Novitas Releases New LCD - Affects Medicare Part B Payments for PA, MD, DE, NJ and DC Ambulance Services

Novitas, the Medicare Administrative Contractor (“MAC”) for Jurisdiction 12 (covering Pennsylvania, Maryland, New Jersey, Delaware and Washington DC), released a new “Local Coverage Determination” (“LCD”). This “LCD” went into effect on April 12, 2012. It is available HERE. The LCD establishes new payment procedures that now require ambulance services to use Novitas-approved ICD-9 codes in order for the claim to be paid.
Included in this LCD is a list of about 100 “approved” ICD-9 codes. At least one of these codes must appear on the claim for the claim to be considered “medically necessary.” We understand that claims billed solely with an ICD-9 Code that is not on the list will be denied with a PR-50 Code. Additional Remark Codes that may be listed on the Remittance Advice include N105 and N119. Collectively, these codes indicate that the transport was determined to be not medically necessary, based upon the LCD, and the claim was treated as a “complex review” after a review of the medical records. In short, the failure of the ambulance service to use an ICD-9 Code listed in the LCD will cause an automatic “medical necessity” denial. The MA-01 Code is also listed on the Remittance Advice, which should permit the provider to appeal.  
If you receive one of these denials, and believe that financial responsibility was inappropriately shifted to the beneficiary because the claim was not submitted using one of the “approved” ICD-9 codes, you should appeal the claim and seek a redetermination based on the appropriate ICD-9 code for that specific transport. Resubmitting the claim is not appropriate, as it will likely result in a denial for a duplicate claim submission. We understand that these claims are not being “rejected,” but are actually being adjudicated (almost immediately) and denied due to the failure to use one of the approved codes contained in the Novitas LCD.
Note that the PWW “Condition Code” list (as contained in the PWW Desktop Reference Guide) comes from the Medicare Manual (the National Coverage Determination). This new ICD-9 code List is a Novitas-specific list, and many of the Novitas-approved ICD-9 Codes are in fact different from the Medicare “Condition Codes.” For now, if Novitas is your MAC, you’ll need to use the specific “ICD-9” codes listed in the Novitas LCD, not the “Condition Codes” listed in the Medicare Manual and the PWW Guide.
Although this LCD was initially released (in draft format) in the fall of 2011, limited comments were received, and the final version was introduced in substantially the same form as the draft. However, there is a “reconsideration” process, and providers and suppliers are encouraged to offer comments to Novitas in order to recommend any changes to this LCD.   We are urging Novitas to eliminate their local list of ICD-9 codes and rely solely on the published Medicare Ambulance Condition Codes which have worked well over the years and were established to provide a consistent standard for processing ambulance claims.
Remember, this LCD only affects ambulance providers and suppliers in MAC Jurisdiction 12. However, note that later in 2012, Novitas Solutions will be replacing TrailBlazer as the Medicare Administrative Contractor for Jurisdiction H (Arkansas, Colorado, Louisiana, Mississippi, New Mexico, Oklahoma and Texas). Additionally, other MACs covering other Jurisdictions are always able to adopt Local Coverage Determinations that may affect your billing practices.