FY 2014 Budget Recommends Removing Therapy From In-office Ancillary Services

via apta.org – – – APTA is highly encouraged by the proposal within President Obama’s fiscal year 2014 budget, released yesterday, to exclude therapy services, including physical therapy, along with radiation therapy and advanced imaging from the in-office ancillary services (IOAS) exception of the Stark self-referral laws.

The Office of Management and Budget concluded that closing the loophole for these services would provide a savings of $6.1 billion over the standard 10-year budget window, providing further evidence that these self-referral arrangements lead to overutilization of Medicare services and should be addressed by Congress.

On its own for many years and more recently as part of the Alliance for Integrity in Medicare (AIM) coalition of medical specialty, laboratory, radiation oncology, and medical imaging groups, APTA has long advocated for exclusion of physical therapy from the IOAS exception. APTA agrees with the Administration’s proposal on physician self-referral and believes this issue should be addressed as part of any fundamental delivery system reform.

APTA and its AIM partners continue to be gravely concerned about the ongoing misapplication of the IOAS exception to the physician self-referral law, believing this loophole results in increased spending, unnecessary use of medical services, and potentially compromised patient choice and care. Studies published by the New England Journal of Medicine, Health Affairs, and the Government Accountability Office, among others, have highlighted abuses that result from physician self referral. These ongoing issues serve only to erode the integrity of the Medicare program and undermine patient care.

APTA and AIM now strongly urge the 113th Congress to follow the recommendations of the Administration budget and pass legislation to remove physical therapy, advanced diagnostic imaging, anatomic pathology, and radiation therapy from the IOAS exception.


The Preventionists Are Coming!

paul-revereThe popular conception in healthcare is that (1) a new law was passed, (2) it changed everything, and (3) in a bad way.  Over time, however, it should get clearer that, while there was a law passed, the law alone is not driving changes to our healthcare system: it’s our own demographics and behavior.  Most of the tax dollars currently fueling our healthcare system (and arguably our economy) are tied to an aging Boomer population that are soon to drop off the income producing cliff into the Medicare population.  Bye bye income earners; hello ridiculous public healthcare expenditures.  Though it is true that the timing for expanding public spending on healthcare (with the federal mandates aimed at employers and Medicaid eligibility expansion) could not be more poorly timed, the situation is more of a “Perfect Storm” than a surgical strike.

The financial stress of our changing population and of a historic utilization based healthcare system is causing our healthcare system to morph in every way.  “Health insurance,” with increasing cost, copays and deductibles and reduced benefits, is quickly ceasing to look like your father’s 80/20 major medical plan and starting to look more like catastrophic coverage.  Fee for service compensation is fast becoming “spoken” out of existence.  There are more “pay for performance,” “case rate” and other outcome and risk based compensation models than you can shake a stick at.  The simple truths are: payers have to deliver more with less; and patients have to bear more and more of their healthcare expenses. Continue reading

Billing for Associates Fraught with Risk

ACO-Payment-300x225You’ve hired a new doctor to join your practice, but it will take several months to get the new doctor on your insurance plans and to add him or her to your group practice.  What do you do?  Can you bill for the new doctor’s services under your own provider name or number?  Can you hold the billing and submit it at a later date?

Billing for the new doctor’s services under the name or provider number of a physician who did not actually perform the service is fraud.  It’s as simple as that.  And it’s a serious offense, punishable as a criminal offence, regardless of the payer involved.  In other words, it’s not true to say “Well, it’s ok to do with HMOs, but not Medicare.”  It’s fraud for every payer.  And, with federal payers, it’s a federal crime!  So what do you do?

Physicians are very limited with respect to Medicare and Medicaid patients.  The new doctor must be added to the practice’s provider number, especially if the practice provides “designated health services” such as PT, rehab, clinical lab and diagnostic imaging.  Most practices time the hiring of the new doctor with adding him or her to the provider number and also ensuring that the new doctor is contracted with various payers, all of which can take several months.

There may be a little more flexibility with respect to PPOs and HMOs, though this is tricky.  These payers are usually adamant about credentialing the new doctor and about having him or her sign a participating provider agreement before providing services to their insureds.  In some very limited circumstances, a payer may expedite the process and may even suggest a billing arrangement that would otherwise constitute insurance fraud, but physicians still need to be careful with these arrangement.  When a payer suggests such an arrangement, it is absolutely essential that the proposal and agreement be in writing and review to ensure regulatory compliance.  Otherwise, the practice and the doctors involved may be subject to fraud based claims—e.g. violations of the state insurance laws and even the federal False Claims Act.


