Is it possible that the admin's being 'included' in the J-codes, instead of the E/M? That would make more sense to me. I'm not positive, but I think I've seen administration codes bundled into J-codes for Medicare before. It's something you should definitely look up on your MAC's website. I also believe that there are a few paragraphs in the back of the HCPCS books, but I don't have mine with me, so I'm not much help telling you where to look.
If that's not the case, you should definitely appeal with records and documentation supporting the way you're billing it (according to CPT guidelines). That's not something that's done nationwide, and it contradicts CPT guidelines - when many patients rely on some kind of secondary commercial or Medicaid coverage, it's unreasonable to ask you to follow some made-up utilization of CPT codes and modifiers, just for them. I'd fight this one all the way to the state department of insurance (or insurance commisioner - whichever's relevant).
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