MCA News

• Key provisions of the final 2009 Medicare physician fee schedule

  November 5, 2008

  The Centers for Medicare & Medicaid Servic(CMS) released the 2009 final Medicare physician fee schedule on Oct. 30. In this rule, CMS has made a variety of policy changes that significantly affect medical group practices.
  
  The final rule:
  - Replaces the previously proposed 15.1 percent cut to Part B services with an overall 1.1 percent increase for 2009.
  
  - Shifts and recalculates the budget-neutrality adjustor. The effect is an approximate 6 percent reduction to the conversion factor and 12 percent increase to physician work values. While the conversion factor will fall from $38.09 in 2008 to $36.07 in 2009, overall average payments will increase by 1.1 percent as mandated by law. This change returns $200 million in savings to the physician spending pool from previously mandated cuts in imaging payments.
  
  - Extends the work Geographical Practice Cost Index (GPCI) floor and the therapy cap exception process through Dec. 31, 2009.
  Increases the Physician Quality Reporting Initiative (PQRI) bonus incentive to 2 percent for 2009 and 2010. In 2010, CMS will post the names of successful 2009 PQRI participants on a CMS Web site.
  
  - Implements a five-year program of incentive payments for e-prescribing and extends the current e-prescribing fax exemption until Jan 1, 2012.
  
  - Significantly curtails the ability of medical practices to retroactively bill Medicare for services provided while enrollment applications are pending. Instead, practices will now only be able to bill for 30 days prior to the later of: The date of filing of a Medicare provider enrollment application that was subsequently able to be processed by a Medicare contractor; or The date a provider began furnishing services at a new practice location.
  Adds two HCPCS (Healthcare Common Procedure Coding System) codes for follow-up inpatient telehealth consultation.
  
  - Does not finalize a proposal requiring physician offices to enroll in Medicare as independent diagnostic testing facilities (IDTFs).
  
  - Requires mobile diagnostic testing entities to enroll as IDTFs and to bill Medicare directly for services (except entities furnishing services under arrangement with a hospital).
  
  - Extends the comment period for CMS to consider an exception to the physician self-referral (Stark) law that would allow incentive payments and shared savings programs.
  Expands the "anti-markup" Medicare billing rule to apply to diagnostic testing services performed by a physician who does not share a practice with the billing physician or group, which includes applying the rule to certain tests performed inside a group practice when the performing physician: Does not perform 75 percent of his/her professional services through the billing physician or group; and Does not perform the tests in a location where the ordering physician provides substantially the full range of patient care services he/she provides generally.
  
  - Discontinues reimbursement for continuous positive airway pressure (CPAP) devices when the supplier is directly or indirectly providing the sleep test used to diagnose the beneficiary with obstructive sleep apnea (except for attended facility-based polysomnograms).
  
  Source: MGMA
  

  Read the CMS Press Release on the final 2009 Physician Fee Schedule

• ELECTRONIC PRESCRIBING INCENTIVE PROGRAM

  October 31, 2008

  PHYSICIANS MAY EARN PAY BOOST OF UP TO 5.1 PERCENT FROM MIPPA UPDATE PLUS E-PRESCRIBING AND PQRI INCENTIVES
  
  The Centers for Medicare & Medicaid Services (CMS) today announced a new initiative for physicians to trade in their prescription pads and improve efficiency and safety when ordering drugs for patients with Medicare. The initiative is included in the Medicare Physician Fee Schedule (MPFS) final rule for calendar year 2009.
  
  Widespread adoption of electronic prescribing can eliminate medication errors that result from the misreading of handwritten prescriptions. Medicare beneficiaries may also have reduced out-of-pocket costs as e-prescribing facilitates communication between prescribers and pharmacies on lower-cost generic alternatives.
  
  Physicians and other eligible professionals who adopt and use qualified electronic prescribing (e-prescribing) systems to transmit prescriptions to pharmacies may earn an incentive payment of 2.0 percent of their total Medicare allowed charges during 2009. This incentive is in addition to a 2.0 percent incentive payment for 2009 for physicians who successfully report measures under the Physician Quality Reporting Initiative (PQRI), and both incentive payments are in addition to the 1.1 percent fee schedule update required by the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Thus, a physician who successfully reports under both the e-prescribing and PQRI initiatives could receive up to a 5.1 percent pay boost for 2009.
  
  “E-prescribing can greatly reduce the number of medication errors that jeopardize the health and safety of Medicare patients and waste precious health care dollars treating conditions that never should have happened,” said CMS acting administrator Kerry Weems. “The Institute of Medicine says more than 1.5 million Americans are injured every year by drug errors. E-prescribing lets providers know—up front—their patients’ medication history and the risk of dangerous interactions.”
  
  To participate in the e-prescribing incentive program, physicians will need to have a qualified e-prescribing system with certain required capabilities. Qualified systems must be able to:
  
  - Communicate with the patient’s pharmacy;
  - Help the physician identify appropriate drugs and provide information on lower cost alternatives for the patient;
  - Provide information on formulary and tiered formulary medications; and
  - Generate alerts about possible adverse events, such as improper dosing, drug-to-drug interactions, or allergy concerns.
  
  To earn the incentive payment, physicians must successfully report one of three codes for the e-prescribing measure when submitting claims for specified types of medical visits, indicating either that:
  
  - They did not prescribe any medications during the visit;
  - They used e-prescribing for any medications prescribed during the visit; or
  - They did not use e-prescribing for a prescription because the law prohibits electronic prescribing for the specific type of drug, such as a controlled substance.
  
  
  As part of its e-prescribing incentive program, Medicare will be providing information and other educational resources to physicians and their offices about available e-prescribing systems.
  
  
  
  The e-prescribing incentive program is one of several provisions intended to promote access to higher quality and more efficient health care that is included in a final regulation updating the MPFS, which establishes payment rates for more than 7,000 types of services based on the resources required to furnish them. The rates and policies adopted in the final rule will apply to services furnished on or after January 1, 2009.
  
  
  
  Approximately 980,000 physicians and nonphysician practitioners (NPPs) bill Medicare under the MPFS for the services they furnish to beneficiaries. Of these, nearly 95 percent accept Medicare’s fee schedule rate as payment in full for their services. Medicare pays 80 percent of the fee schedule rate, while the beneficiary is responsible for the remaining 20 percent.
  
  
  
  As required by MIPPA, which became law on July 15, 2008, payment rates for physician fee schedule services will be increased by 1.1 percent in 2009, rather than being reduced by 5.4 percent as would have happened if CMS had applied the physician fee schedule conversion factor projected in the proposed rule. Total Medicare spending under the 2009 Physician Fee Schedule is projected at $61.9 billion, up 4 percent from the $59.5 billion projected for 2008.
  
  
  
  
  
  In the final rule, CMS also adopts improvements to the Physician Quality Reporting Initiative (PQRI), which allows eligible professionals to report quality measures relating to their clinical practice. Physicians who successfully report on their cases during 2009 will be able to earn an incentive payment, in addition to the e-prescribing incentive payment of 2.0 percent of their total Medicare allowed charges.
  
  
  
  Launched in 2007, the PQRI was expanded in July 2008 to provide alternative, streamlined methods for reporting. Among the changes for 2009 is removal of the quality measure 125 that was used to report on the use of e-prescribing, since that is now the focus of the e-prescribing incentive program. The final rule also adds 52 new quality measures (bringing the total number of measures to 153 from which eligible professionals can select from for 2009 PQRI), addressing such areas as osteoarthritis, rheumatoid arthritis, back pain, coronary artery bypass graft (CABG), chronic kidney disease (CKD), melanoma, oncology, coronary artery disease, hepatitis, and HIV/AIDS. Eighteen of the new measures are reported exclusively through registries.
  
  
  
  Finally, in the interest of patient care and safety, and to encourage prescribers and dispensers to adopt e-prescribing, CMS is reversing the modifications to the computer generated facsimile exemption in the CY 2008 MPFS final rule with comment period and reinstating the original computer-generated facsimile exemption that was adopted in the November 7, 2005 e-prescribing final rule, effective January 1, 2009.
  
  
  
  The revised policies and payment rates will become effective January 1, 2009.
  
  
  
  
  
  The final rule with comment will appear in the November 19 Federal Register. Comments on designated provisions are due by 5:00 p.m. Eastern time on December 29, and a final rule responding to the comments will be published at a later date.
  
  
  
  

  Click here for Medicare fact sheet

• What the Medicare act's e-prescribing financial incentives mean to you

  September 19, 2008

  E-prescribing offers significant benefits to medical practices. It can reduce the number of medical errors caused by drug-to-drug interactions and, from an administrative perspective, can improve a practice’s performance. By automating the prescription refill process and reducing the number of pharmacy callbacks due to improved formulary compliance and illegible handwritten prescriptions, the technology can boost a practice’s bottom line.
  
  Financial incentives
  The bonus program is designed to address some of the costs of implementing and maintaining an e-prescribing system — significant barriers to adoption of the technology. While the specifics of the programs have yet to be completed, the act phases out government bonuses for e-prescribing after five years. Practices that have not adopted e-prescribing at that point will be reimbursed at lower rates.
  Highlights of the e-prescribing program under the MIPPA incentive program:
  
  • In 2009 and 2010, Medicare will pay a 2 percent e-prescribing bonus in addition to the practice’s Medicare fee for e-prescribing;
  
  • In 2011 and 2012, the bonus will drop to 1 percent;
  
  • In 2013, the bonus will drop to 0.5 percent; and
  
  • If eligible practices do not e-prescribe, the legislation imposes penalties of -1 percent in 2012, -1.5 percent in 2013 and -2 percent in 2014 and beyond.
  
  Many practices may find that the bonuses don’t cover the costs of their e-prescribing systems. MIPPA instructs the Centers for Medicare & Medicaid Services (CMS) not to pay the bonus if less than 10 percent of submitted claims contain an e-prescribing quality measure defined by the government. In addition, CMS will set a minimum number of Medicare Part D prescriptions to qualify for the bonus.
  In a recent press briefing, Department of Health and Human Services Secretary Mike Leavitt indicated that the new bonuses for e-prescribing will be in addition to those paid as part of Medicare’s Physician Quality Reporting Initiative and other Medicare reimbursements. Leavitt is expected to issue official guidance on eligibility for the bonuses and clarify how practices will report their use of e-prescribing.
  
