Posts Tagged ‘Medicare’

Multiple Fee Schedules – Good or Bad?

In Uncategorized on August 23, 2013 at 6:37 pm

A client recently asked M.E.D.I.C., Inc. about the legality and viability of implementing multiple fee schedules – each tailored to a specific carrier allowable, so as to reduce the appearance uncollectible AR in reports.  I thought that perhaps other clients and non-client providers may have considered this as well, and would thus be interested in this information.  For the reasons outlined below, I believe that it is preferable for a medical practice to maintain only one fee schedule.

As an initial matter, it is fairly common knowledge that a practice cannot bill Medicare a fee that is more than the fee billed to other carriers.  Medicare’s guidance on this is not crystal clear, however the rules do say are that a providers’ fee may not be “substantially in excess” of their “regular fee” (or “usual and customary” fee) for the same service(s).  Translation: if a providers’ fees to Medicare exceed their fee for the same service more than some unstated amount, or more often than ‘occasionally’, then that practice would be violating Medicare’s rule.  The premise is that if a provider charges less to other carriers, then that provider’s regular or usual and customary fee is in fact that lower fee.

So, if Medicare is your best payer, then it is moot to even entertain the idea of tailoring fee schedules to the carrier allowables, for you will run afoul of this regular/usual and customary fee rule.

Conversely, if Medicare is the lowest fee schedule, and you are wanting to charge other carriers higher fees because they may allow (and thus, pay) more, you will be safe with regard to Medicare’s rules.  BUT, while not running afoul of Medicare rules, this practice may be in violation of your participation agreements with those other carriers.  Those participation agreements may contain “most favored rate” or “most favored nation” clauses which provide that that carrier receives the best (i.e., lowest) fee schedule rate that you have.  In a case in which Medicare is the lowest fee schedule, then any carrier possessing such a “most favored rate/nation” clause must only be charged the Medicare (i.e., lowest) fee, and again the discussion of tailoring fee schedules is moot.

The key question to ask is why a practice may want to use multiple fee schedules – each tailored to the specifics of the various carriers with which the practice participates.  Often, the rationale is to avoid posting contractual adjustments…  if the fee that a provider charges is equivalent to the carrier allowable, then there will be no contractual adjustment.  However, the time saved by not posting contractual adjustments will be lost in the constant management and updating of that fee schedule to accommodate the constantly changing allowable.   And, if those fees are not constantly managed and updated, then the provider will undoubtedly leave some money on the table.  Also, keep in mind that this is a code-by-code analysis, not a schedule-by-schedule one…  for example, Medicare may pay more for some CPTs but not others – so now you have to worry about not only capturing all moneys to which you are entitled on an ever-changing code-by-code analysis, but you also have to remember not to violate Medicare’s regular and customary fee rule on a code-by-code basis!  This is undeniably an administrative nightmare!

Another rationale that is often asserted is that using one “overinflated” fee schedule will result in overstated AR, while tailoring the fee schedule to the carrier allowable will result in an accurate depiction of the truly owed and collectible AR.  That may be true, however, there are several elements that must be factored into this equation:

  • The contractual adjustments that are logged (and thus, which can be reported on) when using a single fee-schedule provide practices with a complete depiction of the amount of income that that practice has foregone by virtue of its participation agreements – i.e., the amount contractually written-off versus collected as the full fee.  This is important to a practice’s ability to analyze the value of participation with a particular carrier.  For example, when deciding whether to continue participating with ABC Insurance Company, a practice with a single fee schedule can take its most frequently billed procedure codes and analyze the collection rate across various carriers – they are all being charged the same fee, so the amount paid vs. write-off is patently obvious, and comparable.  This analysis is impossible with multiple fee schedules.
  • Absent a constant review and analysis of fee schedules and carrier allowables, a practice employing multiple fee schedules is bound to lose some money by underbilling for charges whose allowables have changed, or using the lower fee based on the allowable of one carrier when filing to another carrier that would have allowed and paid more.
  • Finally, there is the problematic conundrum of billing for patients with multiple coverage.  A practice cannot charge two different fees for one service on the same claim form.  So, although a practice may have established multiple fee schedules for each carrier, how does determine which fee to use for a claim for a patient having secondary (and perhaps tertiary) insurance coverage?  One fee must be selected, and in doing so, that practice is clearly going to either lose some amount of income (if the fee is less than one of the carriers’ allowable), or it is going to have a contractual write-off (the thing that it was trying to avoid in the first place).

All things considered, while the single-fee schedule approach may indeed lead to inflated AR figures, the benefits of that system appear to far outweigh the negatives, and in the long-run is much more efficient than the multi-fee-schedule approach.

As always, please do not hesitate to contact M.E.D.I.C., Inc. at any time to discuss these – or any matters – further.


Vaccine Coverage Reminder… What Do Medicare Preventative Services Cover?

