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I N D I A N A
H E A L T H
C O V E R A G E
P R O G R A M S
Healthy Indiana Plan
Reimbursement
Manual
L
P
P
V
I B R A
O L I C
U B L I
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R Y R E F E R E N C E N U M B E R : P R H P 1 0 0 0 1
I E S A N D P R O C E D U R E S A S O F F E B R U A R Y
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Library Reference Number: PRHP10001
Document Management System Reference: Healthy Indiana Plan (HIP) Reimbursement Manual
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Healthy Indiana Plan Reimbursement Manual
Revision History
Version
Date
Reason for Revisions
Revisions Completed By
1.0
November 1, 2010
Initial Publication
HP Publications
2.0
June 21, 2011
Semiannual Update
HP Managed Care Unit and
HP Publications
2.1
Policies and Procedures as of
November 1, 2011
Published: December 22,
2011
Semiannual update
HP Managed Care Unit and
HP Publications
3.0
Policies and Procedures as of
May 1, 2012
Published: September 6,
2012
Semiannual update
HP Managed Care Unit and
HP Publications
3.1
Policies and Procedures as of
November 1, 2012
Published: February 25, 2013
Semiannual update
HP Managed Care Unit and
HP Publications
4.0
Policies and Procedures as of
May 24, 2013
Published: July 11, 2013
Semiannual update
HP Managed Care Unit and
HP Publications
4.1
Policies and Procedures as of
January 1, 2014
Published: February 20, 2014
Semiannual update
HP Managed Care Unit and
HP Publications
5.0
Policies and Procedures as of
May 1, 2014
Published: June 10, 2014
Semiannual update
HP Managed Care Unit and
HP Publications
6.0
Policies and Procedures as of
February 1, 2015
Published: June 4, 2015
Semiannual update
HP Managed Care Unit and
HP Publications
Library Reference Number: PRHP10001
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
iii
Healthy Indiana Plan Reimbursement Manual
Table of Contents
Revision History .................................................................................................. iii
Table of Contents.................................................................................................. v
Section 1: Rules ................................................................................................. 1-1
Overview ........................................................................................................ 1-1
Healthy Indiana Plan Reimbursement Rules ..................................................... 1-2
Healthy Indiana Plan Covered Benefits ............................................................ 1-2
Provider Reimbursement Guidelines ................................................................ 1-3
Section 2: Reimbursement Procedures ............................................................. 2-1
Overview ........................................................................................................ 2-1
Acute Care Hospital Inpatient .......................................................................... 2-1
Acute Care Hospital Outpatient ....................................................................... 2-2
Ambulance – Independent and Provider Based ................................................. 2-3
Air Ambulance Service Levels .................................................................... 2-3
Ground Ambulance Services ....................................................................... 2-3
Anesthesia....................................................................................................... 2-4
Ambulatory Surgery Center ............................................................................. 2-4
Assistant at Surgery (Physician)....................................................................... 2-4
Blood .............................................................................................................. 2-5
Cancer Hospital Inpatient Services................................................................... 2-5
Cancer Hospital Outpatient Services ................................................................ 2-5
Chiropractic Services....................................................................................... 2-5
Certified Registered Nurse Anesthetist............................................................. 2-5
Clinical Nurse Specialist.................................................................................. 2-6
Clinical Psychologist ....................................................................................... 2-6
Clinical Trial Services ..................................................................................... 2-6
Community Mental Health Center and CMHC-owned Critical Access
Hospital .......................................................................................................... 2-6
Cosurgeon and Cosurgeons, Team Surgery ...................................................... 2-6
Critical Access Hospital .................................................................................. 2-6
Consultation Codes ......................................................................................... 2-7
Dental ............................................................................................................. 2-7
Diabetic Shoes ................................................................................................ 2-7
Drugs .............................................................................................................. 2-7
Durable Medical Equipment ............................................................................ 2-7
Emergency Room ............................................................................................ 2-8
Emergency Admission – Out of State, Out of Network, and Not an IHCP
Provider .......................................................................................................... 2-8
End-Stage Renal Disease Facility .................................................................... 2-8
Federally Qualified Health Center – Independent and Provider Based .............. 2-8
Health Professional Shortage Area ................................................................... 2-9
Home Health Agencies – Independent and Provider Based ............................... 2-9
Home Infusion ................................................................................................ 2-9
Hospice ........................................................................................................... 2-9
Adult Presumptive Eligibility .......................................................................... 2-9
Hospital Transfer – Acute to Acute and Acute to Post ...................................... 2-9
Human Organ Transplant............................................................................... 2-10
Laboratory – Free-Standing and Hospital-Based ............................................ 2-10
Long Term Care Hospital .............................................................................. 2-10
Library Reference Number: PRHP10001
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Version: 6.0
Table of Contents
Healthy Indiana Plan Reimbursement Manual
Nurse Practitioner.......................................................................................... 2-10
Physical Therapy, Occupational Therapy, and Speech Therapy ...................... 2-10
Physician – Medical Doctor (MD) and Doctor of Osteopathy (DO) ................ 2-10
Physician Assistant ........................................................................................ 2-11
Physician Shortage Area ................................................................................ 2-11
Pregnancy ..................................................................................................... 2-11
Prosthetic Devices ......................................................................................... 2-11
Psychiatric Hospital – Inpatient and Outpatient .............................................. 2-11
Radiology ..................................................................................................... 2-11
Rehabilitation Hospital – Inpatient ................................................................. 2-12
Rehabilitation Hospital – Outpatient .............................................................. 2-12
Rural Health Clinic........................................................................................ 2-12
Rural Health Clinic – Laboratory or Technical Component of Diagnostic
Tests Done in RHCs ...................................................................................... 2-12
Skilled Nursing Facility – Individual and Provider-Based............................... 2-12
Surgical Dressings ......................................................................................... 2-13
Swing Bed..................................................................................................... 2-13
Unaccounted Services.................................................................................... 2-13
Vaccines ....................................................................................................... 2-13
Vision ........................................................................................................... 2-13
Index ...................................................................................................................I-1
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Library Reference Number: PRHP10001
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
Healthy Indiana Plan Reimbursement Manual
Section 1: Rules
Overview
The Healthy Indiana Plan (HIP) is a program that offers healthcare coverage to all eligible Indiana
residents ages 19-64 with incomes up to and including 133% of the federal poverty level (FPL). The
HIP program consists of multiple HIP plans that are funded with a $2,500 Personal Wellness and
Responsibility (POWER) Account per member that is modeled after a Health Savings Account. There
are two different funding mechanisms used to participate in HIP. A member may make POWER
Account contributions and be enrolled in HIP Plus. If the member chooses not to make POWER
Account contributions and earns less than 100% of the FPL, they may default into HIP Basic and make
copayments for each service they receive at the point of service. The plans include HIP Plus, HIP
Basic, and HIP State Plan. HIP Plus is the preferred plan because it offers the best value for members.
• The HIP Plus plan uses monthly contributions, with a minimum contribution of $1 a month, that is
paid into a POWER Account for members to use. To determine the member’s monthly contribution
their annual household income is multiplied by 2% and then divided by 12. There is a $100
maximum contribution per month. The State contributes the remainder of the POWER Account
funding up to the deductible amount. HIP Plus also covers vision and dental services as well as
enhanced pharmacy services.
• HIP Basic requires copayments at the point of service for any visit or service provided. These
copayments generally range from $4 to $8 per service or visit. An inpatient stay requires a $75
copayment. The HIP Basic POWER Account is funded entirely by the State. HIP Basic does not
cover vision and dental services and also has fewer pharmacy services.
• HIP State Plan is available for individuals who qualify as low-income parents and caretakers or
low-income 19- and 20-year-olds, individuals receiving transitional medical assistance (TMA) as
well as “medically frail” individuals (those with serious and complex medical, mental, or
behavioral health conditions). These members receive access to the comprehensive Indiana
Medicaid State Plan and include services such as nonemergency transportation. These individuals
will use HIP Plus (POWER Account contributions) or HIP Basic (copayments) as the payment
mechanism for access to coverage.
All HIP members are subject to a copayment if they use the emergency room (ER) inappropriately or
when there is not a true emergency. This copayment is $8 for the first instance and $25 for every
subsequent instance of nonemergency ER use.
Reimbursement for HIP continues to be at Medicare rates or 130% of the Medicaid rate if a Medicare
rate does not exist. An exception is that facility charges for individuals that qualify as low-income
parents and caretakers, and 19- and 20-year-old low-income dependents enrolled in HIP State Plan
will be reimbursed at Medicaid rates. Facilities that offer payments to this group of members will
receive supplemental payments from the Hospital Assessment Fee (HAF) funds. Physician rates
arising out of inpatient facility based hospital services, however, will be paid at the standard HIP
reimbursement rates.
This section provides the Indiana Administrative Code (IAC) HIP reimbursement rules, and the
benefits covered in each HIP plan. The following citations reflect the Emergency Rule put in place on
February 1, 2015, and will be updated upon the promulgation of the applicable IAC.
If a provider is unable to find the specific guidance they need in this manual, see the most recent
bulletins and banner pages at indianamedicaid.com or contact your HP/MCE provider services for
assistance.
Library Reference Number: PRHP10001
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
1-1
Rules
Healthy Indiana Plan Reimbursement Manual
Healthy Indiana Plan Reimbursement Rules
Section 2: (kk) "Plan reimbursement rate" means the amount of reimbursement insurers pay to
providers participating in the plan. This amount shall be:
(1) established by the secretary; and
(2) based on a Medicaid reimbursement formula that is:
(A) comparable to the federal Medicare reimbursement rate for the service provided; or
(B) one hundred thirty percent (130%) of the Medicaid reimbursement rate for a service that
does not have a Medicare reimbursement rate
Healthy Indiana Plan Covered Benefits
Section 22. (a) This Section outlines the benefits available to an individual enrolled in HIP Basic. The
covered services provided under HIP Basic are in accordance with the essential health benefit
requirements under 42 CFR 440.347 for alternative benefit plan. The HIP Basic plan includes the
coverage criteria, limitations, and procedures specified in this regulation as well as the HIP Basic
alternative benefit plan approved by the Centers for Medicare & Medicaid Services (CMS).
(b) HIP Basic shall include covered services and benefits in each of the following categories:
(1) Ambulatory patient service.
(2) Emergency services
(3) Hospitalization
(4) Maternity services
(5) Mental health and substance abuse services
(6) Prescription drugs
(7) Rehabilitative and habilitative services and devices
(8) Laboratory services
(9) Preventive care services
(10) Early and periodic screening, diagnostic, and treatment (EPSDT) services, as defined at
42 U.S.C. § 1396d(r), will be provided for nineteen (19) and twenty (20) year old HIP
Basic members
(c) The following services are not covered under HIP Basic:
(1) Services that are not medically necessary
(2) Dental services
(3) Vision services
(4) Nonemergency transportation services
(5) Any other services not approved by the CMS in the HIP Basic alternative benefit plan
Section 23. (a) This Section outlines the benefits available to an individual enrolled in HIP Plus. The
covered services provided under HIP Plus are in accordance with the essential health benefit
requirements under 42 CFR 440.347 for alternative benefit plan. The HIP Plus plan includes the
coverage criteria, limitations, and procedures specified in this regulation as well as the HIP Plus
alternative benefit plan approved by the CMS.
(b) HIP Plus shall include covered services and benefits in each of the following categories:
(1) Ambulatory patient services
(2) Emergency services
(3) Hospitalization
(4) Maternity services
(5) Mental health and substance abuse services
(6) Prescription drugs
(7) Rehabilitative and habilitative services and devices
(8) Laboratory services
(9) Preventive care services
(10) Vision services
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Healthy Indiana Plan Reimbursement Manual
Rules
(11) Dental services
(12) Early and periodic screening, diagnostic, and treatment (EPSDT) services, as defined in
42 U.S.C. § 1396d(r), for nineteen (19) and twenty (20) year old members
(c) The following services are not covered under HIP Plus:
(1) Services that are not medically necessary
(2) Nonemergency transportation services
(3) Any other services not approved by the CMS in the HIP Plus alternative benefit plan
Section 24. (a) This Section outlines services available to a member enrolled in HIP State Plan. All
covered services and benefits under HIP State Plan are subject to the coverage criteria, limitations, and
procedures specified in this regulation as well as the benefits specified in the CMS approved Medicaid
State Plan.
