Archive for the ‘Revenue Cycle Management’ Category

ICD-10 is Coming! Are you ready?

April 22, 2011

ICD-10The compliance date for implementation of the International Classification of Diseases, 10th Edition, Clinical Modification/Procedure Coding system (ICD-10-CM/PCS) is October 1, 2013.  There are two parts to the ICD-10-CM/PCS:

  • ICD-10-CM (Diagnosis Codes) – The diagnosis classification system developed by the by the Centers for Disease Control (CDC) and Prevention for us in all the U.S. health care treatment settings.
    • 3-7 digits
    • Digit 1 is alpha
    • Digit 2 is numeric
    • Digits 3-7 are alpha or numeric (alpha digits are not case sensitive)
        • Examples:
          • A78 – Q fever
          • A69.21 – Meningitis due to Lyme disease
          • S52.131a – Displace fracture of neck of right radius, initial encounter for closed fracture
  • ICD-10-PCS (Procedural Codes) – The procedure classification system developed by CDC for Medicare & Medicaid Services (CMS) for use in the U.S. for inpatient hospital settings ONLY.
    • 7 digits
    • Each digit is either alpha or numeric (alpha digits are not case sensitive and letters 0 and I are not used to avoid confusion with numbers 0 and 1)
        • Examples:
          • 0FB03ZX – Excision of liver, percutaneous approach, diagnostic
          • 0DQ10ZZ – Repair upper esophagus, open approach

Note: Physicians, outpatient facilities , and hospital outpatient departments should continue to use CPT codes for Medicare fee-for-service claims.

ICD-10-CM/PCS provides significant improvements through greater information and the ability to expand in order to capture additional advancements in clinical medicine.  A number of other countries have already moved to ICD-90, including:

  • United Kingdom (1995);
  • France (1997);
  • Australia (1998);
  • Germany (2000); and
  • Canada (2001).

Click the link to see the ICD10 compliance timeline: ICD10 Compliance Timeline


Medi-Cal providers receive retroactive payments for 10% Medi-Cal cuts

August 16, 2010

California Medi-Cal providers recently received checks totaling $25.8 million as retroactive payment for claims processed between July 1, 2008 and August 18, 2008.

In February 2008, a 10-percent Medi-Cal provider cut was proposed by the Schwarzenegger administration and agreed to by the state Legislature in an emergency budget session as part of efforts to address a $15 billion budget shortfall. The 10-percent cut took effect July 1, 2008.

The California Medical Association filed a federal lawsuit in May 2008 to stop the unlawful cuts. On August 18, 2008, six weeks after the cuts took effect, a federal court issued an injunction ordering the state of California to reverse the 10-percent cut, finding that the cuts would irreparably harm access to health care for nearly 7 million Californians. Unfortunately, at the time the injunction was not retroactive to Medi-Cal services provided between July 1, 2008, and August 18, 2008.

In January 2010, a federal court ruled that the state was obligated to make retroactive payments to providers for claims processed at the lower rates between July 1, 2008, and August 18, 2008. Most physicians impacted by these cuts received checks in April of this year. The checks were not, however, accompanied by a letter of explanation.


Health Savings Accounts

June 14, 2010

What are HSAs?
Health Savings Accounts
(HSAs) allow individuals to deposit pretax income into a savings account that can be used to pay for qualifying medical expenses — up to $3,050 for individuals and $6,150 for families in 2010. In return, enrollees have annual deductibles of $1,200 or more, with only certain types of care paid for by the plans. Generally, HSAs are associated with high-deductible health insurance plans.  Recently there has been an increase in such plans.  As of January 2010, the enrollment in high-deductible health insurance plans – including those with associated HSAs – reached 10 million from 3.2 million in January of 2006, according to America’s Health Insurance Plans.

However, there are going to be some significant changes in HSAs, starting next year.  Effective 2011, subscribers no longer will be able to use HSA balances to pay for over-the-counter drugs. Also next year, the penalty for using HSAs for nonmedical expenses increases from 10% – 20% of the amount spent.

Medicare Physician Payment Cut – Congress Considering a 3-Year Fix

May 26, 2010

A 21.3% Medicare physician payment cut takes effect on June 1, unless Congress comes up with a solution.  ACOG, the AMA, and other medical groups are pushing for a permanent fix through repeal of the flawed SGR formula for setting payment rates.  But Members of Congress, many of them squeamish about increasing the federal deficit in an election year, are looking at shorter-term alternatives.  This week, Congress takes up a compromise fix:

  • A three-year fix to payment rates.  House and Senate Democratic Leaders agreed to include certain “extenders” in a tax bill, the American Jobs and Closing Tax Loopholes Act of 2010, H.R. 4213.  This compromise would avoid the 21.3% physician payment cut set to kick in on June 1 and instead give doctors a 1.3% boost through the end of the year.  Physicians would then get an additional 1% increase in 2011.  The fix would offer additional increases in 2012 and 2013, based on the growth in Medicare health spending.  This growth would be measured by the target growth rate formula in H.R. 3961, legislation passed by the House in 2009.  The new legislation guarantees that physicians cannot see a cut in years 2012 and 2013. Primary care doctors would see higher payment boosts.

A major drawback to this compromise fix:  in 2014 and beyond, the physician payment system would revert back to current law under the SGR formula, resulting in physician pay cuts as high as 37%.

Had Congress permanently solved the payment problem 4 years ago at a cost of $49 billion, it would have cost less than shorter-term remedies now under consideration.  Last week, the Congressional Budget Office and the staff of the Joint Committee on Taxation issued this estimate that the net cost of the 3-year fix under H.R. 4213 would be $64.6 billion over the years 2010-2015.  

The House Rules Committee is expected to take up these provisions this week, with Senate consideration to follow the House vote.  