  Hardship exception
  
  The legislation permits the Health and Human Services secretary, on a case-by-case basis, to exempt an eligible health care professional from the e-prescribing requirements. The exemption is available if the secretary determines that compliance with the requirements would result in a significant hardship, such as the case of an eligible professional who practices in a rural area without sufficient Internet access. The exemption is subject to annual renewal.
  
  Getting started with e-prescribing
  
  To begin realizing the benefits of e-prescribing as quickly and easily as possible, we encourage you to visit www.GetRxConnected.com/mgma. The site contains information and guidance on moving forward with e-prescribing. These resources are equally important for those who have not yet taken steps to acquire e-prescribing technology and for those who may already be using an electronic health record or e-prescribing system but have not yet established an electronic connection to pharmacies.
  The Get Connected Web site is supported by MGMA and many of the nation’s leading medical societies.
  
  There are a lot of details that still need to be determined on the e-prescribing program. CMS is holding a conference in Boston in October on this & will hopefully provide answers to all questions and more at that time. MCA will keep you informed.
  

  Click here to go to GetRxConnected.com

• Physicians and licensed health professionals exempted from DME accreditation

  September 12, 2008

  As a result of aggressive lobbying by the Medical Group Management Association (MGMA), the American Medical Association and other stakeholders, the Centers for Medicare & Medicaid Services (CMS) hosted a special Open Door Forum to clarify Durable Medical Equipment Prosthetics and Orthotics Suppliers (DMEPOS) accreditation as it relates to the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).
  
  
  
  Prior to MIPPA, there were three accreditation deadlines:
  
  After March 1, 2008: New physicians who wish to enroll in Medicare and supply DMEPOS must be accredited prior to submitting an enrollment application.
  Jan. 1, 2009: Physicians who wish to supply DMEPOS for the first time between Jan. 1, 2008, and Feb. 29, 2008, must be accredited prior to this date.
  Sept. 30, 2009: Date by which all physicians who are DMEPOS must be accredited.
  MIPPA states that accreditation standards should not be applied to health professionals unless CMS has specific guidelines for health professionals. The act also gave CMS the authority to further exempt professionals from the accreditation. CMS has now clarified that physician and licensed healthcare professionals are exempted from all of these deadlines unless CMS develops new quality standards applicable to those exempted providers. Currently, CMS has no timeframe scheduled to develop new quality standards for exempted providers. CMS advices exempted professionals to continue to bill as usual using their DME supplier number. For those professionals currently in the process of accreditation, CMS urges practices to contact the accreditation organization to make a decision on whether to continue the process. This is a practice decision; however, as a result of this announcement, CMS has informed accreditation organizations that practices have the ability to withdraw from the process.
  
  Source: MGMA

  CLICK HERE FOR MORE DME INFO

• Chart Auditing & Procedure Coding Seminar - 9/23/08 Utica

  August 26, 2008

  An intensive five hour seminar:
  
  - CPT coding and its relationship to billing
  - Compliance
  - Maximizing reimbursemnts
  - Implementing an internal audit program
  - ...and much more!!!
  

  REGISTER HERE

• CMS issues rules for ICD-10 code sets and new HIPAA transactions

  August 22, 2008

  The Centers for Medicare & Medicaid Services (CMS) released a proposed rule to require medical groups to shift to a new, greatly expanded health care coding system on Oct. 1, 2011. The proposed rule would mandate a move from the International Classification of Diseases, Ninth Revision (ICD-9) to the International Classification of Diseases, Tenth Revision (ICD-10). It would mean that medical groups and other health care organizations would have to use 155,000 diagnosis codes rather than the current 17,000 in ICD-9. Also, codes in ICD-10 use a new alphanumeric structure.
  
  CMS also released a proposed rule to adopt updated Health Insurance Portability and Accountability Act (HIPAA) electronic transaction and pharmacy standards. The proposal agrees to X12 Version 5010, National Council for Prescription Drug Programs (NCPDP) version D.0, a new standard for Medicaid subrogation, and NCPDP version 3.0 for pharmacy claims, with an effective date of April 1, 2010. The updated version of HIPAA electronic transaction standards includes claims, claim status, remittance advice, eligibility inquiries, referral authorization and other widely used transactions.
  
  Version 5010 of the electronic standards must be in place to accommodate ICD-10 codes. In setting an accelerated compliance date of April 1, 2010, CMS did not follow the recommendations of the federal advisory body, the National Committee for Vital and Health Statistics, the Medical Group Management Association (MGMA), and many others who called for a minimum 24-month implementation timeframe. The compliance date of Oct. 1, 2011, for ICD-10 will require many medical groups to implement both mandates simultaneously.
  
  MGMA has raised concerns for several years regarding appropriate timing for adopting ICD-10. MGMA remains concerned that the government has overestimated the benefits and underestimated the costs that medical groups will experience in adopting these new standards. MGMA will continue to advocate a transition to ICD-10 only after the 5010 electronic transactions standards are fully implemented and tested.
  
  These two rules apply to HIPAA-covered entities, including health care providers, health plans and health care clearinghouses.
  
  
  
  
  
  
  

  Read fact sheets describing both proposed rules.

• Sept. 1: New ABN deadline

  August 14, 2008

  In March, the Centers for Medicare & Medicaid Services (CMS) replaced both the General Use Advanced Beneficiary Notice (ABN) (CMS-R-131-G) and the Lab ABN (CMS-R-131-L) with the ABN of Noncoverage (CMS-R-131). CMS allowed medical practices a six-month transition period; however you must start using the form no later than Sept. 1. Notable changes to the form include:
  • A new title, the "Advance Beneficiary Notice of Noncoverage" (ABN);
  • A mandatory field for cost estimates of items/services; and
  • A new option for beneficiaries to pay their bill themselves and not submit a claim to Medicare first.
  

  Click here for form and instrucitons

• CMS clarifies incident-to billing guidelines

  May 16, 2008

  The Centers for Medicare & Medicaid Services (CMS) released a new policy May 2 to clarify incident-to billing guidelines. Effective June 2, the policy explains what types of services are appropriate for incident-to billing, as well as when it is appropriate to bill incident-to nonphysician practitioner services. It provides important additional guidance about changes to the supervision and documentation requirements for such services.
  
  

  Click here to read the new policy

• Waiver of copays causes trouble

  February 27, 2008

  By the MGMA Government Affairs Department
  
  The New York Office of the Comptroller recently forced four New York ambulatory surgery centers (ASCs) to repay insurer United HealthCare for overpayments that resulted when they waived copayments for patients covered by a state employee health plan administered by United HealthCare. In each instance, the ASC did not participate in United HealthCare's Empire Plan, although many of the referring physicians did.
  
  The Empire Plan pays 80 percent of the lesser of reasonable and customary costs or the amount claimed for nonparticipating providers. This amount is often more than a participating provider would receive. To discourage patients from using nonparticipating providers, Empire Plan members are required to pay the remaining 20 percent out of their own pockets. The audits uncovered a pattern of ASCs waiving the 20 percent copayment.
  
  The Office of the Comptroller had two concerns with this practice. First, the ASCs eliminated the disincentive for seeing nonparticipating providers. Second, the ASCs misstated their charges. In other words, if the provider told the Empire Plan that the charge for a procedure was $100 but accepted the $80 from the plan as payment in full, the ASCs’ actual charge for the procedure was $80.
  
  As a result of the audits, the New York Office of the Comptroller determined that United HealthCare overpaid the facilities for services and required the ASCs to repay the plan. The comptroller’s office referred the matter to the New York State Department of Civil Service to determine whether the actions violated New York insurance laws and the penal code.
  
  While these audits are specific to the Empire Plan, as well as to New York state law, providers should be aware that the routine waiver of copayments could create problems with insurers and state laws. The routine waiver of copayments may also implicate federal and state antikickback and self-referral laws, as well as the patient-inducement prohibition found in the civil monetary penalty provisions of the Social Security Act, which is applicable to Medicare and other federally supported state health-care programs. Providers should consult an experienced health care attorney before engaging in such practices.
  
  

• OIG issues advisory opinion on prompt-pay discounts

  February 15, 2008

  On Feb. 8, the Department of Health and Human Services' Office of Inspector General (OIG), issued an advisory opinion on the provision of prompt-pay discounts to patients. The OIG advisory opinions are intended to provide advice on specific arrangements that could potentially violate the federal antikickback statute. They are published with all identifying information redacted.
  
  The requester of Advisory Opinion No. 08-03 detailed a proposed arrangement under which a health system would offer a prompt-payment discount to federal health care program beneficiaries and other insured patients for both covered and non-covered services and for inpatient and outpatient services. The health system would offer the discount regardless of a patient's financial status. The health system said the discount program would be aimed at reducing accounts receivable and encouraging prompt payment.
  
  The antikickback statute prohibits health care providers from offering remuneration to induce referrals of items or services payable by a federal health care program. Safe harbors have been promulgated to allow remuneration in instances where no inducement is intended. Specifically, the OIG has created a safe harbor that allows the waiver of beneficiary co-insurance and deductibles for inpatient hospital services under certain conditions. However, no such safe harbor exists for outpatient services.
  
  The OIG expressed concern about arrangements that might disguise payment for referrals. However, based on the facts set forth in this request, it ultimately determined that the proposed program was a legitimate prompt-payment incentive and not an inducement for patients to self-refer. Because of the factors listed below, the OIG advised the requester that it would not impose sanctions under the antikickback statute or the civil monetary penalties provisions of the Social Security Act.
  
  The OIG specifically focused on the requester's certifications that it would:
  
  · Not advertise the opportunity for a discount. Patients would only be advised of the availability of the discount during the billing process.
  
  · Notify other third-party payers of its prompt-payment policies.
  
  · Bear all of the costs of the arrangement.
  
  · Ensure that the prompt-pay discounts bear a reasonable relationship to the amount of avoided collection costs.
  
  
  
  Practices should keep in mind that OIG advisory opinions explicitly protect only the individual requester and are limited to the specific arrangements described in the request for the opinion.
  
  Additionally, practices should be aware that many states have their own antikickback statutes or other laws that may impact this type of arrangement. For instance, the New York State Controller's Office recently completed audits of four ambulatory surgery centers and found that they had inappropriately billed for claims when out-of-pocket patient costs were routinely waived. Under New York law, submitting a false insurance claim, such as one with an inflated charge, may constitute insurance fraud. The Controller's Office recommended that the health insurance plan seek to recoup the funds and that it work with the Department of Civil Service to prevent providers from taking advantage of the system and inappropriately waiving patients' out-of-pocket costs.
  
