Washington Report –May, 2006
Bill Finerfrock
Capitol Associates
CMS moving to all-electronic system
Over the past few months, the Centers for Medicare and Medicaid Services (CMS) has taken steps to accelerate the process of moving to an electronic billing and payment system. Mandatory use of Electronic Funds Transfer for new providers, adoption of the NPI system and changes to the Medicare enrollment forms are all part of a larger effort to move the claims processing and payment processes into an electronic format.
The following information was sent out in mid-May by CMS and we have been asked to share this with all billing companies and that you, in turn, share it with your physician clients. Much of this was posted on the HBMA listserve but because not all members participate in that forum, we thought it appropriate to reprint the information here.
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As of June 1, 2006, if you have been receiving both an Electronic Remittance Advice (ERA), either directly from your Medicare carrier/DMERC or indirectly from a clearinghouse, billing agent, or other entity representing you, and a Standard Paper Remittance (SPR) from your carrier/DMERC for 45 days or more, you will no longer be mailed an SPR by your carrier/DMERC, in accordance with Change Request (CR) 4376. Check out Special Edition MLN Matters article SE0627 which outlines some of the options available to providers who will no longer receive the SPR directly from their carrier/DMERC. The article is located at
http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0627.pdf
on the CMS website.
For more information about Medicare Remit Easy Print (MREP) software or about receiving a HIPAA-compliant ERA, please contact your Medicare carrier or DMERC, or go to their website. Medicare Part B Electronic Data Interchange (EDI) Helpline phone numbers are available at
http://www.cms.hhs.gov/ElectronicBillingEDITrans/Downloads/MedicarePartBEDIHelpline.pdf
on the CMS website.
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There is less than one year left; don't risk disruption to your cash flow - get your NPI now!
National Provider Identifiers (NPIs) will be required on electronic claims sent on and after May 23, 2007. Every health care provider should obtain an NPI!
Getting your NPI is the first step in the process of meeting the compliance date. Once you have your NPI, you may need to modify your existing business processes to accommodate use of the NPI. You will also need to share your NPI with other health care providers with whom you do business.
Learn more about NPI and how to apply by visiting www.cms.hhs.gov/NationalProvIdentStand/
on the CMS website. This page also contains a section for Medicare Fee-For-Service (FFS) providers with helpful information on the Medicare NPI implementation. A Countdown Clock is now available on this page to remind health care providers of the number of days left before the compliance date; bookmark this page as new information and resources will continue to be posted.
Please click here to see the press release:
http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=1870
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CMS policy concerning the new 855 form released in April 2006 requires that providers and suppliers initially enrolling in the Medicare program, and providers and suppliers submitting a CMS-855 change request who are not currently receiving payments via Electronic Funds Transfer (EFT) begin to receive Medicare payments by EFT (also known as direct deposit) rather than paper check.
The EFT requirement has been adopted in order to move CMS into compliance with a law passed in the 1990's mandating federal payments by EFT. The federal law, found in Title 31 of the US Code
(31USC3332) says, in part,
"(f)(1) Notwithstanding any other provision of law (including subsections (a) through (e) of this section and sections 5120(a) and (d) of title 38), except as provided in paragraph (2) all Federal payments made after January 1, 1999, shall be made by electronic funds transfer"
CMS has been under pressure from the Treasury Department to comply with this law.
CMS has heard from many providers and organizations, including HBMA, expressing concerns regarding the implementation of this new policy, including the administrative complexity of implementation by large groups.
In response to concerns about a short lead time on this policy, CMS will allow providers submitting the previous version of the 855 form to opt out of EFT as long as their completed application is submitted by June 2nd.
CMS's Physicians Regulatory Issues Team (PRIT) is very interested in hearing from billing companies who are having trouble implementing EFT on behalf of their physician clients.
Please let me know what issues or problems arise from this new policy so I can forward them to the appropriate staff within CMS.
In addition, I will be meeting with CMS staff in the near future to discuss the various operational issues that have arisen as a result of the roll-out of the new 855s, in particular, the lack of planning and communication associated with these changes.
