Practice Management Alert

Medicare Adopts New Rule for Payments The Centers for Medicare and Medicaid Services recently announced a new interim final rule that will alter the payment adjustments you see. The rule with comment makes sure healthcare providers that service Medicare beneficiaries will be paid appropriately for certain health-care services.

Applied to all Part B services except those under the Medicare Physician Fee Schedule or prospective payment system, the regulation streamlines the process by which CMS can adjust payment rates that are determined to be too low or too high for services covered by Medicare. The new rule clarifies the role of the contractors that process Medicare claims, in making local "inherent reasonableness" adjustments.

The law limits these payment adjustments to a 15 percent increase or decrease in any given year and requires that contractors submit any proposed inherent reasonableness adjustment to CMS. Otherwise, the payment adjustment can't be imposed until CMS informs the contractor that notification of the adjustment was received. The new provision is designed to ensure that full consideration is give to pertinent factors before limitations are set locally.

The memo could be important for billers, but CMS often puts out influential information that it then leaves to the carrier's discretion, says Terry A. Fletcher, CPC, CCS-P, CCS, a healthcare coding consultant in Laguna Beach, Calif. There is no reason for a payer to tamper with this ruling, Fletcher says, and if left to the carriers, the rule could effectively have little impact.

As for useful applications, Fletcher predicts that it will be useful for medications, e.g., Synvisc, or nuclear medicine. Physicians use very expensive medicine, for example, for stress tests, which require pharmacological agents to perform the tests. The problem is that physicians aren't getting paid for these agents. Fletcher hopes that the new rule will make CMS examine why its reimbursement is lower than what physicians now pay out-of-pocket. You're Not Immune from Facility Billing Fraud If you think that hospitals charged with noncompliance have no bearing on the physician side think again. One of the hot topics for facility billing fraud shows how it can contaminate your physician's office.

The federal watchdog agency, the HHS Office of Inspector General, recently announced its work plan for 2003, and certain hospital investigations will include an examination of physician billing. Following up work done many years ago, the OIG's new plan indicates that they see a "disconnect" between procedure coding for outpatient services billed by the hospital (facility fee) and what the physician billed for the same service (professional component), says Bill Sarraille, an attorney at Arent Fox Kintner & Kahn in Washington, D.C. The OIG last year reported a notable error rate between the code matches, and you can [...]