Are you located in a state that requires sales tax?

If you are please read the following information:

1. Purpose

This document provides a best practices guideline for reporting taxes on dental services in jurisdictions where applicable. The dental community has come together to provide guidance on use of the CDT Code “D9985 sales tax“ This guideline was proposed by the NADP, and developed in collaboration with the ADA, ASCX12, NDEDIC and WEDI. Individuals from several organizations, acknowledged below, compiled this best practices guideline to instruct the dental community - payers, practice management companies, clearing houses and providers – on how and to apply the code consistently.

2. Background

Recognizing the trend in states adopting sales taxes for health care treatment, the ASC X12,version 5010 electronic claim (837D) allows for the inclusion of sales tax at the line level while the remittance transaction (835) includes provisions for applying such taxes at either the total claim level or at the line level. It was determined that in the absence of having a line level standard available prior to the version 4010/5010 transactions, some dental payers and/or clearinghouses process sales/service taxes in different ways, as indicated below.

 Input a “Dummy” proprietary, procedure code at the claim level or service line level.

 Input a CDT “Not Otherwise Classified” procedure code, for example, D9999 with a written

description/note such as “Sales Tax.”

 Apply the lump-sum sales/service tax at the claim level. To address the inconsistencies, NADP put forth a recommendation through the ADA CDT Code maintenance process to create a new CDT code to support reporting taxes on dental services.

 As of 11/01/2013, three U.S. states have imposed a tax on services rendered: Hawaii, New

Mexico and Minnesota.  More states will be added every year so keep your email open and I will send you any other states as they are added.

CDT Code “D9985 sales tax” is effective January 1, 2014. This code is used in a jurisdiction that has enacted a tax on dental services and the billing dentist or dental entity elects to include this cost on a claim submission.

D9985 can be entered on the service line for each procedure, or in the total where not included in the fee.

The total amount coded to D9985 for each claim, should be the total amount of individual tax amounts for all procedures on the same claim submission.

3. Complete Instructions

 837Dv5010A2

When D9985 is recorded on a separate service line the following TR3 instructions are affected.

 AMT - SALES TAX AMOUNT

Loop: 2400 – SERVICE LINE NUMBER

Usage: – Situational

SV3 – DENTAL SERVICE

Loop: 2400 – SERVICE LINE NUMBER

SV302 782 Monetary Amount

 IMPLEMENTATION NAME: Line Item Charge Amount: This is the total charge amount for this service line. The amount is the provider’s base charge only.

 ADA Dental Claim Form

 CDT Code D9985 is recorded on any unused line (1 through 10) in the ‘Record of Services Provided' section of the form.

NOTE: Billing entities may record sales tax in different ways on a claim submission, such as: 

 Page 5 of 6

  Once after all procedures listed

 Once, after a single procedure subject to sales tax

 More than once after each procedure, or groups of procedures (e.g., by procedure date, if

claim is for services on multiple days), subject to sales tax

The following special instructions for Items 24 - 31 apply to the service line on which D9985 is reported.

24. Procedure Date (MM/DD/CCYY): Enter date the dental procedure, or procedures, subject to sales tax were performed. The date must have two digits for the month, two for the day, and four for the year.

25. Area of Oral Cavity: Not Used

26. Tooth System: Not Used

27. Tooth Number(s) or Letter(s): Not Used

28. Tooth Surface: Not Used

29. Procedure Code: Enter D9985.

29a Diagnosis Code Pointer: Not Used

29b Quantity: Cannot be greater than “1”

30. Description: Enter “Sales Tax.”

31. Fee: Enter the sales tax amount.

NOTE: The amount entered into Item #31 depends on how the Billing Entity elects to record sales tax.

Examples:

 One D9985 after all procedures listed on the claim submission – Enter the total of all individual tax amounts applicable to the listed procedures.

 A D9985 after a single procedure subject to sales tax – Enter the tax amount applicable to the single procedure.

 More than one D9985, each after a procedure, or group of procedures, subject to sales tax –

Enter the tax amount applicable to the procedure or group of procedures.

The following special instructions apply when D9985 is reported on any service line:

31a Other Fee(s): When charges imposed by regulatory bodies applicable to dental services must be reported, enter the amount here.

NOTE: Do not include sales tax in 31a when reported on a separate service line with CDT Code D9985.

32. Total Fee: Enter the sum of amounts in Item 31 from all service lines, and the amount (if any) in 31a.

 Copyright © 2013 American Dental Association. All rights reserved. Reprinted with permission.