Friday, February 28, 2014

Three Facts Physicians Should Know About Overpayment Liability

By Ericka L. Adler from Physicians Practice

If there is one thing that is certain in the healthcare industry today, it’s the increasing number of audits and recoupment actions.  Every day my colleagues and I receive notices from CMS detailing new investigations and recoupment actions.  Accordingly, many of our clients have become increasingly concerned about their actions, and how the actions of other practice physicians can impact liability for the practice as a whole.  Their general concerns are not liability for fraud or illegal conduct, but simple, unintentional overpayments.

Below are some of our physicians' most commonly asked questions and our answers related to these issues:

1. What liability does a practice have for recoupment of payment for services rendered by its physician providers?

Under Medicare, and assuming the services were billed under a number assigned to the practice, Medicare will look to the practice for the recoupment of payments for services rendered by its employed physicians.  For independent contractors, however, Medicare can look to both the practice and the independent contractor for recoupment, as Medicare policies dictate that independent contractors only can assign their right to receive payment to the practice if they maintain “joint and several” liability for overpayments.  If you’re an independent contractor physician, you should pay attention to the group’s billing practices to minimize your exposure. For non-Medicare payments, the provider agreement with the payer controls recoupment.  Generally, however, the payer will recoup payments from the party who received such payment.  Accordingly, if the physician's services were billed under the practice's billing number, then the practice likely would be responsible for the recouped amount.

2. What happens if the practice no longer provides services and dissolves? Medicare and other payers have no greater claim to recoup money owed to them than any other creditor upon dissolution.  Once the practice dissolves and all assets liquidated, payers likely will not be able to recoup any amount from the practice.  They may, however, attempt to collect through other methods.

If the physicians form a new practice after dissolution, a payer may successfully argue the new entity is a successor to the prior entity, and therefore, it should be able to look to the new entity to recoup the amounts due.  Whether the two entities are so closely related as to be deemed successors is very fact-specific and varies from state to state.  If your practice intends to defeat a recoupment action by going out of business, you should consult legal counsel to avoid successor liability.
If an overpayment is attributable to the services of an independent contractor of the practice, then Medicare can look to the independent contractor for payment as set for above.  Again, a commercial-payer's ability to act accordingly is dependent upon the specific payer agreement.

Under limited circumstances, a payer may attempt to obtain amounts owed by the dissolved practice from its individual owners.  This concept is known as "piercing the corporate veil" and occurs when a practice-entity operates in such a way that it is not deemed separate and distinct from its owners. The ability for creditors to hold owners liable for the debts of an entity under this doctrine is uncommon, but still is a theoretical possibility.  Accordingly, it is important to follow the advice of legal counsel when forming and operating your practice as a corporate entity.

3. If a physician is employed by two practices, can payers offset overpayments attributable to services provided by such physician on behalf of Practice A from payments attributable to services provide by physician on behalf of Practice B?

There is no clear law or policy allowing Medicare to recoup funds owed by one practice from another when the services were provided by the same physician.  Any right a commercial payer has in this regard likely would be set forth in the payer agreement. As illustrated by the foregoing, whether a physician is liable for an overpayment is not determined solely by whether such action is attributable to that physician.  If you practice medicine through a group, you should always remain informed of the billing practices and actions of your colleagues to minimize your legal exposure.

Article from Physicians Practice:

Participating in New Healthcare Exchange Plans

By Susanne Madden from Physicians Practice

It is early with regard to the healthcare exchange plans and yet practices across the country are already feeling the impact. It's not just consumers who have experienced problems while attempting to sign up for the exchange plans on the website; providers too are dealing with major headaches as they navigate through the first couple of months of this new system.

Let me explain. The insurance companies created something called "narrow networks" within their full network of providers. What that means is that only a subset of physicians within any given insurance company's network "qualified" for participation in the exchange plans. The result is that while some physicians got rolled into these plans, others were excluded, even though they participate in some of the other products with that particular insurance company. For example, a physician could be participating with an HMO and a PPO-type product, but be excluded from the exchange product. This has created a dilemma for many practices. On the one hand, it means no new business coming in from new exchange members. On the other hand, it also means scrambling to hold onto existing patients that have switched to these new, lower-priced health insurance products.

The physicians that were rolled in (or opted in, in many cases) to the new exchange networks are struggling to determine new patients' eligibility under these plans. Many patients have not yet received insurance cards, and those that have are sometimes finding that their physician was mistakenly listed on the website as a "participating" provider.

In addition, those physicians who are participating with the exchange plans are finding that they are getting paid less for doing more. That is, not only are the rates less in these plans, but many patients who previously did not have health insurance may have gone without care for prolonged periods of time. As a result, they are typically sicker than patients who have been under care over time.

Also, signing up for participation in these plans means accepting a lower payment rate because the insurance companies are offering these as "budget" plans with low premiums. Naturally, the discounts have to come from somewhere and this is in the form of lower payments to physicians who participate with these plans.

So where does that leave things for physicians?

Here are four points to consider:

1. Physicians need to know whether they are participating with an exchange plan.

This can usually be readily discovered by looking yourself up on an insurance company's online directory. But don't just trust the data that you find there; double-check by calling the insurance company and verify that you are in fact participating with an exchange plan (there have been many errors on these sites so far).

2. Physicians need to determine what their fee schedule is going to be.

Ask the insurance plan to send you a sample for your specialty or send them your highest utilized codes for pricing.

3. Physicians need to communicate very clearly with patients if they are not in the exchange plans.

Hang posters on your waiting-room walls and get communications out to patients to explain that the insurance company (if this is the case) has decided to exclude you from the exchange product. Many patients wrongly assume that their physician is automatically in the network, so do your best to educate them as soon as possible.

