Andrea Stark & Angela Hayden

Almost four years after the public implementation of the PECOS project, CMS started the clock on the countdown to Phase 2.  This second phase will implement edits to deny claims dated on or after May 1, 2013 for claims with physician data that does not link to a valid PECOS record.  Claims for DME, Home Health and Part B lab and similar services prescribed by a referring physician will be affected by the new edits.  This has been in the works for quite some time; however, because of the repeated delays to implementation, the call to action has waned.  With larger scale issues on the docket such as Competitive Bidding, PECOS seems to have been all but forgotten.  As previously reported on our blog and in several editions of our signature Vista Notes publication, we believed it to be imminent that suppliers would be given a 60 day window, for the Phase 2 announcement. Now that we are proceeding to implementation, suppliers must ensure that physician records match the PECOS database before the edits go into place. Don’t expect any more delays… the official countdown has begun.

Phase 1 (the informational messaging phase) began in October of 2009 using claim rejection, warning messages to communicate that the ordering/referring provider submitted on a given claim was not PECOS certified.  This front-end warning system was used until the implementation of Version 5010 when these claims were allowed to proceed past the front-end system and warnings are now reflected in the form of a remark code N544 on Medicare remittance advices.  Until now, these N544 remark codes have served only as a warning to providers of denials to come if action is not taken on these flagged physicians. Beginning May 1, under Phase 2, these remittance warnings will become actual denials on future EOBs.

Providers need to act swiftly to identify which physicians in their billing system are problematic and cannot be validated in the PECOS database.  Affected claims will be denied and cannot be reprocessed until the data is corrected or the physician has been certified.   At this stage of the game, most of the N544 remark codes are likely tied to typographical errors, transposed NPI numbers, or incorrect use of group NPI numbers instead of individual practitioner NPI numbers.  There are still a select number of practitioners that are either new or not linked to PECOS, and these will be a bit more difficult to resolve.

Here are a few steps to help you identify which records can be fixed in your billing software and which physicians will require contact:

1. Start by verifying that the NPI from the physician record in your billing system ties back to the individual physician and not a group practice or facility by looking up the NPI in your system on the NPPES website. Make sure there are no spelling errors in the first or last name and that the NPI is correct for the doctor.
2. Next, compare your physician record to the PECOS database located here (in the Downloads section click the CSV version of the Medicare Ordering and Referring File) to verify that this physician is confirmed as PECOS certified.
3. When you do find a match (based on NPI), ensure that the first letter of the first name and the first four letters of the last name match exactly to the PECOS record.  If your record does not match the PECOS file, claims will be denied.
4. Identify and parse out those physicians that do not have a match in the PECOS database and begin contacting them to encourage the completion of the enrollment process.  In the case of long standing physicians they may need to send in a renewal of their Medicare enrollment information, so the PECOS record can be created.  Remind the doctor that none of their referrals for DME, Home Health or lab referrals will be payable after May 1 until this issue is resolved.

While it is in the hands of the physician to complete the enrollment process, there are some resources that providers can use to explain what PECOS is and why this update or enrollment is necessary. The most recent piece of information is provided in an MLN Matters article released by CMS (#SE1305), which is a consolidation of previous instruction and can be found here: http://www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1305.pdf. Physicians should also be reminded that the PECOS database is used to populate the www.medicare.gov website and without enrollment, Medicare beneficiaries will not be able to validate or locate them for new business.

The bottom line is that real revenue is at stake if providers are not mindful of this deadline. By taking these steps and utilizing the resources available, PECOS Phase 2 Implementation can be a smooth transition for providers, but action must be taken now.  For additional guidance on navigating through this process you can attend our webinar on April 10th @2pm EST (registration details here) or contact our office to schedule a consult with reimbursement consultant, Andrea Stark at 803-462-9959 ext.246.

Andrea Stark

**This is a snippet from an article in the February 2013 edition of Vista Notes**

See: http://tinyurl.com/NSCOpenEnrollment

The most substantial provision affecting DME providers in the American Tax Payer Relief Act of 2012 (ATRA) is the provision to reduce all diabetic supplies (including strips, lancets and control solution sold in retail stores) to mail order rates effective 4/1/2013.  This equates to a 14% cut in the upcoming months.  More devastating than this is the next provision to subject retail diabetic supplies to national mail order rates as soon as that program goes into effect on 07/01/2013.  We know now that this will equate to a 72% cut across the board even if you did not participate in the bid program.

