JD-J.01.G VA_DME_MRA_SOW_12232014_redline.docx

HHSM-500-2015-RFP-0101 MRA VA DMEPOS SOW

Attachment J.01.G 12/23/201410/08/2014

Medicare Remittance Advice (MRA) for Veterans Administration (VA) Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Claims

Statement of Work (SOW) (Reference SOW C.7.1)

PURPOSE:

The purpose of this Statement of Work (SOW) is to procure the services of a Durable Medical Equipment (DME) Medicare Administrative Contractor (MAC) to process Veterans Administration (VA) Durable Medical Equipment Prosthetic and Orthotics Supply (DMEPOS) no-pay claims for electronic Medicare remittance advice (MRA) which allows the VA to send a Medicare equivalent remittance advice to third party insurers to help determine payment amounts owed to the VA.

BACKGROUND:

Use of a Medicare Remittance Advice (MRA) was mandated by a VA legal settlement with USAA/Hartford in January 2003. The settlement required the VA to submit all secondary professional and institutional claims to third party payers with a MRA that indicates the amount due from the secondary payer. This MRA process is intended to fulfill the settlement requirements by providing Medicare-equivalent adjudication information to secondary payers so they can accurately determine the appropriate amount of reimbursement due to the VA for DMEPOS claims.

Previously, the VA established a process with a Part A/B MAC to provide the VA with a remittance advice reflecting the deductible and coinsurance amounts due from secondary payers for other claim types. Medicare secondary payers use the MRA data generated by the MAC to reimburse the VA for health care services provided to veterans for their non-service-connected treatment. The VA estimates that the potential claims volumes for this project when implemented for DMEPOS will be approximately 1,000,000 per year.

Since DMEPOS services are not presently included in the MRA process, secondary claims are submitted to third party payers without the benefit of the MRA. These payers often reject these secondary claims because they lack the MRA attachment or require a paper claim submission with a cover letter to explain why no MRA is included. If the claims are not rejected, they are frequently reimbursed at a level that is not consistent with the appropriate deductible and coinsurance amounts. As a result, VA staff must contact these payers, on a claim-by-claim basis, in order to request that the secondary claims be accurately adjudicated.

Implementation of this process will allow the VA to send a Medicare equivalent remittance advice to third party insurers to determine deductible and coinsurance amounts owed to the VA, and reduce improper payments by creation of the MRA process for VA DMEPOS claims.

REQUIREMENTS:

1. The purpose of the VA MRA DMEPOS project is to have CMS process VA-submitted claims for DMEPOS in order to secure a no-pay MRA from CMS.

2. The VA will submit VA MRA DMEPOS claims only on behalf of itself.

3. The VA will submit DMEPOS MRA claims electronically using the X12 ASC 837P electronic format and will employ HIPAA-standard coding in such claim format. The VA will identify itself on the claim via an alpha-numeric indicator to be supplied by CMS. There is one exception that will be for claims requiring a CMN. For claims that require CMNs, the first claims will be submitted in paper format and will include a paper CMN. Each subsequent claim associated with that CMN will be submitted in electronic format for the required number of months. The MAC will not require any clinical lab tests ordinarily associated with the CMN.

4. All VA-submitted claims for DMEPOS will identify a common beneficiary. That is, the patient will be both eligible for VA benefits and a Medicare beneficiary entitled to and enrolled in Medicare Part B. Each beneficiary will be identified on VA-submitted claims by his or her Health Insurance Claim Number (HICN) used for Medicare.

5. VA MRA DMEPOS claims will be annotated with the demonstration code “31” in a field to be specified by CMS.

6. The VA will identify on the claim outside suppliers providing the item of DMEPOS. Identification will include the entity’s name, address, and National Provider Identifier (NPI).

7. All VA submitted claims for DMEPOS will reflect an item of Medicare-covered DMEPOS that has been furnished to the common beneficiary by the VA (directly or indirectly), for which the VA is the primary insurer.

