1. CMA-Sponsored Bill Introduced Into U.S. Congress
Would Bring Equity to Geographic Payment Formula
Rep. Sam Farr (D-Carmel) last week introduced a CMA-sponsored bill to fix the inequitable and outdated Medicare geographic payment formula. The bill, which has bipartisan support from key members of the California congressional delegation, would allow currently underpaid counties to be reimbursed based on more accurate geographic practice costs.
"We are grateful to Congressman Sam Farr and the California authors of this important legislation for working so hard on behalf of physicians and patients to achieve Medicare geographic payment equity,” says CMA President Anmol S. Mahal, M.D.
CMA has for many years sought a fix to the geographic payment problem. The reimbursement formula includes a geographic adjustment factor (GAF) that adjusts the payment rate for local geographic market conditions. The goal is to base physician reimbursement on what it costs to provide care in a particular geographic region. The formula calculates a geographic adjustment factor for each county and assigns each county to a Medicare payment locality.
Unfortunately, the payment locality assignments have not been updated in 10 years, and the last update was made using 1966 demographic data. Practice costs in many recently urbanized counties have increased dramatically, yet the counties remain inappropriately grouped into payment localities with lower-cost counties. The result is that physicians in 174 counties in 32 states are paid up to 14 percent less than they should be according to their GAF. The ten most underpaid counties in California are Santa Cruz (-10.2 percent), Sonoma (-8.2 percent); Monterey (-6.7 percent), Marin (-6 percent), San Diego (-5.5 percent), Sacramento (-4.6 percent), Santa Barbara (-3.5 percent), El Dorado (-3.3 percent), Placer (-2 percent), and San Luis Obispo (-1.2 percent).
This bill would require the Centers for Medicare and Medicaid Services (CMS) to move any county whose county GAF exceeds its locality GAF by 5 percent to its own locality and be reimbursed at the geographically appropriate rate. The bill also requires CMS to update the payment localities every 3 years using the 5 percent threshold. The legislation would also protect the physicians in counties remaining in original payment localities by establishing a geographic payment floor at current levels.
If your members of Congress are authors or sponsors of the bill, please thank them for supporting this long-overdue fix. If your representatives have not yet signed on, please urge them to do so immediately!
Click here for more information, including a full list of the bill’s authors/sponsors
Contact: Elizabeth McNeil, 415/882-3376 or emcneil@cmanet.org.
2. Two New PPO Solicitations Masquerading
as Official Business Correspondence
It’s not uncommon for physician offices to receive deceptive PPO solicitations that appear to be genuine business correspondence. These seemingly official letters and notices are often veiled attempts to get physicians to join discount networks and accept discounted rates as payment in full. CMA urges physicians and their staff to be wary of requests for physician information from unknown payors.
Two new deceptive PPO solicitations have recently been brought to CMA’s attention:
Healthcare Networks of America (HNA): A number of physicians have reported receiving “warning” letters from HNA, which threaten that they will be removed from HNA’s preferred provider panel for “failing to return the credentialing information on multiple occasions.” The letter implies that the physicians are already contracted with HNA and will “lose patients” if they don’t respond immediately and pay the $115 membership fee. Physicians should never feel pressured to join a network for fear of losing patients.
Physicians should be aware that most payors do not charge membership or application fees. HNA also requests the physician’s medical license number, DEA certificate number, and federal tax ID number. Physicians should also advise their staff to verify the legitimacy of any such request before disclosing sensitive physician information.
Integrated Health Plan (IHP): Physicians are also receiving solicitations from IHP. The first red flag is the plan’s $150 “application/credentialing fee.” The solicitation also reveals that IHP’s PPO network is leased or rented by more than 1,100 payors.
Additionally, IHP encourages physicians to join its “discount card program.” As you know, discount health cards are not insurance. Unfortunately, many patients are misled into believing they are purchasing health insurance, only to find, when they present the card at the doctor’s office, that they do not have insurance. The Department of Managed Health Care has filed several cease and desist orders against companies marketing discount health cards.
Be Informed: Before joining any network, particularly one that is leased or rented by other payors, you should carefully review the contract, including the list of payors that would have access to the discounted rates. Physicians should ensure that the proposed compensation, including the payor’s payment policies and the rules it uses to adjudicate claims, will be sufficient to maintain a medical practice. Without doing this analysis, you cannot make an informed decision about signing the contract.
