Premera Blue Cross Blue Shield of

October 2008 Network news News from Premera Blue Cross Blue Shield of Alaska Premera has implemented the Advanced Imaging Quality Initiative. Contents Company Updates page 1 Claims & Payment Policy Updates page 2 Online Services Updates page 3 Medical Policy Updates page 4-5 Pharmacy Updates page 6 Administrative Resources page 6 Company Updates AIQI Gains Provider Participation Premera Blue Cross Blue Shield of Alaska launched the Advanced Imaging Quality Initiative in July 2008. This initiative applies clinically based guidelines to outpatient CT, MRI, MRA, and Nuclear Cardiology services to support appropriate management of advanced imaging utilization, cost, quality, and patient safety. We want to thank our network providers for your participation and share some messages and updates about the status of the program: w So far, we are encouraged by the significant participation from our network providers, and we have received positive comments from providers about the process. We appreciate your efforts to collaborate on this important initiative. w Premera and our vendor, American Imaging Management (AIM), are working diligently to respond to provider questions. w Imaging providers should not delay or interrupt urgent services to Premera members as a result of this initiative. w To help the process go quickly, providers should have the following clinical information on hand when submitting a web or call-in request to AIM. Diagnosis suspected or confirmed Symptoms (including duration, frequency, and intensity) Treatment (including duration and type) Previous relevant testing (diagnostic imaging, lab results, if applicable) Is this injury related? w Providers should contact AIM Customer Service 1-866-666-0776 for assistance with the following: Online/call-in process Submitting a review request Registration, log-in, web functionality, system requirements Questions about AIM s clinical guidelines Additional information about this initiative is available on our Provider Portal at Premera.com/provider. We are interested in hearing how the program is working in your practice. If you have further questions or feedback about this initiative, please call Premera Physician and Provider Relations: 1-800-722-4714, option 4. An Independent Licensee of the Blue Cross Blue Shield Association October 2008 Alaska Network News 1

Claims & Payment Policy Updates Payment Policy Reminder: Modifiers 25 and 59 Modifiers should be used to indicate if a service or procedure has been altered by a specific circumstance, but they do not change the actual code or procedure definition. While most modifiers are applied correctly, industry studies have identified that modifiers 25 and 59 are frequently used incorrectly.* Please refer to the definitions and billing guidelines below to ensure proper use of these modifiers. Definitions and Billing Guidelines: Premera s payment policy for the use of these two modifiers is based on the modifier definitions described in the CPT 2008 (Current Procedural Terminology Professional Edition) produced by the American Medical Association (AMA), as well as Ingenix Coding Lab: Understanding Modifiers. w Modifier 25 (Significant, separately identifiable Evaluation and Management service by the same physician on the same day of the procedure or other service) Modifier 25 is used to indicate that, on the day a procedure or service (identified by a CPT code) was performed, the patient required a significant, separately identifiable evaluation and management (E/M) service. This service is above and beyond the other service provided, or beyond the usual pre-operative and post-operative care associated with the procedure performed. Correct use of the modifier requires that modifier 25: Should only be appended to E/M service codes Should not be used to report an E/M service that resulted in the decision to perform a major surgery (see CPT definition of modifier 57) Should not be appended to an E/M service performed on the same day as a minor surgical procedure when the patient s visit was solely for performance of the minor procedure. w Modifier 59 (Distinct Procedural Service) Modifier 59 identifies a procedure or service not normally reported with another, but which is appropriate to report under the circumstances. This may occur when reporting a different session or patient encounter, a different procedure or surgery, a different site or organ system, a separate incision/or excision, a separate lesion, or a separate injury or area of injury not ordinarily encountered or performed on the same day by the same physician. Correct use of the modifier requires that modifier 59 be used only on the procedure designated as the distinct procedural service and that the medical record clearly documents it as a separate distinct procedure. Please note that modifier 59 should not be used when another already established modifier is more appropriate. Use modifier 59 to best explain the circumstances, but only if there is no other modifier available that is more descriptive. Final payment is subject to Premera s fee schedule and payment policies, a member s eligibility, coverage and benefit limits at the time of service and claims adjudication edits common to the industry. If you have questions, contact the Physician and Provider Relations team at 1-800-722-4714, option 4. * The Office of Inspector General (OIG) identified as many as 47% of claims submitted to the Centers for Medicare & Medicaid Services (CMS), using modifier 59, were billed incorrectly. Department of Health and Human Services, Office of the Inspector General (OIG) found 35% of claims using modifier 25 did not meet program requirements. Federal Employee Program (FEP) Appeals When submitting an appeal for a FEP member, please send the appeal to the address listed below. Submitting the appeal to any other address (e.g., Premera Blue Cross Blue Shield of Alaska, claims, correspondence, etc.) may cause a delay in processing the appeal, and can often result in unnecessary follow-up. For more information visit www. premera.com/providerfep. Federal Employee Program Appeals Department PO Box 91058 Seattle, WA 98111-9158 2 October 2008 Alaska Network News

Online Services Updates Secure Email Capability Premera now has secure email. Using secure email enables you to communicate with us without the threat of interception by an outside party. Regular email is not considered secure. Called Proofpoint Secure Messaging, the new secured email is encrypted, meaning that the message contents are scrambled and can be read only by the intended receiver. No special software is needed. Here s how to send a secure message: To send a message to us: w In your Internet web browser, go to https://voltage-pp-0000.premera. com/login/ w Sign in by entering your email address, and then click Next. w At this point, you will be asked to authenticate yourself by answering some questions. w Upon completion of the authentication process, a compose page will be displayed. w In the To field, enter the recipient s email address. (To send a message to multiple recipients, enter their email addresses separated by commas, semicolons or blank spaces.) w In the Subject field, type the subject of your message. w Type your message in the large text box. w To attach a file, click Browse, locate and select the file to attach, and then click the Attach button. w Click Send Secure. To respond to a message from us: w You will receive a message from Premera with an attachment. w Open the attachment and click read message, which for first time use only, will launch the SecureMail ID creation. w You will be asked to create your SecureMail ID and password. w Then click Continue and you will be taken to your secure email with Premera. Enhanced Claims Detail Available on Provider Portal We recently enhanced the claims lookup function at Premera. com/provider to give providers more information about the status of a claim. The claims detail page now lists the specific item, when a claim shows as pended for external documentation (i.e., incident questionnaire, other health insurance information, medical records, etc.). By providing this level of detail, you will be able to work more efficiently with the member to supply the necessary documentation, resolve issues and expedite claims processing. If the claim is in the normal processing cycle, and is not pended for any reason, the status will show claim in process. Did you know we process 97 percent of claims within 30 days of receiving them? To increase efficiency and minimize phone calls for your office, please allow at least 30 days for claims processing, before contacting us by phone. Calling prior to the 30-day period does not typically expedite your payment, and may actually increase your administrative costs. You can quickly obtain claims information on our secure web site at Premera.com/provider. Log on 24 hours a day, 7 days a week to use the following options:* w Eligibility and Benefits w Claims Status w BlueExchange (for Blue Cross and/or Blue Shield BlueCard, NASCO, and FEP members) * You must register at www.onehealthport.com for a free ID and password, before you can access the secure area of the portal. October 2008 Alaska Network News 3

