The year 2010 portends to be a very active year for medical offices. A plethora of regulatory changes will have a significant impact on the way practices function. Some of these changes are known. Some, however, are yet to be discovered.

 

Effective Jan. 1, the Centers for Medicare and Medicaid (CMS) issued a directive that it will no longer recognize consultation CPT codes. Instead, providers must use either hospital admission codes or evaluation and management codes. The directive applies to both hospital- and office-based services. This, however, only applies to charges submitted to Medicare Part B. Medicare Advantage plans are not included. It’s unclear at this time whether commercial carriers will follow suit. The practice is in a precarious position. How should the physician’s services be submitted to commercial carriers? There’s likely to be a great deal of confusion during the first part of the year as this billing issue is sorted out. There’s a high probability that commercial carriers will follow CMS’s lead since consult codes reimburse more than evaluation and management codes.

 

Buried within the stimulus bill passed in 2009 is an expansion of requirements associated with HIPAA (Health Insurance Portability and Accountability Act) related to disclosure of patient information. It was the intent of this portion of the legislation to require patient notification when this information was disclosed to anyone. Prior to the first of the year, the clinic was required to keep a log of disclosures and would provide that information only if requested by a patient. Under the language in the stimulus bill, requirements were established to notify the patient and even the media depending upon the number of patients’ whose information was disclosed.

 

CMS has a relatively new provider system known as PECOS (Provider Enrollment, Chain and Ownership System), in which information concerning the various providers of Medicare services is stored. In a directive issued late in 2009, CMS indicated that a provider must be enrolled in the PECOS system by Jan. 1 to receive payment from Medicare. In some cases, Medicare has provided a warning notice on provider EOBs if the provider was not active in the PECOS system. Unless there was some activity to require a long-time Medicare provider to re-validate his information, he may not be in the new system. There was some speculation that even if a provider was enrolled, there could be complications with his receiving payment if, for instance, a physician referring the patient to him was not enrolled. With concerns expressed by a number of providers and organizations such as the AMA (American Medical Association) and MGMA (Medical Group Management Association), CMS has delayed implementation of this requirement until April 1. Clinics need to ensure that providers are enrolled in the PECOS system. Enrollment may take 60 to 90 days to complete if applications are submitted correctly with all the necessary information and documentation provided. 

 

Medicaid is outsourcing some of its payment services. Magnolia Health Plan and UnitedHealthcare through AmeriChoice have been selected as CCO (Coordinated Care Organizations) for the MississippiCan program. At press time, Medicaid had issued a letter of intent to these two organizations and was awaiting response before formally acknowledging them as the processing intermediaries. Medicaid has established certain categories of Medicaid beneficiaries to be administered by the CCOs. These categories include Supplemental Security Income patients, foster care children, and breast and cervical cancer patients. The beneficiary will have to choose one of the two organizations. Mississippi Medicaid will not cover them. The practice must first decide if it wants to participate. If it chooses to do so, it must enroll with the organizations. Payment and processing for the services will be based upon requirements of the CCOs and not the currently established Medicaid guidelines. Estimated implementation of this program is April or May.

 

The FTC (Federal Trade Commission) has also impacted medical offices with the issuance of Red Flag Rules. The intent of these guidelines is to implement procedures to help prevent identity theft. The result is another set of administrative procedures on an already administratively burdened staff. The impact on the medical office came about through the FTC’s expansion of its definition of a creditor to include medical offices. Many contend that these rules overlap with HIPAA guidelines and there is no need for additional regulations. Because of the outcry, the FTC has delayed implementation of the Red Flag Rules until June 1. There has also been discussion that medical practices with fewer than 20 employees may be excluded from having to implement Red Flag Rules. 

 

Looming in the not-too-distant future is the requirement that standard diagnosis codes change from ICD-9 code set to ICD-10 code set. This change is scheduled to take place in 2013. However, it’s been recommended that clinics start no later than 2010 in preparation for this change. The transition to ICD-10 will have significant impact upon the medical office. Diagnosis codes are used to provide the reason for the procedures performed on a patient. Without proper diagnosis coding, the clinic will experience revenue problems. The ICD-10 codes are more numerous and more detailed. This will impact the physician directly. Even if a clinic has someone “coding” for a provider, the provider must understand that more information will have to be provided to ensure the proper diagnosis code is supplied. Also, the billing system utilized must be capable of handling ICD-10 codes. ICD-9 codes are numeric only. The new codes will contain alphabetic characters in addition to numeric codes. This may seem minor; however, it may require extensive reprogramming. If a change in billing software is required, it will take several months to successfully accomplish a transition.

 

Also found in the stimulus bill of 2009 was an incentive to encourage practices to embrace EMR (Electronic Medical Records). It provides up to $44,000 per provider to be paid over a 4-year period. The first payment is for systems demonstrating “meaningful use” in 2011. If meaningful use cannot be demonstrated, the incentive payment for that year would be lost and the full incentive payment could not be realized. Although recommendations have been made, at press time, meaningful use has not been finalized. Many practices are waiting for the definition of meaningful use and other issues before implementing EMR. If a practice waits until 2011, it will probably be very difficult to demonstrate meaningful use, whatever the definition may be. It takes considerable time to transition from a paper-based record to an electronic one.   The clinic must allow sufficient time for this process to take place. Also, if organizations providing EMR software and services are inundated with requests, implementation delays will be experienced. This year is the time to begin the EMR process if the practice wishes to participate in the incentive payments included in the 2009 stimulus bill.

 

And, the most significant impact of all will be healthcare reform. It may not include a single payer system or expansion of Medicare coverage. However, it will undoubtedly include new regulations for both insurers and providers. In addition to the specific changes addressed in this legislation, the consequences of 2,000 pages of legislative action will certainly include some that are unintended. One thing seems certain. Significant change will occur in the medical practice.

 

Be aware of what’s happening. Stay in touch with legislative activities, both locally and nationally. Watch for changes in reimbursement patterns. React quickly. Plan ahead. The year 2010 will be one of significant change and perhaps significant opportunities for those are ready to take advantage of them.