Yesterday the NCMS and the Physicians Advocacy Institute, Inc., (PAI) released a documentary detailing the two-year ordeal that Eastern Carolina Internal Medicine (ECIM) experienced during a Medicare audit. The documentary, entitled “Guilty Until Proven Innocent: When Medicare Audits Cause Casualties,” reveals the Medicare audit process as unfair, devoid of common sense and negatively impacting doctors as they work to provide quality patient care. View the video below.

“This documentary offers an example of the real-life consequences of a federal government audit program that is out of control,” said Robert W. Seligson, executive vice president and CEO of the NCMS. “Federal audit contractors are paid to find problems, extrapolate the findings and increase the fines to exorbitant amounts, which can lead to medical practices closing their doors, especially in rural communities already facing critical primary care physician shortages.”

The documentary describes a series of events, beginning with a medical records request, that resulted in the Centers for Medicare and Medicaid Services (CMS) imposing a fine on ECIM of more than $1 million. The Medicare Program Safeguard Contractor (PSC) took minor errors alleged in the medical charts and extrapolated $40,000 to reach the overpayment amount of $1 million. After two years, thousands of dollars in legal and administrative expenses and a severe impact on access to patient care, ECIM proved that it had provided the appropriate services to its patients and had documented claims correctly. The original fine was reduced to less than $4,000 only after ECIM physicians and staff spent three days with an administrative law judge reviewing each claim in question. It even took US Senator Richard Burr (R-NC) contacting CMS directly in order for ECIM to receive the money owed back to them.

The NCMS and PAI hope to urge the federal government to take steps in addressing the flawed audit system and help physician practices understand the importance of appealing adverse audit findings. For a copy of the video, contact the NCMS at 919-833-3836 or 800-722-1350. Members can also refer to the NCMS Health Care Audit Resource Center for more information on how to prepare for and address medical audits. PAI will be hosting the webinar “Medical Audits: What Physicians Need to Know” on Tuesday, May 15, 2012, 2:00 pm, which will provide information about different types of audits faced by physician practices. Principal author of PAI’s recently published white paper, “Medical Audits: What Physicians Need to Know,” Frank Cohen, MPA, MBB, will present the webinar. Click here to register. Look for more medical audit learning opportunities in future issues of the Bulletin.

CIGNA Health Care of North Carolina recently mailed a notice to providers stating that as of August 1, 2012, the timeframe to submit claims for reimbursement will change to 90 days from the date of service, except where a different timeframe is required by state law. Where CIGNA is a secondary payor, the notice states the timely filing deadline is 90 days from the date that the practice receives the explanation of payment from the primary payor.

North Carolina state law requires health plans to give practices at least 180 days to file claims. However, that state law only applies to claims that you file to fully-insured, commercial health plans that are subject to North Carolina’s insurance regulations. The 180-day requirement does not apply to self-funded health plans, even when CIGNA, Aetna, or BCBSNC handles the administration of those self-funded health plans.

Until now, CIGNA has been accepting all claims in accordance with North Carolina’s 180-day minimum, without regard to whether the plan was self-insured or fully-insured. North Carolina is one of the last states in the country that CIGNA has not already converted to a 90-day timely-filing requirement for claims filed against self-insured plans. Pressure from employer groups across the country was cited as the primary reason for the change.

The proposed change essentially creates two separate timelines for filing claims to CIGNA. First, you would be required to file claims within 90 days against self-funded plans that CIGNA administers; i.e., where CIGNA handles administrative services only for that plan.  For fully-insured CIGNA plans, the more generous, state-required 180-day filing window still applies.

Unfortunately, a 90-day timely filing requirement for self-insured plans is not new in North Carolina or unique to CIGNA. Several other major self-insured health plans and third-party administrators in North Carolina have already shortened the filing window. Patient insurance cards should inform medical practices whether a plan is self-insured or fully-insured, allowing them to identify the applicable filing period.

