Medical Billing Audit: Internal or External?

Kathy McCoy, MBA March 29th, 2012

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You’ve worked hard on your compliance plan. You’ve done your homework and are in the process of implementing the Office of Inspector General’s seven elements of an effective compliance plan. These elements include:

  1. Implement Compliance Policies and Procedures
  2. Designate a Chief Compliance Officer
  3. Develop an Education Program
  4. Provide a Hotline for Anonymous Disclosures
  5. Create a Response and Enforcement System for Disclosures
  6. Investigate and Correct Problems Identified
  7. Institute a Medical Billing Audit Plan

But what about number seven? Just what is a medical billing audit plan, and who should do it? Small practices with just one to four physicians may believe that internal auditing makes the most sense. After all, audits are costly and small practices must do everything they can to remain competitive – especially when healthcare systems are consolidating into ever-larger and more powerful organizations.

What’s In an Audit?

An audit can take two forms. Prospective audits are performed before claims submission and retrospective audits are performed after claims have been paid. Both forms of audit should be conducted regularly, and can be conducted by an internal staff or by paid, outside consultants.

In a medical billing audit, billing documentation and coding are two of the most important areas tested. If a bill is undercoded, revenue is lost. If this happens on a consistent basis, even a small mistake can become quite substantial to the practice financially. Overcoded bills generate more revenue than they should, and if discovered, that money must be returned to the payer. If overcoding is discovered by the OIG, the money will be demanded by Medicare, the practice may be fined and it may even be put on OIG pre-payment review. Transposed CPT numbers or even inaccurate patient data can also result in denied claims. The audit process can identify all of these errors.

Advantages of Internal Audits

While it may seem as though an internal audit would be less costly, a medical billing audit requires objective, dedicated resources. In large companies more resources are available to administer the audit process, and these resources may come from another part of the company with a less subjective viewpoint than a billing department employee might have. With a dedicated internal audit group, audits may be performed on a periodic or even ongoing basis, allowing the organization to continuously adapt its processes for improved accuracy. However, even a dedicated audit staff must be checked, so every practice should have an independent, external audit performed on an annual basis.

Advantages of External Audits

A small practice can be a busy place, and often there just aren’t enough hours in the day – or weekend – to attend to the task of a medical billing audit. It’s no surprise that there are companies that specialize in this area, providing education, consultation, exhaustive reports and recommendations for improvement.

External auditors are immune to conflicts of interest that may otherwise compromise an internal audit staff. An upcoded bill is often providing increased revenue, which, for most, is a huge problem. Experienced external auditors know where to look for issues such as this that may be missed by less objective eyes. And even when an internal auditor finds problems in the policies and procedures of its own practice, the auditor’s recommendations may go unheeded. Commenting about audit objectivity, Vice President Dan Schwebach of the external audit firm AAPC Physician Services said, “We find that when a practice pays for an outside service like ours, the feedback is considered valuable and is taken very seriously.”

Additional Services

With experience in medical billing audits comes experience in compliance, so many external audit companies also provide other compliance program services; offering policies and procedures, education, and the other OIG-recommended compliance program elements. Many of the companies that perform external medical billing audits also provide other healthcare consulting services, including HIPAA and OSHA compliance programs, ICD-10 implementation education and more.

Whether you choose to perform internal audits or not, hiring an external auditor for your annual medical billing audits is something to consider to ensure that your practice gets objective information about its billing accuracy. An objective audit is a crucial element in your compliance program that can help you to maximize your medical billing and spare you from exposure to the OIG.

For more information on CMS compliance, watch our archived webinar on “Medical Billing Compliance: How to Keep CMS Out of Your Business” or a short video by Betsy Nicoletti on “How to Avoid the Three Deadly Sins of Compliance in Medical Billing.”


AMA – Physician Compliance: Federal Fraud Enforcement, Physician Compliance Planning

Physician’s Practice – The Art of the Internal Billing Audit

Health Care Compliance Association – Compliance Information

AMA – How to Perform a Physician Practice Internal Billing Audit

AAPC Physician Services – External Audit Services

OIG/DHHS – Elements of an Effective Compliance Program

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What You Don’t Know About the False Claims Act CAN Hurt You

Kathy McCoy, MBA March 28th, 2012

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In an effort to keep health care providers informed about their rights and responsibilities when it comes to billing for federal health care services (including Medicare and Medicaid), the United States Office of the Inspector General (OIG) has produced a series of provider-compliance training videos explaining the ins and outs of how the system works. One such video, conducted by OIG attorney Katie Fink, explains the False Claims Act and its significance for health care providers who bill for services to federal health care patients.

