April 22, 2013

Physicians who refer or order services for Medicare patients must be enrolled in PECOS, the Medicare Provider Enrollment, Chain, and Ownership System database, and physicians who bill Medicare are required to list the name and National Provider Identifier (NPI) of the ordering/referring physician on their claims in order to be paid.  The source of these requirements is Section 6405 of the Affordable Care Act.

CMS is about to implement an automatic edit so that claims submitted on or after May 1^st for certain services ordered by a physician or healthcare provider who is not enrolled in PECOS, even if his or her name and National Provider Identifier (NPI) are on the claim, will be denied.  This change may affect a relatively small but important set of anesthesiologists, who have raised questions about the issue.  As part of the pre-operative evaluation of surgical patients, anesthesiologists may order clinical laboratory or even imaging studies.

The new edits are of particular significance to academic medical centers and other facilities in which anesthesia residents or fellows order lab or imaging services (or for that matter durable medical equipment or home health care, which are not relevant to our specialty).  These centers may continue to use the name and NPI of the teaching anesthesiologist if unlicensed residents order labs, but if states provide provisional licenses or otherwise permit residents to order and refer services, CMS will allow interns and residents to enroll to order and refer, consistent with state law.  (Note: although nurse practitioners, certified nurse midwives and physician assistants and certain other nonphysician providers are eligible to order services for Medicare patients, neither nurse anesthetists nor anesthesiologist assistants are on the eligible list.)

The CMS requirement has been in effect since 2009.  In 2010, Congress passed a statutory provision to require physicians who order or refer to enroll in Medicare and to list their NPI on all such claims, but until now the consequences of noncompliance were limited to warning letters.  Effective May 1^st, CMS will turn on the edits that will deny claims and will indicate the reasons using the following codes:

The American Medical Association, the Medical Group Management Association and the specialty societies successfully sought to delay implementation of the edits since many physicians had not enrolled in the cumbersome PECOS program.  As the denials begin, CMS has made some important changes to its original proposal, including the following:

• Referrals to physician specialists are excluded from the final rule.  The technical components of lab and imaging services, but not the professional components, are covered.
• Physicians who just order Part D or B drugs are excluded from the final rule.
• If a state allows a medical resident who has a provisional license, or is otherwise permitted by state law to practice or order and certify services, CMS will permit the resident to enroll in Medicare to order and certify, at the discretion of the resident’s institution.

Actions to Take if You are a Physician who Orders or Refers for Imaging or Clinical Laboratory Services:

• Ensure that you are enrolled in Medicare now to avoid claim rejections:

• Check the Ordering Referring Report and if you are on that report, you have a current enrollment record in Medicare and it contains your NPI; or
• Contact your designated Medicare contractor and ask if you have an enrollment record in Medicare and it contains the NPI; or
• Use Internet-based PECOS to look for your Medicare enrollment record (if no record is displayed, you do not have an enrollment record in Medicare).  If you will be using Internet-based PECOS, please visit the Medicare provider/supplier enrollment web page to learn more about the web-based system before you attempt to use it.
• If you do not have an enrollment record in Medicare, you will need to submit either an electronic application through the use of internet-based PECOS or a paper enrollment application to Medicare.

• Retain records related to orders or certifications for seven years. There is no requirement regarding the manner of record retention (i.e. electronic or paper).

For further information on this very technical Alert, please consult the Medicare web sites noted above and the MGMA-AMA Ordering/Referring Fact Sheet.  ABC clients who are affected by the new edits are urged to contact their account managers for assistance.

With best wishes,

Tony Mira
President and CEO