On Friday, October 31, the Centers for Medicare and Medicaid Services (CMS) released the 2009 Physician Fee Schedule Final Rule. This final rule establishes the physician fee schedule payment rates under Medicare Part B and makes a number of other changes of interest to physicians and billing companies. The final rule will not be official until it actually appears in the Federal Register. It is scheduled to be published in the November 19th Federal Register. To review this early release document, go to:
1. 2009 Physician Fee Schedule Conversion Factor
One of the most significant actions announced in the annual fee schedule final rule is the conversion factor for the upcoming calendar year. The conversion factor is the number Medicare uses to convert the point value assigned to a code under the Resource Based Relative Value Scale (RBRVS) system. For the past several years, this number was scheduled to go down significantly, however, intervention by Congress has prevented reductions in physician payments. As in the past, Congress intervened earlier this year to prevent a scheduled reduction and instead, authorized a 1.1% increase in the conversion factor.
The final rule does announce the conversion factor (CF) will be adjusted upwards by 1.1% as authorized by Congress. HOWEVER, another change authorized by Congress will mitigate this increase for some specialties but result in higher payments for others.
Under the RBRVS system, each code is assigned a point value also referred to as the Relative Value Unit. The point value assigned to each code is determined by an independent organization that looks at the physician work required to produce a service, the amount of office overhead (practice expense/ PE) required to produce that service and the malpractice costs associated with the service or specialty.
Due to changes in how services are delivered and costs associated with those services, the RVUs are constantly being reviewed and adjusted. Each year, a certain number of RVUs are evaluated and new RVUs are created with the advent of new services. These adjustments have an impact on Medicare expenditures in that they can translate into higher or lower payments. When an RVU is assigned a higher point value, Medicare payments for that service go up and when an RVU is assigned a lower point value, Medicare payments go down.
In the past, Federal law stipulated that whenever annual changes in the RVUs would result in an increase in Medicare expenditures of $20 Million or more, CMS must make an overall adjustment (across-the-board) in all RVUs to ensure that the projected total spending for Part B services did not exceed the amount projected before the adjustments were made. Because the adjustments were made to the RVUs (which are largely invisible to most providers), it was difficult to know what the overall impact was on different specialties. This year, Congress mandated that instead of the adjustment being made to all RVUs, it should be made to the conversion factor.
It is not clear what the impact of this change will be on physician fee schedule payments in 2009. There’s no question that RVU adjustments in the past have had a disproportionate impact on different specialties but that was hard to assess. Now, because of the adjustment to the conversion factor, the RVU effect will be more obvious. Here’s a chart showing the impact on select specialties. The table below shows the impact on several specialties. The entire table can be found in the final rule document (link above).
In the final rule, CMS also provides a sampling of the impact these changes will have on selected codes.
You are encouraged to review the projected specialty specific adjustments found in the final rule. The specialty specific information provided above can be found in Table 48 on page 1045. The code specific information can be found in Table 49 on page 1048.
2. Retroactive Billing for new physicians or physicians that change location
Physicians are prohibited from submitting a claim to Medicare prior to their enrollment date; however, the Medicare program has long permitted physicians, once they are enrolled, to bill for services delivered to Medicare patients prior to their formal enrollment in the program. Current policy limits the provider to services delivered 27 months prior to enrollment. Earlier this summer, CMS proposed rescinding physicians’ ability to retroactively bill citing, “it is possible that physicians who meet our program requirements on the date of enrollment may not have met those same requirements prior to the date of enrollment.”
HBMA, along with hundreds of other organizations objected to this change pointing out the negative impact this would have on physicians and their employers. While CMS has made some changes in the final rule that reflect the comments submitted, they are still going to dramatically limit the ability of physicians to retroactively bill for services rendered prior to formal enrollment in the Medicare program.
final rule, Medicare will limit, effective
In adopting this policy, CMS acknowledged that a large number of providers do not support this policy - particularly emergency room physicians and organizations. Despite the concerns, CMS adopted the new restrictive policy anyway.
In rejecting the comments of those who opposed the policy, CMS states, “We believe that we have adopted an approach that balances the need to strengthen the Medicare enrollment process, protect the Medicare Trust Funds, and ensure that individual practitioners and physician and NPP organizations receive payment for services furnished to Medicare beneficiaries.”
