Riverbend

ListServ Messages 07/18/2008

Listserv Message Week Ending July 18, 2008

The following Listserv information is being distributed through Riverbend GBA. Please review to the end of this document for information that may affect your facility.

Information from The CMS.

New 2008 Medicare Physician Fee Schedule Payment Rates Effective for Dates of Service July 1, 2008 through December 31, 2008

The Medicare Improvements for Patients and Providers Act of 2008 was enacted on July 15, 2008. As a result, the mid-year 2008 Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent has been replaced with a 0.5 percent update, retroactive to July 1, 2008.

Physicians, non-physician practitioners and other providers of services paid under the MPFS should begin to receive payment at the 0.5 % update rates in approximately 10 business days, or less. Medicare contractors are currently working to update their payment system with the new rates.

In the meantime, to avoid a disruption to the payment of claims for physicians, non-physician practitioners and other providers of services paid under the MPFS, Medicare contractors will continue to process the claims that have been on hold on a rolling basis (first in/first out) for payment at the -10.6% update level. After your local contractor begins to pay claims at the new 0.5% rate, to the extent possible, the contractor will begin to automatically reprocess any claims paid at the lower rates.

Under the Medicare statute, Medicare pays the lower of submitted charges or the Medicare fee schedule amount. Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1 – June 30, 2008, fee schedule amount will be automatically reprocessed. Any lesser amount will require providers to contact their local contractor for direction on obtaining adjustments. Non-participating physicians who submitted unassigned claims at the reduced nonparticipation amount also will need to request an adjustment.

Contractor websites are being updated with the new rates and these should be available shortly. Be aware that any published MLN Matters articles affected by the new law will be revised or rescinded as appropriate. Finally, be on the alert for more information about other legislative provisions which may affect you. Further instructions regarding other provisions of MIPPA will be forthcoming.

Effective 8/18/08 - SADMERC Transition to NAS PDAC

Noridian Administrative Services, LLC (NAS) has been named the Pricing, Data Analysis and Coding (PDAC) Contractor by the Centers for Medicare & Medicaid Services. By August 18, 2008, NAS will perform the following activities that Palmetto GBA, as the Statistical Analysis DME Regional Carrier (SADMERC), currently performs:

· Provide data analysis support to the DME Program Safeguard Contractors (PSCs)

· Guide manufacturers and suppliers on the proper use of the Healthcare Common Procedure Coding System (HCPCS) for Medicare billing purposes, through product reviews and decisions, the DMECS system and the HCPCS Helpline

· Conduct national pricing functions for DMEPOS services

· Assist CMS with DMEPOS fee schedules

Transition Key Points/Dates:

· The HCPCS Helpline number (877-735-1326) will remain the same even after the transition to NAS. However, during the transition, this number will be temporarily unavailable between 11 a.m. CT August 14, 2008 and 8:30 a.m. CT August 18, 2008.

· Certain PDAC functions will transition to NAS before August 18, 2008. We do not have specific dates at this time. Please continue to reference the SADMERC Web site, www.palmettogba.com/sadmerc, for transition updates and information, including information regarding the date of launch of the PDAC web site, www.dmepdac.com.

Medical Review Quarterly posted to the RGBA Website:

The attached MRQ has been published to the Riverbend Website. These articles will also be posted to the CMS Coverage Database. The MRQ can be reviewed at: http://www.rgbagov.com/Publications/Medical-Review-quarterly/2008/Medical_Review_QuarterlyVol16No2.pdf

This MRQ includes an article regarding the KX modifier for noting a therapy cap exception. As we all know this exception expired on June 30, 2008. However, congress did pass legislation to continue the therapy exception which is awaiting President Bush’s signature.

Information from The CMS.

Note: Click the hyperlink to view the full story.

CMS Updates to Coverage Pages

Tue, 15 Jul 2008 16:15:04 -0500

NEW REPORT SHOWS CMS PILOT PROGRAM SAVING NEARLY $700 MILLION IN IMPROPER MEDICARE PAYMENTS

On Friday, July 11, 2008, the Centers for Medicare & Medicaid Services (CMS) released a new report offering fresh evidence that the recovery audit contractors (RACs) pilot program is successfully identifying improper payments. The findings will also help the agency improve the program as it is expanded nationwide within two years, officials say.