In Uncategorized on August 22, 2013 at 9:03 pm

MEDIC wants to remind its providers that the following vaccines are the only ones that are automatically covered under Medicare’s preventative services:

  • The flu vaccine is covered on an annual basis,
  • The pneumococcal vaccine is covered once per lifetime, and
  • The hepatitis-B vaccine is covered in the event that a patient is deemed/falls into a high risk category

Other vaccines are covered only based on patient exposure.  Examples of vaccines that receive coverage based on exposure are: tetanus, rabies, botulin, antivenin or immune globulin.  For any of these exposure-based vaccines, providers should have patients complete an ABN (Advanced Beneficiary Notice – see — at the bottom of the page, there are downloads from which you can   access the current ABN) to ensure collection of monies for these otherwise routine vaccines. 

In speaking with billing staff, we have deduced that the majority of patient calls/questions are regarding the tetanus vaccine, so to reiterate:  if a patient suffers an injury, then Medicare will cover the tetanus vaccine; however, absent an injury (i.e., a routine administration), that vaccine will not be covered.

Finally, please note that the Zoster vaccine for shingles is a Medicare Part B non-covered service, which will require an ABN in order to be able to bill the patient.  Patients may have Part D coverage or a secondary that will cover it, but that is a case-by-case coverage analysis, and not necessarily the norm.  

 Please feel free to contact MEDIC if you have any questions relating to this issue of vaccine coverage.

Can Your Practice Discount Self-Pay Patients?

In Uncategorized on August 22, 2013 at 6:47 pm

Recently, an issue arose dealing with a practice’s ability to offer a discount exclusively to self-pay patients.  Following the old educational philosophy that if one person has the question then the odds are that others do as well, I am addressing that matter here.  

Generally speaking, there is no prohibition against a physician discounting a fee for a self-paying patient (that is, a patient who pays out-of-pocket and is not covered by a health plan, including Medicare or Medicaid).  A practice can always offer purely self-pay patients a discount, and many do, otherwise the self-pay patient is stuck being charged the full fee schedule amount, while insured patients benefit from contractual write-offs which adjust the practice’s charge down to the  contractual allowable. 

Where a practice can run into issues is when it offers discounts to patients who have insurance coverage – most especially when that practice is participating with the carrier.  When a practice is participating with a carrier, then part of the provider participation agreement addresses the fact that the provider agrees to collect all co-payments, file all charges, and collect all deductibles and co-insurance from the patient in exchange for being treated as in-network/participating.  By offering discounts to patients with coverage, the practice is not adhering to its contractual obligations.  NOTE that a “professional courtesy” and/or “insurance only billing” is the same as a discount – the patient is receiving a benefit (excused from payment obligation) that runs afoul of the provider’s contractual obligations (and in the latter case, runs afoul of federally recognized compliance guidelines).* 

*Please note that since this article was written, the Omnibus Rule has had some impact on this, in that a patient can request that a provider NOT submit a claim to his/her insurance carrier, and that request MUST be accommodated.  Such requests, legitimized by the Omnibus Rule, trump the contractual obligation of a provider to submit a claim pursuant to a participation agreement.

Furthermore, regardless of a practice’s participation status with commercial carriers, if the practice is a Medicare provider, then it must not discount below the fee charged to Medicare – and most especially, the Medicare allowable, as Medicare law prohibits you from submitting Medicare claims that contain charges substantially in excess of your usual charges.  If the discounts consistently dipped below the billed fees, then Medicare would deem that new lower price to be the practice’s standard/customary fee.  If this fee is below the Medicare allowable, then the practice would be leaving money on the table that otherwise could have been collectable!

As always, if your practice has any questions, please do not hesitate to contact us!

Think That You Are Ineligible For Stimulus Funds??? Check Here!

In Uncategorized on April 1, 2011 at 7:09 pm

As the timing ticks away for practices to select, implement and meaningfully use a certified EHR so as to take advantage of the maximum ARRA EHR stimulus rebate, perhaps the most pressing question being asked by providers is whether they are even eligible for ARRA EHR stimulus funds???

Every provider that accepts Medicare qualifies for some portion of stimulus funds.  The percentage of a provider’s Medicare patient base is not a factor in determining eligibility for the Medicare stimulus finds.  Rather, it is the Medicare allowable charges that is key.  As long as a providerr has one allowable charge, then he/she is eligible for the stimulus funds.  Then the question becomes how much of the annual stimulus rebate is he/she entitled to receive.  There is a simple formula for determining this:

Total annual Medicare Allowable Charges by provider divided by $24,000

That formula will result in the percentage of Medicare stimulus funds a provider is entitled to receive, up to 100%, which represents the the maximum percentage of the annual stimulus funds that can be earned during a particular year.

