Practice Management Alert

The Centers for Medicare and Medicaid Services recently announced a new interim final rule that will alter the payment adjustments you see. The rule with comment makes sure healthcare providers that service Medicare beneficiaries will be paid appropriately for certain health-care services.

Applied to all Part B services except those under the Medicare Physician Fee Schedule or prospective payment system, the regulation streamlines the process by which CMS can adjust payment rates that are determined to be too low or too high for services covered by Medicare. The new rule clarifies the role of the contractors that process Medicare claims, in making local "inherent reasonableness" adjustments.

The law limits these payment adjustments to a 15 percent increase or decrease in any given year and requires that contractors submit any proposed inherent reasonableness adjustment to CMS. Otherwise, the payment adjustment can't be imposed until CMS informs the contractor that notification of the adjustment was received. The new provision is designed to ensure that full consideration is give to pertinent factors before limitations are set locally.

The memo could be important for billers, but CMS often puts out influential information that it then leaves to the carrier's discretion, says Terry A. Fletcher, CPC, CCS-P, CCS, a healthcare coding consultant in Laguna Beach, Calif. There is no reason for a payer to tamper with this ruling, Fletcher says, and if left to the carriers, the rule could effectively have little impact.

As for useful applications, Fletcher predicts that it will be useful for medications, e.g., Synvisc, or nuclear medicine. Physicians use very expensive medicine, for example, for stress tests, which require pharmacological agents to perform the tests. The problem is that physicians aren't getting paid for these agents. Fletcher hopes that the new rule will make CMS examine why its reimbursement is lower than what physicians now pay out-of-pocket.

If you think that hospitals charged with noncompliance have no bearing on the physician side think again.

One of the hot topics for facility billing fraud shows how it can contaminate your physician's office.

The federal watchdog agency, the HHS Office of Inspector General, recently announced its work plan for 2003, and certain hospital investigations will include an examination of physician billing. Following up work done many years ago, the OIG's new plan indicates that they see a "disconnect" between procedure coding for outpatient services billed by the hospital (facility fee) and what the physician billed for the same service (professional component), says Bill Sarraille, an attorney at Arent Fox Kintner & Kahn in Washington, D.C. The OIG last year reported a notable error rate between the code matches, and you can bet they assume overpayments are owed to the federal government, he says.

As a response to this report and investigation, "it is very important" that facilities and physicians "coordinate" their billing decisions so each side is aware of the other's billing decisions and code selections, Sarraille says. Otherwise, the feds might find inconsistent coding and point fingers at one or both billing sides.

You could coordinate billing by simply selecting physician billing staff to convene with hospital personnel to talk about particular billing issues and coding particularities, Sarraille says.

Or, if you want a more extensive effort, you could try some sample reviews to see if procedure codes match up, even if you only investigate three or four services on a quarterly basis, he adds.

You can even request a more "systematic" coordination and suggest that the hospital staff not code until it has a dictated report from the surgeon or the physician for the service, Sarraille says. This method ensures that two different coders select codes based on the same information, he explains.

"Whatever system you select, it's an excellent idea to make sure that you have coordinated your work," Sarraille says.

Keep an eye on these other issues for physician billing because the OIG will be investigating them next year, Sarraille says.