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American Academy of Family Physicians
Friday Jan 03, 2014

Medicare to begin new restrictions on durable medical equipment and other supplies

Medicare is finally implementing new rules that will target physicians who order or refer items and services for their Medicare patients but who lack proper identification.

Effective Jan. 6, 2014, Medicare contractors will implement specific edits that will restrict suppliers of durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) from receiving payment from Medicare for items that physicians have prescribed if they do not have a current enrollment in the Medicare Provider Enrollment, Chain and Ownership System (PECOS).

The second phase of denial edits was originally supposed to go into effect last May, but they were delayed by technical issues and the new date announced in December.

For any DMEPOS item to qualify for Medicare coverage, it must be ordered by a physician or a practitioner who:
•    is enrolled in PECOS,
•    is registered in the system, and
•    has a specialty that is eligible to order DMEPOS items for Medicare beneficiaries.

The provider specialties who can order DMEPOS items include:
•    Doctor of Medicine or Osteopathy
•    Doctor of Dental Medicine or Dental Surgery
•    Doctor of Podiatric Medicine
•    Physician Assistant
•    Certified Clinical Nurse Specialist
•    Nurse Practitioner
•    Doctor of Optometry

Physicians can help the DMEPOS suppliers with whom they work by promptly enrolling in PECOS, or by updating their existing Medicare enrollment information. To continue to order DMEPOS for Medicare beneficiaries, physicians will have to enroll in the Medicare program or “revalidate” their Medicare enrollment information. To do so, either use the Internet-based PECOS, or fill out the appropriate Medicare provider enrollment application(s) and mail it, along with any required information, to the local Medicare carrier or A/B Medicare Administrative Contractor (MAC) for processing.

You can confirm if you are currently enrolled in Medicare by contacting your designated enrollment contractor or by viewing your enrollment record online on PECOS. If you have a PECOS record, make sure it includes your National Provider Identifier (NPI) and update your record if it doesn't. You can also download the Medicare Ordering and Referring file and see if your NPI is listed.

For additional information, contact your local A/B MAC.

– Kent Moore, Senior Strategist for Physician Payment for the American Academy of Family Physicians

Wednesday Aug 17, 2011

Your Medicare participation options

A couple of recent news items have me asking again a question previously asked on this blog in October of 2010. "Why would any physician in his [or her] right mind want to participate in a system such as this [Medicare]?"

First, the ever-voluminous proposed rule for the Medicare Physician Fee Schedule has been published and is now open to comment. Looming above all the program changes and some potential additional work that is proposed is the ever-constant threat of a pay cut due to the sustainable growth rate (SGR). If Congress, also charged with reducing a massive budget deficit, does not act to either fix the SGR or again delay the related decrease in payments, the Medicare Physician Fee Schedule will be reduced by 29.5 percent. Doesn't sound like a reasonable business proposition to me.

Second, CMS announced this week that all physicians and providers who completed the enrollment process before March 25, 2011 will once again have to re-validate their enrollment in PECOS. (PECOS may stand for Particularly Exacerbating CMS Online System.) CMS notes that this is to comply with Section 6401(a) of the Affordable Care Act, which increases screening of physicians and providers enrolling in Medicare and Medicaid. (Note: You must complete this work when your Medicare contractor notifies you to do so and not before then, but then you must not be late either. "Upon receipt of the revalidation request, providers and suppliers have 60 days from the date of the letter to submit complete enrollment forms. Failure to submit the enrollment forms as requested may result in the deactivation of your Medicare billing privileges. ")

So what is the alternative? There are three Medicare participation options. The first is to participate, which means enrolling, accepting the Medicare fee schedule for all Medicare patients and being paid directly from Medicare. The second is to enroll but not participate, which allows you to charge the patient a fee up to the Medicare limiting charge and submit a claim for the patient to receive the reduced payment from Medicare. The third is to opt-out of Medicare for periods of two years and privately contract with your Medicare patients. To opt out, a physician must file an affidavit that meets the necessary criteria and is received by the carrier at least 30 days before the first day of the next calendar quarter.

Acknowledging that physicians in hospital-owned or large group practices may not have the luxury of opting out of Medicare, a good business case might be made for individual practices. There is some administrative burden in completing the opt-out affidavit and being sure that the Medicare contractor has validated it and then having each Medicare or Medicare Advantage patient sign a private contract every two years. But that effort should be more than offset by a reduction in many other administrative areas and an improvement to cash flow if a reasonable fee is set based upon actual costs per visit and perhaps a sliding scale for those patients with limited resources. If interested, you can try it out for 90 days and see if it works for your practice. There is a 90-day period after the effective date of the first opt-out affidavit during which physicians may revoke the opt-out and return to their prior status.

What do you think? If you are one of the few physicians who have opted out and still care for Medicare patients, how is it going? Are your patients able to receive equal or better access and quality of care? Do you miss dealing with CMS and their contractors?