The evaluation report shows that $693.6 million in improper Medicare payments was returned to the Medicare Trust Funds between 2005 and March 2008. The funds returned to the Medicare Trust Funds occurred after taking into account the dollars repaid to health care providers, the money overturned on appeal and the costs of operating the RAC demonstration program.

Of the overpayments, 85 percent were collected from inpatient hospital providers, and the other principal collections were 6 percent from inpatient rehabilitation facilities, and 4 percent from outpatient hospital providers. 

The program, designed to protect the Medicare Trust Funds and beneficiaries from improper payments, began in California, Florida and New York in 2005 and in July 2007 expanded to Arizona, Massachusetts and South Carolina. 

CMS has begun the expansion process by initiating a competition for four permanent RACs after the pilot program ended in March 2008. CMS also has developed a strategy to ensure that the RAC program does not interfere with the transition from the existing Medicare claims processing contractors to the new claims processors, called Medicare Administrative Contractors (MACs). This will allow the new MACs to focus on claims processing activities before working with the RACs, according to a report evaluating the RAC pilot program issued today by CMS. 

When a new RAC begins to issue its first overpayment notification letters, it will be limited to black-and-white billing issues, such as duplicate claims and wrong fee schedule amounts. 

Because of the success of the recovery audit contractor pilot, Congress has made the program permanent and required its expansion throughout the country, Acting CMS Administrator Kerry Weems said. The RAC pilot helped us refine and plan the implementation of the future, permanent national program.

The results described in the evaluation report demonstrate that the RAC program is a needed and useful resource for detecting and correcting past improper payments. CMS continues to evaluate the extent to which the program protects the Medicare Trust Funds from improper payments. 

We need to ensure accurate payments for services to Medicare beneficiaries, Weems said. With a permanent recovery audit contractor program, people with Medicare can be assured they are being charged correctly for their share of their health care services. 

The RACs corrected over $1 billion of Medicare improper payments from 2005 through March 27, 2008. Roughly 96 percent of the improper payments ($992.7 million) were overpayments collected from providers, while the remaining 4 percent ($37.8 million) were underpayments repaid to providers. 

Of the $1 billion in improper payment determinations by the RACs, providers chose to appeal only 14 percent of the RAC decisions. Of all the RAC overpayment determinations, only 4.6 percent were overturned on appeal. Throughout the demonstration, the RAC program has cost only 20 cents for each dollar collected. 

The evaluation report found that the RAC program has had a limited financial impact on most providers. For example, in fiscal years 2006-2008, over 84 percent of hospitals in California, Florida and South Carolina had their Medicare revenue impacted by less than 2.5 percent, while in New York and Massachusetts over 94 percent of hospitals had their Medicare revenue impacted by less than 2.5 percent. 

A key part of the future recovery audit contractor program will be to contract with a RAC validation contractor to conduct independent third-party reviews of RAC claim determinations Weems said. Other changes will include limiting the claim review look-back period to three years, requiring each RAC to hire a medical director, and conducting significant outreach to providers. These and other program improvements are a direct result of lessons learned from the pilot program. 

The RAC program was created by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) to find and correct improper Medicare payments paid to health care providers participating in fee-for-service Medicare.

Medicare processes more than 1.2 billion Medicare claims annually, submitted by more than one million health care providers, including hospitals, skilled nursing facilities, physicians and medical equipment suppliers. Errors in claims submitted by these health care providers for services provided to Medicare beneficiaries can account for billions of dollars in improper payments each year. 

Most of the improper payments that the RACs identified occurred when health care providers submitted claims that did not comply with Medicare’s coverage or coding rules. The types of inadvertent errors leading to improper payments, found by the RACs include billing for a procedure multiple times (for example, when a health care provider charged Medicare for conducting three colonoscopies on the same patient on the same day), incorrectly coded procedures, and submission of duplicate claims resulting in two payments to a provider. 

The permanent RAC demonstration is a key tool that CMS will use to ensure that payments to health care providers are accurate and proper and that the number of errors in Medicare claims continues to decline. Medicare calculates the error rate the amount of incorrect claims submitted by health care providers as part of the Comprehensive Error Rate Testing (CERT) program.

Since CMS began the program, the error rate dropped from 14.2 percent in 1996 to 3.9 percent in 2007. This decline in improper payments reflects CMS’ efforts to target erroneous claims processing, inaccurate billing and errors by health care providers.

