Medicare Update

Urology Groups Challenge Revised Anti-Markup Rule

On January 24, 2008, a laboratory management company and 3 physician urology groups filed a Complaint for Declaratory and Injunctive Relief (Complaint) in the U.S. District Court for the District of Columbia.

The Complaint seeks to enjoin the Department of Health and Human Services and Centers for Medicare & Medicaid Services (CMS) from applying the revised anti-markup provisions to anatomic pathology diagnostic testing services furnished in a "centralized building" that is not the "same building" under the Stark law definitions. The Complaint also seeks an order that would delay the application of the revised anti-markup provisions to anatomic pathology diagnostic testing services until January 1, 2009.

In the Medicare Physician Fee Schedule Final Rule for 2008 (MPFS Final Rule), CMS revised the anti-markup provisions of 42 C.F.R. 414.50 to provide that, if a physician/physician group bills for the technical component (TC) or professional component (PC) of a diagnostic test ordered by the physician and the test is performed at a site other than the "office of the billing physician or other supplier," the payment for the TC or PC may not exceed the lowest of the following amounts:

• the performing supplier's net charge to the billing physician or other supplier;
• the billing physician or other supplier's actual charge; or
• the fee schedule amount for the test that would be allowed if the performing supplier billed directly.

The MPFS Final Rule defines "office of the billing physician or other supplier" as the medical office space where the physician or other supplier regularly furnishes patient care.  With respect to a physician organization, the MPFS Final Rule defines "office of the billing physician or other supplier" as the space in which the physician organization provides substantially the full range of patient care services that the physician organization provides generally.

However, after publishing the MPFS Final Rule, CMS reported that the definition of "office of the billing physician or supplier" may not be entirely clear and that it may have unintended consequences.  Therefore, CMS published a Final Rule in the Federal Register on January 3, 2008 delaying the applicability of the anti-markup provisions until January 1, 2009. However, CMS did not apply the delay to anatomic pathology diagnostic testing services furnished in a "centralized building" that is not the "same building." 

According to the Complaint, the revised anti-markup provisions will prohibit the plaintiffs from billing for the MPFS amount and require that the plaintiffs bill at an actual loss.  Among other things, the plaintiffs also assert that the Final Rule (effectuating the delay) contravenes the notice and comment requirements of the Administrative Procedure Act and that the revised anti-markup provisions are contrary to the Stark law and contrary to and without authority under the MPFS statute.  For more information see Atlantic Urological Associates, P.A. et al. v. Leavitt, Case No. 1:08-cv-00141-RMC.

CMS Releases Hospital Acquired Condition and Present on Admission Information

The Centers for Medicare & Medicaid Services (CMS) recently posted 2 new fact sheets on the CMS website.  The facts sheets are The Hospital-Acquired Conditions (HAC) in Acute Inpatient Prospective Payment System (IPPS) Hospitals Fact Sheet and The Present On Admission (POA) Indicator Reporting by Acute Inpatient Prospective Payment System (IPPS) Hospitals Fact Sheet.  Among other things, the fact sheets provide:

• the list of affected and exempt hospitals;
• the implementation timeline;
• a detailed chart on the category of conditions; 
• general reporting requirements; and
• information on coding, documentation and claims.

CMS also recently posted the presentation from the December 17, 2007 listening session on HACs and POA indicator reporting on the CMS website.

CMS to Host National Roundtable on Common NPI Billing Errors

The Centers for Medicare & Medicaid Services (CMS) will host a national roundtable/Q&A session on common National Provider Identifier billing errors for Medicare fee-for-service providers.  The national roundtable will take place from 2:00 p.m.-3:30 p.m. (EDT) on August 2, 2007.  To participate in this teleconference, registration is required.  Registration will close at 2:00 p.m. (EDT) on August 1, 2007 or when available space is filled.  There will also be an audio replay of the national roundtable available starting at 5:30 p.m. (EST) on August 2, 2007.  To access the audio replay, one must dial (800) 642-1687 and use passcode 7025327.

