Washington Report –March/April, 2006
Bill Finerfrock
Capitol Associates
CMS Releases New Enrollment Applications
With no advance notice, the Centers for Medicare and Medicaid Services (CMS) released new provider applications (855A, 855B, 855I, 855R and 855S) on April 30th. Although the new applications had been anticipated and HBMA reviewed and commented on DRAFT versions of the new applications, no advance notice was given to the provider community prior to their release.
In anticipation of the release, several Medicare Contractors had refused to accept the “old” application forms. Even more disturbing were statements by Contractor staff indicating that pending applications would be returned to the providers with instructions to complete the new applications.
When HBMA inquired about this with CMS staff, HBMA was told that the Contractors were refusing to accept these applications in error AND that all pending applications should be processed by the Contractor.
Finally, HBMA members attempting to complete the new applications noted that on the 855I (the individual application form) Section 8 requested that billing companies provide their NPI number. HBMA had been informed previously that because billing companies were not providers, they could not obtain an NPI. When this was brought to the attention of the CMS Enrollment Staff, the reaction was one of surprise.
In all likelihood, CMS will have to issue instructions to Contractors to ignore the NPI request found in Section 8 until a revised form is issued. CMS has informed HBMA that a correction notice has been prepared for transmission to the Office of Management and Budget requesting a change in the 855I removing the NPI reference for billing companies. It is expected that this will take a week to work its way through the system. Once the corrected form is completed, it will be put on the CMS website for download.
Here are links to the new 855s:
CMS 855A Medicare Enrollment Application - Institutional Providers
www.cms.hhs.gov/cmsforms/downloads/cms855a.pdf
CMS 855B Medicare Enrollment Application - Clinics/Group Practices and Certain
Other Suppliers
www.cms.hhs.gov/CMSforms/downloads/cms855b.pdf
CMS 855I Medicare Enrollment Application - Physicians and Non-Physician
Practitioners
www.cms.hhs.gov/cmsforms/downloads/cms855i.pdf
CMS 855R Medicare Enrollment Application - Reassignment of Medicare Benefits
www.cms.hhs.gov/cmsforms/downloads/cms855r.pdf
CMS 855S Medicare Enrollment Application - Durable Medical Equipment, Prosthetics,
Orthotics, and Supplies (DMEPOS) Suppliers
www.cms.hhs.gov/cmsforms/downloads/cms855s.pdf
These are all effective as of 4/30/06
Medicare Issues New Enrollment Regulations
In a development related to the issuance of the new Medicare Enrollment applications, CMS also issued the long-awaited regulations associated with provider enrollment.
In April, 2006, HHS announced proposed changes in the Medicare enrollment process. HBMA and other groups submitted comments on those proposed changes.
“The final regulation makes Medicare enrollment requirements more uniform so a health care provider or supplier can bill Medicare most efficiently. The rule standardizes existing Medicare enrollment requirements that have been used by the various Medicare contractors that process and pay Medicare claims.”
In announcing the new rules, Tim Hill, Chief Financial Officer and Director, Office of Financial Management at CMS said, “By standardizing the information that a health care provider or supplier must use in order to bill Medicare, we will be better able to protect the Medicare program and assure providers and suppliers that they will be paid promptly.” CMS also believes that these new rules will help facilitate the development of electronic medical records.
Significantly, the new regulations expand CMS’ authority to deny or revoke an enrollment application.
In the past, there was no requirement that providers periodically update their enrollment information. Under the new rules, providers and suppliers will be required to re-certify the accuracy of their enrollment information every 5 years.
While one of the primary requirements of this rule is that all providers and suppliers (both new and those already in the program) complete the CMS-855 Medicare enrollment application, existing providers and suppliers are not required to take any action at this time. CMS will notify the provider or supplier when it is time to re-certify their Medicare enrollment information.
Medicare Trustees Release Annual Report
According to a report released by the Medicare Trustees, “continued growth in Medicare program expenditures and the retirement of the “baby boom” generation, Medicare faces growing strains on its financing sources.”