8. Medicare payment for all such VA-furnished DMEPOS is excluded; accordingly, CMS will make no payment on VA-submitted claims for DMEPOS.

9. The MRA will reflect the Medicare allowed amount for each item and the coinsurance and deductible amounts that the beneficiary would have been responsible for, had the beneficiary obtained the item of DMEPOS from a Medicare-enrolled supplier in good standing and had such supplier billed Medicare for the item. The VA will use the MRAs as a basis to secure reimbursement of such deductible and coinsurance amounts from third party insurers.

10. The VA’s claims and its claim submission processes will conform to standard Medicare fee-for-service practices, except as may be needed for CMS to implement the project successfully.

11. The MAC will perform systems beta and User Acceptance Testing on the VA MRA process for DMEPOS claims prior to its implementation, in accordance with the CMS IOM, Pub.100-4, Chapter 7, Section 40.3. In addition, the MAC will be the sole tester, responsible for all Medicare testing requirements related to the VA MRA project.

12. The approximate kick off for this project will be in March 2016. Development for this project is scheduled to begin in April 2016. The shared system maintainers will implement software over three releases. Implementation/startup activities will focus on the system setup by the Shared System Maintainers and the Virtual Data Center, and will also require the DME MAC to set up their own program management guidelines and tools to ensure the timely development, set up, and testing of the new regions according to their own internal systems and processes. Processing of VA claims will begin in January 2017. See Table 1 below.

Table 1 – Projected release schedule (CLIN0010)

(CLIN0010 end)

*Timeframes in Table 1 are estimates - Project Plan subject to operational start date.

VA OPERATIONS AND STANDARDS:

1. The VA furnishes DMEPOS to veterans both directly through facilities the VA operates and indirectly from outside (i.e., non-VA) suppliers that furnish items under contract to VA’s facilities.

2. All VA MRA DMEPOS claims will be submitted to CMS by a central VA clearinghouse (Emdeon).

3. The VA will not separately identify its facilities on its MRA DMEPOS claims. Therefore, a single VA identifier, to be supplied to the VA by CMS, will be sufficient for both CMS and the VA to identify such claims. (CMS understands that for Part B claims other than for DMEPOS, the VA enumerates each facility and department within each facility. That enumeration scheme can be accommodated for DMEPOS claims if necessary.)

4. The VA intends to submit claims only for items covered, and separately payable, under Medicare Part B.

5. The VA is familiar with and, except as the parties may mutually agree, intends to comply with, both Health Insurance Portability and Accounting Act (HIPAA) standards re billing and Medicare DMEPOS claims filing standards.

6. The VA will maintain its own claims history of MRA DMEPOS claims adjudicated by CMS.

7. The VA may initiate adjustments to MRA DMEPOS claims.

8. The VA will receive rejects or technical denials which they will need to correct and resubmit the claim. The resubmitted claim would process as an original claim and process to completion for MRA if the reason for the previous denial or rejection has been corrected.

9. The VA shall participate in end-to-end testing with Emdeon, its clearinghouse, and the Medicare shared system prior to the MRA implementation.

MAC REQUIREMENTS/TASKS:

1. The MAC shall work with the HPES VDC to establish one new production region and one new User Acceptance Test (UAT) region and the respective related batch processes for both.

2. The MAC will work with the HPES VDC to support testing of the VA batch process and the setup of the necessary file transfers including files that are sent to the Common Working File (CWF), Common Electronic Data Interchange (CEDI), the ViPS Medicare System (VMS), and the VA.

3. All work done by VMS, CWF, VDC, and CEDI will be separately funded by CMS.

4. The MAC will identify the applicable Medicare coinsurance amount for VA MRA DMEPOS claims in the same way that CMS determines the coinsurance amount to DMEPOS supplier claims. This will include pricing claims with all 4 DME MAC jurisdictions.

5. The MAC will calculate the Medicare deductible amount on VA MRA DMEPOS claims in the same manner as it would if the claim had been submitted, on the same date, by a Medicare enrolled supplier.

6. The VA does not pay for items of DMEPOS on a rental basis, whereas CMS does so for certain “capped rental” items. The MAC will not track the rental of DMEPOS equipment; however, the first capped rental claim will be submitted via paper and subsequent claims will be submitted electronically. The MAC will determine allowed amounts on a fee-schedule basis only.

7. DMEPOS National Competitive Bidding (NCB) Program and National Mail Order (NMO) Program rules will not be applied.

8. The MAC will not review VA MRA DMEPOS claims to verify whether any outside supplier was, on the date of service a Medicare-enrolled, DMEPOS supplier in good standing. The MAC will treat outside suppliers as being enrolled with Medicare as DMEPOS suppliers in good standing.

9. The MAC will reject and return to the VA all VA MRA claims that do not to comply with the applicable Health Insurance Portability and Accountability Act (HIPAA) or Medicare Part B standards applicable to DMEPOS claims (e.g., reporting the required Healthcare Common Procedure Coding System (HCPCS) codes, modifiers, ICD-9/10 codes, etc.), except the use of the alpha-numeric indicator to identify the VA and except as the parties may mutually agree. The VA, upon receiving notice that a claim has been rejected, may correct and resubmit a claim rejected by the DME MAC.

10. The MAC will accept adjustments initiated by the VA.

11. The MAC will provide customer service call center support for VA MRA claims and adjustments. See Table 2 for estimated call center workload volume.

12. The MRA for each DMEPOS claim will be sent to the VA clearinghouse (Emdeon). The MRA will be in the X12 835 Health Care Claim Payment and Remittance Advice format. Standard Medicare messages will be used for the MRA.

13. The MAC will require the VA to submit a paper Certificate of Medical Necessity (CMN) for VA MRA DMEPOS claims for items that customarily require a CMN. The first claim submission will be in a paper format (including a paper CMN) and then each subsequent claim will be submitted in electronic format for the required number of months following the initial submission. Based on the estimated claims volume the VA expects the initial paper CMN claims to be approximately 10,000 claims with paper CMNs. This initial number is based on MAC Requirement 2120, which states the VA can submit claims with dates of service up to one year prior to the operational start date. Therefore the VA is making the assumption that there will be a larger number of claims with CMNs with startup processing of VA DMEPOS claims. The VA expects claims volumes for CMNs in subsequent months to be approximately 400 claims per month. The MAC will not require any clinical lab tests ordinarily associated with the CMN be submitted with the CMN claim submission.

14. The MAC will apply consolidated billing rules to VA MRA DMEPOS claims, except that CMS will assume that prosthetics, orthotics, and supplies furnished to a SNF resident in a non-covered stay is separately payable for the purpose of adjudicating VA MRA DMEPOS claims.

15. The MAC will apply all normal edits for standard Medicare coverage, including relevant National Coverage Determinations (NCD) and Local Coverage Determinations (LCD). However, the MAC will not apply any medical review edits that are not related to LCDs or NCDs and will not conduct medical review related to appeals.

16. Duplicate claims received from the VA will be denied as duplicates.

17. The MAC will suppress The Medicare Summary Notice (MSN). That is, the common beneficiary will not receive any notice from CMS regarding the outcome of CMS’ processing of a VA MRA DMEPOS claim.

18. The MAC will not apply the Medicare Secondary Payer (MSP) rule with respect to the VA being primary.

19. The MAC will not maintain any claims history on VA DMEPOS claims on behalf of the VA.

20. The MAC will not reprocess VA DMEPOS MRA claims when reprocessing regular Medicare claims in order to implement mass adjustments.

21. VA MRA DMEPOS claims shall be subject to the Medicare timely filing rules. However, the VA can submit claims with dates of service up to one year prior to the claims processing start date of January 1, 2017.

22. The Contractor shall ensure that the remittance advice for a VA MRA DMEPOS claim that would be payable had it been submitted by a Medicare-enrolled supplier shall contain remark code MA-118.