  Given the complexity of this area of the law, practices are strongly advised to consult an experienced health care attorney before proceeding with any arrangement that could potentially be construed as a kickback.
  
  Source: MGMA

  Click here to read Advisory Opinion No. 08-03

• CUOMO ANNOUNCES INDUSTRY-WIDE INVESTIGATION INTO HEALTH INSURERS’ FRAUDULENT REIMBURSEMENT SCHEME

  February 13, 2008

  NEW YORK, NY (February 13, 2008) – Attorney General Andrew M. Cuomo today announced that he is conducting an industry-wide investigation into a scheme by health insurers to defraud consumers by manipulating reimbursement rates. At the center of the scheme is Ingenix, Inc., the nation’s largest provider of healthcare billing information, which serves as a conduit for rigged data to the largest insurers in the country.
  
  Cuomo also announced that he has issued 16 subpoenas to the nation’s largest health insurance companies including Aetna (NYSE: AET), CIGNA (NYSE: CI), and Empire BlueCross BlueShield (NYSE: WLP), and that he intends to file suit against Ingenix, Inc, its parent UnitedHealth Group (NYSE: UNH), and three additional subsidiaries.
  
  The six-month investigation found that Ingenix operates a defective and manipulated database that most major health insurance companies use to set reimbursement rates for out-of-network medical expenses. Further, the investigation found that two subsidiaries of United (the “United insurers”) dramatically under-reimbursed their members for out-of-network medical expenses by using data provided by Ingenix.
  
  Under the United insurers’ health plans, members pay a higher premium for the right to use out-of-network doctors. In exchange, the insurers promise to cover up to 80% of either the doctor’s full bill or of the “reasonable and customary” rate depending upon which is cheaper.
  
  The Attorney General’s investigation found that by distorting the “reasonable and customary” rate, the United insurers were able to keep their reimbursements artificially low and force patients to absorb a higher share of the costs.
  
  “Getting insurance companies to keep their promises and cover medical costs can be hard enough as it is,” said Attorney General Andrew Cuomo. “But when insurers like United create convoluted and dishonest systems for determining the rate of reimbursement, real people get stuck with excessive bills and are less likely to seek the care they need.”
  
  Cuomo’s investigation also found a clear example of the scheme: United insurers knew most simple doctor visits cost $200, but claimed to their members the typical rate was only $77. The insurers then applied the contractual reimbursement rate of 80%, covering only $62 for a $200 bill, and leaving the patient to cover the $138 balance.
  
  The United insurers and many other health insurance companies relied on the Ingenix database to determine their “reasonable and customary” rates. The Ingenix database used the insurers’ billing information to calculate a “reasonable and customary” rate for individual claims by assessing how much a similar type of medical service would typically cost, generally taking into account the type of service, physician, and geographical location. However, the investigation showed that the “reasonable and customary” rates produced by Ingenix were remarkably lower than the actual cost of typical medical expenses.
  
  The United insurers and Ingenix are owned by the same parent corporation, United HealthGroup. When members complained their medical costs were unfairly high, the United insurers hid their connection to Ingenix by claiming the rate was the product of “independent research.” The Attorney General’s notice to United expressed concern that the company’s ownership of Ingenix created a clear conflict of interest because their relationship gave Ingenix an incentive to set rates that benefited United and its subsidiaries.
  
  Cuomo’s notice of intent to sue names the following potential defendants: UnitedHealth Group and its subsidiaries, United HealthCare Insurance Company of New York, Inc., United Healthcare of New York, Inc., United Healthcare Services, Inc. and Ingenix.
  
  The subpoenas served today request documents showing how the insurer computes reasonable and customary rates, copies of member complaints and appeals, and communications with members and between Ingenix and the insurer on the issue.
  
  Cuomo continued, “The lack of accuracy, transparency, and independence surrounding United’s process for setting a ‘reasonable and customary rate’ is astounding. United’s ownership of Ingenix coupled with the inherent problems with the data it is using clearly demonstrate a broken reimbursement system designed to rip off patients and steer them towards in-network-doctors that cost the insurer less money.”
  
  Consumers Union Programs Director Chuck Bell said, "Based on the findings in this investigation, it appears that United Health failed to fulfill the promises it made to cover a fair portion of medical expenses, and consumers were stuck with the bill. The current process for establishing ‘reasonable and customary’ rates is riddled with conflicts of interest and manipulations that consistently lead to patients paying more, and insurers paying less. We applaud Attorney General Cuomo for taking on this issue which is vitally important for consumers everywhere.”
  
  Cancer Care’s Associate Executive Director Ellen Coleman said, “Cancer patients and others faced with life-threatening illnesses need to know that a fair portion of the often overwhelming medical expenses will be covered by their insurance company. Insurers should fulfill their promises and not leave patients forced to choose between the medical care they need and the medical care they can afford. Cancer Care thanks Attorney General Cuomo for taking action on this issue and for continuing to protect the rights of patients.”
  
  “The litigation initiated by the Attorney General is critically important for two reasons,” said Ron Pollack, Executive Director of the health consumer organization Families USA. “First, it is essential that health services obtained outside of a network be compensated fairly and adequately. Eighteen million Americans under the age of 65 will spend more than a quarter of their family income on health care this year, and healthcare debt is the number one cause of individual bankruptcy. Second, there needs to be transparency in these payment arrangements. For these reasons, we support the efforts of the Attorney General.”
  
  The American Medical Association's President-elect Nancy Nielsen M.D. said, “The investigation launched today by New York Attorney General Andrew Cuomo calls into question the validity of a system that health insurers have used for years to reimburse physicians and their enrolled members. Patients have a right to expect fair and accurate payment for services promised by health insurers. The AMA greatly appreciates the Attorney General’s interest and leadership in protecting consumers, and we offer our full cooperation in any effort to hold UnitedHealth accountable to New York state laws.”
  
  The Medical Society of the State of New York President Dr. Robert Goldberg said, “The Medical Society of the State of New York applauds Attorney General Cuomo and his hard-working staff for their diligent efforts in moving forward in an investigation that we believe will have long term benefits to healthcare in New York. MSSNY also applauds the Attorney General for acting on the complaints of our patients and our physician members.”
  
  

• CPT codes: Get ready for 2008

  December 26, 2007

  Don't let outdated codes cause claim denials. Review key changes here. To view a comprehensive article addressing key changes click on the link below. A list of all CPT coding changes was distributed to all MCA clients on December 19, 2007.
  

  CPT Codes: Get Ready for 2008

• Senate passes 6 month Medicare cut delay, bill moves to House

  December 18, 2007

  Late Tuesday Dec 18th, the Senate passed the Medicare, Medicaid and SCHIP Extension Act of 2007 (S. 2499) that would replace the 10.1 percent reduction in Medicare Part B payments in 2008 with a 0.5 percent increase for six months. Physicians will face a payment reduction in Part B payments in July 2008 unless Congress once again intervenes.
  
  The House is expected to consider the legislation on Wednesday Dec 19th. Further details regarding specific provisions in the final legislation will be communicated once the legislation passes the House.
  

• Grassroots efforts needed now to avert Medicare cuts

  December 11, 2007

  Only 22 days remain before the 10.1 percent cut to Medicare Part B payments goes into effect. Currently Senate and House leaders are negotiating a Medicare bill.
  
  It is important to continue contacting members of Congress to remind them of the urgency of fixing these devastating cuts before they threaten access to patient care.
  
  The Medical Group Management Association(MGMA) in partnership with the American Medical Association (AMA) has established a toll-free hotline to contact members of Congress. Call your representatives and senators by dialing the AMA hotline at 800.833.6354. You will be patched through to your senators and representatives via your ZIP code.
  
  Tell your legislators that you want to register your concerns on the pending 10.1 percent physician payment cut. Tell them:
  
  · Congress must take action to avert cuts before the end of the year; and
  
  · Two years of positive updates are needed to stabilize Medicare beneficiary access to care.
  
  Source: MGMA
  
  

• 2008 Medicare physician fee schedule and participation enrollment materials are now available

  November 21, 2007

  The 2008 Medicare physician fee schedule and participation enrollment materials are now available on the Upstate Medicare Division (UMD) Web site.
  
  To access fee schedule information and participation enrollment materials, visit the "What's New" section of the UMD Web site at http://www.umd.nycpic.com/whatsnew.html then click on "2008 Medicare Physician Fee Schedule" or click on the link below.
  

  Upstate Medicare2008 Fee Schedule

• Medical Economics Exclusive Survey: Productivity: Sinking reimbursement, harder work

  November 20, 2007

  How are you doing compared to your colleagues? The 2007 Medical Economics Exclusive Survey gives you a chance to find out. The survey, conducted in July and August of this year, included questions about physician compensation; productivity; practice setting, size, and staff; expenditures; and third-party payer arrangements; as well as basic demographic data.
  
  To view the entire article, click on the link below:

  Medical Economic Magazine: Productivity: Sinking reimbursement, harder work

• Medical practices now face 10.1 percent Medicare payment cut

  November 5, 2007

  MEDCARE ADMINISTRATORS IS A MEMBER OF THE MEDICAL GROUP MANAGEMENT ASSOCIATION (MGMA). The following was recently released by the MGMA.
  
  In the final 2008 Medicare physician fee schedule, the Centers for Medicare & Medicaid Services (CMS) announced that the cut to physician payment for Medicare services has increased from 9.9 percent to 10.1 percent. Unless Congress takes action prior to Jan. 1, 2008, the conversion factor will drop to $34.0682 from $37.8975. The anesthesia conversion factor will decline to $16.3307 from 17.7594.
  
  The Medical Group Management Association (MGMA) will post specialty-specific information on the impact of the final Medicare physician fee schedule on mgma.com early next week.
  
  Anesthesia providers, one of the few specialties not to see change as a result of the five-year review of work relative value units (RVUs) that occurred in the 2007 Medicare physician fee schedule, are rewarded in the 2008 fee schedule with a 32 percent increase in their work value. However, this boost is offset by a decrease in the budget neutrality adjustor, which affects all provider types. The budget neutrality adjustor for 2008 will be 0.8806.
  
