Posts Tagged Medicare


CMS to Hold Open Door Forum on Medicare Provider and Supplier Enrollment via PECOS

On February 17, 2010 from 2:00PM ”“ 3:30PM ET the Centers for Medicare & Medicaid Services (CMS) will hold a Special Open Door Forum (ODF) to discuss Medicare provider enrollment issues. During this call, CMS staff will discuss:

  • Internet-based Provider Enrollment, Chain and Ownership System (PECOS) for physicians, non-physician practitioners and provider and supplier organizations
  • Provider and supplier reporting responsibilities
  • Medicare ordering and referring issues
  • Revalidation efforts

Afterwards, there will be an opportunity for the public to ask questions.

Open Door Forum Instructions:

**Capacity is limited so dial in early. You may begin dialing into this forum as early as 1:45 PM ET.**

Dial: 1-800-837-1935
Reference Conference ID 52537484
An audio recording of this Special Forum will be posted to the Special ODF website here and will be accessible for
downloading on or around Monday March 1, 2010 and available for 30 days.

For automatic emails of Open Door Forum schedule updates (E-Mailing list subscriptions) and to
view Frequently Asked Questions click here.

Posted in: Medicare & Reimbursement, PECOS

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Is Your Practice Ready for the 60-Day PECOS Countdown?

NOTE: The date has been changed to July 5, 2011. delayed indefinitely.


As of April 5, 2010 As of January 3, 2011, As of July 6, 2010, if the ordering/referring provider of goods and services on the CMS-1500 claim is not listed in PECOS and eligible to order/refer, the claim will not be paid.  Your patients may not be able to get the items they need, they may have problems with rented items (going three years back) and hospital discharges may be delayed.  Even if your practice doesn’t fall into any of these categories, you will fall into some Medicare category sooner or later, particularly if you need to inform CMS of any practice changes.

If your providers aren’t in the PECOS database, you should bite the bullet and GET STARTED TODAY!

Some terminology I use in this article:

AO = Authorized Official

CMS = Centers for Medicare & Medicaid Services

EUS – External User Services (for CMS PECOS) Help Desk

MAC = Medicare Administrative Contractor

NPPES = National Plan and Provider Enumeration System (the system that assigns the National Provider Identifier (NPI)

Providers = physicians and non-physician practitioners (I know physicians hate being called “providers”, but there it is.)

Type I NPI = National Provider Identifier for a physician or non-physician practitioner

Type II NPI = National Provider Identifier for a practice or organization


PECOS stands for the Provider Enrollment and Chain/Ownership System. It was created by CMS as an electronic portal for Medicare enrollment of physicians, non-physician practitioners, and provider and supplier organizations.

Even though some providers are enrolled in Medicare, their enrollment records might not be in PECOS. If they have not sent in a Medicare application to report any changes to their Medicare enrollment information within the past 5 years, they probably do not have an enrollment record in PECOS. These individuals will need to submit a  Medicare enrollment application. To see if a provider is enrolled in PECOS, check here. If the name is not there, the PECOS enrollment is incomplete or missing.

PECOS is designed to electronically:

  • Enroll in the Medicare program
  • Make changes to Medicare enrollment information
  • View existing Medicare enrollment information
  • Withdraw from the Medicare program
  • Check the status of an Internet-submitted Medicare enrollment application

While PECOS supports most enrollment application actions, there are some limitations. Providers cannot use PECOS to:

  • Change his/her name or Social Security Number, or changes in Taxpayer Identification Number (TIN). These must be done using the paper enrollment application (CMS-855)
  • Change an existing business structure or changes in Legal Business Name (LBN). These must be done using the paper enrollment application (CMS-855). An example of a change to a business structure is:
    • A sole owner of an enrolled Professional Association, Professional Corporation, or Limited Liability Company cannot change the business structure to a sole proprietorship; or
    • An enrolled sole proprietorship cannot be changed to a solely-owned Professional Association, Professional Corporation, or Limited Liability Company.
  • Reassign benefits to another supplier if that supplier does not have a current Medicare enrollment record in PECOS.
  • An enrolled Medicare Part A provider or supplier organization wants to enroll with a Medicare carrier or A/B Medicare Administrative Contractor (MAC) to bill for Part B services. This must be done using the paper enrollment application (CMS-855).

WHY should I use PECOS?

Described as being 50% faster than paper, PECOS will alert the applicant when a response is inadequate or unacceptable, thereby decreasing the possibility of a rejected application.

Going forward, Medicare providers are required to notify Medicare of reportable events within a specific timeframe or risk losing their ability to bill for services provided to Medicare patients. A reportable event is any change that affects information in a Medicare enrollment record. A reportable event may affect claims processing, claims payment, or a provider’s eligibility to participate in the Medicare program.

Effective April 4, 2010, providers are required to report the following changes within 30 days of the following reportable events:

  • Change in ownership
  • Change in practice location, and
  • Final adverse action.

A final adverse action includes: (1) a Medicare imposed revocation of any Medicare billing privileges; (2) suspension or revocation of a license to provide health care by any State licensing authority; (3) revocation or suspension by an accreditation organization; (4) a conviction of a Federal or State felony offense (as defined in 42 CFR 424.535(a)(3)(i)) within the last ten years preceding enrollment, revalidation, or re-enrollment; or (5) an exclusion or debarment from participation in a Federal or State health care program.

Providers are required to report the following changes immediately, but not later than 90 days, after the reportable event:

  • Change in practice status (e.g., retirement, voluntary surrender of medical license or voluntary withdrawal from the Medicare program)
  • Change of business structure, Legal Business Name or Taxpayer Identification Number
  • Banking arrangements or payment information
  • A change in the correspondence or special payments address

Hopefully, PECOS should make this reporting easier by:

  • Reducing the time necessary for provider and supplier organizations to enroll or make a change in their Medicare enrollment information;
  • Streamlining the Medicare enrollment process for provider and supplier organizations;
  • Allowing provider and supplier organizations to view their Medicare enrollment information to ensure that it is accurate; and
  • Reducing the administrative burden associated with completing and submitting enrollment information to Medicare.

