CMS Pub. 100-04, ch. 17, § 50

A. A/B MACs (B)

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, nonphysician 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.

A/B MACs (B) 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, A/B

MACs (B) 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 an A/B MAC (B) has

changed the claim to assigned status (regardless of whether the contractor had to split the claim):

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

payment under this policy. The RARC below is not included in the CAQH CORE Business Scenarios.

Group Code: N/A

CARC: N/A

RARC: MA72

MSN: 16.50

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

necessary.

B. DME MACs

Under §114 of BIPA, DMEPOS suppliers must accept assignment on all claims for drugs and

biologicals that they bill to the DME MACs. 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 DME MACs 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 DME MACs must deny any claims a beneficiary submits for drugs and biologicals with dates of

service on or after February 1, 2001. The DME MACs 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, DME MACs 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

DME MAC for a drug or biological, the DME MAC 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 DME MAC that contains both codes for drugs

or biologicals and codes for other items, the DME MACs must replicate the claim. This will result in

two claims in the DME MAC 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 DME

MAC changes an unassigned drug claim to an assigned claim, the contractor shall use the following

remittance advice messages and associated codes when adjusting payment under this policy. The

RARC below is not included in the CAQH CORE Business Scenarios

Group Code: N/A

CARC: N/A

RARC: MA72

MSN: N/A

Suppliers that bill the DME MACs for drugs for use with DMEPOS must have a pharmacy license to

dispense drugs. When a DME MAC 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 DME MAC 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

DME MAC 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.

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

payment under this policy. The RARC below is not included in the CAQH CORE Business Scenarios.

Group Code: N/A

CARC: N/A

RARC: MA72

MSN: N/A

OR

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 Three.

Group Code: CO

CARC: B7

RARC: M143

MSN: N/A

Or

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: 107

RARC: N/A

MSN: N/A

The DME MACs 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 DME MACs to

implement the necessary edits in their systems. Finally, the four DME MACs 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 DME MACs 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 DME MACs must share these lists with VMS shared system

maintainer and CMS Central Office.