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Archive for June, 2010

Physician Pay Fix Passes

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

Late yesterday, the House of Representatives passed a 6-month fix to the Medicare Physician Fee Schedule. The legislation passed not only reverses the 21.3% pay cut that affected claims with dates of service from June 1st, but also provides for a 2.2% increase to the previously determined fee schedule for 2010. This enhancement in pay will now be in effect for all claims with dates of service between June 1 and November 30, 2010.

The legislation that originally contained the pay fix was returned to the Senate for consideration by House Speaker Nancy Pelosi on Friday June 18th. In addition to the pay increase, the larger bill contained extensions of unemployment benefits and supplemental payments to the states to augment Medicaid programs. Senate Majority Leader Harry Reid spent the second half of yesterday afternoon attempting to garner the 60 votes needed to advance the legislation to a full vote on the floor. Ultimately, his efforts failed when the cloture vote tally of 57-40 doomed the bill. Minutes after the Senate vote, the House, by an overwhelming majority, passed the breakaway bill containing the pay fix that was sent to them late last week. The legislation was signed this morning by President Obama.

CMS has been processing claims with a 21.3% cut for the last 5 working days.  It is expected that CMS will soon announce that claims are now going to be processed at the pay fix rate. Any claims that have been processed over the last week will need to be reprocessed at the new, higher rates absent the previous cut.

While this legislation brings the latest chapter in this drama to a close, the story will begin anew as December 1st approaches. If either another temporary remedy affecting the fee schedule or a permanent fix to the Sustainable Growth Rate (SGR) formula is not passed prior to this date, physicians will face a 23% across-the-board cut in reimbursement.

I invite you to look very carefully at the mathematics involved with this. The conversion factor for 2010 was frozen at the beginning of January at 36.0846. Due to the larger health care reform legislation passed earlier in the year, the conversion factor was decreased for all 2010 claims to 36.0791. This did not affect claims already processed, but if you have recently submitted claims to your contractor for dates of service from early 2010, you may have noticed that the payments are decreased by a few pennies from how similar services were processed in the beginning of the year. The 2.2% increase now in effect applies to the lower, updated conversion factor.

While the latest conversion factor for the six-month period has not been released as of yet, a 2.2% increase to 36.0791 gives you a number in the neighborhood of 36.8728. Now, let’s suppose for purposes of envisioning the worst-case scenario that a 23% cut goes into effect on December 1st. This cut would be applied not to the temporary conversion factor, but the legislated conversion factor of 36.0791, which would give you a conversion factor closely resembling (again, not exact due to a lack of CMS announcement at the time of this writing) 27.7809.

The conversion factor is slated to take a further hit at the beginning on 2011, which would result in reductions that would bring the total net cut very close to the 30% range. Words have yet to be devised that would fully describe the negative impact on the healthcare delivery system in the United States that occurs if such a cut ever takes place.

For now, enjoy the summer sun and bask in the beauty of Autumn’s color when it arrives, as it could very well be a winter longer than any other we’ve ever experienced.

June 25th, 2010 | 1 Comment »

No News Is, In Fact, No News

Posted by J. Paul Spencer, CPC, CPC-H in In the Press, J. Paul Spencer, CPC CPC-H, Medicare Fee Schedule

When last we left the legislative world as it relates to the 21.3% cut in the Medicare Physician Fee Schedule on Friday the 18th, the passage of a 2.2% pay increase was sent to the House of Representatives as a stand-alone bill ticketed for what was hoped to be immediate passage. Unable to hold claims any further due to statutory limitations, CMS ordered contractors to begin processing claims with dates of service of June 1st, 2010 and after with the 21.3% cut applied. It was also recognized that the earliest the House would vote on the Senate bill was Tuesday (yesterday).

This past Saturday, House Speaker Nancy Pelosi (D-CA) made it very clear that she was not inclined to pass the Senate bill unless it is part of a larger measure similar to what the House passed in late May. It appears from a cursory look at the House calendar for yesterday and today that Pelosi was not bluffing. Yesterday’s legislative session in the House was dedicated to such weighty issues as a recognition of National Caribbean-American Heritage Month and a discussion of a resolution supporting National Men’s Health Week. Today’s calendar continues the focus on just the sort of topics that should shoot straight up to the top of the legislative calendar when there is near-10% unemployment, two wars and the looming threat of Medicare patients not receiving medical treatment: a discussion of the Formaldehyde Standards for Composite Wood Products Act and the Congressional Award Program Reauthorization Act (who would want an award from these people?). Sixteen other bills and resolutions are on the House calendar for today, and the Senate pay fix bill is not one of them.

