DOH Medicaid Update May 2000 Vol.15, No.5

Office of Medicaid Management
DOH Medicaid Update
May 2000 Vol.15, No.5

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

Announcing eMedNY!
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The New York State Department of Health has signed a $351 million, six year contract with Computer Sciences Corporation (CSC) to revitalize and modernize the NYS Medicaid Management Information System. The new system, to be called eMedNY, will combine the existing EMEVS and claims processing system under one roof, and will add a 7 terabyte Data Warehouse application. Many existing paper dependent functions, such as provider manuals (which will become available via the internet) and remittance advices, will be made available electronically. Provider payment via electronic funds transfer will also be offered, along with a host of other features aimed at enhancing processing efficiencies and information retrieval.

CSC will subcontract with Consultec, Inc., to design and develop the new electronic commerce (EMEVS) and claims processing and reporting system, and with Bull HN Information Systems to design and build the Data Warehouse.

Implementation dates for the three major eMedNY components are currently anticipated to be June 30, 2001 for the EMEVS replacement function, October 31, 2001 for the Data Warehouse, and June 30, 2002 for the claims processing and reporting system. Keep watching for further bulletins in future issues of the Medicaid Update.

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The following products have been added to the list of drugs which are not included within the cost components of Article 28 Nursing Facility Rates:

Effective DateDrugDosageNDC#
February 22, 2000ZyprexaTab 15 mg 00002-4415-30
November 24,1999ViraceptTab 250 mg 63010-0010-33

Claims for these products that are submitted more than 90 days from the dispensing date must be submitted with a copy of this article. Computer Sciences Corporation (CSC) must receive these claims no later than 12:00 noon on September 1, 2000. Questions regarding submission of pharmacy claims may be addressed to CSC at 1-800-522-5535.

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Medicaid law and regulation require that when a recipient is eligible for both Medicare and Medicaid benefits, the provider must bill Medicare first for covered services prior to submitting a claim to Medicaid. When Medicare is the primary payment source, Medicaid will pay the deductible and coinsurance amounts required by Medicare. It is NOT necessary to obtain prior approval from the New York State Medicaid program when Medicare is the primary payment source for durable medical equipment, prosthetics, orthotics or medical/surgical supplies.

When Medicare is the individual's primary payment source, New York State Medicaid will entertain prior approval requests for durable medical equipment, prosthetics, and orthotics or medical/surgical supplies ONLY in the situations described below. Please note that a provider must comply with all of the requirements identified under each situation to obtain a Medicaid prior approval determination. When required, the provider must furnish conclusive documentation when submitting a Medicaid prior approval request that the Medicare Durable Medical Equipment Regional Carrier (DMERC) has denied the provider's claim, and that an appeal for reconsideration has been submitted to and denied by the DMERC:


When the DMERC issues a denial because the Medicare beneficiary has received a product within the last five years which has the same or similar therapeutic benefit for the same medical condition, the provider must include documentation of the DMERC denial with any Medicaid prior approval request. The prior approval request must include any information available to the provider about the item or items that caused the current Medicare claim to be rejected. Based upon this information Medicaid will make an independent determination of medical necessity with respect to the requested item.


When the DMERC issues a denial because a requested item is not being used "in the home", the provider must submit documentation of the DMERC claim rejection with any Medicaid prior approval request. The prior approval request must also contain any information available to the provider about products supplied under Medicare reimbursement for the beneficiary's use in the home.


When the DMERC issues a denial because the physician's certificate of medical necessity for a Medicare covered item requests quantities that exceed Medicare payment screens, the provider must submit documentation of the denial with any Medicaid prior approval. The provider must also appeal that denial to the DMERC and maintain a copy of the DMERC's determination on the appeal in the provider's records.

Note: It is NOT necessary to submit claims to Medicare before requesting Medicaid prior approval in situations where Medicare categorically does not cover an item.

When APPROVALABLE requests for major items of medical equipment such as power or motorized wheelchairs are received, Medicaid will issue a prior approval in the amount of $1.00 pending resolution of the appeal of the adverse Medicare coverability determination to the DMERC. Once a DMERC denial is received, Medicaid payment will be made according to the applicable Medicaid pricing policy. If the DMERC approves the major item of medical equipment on appeal, a bill may be submitted directly to the Medicaid Management Information System (MMIS) indicating the Medicare Approved and Medicare Paid amounts. When the DMERC approves such a request on appeal, DO NOT enter the Medicaid prior approval number issued to you on your Medicaid claim. If New York State Medicaid issues a prior approval, and a subsequent decision by Medicare results in a Medicare payment to the provider, the provider is required to adjust any Medicaid paid claims to reflect the Medicare Approved and Medicare Paid amounts received in conformity with Department of Health Regulation 18 NYCRR 540.6.