  Antimarkup requirement for both technical and professional components of diagnostic tests
  
  At MGMA's recommendation, CMS reversed a proposal that would have applied the antimarkup provision to part-time physicians and technical employees. The antimarkup provisions limit payment to the lowest of:
  
  The performing supplier's net charge to the billing physician or other supplier;
  The billing physician or other supplier's actual charge; or The fee schedule amount for the test that would be allowed if the performing supplier billed directly.
  Under new language in the regulation, the antimarkup requirement will apply to both the technical component and the professional component of diagnostic tests ordered by the billing physician or other supplier (or a related party) when such services are purchased outright or are performed at a site other than the billing physician's office. The proposed physician fee schedule did not contain this new site-of-service-test, which appears to subject diagnostic tests to the antimarkup rule even if they are not purchased. MGMA has serious concerns about this provision is seeking clarification from CMS.
  
  No changes to Stark law
  
  As a result of numerous recommendations from MGMA and others in the provider community regarding changes to the physician self-referral (Stark) law, CMS decided not to finalize any of its Stark law proposals at this time.
  
  Final rule covers wide ground
  
  Other highlights in the final rule include:
  
  
  
  · An expansion of the number of imaging procedures subject to the payment limitation imposed by the Deficit Reduction Act.
  
  · An increase in restrictions on independent diagnostic testing facilities (IDTFs), including limiting an IDTF's ability to share space with other Medicare-enrolled individuals or organizations and establishing a later date of enrollment for IDTFs than under the previous policy.
  
  · A decision, based on recommendations by MGMA and others, not to increase the equipment utilization rate assumption. A change in this assumption would have decreased the practice expense RVU, given that the cost of the equipment would have been spread across more services.
  
  · Further study of potential changes to payment localities. While CMS proposed three possible methods for adjusting the boundaries of payment localities, it opted not to select one based on the number of comments and suggestions it received.
  
  · A cap of $1,810 on reimbursement for outpatient physical therapy and speech language pathology services, and a separate cap of the same amount on outpatient occupational therapy services. CMS is required by law to cap payment for outpatient therapy services.
  
  · An additional payment for practices that administer intravenous infusion of immunoglobulin (IVIG). In its comments on the proposed rule, MGMA supported continued payment for this service, given the difficulties faced by medical practices in obtaining IVIG.
  
  · The acceptance of all measures adopted by the National Quality Forum and AQA by Oct. 31, 2007, based on the recommendations of provider organizations. CMS also confirmed the creation of two structural measures for the 2008 Physician Quality Reporting Initiative.
  
  Your senators need to hear from you now!
  MGMA is partnering with the American Medical Association (AMA) and national medical specialties in a targeted call-in campaign on Tuesday, Nov. 6; Wednesday, Nov. 7; and Thursday, Nov. 8 to urge senators to act.
  
  Senate offices need to hear directly from you and all providers in your practices now, as the Medicare payment package is being crafted. Tell them why it's vital that the Senate stop the pending Medicare physician payment cut.
  
  Simply dial the toll-free AMA hotline at 800.833.6354 and you will be patched through to your senators using your ZIP code.
  
  
  
  Ask your senators to speak to Sens. Max Baucus, D-Mont., and Charles Grassley, R-Iowa, the chair and ranking member of the Senate Finance Committee, respectively, and urge them to include positive Medicare physician updates in the Medicare bill. Without your action, we won't succeed.
  
  

• ICD-9-CM codes: The latest changes

  October 19, 2007

  ICD-9 codes are updated effective 10/1/07 and there is no grace period with CMS; they will reject claims without current valid codes.
  
  For a comprehensive article from Medical Econonomics Magazine summarizing the changes click below...

  Click here for article: Preparing your practice for changes this fall

• Medical Office Management - A Seminar on The Business of Medicine

  October 16, 2007

  This program will provide training to better manage a medical practice with a concentration on improving maximum reimbursements. Plus, how to prevent a Payor Audit and what to do if one occurs.
  
  WHEN: Tuesday, October 30th, 2007
  
  WHERE: GPO Classroom, 4311 Middle Settlement Rd, New Hartford, NY
  
  Registration 5:30-6:00 ~
  Program 6:00 – 9:00 p.m. ~
  Dinner Served at 6:00 p.m.
  (Dinner Catered by Symeon’s)
  
  PRESENTED BY:
  Med-Care Administrators, LLC; and Bruce A. Smith, Esq., Wood & Smith, P.C
  
  SPONSORED BY:
  The Medical Societies of the Counties of Oneida, Herkimer & Madison
  
  COST: No Charge for Medical Society Members and Non-Members
  
  RSVP by October 26: Phone (315) 735-2204; Fax (315) 735-1608; or e-mail to franholz@medsocieties.com
  
  3 Continual Medical Education (CME) credits for physicians;
  
  PRE-REGISTRATION DEADLINE: October 23 (Pre-registered applicants qualify for a FREE Practice Assessment and Fee Schedule Analysis to be performed by Med-Care Administrators, LLC)
  
  This activity has been planned and implemented in accordance with the Essential Areas and Policies of the Medical Society of the
  State of New York (MSSNY) through the joint sponsorship of Central New York Academy of Medicine and Oswego County Medical
  Society. The Central New York Academy of Medicine is accredited by the MSSNY to provide continuing medical education for physicians. The Central New York Academy of Medicine designates this educational activity for a maximum of 3 AMA PRA Category 1 Credit (s)™.
  Physicians should only claim credit commensurate with the extent of their participation in the activity.
  

• Medicare Education News - .An Educational resource guide from the Upstate Medicare Division

  October 11, 2007

  Med-Care Administrators, a member of the Upstate Medciare POE Advisory Group, is happy to share this with you.
  
  What’s Inside…
  • Required use of the Interactive Voice Response Unit
  • First Point of Contact
  • Reminder about the Toll-Free Line for Beneficiaries
  • Web Resources
  • CMS-1500 Claim Submission Errors
  • Comprehensive Error Rate Testing
  • ListServe Subscription Form
  • Medicare B Hotline Bulletin Order Form
  • Educational Events
  • Event Calendar
  • Physician Quality Reporting Initiative (PQRI)
  

  Click here to view the Resource Guide

• CMS mandates enrollment revalidation

  October 5, 2007

  If your practice is among the top 100 Medicare billers (based on dollar value of claims submitted) within your Medicare carrier's jurisdiction, you should have received a notification from the carrier requesting that you revalidate enrollment information from all of your group's providers within 60 days. The Centers for Medicare & Medicaid Services (CMS) directed carriers to distribute these requests by Sept. 30.
  
  When revalidating Medicare enrollment information, providers should complete the appropriate CMS-855 form. Applications must be complete, including all attachments and original signatures, before your carrier can process it.
  
  

• Nartional Provider Identifiers (NPIs) Published

  September 27, 2007

  By posting online a list of all health care providers who have national provider identifiers (NPIs), CMS has addressed one of the unresolved issues that forced it to delay the deadline for NPI implementation by one year. The NPI registry was published Sept. 4 and became downloadable on Sept. 12.
  
  All health care providers must use NPIs on claims forms by May 23, 2008. But private payers are still testing the new numbers with physicians, hospitals, and other HIPAA-covered entities. CMS urges providers to include their UPIN and other "legacy" numbers in the applications for NPIs, so that those can be posted in the online NPI disclosures for use in testing.
  
  Registry listings include a doctor's office address, phone number, specialty, and medical license number. CMS policy is to exclude social security numbers, DEA numbers, dates of birth, and other identifying information that could put providers at risk of identity theft. But physicians are urged to check their own files to make sure that none of that data has been inadvertently disclosed. (To update your file, go to nppes.cms.hhs.gov.)
  
  

  To find out how to access or download the NPI file click here

• CMS releases Stark III final rule prohibiting physician self-referral

  August 31, 2007

  The Centers for Medicare & Medicaid Services (CMS) released the third phase of its final rule implementing the physician self-referral, or "Stark" law. Stark III, named for Rep. Pete Stark, D-Calif., responds to comments in response to the second phase of regulations published March 26, 2004.
  
  While CMS does not propose any new Stark exceptions, it refines the current exceptions. One significant change is the requirement that a physician "stand in the shoes" of his or her group practice. Under this provision, arrangements currently considered indirect compensation arrangements will now be deemed direct compensation arrangements and may need to be restructured to comply with the Stark requirements.
  
  In a press release, CMS contends this new rule will provide benefits to physicians, including:
  · Enhanced flexibility in structuring compensation arrangements;
  · Relief from inadvertent violations under certain circumstances;
  · Reduced regulatory burden; and
  · A clearer interpretation of existing regulations.
  
  The final regulations are available unofficially online. CMS will publish the official version in the Sept. 5, 2007 Federal Register. The rule will take effect 90 days after publication.
  
  

  Click here to read the Stark III Rule

• National Provider Identifier Edit Effective September 3rd

  August 17, 2007

  Since October 2, 2006, providers have been encouraged to submit both the National Provider Identifier (NPI) and Medicare legacy identifier (PIN) on their claims. During this timeframe, providers were not penalized for invalid NPI/legacy ID combinations.
  
  Effective September 3, 2007, the Upstate Medicare Division - Part B, will begin editing the NPI/legacy ID combinations for validity against the NPI crosswalk file. Where a match cannot be located on the crosswalk, claims will be rejected or returned to the provider.
  
  When the claim is returned, a provider should first verify that the correct NPI was submitted. If correct, you will need to verify that your legacy identifier (PIN or NSC) number corresponds with the information on file with the National Plan and Provider Enumeration System (NPPES). NPPES data may be checked on line at https://nppes.cms.hhs.gov.
  
  If your NPPES information is correct and you have included and matched ALL Medicare legacy identifiers with a corresponding NPI in NPPES, but you are experiencing provider identifier problems with your claims that contain an NPI, you may need to submit a Medicare enrollment application (i.e., the CMS-855). Please contact your contractor if you need more information. For the Upstate Medicare Division (UMD), you can call the toll-free provider line at 877-567-7173.
  
  It's suggested that providers send a small number of claims using only the NPI to validate the legacy selected to match with the NPI is correct. If no claims are rejected, you can gradually increase the volume.
  
  More information and education on the NPI may be found at the Centers for Medicare & Medicaid Services (CMS) NPI page, www.cms.hhs.gov/NationalProvIdentStand, on the CMS Web site. Also, providers can apply for an NPI online at https://nppes.cms.hhs.gov.
  

