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Physician Reimbursement Systems. The Premier Source for Coding & Reimbursement Assistance 2635 Walnut St. Denver, CO 80205 800.972.9298 Fax 303.534.0577 1. 2012 Update. 2012 Update. SGR and Conversion factor Health Care Reform ACO’s Billing Oversight eRx

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physician reimbursement systems
Physician Reimbursement Systems

The Premier Source


Coding & Reimbursement Assistance

2635 Walnut St.

Denver, CO 80205


Fax 303.534.0577


2012 update1
2012 Update
  • SGR and Conversion factor
  • Health Care Reform
  • ACO’s
  • Billing Oversight
  • eRx
  • EMR
  • PQRS
  • ICD-10
sustainable growth rate
Sustainable Growth Rate

What will happen?

What if the cuts go through?

sustainable growth rate1
Sustainable Growth Rate

No plan to address SGR after Jan 1.

$300 billion additional debt to “cure”

Republican Senator – no SGR cuts

Med Pac - Cut Non-Primary Care

Super-committee for budget savings failed to make recommendations on budget cuts or a solution to the SGR

sustainable growth rate2
Sustainable Growth Rate

What will happen?

A. Permanent fixed SGR–no cuts

B. Kick the can down the road–no cuts

C. No action–27% cut

What if the cuts go through?

A. Continue to see Medicare all patients

B. Limit Medicare patients

C. Stopped seeing Medicare patients

D. Start driving a cab or

look for other work

sustainable growth rate action
Sustainable Growth Rate Action

Work through Thanksgiving Christmas holidays– vacation the 1st few weeks in January

Prepare for cash delay

Line of credit / Cash reserves

Schedule changes

Prepare for cut in Medicare payments

Cut expenses

Plan to live with less

health care reform in progress
Health Care Reform In progress
  • Cost containment
    • Medical necessity
    • Increased over-site
      • Anti-Fraud
      • Audits & Take-backs
    • Cut Fee for service payments
      • Private
      • Medicare


health care reform in progress con t
Health Care Reform In progress (con't)
  • Payment Reform
    • Value Based Purchasing
    • Shared risk payment plans
    • ACO’s
    • Co-ops
    • Bundled payments
    • Medical Home


health care reform in progress con t1
Health Care Reform In progress (con't)
  • Private payer positioning
  • Data collection
    • PQRS,
    • Elect Rx,
    • Prepare for EMR Grants
  • Quality / Cost Efficiency
  • Transparency


health care reform wildcard
Health Care Reform “Wildcard!”

Shortage of Urologist

  • Location specific
  • ? Increased bargaining power
  • Early vs. later


accountable care organizations1
Accountable Care Organizations
  • Final rules–physician friendly
  • Not yet fully defined
  • Many are positioning
  • Can be many shapes and sizes
accountable care organizations co s
Accountable Care Organizations CO’s
  • Rationale:
    • US Healthcare is known for its fragmented payment and delivery systems
    • Fragmentation leads to waste, duplication and, ultimately, unnecessarily high costs
    • Fragmentation of care may also lead to higher occurrence of medical errors and poor clinical outcomes
accountable care organizations s
Accountable Care Organizations ’s
  • Most patients have multiple doctors (recipe for frustration) -
    • Lost or unavailable medical charts
    • Duplicated medical procedures
    • Having to share information over and over with different doctors
accountable care organizations s1
Accountable Care Organizations ’s
  • What is an ACO?
    • network of Hospitals, MD’s and other providers that share responsibility for providing care to patients with original Medicare coverage (not Medicare Advantage private plan)
    • The ACO agrees to manage ALL the health care needs of a minimum of 5000 Medicare beneficiaries for at least 3 yrs
    • GOAL: Provide seamless, high quality care for Medicare beneficiaries
accountable care organizations aco s
Accountable Care Organizations ACO’s
  • Who’s in charge?
    • Hospitals, Primary Care Providers and other physicians are in charge but Insurers may also play a role.
    • Humana, United Healthcare and Cigna have announced plans to form ACO’s for the private market
aco s final rule
ACO’s final rule
  • Two types of Risk Models in setting up ACO
    • One-sided Risk Model: sharing of savings for the first 2yrs and sharing of savings + losses for the 3 yr
    • Two-sided Risk Model: sharing of savings + losses for 3 yrs.
  • No requirements to withhold shared savings payments to cover potential future losses
  • shared savings from 1st dollar
aco s final rule s
ACO’s final rule’s
  • The amount of “Shared Savings” is linked to performance on five key quality standards:
      • Patient/Caregiver experience of care
      • Care Coordination
      • Patient Safety
      • Preventive health
      • At-risk population/frail elderly health
aco s final rule con t
ACO’s final rule (con’t)
  • 33 quality measures instead of 65
  • Beneficiaries assigned through attribution methodology
  • Elimination of requirement for EMR use–
  • Rolling application process
aco s final rule con t1
ACO’s final rule (con’t)
  • Antitrust relief
    • eliminated the need for mandatory review
    • relief applies to independent contractors
  • Fraudwaiversforsomepatient inducement services
big brother is watching