So far the above has not been the case, but let’s move on.

WHO needs to enroll in PECOS?

  • If you are not enrolled in the Medicare program and want to become enrolled,  you do.
  • If you enrolled more than 6 years ago and have not submitted any updates or changes to your enrollment information in more than 6 years, you do. If a provider who is currently enrolled in the Medicare program has not submitted a complete Medicare enrollment application (CMS-855) since November 2003, the Medicare contractor will require the individual or organization to submit a complete CMS-855 in order to update or make a change in their enrollment information.

In order to continue to order or refer items or services for Medicare beneficiaries, you will have to submit an initial enrollment application, which you may do in one of two ways:

  1. Using Internet-based PECOS (which transmits your enrollment application to the MAC) AND BE SURE to mail the signed and dated Certification Statement to the carrier or A/B MAC immediately after submitting the application.
  2. Filling out the appropriate paper Medicare provider enrollment application(s) (CMS-855I and CMS-855R , if appropriate) and mailing the application, along with any required additional supplemental documentation, to the local Medicare carrier or A/B MAC, who will enter your information into PECOS and process your enrollment application. Information on how to enroll in Medicare is found on the Medicare provider/supplier enrollment web site.

If you are already enrolled in Medicare, make sure you have a current enrollment record in PECOS.  You can find out by:

  • Calling your designated carrier or A/B MAC (recommended). Find out who your A/B MAC is here.
  • Using PECOS to view your enrollment record.
  • Going to and searching for the provider

If you are a dentist or a physician with a specialty such as a pediatricians who is eligible to order or refer items or services for Medicare beneficiaries but have not enrolled in Medicare because the services you provide are not covered by Medicare or you treat few Medicare beneficiaries, you need to enroll in Medicare in order to continue to order or refer items or services for Medicare beneficiaries.

WHICH paper enrollment form should be used?

CMS uses five different provider and supplier enrollment applications:

  • Part A providers are required to use the CMS-855A to enroll or update their enrollment information;
  • Part B suppliers (except suppliers of Durable Medical Equipment, and Prosthetics, Orthotics, and Supplies (DMEPOS)) are required to use the CMS-855B to enroll or update their enrollment information;
  • Physicians and non-physician practitioners are required to use the CMS-855I to enroll or change their enrollment information;
  • DMEPOS suppliers are required to use the CMS-855S to enroll or update their enrollment information.
  • Individual practitioners who would like to reassign their benefits to an eligible provider or supplier or terminate an existing reassignment agreement would use the CMS-855R.

You should file a CMS-855A (pdf) with the designated MAC if you would like to enroll your organization in the Medicare program as one of the following types of providers.

  • Community Mental Health Center
  • Comprehensive Outpatient Rehabilitation Facility
  • End-Stage Renal Disease Facility
  • Federally Qualified Health Center
  • Histocompatibility Laboratory
  • Home Health Agency
  • Hospital
  • Hospice
  • Indian Health Services Facility
  • Organ Procurement Organization
  • Outpatient Physical Therapy/Occupational Therapy/Speech Pathology Services
  • Religious Non-Medical Health Care Institution
  • Rural Health Clinic
  • Skilled Nursing Facility

You should file a CMS-855B (pdf) with the designated MAC if you would like to enroll in the Medicare program as one of the following types of suppliers:

  • Ambulance Service Supplier
  • Ambulatory Surgical Center (site visit or state survey typically required)
  • Clinic and Group Practices
  • Hospital Departments
  • Multi-Specialty Clinic
  • Public Health/Welfare Agency
  • Physical/Occupational Therapy Group in Private Practice
  • Single Specialty
  • Independent Clinical Laboratory
  • Independent Diagnostic Testing Facility (site visit or state survey typically required)
  • Mammography Center
  • Mass Immunization – roster biller only
  • Portable X-ray Facility (site visit or state survey typically required)
  • Radiation Therapy Center
  • Slide Preparation Facility
  • Voluntary Healthy/Charitable Agency

You should file a CMS-855I (pdf) with the designated MAC  if you would like to enroll in the Medicare program as one of the following types of providers.

  • Physicians (all specialties)
  • Non-Physicians
    • Anesthesiology Assistant
    • Audiologist
    • Certified Nurse Midwife
    • Certified Nurse Specialist
    • Certified Register Nurse Anesthetist
    • Clinical Social Worker
    • Mass immunization, roster biller (individual only)
    • Nurse Practitioner
    • Occupational Therapist in private practice
    • Physical Therapist in private practice
    • Physician Assistant
    • Psychologist, Clinical
    • Psychologist, billing independently
    • Registered Dietitian or Nutrition Professional

NOTE!! If you are enrolled in Medicare and your NPPES record is correct, you are not re-enrolling, you are revalidating, an important distinction in terminology. The word on the street is that it seems to be easier to revalidate via paper by completing the CMS-855 and writing “REVALIDATION” in the upper margin of the first page.

WHAT information is needed for a PECOS enrollment?

Below is a list of the types of information needed to complete an initial enrollment action using PECOS. This information is similar to the information needed to complete a paper Medicare enrollment application. You may find it useful to print and review the CMS-855 paper enrollment application before initiating an Internet-based PECOS enrollment action.