Medicare providers that are enrolled as ”participating providers” will most likely have to take the supplies off the shelf and cease selling them in their stores because the prices are not sustainable.  “Non-participating providers” will be left with no choice but to file claims non-assigned.  While non-participating providers can CHOOSE to accept assignment on a case-by-case basis, they also have the right to file claims on a non-assigned basis.  Non-assigned claims allow providers to collect the retail price up front and, after the claim is filed, Medicare remits payment to the beneficiary directly.  Beneficiaries will likely come out of pocket only a few times before they switch to a much cheaper, contracted, mail-order provider that will be forced to accept the cuts.

Because of the doc-fix provisions in ATRA and ensuing fee schedule changes for physicians, Medicare did extend the deadline to change participation status through 02/15/2013.  If you intend to change your participation status with Medicare, you must submit a letter signed by the Authorized Official to the National Supplier Clearinghouse and have it postmarked no later than today 02/15/2013.  Normally the Open Enrollment deadline would have already been closed effective 12/31/2012.  If you are a participating provider selling retail diabetic supplies and you do not want to accept assignment on these products, you may want to consider changing your status.  However, if you have multiple lines of business, such as a hospital-owned DME, the participation status must be the same for all entities… if the hospital is participating; the DME line of business must also remain participating.  To quickly see if you are listed as a participating supplier, visit this link, and enter the zip code where you are located along with a product you sell, then hit search.  If you see a green “P” next to your business, you are registered as a participating provider and must accept Medicare fee schedule rates on any covered product you sell to Medicare beneficiaries (unless you file the paperwork to change your participation status).  If there is no green “P” next to your business, there is no need to worry about the deadline and you already have the flexibility to choose assignment on a case-by-case basis. Your final decision to participate or not should be heavily weighted on your product mix and the Medicare fee schedule viability as it relates to your business.  For additional questions, arrange to speak with Reimbursement Consultant Andrea Stark at (803)-462-9959 ext. 246.

Andrea Stark

*Update on 02/07 corrects a typographical error regarding the number of payments made to contracted suppliers for transitioning beneficiaries with previously rented equipment.

Competitive Bid Prices are officially real and the cuts are deep.  With the announcement of Single Payment Amounts (SPAs) on January 30, the supplier community was stunned.  If you sell diabetic supplies anywhere in the country, or if you are in any of the Round 2 MSAs, you have big questions that need to be answered.  We outline below several considerations that each of you will need to contemplate in some form or other…

Contract Offers:  The first round of contract offers started to arrive on February 1 and gave business owners two weeks to determine what the next three and a half years will hold for the future of the business.  Acceptance is not an easy decision and should not be made lightly.

With hard, fast numbers in hand, you will want to ensure that you can be profitable with the margins you’ll be getting.  Consider variable costs that can wreak havoc on those margins such as wages, overhead expenses, and fuel prices to service what will equate to a much larger area.  Give consideration to the Medicare weight assigned to the HCPCs at the time of bid submission.  Weight was assigned by CMS to HCPCs based on Medicare historic utilization data (which is not always consistent with the most expensive item in a product category).  For example in the CPAP product category there were 23 HCPCs up for bid, Disposable filters was the top product with an overall weight of 35.5% of your bid submission.  The CPAP ranked #11 with an overall weight of 2%. This should guide you with where Medicare highlights the relative market importance.

Consider what contracts you are being offered.  Where will the referrals come from:  Hospitals? Nursing homes? Private Practices?  Sleep Labs?  Wound Care Clinics? Your product mix offerings will play a large role in whether or not you can expect any increases in new referrals.  If you expect to get your referrals from local hospitals, do you have enough contracts to make it worth the discharge planner’s referral?  If you won hospital beds and a competitor won beds, walkers, wheelchairs, and oxygen, chances are they will not split the referral to send you a bed when the patient needs multiple items.

What will life look like after the bid starts?  Do you have the resources to pull through the initial wave of new patients?  Many of the products like oxygen and CPAP setups for example will be documentation heavy.  Heavy documentation requirements will directly impact your DSO.  Remember, you’ll have to get your own supporting documentation for new customers that are switching from a non-contracted supplier (CMNs, orders, chart notes, compliance documentation, etc.).  Can you float the new inventory needs to accomplish these setups while you track down doctors for old documentation and wait 30-60-90 days for orders to get confirmed and reach a billable status?

