PECOS Compliance – Clearly unclear

The following is a portion of the July 12 HomeCare Monday email discussing the current status of PECOS compliance. It’s bad enough that home infusion providers are being held for physician compliance, something they do not have control over, but reading this gave some real insight to the precarious position we are in and the lack of clarity from CMS.

Say What about the PECOS?
BALTIMORE—The question has been asked any number of times now in any number of ways: What exactly is the deal with PECOS compliance regarding DME claims?

The industry’s latest attempt at getting a straight answer came from the American Association for Homecare’s Walt Gorski, vice president of government affairs, on a CMS Open Door Forum July 7.

The background:

The deadline for physician and other prescriber enrollment in the Provider Enrollment, Chain and Ownership System was Jan. 3, 2011, but in order to be compliant with the new health reform law (Affordable Care Act, or ACA), CMS pushed that deadline up to July 6 in an interim final rule.

In a June 30 announcement, the agency said it would “for the time being not implement PECOS edits that would automatically reject claims based on orders, certifications, and referrals made by providers that have not yet had their applications approved by July 6, 2010.”

But the agency gave providers no assurance that, in future audits, they wouldn’t have to give back their Medicare reimbursements based on claims submitted from July 6 to Jan. 3 if the ordering physician was not enrolled in PECOS.

So, AAHomecare’s Gorski asked:

Will [you] address that specific issue, that CMS and its contractors will not seek recoupment from claims that are receiving warnings during this period?

Jim Bossenmeyer, CMS director of provider enrollment, responded this way:

There are a number of reasons why Medicare may recoup money.”

He added that DMEPOS suppliers should:

• Make sure their claims contain the legal name of the physician or other eligible professional along with their Type 1 NPI;
• Make sure the individual is licensed to practice in the state and has not been excluded from the program by the Office of Inspector General;
• Keep documentation from orders for services referred to them; and
• Work with their referral sources to make sure they know there is a requirement for PECOS enrollment.

Gorski tried again:

If we do that and a ZPIC or RAC audit occurs in 2012 and they look and see the effective date of the IFR and see that the referring physician was not enrolled in PECOS, you are telling the supplier community that the money will not be recouped?

To which Bossenmeyer replied:

I have not said that. I understand what you would like me to say, but I cannot give you that answer today.

The comment period for the IFR closed July 6.

At some point,” Bossenmeyer said, “CMS, after we have gone through looking at the public comments, will make a decision regarding the implementation of systematic editing.

One more try from Gorski:

If that is the case, what do [suppliers do if they] get a referral from a physician that is not PECOS-enrolled?

Said Bossenmeyer:

What I’m suggesting to you is that most physicians have an enrollment record in PECOS.” There are 26,000 more physicians and 3,400 more non-physician practitioners in the system’s “pending” file that are currently going through the enrollment process, he added.

“DMEPOS suppliers know the physicians they work with and they know the non- physician practitioners they work with,” Bossenmeyer said. “They should submit compliant claims.

What I’m suggesting to you is that most physicians have an enrollment record in PECOS.” There are 26,000 more physicians and 3,400 more non-physician practitioners in the system’s “pending” file that are currently going through the enrollment process, he added.

With that, AAHomecare reported in its July 8 newsletter, the association “continues to press CMS for clear and unambiguous guidance and is working with providers and patient groups to address our concerns.” And there are a lot of them.

In an eight-page letter sent to CMS, the association formally requested a delay in enforcement of PECOS regulations. The letter reads, in part:

Under the circumstances, it would be patently unfair for CMS and its contractors to reopen claims as a means of enforcing ACA compliance. DMEPOS providers, at best, have only limited influence over what their referral sources do.

More importantly, the IFR offers zero guidance with respect to what providers must do to demonstrate their compliance with the new rules. Although we appreciate the steps CMS is taking to soften the impact of the rule, the potential that providers, whose claims get paid after July 6 but before CMS implements rejections for ordering/referring physicians, will nonetheless be at risk for recoupments based on audits. This will affect HME providers’ cash flow in ways that can be disruptive to patient care.

Consequently, we request that CMS delay the rule and its enforcement until January 3, 2011, at the earliest. Further, because our experience proves how difficult it is to motivate referral sources to comply with these rules, we strongly recommend that CMS publish the percentage of physicians and eligible professionals enrolled in PECOS as of November 30, 2010. If the percentage of providers who are not enrolled in PECOS is greater than five percent of the total number of prescribing physicians and eligible professionals nationwide, CMS should delay the implementation date until this target is met.” Also on the Open Door call, Bossenmeyer said DMEPOS suppliers would not able to use the PECOS system themselves “until the fall of this year.” CMS had previously said the system would be open for DMEPOS enrollment in July.

