The Medicare News You Can Use This Week: eRx Exemptions for 2012 and 2013, Billing Education, and eSignatures

pg 25 of The Story of Doctor Dolittle

(PECOS) You Can Now Sign Your Medicare Enrollment Application Electronically

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(PPACA) New CME Module on CMS Healthcare Delivery Reform Available on Medscape (jump to story)


(Release of Information) Authorization to Disclose Information to the Social Security Administration (jump to story)


(5010) ICD-10: It’s Closer Than It Seems – Have You Completed Your 5010 Implementation? (jump to story)


(eRx) 2012 eRx Payment Adjustment Update (jump to story)


(eRx) Medicare ePrescribing Penalty: Phone Lines Now Open (jump to story)


(eRx) Hardship Exemptions for 2013 Electronic Prescribing Payment Adjustment (jump to story)


(PQRS) Medicare Quality Reporting Incentive Programs Manual Update (jump to story)


(HCPCS) April Update to the Calendar Year (CY) 2012 Medicare Physician Fee Schedule Database  (jump to story)


(Codes G0442 & G0443) Screening and Behavioral Counseling Interventions in Primary Care to Reduce Alcohol Misuse (jump to story)


(Billing) Medicare Billing Certificate Programs for Part A and Part B Providers (jump to story)


You Can Now Sign Your Medicare Enrollment Application Electronically

Internet-based PECOS (Provider Enrollment, Chain, and Ownership System) now allows providers to sign Medicare enrollment applications electronically.  Save time and expedite review of your application by using internet-based PECOS.  This feature does not change who is required to sign the application.

Any Organizational Provider applications that are submitted via internet-based PECOS will require the user completing the application to provide an email address for the authorized signer of the application as part of the submission process.  The authorized signer can then follow the instructions in the email and electronically sign the application.  This applies to applications using the following forms:

  • 855-A for Institutional Providers
  • 855-B for Clinics, Group Practices, and Certain Other Suppliers, and
  • 855-S for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Suppliers

In internet-based PECOS, all Individual Provider applications submitted by the individual provider that do not include new reassignments may be e-signed as part of the submission process.  This applies to applications using the following forms:

  • 855-I for Physicians and Non-Physician Practitioners, and
  • 855-O for Eligible Ordering and Referring Physicians and Non-physician Practitioners

Any Individual Provider application (855-I) containing new reassignments (855-R) can be electronically signed as part of the submission process; however, you must select the Authorized Official / Delegated Official (AO/DO) for the Organization that is accepting the reassignment and enter that official’s email address.  The official then will be required to follow the instruction in the email and electronically sign the application.

If an individual provider or AO/DO does not want to make use of the e-signature process, they can simply follow the current process of printing and signing the certification statement (which then needs to be mailed to the appropriate contractor).

Questions concerning a system issue regarding PECOS should be referred to the CMS EUS Help Desk at 866-484-8049 or EUSSupport@cgi.com.

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New CME Module on CMS Healthcare Delivery Reform Available on Medscape

On Thu Mar 22, a new CME module was posted on Medscape.  This module provides information and continuing medical education (CME) about CMS’s healthcare delivery system reform efforts and can be accessed on Medscape (with a free registration) at http://www.Medscape.org/viewarticle/760133.

This is actually a nice synopsis of all the different efforts underway and a good read for anyone!

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Authorization to Disclose Information to the Social Security Administration

On Thu Mar 22, Commissioner Astrue signed an Open Letter to Healthcare Providers, Health Information Managers, and Medical Records Administrators about Social Security’s new electronic signature process for Form SSA-827, “Authorization to Disclose Information to the Social Security Administration.”  This means many future records requests coming from Social Security will not be accompanied by the traditional patient signature (sometimes referred to as “wet-signed”) – they will be electronically signed, although the form itself will look the same.

To see this important message, visit http://go.usa.gov/EUu.  To learn about Social Security’s new electronic signature process, visit http://go.usa.gov/P7V.

