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MLN Matters Article Discusses New Remittance Advice Code Created to Identify Claims Subject to the Limitation on Home Health Prospective Payment System Outlier Payments

Last month the Centers for Medicare and Medicaid Services (CMS) published an MLN Matters Article regarding changes to remittance advice coding. The article is directed towards Home Health Agencies that submit claims to a Regional Home Health Intermediary (RHHI) or to the Home Health Medicare Administrative Contractor (HH MAC – National Heritage Insurance Corporation (J14 only)) for services provided to Medicare beneficiaries.

The article explains that CMS released Change Request (CR) 6897 to instruct Medicare RHHIs and the J14 HH MAC to use a new Remittance Advice Remark Code (RARC) and a changed Claims Adjustment Reason Code (CARC) for home health agencies (HHAs) that are subject to the Home Health Prospective Payment System (HH PPS) outlier limitation. Up to CR 6897, the code “CARC 45” had been used to alert HHAs that an outlier payment, which would be eligible for payment, was not eligible because the HHA’s outlier limitation had been met. CMS found that CARC 45 did not adequately explain the reasoning for the denial of the payment, and therefore created a new remittance advice remark code (RARC) to be used in situations where the outlier limitation has been met. Then new RARC is N523. In addition to N523, HHAs can expect to see the claim adjustment reason code B5 (CARC B5).

The new RARC and updated CARC are effective for claims with dates of service on or after March 1, 2010. Therefore, if a calculated outlier amount is not paid because the HHA has reached the outlier limitation, HHAs can expect to see the following on their remittance advice: (1) Group Code CO: “Contractual Obligation,” (2) Claim adjustment reason code B5 (CARC B5); (3) RARC N523.

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