CMS Pub. 100-04, ch. 1, § 10.1.1.1

A. Instructions for the 4010/4010A1 Version of the ASC X12 837 Professional

Electronic Claim (for Claims Processed Before Implementation of Version 5010)

Note that the following instructions do not apply to services rendered at POS home -12.

For services rendered at POS home – 12, use the address on the beneficiary file for the

beneficiary’s home (or wherever else the beneficiary information is currently being

stored) to determine pricing locality. (See §10.1.1 for changes to processing for services

rendered at POS home – 12.)

For pricing purpose, contractors shall use the ZIP code of where the service was

performed. Contractors shall locate that information according to the Implementation

Guide of the 4010/4010A1 version of the ASC X12 837 professional claim format.

EXCEPTION: For DME MAC claims - Effective for claims received on or after 1/1/05,

the Standard System shall not evaluate the 2010AA loop for a valid place of service. If

there is no entry in the 2420C loop or the 2310D loop, the claim shall be returned as

unprocessable.

• If the Pay-To Provider Name and Address loop 2010AB is not the same as the

Billing Provider, both will be entered. If the Service Facility Location loop 2310D

is not the same as the Billing Provider or the Pay-To Provider, the Service Facility

Location loop 2310D (claim level) will be entered. Price the service based on the

ZIP code in Service Facility Location loop 2310D, unless the 2420C (line level) is

also entered. In that case, price the service based on the ZIP code in the Service

Facility Location loop 2420C (line level) for that line.

If the POS code is the same for all services, but the services were provided at different

addresses, each service shall be submitted with the appropriate address information for

each service. This will provide a ZIP code to price each service on the claim.

B. Entering the Address of Where a Service was Performed on the 5010 Version of

the ASC X12 837 Professional Claim

Following the requirements of the implementation guide of the 5010 version of the ASC

X12 837professional claim, the complete address of where a service was performed shall

be entered. Pay the service based on the ZIP code of the address of where the service

was performed based on the appropriate entry on the claim.

See §30.2.9 and Chapter 12 for information on anti-markup tests.

C. Paper Claims Submitted on the Form CMS-1500

Note that for claims processed on the Form CMS-1500 prior to January 1, 2011, the

following instructions do not apply to services rendered at POS home – 12 or any other

places of service contractors consider to be home. (See §10.1.1.1)

It is acceptable for claims to contain POS home and an additional POS code. No service

address for POS home needs to be entered for the service rendered at POS home in this

situation as the address will be drawn from the beneficiary file (or wherever else the A/B

MAC (Part B) is currently storing the beneficiary information) and the information on the

claim will apply to the other POS.

Except for the situation described above, the provider shall submit separate claims for

each POS. The specific location where the services were furnished shall be entered on

the claim. Use the ZIP code of the address entered in Item 32 to price the claim. If

multiple POS codes are submitted on the same claim, treat the claim as unprocessable

and follow the instructions in §80.3.1.

The contractor shall use the following remittance advice messages and associated codes

when rejecting/denying claims under this policy. This CARC/RARC combination is

compliant with CAQH CORE Business Scenario Two.

Group Code: CO

CARC: 16

RARC: M77

MSN: 9.2

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

the Form CMS-1500 paper claim, it will no longer be acceptable for the claim to have

more than one POS. Separate claims must be submitted for each POS. Contractors shall

treat claims submitted with more than one POS as unprocessable and follow the

instructions in §80.3.2.1.1.

If the contractor receives a fee-for-service claim containing one or more services for

which the MPFS payment locality is in another A/B MAC (Part B)’s jurisdiction, handle

in accordance with the instructions in §10.1.9. If you receive a significant volume or

experience repeated incidences of misdirected Medicare Physician Fee Schedule

claims/services from a particular provider, an educational contact may be warranted.

Handle misdirected claims/services for HMO enrollees in accordance with §10.1.1.C and

D.

D. Determining the Correct Payment Locality for Services Paid Under the Medicare

Physician Fee Schedule (MPFS) and Anesthesia Services When Rendered in a

Payment Locality that Crosses ZIP Code Areas

Per the instructions above, Medicare A/B MACs (Part B) have been directed to determine

the payment locality for services paid under the MPFS and anesthesia services by using

the ZIP code on the claim of where the service was performed. It has come to the

attention of CMS that some ZIP codes fall into more than one payment locality. The

CMS ZIP Code file uses the convention of the United States Postal Service, which

assigns these ZIP codes into dominant counties. In some cases, though the service may

actually be rendered in one county, per the ZIP code it is assigned into a different county.