In response to a comment that physicians are being asked to provide services for which they will not be able to receive payment, CMS stated, “While we agree that physicians should be reimbursed for the services furnished to Medicare beneficiaries, we also believe that physicians, NPPs and physician and NPP organizations are responsible for enrolling or making a change in their enrollment in a timely manner. In most cases, we believe that physicians and NPP practitioners can submit an enrollment application prior to providing Medicare services at a new practice location.”
There was considerable discussion in the final rule about the
3. Maintaining Ordering and Referring Documentation
In the proposed rule published in August, CMS proposed to add a new §424.516(f) that would specify, “A provider or supplier is required to maintain ordering and referring documentation, including the NPI, received from a physician or eligible NPP. Physicians and NPPs are required to maintain written ordering and referring documentation for 10 years from the date of service.” In commenting on this proposal, HBMA supported use of the “date of service” rather than the date of claim submission; however, HBMA also argued that 10 years was too long and that the time period should be shortened to 7 years.
In the final rule, CMS agreed with the recommendation made by HBMA and changed the policy so that effective with services rendered on or after January 1, providers will be required to retain ordering and referring provider information for 7 years from the date of service.
4. Revocation of Enrollment and Billing Privileges in the Medicare Program
CMS proposed to significantly curtail the amount of time a physician whose billing number has been revoked may have to bill for services furnished prior to the revocation. Current policy provides these physicians with the same amount of time – 27 months – as others to submit claims for services rendered. CMS proposes that all outstanding claims not previously submitted must be submitted within 30 calendar days of the revocation effective date. While HBMA agreed with CMS that 27 months is too long, HBMA argued that the proposal for the submission within 30 days is too short. HBMA recommended that providers be eligible to submit claims for services provided 6 months prior to revocation of billing privileges.
In the final rule, CMS states that revocation becomes effective 30 days after CMS or the CMS contractor mails notice of its determination to the provider or supplier, except if the revocation is based on Federal exclusion or debarment, felony conviction, license suspension or revocation, or the practice location is determined by CMS or its contractor not to be operational. When a revocation is based on a Federal exclusion or debarment, felony conviction, license suspension or revocation, or the practice location is determined by CMS or its contractor not to be operational, the revocation is effective with the date of exclusion or debarment, felony conviction, license suspension or revocation or the date that CMS or its contractor determined that the provider or supplier was no longer operational.
A physician organization, physician, non-physician practitioner or independent diagnostic testing facility must submit all claims for items and services furnished within 60 calendar days of the effective date of revocation.
5. Medicare Billing Privileges and Existing Tax Delinquency
In the proposed rule, CMS requested industry feedback on possible future adoption of a policy which would allow CMS to deny enrollment to a physician with a federal tax delinquency.
In response to this request, HBMA questioned the value of this proposal because CMS indicated in the notice that it will utilize the Federal Payment Levy Program (FPLP) process starting in fiscal year 2009 for Medicare payments made under Part A and Part B. Thus, if a physician participates in the Medicare program, the government is guaranteed to receive payment for the tax debt via FPLP.
HBMA pointed out that if a physician with a tax debt is prohibited from participating in the Medicare program or has his or her billing privileges revoked, the government’s recovery of the tax debt could be difficult, if not impossible.
HBMA argued that physicians with a tax delinquency should fulfill that tax obligation but maintained that, in general, it is bad policy to predicate payment for medical services on satisfaction of obligations to another, unrelated, government entity. The potential administrative complications are almost confounding.
While CMS did not propose any changes in this policy at this time, it did indicate that CMS will consider proposing this type of change in a future rulemaking effort after it has implemented the FPLP process, monitored and evaluated the implementation of the FPLP process, and analyzed the potential impact of this change on physician and NPPs who are subject to the FPLP but for whom Medicare is unable to directly levy future payments through the FPLP. HBMA has expressed a willingness to work with CMS on this proposal.
Medicare has been working on developing an on-line
Earlier this year, HBMA was invited to provide individuals who could test the system and assess its efficiency, workability and value. While there were still some bugs to be worked out, reports from those who tested the system were very positive.
Once implemented, this program would allow providers to submit their Medicare enrollment forms (855) or modify their enrollment information electronically. It is anticipated that use of an electronic enrollment process could accelerate the time required by the Medicare Contractors to process enrollment applications. Although the goal for processing applications is 60 days from receipt of a completed application, it is not uncommon for applications to take 90 – 120 days.