Here’s a tip for the House of Representatives: the best way to insure that National Men’s Health Week comes off as a success is to make sure that men, and indeed all people, of Medicare age do not have their relationship with their physician threatened by a 21.3% percent cut in the doctor’s reimbursement.

I’ll continue to monitor the ongoing and oh-so-important work of Congress as the payment apocalypse continues. For now, as the headline says, there is indeed no news on this front.

June 23rd, 2010 | 1 Comment »

Physician Pay Cut Currently In Effect

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H

When the U. S. Senate adjourned last night at 8:38 PM EDT, it did so without passing emergency legislation to delay a 21.3% cut in the Medicare physician fee schedule.

The bill under consideration last evening, which also included an extension of long-term unemployment benefits, was defeated on primarily on a straight party line vote. Following the vote, Senate Majority Leader Harry Reid (D-NV) attempted to bring a bill to the floor for a vote that addressed only the physician pay cut. This bill would delay the pay cut until the end of 2010. Minority leader Mitch McConnell (R-KY) raised an immediate objection to the bill being brought up for debate, and the Senate adjourned until this morning.

A look at the executive schedule of business for the Senate today shows that no legislation is scheduled to be brought up for debate.

Fi-Med will be following this story as it develops throughout the day. This post will be updated immediately upon release of new information regarding a possible fix to this situation.

UPDATE: [2:18 PM EDT, 6/18/2010]: The Senate has passed legislation that delays the 21.3% pay cut for a six-month period. Because this bill is now a new piece of legislation, it must be returned to the House of Representatives for approval. Apparently, the House is unable to take up the legislation until next week. Moments after the bill passed the Senate, CMS issued a statement saying that claims processing will begin today at the lower pay rate. By law, CMS has run out of options with regard to delaying claims processing any further.

One good piece of news comes out of this. When the bill is passed by the House, all claims with dates of service between June1st and November 30th, 2010 will be subject to a 2.2% increase in the fee schedule that has been followed in the first 5 months of this year.

So to recap, this is a 21.3% cut, followed by reprocessing that repays the cut, plus 2.2%.

A curiosity in all of this is that the AMA is stating that after the cut is eliminated, CMS will only automatically reprocess claims when the submitted charges are higher than the reinstated allowed amount. Those claims with charge amounts that are lower than the new rate will require contact with the contractor.  When the cut is reversed, this needs to be watched carefully.

June 18th, 2010 | No Comments »

CMS Claims Hold To Continue

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, In the Press, J. Paul Spencer, CPC CPC-H

Due to what is considered the pending passage of legislation that will once again set aside the scheduled 21.3% pay cut to the Medicare Physician Fee Schedule, CMS has taken the unprecedented step of extending the current hold on processing of claims, which was set to expire today, through this Thursday, June 17th.

This current hold affects services from June 1st, 2010 and after. If for some reason legislation is not passed by Thursday, the claims hold will be lifted on Friday and claims will be processed with the cut.

June 14th, 2010 | No Comments »

Another Deadline To Pass on Physician Pay Cut

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H

The office of U. S. Senate Majority Leader Harry Reid (D-NV) has been quoted by an industry source as saying that legislation currently in the Senate that would further delay the 21.3 % Medicare physician fee schedule cut will not be considered prior to the next dealine for the cut to take effect.

The pay reduction was originally scheduled to be implemented on June 1st. CMS is currently holding claims for the first 10 working days of June, which is delaying the cut until this coming Monday, June 14th. Senator Reid’s office has stated that no votes are scheduled on the pending legislation either tomorrow or Monday, as senators will be visiting their home states during this time.

The earliest a vote could be cast on the legislation would be Tuesday, June 15th. In the recent past, when faced with a similar deadline, Congress requested that CMS not release claims for payment until the legislation could be considered and sent to the president for his signature. Given this history, I am of the opinion that this legislation will be reviewed and passed upon the Senate reconvening on Tuesday the 15th. The only way to be certain of this outcome is to stay tuned.

The legislation currently on the table provides for a 2.2% payment increase for the remainder of 2010, followed by a 1% increase in 2011. The current oft-delayed pay cut would be restored in 2012, more than likely at a deeper percentage rate, unless a permanent fix to the Sustainable Growth Rate is implemented prior to 2012.

June 10th, 2010 | No Comments »

Minimizing The Risks of a Practice Purchase

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, J. Paul Spencer, CPC CPC-H

“Where do you see yourself five years from now?”

I’m sure that at least once in your life, you’ve been asked this question. Maybe it was your high school guidance counselor trying to steer your post-high school ship? Eventually, it moved into the realm of job interviews or an older and (allegedly, in my case) wiser adult who couldn’t wait to dispense sage advice about your life plan. Thinking about it now, you grappled for an answer, thinking about your first choice of major for college or that special someone who was in your life when you were younger that you thought was going to be by your side for years to come. Looking back on it now, you shake your head wondering why you ever wanted to enter that long-abandoned field of study as you shared you life with a person you haven’t seen or thought about in years.

For someone like me who lives his life as a passenger of The Flow, I think about several different scenarios in my 5-year plan. Will I still be in the same house? Given my familial history of early male heart disease, will I be there to see it? Will the ice caps melt, leaving me on my homemade wooden skiff, forever floating upon the landless seas until the eventual invasion and enslavement from the skies by our distant alien overlords who have searched the universe for water to ensure their survival? As you can see, a vivid imagination has been a constant impediment to setting my ever-evolving 5-year plan in stone.

Unfortunately, when it comes to a single or multiple provider medical practice, imagination will not be useful in the current climate. Five years from now, quality reporting will be mandatory, as well as e-prescribing and the use of interoperable electronic health records. Add CMS’ doubling down on rooting out fraud and abuse to this equation, and suddenly the idea of operating a small, independent physician practice without a support network of IT, compliance and financial management professionals appears to be extremely difficult, if not impossible.

In this environment, many small practices are suddenly discovering the idea of strength in numbers and contemplating either selling their practice or merging with other larger physician groups. This approach presents dangers to both sides of the equation.

For the selling or pursued practice, the concerns deal mainly with sale price, but other problem areas line the road to sale. The practice needs to be certain that the larger practice has an experienced compliance and IT infrastructure that is prepared for the new environment on the horizon. For the practice’s patient population, the effect of the purchaser’s current insurance contracts must be assessed, not only to provide cost certainty for contract redundancies between the two entities, but to determine if the purchaser’s active contracts are compatible with the practice’s already developed patient population.

For the purchasing practice, the compliance risk of acquiring the new physician needs to be examined. Does the new practice have billing and coding patterns that would suddenly represent an outlier when compared to the current physician population? Do the typical services performed by the provider have the potential to lead to an increase in initial purchase price or eventual overhead costs for the purchaser? How easily will the new practice be integrated into the group when it comes to capacity for training and new system adaptability?

With the impending storm of regulatory changes fast approaching, the instinct is to attempt to get a deal done as quickly as possible. With the future of your bottom line, as well as what is in the best interests of your patients on the line, a small investment of time in the due diligence process prior to sale or acquisition can provide a healthy foundation for facing the coming changes.

June 4th, 2010 | No Comments »

Pre-Holiday News Dump Review

Posted by J. Paul Spencer, CPC, CPC-H in Hot Topics, Industry Updates, J. Paul Spencer, CPC CPC-H

As we return from the Memorial Day recess, we are greeted by news on two fronts that was released late on Friday, May 28th:

Physician Pay Fix - To no one’s surprise, Congress was unable to pass a payment fix to the projected 21.3% pay cut that is due to take effect today. As a result, CMS has once again stated that claims with dates of service of June 1st and after are now subject to a hold in processing for ten business days to avoid applying the cut to claims. This will last on the calendar until June 14th. Congress is in recess for the remainder of this week as part of their “Memorial Day Recess” (funny how we get one day and they get five), meaning that almost half of CMS’ hold period will be spent waiting for Congress to come back to work and pass yet another temporary pay fix.

Red Flags Rules - The Red Flags Rules, of which the delays in enforcement  I have now officially lost count, have once again been delayed, this time until December 31st, 2010. Congress requested this particular delay in the rule because it is currently working on legislation that would either exempt certain businesses automatically from the rules or would allow businesses to request an exemption. At the same time as this legislation is being crafted, the AMA, the American Osteopathic Association and the Medical Society of the District of Columbia filed suit against the FTC on May 21, 2010 requesting that the FTC be barred from enforcing the rules against physicians. The suit argues that the FTC is exceeding its statutory authority by defining physicians as “creditors”.

As you can see, this is your typical federal government Friday news dump. Be certain to keep an eye on this space for further updates as they occur.

June 1st, 2010 | No Comments »