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Medicare will begin enforcing a new claim denial process on May 1 that will affect multiple health care providers ordering particular Medicare-covered items or services for Medicare beneficiaries. As of that date, a provider of a covered clinical laboratory, imaging, durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) or home health service will not be paid if the ordering or certifying practitioner has not enrolled in Medicare or properly opted out.

The final rule was issued on June 26, 2012 after Medicare officials modified the proposed regulations in several ways in response to advocacy from healthcare provider associations. CMS states that:

‘«£Effective May 1, 2013, the Centers for Medicare & Medicaid Services (CMS) will turn on the Phase 2 denial edits. This means that Medicare will deny claims for services or supplies that require an ordering/referring provider to be identified and that provider is not identified, is not in Medicare’s enrollment records, or is not of a specialty type that may order/refer the service/item being billed.‘«ō

Phase 1 edits notified providers if the ordering or certifying practitioner was not enrolled or properly opted out but did not deny payment. The CMS uses the term “ordering/referring” to refer to practitioners who order or certify covered items and services. PECOS is the Internet-based Provider Enrollment, Chain and Ownership System.

What this means to you

In Phase 2, if the ordering/referring provider does not pass the edits, the claim will be denied. This means that the billing provider will not be paid for the items or services that were furnished based on the order or referral. Below are the denial edits for Part B providers and suppliers who submit claims to carriers and/or MACs, including DMEMACs:

254D Referring/Ordering Provider Not Allowed To Refer

255D Referring/Ordering Provider Mismatch

289D Referring/Ordering Provider NPI Required

CARC code 16 and/or the RARC code N264 and N265 shall be used for denied or adjusted claims.

The announcement of Phase 2 implementation in a special edition of MLN Matters?Šincludes guidance and Q&A on the new rule:

I order and refer. How will I know if I need to take any sort of action with respect to these two edits?

In order for the claim from the billing provider (the provider who furnished the item or service) to be paid by Medicare for furnishing the item or service that you ordered or referred, you, the ordering/referring provider, need to ensure that:

a. You have a current Medicare enrollment record.

‘«ů If you are not sure you are enrolled in Medicare, you may:

i. Check the Ordering Referring Report and if you are on that report, you have a current enrollment record in Medicare and it contains your NPI;

ii. Contact your designated Medicare enrollment contractor and ask if you have an enrollment record in Medicare and it contains the NPI; or

iii. Use Internet-based PECOS to look for your Medicare enrollment record (if no record is displayed, you do not have an enrollment record in Medicare).

iv. If you choose iii, please read the information on the Medicare provider/supplier enrollment web page about Internet-based PECOS before you begin.

b. If you do not have an enrollment record in Medicare.

‘«ů You need to submit either an electronic application through the use of internet-based PECOS or a paper enrollment application to Medicare.

c. You are an opt-out physician and would like to order and refer services. What should you do?

If you are a physician who has opted out of Medicare, you may order items or services for Medicare beneficiaries by submitting an opt-out affidavit to a Medicare contractor within your specific jurisdiction. Your opt-out information must be current (an affidavit must be completed every 2 years, and the NPI is required on the affidavit).

d. You are of a type/specialty that can order or refer items or services for Medicare beneficiaries.

When you enrolled in Medicare, you indicated your Medicare specialty. Any physician specialty (Chiropractors are excluded) and only the non-physician practitioner specialties listed above in this article are eligible to order or refer in the Medicare program.

Be sure to review MLN Matters for full information on the rule.

For help in ensuring you are receiving all the reimbursement your practice deserves, contact at 800-966-9270 or is a national medical billing company with 5 locations (and growing) on the East coast and West coast alike. We do billing for over 1,500 providers. We are headquartered in Los Angeles, with large billing centers in Manhattan, Long Island, Los Angeles, Maine and Atlanta.

We‘«÷re ready to help you bring all the revenue you deserve to your bottom line.

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There are a variety of excellent resources for medical billing tips and changes, and we are pleased to bring you some items from some of the leading experts.

Medicare Recouping Payments for Annual Wellness?ŠVisits

Betsy Nicoletti, Nicoletti Notes, March 14, 2013

Betsy Nicoletti reports that CMS is recouping payments when its contractors have paid for both a facility and a professional fee for AWV. ?ŠFor billing purposes, she says, either the facility or the physician may report the AWV but not both.?Š Specifically, this refers to codes G0438 and G0439.?Š It does not change the reporting of the Welcome to Medicare Visit G0402, which may still be reported with both a facility and professional fee. Read More


Physicians Practice has published several helpful articles on medical billing lately featuring tips by experts, including:

Transitional Care Management and E&M Counseling

Bill Dacey, Physicians Practice, April 8, 2013

New Medicare Codes

Q:I was told that I do not need to see a patient to use the new Medicare transitional care management codes. Will the care coordination activities without a face-to-face office visit suffice?

