The PERM program measures improper payments in Medicaid and CHIP and produces error rates for each program. The error rates are based on reviews of the fee-for-service (FFS), managed care, and eligibility components of Medicaid and CHIP in the fiscal year (FY) under review. It is important to note the error rate is not a “fraud rate” but simply a measurement of payments made that did not meet statutory, regulatory or administrative requirements.

Through the PERM program, CMS samples state Fee-For-Service (FFS) CHIP and Medicaid payments, collects documentation from providers, conducts a data processing review on sampled FFS payments, and performs a medical record review on sampled FFS claims.

CMS recovers the federal share of CHIP and Medicaid payments from states on a claim-by-claim basis from the FFS overpayments found in error. CMS also works closely with states to review their error rates, determine root causes of errors and develop corrective actions to address the major causes of errors.

DPHHS recently completed CMS’s PERM review for FFY 2011.  Following are types of errors found by CMS contractor reviews of claims submitted by HMK (CHIP) and HMK Plus (Medicaid) participating providers:

  • Provider records did not support the number of units billed
  • Provider records did not contain provider’s signature
  • Provider documentation did not support the claim

In addition to the types of errors listed above, HMK Plus (Medicaid) participating provider claims had the following error:

  • Provider did not validate patient’s eligibility for the reviewed program

HMK and HMK Plus programs appreciate the work participating providers do to provide quality health care services for Montana children. 

Please keep in mind requirements of recordkeeping and submitting claims in order to avoid potential review findings.

Thank you for providing outstanding medical care for children participating in the HMK (CHIP) and HMK Plus (Medicaid) programs.

Healthy Montana Kids (HMK) Pharmacy Benefit

Effective October 1, 2013, the pharmacy benefit for Healthy Montana Kids Members has changed from administration of the plan by Blue Cross and Blue Shield of Montana to administration by Xerox State Healthcare.  The expected changes can be seen in the proposed Evidence of Coverage on the Healthy Montana Kids   website.

Changes include:

  • A network pharmacy provider will be a provider enrolled as a Montana Health Care Programs Provider
  • HMK members will have no copayments for pharmacy benefits. 
  • Prescribed oral fluoride preparations are now a covered pharmacy benefit.
  • Out-of-state pharmacy benefits will be paid only if the provider is enrolled as a Montana Health Care Programs Provider.

The lists of covered and noncovered pharmacy benefits are updated in the proposed Evidence of Coverage to reflect the change in pharmacy benefits.  Prescription drug coverage mirrors coverage of Healthy Montana Kids Plus and is limited to products whose pharmaceutical manufacturer has signed a rebate agreement with the Federal government.  In addition, covered prescribed medications are subject to the preferred drug list and prior authorization requirements.  Prior Authorization for pharmacy claims will be obtained through the Department’s Drug Prior Authorization Unit.  The prior authorization process for prescriptions may be initiated by the prescriber or dispensing pharmacy.

Dispensing quantities will be limited to a 34-day supply. The Proposed Evidence of Coverage lists the exceptions to the 34-day supply rule.  Prescriptions for noncontrolled substances may be refilled after 75% of the estimated therapy days have elapsed. Prescriptions for controlled substances and a few other medications may be refilled only after 90% of the estimated therapy days have elapsed.  Early refills will be authorized only if a prescriber changes the dose.  Early refills will not be granted for lost or stolen medication, or for vacation or travel.  Contact Katie Hawkins, Pharmacy Program Officer, at 406 444 2738 or for more information.

Revised CMS-1500 Paper Claim Form (Version 02/12) Coming Soon!

The National Uniform Claim Committee (NUCC) maintains the CMS-1500 paper claim form
and makes updates according to health care industry requirements. NUCC recently announced that the health care industry will transition to a revised version of the CMS-1500 paper claim form in early 2014.

On June 10, 2013, the White House Office of Management and Budget (OMB) approved the
revised CMS-1500 paper claim form, known as OMB-0938-1197 FORM 1500 (02-12). You’ll see this new code at the bottom of the revised version.

Notable changes include:

  • Indicators added for differentiating between ICD-9-CM and ICD-10-CM diagnosis codes
  • The number of possible diagnosis codes expanded to 12
  • Qualifiers added to identify provider roles (ordering, referring, supervising)

For consistency with electronic transactions, the revised paper form also aligns with the requirements of the Accredited Standard Committee X12 (ASC X12) Health Care Claim: Professional (837P) Version 5010 Technical Reports Type 3 (TR3s).* Several fields on the previous paper form were removed for CMS-1500 (version 02/12) since they are not reported in the 837 transaction.

The tentative implementation timeline is as follows:

  • Jan. 6, 2014 − Medicare begins receiving and processing paper claims submitted on the revised CMS-1500 claim form (version 02/12).
  • Jan. 6, 2014 through March 31, 2014 − Dual-use period during which Medicare continues to receive and process paper claims submitted on the old CMS-1500 claim form (version 08/05), as well as on the new revised CMS-1500 claim form (version 02/12).
  • April 1, 2014 − Medicare receives and processes paper claims submitted only on the revised CMS-1500 claim form (version 02/12).

The above timeline is pending finalization and is subject to change. BCBSMT will comply with the mandated timeline for implementation of the revised CMS-1500 paper claim form.

Please note: BCBSMT encourages all providers to use electronic claim submission. This can help streamline your administrative processes, help protect your patients’ information, and may result in faster claim processing and payment. To learn more view the Claims section of the Provider Education page.

For additional information on the CMS-1500 claim form, visit the NUCC website at Please share this information with your practice management software vendor and/or your billing service or clearinghouse, if applicable.

*The Washington Publishing Company (WPC) is an independent publisher of implementation guides recognized by the Centers for Medicare & Medicaid Services (CMS) as the industry standard. To purchase TR3s,visit the WPC website at .

For questions or concerns about this communication, please contact your Health Care Services Provider Account Consultants at 1.800.447.7828.




Western Jenifer Sampson 406.437.6121
Central Julie Sakaguchi 406.437.6122
Eastern Christy McCauley 406.437.6068

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