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June 2010 Client Newsletter

HealthNet of the Northeast

United Healthcare has acquired the licensed subsidiaries of HealthNet of the Northeast effective May 1, 2010. As a result, it will no longer be able to provide managed care services for its NJ Family Care/Medicaid members. Patients will be able to select a different HMO or will be assigned to AmeriChoice if they do not select another by April 9th. If you see Medicaid patients, please be sure to verify their insurance coverage.


The incentive payments for 2009 are tentatively scheduled to be dispersed late summer/early fall 2010. The incentive payment, with the remittance advice, will be issued by the Carrier/MAC contractor and identified as a lump-sum PQRI incentive payment. The electronic remittance advice only reflects “LS” (Lump Sum). The paper remittance advice states, “This is a PQRI incentive payment.”


Lately, with Congress not getting the Medicare Fee Schedule SGR factor issue passed on a timely basis, I have had several inquiries about provider’s options if the 21% cut (or something smaller) is allowed to go into effect.

Providers have 3 options:
1. Remain participating. No change from your current status.
2. Change to Non-participating.
3. Opt out of the Medicare program entirely.

Non-par providers have the option of accepting/not accepting assignment on the claims. Assigned claims process directly to the provider with the allowable at 95% of the current fee schedule. Non-assigned claims process directly to the patient. As a non-par provider, the maximum amount the provider can charge the patient is 115% (known as the “Limiting Charge”) of the Medicare allowable. Medicare believes the pain of getting the monies from the patient is more than the 15% extra that can be collected. As a non-par provider, providers may collect the full Limiting Charge amount at the time of service. And that is the key – it must be collected at the time of service not billed later – as the collection amount is significantly lower.
Note – if you have been par all along, you will have to submit a letter to Medicare during the annual enrollment period which is typically mid-November through December 31 to become non-par. If that has not yet been done, you will have to wait until November to change status.

The third option is to opt out entirely. Major step. The 1997 BBA, allows physicians and other selected providers of Part B services to opt-out of the Medicare Program and establish, in writing, private contracts with Medicare beneficiaries for all covered Part B services, except those services provided for emergency and urgent care. Not all providers may opt out. Private contracting was only authorized for physicians, osteopaths, and selected non-physician providers (clinical psychologists, clinical social workers, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse midwives). The Medicare Prescription Drug Improvement, and Modernization Act of 2003 (MMA) extended private contracting to podiatrists, dentists, and optometrists effective December 2003.

Under these private contracts, beneficiaries are liable for payment of the costs of care provided and cannot bill Medicare. Providers sending opt-out affidavits to their Part B claims carriers would be prohibited from billing Medicare for services provided to program beneficiaries or receiving payment linked to Medicare health maintenance organization (HMO) capitation payments for 2 years after the effective date of opt-out on the affidavit. Providers opting-out of Medicare, however, may order services for Medicare patients to be delivered by providers who have not opted-out.

If you want to change your participation status, please call Rich to discuss. There are major opportunities – and pitfalls – depending on a number of factors.


As you know, the FTC delayed implementation a few months ago until June 1, 2010. The AMA & AOA filed suit against the FTC to exclude physicians from the regulations – but it does not delay it taking effect for physicians. If you have not already implemented a Red Flag Rule policy in your office and need assistance, the AMA offers information and a sample policy which can be used to create one.

Feel free to call Rich if you need any assistance setting up this policy.

Medicare Banking Transition

The Centers for Medicare and Medicaid Services (CMS) recently awarded new banking contracts to U.S. Bank and JP Morgan Chase. Medicare providers do not have to take any action but should be aware that the Medicare payments will be made by a different bank than in the past because of these new banking contractors. Highmark will be transitioned to U.S. Bank on August 2.
2010 Client Newsletter Archive