CMS Pub. 100-04, ch. 1, § 10.1.1

Paid Under the Physician Fee Schedule and Anesthesia Services

(Rev. 4473, Issued: 12-6-19; Effective: 3-9-20; Implementation: 3-9-20)

The jurisdiction for processing a request for payment for services paid under the

Medicare Physician Fee Schedule (MPFS) and for anesthesia services is governed by the

payment locality where the service is furnished and will be based on the ZIP code.

Though a number of additional services appear on the MPFS database, these payment

jurisdiction rules apply only to those services actually paid under the MPFS and to

anesthesia services. (For example, it does not apply to clinical lab, ambulance or drug

claims.)

Effective for claims received on or after April 1, 2004, A/B MACs (Part B) must use the

ZIP code of the location where the service was rendered to determine A/B MACs (Part

B) jurisdiction over the claim and the correct payment locality. Effective for dates of

service on or after October 1, 2007, except for services provided in POS “Home,” if they

are not already doing so, A/B MACs (Part B) shall use the CMS ZIP code file along with

the ZIP code submitted on the claim with the address that represents where the service

was performed to determine the correct payment locality. (See section 10.1.1B for

instructions on processing services rendered in POS Home -12 and section 10.1.1.1 for

instructions on when a 9-digit ZIP code is required.)

When a physician, practitioner, or supplier furnishes physician fee schedule or anesthesia

services in payment localities that span more than one A/B MAC (Part B)’s service area

(e.g., provider has separate offices in multiple localities and/or multiple A/B MACs (Part

B)), separate claims must be submitted to the appropriate area A/B MACs (Part B) for

processing. For example, when a physician with an office in Illinois furnishes services

outside the office setting (e.g., home, hospital, SNF visits) and that out-of-office service

location is in another A/B MAC (Part B)’s service area (e.g., Indiana), the A/B MAC

(Part B) which processes claims for the payment locality where the out of office service

was furnished has jurisdiction for that service. It is the A/B MAC (Part B) with the

correct physician fee schedule pricing data for the location where the service was

furnished. In the majority of cases, the physician fee schedule or anesthesia services

provided by physicians are within the same A/B MAC (Part B) jurisdiction that the

physicians’ office(s) is/are located.

Although pricing rules for services paid under the MPFS remain in effect, effective for

claims with dates of service on or after January 25, 2005, suppliers (including

laboratories, physicians, and independent diagnostic testing facilities (IDTFs) must bill

their A/B MAC (Part B) for the technical component and professional component of

diagnostic tests that are subject to the anti-markup payment limitation, regardless of the

location where the service was furnished. Beginning in 2005, and in each subsequent

calendar year (CY) through 2013, CMS provided A/B MACs (Part B) with a national

abstract file containing Healthcare Common Procedural Coding System (HCPCS) codes

that are payable under the MPFS as anti-markup tests for the year. In addition, CMS

made quarterly updates to the abstract file to add and/or delete codes, as needed, in

conjunction with the MPFSDB quarterly updates. Beginning in 2014, CMS adopted a

more streamlined approach to providing the A/B MACs with the HCPCS codes payable

under the MPFS as anti-markup tests for the year. The national abstract file was

discontinued and an Anti-markup (formerly Purchased Diagnostic) Test Indicator, to

identify HCPCS codes payable under the MPFS as anti-markup tests for the year, was

added to the MPFS payment file. Quarterly updates to the Anti-Markup Test Indicator

are made directly to the MPFS Payment file. As with all other services payable under the

MPFS, the ZIP code of the locality in which the service was furnished determines the

payment amount. Refer to §30.2.9 of this chapter for information on the anti-markup

payment limitation as it applies to supplier billing requirements.

A. Multiple Offices

In states with multiple physician fee schedule pricing localities or where a provider has

multiple offices located in two or more states, or there is more than one A/B MAC (Part

B) servicing a particular state, physicians, suppliers and group practices with multiple

offices in such areas must identify the specific location where office-based services were

performed. This is to insure correct claim processing jurisdiction and/or correct pricing of

MPFS and anesthesia services. The A/B MAC (Part B) must ensure that multiple office

situations are cross-referenced within its system. If a physician/group with offices in

more than one MPFS pricing locality or a multi-contractor state fails to specify the

location where an office-based service was furnished, the A/B MAC (Part B) will

return/reject the claim as unprocessable.