  For more information click here

• Proposed Blue Cross Blue Shield Class Action Settlement

  August 13, 2007

  Medical Practices should have received a Notice of Proposed Settlement in the mail if they provided covered services to any individual enrolled in or covered by Blue Cross and Blue Shield plans at anytime between May 22, 1999 and May 31, 2007.
  
  We urge you to review the notice and consider filing a notice of claim. As explained in the Notice of Proposed Settlement, in order to qualify for a settlement payment, you must complete a Claim Form, sign the form, and mail the completed and signed form NO LATER THAN OCTOBER, 19, 2007.
  
  The proposed settlement offers two forms of relief:
  1. Settlement fund payments to Physicians, who are class Members and who timely file a Claim Form, from a cash Settlement Fund, and
  2. Prospective Relief requiring Blue Parties to commit to certain business practices and to disclose certain information about their claim processing policies and procedures on their website. These changes as well as other are more fully described in the Settlement Agreement.
  
  As part of the Settlement, the Blue Parties have agreed to make a settlement payment of $131,209,507, which together with accrued interest from June 30, 2007, will be distributed to Physicians who are Class Members and who timely file a Claim Form. If the Settlement is approved by the Court, these Class Members will be entitled to payments from the Settlement Fund in accordance with formulas that are set forth in the Settlement Agreement.
  
  Gross Receipts paid to an active physician for calendar years 2004, 2005, and 2006 will determine the pro rata portion of the of the Settlement Fund that a physician will receive. You will need to know your gross receipts for this period in order to complete the Notice of Claim. MCA has prepared and sent a summary of gross receipts to each of its clients.
  
  Please refer to bcbsphysiciansettlement.com for complete details of the settlement, a Q&A section as well as a claim form and claim form instructions.
  
  Med-care Administrators, LLC does not provide legal advice. The actual settlement documents should be used by you when making decisions. You may want to consult with your attorney.
  

  Click here for the BCBS Settlement Website

• House votes to eliminate 9.9 percent Medicare physician-payment cut

  August 1, 2007

  Earlier this evening, the House of Representatives voted 225-204 to approve H.R. 3162, the Children's Health and Medicare Protection (CHAMP) Act of 2007. This legislation includes provisions that eliminate the scheduled 9.9 percent Medicare physician payment reduction for 2008 and the 5 percent reduction for 2009. Instead, the bill includes a 0.5 percent payment increase for physicians in each of these years.
  
  In addition, the legislation repeals the sustainable growth rate formula on which Medicare reimbursement is based, and provides six separate service categories, each targeting growth rates. Numerous other provisions in the 471-page document affect medical groups, including:
  · Reauthorization of the State Children's Health Insurance Program (SCHIP);
  · Changes to the Medicare Advantage program; and
  · An increase in the tobacco tax.
  
  This bill will now proceed to a conference with the Senate-passed SCHIP bill, which does not now contain any provisions relative to Medicare physician payment. The differences between the two bills must be reconciled; then both the House and the Senate must approve a conference agreement before the legislation goes to the president for signature.
  

• House to vote to eliminate 9.9 percent Medicare payment cut

  July 30, 2007

  The House of Representatives has scheduled a vote later this week on H.R. 3162, the Children's Health and Medicare Protection (CHAMP) Act of 2007, which was recently approved by the Ways and Means Committee. This legislation includes provisions that eliminate the scheduled 9.9 percent Medicare physician payment reduction for 2008 and the 5 percent reduction for 2009. The bill provides a 0.5 percent payment increase for physicians in each of these years.
  
  In addition, the legislation repeals the sustainable growth rate formula on which Medicare reimbursement is based, and provides six separate service categories, each target growth rates.
  
  Numerous other provisions in the 482-page document affect medical groups including:
  · Reauthorization of the State Children's Health Insurance Program (SCHIP);
  · Changes to the Medicare Advantage program; and
  · An increase in the tobacco tax.
  
  Further changes to the legislation are anticipated before the full House considers this bill.
  
  

• NPI NPPES data dissemination policy issued by CMS

  May 25, 2007

  The Centers for Medicare & Medicaid Services (CMS) released a notice describing the policy by which it will disclose certain health care provider data that are contained in the National Plan and Provider Enumeration System (NPPES), developed in support of the National Provider Identifier (NPI).
  
  CMS will not disclose a health care provider's social security number, Internal Revenue Service individual taxpayer identification number or date of birth. Health care providers are required by regulation to update their NPPES data within 30 days of any change and are required to disclose their NPIs to any entity that needs them for use in a standard transaction.
  
  The compliance date for the National Provider Identifier was May 23, 2007, although CMS has issued contingency plans for both Medicare fee-for-service and all other covered entities.
  
  
  

  Read CMS' Data Disemination Notice

• NPI Payor Contingency Plans

  May 14, 2007

  On April 2nd, 2007, the Centers for Medicare and Medicaid Services (CMS) released CMS Guidance on Compliance with the HIPAA National Provider Identifier Rule. The guidance permits health plans and covered entities that show "good faith efforts" to take up to May 23rd, 2008 (one additional
  year) to complete testing and other activities in order to avoid potential payment disruption.
  
  To date here is the information compiled from the major insurance companies regarding their contingency plan:
  
  . Excellus (BS of Central NY, Rochester, UticaWatertown and Univera) -
  After 5/23/07 will accept the Legacy number or Legacy number and NPI.
  
  . ASK (BS of WNY, HealthNow and BS of NENY) - After 5/23/07 will accept the
  Legacy number or Legacy number and NPI. Warnings on the response reports
  will continue to appear if NPI is not reported.
  
  . Independent Health - After 5/23/07 will accept the Legacy number or Legacy number and NPI.
  
  . Preferred Care - After 5/23/07 will accept the Legacy number or Legacy number and NPI or NPI only.
  
  . NY Medicare - After 5/23/07 will accept the Legacy number, Legacy number and NPI or NPI only. Claims will reject after 7/1/07 with no NPI.
  
  . Railroad Medicare - After 5/23/07 will accept the Legacy number, Legacy number and NPI or NPI only.
  
  . NY Medicaid - Announced in their December 2006 Newsletter that they are
  not ready to implement the NPI number and after 5/23/07 they will accept
  the Legacy number or Legacy number and NPI.
  
  . DME Medicare - Will accept the Legacy number only until 7/1/07. Are able to handle the Legacy number and NPI or NPI only after 5/23/07.
  
  . Empire Blue Shield - After 5/23/07, will accept the Legacy number or the Legacy number and NPI until 1/25/08.
  
  . CDPHP - After 5/23/07 will accept the Legacy number or the Legacy number and NPI or NPI only after 5/23/07.
  
  . Alabama Blue Shield - After 5/23/07 will accept the Legacy number, Legacy number and NPI or NPI only.
  
  . Illinois Blue Shield - After 5/23/07 will accept the Legacy number or Legacy number and NPI. No NPI only.
  
  - Illinois Medicare - After 5/23/07 will accept the Legacy number, Legacy number and NPI or NPI only. Claims will reject after 7/1/07 with no NPI.
  
  . Virginia Blue Shield - After 5/23/07 will accept the Legacy number or Legacy number and NPI. No Legacy number after 1/25/08.
  
  Note: This is current as of May 10, 2007 and is based on information provided to MCA. MCA is not responsible for its contents or accuracy. MCA suggests you contact any of your significant payers directly to verify the information.

• Medicare Provider Enrollment Delays; If your contemplating changes plan ahead!!!

  March 8, 2007

  The Upstate Medicare Division (UMD) Provider Enrollment Unit is experiencing a serious backlog situation. In July 2006, the Centers for Medicare & Medicaid Services (CMS) implemented new, additional enrollment regulations which have caused a significant backlog.
  
  Contractors are required to develop for missing or inaccurate information that we could previously obtain from other sources available to our enrollment staff. Currently, UMD is developing for missing/inaccurate information on over 90 percent of the enrollment applications received. This has caused a significant delay in processing time.
  
  Also, if an applicant is not in the national Provider Enrollment Chain and Ownership System (PECOS), and he/she requests any change to his/her enrollment data (i.e., change of address, name change, etc.), the applicant is required to complete and submit a full CMS-Form 855 application. In this case, the application is processed using the initial enrollment processes and guidelines, significantly adding to processing time.
  
  The regulations mentioned above are documented in Pub. 100-08, Medicare Program Integrity Manual, Chapter 10 – Provider Enrollment, which is available on the CMS Web site at www.cms.hhs.gov/manuals/downloads/pim83c10.pdf.
  
  UMD is working diligently to reduce the time it takes to process applications, however, we must follow all regulations mandated by CMS.
  
  Common Errors on the CMS-855 Application
  Below are the most common errors found on the CMS-855 enrollment application. Providers can help to facilitate the enrollment process by avoiding these errors, and ensuring that they are following all instructions for completing the CMS-855 enrollment application. Please remember that enrollment applications are a contract between the provider and the U.S. Government, therefore, all required fields must be filled in.
  
  • Required sections left blank (e.g., Social Security Number (SSN)). We must require providers to complete those sections and return with new certification statement.
  
  Per Pub. 100-08, Medicare Program Integrity Manual, Chapter 10, effective July 3, 2006, “Even if the provider’s application contains missing information that is nevertheless detected elsewhere on the form, in the supporting documentation, or on another enrollment form, the contractor must still send a prescreening letter requiring the provider to furnish the missing data on the CMS-855.”
  
  • When submitting CMS-855 application sections that were requested on the prescreening form, the provider must include a new certification page signed and dated.
  
  • The CMS-855R reassignment application must be signed and dated by both the provider and the Authorized Official or Designated Official (A/O-D/O) of the group.
  
  • Names must match Internal Revenue Service (IRS) documentation, including punctuation (e.g., periods and commas).
  
  • Effective dates: Providers must enter the effective date in every section that asks for it. One that is frequently missed is on the CMS-855R, Section 1.
  
  • CMS-855I: Providers who are rendering all of their services as a group member complete Sections 1, 2, 3 & 4B1 and should then skip to Section 13. They do not have to complete the sections in between.
  
  • CMS-855I: SOLO providers must complete Section 4C and enter their personal National Provider Identifier (NPI) in this section.
  
  • CMS-855I: Physician assistants and providers reassigning benefits must enter their NPI in “Section 1: BASIC INFORMATION – A.”
  