(b) HIP State Plan shall include covered services and benefits in the following categories that are
equivalent to the Medicaid State Plan:
(1) Ambulatory patient services
(2) Emergency services
(3) Hospitalization
(4) Maternity services
(5) Mental health and substance abuse services
(6) Prescription drugs
(7) Rehabilitative and habilitative services and devices
(8) Laboratory services
(9) Preventive care services
(10) Vision services
(11) Dental services
(12) Early and periodic screening, diagnostic, and treatment (EPSDT) services, as defined in
42 U.S.C. § 1396d(r), for nineteen (19) and twenty (20) year old members
(c) The following services are not covered under HIP State Plan:
(1) Services that are not medically necessary
(2) Any other services not covered by the CMS-approved Medicaid State Plan
Provider Reimbursement Guidelines
Section 40. (a) Reimbursement matters including:
(1) the time limit for filing claims; and
(2) rates paid to providers contracting with insurers; are governed by the contract between the
provider and the insurer.
(b) Reimbursement rates paid by insurers to providers without contracts who render services to plan
members shall be at plan reimbursement rates governed by IC 12-15-44.2-14(a)(2).
(c) No provider retains any independent or duplicative right for reimbursement from the office in
addition to or in lieu of reimbursement received from the insurer.
Section 41. (a) A provider shall be reimbursed for covered services as follows:
(1) Until the member's deductible is met, with POWER Account funds accessed through the
member's POWER Account and paid by the insurer. If the member lacks sufficient
POWER Account funds at the time of service, the insurer must pay for any portion of the
plan reimbursement rate that cannot be paid with POWER Account funds but, shall
reconcile these prepaid amounts as additional POWER Account funds are received from
the member.
(2) For all covered preventive care services, which are not subject to the member's deductible,
by the insurer.
(3) For covered services under the member's health plan after the deductible has been met, by
the insurer. The provider shall be reimbursed at the plan reimbursement rate.
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Healthy Indiana Plan Reimbursement Manual
(b) Reimbursement is not available for services provided to individuals who are not enrolled in the
plan on the date the service is provided except as provided under the following:
(1) To those individuals whose coverage dates back to the first of the month as outlined in
Section 4 or 5 of this regulation.
(2) To an individual in accordance with Section 38(b) and 38(c) of this regulation
(3) To a member described in Section 9(e) of this regulation who:
(A) did not gain coverage through presumptive eligibility as set forth at Section 16 of this
regulation;
(B) received a covered service no later than ninety (90) days prior to the date he or she
was determined eligible for the plan by the division; and
(C) had a claim submitted on his or her behalf by a provider seeking reimbursement for
the service identified in subsection (B) within ninety (90) days after his or her receipt of a
bill for such service.
(c) The plan reimbursement rate defined in Section 2(kk) of this regulation does not include:
(1) critical access hospital payments;
(2) graduate medical education payments; or
(3) disproportionate share hospital payments.
(d) Insurers shall reimburse federally qualified health centers (FQHCs) and rural health clinics (RHCs)
for covered FQHC and RHC services at the Medicare all-inclusive rate for each visit, as established by
the Medicare fiscal intermediary and according to Medicare policy. If the amount paid by insurers is
less than the amount set forth in 42 U.S.C. § 1396a(bb), the office shall make a supplemental payment
in accordance with 42 U.S.C. § 1396a(bb)(5).
Section 42. A provider must accept plan reimbursement as payment in full. A provider cannot collect
from a member any portion of the provider's charge for a covered service that is not reimbursed by the
insurer, with the exception of the following:
(1) Emergency room copayments authorized under this regulation
(2) Payments made with POWER Account funds before the deductible of the member's health
plan is met
(3) Copayments authorized under Section 45(b) of this regulation
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Library Reference Number: PRHP10001
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
Healthy Indiana Plan Reimbursement Manual
Section 2: Reimbursement Procedures
Overview
This section describes the procedures for reimbursing providers contracted by the plans to provide
services to the Healthy Indiana Plan (HIP) members.
Acute Care Hospital Inpatient
Providers bill claims for the HIP program on the Centers for Medicare &Medicaid Services (CMS)
1450 form (UB-04). Use the Medicare Inpatient Prospective Payment System (IPPS) to calculate
payment based on diagnosis-related groups (DRGs). The CMS Medicare Severity (MS) Grouper
provides and edits DRGs. The CMS MS Grouper includes tables for all valid diagnoses, procedures,
and DRGs. The CMS MS Grouper also includes clinical edits that identify inconsistencies after
evaluating a patient’s principal diagnosis, any secondary diagnoses, surgical procedures, age, sex, and
discharge status for possible errors. Disproportionate-share hospital (DSH), independent medical
examination (IME), and new technology add-ons are excluded under HIP reimbursement.
Payment includes the following:
• Base payment rate
−
The base rate is divided into labor related and non-labor related.

The labor-related share is adjusted by the wage index for the area where the hospital is
located.

The non-labor related share is adjusted by a cost-of-living adjustment factor.
• Outlier amount
• Operating expense
• Capital expense
Updates to the Inpatient Prospective Payment System (IPPS) Pricer occur four times each year during
October, January, April, and July. Updates to the Grouper occur at a minimum in October of each year,
and as needed, based on any changes proposed by the CMS during the year.
Plans apply Medicaid policy and reimburse for hospital services at the lower of the Medicaid billed
amount or the Medicare-allowed rate.
Plans apply Medicaid policy and deny readmissions as appropriate. A readmission is defined as an
admission within three days following a previous admission and discharge for the same or related
condition.
The State follows Medicaid policy and mandates the 72-hour observation rule.
The State follows Medicaid policy for 23-hour outpatient billing requirements. This applies to
surgeries with less than a 23-hour hospital stay when Medicare does not allow the procedure as an
outpatient, but Medicaid instructs providers to bill surgeries with less than a 23-hour stay as outpatient.