You can object to the proposal.  In its notice, CIGNA provided a specific contact and instructions for submitting written objections. CIGNA has told the NCMS that objections will be reviewed and decided upon a case-by-case basis.

This week the Office of Inspector General of the U.S. Department of Health and Human Services (DHHS) released a report entitled “Early Assessment of Audit of Medicaid Integrity Contractors,” which found that 81% of the Centers for Medicare & Medicaid Services’ (CMS) pre-screened audits undertaken to fight waste, fraud and abuse in Medicaid were either unable or unlikely to identify overpayments during a recent six-month period.
 
The analysis found only 11% of assigned audits conducted from January 1 – June 30, 2010 by Medicaid Integrity Contractors (MIC) were completed with $6.9 million in overpayments identified, $6.2 million of which resulted from seven completed collaborative audits involving Audit MICs, Review MICs, States, and CMS. The remaining audits had not progressed enough to draw conclusions about likely outcomes.

Failure to find overpayments was blamed on the use of audit algorithms previously found ineffective, errors in the data, and the contractors who selected the providers to receive audits based on their likelihood to receive overpayments. The CMS spent $17.2 million on all such contractors in fiscal 2010. The report recommended the CMS increase its coordination with each state’s Medicaid officials.

The NCMS provides assistance and education to medical practices on how to prevent such audits.  Visit the NCMS Health Care Audit Resource Center for more information. PractEssentials, a NCMS Foundation initiative, provides consulting services designed to help your practice identify potential problems areas, evaluate options, and implement solutions. On April 25, PractEssentials will conduct a one-hour webinar on recovery audits. For assistance from PractEssentials or for more information, contact Franklin Walker, Director of Programs, at (800) 722-1350 ext 141.

If you are a provider who needs to file for hardship exemption for the 2013 Electronic Prescribing (eRx) payment adjustment, your opportunity to do so has been extended. The Centers for Medicare and Medicaid Services (CMS) has reopened the Quality Reporting Communication Support Page until Saturday, June 30, 2012.

Guidance on requesting a hardship exemption is available at the Quality Support Page User Manual.

The NCMS Health Information Technology (HIT) Resource Center may also be helpful. Questions can be directed to Terri Gonzalez, NCMS Foundation Practice Technical Assistance Coordinator, at 919-833-3836 or tgonzalez@ncmedsoc.org.

In the March Medicaid Bulletin issued this week, DMA again announced that physician assistants are eligible to enroll directly as Medicaid providers.  The article confusingly states that PAs “may be enrolled effective April 1.”  It is not clear if April is the new deadline that DMA has set for the submission of enrollment applications.

For months now, the North Carolina Medical Society, with the support of the NC Academy of Physicians Assistants and the NC Medical Group Mangers, has advised PAs and their practices to hold their Medicaid applications.  (See NCMS’s previous articles on this topic from October and November.)  

Because DMA has done little to clarify its authority to require enrollment, our position remains the same.  Of course, this is ultimately a decision best left to the practice, but in our view, the safest course of action for PAs and practices is to continue to hold their application.

We call on DMA to bring forward its timeline for completing the administrative rulemaking process, clear application instructions for PAs and practices, the expected compensation rate for these professionals, billing guidelines, and future opportunities for stakeholder input.

A few months ago, the North Carolina Medical Society, NCHA, and the NC Radiology Society jointly petitioned the NC Department of Insurance regarding BCBSNC’s move to implement a new radiology reimbursement policy in a way that we believed violated state law. The DOI agreed and instructed BCBSNC that, in order to implement the policy, the insurer must first follow a formal process for amending its contracts with affected physicians and facilities. Review that story here.

Since then, BCBSNC has appealed the DOI’s decision to an administrative hearing officer.  Quickly after BCBSNC filed its appeal, the NCMS, NCHA, and NCRS requested to intervene in the case and were granted full-party status by the Hearing Officer.  As full parties, the three organizations will help the DOI defend its position that BCBSNC must follow the fair contracting statutes before implementing the radiology policy.  The appeal is still pending.

