Changes coming to Medicare payments for durable medical equipment
If you prescribe durable medical equipment (DME) for your Medicare patients, you should be aware that, effective July 1, Medicare will expand its competitive bidding program for DME, prosthetics, orthotics, and other supplies. The expansion may affect where your patients can fill their prescriptions and how much they and Medicare end up paying for the DME.
The Centers for Medicare & Medicaid Services (CMS) introduced its competitive bidding program in nine areas of the country in 2011. Based on the program's success in those areas, CMS is extending it to 91 new areas across the country. CMS will also implement a national mail-order program for diabetic testing supplies on July 1.
The program affects Medicare payments for wheelchairs, oxygen, mail-order diabetic supplies, and more. Historically, Medicare based its payment for most of these items on historical charges, adjusted for inflation over time. However, many studies have shown that the prices Medicare has paid for certain medical equipment and supplies are excessive – sometimes three or four times retail prices and the amounts paid by commercial insurers.
Under the competitive bidding program, suppliers submit bids for certain medical equipment and supplies that must be lower than what Medicare pays for these items currently. Medicare then uses the bids to set the amount it will pay for those items and chooses the qualified, accredited companies with winning bids as Medicare contract suppliers. The lower Medicare payment amounts also lower a Medicare beneficiary’s co-payment.
The competitive bidding is part of CMS's efforts to fight fraud and waste in the Medicare program. Media reports have noted that, from 2009 to 2012, Medicare paid $43 billion for DME, more than 60 percent of which may have been improper. Similarly, CMS has introduced a pilot program that requires approval before Medicare will pay for power wheelchairs and scooters for beneficiaries in seven states with high rates of fraud and errors: California, Illinois, Michigan, New York, North Carolina, Florida, and Texas.
You and your patients can find a list of Medicare contract suppliers in your area by visiting Medicare's supplier directory tool or by calling 1-800-MEDICARE. For additional information, visit the Medicare DME Competitive Bidding Program's website, which includes all of the products and items that are covered under the program.
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Medicare delays penalties for claims with invalid or missing NPIs
In a recent post, I referenced that the day of reckoning was finally coming for those who order or refer items or services for their Medicare patients but who lack the proper identification. As it turns out, that day has been pushed back.
The Centers for Medicare & Medicaid Services (CMS) announced late last week that, due to technical issues, implementation of phase 2 of the ordering and referring denial edits is being delayed from May 1 to an unspecified future date. As a reminder, these edits would have denied certain claims from physicians and other eligible professionals who lacked a valid individual National Provider Identifier. Those claims include Medicare Part-B claims involving laboratories, imaging centers, durable medical equipment, orthotics, and supplies that have an ordering or referring physician/nonphysician provider as well as Part-A home health agency claims that require an attending physician.
CMS will advise physicians and other qualified health professionals of the new implementation date in the near future. In the interim, the agency will continue to attach warnings to those claims that would have been denied had the edits been in place.
All of this means that if you order or refer items or services for Medicare beneficiaries and you do not have a Medicare enrollment record, you have a little more time to submit an enrollment application to Medicare using the Internet-based Provider Enrollment, Chain, and Ownership System. As noted previously, physicians who have a valid opt-out affidavit on file are not required to enroll in Medicare for this purpose; CMS has a special, shorter enrollment form, known as the CMS-855O, for use by physicians and other health professionals who just refer and order services but do not bill Medicare directly.
More information on the new edits can be found here.
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Medicare to deny claims with no NPI
The day of reckoning is finally coming for those who order or refer items or services for their Medicare patients but who lack the proper identification.
On May 1, the Centers for Medicare & Medicaid Services (CMS) will begin instructing its contractors to deny Medicare claims from individuals who don't include a valid National Provider Identifier (NPI).
Section 6405 of the Affordable Care Act requires physicians or other eligible professionals to be enrolled in the Medicare program to order or refer items or services for Medicare beneficiaries. Also, Medicare requires that a physician or supplier that bills Medicare for a service or item show the name and unique identifier (i.e., the NPI) of the attending physician on the claim if that service or item was the result of an order or referral.
Beginning in October 2009, Medicare contractors began alerting billing providers if the identification of the ordering/referring provider was missing, incomplete, or invalid, or if the ordering/referring provider was not eligible to order or refer. The alerts were merely warnings, however, that the claims lacked the required information, and the claims were paid anyway. Beginning next month, however, CMS will deny Part B, durable medical equipment, and Part A home health agency claims that fail the ordering/referring provider edits.
Physicians and others who want to continue ordering and referring items and services need to establish their Medicare enrollment record and make sure they're of a specialty that is eligible to order and refer. You can enroll in the Medicare program here: Internet-Based Provider Enrollment, Chain, and Ownership System (PECOS). Physicians who have a valid opt-out affidavit on file are not required to enroll in Medicare. CMS also has a shorter enrollment form, known as the CMS-855-0, for use by physicians and other health professionals who refer and order services but do not bill Medicare directly.
