As noted in the Fee Schedule article below, the Medicare Physician Fee Schedule Final rule released on November 29th announced the SGR related cut for 2012. In making this announcement, then CMS Administrator Don Berwick, MD had this to say upon release of the 2012 rate announcement:

“This payment rate cut would have dire consequences that should not be
allowed to happen. We need a permanent SGR fix to solve this problem
once and for all. We are committed to working with the Congress to achieve
a permanent and sustainable fix.”

The 27.4 percent reduction will be on the Conversion Factor used by CMS to convert the numeric value (Relative Value Unit or RVU) assigned to each code to an actual dollar value. Actual payments for specific services could be more or less than 27.4 percent depending upon other code or regional adjustments (geographic adjusters, misvalued code adjustments, RVU changes, etc.) that are also being made.

On December 23rd Congress and the President reached agreement on a short-term (two month) extension of the 2011 CF, thus temporarily avoiding the SGR related cut on January 1, 2012. This extension expires on February 29th. Congress and the President must agree on either a longer-term fix or another short-term fix by February 29th in order to avoid the SGR cut on March 1, 2012. While all are in agreement that the SGR cut should not occur and the potential impact on physicians and patients could be extremely harmful, the House, Senate and White House have been unable to come to a consensus on a long-term solution.

In early December, the House of Representatives passed a bill that would rescind the SGR related cut for both 2012 and 2013 and instead, provide for a 1% increase in the Conversion Factor. The Senate rejected this two-year fix and instead, adopted the two-month extension of the current CF in order to allow more time to reach an agreement with the House. President Obama, while expressing support for a long-term fix, asked Congress to pass at least a short-term fix in order to prevent the cut from occurring.

CMS, in anticipation of the Congressional standoff, has announced that their Contractors have been instructed to hold Medicare claims for services provided on or after January 1 for 10 days. 4D Medical continues to encourage Congress to fix the SGR problem permanently and remove the specter of annual cuts in Medicare payments.

On November 29th, the Centers for Medicare and Medicaid Services (CMS) published the CY 2012 Medicare Physician Fee Schedule final rule in the Federal Register. The Final Rule announced a number of policy changes being adopted by CMS effective January 1, 2012.

The most anticipated announcement in this Final Rule had to do with the Sustainable Growth Rate (SGR) related cut to the Medicare Physician Fee Schedule Conversion Factor (CF). The proposed rule published in July indicated that the SGR related cut would be approximately 29%. However based upon additional information obtained subsequent to the publication of the proposed rule, CMS determined that the actual SGR related cut would be 27.4%. In real terms, this means that beginning on January 1, 2012, the Medicare Physician Fee Schedule CF will be $24.6712 (see subsequent article on Congressional Action on preventing the SGR related cut).

A number of other policy changes were announced in the Final Rule. These were:

In addition to the SGR related fee schedule adjustment, CMS also announced other changes for 2012 as well. Some of the other changes being adopted in the final rule include:

• CMS is expanding its multiple procedure payment reduction (MPPR) policy to the professional interpretation of advance imaging services to recognize the overlapping activities that go into valuing these services. According to CMS, this policy “better recognizes efficiencies that are expected when multiple imaging services are furnished to the same patient, by the same physician, in the same session on the same day.”
After reviewing the comments submitted, including the extensive comments, CMS concluded that the amount of the reduction in the proposed policy (50%) was too high and instead, was setting the amount of the reduction at 25%.

• CMS is adopting criteria for a health risk assessment (HRA) to be used in conjunction with Annual Wellness Visits (AWVs), for which coverage began Jan. 1, 2011 under the Affordable Care Act. The HRA is intended to support a systematic approach to patient wellness and to provide the basis for a personalized prevention plan.

• CMS is expanding the list of services that can be furnished through telehealth to include smoking cessation services. CMS is also changing the criteria for adding services to the telehealth list to focus on the clinical benefit of making the service available through telehealth. This change will affect services proposed for the telehealth list beginning in CY 2013.

• CMS is updating and modifying aspects of the Physician Quality Reporting System, the ePrescribing Incentive Program and the Electronic Health Records Incentive Programs.

• The announcement finalizes quality and cost measures that will be used in establishing a new value-based modifier that would adjust physician payments based on whether they are providing higher quality and more efficient care as required by the Patient Protection and Affordable Care Act (PPACA). The PPACA requires CMS to begin making payment adjustments to certain physicians and physician groups on Jan. 1, 2015, and to apply the modifier to all physicians by Jan. 1, 2017.

• CMS announces that they will implement the third year of a 4-year transition to new practice expense relative value units, based on data from the Physician Practice Information Survey that was adopted in the Medicare Physician Fee Schedule (MPFS) CY 2010 final rule.

Effective January 1, 2012, all electronically submitted health claims must be submitted in compliance with the 5010 operating rules. Providers submitting non-5010 compliant claims could see those claims rejected.
Although CMS announced that it would not “enforce” the 5010 requirement for at least 90 days after January 1, this does not constitute a rescission of the policy. More importantly, this grace period only applies to governmental enforcement of non-compliance. A Health Plan that is ready to accept 5010 compliant claims may reject non-compliant claims.

If you are not currently setup to send 5010 claims, your claims may be rejected beginning on January 1, 2012. 4D Medical is leading the way for providers in implementing the 5010 requirements.

Please please call us at 888-434-2455 to benefit from our experience and knowledge in implementing these new requirements.

Aetna knows you may be concerned about receiving prompt payments for services provided. That’s why EFT, a time-tested electronic solution, is the answer for you. Instead of sending paper checks, Aetna will send payments via Electronic Funds Transfer (EFT), a secure capability that allows you to:
• Get claims payments transmitted directly to a designated bank account(s) up to one week faster than with paper checks.
• Reduce mail coming to your office, handling time by your staff, and eliminate the need for trips to the bank. Not only does EFT save time, it also helps you manage your business more effectively with a convenient audit trail.

Ready to enroll with Aetna EFT?

Go to www.AetnaEFT.com. Print out the enrollment form, and fax your completed form and account documentation to a secure enrollment desk at the number shown on the form.

Centers for Medicare & Medicaid Services’ Office of E-Health Standards and Services Announces 90-Day Period of Enforcement Discretion for Compliance with New HIPAA Transaction Standards

Today the Centers for Medicare & Medicaid Services’ Office of E-Health Standards and Services (OESS) announced that it would not initiate enforcement action until March 31, 2012, with respect to any HIPAA covered entity that is not in compliance with the ASC X12 Version 5010 (Version 5010), NCPDP Telecom D.0 (NCPDP D.0) and NCPDP Medicaid Subrogation 3.0 (NCPDP 3.0) standards. Notwithstanding OESS’ discretionary application of its enforcement authority, the compliance date for use of these new standards remains January 1, 2012 (small health plans have until January 1, 2013 to comply with NCPDP 3.0).

CMS’ Office of E-Health Standards and Services is the U.S. Department of Health and Human Services’ component that enforces compliance with HIPAA transaction and code set standards.
OESS encourages all covered entities to continue working with their trading partners to become compliant with the new HIPAA standards, and to determine their readiness to accept the new standards as of January 1, 2012. While enforcement action will not be taken, OESS will continue to accept complaints associated with compliance with Version 5010, NCPDP D.0 and NCPDP 3.0 transaction standards during the 90-day period beginning January 1, 2012. If requested by OESS, covered entities that are the subject of complaints (known as “filed-against entities”) must produce evidence of either compliance or a good faith effort to become compliant with the new HIPAA standards during the 90-day period.
OESS made the decision for a discretionary enforcement period based on industry feedback revealing that, with only about 45 days remaining before the January 1, 2012 compliance date, testing between some covered entities and their trading partners has not yet reached a threshold whereby a majority of covered entities would be able to be in compliance by January 1. Feedback indicates that the number of submitters, the volume of transactions, and other testing data used as indicators of the industry’s readiness to comply with the new standards have been low across some industry sectors. OESS has also received reports that many covered entities are still awaiting software upgrades.
Version 5010, NCPDP Telecom D.0 and NCPDP Medicaid Subrogation 3.0 standards represent significant improvement over the current standard versions. NCPDP Telecom D.0 addresses certain pharmacy industry needs. NCPDP Medicaid Subrogation 3.0 allows state Medicaid programs to recoup payments for pharmacy services in cases where a third party payer has primary financial responsibility. Version 5010 in particular provides more functionality for transactions such as eligibility requests and health care claims status Implementation of Version 5010 also is a prerequisite for using the updated ICD-10 CM diagnosis and ICD-10-PCS inpatient procedure code set in electronic health care transactions effective October 1, 2013.
Links to information on Version 5010, NCPDP D.0 and NCPDP 3.0 are available at www.cms.gov/ICD10

Section 6401 (a) of the Affordable Care Act established a requirement for all enrolled providers and suppliers to revalidate their enrollment information under new enrollment screening criteria. This effort applies to all those providers and suppliers that were enrolled prior to March 25, 2011.

CMS has announced that the revalidation notices will now be sent through March of 2015, rather than the original deadline of March 23, 2013.

NOTE: This extension does not affect those providers which have already received a revalidation notice. If a provider has received a revalidation notice from the contractor, the provider must respond to the request by completing the application through internet-based PECOS or by completing the appropriate 855 application.

CMS meets quarterly with industry stakeholders and the provider community to solicit feedback to improve the PECOS internet-based system. Enhancements and updates are made quarterly to PECOS based on this feedback and CMS is continuing to work to make improvements and reduce the burden on providers. Significant improvements will be made during the January, 2012 and April 2012 PECOS updates and the announcements for these updates will be made closer to the release dates.

A link to the latest revalidation MLN is available at:

http://www.cms.gov/MLNMattersArticles/downloads/SE1126.pdf

Revalidation FAQ’s are available at:

http://eushelpdesk.com/PECOS/revalidation_FAQs.html

On November 2, 2011 the Centers for Medicare & Medicaid Services announced the calendar year (CY) 2012 application fee – $523.00 – for institutional providers that are initially enrolling in the Medicare or Medicaid programs or Children’s Health Insurance Program (CHIP); re-validating their Medicare, Medicaid, or CHIP enrollment; or, adding a new Medicare practice location. This fee is required with any enrollment application submitted on or after January 1, 2012.

The 2011 fee of $505.00 will remain in effect through December 31, 2011.

In the announcement, CMS estimates that approximately 840,000 Medicare providers and suppliers will be subject to re-validation in calendar year 2012. Of this total, CMS believes that roughly 80 percent will be exempt from the application fee requirement because the provider or supplier is a physician.

By law, physicians are exempt from the application fee requirement.

The Part B annual deductible is going down due to lower than expected costs. The Part B deductible for 2012 will be $140.00 for all Part B beneficiaries. The deductible in 2011 was $162.00.

On November 1, 2011 the Centers for Medicare & Medicaid Services announced the monthly Medicare Part B premium for aged and disabled beneficiaries as well as the income-related monthly adjustment amounts to be paid by beneficiaries with modified adjusted gross income above certain threshold amounts.

The standard monthly Part B premium rate for 2012 will be $99.90, which is approximately 25% of the expected average total cost of Part B coverage for aged enrollees. The 2011 standard monthly premium rate was $115.40. However, by law, last years premium increase was NOT passed along to most Medicare Part B recipients because another federal law prohibits an increase in the Medicare Part B premium that is more than the increase in Social Security benefits. Because there was no Social Security cost-of-living adjustment last year, the 2011 premium increase was waived for most Medicare recipients.

For 2011, most Medicare Part B recipients had their premiums frozen at the 2010 level of $96.40. So even though the 2012 Medicare Part B premium is technically lower than the published 2011 premium ($115.40), the 2012 premium represents a $3.50 increase for most recipients.

On June 30th, the Centers for Medicare and Medicaid Services (CMS) issued a Notice of Proposed Rulemaking (NPRM) proposing numerous changes in the Medicare Physician Fee Schedule (MPFS). This is an annual process.

4D Medical has reviewed the NPRM since it’s release.

CMS is proposing to expand a number of initiatives originally designed to reduce Medicare payments for the technical component of certain imaging services to the technical component of other medical specialties (in particular pathology) and extend some of these “technical component” payment reduction initiatives to the professional component of imaging services.

4D Medical will report any Physician Fee Schedule changes when the final fee schedule is released.

A provision in The Affordable Care Act authorizes the federal government to provide billions of dollars in start-up and capitalization funding for new state-based Health Insurance Cooperatives (CO-OPs).

On July 18th, the Centers for Medicare and Medicaid Services (CMS) announced it was taking the steps necessary to “encourage the creation of Consumer Operated and Oriented Plans (CO-OPs)” According to CMS, these new, private non-profit, consumer-governed health insurance plans will “help increase competition and give consumers and small businesses additional affordable health insurance choices.” 

CMS is proposing standards for CO-OPs, as well as the requirements a CO-OP must meet in order to qualify for loans to help start-up and capitalize these new health plans. Approximately $3.8 Billion in federal loans will be available to these new entities. Because these are loans and not grants, all of the money must be repaid with interest. Loans will only be made to nonprofit entities that demonstrate a high probability of becoming financially viable.

Despite the stated “high probability of becoming financially viable” requirement, CMS estimates that there will be a 40% default rate for the start-up and capitalization loans.

Loosely modeled after the Rural Electric CO-Ops familiar in many rural areas of the country, these health insurance CO-Ops are intended to “give consumers and small businesses control over their own health insurance.”  And, because these CO-OPs must be private, non-profit insurers governed by their members, the expectation is that these plans will offer more affordable consumer-friendly health insurance options than those available from for-profit insurance companies.

Under the CMS proposed standards, CO-OPs will be required to use any profits the plan generates “to benefit it members, including actions to lower premiums, improve health benefits, improve the quality of members’ health care, expand enrollment, or otherwise contribute to the stability of coverage for members.”

The goal of the program is to create a CO-OP in every state. Once up and running, the CO-OP plans will be available for purchase through either the Affordable Health Insurance Exchanges or the Small Business Health Option Program (SHOP) Exchanges mandated by the Patient Protection and Affordable Care Act. However, unlike private insurance products that will have to be certified by the federal government to be available through either of the Exchanges, CO-OP insurance plans will not be subject to federal government certification and will automatically be available in the Exchanges.

CO-OP insurance products are not new. According to CMS, approximately 2 Million people currently obtain their health insurance through a co-operative insurance entity. Existing CO-OP insurance entities are ineligible for these start-up or capitalization loans.

Medical Billing for these plans will still be required just as any other private, federal or state health insurance.