Medicare Compliance & Reimbursement

May 1 is the deadline you have to watch out for according to CMS.

The last thing you want are a heap of claims rejections. If you don’t ensure that your physicians are listed correctly according to their specialties, you could be setting your practice up for denials and pay losses.

Background: Back in 2009, the Centers for Medicare & Medicaid Services (CMS) implemented edits for physicians, home health agencies, and durable medical equipment suppliers to detect when claims contained an invalid ordering or referring provider. Under the edits, the ordering physician for home health agency services must have a valid National Provider Identifier (NPI) number and be enrolled in Medicare’s Internet-based Provider Enrollment, Chain, and Ownership System (PECOS).

Practices have been waiting patiently for an official word regarding when CMS will turn on the ordering/referring edits, at which point claims without an ordering/referring physician’s NPI could be rejected. CMS recently confirmed that these denials will begin on May 1, according to MLN Matters article SE1305.

CMS had previously hinted at a May 1 deadline with the pre-release of this article, but quickly rescinded it, and re-released it on March 1. The article states, “Effective May 1, 2013, CMS will turn on the edits to deny Part B, DME, and Part A HHA claims that fail the ordering/referring provider edits.”

Be Ready Before May 1

You probably already know that if your physician performs a service as a result of an order or referral, your claim must include the referring or ordering practitioner’s national provider identifier (NPI). What many practices don’t realize is that even if the physician has an NPI, he may not necessarily be in the PECOS system, and starting in May, you could face penalties if you perform services referred or ordered by doctors that are not part of PECOS or the MAC’s claims system.

How this happens: If the referring/ordering doctor has a valid NPI but has not updated his enrollment in the last five years, he may not be in the PECOS system. CMS instituted two phases of penalties for practices that report services that are ordered or referred by physicians that aren’t in PECOS or the MAC’s claims system, as follows:

Phase 1: Between Oct. 5 and April 30, 2013, your MAC will search the PECOS system and the MAC’s own claims system for the ordering/referring provider. If the provider is not in PECOS or the claims system, the claim will continue to process and the Part B provider or supplier will receive a warning message on the Remittance Advice. The informational messages thus far have either been identified as N264 (Missing/incomplete/invalid ordering provider name) or N265 (Missing/incomplete/invalid ordering provider primary identifier).

Phase 2: After May 1, CMS will hit you in the pocketbook by denying your claim if your ordering physician isn’t part of PECOS or the MAC’s claims system. In fact, even if the ordering doctor is part of PECOS or the claims system, but is not of the specialty to order or refer, the claim will be rejected.

This change will hit specialties that take a lot of referrals the hardest — such as those that perform extensive diagnostic testing or labs. The MLN Matters article outlines which specialties are allowed to refer or order services and you can read it in its entirety at www.cms.gov/Outreach-and-Education/Medicare-Learning-Network-MLN/MLNMattersArticles/Downloads/SE1305.pdf.

Keep Track of NPIs

Claims can run afoul of the edits in two main ways. The referring physician may not appear in the eligible attending physician file from PECOS, CMS notes. Or the physician may be in the PECOS file, “but the name does not match the NPI record.” Small differences such as using an initial or nickname instead of a full first name can trigger the latter denial reason.

The system also will deny claims if the physician isn’t of an eligible specialty to order. For home care services, eligible specialties include Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), or Doctor of Podiatric Medicine (DPM), CMS points out in the MLN Matters article.

CMS’s new penalty phase will mean that your practice has to remain as vigilant as ever in tracking the NPIs of physicians that refer or order services. Although it may sound like an extra step, it could save you time filing appeals later down the road.

If you are part of a specialty where you are subject to an unusual number of physician orders, you may want to put an extra step in place when you accept a physician order, during which you specifically request the physician’s NPI.

NPI registry search: CMS created a searchable database that allows you to look up a physician’s NPI if you can’t get it from the practice. To access the registry, visit the CMS Web site at nppes.cms.hhs.gov/NPPES/NPIRegistryHome.do.

Rough PECOS Seas Ahead

Home health agencies had better pay close attention to the new phase of these edits or risk serious financial burdens. “I am a little concerned about this,” says Rick Ingber with Vanta-Health Consulting in Plymouth Meeting, Pa. “Because the threat of denial has been hanging out there so long without being enforced, my worry is that agencies will continue to assume the issue will continue to be pushed down the road.”

HHAs that stayed on top of the issue when it first arose may have let their physician PECOS checking slide, experts fear.

Denials Vs. Returns An Important Distinction

Making sure claims comply with this requirement is crucial, because the edits will deny rather than return claims. Denial “is very different from a claim being rejected or returned for corrections, as the claim will have to go through the appeals process to be paid rather than just being corrected and re-billed,” points out billing expert M. Aaron Little with BKD in Springfield, Mo.

Bottom line: “The appeals process will not only delay cash flow but can also be very costly,” Little warns.