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Thursday, November 19, 2009

Medicare shoots first and asks questions later

On Oct. 5, 2009, the Centers for Medicare and Medicaid Services (CMS) quietly began implementing system edits intended to assure that Medicare Part B providers and suppliers bill for ordered or referred items or services only when those items or services are ordered or referred by physician and non-physician practitioners who are eligible to order/refer such services.  The edits are an expansion of existing claims edits intended to meet the Social Security Act requirements for ordering and referring providers.  Essentially, the law requires that a provider or supplier who bills Medicare for an item or service that was ordered or referred must show the name and unique identifier of the ordering/referring provider on the claim.

That is all well and good, but CMS has interpreted that to mean that claims that are the result of an order or a referral must contain the National Provider Identifier (NPI) and the name of the ordering/referring provider and the ordering/referring provider must be in the Medicare Provider Enrollment, Chain and Ownership System (PECOS) or in the Medicare contractor's claims processing system with the appropriate type of provider.  During Phase 1 of the implementation (Oct. 5, 2009 to Jan. 3, 2010),  if the ordering/referring provider is not in PECOS and is not in the claims system, the claim will continue to process and the Part B provider or supplier will receive a warning message on the Remittance Advice.  During Phase 2 (Jan. 4, 2010 and thereafter), if the ordering/referring provider is not in PECOS and is not in the claims system, the claim will not be paid. It will be rejected (but not denied), which means it can be resubmitted at some point, but it cannot be appealed.  For more information, you can read MedLearn Matters article 6417 on the CMS web site. 

Like seemingly all Medicare policies, this one is fraught with problems.  For instance, despite being enrolled in Medicare, if physicians and other health care practitioners are not in the PECOS database or in contractor files, those physicians, suppliers, and other health care practitioners to whom they refer and order services will not be paid. A physician or health care practitioner who enrolled in Medicare prior to 2003 when CMS began using PECOS will be required to re-enroll if they want to continue referring and ordering. As of July 2008, there were 793,346 physicians and other health care practitioners enrolled in Medicare.  According to data from an October 2009 Office of Inspector General report, there were 559,235 physicians and other health are practitioners in PECOS. Therefore, as many as 200,000 or 30 percent of all Medicare physicians and other health care practitioners are not in PECOS and will need to re-enroll, and we all know how glacial the pace of Medicare enrollment is. 

Another flaw is that some providers who commonly refer Medicare patients or order services for them do not typically enroll in Medicare.  For instance, some residents may not be enrolled in Medicare but will certainly be ordering or referring providers for Medicare purposes.  Likewise, dentists may be ordering/referring providers but otherwise have no reason to enroll in Medicare.  CMS staff indicate that they will soon be issuing instructions to deal with the dentist issue, but one wonders why CMS didn't think to do that before it started implementing the edits in question. 

Finally, physicians have no practical or convenient way to check whether the physicians or other health care practitioners who send them patients with orders or referrals are included in PECOS or other contractor enrollment records. CMS has promised to address this particular concern by making publicly available a list of eligible referral providers before January 2010, but again, one is left to wonder why they did not do so before implementing the edits.  I can only conclude that CMS staff favors the "shoot first and ask questions later" approach. 

In the meantime, downstream providers and suppliers of referred/ordered services/items are at risk of nonpayment, even though they are not responsible for the enrollment/reenrollment of physicians and other health care practitioners who legally order and refer patients to them for items or services.  That is why the AAFP, the AMA, and 54 other organizations are advocating with CMS to:

  1. Take action to ensure that otherwise acceptable claims are paid without delay or need for appeals;
  2. Indefinitely suspend the plan to deny these claims and instead wait at least until all practicing Medicare physicians, other health care practitioners, and residents can be revalidated and reenrolled or enrolled for the first time;  
  3. Focus its efforts on ensuring a smooth and efficient revalidation process, which will require physicians and other health care practitioners to re-enroll in Medicare if they have not done so since 2003; and, 
  4. Convene a high-level meeting with stakeholders to discuss concerns about ordering and referring physicians and other health care practitioners, and collaboratively develop a feasible and appropriate plan and timetable for addressing these concerns.