More information on the new edits can be found in this Medicare bulletin.
– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians
Shields and swords
What is the difference between a shield and a sword? Sometimes, it's hard to tell and may depend on where you sit. This point was driven home to me recently in an exchange of correspondence between the AAFP and Wisconsin Physician Services (WPS), the Medicare contractor that processes Part B claims in several Midwestern states.
Earlier this spring, the AAFP submitted comments to WPS regarding a draft local coverage determination (LCD) that WPS posted regarding home and domiciliary services (PDF download). The AAFP expressed at least four concerns with the LCD, and it was clear from our comments that our primary concern was that WPS would use the LCD as a sword to unfairly penalize physicians who do home visits.
Although WPS does not typically respond individually to comments made regarding draft LCDs, it did choose to respond to the AAFP comments in this case. In doing so, it noted that a review of medical records for claims submitted by Part B providers in place of service "home" when the beneficiaries were also concurrently being seen by a home health agency showed that the service billed by the Part B provider was seldom, if ever, the service actually rendered. WPS also shared statistics showing that utilization of home visit codes paid under the Medicare physician fee schedule was significantly higher in WPS's service area as compared to national averages, with financial implications for the Medicare trust fund. From the letter, it was apparent that WPS viewed the draft LCD as a shield designed to protect Medicare and its beneficiaries.
So, is the LCD a sword or a shield? The answer clearly depends on whom you ask and, ultimately, how it is used. In any case, the point of the story is that, when dealing with Medicare (and, likely, other payers, too), it is important to remember that there are often legitimate differences in perspective that must be acknowledged and addressed if true dialogue and progress is to occur.
CMS offers free ICD-10 teleconference on Sept. 13
The AAFP has information and resources for learning about and planning for transition to HIPAA 5010 electronic transaction standards and ICD-10 diagnosis codes, but we thought it might also be helpful to alert you to the free resources that the Centers for Medicare & Medicaid Services (CMS) is providing. Among these resources are conference calls to provide basic information and answer questions you or your coding and billing staff may have.
CMS will soon host a national provider conference call on "ICD-10 Implementation in a 5010 Environment." Subject matter experts will review basic information on both ICD-10 and 5010 and explain how they are interrelated. A question and answer session will follow the presentations.
When: Monday, Sept. 13, 2010;
Time: 12:00 p.m. – 1:30 p.m. ET;
Target Audience: Medical coders, physician office staff, provider billing staff, health records staff, vendors, educators, system maintainers and all Medicare fee-for-service (FFS) providers.
The following topics will be discussed:
• ICD-10 implementation for services provided on and after Oct. 1, 2013;
• Differences between ICD-10 and ICD-9-CM codes;
• Tools for converting codes – General Equivalence Mappings (GEMs);
• Proposal to freeze ICD-9-CM and ICD-10 code updates except for new technologies and diseases;
• Compliance dates and timelines (no contingencies);
• 5010 before and after ICD-10 implementation;
• Readiness review for implementing HIPAA version 5010 and D.0;
• What you need to be doing to prepare;
• Medicare fee-for-service activities update.
For more information and to register for this informative session, please go to http://www.cms.gov/ICD10/02c_CMS_Sponsored_Calls.asp#TopOfPage on the CMS web site. Registration will close at 12:00 p.m. ET on Sept. 10, 2010, or when available space has been filled. No exceptions will be made. CMS asks that you please register early.
If your practice has not begun preparations for these big changes, this may be an invitation you don't want to miss.
New time limit for filing Medicare claims
Historically, as authorized by statute and the Centers for Medicare and Medicaid Services (
In the past,
The first new exception would apply when
- At the time the service was furnished the beneficiary was not entitled to Medicare; and
- The beneficiary subsequently received notification of Medicare entitlement effective retroactively to or before the date of the furnished service.
The second new exception would apply when
- At the time the service was furnished the beneficiary was not entitled to Medicare;
- The beneficiary subsequently received notification of Medicare entitlement effective retroactively to or before the date of the furnished service; and
- A state Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier 11 months or more after the date of service.
In the case of the first new exception, the time to file a claim would be extended through the last day of the 6th calendar month following the month in which the beneficiary received notification of Medicare entitlement effective retroactively to or before the date of the furnished service. In the case of the second new exception, the time to file a claim would be extended through the last day of the 6th calendar month following the month in which the state Medicaid agency recovered the Medicaid payment for the furnished service from the provider or supplier.