According to Fink, the False Claims Act “prohibits the submission of false or fraudulent claims to the government, Medicare and Medicaid.” This includes referrals that are in violation of anti-kickback laws or claims where the service:

  • Is not rendered to the patient
  • Already covered under another claim
  • Miscoded or upcoded
  • Not supported by the patient’s medical history

For the purposes of the False Claims Act, providers can be of any size, from a physician in solo practice all the way up to a large health care organization.

Fink broke down some truths about the False Claims Act:

A provider is considered to be in violation of the False Claims Act if they knew or should have known about the false or fraudulent claims: It may be an old adage, but indeed, deliberate ignorance or reckless disregard for the truth are not excuses in this case. According to Fink, the best possible way for a health care provider to avoid any unpleasant surprises in this regard is to take proactive measures by conducting internal audits on a regular basis.

If a provider is found in violation of the False Claims Act, they must repay any identified overpays, even if the billing mistake was completely innocent: Again, ignorance of the law is not an excuse. Any identified overpays must be repaid to Medicare or Medicaid within 60 days. On top of that, the costs can add up quickly. Fink noted that a provider found in violation may be responsible for up to three times the amount of the government loss in overpayments, with an additional $11,000 fine per claim. When you consider that each individual service may have its own claim (rather than bundled together), the price of fraudulent claims adds up quickly.

The False Claims Act also provides incentives for reporting fraud: Whistleblowers may be entitled to a reward of up to 30% of the amount of any money recovered under the False Claims Act. Fink added that the most common whistleblowers are former business partners, current or former employees, competitors, and sometimes even patients.

Fink closed by giving an example of just how expensive it can be to run afoul of the False Claims Act. A cardiologist was found to have submitted claims for services that were not supported by patient records. In addition, they billed individually for services that had already been paid for as a bundle for a group of services; essentially attempting to double-bill for the same services. When the cardiologist was found guilty, they were forced to pay back $455,000. They also had to sign a five-year integrity agreement.

The plain truth is that it is the health care provider’s responsibility and duty to always be honest when submitting Medicare or Medicaid claims for payment. Keeping on top of this with regular internal audits is the best way not to be caught unaware. Even an innocent oversight can be very costly, both financially and to your reputation.

You can watch the entire provider compliance training video on the False Claims Act now.

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Clinical Documentation Improvement (CDI) in Physician Practices: What’s It All About?

Lisa Eramo March 27th, 2012

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Clinical Documentation Improvement refers to the process of improving documentation to better reflect patient severity and help ensure accurate reimbursement.

Physicians may incorrectly assume that a busy practice equals revenue coming in the door. This is not necessarily true, particularly when documentation sends an incomplete—or even incorrect—message to insurance carriers about the services rendered.

Essentially, it all boils down to documentation—that is, whether the words physicians write (or type into the EMR) accurately depict the patient’s complexity and the tests or procedures performed to address the chief complaint. This is the information on which physicians’ profiles, quality scores, and most importantly—reimbursement—is based. 

Understand the role of CDI

Clinical Documentation Improvement (CDI) refers to the process of improving documentation to better reflect patient severity and help ensure accurate reimbursement.

It can greatly assist with the following:

  • Evaluation and management (E/M) code assignment
  • CPT coding of surgeries/procedures performed in the office setting
  • Justification of medical necessity for services rendered

Another advantage of CDI is that it increases patient satisfaction. That’s because accurate documentation leads to fewer denials. This means patients won’t receive bills for services that should have been paid. Most patients appreciate not having to call their insurance company to inquire about services that were incorrectly documented, coded, or both.

Glenn Krauss, RHIA, CCS, CCS-P, CPUR, FCS, PCS, CCDS, C-CDI, independent revenue cycle consultant in Madison, WI, and author of The Documentation Improvement Guide to Physician E/M, says although CDI is common in hospitals, it’s often overlooked in the practice setting. That’s because physicians generally don’t understand the consequences of insufficient documentation.