In an interesting twist, BCBSNC Network Management simultaneously issued proposed contract amendments to radiology providers in the network, seemingly in compliance with the DOI’s initial decision and relevant state laws. This was also what the NCMS, NCHA, and NCRS had been asking – and then pushing – BCBSNC to do all along.

In its written notice to affected practices, BCBSNC disclosed that it would implement the radiology policy in April 2012. Physician practices and facilities in receipt of this notice should know that, at this point, the outcome of BCBSNC’s appeal at DOI will likely have no effect on the proposed contract amendment that you may now be considering.

BCBSNC has indicated to us that its contracting effort does not change their intention to pursue an appeal of DOI’s decision. This is unusual, though, since the original decision instructed BCBSNC to comply with the statutes before moving forward, and it now seems like they have.  This paradox was the basis for a Motion to Dismiss the Appeal that was filed by DOI this week and will be supported by the three provider organizations.

Check back for additional updates on this issue from NCMS.

Groups of individuals and businesses that hold health insurance policies with Blue Cross and Blue Shield of North Carolina have filed a class action lawsuit in federal court against both BCBSNC and the Blue Cross Blue Shield Association. The complaint highlights BCBSNC’s dominance in state health insurance markets and alleges violations of federal antitrust laws and unlawful restraint of trade under state law.

The plaintiffs specifically target BCBSNC’s use of Most Favored Nations clauses (MFNs) in its contracts with physicians and facilities as a way to artificially inflate premiums. (The use of MFNs has increased across North Carolina; the clauses function to guarantee that the most-favored health plan will always receive the best pricing for health care services.) The complaint alleges:

BCBS-NC has used its market and monopoly power in North Carolina to engage in a number of anticompetitive practices. For example, BCBS-NC has required key health care providers to agree to [MFNs] in their contracts with BCBS-NC….The MFNs restrict competition by preventing competitors from negotiating for lower costs and thus raising the prices that other health insurers must pay….

The Medical Society will continue to watch this case closely and provide updates as it progresses.  We anticipate that the case will generate increased interest in Senate Bill 517, which would ban the use of MFNs by North Carolina health plans. BCBSNC has emerged as the sole organization opposing its passage. The bill remains eligible for consideration during the General Assembly’s Short Session, which begins in May.

Review the Complaint Here.

Worried about physician ratings and tiering by health plans? The Physicians Advocacy Institute (PAI) has created the TIP Sheet for Physicians: Reviewing and Disputing Physician Rating and Tiering by Health Plans. The easy-to-follow seven-step guidelines offer practical ways to address concerns that physicians have expressed about ratings and tiering data. Click here for a copy of the TIP Sheet.

The NCMS is a founding member of the PAI, and EVP, CEO Robert Seligson serves as president of the organization. If you have questions about the PAI or ratings and tiering by health plans, please contact the NCMS Members Resource Center at kfreeman@ncmedsoc.org or call (800) 722-1350.

See related articles:

UHC Notifying MDs about Physician Profiling/Tiering Program; Doctors Have Limited Time to Seek Reconsideration of Misinformation (Bulletin, 1-14-11)

BCBSNC Launches Tiered Providers Network for Food Lion (Bulletin, 11-5-10)

Physicians will soon receive long-awaited payments resulting from a hard-fought legal battle against a major health insurance company. This week U.S. District Judge Lawrence McKenna in New York cleared the way for releasing payments in the 2009 settlement that ended the historic class-action challenge against UnitedHealth Group, led by the AMA Litigation Center, which receives financial support from the NCMS and other state medical associations. Nearly $200 million in awards will be paid to settle claims from physicians for 15 years of artificially low payments from UnitedHealth for out-of-network health services.

Physician organizations, state regulators and U.S. Senators brought evidence of UnitedHealth’s improper business practices to the attention of former New York Attorney General Andrew Cuomo in 2008. At issue was the use of flawed data by UnitedHealth to justify lower reimbursement rates for physicians for out-of-network services. Mr. Cuomo’s investigation confirmed the abuses and led several major insurers to agree to meaningful reforms and to fund a new, independent system that can be used to accurately set usual, customary and reasonable rates. In the settlement agreement, UnitedHealth admitted no wrongdoing and terminated use of the Ingenix database.