Rock-Pond Solution’s PECOS Database Audit Tool is one way to assess your risk and do something about it NOW. 

CMS Physician Registration Compliance

Any physician who refers or orders services (DMEPOS, home health, specialist services [not defined by CMS], lab, or imaging) will need to be enrolled with Medicare in the Provider Enrollment, Chain and Ownership System (PECOS) by July 6, 2010. This includes any physician who has not submitted an updated enrollment application to Medicare since November 2003 or has had a change to their enrollment information during this time but has not reported the change. If physicians are not enrolled by July 6, the physicians who they refer patients to could see their claims reject. This enforcement goes beyond what is in the new health system reform law which says that by July 1, 2010, all physicians who refer/order home health and DMEPOS must be enrolled. The law does allow for the Secretary to require physicians who order/refer other services to be enrolled later, but CMS has decided to require them all to be enrolled in PECOS by July 6, 2010.

Earlier this year, the compliance date had been delayed to January 3, 2011. Physicians and other providers should not delay in verifying their current PECOS enrollment as the enrollment process takes about 45 days. To verify current PECOS enrollment, contact WPS Medicare enrollment at (866) 503-7664 or check the “Medicare Ordering and Referring File” periodically updated on the CMS Web site.

What this means for home infusion providers is:

1. They must identify on an ongoing basis which of their physicians who refer Medicare patients are not in the PECOS database.
2. The new physician process needs to be changed to add the step to check the CMS website to determine if the physician is registered.
3. A process needs to be put in place to contact the physician if they are not registered. 

Rock-Pond Solutions has added a PECOS database audit service to do a physician file audit with a 24 hour turnaround to assist providers in determining their physician compliance and minimize the financial risk of denials. 

The following is a sample letter that might be sent to a physician to request them to register in the PECOS database.

Dear Dr. XXXXXX:

By now you have likely heard of PECOS. PECOS (the Provider Enrollment, Chain, and Ownership System) is a comprehensive healthcare provider database maintained by the Centers for Medicare and Medicaid Services (“CMS”). 

On October 5, 2009, Medicare contractors began validating referring physicians referenced in claims for reimbursement for durable medical equipment against PECOS to ensure that only those physicians qualified to prescribe DME are doing so.

Currently, these validations result in warnings to the DME providers; however, on July 6, 2010 claims will be rejected if the referring physician’s information is not found in the PECOS database. It is important that your information in PECOS is complete and accurate so that your patients’ DME equipment is eligible for reimbursement after July 6, 2010.  It is ESSENTIAL that your information is complete and accurate to ensure your patients receive the necessary supplies, medications, and equipment required for their care at home.

Attached please find a basic guide for accessing and updating your PECOS information in the CMS database.  If you have not yet registered and would like more detailed instructions in how to complete this process, please contact our office at (XXX) XXX-XXXX.  Thank you in advance for your business.

Regards, 

Name
Title

Patient Pay Accounts – measure & manage them

Too often we measure the results of our staff by the wrong measures.  This is a disservice to our staff and a liability to our business.  The more we measure based on absolute numbers that are indicators of the business results we are looking for, the more satisfied our staff will be and the healthier our business will be.   

Consider the patient pay collection process.  The process is simple

1. Transfer the balance to the patient.
2. Contact the patient to set up a payment plan (payment in full or monthly payments).
3. If the phone does not work, use certified mail.
4. If the patient won’t pay, escalate the notices you send or transfer to collection.
5. If the patient is still active, collect the amount on the next delivery.

How do you measure this process?

1. The number of calls made
2. The number of patients contacted
3. The number of payment plans set up
4. The number of accounts sent to collection
5. The percentage of patient A/R to total A/R

Reimbursement management needs to know the amount of time is being spent on patient collections and the results that are coming in from these efforts.  You must know the costs you are incurring to collect the accounts and the money you are collecting as a result.  If you don’t, the effectiveness of your patient pay process is a guess at best and you may be chasing a $10 bill with $100.

How many infusion patients did we serve?

Regardless of what business you are in, it is important to know the number of customers served, where they came from and what services or products were provided.  Knowing the number of prospective, current and former customers and understanding as much as you can about them gives you valuable insight into your business.  Although we count “customers” and “services” a little different, this is no less important in home infusion therapy.

