Assignment Required for Drugs and Biologicals (Rev. 1, 10-01-03)

by  Jared Staheli
July 8th, 2015

A. Local Carriers

Under §114 of the Benefits Improvement Act of 2000, effective for claims with dates of service on or after February 1, 2001, payment for any drug or biological covered under Part B of Medicare may be made only on an assignment-related basis. Therefore, no charge or bill may be rendered to anyone for these drugs and biologicals for any amount except for any applicable unmet Medicare Part B deductible and coinsurance amounts.

All entities (including physicians, nonphysicians practitioners, pharmacies and suppliers) that bill Medicare for drugs and biologicals must take assignment on all claims for drugs and biologicals furnished to any beneficiary enrolled in Medicare Part B. Contractors apply this policy to all items paid based on the lower of the actual charge on the claim or 95 percent of the AWP.

See §§20 for a description of the AWP. Mandatory assignment does not apply to HCPCS code E0590, which represents the dispensing fee for nebulizer drugs.

Carriers process all claims for drugs and biologicals with a date of service on or after February 1, 2001, as though the physician or nonphysician practitioner had taken assignment. If only drugs and biologicals are billed on the claim, and the claim was submitted as unassigned, contractors change the claim to assigned and process as an assigned claim. If a physician or nonphysician practitioner submits an unassigned claim that contains both codes for drugs or biologicals and codes for other services, carriers split the claim into two claims. The first claim will be an unassigned claim for services other than drugs or biologicals, and the second will be an assigned claim for drugs or biologicals furnished on or after February 1, 2001. The following messages apply when a carrier has changed the claim to assigned status (regardless of whether the contractor had to split the claim):

• Remittance advice remark code N71, “Your unassigned claim for a drug or biological, clinical diagnostic laboratory services or ambulance service was processed as an assigned claim. You are required by law to accept assignment for these types of claims.”

• MSN 16.50 English, “The doctor or supplier may not bill more than the Medicare approved amount,” or MSN 16.50 Spanish, “El doctor o suplidor no podrá facturar más que la cantidad aprobada por Medicare.”

• Remark Code MA 72, “The beneficiary overpaid you for these assigned services. You must issue the beneficiary a refund within 30 days for the difference between his/her payment to you and the total amount shown as patient responsibility and as paid to the beneficiary on this notice.”

Additional appropriate message for physicians, suppliers, and beneficiaries should be added as necessary.

B. DMERCs

Under §114 of BIPA, DMEPOS suppliers must accept assignment on all claims for drugs and biologicals that they bill to the DMERCs. A supplier may not render a charge or bill to anyone for these drugs and biologicals for any amount other than the Medicare Part B deductible and coinsurance amounts.

Mandatory assignment does not apply to HCPCS code E0590, which represents the dispensing fee for nebulizer drugs.

The DMERCs must inform suppliers on their Web sites and in their next bulletins that they must accept assignment on claims for drugs and biologicals furnished on or after February 1, 2001.

The DMERCs must deny any claims a beneficiary submits for drugs and biologicals with dates of service on or after February 1, 2001. The DMERCs must notify beneficiaries that suppliers must accept assignment on claims for drugs and biologicals, and therefore, the beneficiaries may not submit claims for drugs and biologicals. When denying beneficiary-submitted claims, DMERCs use the following Medicare Summary Notice (MSN) messages:

MSN 16.6 (English): “This item or service cannot be paid unless the provider accepts assignment.”

MSN 16.6 (Spanish): “Este artículo o servicio no se pagará a menos de que el proveedor acepte asignación.”

MSN 16.7 (English): “Your provider must complete and submit your claim.”

MSN 16.7 (Spanish): “Su proveedor debe completar y someter su reclamación.”

MSN 16.34 (English): “You should not be billed for this service. You do not have to pay this amount.”

MSN 16.34 (Spanish): “Usted no debería ser facturado por este servicio. Usted no tiene que pagar esta cantidad.”

MSN 16.36 (English): “If you have already paid it, you are entitled to a refund from this provider.”

MSN 16.36 (Spanish): “Si usted ya lo ha pagado, tiene derecho a un reembolso de su proveedor.”

