News and Insights
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CMS Instructs Carriers to Hold Medicare Payments for Two Weeks In Anticipation of SGR Reduction Delay
On March 31, 2014, Congress finalized legislation to temporarily prevent a scheduled decrease in Medicare reimbursements to providers that was set to take effect on April 1, 2014. The Protecting Access to Medicare Act of 2014, H.R. 4302, has now been sent to President Obama who is expected to quickly sign it. The law will delay the reductions for one year.
In the hope that Congress would intervene to prevent the reductions from taking effect, the Centers for Medicare and Medicaid Services (CMS) instructed all Medicare Administrative Contractors to hold any claims for services paid under the Medicare Physician Fee Schedule with dates of service on or after April 1, 2014, until April 14, 2013. All claims for services delivered on or before March 31, 2014, will be processed and paid under normal procedures.
CMS believes that this hold should have a minimal impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 days for paper claims) after the date of receipt.
Update: The President signed the Protecting Access to Medicare Act of 2014 on April 1.
The deal approved by Congress and President Obama on January 2, 2013, to avoid the “fiscal cliff” brings temporary relief and permanent grief to physicians.
First, Congress extended the Medicare physician payment rate for a one-year period, which is based upon the program’s Sustainable Growth Rate formula. Had this extension not been granted, Medicare payments to physicians would have been cut by 26.5%. Physician and hospital groups have been calling for the repeal of this formula, arguing that it will lead to a reduced number of providers willing to take on Medicare patients.
The fiscal cliff legislation also delays a pending two percent reduction to physician payment rates and an eight percent reduction to medical education programs for two months, each of which are mandated by the Budget Control Act. Congress is being urged to address these issues as it grapples with the upcoming round of budget measures.
Second, the fiscal cliff legislation also includes a provision, titled “Removing Obstacles to Collection of Overpayments,” that increased the amount of time for which the government may recoup no-fault overpayments to providers from three years to five years. This change comes at the recommendation of the Office of Inspector General, which reported that nearly $500 million of identified nonfraudulent overpayments (e.g., data entry error) could not be recouped from Medicare providers because of the three-year statute of limitation. The extended limitations period means that if the government identifies an overpayment within five years after the payment is made, and the overpayment was not made due to fraud or abuse by the provider, subsequent payments to that provider may be reduced to recoup the overpayment. If the government does suspect that fraud or abuse was involved in the overpayment, then the government has other avenues of recoupment, which are not bound by the five year limitations period.
For more information, see generally the American Taxpayer Relief Act of 2012
Effective January 1, 2012, Medicare no longer paid for the technical component of diagnostic MRI, CT, nuclear medicine, or PET tests unless the practice is accredited by one of the following three organizations: (1) American College of Radiology; (2) the Intersocietal Accreditation Commission; or (3) The Joint Commission. Practices that bill Medicare for these modalities should carefully review and consider the implications of this accreditation requirement to ensure continued compliance with Medicare’s reimbursement rules, the Anti-Markup Rule, and the Stark Law.
To become accredited, practices must meet standards established by an accrediting organization. Each organization assesses, among other things, the qualifications of physicians who supervise the technical component of the diagnostic test. Practically speaking, two of the three accrediting organizations require the supervising physician to be a radiologist with expertise in the particular modality.
Medicare’s diagnostic testing billing requirement permits any physician to supervise the technical component of a diagnostic test. However, with this accreditation requirement the supervising physician for accreditation purposes may also need to be the supervising physician for billing purposes. The fact that many practices contract with an outside radiologist for accreditation purposes could make compliance with the Anti-Markup Rule and the In-Office Ancillary Services (“IOAS”) exception to the Stark Law exceedingly difficult.
At the risk of oversimplification, the Anti-Markup Rule prohibits a practice from billing Medicare for the technical and professional components of diagnostic tests unless the practice complies with one of two tests, which will be difficult for most practices to comply with when the accreditation requirement goes into effect. Further, the IOAS exception to the Stark Law is the main exception to the Stark Law that permits practices to bill Medicare and Medicaid for ancillary services, including diagnostic imaging tests and nuclear medicine. Compliance with the IOAS exception’s physician supervision requirement is more difficult with this accreditation requirement.
All practices that seek reimbursement for the technical components of MRI, CT, nuclear medicine, or PET should carefully review the implications of the accreditation requirement.
The Office of Inspector General of the Department of Health and Human Services (“OIG”) published a report in May 2012 finding that physicians have “steadily increased” code levels billed for evaluation and management (E/M) services between 2001 through 2010. The OIG used claims data to analyze and identify physicians who consistently billed higher level E/M codes during that time period. The OIG concluded that the use of higher level codes resulted in Part B Medicare payments increasing by 43 percent over those years.
The report indicates that, although the average billing level increased across the board, nearly 1,700 indentified physicians consistently billed at the two highest levels for E/M services within a specific visit type at least 95 percent of the time. These higher-billing level physicians practice in nearly all states, and treat patients within the same practice specialties as the broader percentage of physicians providing E/M services.
The OIG did not determine whether the physicians actually billed appropriately, but recommended that CMS review physicians who bill higher level E/M codes for “appropriate action.” Increased scrutiny into claims data and sophisticated technology could lead to focused reviews of provider data by carriers, Medicare program integrity auditors, and the OIG.