For the existing exception, the extension of time is the last day of the 6th calendar month following the month in which the error or misrepresentation is corrected. However, no extension of time will be granted when the request for this particular exception is made to
CMS's proposals are generally consistent with PPACA, and the proposed additional exceptions are welcome. However, one has to question why
Also, as regards the exception due to error or misrepresentation on the part of Medicare, one would think the extended time limit should be based on the month in which the error or misrepresentation is corrected and the physician has been notified of that fact. As proposed, the extended time limit begins when the error or misrepresentation is corrected, without apparent regard to whether the physician is aware of that fact. Recognizing that there may be some time between when the error or misrepresentation is corrected and when the physician is notified of this fact, it is at the latter point (i.e., the point at which the physician becomes aware of the correction) that the extended time limit should begin from a physician perspective.
Finally, there is a question that CMS does not address with respect to the exception based on retroactive beneficiary enrollment. Namely, the extended time limit commences with notification of the Medicare beneficiary regarding his or her retroactive entitlement effective date. However, if the beneficiary does not, in turn, notify the physician of the retroactive entitlement until after the extended claims filing time limit expires, does the beneficiary remain responsible for payment of the service? Hopefully, CMS will address this question in the final rule.
In the meantime, if you have yet to file a claim for dates of service before 2010, you have until the end of the year to do so, and the 12-month clock is ticking to file claims for services provided this year.
And so it begins ... Medicare claims pay out today, fees cut 21 percent
With half of the year behind us, the Medicare Physician Fee Schedule for 2010 still hangs in limbo. This afternoon, the Senate voted to delay the cut another six months, but the cut is still in place until the U.S. House of Representatives acts.
In response to Congressional inertia, CMS had issued guidance to the Medicare contractors on June 14 to continue holding claims with dates of service June 1 or later until Friday, June 18. So starting today, your claims for dates of service June 1 or later will be paid at the 21-percent reduced rate – and likely reprocessed later if Congress makes an updated fee schedule retroactive to June 1.
Hopefully the Congressional action will take place next week but in the meantime, your practice must determine if and how this affects your day-to-day operations. If you have a significant Medicare and Tricare patient population, you may need to assess your options for maintaining a workable cash flow and perhaps making some temporary cut backs in expenses:
- Are there any planned purchases that can be delayed?
- Can you schedule more procedures and ancillary services to offset the lost revenue?
- Would a push to clean-up outstanding accounts receivables make a difference?
- Can you limit the number of non-urgent Medicare and Tricare patients seen in the next few weeks to bring in more patients whose plans pay higher fees?
These disruptive and disheartening delays take away from your practice's ability to focus on quality care and waste tax dollars to pay for the reprocessing of claims due to untimely legislation and the unwillingness of our Congress to develop a long-term solution to this broken payment methodology. Help keep this issue in front of the Congressional representatives through AAFP Speak Out. Download and share this patient information piece about the broken Medicare physician payment system by placing copies in your waiting and exam rooms.
Stay tuned. Good, bad, or more of the same, we'll keep the reports coming. In the meantime, keep in mind this quote often attributed to Mark Twain: "No man's life, liberty, or property is safe while the legislature is in session." Things haven't changed much in 150 years, have they?
2010 Medicare physician fee schedule: Stop me if you've heard this one before
I know that it's April 1, but this is not a joke. The U.S. Senate dropped the ball again, and Medicare payment allowances for physicians dropped 21 percent today.
As you will recall from my last post (see "2010 Medicare physician fee schedule: What next?"), on March 2, Congress and the President enacted legislation that extended the 2009 Medicare payment rate through the end of March. This reversed a one-day drop in the fee schedule which occurred after the U.S. Senate failed to pass an extension by the previous deadline of Feb. 28, 2010.
Like deja vu all over again (to quote Yogi Berra), the Senate again failed to pass a bill that would have extended the 2009 payment rate for physicians until April 30. The bill was ready for passage under standard unanimous consent procedures, but Sen. Tom Coburn (R-OK), playing the role previously played by Sen. Jim Bunning (R-KY), objected because the bill was not completely paid for. Then the Senate left for a two-week recess. As a result, the 21-percent reduction in physician payments took effect today.
Once again, the Centers for Medicare and Medicaid Services (CMS) is trying to play the good guy in this farce. CMS has instructed its contractors to hold claims containing services paid under the fee schedule for the first 10 business days of April, which, according to my calendar, would be through April 14. This hold will only affect claims with dates of service April 1, 2010, and forward. CMS expects the hold will have minimal impact on cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt anyway.
The Senate will return on April 12. Senate Majority Leader Harry Reid (D-NV) has filed a motion to close debate and proceed to consideration of the temporary extenders legislation if there is no unanimous consent at that time. Expectations inside the Beltway are that negotiations between both sides will continue during the recess, and it is likely that the bill will proceed quickly through the Senate when they return.