Sample Letter for Physicians – Medicare Open Enrollment

Via Marilyn Tavenner,  Acting Administrator, Center for Medicare Services 

It’s picking season – pumpkins, apples, Halloween candy…and a Medicare health or drug plan. Today is the start of Medicare Open Enrollment!

In my work with Medicare, one of the questions people ask me often is which plan is the best one. That’s not something I can answer, because picking a plan is an important and personal decision. Each person has a unique set of priorities. How do you weigh your options? Now’s the time to think about what matters to you, and pick the Medicare plan that meets your needs.

When you sit down to review your Medicare health and drug plan choices this year, keep track of the things you may want in a plan, and pick one that’s right for you. Here are some things to keep in mind while you consider your choices:


You should look at your current health care costs to find coverage that works with your financial situation. How much are your premiums and deductibles? How much do you pay for hospital stays and doctor visits? Just like with everything else, the lowest-premium health plan option might not be the best choice for you.


Are the services you need covered? We know future health care needs can be hard to predict, but changes happen. Maybe your doctor changed your prescriptions this year or you have different health concerns. Make sure you understand what services and benefits you’re likely to use in the coming year and find coverage that meets your needs.


Your time is valuable. When comparing plans, make sure you check which doctors and hospitals you’ll be able to use. Where are they located and what are their hours? Check which pharmacies you can use. Can you get prescriptions by mail? Remember that even if you’re happy with your current plan, these answers might change from year to year.

Quality of care

Ask yourself whether you’re truly satisfied with your medical care. Not all health care is created equal, and the doctors, hospitals and facilities you choose can impact your health. Look for plans with a 5‑star performance rating — the right expertise and care may help speed your recovery and improve your outcomes.

It’s worth your time to take a look and compare coverage between now and when Open Enrollment ends on December 7. Use the Medicare Plan Finder to look at all of the health and drug plan options in your area. If you still need help comparing, call 1‑800‑MEDICARE (1‑800‑633‑4227).

Only you know what’s most important to you and your family – that’s why I want to make sure you have all the information you need to make the best decision. Before you consider your Medicare plan options, think about your personal priorities so you can be sure your plan meets your unique needs.

Stay up to date on the latest Medicare news and follow us on Twitter @Medicarego

June 30th Deadline to e-Prescribe to Avoid Medicare Adjustment Penalty

June 30, 2012 is the deadline for submitting ten (10) Part B Fee for Service (FFS) claims to Medicare to avoid the 2013 Adjustment (penalty) of 1.5% against 2013 reimbursements.

Exception: if a provider submitted 25 e-prescribing events successfully in 2011, they have already met the reporting requirement to avoid the 2013 penalty. Otherwise, this upcoming June 30, 2012 deadline will apply. If you’ve started e-prescribing and are continuing to do so, do not stop at just 10 for this year to avoid the reduced reimbursement for 2013. This should be continually noted on all Medicare claims regardless to avoid any future penalties into the coming years as they will continue to require this as there will be a 2% reduction for year 2014 as well.

CMS Clarifies Place of Service (POS) Coding Requirements

Billing Medicare for services requires the correct POS code on the claim form. Improper use of the POS code has been a problem, especially when services are provided in out-patient hospitals and surgery centers. The OIG has found many circumstances where such services were provided in those facilities were billed as though services were provided in the physician office. The POS code is intended to identify where the physician is physically present and has a face to face encounter with a Medicare patient when covered services are provided.

CMS has issues revised and clarified POS coding instructions. They give multiple examples, including one where a Medicare patient receives MRI services at a hospital. The hospital bills the technical component . The physician is to submit a claim showing the professional component POS as his/her office (code 22), since that is where the physician performed the covered service, not the MRI center at the hospital. The Instructions describe the proper use of POS modifiers and are invaluable in avoiding liability to Medicare.

