Home Health & Hospice Week

You could see your cash flow fall into serious jeopardy starting in the new year if you have referring physicians who aren't enrolled in Medicare's PECOS system.

That's because the Centers for Medicare & Medicaid Services is subjecting home health agency claims to the same Medicare Provider Enrollment Chain and Ownership System (PECOS) edits that durable medical equipment claims are currently undergoing, as required in the Patient Pro-tection and Affordable Care Act (PPACA). The requirement is in the Social Security Act, CMS says in April 28 Transmittal No. 677 (CR 6856).

The edits will "verify the attending physician provider on an HHA claim is eligible and is enrolled and active in the Medicare program's Provider Enrollment, Chain and Ownership System (PECOS)," the transmittal says. "This means providers who are enrolled in the Medicare program must be in the PECOS in an approved or opt out status."

As with DME claims, CMS will implement the PECOS edit for HHAs in two phases. In the first phase that runs from Oct. 4 to Jan. 2, the Medicare claims system will still pay claims without a valid physician National Provider Identifier (NPI) number in the referring physician field, but will give providers an informational message that the claim isn't valid.

How you'll know: The remittance advice will include remark code N272 (missing/incomplete/invalid other payer attending provider identifier) for claims without a valid NPI. To be valid, the NPI must be in the PECOS system.

And you'd better pay attention to those remark codes. "Agencies will need to start now ensuring that all physicians they receive a referral from are in the PECOS system," says reimbursement expert Melinda Gaboury with Healthcare Provider Solutions in Nashville, Tenn.

If you ignore those informational edits because the claims still pay, you could hit a big cash drop-off in phase 2. In that phase, which starts Jan. 3, 2011, the claims system will reject claims without a valid NPI in the attending physician field.

Remember: Only physicians enrolled in Medicare can order HHA services, CMS says in the transmittal. And the ordering physician must be a doctor of medicine or osteopathy or have a podiatric medicine specialty.

The good news is that HHAs should have plenty of time to confirm PECOS status of their referring physicians before phase 2 hits, predicts Lynn Olson with Astrid Medical Services in Corpus Christi, Texas. "With the 60-day episode, the phase 1 90-day period allows the provider to cycle all their ongoing and new patients' physicians," Olson tells Eli.

Add a step: Providers check Medicare eligibility for patients before billing, Olson observes. "Now they'll need to check the physician too."

Judging from suppliers' experience so far, HHAs may have an uphill battle getting some of their referring physicians to enroll in PECOS. That's at least partly because the docs' Medicare reimbursement isn't at all affected by the enrollment.

"I don't have control over my physicians,"Carey Jinright of Precision Medical Systems in Montgomery, Ala. told CMS in a Jan. 20 home health Open Door Forum. Physician office managers who are already overwhelmed with other reimbursement concerns and regulatory burdens aren't interested in signing up for PECOS when it doesn't affect their Medicare billing, Jinright said in the forum.

Tip: To avoid triggering the PECOS edit in error, be sure you know how to fill in your referring physician's name on the claim. The edit makes matches to the PECOS list by using the physician's first letter of her first name, first four letters of her last name, and NPI. That means you can't use a nickname like "Bob" when the doc's PECOS file is under "Robert."

(For more tips to avoid PECOS edit rejections, including using CMS's physician file database to check which of your docs are enrolled in the system, see Eli's HCW, Vol. XIX, No. 5, p. 36.)

No more substitutions: HHAs hoping to avoid these edits by continuing to use their own NPI in the attending physician field are out of luck. That tactic, which CMS allowed in 2008 because many physicians hadn't yet obtained or communicated their NPIs, will "no longer be valid" when the PECOS edits begin in October, CMS says in a related MLN Matters article.

Bright side: At least the implementation date for the HHA edits has been pushed back from the July 2010 date set forth in the health care reform law. And HHAs may benefit from suppliers' efforts in this area over the last six months or so.