If you have any questions concerning the above information, you may contact the Office of Medicaid Management, Bureau of Medical Review and Payment at (518) 474-8161.

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On or about June 1, 2000 a front end EMEVS prescriber license verification edit will be activated. The edit will reject all EMEVS transactions with misreported license or MMIS numbers, as well as numbers associated with sanctioned Medicaid providers. If your transaction is rejected, please verify the accuracy of the prescriber number by contacting the prescriber. As an alternative, contact the State Education Department (SED) on line at to obtain or verify license numbers. Finally, check the monthly list of sanctioned providers to assure that the prescriber is eligible to participate in the Medicaid program. Listed individuals are ineligible to order or prescribe Medicaid services. For the foreseeable future, the Department of Health will continue to send out hardcopies of the monthly sanctioned provider list and the semi-annual deceased provider list.

A number of providers have contacted the Department regarding the use of MMIS numbers to identify prescribers. If you are entering an MMIS number rather than an SED license number, make sure to enter only the 8-digit MMIS number left justified. Do not enter spaces before the number. Do not enter a license type with an MMIS number. If you do, the transaction will be rejected. If the MMIS number is a facility, use it as a last resort and only after making a concerted effort to identify the actual prescriber.

Finally, look for one of the following new EMEVS denial messages and codes that will be returned as a result of the license verification editing:

(TRANZ 330)
(PC, CPU, etc.)
Disqualified Ordering ProviderDisqualified Orderer (two lines)66
Deceased Ordering ProviderDeceased Orderer67
Invalid Ordering ProviderInvalid Ordering Provider (two lines)68

Pharmacies should note that the above denial codes will be preceded by the NCPDP reject code 25 (M/I Prescriber ID).
For more information about this edit, please refer to the March 2000 Medicaid Update.

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The January 2000 Medicaid Update included an article for hospital providers regarding billing for commercial insurance deductible and/or coinsurance amounts due from Medicaid. This change was necessitated by the 1997 Health Care Reform Act legislation and impacts Medicaid/other insurance claims with discharge dates on or after January 1, 1997. Hospitals were advised to void any previously paid claims which resulted in an overpayment, and to hold any current claims that would result in an overpayment.

Changes have been made to the Medicaid Management Information System inpatient claiming process which will allow the appropriate Medicaid payment when a commercial insurer is the primary payor and Medicaid is responsible for part or all of the deductible and/or coinsurance amount.

The system has been modified to recognize and react to the A1 through G1 Value Codes used in Record Type 41, Fields 41-16 through 41-39 (Version 4 and 5 electronic billing) in the manner they were originally intended. The interpretation of these codes will no longer be limited to just the Medicare Part A responsibility.

Payment for deductibles (including Medicare Part A) would be claimed using the following code(s):

Value CodePayor Sequence Number
A1Deductible - Payor A (sequence number 01 from 30 record)
B1Deductible - Payor B (sequence number 01 from 30 record)
C1Deductible - Payor C (sequence number 01 from 30 record)
*E1Deductible - Payor E (sequence number 01 from 30 record)
F1Deductible - Payor F (sequence number 01 from 30 record)
G1Deductible - Payor G (sequence number 01 from 30 record)

The 'Value Amount' entered is the deductible amount being claimed.
Payment for co-insurance amounts (excluding Medicare**) would be claimed using the following code(s):

Value CodePayor Sequence Number
A2Coinsurance - Payor A (sequence number 01 from 30 record)
B2Coinsurance - Payor B (sequence number 01 from 30 record)
C2Coinsurance - Payor C (sequence number 01 from 30 record)
*E2Coinsurance - Payor E (sequence number 01 from 30 record)
F2Coinsurance - Payor F (sequence number 01 from 30 record)
G2Coinsurance - Payor G (sequence number 01 from 30 record)

The 'Value Amount' entered is the coinsurance amount being claimed.
* Value Codes D1 and D2 are not available for use.
** Billing for Medicare coinsurance amounts has not changed. Providers should continue to use Value Codes 08-11 for LTR and coinsurance claims.