Medical Policy Updates Physicians, Providers and Office Staff Premera Blue Cross Blue Shield of Alaska medical policies are guides in evaluating the medical necessity of a particular service or treatment. We adopt policies after careful review of published peer-reviewed scientific literature, national guidelines and local standards of practice. Since medical technology is constantly changing, we reserve the right to review and update our policies as appropriate. When there are differences between the member s contract and medical policy, the member s contract prevails. The existence of a medical policy does not guarantee that the member s contract allows the service. Medical policies are now available on the www.premera.com website. Go to the Provider Portal and then to Library. Click on Reference Info and then click on Medical Policies. If you are not able to obtain the policy from that site and you would like a copy of a particular medical policy, e-mail your request to medicalpolicy@premera.com. If you do not have Internet access, you may call 1-800-722-4714. Note: All policy numbers begin with CP.MP. The following policy changes are effective for dates of service of July 8, 2008, and later: PR.2.01.500 Allergy Testing. Policy statement revised to add Nambudripad s Allergy Elimination Technique (NAET) to the list of allergy tests considered investigational in the diagnosis of an allergic patient. BC.2.04.18 HIV Genotyping and Phenotyping. Policy statements revised. HIV genotyping or phenotyping may be considered medically necessary in patients with acute or recent infection for guiding treatment decisions. HIV genotyping or phenotyping may be considered medically necessary in antiretroviral naïve patents entering treatment. PR.5.01.600 Pharmacologic Treatment of Psoriasis and Psoriatic Arthritis. Policy statements updated to call out preferred agent and second line agents. Both preferred and second line agents are considered medically necessary when guidelines are met. Infliximab is generally considered a second line agent with the exception of treatment for severe pustular, exfoliative or inflammatory psoriasis. Use of a second line agent for psoriatic arthritis without prior use or failure/intolerance of a preferred agent is considered not medically necessary. Psoriatic Arthritis policy statements added. BC.6.01.04 Intravascular Ultrasound Imaging of Coronary Arteries. This policy has been deleted and will no longer be reviewed. AR.6.01.16 Magnetic Resonance Angiography of Vessels of the Head, Neck, Abdomen, Pelvis, and Lower Extremity. This policy has been deleted and will no longer be reviewed. PR.7.01.516 Morbid Obesity Surgery. Policy statements added. Prophylactic cholecystectomy in the absence of pre-surgery gall bladder disease is not medically necessary during obesity surgery. Endoscopic procedures (e.g. insertion of the StomaphyX device) to treat weight gain after bariatric surgery to remedy large gastric stoma or large gastric pouches are considered investigational. October 2008 Alaska Network News 4

Medical Policy Updates The following policy changes are effective for dates of service of August 12, 2008, and later: BC.4.01.04 Endometrial Ablation. This policy has been deleted and will no longer be reviewed. PR.5.01.601 Pharmacologic Treatment of Rheumatoid Arthritis and Other Arthropathies. Policy statement clarified to include juvenile idiopathic arthritis as a medically necessary indication. Use for other autoimmune rheumatologic conditions when all conventional therapies have been tried and failed or where they are clinically contraindicated may be considered on a case-bycase basis. PR.5.01.517 Use of Vascular Endothelial Growth Factor Receptor (VEGF) Inhibitors and Other Angiogenesis Inhibitors in Oncology Patients. New Policy. Bevacizumab (Avastin ) may be considered medically necessary for first line treatment of patients with metastatic colorectal cancer (CRC) in combination with 5-FU-based chemotherapy regimens; second-line treatment of patients with metastatic renal cell carcinoma refractory to immunotherapy; treatment of patients with advanced non-squamous cell nonsmall cell lung cancer (NSCLC) in combination with a taxane plus carboplatin; and treatment of patients with recurrent or metastatic breast cancer in combination with a taxane or, treatment of recurrent high grade (grade IV) glioblastoma in combination with Irinotecan. Bevacizumab (Avastin ) is considered investigational for all other indications including ovarian cancer. Lenalidomide (Revlimid ) may be considered medically necessary for treatment of myelodysplastic syndrome and treatment of multiple myeloma. Use of Revlimid to treat other diagnoses is considered investigational. PR.5.01.518 Bcr-Abl Kinase Inhibitors. New Policy. Imatinib (Gleevec ) may be considered medically necessary for treatment of newly diagnosed adult and pediatric patients with Philadelphia chromosome positive chronic myeloid leukemia (Ph+ CML) in chronic phase; treatment of Ph+ CML in blast crisis, accelerated phase, or in chronic phase after failure of interferon therapy; treatment of pediatric patients with Ph+ CML, whose disease has recurred after stem cell transplant, or who are resistant to interferon therapy; treatment of adult patients with relapsed or refractory Philadelphia chromosome positive acute lymphoblastic leukemia (Ph+ALL); and treatment