Medicare benefits (Part A, B, and D) are funded from two trust funds—the Hospital Insurance (HI) trust fund and the Supplementary Medical Insurance (SMI) trust fund. The HI (Part A) trust fund pays for a portion of the costs of inpatient hospital services and related care furnished under Part A of the Medicare program. The HI trust fund is primarily financed through payroll taxes, plus a relatively small amount of interest, income taxes on Social Security benefits, and other revenues.
The SMI (Part B and D) trust fund pays for a portion of the costs of physicians' services, outpatient hospital services, and other related medical and health services furnished under Part B of the program. Beginning this year, the SMI trust fund also pays for private prescription drug insurance plans to provide drug coverage under Part D of the program. The separate Part B and Part D accounts in the SMI trust fund are financed through general revenues, beneficiary premiums, and interest income and, in the case of Part D, special payments from the States.
In 2005, Medicare provided coverage to 42.5 million people, spending $330 billion on benefits.
The Trustees Report presents a unified summary of Medicare’s overall projected expenditures and dedicated revenue sources, and the general revenue that is required to fill the gap between spending and dedicated revenue. Based on this unified approach, the Trustees Report projects that the difference between outlays and dedicated revenues is expected to exceed 45 percent of total Medicare expenditures in 2012.
The Trustees believe that “the serious long-range financial outlook of the HI trust fund requires action now to slow down spending growth. The proportion of HI costs that can be met by HI tax income is projected to decline steadily over time as costs continue to grow rapidly.” The report notes that there are 3.9 workers for every beneficiary; by 2030, there will only be about 2.4 workers for every beneficiary.
The picture isn’t any brighter for the Part B Trust Fund. Under the “sustainable growth rate (SGR)” formula used in current law, the Trustees project that physician payment rates would have to be reduced by 4 to 5 percent each year through at least 2015. Given past Congressional reluctance to allow these types of cuts to take place, Congressional intervention is expected to prevent these types of reductions from becoming reality.
In a related story, Herb Kuhn, Director of the Medicare program has announced that without Congressional intervention, Medicare payments to physicians will be reduced 4.6 percent in 2007. By law, Medicare officials are charged with informing the Medicare Payment Advisory Commission (MedPAC) of the projected annual adjustments in physician payments. In a letter to MedPAC, Kuhn states that the 4.6 percent reduction would result in a conversion factor in 2007 of $36.1542.
If there was “good news” in Trustees report, it was that expenditures under the Part D, prescription drug program, expenditures were lower than anticipated. The Trustees attribute these lower than expected expenditures to, “greater savings from manufacturer rebates and other discounts, utilization management projected to be achieved by Part D plans in the first few years, and preliminary data on actual Part D enrollment for 2006.” Projected net Medicare spending for Part D from 2006-15 is roughly 20 percent lower than originally projected.
Although no specific recommendations accompanied the Trustees report, it is expected that the report will serve as the basis for future reforms of the Medicare program. Because 2006 is an election year, no legislative changes – other than another attempt to prevent a reduction in the physician fee schedule in 2007 – are expected this year.
Brailer Resigns as head of ONCHIT
On April 20th, HHS Secretary Michael Leavitt announced the surprise resignation of Dr. David Brailer as head of the Office of the National Coordinator for Health Information Technology (ONCHIT). Brailer has been the head of this office since it was created by President Bush a few years ago. Although Brailer has resigned as head of ONCHIT, he will continue to serve as the Vice Chair of the American Health Information Community (AHIC) which is charged with making recommendations to the Secretary of HHS to “facilitate the development and adoption of a standards-based health IT.” No replacement for Dr. Brailer has been announced.
Separately, a member of the ONCHIT staff released the following statement
“David Brailer has asked me to convey his thanks to the thousands of people who have written to express support and thanks. Because of his pressing duties advancing our work, he is not able to respond to them all at this point, but he has asked me to assure you that he will answer as many as possible over the coming days.”
Association Health Plan Legislation on the Docket
Senate Republican leaders have scheduled “health week” for early May with consideration of the “Association Health Plan” legislation at the top of the agenda. AHP legislation would allow small businesses to band together to purchase health insurance. S.1955 would amend Title I of the Employee Retirement Security Act of 1974 and the Public Health Service Act and, according to the sponsors, “expand health care access and reduce costs through the creation of small business health plans and through modernization of the health insurance marketplace.”