Implementation of the RAC program has been guided by reports from the Department of Health and Human Services’ Office of Inspector General and the Government Accountability Office. The RACs in the demonstration returned funds to the Medicare Trust Funds based on the recommendations included in these reports and experience gained from their work conducting audits of Medicaid and the private sector health care claims. 

The RAC demonstration, authorized in the MMA, was required by Congress to be a permanent part of Medicare in the Tax Relief and Healthcare Act of 2006. The law states the national program must be implemented by Jan. 1, 2010. 

For more information on the RAC program and to view the evaluation report, visit: http://www.cms.hhs.gov/RAC 

This is an important message from the Centers for Medicare & Medicaid Services regarding some helpful informational materials on the subject of Inpatient Prospective Payment System Hospital and Long Term Care Hospital Review and Measurement. For more information, go to the materials now posted on the CMS website at: (Fact Sheet) http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/InpatientReviewFactSheet.pdf

And (PowerPoint Slides) 

http://www.cms.hhs.gov/AcuteInpatientPPS/downloads/Inpatient_Hospital_Review_Transition.zip.

Subject: Rollout: Medicare Quality Reporting Initiative Pays Over $36 Million To Participating Physicians From the 2007 PQRI Reporting Period GO Begin Outreach Medicare Quality Reporting Initiative Pays Over $36 Million To Participating Physicians From the 2007 PQRI Reporting Period

The Centers for Medicare & Medicaid (CMS) today announced payment of more than $36 million in bonus payments to many of the more than 56,700 health professionals who satisfactorily reported quality information to Medicare under the 2007 Physician Quality Reporting Initiative (PQRI).

Creating a value based purchasing system is a critical way to improve our health care systems. By collecting quality data, health care providers can use the information to improve the quality care of beneficiaries, said Health and Human Services Secretary Michael Leavitt.

Physicians, physician group practices, and other PQRI eligible professionals should receive their payments by August 2008. The average incentive amount for individual professionals is over $600 and average incentive payment for a physician group practice is over $4,700, with the largest payment to a physician group practice totaling over $205,700.

The PQRI is part of the President’s Value-driven Health Care Agenda that seeks to address current problems in the health care sector regarding preventable errors, uneven quality of care and rising health care costs.

More information about the PQRI program, including how eligible professionals can participate and the criteria to qualify for an incentive payment is available at www.cms.hhs.gov/PQRI. To read the entire CMS Press release issued today click here: http://www.cms.hhs.gov/apps/media/press_releases.asp

Presentation Materials Posted for July 15, 2008 Special Open Door Forum: 2008 PQRI Reporting Initiative Participation by the American College of Physicians

The PowerPoint Presentation for the July 15, 2008 Special Open Door Forum (ODF) has been posted on http://www.cms.hhs.gov/PQRI/02_CMSSponsoredCalls.asp . They can be accessed by clicking on the link under the Related Links Outside CMS section at the bottom of the web page.

Rural Health Clinic Fact Sheet

The April 2008 version of the Rural Health Clinic Fact Sheet, which provides information about Rural Health Clinic (RHC) services, Medicare certification as a RHC, RHC visits, RHC payments, cost reports, and annual reconciliation, is now available from the Medicare Learning Network in downloadable format at http://www.cms.hhs.gov/MLNProducts/downloads/RuralHlthClinfctsht08.pdf

Physician Pathology Services Furnished to Hospital Patients

In the final physician fee schedule regulation published in the Federal Register on November 2, 1999, the Centers for Medicare & Medicaid Services (CMS) stated that it would implement a policy to pay only the hospital for the technical component (TC) of physician pathology services furnished to hospital patients. Prior to this proposal, any independent laboratory could bill the carrier under the physician fee schedule for the TC of physician pathology services for hospital patients. At the request of the industry, to allow independent laboratories and hospitals sufficient time to negotiate arrangements, the implementation of this rule was administratively delayed. Subsequent legislation formalized a moratorium on the implementation of the rule. As such, during this time, the carriers and, more recently, Medicare Administrative Contractors (MAC) have continued to pay for the TC of physician pathology services when an independent laboratory furnishes this service to an inpatient or outpatient of a covered hospital.