It remains to be seen how CMS will respond to this advocacy.  In the meantime, please be aware of the issue and how it may affect your Medicare claims beginning in January. 

Thursday, November 5, 2009

Sunny with a chance of gloom

There is potential good news on the Medicare horizon as far as family physicians are concerned.  However, the silver lining is attached to a big, black cloud that could rain on everyone's parade unless Congress intervenes by the end of the year.

On Friday, Oct. 30, the Centers for Medicare and Medicaid Services (CMS) put the final rule on the 2010 Medicare physician fee schedule on display for review and comment by all interested stakeholders.  CMS plans to publish the final rule in the Federal Register on Nov. 25, 2009.  CMS will accept comments until Dec. 29, 2009.

In the final rule, CMS finalized many of the proposals that it made in its proposed rule earlier this year.  For those of you keeping score at home, that's good news for family physicians.  In fact, in the final rule, CMS estimates that family physicians will experience a 4 percent increase in their Medicare allowed charges in 2010 as a result of the rule, all other things being equal.  That is second only to ophthalmologists and optometrists, who are projected to reap a 5 percent increase, and much better than physicians in many other specialties, who are expected to see a decrease in their 2010 Medicare allowed charges as a result of the rule.

Of course, with Medicare, there's always a catch, and the final rule on the 2010 physician fee schedule is no exception.  Under current law, the Medicare conversion factor, which translates Medicare's relative value units into payment allowances, is scheduled to decrease 21.2 percent on Jan. 1, 2010, which would more than wipe out the potential gains for family medicine noted above.  That means Congress has until Dec. 31, 2009, to intervene, as it has the last several years, to avoid this cut.  Forecasters inside the Beltway are optimistic, but as they say on Wall Street, past performance is no indication of future returns.

So, as we approach the new year, the outlook is sunny, but you might want to keep your umbrella handy, just in case.

Monday, November 2, 2009

Crossing the finish line

In a relay race, no matter how hard all the others run, if one runner drops the baton, the team will likely lose the race. Likewise, if you provide and document a patient's care and select the correct codes and modifiers for that care, but the claim gets sent to the wrong payer, denied, and written off as bad debt, you have likely missed the goal of getting paid for services provided. There are many steps and hand-offs in the race to getting paid so you need to be sure that each runner finishes his or her leg.

Now, I am not saying that there aren’t a lot of other factors influencing the financial health of your practice, such as payer fee schedules that are set too low. However, I’ve seen firsthand, and the statistics show, that a lot of the money that physicians should collect is left behind due to lack of training and discipline in the billing process. To collect all that is due your practice, you need trained and disciplined staff using a well-designed system.

I’m not talking about expensive computer systems or consultants. Much of this comes down to the basics that haven’t changed since the days of using a typewriter and a whole lot of White-Out to produce claim forms. Good billing practices have always depended on team work and efficient processes.

Some simple steps include the following:

  1. Verify the patient's insurance coverage each time a service is scheduled.
  2. Know what services may not be covered or require prior approval. 
  3. Get charges to the biller as soon as possible after services are provided.
  4. Verify charges billed against the sign-in sheets or other records of what patients were seen each day.
  5. Update insurance information every time charges are entered.
  6. Research all unpaid claims and take any necessary action within 45 days of date of service.
  7. Review a report of write-offs each month to determine appropriateness.


These steps illustrate that the process depends on a team of people (though in smaller practices, each person may run longer legs). The scheduler gets the initial information. The front desk staff copy the cards and update demographics. Clinical staff get any necessary prior approvals and document all charges promptly. Billing staff update information, enter charges correctly and follow-up on the account until paid. Finally, a manager or physician reviews what was paid and what was written off and makes adjustments as necessary to keep the team fit.

Need more information or some resources on billing and accounts receivable management? The AAFP has some resources to help. See the Billing & Claims section of the AAFP Coding Resources web page -- and, of course, the FPM Toolbox (click on the link titled "Billing, Collections and Claims Processing").

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