While the legislation is generally favored by small businesses, it has come under increasing opposition by a coalition of consumer/medical advocacy groups and large health insurers.
Small businesses favor the legislation because the potential it holds to make lower cost insurance policies available to them that are generally only available to large businesses under federal ERISA protection. Consumer/medical advocacy groups oppose the legislation because they fear it will allow associations to drop certain expensive coverage from their plans. Certain health professionals who benefit from state mandated covered (i.e. chiropractors, podiatrists, etc.) also oppose the legislation because it may avoid those state mandates.
In order to avoid a possible filibuster, the sponsor of the bill, Senate Health, Education, Labor and Pensions Chairman Enzi, will need 60 votes to pass the AHP legislation. While the bill has generated some bi-partisan support, it is not clear whether it can get the 60 votes necessary to avoid a filibuster.
Senate Minority Leader Harry Reid said of the Enzi bill, it, “threatens existing coverage for everyone who has state-regulated health insurance.”
The bill would allow insurers to offer health policies to Associations such as HBMA, formed by small businesses. Because the Association would have members across state lines, the Association’s health plan would be exempt from some state regulations.
Budget Talks Still Stalled
The President typically submits the budget recommendations of the Administration in early February. Congressional Budget Committees review the President’s budget proposals and make recommendations to their respective houses in late March. House and Senate budget negotiators will typically meet in early April with the goal of completing and setting the federal budget by mid-April.
While the Senate has completed action on its version of budget, House leaders have been unable to complete their work on the budget as of early May.
Failure to complete the budget process, unlike failure to approve an appropriations bill, does not result in a shut down of the federal government, but it does make it more difficult to enact legislation.
The budget sets overall goals for various broad program areas but does not set specific funding for federal programs. Setting a budget is an important tool in attempting to control federal spending because it does set an upper limit on what Congress will spend. Any bill that comes to the floor of the House or the Senate that would result in spending that would exceed the budget target, is subject to a point of order and cannot be considered.
Medicare and Medicaid benefits, as so-called entitlement programs, are not subject to the annual appropriations process. However, the money to run the agency that administers the programs – CMS – is governed by the budget and appropriations process. Thus, while benefits can be paid despite the failure of Congress to adopt a budget, the salaries and expenses of the people who actually process claims, adopt policies, etc. are affected.
House Appropriations Chair Jerry Lewis (R-CA) has announced that he will not wait for the House to adopt a budget and he is prepared to move ahead with the 2007 appropriations bills. Chairman Lewis plans to try to report all of the appropriations bills by mid-July.
CMS Releases Electronic Version of Evaluation & Management Services Guide
On April 20, the Centers for Medicare and Medicaid Services announced the release of the electronic version of the Evaluation & Management Services Guide. This document provides evaluation and management services information regarding medical record documentation; International Classification of Diseases, 9th Revision, Clinical Modification and American Medical Association Current Procedural Terminology Codes; and key elements of service is now available from the Medicare Learning Network at:
http://www.cms.hhs.gov/MLNProducts/downloads/eval_mgmt_serv_guide.pdf
on the CMS website.
CMS announced that this guide is offered as a reference tool and does not replace content found in the 1995 Documentation Guidelines for Evaluation and Management Services and the 1997 Documentation Guidelines for Evaluation and Management Services. It is recommended that health care providers refer to the 1995 Documentation Guidelines for Evaluation and Management Services in order to identify differences between the two sets of guidelines.
This guide offers Medicare health care providers the following evaluation and management services information:
• Medical Record Documentation
• Medical Record Documentation Background
• Guidelines for Residents and Teaching Physicians
• International Classification of Diseases, 9th Revision, Clinical Modification and American Medical Association Current Procedural Terminology Codes
• Key Elements of Service
• History
• Examination
• Medical Decision Making
• Documentation of an Encounter Dominated By Counseling and/or Coordination of Care
CMS recommends that providers refer to the following publications, which were used to prepare this guide: