Empty box on claims means Medicare denials

Washington -- It's tough being the little guy, particularly when the big guy is Medicare.

With fewer than 10 full-time employees at his solo practice in rural Minden, Nev., Robert Chudnow, MD, isn't required to bill for Medicare services electronically yet. He's resigned to the fact that carriers set aside paper claims for a 28-day waiting period. But in May, his claims began to be summarily rejected by his Medicare carrier.

It seems Dr. Chudnow and many other doctors were not told of a change in how to fill out the paper claims form. According to instructions he had, he was to leave box 32 blank if the service was provided at a patient's home or in a doctor's office. Since Dr. Chudnow saw all his patients in the office, he left box 32 blank.

But as of April 1, Medicare requires physicians to enter the address where service was provided in all cases except home visits. So after waiting 28 days, the carrier rejected Dr. Chudnow's claims with the empty box 32.

Unaware there was a problem, Dr. Chudnow continued to bill Medicare in that manner throughout April. It was only after the 28 days passed on the first claims sent in April that he was notified of the billing error. He had no choice but to fill in box 32, resubmit the claims, and wait another 28 days for the contractor to begin processing the claims again.

Dr. Chudnow had hoped that the carrier at least would waive the second month-long waiting period for the resubmitted claims, but to no avail.

"Basically, it's an eight- to 10-week period where we get no reimbursement from Medicare," Dr. Chudnow said. "I have to borrow money just to pay my overhead."

In correspondence to the American Medical Association, Medicare officials indicated that the change regarding box 32 was to ensure that carriers were paying the correct rates for services. Because Medicare payments vary from county to county to account for differences in practice expenses, physician work costs and liability premiums, carriers must have the correct ZIP code to identify the jurisdiction and pay the correct fee.

Previously, carriers had used the office location on file to determine where a service was provided. But information in those files is not always up-to-date, and the claim would not reflect when services were provided in another office, Medicare officials said.

Physicians soon will be assigned National Provider Identifier numbers that will identify the practice, not specific practice locations.

The Centers for Medicare & Medicaid Services said it had told carriers to notify physicians about the April 1 change and is planning additional education. For physicians such as Dr. Chudnow, the window for any relief has likely passed. He has resubmitted the rejected claims and is now filling in box 32 on all new claims.

While the Medicare Modernization Act of 2003 provided regulatory relief for physicians, many doctors still see complexity as a problem, said outgoing AMA President Donald J. Palmisano, MD.

"We've heard for years from physicians that Medicare's rules and procedures are needlessly complex and constantly changing, making it nearly impossible to bill correctly all or most of the time," he said. "This sense of unfairness is heightened by a carrier's failure to educate physicians either about what they're doing wrong or about correct billing policies."

Medicare has made strides in cutting paperwork hassles. The agency has acted on recommendations from a regulatory relief committee convened by Health and Human Services Secretary Tommy Thompson. CMS also holds monthly conference calls during which individual physicians can seek help with regulatory issues.