If a supplier submits an unassigned claim with a date of service on or after February 1, 2001, to the DMERC for a drug or biological, the DMERC must process the claim as though the supplier accepted assignment. It is possible that a supplier may bill drugs and other items on the same claim, which would result in a claim with some assigned and some nonassigned items.

In the event that a supplier bills an unassigned claim to a DMERC that contains both codes for drugs or biologicals and codes for other items, the DMERCs must replicate the claim. This will result in two claims in the DMERC system: an unassigned claim for items other than drugs or biologicals, and an assigned claim for drugs and biologicals furnished on or after February 1, 2001. When a DMERC changes an unassigned drug claim to an assigned claim, it must use the following messages on the supplier remittance advice (RA):

Remark code MA72: “The beneficiary overpaid you for these assigned services. You must issue the beneficiary a refund within 30 days for the difference between his/her payment to you and the total of the amount shown as patient responsibility and as paid to the beneficiary on this notice.” (VMS shared system maintainer must use remark code MA72 on the claim level on the remittance advice for drugs and biologicals when the incoming claim indicated that the patient had already paid for the billed services.)

Remark code N71: “Your unassigned claim for a drug or biological was processed as an assigned claim. The law requires that you must take assignment on all claims for drugs and biologicals.”

The VMS Shared System Maintainer must hard-code RA message MA72 and RA message N71 into its system.

Suppliers that bill the DMERCs for drugs for use with DMEPOS must have a pharmacy license to dispense drugs. When a DMERC denies a claim for a drug because the National Supplier Clearing House (NSC) records do not show that the supplier has a pharmacy license, the DMERC must also deny any equipment, accessories, and supplies related to the drug, when the supplier bills the drug on the same claim as the equipment. (Suppliers should bill drugs for use with DMEPOS on the same claim as the equipment itself, if they are also providing and billing for the equipment.) In situations when a supplier bills unassigned drugs and equipment, accessories, or supplies on the same claim, the DMERC and VMS Shared System Maintainer must ensure that they apply nonlicensed pharmacy equipment, accessory and supply edits and denials before they replicate the claim. Even if the system denies a line due to the nonlicensed pharmacy edit prior to replicating the claim, the system must still replicate any unassigned claims for drugs and biologicals and change the assignment indicator. DMERCs use the following messages to suppliers, as appropriate:

RA Remark code MA72: “The beneficiary overpaid you for these assigned services. You must issue the beneficiary a refund within 30 days for the difference between his/her payment to you and the total of the amount shown as patient responsibility and as paid to the beneficiary on this notice.” (VMS shared system maintainer must use remark code MA72 on the claim level on the remittance advice for drugs and biologicals when the incoming claim indicated that the patient had already paid for the billed services.)

RA Remark code N71: “Your unassigned claim for a drug or biological was processed as an assigned claim. The law requires that you must take assignment on all claims for drugs and biologicals.”

RA Adjustment reason code B6: “This service/procedure is denied/reduced when performed/billed by this type of provider, by this type of provider in this type of facility, or by a provider of this specialty.”

RA Adjustment reason code #107: “Claim/service denied because the related or qualifying claim/service was not paid or identified on the claim.”

RA Remark code M143: “We have no record that you are licensed to dispense drugs by the state in which you are located.”

The DMERCs must work together to create and maintain a list of HCPCS drug codes that suppliers must bill on an assigned basis. This will enable VMS shared system maintainer and the DMERCs to implement the necessary edits in their systems. Finally, the four DMERCs must work together to create a list of drug and equipment codes to which the nonlicensed pharmacy edit would apply in this situation. For this second list, the DMERCs need add only drugs that are used with equipment, and the equipment, and related supplies and accessories, that use those drugs, as opposed to all drugs that are subjected to the licensure edit. The DMERCs must share these lists with VMS shared system maintainer and CMS Central Office.

References:

Assignment Required for Drugs and Biologicals (Rev. 1, 10-01-03). (2015, July 8). Find-A-Code Articles. Retrieved from https://www.findacode.com/articles/assignment-required-for-drugs-and-biologicals-rev-1-10-01-03-27109.html

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