Representative Corcoran’s HB 1329 Signage and Balanced Billing

Imagine this: the Florida Legislature believes that consumers need to be protected from unscrupulous business practices by physicians and facilities (including physicians, hospitals and surgery centers) and will require things like (1) publishing charges with huge signage, and (2) informing consumers how charges compare to hospital imaging center charges. Failure to do so will subject the physicians and the centers to civil fines of $1,000/day is grounds for professional discipline. The Bill also holds insurers responsible for paying for medical services, but not where the provider doesn’t have a contract with the insurer. This leaves out of network providers out in the cold and will mean significant notice requirements being imposed on all providers.

View the bill in it’s entirety HERE

The 2012 OIG Work Plan – The Government is Still at Work During the Holidays

On November 10, 2011, the Office of the Inspector General of the Department of Health and Humans Services (the “OIG”) issued their 2012 Work Plan. The annual Work Plan is designed to give Medicare providers and supplier notice and information on areas of potential abuse that the OIG to address with particular attention. As we approach a new year, here are some areas that our clients and friends may wish to examine to avoid scrutiny by the OIG

Medical Equipment Companies

Enrollment Abuses

The OIG has discovered a pattern of improper enrollment among supplier of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS). The OIG is looking to Medicare contractors (carriers and intermediaries) to be more scrutinizing in the enrollment of DMEPOS suppliers. The contractors will be assessed on their use of enrollment screening mechanisms and post enrollment monitoring activities to find companies that may pose fraud risks. It is, therefore, important for DMEPOS suppliers to make sure all applications for enrollment and even those for change of ownership are completed accurately and thoroughly.

Payments for High Priced Equipment

Additionally, the OIG will be undertaking a heightened review of the appropriateness of payments to DMEPOS suppliers for “high ticket” items such power mobility devices, oxygen and hospital beds. The medical equipment industry has always been the target of potential abuse. The OIG confirms this stating that there continues to be wide spread abuse of DME not ordered by physicians, not delivered or not needed. The OIG will focus on geographic areas with high volumes of “high ticket” reimbursements and review for compete records demonstrating that the services are “reasonable and necessary for the diagnosis and treatment of the illness or injury.” For frequently replaced supplies such as CPAP and respiratory supplies, the OIG will review compliance with the requirements that a Certificate of Medical Necessity must specify the type of supplies needed and the frequency with which they must be replaced used or consumed.

Diabetic Testing Supplies

The OIG will also review Medicare claims for diabetic testing strips and lancets (diabetic testing supplies) to identify questionable billing. Medicare has utilization guidelines for the amount of diabetic testing supplies (DTS) that beneficiaries may receive. To receive reimbursement from Medicare, suppliers must maintain documentation demonstrating that their DTS claims meet all Medicare coverage, coding, and medical necessity requirements. DTS claims with certain characteristics (e.g., DTS provided to a beneficiary at irregular intervals) may indicate improper supplier billing.


Some highlights of physician’s services that are going to be under review include the following:

Place-of-Service Errors

The OIG will be reviewing physicians’ coding practices on Medicare Part B claims for services performed in ambulatory surgical centers and hospital outpatient departments to determine whether they properly coded the places of service. The OIG will particularly pay attention to this as there is evidence of physicians coding for services at the higher non-facility rate when the services were actually performed in an ASC or outpatient setting. Medicare pays a physician higher amounts for serviced performed in a non-facility setting such as the physician’s office.

Incident-To Services

“Incident-to” services will also be reviewed. This is a new initiative on the part of the OIG and therefore, should garner lots of attention. The OIG will try to determine whether payment for such services had a higher error rate than that for non-incident-to services. We will also assess CMS’s ability to monitor services billed as “incident-to.” One of the main focuses of this review is to cut down the amount of billings for incident to services performed by non-physicians without the required direct physician supervision. The OIG has found that unqualified non-physicians performed 21 percent of the services that physicians did not perform personally. Incident-to services represent a potential abuse for the Medicare program in that they do not appear in claims data and can be identified only by reviewing the medical record.

Evaluation and Management Services (“E/M Services”)

In 2009, Medicare paid $32 billion for E/M services. This represented nearly 20% of all Medicare Part B payments. With those dollars at stake, the OIG will be reviewing E/M claims to assure there is appropriate documentation to justify payment for the more intensive E/M codes. It is important to thoroughly document records to demonstrate the type, setting, and complexity of services provided and the patient status, such as new or established. Also under review will cases of multiple E/M services for the same providers and beneficiaries to identify electronic health records (EHR) documentation practices associated with potentially improper payments. Medicare contractors have noted an increased frequency of medical records with identical documentation across services.