4. Physicians need to quantify the damage.

Take note of the number of patients that you may lose due to their choice of plan and appeal to the insurance company to see if there is a way that you can retain them. If you purposefully opted out of the exchange network then it is unlikely that you can hold onto these patients. But if you were excluded from the network, you may be able to appeal ― in doing so the plan might make an exception and add you in.

If you are participating with an exchange product and you find that you are receiving an influx of these patients, my best advice to you is to set up some very good patient education materials and tools around the most frequently seen chronic conditions, in order to help manage what may be a sicker population of patients. Don't be afraid to look at what the insurance company is offering in terms of chronic-care support. Many have teams of nurses that help to manage the patient's care and do a relatively good job of feeding that information back to the primary-care physician.

Lastly, remember that it is still early. There are going to be a lot of missteps under this new system, on all sides. So I suggest hanging in there to see how things shake out. Like any new program it will take a while to work out the kinks.

Article by: Susanne Madden, MBA, is founder and CEO of The Verden Group, a consulting and business intelligence firm that specializes in practice management, physician education, and healthcare policy. She is also COO, National Breastfeeding Center, and cofounder, Patient Centered Solutions. She can be reached at or by visiting

From Physicains Practice

Code Chaos: Another nightmare for doctors, courtesy of the federal government

Mar 10, 2014, Vol. 19, No. 25 • By STEPHEN F. HAYES from The Weekly Standard
Jacksonville, Fla. Ever considered suicide by jellyfish? Have you ended up in the hospital after being injured during the forced landing of your spacecraft? Or been hurt when you were sucked into the engine of an airplane or when your horse-drawn carriage collided with a trolley?
Dave Malan
Chances are slim.
But should any of these unfortunate injuries befall you after October 1, 2014, your doctor, courtesy of the federal government, will have a code to record it. On that date, the United States is scheduled to implement a new system for recording injuries, medical diagnoses, and inpatient procedures called ICD-10​—​the 10th version of the International Classification of Diseases propagated by the World Health Organization in Geneva, Switzerland. So these exotic injuries, codeless for so many years, will henceforth be known, respectively, as T63622A (Toxic effect of contact with other jellyfish, intentional self-harm, initial encounter), V9542XA (Forced landing of spacecraft injuring occupant, initial encounter), V9733XA (Sucked into jet engine, initial encounter), and V80731A (Occupant of animal-drawn vehicle injured in collision with streetcar, initial encounter).
The coming changes are vast. The number of codes will explode​—​from 17,000 under the current system to 155,000 under the new one, according to the Centers for Medicare and Medicaid Services (CMS).
The transition to ICD-10 was planned long before Congress passed the Affordable Care Act in 2010. But Obama administration officials say it is a critical part of the coming reforms. “ICD-10 is the foundation for health care reform,” said Jeff Hinson, a CMS regional administrator, in a conference call about ICD-10 for providers in Colorado.

It will affect almost every part of the U.S. health care system​—​providers and payers, physicians and researchers, hospitals and clinics, the government and the private sector. That system​—​already stressed with doctor shortages, electronic medical records mandates, and the broader chaos of Obamacare​—​is nowhere near ready. And that has lots of people worried.
Health care professionals use ICD codes to talk to one another. The codes record diagnoses and services provided, and third-party payers​—​government, insurance companies​—​use the codes to determine reimbursements and to deter fraud. Coding errors can mean unpaid claims or costly audits​—​or both.
Virtually everyone agrees that the transition will mean decreased productivity and lost revenue, at least for a time. Some experts, dismissed as alarmists by ICD-10 enthusiasts, are predicting widespread chaos in a sector of the economy that can little afford it.
“I’m very nervous about whether once we flip that switch on October 1 this is all going to work,” says William Harvey, an assistant professor of medicine and the clinical director of the Division of Rheumatology at Tufts Medical Center in Boston.
But nobody really knows just what to expect. And remarkably, despite the embarrassing failures of, until recently the federal government had no plans to conduct end-to-end testing of the system before the launch this fall.
In a letter to CMS administrator Marilyn Tavenner on February 18, 2014, four Republican senators pressed for comprehensive testing. The senators​—​Tom Coburn, Rand Paul, John Barrasso, and John Boozman​—​are all physicians and expressed deep concern that CMS is planning only one week of “front-end” testing. After receiving the letter, CMS hastily announced that it will offer limited end-to-end testing to “a small group of providers” at some point in “summer 2014” and promised that “details about the end-to-end testing process will be disseminated at a later date.”
That’s hardly reassuring. One health care consultant, a longtime ICD-10 proponent, put it this way: “This is probably going to be the most painful year we’ve seen in the history of U.S. health care.”
On a foggy Thursday morning in early January, 30 medical coders gathered in a nondescript meeting room on the third floor of the downtown Hyatt Regency in Jacksonville. They paid between $585 and $985 each to attend a two-day “boot camp” on the new codes taught by Annie Boynton, from the American Academy of Professional Coders. On the black cloth covering each table were the day’s necessities: a Hyatt Regency pad of paper and pen, a coffee cup and saucer, a jar full of hard candy, a glass and a sweating metal pitcher filled with ice water. At each place, students found a thin spiral book​—​the “ICD-10-CD General Code Set Manual” for 2014​—​and a six-pound, phone-book-thick “ICD-10 Complete Draft Code Set.” 

