Carrier backlogs continue to stall physician Medicare enrollment

CMS considers interest payments to doctors waiting to bill the program.

By Markian Hawryluk — Posted June 21, 2004

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Although progress has been made in reducing the logjam, many physicians are still experiencing lengthy delays enrolling in Medicare or making simple changes to their enrollment data.

For physicians such as Robert Wierman, MD, an orthopedic surgeon from Gulfport, Miss., that means going months on end without any Medicare revenue and scrambling to find other funding to keep his practice open.

Three years ago, Dr. Wierman moved from New Jersey to join a clinic in Gulfport. Last year, when the clinic was sold, he decided to go out on his own. Despite having a Medicare billing number since 1973, Dr. Wierman had to submit an application with his new practice address.

That was in December 2003. After five months without payment from Medicare, which makes up about 40% of his revenue, he received his first check on April 30. "Something's not right there," he said. "All I did was change my address."

To add insult to injury, when checks came in, he discovered that Medicare now considered him a "nonparticipating" physician and paid him at a lower level. Although Dr. Wierman has been a participating physician in Medicare for 30 years, the carrier changed his status when the new application did not include a signed participation agreement.

Dr. Wierman since has changed his status but has not been able to make the change retroactive to Jan. 1. "It's bad enough I'm being paid 30 cents on the dollar on whatever I do, but then to rub your nose in it and not be helpful -- it's very frustrating."

To weather the storm, he moved to a smaller office, cut expenses and borrowed money from his wife to keep the practice going. Many other doctors are still waiting for their enrollment applications to be processed.

Officials from the Centers for Medicare & Medicaid Services working on the enrollment system said 87,000 enrollment forms -- both new applications and changes to existing files -- await processing. That's down from a high point of more than 100,000 in the queue earlier this year. Medicare carriers process about 600,000 applications each year.

The processing problems began last fall when CMS moved from a system in which each carrier maintained its own enrollment program for doctors and other practitioners to a centralized database. The Provider Enrollment Chain and Ownership System was swamped by carriers trying to access the system and experienced long periods of downtime.

CMS added additional servers and stabilized the program at the start of the year, but by that time the backlog of applications had swelled. Agency officials admit they expected some glitches, as with any new computer system, but were surprised at the difficulty in getting PECOS to work consistently. The system still experiences downtime of a few seconds to a few minutes, but not the lengthy interruptions experienced earlier in the year, officials said.

In May the agency released more than $5 million to contractors to hire extra staff to whittle down the backlog. Many carriers opted to use the funds to pay overtime for existing staff members already trained in PECOS.

Medicare standards require carriers to process 90% of enrollment applications within 60 days and 99% of applications within 120 days. The agency said some carriers already are meeting that standard despite the difficulties with PECOS, but others have a significant way to go.

CMS originally chose not to download physician records from contractors' existing enrollment databases to keep the PECOS data as accurate as possible. But that meant that changes to existing applications required carriers to re-enter the existing enrollment information to make a simple change. In July, the agency plans to allow carriers to pull those data from their old systems when processing changes in enrollment information.

AMA calls for action

The American Medical Association has urged CMS to take additional steps to ensure that physicians are not adversely affected by the backlog.

"Without a valid and current enrollment number, physicians are experiencing major cash-flow problems," the AMA said in a written statement to the agency. "This can be devastating for small businesses, such as a physician practice."

The AMA called on CMS to put off plans to re-enroll all physicians in Medicare with PECOS. Currently only new applications and enrollment changes are done using PECOS. The Association also asked for sufficient funding to carriers to resolve the processing delays and said the government should pay interest to physicians whose claims are being delayed by carriers' inability to process enrollment applications on a timely basis.

"It is not the physician's fault that the claims can't be processed," said AMA President Donald J. Palmisano, MD. "We'd like a definite date when the backlog will be resolved and assurances that new physician applications will be handled expeditiously."

The Practicing Physicians Advisory Council, a panel of doctors that makes recommendations on physician issues to CMS, backed the idea of interest payments to physicians in its May report to the agency. CMS officials are considering whether they have the statutory authority and financial means to pay interest.

Agency officials said they expect the backlog to be eliminated by Sept. 30. But physicians could see the long delays as another hassle in dealing with a Medicare program under which payments haven't kept up with costs. Many have opted out already. Dr. Wierman, who turns 62 in July, said he would consider retirement if he were in a better financial situation.

"I can't stay in medicine if it's costing me money to run an office and not make money," he said. "I don't know what I could do. Open a restaurant, I guess."

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