Medicare modifies ordering, referring rules for physicians

Washington Medicare claims involving referrals for specialty care would be spared extra scrutiny under billing and enrollment rules published by the Centers for Medicare & Medicaid Services on April 24.

CMS finalized requirements that have been in development for three years. It calls for all physicians and other health professionals billing Medicare to be signed up for the program through its Provider Enrollment, Chain and Ownership System, known as PECOS.

The final rule made several changes advocated by the American Medical Association and specialty medical societies, which had warned that proposed Medicare enrollment requirements would negatively impact physicians and the patients they serve. Those requested changes included delaying the enforcement of the new requirements indefinitely and making the PECOS mandate less strict.

“The AMA is pleased that the requirements of the final rule for Medicare enrollment exclude referrals to specialists, and we appreciate CMS’ effort to streamline and improve the enrollment system for physicians,” said AMA President Peter W. Carmel, MD. “In this final rule, those in the Medicare legacy enrollment system, as well as those in Medicare [PECOS], satisfy the enrollment requirements.”

The Medicare agency first outlined new enrollment rules for ordering and referring physicians in 2009. But CMS stopped short of enforcing those requirements, because as many as 200,000 doctors and other health care professionals out of about 750,000 did not have enrollment records in PECOS.

In 2010, Congress required the use of national provider identifiers for ordering and referring physicians on claims for medical equipment or services from laboratories, imaging providers and suppliers. CMS later issued an interim regulation requiring all physicians who order supplies or refer services, including those from specialists, to be enrolled in PECOS by July 2010, but CMS delayed enforcement of that rule as the agency worked to validate and update enrollment records. Enforcement would have meant that claims for items or services would be rejected unless the ordering or referring physician also was in the enrollment system, not just the physician who provided the care.

The final rule removed specialist services from the enhanced scrutiny. Medicare does not require beneficiaries to obtain a referral from a physician to receive services from another doctor, physician organizations told CMS. Medicare contractors, who process physician claims, would have had difficulties determining if a patient sought a specialist’s care based on a referral or on his or her own.

Medicare contractors will continue to use legacy systems, not just PECOS, to determine if an ordering physician has a valid record. Both PECOS and legacy systems collect enrollment data.

Residents in an accredited graduate education program also could enroll in Medicare to order services. The interim rule had excluded residents.

The Medicare agency has not activated automatic edits that would deny payment for noncompliant claims from physicians and other health professionals. CMS is delaying activation indefinitely and will not turn on the edits without 60 days of advance notice.

CMS officials have said the enrollment and billing changes are needed to fight Medicare fraud and protect patients. Through the enhanced enrollment process, CMS will be able to verify the credentials of health professionals who order or certify equipment and supplies — a major hub of fraudulent activity.

The rule continues to require physicians and other professionals to use national provider identifiers on applications to enroll in Medicare and Medicaid. This allows CMS and state health agencies to link claims for services and supplies to the referring professional and check for suspicious activity. CMS expects that changes in the final rule will save the system $1.6 billion over 10 years.