In home infusion therapy this is called census management.  Sounds simple, but not always so.  Patient census is most commonly referred to as the “midnight census” in a hospital.  That is, how many patients are in a bed in the hospital when the clock strikes midnight.  This is an easy count.  This number is referred to as a patient day and hospitals have been managing their census by patient days for years.  In home infusion therapy, we are not confined by hospital walls and there is more of a focus on the therapies that are being provided.  Therefore we need to manage by therapy days more than patient days.  In home care when we produce a census that counts each patient once, regardless of the number of therapies they are on, it is referred to as an unduplicated census.  So, we need to manage by therapy, focusing on key therapies, but also know how many patients we are serving.  Finally, since insurance companies typically reimburse by therapy, a patient with multiple therapies will cost less to serve than multiple patients, each with one therapy.  How well do you understand your patient and therapy census?

Some home infusion providers, and software vendors, fall into the trap of trying to identify the primary therapy.  The problem with this is when you only look at the primary therapy, you loose visibility of very important census and therapy information.  The second problem is that keeping up with the primary therapy as physician orders change is a tedius process and seldom followed through on.  This would be like tracking revenue by only primary payer.  It’s easy but it doesn’t give you a very accurate picture of your business.

The key to accurately reporting therapy and patient census is to be able to produce total and distinct numbers.  If you are using a system like CPR+ that does not allow you to establish specific cases by therapy, the therapy is only recorded at the order level.  It is carried through to the delivery ticket and is only accurate if you have only one therpy on a delivery ticket.  If we determine that a patient is served when a prescription is filled or a delivery made and have the ability to have total and distinct counts, we are able to see our patient and therapy census in total and in an unduplicated formats.  This is essential to census management.  This will also take out the margin of error that is caused by patients not being discharged on a timely basis and patients who are on and off service due to hospitalization.

So, how many patients did you serve last month?  How many therapies?  How many IV Antibiotic patients?  How many IV Antibiotic patients who also had other therapies?  The answers to these questions are just the beginning to understanding your business.

Revenue Analysis by Payer

Recently I got a call from a customer who was trying to explain a drop in revenue for one of his sites.  Pharmacy production, patient census and even the payer mix seemed to stay fairly constant.  Yet, the billed revenue for the month was lower than expected.  After reviewing all of the normal areas (did we confirm all of our tickets, what was the change in the unbilled, number of billable days in the month, etc.), it was determined that they needed to dig a little deeper and they needed Rock-Pond to help them pull the information out of their system. 

Let me tell you what we found and then I’ll tell you what we learned.  We found that the payer mix and the specific drugs dispensed within a therapy and payer type caused a significant, unexpected drop in the revenue.  The therapy was IVIG and the payor type was Blue Cross.  Although the number of IVIG patients and the number of days on service did not change significantly, a couple of patients with higher priced drugs who had better paying Blue Cross plans were discharged and replaced with a couple of other patients, also Blue Cross, but with very poor reimbursement and with physician orders for drugs that had a much lower AWP.

When we were able to finally see the patient data side by side grouped by billing month within payer within payer type, it was clear that not only do some of our Blue Cross Payers pay better than others, but the variations at the drug level were very significant.  Put those together where both the drug and the payer reimbursement go down at the same time and it’s the perfect storm.

The lesson here is that you need to be able to look at your business from many different directions in order to truly see what is going on.  Just being able to analyze revenue by payer type or therapy type isn’t good enough.  If you can’t go to the drug level and the individual plan within payer, you are not going to be able to fully understand your business.  Finally, analyzing “what happenned” is not good enough either.  Once you learn what payer plans and drugs are going to be losers you must turn that into proactive policy at the time the patient is accepted.  Often a call to a physician indicating that you are not going to be able to accept the patient with their insurance plan / drug order will end up with a therapeutically equivalent order that you can afford to accept.  Let’s face it, if the health care providers go out of business, nobody wins.

Extending the Value of your Home Infusion DATA

Regardless of what home infusion software you are using, your staff spends countless hours entering data into the system and often comes up blank when looking for information they need to get their job done.  The more data you enter and the more feature rich your software becomes, the more potential there is to exploit the data to get critical information to meet your business goals.  That’s where Rock-Pond Solutions can help.  We will extend the value of the your systems and give you the information you need from the data you’ve got.

Although we’d like to take the credit, the truth is that everything we have produced started with a request from someone working in a home infusion company who had an obstacle or an opportunity.  Welcome to Rock-Pond.com.  Here you’ll find an overview of who we are and what we do as well as regular posts about the things we are doing and problems we are solving.  If you use one of the top  3 home infusion software products (CPR+, Ascend or HomecareNET), the quickest and best way to get to know us is to let us show you some of the reports we’ve developed for other home infusion providers.  We’ll set up our viewer on your system in 15 minutes and show them to you with your data.  We’re looking forward to your call.