Physician Fee Schedule Update - Update
As part of its statutory responsibilities, the Centers for Medicare and Medicaid Services (CMS) notified the Medicare Payment Advisory Commission (MedPAC) that absent Congressional intervention, the physician fee schedule payments would be reduced by approximately 4.6% effective for services performed after January 1, 2007. This projected cut was the result of the payment formula adopted by Congress several years ago and was intended to help control the growth in Medicare payments for physician services. The formula, known as the Sustainable Growth Rate (SGR) has been controversial almost from its inception in the 1990s.
Although several attempts to revise the formula have failed, Congress continues to hold out hope that one day the formula will be fixed. Similar hope has been offered with regard to a cure for the common cold and the enactment of legislation mandating that every day be sunny. You can decide which is most likely to occur first.
Recently, it was reported by “Inside CMS” that Congressman Jim McCrery (R-LA) a senior member of the House Ways and Means Committee predicted that a one year freeze would once again be approved by Congress thereby avoiding the cut. However, in an unusual admission of journalistic honesty, the article admitted that it was not clear where or when the Congressman made these remarks. According to staff quoted in the article, the Congressman made the prediction at “either during a luncheon fundraiser for Pennsylvania Republican Charlie Dent on May 9, or at a fundraiser for himself later in the day.”
While there has been broad bi-partisan support for fixing the SGR formula, the long-term cost of a fix has been considered prohibitive by Congressional leaders. Consequently, these one-year postponements have been enacted for the past several years.
Earlier this year it was reported that as part of the deal to repeal the 2006 cut and replace it with a freeze, Congressional leaders extracted a promise from the American Medical Association that the AMA would work with CMS on the implementation of a Pay for Performance system (P4P). While it is not clear how much, if any, progress is being made on P4P, any movement on legislation repealing the fee schedule cut will clearly be tied P4P.
The timing of the consideration of legislation repealing the cut could be critical to the ultimate success or failure of that initiative. It is important to remember that this is an election year and we have already seen evidence that partisan considerations are enough to prevent legislation from being enacted even when there is bipartisan support for that legislation. Should the physician fee schedule issue not get resolved by September, the prospects for a fix could diminish as the political maneuvering begins in earnest.
Association Health Plan Legislation Pulled Down Due to Filibuster Threat
For the first time, legislation seeking to reform the small business health insurance market made its way to the floor of the United States Senate. However, opponents of the legislation were able to prevent the bill, S. 1955, the Health Insurance Marketplace Modernization and Affordability Act from coming to a vote.
According to the sponsor of the bill, Senator Mike Enzi (R-WY), the legislation would “allow small business associations to pool their members across state lines to leverage their combined purchasing power and negotiate more affordable insurance options. In a statement released by Senator Enzi, he states, “Actuaries project that it will lower health insurance premiums by 12 percent, and bring one million people into the insurance market. Our bill gives small business owners and working families the power to demand the health benefits they want and need, at prices they can afford.”
Senator Ted Kennedy (R-MA) one of the leading opponents of the legislation, called the proposal, “a Republican plan that would raise the premiums and lower the benefits for millions of Americans who already have health coverage today.” Kennedy went on to state, “although the bill has been presented as legislation for small businesses, the effects of this bill go far beyond the “small business plans” and would sweep away important protections for patients in every state-regulated insurance market.”
In defending his bill, Enzi stated, “It gives them (small businesses) the same rights and benefits that large companies and unions already enjoy.”
While generally supported by the business community, the legislation was opposed by some health professional and patient groups who felt that mandates enacted at the state level regarding coverage of certain providers or services would be circumvented under the federal legislation. In addition, the legislation was vigorously opposed by the Blue Cross-Blue Shield Health Associations.