The most recent extension of the moratorium, established by the Medicare, Medicaid, and SCHIP Extension Act (MMSEA), Section 104, expired on June 30, 2008. A new extension of the moratorium has been established by the Medicare Improvements for Patients and Providers Act of 2008, Section 136, retroactive to July 1, 2008.

A previous communication indicated that the moratorium had ended and that independent laboratories may no longer bill Medicare for the TC of physician pathology services furnished to patients of a covered hospital, regardless of the beneficiary's hospitalization status (inpatient or outpatient) on the date that the service was performed. This prohibition is rescinded and the moratorium will continue effective for claims with dates of service on and after July 1, 2008, but prior to January 1, 2010.

Extension of Therapy Cap Exceptions

The Medicare Improvements for Patients and Providers Act of 2008 was enacted on July 15, 2008. One provision of this legislation extends the effective date of the exceptions process to the therapy caps to December 31, 2009. Outpatient therapy service providers may now resume submitting claims with the KX modifier for therapy services that exceed the cap furnished on or after July 1, 2008.

For physical therapy and speech language pathology services combined, the limit on incurred expenses is $1810 for calendar year 2008. For occupational therapy services, the limit is $1810. Deductible and coinsurance amounts applied to therapy services count toward the amount accrued before a cap is reached. Services that meet the exceptions criteria and report the KX modifier will be paid beyond this limit.

Before this legislation was enacted, outpatient therapy service providers were previously instructed to not submit the KX modifier on claims for services furnished on or after July 1, 2008. The extension of the therapy cap exceptions is retroactive to July 1, 2008. As a result, providers may have already submitted some claims without the KX modifier that would qualify for an exception.

Providers submitting these claims using the 837 institutional electronic claim format or the UB-04 paper claim format would have had these claims rejected for exceeding the cap. These providers should resubmit these claims appending the KX modifier so they may now be processed and paid. Providers submitting these claims using the 837 professional electronic claim format or the CMS-1500 paper claim format would have had these claims denied for exceeding the cap. These providers should request to have their claims adjusted in order to have the contractor pay the claim.

In all cases, if the beneficiary was notified of their liability and the beneficiary made payment for services that now qualify for exceptions, any such payments should be refunded to the beneficiary

Medicare Quality Reporting Initiative Pays Over $36 Million To Participating Physicians from the 2007 PQRI Reporting Period

The Centers for Medicare & Medicaid (CMS) today announced payment of more than $36 million in bonus payments to many of the more than 56,700 health professionals who satisfactorily reported quality information to Medicare under the 2007 Physician Quality Reporting Initiative (PQRI).

Creating a value-based purchasing system is a critical way to improve our health care systems. By collecting quality data, health care providers can use the information to improve the quality care of beneficiaries, said Health and Human Services Secretary Michael Leavitt.

Physicians, physician group practices, and other PQRI eligible professionals should receive their payments by August 2008. The average incentive amount for individual professionals is over $600 and average incentive payment for a physician group practice is over $4,700, with the largest payment to a physician group practice totaling over $205,700.

The PQRI is part of the President’s Value-driven Health Care Agenda that seeks to address current problems in the health care sector regarding preventable errors, uneven quality of care and rising health care costs.

More information about the PQRI program, including how eligible professionals can participate and the criteria to qualify for an incentive payment is available at www.cms.hhs.gov/PQRI.

To read the entire CMS Press release issued today, click here: http://www.cms.hhs.gov/apps/media/press/release.asp?Counter=3198&

The Medicare Improvements for Patients and Providers Act of 2008 was enacted on July 15, 2008. This new law has delayed the Medicare Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Competitive Bidding Program. Items that had been included in the first round of the DMEPOS Competitive Bidding Program can be furnished by any enrolled DMEPOS supplier in accordance with existing Medicare rules. Payment for these items will be made under the fee schedule. Additional guidance regarding this new law will be forthcoming.

Extension of Payment Rule for Brachytherapy and Therapeutic Radiopharmaceuticals

The Medicare Improvements for Patients and Providers Act of 2008 (MIPPA), enacted on July 15, 2008, extends the use of the cost to charge payment methodology for Brachytherapy and Therapeutic Radiopharmaceuticals through January 1, 2010. This change is retroactive to July 1, 2008. Some claims have already been processed, however, using the Outpatient Prospective Payment System (OPPS) rates that were in effect until MIPAA enactment. To avoid a disruption in payment while the cost to charge payment methodology is re-implemented, impacted claims will continue to be paid based on the OPPS rates. Contractors will mass adjust all impacted OPPS claims with dates of service beginning July 1, 2008, as soon as the cost to charge payment methodology has been implemented. Reprocessing will be complete by September 30, 2008.