Payments for Services Ordered or Referred by Excluded Providers

Medicare does not allow payment to a physician or supplier for services and items provided that were prescribed or ordered by individuals or entities excluded from the Medicare program. To combat that practice, the OIG will undertake a review of the nature and extent of Medicare payments for services ordered or referred by excluded providers (those who have been barred from billing Federal health care programs) and examine CMS’s oversight mechanisms to identify and prevent payments for such services.

There are numerous other areas of concern that will be reviewed by the OIG during 2012. To assure compliance with the items describes as well as other health care laws, the Florida Healthcare Law Firm offers a comprehensive compliance audit of your organization. For more information please contact us  at 561-455-7700

Supervisory Requirements for IDTFs

supervisionWe get questions all the time regarding the supervisory requirements for Independent Diagnostic Treatment Facilities (IDTF). Here are some tips in complying with one of the key elements in obtaining and maintaining status as an IDTF and as a Medicare provider.

An IDTF must have one or more supervising physicians who are responsible for the direct and ongoing oversight of the quality of the testing performed, the proper operation and calibration of equipment used to perform tests, and the qualifications of non-physician IDTF personnel who use the equipment. Not every supervising physician has to be responsible for all of these functions. One supervising physician could be responsible for operation and calibration of equipment, while other physicians are responsible for test supervision and the qualifications of non-physician personnel. Continue reading

Are Recovery Audit Contractors Going to Put You on the RAC?

Recovery Audit Contractors are here to stay and they are affecting the way medicine is practiced across the nation.  If they have not already, they will influence your office and facility practice, and likely hit you in the pocket book.

Recovery Audit Contractors, or ‘RACs’, were designed through a federal demonstration project from 2005 until 2008.  The purpose of RACS is twofold:

  • Ensure Medicare providers deliver more nationally consistent, evidence based health care
  • Reduce noncompliance with Medicare coverage, coding and billing rules.

The goal is to reduce Medicare spending, plain and simple.

RACs are structured by region and our southeast region RAC is Connolly Consulting Associates, Inc of Wilton CN.  RACs work on a 9 to 12% contingent fee basis, but must return any fees if a RAC finding is overturned.  Each RAC must post on its website the types of issues under review.  This is a good place to start if you would like to know what Connolly is auditing.  Each RAC must employ a full time medical director, nurses, therapists and certified coders.

RACS perform two types of reviews, automated and Complex.  Automated reviews review claims data derived from the CMS database without a review of the records supporting the claim.  Complex reviews are performed when there is a high likelihood of overpayment.

For the most part, RACs have focused on inpatient hospitals, but that is changing.  Five categories of improper payments are generally being identified:

  • Not Medically Necessary- The record does not support the need for the procedure or stay.  Short stays are often deemed not medically necessary, as is duplicate billing for the same procedure.  This category often is found when a provider either fails to submit documentation or fails to submit sufficient documentation to support a claim.
  • Incorrectly Coded-A claim is submitted for a certain procedure, but the medical record indicates Performance of a different procedure
  • Incorrect Payment Amounts
  • Non covered, or duplicative services
  • Other errors- For example, a provider uses an outdated fee schedule or is paid twice for the same claim.

Likely, physicians are affected because inpatient facilities are working hard to assure records substantiate the billed for admission or procedures.  You may be called upon by your inpatient facility to improve and/or supplement your medical record keeping to avoid RAC recoveries.  In addition, remember, the RAC only looks at the inpatient medical record.  If justification for the hospitalization or procedure is in your office records, but not in the inpatient record, it does not count.

There is a lot more to say about RACs, but we will conclude this article with a look into the future.  HHS Office of the Inspector General has recommended CMS focus RAC activity on nursing homes; highly utilized outpatient therapies; and maximized use of generics.  With the amount of fraud in home care services and DME’s, you can bet they will go there, too.  Medicare Part D RACS are just rolling out, and Medicare Quality Reviews are on the horizon.  In addition, Medicaid RACs are coming next.

RACs are here to stay, so stay tuned for more on RACs.