of patients with Kit (CD117) positive unresectable and/or metastatic malignant gastrointestinal stromal tumors (GIST). Dastainib (Sprycel ) and Nilotinib (Tasigna ) may be considered medically necessary for adults with chronic, accelerated, or myeloid or lymphoid blast phase chronic myeloid leukemia refractory to Gleevec; treatment of adults with Philadelphia chromosome positive acute lymphoblastic leukemia (Ph+All) refractory to Gleevec; and treatment of patients with gastrointestinal stromal tumor (GIST) refractory to Gleevec. PR.5.01.519 Mecasermin; recombinant human insulinlike growth factor-1 (Increlex ). New Policy. Mecasermin may be considered medically necessary for its FDA-approved indication for the treatment of growth failure in children with severe primary IGF-1 deficiency (growth hormone receptor mutations, post-growth hormone receptor signaling pathway mutations, or IGF-1 gene defects) and in those with growth hormone (GH) gene deletion who have developed neutralizing antibodies to GH. Use of mecasermin to treat all other indications, including but not limited to, less severe forms of IGF-1 deficiency, secondary forms of IGF-1 deficiency (GH deficiency, malnutrition, hypothyroidism, or chronic corticosteroid therapy), growth failure due to other identifiable causes (e.g., Prader-Willi syndrome, Turner syndrome, Noonan syndrome), diabetes mellitus, AIDSassociated wasting, women with anorexia nervosa, obesity in postmenopausal women, advanced chronic renal failure, cystic fibrosis, amyotrophic lateral sclerosis (ALS), severe head injury, or use in combination with GH is considered investigational. Use of Mecasermin for idiopathic short stature is considered not medically necessary. BC.6.01.33 Wireless Capsule Endoscopy as a Diagnostic Technique in Disorders of the Small Bowel and Esophagus. Policy statement added. The patency capsule is considered investigational, including use to evaluate patency of the gastrointestinal tract before wireless capsule endoscopy. PR.7.01.533 Reconstructive Breast Surgery/Management of Breast Implants. Policy statements amended under explantation for reconstructive purposes and explantation for cosmetic purposes to include or other malignancies involving the breast. All other indications for explantation of implants placed for cosmetic purposes maybe contractually excluded as a non-covered service, irrespective of the existence of a medical necessity criteria described in the above section devoted to explantation of implants placed for reconstructive purposes. PR.8.03.502 Physical Medicine and Rehabilitation. Policy statement revised. Physical therapy services may be considered medically necessary when performed to meet the functional needs of a patient who suffers from physical impairment, functional limitation or disability due to disease, trauma, congenital anomalies, or prior therapeutic intervention. October 2008 Alaska Network News 5

Premera Blue Cross Blue Shield of Alaska P.O. Box 327 Seattle, WA 98111 PRESORTED STANDARD U.S. POSTAGE PAID SEATTLE, WA PERMIT NO. 2944 Please post or circulate this newsletter in your office Pharmacy Updates Specialty Pharmacy Network Change Effective Oct. 1, 2008, Caremark Specialty Pharmacy will no longer be part of Premera Blue Cross Blue Shield of Alaska s Specialty Pharmacy Network. Walgreens Specialty Pharmacy will replace Caremark on this date. Premera will continue to offer Accredo Health Group (a Medco company) on its other contracted Specialty Pharmacy provider. We will directly notify patients who are affected by this change in early fall of this year. Walgreens Specialty Pharmacy will work with your patients to transfer their prescriptions from Caremark starting October 1. Providers may be contacted by either Walgreens Specialty Pharmacy or patients to assist in this transition. If you have any questions concerning this transition, call Premera Physician and Provider Relations at 1-800-722-4714, option 4. Administrative Resources What s Coming? Calculate Patient Liability Premera Blue Cross Blue Shield of Alaska recognizes that patient out-of-pocket costs and the expense to collect these costs are rising. Determining a patient s out-of-pocket cost at the time of service could allow for accurate up-front collection and eliminate the need for post-billing. A future enhancement for physicians and other professional providers billing staff will be the ability to calculate the patient s portion of liability at the time of service. This new estimating tool will support the reduction of provider administrative and collection expenses and will be available in 2009. Please watch for future announcements about this exciting new technology. Network News Back issues of Network News are on our Web site at premera.com/provider in the Library on the Provider page under Communications. 6 October 2008 Alaska Network News 012335 (10-2008)