Boynton began by asking the students to introduce themselves, to describe the practice that employs them, and, as an icebreaker, to tell everyone the first album that they’d purchased. She started in the back of the room, where, in an effort to remain unobtrusive, I had chosen to sit.
Left with no choice, I told the class that I was a journalist working on an ICD-10 story, and admitted, reluctantly, that my first album was Asia by Asia. (The signature song of that debut album, “Heat of the Moment,” played in my head for the rest of the day, as it may now do in yours.) Others in the class—with one exception, all of them females—came from a variety of fields that will be directly affected by the coming changes. There was an obstetrics coder, a Medicare contractor, a hospital administrator, and an owner of two urgent care clinics (Britney Spears, Def Leppard, the Monkees, and Michael Jackson, respectively).
Boynton, whose first album was Tiffany, is a native of northern Maine who now lives in Boston. The computer she uses for her PowerPoint presentation features a large “Eat Lobster” sticker, and her favorite descriptor, not surprisingly, is “wicked,” used as both a positive and a negative qualifier.
Boynton knows her stuff. She is the director of communication/adoption and training for UnitedHealth Group and she helped write the ICD-10 curriculum for the group sponsoring this course, the American Association of Professional Coders. A list of her credentials, displayed on the large screen at the front of the room, contains more letters than the alphabet: BS, RHIT, CPCO, CCS, CPC, CCS-P, CPC-H, CPC-P, CPC-I. She’s been working on the ICD-10 transition for nearly a decade.
She began the session with a straightforward question: “How many of your practices have begun to prepare for the transition to ICD-10?” Just three hands went up. Boynton smiled and shook her head in amazement. She’s not surprised. “I gave a speech to providers in California last month and only 7 of the 300 doctors in attendance had begun preparing for the transition,” she tells the class.
A survey of physician practices released in mid-January backs her up: Seventy-four percent of those surveyed reported that they’d done nothing at all to prepare. (Despite this lack of preparation, most expressed confidence that they’d be ready.)
“How many of you work for a physician who doesn’t think ICD-10 is even going to go live?” she asks. Almost everyone raises a hand. “If I had a nickel for every one, I’d be on a beach somewhere with a fruity drink in my hand. It’s 5 o’clock somewhere, right?”
Boynton launches into a brief history of ICD-10 and the debate surrounding its implementation. The current coding system, ICD-9, has been in place for nearly 30 years. Although it has expanded gradually, with additional codes to reflect new diseases, the latest innovations in treatment, and improvements in medical technology, it is nearing something close to its capacity. ICD-10 proponents​—​and Boynton is one of them​—​say there is no choice but to move to a more sophisticated code set.
Other developed countries began their implementation of ICD-10 some 20 years ago, after the World Health Organ-ization released its basic version of the new code set. But their versions of ICD-10 won’t be nearly as complicated as the U.S. version. Boynton says that only 10 other countries use the codes for reimbursements​—​one of the main functions of ICD-10 in the United States. And payment systems elsewhere are far less complicated, in part because there is usually just one payer: the government.
The multiplicity of payers in the U.S. system partly explains why ICD-10 will be vastly more complicated here. But, paradoxically, if government explains the simplicity of ICD-10 codes elsewhere, government largely explains the complexity of the ICD-10 codes here. And those codes are complex.
“If you sustain an injury falling off a toilet seat on a spaceship in Jacksonville after this class, there’s probably a code for that,” says Boynton.
There are codes for those “bitten” by a crocodile, “struck” by a crocodile, and “crushed” by a crocodile. There is also a code for injuries sustained through “other contact” with crocodiles. “I just don’t want to know about ‘other contact,’ especially with farm animals,” says Boynton, to sustained laughter. “That joke doesn’t fly in Montana.”
Boynton’s “personal favorite” is code V9027XA: “Drowning and submersion due to falling or jumping from burning water-skis, initial encounter.”
It’s the favorite of many who have studied ICD-10 codes (and the “white whale” for others). In the reporting that I had done before attending the ICD-10 boot camp, I’d had no fewer than five people mention it to me. The obvious question: Has anyone ever drowned because he’d jumped from burning water-skis? Do we need codes for things that have never actually happened?
For the answer, I turned to experts at the USA Water Ski Foundation and Hall of Fame. I was introduced to Lynn Novakofski, who was described to me as “a walking history book of water-skiing.”
His answer seems to confirm suspicions. “In my 60 years of skiing, I am not aware of a drowning caused by ‘burning skis,’ ” he told me. “Back in the ’50s, a popular act in water-ski shows was to pour gasoline on the water in front of a ski jump, light it on fire, and a ‘daredevil’ skier would jump over the flames. I have even seen the ski jumper kick off his skis in midair, dive headfirst into the flames, and swim under water​—​while everyone in the audience held their breath​—​to surface a safe distance from the burning oil. More recently, I have on occasion seen skiers, usually barefooting, skimming along with a water and oil soaked towel on fire billowing out behind them. This has a bit more potential for singeing the skin, but all the skier needs to do is drop into the water and the flames are quenched.”
Even if no one in the United States has drowned after jumping or falling off of burning water-skis, it’s possible such a tragedy has occurred overseas. I checked with Dr. Lorenzo Benassa, chairman of the medical committee at the International Waterski and Wakeboard Federation, who reported, after consulting “literature from the past 20 years” that he found “no cases” of “burning water-ski injuries.” He added: “In our experience, we have never heard of something similar.”