OIG Withdraws Proposed Rule on Charges Substantially in Excess of Usual Charges

On June 18, 2007, the Department of Health and Human Services' Office of Inspector General (OIG) published a Notice in the Federal Register announcing that it will not promulgate a final rule clarifying the OIG's permissive exclusion authority under Section 1128(b)(6)(A) of the Social Security Act.

Section 1128(b)(6)(A) and its implementing regulations allow the OIG to exclude a provider from the Medicare and Medicaid programs for submitting payment requests based on charges that are "substantially in excess" of the provider's "usual charges."  On September 15, 2003, the OIG published a Proposed Rule in the Federal Register attempting to clarify its exclusion authority by defining "substantially in excess" and "usual charges," and further clarifying the "good cause" exception. 

In the Notice, the OIG indicates that it will not be promulgating a final rule at this time because it does not have sufficient information to establish a single, fixed numerical benchmark for "substantially in excess" that can be applied equitably across health care sectors and items and services.  The OIG also indicates that it has insufficient information to assure that a final rule would not have the unintended effect of increasing health care costs across the industry.  Instead, the Notice suggests that the OIG will continue to evaluate billing patterns on a case-by-case basis to address instances where the Medicare and Medicaid programs are charged substantially more than other payers, without good cause.

The Notice also addresses concerns regarding whether discounts to uninsured and underinsured patients might skew a provider's "usual charges" and expose the provider to the OIG's exclusion authority under Section 1128(b)(6)(A).  Specifically, the Notice indicates that it will continue to be the OIG's position that, when calculating "usual charges," a provider does not need to consider free or substantially reduced charges to:

• Uninsured patients; or
• Underinsured patients who are self-pay patients for the items or services furnished.

In conjunction with the Notice, the OIG has also released an Addendum to a February 2, 2004 guidance document, entitled "Hospital Discounts to Patients Who Cannot Afford to Pay Their Hospital Bills."

CMS Extends Acceptance Period for Health Insurance Claim Form CMS-1500 (12-90)

On March 9, 2007, the Centers for Medicare & Medicaid Services (CMS) reported that it will extend the acceptance period for health insurance claim Form CMS-1500 (12-90).

In July 2006, Form CMS-1500 (12-90) was revised resulting in Form CMS-1500 (08-05).  In September 2006, CMS announced that it would implement Form CMS-1500 (08-05) on January 1, 2007 with dual acceptability of both versions until March 31, 2007.  Therefore, beginning April 1, 2007, Form CMS-1500 (08-05) was to be the only acceptable version of the form and the prior version, Form CMS-1500 (12-90), was to be rejected.

However, on March 9, 2007, CMS reported that there are incorrectly formatted versions (both printed forms and negatives) of Form CMS-1500 (08-05) being sold by print vendors, specifically the Government Printing Office.  Therefore, CMS reports that it has decided to extend the acceptance period of Form CMS-1500 (12-90) beyond the original April 1, 2007 deadline while this situation is being resolved.

Further, CMS will direct Medicare contractors to continue accepting Form CMS-1500 (12-90) until notified by CMS to cease. CMS is targeting June 1, 2007 as that date.  CMS also reports that Medicare contractors will be directed to return, not manually key, any Form CMS-1500 (08-05) forms that are not printed to specification.

CMS has stated that "[t]he best way to identify if your CMS-1500 (08-05) version forms are correct is by looking at the upper right hand corner of the form."  According to CMS, "[o]n properly formatted claim forms, there will be approximately a 1/4" gap between the tip of the red arrow above the vertically stacked word 'CARRIER' and the top edge of the paper."  However, "if the tip of the red arrow is touching or close to touching the top edge of the paper," CMS has indicated that "the form is not printed to specifications."

The actual CMS announcement extending the acceptance period of Form CMS-1500 (12-90) can be found on the CMS website as BREAKING NEWS! CMS-1500 (08/05).

CMS Proposes Appeals Process for Providers or Suppliers Failing to Meet Billing Privilege Requirements

On March 2, 2007, the Centers for Medicare & Medicaid Services (CMS) published a Proposed Rule (Proposed Rule) in the Federal Register that would establish an appeals process for providers and suppliers whose Medicare enrollment applications are denied or billing privileges are revoked.

In the Proposed Rule, CMS also proposes to update the reasons for rejecting a Medicare enrollment application by reducing the amount of time, from 60 to 30 calendar days, that a provider or supplier must furnish information requested by a contractor.  CMS also proposes a reduction from 60 to 30 calendar days for the time period allowed to furnish all supporting documentation after a provider or supplier has submitted a Medicare enrollment application.  CMS reports that approximately 70 percent of the submitted enrollment applications are incomplete or lack supporting documents, and that these changes would reduce the administrative burden of processing Medicare enrollment applications.

The Proposed Rule would also expand the reasons for revoking a Medicare provider's or supplier's billing privileges.  In particular, the Proposed Rule would allow the revocation of Medicare billing privileges when a provider or supplier submits a claim for services that could not have been furnished to a beneficiary on the date of service.  The Proposed Rule indicates that such instances could include situations where a beneficiary is deceased, a physician or beneficiary is not in the state or country when services are furnished, or when necessary equipment is not present where the testing is said to have occurred.   The Proposed Rule would also require that a provider or supplier wait 3 years before reapplying to participate in the Medicare program when the provider's or supplier's billing privileges have been revoked.

CMS will be accepting comments on the Proposed Rule.  To be assured consideration, comments must be received by 5 p.m. on May 1, 2007.  The Proposed Rule explains how to submit comments to CMS.

CMS Transmittal Addresses Laboratory Billing for Physician Pathology Services

On January 5, 2007, the Centers for Medicare & Medicaid Services (CMS) issued Transmittal No. 1148 addressing the Tax Relief and Health Care Act of 2006 and changes to laboratory billing for the technical component (TC) of physician pathology services.

In Transmittal No. 1148, CMS instructs Medicare Carriers to conduct provider education activities to notify independent laboratories, which qualify to bill their Medicare Carrier for the TC of a physician pathology service furnished to a patient of a covered hospital, that they may continue to do so through December 31, 2007. 

In the Medicare physician fee schedule final rule for calendar year 2000, CMS stated that it would implement a policy to only pay a hospital for the TC of a physician pathology service furnished to hospital patients.  However, the Benefits Improvement and Protection Act of 2000 delayed the policy's implementation.   

Later, a provision of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) further delayed the policy's implementation.  However, the MMA provision was scheduled to sunset on December 31, 2006.   The Tax Relief and Health Care Act of 2006 has extended that sunset date to December 31, 2007.

CMS Issues Quick Reference Information on Immunization Claims

The Centers for Medicare & Medicaid Services (CMS) has released a Quick Reference Information: Medicare Immunization Billing chart (Chart).  The Chart is designed to give Medicare fee-for-service physicians, providers, suppliers and other health care professionals quick information to assist with the filing of claims for influenza, Pneumococcal Polysaccharide (PPV) and Hepatitis B (HBV) vaccines, and their administration.  The Chart can be viewed and downloaded in a PDF format or a hardcopy of the Chart can be ordered through the Medicare Learning Network Product Ordering Page.

HHS to Issue Final Rule on Charges Substantially in Excess of Usual Charges

On December 11, 2006, the Department of Health & Human Services (HHS) published its Semiannual Regulatory Agenda (Agenda) in the Federal Register.  The Agenda identifies rules that HHS expects to propose and finalize over the next year. 

In the Agenda, HHS reports that it will issue a final rule in April 2007 that amends the Office of Inspector General's (OIG) permissive exclusion regulations, which allow the OIG to exclude a provider from the Medicare and Medicaid programs for submitting payment requests based on charges that are "substantially in excess" of the provider's "usual charges."  According to the Agenda, the final rule will define key terms, such as "substantially in excess" and "usual charges," and clarify the "good cause" exception. 

On at least two occasions during the 1990s, HHS published a proposed rule to clarify those key terms, but did not take any final action.  Most recently, HHS proposed definitions for those terms in a proposed rule that was published in the Federal Register on September 15, 2003.