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June 2007 Client Newsletter


The Centers for Medicare & Medicaid Services (CMS) announced that it is implementing a contingency plan for covered entities (other than small health plans) who will not meet the May 23, 2007, deadline for compliance with the National Provider Identifier (NPI) regulations under HIPAA. CMS will not enforce the deadline as long as the entity is making progress toward compliance and that cash flow for providers is not adversely affected. This decreases the likelihood of cash flow issues but does not guarantee there will be no problems. Insurers can still implement the requirement to rely only on the NPI # starting May 23rd. Health care providers who are covered entities under HIPAA are required by regulation to update their NPPES data within 30 days of any change.

Part of the contingency plan is that the UPINs can still be used until May 23, 2008 when necessary for payment. This is not a surprise since CMS still has not released the NPI # list needed to replace the UPINs. The data dissemination notice (for NPI #’s) was put on display on May 23rd at 4:00 for CMS officials to review. CMS is supposed to make it available for download as a file in 30 days with NPIs office addresses, practitioner name, and license number (no SSN).

CPB still strongly encourages you to be very frugal with your cash until we see how this progresses thru the end of June.


CMS continues to roll out the Physician Quality Reporting Initiative (PQRI). Their latest point is that while there is only a 1.5% bonus starting July 1st, they estimate that within the next few years as much as 30% of your reimbursement could be quality-based. The fee schedule will not be increased – rather there will be 70% as a base fee and 30% for reporting quality measures.

Clinical vignettes are supposed to be available in June. CPB is able to submit the required codes if you elect to participate. You will need to select which codes you will use, modify your charge forms, understand when to use modifiers, and let us know so we can load the codes you select. We can assist if you are interested.

CERT Reviews

In May, many of our physician clients received a “Comparative Distribution Report” from the CMS CERT (Comprehensive Error Rate Testing) Program indicating an "alarming increase in errors on the claims reviewed in the... New Jersey region." Specifically they looked at the Subsequent Hospital Visit codes (99231-99233).

If you have specific questions, please call Rich. Even if your distribution is similar to the overall groups, it will be important to ensure that your documentation meets the requirements for each E&M level of service. CERT audits that find upcoding can result in large monetary refunds to CMS in some cases and even removal from the Medicare program for more serious offenses. We strongly advise not taking this lightly.

Billing Medicare for Digital Rectal Exam (DRE) & an E&M Code

Billing the G0102 (digital rectal exam) for a Medicare patient and an office visit on the same day results in only the E&M code being paid. The G0102 is bundled by Medicare into the E&M code. A modifier is not allowed.

Revised Horizon Fee Schedule

As you may know, last month Horizon sent a letter indicating that effective July 1, 2007 they were going to update their HMO and PPO fee schedules based on the 2007 CMS fee schedule and begin to reimburse procedures based on a site of service differential.

On the face of it, it may be positive but being “based-on the 2007 CMS Fee Schedule” can be interpreted many different ways. The CMS FS has some codes that went up – and others that decreased – including E&M codes. Horizon is not likely to be very generous since their high-level employees need to be appropriately paid (often $ millions per year) in order to avoid being "homeless." Okay, I know, that was sarcastic.

The second paragraph refers to the "site of service differential." This simply means that they will use the same logic as Medicare -Horizon will pay more for procedures performed in the office (since you have the cost of overhead, supplies, employees, etc. there) and less for procedures performed in a hospital or other facility setting.

For those who perform no procedures, that part will have no effect on your income. For those who perform procedures in both the office and the hospital (or other facilities), this is likely to decrease your income since they will now pay less for procedures performed in the hospital (or other facilities). However, Horizon has not indicated how they will apply this fee schedule based on their current fee schedule. They could leave the fees for hospitals alone, and increase the office payments (that would be a surprise!). Or more likely, we think, leave the office procedure payments as they are and decrease those paid in the hospital.
2007 Client Newsletter Archive