Physicians, suppliers, and group practices that furnish physician fee schedule services at

more than one office/practice location may submit their claims through one office to the

A/B MAC (Part B) for processing. However, the specific location where the services

were furnished must be entered on the claim so the A/B MAC (Part B) has the ZIP code,

can determine the correct claims processing jurisdiction, and can apply the correct

physician fee schedule amount.

B. Service Provided at a Place of Service Other than Home-12 or Office-11

For claims submitted prior to April 1, 2004, in order to determine claims jurisdiction,

Medicare approved charges, Medicare payment amounts, Medicare limiting charges and

beneficiary liability, Part B fee-for-service claims for services furnished in other than in

an office setting or a beneficiary’s home must include information specifying where the

service was provided.

Effective for claims received on or after April 1, 2004, claims for services furnished in all

places of service other than a beneficiary’s home must include information specifying

where the service was provided. A/B MACs (Part B) must use the address on the

beneficiary files when place of service (POS) is home - 12, or any other mechanism

currently in place to determine pricing locality when POS is home – 12. A/B MACs

(Part B) shall take this same action for any other POS codes they currently treat as POS

home.

Effective for claims processed on or after October 5, 2009, for services rendered in POS

home -12, or for any other POS the contractor currently treats as POS home, when alerted

by the shared system that a 9-digit ZIP code is required according to the CMS ZIP Code

file, and a 9-digit ZIP code is not available on the beneficiary file, the contractor shall

determine that ZIP code by using the United States Postal Service Web site. They shall

use that ZIP code to determine the correct payment locality for the claim for pricing

purposes.

A/B MACs (Part B) processing these claims shall take necessary steps to ensure that the

claims for services rendered in the physical location for which they are the MAC are

priced and processed correctly applying appropriate edits as necessary.

Effective January 1, 2011, for claims processed on or after January 1, 2011, using the

5010 version of the ASC X12 837 professional claim format, submission of the complete

address of where the service was performed is required regardless of where the service

was performed. This information should be entered on the claim per the Implementation

Guide for the current version. Contractors shall use that ZIP code to determine correct

payment locality.

Effective January 1, 2011 for claims processed on or after January 1, 2011 on paper

claims submitted on the CMS-1500 form, submission of the ZIP code of where the

service was provided will also be required for all POS code and contractors shall use that

ZIP code to determine correct payment locality.

For paper and electronic claims, when a global diagnostic service code is billed (e.g. no

modifier TC and no modifier 26), the address where the technical component was

performed shall be reported on the claim (this only applies to global services with

separate technical component/professional component). Global billing does not apply to

anti-markup tests because the technical and professional component must be billed

separately when the anti-markup payment limitation applies.

Refer to Pub 100-04, Chapter 35, Section 10.2.1 and 10.2.2 for more information on

global billing and separate technical and professional billing.

Contractors shall make no changes for claims submitted on the 4010A1 format as they

pertain to POS Home and determining pricing locality.

Contractors shall require the submission of the 9-digit ZIP code when required per the

CMS ZIP Code file.

C. Outside A/B MAC (Part B) Jurisdiction

If A/B MACs (Part B) receive claims outside of their jurisdiction, they must follow

resolution procedures in accordance with the instructions in 10.1.9. If they receive a

significant volume or experiences repeated incidences of misdirected Medicare Physician

Fee Schedule or anesthesia services from a particular provider, an educational contact

may be warranted.

D. HMO Claims

For services that HMOs are not required to furnish, A/B MACs (Part B) process claims

for items or services provided to an HMO member over which they have jurisdiction in

the same manner as they process other Part B claims for items or services provided by

physicians or suppliers. Generally, the physician/supplier who provides in-plan services

to its HMO members submits a bill directly to the HMO for payment and normally does

not get involved in processing the claim. However, in some cases, claims for services to

HMO members are also submitted to A/B MACs (Part B), e.g., where claims are received

from physicians for dialysis and related services provided through a related dialysis

facility.