Doctors face risk of harsh penalties from new Medicare enrollment rules

Stricter requirements governing retroactive billing, changes of address kicked in April 1.

By — Posted April 20, 2009

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Physician practices are anticipating major difficulties with Medicare enrollment rules that went into effect amid protests from doctors and practice managers. A wrong step by a practice could mean that it loses Medicare revenue or even gets kicked out of the program altogether.

Starting April 1, the time frame under which physicians can bill retroactively for services after successful enrollment or re-enrollment in Medicare has been shortened from 27 months to only 30 days. In addition, doctors must alert contractors of a change in practice location within 30 days, or risk expulsion from Medicare for up to two years.

The policy changes appeared in the final 2009 Medicare physician fee schedule rule and were slated to go into effect Jan. 1. But the American Medical Association and the Medical Group Management Assn. convinced Centers for Medicare & Medicaid Services officials to hold off implementation while they discussed the organizations' concerns.

"Many of the changes to Medicare's enrollment process are cause for concern, and the AMA is working to improve the process so physicians can participate without disruption to their practice," said Board of Trustees Chair Joseph M. Heyman, MD.

Derise Woods, operations project manager for TeamHealth, an emergency department staffing services company based in Knoxville, Tenn., is particularly worried about the shortened retroactive billing period. Far from the flexibility of the old 27-month window, the new 30-day window is counted back from the filing date of an enrollment application that is subsequently approved.

"From a billing standpoint, this will have a great impact on our revenue," Woods said. Time is a precious commodity when it comes to providing medical services, particularly in an emergency department, she added. "You may have situations where providers will go to work before the paperwork can be provided to Medicare."

Fear of punishment

The AMA is still working with CMS to ensure that contractors are clear about the details of the new retroactive billing rule. Some potentially vague language in rule guidance has physicians concerned that not all practices will be allowed even a 30-day retroactive billing period.

Physicians who can't comply with the new retroactive billing timeline are at risk of losing payment for any services they billed before the 30-day limit. But doctors who fail to update their addresses within 30 days of moving face the potentially more costly penalty of being unable to bill the program at all for up to two years.

Leslie Witkin is president of Physicians First Inc., a consulting company based in Orlando, Fla., that provides operational assessments, auditing and other consulting services to doctors. She has heard about Medicare participants who have been afraid to update their billing information with CMS for fear that billing privileges will be revoked.

"Providers out there are trying to keep pace with a lot, and there hasn't been intent or malice on their part, and now you're cutting people off at the knees by taking their revenue," Witkin said.

The AMA is pushing for physicians once again to have up to 90 days to report a change in practice location or ownership.

The harsh penalty of revocation is familiar to Erastus Smith, MD, an internist in Sanford, N.C. He said he was burned by the Medicare program in 2008 when his billing privileges were revoked for 5½ months after it was discovered he mistakenly had been assigned two National Provider Identifiers by CMS.

The development was a huge setback for the solo physician, who estimates that 40% to 60% of his business is based on Medicare pay. As a result of losing his billing privileges, Dr. Smith said his life insurance policy was canceled when he no longer could make payments and his credit rating went down. He also had to give up his receptionist of 26 years because he no longer could afford to pay her.

Dr. Smith is once again billing Medicare, but the experience has made him exceedingly wary. He is renovating a new office space across town that he hopes to move into soon, but he's fearful that any filing error connected to the move could have results similar to last year's disaster.

The new policies "set the stage for some severe problems for physicians," Dr. Smith said. "The vast majority of physicians are bringing a certain comfort to the people we see. These plan changes make it harder for us to do our jobs and get paid."

Looking for good faith

CMS is trying to reassure physicians that it is not trying to punish practices that are acting in good faith.

"Medicare does not intend to revoke those billing privileges," said Jim Bossenmeyer, director for provider and supplier enrollment at the CMS Program Integrity Group. "However, if we were conducting on-site inspections and we determined the supplier was no longer in that practice location, then Medicare may revoke privileges."

Bossenmeyer also said physician offices shouldn't be concerned about the new retroactive billing limit, as long as they update their Medicare enrollment prospectively.

In addition, rather than rejecting incomplete enrollment applications outright, contractors should simply deny the enrollment, he added. Then the physician can send a letter to the contractor within 30 days requesting a corrective action plan, thereby ensuring that the initial filing date -- and the original retroactive billing window -- is preserved.

Nevertheless, the AMA and others are worried that physicians will be punished for delays and glitches that are not their fault. The new provisions come amid reports of continuing serious enrollment problems stemming from last year's transition from older ID numbers to NPIs.

Even before the economic recession, physicians reported that many Medicare contractors already were strained beyond capacity and incapable of handling large enrollment workloads. The ongoing Medicare Administrative Contractor transition also has exacerbated enrollment delays, physicians said.

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A matter of time

Several new rules for Medicare's enrollment process for physicians went into effect April 1. To help practices navigate the process, the AMA and the Medical Group Management Assn. have developed a Medicare Provider Enrollment Toolkit for members. It includes a list of important enrollment time frames:

15 days: A physician must submit a signed certification statement and required attachments within 15 days of submitting an Internet-based enrollment application.

30 days: A physician can file an enrollment application up to 30 days before providing services at the designated location.

45 days: A physician should not expect an Internet enrollment application to be processed in fewer than 45 days, though the process might move faster if all needed information is included.

60 days: A physician should not expect a paper enrollment application to be processed in fewer than 60 days, though the process might move faster if all information is included.

90 days: A physician must notify the Medicare contractor within 90 days if changing any enrollment information other than the data subject to a 30-day notification window.

Source: AMA, MGMA Medicare Provider Enrollment Toolkit (link)

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External links

Medicare Provider Enrollment Toolkit by the AMA and Medical Group Management Assn., for members only (link)

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