The PPACA and Physician’s Ability to Bill

Posted on July 9, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

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Failure of Physician Referral Sources to Enroll in Medicare’s Provider Enrollment, Chain and Ownership System [PECOS] May Affect their Ability to Bill

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By Garfunkel Wild, PC

In response to, among other things, the Patient Protection and Affordable Care Act that was signed into law earlier this year, the Centers for Medicare and Medicaid Services (CMS) issued an interim final rule on May 5, 2010 that requires all:

  • Physicians [1] and non-physician practitioners [2] who order or refer Medicare beneficiaries for, or furnish Medicare beneficiaries with, Part B covered items and services; and
  • Physicians who certify home health services be enrolled in PECOS as of July 6, 2010 in order for the billing provider to receive payment for the ordered, referred, or furnished items or services under Medicare Part B (and, in the case of home health services, Part A).  Some of the types of claims that will be affected by this new rule include:
  • Claims from laboratories for ordered tests;
  • Claims from imaging centers for ordered imaging procedures;
  • Claims from suppliers of DMEPOS for ordered DMEPOS;
  • Certification for Part A and Part B covered home health services; and
  • Claims from specialists or specialty groups for referred services (including, but not limited to, physical therapy services).

In addition to prohibiting payment for these services, the interim final rule also requires that the teaching physician — NOT the intern or resident — be identified on the claim for Part B services as the referring or ordering physician whenever an intern or resident orders or refers.  This is also effective as of July 6, 2010.

Physician Health

Assessment Therefore, all providers who bill for ordered, referred, or furnished items or services that are payable under Medicare Part B (and home health care providers who bill for Part A and/or Part B covered services) should check the “Ordering and Referring Report” maintained by CMS to confirm whether the ordering or referring provider has an enrollment record in PECOS before submitting a claim as of July 6, 2010.

This Report can be viewed at: www.cms.gov/MedicareProviderSupEnroll/06_MedicareOrderingandReferring.asp.

If the ordering or referring provider is not listed on the Report, there is confusion as to whether billing providers are entitled to submit claims for items and services ordered or referred by such providers.  While CMS has acknowledged that some providers have encountered problems getting their information into PECOS and announced that, for the time being, it will not implement changes that would automatically reject claims based on orders, certifications, and referrals made by providers that have not yet had their applications approved by July 6, 2010, CMS has expressly declined to delay implementation of the interim final rule as of the date of this Alert.

References [1] This includes a doctor of medicine or osteopathy, doctor of dental medicine, doctor of dental surgery, doctor of podiatric medicine, doctor of optometry, and doctor of chiropractic medicine.

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A Skeptical View of the ‘National Summit on Health Care Fraud’

Posted on February 2, 2010 by Dr. David Edward Marcinko MBA MEd CMP™

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Seeking Real Results; not Empty Rhetoric

By Dr. David Edward Marcinko; MBA, CMP™

[Publisher-in-Chief]

All our ME-P readers and subscribers are aware of the ‘National Summit on Health Care Fraud’, at the National Institutes of Health (NIH), held on January 28, 2010 in Bethesda, Maryland. The much publicized summit discussed ways to eliminate fraud, waste and abuse in the US health care system.

A major speaker, of course, was US Secretary of Health and Human Services [DHSS] Kathleen Sebelius.

In My Opinion

IMHO, the summit was more political posturing and “nibbling at the margins”, than innovative thought leadership. Much like a hawkish politician with a platform against crime; who can argue with the proposition?

But, how do we actually reduce fraud and abuse? In other words, how can we achieve real results, and not just more anti-fraud rhetoric?

Here are two considerations, currently on the books, that need hard enforcement:

1. Medicare Integrity Program

The MP-P allows the DHHS to contract with non-governmental organizations, known as Medicare Program Safeguard Contractors, to carry out fraud and abuse detection, cost report audits, utilization review, provider payment determinations, and provider education, and to create a list of durable medical equipment subject to prior authorization for reimbursement.

Under this program, the Centers for Medicare and Medicaid Services (CMS) must implement regulations for contracting procedures.

2. Beneficiary Incentive Program

Under the BIP, Medicare beneficiaries are encouraged to report any suspicious billing activities. When a claim results in collection of funds of at least $100, the beneficiary may be paid a portion of the collections, up to $1,000 for each occurrence. Since this process does not require the same amount of time and resources associated with whistleblowing actions, there has been activity generated by senior groups leading to various enforcement actions.

This program has allowed the Medicare carriers to send notices to patients, which encourages them to call, report, and possibly be rewarded if the report results in action.

Assessment

The first step in fighting healthcare fraud and abuse is to know which laws apply in specific cases.

The next step is formulating policies and procedures to ensure that all workforce members understand how to comply and what their individual responsibilities are in maintaining a sound healthcare business organization.

The third step is enforcement and punishment; less talk and more action!

Assessment

The most effective way to accomplish all of this is through the implementation of a medical practice compliance program, and more specifically, the augmentation of the above two programs currently in existence.

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Understanding the Medicare Prospective Payment System

Posted on September 17, 2009 by Dr. David Edward Marcinko MBA MEd CMP™

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Origins of Diagnostic Related Groups

By Dr. David Edward Marcinko; MBA, CMP™

[Editor-in-Chief]dem21

The Medicare Prospective Payment System (PPS) was introduced by the federal government in October, 1 1983, as a way to change hospital behavior through financial incentives that encourage more cost-efficient management of medical care. Under PPS, hospitals are paid a pre-determined rate for each Medicare admission. Each patient was classified into a diagnosis-related group (DRG) on the basis of clinical information. Except for certain patients with exceptionally high costs (“outliers”), the hospital is paid a flat rate for the DRG, regardless of the actual services provided.

Enter the DRGs

Each Medicare patient is classified into a DRG according to information from the medical record that appears on the bill:

  • principal diagnosis (why the patient was admitted);
  • complications and co-morbidities (other secondary diagnoses);
  • surgical procedures;
  • age and patient gender; and
  • discharge disposition (routine, transferred, or expired).

Medical Records DocumentationMedical Records

Diagnoses and procedures must be documented by the attending physician in the patient’s medical record. They are then coded by hospital personnel using ICD-9-CM nomenclature. This is a numerical coding scheme of over 13,000 diagnoses and more than 5,000 procedures. The coding process is extremely important since it essentially determines what DRG will be assigned for a patient. Coding an incorrect principal diagnosis or failing to code a significant secondary diagnosis can dramatically affect reimbursement.

DRG Categories

Originally, there were more than 490 DRG categories defined by the Centers for Medicare and Medicaid Services (CMS, formerly known as the Health Care Financing Administration [HCFA]). Each category was designed to be “clinically coherent.” In other words, all patients assigned to a DRG are deemed to have a similar clinical condition. The PPS is based on paying the average cost for treating patients in the same DRG.  Each year CMS makes technical adjustments to the DRG classification system that incorporates new technologies (e.g., laparoscopic procedures) and refines its use as a payment methodology. CMS also initiates changes to the ICD-9-CM coding scheme. The DRG assignment process is computerized in a program called the “grouper” that is used by hospitals and fiscal intermediaries. It was last significantly updated by CMS in 2006.

Assessment

Each year CMS also assigns a relative weight to each DRG. These weights indicate the relative costs for treating patients during the prior year.  The national average charge for each DRG is compared to the overall average. This ratio is published annually in the Federal Register for each DRG. A DRG with a weight of 2.0000, for example, means that charges were historically twice the average; a DRG with a weight of 0.5000 was half the average; and so on.

Conclusion

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