An example is anterior cervical disectomy and fusion (ACDF) surgery. This may require manual
processing to pay at 130% of the Medicaid rate.
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Reimbursement Procedures
Healthy Indiana Plan Reimbursement Manual
Acute Care Hospital Outpatient
Reimburse outpatient services according to the Medicare Ambulatory Payment Classification (APC)
system. Providers bill services on a UB-04 claim form and should follow the CMS billing practices for
Medicare. Each line item on a claim is evaluated for payment or nonpayment using various criteria.
The outcome of the evaluation results in a status indicator assigned to each line. These status indicators
determine the applicable payment mechanism. Lines that are determined payable may be priced using
multiple mechanisms.
Certain Current Procedural Terminology (CPT®1)/Healthcare Common Procedure Coding System
(HCPCS) codes are designated payable as an APC payment for which the billed code is mapped into a
“grouping” of codes with similar costs. Components of the calculation include the following:
• Grouper that classifies CPT/HCPCS codes into appropriate APC categories
• Medicare relative weights assigned to each APC category
• Current National Medicare rate file inclusive of the conversion factor (CF), hospital-specific
components such as wage indices, and outpatient ratio of cost to charge (ORCC). A conversion
factor is a dollar amount that serves as a nationally uniform base rate.
• Pricer mechanism that calculates the APC price (the conversion factor times weight), which is
inclusive of packaged services
• Applicable pricer-determined outlier adjustment
• Lines that do not receive APC payments are paid under alternative methods
• Certain codes, such as laboratory, are paid using the appropriate Medicare Fee Schedule
• Certain codes or lines that do not receive payment under the Medicare Outpatient Prospective
Payment System (OPPS) due to discontinued codes, codes not recognized by Medicare, and other
Medicare outpatient payment guidelines
The following items are not included and are paid based on the Medicare Fee-Schedule and endstage renal disease (ESRD) composite rate:
−
Lab
−
Ambulance
−
Durable medical equipment (DME)
−
Physical therapy (PT)
−
Occupational therapy (OT)
−
Speech therapy (ST)
• As part of the APC-based OPPS nonpayment determination, Medicare applies packaging of
services. The term “packaging” means that reimbursement for certain services or supplies is
included in the payment for another procedure or service on the same claim. The list of packaged
services is very extensive and includes but is not limited to the following:
− Inexpensive drugs
− Medical/surgical supplies
− Recovery room charges
1
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trademark of the American Medical Association.
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Version: 6.0
Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
The State follows Medicaid policy and allows the 72-hour observation rule.
The State follows Medicaid policy for 23-hour outpatient billing requirements. This applies to
surgeries with less than a 23-hour hospital stay when Medicare does not allow the procedure as an
outpatient but Medicaid instructs providers to bill surgeries with less than a 23-hour stay as outpatient.
An example is ACDF surgery, which may require manual processing to pay at 130% of Medicaid rate.
Certain procedures are reimbursed only when provided and billed on an inpatient basis. Surgical codes
that are noncovered as outpatient procedures are published in the addendum of the OPPS guidance
from the CMS.
Ambulance – Independent and Provider Based
Providers bill claims for ambulance services on a CMS-1500 form. Payment for ambulance services is
based on the lesser of the actual charge or the applicable fee schedule amount. The fee schedule
payment for ambulance services equals a base rate for the level of service, plus payment for mileage
and the following applicable adjustment factors:
1. Money amount that serves as a nationally uniform base rate, or CF, for all ground ambulance
services
2. Relative value unit (RVU) assigned to each type of ground ambulance service
3. Geographic adjustment factor (GAF) for each ambulance fee schedule locality area (geographic
practice cost index [GPCI])
4. Nationally uniform loaded mileage rate
5. Additional amount for certain mileage for a rural point-of-pickup
Air Ambulance Service Levels
The base payment rate for the applicable type of air ambulance service is adjusted by the GAF and,
when applicable, by the appropriate risk assessment factor (RAF) to determine the amount of payment.
Air ambulance services have no CF or RVUs. This amount is compared to the actual charge. The lesser
of the charge or the adjusted GAF rate amount is added to the payment rate per mile, multiplied by the
number of miles that the beneficiary was transported. When applicable, the appropriate RAF is also
applied to the air mileage rate as follows:
1.
Nationally uniform base rate for fixed wing transportation and a nationally uniform base rate for
rotary wing transportation
2.
GAF for each ambulance fee schedule locality area (GPCI)
3.
Nationally uniform loaded mileage rate for each type of air service
4.
Rural adjustment to the base rate and mileage for services furnished for a rural point-of-pickup
Ground Ambulance Services
Conversion Factor
The CF is a dollar amount used to develop a base rate for each category of ground ambulance service.
Updates to the CF occur annually by the ambulance inflation factor and for other reasons, as necessary.
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Healthy Indiana Plan Reimbursement Manual
Relative Value Units
RVUs set a numeric value for ambulance services relative to the value of a base level ambulance
service. Because there are marked differences in the resources required to furnish the various levels of
ground ambulance services, different levels of payment are appropriate for the unique levels of service.
An RVU expresses the constant multiplier for a particular type of service (including, where
appropriate, an emergency response). An RVU of 1 is assigned to the basic life support (BLS) of
ground service; higher RVU values are assigned to the other types of ground ambulance services that
require more service than BLS.
Anesthesia
Providers bill claims for anesthesia on a CMS-1500 form. Payment is based on the lesser of the actual
charge or the anesthesia fee amount for anesthesia services performed.
The fee amount is calculated based on whether the procedure is medically directed, or medically
supervised, by a physician. The vendor pays the lesser of the actual charge or the anesthesia fee
schedule amount. Providers must indicate the actual time of the service rendered, in minutes, in the
Units field of the CMS-1500 claim form. Plans systematically convert minutes to units (one unit equals
15 minutes) and add the assigned base units in addition to units for modifying circumstances for a total
unit value times the anesthesia conversion factor.