  • CMS 855-I: SOLE owners of a professional corporation, association, or a limited liability company (e.g., PC, PLLC, etc.) must enter the business NPI in Section 4A and their individual NPI in Section 4C.
  
  CMS Provider Enrollment Web Site for Enrollment Forms
  CMS has established a page on their Web site about Medicare provider enrollment. This site includes information on how to enroll, application forms, and instructions.
  
  Visit the CMS Web site at www.cms.hhs.gov/MedicareProviderSupEnroll. The enrollment forms can be accessed at:
  
  • CMS-855B – www.cms.hhs.gov/cmsforms/downloads/cms855b.pdf.
  
  • CMS-855I – www.cms.hhs.gov/cmsforms/downloads/cms855i.pdf.
  
  • CMS-855R – www.cms.hhs.gov/cmsforms/downloads/cms855r.pdf.
  
  • CMS-588 (Electronic Funds Transfer (EFT)) – www.cms.hhs.gov/cmsforms/downloads/cms588.pdf.
  

• Important Updates to Medicare's Diabetes Related Services in 2007

  November 29, 2006

  In 2005, Medicare expanded coverage for preventive services to include diabetes screening. Starting January 1, 2007, Medicare will provide more coverage for services that affect people with diabetes. Medicare is increasing payments to doctors for some of the most frequently billed face-to-face doctor/patient services, as well as expanding access to rural and underserved areas. Medicare is also updating a broad range of preventive services, including, adding a new abdominal aortic aneurysm screening to the “Welcome to Medicare” physical exam and excluding colorectal cancer screening procedures for the Part B deductible.
  
  The Centers for Medicare & Medicaid Services (CMS) is informing its many audiences about the fact that Medicare pays for many preventive services to keep beneficiaries healthy. For more details on these important new updates to Medicare’s diabetes-related covered services in 2007 go to: http://www.cms.hhs.gov/partnerships/downloads/diabetesupdate.pdf
  
  

  Click here for details of update

• AMA meeting kicks-off year-end push for Congressional action to stop Medicare cut; save seniors' access to health care

  November 14, 2006

  With less than two months until deep cuts in Medicare reimbursements to physicians begin on Jan. 1, the AMA launched its year-end campaign to gain immediate congressional action to stop the cuts at its semi-annual policy-making meeting today.
  
  "As physicians from across the nation meet this week to set the course for the future of medicine, our focus is on stopping Medicare cuts that will harm seniors' access to health care," said AMA Board Chair Cecil Wilson, MD
  
  With approximately 3,000 attendees at the AMA meeting, physicians are contacting their members of Congress from the meeting to let them know how important this issue is to them and their patients, and are signing an open letter to patients that will serve as the basis for an AMA ad published this week in the Washington Post and USA Today.
  
  "Congress returns to Washington today for its lame-duck session, and we urge lawmakers to make preserving seniors' ability to get in and see the doctor a priority," said Dr. Wilson. "Congress can do this by halting the 2007 Medicare physician payment cut and instead ensure a payment update that reflects increases in the costs of caring for patients," said Dr. Wilson.
  
  The urgent need for Congress to act is heightened by additional payment cuts from other Medicare payment policy changes. While all physicians face a 5 percent payment cut next year, nearly half of physicians will face even larger cuts of 6 to 20 percent – making it extremely difficult for physicians to continue practicing medicine as usual.
  
  "If Congress does not act, we fear that physicians will be forced to make difficult decisions: Nearly half of physicians say Medicare cuts will force them to decrease or stop taking new Medicare patients," said Dr. Wilson. "Current Medicare payments in 2006 are about the same as they were in 2001, and nine years of cuts to physicians totaling about 40 percent will have a severe impact on seniors ability to get health care."
  
  The AMA Board of Trustees is issuing a report at the meeting on AMA activities to raise awareness of the cuts impact on seniors and outline next steps. The report calls on Congress to stop the 2007 payment cut, provide a positive payment update to reflect increases in medical practice costs, and include provisions to facilitate a long-term solution to the current flawed physician payment system.
  
  "Eighty Senators and 265 Representatives have called on Congress to take action in this session of Congress to stop the cuts, and Congress" own advisory committee on Medicare has recommended tying Medicare payments to practice costs," said Dr. Wilson. "This week at the AMA meeting, physicians nationwide speak in one voice to ask Congress to act now before time runs out for seniors and the physicians who care for them."
  
  

• MEDICARE NEW PAYMENT RATES WILL ENCOURAGE INCREASED PHYSICIAN/PATIENT COMMUNICATION

  November 2, 2006

  Starting next year, the Medicare program will pay physicians more for the time they spend talking with Medicare beneficiaries about their health care and will pay for a broader range of preventive services. The changes, which will become effective January 1, 2007, are included in the Medicare Physician Fee Schedule (MPFS) final rule released today by the Centers for Medicare & Medicaid Services (CMS).
  
  CMS projects that it will pay approximately $61.5 billion to over 900,000 physicians and other health care professionals in 2007 as a result of the payment rates and policies adopted in this rule. This new spending figure reflects current law requirements to reduce payment by 5 percent to account for the combined growth in volume and intensity of physician services.
  
  “The rule we are announcing today will pay physicians more for the time they spend talking with their patients about their health care,” said Leslie V. Norwalk, CMS Acting Administrator. “We believe that this emphasis on personalized care will lead to better outcomes for patients, and more efficient use of health care resources.”
  
  The hallmark of this rule is a stronger emphasis on the physician-patient relationship. The final rule increases significantly the work component for the RVUs for the face-to-face visits (evaluation and management or “E&M services”) during which the physician and patient discuss the patient’s health status and the steps that can be taken to maintain or improve the patient’s health. For example, the work component for RVUs associated with an intermediate office visit, the most frequently billed physician’s service, is increasing by 37 percent. The work component for RVUs for an office visit requiring moderately complex decision-making and for a hospital visit also requiring moderately complex decision-making are increasing by 29 percent and 31 percent respectively. Both of these services rank in the top 10 most frequently billed physicians’ services out of more than 7,000 types of services paid under the physician fee schedule.
  
  The increases in the work component for E&M services are the result of a comprehensive review of the values CMS has placed on the physician work involved in providing a service. Medicare law requires that this review be conducted at least every five years. Consistent with longstanding practice, CMS worked with the Relative Value Update Committee (RUC), which operates under the auspices of the American Medical Association, to review work relative value units for over 400 services. The RUC recommended the proposed E&M increases, and many of the specialty societies commented favorably on them in their comments on the proposed MPFS rule.
  
  “We believe this increase in the work component will encourage physicians to spend more time with their patients, assessing their health status, and educating them about how to live longer, healthier lives,” said Ms. Norwalk.
  
  Beginning January 1, Medicare will expand its preventive services benefits, as provided for in the Deficit Reduction Act of 2005 (DRA). Medicare will pay for preventive ultrasound screening for abdominal aortic aneurysms (AAA) for at risk beneficiaries as part of the Welcome to Medicare physical. AAA refers to a weakening in the wall of the large artery that takes blood from the heart to the body. Caught early, there are a number of treatment options, but if the AAA ruptures, it can be fatal. AAA affects 6-9 percent of men over 65 and is the 10th leading cause of death for men over 55. The screening will be available to men aged 65 to 75 who have smoked at least 100 cigarettes in their lifetimes, individuals with a family history of AAAs and any other individuals recommended for screening by the United States Preventive Services Task Force.
  
  The rule expands the number of beneficiaries who qualify for bone mass measurement due to long term steroid therapy. For these beneficiaries, the rule reduces the dosage equivalent required for eligibility by one-third, from an average of 7.5 milligrams per day of prednisone for at least three months to 5.0 milligrams.
  
  The final rule also exempts the colorectal cancer screening benefit from the Part B deductible, eliminating a potential financial barrier to using this benefit. Colorectal cancer is the second leading cause of cancer deaths, and survival is closely related to the stage of the disease at diagnosis. The five-year survival rate when the cancer is detected early approaches 90 percent. Unfortunately, approximately 65 percent of patients present with advanced disease. Once the lymph nodes are involved, chances of survival drop to a range of 35 to 60 percent and with metastatic disease, less than 10 percent.
  
  “CMS believes that paying more for screening services to detect and treat health problems early will improve the quality of life for Medicare beneficiaries while saving money for both the beneficiaries and taxpayers,” said Ms. Norwalk.
  
  The Medicare law includes a statutory formula that will require CMS to implement a minus 5.0 percent update in payment rates for physician-related services. This is slightly less than the 5.1 percent reduction in the proposed rule. This formula compares the actual rate of growth in spending to a target rate, which is based on such factors as the growth in number of Medicare fee-for-service beneficiaries and statutory or regulatory changes in benefits. If the actual rate of spending growth exceeds the target rate, the update is decreased; if it is less, the update is increased. Every year beginning with 2002, in response to rising spending, the statutory update formula would have operated to impose payment cuts. The negative update went into effect in 2002, but for 2003 to 2006, Congress intervened and temporarily suspended the requirements of the formula in favor of specific, statutory updates.
  
  CMS is working with physician organizations, the AQA Alliance, the National Quality Forum, and others to develop quality measures, in order to identify and support higher-quality care. Earlier this month, CMS posted on its website a pool of potential quality measures for physicians to report as part of the Physician Voluntary Reporting Program. More information about this program, including the potential measures can be found at: www.cms.hhs.gov/PVRP.
  
  In order to promote best practices in cancer treatment, CMS in 2005 and 2006 conducted a pay for reporting demonstration for oncology services. An extension of this oncology demonstration remains under consideration.
  
  The final rule adopts a new methodology for determining practice expense (such as office overhead) RVUs, as in the proposed rule, but will phase in the changes over a four year period. This methodology will be more transparent than the existing methodology, allowing specialties and other stakeholders to predict the effects of proposals to improve accuracy of practice expense payments.
  
  This rule also codifies in regulation a DRA provision that adds diabetes outpatient self-management training and medical nutrition therapy services to the list of covered and separately payable services included in the Federally Qualified Health Center benefit, making these services more available to beneficiaries in underserved areas, whether rural or urban.
  