Switching to a contracted supplier will be treated just like a traditional change in supplier today.  There will be no free passes, and you shouldn’t expect much cooperation from your former competitors that are losing their patients.  Keep in mind however, for every patient that switches from an existing DME capped rental product, you are entitled to start a new capped rental cycle as a newly contracted supplier (regardless of how many rental payments were made previously).  If the patient is an existing oxygen customer that switches from a non-contracted supplier, you are entitled to at least 10 months of rental payments (unless they have more than 10 payments left on their CMN for payment).

But on the flip side, contracted providers are not exempt from audit activity.  In fact, audit activity is traditionally based on increases in volume and billing concentrations… so expect to have a portion of your funds and resources tied up in pre-pay reviews.

Diabetic Suppliers:  With the SPA announcement we also learned that 15 suppliers would be offered a contract to handle the entire nation’s home delivery of diabetic supply needs.  Rates were cut by 72% in this category, and that really stings.  What is worse is that this newly contracted rate will be EVERYONE’s new fee schedule for diabetic supplies beginning July 1, 2013 thanks to the American Taxpayer Relief Act (ATRA).  ATRA is the same legislation that prevented the rest of the nation from falling off the infamous “fiscal cliff”.  A sleeper provision in this bill will force all retail operations to accept this new lower rate when they sell diabetic supplies to Medicare beneficiaries directly.  Another provision in ATRA will help you to slide into this cut by forcing an approximate 14% reduction on diabetic testing supplies sold after April 1, 2013.  The fee schedule updates apply to diabetic testing supplies like strips, lancets, control solution, etc.  They do not affect the glucose monitor purchase price.

Grandfathering: Let’s face it.  If 18,000 suppliers put their name into the round 2 hat and 867 got contracts, there will be more suppliers contemplating what life looks like without a contract.  Suppliers included in this multitude will be contemplating the grandfathering provision that applies to rented equipment.  For traditional capped rental items, like beds, CPAPs and manual wheelchairs, grandfathering will allow you to finish up the rental cycle for any setup that began prior to 7/1/2013.  You’ll still be paid at the rate you started out with (not the newly published SPA amounts).  You will not be allowed to setup any new customers after 7/1/2013… those patients will have to seek out service from a contracted supplier.  Additionally, if the item you are billing requires supplies (e.g. CPAP equipment), then you can bill the accessories for as long as the item is actively billing rental.  After 13 payments are made and the item caps the patient must get their supplies from a contracted supplier.  You will also retain the liability for capped equipment to ensure it is free from defect for the remainder of the useful lifetime of the equipment (5 years from the initial date).

These changes force suppliers to make tough decisions and while we cannot make the final decision for you, MiraVista will partner with you in asking the right questions and contemplating the unforeseen. As you have questions, MiraVista will help direct you to the answers that make the difference between just surviving and thriving.  Arrange to speak with Reimbursement Consultant Andrea Stark  or Operations and Analytical Expert Derrick Stark to discuss your concerns at (803) 462-9959 ext. 246.

Just as a reminder, if you sell an item to a beneficiary that wants to pay you cash and not use their Medicare benefits, you must procure an Advance Beneficiary Notice (ABN) where the beneficiary selects the option to waive their rights.  But it is not as simple as just getting a signature and checking the right box… you must also disclose any reasons you believe the claim would likely deny IF you were to file the claim.  Waiving benefits doesn’t give you a pass on documentation collection or medical necessity verification.

The reason you must go this extra step is because the waiver of Medicare benefits is a revocable designation.  At any time in the future if the beneficiary changes their mind and wants you to file a claim (or if the caretakers get involved and insist you file), you will be obligated to do so.  In the event that the claim is filed and then denies for medical necessity reasons (that were NOT disclosed to the beneficiary in writing), you will be back on the hook to refund monies you collected.  So, do the leg work… make sure that the protections you intended to have at setup are still there waiting for you in the eventual case you have to file that claim.

While there can be profit in the retail market, there are still pitfalls to be mindful of.  This is just one of the can’t miss topics to be discussed in our upcoming webinar with Andrea Stark and healthcare attorney Jeff Baird on Jan 15.  For the last three years, HME News has had Andrea and Jeff present a candid and practical update for the coming year.  In this webinar they’ll tackle entry into cash and internet sales market place, what you should, can and cannot do with regards to patient collections, and common sense protections to ensure you are not left in the wake of the technology revolution.

You can register for this event or reserve a digital recording through our website using the Seminars and Webinars link. Seats are limited so register today!

Andrea Stark

The DME MACs continue to push buttons and create uncertainty for providers that provide consumable supplies on a regular basis. A recent bulletin takes a pretty swift shot at providers that utilize automated Voice Recognition software and technology to efficiently process refill requests for consumable supplies such as ostomy, urological supplies, surgical dressings, diabetic testing supplies, etc.

