Medicare Compliance & Reimbursement

This summer, Medicare carriers will be doling out checks to physicians whose January and February claims get snagged by the new fee schedule, but it’ll hardly count as Christmas in July.

In a deal hammered out late in the evening of Feb. 10, House and Senate negotiators agreed to ditch the 4.4-percent cut in the physician fee schedule. In fact, the deal they struck will increase the payment rate by 1.6 percent. While Capitol Hill and physicians nationwide were trying to figure out a fix, the Centers for Medicare & Medicaid Services was trying to figure out how to deal with the switch in rates.

The problem is that claims filed for services provided in January and February — before the planned March 1 implementation of the new schedule — likely won’t be paid until after the change takes effect. That means physicians will be paid for January and February services at the 2003 rate, when they actually should receive the 2002 rate, CMS notes in Feb. 3 program memo B-03-011.

And under the new deal, the 2003 rate will actually be higher than the 2002 rate, which will result in the physician receiving an overpayment. Don’t think the government is going to let that slide — doctors can count on the carriers coming back to collect the extra cash.

To remedy the problems that will accompany the rate switch, CMS has instructed carriers to complete a “mass adjustment” in July. “Standard System Maintainers must make systems changes to automatically adjust in July, claims with dates of service January 1 through February 28, 2003, processed after March 1, 2003. These claims must be adjusted to pay at the 2002 rates. Pay interest if applicable.

Recover any overpayments if applicable resulting from the mass adjustments,” the PM says.

Of course, claims submitted and paid before February 28 won’t present any problem at all, notes consultant Patricia Trites with Healthcare Compliance Resources in Augusta, MI. “The problem(s) come when a provider submits his/her claim for a service dated between Jan. 1 and Feb. 28 after Feb. 28, which happens all the time,” she explains. This also will apply to claims submitted before the end of February that are held up in the system for one reason or another.

Since carriers likely won’t make these adjustments in “real time,” thereby avoiding a mass adjustment in July, physicians “that are paid incorrectly will either get more money, or will have an overpayment for which they will receive a demand letter,” Trites explains.

What Physicians Can Expect

This is going to be a “bookkeeping nightmare” for physician practices, says consultant Crystal Reeves with The Coker Group in Roswell, GA. Reeves worries that carriers won’t catch every affected claim, and physicians will end up not receiving the money they deserve.

That means physician practices must stay on top of those claims to ensure they’re ultimately paid correctly. Practices need to “proactively decide how they’re going to isolate those services, how they’re paid, and what they’re owed,” says Reeves.

Another problem spot for practices will be the interest paid on originally under-reimbursed claims, worries consultant Robyn Lee with Lee- Brooks Consulting in Chicago. This will cause a huge mess, she laments, since interest is tricky when it comes to accounting.

According to the Q&A document, CMS will “pay the interest based on the current rate at the time the claim is processed … For the first quarter of 2003, the rate is 4.250 percent.”