MEDICARE FACT SHEET

FOR IMMEDIATE RELEASE

July 16, 2008

MEDICARE IMPROVEMENTS FOR PATIENTS AND PROVIDERS ACT, 2008

Today, the Centers for Medicare & Medicaid Services (CMS) announced steps it is taking to implement certain Medicare provisions in the Medicare Improvements for Patients and Providers Act of 2008. On Tuesday, July 15, Congress voted to override the President's veto of the Medicare Improvements for Patients and Providers Act (H.R. 6331). The House vote was 383-41, while the Senate voted 70-26 in favor of enacting H.R. 6331 into law.

As a result, the mid-year 2008 Medicare Physician Fee Schedule (MPFS) rate of -10.6 percent has been replaced with a 0.5 percent update, retroactive to July 1, 2008.

Physicians, non-physician practitioners and other providers of services paid under the MPFS should begin to receive payment at the 0.5 % update rates in approximately 10 business days, or less. Medicare contractors are currently working to update their payment system with the new rates.

In the meantime, to avoid a disruption to the payment of claims for physicians, non-physician practitioners and other providers of services paid under the MPFS, Medicare contractors will continue to process the claims that have been on hold on a rolling basis (first in/first out) for payment at the 10.6% update level. After your local contractor begins to pay claims at the new 0.5% rate, to the extent possible, the contractor will begin to automatically reprocess any claims paid at the lower rates.

Under the Medicare statute, Medicare pays the lower of submitted charges or the Medicare fee schedule amount. Claims with dates of service July 1 and later billed with a submitted charge at least at the level of the January 1 – June 30, 2008, fee schedule amount will be automatically reprocessed. Any lesser amount will require providers to contact their local contractor for direction on obtaining adjustments. Non-participating physicians who submitted unassigned claims at the reduced nonparticipation amount also will need to request an adjustment.

To read the CMS Fact Sheet at: http://www.cms.hhs.gov/apps/media/fact_sheets.asp

More information on physician pay issues is available at

ttp://www.cms.hhs.gov/PhysicianFeeSched/

More information on therapy caps is available at http://www.cms.hhs.gov/TherapyServices/

More information on DME is available at http://www.cms.hhs.gov/DMEPOSCompetitiveBid

The next CMS Rural Health Open Door Forum is scheduled for...

Date: July 29, 2008

Start Time: 2:00 PM Eastern Daylight Time (EDT)

(Please dial in at least 15 minutes before call start time.)

Conference Leader(s): Terry Kay/John Hammerlund/Natalie Highsmith

Open Door Forum Participation Instructions:

There are 2 ways to participate, in person or by phone.

1. To participate in person at the Hubert H. Humphrey Building, RSVP and Security Clearance is required. RSVP no later than 2:00 PM EDT, July 27, 2008. To RSVP, send your name, organization and telephone number to RURALHEALTHODF-L@cms.hhs.gov. Be sure to include Rural Health in the subject line.

Upon entry into the building, you will be required to present to Security a Government issued photo identification, preferably valid driver's license.

Please arrive no later than 1:30 PM.

2. To participate by phone:

Dial: 1-800-837-1935 & Reference Conference ID: 53531770

(Persons participating by phone are not required to RSVP.)

TTY Communications Relay Services are available for the Hearing Impaired. For TTY services dial 7-1-1 or 1-800-855-2880 and for Internet Relay services click here p://www.consumer.att.com/relay/which/index.html . A Relay Communications Assistant will help.

ADDRESS:

Hubert H. Humphrey Bldg.

200 Independence Avenue S.W.

Washington, D.C. 20201

Map & Directions: http://www.hhs.gov/about/hhhmap.html

Encore: 1-800-642-1687; Conf. ID# 53531770

Encore is an audio recording of this call that can be accessed by dialing 1-800-642-1687 and ntering the Conf. ID., beginning on 2 hours after the call has ended. The recording expires after 3 business days.

For Forum Schedule updates, Listserv registration and Frequently Asked Questions please visit our website at http://www.cms.hhs.gov/OpenDoorForums/ .Thank you.