October 2008 Client NewsletterMedicare CARRIER TRANSITION ON NOVEMBER 14
Most clients have now sent CPB a copy of the Medicare letter indicating their new EFT has been processed. That letter is the only way you know that your EFT has been properly set up so that your Medicare payments will continue after the transition to the new Medicare carrier on November 14. If you have not already done so, please be certain to send us a copy of that letter while it is still something you can find. In the event of any problems, CPB will then be able to advocate for you.
We have been watching Medicare carrier transitions across the nation the past few months. Some have been smooth, others have not. In at least one case, charges that were paid without any problem were denied due to new Carrier Determinations â€“ resulting in delayed and/or denied claims. For New Jersey, NGS will transition to Highmark. While CPB has done everything asked to ensure the transition is smooth, the possibility exists that payment delays will occur. We recommend that clients plan accordingly.
CMS Announces Medicare Premiums, Deductibles for 2009
The standard Medicare Part B monthly premium will be $96.40 in 2009, the same as the Part B premium for 2008. This is the first year since 2000 that there was no increase in the standard premium over the prior year. This monthly premium paid by beneficiaries enrolled in Medicare Part B covers a portion of the cost of physiciansâ€™ services, outpatient hospital services, certain home health services, durable medical equipment, and other items.
By law, the standard premium is set to 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.
FTC â€œRed Flagâ€ Rules
The HBMA Government Relations Committee has become aware of the Federal Trade Commissionâ€™s so-called â€œRed Flagâ€ rules for â€œfinancial institutionsâ€ and â€œcreditorsâ€ which become mandatory, on November 1, 2008. There remains some debate among healthcare attorneys, trade associations and others about the applicability of the â€œRed Flagâ€ rules on hospitals and physicians. However, the potential impact of these requirements on health care providers and their close implementation date led the Committee to ask HBMAâ€™s counsel to review the regulations and prepare the following:
In brief, the Red Flag rules require financial institutions and creditors to implement identity theft prevention programs to detect, prevent and mitigate identity theft in connection with an existing or new account. These programs must be in writing, tailored to the particular financial institution or creditor and designed to detect relevant warning signs (the â€œRed Flagsâ€) that indicate identity theft and respond appropriately.
The regulations do not mention health care providers. However, the definition of creditor is extremely broad. Anyone who regularly extends credit in connection with a covered account is within the scope of the Red Flag rules. Credit includes the right to purchase services and defer payment. A covered account includes any account for which there is a reasonably foreseeable risk to the customer or the creditor from identity theft. A creditor must be under the jurisdiction of the Federal Trade Commission for the Red Flag rules to apply. While the jurisdictional rules are convoluted, they are based on the Federal Trade Commissionâ€™s enforcement authority under the Fair Credit Reporting Act, which is interpreted very broadly.
Several creditable national health care organizations have concluded that when a health care provider issues an invoice, instead of being paid at the time of service, the health care provider may be a creditor under the Red Flag rules. Given the breadth of the definition of a covered account and the Federal Trade Commissionâ€™s broad jurisdictional ambit, it thus appears possible that physicians and other providers may be required to comply with the Red Flag rules. There are indications that clarification of this may be sought by one or more of these organizations from the Federal Trade Commission.
The HBMA Government Relations Committee will continue to analyze the Red Flag rules and their application to third party billing companies, including reaching out to the national health care organizations that are already involved in this issue and to provide further information and analysis as it becomes available. As things develop, CPB will keep you informed.