Prior to sending out refills suppliers must determine the quantity of each item the beneficiary has on hand.

In the educational articles posted by the MACs (see links below) they have taken a position that questions that result in a Yes or No response will not be accepted as meeting the documentation burden. Questions that spoon feed beneficiaries and only capture an amount of supplies the beneficiary is requesting or responses to questions stating the beneficiary has less than “X” number of days remaining are all considered vague and non-specific, and the contractors will not justify reimbursement based on this captured data. The article further stipulates that the MACs prefer (although they do not require) an actual count of supplies remaining. Basically if your questions produce an identical response from multiple beneficiaries it is likely to be discounted.

So can we continue to use IVRs without risk of incurring audit risk? That is a good question! We are requesting additional dialogue with CMS on these directives and hope to procure a more liberal take on what can and cannot satisfy this requirement. While we maintain the MACs are taking an overly restrictive position beyond the scope of what SHOULD be required to meet this burden, they have put their cards on the table and providers have to adapt accordingly. In light of the directives, MiraVista recommends that scripts be modified to require a unique response from beneficiaries by asking open ended questions. We believe that if the provider asks “How many days of supply do you have remaining?” or “When do you expect that you will run out of your current supply?”, that CMS will have to accept the answer as a unique response. If using an IVR system it is preferred that you collect an individual, open response from the beneficiary to establish compliance with the current CMS requirements. You could model your question along the lines of the following:

“Please take a moment and assess how much supply you have remaining, and then answer the following question: How many days’ worth of supplies do you have left? Enter a two-digit representation for the number of days remaining: 1 day should be entered as 0-1, 14 days as 1-4.”

In cases where the response indicates the beneficiary has more than 10 days worth of supply remaining, your shipment should be delayed or the beneficiary should be personally contacted to verify the response.

This is a featured article from the December 2012 edition of VistaNotes.

Links:

http://www.medicarenhic.com/dme/medical_review/mr_bulletins/

 http://www.cgsmedicare.com/jc/pubs/news/2012/1012/cope20351.html

The US Supreme Court has voted to uphold all provisions of the Affordable Car Act, including the hotly debated individual mandate and Medicaid expansion provisions. Both provisions have been contested as unconstitutional and outside the scope of the government’s authority.

The individual mandate is a provision within the law that would require most Americans to obtain a minimum level of health insurance by 2014, or else begin paying a new tax. The amount of the tax would be determined by factors such as the person’s income bracket, number of dependents and filing status. The tax would not apply to individuals who do not pay federal income taxes because their household income is less than the filing threshold established by the IRS.

Another key provision challenged in the Act is the requirement to expand the scope of coverage for the Medicaid program and increase the number of individuals States must cover. For example, extending coverage to all individuals under age 65, including those without children, who have incomes less than 133% of the federal poverty level by 2014. If States do not comply, they are threatened with losing federal funding.

Supreme Court Justice John Roberts delivered the court’s opinion:

“Under the mandate, if an individual does not maintain health insurance, the only consequence is that he must make an additional payment to the IRS when he pays his taxes. See §5000A(b). That, according to the Government, means the mandate can be regarded as establishing a condition—not owning health insurance—that triggers a tax—the required payment to the IRS. Under that theory, the mandate is not a legal command to buy insurance. Rather, it makes going without insurance just another thing the Government taxes, like buying gasoline or earn­ing income… The Federal Government does not have the power to order people to buy health insurance. Section 5000A would therefore be unconstitutional if read as a command. The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax,” Roberts said in his opinion.

The Supreme Court did agree that threatening to revoke federal funding to States for noncompliance with the Medicaid expansion clause is unconstitutional. The Justices struck down this clause in their final opinion, allowing the mandated expansion of Medicaid, but precluding the Secretary from withdrawing existing Medicaid funds from States for failure to comply. No other provisions in the Affordable Care Act were impacted by this change.

Standing provisions within the Act that impact Medicare and DME, include: enhanced supplier screenings (i.e. revalidation); the expansion of Competitive Bidding and the application of bid prices nationwide by 2016; the elimination of the first month purchase option for standard power wheelchairs; the 2.3% medical device sales tax; authority for the OIG to enact payment suspensions during fraud investigations; authority for CMS to enact enrollment moratoriums (not yet enacted); and a face-to-face requirement for all billable DME items (not yet enacted).