Speaking after the legislation was taken off the Senate calendar, Senator Enzi, Chairman of the Senate Health, Education, Labor and Pensions (HELP) Committee, said he is “deeply disappointed that dozens of Democrats have moved to block a vote on S.1955, which would give working families better access to affordable health insurance, and relief from rising health care costs. “This effort clarifies the minority’s commitment to special interests over the needs of America’s small businesses and working families,” Enzi went on to state, “It disappoints me that some of my colleagues are unwilling to move forward on a bill that will significantly reduce insurance premiums for small businesses and bring many new people into the insurance market.
S.1955 would allow business and trade associations (such as HBMA) to band their members together and offer group health coverage on a national or statewide basis. Senator Enzi and his staff have indicated that they hope to try and bring this legislation up again later this year or perhaps early in the next Congress.
House Ways and Means Health Subcommittee Markup of The Health Information and Technology Promotion Act
On Wednesday, May 24, 2006, the House Ways and Means Subcommittee on Health chaired by Rep. Nancy L. Johnson (R-CT), held a markup of H.R. 4157, The Health Information and Technology Promotion Act.
Members of the House in attendance were: Chairman Nancy Johnson (R-CT), Ranking Member Fortney Stark (D-CA), Jim McCrery (R-LA), Sam Johnson (R-TX), Dave Camp (R-MI), Jim Ramstad (R-MN), Phil English (R-PA), J.D. Hayworth (R-AZ), Kenney Hulshof (R-MO), John Lewis (D-GA), Lloyd Doggett (D-TX), Mike Thompson (D-CA), and Rahm Emanuel (D-IL).
According to the Chair, the legislation is intended to encourage the improvement of Health Information Technology in order to “ improve the efficiency of record keeping of patient information.” The Committee believes that adoption of HR 4157 would decrease the number of deaths from patient information related health errors, improve the quality of health care for all patients, increase efficiency for health care providers, as well as save money by replacing paper documents with electronic records.
Ironically, the bill would authorize the establishment of a National Coordinator of Health Information Technology. For individuals who follow this issue closely, you will no doubt know that we already have a Coordinator of National Health Information Technology – or at least we did until the sudden resignation of Dr. David Brailer. Congress “authorizing” the creation of an office after it has already been created by the Administration is not new in Washington. Rumor has it that next week, Congress will consider legislation recognizing the 4th of July as the national day for recognizing our independence from England. One can only hope, with thousands of hotdogs hanging in the balance, the legislation can be approved in time!
There was much debate about the absence of a required compliance date in the bill; however, an amendment requiring a compliance date did not pass. Rep. Stark stated that without a required date of compliance, some health care providers would be reluctant to switch to a system of Health Information Technology. Rep. Emanuel noted that Medicare and other similar programs set dates certain and that without a date certain the subcommittee will be at the very same point in the implementation of Health Information Technology legislation next year. Chairman Johnson noted that it is too early to set a date and that by setting a particular date, it would put some health care practitioners at a disadvantage because the date set could be too late for some and too early for others.
The bill now moves onto be considered by the full Ways and Means Committee where approval is expected.
P4P Coming to a Practice Near You
While Congress and the Bush Administration work with physician organizations (particularly the AMA), on researching and analyzing various aspects of Pay For Performance (P4P), private insurers appear prepared to move ahead with payments tied to performance.
According to an article in Managed Care Week (May 22, 2006, Volume 16, Number 20), “…some insurers are moving ahead with their own programs to evaluate and reward specialists for high-quality and efficient care.” While the article notes that primary care based “P4P programs have been around for more than 10 years,” and some consensus has evolved within the primary care community, similar unity is missing in the specialty arena.
The article suggests that the development of P4P for specialists is more complicated “because there are fewer physicians in any one discipline” thus making it more difficult to get a sample size large enough to generate statistically significant results. Some of the insurers reportedly developing specialty P4P criteria are: BC/BS of Massachusetts and Horizon Blue Cross and Blue Shield of New Jersey.
Tying provider payments to performance may present special challenges for billing companies. HBMA has begun reaching out to CMS and the specialty societies involved in developing the P4P in an attempt to incorporate billing and coding concerns into the discussion at an early stage in order to avoid billing problems down the road.