Physicians seek more Medicare PECOS relief

CMS holds off on automatically rejecting claims for enrollment noncompliance, but the AMA wants the deadline pushed back through regulation.

By Chris Silva — Posted July 19, 2010

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Advocacy efforts led by the American Medical Association were successful in convincing Medicare officials to rethink accelerated deadlines they had established for physicians to be enrolled in the program through the Provider Enrollment, Chain and Ownership System, or PECOS.

After numerous complaints from the AMA and other physician organizations, the Centers for Medicare & Medicaid Services announced on June 30 that it was launching a review of PECOS. As part of the review, CMS said contractors would not immediately start automatically rejecting physician claims for which the ordering or referring doctor is not properly enrolled in the system. The agency previously had moved that deadline up to July 6 from Jan. 3, 2011, for many types of Medicare claims.

CMS said it accelerated the deadline due to changes stipulated by the health system reform law, which went into effect in March. But in a comment letter addressing an interim final rule the agency published on May 5, the AMA and more than 40 other physician organizations argued that only physicians who order or refer durable medical equipment, prosthetics, orthotics and supplies, or home health services are required by the new law to be enrolled with Medicare through PECOS by July. CMS went beyond the requirements by also stating that physicians who order or refer specialist, laboratory and imaging services needed to be enrolled as well, the letter said.

Despite the delay in automatic claims rejections, the AMA is pushing for CMS to revert to the previous deadline of Jan. 3, 2011. At this article's deadline, CMS officials said publication of a final rule was in the works, and they could not say if a new deadline would be set or what that deadline might be.

The agency also couldn't say how long it would hold off on automatically rejecting noncompliant claims. The AMA said it was glad to have secured at least a temporary reprieve.

"We are pleased that due to AMA efforts, CMS will not automatically reject claims containing the names of referring or ordering physicians who are not yet enrolled in the Medicare PECOS system by July 6," said AMA President Cecil B. Wilson, MD. "We continue to urge CMS not to reject any claims sooner than Jan. 3, [2011] the original date by which all referring and ordering physicians were required to be enrolled."

Cash flow stoppages

The health reform law provisions were designed to prevent Medicare fraud by ensuring that only eligible physicians and other professionals can order and refer covered items, CMS said. The agency noted that many doctors have made good-faith efforts to make sure they have accurate PECOS records, and that such efforts will be taken into account in the forthcoming final rule.

The AMA said the agency must consider cash flow problems that could ensue for "downstream" physicians, or those who see Medicare patients referred to them by doctors who are not yet enrolled through PECOS. Such claims might be rejected if CMS does not make the requested changes in its final rule.

"As CMS moves forward, it is critical that they continue to fully consider all comments received and address other critical issues, including ensuring physicians are not audited for listing the name of any ordering or referring physicians on their claims who are not enrolled in PECOS by July 6," Dr. Wilson said. "We also continue to urge CMS to work collaboratively with us to address the systemic problems with enrollment, such as long processing backlogs and ill-equipped customer service lines, which prevent physicians from enrolling."

In its June 30 announcement, CMS said that although it is "taking a more deliberative approach" in its review of PECOS noncompliance, the agency would employ a contingency plan to ensure that those not showing up in the database were eligible physicians.

Officials declined to provide further details of this contingency plan.

In the meantime, the changing PECOS deadlines have caused some doctors and their staffs to question CMS for its commitment to a system that some have labeled archaic and constrained.

Bonnie Adams, an information management coordinator with Schenectady (N.Y.) Anesthesia Associates, said her practice went nearly eight weeks without receiving Medicare payments earlier this year because of a PECOS glitch.

The practice was erroneously given a new identification number and began receiving letters from CMS saying it could not receive payment as a result.

Adams said the 25-person practice had missed nearly $10,000 in payments before it was finally able to resolve the problem. "I can see where this can have a big impact, particularly with small organizations."

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Changing deadlines

Problems reported by physicians trying to enroll in the Provider Enrollment, Chain and Ownership System have convinced the Centers for Medicare & Medicaid Services to launch a review of the system. As a result, claims were not automatically rejected starting July 6 for physicians not enrolled properly. The change in policy is the latest development in altering PECOS deadlines:

November 2003: CMS begins using PECOS to sign up Medicare physicians.

December 2008: Medicare rolls out Internet-based PECOS, allowing physicians to submit their enrollment applications and make changes online.

October 2009: Medicare contractors begin marking electronic Medicare claims for nonpayment if the physician ordering or referring a service was not in the PECOS database. This was meant to be a warning phase (with the second phase being actual rejection of claims), but physicians reported being confused by the informational edits on their claims.

December 2009: CMS announces that its date to start rejecting claims listing physicians who are not in PECOS would be moved back by three months, from Dec. 31, 2009, to April 5, 2010.

February 2010: At the behest of the AMA and other physician organizations, CMS announces it is again pushing back the PECOS enrollment deadline, from April 5, 2010, to Jan. 3, 2011.

May 2010: CMS publishes an interim final rule moving up the enrollment deadline to July 6 for all physicians who order/refer not only medical equipment and home health services (as required by the health reform law), but also specialist, laboratory or imaging services.

June 2010: After numerous complaints, CMS announces it is launching a PECOS review and will not start rejecting claims automatically on July 6.

Sources: Centers for Medicare & Medicaid Services, American Medical Association

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