  • An active National Provider Identifier (NPI).
  • The NPI of the Practice (PA, PC, or LLC)
  • National Plan and Provider Enumeration System (NPPES) User ID and password.
  • Personal identifying information. This includes legal name on file with the Social Security Administration, date of birth, Social Security Number
  • Professional license and certification information. This includes information regarding the physician’s or non-physician practitioner’s professional license, professional school degrees or certificates.
  • Practice location information. This information includes information regarding the practitioner’s medical practice location, the legal business name of a solely-owned Professional Association, Professional Corporation, or Limited Liability Company (LLC) on file with the Internal Revenue Service and appearing on the IRS CP575
  • Any Federal, State, and/or local (city/county) business licenses, certifications and/or registrations specifically required to operate as a health care facility.
  • A photocopy of the CP-575 form;
  • If applicable, information regarding any final adverse actions. A final adverse action includes: (1) a Medicare-imposed revocation of any Medicare billing privileges; (2) suspension or revocation of a license to provide health care by any State licensing authority; (3) revocation or suspension by an accreditation organization; (4) a conviction of a Federal or State felony offense (as defined in 42 CFR 424.535(a)(3)(A)(i)) within the last ten years preceding enrollment, revalidation, or re-enrollment; or (5) an exclusion or debarment from participation in a Federal or State health care program.

The following forms are routinely submitted with an enrollment application:

  • Electronic Funds Transfer (EFT) Authorization Agreement (Form CMS 588)
  • Medicare Participating Physician or Supplier Agreement (Form CMS 460)

HOW do you enroll in PECOS?

There are three basic steps to completing an enrollment action using Internet-based PECOS. Providers must:

  1. Have an active National Provider Identifier (NPI) and have a web user account (User ID/Password) established.  For security reasons, providers should change passwords periodically, at least once a year. If you/your provider needs help in changing your password, contact the NPI Enumerator at 1-800-465-3203 or send an email to
  2. Go to Internet-based PECOS by clicking on this link and complete, review, and submit the electronic enrollment application via Internet-based PECOS.
  3. Print, sign and date the 2-page Certification Statement for each enrollment application submitted and mail the Certification Statement and all supporting paper documentation to the Medicare contractor within 7 days of electronic submission. Note: A Medicare contractor will not process an Internet enrollment application without the signed and dated Certification Statement. In addition, the effective date of filing an enrollment application is the date the Medicare contractor receives the signed Certification Statement that is associated with the Internet submission. The Certification Statement must be signed by the provider enrolling or making changes to enrollment information. Signatures must be original and in ink (blue ink recommended). Copied or stamped signatures will not be accepted.  NOTE: CMS encourages providers to print and retain a copy of the enrollment application for their records, however providers should only mail the 2-page Certification Statement and supporting documentation to the designated Medicare contractor.

HOW can managers facilitate the enrollment?

  • Look at your original Medicare application to see who is the “authorized official”. The Authorized Official (AO) may be theprovider, or may be the owner of the practice, or the CFO of the hospital, in the case of a hospital-owned practice.  The AO (in an original application) may be registered through PECOS and an approval email will be issued in 3-4 weeks. Print the screen that provides the tracking ID.  You will need to refer to it in the future.
  • If you do not have a copy of your organization’s original Medicare enrollment information and do not know who has been designated as your organization’s “authorized official”, an owner of your practice must submit a written letter on the organization’s letterhead to your Medicare contractor authorizing the release of that information.  Medicare contractors are not allowed to release such information over the telephone or in an e-mail, and neither are they allowed to release it to practice staff.
  • The organization AO goes into PECOS Identification & Authentication (I & A) and registers. As part of this process, the AO must mail a photocopy of the CP-575 to the CMS EUS Help Desk so that the Help Desk can verify the organization provider/supplier. Print the screen that provides the tracking ID.  You will need to refer to it in the future.
  • The Help Desk verifies both the organization provider/supplier and the AO, and approves the AO’s registration. The AO receives a system-generated e-mail indicating that the registration has been approved.
  • Once the AO receives this notification, the AO can let the end-user know that he/she can register in PECOS.
  • The end-user goes into PECOS I&A and registers. The registration request will be directed to the AO of the provider/supplier organization.
  • The AO must approve or reject the end-user in PECOS I&A.
  • Once the end-user has been approved in PECOS I&A by the AO for access on behalf of the organization provider/supplier, the end-user will receive a system-generated e-mail indicating that he/she has been approved.
  • The end-user then logs into PECOS and downloads the Security Consent Form. He or she fills it out, obtains the signature/date of signature of the AO, and mails the completed Security Consent Form to the CMS EUS Help Desk at P.O. Box 792750, San Antonio, TX 78216.
  • The Help Desk verifies the information on the Security Consent Form and also calls the AO to verify that the AO did, in fact, sign the Security Consent Form.
  • Once the information on the security Consent Form has been confirmed, the Help Desk approves the Security Consent Form in PECOS and an e-mail is sent to the AO notifying the AO that the end user’s organization has been approved to use Internet-based PECOS on behalf of the organization provider/supplier.
  • It is the AO’s responsibility to notify the end-user’s organization that the end-user can now use Internet-based PECOS. An e-mail is sent to the AO (step 9) because the AO is ultimately responsible for the enrollment information and who has access to that enrollment information. It is the AO’s responsibility to inform the end-user that the Security Consent Form has been approved.


  • Providers, if you search for yourself at and cannot find your record, you do not have a PECOS record – it is either missing or incomplete.  Call Provider Enrollment at Medicare or your MAC for help.
  • If you do not have a PECOS record, send in a paper enrollment or complete the online (PECOS) enrollment.
  • The prerequisite for getting a PECOS record is to have a NPPES record.  Make sure you have your NPPES login and password and that your record (Type I NPI) is correct.  Your organization also needs an NPPES record (Type II NPI), and make sure your organization name on the NPPES record matches the name on your IRS letter.


Read about PECOS in downloadable documents section: Downloads for PECOS

The AMA and MGMA have published an absolutely excellent resource:  “The Medicare Provider Enrollment Toolkit” available here for MGMA members. Enter “Medicare Enrollment” in the search box.

The CMS External User Services (EUS) Help Desk contact information for providers and suppliers using PECOS can be found here (pdf) on the CMS website. The Help Desk hours of operation are Monday ”“ Friday, from 6 a.m. to 6 p.m. Central Standard Time. The Help Desk toll-free number is 1-866-484-8049 and their e-mail address is Questions about accessing and using PECOS should be directed to the CMS EUS Help Desk, although I have heard lots of complaints about long wait times and conflicting advice.

Readers: Please share any clarifying information or tips from your enrollment experiences with everyone.  Leave a comment and share the wealth!

Posted in: Headlines, Medicare & Reimbursement, PECOS

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Patient Collection Question #1: How Do I Know What to Collect at Check-Out?

My book on front-end collections has been doing really well and I’m pleased that a number of people have called me or emailed me with questions.  Here’s one question that a number of people have asked  – “Can you tell me more about knowing what to collect from the patient at check-out”?

Hopefully, you have followed my advice and collected co-pays and previous balances before the visit.  The portion that you collect after the visit is the co-insurance and the deductible.

The guideline on collecting after the visit is directly related to the allowables on the services the patient received.  Allowables are the amount that payers consider payment in full.  Of the total allowable, a portion will come from the payer and the balance will come from the patient.  Knowing that percentage is the secret to collecting at the check-out desk.  The percentage of the allowable that the patient will pay is the critical piece of information you need to successfully and accurately collect after the visit.

Allowables fall into three categories:

  1. The Medicare allowable for your area of the country, or state, for the current year.  If you participate with Medicare, you have an allowable, if you do not participate with Medicare, you have a limiting charge that you must use for Medicare patients.
  2. The allowables for the payers with whom you have contracts and have agreed to accept their rate for their subscribers.
  3. The rates paid by payers with whom you do not have a contract.  Their payment for out-of-network services (non-contracted physicians) will determine the amount owed by the patient.

How Do You Collect This Information – Medicare

Medicare allowables are published every year, both in the federal register and online at the CMS (Centers for Medicare and Medicaid) website.  If you are fortunate enough to have a practice management system that loads this information automatically for you, you are golden.  If not, you will need to enter these manually.  The good news is that very few practices need to add more than 50 – 100 allowables to get started.

You can also use a paper cheat sheet to fill in your top 50 – 100 codes.  Make a chart with your fee, the Medicare allowable, and the 20% of the allowable that Medicare patients must pay at every visit.  A note of caution – many Medicare patients have secondary coverage and it can be difficult to know what the secondary coverage will pay.  Most practices will not collect anything for patients with secondary coverage because it can mean a lot of refunds have to be written when the secondary payments come in.

How Do You Collect This Information – Payers You Have Contracted With

If you have a contract with a payer, they must furnish you with a full allowable fee schedule, or with an payment model.  For example, their payment model may be 150% of the 2007 Medicare schedule.  You will need to go to the CMS lookup page here and get these allowables for your services for 2007 and multiply it out.

Example: the 2007 allowable for 99213 established patient office visit is $56.98 for North Carolina (use your locality)

If the payer is paying 150% of that allowable, it will be $85.47, and if the patient has to pay 20% of that allowable, they will owe $17.09.  Don’t forget to include the deductible in this equation, as the patient will need to satisfy the deductible before the payer will pay you 80% of their allowable.

Some practice management systems will have the ability to take that information and calculate it for you, so be sure to ask your vendor about this before you do the work.

If you are constructing a manual cheat sheet, you’ll have your fee (even though it doesn’t come into play, I suggest practices always keep their fee on cheat sheets, so staff can bring anything unusual to the administrator’s attention.  Also as you increase fees, you have a handy visual.)  Add the payer’s allowable, and calculate the percentage the patient will owe.

Use this same sheet for your payment posters to make sure you are getting paid the correct amount if your practice management system doesn’t do this for you.

By the way, if an insurance company that you have contracted with refuses to give you a schedule of allowables or a payment model, contact your state medical society, your state insurance commisioner, or your state legislators for help.

How Do You Collect This Information – Payers You Have Not Contracted With

If you do not have a contract with a payer, getting information on their allowables can be tough.  Some practices will have the patient pay in full and either file the claim for the patient, or give/mail the patient a claim form for them to submit. In this case, you do not need the allowables.  If your specialty has higher in-office fees due to tests, etc., it may be difficult for a patient to pay $250 – $500 in full at time of service. You may want to consider one of these strategies for collecting at time of service:

  1. Collect a deposit based on the total charge.  Let the patient know it is an estimate and that more or less may be owed.  I do not believe in sending statements.  In my book I recommend using a payment portal to securely store patient credit cards, and adjust the remaining balance up or down according to the actual payment.  As payments come in you can develop a knowledge base for what different payers and plans will pay.  This will assist you in estimating the patient’s portion more accurately over time.
  2. You can give patients information about the services they most likely will receive at their visit and ask them to call their payer and get information on payment.  This is a great strategy.  If patients are shocked about their portion, they may want to reconsider becoming your patient.  The last thing you want is a patient who is surprised by the payment due after they have received the services.  Some payers supply subscribers with allowable information on their website.
  3. You can usually get the allowable information by phone if you have the subscriber’s information, or if you have the subscriber on a three-way conference call, or in the room with you.  This is more typically done when the subscriber is contemplating surgery or an expensive procedure and you are working on a payment plan, or outside financing with them.

Knowing what the patient owes and making arrangements for payment in full at time of service is one of the most significant things you can do to increase your receipts and decrease your accounts receivable. No practice can afford to “wait and see what insurance pays” and bill the patient months after the service has been rendered.

Click here to view “The Smart Manager’s Guide to Collecting at Check-Out.”