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ICD-10: It’s Closer Than It Seems – Have You Completed Your 5010 Implementation?

Recently, CMS announced it will not initiate enforcement action against any HIPAA-covered entity for an additional three months, through Sat June 30, for the updated HIPAA transaction standards (ASC X12 Version 5010, NCPDP Versions D.0 and 3.0).  Although much progress has been made in the successful receipt and processing of claims in the Version 5010 format, CMS is aware that there are still challenges and issues impeding an industry-wide upgrade.

During these additional 90 days during which CMS will not initiate enforcement penalties, you should collaborate more closely with trading partners on appropriate strategies to resolve any remaining problems.  Two steps providers can take to ensure a smooth upgrade include:

  • Establish a line of credit:  To avoid potential cash flow disruptions, providers should consider establishing or increasing a line of credit.  By doing so, they can prepare for possible delays and denials in payer claims reimbursements if noncompliant Version 5010 transactions are submitted.
  • Check partner readiness:  Because a provider’s Version 5010 upgrade can be dependent upon his or her vendor, it is important for providers to be aware of their vendor’s transition status.  If your vendor is behind schedule for Version 5010 adoption, get confirmation of their timeline to be compliant, and encourage them to take action so that your system will be prepared to handle your claims.

Other steps to prepare for the Version 5010 upgrade can be found in the “Version 5010: Ensuring a Smooth Transition” factsheet, which provides an overview of several actions providers can take to maintain continuity of operations for their practices as they prepare to complete Version 5010 testing.

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2012 eRx Payment Adjustment Update

CMS continues to receive inquiries about the Medicare Electronic Prescribing (eRx) Incentive Program and the 2012 eRx payment adjustment.  This message seeks to clarify the issues CMS has heard from physicians and other healthcare professionals.

Statutory Authority/Background

CMS is required to adjust the payments of eligible professionals who are not successful electronic prescribers beginning in 2012.  This requirement is outlined in Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA).

CMS listed the requirements for being a successful e-prescriber for purposes of avoiding the 2012 payment adjustment in the 2011 Physician Fee Schedule final rule.  In February 2012, all eligible professionals who did not meet these requirements were sent a letter notifying them of this fact.

Significant Hardship Exemption Requests

In response to stakeholder feedback, CMS also published a standalone eRx rule on Tue Sep 6, 2011, to provide additional circumstances under which eligible professionals would qualify for hardship exemptions.  Eligible professionals initially had until Tue Nov 1, 2011, to submit a request for a hardship exemption for the 2012 eRx payment adjustment via the newly-created Quality Reporting Communication Support Page; this deadline was later extended to Tue Nov 8, 2011.  CMS finished its review of these requests in February 2012 and continues to notify requestors via email whether their request was approved or denied.

Questions and Concerns

Although there is no appeal or review process established for the eRx Incentive Program and payment adjustment, CMS encourages eligible professionals with questions or concerns about the eRx payment adjustment and hardship exemption requests to contact the QualityNet Help Desk.  Through the QualityNet Help Desk, CMS is working with eligible professionals and CMS-selected group practices that have questions about eRx payment adjustments and/or hardship exemption decisions.  CMS is handling all hardship exemption requests and any questions or concerns on a case-by-case basis.   Contact the QualityNet Help Desk if you have issues relating to the eRx payment adjustment and/or the rationale for denial of your hardship exemption request.

The QualityNet Help Desk can be reached Mon – Fri, 7am-7pm CMT, at 866-288-8912 or QNetSupport@sdps.org.

2013 & 2014 eRx Payment Adjustment

Please note that payment adjustments under the eRx Incentive Program run until 2014.  For information on how to avoid the 2013 and 2014 eRx payment adjustments, please visit the Electronic Prescribing Incentive Program webpage and review MLN Matters Article #SE1206.