In the meantime, physicians are left to play the waiting game again and ponder what the punchline is. The situation might actually be funny if it weren't so sad and pathetic at the same time.
CMS extends cease fire on referring/ordering edits
This posting is in follow-up to "CMS issues a temporary cease fire," a posting from last December. I am happy to announce that the Centers for Medicare and Medicaid Services (CMS) has extended the delay in implementation of new rules that give Medicare the authority to reject claims for services or supplies when the ordering physician or health care professional is not enrolled in the Medicare Provider Enrollment, Chain, and Ownership System, or PECOS. The agency is delaying implementation of the new policy until Jan. 3, 2011.
As of this new date, Medicare will reject claims if the ordering or referring provider does not have an active enrollment record in Medicare’s PECOS or is not of the correct type/specialty to order or refer services to Medicare beneficiaries. Currently, physicians who submit electronic claims receive a warning message if the ordering/referring provider is not in PECOS or is in PECOS but is not the correct type/specialty to order or refer services. Despite the warning, the claims hitting these edits will continue to process. However, such claims will be rejected starting Jan. 3, 2011.
CMS recently posted on its web site the Ordering/Referring Report, a list of physician and non-physician providers who are eligible to order or refer items or services for Medicare beneficiaries because they have an active enrollment record in PECOS and are of a right specialty or type to order or refer items or services. Physicians and non-physician providers are encouraged to check this list to make sure that they are on it. If not, they need to submit an 855I Provider Enrollment form to their local Medicare contractor and update their enrollment information to have an active enrollment record. This can be done through the on-line, Internet-based PECOS or by mailing a paper application to the local Medicare contractor.
Please see MLN (Medicare Learning Network) Matters article MM6417 for additional information on this initiative as well as for a complete list of types of practitioners who can order or refer Medicare beneficiaries for items or services.
CMS issues a temporary cease fire
As a follow-up to my last posting ("Medicare shoots first and asks questions later," Nov. 19), I wanted to let readers know that the Centers for Medicare and Medicaid Services (CMS) announced on Nov. 23 that it would delay implementation of new rules that give Medicare the authority to reject claims for services or supplies when the ordering physician or health care professional is not enrolled in the Medicare Provider Enrollment, Chain, and Ownership System, or PECOS. The agency is delaying implementation of the new policy until April 5, 2010. According to CMS, an extension of the implementation date will give physicians and other health care providers sufficient time to enroll or, if necessary, re-enroll in Medicare. CMS has indicated that more detailed information about the rules delay will be published soon in MLN Matters, an online publication that is part of CMS's Medicare Learning Network.
Interestingly, CMS's announcement came just a week after the American Academy of Family Physicians, the American Medical Association, and more than 50 other medical organizations sent a letter to CMS Acting Administrator Charlene Frizzera expressing concerns about the policy. Among other things, the letter asked for an indefinite suspension of CMS's plans. While April 5 does not constitute an "indefinite" suspension, it does suggest that CMS is listening and that collective advocacy on the part of organized medicine can have an impact. When it comes to Medicare, one must take comfort where one can find it.
So, if you or other health care professionals who refer to you are not yet in PECOS, you have been granted a reprieve. Just remember that a reprieve is not a pardon, and CMS will resume shooting on April 5, 2010. In the meantime, to quote an old adage, "Forewarned is forearmed."
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:
Take action to ensure that otherwise acceptable claims are paid without delay or need for appeals;
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;
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,
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.
Everything's up-to-date in Kansas City
Last week, I received a call from a doctor's office inquiring why her claim for a B-12 injection might have been denied by a particular payer. She indicated that they used Current Procedural Terminology (CPT) code 90772 to report the service.
A quick check of my 2009 CPT book identified the problem. Code 90772 has been deleted for 2009; the correct new code is 96372.
It never ceases to amaze and amuse me when a physician's practice is not using the current versions of a CPT, Healthcare Common Procedure Coding System (HCPCS), or International Classification of Diseases, 9th Revision - Clinical Modification (ICD-9-CM) manual. It does not take too many claims denied because of out-of-date codes to equal or exceed what it would have cost the practice to buy current copies of the necessary coding manuals. Indeed, the ICD-9-CM manual is available on CD-ROM from the U.S. Government Printing Office for only $19.00, and HCPCS can be accessed freely on the Centers for Medicare and Medicaid Services web site (although I still prefer to use the manual version).
So, take a moment right now, while you're thinking about it, and pull your CPT, HCPCS, and ICD-9-CM books off the shelf. If they are not the most current versions (i.e., 2009, as I write this), then it's time to order new ones. This ounce of prevention for denied and returned claims should more than equal the pound of cure found in resubmitting or appealing such claims.