Down-coding (i.e., reporting a lower-level E/M code)—and thus receiving less reimbursement—is perhaps the most obvious consequence. Down-coding frequently occurs when physicians don’t adequately document the history of present illness (HPI). Ideally, this portion of the record should be a wealth of information in terms of signs, symptoms, and other details of the patient’s presenting problem. However, in reality, it’s often lacking enough detail to justify even the most basic of services rendered, including the physical exam of multiple body systems.

Insufficient documentation calls into question the work that physicians perform to evaluate and manage patients. For example, “chest pain” is clearly not as compelling as “chest pain radiating down to the neck with shortness of breath, cough, pain in the leg, and edema.”

Take small steps to improve documentation

Although hospitals can devote large budgets to CDI efforts and perhaps even hire full-time CDI specialists, physicians—particularly those in small practices or working as solo practitioners—may not have the resources to do so.

The good news is that physicians who want to improve their documentation don’t necessarily need to hire a full-time CDI specialist. Instead, a coder or practice manager already employed by the practice can obtain CDI training to serve in this role. Once this individual has undergone CDI training, he or she can help monitor code and transmittal changes, Local Coverage Determinations (LCD), National Coverage Determinations (NCD), and other information, such as Comprehensive Error Rate Testing (CERT) reports.

CERT reports are important because they could reveal, for example, a national pattern of insufficient documentation related to certain E/M levels. An individual with CDI knowledge can compile this information, present it to physicians using examples specific to their practice, and ensure compliance going forward.

Another option is to contract with a CDI consultant who can evaluate documentation and provide feedback. The consultant may also be able to assist with training someone onsite to perform ongoing CDI.

Ultimately, CDI will lead to fewer denials and additional reimbursement. These advantages far outweigh any initial or ongoing costs incurred to sustain the efforts.

Lisa A. Eramo is a freelance writer and editor specializing in medical coding, health information management, and other healthcare regulatory topics. Visit her website at Lisa has recently written for Getting Paid on 2012 CPT Code Changes: Reporting Procedures Related to Pacemakers and Cardioverter-Defibrillators, 2012 CPT Code Changes: Billing Prolonged Services, Part I, 2012 CPT Code Changes: Billing Prolonged Services, Part II and 2012 CPT Code Changes: Integumentary Changes for Dermatology.

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The National Health Insurer Report Card: Bad News That’s Good to Know

Kathy McCoy, MBA March 26th, 2012

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The AMA's National Health Insurer Report Card (NHIRC) examines claims underpayments and some of the shocking statistics in insurer payment accuracy

The AMA annually releases its National Health Insurer Report Card (NHIRC), a report that identified a number of negative trends in medical claims processing by health insurance companies. In a previous blog post we covered the topic of claims underpayments and some of the shocking statistics revealed in the report. We’re still amazed that health insurance companies pay contracted rates to practices as little as 62% of the time. But the AMA’s NHIRC is an exhaustive report, and there’s plenty more news that deserves analysis.

The NHIRC covers all key areas of medical claims processing, including payment timeliness, cash flow, accuracy, administrative requirements, claims edit sources and their frequency, denials, and finally, improvement of claims cycle workflow. Let’s take a closer look at a key area that is related to underpayments: accuracy.

“If you don’t have time to do it right, when will you have time to do it over?”Coach John Wooden

Too Many Errors

In 2011, average claims processing errors among commercial payers increased by 2 percent to total 19.3 percent. This increase represents an extra 3.6 million in inaccurate claims processed, adding unnecessary costs to an already stressed healthcare system. According to AMA estimates, eliminating all health insurer claim errors could save the industry a collective $17 billion. It’s hard to imagine a world where a number that large, even when divided by 7 large insurance companies, wouldn’t make a health insurance administrator sit up and take notice.

Commenting on the high error rate, AMA Board Member Barbara McAneny said, “A 20 percent error rate among health insurers represents an intolerable level of inefficiency.” She continued, “Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care.”

Prior Authorization Required

The AMA has been compiling its NHIRC annually since 2008. The 2011 report saw the addition of a section on administrative requirements, reporting the frequency in which prior authorization is required for payment. Prior authorizations, when not communicated in advance, can delay or interrupt medical services, consume significant amounts of time and even complicate medical decisions. In 2011, electronic remittance advice for over 3.4 percent of all health insurance claims among companies surveyed included notes requesting prior authorizations. For one individual insurer, over six percent of its claims required prior authorizations.

Claim Line Reduced to $0

Another area of concern in the NHIRC is claim edits. Claims can be edited by the payer based on a number of different rule sets, including CPT, ASA, NCCI, CMS and payer-specific rules. The AMA report shows percentages of all claim edits by rule set and also documents the total number of claim edits for each rule set. Some payers are more diligent than others in the documentation of claim line edits that result in a reduction in payment to $0. In 2011, the NHIRC reports that 6 percent of all claim lines processed by the commercial health insurance payers surveyed that were reduced to $0 included disclosed claim edits. Percentages of undisclosed claim edits were more encouraging, with only one health insurance payer totaling 1% of its claim lines as undocumented. All other payers’ undisclosed claim line edit totals fell under 1 percent, although four of the seven companies surveyed saw an increase over last years’ numbers. For more information on claims edits and repricing, see this AMA document.

Medical Billing Software Tools Can Help You

What it all comes down to is this: are you being paid for the work that your practice has done? Are you seeing claim denials, claim edits and errors in payment from insurance companies? While the AMA’s report is disturbing, it’s important information to know and act upon. With tools built into your medical billing software, you can verify if your practice is being paid accurately and retrieve payments that might otherwise have been lost. Protect your practice.


The AMA National Health Insurance Report Card

What Private Payers Do To Your Claim: Repricing and Claims Editing

To learn more about the NHIRC and what you can do about inaccurate claims processing, register now for our upcoming webinar, Getting Paid Accurately: What the National Health Insurer Report Card Means to Your Practice and How You Get Paid with expert Frank Cohen, one of the architects of the NHIRC.

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Complimentary Webinar – Getting Paid Accurately: What the National Health Insurer Report Card Means to Your Practice and How You Get Paid

Kathy McCoy, MBA March 22nd, 2012

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Thursday, April 19, 2012
1:00 PM EDT/10:00 AM PDT
Speaker: Frank Cohen

The AMA’s National Health Insurer Report Card (NHIRC) for 2011 revealed that you may be paid accurately what you are contractually owed as little as 62% of the time; learn how to improve that in this complimentary webinar.

Did you know that the AMA’s National Health Insurer Report Card (NHIRC) for 2011 revealed that you may be paid accurately what you are contractually owed as little as 62% of the time? Did you know that physicians spend nearly three full work-weeks per year interacting with payers on administrative tasks? In this webinar, you’ll hear from Frank Cohen, one of the architects and the lead analyst/statistician for the National Health Insurer Report Card, on what the NHIRC means for your practice profitability and how you can use the information to improve your denial rates and your revenue.

You’ll review:

  • What the National Health Insurer Report Card means to your practice
  • How to develop your own insurer report card
  • How to evaluate your payer contracts – not all contracts are good contracts
  • How to determine whether you should consider seeing only cash-paying patients, and the compliance implications of that decision
  • And much more

With profit levels for private practices falling drastically, you can’t afford to lose money on the front end. Learn how to evaluate your payers and their accuracy in payments to improve your bottom line.

Register Now to learn about the National Health Insurer Report Card and how to reduce your costs of getting paid

CEU Credit

"Getting Paid Accurately: What the National Health Insurer Report Card Means to Your Practice and How You Get Paid" meets the criteria of the Professional Association of Health Care Office Management and is approved for 1.0 CEU(s).“Getting Paid Accurately: What the National Health Insurer Report Card Means to Your Practice and How You Get Paid” meets the criteria of the Professional Association of Health Care Office Management and is approved for 1.0 CEU(s).

You can download the Kareo Getting Paid Accurately handout for the webinar now.

Question-and-Answer Session — Ask your tough questions about the NHIRC, payer accuracy and payer evaluation.

Who Should Attend
Private practice owners, office managers, billing managers, billers, billing service owners and others concerned about receiving accurate, timely payments from insurers will benefit from this informative session.

About Your Speaker:
Frank Cohen

Frank Cohen will discuss the National Health Insurer Report Card (NHIRC) and its impact on your practice

Frank Cohen is principal and Senior Analyst for The Frank Cohen Group, LLC and a certified Master Black Belt in Lean Six Sigma. As a consultant and researcher, his areas of expertise include data mining, predictive analytics, applied statistics, process improvement and evidence-based decision support.

Mr. Cohen is the author of several books, including his newest, “Lean Six Sigma for the Medical Practice; Improving Profits by Improving Processes”. Mr. Cohen has participated in and published numerous articles and studies and trained thousands of physicians, administrators, CPAs and other healthcare professionals in all areas of healthcare analytics. He is one of the architects and the lead analyst/statistician for the AMA’s National Health Insurer Report Card.

Mr. Cohen’s experience includes eight years as a Physician Assistant in both the Navy and as a civilian, clinic administrator and hospital CEO. His clients include hospitals, large and small medical practices, medical and professional associations, legal and accounting professionals, government agencies and other health care professionals.

Register Now to learn about the National Health Insurer Report Card and how to reduce your costs of getting paid

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The PQRS Incentive Program – How to Qualify, Get Started and Get Paid

Kathy McCoy, MBA March 21st, 2012

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The Physician Quality Reporting System (PQRS), a federally mandated, voluntary program implemented by CMS, provides incentive payments to providers

The Physician Quality Reporting System (PQRS) is a federally mandated, voluntary program implemented by CMS. PQRS provides incentive payments to providers who satisfactorily meet specific quality measures. Specifically, this “voluntary” program during 2012 through 2014 pays an incentive of 0.5 percent of estimated total allowed charges for covered Medicare Part-B services during the reporting period. But in 2015, this “voluntary” program’s as-yet-undecided penalties kick in.

So, with available incentive payments and coming penalties, providers who aren’t already participating in PQRS should make the leap now.

Who is eligible to participate in PQRS?

  • Eligible professionals…
  • with an individual National Provider Identifier (NPI) and Tax ID Number (TIN)…
  • who satisfactorily reports data on quality measures…
  • for covered PFS services…
  • that have been furnished to Medicare Part-B Fee-for-Service beneficiaries

What is an “eligible professional”?

“Medicare physicians”

  • Doctor of Medicine
  • Doctor of Osteopathy
  • Doctor of Podiatric Medicine
  • Doctor of Optometry
  • Doctor of Oral Surgery
  • Doctor of Dental Medicine
  • Doctor of Chiropractic

Non-physician practitioners

  • Physician Assistant
  • Nurse Practitioner
  • Clinical Nurse Specialist
  • Certified Registered Nurse Anesthetist (and Anesthesiologist Assistant)
  • Certified Nurse Midwife
  • Clinical Social Worker
  • Clinical Psychologist
  • Registered Dietician
  • Nutrition Professional
  • Audiologists

Eligible therapists

  • Physical Therapist
  • Occupational Therapist
  • Qualified Speech-Language Therapist

Group practices may also qualify to earn an incentive payment (0.5 percent of the practice’s total estimated Part B PFS-allowed charges during a 2012 PQRS reporting period). But the group practice must meet specific criteria, including reporting 29 different quality measures. For more information about these and other requirements, visit the CMS’ Group Reporting Option page.

Barriers to participation

CMS considers otherwise-eligible providers to be “not able to participate” in PQRS under a few circumstances:

  • If the professional is paid under/based on the PFS billing Medicare Carriers/ Medicare Administrative Contractors (MACs) who do not bill directly.
  • If the professional is paid under the PFS billing Medicare fiscal intermediaries (FIs) or MACs. The FI/MAC claims processing systems currently cannot accommodate billing at the individual physician or practitioner level: (For additional detail, download CMS’ “List of Eligible Professionals.”)
  • If the services payable under fee schedules or methodologies other than the PFS are not included in PQRS. (E.g., services provided in or by federally qualified health centers, independent laboratories and diagnostic facilities, hospitals, rural health clinics, ambulatory surgery centers and ambulance providers.)

How to get started… and start getting paid!

As mentioned previously, PQRS does not require signup or pre-registration. But providers must first make sure they’re eligible. They must also…

CMS, of course, is the authoritative source for its PQRS program. But we will continue to monitor the goings-on with PQRS, and the other CMS incentive programs, and keep you informed.

To learn more about PQRS and other government incentive programs for 2012 and beyond, register now for our complimentary webinar on March 22 on Government Incentives for Medical Practices: Tips and Tools to Qualify, Participate and Get Paid featuring expert Elizabeth W. Woodcock, MBA, FACMPE, CPC.

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Beyond ACOs and EHRs – Tapping into Government Incentives for Medical Practices

Laurie Morgan March 20th, 2012

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Government incentives for medical practices include many programs that practices can participate in.

When you hear the phrase “government incentives for medical practices” these days, chances are the first things you’ll think of will be newly forming ACOs or the highly publicized payments for implementing EHR.  But while these complex programs get most of the media attention, there are many other programs that practices can participate in – and, in most cases, the funds are easier to tap compared with the EHR and ACO programs.

HPSA and PCIP Programs:  Automatic Enrollments

Many CMS programs are designed to kick in automatically – for example, the Health Professional Shortage Area (HPSA) bonus program and the Primary Care Incentive Program (PCIP).  The former provides a ten-percent bonus on qualifying services provided in areas that CMS considers under-served; the latter provides a ten-percent bonus on CMS allowed charges for primary care providers in an effort to ameliorate primary care shortages.

Providers who have billed Medicare/Medicaid previously should receive these quarterly payments automatically.  But certain situations can increase the likelihood your providers won’t be correctly enrolled.  For example, the PCIP originally required two years of billing history with CMS, but was amended to allow new primary care physicians to participate immediately.  However, Medicare carriers are responsible for maintaining the lists of eligible physicians and processing incentive payments – so, your practice won’t get paid unless all your eligible providers are properly listed.  Your practice may also be eligible for PCIP even if its specialty is not primary care – as long as you have a qualifying mid-level or physician on staff who bills Medicare/Medicaid under his or her own provider number.  To be sure your practice receives all PCIP funds it is entitled to, be sure all your primary care providers are properly documented with your Medicare carrier.

Because it’s geographically based, the HPSA awards its bonuses automatically based on provider zip codes and county locations.  However, occasionally a zip code falls partially within an HPSA, or a county is considered partially qualified as an HPSA.  When an eligible location won’t trigger automatic bonus payments, practices can use modifier AQ to be sure charges are tracked as HPSA-eligible.

Another interesting aspect of these programs is that some practices can be eligible for both programs at once.  Surgery practices can even qualify for a third program – an offshoot of HPSA called the HPSA Surgical Incentive Program (HSIP).  Make sure your practice is receiving payments from all the programs it qualifies for.

Pay for Performance

As Kathy McCoy noted in her recent blog post, long-awaited pay-for-performance programs are beginning to take shape as part of the Affordable Care Act.  The most visible of these programs, the Physician Quality Reporting System (PQRS), allows Medicare Part B participants the opportunity to earn a .5% bonus from 2012 through 2014 for reporting quality data.  (Right now, the program offers incentives for reporting. But, it’s worth noting that while this program is technically voluntary, physicians who haven’t begun reporting quality data by 2013 are slated to face across the board reductions in Medicare rates starting in 2015 – so the time is now to get started if you haven’t already.)

Investigate State and Local Programs, Too

If your practice is participating in HPSA, remember that states have their own programs focused on underserved areas – including tuition reimbursement/loan forgiveness programs.  While many of these programs focus on medical students – i.e., matching a commitment to practice for a period of time in a needy area with a scholarship or loan forgiveness – there are a surprising number of programs that can be tapped by practitioners of any age.  There could be an opportunity to earn a tuition rebate for, say, opening a second office or new practice in a community with poor physician coverage. The American Association of Medical Colleges has an excellent list of programs by state.

Beyond care-focused programs, remember that your medical practice is a small business and employer in your community – and that alone may qualify your practice for government help. For example, if your practice is relocating, be sure to look into the possibility of incentives or tax abatement based on where you locate.  Your tax accountant or lawyer can help you be sure to explore all possible avenues for local government incentives.

Laurie Morgan is a management consultant with Capko & Company. She specializes in marketing, management and technology for medical practices and blogs about practice management issues at Laurie has a BA in Economics from Brown University and an MBA from Stanford. Her last article for Getting Paid was Best Practices: Should a Credit Check Be Part of Your Medical Practice Hiring Process?

To hear more about these government incentive programs for 2012 and beyond, register now for our complimentary webinar on March 22 on Government Incentives for Medical Practices: Tips and Tools to Qualify, Participate and Get Paid featuring expert Elizabeth W. Woodcock, MBA, FACMPE, CPC. Elizabeth is always an informative and engaging speaker, and she has practical and interesting information to share with you in this session.

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BREAKING NEWS: CMS Delays 5010 Enforcement AGAIN

Kathy McCoy, MBA March 15th, 2012

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CMS will not begin enforcing the mandated move to Version 5010 transaction standards for an additional three months, until June 30, according to an announcement by Modern Healthcare.