(Base Units + Time Units) x Anesthesia Conversion Factor = Anesthesia
Reimbursement Rate
Physicians involved with two concurrent cases with residents can bill the actual time the physician is
actually present with the resident during each of the two concurrent cases. If the physician medically
supervises more than four concurrent anesthesia services, the reimbursement is the fee schedule
amount on an anesthesia-specific CF and three base units.
Ambulatory Surgery Center
Providers bill claims for Ambulatory Surgery Centers (ASCs) on the UB-04 claim form. ASCs are
reimbursed for covered surgical procedures. Medicare makes additional payments for covered ancillary
services. Covered surgical procedures are published in the Addendum AA of the OPPS. Covered
ancillary services are in the Addendum BB of the OPPS. Reimbursement rates are based upon local
payer methodology.
Assistant at Surgery (Physician)
Reimburse surgery assistants providing services (other than assistant-at-surgery services) at 85% of the
allowable Medicare physician fee schedule (MPFS) rate for the service.
If a physician furnished the assistant-at-surgery service, reimbursement is based at 85% of the MPFS
allowed rate for the service.
The determination of the medical necessity of an assistant surgeon for any given procedure and patient
will be made by the payer in accordance with approved Clinical Practice Guidelines and the State’s
Utilization Management laws and regulations.
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Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
Blood
Medicare does not currently provide separate payment for blood and blood products when used during
an inpatient hospital stay. Reimbursement for blood and blood products is packaged into the single
payment rate for the MS-DRG.
Hospital outpatient departments receive a separate APC payment for blood processing, in addition to
the APC payment for the transfusion procedure.
Cancer Hospital Inpatient Services
Cancer hospitals subject to IPPS use the methodology described for acute care hospital inpatient
services. For IPPS-exempt cancer hospitals, reimbursement is based on the lesser of their actual costs
or their Tax Equity and Fiscal Responsibility Act (TEFRA) limited costs. Payments are adjusted
depending on the difference between these two costs. Routine costs are reimbursed on a per diem
amount. The hospital supplies a copy of the rate letter from the Medicare intermediary for the per diem
amount.
Note: There are currently no cancer or exempt cancer hospitals in the state of
Indiana.
Cancer Hospital Outpatient Services
Reimburse outpatient hospital services according to Medicare APC payment methodology.
Chiropractic Services
Chiropractic services are not covered benefits under the HIP Basic or HIP Plus plans. Individuals who
are pregnant or become pregnant are able to receive chiropractic services as a part of their maternity
wrap-around coverage. Individuals enrolled in the HIP State Plan are eligible to receive chiropractic
services, but are limited to 50 treatments per benefit period.
Covered services provided by a chiropractor operating within the scope of his or her practice should be
billed as a covered service performed by any other provider type allowed by HIP legislation.
There are no benefits under HIP Basic or HIP Plus for the following CPT codes:
• 98940 – Chiropractic manipulative treatment (CMT); spinal, one to two regions
• 98941 – Spinal, three to four regions
• 98942 – Spinal, five regions
• 98943 – Extraspinal, one or more regions
Certified Registered Nurse Anesthetist
The allowance for anesthesia service furnished by a certified registered nurse anesthetist (CRNA),
whether medically directed or not, is based on allowable base and time units.
Library Reference Number: PRHP1000
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
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Healthy Indiana Plan Reimbursement Manual
1. The allowance for an anesthesia service furnished by a medically directed CRNA is based on a
fixed percentage of the allowance recognized for the anesthesia service personally performed by the
physician alone. If the service is not medically directed, the CRNA is reimbursed at 80% of the
allowable charge. The CRNA is reimbursed at 50% of the allowable charge if medically directed.
2. The CF for an anesthesia service furnished by a CRNA not directed by a physician may not exceed
the CF for a service personally performed by a physician.
Clinical Nurse Specialist
The fee schedule for a clinical nurse specialist (CNS) is 85% of the MPFS with no patient copayments.
Clinical Psychologist
Reimbursement is based on the MPFS for covered services provided by a clinical psychologist.
Reimburse for services rendered by midlevel practitioners at a reduced Medicare reimbursement
percentage when providers submit charges with the appropriate modifier.
Clinical Trial Services
Clinical trial services are not a covered service under the HIP.
Community Mental Health Center and CMHC-owned Critical
Access Hospital
Reimburse community mental health centers (CMHCs) using the MPFS, the same as any other
provider.
Reimburse partial hospitalization services furnished by CMHCs under the hospital prospective
payment system.
Cosurgeon and Cosurgeons, Team Surgery
Reimburse each cosurgeon based on the lesser of the actual charges or 62.5% of the MPFS amount.
For both surgeons to receive appropriate reimbursement, they must not be assisting each other, but
performing distinct and separate parts of the same surgical procedure.
Critical Access Hospital
Reimburse critical access hospital (CAH) on MS-DRG like any other rural hospital or acute care
hospital. Davies County Hospital is the model/standard for CAH pricing in Indiana.
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Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
Consultation Codes
The State follows Medicare disallowment of consultation codes. Other evaluation and management
code reimbursements were increased when these codes were removed. This change was effective on
the date the Medicare change became effective.
Dental
Dental services are covered under the HIP Plus and HIP State Plan coverages. HIP Basic does not
include dental service coverage. Pregnant women who are in HIP Basic are eligible to receive dental
services as a part of their maternity wrap-around services. In addition, 19- and 20-year-old members
enrolled in HIP Basic receive dental services through EPSDT benefits.
Diabetic Shoes
Reimburse diabetic shoes (orthotics) according to the DME payment methodology. Providers must
include a diagnosis code of diabetes on the claim form for reimbursement.
Drugs
Reimburse outpatient drugs and biologicals that are not included in an outpatient ambulatory payment
classification (APC) at a payment rate based according to the CMS average sales price (ASP) fee
schedule. Most drugs for patients in a prospective payment system (PPS) hospital are included in the
DRG amount and are not billable. APC payments for outpatient services generally include payment for
drugs except for certain new drugs.