“Big brother is watching”

Medicare Administrative Contractor (MAC)

Zone Program Integrity Contractor (ZPIC)

Recovery Audit Contractors (RAC)

Office of Inspector General (OIG)

Comprehensive Error Rate Testing (CERT)

Quality Improvement Organization (QIO)


oig workplan for 2012
OIGworkplan for 2012
  • Evaluation and Management Services: Potentially Inappropriate Payments
  • Evaluation and Management Services: Trends in Coding of Claims
  • Evaluation and Management Services Provided During Global Surgery Periods
oig workplan for 20121
OIGworkplan for 2012
  • Physicians and Other Suppliers: High Cumulative Part B Payments (New)
  • Physician-Owned Distributors of Spinal Implants (New)
  • Physicians: Place-of-Service Errors
  • Physicians: Incident-To Services
  • (New) Physicians: Impact of Opting Out of Medicare (New)
oig workplan for 20122
OIGworkplan for 2012
  • Ambulatory Surgical Centers: Payment System Ambulatory Surgical Centers : Safety and Quality of Surgery and Procedures (New)
  • Part B Imaging Services: Medicare Payments
  • Diagnostic Radiology: Excessive Payments
  • Laboratories: Trends in Laboratory Utilization
fraud alert
Fraud Alert
  • USA today
  • TrailBlazers
  • RAC’s
rac process
RAC Process
  • Targets listed on Website
  • Demand Letter sent from RAC notification of suspected violation
  • 40 days to appeal to the RAC
    • RAC can reverse decision
    • Recoupment begins on Day 41
normal appeal process
Normal Appeal Process
  • Redetermination by an FI, carrier or MAC
  • Reconsideration by a QIC
  • Hearing by an Administrative Law Judge (ALJ)
  • Review by the Medicare Appeals Council within the Departmental Appeals Board, (hereinafter “the Appeals Council”)
  • Judicial review in U.S. District Court
electronic prescribing erx incentive program1
Electronic Prescribing (eRx) Incentive Program
  • Report eRx data by any one of the following methods:
    • Submit 25 Medicare Part B claims with code G8553 (in the numerator) and a standard service code (denominator) directly to CMS before December 31, 2011
    • Data submitted to CMS via a qualified (EHR)
    • Data submitted to a qualified and CMS-vetted Registry
electronic prescribing erx incentive program2
Electronic Prescribing (eRx) Incentive Program
  • Why do this?
    • Electronic prescribers (or Group Practices) will be awarded a 2% additional bonus over their actual claims payments
  • What if you don’t do this?
    • 2012: 1% penalty assessed (“payment adjustment”)
    • 2013: 1.5%
    • 2014: 2.0%
electronic prescribing erx incentive program program
Electronic Prescribing (eRx) Incentive ProgramProgram
  • What constitutes a “Qualified”eRx system? The system must be capable of;
    • Generating active medication list
    • Selecting medications, printing prescriptions, eRx, and conducting alerts
    • Information related to lower cost and Rx alternatives
    • Provides information on formulary and authorization requirements
  • Is your practice considering participating in the eRX incentive program?
    • A. Yes
    • B. No
    • C. I don’t know
    • D. I don’t think we will qualify
medicare ehr incentive program r
MedicareEHR Incentive Programr
  • Overview:
    • The Medicare/Medicaid EHR Incentive Programs will provide incentive payments to eligible professionals, eligible hospitals and critical access hospitals as they adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology
me medicare ehr incentive program
MeMedicareEHR Incentive Program
  • Eligible professionals can receive up to $44K over five yrs
  • To get max payment, participation must begin in 2012
  • 2015 or later - Medicare eligible professionals that do not successfully demonstrate meaningful use will have a “payment adjustment” in Medicare reimbursements
common barriers
Common barriers
  • High cost of implementation and maintenance
  • Uncertain of the return on investment
    • Providers incur the acquisition costs
    • plans receive the financial benefits
  • Challenges:
    • time/cost of personnel training
    • uneven financial rewards
    • equipment costs
    • “Meaningful use”
  • Has your practice looked into the EHR incentive program?
    • A. Yes
    • B. No
    • C. I don’t know
    • D. Yes, but we don’t qualify
physician quality reporting system pqrs1
Physician QualityReporting System (PQRS)
  • Financial incentive for eligible professionals to report data
  • The implication is that, in addition to reporting quality data, eligible professionals will also track and use quality data to make service and practice improvements which is the primary aim of PQRS.(and, save $$$)
physician quality reporting system pqrs rs
Physician QualityReporting System (PQRSRS
  • Financial Incentives for participating professionals:
    • 2011: 1% of providers total allowed Medicare charges
    • 2011: an additional incentive of 0.5% by participating in a Maintenance of Certification Program
    • 2015: a 1.5% penalty may be applied for failure to satisfactorily report PQRS measures and 2.0% by 2016
physician quality reporting system pqrs s
Physician QualityReporting System (PQRS)S
  • What are the options for reporting compliance with these pre-determined quality measures?
    • To CMS on their Medicare Part B claims (with G 8553 code)
    • To CMS via a qualified EHR product
    • To a qualified PQRI Registry
  • Does your practice participate in PQRS?
    • A. Yes, with claims based reporting
    • B. Yes, using the registry
    • C. No, but we plan to start in 2012
    • D. No
pqrs formerly pqri
PQRS (Formerly PQRI)
  • Continues incentive payment for participation through 2014
    • 1.0% 2011
    • .5% 2012-2014
  • Beginning in 2015 a payment adjustment will be phased in over a 2 year period
pqrs formerly pqri1
PQRS (Formerly PQRI)
  • Two time frames per year through 2014
    • January through December
    • June through December
  • Two ways to report
    • Claims based reporting
    • Registry based reporting
icd 10 implementation october 1 2013
ICD-10 ImplementationOctober 1, 2013