For example: 

  • if a provider’s allowable charges total $12,000 in his/her first year meaningfully using a certified EHR, then the physician qualifies for 50% of the annual stimulus funding ($12,000/$24,000).  In 2011 the funding is $18,000, so that provider would receive $9,000 of ARRA stimulus funds   
  • if a provider’s allowable charges total $24,000 in his/her first year meaningfully using a certified EHR, then the physician qualifies for 100% of the annual stimulus funding ($24,000/$24,000).  In 2011 the funding is $18,000, so that provider would receive $18,000 of ARRA stimulus funds

Essentially, any provider whose Medicare allowable charges meet or exceed $24,000 will receive 100% of that year’s ARRA rebate incentive (up to a maximum total of $44,00 throughout the life of the program).  This figure can also be arrived at by multiplying total Medicare allowable charges by 75%…  ARRA rebate amount is the product of that equation or 18,000 – whichever is less. 

NOTE TO MEDICAID PROVIDERS:  If you have a measurable Medicaid population — at least 30% of your patient population (or 20% if a pediatrician) — then the Medicaid EHR Incentive Program, which is offered and administered voluntarily by states and territories, may be of interest as an alternative to the Medicare program (must choose between the two programs).  To qualify for Medicaid incentive payments, Medicaid eligible professionals must adopt, implement, upgrade, or demonstrate meaningful use of certified EHR technology in the first year of participation, and successfully demonstrate meaningful use in subsequent participation years, just like in the Medicare program.  However, under the Medicaid program, participants can receive up to $63,750 over 6 years (as opposed to $44,000 over 5 years):

Check with your state’s Medicaid program to see if the rebate program has been implemented yet, as it is a state-by-state roll-out.

Government Incentivizes EMR Adoption

In Uncategorized on April 1, 2011 at 6:05 pm

Reposted from, October 2009

On February 17, 2009, the American Recovery and Reinvestment Act (ARRA) was signed into law, committing $19.2 billion to healthcare information technology (HIT) to promote the use of HIT for all providers of healthcare. A whopping $17.2 billion has been allocated as incentive payments to eligible healthcare professionals for EMR adoption. More specifically, providers using a certified EMR will be eligible for substantial government cash incentives in the years 2011 through 2014. While the law does not yet specify what constitutes a “certified” EMR, industry leaders agree that CCHIT will likely be selected as the standard. Providers who have not adopted a certified EMR by 2015 may be penalized.

As the chart below reflects, those providers adopting a certified EMR system in 2011 & 2012 will receive the greatest benefit, for they will be eligible for incentive payment for 5 years and at a higher rate.

Feel free to contact M.E.D.I.C., Inc. if you would like to discuss EMR options and issues as you prepare to foray into this new technology!

CMS Delays PECOS Phase II Implementation Date

In Uncategorized on March 30, 2011 at 3:11 pm

CMS has recently issued a statement that it will NOT implement Phase 2 of PECOS on July 5th, as was originally published (point of reference:  during Phase I, which is currently underway, claims will have an appended warning when the ordering/referring proivider is not enrolled in PECOS; during Phase 2, which has yet to begin, all claims processed with an ordering/referring provider who is not enrolled in PECOS will be denied…  for more information on what PECOS is, see post published June 8, 2010):

“It has come to CMS’ attention that there was an editorial oversight in the OIG Compendium of Unimplemented Recommendations (March 2011 Edition). The OIG report states that the CMS will delay the implementation of Phase 2 of Change Request (CR) 6417 and CR until Tuesday, July 5, 2011.  This is incorrect. 

 CMS has not yet determined when it will begin to apply the ordering/referring provider claim edit to ordering/referring providers that do not have a record in the Provider Enrollment, Chain, and Ownership System (PECOS).  As previously stated, CMS will give providers ample notice before the ordering/referring provider claim edit is applied.  Recent revisions to CRs #6417 and #6421 require MACs to delay rejecting claims until receiving further direction from CMS.”  (emphasis added)

So, the net result is that parties to whom patients are ordered/refered will continue to receive EOB warnings regarding the PECOS status of the referring provider, but will be paid.  For now. 

When will this change?  I have no idea, so it would be advisable for all providers who have not enrolled in PECOS to date to do so as soon as practicable.  Anyone needing assistance in a) checking to see whether they are currently enrolled in PECOS, or b) enrolling in PECOS can contact M.E.D.I.C., Inc. ( — we are happy to assist! 

CMS Lifts Hold On Claims Processing

In Uncategorized on March 4, 2010 at 2:21 pm

According to the CMS web site:

On March 2, 2010, President Obama signed into law the “Temporary Extension Act of 2010.”  Among other things, this law extends through March 31, 2010, the zero percent update to the Medicare Physician Fee Schedule that was in effect for claims with dates of service January 1, 2010, through February 28, 2010.  Consequently, effective immediately, claims with dates of service March 1 and later which were being held by Medicare contractors will be released for processing and payment.  Please keep in mind that the statutory payment floors still apply and, therefore, clean electronic claims cannot be paid before 14 calendar days after the date they are received by Medicare contractors (29 calendar days for clean paper claims).

In addition, the new law extends through March 31, 2010, the exception process for therapy claims reaching the annual cap, retroactive to January 1, 2010.  Affected providers may submit claims for exceptions to the annual therapy caps, with dates of service January 1 through March 31, 2010, using the KX modifier, following the pre-January 1, 2010, requirements for therapy cap exceptions.