Posted in: Collections, Billing & Coding, Day-to-Day Operations, Medicare & Reimbursement

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The ABN: The Most Misunderstood and Underutilized Document in Healthcare

There’s a new ABN form required to be in use in January 2012 – read about it here in my article “Everybody’s Favorite Form: New Advance Beneficiary Notice of Noncoverage (ABN) Form Begins in 2012”

Note from Mary Pat: The Advance Beneficiary Notice of Noncoverage (ABN) is a collection tool that many medical practices do not know how to implement.  It is particularly difficult to determine who has ownership of this process, because the form must be completed and signed by the patient before the service is provided.  The patient is in the exam room or the lab, ready for the service or test, and a knowledgeable staff person must step in, explain the rules and pricing and obtain the patient’s signature.

Blogger Charlene Burgett does a great job of explaining the ins and outs of using the ABN, and has agreed to share an article originally published on her blog “Conundrum” with MMP readers.


The use of the ABN is required by Medicare to alert patients when a service will not be paid by Medicare and to allow the patient to choose to pay for the service or to refuse the service.

If the practice does not have a signed ABN from the patient and Medicare denies the service, the charge must be written off and the patient cannot be billed for it. The only exception is for statutorily excluded services (those that Medicare never covers like cosmetic surgery and complete physicals for example). In this case, a practice can bill the patient for the non-covered service despite not having an ABN.  It is, however, a good idea to have the ABN signed for non-covered services so the patient is made aware that they are responsible.

If the patient signs the ABN and is made aware of their financial responsibility you may require the patient to pay for this service on the date the service is provided. You may also charge the patient 100 percent of your fee. You do not have to reduce your charge to the Medicare allowable.

With a signed ABN, the practice has proof of the patient’s informed consent to provide the service and their agreement to be financially responsible for the service. In the past, Medicare had a “Notice of Exclusion of Medicare Benefits” (NEMB) that we could provide to the patient (no signature required) to alert them of Medicare’s non-covered services. The ABN has replaced the NEMB.

The typical reasons that Medicare will not cover certain services and that would be applicable are:

  1. Statutorily Excluded service/procedure (non-covered service)
  2. Frequency Limitations
  3. Not Medically Necessary

Statutorily Excluded items are services that Medicare will never cover, such as (not a complete list):

  • Complete physicals (excluding Welcome to Medicare Screenings, with caveats)
  • Most immunizations (Hepatitis A, Td)
  • Personal comfort items
  • Cosmetic surgery

For these items, it is a good idea (not a requirement) to complete the ABN and have the patient check the appropriate box under options and sign the ABN. For the sake of the billing department, I strongly encourage the use of ABN’s for statutorily excluded items.

Frequency Limitations are for services that have a specific time frame between services. For example, Medicare allows one pap smear every 24 months if the pap is normal.  If the patient wants one every 12 months for their peace of mind, Medicare will pay for year one and the patient will pay for year two and that pattern continues. The ABN needs to be on file for the year that the patient is responsible for paying.  If the patient fits Medicare’s guidelines for “high risk” they are allowed to have the pap every 12 months and no ABN is required.

Services that are not considered Medically Necessary are those that do not have a covered diagnosis code based on Local Coverage Determinations (LCD).  One example is for excision of a lesion. If the lesion is being removed because the patient just doesn’t like how it looks, that is considered cosmetic surgery. If the lesion is showing some changes (i.e. bleeding, growing, changing color, etc), then it is considered medically necessary because it potentially can be malignant. The removal needs to have diagnosis coding to substantiate the medical necessity and Medicare has Local Coverage Determinations that list all the codes/coding combinations that Medicare will approve for payment.

A rule of thumb in trying to discern the necessity of ABNs is to ask yourself if there may be some times that the service isn’t covered by Medicare.  The times the service isn’t covered, an ABN is required. To illustrate this point, here are two examples:

  • EKGs are covered for certain cardiac and respiratory conditions. The only time an EKG is covered for preventive screening is during the patient’s first year enrolled in the Medicare program and when being done during the Welcome to Medicare screening.  After that time, Medicare will never cover an EKG for preventive screening. To notify the patient of this and to show that the patient agrees to be financially responsible for the EKG, an ABN should be completed.


  • Another example is for the Tetanus immunization.  Medicare will cover tetanus when medically necessary; if the patient has cut themselves and the tetanus is provided due to that injury.  If the tetanus is provided to the patient because it has been ten years since the last tetanus and the tetanus is not in response to a recent injury, then it will be non-covered because it is not “medically necessary” and the ABN will need to be on file.

ABNs need to be completed in their entirety.  The “Options” box can only be completed by the patient and it states that “We cannot choose a box for you”.  That would appear to be coercion.

A “blanket” ABN, one that is signed by the patient for all services provided within a certain time period, is not acceptable and is illegal.

In addition, there is a small area to provide additional information that can be used by either the patient or the provider’s office. This could be anything pertinent to the information that the ABN covers. The bottom of the form is where the patient signs and dates. We keep the original ABN in the chart behind the progress note for that day. Providers MUST provide a copy of the signed ABN to the patient.

The current ABN form with instructions can be found here.

If a service is denied by Medicare and the physician does not have a signed ABN prior to the service being rendered, the service can not be billed to the patient and will need to be written off.  Sometimes a patient may refuse to sign the ABN – if this happens it is appropriate for the physician to document the refusal and sign, along with having a witness sign.  Medicare will accept this and the patient can be billed for the service if denied by Medicare.

How does Medicare know whether or not you have a signed ABN?  You tell them, by adding a modifier to the CPT code when completing the claim form.  The appropriate modifiers are:

GA:  The ABN is signed, but the service may not be covered.

GY:  A “statutorily excluded” service.

GZ:  The service is expected to be denied as not reasonable or necessary.  This is typically used when there is a secondary payer that requires the Medicare denial before they pay benefits.

The use of the ABN is often misunderstood; however, it is the only way a patient can be informed about their financial responsibility prior to agreeing to a service being rendered.  This is an issue that the OIG has reportedly been interested in investigating for fraud and abuse.