To help physicians negotiate and manage complex third-party payor agreements, CMA has published a contracting toolkit, Taking Charge: Steps to Evaluating Relationships and Preparing for Negotiations—A Focus on Payor Contracting. The toolkit is available free to members at the members-only website. Nonmembers can purchase the toolkit for $100 in the CMA CMA bookstore.
CMA has also published a “Silent PPO Action Guide,” which contains an overview of physician discount contracts and discusses the laws that regulate PPO network leasing. The guide is available through CMA ON-CALL (document #1907). ON-CALL documents are available free to members at CMA’s members-only website. Nonmembers can purchase ON-CALL documents for $2 per page at the CMA bookstore.
Click here for more information.
Contact: Aileen E. Wetzel, 916/444-5532 or awetzel@cmanet.org.
3. Survey Results Confirms Blue Cross’s Widespread Failure to Adequately Notify Physicians of Fee Schedule Changes
CMA would like to thank all of you who completed the Blue Cross fee schedule survey last week. The survey results clearly demonstrate that Blue Cross has failed to provide physicians with timely access to the proposed fee schedule, leaving many physicians unable to assess the financial impact that the fee schedule changes will have on their practices. CMA has urged the Department of Managed Health Care to delay implementation of this new fee schedule, which is scheduled to take effect June 1.
Ninety-two percent of the 174 practices that responded said that Blue Cross failed to provide them with enough information to calculate their new reimbursement rates, and 75 percent of practices that requested additional information did not receive a satisfactory response in a timely manner.
CMA has provided DMHC with the survey results and urged them to take immediate action.
Click here for more information, including detailed survey results.
Contact: CMA's reimbursement help line, 888/401-5911 or or jblack@cmanet.org.
4. Old CMS-1500 Forms Will Not Be Accepted After July 1
The Centers for Medicare and Medicaid Services (CMS) yesterday told carriers to stop accepting the old CMS-1500 forms on July 2.
As reported earlier this year in CMA Alert, CMS announced it would continue accepting the old CMS-1500 claim forms past the original April 1 deadline because of formatting errors in some of the new forms being distributed by the Government Printing Office and other vendors. The form was updated to accommodate the mandated National Provider Identifiers (NPIs).
According to CMS, the problem is not as widespread as previously suspected. Still, physicians should make sure that they have the new and correctly formatted forms before the July 2 implementation date.
The best way to identify badly formatted forms is to look at the upper right-hand corner of the form. If the tip of the red arrow above the vertically stacked word “CARRIER” is touching or close to touching the top edge of the form, then the form is not printed to specifications. There should be approximately a quarter of an inch between the tip of the arrow and the top edge of the paper on properly formatted forms.
Please note that this issue involves the paper claim form only and does not affect the NPI implementation date. Medicare carriers can continue accepting legacy provider identification numbers until May 31, 2008.
Click here for more information.
Contact: CMA’s reimbursement help line, 888/401-5911 or gfonseca@cmanet.org.
5. NPI Look-Up Tool Available Soon
So, you’ve gotten your National Provider Identifier (NPI), right? Did you know you will also have to include the NPIs of referring physicians and health care facilities on your claim forms?
Obtaining NPIs from referring providers can be a time consuming hassle. This has been a major obstacle in the implementation of the NPI rule.
This week, the Centers for Medicare & Medicaid Services (CMS) finally — after many frustrating delays — announced that physicians and other covered entities will soon be able to look up NPIs by simply entering the provider or facility name into an online database. This online lookup will be available on June 28, 30-days after CMS’s official NPI data dissemination policy was published in the Federal Register.
The online lookup will return NPIs and relevant demographic information, but it will not disclose social security numbers, dates of birth, or IRS taxpayer identification numbers, according to CMS.
Physicians are encouraged to look up their information at the NPI enumerator’s website, https://nppes.cms.hhs.gov, and make any necessary updates or corrections to ensure that their information is accurate before it is disclosed by CMS.
Click here for more information.
Contact: CMA’s legal information line, 415/882-5144 or legalinfo@cmanet.org.
6. Member Benefit of the Week: 20% Off Office Supplies
CMA members get 20 percent off medical office supplies from Histacount, including clinical forms, appointment books and cards, filing supplies, letterhead, business cards, and more.
A discount code is required to receive your special member savings. The code is available at CMA’s members-only website. You can also contact CMA’s Member Service Center at 888/233- 2937 or info@cmanet.org.
Click here for more information on your membership benefits.
Contact: CMA’s membership hotline, 888/233-2937 or lgodward@cmanet.org.
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No. 2097