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Medicare ePrescribing Penalty: Phone Lines Now Open (Courtesy of the AMA)

CMS has confirmed that the QualityNet Help Desk is now prepared to take calls from physicians on the Medicare ePrescribing penalty. We understand that physicians have already attempted in the past few weeks to contact the Help Desk to discuss their individual situation which resulted in a 2012 penalty, but in many cases were turned away. CMS has been working diligently with the Help Desk to ensure that a physician’s case is adequately reviewed. CMS wants physicians to know that the issues they are having are being examined.

As CMS has indicated late last week, although there is no formal appeals or review process for the ePrescribing penalty, they encourage physicians with questions or concerns about their penalty and/or hardship exemption request to contact CMS’ QualityNet Help Desk as soon as possible. CMS is handling all penalty and/or hardship exemption requests and any questions or concerns on a case-by-case basis.

Physicians should continue to contact the QualityNet Help Desk if they have issues relating to the ePrescribing penalty. If a physician has previously contacted the QualityNet Help Desk and their case has been resolved to their satisfaction, the physician does not need to contact the QualityNet Help Desk again.

The QualityNet Help Desk can be reached M-F; 7:00 am – 7:00 pm CMT at 866-288-8912 or via email at qnetsupport@sdps.org.

NOTE: If a physician continues to experience problems with the Help Desk, CMS is encouraging physicians to email their concerns directly to Medicare at eRx_hardship@cms.hhs.gov.

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Hardship Exemptions for 2013 Electronic Prescribing Payment Adjustment

On Thursday, March 1, CMS reopened the Quality Reporting Communication Support Page to allow individual eligible professionals and CMS-selected group practices the opportunity to request a significant hardship exemption for the 2013 Electronic Prescribing (eRx) payment adjustment.  The Communication Support Page will accept hardship exemption requests now through Sat June 30, 2012.

The Quality Support Page User Manual is available to assist individual eligible professionals and CMS-selected group practices in submitting their request for a hardship exemption and can also be accessed from the “Help” icon on the Communication Support Page.

For additional information on the 2013 eRx payment adjustment, including who is subject to the payment adjustment and how to avoid the payment adjustment, visit the eRx Incentive Program website at www.CMS.gov/eRxIncentive.  Specifically, eligible professionals should review MLN Matters Article SE1206: “2012 eRx Incentive Program: Future Payment Adjustments.”

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New MLN Matters Article (MM7727) –  Medicare Quality Reporting Incentive Programs Manual Update

The new chapter describes the yearly payment instructions used by the Medicare contractors when making incentive payments described in the “Medicare Quality Reporting Incentives Manual.”


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Revised MLN Matters Article (MM7745) – April Update to the Calendar Year (CY) 2012 Medicare Physician Fee Schedule Database (MPFSDB)

  • HCPCS Codes with Revised Medicare Physician Fee Schedule Payment Indicators
  • New HCPCS Codes to be added with the Effective Date of April 1, 2012
  • New HCPCS Codes to be added with the Effective Date of January 1, 2012
  • New HCPCS Codes to be added with the Effective Date of July 1, 2011
  • HCPCS codes to be discontinued effective April 1, 2012


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Revised MLN Matters Article (MM7633)  – Screening and Behavioral Counseling Interventions in Primary Care to Reduce Alcohol Misuse

Two new G codes, G0442 (Annual Alcohol Misuse Screening, 15 minutes), and G0443 (Brief face-to-face behavioral counseling for Alcohol Misuse, 15 minutes), are effective October 14, 2011, and will appear in the January quarterly update of the Medicare Physician Fee Schedule Database (MPFSDB) and Integrated Outpatient Code Editor (IOCE). For claims with Dates of Service on or after October 14, 2011, through December 31, 2011, your Medicare contractor will use their pricing to pay for G0442 and/or G0443. Deductible and coinsurance do not apply. Contractors will hold institutional claims received prior to April 2, 2102, with TOBs 13X, 71X, 77X, and 85X and release those claims beginning April 2, 2012.