When drugs are billed such that a separate reimbursement is expected, the provider should always
include the National Drug Code (NDC) details. NDC reporting requirements apply. A diagnosis code
and DRG, as applicable, is a required data field and must be included on all encounter claims. The
contractor’s encounter claims must include the NDCs when an encounter involves products or services
with NDCs, including medical and institutional claims where medications with NDCs are included and
billed separately.
Durable Medical Equipment
Reimburse DME, prosthetics, orthotics, parenteral and enteral nutrition (PEN), and surgical dressings
at the rate on the associated Medicare DME fee schedule.
Only reimburse monthly rentals up to the purchase price of the DME. Reimbursement is not allowed in
excess of the purchase price, whether the charge is for rental or purchase.
Reimbursement is based on the Medicare Fee Schedule. If a Medicare rate is not found, the payment
defaults to 130% of the Medicaid fee schedule. If a Medicare or Medicaid rate is not found,
reimbursement defaults to manual pricing at 90% of billed charges.
Library Reference Number: PRHP1000
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
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Healthy Indiana Plan Reimbursement Manual
Emergency Room
Plans must cover all emergency room visits. Plans must cover medical screening examinations
required under the Emergency Medical Treatment and Active Labor Act (EMTALA). Emergency room
providers, including out-of-network emergency room providers, are reimbursed at the HIP rate, minus
copayment (if applicable). If the out-of-network emergency room provider is not a participating
Indiana Health Coverage Programs (IHCP) provider at the time service is rendered, the emergency
room provider may request retroactive enrollment to be reimbursed by the HIP plan; otherwise, the
member may be billed for the service.
Copayments for inappropriate usage of the emergency room (ER) apply to all HIP members regardless
of plan unless they are pregnant women, Native Americans/Alaska Natives, or have reached their 5%
cost-sharing maximum. There are two levels of copayments for inappropriate ER usage. The first
occurrence of using the ER inappropriately results in an $8 copayment for the member. The second
and any ongoing occurrence during the member’s 12-month benefit period will result in a $25
copayment being assessed. It is important for the facility to contact the MCE to determine which is the
appropriate copayment to assess if it is an inappropriate usage of the ER.
It is possible the member is a part of a control group, established for gathering metrics, that has an $8
copayment regardless of the occurrences of inappropriate ER use.
Emergency Admission – Out of State, Out of Network, and Not
an IHCP Provider
If the out-of-network emergency room provider is not an IHCP participating provider at the time
service is rendered, the emergency room provider must apply to the IHCP retroactive to the date of
service before the plan can reimburse the provider. Applicable copayments apply.
End-Stage Renal Disease Facility
Reimburse facilities using the ESRD Pricer available at cms.gov. Services are paid on a per-treatment
basis known as composite rate methodology; this includes geographic and patient case-mix
adjustments. Routine lab charges are included in the composite rate, and the facility pays the lab. Labs
bill nonroutine charges directly and are reimbursed based on the Medicare fee schedule.
Federally Qualified Health Center – Independent and Provider
Based
Reimburse Federally Qualified Health Centers (FQHCs) using the Medicare rates of reimbursement
that are paid to non-FQHC/rural health clinic (RHC) providers. The Indiana Family and Social
Services Administration (FSSA) continues to provide wrap-around payments up to the Medicaid
FQHC and RHC PPS rates as necessary, with year-end settlements based on claims data. Wrap-around
payments and year-end settlement payments are determined based on claims paid during the period.
For claims paid in a calendar year, any difference between HIP insurer payment and payment under
Medicaid PPS is accounted for in the HIP year-end settlement calculations.
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Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
Health Professional Shortage Area
No Health Professional Shortage Area (HPSA) payments are required for HIP.
Home Health Agencies – Independent and Provider Based
There is no Medicare rate for less than 60 days of care; therefore, if less than 60 days of care, MCEs
pay 130% of the Medicaid rate. In addition to paying the home health claim rate, HIP pays occurrence
code 61 and is reimbursed at 130% of the Medicaid rate. If 60 days of care or greater, MCE pay the
Medicare rate.
Home Infusion
Reimbursement for home infusion is per the Medicare Durable Medical Equipment Prosthetic,
Orthotic, and Supplies (DMEPOS) fee schedule for applicable services. Reimburse Part B covered
drugs using the Medicare ASP fee schedule.
Hospice
Medicare requires all other providers bill the hospice for services, and the other providers receive their
reimbursement from the hospice. Providers outside the hospice are no longer allowed to bill Medicare
for services provided to the member. HIP pays 130% of the Medicaid rate.
Adult Presumptive Eligibility
Services rendered under Adult Presumptive Eligibility are reimbursed under the risk-based managed
care (RBMC) delivery system by the MCE with which the member is enrolled. During the Adult
Presumptive Eligibility period, providers must submit claims to the appropriate MCE using the
member’s ‘600’ HPE identification number. Individuals who receive Adult Presumptive Eligibility
will have copayments that mirror the amounts that must be paid when enrolled in HIP Basic. A
copayment shall be applied for each service that the Adult Presumptive Eligibility recipient receives.
Hospital Transfer – Acute to Acute and Acute to Post
Providers bill hospital transfer services on a UB-04 claim form.
Special payment policies apply to hospital transfer cases reimbursed using the MS-DRG methodology.
The receiving hospital, or transferee hospital, is paid according to MS-DRG payment methodology.
Transferring hospitals are reimbursed a DRG prorated daily rate for each day, not to exceed the full
MS-DRG payment amount. The MS-DRG daily rate is determined by dividing the MS-DRG rate by
the average length of stay. The full payment to the transferring hospital is the sum of the MS-DRG
daily rate and the capital per diem rate.
Library Reference Number: PRHP1000
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
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Healthy Indiana Plan Reimbursement Manual
Human Organ Transplant
Under Medicare, the actual organ transplant is reimbursed at the MS-DRG rate, but payment for organ
acquisition costs is outside the DRG payment system. Under Medicare, costs are captured in the annual
Medicare cost report and an annual settlement is made so that the reimbursement reflects the actual
costs associated with acquiring each organ. A separate schedule is prepared and a separate calculation
is performed for each type of organ.
