Washington - Open for Business

Washington Report - October, 2001

Bill Finerfrock

Capitol Associates

Washington - Open for Business

It would be naive to suggest that Washington, DC is the same city today that it was on September 10th. Clearly things have changed. But it would also be a mistake to conclude that the city has shut down and nothing is getting done. Congress is in session, and all government agencies are fully operational. While legislation dealing with the response to the terrorist attack on September 11th is dominating the Congressional agenda, work on other issues continues, albeit slowly.

While it is not likely that Congress will still be in session when HBMA members convene in Washington in December, it is quite apparent that the issues of concern to the HBMA membership will be a long way from being resolved. During the meeting, a complete update on Washington issues will be presented to the attendees and various representatives of important government agencies will speak about issues important to the third party billing community.

It is particularly significant that Tom Grissom, Director of the Center for Medicare Services will be speaking at the Fall meeting. In addition to presenting important information on the Medicare program, Mr. Grissom is interested in hearing about your experience with Medicare and any suggestions you might have for improving the program.

On October 15th, work on Capitol Hill was disrupted temporarily as a result of Anthrax being discovered in a letter sent to Senate Majority Leader Tom Daschle (D-SD). Subsequently, over 30 Congressional staff were determined to be “exposed” to the Anthrax bacteria but none had actually contracted the disease. These staffers, as well as all individuals who had been in the Hart Senate Office building within 24 hours of the discovery of the Anthrax, were encouraged to get tested and begin a three day prophylactic treatment with Cipro. HBMA Washington Representative Bill Finerfrock was in the building in the vicinity of Senator Daschle’s office and was therefore among those tested.

Other than changed procedures for the delivery of mail and heightened security surrounding admission to the Capitol complex of buildings, Congress and Congressional staff are expected to be fully accessible to the public.

New 855 Forms Available Soon

The Center for Medicare and Medicaid Services (CMS) Announced that new Medicare Enrollment Forms (Form 855) will be available for download from the CMS website on October 26th. Providers should begin using the new forms on November 1st. Separate forms will be available for Individual providers, Group Practices, Institutional Providers and DME. There will also be a separate Form 855R for reassignment of claims.

The current forms will still be accepted until December 31, 2001. After that date, only the new forms will be acceptable. Also, effective January 1, an electronic version of the form will be available. HOWEVER, while you will be able to complete the new form on-line, you will not be able to submit the form, on-line for several more months. According to Bob Loyal, Director of the CMS Division of Provider/Supplier Enrollment, the on-line forms will have to be printed and then submitted in hard copy for at least the next 10 months. It is hoped that by that time, the system will be modified such that you will be able to submit the forms electronically.

In addition to the new forms, CMS is imposing new standards on their contractors with respect to the completion of the applications. The new standards are that 90% of all applications are to be completed by the Contractor within 60 days and 99% of applications completed within 120 days. Failure of the Contractor to meet this standard could have financial consequences, as well as affect the ability of the Contractor to retain the contract. Where possible, the Contractors are being directed to contact - by phone - the providers or their identified contact, to resolve any problems with the forms. In addition, they are being directed to resolve all problems at once rather than dealing with them one-at-a-time. It has not been uncommon for a Carrier to contact a provider via mail to clarify a particular portion of the 855 Form, receive the corrections from the provider, then turn around and send the application back to the provider to correct additional problems.

The forms will be available on-line at:

If you experience problems or have a Contractor that is being obstructive or unresponsive, CMS wants to hear from you. You are encouraged to contact the CMS regional office for the state where the problems are arising. The name and phone number of the CMS regional office contact on enrollment issues can be obtained by going to:

and clicking on the state. You will see contacts for the Carrier, Intermediary, and Regional office. In addition, HBMA would like to know if you are experiencing any problems. If you have difficulties, you are asked to e-mail Bob Burleigh at:

Medicare Administrative Reform Legislation Makes Progress

Two House Committees have recently approved important legislation reforming the Medicare contracting procedures for Carriers, Fiscal Intermediaries and other contractors. The two separate, but similar bills make important reforms in the government’s efforts to detect Medicare fraud and abuse and create new procedures and requirements relative to Medicare audits. The Senate appears likely to adopt similar reforms.

The legislation adopted by the Congressional Committees: the Medicare Regulatory and Contracting Reform Act of 2001 (H.R. 2768) approved by the House Ways and Means Committee and the Medicare Regulatory, Appeals, Contracting, and Education Reform Act of 2001(H.R. 3046) approved by the House Energy and Commerce Health Subcommittee. These bills represent the latest versions of a legislative proposal originally referred to as the Medicare Education and Regulatory Fairness Act (MERFA). That bill, while generating considerable grass roots support, incurred significant opposition from a bipartisan coalition of Congressional leaders.

As previously reported, in early August, Representative Nancy Johnson (RCT) introduced H.R. 2768. This bill was cosponsored by every member of the Ways and Means Health Subcommittee of which Rep. Johnson is the Chair. This was written up in the September Washington Report.

On October 9th, the Health Subcommittee adopted a modified version of H.R. 2768 and on October 11th, the full Committee approved the bill by voice vote after approving an amendment by Committee Chairman Bill Thomas (R-CA). If you would like a copy of Chairman Thomas’

substitute, it can be obtained by going to:

waysandmeans.house.gov/fullcomm/107cong/hr2768/hr2768fcsub.pdf

The document is in PDF format.

Much of the bill as reported in September was unchanged but there were some new wrinkles that should be noted.

The following are some of the major changes made in the bill prior to approval. These are a combination of changes made at either the Subcommittee or Full Committee level.

1. When the bill was originally approved by the Health Subcommittee, the proposal stated that if a provider appeals an overpayment accusation to the Administrative Law Judge (ALJ) level of appeal, recoupment of the overpayment would be delayed until a decision is made by the ALJ. If the provider is found to have received an overpayment, the provider must repay the amount, with interest, to the Medicare program. If the provider continued the appeal beyond the ALJ level and was subsequently found to have not received an overpayment, the Medicare program must repay the provider, plus interest. During full Committee consideration, the delay in payment was changed so that recovery would begin after “reconsideration at the Qualified Independent Contractor level” of appeal rather than through the ALJ level.

2. Creation of a Beneficiary Ombudsman. The original bill called for the creation of a Provider Ombudsman, this bill retains that position and also creates a Beneficiary Ombudsman as well.

3. Deletion of the provision in the original bill dealing with the ability of providers to submit appeals on behalf of deceased beneficiaries.

4. Adds an "extreme hardship" category to the repayment section of the bill that allows for repayment to occur over a 5 year period rather than 3 year period, in cases of "extreme hardship".

The Senate has yet to release its recommendations and any final bill must resolve any differences between the various versions. However, of all the Medicare issues under consideration, this particular issue appears to be the closest to being resolved.

Medicare Benefit Reform Stalls

While Congress is making progress on a bipartisan package of administrative reforms, the same cannot be said with regard to benefit reforms. For example, while a significant bipartisan majority in Congress continues to favor adding a prescription drug benefit, the exact nature of that benefit and its cost to both the government and the consumer are nowhere near being resolved.

Congressional leaders also seem to be in agreement that payments to Medicare + Choice health plans should be raised and payment reforms for rural providers (hospitals, clinics and physicians) are needed. As with the prescription drug benefit, major disagreements over the size and shape of those reforms remain.

Finally, the need to put more money into military and domestic agencies dealing with the September 11th terrorist attacks means that less money is available to put into reforming the Medicare program.

It is appearing increasingly likely that consideration of any major benefit reforms will have to wait until next year (2002).

HIPAA Transaction Standards Still on Track

Various insurers, working with a small group of elected officials, have been attempting to delay the effective date of the transaction standards mandated by the Health Insurance Portability and Accountability Act of 1996 (HIPAA) . HBMA and other organizations have been resisting this effort. Legislation to delay the effective date appeared to be gaining some momentum in Congress until groups like HBMA, the American Hospital Association, the Association of American Medical Colleges, the Federal of American Hospitals, and AFEHCT all expressed their strong opposition to delay.

Shortly after HBMA and others sent letters to key Congressional health leaders outlining their opposition to delay, those leaders announced their firm belief that the deadline for compliance should move ahead as planned.

In an October 1 letter sent to the Chairman and Ranking Members of each of the key Congressional Health Committees, HBMA president Vic Glorioso made it clear that HBMA felt the transaction standards should not be delayed. Glorioso’s letter stated, “...we want to express the belief that you should allow the transaction standards to proceed ahead as planned. While there may be issues relative to some of the other HIPAA mandated requirements, we see no legitimate reason for delaying the implementation of the transaction standards.” Glorioso went on to state, “The current system is untenable. Physicians are being burdened by more and more paper and electronic billing requirements. Delay is in no one’s interest except those with an economic interest in supporting the current plethora of diverse requirements.” On October 4th, just days after receiving the HBMA letter, Ways and Means Committee Chairman Thomas and Health Subcommittee Chair Nancy Johnson , along with the Ranking Democrats on the Committee and Subcommittee (Charlie Rangel (D-NY) and Pete Stark (D-CA) respectively), released a statement opposing any delay.

On October 10th, Bill Finerfrock, HBMA Washington Representative, met with CMS Administrator Tom Scully to discuss a variety of Medicare and Medicaid issues. One of the first topics of discussion was CMS’s reaction to a possible delay in the effective date for the transaction standards.

In response to a question, CMS Administrator Scully agreed that delaying the transaction standards was not the answer. He said that as CMS Administrator he had some new found concerns about the agency's ability to be ready to implement in a year but that if Congress moved to delay, who knew when they would get it done. Scully did suggest, however, that there could be a need for some brief delay to give folks some additional time to be ready (he said perhaps 6 months). He suggested that if some small delay was in fact necessary, CMS should do it via administrative procedures rather than getting Congress involved. There is strong consensus among those organizations opposed to delay that if Congress stepped into this issue, it could be five years or more before the transaction standards got back on track and at the end of those five years, opponents would still have the same concerns.

At this time, it does not appear likely that Congress will move to delay the effective date of the transaction standards.

OIG Announces Workplan for 2002

The Department of Health and Human Services Office of Inspector General (OIG) has announed their workplan for CY 2002. Included in this workplan are a number of studies of interest to the third-party billing community.

1. CMS Oversight of Contractor Evaluations - OIG wants to evaluate the ability of CMS to evaluate Contractor performance. Although this sounds like something out of the office of redundancy, it could be useful in determining whether CMS can assess whether their contractors are doing a good job.

2. Contractor Fraud Control Units - OIG wants to study Medicare contractor fraud units and identify those factors that both contribute to successful Program Integrity programs, as well as those factors that inhibit the ability to develop and implement an effective program. This is a follow-up of previous studies that looked at this area.

3. Provider Education and Training - This analysis will look at Medicare Carriers’ provider education and training efforts. Are they effective?

No More Medicare Pre-Payment Review

During a recent conference call with Representatives of national health care organizations, CMS officials confirmed that Carriers are no longer being directed to conduct random prepayment reviews on Medicare claims. Instead, all reviews will be postpayment. If there are reasons to suspect problems, then Carriers will conduct prepayment reviews. This new policy only applies to random prepayment reviews.

Many in Congress have expressed concern to CMS about the policy of random prepayment audits when there is no reason to believe that the provider is engaged in any type of inappropriate activity. No written verification of this new policy is available. If you encounter what you believe are random prepayment audits, you are encouraged to contact the HBMA Washington office.

Medicare Contractors Can Release Certain Info

On September 26th, the Center For Medicare and Medicaid Services released a Program Memoranda (PM AB-01-137) which clarifies the policy regarding the release of individually identifiable Medicare beneficiary information.

Many providers have attempted to determine whether a patient was covered by traditional Medicare or had enrolled in a Medicare + Choice health plan. Many Medicare contractors would not respond to a telephone inquiry seeking to determine the beneficiary’s status.

This PM clarifies that Medicare Contractors may “release eligibility information over the phone to providers”. Prior to releasing the information, the Contractor is to validate the provider’s name and provider number and obtain the following information:

• beneficiary last name and first initial
• beneficiary date of birth
• beneficiary health insurance claim number
• beneficiary gender

Contractors have been directed that the information must match exactly!

Medicare - New System of Records moving ahead

On October 11th, the Center for Medicare and Medicaid Services (CMS) announced in the Federal Register that plans were moving ahead to implement a new System of Records (SOR) for Medicare enrollment. The new SOR, titled the Provider Enrollment Chain and Ownership System or PECOS .

PECOS is the system that will be used to collect and maintain provider/supplier enrollment information contained on the 855A, 855B, 855I, 855R and 855S forms. PECOS will maintain information on ownership, chain/home offices, delegated representatives, billing arrangements, clearinghouses submitting electronic claims and other important information.

To read more about the PECOS system, go to:

and click on the Center for Medicare and Medicaid Services section on Privacy Act Systems of Records. You have the option of viewing the document in either “text” or “PDF” format.

Individuals interested in commenting on this new system are encouraged to contact CMS. The contact name and address are included in the Federal Register notice. Public comments will be accepted for 40 days from the date of the publication of the Federal Register notice. If you do comment, HBMA would appreciate receiving a copy of those comments.

Useful Contacts For Medicare and Medicaid

General

Physicians’ Regulatory Issues Team (PRIT)

Medicare Learning Network

Centers for Medicare &