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Medicare Billing Certificate Programs for Part A and Part B Providers

From the MLN:  Now Available – Medicare Billing Certificate Programs for Part A and Part B Providers– Learn about the Medicare Program, and the specifics for your provider type with a special focus on Medicare billing, and receive a certificate in Medicare billing from CMS for successful completion of the Program.  Successful completion consists of completion of all required web-based training courses, required readings, and a 75-percent or higher score on the post-assessment.

To participate in either the Part A or Part B provider type program, visit http://www.CMS.gov/MLNproducts and click on ‘Web-Based Training Modules’ under ‘Related Links Inside CMS.”

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Medicare 2011 Part A and Part B Premiums, Deductibles and Coinsurance


Click here for the 2012 Medicare Part A and Part B Premiums and Deductibles.



Medicare Premiums for 2011:

Part A: (Hospital Insurance) Premium

  • Most people do not pay a monthly Part A premium because they or a spouse has 40 or more quarters of Medicare-covered employment.
  • The Part A premium is $248.00 per month for people having 30-39 quarters of Medicare-covered employment.
  • The Part A premium is $450.00 per month for people who are not otherwise eligible for premium-free hospital insurance and have less than 30 quarters of Medicare-covered employment.

Part B: (Medical Insurance) Premium

Most beneficiaries will continue to pay the same $96.40 or $110.50 premium amount in 2011.  Beneficiaries who currently have the Social Security Administration (SSA) withhold their Part B premium and have incomes of $85,000 or less (or $170,000 or less for joint filers) will not have an increase in their Part B premium in 2011.  For additional details, see the FAQ titled:

For all others, the standard Medicare Part B monthly premium will be $115.40 in 2011, which is a 4.4% increase over the 2010 premium.  The Medicare Part B premium is increasing in 2011 due to possible increases in Part B costs.  If their income is above $85,000 (single) or $170,000 (married couple), then the Medicare Part B premium may be higher than $115.40 per month.

Medicare Deductible and Coinsurance Amounts for 2011:

Part A: (pays for inpatient hospital, skilled nursing facility, and some home health care) For each benefit period Medicare pays all covered costs except the Medicare Part A deductible (2011 = $1,132) during the first 60 days and coinsurance amounts for hospital stays that last beyond 60 days and no more than 150 days.

For each benefit period you pay:

  • A total of $1,132 for a hospital stay of 1-60 days.
  • $283 per day for days 61-90 of a hospital stay.
  • $566 per day for days 91-150 of a hospital stay (Lifetime Reserve Days).
  • All costs for each day beyond 150 days

Skilled Nursing Facility Coinsurance

  • $141.50 per day for days 21 through 100 each benefit period.

Part B: (covers Medicare eligible physician services, outpatient hospital services, certain home health services, durable medical equipment)

  • $162.00 deductible for 2011. Patients pay 20% of the Medicare-approved amount for services after meetingthe the $162.00 deductible.

Check out the new services that Medicare will cover as of January 1, 2011 here.

My Notes from the CMS Open Door Forum on May 19, 2010: PECOS, DMEPOS and Blue Ink on Paper Forms

CMS held a two-hour Open Door Forum today and there was so much good information shared that I thought I’d pass my notes from the call along to you.

New EFT Form

The revised EFT (Electronic Funds Transfer) authorization form 588 is available here (pdf.) The old form will still work for a few months longer before it becomes invalid.

Changes to the Medicare Program Integrity Manual

The Program Integrity Manual (publication 100-08) will have revisions related to the changes in provider enrollment.  The online-only manual here will have content moved from Chapter 10 to Chapter 15 and the provider enrollment information will be easier to understand. 🙂

The Question on Everyone’s Lips

How do I know if I’m listed in PECOS (Provider Enrollment and Chain/Ownership System) and how do I know if others are listed in PECOS?  A new downloadable file is now available here (12,000 pages!) and everyone listed in this Ordering/Referring file has approved enrollment status.  Anyone not appearing on this list is not in approved status, or has opted completely out of the Medicare program.