The settlement led to a new FAIR Health database, which publicly reports the fair rate for any given out-of-network services. FAIR stands for “Fair and Independent Research.”

“Patients and physicians will be able to go online to see how much a particular service is likely to cost, and how much the insurer is willing to pay, before the patient even sets foot inside the doctor’s office,” AMA President Peter W. Carmel, MD, said.

Related articles and documents:

Click here for details about the settlement between UnitedHealth and former New York Attorney General Andrew Cuomo.

Read the AMA news release, Court Approves Award Payments in AMA Legal Battle Against UnitedHealth

Federal Court Grants Preliminary Approval of Historic $350 Million Settlement with UnitedHealth Group (Bulletin, 12-4-09)

UnitedHealth Group Agrees to Settlements (Bulletin, 1-16-09)

Ingenix Lawsuit Filed (Bulletin, 5-30-08)

As of April 1, 2012, Blue Cross and Blue Shield of North Carolina will have a new pharmacy benefits manager (PBM), Prime Therapeutics. The insurer advises physicians and patients that it expects minimal changes in the number of pharmacies participating in its network, along with limited disruption of pharmacy services for members. The NCMS will be closely monitoring this change and urges members to contact kfreeman@ncmedsoc.org if their practice experiences disruptions related to this transition. NCMS will keep members updated on these changes at http://www.ncmedsoc.org/ and in the Bulletin.

BCBSNC’s current PBM is Medco, which is notifying members in their mail-order program that their next 90-day refill (if refill date is on or after April 1, 2012) will not be covered by Medco. Prime is scheduled to begin mailing new member materials in late February, and BCBSNC has added a message to their customer service line to announce the change.

More information is available on the News and Information page on the BCBSNC Provider Portal.  If you have any questions, please contact your BCBSNC Network Management representative or BCBSNC Customer Service.

Audits and payment recovery actions are hitting doctors with increasing frequency and intensity. The Physicians Advocacy Institute (PAI), in collaboration with NCMS and other state medical associations, has developed a new resource to help physicians avoid and respond to audits and financial reviews conducted by Medicare, Medicaid and private payers. Medical Audits: What Physicians Need to Know explains the various types of audits and how to appeal adverse audit findings.

“This is an important member benefit that will help physicians to prepare for the challenges they face from the business side of their practices,” NCMS EVP, CEO Robert W. Seligson said. “Understanding the types of audits and how to respond to them helps practices to better identify and correct errors in billing and coding, as well revealing when auditors might err in their findings.” Mr. Seligson serves as president of the PAI.

This white paper is available on the NCMS Fraud and Abuse webpage, where you will find other helpful resources covering Medicare and Medicaid audits. The principle author of the paper is Mr. Frank Cohen, a renowned expert in health care analytics and data mining, and a consultant to physicians and medical associations nationwide.

The NCMS is a signatory member of the PAI, which was formed in 2006 as a result of class action settlements with major national health insurers. Even though most of the settlement agreements have expired, the PAI continues to develop projects and tools that guarantee the viability of physician practices and the ability of physicians to deliver quality patient care. Read more about PAI at http://www.hmosettlements.com/.

Due to a high volume of questions coming in through the Member Resource Center, the NCMS will provide a Frequently-Asked-Question (FAQ) for its members each week to make them more aware of current medical and health care issues that their colleagues are having.

Q: What can I do if a clearinghouse, billing company, or third-party payor is not prepared for 5010, or is not following other federally-mandated standards for electronic transactions under HIPAA?

A: The North Carolina Medical Society recommends that you first contact the appropriate trading partner and/or third-party payor to learn more about the problem you are experiencing with your claims. It is important to ask a lot of questions and to gather as much information as possible about the issues you are having.

If the problem does not get resolved, you can file a complaint through the federal Office of E-Health Standards and Services (OESS), which enforces HIPAA’s Administrative Simplification provisions.  To file a complaint, access OESS’s online Administrative Simplification Enforcement Tool. The first time you file a complaint, you will need to create an account. Once you have done so, click on “New Complaint.”  The tool will then lead you through a series of prompts, asking for information about the entity that you are complaining about.

Taking such action will incentivize our vendor and payor partners to work to make industry-wide transitions like 5010 and ICD-10 much smoother.  The NCMS also offers Version 5010 and ICD-10 Resources that will help you with these transitions. Please contact the NCMS Member Resource Center at (919) 833-3836 with any questions or concerns regarding the transition.

NC Medicaid Offers Guidance on Grace Period for 5010 Implementation

The North Carolina Division of Medical Assistance (DMA) has issued a response to the recent announcement from the federal Office of E-Health Standards and Services that it will observe a 90-day grace period for compliance with 5010. (See 5010 Deadline Just Around the Corner, Bulletin, 12-9-2011) 

DMA will continue to process claims filed in 4010 and  5010 formats ONLY until March 31, 2012.  Providers who continue to submit 4010 claims after January 1, 2012 will be required to submit a transition plan documenting their plan to reach 5010 compliance by March 31, 2012. The transition plan must document the steps that have been completed, the remaining steps that need to be completed, the Medicaid provider numbers impacted and contact information, including email address and phone number. 

For questions or assistance regarding this information, please contact Hewlett Packard Enterprise Services (HPES), ECS at 800-688-6696 or 919-851-8888; press option 1.  Click here to read the official notice from DMA.

Physician Assistants, Please Continue to Hold your Medicaid Enrollment Applications

After receiving inquiries about Medicaid enrollment for physician assistants (PAs), the NCMS would like to remind all PAs and their medical practices to hold their Medicaid enrollment applications until the Centers for Medicare and Medicaid Services (CMS) approves the State Plan Amendment and the Division of Medical Assistance (DMA) clarifies details around billing, rates, and other applicable requirements for these practitioners. The North Carolina Medical Society will continue to provide updates on this issue as we receive them.

Please contact the NCMS Member Resource Center at (919) 833-3836 or kfreeman@ncmedsoc.org with any questions or concerns.

See related articles:

Physician Assistant Medicaid Enrollment Update (Bulletin, November 4, 2011)

Physician Assistants, Hold Your Medicaid Enrollment Applications! (Bulletin, October 7, 2011)

Reminder: Important EHR Incentive Program Deadlines Are Approaching

The NCMS would like to remind its members of the following deadlines approaching for the Medicare Electronic Health Record (EHR) Incentive Program:

• Providers have until Wednesday, February 29, 2012, to register and attest to meeting meaningful use in order to receive payment for calendar year (CY) 2011 through the Centers for Medicare and Medicaid Services (CMS) EHR Incentive Program Registration and Attestation System.
• Providers also have until Wednesday, February 29, 2012, to submit any pending Medicare Part B claims from CY 2011. Please notice: CMS allows 60 days after December 31, 2011, for all pending claims to be processed.

More Important Information:

• Medicare EHR incentive payments to providers are based on 75 percent of the Part B allowed charges for covered professional services furnished by the EP during the entire payment year.
• If providers do not meet the $24, 000 threshold in Part B allowed charges by the end of CY 2011, CMS expects to issue an incentive payment for providers in April 2012 for 75 percent of their Part B charges from 2011. Please contact the Division of Medicaid Assistance (DMA) at (866) 844-1113 for more details about payments.

Questions regarding the CMS EHR Incentive Program can be directed to Terri Gonzalez, Practice Technical Assistance Coordinator, at 919-833-3836 or tgonzalez@ncmedsoc.org.

CMS Offers Program to Assist Physician ID Theft Victims

The Centers for Medicare and Medicaid Services (CMS) has developed the provider victim validation/remediation initiative for physicians whose identification has been stolen and used to defraud federal health programs. Physicians can seek resolution from Medicare program safeguard and zone program integrity contractors, which operate according to region and state and can investigate instances of identity theft after being notified by a potential victim. The AMA lists information about the contractors at www.ama-assn.org/resources/doc/washington/identity-theft-victim-program-letter-oct2011.pdf. The Medicare program integrity contractor serving North Carolina is AdvanceMed.

Physicians who believe they are victims of identity theft but have not yet suffered any financial liability should contact Palmetto GBA, the Medicare administrative contractor (MAC) for North Carolina, or the federal Health and Human Services (HHS) Office of Inspector General hotline at 800-HHS-TIPS (800-447-8477).

Sign Up Today for ICD-10 Training

The North Carolina Health Information Management Association (NCHIMA) has partnered with North Carolina Area Health Education Centers (NC AHEC) to provide North Carolina physicians with ICD-10 training. The following Continuing Education class, “ICD-10-CM Training & Implementation Issues (Phase II) for the Provider Office” will be taught at:

Click here to sign up for any of the ICD-10 sessions. Questions or concerns regarding ICD-10 can be directed to Franklin Walker (fwalker@ncmedsoc.org), NCMSF Director of Programs and Practice Management, or Terri Gonzalez (tgonzalez@ncmedsoc.org), NCMSF Practice Technical Assistance Coordinator, at (919) 833-3836.

The North Carolina Medical Society can assist its members in the transition to 5010 and ICD-10. Click here for additional resources on the NCMS website regarding ICD-10.

As a follow-up to last week’s Bulletin story, “New HHS Rule Aims to Cut Paperwork, Saving Physicians Time and Money,” physicians and other Medicare providers are reminded that all Medicare provider and supplier payments must be made by Electronic Fund Transfer (EFT). Regulations require that at the time of enrollment, enrollment change request, or revalidation, providers and suppliers that expect to receive payment from Medicare for services provided must also agree to receive Medicare payments through EFT. The requirement is mandated in the Social Security Act.

As part of the Center for Medicare and Medicaid Services’ (CMS) revalidation efforts, all suppliers and providers who are not currently receiving EFT payments are required to submit the CMS-588 EFT form with the Provider Enrollment Revalidation application, or at the time any change is being made to the provider enrollment record by the provider or supplier, or delegated official.

For more information about provider enrollment revalidation, click here.

A new regulation announced Thursday by the US Department of Health and Human Services establishes Electronic Funds Transfers (EFT) standards that, when implemented by health plans, will save physician practices and hospitals between $3 billion to $4.5 billion over the next ten years. The rule—the Adoption of Standards for Health Care Electronic Funds Transfers and Remittance Advice—creates streamlined standards for a health plan to follow when paying claims to a provider electronically and to issue a Remittance Advice notice. Remittance Advice is a notice of payment sent to providers that may or may not accompany the payment the provider receives.

The NCMS is a strong proponent of federal initiatives to alleviate the administrative burden placed on physician practices. HHS Secretary Kathleen Sebelius said, as a result of the rule, health care professionals will spend less time filling out paperwork and more time focusing on delivering the best care for patients.

Physicians spend about 12 cents of every dollar they receive from patients to cover the costs of filling out forms and performing other administrative tasks, according to a May 2010 study in the journal Health Affairs. Researchers found that simplifying these systems could save four hours a week of a physician’s professional time and five hours of support staff time.

The new EFT rule is the second in a series of regulations required by the Patient Protection and Affordable Care Act. The first—Adoption of Operating Rules for Eligibility for a Health Plan and Health Care Claim Status—was adopted last June and set standards for how physicians and other health care providers use electronic systems to determine a patient’s eligibility for health coverage and check on the status of a claim.

HHS is working on further administrative simplification rules that will include a standard unique identifier for health plans, a standard for claims attachments, and requirements that health plans certify compliance with all HIPAA standards and operating rules.

Click here to view the HHS News Release on streamlining electronic funds transfers in health care.