Medicare contractors continue to report that
information is often missing from the provider enrollment applications and
this causes processing delays.
The electronic enrollment process will not permit the provider to
submit the application if required information is missing. CMS believes this alone will help
accelerate the enrollment process.
In the final rule, CMS states, “We expect that Medicare contractors will
fully process most complete Internet-based
Despite this good news, there was information in the final rule that was disconcerting and will require further clarification.
Buried in the final rule is the following statement:
and NPPs choosing to use billing agents,
clearinghouses, academic medical institutions, etc. will be required to
submit a paper enrollment application to enroll or make a change in their Medicare
enrollment record. In order
to use Internet-based
Upon reading this statement, HBMA staff contacted Medicare enrollment staff to seek clarification. It is the intention of CMS to require that solo practitioners using the PECOS on-line enrollment system will have to access the system personally. Individual providers will not be able to use a billing company or any other agent (including an employee of the provider) to complete and submit the enrollment form electronically.
Provider organizations (i.e. group practices) will be able to use an authorized individual (including a billing company) to complete and update the 855 electronically but this option will not be available to solo practitioners.
HBMA will follow-up
with CMS enrollment staff to seek further clarification of the policy
regarding use of the
October 28, several representatives of HBMA traveled to
The purpose of the meeting was to discuss issues that have arisen with the transition from Medicare’s use of Carriers and Intermediaries to process Medicare claims (Part A and B) to Medicare Administrative Contractors (MACs).
HBMA were President-elect Randy Roat, Government Relations Chair
A summary of the reports from the field was provided to the CMS staff as examples of some of the problems physicians and their billing company representatives were experiencing in different regions.
seemed well aware of the issues that are occurring at the MAC level not just
CMS asked HBMA to continue soliciting MAC transition information from the membership and share our findings with CMS staff. They believe HBMA can serve as either an “early warning” system for CMS staff or as a potential validator of information they are receiving from their contractors.
HBMA requested and CMS has agreed to meet with HBMA representatives either via phone or in person, if necessary, on a quarterly basis to discuss issues and information regarding the MAC transition. Whether meetings occur in person or via phone has not bee determined.
HBMA also discussed with CMS how CMS would recommend HBMA handle individual member problems when the HBMA member cannot get a response from the MAC or a problem is taking a long time to resolve. In this regard, CMS central office staff volunteered to assist in the resolution of problems however, they did ask that before contacting the central office staff, our members seek assistance from the appropriate CMS Regional Office (RO). Along these lines, CMS staff said they would share the RO contact list with HBMA so that the national office could direct members with problems to the appropriate CMS RO staff.
Finally, CMS announced that it is in the process of developing performance standards that CMS will use to assess the work of the MACs. HBMA offered to assist CMS in the development of those standards and CMS staff expressed a willingness to get the organization’s input. HBMA and CMS will need to work out the details on just out that input will occur.
The Centers for Medicare & Medicaid Services (CMS) has announced the awarding of contracts to four permanent Recovery Audit Contractors (RACs).
Relief and Health Care Act of 2006, requires CMS to establish a permanent and
national RAC program to be in place by
The purpose of the RAC program is to identify improper payments made on Part A and Part B claims of health care services provided to Medicare beneficiaries. Although improper payments may be overpayments or underpayments, the disparity in the findings suggest that far more effort is made at uncovering overpayments rather than underpayments. Recovery audit contractors will earn contingency fees ranging from 9.0% to 12.5% of the payments they collect from health care providers in the permanent RAC program.
Overpayments occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies or lack sufficient documentation to support the level of service claimed. Underpayments occur when health care providers submit claims for a procedure and the medical record reveals that a more complicated procedure was actually performed. Health care providers that might be reviewed include hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers and any other provider or supplier that bills Medicare.
The new RACs are:
Collection Services, Inc. of
Technologies and Solutions, Inc. of
Consulting Associates, Inc. of
HealthDataInsights, Inc. of
CMS, in a press release announcing the contract, stated that additional states will added to each RACs in 2009.
As has been previously report, the RACs will be paid on a contingency fee basis on both the overpayments and underpayments they uncover. CMS also announced that as part of preparing Medicare providers for the RAC program, CMS will work closely with national and state medical, hospital and nursing home associations to strengthen relationships to be more proactive and anticipate the needs and concerns of health care providers. Before they begin their work, CMS is requiring the RACs to hold Town Hall meetings in each state with health care providers in October and November.