Tuesday Jul 20, 2010

Don't let PECOS put your practice in a pickle

Many of you have received so many notices from medical supply and home health services advising physicians to update their Medicare enrollment information that you could paper an exam room with them. These notices are correct in stating that federal law requires that claims for supplies and for referred services contain the name and National Provider Identifier (NPI) of the ordering or referring physician and that Medicare contractors who pay these claims must confirm whether the ordering/referring physician has a valid enrollment record in the Provider Enrollment, Chain, and Ownership System (PECOS). However, these notices have also contained some misinformation and caused some confusion. I hope I can clear this up a bit.

First, PECOS is an enrollment system that the Centers for Medicare & Medicaid Services (CMS) adopted for enrolling physicians and other eligible providers in 2003. Physicians who enrolled in Medicare prior to 2003 may not have an enrollment record in PECOS and must go through the enrollment process again to create a PECOS record. CMS has recognized that there are issues with their enrollment process and that many physicians have had difficulty enrolling in PECOS online. In response, CMS has delayed the July 6 activation of edits that would have resulted in denial of claims for supplies or services ordered by a physician not enrolled in PECOS.

Second, physicians who have opted out of Medicare can order supplies and services for their Medicare patients. CMS requires that Medicare contractors establish a PECOS record for physicians with a valid opt-out affidavit. Physicians who have opted out can contact their Medicare contractor to verify their PECOS record.

Physicians who work in specific settings where their services are not typically billed to Medicare should follow CMS guidance when enrolling; the requirements are reduced. Examples of physicians who may take advantage of this guidance are those who practice in public health settings, Tricare, the Veterans Administration, federally qualified health centers and fellowship settings.

If you are not sure whether you have an active enrollment record in PECOS, you can contact your local Medicare contractor or check for your name and NPI on CMS' Ordering/Referring Report. Note that the Ordering/Referring Report will be continuously updated by CMS as many enrollment applications are still in process. If you know that you have recently received approval of your enrollment application from your Medicare contractor but your name is not on Ordering/Referring Report, you should feel comfortable ignoring any PECOS-enrollment-related supplier notices that you might continue to receive. However, if your application has not yet been approved, be sure your staff frequently check the status, as any missing information or documentation can result in your application being returned or eventually rejected.

This enormous undertaking of updating hundreds of thousands of Medicare enrollment applications is in part an effort to reduce the number of fraudulent claims filed under the names of unsuspecting physicians or even deceased or non-existent physicians. Hopefully, the current massive investments in investigating and ending fraud will lead to lesser burdens on the physicians, providers and suppliers who just want honest pay for providing necessary services.

On the other hand, it may just lend credence to Celine's third law: "It is only through honest politicians trying to change the world through laws that true tyranny can come into being through excessive legislation."

Tuesday May 18, 2010

CMS giveth and Congress taketh away

In March (see "CMS extends cease fire on referring/ordering edits" on March 17), I reported that the Centers for Medicare & Medicaid Services (CMS) had 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 had announced a delay in implementation of the new policy until Jan. 3, 2011. 

Unfortunately, what CMS gave, Congress and the President took away with passage of the Patient Protection and Affordable Care Act (PPACA). Amendments made by PPACA essentially mandate implementation of the new rules effective July 1, 2010. 

Or at least that is CMS's interpretation of the statute. CMS published an interim final rule with comment period in the Federal Register on May 5, 2010. The interim final rule implements several PPACA provisions that impact provider and supplier enrollment, ordering and referring, and documentation requirements.  CMS is accepting comments on the interim final rule through July 6, 2010. 

Related to the referring and ordering issue, CMS states that, effective July 1, 2010, it is requiring Medicare contractors to reject claims for selected items and services that are ordered or referred if the legal name(s) and national provider identifier(s) of the ordering/referring provider(s) are not on the claim or the ordering/referring provider does not have an approved enrollment record in PECOS. Affected items and services include durable medical equipment, prosthetics, orthotics, and supplies; home health items or services; and laboratory, imaging, and specialist services, where applicable. CMS is considering extending the provision to prescribed Part B drugs next year. 

CMS has provided an exception to the requirement that the referring/ordering provider have an approved enrollment record in PECOS in the case of an ordering/referring provider who has opted out of Medicare. Apparently, even CMS thought it was ludicrous to require someone to enroll in Medicare for purposes of ordering and referring when they had already opted out of Medicare for everything else.

What makes this particular provision so maddening is the difficulty so many physicians and others have actually enrolling through PECOS. Not only is it cumbersome, but it can often take months, and even making a simple address change through PECOS can lead to enormous headaches, based on some of the horror stories that I have heard.

For those that are interested, CMS is hosting a national provider and supplier conference call on Wed., May 19, from 3 to 5 p.m. ET. The focus of the call will be the interim final rule noted above. To participate, all you have to do is dial 1-800-603-1774 and reference Conference ID 61448973.  It may not change anything, but at least it's an opportunity to learn more on the subject and make your voice heard in the process.

Wednesday Mar 17, 2010

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.

Thursday Dec 03, 2009

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."

Thursday Nov 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. 

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