The deadline for the switch to the 5010 standards was Jan. 1. In November, the CMS announced that although it was not changing the actual deadline for complying with the standards, it would not initiate 5010 enforcement action until March 31.

On Thursday, according to the announcement, the CMS’ Office of E-Health Standards and Services said no action will be taken against noncompliant medical practices, hospitals and other healthcare entities through June 30.

In February, the MGMA-ACMPE (formerly the Medical Group Management Association) requested more time, citing complaints from physicians that the conversion was resulting in “significant delays” in claims payment.

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Getting Paid in 2012: What You Need To Know Now To Make It Happen – Voluntary CMS Incentive Plans

Kathy McCoy, MBA March 14th, 2012

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Expert Elizabeth Woodcock reviewed "voluntary" CMS incentive plans in this informative webinar

When are voluntary CMS incentive plans not entirely “voluntary?” When there are penalties attached to “not getting with the program.” And while the focus of our recent webinar, Getting Paid in 2012: What You Need To Know Now To Make It Happen, was not on penalties per se, no discussion of Medicare and Medicaid’s respective plans would be complete without fully explaining the carrot and stick approach.

The webinar was presented by esteemed practice management and medical billing expert Elizabeth Woodcock, MBA, FACMPE, CPC. Previous blogs on Elizabeth’s webinar recapped her content on changes in CPT codes, tapping into new allowances from Medicare and revenue opportunities under the Affordable Care Act. This blog post touches on the Centers for Medicare & Medicaid Services Programs that trigger incentives or penalties starting in 2011. Because this is a complex subject that you should check out on your own, we have also provided the web addresses where you can check for more specifics on each of these three programs.

The first is the Electronic Prescribing (eRx) Program. Any physician who qualified under the eRx Program to begin prescribing medications electronically ( needed to have either submitted 10 G8553’s by June 30, or declared a hardship by Nov 8. CPT code G8553 is an informational code that documents that at least one prescription was created during a patient encounter, and was then generated and transmitted electronically using a qualified eRx system. If neither of these events occurred, the provider will see a one percent reduction in Medicare payments for all services rendered by that physician in 2012. If physicians did meet the eRx requirements in 2011, they will have earned a one percent bonus in 2012. An additional eRX incentive of .5 percent is available in 2013.

Elizabeth Woodcock discusses the CMS incentive plans that trigger incentives or penalties starting in 2011.

Providers who are participating in Medicare’s Physician Quality Reporting System (PQRS) may also have the opportunity to earn incentives in 2012. Specific requirements can be found at When combined with the incentives available under the eRX program, physicians can earn a bonus on Medicare Fee-for-Service Total Allowed Professional Charges in 2012 all the way through 2014. The combined schedule lists bonus payments of 2 percent in 2012, a possible 1.5 percent bonus in 2013 and a 1 percent bonus in 2014.

Elizabeth also provided a detailed recap of payments available under the Electronic Health Record (EHR) Incentive Program, now called “Meaningful Use.” Physicians who acquire and begin using a qualified electronic health record are eligible for up to the maximum payment of $44,000 over five years from Medicare – but only if they use their EHR the entire year of 2012, and then every year thereafter.

The guidelines for receiving meaningful use dollars are much more lenient through Medicaid, according to Elizabeth. Practices can begin acquisition and partial use of a qualified EHR as late as 2016 and still receive the maximum pay-out of $63,750. To qualify for this incentive, practices much have at least 30 percent of their volume in Medicaid (20 percent for pediatricians). You can find more information at Practices are only eligible for meaningful use dollars under one of these government-funded program—not both.

Kareo’s regularly-sponsored webinars feature respected experts discussing strategies for maximizing cash flow and efficiency in the medical practice setting. If you have a specific issue, you can most likely find a resolution in our webinar archive. If you would like to be put on our notification list for upcoming informative webinars such as this one, click here.

To hear more about these government incentive programs for 2012 and beyond, register now for our webinar on March 22 on Government Incentives for Medical Practices: Tips and Tools to Qualify, Participate and Get Paid featuring expert Elizabeth W. Woodcock, MBA, FACMPE, CPC. Elizabeth is always an informative and engaging speaker, and she has practical and interesting information to share with you in this session.

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eRx – The Electronic Prescribing Incentive Program – How Do You Get Paid?