PLEASE NOTE: Medicaid reimbursement on commercial insurance deductible and coinsurance amounts is limited to the lesser of: the deductible/coinsurance amount OR the difference between the Medicaid payment less the commercial payment(s). If the commercial insurer payment(s) exceeded the amount Medicaid would have paid if Medicaid were primary, no payment is due from Medicaid nor can payment be sought from the patient (see July 1999 Medicaid Update).

It should also be noted that Value Amount fields should not be zero filled since this could result in zero payment.

Only one deductible/coinsurance amount per claim can be billed regardless of the number of payers involved in the claim. Each payer must still have a 30 record indicating the amount paid by that carrier; however, the deductible/coinsurance amount (in the 41 record) must only be entered for one of the payers. (Example: if Medicare applies the deductible and payor B pays that deductible but applies its own deductible, then only the deductible from payor B can be billed to Medicaid.)

In accordance with the above billing requirement, two new edits have been developed related to processing of commercial insurance deductible/ coinsurance claims. Claims will deny Edit 01320 when multiple deductibles or multiple coinsurances are claimed; claims will deny Edit 01321 when the Value Amount is not numeric.

Billing using the new value code structure should begin June 5, 2000. Claims which would have been overpaid and, therefore, were held or voided must be submitted to Medicaid no later than December 26, 2000. Claims billed by this date will not be affected by 90-day and two-year editing.

About mid-June, Computer Sciences Corporation (CSC) will start mailing the Version 4 and Version 5 updates of Record Type 41 to all providers that bill inpatient claims.

Billing questions should be directed to the Provider Relations Unit of CSC at 1-800-522-1892 or 518-447-9810.

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Medicaid payment regulations 18 NYCRR 505.7(g)(7) state that no payment will be made on a fee-for-service basis for laboratory services when the cost of providing such services has been included in the MA rate of payment for the provider of the patient care. Such providers include Article 28 hospitals (including hospital out-patient clinics) and free standing diagnostic and treatment centers.

During the course of our Medicaid audit and review activities, we have found a number of laboratories billing on a fee-for-service basis for tests already included in a facility's rate structure. This situation is considered to be a duplicate payment and, as such, will be recouped by Medicaid. When a lab enters into an agreement or arrangement with a facility, the agreement must include the use of a system of internal controls to allow determination of whether services are billable to Medicaid or billable back to the Article 28 facility.

There are also situations where one laboratory must refer specialized testing for inpatient, clinic, or ambulatory surgery patients to another lab. In these cases, the lab making the referral must identify hospital-based patients so that the testing lab knows which services are not to be billed to Medicaid.

Finally, recent audits of laboratories have found that the ordering identification numbers on claims do not match those on the fiscal order forms. There have been situations where only one ordering provider identification number is indicated for all claims submitted by a laboratory. This practice is incorrect and you should be aware that claims submitted in this manner may be disallowed on audit. Please refer to the billing information section of the Laboratory Provider Manual for proper billing procedures (pp. 3-23 to 3-25).

For additional information regarding this article contact Paul Niedbalec or Colleen Washock, Division of Provider Relations, at 518-402-0075.

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For many years, health risks associated with smoking and smokeless tobacco use have been identified and include chronic lung disease, coronary heart disease, stroke, and various cancers. More recently, increased health risks associated with smoking in the diabetic population have been identified. Smoking may contribute to the cardiovascular burden and the microvascular complications associated with diabetes. All persons with diabetes should be urged to not start smoking or to quit smoking. The following information is provided to help you assist your diabetic patients. Additional information regarding smoking and diabetes can be found at the American Diabetes Association website:

Recommendations Adapted from the American Diabetes Association Regarding Diabetes and Smoking

Assessment of smoking status and history

Systematic documentation of a history of tobacco use should be obtained from all adolescent and adult individuals with diabetes.

Smoking prevention and cessation

  • The Agency for Healthcare Research and Quality has guidelines regarding smoking cessation which are available at  All health care providers should be aware of and familiar with these guidelines.
  • All health care providers should advise individuals with diabetes not to start smoking. This advice should be consistently repeated to prevent smoking and other tobacco use among children and adolescents with diabetes under age 21.
  • Smokers should be advised, as a routine component of diabetes care, to quit smoking. Every smoker should be urged to quit in a clear, strong, and personalized manner that describes the added risks of smoking and diabetes.
  • Every diabetic smoker should be asked if he or she is willing to quit at this time.

Smoking Cessation Follow-up

  • Follow-up procedures designed to assess and promote quitting status should be arranged for all diabetic smokers.