What about an injury short of drowning? Lynn Novakofski allows that there may have been some “minor injuries” as a result of stunts like the ones he’d seen years ago. But he didn’t recall hearing of any.
In any case, ICD-10 has those covered, too. There is a code for a mere “burn due to water-skis on fire” (V9107XA) and for someone being “hit or struck by falling object due to accident on water-skis” (V9137XA) or jumping from “crushed water-skis” (V9037XD). More generally, there’s “other injury due to accident to water-skis” (V9187X) and “other injury due to other accident on board water-skis” (V9387XA). And there’s the rather inexplicable code V9227XA: “Drowning and submersion due to being washed overboard from water-skis.”
“An injury from your water-skis catching on fire?” says Senator Tom Coburn, a physician who is leaving Congress later this year. “Eighty percent of these codes will never be used.”
How do these kinds of injuries​—​real or imaginary​—​get their own codes? This is one of the great mysteries of ICD-10. No one from any of the U.S. government agencies responsible for ICD-10 regulation and compliance would agree to an interview for this article, despite more than two-dozen requests over the course of two months.
That’s odd, since the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) are in the middle of a major public awareness campaign on ICD-10. If you follow CMS on Twitter, your feed is bombarded with tweets conveying the urgency of ICD-10 compliance. “Next CMSeHealth Summit on #ICD10 will be held on Feb 14. Register to attend via webcast here,” read a tweet from @CMSGov on February 3. The next day: “ICD10 is only 239 days away. Check out this CMS blog post on the last year before ICD-10” and “Need an overview of #ICD10? Check out the Intro Guide to ICD-10.” And the day after that: “Are you in a small or rural practice preparing for #ICD10? CMS has a fact sheet with tips for your practice” and “Not sure how your clearinghouse can help you with #ICD10? Read this to find out.”
Despite this urgency, public affairs officials from HHS, CMS, and the National Center for Health Statistics (NCHS) at the Centers for Disease Control all declined repeated requests for interviews. A spokesman for the NCHS provided this overview of the process on background: A contractor developed a prototype of the U.S. ICD-10 code set after reviewing recommendations from the World Health Organization; NCHS offered “enhancements” to that code set and revised it further after consulting with physicians, clinical coders, and other users of the previous version, ICD-9.
The objective was greater detail, more specificity. The new code set introduces the concept of “laterality” to ICD coding, allowing physicians to identify in code, for instance, whether a hand injury is a right-hand injury or a left-hand injury. But ICD-10 also adds thousands upon thousands of new injury codes​—​some 37,000 new musculoskeletal and injury codes all together, according to an ICD-10 expert who consults with CMS.
“There were 9 codes for bites in ICD-9,” says Boynton. “There are over 300 in ICD-10.”
Virtually every conceivable malady or injury has a code. There’s code V9102XA for someone who is “crushed between fishing boat and other watercraft or other object due to collision, initial encounter.” Or T71232A, “Asphyxiation due to being trapped in a (discarded) refrigerator, intentional self-harm, initial encounter.” If you are hurt in an abattoir, there’s code Y9286, “slaughterhouse as the place of occurrence of the external cause.” Code F521 is “sexual aversion disorder,” not to be confused with code G4482, “headache associated with sexual activity.”
Some codes appear to be anticipatory rather than descriptive. Has anyone in the history of mankind ever attacked another human with frog venom? Or sought contact with the same for the purposes of intentional self-harm? Probably not​—​and not just because frogs don’t produce venom.
But code T63813A is “toxic effect of contact with venomous frog, assault, initial encounter.” I asked Dr. Kyle Summers, one of the world’s leading experts on poisonous frogs, about this. He told me that frogs do not produce “venom,” and therefore, while some are poisonous, none are “venomous.” Summers further explained that while members of the Embera tribe of western Colombia have used batrachotoxin from the skin of frogs in the genus Phyllobates on the tips of blow-darts to kill monkeys, he did not know of any incidents in which the darts have been used on human enemies and had “not heard of anyone intentionally hurting themselves by contact with a poison frog. But,” he added, “I have not researched the issue.” Other codes describe occurrences that would seem unlikely to result in any kind of injury at all, such as code W20XXA, “contact with non-venomous frogs.”
Back in Jacksonville, Boynton moves from a general discussion of ICD-10 to some specifics. She explains in tremendous detail how the new codes offer several different ways of codifying engagements with patients—“initial encounter,” a “subsequent encounter,” and “sequela.” The “initial encounter” in codespeak is not limited to the “initial encounter” as one might understand it in plain English, Boynton explains. There could, in fact, be several initial encounters with a patient, if those subsequent visits involved the initial injury and treatment. Bewildered looks spread across the class like bad herpes (A6000 or one of the other 38 herpes codes), and the resultant confusion led to a series of questions about the meanings of “initial” and “subsequent.” One student asked the question that seemed to be on the mind of everyone in the room: “So a subsequent visit would still be an initial encounter?” And then, after a brief explanation, another question: “Wait, there could be five initial encounters with the same physician?” 