Advanced Diagnostic Imaging

Beginning in January 2012, all diagnostic magnetic resonance imaging (MRI), computed tomography (CT), and nuclear medicine imaging such as positron emission tomography (PET) must be performed in a facility accredited by the American College of Radiology (ACR), The Joint Commission (TJC) or the Intersocietal Accreditation Commission (IAC) for the technical component of the test to be reimbursed by Medicare.  This rule does not apply to x-rays, ultrasound, fluoroscopy, mammography or DEXA scans and does not apply to any professional component.

Hospital Revalidations

Hospitals not enrolled in PECOS or not receiving EFT (Electronic Funds Transfer) will be contacted by CMS in an attempt to get all hospitals revalidated.

PECOS (pronounced “pay-cose”)

CMS recommends that anyone with questions or just getting started in PECOS read the “Getting Started Guide”, of which there are two versions, both available here in pdf form.  One is for providers and one is for suppliers of DMEPOS (Durable Medical Equipment, Prosthetics, Orthotics, and Supplies.) You need to know your corporate structure before getting started because the business must enroll before the providers can assign benefits to the business.  The 855I is for individual/solos providers and the 855B is for non-individuals (multiple owners) billing Medicare Part B and assigning benefits to a legal entity/corporation.  Dentists and pediatricians who order or refer services for Medicare patients are required to have an enrollment record in the PECOS. Residents and interns are exempt from the enrollment requirement, but an attending physician needs to be identified on the claim when a service is ordered or referred. The main page for enrollment is https://www.cms.gov/MedicareProviderSupEnroll/

Two Ways to Get Into PECOS

One is to complete the paper form in BLUE INK (and if time is of the essence CMS suggests that you use the paper form) and let the MAC enter it into PECOS for you.  The other is to use the internet-PECOS system directly, and sign, date and mail the certification statement to complete the process.  Submit the participation form or EFT form if required.  The certification form for the paper process is NOT the same as the certification from for the internet-PECOS process.

What is the 30-day rule?

The 30-day rule states that you can bill for services provided to Medicare patients up to 30 days prior to your filing date.  The filing date is the date your enrollment is accepted, not the date you mailed it.  Online it will say “Status Approved”, and you will receive an email, and then a letter confirming it. You will appear on the Ordering/Referring file on the CMS website.

What happens to payments for patients that were referred by a provider not enrolled on PECOS?

Even though you are enrolled, if the referring physician is not enrolled, you will not be paid for that patient’s services.  However, if that referrer becomes enrolled, you can resubmit the claim and it will be paid.

What happens on July 6, 2010? When does this happen?

July 6, 2010 The compliance date for Part A providers (hospitals, skilled nursing homes and home health agencies) and Part B providers (physicians, ambulance) must be enrolled in PECOS as ordering/referring physicians for payments to be made has been delayed indefinitely!

What happens on July 13, 2010?

DMEPOS (pronounced “demmy-pos”) providers must be enrolled in PECOS to receive Medicare payments.

What should be done if a provider leaves a group?

The provider or his Authorized Official (CEO, CFO, Manager) should file a 855R or make the change in PECOS as soon as possible.

Why do provider offices still request UPINs from our office?

Unclear.  UPINs were no longer required as of May 23, 2008.  The NPI is the only number accepted on Medicare claims.

Should the information submitted on a 855 be the same information in PECOS?

Yes, if it isn’t, contact the Help Desk.  Their toll-free number is 1-866-484-8049 and their e-mail address is eussupport@cgi.com.

For more information on the nuts and bolts of PECOS, see my post here.

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 | Dreamstime.com

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 $1,068 deductible for 2009, paid by the beneficiary when admitted as a hospital inpatient, is an increase of $44 from $1024 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: $96.40/month (no change from 2008.)  Premiums are higher for single people over 65 making more than $85K per year and for couples making over $170K.  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 $135, 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 $275, in 2009 it will be $295.


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.