Kathy McCoy, MBA March 12th, 2012

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The Electronic Prescribing (eRx) Incentive Program is a federally mandated reporting program that uses incentive payments and payment adjustments to encourage electronic prescribing for Medicare Part B Fee-for-Service beneficiaries. In order to take part in the program, you must be an eligible professional and identify yourself on your Medicare claims with your National Provider Identifier (NPI) and Tax Identification Number (TIN). Please note that requirements for the eRx Incentive Program adjust every year. If you’ve participated in the program in the past but are not familiar with changes for 2012, check with CMS’ documentation of the eRx program here.

How to Qualify for the Program

No sign-up or pre-registration is necessary to participate in the eRx program, but there are specific requirements to qualify:

  1. An eligible professional must have and use a qualified eRx system like those offered through the EHR systems that partner with Kareo and report his or her adoption of the program using that system.
  2. Eligible professionals must meet CMS’ criteria for a successful electronic prescriber for a given reporting period.

a)      Need to submit 10 G8553’s by June 30, 2012 to avoid the 2013 penalty; 25 by December 31, 2012 to gain the incentive and avoid the 2014 penalty

3.  At least 10% of the codes for Medicare Part B covered services reported by a successful electronic prescriber must appear in the denominator of the eRx measure.

“Eligible professionals” can include physicians, practitioners or therapists. Professionals in any of these groups must also have prescribing authority to participate in the program. CMS provides complete lists of eligible professionals.

Not all eligible professionals are able to participate in the eRx program at this time. Examples include, but are not limited to, the following:

  • Professionals paid under PFS billing Medicare Carriers/Medicare Administrative Contractors (MACs) who do not bill directly.
  • Professionals paid under the PFS billing Medicare fiscal intermediaries (FIs) or MACs. Currently, the FI/MAC claims processing systems cannot accommodate billing at the individual physician/practitioner level.

For more information on eligible professionals, see the CMS document “Eligible Professionals.”

Incentives for Adoption

Successful electronic prescribers may earn an incentive payment equal to up to 1.0% of the submitted claim. Group practices may also qualify for the incentive. Incentive payments to group practices can be equal to 1.0% of the practice’s total estimated Medicare Part B Physician Fee Schedule allowed charges for covered professional services. The estimate is to be based on the 2012 eRx reporting year and requires that the group practice meets the criteria for successful electronic prescribers by CMS.

To qualify for the incentive, an individual eligible professional must prove his/her adoption of a qualified eRx system by reporting information using any one of the following means:

  1. Report the information to CMS on a Medicare Part B claim;
  2. Report the information to a qualified registry;
  3. Report the information to CMS using a qualified EHR product;
  4. Report the information to a qualified data submission vendor.

In 2012, CMS considers a successful electronic prescriber as an individual eligible professional who has reported at least 25 unique electronic prescribing events using a qualified eRx system.

Penalties — Payment Adjustments

In 2012, CMS is also implementing penalties, or payment adjustments, for those who do not successfully complete the specified number of eRx transactions. These payment adjustments are required under Section 132 of the Medicare Improvements for Patients and Providers Act of 2008 (MIPPA). Individual eligible professionals participating in the eRx Program who are unsuccessful in their electronic prescriptions are subject to payment adjustment to all of the eligible professional’s Part B-covered professional services under the Medicare Physician Fee Schedule (MPFS). In 2012, payment adjustments are equal to a 1% reduction in their reimbursements for all MPFS services, and in 2013 and 2014, the payment adjustments will rise to 1.5% and 2%, respectively.


CMS may exempt an eligible professional from the payment adjustment if they determine that such adjustments would result in significant hardship. Any exemptions given by CMS are subject to annual review. To make inquiries regarding payment adjustments, contact the CMS Help Desk Support.

The Electronic Prescribing (eRx) Incentive Program uses incentives for those who use the program successfully and applies payment adjustments for those who do not. Specific qualification information, incentive and payment adjustment amounts may change from year to year, so it’s a good idea to study CMS’ requirements closely and understand how they may change. For more information on eRx, see the CMS document, “E-Prescribing Measure.”

To hear more about eRX and other government incentive programs for 2012 and beyond, register now for our webinar on March 22 on Government Incentives for Medical Practices: Tips and Tools to Qualify, Participate and Get Paid featuring expert Elizabeth W. Woodcock, MBA, FACMPE, CPC. Elizabeth is always an informative and engaging speaker, and I’ve already seen her material for this webinar—I can tell you it is going to be comprehensive and interesting.

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