Optical Character Recognition Guidelines & Tips

All paper claims must be submitted on the current HCFA CMS-1500 (02/12) or current UB-04 CMS-1450 claim form. The official current forms are the only versions accepted by South Dakota Medicaid for each claim type.

Responsibility for Accurate Claims

The provider is ultimately responsible for the accuracy of claims filed for services. We recommend that providers set a policy to ensure all necessary information is included on the initial claim submission and the information is correct.  Providers should refer to our billing manuals for guidance in filling out claims. 

Guidelines for Submitting Clean Paper Claims

South Dakota Medicaid uses optical character recognition (OCR) to process paper claim forms. OCR is a means of inputting text into a computer. It involves scanning a paper document to create a digital image of the text and then using software to store knowledge about that digital image. With OCR, it is very important providers follow proper paper claim submission guidelines.

Failure to follow these guidelines could cause a denial, delay in processing, return of the claim, or affect payment accuracy.  There may be some exceptions made for small providers that submit less than 200 claims per year.

Font and Printing

• Use Courier New font for computer-generated claims. Do not print in italics, bold or script. Do not mix fonts.
• Use Pica 10 or 12-point typeface for claims typed on a typewriter.
• Do not type in italics or script.
• Use upper case letters for all claim data.
• Ensure none of the characters touch.
• Ensure no lines from the printer cartridge are anywhere on the claim.
• Do not use special characters, (dollar signs, dashes, asterisk, or backslashes) unless otherwise specified.
• Use an ink jet or laser printer to complete the CMS-1500 claim form. Because claims submitted with dot matrix printers have breaks in the letters and numbers, OCR equipment is unable to properly read these claims. Suppliers using dot matrix printers risk slow or incorrect processing of their claims.

Ink Color

The OCR equipment is sensitive to ink color. Follow these guidelines on ink color:

• Submit the scannable, red-ink version of the current HCFA CMS-1500 (02/12) or current UB-04 CMS-1450 claim forms.
• Do not use red ink to complete a claim form. OCR scanners "drop out" any red that is on the paper.  Use true black ink. Do not use any other color ink such as blue, purple, or red.

Avoid using old or worn ink cartridges, toner cartridges, or printer ribbons.

Alignment

To process a claim correctly, proper alignment of the claim form information is necessary. The OCR equipment may not read information that is not aligned properly, resulting in unnecessary denials or incorrect payment. To properly align data on the claim form, do the following:

• Center information vertically within the confines of each box on the claim form.
• Align all information on the same horizontal plane.
• Do not include more than six line items on a CMS-1500 claim form.
• Do not squeeze two lines of information on one line.

Handwritten Claims

Handwritten claims are difficult to read; therefore, they take longer to process. The OCR equipment may misread the information, resulting in the entry of invalid information for the claim. To ensure timely and accurate processing of claims, South Dakota Medicaid requires claims to be typed, not handwritten.

Additional Guidelines and Tips

• P.O. Boxes are not accepted in Locator 33, unless the physical location of the facility is entered in Locator 32.
• Diagnosis codes are required, unless you have been notified of an exemption.
• Qualifiers are required.  For example N4 should be listed in front of the NDC.
• Do not use unnecessary stickers, writing, or stamps on the claim form.
• Do not staple through the bar code.

Preprogrammed, Preprinted Information

Do not use preprinted or preprogrammed information on the CMS-1500 claim form. An example of preprinted or preprogrammed information is a qualifier of "ZZ in Locator 24I on all six detail lines but only submitting one claim detail line.

The area of most concern for preprinted or preprogrammed information is Locator 24 and the bottom of the claim form. Preprinted information in these areas cause the OCR equipment to read information not intended for the specific field.

Ordering Claim Forms

In order to purchase claim forms, contact the U.S. Government Printing Office at 866.512.1800, local printing companies, and/or office supply stores.  There may be cheaper options available for purchase online, but we cannot guarantee their quality.  You can also purchase claim forms online from: https://bookstore.gpo.gov/