A:When Medicare proposed its own G-codes for these types of services, it did not require a visit. In late 2012, it decided to adopt the new CPT version of the codes that do include a visit. So yes, you now need the visit and the other communication and coordination elements.

Time Changes

Q:Back in January of 2012, you wrote about a change to the way time could be counted for E&M counseling. Has there been any more written about that?

A:?ŠWhat you are likely referring to is when we pointed out a distinction between “typical times” versus “actual times” that first appeared in the 2011 CPT book introduction. It was the first time we’d seen that distinction. The additional sentence remains in the 2013 CPT manual. It reads: “When codes are ranked in sequential typical times and the actual time is between two typical times, the code with the typical time closest to the actual time is used.”

The CPT manual has not amplified or commented on that section since, but there are indications Medicare believes its version of time is the more conservative “typical time” stated on each E&M code where time applies. I would give that some thought.

The 2013 CPT manual does, however, go into greater detail on time in its new section on psychotherapy codes. For instance, it states: “In reporting, choose the code closest to the actual time (i.e. 16 to 37 minutes for 90832 and 90833, 38 to 52 minutes for 90834 and 90836, and 53 minutes or more for 90837 and 90839).” The three sets of codes referenced have typical times of 30, 45, and 60 minutes respectively. So CPT does seem to be developing this concept with increasing granularity. As a result, it would seem increasingly reasonable to employ the “closest to typical time” approach. Glad you asked!

Read More


How to Ensure Accurate Medical Coding

Janet Colwell, Physicians Practice, April 2, 2013

Failing to educate staff about correct coding may contribute to the downfall of small to midsized practices, since medical coding errors can be a huge source of lost revenue. A recent article in?ŠPhysicians Practice reviews common billing and coding mistakes and offers suggestions on avoiding them.

The solutions include:

– Internal auditing

– Dedicating staff to following up on denials

– Verifying patients‘«÷ personal and insurance information

– Reviewing how to correctly use modifiers

– Teaching physicians what documentation is needed

– Learning the most recent code changes

Read More


In Medical Coding, Apply the Right Rules at the Right Time

Raemarie Jimenez, CPC, Physicians Practice, March 20, 2013

When submitting medical claims, Raemarie writes, not only do you need to get the codes right but you have to apply the right rules. Coding guidelines are found in the CPT?ę code book and payer policies. HIPAA mandates that providers and payers use the same codes but payers can vary the payment policies and coding requirements. For example, bilateral procedures can be reported in different ways. The “right” way is to follow payer preference which can vary from payer to payer.

She adds that in the CPT?ę code book, there are coding guidelines throughout the sections and subsections that provide valuable information for proper code selection. Often the coding guidelines include a description of the procedures and additional procedures that can be billed when performed. For example, the coding guidelines preceding malignant excisions codes (11601-11646) state that a simple closure is included in the procedure. If the excision site requires an intermediate or complex closure, the closure can also be reported if performed. If you did not pay attention to this guideline, she advises, you could be losing money if you did not code the intermediate or complex closure.

Raemarie suggests that the parenthetical notes found in the CPT?ę code book are also valuable, as the intent is to assist in proper coding. She also says that one of the biggest mistakes a practice can make is applying Medicare rules to all payers. This can cause improper reimbursement. There are some procedures Medicare does not cover that private payers will and vice versa.

Read More


More on Transitional Care Management Codes

Bill Dacey, Physicians Practice, March 7, 2013

Bill is asked, ‘«£Are the new CPT codes for transitional care management (TCM) only for a patient’s primary-care provider? We have trauma surgeons and cardiologists asking if they can use these codes to represent their patients’ follow-up care after a hospital stay.‘«ō Bill advises that in the 2013 Physician Fee Schedule Final Rule, CMS mentions that its version of the TCM codes is part of “a strategy to recognize and support primary care and care management.”

He goes on to clarify that although the CPT manual does not specify which providers should use the codes (99495 and 99496), the final rule states, “The post-discharge transitional care services HCPCS G code we propose would be used by the community physician or qualified nonphysician practitioner to report the services furnished in the community to ensure the coordination and continuity of care for patients discharged from a hospital (inpatient stay, outpatient observation, or outpatient partial hospitalization), SNF stay, or CMHC. Given the elements of the service and the short window of time following a discharge during which a physician or qualifying nonphysician practitioner will need to perform several tasks on behalf of a beneficiary, we stated our belief that it would be unlikely that two or more physicians or practitioners would have had a face-to-face E/M contact with the beneficiary in the specified window of 30 days prior or 14 days post discharge and have furnished the proposed post-discharge TCM services. Therefore, we did not believe it necessary to take further steps to identify a beneficiary’s community physician or qualified nonphysician practitioner who furnished the post-discharge TCM services. We propose to pay only one claim for the post-discharge transitional care GXXX1 billed per beneficiary at the conclusion of the 30-day post-discharge period.”

