Palmetto GBA has issued letters to many physician practices as part of a Service-Specific Probe that every Medicare Administrative Contractor is required to conduct. The letters, sent from the Medical Review (MR) Department, explain that Palmetto has identified the physician as an outlier for a specific procedure and will be performing a prospective audit on a limited number – typically around 40 – of your claims.  This does not automatically mean you have done anything wrong or that you will have to pay money back.  The purpose of the review is to validate claims that were submitted, and if necessary, prevent inappropriate Medicare payments.

Note that Palmetto GBA’s first letter does not request any records. 

The Service-Specific Review Process

Palmetto’s system will randomly select for review claims containing the CPT code of the targeted service. (Additional services billed on the same claim that are not being monitored will continue to be processed.) Palmetto will then issue Additional Documentation Request (ADR) Letters to the practice, asking for medical information to substantiate each selected claim.  Records should be submitted within 30 days of receiving the ADR Letter.

The MR Department will use the reviewed claims and medical records to calculate a charge denial rate (CDR), which determines the percentage of charges, if any, that have been billed in error. If they find an issue with your submitted claims, you may receive a Letter of Finds, which will ask you to participate in a corrective action plan. Once that plan in submitted, a second analysis will be completed at a later date.

Where to Go for Help

For additional information from Palmetto GBA, please refer to their Medical Review Progressive Corrective Action (PCA) Process website.

You should also review the new NCMS/PAI white paper, Medical Audits: What Physicians Need to Know, located on the NCMS Fraud & Abuse webpage.  (Scroll to page 12 of the document for information on Service-Specific Probes.)

Finally, additional questions and developments can be directed to Kristin Freeman in the NCMS Member Resource Center at 919-833-3836 or kfreeman@ncmedsoc.org.

NCMS will continue monitoring this audit and will provide updates as we receive them.

Last year the North Carolina General Assembly passed a new law that requires the presentation of photo identification prior to the dispensing of certain controlled substances. Pharmacies will begin asking for identification on Thursday, March 1, 2012.

We encourage you to mention this new requirement to your patients if you prescribe controlled substances to them, as they may not be aware of the change.

Below you will find answers to commonly asked questions about the new law:

For which controlled substances will photo identification be required?

All Schedule II Controlled Substances and Schedule II Controlled Substances listed in subdivision 1-8 of G.S. 90-91 (d). 

May someone else obtain a prescription on behalf of a patient?

Yes. The photo identification of the person picking up the prescription must be documented.

What forms of identification are acceptable under the new law?

Only a driver’s license, a special identification card issued by the NC Department of Motor Vehicles, a military identification card or a passport may be accepted. Identification must be current and unexpired.

Read the new law in its entirety here.

North Carolina’s Division of Medical Assistance (DMA) has implemented its Medicaid Recovery Audit Contractor (RAC) program, as required by the Patient Protection and Affordable Care Act (PPACA). The state’s current vendor, Public Consulting Group (PCG), will serve as one of two NC Medicaid RACs, with a second contract to be awarded later this year.

The RACs perform post payment audits to determine whether any Medicaid payments have been underpaid or overpaid, following federal and state guidelines. NC DMA received approval to establish one or more RACS in February 2011. The federal Medicaid Final Rule required states to implement their Medicaid RAC programs by January 1, 2012, or they would lose federal funding for the program.

Medicaid RAC regulations require the RAC to:

• Have at least one FTE medical director on staff;
• Hire certified coders, unless the state determines that certified coders are not necessary for the effective review of claims;
• Provide a toll-free customer service number which is available during normal business hours;
• Limit audits to a three-year look back period;
• Perform audits based on the number of medical records and frequency of reviews determined by the State; and
• Coordinate with other vendors or entities that perform post payment provider audits, including the Medicaid Investigation Unit (MIU) and the Centers for Medicare and Medicaid Services (CMS) Medicaid Integrity Program, to ensure reviews are not duplicative. However it is possible that entities may review the same claim for different purposes.

Click here to view Federal Regulations for the Medicaid RAC program.