Laboratory – Free-Standing and Hospital-Based
Providers bill services on a CMS-1500 or UB-04 claim form. When not part of an inpatient or
outpatient APC, providers bill lab services on the CMS-1500 form and reimbursement is calculated
using the CMS fee schedules. Hospital-based laboratories should be billing using the UB-04 claim
form. All providers should consult the CMS laboratory reporting and billing requirements.
Reimburse lab services according to the CMS Medicare clinical lab fee schedules. If a Medicare rate is
not found, payment is based on 130% of the Medicaid rate.
Long Term Care Hospital
Providers bill services on a UB-04 claim form. Reimbursement is according to the CMS Medicare
Long Term Care Hospital (LTCH) PPS Pricer at cms.gov.
Nurse Practitioner
The fee schedule for a nurse practitioner (NP) is 85% of the MPFS with no patient copayments.
Physical Therapy, Occupational Therapy, and Speech Therapy
Reimburse physical therapy (PT), occupational therapy, (OT), and speech therapy (ST), including
services provided by individual providers, approved clinics, rehabilitation agencies, comprehensive
rehabilitation facilities, and home health providers using the applicable Medicare fee schedule rates.
When providers bill for these therapies using the UB-04 form, they should follow the CMS reporting
and billing guidelines.
Physician – Medical Doctor (MD) and Doctor of Osteopathy (DO)
Reimburse all professional services according to the allowable rates published in the MPFS. If there is
not an allowable amount on the Medicare Fee Schedule, reimburse at 130% of the Medicaid fee
schedule.
Codes on the MPFS with status code “C” are Carrier priced codes, referred to as “By Report.” These
services include service codes ending in 99, team surgery, unusual services, and some codes for
technical and professional components. The CMS does not establish rates for these procedures because
they are subject to individual considerations by the local carrier, and may be determined by medical
record reviews to determine coverage and pricing. Individual consideration by Medicare carriers
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Library Reference Number: PRHP10001
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Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
cannot be replicated effectively for Healthy Indiana Plan pricing; therefore, covered services under
status code “C” is reimbursed at 130% of the Medicaid rate.
Physician Assistant
Reimburse physician assistant services at 85% of the MPFS, except for covered physician assistant
(PA) at surgery services and services performed in a hospital.
Reimbursement for services performed in a hospital is limited to 75% of the Medicare fee schedule
amount.
Physician Shortage Area
No physician shortage area (PSA) payments are required for HIP.
Pregnancy
Pregnancy and maternity services provided as a benefit under any HIP plan will be reimbursed at the
same rates as those reimbursed in the Hoosier Healthwise program.
Prosthetic Devices
Reimburse for prosthetic devices at 100% of Medicare DMEPOS fee schedule.
Psychiatric Hospital – Inpatient and Outpatient
The Inpatient Psychiatric Facility Prospective Payment System (IPFPPS) is used for freestanding
psychiatric hospitals and certified psychiatric units of general acute care hospitals. Calculate
reimbursement using the Inpatient Psychiatric Facility Prospective Payment System (IPF) PPS Pricer
available at cms.gov.
Outpatient reimbursement is based on Medicare APC payment methodology.
Radiology
Reimburse radiology services, including outpatient radiology services, using the covered CPT code
and rate published in the MPFS. If a Medicare rate is not found, reimbursement is based on 130% of
the Medicaid fee schedule allowed amount.
Reimburse outpatient radiology services according to the APC rates for outpatient claims.
Radiology furnished to skilled nursing facility (SNF) patients cannot be billed separately for the
technical component – payment is included in the comprehensive per diem. When an outside entity
performs a diagnostic test for an SNF patient, the outside entity must bill the SNF.
Providers bill the professional component for a physician to read a test on a CMS-1500 claim form.
Reimburse for the professional component based on the MPFS.
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Policies and Procedures as of February 1, 2015
Version: 6.0
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Healthy Indiana Plan Reimbursement Manual
Rehabilitation Hospital – Inpatient
Calculate reimbursement based on the Inpatient Rehabilitation Facility PPS Pricer available at
cms.gov.
The Inpatient Rehabilitation Facility Prospective Payment System (IRFPPS) is used for freestanding
rehabilitation hospitals and certified rehabilitation units of general acute care hospitals. Calculate
reimbursement using the IRFP Pricer available at cms.gov.
Rehabilitation Hospital – Outpatient
Reimburse based on Medicare APC payment methodology. (See Acute Care Hospital Outpatient.)
Rural Health Clinic
Reimburse services using the Medicare reimbursement rates paid to non-FQHC/RHC providers. The
FSSA will continue to provide wrap-around payments up to the Medicaid FQHC and RHC PPS rates
as necessary, with year-end settlements based on claims data. Wrap-around payments and year-end
settlement payments are based on claims paid during the period. For claims paid in a calendar year,
any difference between the HIP insurer payment and payment under Medicaid PPS is accounted for in
the HIP year-end settlement calculations.
Rural Health Clinic – Laboratory or Technical Component of
Diagnostic Tests Done in RHCs
Reimburse lab services according to the Medicare clinical lab fee schedule. If a Medicare rate is not
found, base the payment on 130% of the Medicaid rate.
Skilled Nursing Facility – Individual and Provider-Based
Reimbursement of skilled nursing facility (SNF) inpatient services are based on the PPS methodology
using the CMS SNF Pricer available at cms.gov. Resource Utilization Group (RUG) and health
insurance prospective payment system (HIPPS) codes are used.
The HIP plans include 100 days of SNF coverage per benefit period.
Medicare requires a member to have a three-day qualifying inpatient hospital stay within 30 days prior
to admission to an SNF. The beneficiary must require skilled nursing care for a condition treated
during the qualifying stay, or for a condition that arose while the beneficiary was in the SNF. Medicare
uses an inpatient stay as a qualifying event and HIP does not; therefore, HIP reimburses based on the
following:
• Medically necessary
• Three-day qualifying event not required
• Reimbursement at 130% of the Medicaid rate
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Healthy Indiana Plan Reimbursement Manual
Reimbursement Procedures
Surgical Dressings
The Medicare DMEPOS fee schedule applies to all surgical dressings except those applied incidentally
to a physician’s professional services, those furnished by a home health agency (HHA), and those
applied while a patient is being treated in an outpatient department or as an acute care inpatient.
Swing Bed
Reimburse for a swing bed the same as for any other SNF.
Unaccounted Services
For any services provided that are not listed in this manual, the provider shall be reimbursed at the
Medicare rate applicable or 130% of the Medicaid rate for that service.
Vaccines
Reimburse vaccines according to the Medicare rate or 130% of the Medicaid rate.
Vision
Vision services are covered under HIP Plus and HIP State Plan coverage. HIP Basic does not include
vision services. Pregnant women who are in HIP Basic are eligible to receive vision services as a part
of their maternity wrap-around services. In addition, 19- and 20-year-old members enrolled in HIP
Basic receive vision services through EPSDT benefits.
Library Reference Number: PRHP1000
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
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Healthy Indiana Plan Reimbursement Manual
Index
A
E
acute care hospital
inpatient.................................................. 2-1
outpatient ................................................ 2-2
acute to acute hospital transfer ................. 2-10
acute to post hospital transfer ................... 2-10
admission, emergency................................ 2-9
air ambulance ............................................ 2-3
ambulance
air ........................................................... 2-3
ground .................................................... 2-4
independent ............................................ 2-3
provider based......................................... 2-3
ambulatory surgery center .......................... 2-4
anesthesia .................................................. 2-4
ASC .......................................................... 2-4
assistant at surgery, physician .................... 2-5
ED ............................................................ 2-8
emergency admission ................................ 2-9
emergency room ........................................ 2-8
end-stage renal disease facility................... 2-9
enteral nutrition ......................................... 2-8
ER............................................................. 2-8
ESRD ........................................................ 2-9
B
CAH.......................................................... 2-7
cancer hospital
inpatient services..................................... 2-5
outpatient services................................... 2-5
certified registered nurse anesthetist ........... 2-6
chiropractic services .................................. 2-5
clinical nurse specialist .............................. 2-6
clinical psychologist .................................. 2-6
clinical trial services .................................. 2-7
CMHC ...................................................... 2-7
CNS .......................................................... 2-6
codes, consultation..................................... 2-7
community mental health center ................. 2-7
consultation codes...................................... 2-7
cosurgeon .................................................. 2-7
cosurgeon, team surgery............................. 2-7
critical access hospital................................ 2-7
CRNA ....................................................... 2-6
health professional shortage area.............. 2-10
home health agencies ............................... 2-10
home infusion.......................................... 2-10
hospice .................................................... 2-10
hospital
acute care hospital
inpatient............................................... 2-1
outpatient ............................................. 2-2
cancer
inpatient services.................................. 2-5
outpatient ............................................. 2-5
CMHC owned critical access .................. 2-7
critical access.......................................... 2-7
laboratory ............................................. 2-11
long term care ....................................... 2-11
psychiatric
inpatient............................................. 2-13
outpatient ........................................... 2-13
rehabilitation
inpatient............................................. 2-13
outpatient ........................................... 2-13
transfer ................................................. 2-10
HPSA ...................................................... 2-10
human organ transplant............................ 2-11
D
I
devices, prosthetic ................................... 2-12
diabetic shoes ............................................ 2-8
DME ......................................................... 2-8
DO .......................................................... 2-12
dressings, surgical............................. 2-8, 2-14
drugs ......................................................... 2-8
durable medical equipment ........................ 2-8
infusion, home......................................... 2-10
bed, swing ............................................... 2-14
blood ......................................................... 2-5
C
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Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0
F
federally qualified health center ................. 2-9
FQHC ....................................................... 2-9
G
ground ambulance ..................................... 2-4
H
L
laboratory
free-standing......................................... 2-11
hospital................................................. 2-11
RHC ..................................................... 2-14
I-1
Index
long term care hospital ............................. 2-11
LTCH ...................................................... 2-11
M
MD.......................................................... 2-12
N
noncovered services .......................... 2-7, 2-12
not IHCP emergency admission ................. 2-9
NP ........................................................... 2-11
nurse
certified registered nurse anesthetist ........ 2-6
clinical nurse specialist............................ 2-6
nurse practitioner .................................. 2-11
nurse practitioner ..................................... 2-11
PSA ........................................................ 2-12
psychiatric hospital
inpatient ............................................... 2-13
outpatient ............................................. 2-13
psychologist, clinical ................................. 2-6
PT ........................................................... 2-11
R
radiology ................................................. 2-13
rehabilitation hospital
inpatient ............................................... 2-13
outpatient ............................................. 2-13
RHC........................................................ 2-14
laboratory ............................................. 2-14
technical component of diagnostic test .. 2-14
O
S
occupational therapy ................................ 2-11
organ transplant ....................................... 2-11
orthotics .................................................... 2-8
OT........................................................... 2-11
out of network emergency admission ......... 2-9
out of state emergency admission ............... 2-9
services, noncovered......................... 2-7, 2-12
skilled nursing facility ............................. 2-14
SNF ........................................................ 2-14
speech therapy......................................... 2-11
ST ........................................................... 2-11
surgeon ..................................................... 2-7
surgical dressings ............................. 2-8, 2-14
swing bed ................................................ 2-14
P
PA ........................................................... 2-12
parenteral nutrition..................................... 2-8
PEN .......................................................... 2-8
physical therapy....................................... 2-11
physician
assistant at surgery .................................. 2-5
DO ....................................................... 2-12
MD ....................................................... 2-12
physician assistant ................................... 2-12
physician shortage area ............................ 2-12
pregnancy ................................................ 2-12
prosthetic devices .................................... 2-12
prosthetics ................................................. 2-8
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Healthy Indiana Plan Reimbursement Manual
T
team surgery, cosurgeon ............................ 2-7
therapy
occupational ......................................... 2-11
physical ................................................ 2-11
speech .................................................. 2-11
transfer .................................................... 2-10
transplant, organ ...................................... 2-11
V
vaccines .................................................. 2-15
Library Reference Number: PRHP10001
Published: June 4, 2015
Policies and Procedures as of February 1, 2015
Version: 6.0