Should the 3-year fix not pass, Congress could consider other measures:

  • A five-year, $88.5 billion plan giving physicians scheduled pay increases.  This was popular among some House Democrats but may be less so among moderate Representatives and Senators due to cost.
  • A delay of the 21.3% cut until the end of the year.
  • A one-month delay in the cuts. Congress approved a similar short-term fix in April.

Source: ACOG

Medicare Claims Filing Deadline is 1 Year Now

May 18, 2010

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act (PPACA), which amended the time period for filing Medicare fee-for-service (FFS) claims as one of many provisions aimed at curbing fraud, waste, and abuse in the Medicare program.

The time period for filing Medicare FFS claims is specified in Sections 1814(a), 1835(a)(1), and 1842(b)(3) of the Social Security Act and in the Code of Federal Regulations (CFR), 42 CFR Section 424.44. Section 6404 of the PPACA amended the timely filing requirements to reduce the maximum time period for submission of all Medicare FFS claims to ONE calendar year after the date of service.

The following rules apply:

Date of Claim Deadline to Submit
On or after Jan. 1, 2010 Within one calendar year after the date of service
Before Jan. 1, 2010  Dec. 31, 2010
  • Before Oct. 1, 2009
Follow pre-PPACA timely filing rules*
  • Oct. 1, 2009, through Dec. 31, 2009
Dec. 31, 2010. 

* Under pre-PPACA rules, Medicare carries can accept claims for dates of service from Oct. 1, 2008, through Sept. 30, 2009. Claims filed beyond one year of the service date will be automatically reduced by 10%.

Insurance Timely Payment

May 1, 2010

State and federal laws require that most payors pay clean claims within specific timeframes.  California law further requires health plans and insurers to pay interest on claims that are not paid within the required timeframe. 

Payor Type Timeframe for Payment Penalty
HMOs and their contracting medical groups/IPAs 45 working days
  • Non-emergent – 15% of amount due per annum
  • Emergent – greater of $15 or 15% per annum.
  • $10 surcharge per claim if plan fails to pay interest automatically.
PPOs 30 working days
  • Non-emergent – 10% of amount due per annum
  • Emergent – greater of $15 or 10% per annum.
ERISA 30 calendar days None
Medi-Cal 30 calendar days 0.25% of amount due per day
Medicare 30 calendar days 10.875% per annum (effective 4/23/2010)
Workers’ Comp 45 working days Payment is increased by 15% + 10% per annum


CMS Will Hold All Physician Claims for 10 Days

March 2, 2010

The Centers for Medicare & Medicaid Services (CMS) is working with Congress, health care providers, and the beneficiary community to avoid disruption in the delivery of health care services and payment of claims for physicians, non-physician practitioners and other providers of services paid under the Medicare physician fee schedule.

Congress is working to avoid the negative update in effect March 1. Consequently, CMS has instructed its contractors to hold claims containing services paid under the MPFS for the first 10 business days of March. The holding of MPFS claims will only affect claims with dates of service March 1, 2010, and forward. This hold should have a minimum impact on provider cash flow because, under current law, clean electronic claims are not paid any sooner than 14 calendar days (29 for paper claims) after the date of receipt.

If you have not called your federal legislator yet, you could call AMA’s toll free number at 1-800-833-6354.

CMS Deletes Consultation Codes in 2010

January 28, 2010

CMS has deleted the consultation codes in 2010.  This has created a lot of questions for the healthcare providers, specifically the specialists. The following Q&A will aid you with some of the common questions:

Will these new changes decrease your revenue?

If compared at the same CPT level e.g. 99243 versus 99203, the effect will be negative. However, the new office visits (99201-99205) pay at a higher level in 2010 compared with the same CPTs in 2009.  This means that if you are a specialist and your consult utilization is higher than your visit utilization, your practice will generate less money for these services than you did last year. 

Will non-Medicare payers follow Medicare’s changes?

It would depend on the payors’ discretion to pay or deny your claim.  It does not help the situation that the consultation codes have not been deleted from the 2010 CPT manual.  But if a payor pays for a consultation code and Medicare happens to be the secondary on the same claim, Medicare will not reimburse its secondary portion.

Is there good news with the changes?

One good news is that providers do not have to worry about meeting the burdensome documentation requirements for a consult:

  1. A consultation is distinguished from a visit because it is provided by a physician whose opinion or advice regarding evaluation and/or management of a specific problem is requested by another physician or other appropriate source;
  2. A request for a consultation from an appropriate source and the need for the consultation must be documented in the patient’s medical record; and
  3. After the consultation is provided, the consultant prepares a written report of his/her findings, which is provided to the referring physician.

What codes will be utilized for new inpatient consults?

The clear choice would be CPT codes 99221-99223, however, the 2009 CPT guidelines for these codes specifically state:

“…codes [99221-99223] are used to report the first hospital inpatient encounter by the admitting physician. For initial inpatient encounters by physicians other than the admitting physician, see initial inpatient consultation codes (99251-99255) or subsequent hospital care codes (99231-99233) as appropriate.”

Since the inpatient consult codes (99251-99255) have been eliminated by CMS in 2010 and the initial hospital care codes (99221-99223) are only for use by the admitting physician, the only other choice remaining would be to use the subsequent hospital care codes (99231-99233) in place of the new or established inpatient consult codes. The allowable on the subsequent hospital care codes are lower than those associated with the inpatient consult codes and will lead to a decrease in revenues for these services.

CMS has stated, “The principal physician of record will append modifier “-AI” Principal Physician of Record, to the E/M code when billed.  This modifier will identify the physician who oversees the patient’s care from all other physicians who may be furnishing specialty care.  All other  physicians who perform an initial evaluation on this patient will bill only the E/M code for the complexity level performed.”

%d bloggers like this: