Unenrolled doctors will cause Medicare claims denials starting May 1

Physicians not enrolled properly in the Medicare system will cause claims for equipment, imaging and lab services to be rejected.

By Charles Fiegl amednews staff — Posted March 18, 2013

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Starting on May 1, Medicare will deny payment to any physician filing claims for certain services when the physician or health professional ordering or referring the services does not have a valid enrollment record.

The enforcement measure is limited and designed to prevent Medicare fraud in high-risk areas of the program by ensuring that the ordering or referring individual has credentials verified by the program's screening process. Physicians and nonphysician practitioners who order items or services — such as lab tests, imaging services and medical equipment — for Medicare patients must be in the enrollment system, CMS stated in guidance published on March 1.

Even if the physician or supplier actually submitting the claim is in the system, that claim will be denied if the ordering/referring doctor is not enrolled.

The American Medical Association had voiced concern about earlier versions of the policy and advocated for changes. As one result of this pressure, referrals to physician specialists have been excluded from the rule. The Centers for Medicare & Medicaid Services also has worked to minimize disruptions to billing physicians, including education efforts and a year-long delay enforcing the requirements, while still targeting Medicare services with a history of fraud.

“We are pleased that CMS heard the AMA's concerns and significantly delayed a process that will reject claims for certain services when the ordering physician is not in the Medicare enrollment system,” said AMA President Jeremy A. Lazarus, MD. “The process that had been set for 2010 will now begin on May 1, which has allowed physicians affected by this change more time to ensure they are enrolled or have an opt-out affidavit filed.

“We urge CMS to monitor physicians' claims to ensure no significant processing problems arise after the May 1 date and to make any changes needed to continue processing claims in a timely manner,” Dr. Lazarus said.

CMS outreach

Enforcement of the requirement follows years of outreach from CMS. The agency made notations on any claim that had incomplete or invalid referring information — indicating that the professional ordering the service did not have a valid enrollment record.

Physicians also have received requests from CMS to update enrollment records and, at times, from suppliers and health professionals fulfilling the orders, said David Zetter, a practice management consultant in Mechanicsburg, Pa. Home health agencies and suppliers have much at stake and stand not to be paid for services when there are problems with the referring physician's enrollment.

CMS had drafted requirements regarding ordering and referring physicians in 2009. The Affordable Care Act then mandated valid national provider identifier numbers to be included on all claims for Medicare equipment, laboratory and imaging services.

But actual enforcement had been delayed due to large numbers of physicians absent from the CMS Provider Enrollment, Chain and Ownership System, known as PECOS. CMS also had backlogs of tens of thousands of physician enrollment applications it since has cleared after finalizing in April 2012 the regulation on ordering and referring. The agency stated at the time that it would provide 60 days' notice before turning on the claim edits to enforce the requirements.

The March 1 guidance clarifies that chiropractors are not eligible to order or refer services for beneficiaries. Home health agency services may be ordered by physicians, but claims for the services ordered by other practitioners will be denied. Optometrists are allowed to order or refer only durable medical equipment, prosthetics, orthotics and supplies, and eligible lab and x-ray services.

CMS stated in the March 1 Medical Learning Network Matters memo: “Physicians and others who are eligible to order and refer items or services need to establish their Medicare enrollment record and must be of a specialty that is eligible to order and refer.”

There are estimates that 10% to 12% of physicians and health professionals do not have valid enrollment records, Zetter said. Physicians can check their enrollment status by accessing a CMS ordering-referring list with nearly 1 million names of doctors and others with valid enrollment records. The list is on CMS' website.

“It will impact a lot fewer people than it would have a couple years ago,” Zetter said.

Seeking program integrity other ways

Medicare has instituted several safeguards to prevent fraud. CMS has checked and rechecked enrollment records during a massive revalidation effort. Nearly 410,000 physicians and health professionals have gone through enhanced screening requirements since 2011, said Peter Budetti, MD, deputy administrator and director for the CMS Center for Program Integrity. Dr. Budetti testified during a House Energy and Commerce health subcommittee hearing on Feb. 27.

“Because of revalidation and other proactive initiatives, CMS has deactivated 136,682 enrollments and revoked 12,447 enrollments,” he stated in his testimony. “These efforts will ensure that only qualified and legitimate providers and suppliers can provide health care items and services to Medicare beneficiaries.”

Similarly, states are taking steps to require physicians to enroll in Medicaid if they order or refer Medicaid patients for services. Medicare also is working with Medicaid programs to ensure that people losing billing privileges in the federal program will not be able to replicate their scams in individual states, Dr. Budetti said.

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Fraud prevention's return on investment

The Centers for Medicare & Medicaid Services is using a fraud prevention system that employs data analytics and predictive modeling to detect suspicious billing activity. The system, launched in June 2011, has been compared to those used by credit card companies to protect cardholders. CMS reported that the system in 2012:

  • Achieved a return on investment of $3 for every $1 spent.
  • Prevented or identified an estimated $115.4 million in improper payments.
  • Generated 536 new investigations by CMS program integrity contractors and augmented information for 511 pending investigations.
  • Triggered 617 interviews with health professionals and 1,642 patient interviews regarding suspect claims.

Source: Statement of Peter Budetti, MD, CMS Center for Program Integrity, before the House Committee on Energy and Commerce subcommittee on health, Feb. 27 (link)

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External links

Centers for Medicare & Medicaid Services, update on PECOS and ordering and referring (link)

American Medical Association on Medicare enrollment (link)

Statement of Peter Budetti, MD, CMS Center for Program Integrity, before the House Energy and Commerce health subcommittee, Feb. 27 (link)

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