HBMA members wishing to get more information on the RACs and the town hall meeting schedule, should go to:
Soon after outreach efforts are made some health care providers in the states that are part of the first phase may begin to receive either requests for medical records or a letter requesting that an overpayment be repaid for their claims that were submitted to and paid for by Medicare. CMS is recommending that in preparation for the RAC process, health care providers should consider conducting an internal assessment to ensure that submitted claims meet the Medicare rules.
For more information on the Permanent RAC Program and to view the evaluation report on the three-year RAC demonstration, visit: http://www.cms.hhs.gov/RAC.
Senators Chuck Grassley (R-IA), Max Baucus (D-MT), Ron Wyden (D-OR), Mike Enzi (R-WY) and Ben Nelson (D-NE) have released a discussion draft of legislation that would provide for greater disclosure of health insurance costs to workers. According to a press release, the Senators supporting this proposal believe that it will provide more information to workers about what they pay for health care and how much costs are increasing year after year. In the end, they believe this will help “control health care costs.”
The sponsors of this proposal are seeking public comment on his idea. Senator Baucus is the Chairman of the Senate Finance Committee and Senator Grassley is the ranking Republican on this Committee. The Finance Committee is the Senate Committee that has jurisdiction over all tax policy as well as Medicare policy.
In putting forward this proposal, Grassley said, "The point of the proposal is to inform people about their health care costs. Once informed, they might seek changes including improved efficiency, reduced waste and fewer unnecessary procedures, balanced with the natural need to have good coverage. Some employees might want to receive different compensation in the form of a higher salary, additional vacation, or more child care instead of more health coverage than they need. As long as people are insulated from the cost and just think someone else is paying for it, then it’s easy to overlook expenses. But once they realize they themselves are paying for it, it should spark a genuine conversation about what to do. Without any knowledge of how much they are paying, though, people aren’t equipped to join the debate, and their view, generally, is, don’t touch my health care. And so nothing can get done politically and costs continue to spiral."
Baucus said, "Today, Americans don't have enough health care information. We often don't know how much our health care costs, or why there has been the rapid spike in prices in recent years. Making people aware of how much is spent for their health insurance coverage is an important step in helping us all become more informed about health care costs. When people get a sense of the cost of their insurance, they may look for ways to reduce the waste and inefficiency that are driving up costs in our health care system. This idea goes hand in hand with other steps to lower health care costs, like comparing the effectiveness of medical treatments and getting that information to the public, too. Finding ways to lower health care costs, along with measures to increase access and cover more Americans, will be an important part of the health care reform agenda I intend to pursue in the Finance Committee next year."
The draft legislation would require employers to disclose the amount of money paid by the employer for an employee’s health insurance coverage on the employee’s annual Form W-2. Those who have looked at this issue believe that many employees are unaware of the amount of money their employer pays for their health insurance coverage.
To view the discussion draft, go to:
comments should be sent electronically to firstname.lastname@example.org
According to a recent report issued by the Blue Cross Blue Shield Association of America (BCBS), enrollment in consumer-directed health plans (CDHP) grew 25% in 2007 to 12.5 million people. The study defined a CDHP as a high-deductible health plans that include a health reimbursement arrangement or health savings account option. The BCBS survey of adults under age 65 with private health coverage found enrollees with HSA-eligible plans were 30% more likely to track their health expenses than those in more traditional health insurance plans, and 27% more likely to ask their doctors about the cost of treatment. They also were more likely to participate in health or wellness programs, and slightly more likely to have regular check ups and preventive screenings.
separate but related development, the Centers for Disease Control and
Based on data from the January - March 2008 study, 20.3% of persons under 65 years of age with private health insurance were enrolled in a high deductible health plan (HDHP), 5.3% were enrolled in a CDHP, and 17.2% were in a family with a Flexible Spending Account (FSA) for medical expenses. Adults aged 25-64 with more than a high school diploma were more likely to be covered by a HDHP, more likely to be covered by a CDHP, and more likely to be in a family with a FSA for medical expenses than those who had only a high school diploma or were not high school graduates.
Almost 20% of persons aged 65 years of age and under with employer-based private coverage were enrolled in a HDHP compared with over 40% enrollment in a HDHP for those with a private plan which was directly purchased or obtained through means other than an employer.
The following transmittals have been issued by CMS within the past 30 days
and Management Association