This causes a payment issue when each of the counties has a different payment locality

and therefore a different payment amount. Note that as the for services which have the

Anti-markup Test Indicator on the MPFS, the 9-digit ZIP code requirements will also

apply to those codes.

Effective for dates of service on or after October 1, 2007, CMS shall provide a list of the

ZIP codes that cross localities as well as provide quarterly updates when necessary. The

CMS ZIP Code file shall be revised to two files: one for 5-digit ZIP codes (ZIP5) and

one for 9-digit ZIP codes (ZIP9). Providers performing services paid under the MPFS,

anesthesia services, or any other services as described above, in those ZIP codes that

cross payment localities shall be required to submit the 9-digit ZIP codes on the claim for

where the service was rendered. Claims for services payable under the MPFS and

anesthesia services that are NOT performed in one of the ZIP code areas that cross

localities may continue to be submitted with 5-digit ZIP codes. Claims for services other

than those payable under the MPFS or anesthesia services may continue to be submitted

with 5-digit ZIP codes.

Beginning in 2009, contractors shall maintain separate ZIP code files for each year which

will be updated on a quarterly basis. Claims shall be processed using the correct ZIP

code file based on the date of service submitted on the claim.

It should be noted that though some states consist of a single pricing locality, ZIP codes

can overlap states thus necessitating the submission of the 9-digit ZIP code in order to

allow the process to identify the correct pricing locality.

Claims received with a 5-digit ZIP code that is one of the ZIP codes that cross localities

and therefore requires a 9-digit ZIP code to be processed shall be treated as

unprocessable.

For claims received that require a 9-digit ZIP code with a 4-digit extension that does not

match a 4-digit extension on file, manually verify the 4-digit extension to identify a

potential coding error on the claim or a new 4-digit extension established by the U.S.

Postal Service (USPS). ZIP code and county information may be found at the USPS Web

site at http://www.usps.com/, or other commercially available sources of ZIP code

information may be consulted. If this process validates the ZIP code, the claim may be

processed. The “Revision to Payment Policies under the Physician Fee Schedule” that is

published annually in the Federal Register, or any other available resource, may be used

to determine the appropriate payment locality for the ZIP code with the new 4-digit

extension. If this process does not validate the ZIP code, the claim shall be treated as

unprocessable.

The contractor shall use the following remittance advice messages and associated codes

when rejecting/denying claims under this policy. This CARC/RARC combination is

compliant with CAQH CORE Business Scenario Two.

Group Code: CO

CARC: 16

RARC: MA114

MSN: N/A

Should a service be performed in a ZIP code area that does not require the submission of

the 9-digit ZIP code, but the 4-digit extension has been included anyway, A/B MACs

(Part B) shall price the claim using the A/B MAC (Part B) locality on the ZIP5 file and

ignore the 4-digit extension.

Effective for claims processed on or after July 6, 2009, the standard system shall make

revisions to allow contractors to add valid 4-digit extensions not included on the current

quarter’s 9-digit ZIP Code file until they appear on a quarterly file.

Contractors shall reprocess claims brought to their attention if the next CMS quarterly

file is received and the locality determination on a new 4-digit extension is different than

that made manually by the contractor thus having inadvertently caused incorrect

payment.

E. ZIP9 Code to Locality Record Layout

Below is the ZIP9 Code to locality file layout. Information on the naming conventions,

availability, how to download the ZIP5 and ZIP9 files, and the ZIP5 layout can be found

in Pub. 100-04, Chapter 15, section 20.1.6.

ZIP9 Code to Locality Record Layout

(Effective for dates of service on or after October 1, 2007.)

Field Name Beg. Position End Position Length Comments

State 1 2 2

ZIP Code 3 7 5

A/B MAC (B) 8 12 5

Pricing Locality 13 14 2

Rural Indicator 15 15 1 Blank=urban

R=rural

B=super rural

Filler 16 20 5

Plus Four Flag 21 21 1 0=no+4 extension

1=+4 extension

Plus Four 22 25 4