Reminder: As a commitment to provide assistance to Medicaid recipients who want to stop smoking, Medicaid now covers prescription and non-prescription smoking cessation agents. We appreciate your participation in helping to make New Yorkers healthier. If you would like more information about the Medicaid program's Smoking Cessation Initiative, please contact the Bureau of Program Guidance at 518-474-9219.

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Effective July 1, 2000, nurse registries (categories of service 0523, Hospital Registry LPN, and 0524, Hospital Registry RN) will be required to complete on their claim forms the "Service Provider" field with, and only with, a valid "NURSE LICENSE NUMBER". A MMIS provider identification number will no longer be accepted in this field. Also, contrary to the current Private Duty Nursing Provider Manual instructions pertaining to leaving the field blank, the "LICENSE TYPE" field must now be completed with the nursing license type code of "42". Whether billing via paper or electronically, the "Service Provider" field should be right justified with zeroes filling those otherwise blank spaces at the left of the field (Ex 0 0 3 2 1 5 4 6). Failure to follow these license completion requirements will result in your claims failing edit 01327, In-State Servicing Provider License Number Not Numeric. If you need additional information concerning this matter, contact Computer Sciences Corporation (CSC), Institutional Services Unit at 1-800-522-1892 or (518) 447-9810.

Rejected Modem Claims
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Have you ever submitted claims via modem and discovered several weeks later that the claims never appeared on a Medicaid Management Information System (MMIS) remittance statement?

Claims submitted via telecommunication (modem) may be rejected for a variety of reasons (edits) in the "front-end" such as "Certification Statement not on file" or "Provider not found on TSN masterfile." Lists of Telecommunications and Transmission Reject Edit Codes are in the Electronic Media Claims (EMC) Data Specifications. Individual invoices or entire claim file submissions may be rejected.

Please note: Rejected claims are not edited any further and do not appear on MMIS remittance statements. Rejected claims are not the same as pended or denied claims.

In order to quickly correct and resubmit rejected claims, providers billing via modem should routinely retrieve Telecommunications Reports (Response files or Error reports) through the MMIS Electronic Gateway main menu option 2. These reports are available two hours after claim file transmission is completed and remain available up to five days. Test files remain available up to three days.

After being presented with the Electronic Gateway main menu, you may choose option 3 (Informational documents) which will allow you to download the user manual to assist you in performing the response file transaction in addition to giving you a wide range of information about the MMIS Electronic Gateway.

In instances where claims are not rejected on the Telecommunications Reports and also do not subsequently appear on the MMIS remittance statement, the provider should review the category of service and/or the specialty code for the provider identification number billed.

Providers making inquiries or requesting billing training by Regional Representatives should contact Computer Sciences Corporation (CSC) by calling the appropriate number below. Please be prepared to supply your Medicaid Provider ID number.

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

During the month of March 2000, co-payments were inadvertently deducted by the Medicaid Management Information System from provider payments for some recipients of Office of Mental Retardation and Developmental Disabilities/Comprehensive Medicaid Case Management. An EMEVS message would not have advised providers that the recipient was co-payment exempt. This system's problem has been corrected, and providers who have had co-payments deducted in error will receive a retroactive adjustment in their checks dated June 12, 2000, which will be released on June 28, 2000. Providers who may have collected co-payments from these recipients must refund those payments to the recipients.

Questions concerning this article should be directed to the Bureau of Policy Development and Agency Relations at 518 473-5873.

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This is to inform you that effective March 13, 2000, nurse midwives were recognized as an acceptable source of Threshold Override Applications (TOAs) under the Utilization Threshold (UT) program. The UT program places limits on the number of services a Medicaid recipient may receive in a benefit year. A benefit year is a 12 month period which begins the month in which the individual becomes Medicaid eligible. TOAs may be submitted to increase the number of services a recipient may receive, or to obtain an exemption from the UT service authorization program depending on the patient's medical needs. The service category limits are as follows:

Physician/clinic10 visits
Pharmacy43 or 40 items (depending on patient's age/aid category)
Laboratory18 procedures
Mental health clinic40 visits
Dental clinic3 visits

Providers should call Computer Sciences Corporation (CSC) at (800) 421-3893 to request TOAs, to inquire about the status of submitted TOAs, and to obtain general information regarding the UT program and the Medicaid Override Application System.

Policy inquires should be directed to Stephen Jackson, Office of Medicaid Management, at (518) 474-1353.

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
(e-mail )

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: