MedicaidCoverageHigh impact
Newsletter Vol. 30, No.01
New Jersey Medicaid·NJ · OB-GYN·Provider Notice
Effective date
Jul 1, 2020
We identified it
Jun 20, 2026
Summary
New Jersey Medicaid (NJ FamilyCare) will no longer reimburse providers for non-medically indicated early elective deliveries (scheduled cesarean sections or inductions prior to 39 weeks gestation) performed on or after July 1, 2020. All labor and delivery claims must include ICD-10-CM diagnosis codes indicating week of gestation (Z3A category), and claims reporting less than 39 weeks without approved medical indication codes will be denied. Providers may appeal denials with supporting medical documentation.
Action Required
By July 1, 2020: Billing team must implement the following: (1) Update billing software to require ICD-10-CM diagnosis code Z3A (week of gestation) on ALL labor and delivery claims submitted to NJ FamilyCare Medicaid—claims without this code will be auto-denied; (2) Configure system to deny claims reporting gestational week less than 39 weeks UNLESS one of the approved medical indication codes (O10, O11, O12, O13, O14, O15, O16, O24, O30, O31, O33, O35, O36, O42, O43, O44, O45, O71, or R03) is present; (3) Add required documentation field to provider encounter forms/EMR templates to capture medical necessity justification for any delivery prior to 39 weeks; (4) Provide providers and clinical staff with ACOG Patient Safety Checklists (links provided in policy) to guide appropriate scheduling decisions and document medical indicators; (5) Establish appeal process: train billing team to submit Medicaid Claim Inquiry/Response Form (FD-998) with hard-copy claim and supporting medical documentation to DXC Technology Correspondence Unit for denied claims when medical necessity exists. Consequences: Claims lacking week of gestation code or meeting <39 weeks criteria without approved medical indicators will be denied payment by NJ FamilyCare Medicaid.