23. Client letter will not be utilized in the new VA region for VA claims.

24. The VA estimates that the MAC will receive approximately 1,000,000 DMEPOS claims per year. The MAC will be responsible to ensure that they are capable to handle the estimated workloads described in Table 2 below.

25. The MAC shall report the actual workload for VA claims through their regular Contractor Reporting of Operational Workload Data (CROWD) reporting methods, and append the Demo 31 in order to identify these claims as VA claims.

26. Normal MAC performance standards rules will apply (including but not limited to) claims processing, claims timeliness, claims adjustments.

27. The DME MAC shall participate in weekly conference calls with VMS, CEDI, EDC, CWF, SSMs and other CMS staff to update and keep staff well-informed of the status of the VA Project implementation, analysis and design. The call will continue until directed otherwise by the Business Function Lead (BFL).

Operations Workload Estimates

Table 2 - Estimated Claim Workload Metrics and Call Center Volume

(CLIN0003)

OY 2 - 4

(totals per contract year)

(CLIN 0004 -CLIN 0006)

*Based on current Part B VA workloads and Total Expected DME VA Claims Volume + Includes claims with dates of service of up to one year prior to January 2017 – the projected start date for claim submission based on the projected release schedule in Table 1.

MAC IMPLEMENTATION TASKS (CLIN0010)

Initial Meeting The MAC shall arrange a kick-off meeting/conference call with the CMS VA MRA Project team in accordance with Table 1. Topics to be discussed shall include but are not limited to:

· Contractor project management/implementation plan and timetable.

· Discussion of any modifications of the format and timetable for deliverables,

· Any other questions or issues identified by the MAC or CMS staff.

Kick-Off Meeting Minutes:

The MAC shall prepare minutes of the kick-off meeting to include issues, decisions made, and action items with responsible parties and provide them to CMS BFL within 7-days after the kick-off meeting.

Project Management/Implementation Plan:

The MAC shall develop a detailed project management/implementation plan and schedule that expands on the processes outlined in their initial proposal as well as incorporate recommendations from the Kick-Off Meeting. It is anticipated that the project management/implementation plan will be updated over time, in consultation with and approval of the CMS BFL. The detailed project management/implementation plan shall be submitted for review and approval within 30 calendar days of the kickoff meeting. The project management/implementation plan shall:

· Specify the activities to be carried out to satisfy each project task/requirements;

· Include a work schedule for completion of tasks;

· Specify the MAC responsibilities, along with impact on other contractors (GDIT, CWF, CEDI, Enterprise Data Center (EDC));

· Present a plan for ongoing communication and interaction with CMS and other contractor stakeholders.

DELIVERABLES

NOTE: Due Dates by Calendar Days versus Business Days: The MAC shall work directly with the Business Function Lead (BFL), and Contracting Officer’s Representative (COR) to ensure that due dates for deliverables are met, with consideration to calendar days, business days, holidays, and weekend days, when appropriate.

Table 3 – MRA VA DMEPOS Project Deliverables

The MAC shall submit a separate monthly status report via CMSART to the COR with a copy to the BFL by the 20th of each month following the operational start date of the VA DMEPOS MRA Project. The report will outline all work related to the VA claims processed for this project, including any problems or issues related to the project. Reports shall include, but are not limited to the following categories:

· Same reporting as is presently done for regular Medicare DMEPOS 1565 Workload report –under 0008 on form Y.

Number of paper claims received with CMNs.

BFL and COR, The submission of the VA project’s monthly status report will coincide with the DME MAC’s submission of the Monthly Status Report as required in their SOW, and will be attached as an addendum to this report.

The MAC shall submit an annual report that summarizes the claims processing activities and workload for the previous period of performance. In addition, any outstanding problems or issues related to the project shall be documented and reported.

BFL and COR, 30 days after the end of the first year of operation and annually in subsequent years.