  Consistent with requirements of the DRA, the final rule caps payment rates for imaging services under the physician fee schedule at the amount paid for the same services when performed in hospital outpatient departments. The final rule includes a list of codes to which the outpatient prospective payment system (OPPS) cap would apply. The rule also finalizes a policy of reducing by 25 percent the payment for the technical component of multiple imaging procedures on contiguous body parts. CMS will apply the multiple imaging reductions first, followed by the OPPS imaging cap, if applicable.
  
  The final rule also includes further guidance on how drug manufacturers should address particular issues related to their reporting requirements. In 2005, as required by the Medicare Modernization Act, CMS implemented a new method of paying for Part B drugs, such as those administered by a physician in the office. This new methodology is based on the manufacturer’s average sales price (ASP), plus six percent. The rule finalizes manufacturer reporting requirements and addresses a number of technical ASP issues such as the treatment of bona fide service fees in the context of the ASP calculation and the definition of nominal sales.
  
  Additional provisions in the final rule include:
  
  Amending the public consultation process for developing payment amounts for new clinical laboratory tests.
  
  Adopting supplier standards for independent diagnostic testing facilities (IDTFs).
  
  Continuing the temporary intravenous immune globulin preadministration-related services fee into 2007.
  
  The final rule does not finalize the proposals to (1) amend the reassignment regulations to clarify that any reassignment pursuant to the contractual arrangement exception is subject to program integrity safeguards that relate to the right to payment for diagnostic tests; and (2) amend the physician self-referral regulations to place restrictions on what types of space ownership or leasing arrangements will qualify for purposes of the in-office ancillary services exception or the physician services exception to the physician self-referral prohibition. CMS will issue final regulations on these proposals at a later time after further consideration.
  
  “CMS remains committed to addressing arrangements that may encourage over utilization of diagnostic services,” said Ms. Norwalk. “However, we want to be careful that we do not interfere with legitimate group practice arrangements that enable Medicare beneficiaries to receive medical services at one location.”
  
  Also included in the MPFS final rule are final regulations affecting ambulance payment policy under the ambulance fee schedule. This final rule will improve the accuracy of payments for ambulance services and incorporate changes in geographic adjustments based on the most recent census data. The final rule announces an Ambulance Inflation Factor (AIF) for CY 2007 of 4.3 percent. In addition, the final rule further clarifies the definition of the types of facilities that can be included as origin and destination points for "interfacility" transport for Specialty Care Transport purposes. It also clarifies that ongoing patient care services performed by a health care professional will be included in the services that can be paid at a Specialty Care Transport level.
  
  The rule will be effective for services on or after January 1, 2007.
  
  For further information, please see fact sheets on Preventive Services, Physician Participation, and Imaging Services at www.cms.hhs.gov/apps/media/?media=facts or click on the link below.
  
  

  Medicare Preventative Services

• Aetna Claims Resubmission for E&M visits billed with Modifier 57

  October 20, 2006

  Important Message Regarding Aetna's Payment Policy for Modifier —57 for Evaluation and Management (E&M) Visits at Which Decision for Surgery Is Made
  
  Aetna has reached an agreement with state medical societies to pay resubmitted claims for E&M visits billed with a Modifier -57 (indicating that the decision for surgery was made during the visit), for dates of service from January 1, 2005 through February 11, 2006. After seeking input from medical societies and the independent Physician Advisory Board, Aetna decided to change its policy and began paying these claims effective February 12, 2006.
  
  When may claims be resubmitted?
  The resubmission period will begin on January 1, 2007 and will extend through April 30, 2007. Claims resubmitted before January 1, 2007 will be rejected as duplicate claims.
  
  
  Online information will be available on Aetna’s Website in December 2006
  Aetna will post key information, including detailed instructions and forms that are required to ensure timely and accurate processing of the resubmitted claims on www.aetna.com in December.
  
  MCA will handle this for MCA clients.
  MCA will run reports to identify all denied claims affected by this change and will resubmit those claims in accordance with the Aetna instructions. MCA clients will not need to take any action.
  
  
  Source: http://www.aetna.com/provider/payment_policy.html
  

  Aetna Modifier 57

• Proposed Calendar Year 2007 Medicare Physician Fee Schedule Impact Chart

  October 19, 2006

  This information is taken from table 7 of the proposed rule, which details the anticipated impact of the proposed changes on total allowed charges by physician, practitioner and supplier category. It takes into consideration the combined CY 2007 Total Allowed Charge Impact for the Five-Year Review of Work RVUs and Practice Expense Changes, DRA 1502, and the CY 2007 Update. The final rule is subject to change and is scheduled to be announced in November. This will give you an estimate of the overall impact on various medical specialties as it stands now.
  
  Specialty/Impact
  ALLERGY/IMMUNOLOGY -3%
  ANESTHESIOLOGY -12%
  CARDIAC SURGERY -3%
  CARDIOLOGY -7%
  COLON AND RECTAL SURGERY -5%
  CRITICAL CARE -1%
  DERMATOLOGY -7%
  EMERGENCY MEDICINE +2%
  ENDOCRINOLOGY 0%
  FAMILY PRACTICE 0%
  GASTROENTEROLOGY -5%
  GENERAL PRACTICE -3%
  GENERAL SURGERY -6%
  GERIATRICS -3%
  HAND SURGERY -7%
  HEMATOLOGY/ONCOLOGY -3%
  INFECTIOUS DISEASE +3%
  INTERNAL MEDICINE 0%
  INTERVENTIONAL RADIOLOGY -14%
  NEPHROLOGY -6%
  NEUROLOGY -4%
  NEUROSURGERY -7%
  NUCLEAR MEDICINE -14%
  OBSTETRICS/GYNECOLOGY -4%
  OPHTHALMOLOGY -8%
  ORTHOPEDIC SURGERY -8%
  OTOLARNGOLOGY -5%
  PATHOLOGY -10%
  PEDIATRICS -4%
  PHYSICIAL MEDICINE -4%
  PLASTIC SURGERY -6%
  PSYCHIATRY -7%
  PULMONARY DISEASE 0%
  RADIATION ONCOLOGY -7%
  RADIOLOGY -16%
  RHEUMATOLOGY -3%
  THORACIC SURGERY -4%
  UROLOGY -5%
  VASCULAR SURGERY -11%
  AUDIOLOGIST -6%
  CHIROPRACTOR -13%
  CLINICAL PSYCHOLOGIST -14%
  CLINICAL SOCIAL WORKER -14%
  NURSE ANESTHESTIST -13%
  NURSE PRACTITIONER -5%
  OPTOMETRY -8%
  ORAL/MAXILLOFACIAL SURGERY -6%
  PHYS/OCC THERAPY -9%
  PHYSICIANS ASSISTANT -4%
  PODIATRY -7%
  DIAGNOSTIC TESTING FACILITY -25%
  INDEPENDENT LABORATORY -2%
  PORTABLE X-RAY SUPPLIER -4%
  
  

• A Reminder: Are you missing out on potential revenue?

  October 13, 2006

  Medicare Coverage for Smoking & Tobacco-Use
  Cessation Counseling Services
  
  Medicare provides coverage of smoking and tobacco-use counseling for beneficiaries who:
  
  • Use tobacco and have a disease or an adverse health effect that has been found by the U.S. Surgeon General to be linked to tobacco use; or
  
  • Are taking a therapeutic agent whose metabolism or dosing is affected by tobacco use as based on FDA-approved information.
  
  Medicare will cover two cessation attempts per year. Each attempt may include a maximum of 4 counseling sessions. The total annual benefit covers up to 8 counseling sessions in a 12-month period. The beneficiary may receive another 8 counseling sessions during a second or subsequent year after 11 full months have passed since the first Medicare covered cessation counseling session was performed. For example, if the first of 8 covered sessions was performed in April 2005, a second series of 8 sessions may begin in April of 2006.
  
  Counseling may be provided to both outpatient and inpatient beneficiaries as long as coverage requirements are met.
  
  The coinsurance or co-payment applies after the yearly Medicare Part B deductible has been met.
  
  Medicare’s prescription drug benefit also covers smoking and tobacco-use cessation agents prescribed by a physician.
  
  What is a Cessation Counseling Attempt?
  A cessation counseling attempt occurs when a qualified physician or other Medicare-recognized practitioner determines that a beneficiary meets the eligibility requirements and initiates treatment with a cessation counseling attempt. A counseling attempt includes up to 4 counseling sessions.
  
  What is a Cessation Counseling Session?
  
  • Cessation counseling session refers to face-to-face patient contact of either intermediate (greater than 3 minutes up to 10 minutes), this is billed using code G0375; or
  
  • Intensive (greater than 10 minutes) which is billed using code G0376
  The counseling sessions may be performed “incident to” the services of a qualified practitioner. During a 12-month period, the practitioner and the beneficiary have flexibility to choose between intermediate or intensive counseling strategies for each session.
  
  Documentation
  Keep patient record information on file for each Medicare patient for whom a smoking and tobacco-use cessation counseling claim is made. Medical record documentation must adequately demonstrate that Medicare coverage conditions were met.
  
  Diagnosis codes should reflect:
  
  • The condition the patient has that is adversely affected by tobacco use; or
  
  • The condition the patient is being treated for with a therapeutic agent whose metabolism is affected by tobacco use.
  
  For information, resources, and tools to use with your patients, please visit Smokefree.gov.
  
  If you have any questions regarding this coverage, please do not hesitate to contact Lori Tubia, MCA Team Leader, at 315-736-2080 ext. 228.
  
  Source: MLN ICN#006767 March 2006
  

• What you can do about the Medicare cuts

  October 11, 2006

  On Jan. 1, the Centers for Medicare & Medicaid Services will cut Medicare payment rates to physicians by 5.1 percent. Congress failed to act before it recessed for the campaign period leading up to the November elections.
  
  Congressional leaders have repeatedly promised to take up the issue of a Medicare physician-payment fix when they return on Nov. 13. Our only hope of making legislators address this issue is to make sure they hear us! Please have every member of your staff send a letter to your senators and representatives.
  
  Medicare payment rates continue to drop, even though the cost of providing medical services has risen more than 30 percent in the past five years, according to MGMA Cost Survey data. Medicare reimbursement has failed to keep pace with the actual cost of delivering care as a result of the sustainable growth rate (SGR) formula, which is tied to performance of the nation’s economy instead of the true costs of providing care.
  
  Only Congress can replace the SGR formula with a system that appropriately reimburses physicians who treat Medicare patients. Recent projections of the SGR formula reveal that physician reimbursement rates under Medicare are scheduled for a 34 percent reduction between 2007 and 2015!
  