After lunch, the class plunged deeper still into the intricacies of the new coding. Boynton walked the class through “excludes” codes, meant to prevent using two codes that would seem to contradict one another, and the advent of the “placeholder” character, intended to allow coders to fill all seven characters of a code in which not every character has meaning. (“X can be a placeholder, but it can also be a code character.”) Boynton is a very clear communicator and managed to keep the interest of most of my classmates by alternating between code minutiae, issuing stark warnings about the consequences of failing to understand ICD-10, and dropping the occasional codeworld inside joke.
But the system is complex and the scope of change is immense. “Learning these codes makes learning Mandarin seem easy,” she tells a frustrated student. This is what has so many in the health care world nervous.
The introduction of a system with exponentially more codes, and far more complicated codes, will inevitably mean many more coding errors. The default position of payers, whether government or the private sector, will be to deny all claims that are not coded correctly. In many cases, providers will be left with a lose-lose choice: forgo payment altogether or dedicate valuable time and resources to appealing the denied claims. Hospitals, large physician practices, and other big institutions can absorb some of the losses and have the workforce at their disposal to challenge the denials. Small practices do not.
“When you have a provider who hasn’t prepared, who doesn’t know the codes, ​and they have every claim rejected because of improper coding for three months, that’s going to put people out of business,” Boynton tells me over breakfast before the second day of training.
“Most practices in the United States are small businesses,” says Senator Coburn, an obstetrician and family practice doctor from Muskogee, Oklahoma. “This could ruin them.”
An ICD-10 preparation plan from the Health Information and Management Systems Society (HIMSS) advises practices to have a minimum of six months revenue in reserve to help avoid that possibility. Such warnings have been coming for years. Financial institutions have begun offering lines of credit targeted to potential ICD-10 shortfalls. “With potential disruptions becoming more and more probable as the industry hurtles haphazardly towards October 1, 2014, having half a year’s cash or credit on hand may be vital to keeping your doors open,” writes Jennifer Bresnick in EHR Intelligence, a website that tracks news on electronic health records and medical technology.
A 2008 study on the costs of implementing ICD-10 from the health care IT firm Nachimson Advisors warned that “significant changes in reimbursement patterns will disrupt provider cash flow for a considerable period of time.” The study projected that the total cost of the ICD-10 implementation would be $83,290 for a small practice (3 physicians and 2 administrative staffers), $285,195 for a medium practice (10 providers, 1 professional coder, and 6 administrative staffers), and $2.7 million for a large practice (100 providers, 10 full-time coding staffers, and 54 medical records staffers). Boynton says those numbers seem on target five years later.
Coburn believes the new system will require doctors to spend more time coding. “You’re just not going to trust a nurse to do that,” he says. “If they put in the wrong code, they’re going to hammer you. The penalties are getting more severe. If you fail a recovery audit, they don’t just take your money, they penalize you on top of that.”
Coburn’s concerns go beyond the likelihood of a rough transition to ICD-10 to the long-term effect the changes could have on the doctor-patient relationship. The specificity of the codes will require doctors to spend more of their time on documentation. “Let’s say it takes you an extra two minutes per patient to do the coding yourself,” he says. “It doesn’t sound like much. But if you see 30 or 40 patients a day, that’s at least an extra hour you’re spending on this stuff. That minute or two that you’re not spending talking with the patient might be the minute when you learn something critical to your diagnosis or treatment plan.”
His prescription: “Delay it forever. The health care system can’t take another cost, especially right now.”
Coburn has introduced legislation to do just that, but most industry experts believe the prospects for a delay are poor. ICD-10 implementation has already been delayed twice, most recently in April 2012, giving “covered entities” an extra year that expires at the end of September. “I’d be shocked” if there’s a further delay, says Holly Louie, the ICD-10 coordinator for the Healthcare Billing and Management Association.
CMS administrator Jeff Hinson, in his conference call with Colorado providers, offered a stern warning about the October 1, 2014, compliance date. “You need to know that the deadline is firm,” he said. “The deadline is firm.”
That could spell disaster.
Despite desperate pleas from virtually every corner of the health care industry, the federal government has offered no details for comprehensive end-to-end testing of the new coding system before it goes live in seven months. “In meetings over the past two or three years between commercial payers and CMS, we were told that if everything went relatively smoothly, and we just saw the typical hiccups associated with a major transition like this, there could be as much as a one-year disruption in cash flow​—​for both large and small practices,” says Louie. “And that’s when we thought there would be end-to-end testing.”
Coburn, along with the other Republican physicians in the Senate, is trying to force CMS to perform comprehensive testing or to delay the start date. “Given the size and scope of the potential transition to ICD-10, the brevity and limited scope of this test is worrisome,” they wrote in their letter to Tavenner.
Annie Boynton, the ICD-10 trainer, says that 20 of the 50 states have done “nothing” to update their systems for ICD-10. “The sector of the industry that scares me the most is government,” says Boynton. “Historically, they are not great with major regulatory implementation rollouts,” she adds with a knowing smile. “ was a perfect example. When [Health and Human Services] Secretary Sebelius was sitting in front of Congress, the Energy and Commerce Committee, answering all those questions, I had this really sinking feeling that in 2015, we’re going to be there again.”
Stephen F. Hayes is a senior writer at The Weekly Standard.


Wednesday, February 26, 2014

ICD-10 Testing Approach: Medicare/Noridian

ICD-10 Testing Approach

MLN Matters® Number: SE1409
Related Change Request (CR) #: N/A
Related CR Release Date: N/A
Effective Date: October 1, 2014
Related CR Transmittal #: N/A
Implementation Date: N/A

Provider Types Affected
This article is intended for all physicians, providers, and suppliers submitting claims to Medicare Administrative Contractors (MACs), including Home Health & Hospice MACs (HH&H MACs), and Durable Medical Equipment MACs (DME MACs)) for services provided to Medicare beneficiaries.

Provider Action Needed
For dates of service on and after October 1, 2014, entities covered under the Health Insurance Portability and Accountability Act (HIPAA) are required to use the ICD-10 code sets in standard transactions adopted under HIPAA. The HIPAA standard health care claim transactions are among those for which ICD-10 codes must be used for dates of service on and after October 1, 2014. Be sure you are ready. This MLN Matters® Special Edition article is intended to convey the testing approach that the Centers for Medicare & Medicaid Services (CMS) is taking for ICD-10 implementation.

The implementation of International Classification of Diseases, 10th Edition (ICD-10) represents a significant code set change that impacts the entire health care community. As the ICD-10 implementation date of October 1, 2014, approaches, CMS is taking a comprehensive four-pronged approach to preparedness and testing to ensure that CMS as well as the Medicare Fee-For-Service (FFS) provider community is ready.
When "you" is used in this publication, we are referring to the FFS provider community.
The four-pronged approach includes:
  • CMS internal testing of its claims processing systems; 
  • Provider-initiated Beta testing tools; 
  • Acknowledgement testing; and 
  • End-to-end testing.
Each approach is discussed in more detail below

CMS Internal Testing of Its Claims Processing Systems
CMS has a very mature and rigorous testing program for its Medicare FFS claims processing systems that supports the implementation of four quarterly releases per year. Each release is supported by a three-tiered and time-sensitive testing methodology:
  • Alpha testing is performed by each FFS claims processing system maintainer for 4weeks; 
  • Beta testing is performed by a separate Integration Contractor for 8 weeks; and
  • Acceptance testing is performed by each MAC for 4 weeks to ensure that local coverage requirements are met and the systems are functioning as expected. 
CMS began installing and testing system changes to support ICD-10 in 2011. As of October 1, 2013, all Medicare FFS claims processing systems were ready for ICD-10 implementation. CMS continues to test its ICD-10 software changes with each quarterly release.

Provider-Initiated Beta Testing Tools
To help you prepare for ICD-10, CMS recommends that you leverage the variety of Beta versions of its software that include ICD-10 codes as well as National Coverage Determination (NCD) code crosswalks to test the readiness of your own systems. The following testing tools are available for download:
  • NCDs converted from International Classification of Diseases, 9th Edition (ICD-9) to ICD-10 located at This link will take you to an external website. on the CMS website;
  • The ICD-10 Medicare Severity-Diagnosis Related Groups (MS-DRGs) conversion project (along with payment logic and software replicating the current MS-DRGs), which used the General Equivalence Mappings to convert ICD-9 codes to International Classification of Diseases, 10th Edition, Clinical Modification (ICD-10-CM) codes, located at This link will take you to an external website. on the CMS website. On this web page, you can also find current versions of the ICD-10-CM MS-DRG Grouper, Medicare Code Editor (available from National Technical Information Service), and MS-DRG Definitions Manual that will allow you to analyze any payment impact from the conversion of the MS-DRGs from ICD-9-CM to ICD-10-CM codes and to compare the same version in both ICD-9-CM and ICD-10-CM; and  
  • A pilot version of the October 2013 Integrated Outpatient Code Editor (IOCE) that utilizes ICD-10-CM located at This link will take you to an external website. on the CMS website. The final version of the IOCE that utilizes ICD-10-CM is scheduled for release in August 2014.
Crosswalks for Local Coverage Determinations (LCDs) will be available in April 2014.
If you will not be able to complete the necessary systems changes to submit claims with ICD-10 codes by October 1, 2014, you should investigate downloading the free billing software that CMS offers from their MACs. The software has been updated to support ICD-10 codes and requires an internet connection. Alternatively, many MACs offer provider internet portals, and some MACs offer a subset of these portals that you can register for to ensure that you have the flexibility to submit professional claims this way as a contingency.

Acknowledgement Testing
CMS will offer ICD-10 acknowledgement testing from March 3–7, 2014. This testing will allow all providers, billing companies, and clearinghouses the opportunity to determine whether CMS will be able to accept their claims with ICD-10 codes. While test claims will not be adjudicated, the MACs will return an acknowledgment to the submitter (a 277A) that confirms whether the submitted test claims were accepted or rejected. For more information about acknowledgement testing, refer to the information on your MAC's website.
CMS is exploring offering other weeks of acknowledgement testing after it analyzes the results of the March 2014 testing week.

End-to-End Testing
In summer 2014, CMS will offer end-to-end testing to a small sample group of providers. Details about the end-to-end testing process will be disseminated at a later date.
End-to-end testing includes the submission of test claims to CMS with ICD-10 codes and the provider's receipt of a Remittance Advice (RA) that explains the adjudication of the claims. The goal of this testing is to demonstrate that:
  • Providers or submitters are able to successfully submit claims containing ICD-10 codes to the Medicare FFS claims systems; 
  • CMS software changes made to support ICD-10 result in appropriately adjudicated claims (based on the pricing data used for testing purposes); and
  • Accurate RAs are produced.  
The small sample group of providers who participate in end-to-end testing will be selected to represent a broad cross-section of provider types, claims types, and submitter types. 
Last Updated Feb 21, 2014

Monday, February 24, 2014

Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131 - Correction CR February 2014

Advance Beneficiary Notice of Noncoverage (ABN), Form CMS-R-131 - Correction CR

MLN Matters® Number: MM8597
Related Change Request (CR) #: CR 8597
Related CR Release Date: February 14, 2014
Effective Date: May 15, 2014
Related CR Transmittal #: R2878CP
Implementation Date: May 15, 2014

Provider Types Affected
This MLN Matters® Article is intended for physicians, providers, (including Home Health Agencies) and suppliers that submit claims to Medicare Administrative Contractors (MACs), including Home Health & Hospice Medicare Administrative Contractors (H&HH MACs), and Durable Medical Equipment Medicare Administrative Contractors (DME MACs), for services to Medicare beneficiaries.

What You Need to Know 
This article, based on Change Request (CR) 8597, provides the removal of language that was erroneously included in CR8404 and in the "Medicare Claims Processing Manual," Chapter 30, Sections 50.3 and 50.6.2. It also provides clarified manual instructions regarding home health agency issuance of the Advance Beneficiary Notice of Noncoverage (ABN) to dual eligible beneficiaries.

The ABN is an Office of Management and Budget (OMB)-approved written notice issued by providers and suppliers for items and services provided under Medicare Part B, including hospital outpatient services, and care provided under Part A by home health agencies (HHAs), hospices, and religious non-medical healthcare institutes only.

Key Points of CR8597
  • With the exception of Durable Medical Equipment Prosthetic, Orthotics & Supplies (DMEPOS) suppliers, providers and suppliers who are not enrolled in Medicare cannot issue the ABN to beneficiaries. DMEPOS suppliers not enrolled as Medicare suppliers are required by statute to provide ABN notification prior to furnishing any items or services to Medicare beneficiaries. 
  • An example of an approved customization of the ABN which can be used by providers of laboratory services (Sample Lab ABN) is now available for download at This link will take you to an external website.
  • When issuing ABNs to dual eligibles or beneficiaries having a secondary insurer, HHAs are permitted to direct the beneficiary to select a particular option box on the notice to facilitate coverage by another payer. This is an exception to the usual ABN issuance guidelines prohibiting the notifier from selecting one of the options for the beneficiary. When a Medicare claim denial is necessary to facilitate payment by Medicaid or a secondary insurer, HHAs should instruct beneficiaries to select Option 1 on the ABN. HHAs may add a statement in the "Additional Information" section to help a dual eligible better understand the payment situation such as, "We will submit a claim for this care with your other insurance," or "Your Medical Assistance plan will pay for this care." HHAs may also use the "Additional Information" on the ABN to include agency specific information on secondary insurance claims or a blank line for the beneficiary to insert secondary insurance information. Agencies can pre-print language in the "Additional Information" section of the notice.
  • Some States have specific rules established regarding HHA completion of liability notices in situations where dual eligibles need to accept liability for Medicare noncovered care that will be covered by Medicaid. Medicaid has the authority to make this assertion under Title XIX of the Act, where Medicaid is recognized as the "payer of last resort", meaning other Federal programs like Medicare (Title XVIII) must pay in accordance with their own policies before Medicaid picks up any remaining charges. In the past, some States directed HHAs to select the third checkbox on the HHABN to indicate the choice to bill Medicare. On the ABN, the first check box under the "Options" section indicates the choice to bill Medicare and is similar to the third checkbox on the outgoing HHABN. Note: If there has been a State directive to submit a Medicare claim for a denial, HHAs must mark the first check box when issuing the ABN. 
  • HHAs serving dual eligibles should comply with existing HHABN State policy within their jurisdiction as applicable to the ABN unless the State instructs otherwise. The appropriate option selection for dual eligibles will vary depending on the State's Medicaid directive. If the HHA's State Medicaid office does NOT want a claim filed with Medicare prior to filing a claim with Medicaid, the HHA should direct the beneficiary to choose Option 2. When Option 2 is chosen based on State guidance, but the HHA is aware that the State sometimes asks for a Medicare claim submission at a later time, the HHA must add a statement in the "Additional Information" box such as "Medicaid will pay for these services. Sometimes, Medicaid asks us to file a claim with Medicare. We will file a claim with Medicare if requested by your Medicaid plan."
Additional Information
The official instruction, CR8597, issued to your MAC regarding this change, may be viewed at This link will take you to an external website. on the CMS website.
Last Updated Feb 19, 2014

Wednesday, February 12, 2014

How to Better Address Patient Complaints about Long Wait Times

There's no way your practice can run on time, all the time. But there are some ways to ease patient frustrations when you do run behind schedule.

One of the best ways: handling patient complaints regarding long waits appropriately.

That's according to Leslie Bank, director of customer service at Montefiore Medical Center, a large healthcare system based in Bronx, N.Y.

"Complaint is a human piece of business, so how it is managed, how it’s attended to is a great signal about how interested the practice, the personnel are in the patient making the complaint," Bank, who coauthored the book, I'm Sorry to Hear That: Real Life Responses to Patients' 101 Most Common Complaints About Health Care, recently told Physicians Practice. "If you’re looking for a loyal patient, or someone who is convinced that their interest is upmost in your mind, then a complaint is a gift, in a way, that allows you to cement that relationship and the engagement with the patient even more rock solid than before."

To ensure your staff is turning patient complaints into positive and productive interactions, follow these four tips:  • Anticipate. Take steps to reduce the number of patient complaints that occur by being open and honest with patients regarding long wait times. Explain delays, and ask patients if you can do anything to make them more comfortable while they wait. "The main deal is not how you answer complaints but how you are already prepared, understand what complaints may be, and head off as many as possible," said Bank. • Be consistent. Ensure staff, managers, and physicians know exactly how to respond to complaints, and ensure that those responses are consistent with your practice's mission and vision, said Bank. "You write the standards of practice and those standards should reflect what you feel is excellent service." • Take the blame. When complaints do crop up, remember the three "A's," said Bank. "Agree, apologize, acknowledge that the complaint is valid whether you agree with that or not," she said. "This is effective because you are relating to the person’s emotions at the time. Some people are way off the Richter scale so by acknowledging and apologizing, you're right away getting underneath that emotional high and preventing any further escalation generally." • Take it elsewhere. If a patient complaint begins to escalate, and the patient becomes extremely upset, loud, or unruly, act quickly and privately, said Bank. "Go quietly to the person, [say], 'I’m so sorry to you’re having a rough time. Please come with me let me see how I can help you.' Just get them out of the [reception] room." Once you find a quiet and safe place to speak with the patient, sit down, make eye contact, and lean in toward the patient to make it clear that you are listening closely, said Bank. Say something like, "I see how upset you are and I am very sorry. How can I help?" she said. "Let the patient tell the story, then agree and acknowledge, then state, 'This is what I can do. Would that work for you?' Then see where that goes. Once you have acknowledged [the patient's emotions], the patient will be able to think more clearly." What tactics do you recommend staff members use when patients complain about long wait times?

Article By Aubrey Westgate from Physicans Practice

Getting Paid for Value: Defining New Reimbursement Models

As payment for physicians' services continues its steady decline, practices across the country are exploring new ways to thrive. For pediatrician Jesse Hackell's five-physician practice, part of the solution was joining a large multi-specialty pediatric group.

"We found that payments were not keeping pace with inflation and hadn’t been for many, many years, and that was becoming an untenable situation," says Hackell, whose practice is located in Pomona, N.Y. "What joining a large group enabled us to do was finally level the playing field a little bit in negotiating with the insurance companies. It gave us some strength by virtue of our numbers."
But while partnering up might provide some practices with negotiating leverage, it may only be a temporary solution to a more permanent problem. The results of Physicians Practice's 2013 Fee Schedule Survey indicate that the downward reimbursement trend continues. Between 2012 and 2013, average commercial payer reimbursement for all new and established office visits fell nearly 9 percent. That's on top of a 10 percent decline that occurred between 2011 and 2012. (More in-depth survey data is available in the accompanying survey results and online at

Editor's note: The results of our annual Fee Schedule Survey are in. See where your practice stacks up when it comes to payment for top codes.

Eventually, even negotiating higher rates with payers won't get practices very far.  But it's not all bad news. As fee-for-service declines, more payers are exploring value-based reimbursement models, in which practices receive higher pay if they provide high-quality, low-cost care. And while many physicians are hesitant to embrace such models — only 16 percent of our fee schedule survey respondents said the shift in payment methodology would be good for their practices — experts say a proactive approach is the best course. "The world's changing and the market's changing, and I think that all too often physicians like it the way it was, and it’s not going to be like that," says John Lutz, managing director at Huron Healthcare, a healthcare consulting firm based in Chicago. "I think that the sooner people start looking forward instead of looking in the rearview mirror, we'll be better off."  But finding the best path forward is not easy, and the broad array of emerging value-based payment models and incentives makes it even more difficult. Here's a closer look at some of the most prevalent value-based models and incentives, and what the experts say your practice can do to get involved.

Pay-for-performance incentives

Getting paid for value does not mean your practice needs to jump headfirst into a full-fledged value-based payment model, such as an accountable care organization (ACO) or a bundled payment arrangement. Many payers are offering smaller-scale value-based incentives, such as pay-for-performance incentives, to practices that reach quality and/or cost targets.  Though pay-for-performance incentives are nothing new, the bonus targets set forth by payers are becoming "much more sophisticated" as the shift toward value gains momentum, says Randy Cook, president and CEO of consulting firm AmpliPHY Physician Services.
For example, in the past, a practice may have received a bonus if it prescribed generic medication to a certain percentage of its patients. Now, a practice may receive a bonus if a certain percentage of its diabetic patients have their A1C levels under control. "That's what's called an outcome measure," says Cook, who is based in Columbia, Tenn. "[You] have to accomplish a whole lot of other things in order to create that outcome."

By Aubrey Westgate from Physicians Practice

Hospitals, Office Visits of Great Use In the Future, Doctor

Medicare Redeterminations: Top Five Requested Codes and Tips

Redeterminations: Top Five Requested Codes and Tips

Noridian conducted data analysis on the top procedure codes from redetermination requests submitted since October 2013. Below are the top five CPT/HCPCS codes, resources and tips to assist your office when submitting such requests.
CPT 88305 - Pathology Examination of Tissue Using a Microscope
CPT 99214 - Established Patient Office or Other Outpatient
CPT 99232 - Subsequent Hospital Inpatient Care, Typically 25 Minutes
CPT 99233 - Subsequent Hospital Inpatient Care, Typically 35 Minutes
HCPCS A0425 - Ground Mileage, per Statute Mile
Published: 01/30/14
Last Updated Jan 30, 2014

New CMS-1500 Claim Form Must Be Submitted on April 1, 2014

New CMS-1500 Claim Form Must Be Submitted on April 1, 2014

The CMS-1500 claim form has been updated for ICD-10. Form Version 02/12 will replace the CMS-1500 claim form, 08/05, effective for claims received on/after April 1, 2014.
Below are key dates for compliance with the claim submission rules:
  • Medicare began accepting claims on the revised form, version 02/12, on January 6, 2014;
  • Medicare will continue to accept claims on the old form, version 08/05, through March 31, 2014;
  • On April 1, 2014, Medicare will only accept paper claims on the revised CMS-1500 claim form, version 02/12; and
  • On and after April 1, 2014, Medicare will no longer accept claims on the old CMS-1500 claim form, version 08/05.
The grace period for providers to transition to the new form expires on April 1, 2014. Providers need to plan ahead to ensure that claims submitted on the "old" 08/05 claim form mailed or sent via a courier service reach the Noridian offices located in Fargo, ND by March 31, 2014. Claims on the "old" claim form received on/after April 1, 2014 will not be processed. Providers will receive a letter stating that the incorrect form was submitted and that they will need to submit the claims on the current, 02/12 version of the paper claim form.
Note: Updating the print layout for the new claim form will require fairly significant adjustments. The revised form, version 02/12, has a number of revisions which require changes to the print layout for proper data alignment.
Those most notable changes to the 02/12 claim form are for Items 17, 21 and 24E.
Item 17 must have a qualifier entered to the left of the dotted vertical line in Item 17 to indicate the type of provider being reported in this field, as outlined below:
  • DN - Referring Provider
  • DK - Ordering Provider (this is the appropriate qualifier for DME claims)
  • DQ - Supervising Provider
Item 21 now allows for 12 diagnosis codes, rather than 4 and the diagnosis pointers have changed from 1-4 to A-L. In addition, the diagnosis codes are now read left to right, rather than up and down.
Item 24E now requires the corresponding alphabetic, rather than numeric, diagnosis pointer. See Item 21.
Providers are encouraged to start their claim form transition now, by updating your print layouts and obtaining the new claim form for testing. Proper preparation and testing will ensure your ability to properly submit claims on the new form by April 1, 2014.
For more information, see the following:
Last Updated Feb 06, 2014