Industry Updates: 5010, SGR, Place of Service Rules and ICD-10

The 5010 Disaster

In a recent e-mailed statement, AMA President Dr. Peter Carmel said that since the 5010 standard was implemented on January 1, 2012, payors are experiencing very alarming problems that have resulted in significant interruptions in cash flow for physicians. Some carriers, states and regions have been harder hit than others. Also, practice complexity has impacted the payors ability to address the changes mandated by 5010. Single location groups have not had nearly the negative impact of multi-location groups and those that bill for both professional and global services.

The Texas, New Mexico and Oklahoma Medicare intermediary is requiring some groups (depending on when they were originally credentialed with Medicare) to re-file EDI applications, which can take up to 6 weeks for Medicare to approve, before they can submit claims to Medicare. This is a monumental issue because some radiology groups in this part of the country are 50% Medicare. Medicare is needlessly inflicting an incredible financial burden on these groups due to their endless and uncontrolled bureaucracies.

SGR Update

Any hope for a fast and quiet resolution to the Congressional battle over fixing the 27% Medicare rate cut seemed to dim this week as members of a bipartisan negotiating committee clashed over how to pay it and other parts of the bill. Senate Democrats suggested that they would come up with their own bill to get the matter resolved.

The so-called Conference Committee was formed at the end of last year to come up with a 10 month extension of the payroll tax cut, unemployment benefits, and a “Doc Fix”. Republicans and Democrats had been unable to come up with a long-term plan and settled on a two-month extension instead.

Behind the scenes, both sides say there has been some progress. Negotiators have resolved minor issues, and Senate negotiators this week will offer proposals to counter House Republicans on the three most contentious issues……stay tuned.

CMS Revises and Clarifies Place of Service (“POS”) Coding Instructions

The Centers for Medicare & Medicaid Services (“CMS”) released Change Request 7631 – issued as part of Transmittal 2407 – which provides, in part, new guidance for the proper use of POS codes with regard to the Professional Component (“PC”) and the Technical Component (“TC”) of diagnostic tests.

CMS previously issued the now-rescinded Transmittal 1873, which instructed the use of the two-digit POS code to reflect the actual location of the radiologist at the time of rendering the interpretation. With the common use of tele-radiology and remote reading, this became unimaginably complex to administer.

However, CMS now establishes that for virtually all services reimbursed under the Medicare Physician Fee Schedule (“MPFS”), the POS code to be used shall be the same POS code which represents the setting where the beneficiary received the face-to-face service.

In cases where the face-to-face requirement is obviated, such as when a physician provides the PC from a distant site, the POS code assigned by that interpreting physician will be the same as the setting in which the beneficiary received the T C of the service. In other words, when a radiologist furnishes a diagnostic interpretation, the POS code assigned by the radiologist for that interpretation (i.e. the “PC”) shall be the same POS code representing the setting where the beneficiary received the Technical Component (“TC”) service.

To illustrate, CMS offered the following example: “A beneficiary receives an MRI at an outpatient hospital near his/her home. The outpatient hospital submits a claim that would correspond to the TC portion of the MRI. The physician furnishes the PC portion of the beneficiary’s MRI from the physician’s office location. POS code 22 (Outpatient Hospital) shall be used on the physician’s claim to indicate that the beneficiary received the face-to-face portion of the MRI, the TC, at the outpatient hospital.” In the same light, for teleradiology services, Transmittal 2407 now instructs that the POS code is generally the place where the beneficiary received the TC.

While Transmittal 2407 offers important and long-overdue clarification with respect to POS, two issues need further investigation: (1) whether the carrier jurisdiction rules (Claims Process Manual, Ch. 1, Sec. 10.1.1.3) are superseded by zip code billing process and (2) the impact on global billing since billing the PC and TC components together is now possible only when the TC supplier and the physician who provides the interpretation service are the same.

AMA Says Stop ICD-10

As a result of a resolution passed by the AMA’s House of Delegates this past November, Dr. James Madara, the physician organization’s chief executive, has written a letter to House Speaker John Boehner (R-OH) urging him to push legislation stopping the Federal government from adopting the ICD-10 coding system.

The AMA argues that moving to ICD-10 is unnecessary and would provide very little in the way of a return. Given the industry’s handling of the 5010 conversion, which is much less complex than the impending ICD-10 conversion, any conversion to ICD-10 could be catastrophic.

Madara also noted that the timing of the move to ICD-10 is problematic given all of the other changes that will be occurring over the next two years. The letter notes, “The timing of the ICD-10 transition that is scheduled for October 1, 2013, could not be worse, as many physicians are currently spending significant time and resources implementing electronic health records (EHR) into their practices.”

ADVOCATE will continue to provide updates as they become available.

Best regards,
Kirk Reinitz, CPA
President & CEO

Andre Perrotta, Esq.
Chief Compliance Officer