CurrentMolina HealthcarePolicy N/A

ESRD Prospective Payment System (PPS) consolidated billing for outpatient renal dialysis services

Governs Molina Healthcare reimbursement and billing expectations for outpatient End Stage Renal Disease (ESRD) dialysis services under the ESRD Prospective Payment System (PPS), including consolidated billing rules and state exceptions; affects ESRD facilities, outside providers, and billing staff.

Policy Summary

PayerMolina Healthcare

PolicyESRD Prospective Payment System (PPS) consolidated billing for outpatient renal dialysis services

Policy CodePolicy N/A

Change TypeNo material change

Effective DateN/A

Next Review DateN/A

Key ActionProviders other than the ESRD facility should seek payment from the ESRD facility for bundled renal dialysis services; include the AY modifier when services are unrelated to ESRD to permit separate payment.

SourceLink

POLICY UPDATE CHANGES

No material clinical or coverage changes in this revision.

Consolidated billingPrimary reimbursement approach described

IL, OH, SC, WA, WI, MedicareState exceptions noted

Created 04/26/2024; template 08/04/2025Documentation history

AY requiredModifier guidance

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ESRD PPS Consolidated Billing Coverage Criteria

Coverage criteria for ESRD PPS consolidated billing

Covered when ALL of the following apply:

ESRD facility is accountable for and compensated for furnishing all renal dialysis services under the ESRD PPS for outpatient maintenance dialysis; consolidated billing applies to these services whether furnished directly or through arrangements.

Source: policy overview and reimbursement guidelines

The ESRD PPS bundled payment includes specific Part B items and services such as laboratory tests, drugs and biologicals, equipment, and supplies; these items are covered under the bundle and are not separately reimbursable when provided to ESRD beneficiaries by non‑ESRD facilities.

Consolidated billing scope

If a provider other than the ESRD facility furnishes renal dialysis services that are part of the ESRD bundle to an ESRD beneficiary, that provider should seek payment from the ESRD facility rather than submitting a claim to the Medicare Administrative Contractor (MAC).

Billing routing guidance

When services are provided to an ESRD beneficiary for reasons unrelated to ESRD, the claim must include the AY modifier to permit separate payment; absence of the AY modifier may prevent separate reimbursement.

AY modifier requirement for non‑ESRD‑related services

State and payer exceptions modify these rules; providers must follow the state exception table for applicable exclusions (examples include exclusions and special rules for IL, OH, SC, WA, WI, and Medicare).

Follow state exceptions where applicable

Coding, Modifiers, and Disclaimer

Modifiers and example excluded codesModifier | HCPCS

AY	Modifier required on claims when renal dialysis beneficiaries receive services unrelated to ESRD to allow separate payment
J0606	CPT/HCPCS code listed as excluded for IL and OH in state exceptions

Coding disclaimer

Scope of code listingsCodes listed are for reference purposes only and may not be all-inclusive; listing does not guarantee coverage.

Deleted/ineffective codesDeleted codes and codes not effective at the time of service may not be eligible for reimbursement.

Coverage determinationCoverage is determined by the member benefit document; policy listing alone does not ensure payment.

Coding standardsMolina adheres to CPT® coding and expects providers to use industry-standard coding practices; improper billing may result in denial and recovery of payments.

Policy changesMolina reserves the right to revise this policy as industry practices change.

Billing and Provider Action Guidance

Billing Rule

Billing and payment routing guidance

Under the ESRD consolidated billing rules, providers other than the ESRD facility should seek payment from the ESRD facility rather than billing Molina or Medicare directly for services that are included in the ESRD PPS bundle. If a non-ESRD provider administers services unrelated to ESRD treatment (for example, cancer-related labs), the claim must include the AY modifier to permit separate payment. Providers should confirm whether services fall inside the ESRD bundle before billing and route payment requests to the ESRD facility when included.

If service is included in ESRD PPS bundle → seek payment from the ESRD facility, do not submit separate claim to MAC.
If service is unrelated to ESRD care and separately payable → include AY modifier on the claim to enable separate payment.

Note

State exceptions - provider action required

State and Medicare-specific exceptions require provider action. Review state rules before billing; the following exceptions identify codes/modifiers that are excluded from the ESRD consolidated billing bundle or have special handling and therefore may be billable separate from the ESRD facility.

Illinois (IL): Exclude CPT J0606 from ESRD consolidated billing — providers may bill separately for J0606.
Medicare (national): Exclude revenue code series 80X and exclude Modifier AY and HCPCS J0604 from consolidated billing (i.e., these are not treated under the ESRD bundle for Medicare claims).
Ohio (OH): Multiple exclusions — do not consider the listed CPT/HCPCS (including J0606, J0604, J0610, J0882, J0887, J1200, J1270, J1756, J1940, J2501, J2916, Q0163, Q4081, Q5105 and many panels such as 80047–80076 and others) and excluded modifiers (AY, 59, 91) and an extensive list of revenue codes (0800–0890 series and variants). These excluded codes/modifiers may be billed outside the ESRD facility bundle per OH rules.
South Carolina (SC): SC Medicaid does not apply ESRD PPS — Medicaid may not pay ESRD PPS; check state Medicaid policy before billing.
Washington (WA): Exclude claims paid via Medicaid fee schedule method; reports should include contract description, contract term description, and term type for both claims to clarify special contract language.
Wisconsin (WI): Exclude claims with custom contracts 'MP - HOSP - HSHS' for WI — these arrangements are handled outside the standard ESRD bundled billing.
Provider action summary: Verify state-specific exclusions and, when applicable, include required modifiers (for example AY when billing outside the ESRD bundle for unrelated services) or omit/handle excluded codes per the state or Medicare exception lists before submitting claims.