Charlene Burgett, MA-HCM

Note: Readers, how do you make the ABN work in your practice?  Do you train the clinical staff, the physicians, or other staff to recognize the “ABN Moment”?  How do you make it work? Please share your ideas by responding with a comment.

Posted in: Collections, Billing & Coding, Day-to-Day Operations, Medicare & Reimbursement

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The RAC Outreach Session: Get Your Medical Practice Ready Now!

Today I was fortunate enough to attend an outreach session designed to educate hospitals, physicians and other providers about Recovery Audit Contractors (RAC), specifically Connolly Consulting, the RAC for North Carolina.  Although I cannot vouch that the information I am sharing for Region C will be consistent for the other three RACs, the fact that there is a standard handout being used for all RAC outreach sessions makes me think there’s a very good chance that CMS is encouraging a high level of consistency.

If you read the recent Manage My Practice article here by Carla Hannibal, you already know that the RACs were established after CMS demonstration projects proved “to be successful in returning dollars to the Medicare Trust Funds and identifying monies that need to be returned to providers. It has provided CMS with a new mechanism for detecting improper payments made in the past, and has also given CMS a valuable new tool for preventing future payments.” (CMS website)

Each RAC bid for and won the jurisdiction as follows:

  • Region A: CT, DE, DC, MD, ME, MA, NH, NJ, NY, PA, RI, VT Diversified Collection Services (DCS) -1-866-201-0580, website here
  • Region B: MN, WI, IL, IN, OH, MI, KY CGI Technologies and Solutions -1-877-316-7222, website here
  • Region C: AL, AR, CO, FL, GA, LA, MS, NC, NM, OK, SC, TN, TX, VA, WV and the territories of Puerto Rico and U.S. Virgin Islands. Connolly Consulting, Inc. -1-866-360-2507, website here
  • Region D: WA, OR, ID, CA, NV, MT, WY, UT, AZ, ND, SD, NE, KS, IA, MO, AK, HI HealthDataInsights, Inc.-Part A: 866-590-5598, Part B: 866-376-2319, e-mail: website here

Each RAC is required to provide outreach education sessions in their region prior to sending out any letters.   Any hospital or physician who bills fee-for-service programs (Part A and/or Part B) for Medicare beneficiaries is eligible for a RAC audit.

These are the important points that I took away from attending this outreach program:

  1. RACs may review claims as far back as October 1, 2007.
  2. RACs review claims after they have been paid using the same Medicare policies used to pay the claim initially.
  3. There are two types of reviews: Automated Reviews which do not request the medical record and Complex Reviews which will request the medical record.
  4. Automated Reviews are “done deals” and the claim will be adjudicated and a letter sent detailing the dollars requested.
  5. Providers may return the payment by writing a check, allowing a recoupment from future payments or may apply for an extended payment plan.
  6. Complex Reviews entail a request for medical records.  Records can be mailed, faxed, or sent on a CD/DVD.  Mailed records must be sent in a tamper-proof package, and should be sent via trackable carriers (FedEx, UPS, Registered USPS.)  Multiple records may be sent in one package if each record set is in a separate envelope inside the package.
  7. Note: if faxing, fax the records to yourself to check for readability before you fax to the RAC.
  8. Email records are currently not acceptable due to HIPAA.
  9. Providers have 45 days plus 10 mailing days for a total of 55 days to send the records, but extensions are available if this is not abused.  If you do not communicate with your RAC about any problems you are having sending the records (e.g. you can’t find the record!), you risk having the claim(s) automatically recouped.  The Connolly representative even mentioned something to the effect that she wasn’t above calling the practice/entity CEO to let them know that their contact person wasn’t playing by the rules.
  10. Once a claim has been reviewed and a Complex Review is in play, the provider will receive a Demand Letter from the RAC and the provider will have a “discussion period” to contact the RAC and ask questions and/or provide additional information.  The RAC representative emphasized to communicate, communicate, communicate and to call the RAC and  speak to the reviewer of the claim.  Once you have spoken to the reviewer, if you still disagree with the decision, you should ask to speak to the supervisor, and if there still is no agreement, you need to file an appeal.
  11. Appeals must be filed within 120 days of the receipt of the demand letter from the RAC.

Here is a suggested action plan for physician practices to prepare for the RAC process:

  1. Visit the CMS website here and click on Demonstration Projects to see what improper payments were found by the RAC demonstration projects.
  2. Visit the CMS and OIG websites to see what improper payments were found by reading the OIG (Office of Inspector General) reports here and CERT (Comprehensive Error Rate Testing) reports here.
  3. Conduct an internal assessment to see if you are in compliance with Medicare rules, and if not, identify corrective actions needed to bring your group into compliance.  Corrective actions may include provider education and a periodic internal audit to rate the improvement.
  4. Provide your RAC (they will tell you how to do this) with a contact person who will receive RAC letters and who will be the point person for providing the RAC with additional documentation.  The RAC will also ask for information about providers and their NPIs, including any providers who were with the group between October 1, 2007 and now, even if the provider is no longer with you.  Connolly suggests copying the list of providers you supply to the RAC and placing it in the personnel file of the contact person to be reminded of this important responsibility if this person leaves the organization.
  5. Develop a basic tracking system for receipt of letters, and activity for each request.

I have received lots of questions about what a RAC letter will look like, and the speaker today provided a sliver of information saying that the Region C letters will have the CMS logo at the top of the letter and Connolly’s logo at the bottom of the letter.  Because your practice/entity will be providing the RAC with a contact person’s name, unless things are in total chaos at your place of business, the letters will go to the person you’ve entrusted with this important responsibility.

Here are some other questions and answers from the program today:

Q: Does the RAC pay for the copying/mailing for records?

A: They will pay hospitals, but will not pay physicians for record expense.

Q: If  a claim is refunded to Medicare, must the patient be refunded their portion?

A: Yes.