  Send a strong grassroots message to your senators and representatives. Please ask your practice staff to do so, as well. Carry the message that these cuts will have a dire impact on seniors’ access to vital medical care. Please ask your senators and representatives to prevent the SGR cut from taking effect.
  
  The following is a sample letter prepared by the MGMA that you can use as a guide and customize for your use.
  
  Source: MGMA
  
  
  
  
  SAMPLE LETTER
  
  October 11, 2006
  
  The Honorable Firstname Lastname
  123 Street Address
  CapitolCity, ST 12345
  
  Dear:
  
  As a constituent, I am writing to alert you to the significant consequences of the scheduled 5.1 percent reduction in Medicare reimbursement for physician services as a result of the flawed Sustainable Growth Rate (SGR) formula. As a medical practice administrator in your Congressional district, I remain concerned about the future of Medicare reimbursement to physician practices.
  
  If the flawed Medicare reimbursement formula is not eliminated, physician reimbursement rates in 2007 will fall below their 2001 levels. In fact, Medicare's reimbursement formula for physicians is so irreparably broken that the Centers for Medicare & Medicaid Services estimates that physicians will receive reductions of this magnitude until at least 2015, with a total projected reduction in reimbursement of 34 percent.
  
  I am writing to urge you to take decisive action before the end of 2006 to prevent the projected 5.1 percent cut for 2007 and to provide physicians with an annual update that keeps pace with increasing overhead costs as estimated by the Medicare Economic Index (MEI). The Medicare Payment Advisory Commission recommended to Congress that Medicare physician reimbursement for 2007 be increased by 2.8 percent, consistent with the growth in the MEI. But the current flawed SGR formula responds by further reducing reimbursement.
  
  You should also be aware that most physician group practices have contracts with private payers linking their payment rates to the Medicare fee schedule. A drop in Medicare payments in 2007 will mean a commensurate drop in reimbursement from numerous other payers, damaging our ability to provide medical care in [User_City], [User_State]. This issue is critical to continued medical access in your community.
  
  Today, [UserField1] percent of my practice is devoted to the care of Medicare beneficiaries. To keep serving these patients, we must be able to meet the expenses we incur in providing their medical care.
  
  The Medical Group Management Association (MGMA), has conducted extensive practice cost surveys for more than 50 years. MGMA data indicates that the cost of operating a group practice rose by 30 percent over the past five years. However, Medicare reimbursement for physician services has actually fallen over the same time period. Therefore, it is critical that Congress act to replace the failed SGR formula and link Medicare physician reimbursement updates to the MEI, or some other method that more accurately measures increases in the cost of providing care.
  
  Sincerely,
  

• Office of Inspector General Issues 2007 Work Plan

  September 28, 2006

  The OIG 2007 work plan is prepared to identify vulnerabilities in Department of Health and Human Services Programs, including Medicare and Medicaid. It also promotes improvement in their efficiency and effectiveness.
  
  Projects slated for FY 2007 that focus on physicians include:
  - Violation of assignment rules by Medicare providers
  - Medicare reimbursement for polysomnography
  - "Long-distance" physician claims associated with home health and skilled nursing facility services.
  
  
  The OlG Work Plan sets forth various projects to be addressed by the Office of Audit Services, Office of Evaluation and Inspections, Office of Investigations, and Office of Counsel to the Inspector General. The Work Plan includes projects planned in each of the Department's major entities: the Centers for Medicare & Medicaid Services; the public health agencies; and the Administrations for Children, Families, and Aging. Information is also provided on projects related to issues that cut across departmental programs, including State and local government use of Federal funds, as well as the functional areas of the Office of the Secretary. Some of the projects described in the Work Plan are statutorily required, such as the audit of the Department's financial statements, which is mandated by the Government Management Reform Act.
  
  To read the OIG's 2007 Work Plan go to the link below:
  
  

  OIG 2007 Work Plan

• ICD-9 Code Revisions Effective 10/1/06

  September 25, 2006

  The following link will take you to a summary of the ICD 9 Coding changes that are effective 10/1/06. For those practices whose superbills are managed by MCA, we have reviewed your superbill and found that no changes are required. If you manage your own superbill, please take a moment to make sure you have valid codes. MCA’s electronic system has been updated so that invalid codes cannot be used for billing and all new codes have been added.

  Centers for Medicaare and Medicaid

• MEDICARE DEDUCTIBLES FOR 2007

  September 12, 2006

  CMS recently released the following Medicare deductibles for 2007:
  
  Part A deductible: $992
  
  Part B deductible: $131
  
  The standard Medicare Part B monthly premium will be $93.50 in 2007, an increase of $5.00 or 5.6 percent from the current $88.50 Part B premium, considerably lower than was earlier projected. This premium is the smallest percent increase in the Part B premium since 2001 and less than half of the dollar increase in the premium for 2006.
  
  Together with an increase of 0.1 percent in the average Part D enrollee premium – and less if beneficiaries choose lower-cost drug plan options, as they did for 2006 – Medicare beneficiaries are experiencing cost increases that are modest in comparison to recent health care cost trends. This is also less than the projected 6 percent increase in per capita national health spending for 2007 and the projected 7 percent increase for 2007 retail prescription drug spending. In addition, more than one-fourth of beneficiaries can receive assistance that pays for their entire Part B premium
  
  Growth in traditional fee-for-service Part B spending per capita, and not spending in the Medicare Advantage program, accounts for the bulk of the premium increase. In particular, very rapid growth in spending for hospital outpatient services is a major contributor to the premium increase. Although outpatient hospital spending accounts for only about 13 percent of total Part B spending, it accounts for one-third of the increase in the 2007 premium. Hospital spending accounts for more of the premium growth than spending growth for physician services and physician-related services, including lab tests and physician-administered drugs, which together account for a greater share of the total Part B spending. While outpatient spending growth has continued rapidly, the growth rate in 2005 spending for physician fee schedule services slowed compared to trends in recent years, though the 2007 projected volume and intensity growth for physician-related services is still high at about 5 percent.
  
  In addition to accounting for growth in hospital outpatient services and physician-related services, a portion of the 2007 Part B premium is necessary to increase assets that are held in the Part B account of the trust fund for contingency reserves to a more adequate level. However, the assets needed to replenish the Part B account are significantly less than previously projected.
  
  In 2007, approximately 4 percent of Medicare Part B enrollees with higher incomes will pay a higher Part B premium based on their income. The income-related Part B premiums for 2007 will be $106.00, $124.70, $143.40, or $162.10, depending on the extent to which an individual beneficiary’s income exceeds $80,000 (or a married couple’s income exceeds $160,000), with the highest premium rates only paid by less than 1 percent of beneficiaries whose incomes are over $200,000 (or $400,000 for a married couple). A beneficiary who pays the highest income-related premium in 2007 would pay $1,945 per year in Part B premiums, but is estimated to receive an average of $4,363 in Medicare Part B benefits.
  
  These limits will reduce Medicare costs by an estimated $7.7 billion over the next five years and $20.8 billion over the next 10 years, improving Medicare’s sustainability to provide effective coverage for all eligible persons in the future.
  
  
  
  

• Proposed 2007 Medicare Physician Fee Schedule cut 5.1%

  August 9, 2006

  On Aug. 8, 2006, the Centers for Medicare & Medicaid Services (CMS) released the proposed 2007 Medicare physician fee schedule. Although providers had anticipated 4.6 percent reduction in payment, revisions of the sustainable growth rate (SGR) calculation have increased the cut to 5.1 percent.
  
  The proposed rule will be published in the Federal Register on Aug. 22, 2006; however, CMS has made available a preview of the rule on its Web site. Use the attached link to access the CMS version of the proposal.
  
  
  The Medicare Physician Fee Schedule (MPFS) is updated on an annual basis according to a formula specified by statute. The formula specifies that the update for a year is equal to the Medicare Economic Index (MEI) adjusted up or down depending on how actual expenditures compare to a target rate, called the sustainable growth rate, or SGR. The SGR in turn is calculated based on medical inflation, the projected growth in the domestic economy, projected growth in the number of beneficiaries in fee-for-service Medicare, and changes in law or regulation.
  The MEI is a measure of inflation faced by physicians with respect to their practice costs and general wage levels. The MEI includes a bundle of inputs used in furnishing physicians’ services such as physician’s own time, non-physician employees’ compensation, rents, medical equipment, etc. The MEI measures year-to-year changes in prices for these various inputs based on appropriate price proxies.
  
  The economy-wide wage indices used in the MEI as a proxy for changes in the wages of physicians and their employees already include an adjustment for multi-factor productivity (MFP). If the MEI did not net out either the MFP in the wage index proxy or the MFP in the outputs furnished by physicians, it would effectively double-count productivity and result in an overstatement of the MEI.
  Since its inception in 1975, the MEI has included a productivity adjustment. The recent rebasing of the MEI in 2004 included an adjustment that accounts for changes in multifactor productivity (MFP). The productivity adjustment has been based on private non-farm business multifactor productivity, as calculated by the Bureau of Labor Statistics (BLS). A 10-year moving average of MFP is used to minimize yearly fluctuations in multifactor productivity associated with normal business cycles.
  The BLS recently converted from the Standard Industrial Classification System-based measure of MFP, to the North American Industrial Classification System (NAICS)-based measure. This new productivity data series replaces the previous data series. These represent the best available productivity data, and later years of the previous series are no longer available (the series ended in 2002). Consequently, CMS must use the new NAICS-based data.
  
  The new NAICS-based series contains new data on multifactor productivity for 2003 and 2004, which were incorporated into the 10-year moving average for productivity used in this year’s update. The two most recent years’ MFP rates were among the highest in recent history and, as a result, the 10-year moving average MFP figure has increased.
  
  The Mid-Session Review of the Budget contained lower projections of inflation, which will affect components of the MEI reducing the projected MEI for 2007. Based on lower projections and the new BLS MFP series, including use of actual rather than estimated data for 2003 and 2004, the 2007 MEI is now estimated to be 0.5 percentage points lower than the estimate contained in the President’s Budget. The lower MEI estimate translates into a lower update and as a result, the latest estimate for the physician update for 2007 is negative 5.1 percent. This projection will be updated for the final rule, though we do not anticipate substantial changes
  

  CMS Proposal

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