June 1, 2010

1. Medicare Payment Cut?

Today, June 1st, is the date that the 21.2 percent un- Sustainable Growth Rate (SGR) reduction in Medicare payments to physicians is going to go into effect. Once again Congress is trying to pass legislation that will give physicians a very small increase for now and defer solving the SGR problem until a later date – 2014, under the American Jobs and Closing Tax Loopholes Act of 2010 (H.R. 4213). The Senate adjourned without taking up the bill, however; it will return on June 7th.

As has happened each time that we’ve approached the deadline before, CMS has announced that it will hold claims for services provided on the effective date of the cut and during the following nine business days, to give Congress time to pass the legislation that would postpone the SGR cut. This time claims will be held through June 14th.

On Thursday May 27th, CMS sent out the following notice on its physician payment listserv:

The Continuing Extension Act of 2010, enacted on April 15, 2010, extended the zero percent (0%) update to the 2010 Medicare Physician Fee Schedule (MPFS) through May 31, 2010.  The Centers for Medicare & Medicaid Services (CMS) believes Congress is working to avert the negative update scheduled to take effect June 1, 2010.  To avoid disruption in the delivery of health care services to beneficiaries and payment of claims for physicians, non-physician practitioners, and other providers of services paid under the MPFS, CMS has instructed its contractors to hold claims containing services paid under the MPFS (including anesthesia services) for the first 10 business days of June.  This hold will only affect MPFS claims with dates of service June 1, 2010, and later.

This hold should have minimum impact on provider cash flow because, under the current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt.

There are 18 Medicare Fee For Service provider listservs. To subscribe to one or more of these listservs, go to: www.cms.hhs.gov/prospmedicarefeesvcpmtgen/downloads/Provider_Listservs.pdf.

2. More CMS Clarifications to the Hospital Interpretive Guidelines for Anesthesia Services

Our May 10 Alert discussed the December 2009 and February 2010 revisions to the anesthesia services section of the Interpretive Guidelines that elaborate on the Medicare Conditions of Participation for hospitals.  Many readers are by now quite familiar with the difficulties created by the rewrite of these Interpretive Guidelines.  We indicated in the hyperlinked Alert that ASA was seeking to have CMS correct some of the more problematic innovations.  The conversations between ASA and CMS have begun to bear fruit.  In a May 21st update to the Interpretive Guidelines manual.    CMS made the following important changes:

• The supervising anesthesiologist is “immediately available” if in the same procedure suite or L&D suite.  In states that have not opted out of the Condition of Participation requiring supervision of nurse anesthetists, the hospital Interpretive Guidelines (as well as the anesthesia medical direction payment rules, independently) require that the anesthesiologist be “immediately available” while supervising CRNAs or AAs.  The earlier version of the Interpretive Guidelines spoke of being in the same labor and delivery unit, or in the same procedure room.”
• For outpatient surgery, the post-anesthesia evaluation does not need to be completed before discharge.  It must still be completed within 48 hours from the time that the patient arrives in the recovery area.

The announcement of these clarifications on the ASA website concludes with the statement: “According to an Agency official, this transmittal represents a minor, preliminary clarification. Hence, further clarification from future transmittals may be forthcoming. ASA will continue to work with CMS to address ongoing concerns.”

Note that an ASA ad hoc committee has created an unofficial set of templates and resources to help anesthesiology departments comply with the Interpretive Guidelines and thus be better prepared for the next TJC survey. The set, which is available on the Members-only page on the ASA website and which does not necessarily represent ASA policy, includes the following:

• Scope of Anesthesia Services Policy
• Director of Anesthesia Services Policy
• Policies and Procedures Governing Anesthesia Privileging in Hospitals
• Pre Anesthesia Evaluation Policy
• Pre Anesthesia Evaluation Note
• CMS Pre Anesthesia Evaluation Form
• Intraoperative Anesthesia Record Policy
• Post Anesthesia Evaluation Policy
• Post Anesthesia Evaluation Note
• CMS Post Anesthesia Evaluation Form

ASA members who register at www.ASAhq.org can download the templates and sample policies.  Others are advised to work with one or more ASA members to obtain and adapt the materials.

3. CMS Makes Small Adjustments to PQRI Bonus Payments for 2008

So many physicians questioned the amount of the bonuses they received for successfully participating in the 2008 PQRI program that CMY took a careful look and identified inaccuracies in counting claims submitted for reconsideration or on which Medicare was a secondary payer.  In its notice, CMS said, “Although the amount of the inaccuracy was overall small, it affected a large portion of eligible professionals who satisfactorily reported for 2008 PQRI. In the vast majority of cases the resultant incentive payment adjustment is very small.”

Also according to the CMS notice, the Medicare contractors should have finished processing the adjusted payments by May 21st.  You will be able to recognize any such adjusted PQRI incentive payment by specific language on paper checks.  “If you receive electronic remittances, look for provider adjustment reason code “LE” in the PLB 03-1 segment, and PQ08 in the PLB 03-2 segment, on the 835P to alert you that the incentive adjustment payment is for the 2008 PQRI. (The monetary amount will be in the PLB04 segment of the 835P.”

Finally, CMS indicates that it plans to publish a 2008 experience report that “will detail the program results for 2008 including results of the inquiry process.”

4. The June 1st Deadline for Compliance with the Red Flag Rules is Postponed Again

June 1st was to have been the final deadline for physicians and other entities that extend credit (by providing services and then billing the patient) to comply with the Federal Trade Commission’s “Red Flag Rules,” which require the implementation of identity theft prevention programs.

The FTC announced on May 28th, however, that it would extend the deadline again, this time until December 31, 2010. Several Members of Congress had requested the delay because the Senate has still not taken action on legislation that would exempt some businesses from the Red Flag Rules. (The bill, H.R. 3763, passed unanimously in the House of Representatives in October 2009.)

The identity theft programs mandated by the Red Flag Rule are scalable to the nature and size of the organization.  They must include “reasonable” policies and procedures to identify relevant Red Flags that could signal problems, to detect Red Flag incidents and to respond appropriately to any Red Flags that are in fact detected. For further information on the Red Flags Rule, see our Alert dated March 30, 2009.

The compliance deadline was originally November 1, 2008.  It has now been delayed five times as a result of lobbying by various interests including organized medicine, which objected to the inclusion of physicians among the “creditors” covered by the Red Flag Rules. The AMA, together with the American Osteopathic Association and the Medical Society of the District of Columbia filed a lawsuit on May 21st to block the application of the Rule to physicians.

We all hope that the lawsuit will succeed and that physicians will be exempted from this regulatory burden, which strikes some of us as coming from left field (if not the bleachers).  Meanwhile, though, like the AMA et al., we are advising compliance if and when the Rules finally do become effective, and we will assist our clients in meeting the Red Flag Rule requirements with as little disruption as possible.

You may expect to read more on all of these subjects as they evolve.  We hope that today’s update has been useful to you.

Sincerely,

Tony Mira
President and CEO