The Office of Inspector General (OIG) is warning physicians that they may be liable for false claims submitted by entities to which the physicians reassigned their Medicare payments. Physicians can legally reassign their Medicare payments from the Centers for Medicare and Medicaid Services (CMS) to outside organizations by filling out Form CMS-855$ (PDF). However, an OIG Alert issued on February 8, 2012 cautions physicians to use increased scrutiny of entities prior to reassigning their Medicare payments.

The OIG recently reached settlements with eight physicians who violated the Civil Monetary Penalties Law by causing the submission of false claims to Medicare from physical medicine companies. In this case, the physicians reassigned their Medicare payments to various physical medicine companies in exchange for Medical Directorship positions. While serving as Medical Directors, the physicians did not personally render or direct any services. OIG says there was evidence that the services the physical medicine companies claimed the physicians performed were not actually performed or were not performed as billed.

“The failure of the physicians to monitor the services billed using their reassigned provider numbers resulted in individuals with little or no medical background serving as physical therapy ‘technicians,’” according to the Alert. “These unlicensed ‘technicians,’ including retail cashiers and massage therapists, rendered unsupervised in-home physician therapy services to Medicare and Medicaid beneficiaries. The physical medical companies falsely billed Medicare using the physicians’ reassigned provider numbers as if the physicians personally rendered the services or directly supervised a ‘technician’ rendering the services.”

Click here to read the complete OIG Alert.

Big changes are coming to our workers’ compensation system. To help physicians and their practices understand and adjust to these changes, the North Carolina Medical Society (NCMS) has created a new webpage, Workers’ Comp: Information for Physicians. There you will find a physician’s guide to House Bill 709, along with other resources, helpful links, and news from the Industrial Commission.

Make the NCMS Workers’ Comp webpage your source for the latest news and resources as the NCMS Workers’ Compensation Task Force continues its long-standing mission to improve how doctors of all specialties treat injured workers and interact with the workers’ compensation system. NCMS Past President Richard Bruch, MD, chairs the Task Force, and Keith Kittelberger, MD, serves as Vice Chair.

The NCMS played a key role in the negotiations that led to the enactment of HB 709 – Protect and Put North Carolina Back to Work. This workers’ comp reform bill addressed many issues important to physicians, such as second opinions, independent medical exams, and access to medical information by employers. The law also directed the Industrial Commission to adopt rules that will require electronic billing and payment, standardize the medical documentation that accompanies claims to carriers, and require carriers to accept 5010 transactions and ICD-10 diagnosis codes.

NCMS members may contact the Member Resource Center with questions about workers’ compensation at kfreeman@ncmedsoc.org or by calling 800-722-1350.

See related Bulletin articles:

NC Industrial Commission Delivers on E-Billing and Electronic Payment in Workers Comp (6-17-11)

NCMS Efforts to Secure E-Billing Mandate in Workers’ Comp Gets National Attention (11-4-11)

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/.

The Centers for Medicare and Medicaid Services (CMS) says it will continue its current policy that the Emergency Medical Treatment and Labor Act (EMTALA) does not extend to inpatients or to the transfer of inpatients to hospitals with specialized capabilities. The announcement was published in a Request for Comment (Federal Register) on Thursday. CMS says it will continue to monitor whether it may be appropriate in the future to reconsider whether to extend EMTALA to inpatients. The American Medical Association (AMA) plans to comment in support of CMS’ decision not to extend EMTALA.

When CMS published an Advanced Notice of Proposed Rulemaking on EMTALA [CMS-1350-ANPRM] on December 23, 2010, it indicated it was reconsidering the current policy which provides that:

1. a hospital’s EMTALA obligation ends upon the admission of a patient as an inpatient; and
2. EMTALA does not apply to the transfer of inpatient to a hospital with specialized capabilities.

The AMA submitted comments that strongly objected to the extension. The organization said that physicians are already bound by a host of legal and ethical obligations to provide necessary patient care, and take those obligations seriously. The AMA also asserted that EMTALA obligations often result in over-utilization of physician resources, uncompensated care, and administrative hurdles.

Physicians may submit comments electronically to http://www.regulations.gov/, or by regular mail to:

Centers for Medicare & Medicaid Services

Department of Health and Human Services

Attention: CMS—1350—NC

P.O. Box 8013

Baltimore, MD 21244-8013

Comments must be received no later than 5:00 pm Eastern Time on April 2, 2012.

William Pully, President of the North Carolina Hospital Association (NCHA), was honored as the 2012 recipient of the Ronald Levine Legacy Award in recognition of his contributions to public health in North Carolina. The award was presented at the annual 2012 State Health Director’s Conference on January 27, 2012. It is named in honor of the former State Health Director and long-time NCMS leader, Ron Levine, MD, who presented the award along with outgoing State Health Director Jeffrey Engel, MD.

“Bill is well deserving of this prestigious recognition for his leadership in helping create a statewide disease event tracking system and the Public Health and Hospital Collaborative,” NCMS EVP, CEO Robert W. Seligson said. “These advancements contribute greatly to the quality of care given our citizens and to the public health of our great state.” 

The Collaborative is a public-private partnership between the Division of Public Health, NCHA, the NC Institute for Public Health and the NC Center for Health Quality that has developed standards for community health assessments as required for non-profit hospitals by the federal health care reform law and the Public Health Exchange.

Pully, a Rocky Mount native began his career with NCHA as director of government relations. He became president of the association in 1999.

Physician organizations, including the NCMS and other state medical societies, have asked the Centers for Medicare and Medicaid Services (CMS) for written public policy guidance on how patients enrolled in Medicare may obtain reimbursement for covered services provided by physicians who are not enrolled in Medicare and bill their patients directly.

In a letter to Acting CMS Administrator Marilyn B. Tavener, the organizations state that Medicare materials typically describe three alternatives: being a participating physician, being a non-participating physician, or opting out of Medicare and privately contracting with patients who are enrolled in Medicare.

“Questions have recently been raised within the physician community about a fourth option, whereby physicians who do not enroll as Medicare providers bill their patients directly at fee levels that are set without regard to Medicare payment rates or limiting charges. Medicare patients pay the physician bills out of pocket and then seek reimbursement from Medicare using form CMS-1490S,” according to the letter.

The organizations note that electronic e-mail correspondence reveal, “it is the view of the CMS that the option of having physicians not enrolled in Medicare and having beneficiaries submit claims on their own using the form CMS 1490S is not consistent with Medicare law and un-enrolled physicians who engage in this type of practice are subject to penalties.”

In addition to announcing that she would not seek reelection this week, Governor Beverly Perdue announced that Laura Gerald, MD, former Executive Director of the Health and Wellness Trust Fund, would become State Health Director, effective February 1, 2012, and will lead the newly combined Division of Prevention, Access and Public Health Services. Outgoing State Health Director Jeffrey Engel, MD, will move to a broader policy-making role and become a special advisor on health policy to the Secretary of the Department of Health and Human Services (DHHS). Both Dr. Gerald and Dr. Engel are active members of the NCMS.

The leadership moves coincide with the Governor’s executive order encouraging agencies to consolidate and realign state government, to improve service and efficiency, according a DHHS news release.

“As we move to enact the Governor’s executive order, the focus shifts to a more integrated approach to improving the health of all North Carolinians,” outgoing DHHS Secretary Lanier Cansler said. He will be working in consultation with incoming Acting Secretary Al Delia to begin the formation of the new division.

Related articles:

State health official stepping down, 1-24-12, Winston-Salem Journal, by Richard Carver

Governor Names Delia Acting DHHS Secretary, Bulletin, 1-20-12

Special Report: DHHS Secretary Cansler Resigns, Doctor to Doctor Blog, 1-14-12

Governor Perdue named senior policy advisor Al Delia as Acting Secretary of the Department of Health and Human Services (DHHS), following the resignation of Secretary Lanier Cansler last Friday. Delia was appointed Policy Director in March 2009, after serving as president and CEO of North Carolina’s Eastern Region Development Commission, which oversees business recruitment and economic development of a 13-county region in Eastern North Carolina. Before joining the Commission, Delia spent 20 years working in economic development for the North Carolina University System. He earned a BA in Political Science from Drew University in New Jersey.

Secretary Cansler’s resignation is effective January 31, 2012. He was appointed by Governor Perdue in 2009. He served as deputy secretary from 2001 to 2005, after serving in the State House. In a prepared statement released by the Governor’s Office, Cansler said he plans to take a job in the private sector and will serve as the unpaid chairman of a state commission on affordable health care, to be named later.

DHHS is the state’s largest governmental department and oversees the North Carolina Medicaid Program. The state budget and the Medicaid program are high priorities of the NCMS Legislative Affairs Team. We will be providing updates and analysis throughout the year at http://www.ncmedsoc.org/ and in the Bulletin.   

See related story, Special Report: DHHS Secretary Cansler Resigns (1-14-12).

Published reports this week indicated that the Obama Administration is ready to require drug companies to disclose payments they make to doctors for consulting, entertainment, research, speaking and travel.  ((See U.S. to Force Drug Firms to Report Money Paid to Doctors, The New York Times, 1-16-12, By Robert Pear).  The NCMS addressed this issue in the Bulletin series on Health Care Reform more than a year ago. (See Focus on Health Care Reform: Drug Sample Reporting, Bulletin, 11-5-10).

Of primary concern is the need for accurate reporting so that any information made public is clearly understood by patients and others accessing the data. The NCMS will be working with other state and national physician groups to address this issue and ensure that physicians and practices will be able to review and revise any data before it is released to the public. If you have any questions or comments, please contact the NCMS at kfreeman@ncmedsoc.org or call 800-722-1350.

See related article: CMS Proposes Rule for Physician Financial Disclosure, Payor News, Bulletin, 12-16-11.

See also Health Reform FAQs on the NCMS Government Affairs website.

The head of the state’s largest governmental department is stepping down effective January 31, 2012.  Lanier Cansler, Secretary of the Department of Health and Human Services (DHHS), was appointed by Governor Perdue in 2009. A Republican, Cansler served as deputy secretary from 2001 to 2005, after serving in the State House.

Governor Perdue has appointed senior policy advisor Al Delia as Acting Secretary.  Her office said Friday that Sec. Cansler will be taking a job in the private sector and will serve as the unpaid chairman of a state commission on affordable health care, according to a report in The News and Observer (1-14-12, “Health agency head resigns”).

The NCMS learned of Cansler’s decision on Friday, but it was not formally announced until after the NCMS Bulletin had been published. Published reports indicated that Cansler’s letter of resignation was dated December 13, 2011.

In a prepared statement from the Governor’s Office, Cansler said DHHS had “eliminated waste and consolidated agencies – all to make state government more efficient without neglecting our core mission of serving the people.”  The decision follows the recent release of a state audit that was critical of the costs associated with a new Medicaid claims system. The audit report comes as legislators  continue to wrestle with ongoing budget deficits that are  expected to impact the budget debate when the General Assembly convenes in May.

The state budget and the Medicaid program are high priorities of the NCMS Legislative Affairs team. We will be providing updates and analysis throughout the year at www.ncmedsoc.org and in the Bulletin.

The Medicare Payment Advisory Commission (MedPAC) voted Thursday to recommend that Congress reduce Medicare reimbursement fees for office visits at hospital outpatient departments. MedPAC wants the fee structure for non-emergency offices to be the same as for services provided in a physician’s office. An assessment of the current structure shows that routine visits, consultations and preventive medicine visits that are performed in a hospital are paid at a much higher rate than when the same services are performed in a physician’s office. The recommendation comes as hospitals are hiring more private practice physicians to work in hospitals, resulting in more office visits to outpatient departments, according to a report in http://www.medpagetoday.com/.

During its two-day meeting this week, MedPAC assessed a variety of Medicare payment structures and services that included ambulatory surgical centers, outpatient dialysis clinics, hospice services, skilled nursing facilities, and long-term care. A transcript of the proceedings will be available at http://www.medpac.gov/ in a few days.

Questions concerning Medicare can be sent to kfreeman@ncmedsoc.org or call 800-722-1350 and ask for the NCMS Member Resource Center.

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.