A copy of the full court opinion is available here.

In most cases where Medicare is the primary payor and the patient has a secondary insurer, the responsibility of transmitting the claim to the supplemental insurer for payment falls on the coordination of benefits contractor (COBC). For claims submitted in the new HIPAA Version 5010 format, once Medicare adjudicates the claim and payment has been finalized, the COBC then translates the claim (if necessary) into the claim format accepted by the secondary payor and runs a series of HIPAA compliance validations prior to transmission. If a compliance issue is identified, the COBC notifies the DME MAC that crossover to the secondary payor could not be completed and the submitting supplier is mailed a letter that indicates “The claim(s) could not be crossed over due to claim data errors…” with a specific error code. The supplier then becomes responsible for resolving the issue and taking the additional steps to bill the supplemental payor.

CMS recently identified flaws in the COBC’s system that resulted in incorrect rejections for crossover claims submitted in the new HIPAA Version 5010 format. If you received a letter stating that your claim could not be crossed over due to one of the following errors, it was likely rejected as result of a defect in the COBC’s compliance validation process:

According a release published by all four DME MACs, effective Monday, February 27, the MACs began resending claims affected by error code H20203 to the COBC for crossover. In addition, CMS has asked contractors to hold letters for claims rejecting due to error code H45255. Once the issue is resolved, the DME MACs will be instructed to resend the affected claims to the COBC so they may be successfully crossed over.

After placing a call to the Jurisdiction C DME MAC, we were able to verify that the DME MACs did NOT receive instruction to resubmit claims rejected for reason code H51108. If you received a crossover rejection for H51108 prior to January 16, 2012, you will need to manually submit this claim to the secondary insurer for payment.

As discussed in yesterday’s blog, the Jurisdiction A DME MAC, NHIC, will no longer be issuing paper Acknowledgement Letters for redetermination requests effective April 1, 2012 – a trend that seems to be catching on. In another list serve released by the Jurisdiction D DME MAC, NAS announced that it too plans to eventually eliminate mailing paper Acknowledgement Letters as suppliers begin to utilize its Endeavor (a web-based alternative to calling the Jurisdiction D IVR) and IVR systems to verify the receipt and status of appeals.

Note: This change does not impact decision letters, only the acknowledgement letters sent to confirm your appeal was received.

Beginning yesterday, February 29^th, suppliers in Jurisdiction D may obtain the status of an appeal by calling the MAC’s IVR and selecting the appeals menu option. You must wait at least 10 days from date your appeal is received for it to be uploaded into the IVR system and will need the following information to access the status of your appeal:

1. Your National Provider Identifier (NPI)
2. Your Provider Transaction Access Number (PTAN)
3. The last five digits of your Tax Identification Number (TIN)
4. The patient’s Medicare number
5. The patient’s name as it appears on their Medicare card
6. The 14-digit claim control number (CCN). This can be found on your remittance advice in the Internal Control Number (ICN) field.

NAS has not specified the exact date it plans to discontinue mailing Acknowledgement Letters; however, we don’t expect it to be too far down the road. Information on how to use the IVR to check on the status of an appeal is available on the NAS website here.

As technology improves and the push towards electronic health records progresses, we will likely see a reduction in the number of paper statements/letters mailed by contractors and a shift towards electronic communications. The latest example of this comes from the Jurisdiction A DME MAC, NHIC, which recently announced that they will no longer issue hard-copy Acknowledgement Letters when redetermination requests are received.

Effective April 1, 2012, suppliers in Jurisdiction A will need to call the MAC’s IVR system to check on the status of a redetermination request. According to the MAC, suppliers should wait at least 10 days after submitting their request for it to be received and uploaded into the IVR system. If you call the IVR 10 days after submission and are unable to locate your request, you should call NHIC’s customer service line at: 1-866-590-6731. Per NHIC, if a redetermination request is determined to be a reopening issue, it will be reassigned in the system as a pending reopening case.

Instructions on how to use the IVR to check on a redetermination request are available in the DME MAC A IVR User Guide at:

http://www.medicarenhic.com/dme/contacts/DME_MAC_A_IVR_User_Guide.pdf.

Have you ever found it difficult to obtain required documentation from a physician? In this interview with HME News, DME consultant Andrea Stark discuses several ways you can obtain the documentation you need without alienating your referral sources.

“It’s important to time it correctly so that you’re [requesting documentation] while the doctor still needs something from you” – Stark.

To see the full interview, visit: http://www.hmenews.com/video.php?cat_id=2&v_id=260.