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1. Medicare payments remain in flux – Congress left Washington late last year after only passing a two month fix for the flawed sustainable growth rate (SGR) formula, despite the fact that they had a full year to address the 2012 cuts. Congress’s inability to avert the 27.4 percent cut for a full year exacerbates uncertainty for physician payment in 2012.
2. Version 5010 transition – Jan. 1 was the compliance deadline to use Version 5010 standards for electronic claims and other HIPAA transactions. MGMA research indicated that some practice trading partners, including practice management system vendors and health plans, were not able to meet the deadline.
3. E-prescribing penalties begin in 2012 – A 1% penalty will be levied in 2012 for physicians who are eligible for the Medicare e-prescribing program and did not successfully e-prescribe in 2011 or have a hardship exemption request approved by the Centers for Medicare & Medicaid Services (CMS). E-prescribing penalties increase to 1.5 % in 2013 and to 2.0% in 2014.
4. Countdown to ICD-10 – The healthcare industry has been focused on transitioning to HIPAA Version 5010 electronic transaction standards, but 5010 is only a stepping stone to implement ICD-10, the new diagnosis code set. The industry must transition from ICD-9 to ICD-10 by Oct. 1, 2013. This new code set is vastly more complex.
5. 2012 elections – Campaigns are underway for the 2012 elections, which could change the political landscape for the next four years and have a significant impact on health policy, including repeal or further implementation of healthcare reform.
6. Continued emphasis on compliance – Both Congress and CMS continue to focus on curbing fraud, waste and abuse in public health programs, such as Medicare and Medicaid. Medicare recovers more than $7 for every $1 spent on fraud investigations, according to government data. Group practices should be prepared for new compliance initiatives.
7. The Supreme Court hearing on ACA – Justices will hear challenges to the constitutionality of the 2010 healthcare reform bill, the Patient Protection and Affordable Care Act (ACA).
8. CMS explores alternative payment models – The Center for Medicare & Medicaid Innovation (CMMI) and CMS continue to explore payment models that move away from the current fee-for-service reimbursement method.
9. Focus on site of service payment differentials – The Medicare Payment Advisory Commission and Congress are taking a closer look at payment differences for identical services across delivery settings, including the difference between payments made to hospitals and physician practices.
10. EHR meaningful use incentives continue – The second year of the Medicare EHR incentive program is important because 2012 is the last year that physicians can start participating and earn the maximum amount of $44,000 over five years per eligible professional.
As part of the change to the 5010 version of the HIPAA transaction standards starting in 2012, practices will no longer be permitted to use a PO box or lock box address as the “billing provider” address to receive payments. For electronic claims, a street address or physical location is required as the billing provider address. The Centers for Medicare & Medicaid Services (CMS) report that the PO box issue is one of the leading causes of test claim rejections. CMS has indicated it will reject Medicare claims that continue to
report a PO box in the billing provider address field.
Under HIPAA, all physicians and other healthcare providers that submit claims electronically are required to transition to the Version 5010 transactions by Jan. 1, 2012. Practices that wish to continue having payments sent to a PO box or lock box must report this address in the “pay-to” address field.
Practice administrators should ensure that their practice management system vendor, billing service or clearinghouse has made this change. Practices must update their address information before Jan. 1 to prevent claims rejections and interruptions in cash flow. Commercial payer are implementing the 5010 standards as well, so be ready to trouble shot the commercial payers claims denials or prepare for a significant cash flow impact.
Visit mgma.com/5010 or the CMS Web site for more information on the change to Version 5010.
Physicians in the United States are anxiously watching the clock tick down to January 1, 2012, when, barring another last-minute Congressional overide, their pay for caring for Medicare patients will drop by an estimated 29.5%.
The cut is mandated under the sustainable growth rate (SGR) formula that determines physician pay. Since 2002, the formula, which is based on the economy and Medicare spending, has calculated declines in physician pay. All declines have repeatedly been averted by eleventh-hour legislation.
The ongoing threat of cuts harms physician morale and is causing many providers to re-evaluate their practices.
This is a 30% pay reduction. This article is from the October 2011 issue of Anesthesiology News, volume 37 number 10. The author is Christina Frangou.
On October 5 and 6, 2011, the Medicare Payment Advisory Commission (MedPAC), the commission tasked with advising Congress on Medicare payment issues, will meet to review a draft recommendation that would help cover the costs of SGR repeal by cutting payments to specialty physicians, such as anesthesiologists, by nearly 18 percent over three years.
In a letter written to MedPAC in response to the proposed plan, ASA President Mark A. Warner, M.D., expresses strong opposition to the commission’s draft recommendation. Dr. Warner writes, “While we support permanently fixing the SGR, we believe cutting payment for anesthesia by 5.9 percent each year over the next three years, followed by a freeze in payment would harm patient access to care and does not take into account that Medicare currently pays anesthesiologists only 33 percent of the average commercial insurance payment for the same service.”
The proposed 10 year plan would differentiate specialty physicians from primary care physicians in regards to Medicare payments. For specialty physicians, the draft recommendation would reduce payments 5.9 percent annually in years 2012, 2013 and 2014, followed by payment freezes for the final seven years. Payments for primary care specialties would be exempt from the payment reductions and would instead be frozen at current 2011 levels for the entirety of the 10-year period.
ASA will continue to update members on the latest MedPAC developments.
