Alabama Medicaid: Small Announcement, Huge Impact for Hospitals

on Tuesday, 25 September 2012. All News Items | AL Medicaid | Billing

On September 17, 2012, Alabama Medicaid released an Alert that announced changes effective October 1, 2012 for two hospital outpatient issues. The Alert is very concise and to-the-point with only a sentence or two about each issue, but the changes will have a huge impact on Alabama hospitals.

The first issue is that hospitals designated as 340-B entities can bill their “total charges” for outpatient pharmacy drugs. Previously, hospitals were required to report their acquisition costs to Medicaid for drugs purchased under the 340-B program. This was a challenging process for hospitals because it was a different charging practice than used for other payers and acquisition costs could vary from time to time. Whatever process hospitals used to accomplish this required efficient and frequent communication between the pharmacy and the financial end. To now be allowed to simply bill charges, as with other payers, will certainly streamline the process for the 340-B hospitals.

The second change announced in the Alert is that Medicaid will allow hospitals to bill clinic visit levels (CPT codes 99201-99215) on their claims using revenue code 51X. Prior to this change, Alabama Medicaid did not pay for facility clinic visits. The only other information in the announcement is that only one visit per day will be allowed; hopefully more details will be forthcoming. Note that Blue Cross still does not cover facility clinic visits, but Medicare has always paid for these codes under OPPS.

If Medicaid follows the Medicare billing guidelines, the rules are:

  • A clinic visit level would not be billed for every visit - - usually only for the visits where the patient is evaluated by the physician. (If patient comes in "ONLY" to get chemo, bill the chemo and the drugs, but no clinic visit.)
  • These charges would be in the charge description master (CDM), and then, when appropriate to report a visit level, you would select the applicable clinic visit level.
  • Clinic visit levels (with the corresponding codes) would be selected based on the definitions of an internal matrix. Levels are defined based on the amount of facility resources used for each level and should be able to be verified by other sources by review of clinically necessary documentation.
  • The CPT codes are the same as those reported by physicians:
    • 99201 - 99205 for new patients
    • 99211 - 99215 for established patients
  • Patients are defined as new or established based on whether they have been seen at the facility within the past 3 years or not.
  • You would not necessarily report the same CPT code level that the physician reports on the 1500 - they use entirely different criteria.

green-iconWe are an environmentally conscious company, dedicated to living “green” both at work and as individuals.


1900 Twentieth Avenue South
Suite 220
Birmingham, AL 35209


This email address is being protected from spambots. You need JavaScript enabled to view it.