Q:What determines which region the practice/entity belongs to for RAC?

A: The state that the practice/entity is located in.

Q: Are patients contacted if their claim is audited?

A: They receive a notice if the claim is adjusted in any way.

Q: I heard that there are consultants selling RAC insurance – is that a good idea?

A: There is no such thing as audit insurance, but there is such a thing as appeal insurance.

Q: Will a claim be audited if a practice/entity self-audits, finds an error and corrects it?

A: As long as an amended claim is filed by the provider, RAC will not audit the claim.

Q:Who sets the guidelines for medical necessity?

A: The medical director of the RAC.

Q: Are the number of claims that can be audited in each period counted by transaction lines (5 per CMS form) or by claim/single CMS form?

A: By transaction lines.

Q: Will the RACs extrapolate their findings?

A: The RACs are entitled to extrapolate their findings if they so choose.

Q: Are the RACs paid on a percentage of their findings?

A: Yes, RACs are paid a percentage of both overpayments and underpayments.  The percentage ranges from 9% to 12.50% based on each RAC’s bid.

If this information is new to you, I suggest you click on some of the links provided in this article, start developing your RAC plan, and start educating your providers and staff.  This topic is also a good one for sharing of best practices between local and regional groups.  To get email updates on RAC from CMS, sign-up here. Remember to bookmark your RAC’s website and visit often!

Photo credit: © Milosluz |

Posted in: Medicare & Reimbursement

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CfC (Conditions for Coverage)

UPDATE: 2/11/2010

Clarification on H&P Requirement Prior To ASC Procedure (Angela Mason-Elbert of CMS:

“Each patient that is seen in an ASC must have a comprehensive medical history and physical assessment (H&P) not more than 30 days before the date of the scheduled surgery. The H&P is to determine if the patient has any underlying conditions that would put the patient at risk for having such a procedure or to identify any new or existing co-morbid conditions that would require additional interventions. Additionally, the H&P could provide evidence that the ASC is not the appropriate setting for this particular procedure. The H&P, as long as it is comprehensive, can be completed the day prior to the procedure and even on the day of the procedure. It does not have to be completed prior to scheduling the procedure.”

UPDATE 5/18/2009

Medicare announced that it will allow an exception for the patient notices required in advance of the day of the procedure in certain cases. Specifically, the Centers for Medicare and Medicaid Services (CMS) said:

It is not acceptable for the ASC to provide the required notice for the first time to a patient on the day that the surgical procedure is scheduled to occur, unless:

  • the referral to the ASC for surgery is made on that same date; and
  • the referring physician indicates, in writing, that it is medically necessary for the patient to have the surgery on the same day, and that surgery in an ASC setting is suitable for that patient.

In such situations the ASC must provide the required notice prior to obtaining the patient’s informed consent. Cases of surgery occurring on the same day it is scheduled are expected to be rare, since ASCs typically perform elective procedures. Frequent occurrence of such cases may represent noncompliance with the advance notice requirement.

This information and new interpretive guidelines are available at As the ASC Association analyzes these guidelines more information will be available on the web site.

(Finalized October 30, 2008)

The OPPS/ASC (Outpatient Prospective Payment System for Ambulatory Surgery Centers) final rule modernizes Medicare’s ASC Conditions for Coverage (CfC).  The rule reflects current ASC practice by focusing on the care provided to patients and th impact of that care on patient outcomes.  Specifically, the new CfCs:

  • Define an ASC as a distinct entity that operates exclusively for the purpose of providing surgical services to patients not requiring hospitalization and in which the expected duration of services would not exceed 24 hours following admission.
  • Strengthen Patients’ rights regarding disclosure of physician financial interests in the ASC; advance directives; the grievance process; and confidentiality of clinical records.
  • Impose stronger obligations on the governing body of an ASC to oversee its quality assessment and performance improvement (QAPI) program, while allowing ASCs flexibility to use their own information to assess and improve patient services, outcomes, and satisfaction.
  • Emphasize the importance of infection control practices.
  • Strengthen the requirements for assessing the patient’s condition at admission to verify that the surgery is appropriate and safe for the patient in an ASC setting, and at discharge to ensure appropriate post-surgical care for the patient.
  • Require the ASC to adopt a disaster preparedness plan.

Posted in: Definitions

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What Health Care Providers Need To Know About Medicare and the RAC

Carla Hannibal

By Carla Hannibal, CMM,CPM,CIMBS

Recovery Audit Contractors (RACs) will pursue corrections of Medicare claims by auditing for overpayments and underpayments under Part A or B of the title XVIII of the Social Security Act.  Health care providers will be affected as Medicare has recently contracted with RACs for 2009 and beyond.  RACs will audit every United States and Peurto Rico health care provider who files with Medicare.  The audit and recovery plan is expected to be in place by (more…)

Posted in: Headlines, Medicare & Reimbursement

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Are New Consumer Satisfaction Measurements Needed for NCQA Health Plan Ratings?

From today’s US News & World Report:

This is the fourth year that U.S. News and the National Committee for Quality Assurance, managed care’s major accrediting and standards-setting body, have teamed up to rank healthcare plans. We release the rankings during open-enrollment season, when millions of Americans prepare to select their healthcare coverage for the next year.

How were plans rated?

The rankings … show how well plans do at preventing and treating illness and providing consumer services to members.

How is consumer service defined?

(Measures) …included members’ opinions about the ease of making appointments and getting care, doctors’ ability to communicate effectively, and satisfaction with claims handling.