Bill concludes, ‘«£So it is clear Medicare envisioned that the primary-care physician or practitioner would use these codes. That said, CMS is not prohibiting other specialties from billing the new codes because it believes ‘«ˇthere will be circumstances in which cardiologists, oncologists, or other specialists will be in the best position to furnish transitional care coordination.‘«÷”

Read More

AAPC News always provides a variety of useful articles on its website. A recent piece worth noting is:

Top 10 Medicare Risk Adjustment Coding Errors

Carol Olson, CPC, CPC-H, CPC-I, CEMC, CCS, CCS-P, CCDS, AAPC News, March 20, 2013

If you are seeing Medicare Advantage patients, be mindful of opportunities and pitfalls. MA?Šhealth plans are reimbursed based on beneficiaries‘«÷ chronic conditions. Submitting an inaccurate diagnosis, or a diagnosis resulting in a different hierarchical condition category (HCC), is a compliance risk. Any change in the HCC could mean you are receiving too much or too little revenue. Either way, the code would not be validated and would be considered discrepant.

There are opportunities for you to capture a more appropriate HCC code. Consider this list of the top 10 coding errors for risk adjustment:

1. The record does not contain a legible signature with credential.

2. The electronic health record (EHR) was unauthenticated (not electronically signed).

3. The highest degree of specificity was not assigned the most precise ICD-9-CM code to fully explain the narrative description of the symptom or diagnosis in the medical chart.

4. A discrepancy was found between the diagnosis codes being billed versus the actual written description in the medical record. If the record indicates depression, NOS (311?ŠDepressive disorder, not elsewhere classified), but the diagnosis code written on the encounter document is major depression (296.20?ŠMajor depressive affective disorder, single episode, unspecified), these codes do not match; they map to a different HCC category. The diagnosis code and the description should mirror each other.

5. Documentation does not indicate the diagnoses are being monitored, evaluated, assessed/addressed, or treated (MEAT).

6. Status of cancer is unclear. Treatment is not documented.

7. Chronic conditions, such as hepatitis or renal insufficiency, are not documented as chronic.

8. Lack of specificity (e.g., an unspecified arrhythmia is coded rather than the specific type of arrhythmia).

9. Chronic conditions or status codes aren‘«÷t documented in the medical record at least once per year.

10. A link or cause relationship is missing for a diabetic complication, or there is a failure to report a mandatory manifestation code.

In comments following the article, Judy Marino points out that all of Carol Olson‘«÷s comments are out of the CMS 2008 HCC Manual available on the CMS website.

Read More

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Did you know that unless you take certain steps this year, your reimbursements from Medicare in 2015 and beyond will be cut 2 percent or more?

That‘«÷s right‘«Ųbecause the PQRS and eRX programs are shifting from bonus to penalty programs to insure compliance, your revenue could be affected if you don‘«÷t take key steps.

More than 80 percent of Medicare providers will face penalties for failing to meet quality thresholds if current performance trends continue.

To find out more about these changes and what you need to do to protect your practice, view our user-friendly infographic now.


Make sure you protect your practice by following these key steps–and for help protecting your practice revenue and bringing more to the bottom line, contact today at 800-966-9270.

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CMS will host a National Provider Call featuring subject matter experts discussing how to avoid a 2014 eRx and 2015 PQRS payment adjustment on Tuesday, February 19. Many providers may not realize that Medicare is transforming its voluntary Physician Quality Reporting System and ePrescribing programs from rewarding doctors who participate to punishing doctors who do not. This is a good opportunity to learn firsthand what your practice needs to do to avoid penalties.

“Because it’s physician reporting behavior in 2013 that will be used as the basis for penalties in 2015, we now have about 365 days to get our collective act together so that we — physicians in general — won’t be subject to widespread government penalties,” says Dr. Richard Duszak, chief executive officer and senior research fellow of the Harvey L. Neiman Health Policy Institute.

Event: How to Avoid a 2014 eRx and 2015 PQRS Payment Adjustment National Provider Call

Topic: Physician Quality Reporting System and Electronic Prescribing (eRx) Incentive Program


The Centers for Medicare & Medicaid Services (CMS) Provider Communications Group host a National Provider Call on the Physician Quality Reporting System (PQRS) and Electronic Prescribing (eRx) Incentive Program wherein subject matter experts discuss how to avoid a 2014 eRx and 2015 PQRS payment adjustment.

When: Tuesday, February 19, 2013

Time: 1:30-3pm Eastern Time

Who Should Participate:

Eligible Professionals, Medical coders, physician office staff, provider billing staff, health records staff, vendors and all other interested Medicare fee-for-service (FFS) healthcare professionals


  • Announcements
  • How to Avoid 2014 eRx and 2015 PQRS Payment Adjustment National Provider Call Presentation
  • Resources & Who to Contact for Help
  • Question & Answer Session

Register now to join this call at:

After you participate, please share your comments and concerns in the comments box below–we’d like to know what your practice plans to do to avoid these penalties and protect your practice revenue. Have you filed for exemptions, are you already in compliance, or are you planning to take the hit? Share your thoughts with us and your colleagues, and we can all learn from each other.

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