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CMS Imposes New Zip Code Requirements on Claims

By: Mary Emma Karam and Virginia Alverson

As of January 2, 2007, CMS is requiring providers submitting claims for their primary facility and its subparts to submit a nine-digit zip code on their claims (CMS Change Request 5243). 

While this seems like a minor change to reimbursement forms, providers should take note because this change could have significant reimbursement consequences.  Since many private payors’ claims systems base their reimbursement policies on the standards set forth by CMS, it is possible that private payors will also require providers to submit nine-digit zip codes on their claims.  Additionally, providers are likely to find that state insurance companies may adopt the new zip code requirement.  Specifically, in defining a “clean claim,” the Texas Insurance Code, Section 843.336(e), provides that the State Insurance Commissioner may not require any data to be present on an electronic claim that is not required by Federal law.  However, now that CMS requires a nine-digit zip code, the State may eventually require such information. 

If both state insurance companies and private insurance companies follow CMS’ policies, providers should be aware that their claims may be rejected and/or returned for failure to include this additional information.  Therefore, it is advisable for all providers to revamp their electronic and paper claim forms to include all of the data CMS requires on a claim in order for it to qualify as a “clean claim” (including a nine-digit zip code).  This will help providers avoid and minimize the rejection of their claims for these types of minor errors.

If you have any questions with regard to this e-alert please contact Mary Emma Karam at mkaram@jw.com or Virginia Alverson at valverson@jw.com.

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