I find these measures particularly interesting as only “satisfaction with claims handling” is a measure of the plan.  “Making appointments” and “doctors’ ability to communicate effectively” are services provided by the participating physician, unless the physicians are employed by the plan.  I would like to see measurements of plans be more along the lines of:

  • clarity of plan details communicated to subscribers and physicians;
  • ability of plan agents to communicate with consumers and physician offices about routine issues and priority issues;
  • ability of the plan to provide the physician office (preferably electronically) with pre-authorizations and pre-notifications for services, procedures, surgeries, and implants in a timely and efficient manner.  These functions, which are very critical to getting patients needed services in a timely and efficient manner, are not usually considered to be a part of the claims handling process.
  • ability of the physician offices to obtain (electronic) information on individual plan benefits by subscriber or beneficiary OR electronic adjudication of the patient’s visit that day;
  • ability of the payer to provide the physician office with info for giving patients real quotes on tests, therapies, procedures and surgeries so that patients can make informed decisions about the cost of their care prior to having a service.

I know that to measure this, the plans would have to collect data from the physician offices (and some do), and publish this (none do that I know of.)  Kudos to any plans doing this (and write to me and tell me if they/you are) because it acknowledges that the physicians are stakeholders and are a critical part in satisfying consumers.

Medical Group Management Association (MGMA) recently sponsored a survey ..” to assess group practice professionals’ attitudes concerning payers in all 50 states.”  Members who participated will receive a copy of the survey for responses from their state.

More on NCQA:



NCQA is a private, non-profit organization whose mission is to improve health care quality. The organization measures and reports on various aspects of performance and offers a range of accreditation and certification programs for different entities and individual physicians. Visit them online at

Posted in: Medicare & Reimbursement

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Basics for Healthcare Managers: Medicare Parts A, B, C & D with 2009 Premiums & Deductibles

With the Centers for Medicare and Medicaid Services (CMS) revealing yesterday what the Medicare premiums and deductibles will be for 2009, it seems like a good time to brush up on Medicare and what choices providers have in enrolling and participating in Medicare.

Medicare is a health insurance program created in 1965 for:

  • people age 65 or older,
  • people under age 65 with certain disabilities, and
  • people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant)


Medicare Part A – 99% of patients don’t pay a premium for Part A (hospital insurance) because they or a spouse already paid for it through their payroll taxes while working. The ,068 deductible for 2009, paid by the beneficiary when admitted as a hospital inpatient, is an increase of from 24 in 2008.   Part A helps cover:

  • inpatient care in hospitals
  • including critical access hospitals
  • skilled nursing facilities (not custodial or long-term care)
  • some hospice care
  • some home health care

Medicare Part B
– Part B (outpatient/doctor insurance) base premium for 2009: .40/month (no change from 2008.)  Premiums are higher for single people over 65 making more than K per year and for couples making over 0K.  Part B premiums cover approximately one-fourth of the average cost of Part B services incurred by beneficiaries aged 65 and over.  The remaining Part B costs are financed by Federal general revenues.  In 2009, the Part B deductible will be 5, the same as it was in 2008.  Part B helps cover:

  • doctors’ services and outpatient care
  • some services of physical and occupational therapists
  • some home health care

Medicare Part D
–  Starting January 1, 2006, Medicare prescription drug coverage became available to everyone with Medicare.  In 2008, the deductible is 5, in 2009 it will be 5.


Medicare Part C – Medicare now offers beneficiaries the option to have care paid for through private insurance plans.  These private insurance options are part of Medicare Part C, which was previously known as Medicare+Choice, and is now called Medicare Advantage. Medicare Advantage expands options for receiving Medicare coverage through a variety of private insurance plans, including private fee-for-service (PFFS) plans, health maintenance organizations (HMOs) and preferred provider organizations (PPOs), and through new mechanisms such as medical savings accounts (MSAs), as well as adding payment for additional services not covered under Part A or B.



Original Medicare Plan

WHAT? The traditional pay-per-visit (also called fee-for-service) arrangement available nationwide.

HOW? Providers can choose to participate (“par”) or not participate (“non-par”.)  Participating providers accept the Medicare allowable and collect co-insurance (20% of the allowable.) Reimbursement comes to the providers.  Non-participating providers may charge 15% more (called the “limiting” charge) than the Medicare allowable schedule, but the patient will receive the check, which is why some non-par practices require payment at time of service for Medicare patients. To charge patients for non-covered services, patients must sign an ABN before the service is provided.

Original Medicare Plan With Supplemental Medigap Policy

WHAT? The Original Medicare Plan plus one of up to ten standardized Medicare supplemental insurance policies (also called Medigap insurance) available through private companies.

HOW? Medigap plans may cover Medicare deductibles and co-insurance, but typically will not cover anything Medicare will not.  Medicare primary claims will “cross-over” to many Medigap secondary claims so the practice does not have to file the secondary Medigap claim.  Patients may still have a small balance that is cost-prohibitive to bill for.

Medicare Coordinated Care Plan

WHAT? A Medicare approved network of doctors, hospitals, and other health care providers that agrees to give care in return for a set monthly payment from Medicare. A coordinated care plan may be any of the following: a Health Maintenance Organization (HMO), Provider Sponsored Organization (PSO), local or regional Preferred Provider Organ. (PPO), or a Health Maintenance Organization with a Point of Service Option (POS).

HOW? You have to have signed a contract or be grandfathered in (called an “all-products” clause) under an existing contract to see patients and get paid. Primary care providers may have to provide referrals and/or authorization for specialty services and providers. A PPO or a POS plan usually provides out of network benefits for patients for an extra out-of pocket cost.

Private Fee-For-Service Plan (PFFS)

WHAT? A Medicare-approved private insurance plan. Medicare pays the plan a premium for Medicare-covered services. A PFFS Plan provides all Medicare benefits. Note: This is not the same as Medigap.

HOW? Most PFFS plans allow patients to be seen by any provider who will see them. PFFS plans do not have to pay providers according to the Medicare fee schedules or pay in 15 days for clean claims.  Providers may bill patients more than the plan pays, up to a limit. It would be a good thing to notify patients if your practice intends to bill above the plan payment.

Need more?  Try CMS or Medicare.

Posted in: Medicare & Reimbursement

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