Medicare Compliance & Reimbursement

Plus: CMS continues with competitive bidding for DME

Transition to the ICD-10 diagnosis coding system may not just be a practical headache -- it could also cost you a small fortune.

On Aug. 15, the Department of Health & Human Services announced its proposal to replace the ICD-9 codes with the ICD-10 series effective Oct. 1, 2011. Not only would the new code set completely overhaul your claims systems, software, and superbills -- but it could require vast training and significant outlay for your practice.

An Oct. 8 study by Nachimson Advisors, LLC indicated that switching from the ICD-9 system to ICD-10 would cost a "typical small practice" (up to three physicians and two administrative staffers) $83,290. A medium-sized practice (with 10 providers, a full-time coder, and six administrative staffers) would incur approximately $285,195 in costs for the transition, and a large practice (with 100 providers, 64 coding staffers, and six administrative members) would take a $2.7 million hit.

To read Nachimson Advisors' entire study on the issue, visit the Web site http://nachimsonadvisors. com/Documents /ICD10%20Impacts %20on %20Providers.pdf.

In Other News

• If you've ever been confused about how CMS sets fees and determines payment amounts, MedPAC has an answer for you.
  The Medicare Payment Advisory Commission (MedPAC) released its "Medicare Payment Basics" series, which discusses the specifics of payment rules for physician services, outpatient therapy, skilled nursing facilities, and other providers.
  According to the document, "Under the fee schedule payment system, payment rates are based on relative weights, called relative value units (RVUs), which account for the relative costliness of the inputs used to provide physician services: physician work, practice expenses, and professional liability insurance (PLI) expenses.
  
• Upcoding service levels just bit one physician right in the wallet. Kentucky-based ophthalmologist Harry Stephenson, MD, and his wife Catherine Stephenson have agreed to pay $461,893 back to the government after being accused of submitting false claims to Medicare between 2001 and 2006.
  According to a September OIG press release, the Stephensons improperly billed Medicare for a higher service level than the documentation supported and used false dates of service to collect more from Medicare than they were entitled to.
  In addition to the financial impact, Stephenson entered into a five-year Individual Integrity Agreement with the OIG, allowing the OIG to monitor his day-to-day compliance activities. Stephenson must retain an independent company to review and audit his billing practices on a regular basis and his wife will be excluded from Medicare, Medicaid, and other Federal health programs for two years.
   To read more about the case, visit www.usdoj.gov/ usao/kyw/press_releases/PR/20080905-1.html.
• CMS continues to move forward with competitive bidding for DME despite everyone's belief that the program was dead in the water.
  CMS is calling for nominations for the Program Advisory and Oversight Committee (PAOC) on durable medical equipment (DME) bidding.
  "Medicare is committed to making sure that beneficiaries and taxpayers get the highest value for their health care dollars, and evidence from pilot projects has proven that competitive bidding for certain types of DMEPOS items and services can be a major tool in achieving that goal," CMS Acting Administrator Kerry Weems said in a release.
  CMS is ending the current PAOC members' terms because the Medicare Improvements for Patients and Providers Act delayed bidding and extended its implementation timeline, the agency says.