Will it be implemented?

Will it be delayed?

What is your biggest concern:

Cash flow?

Extra work?


Added expense

ama takes stand against icd 10 implementation
AMA Takes Stand Against ICD-10 Implementation

(11/15/2011) ---------. The AMA House of Delegates voted to work vigorously to stop implementation of ICD-10 ----"The implementation of ICD-10 will create significant burdens on the practice of medicine with no direct benefit to individual patients' care. At a time when we are working to get the best value possible for our health care dollar, this massive and expensive undertaking will add administrative expense and create unnecessary workflow disruptions. The timing could not be worse as many physicians are working to implement electronic health records ----,”

Peter W. Carmel, M.D., AMA president,

it s true all these codes exist

It’s True….all these codes exist

The Good news….You don’t have to worry about all of them!

icd 10 implementation
ICD-10 Implementation
  • 2 step process
    • Step 1
      • Electronic form 5010 Implementation- January, 2012
        • All electronic claims must use Version 5010
        • Version 4010 claims are no longer accepted (Delayed until March 31)
    • Step 2
      • ICD I0 implementation date October 1, 2013
        • medical diagnosis (ICD-9 CM diagnosis codes no longer accepted)
why version 5010
Why Version 5010?
  • Includes essential infrastructure changes for ICD-10:
    • Increases the ICD code field size
    • Adds an ICD code version indicator (9 or 10)
    • Increases the number of diagnosis codes allowed on a claim
    • Includes other changes to accommodate new standards
  • Are you ready to transition to version 5010 in January, 2012?
    • A. Yes
    • B. No
    • C. I don’t know
problem some are exempt
Problem: Some are Exempt
  • Specifically identified
    • Property and casualty insurance health plans
    • Workers' compensation programs
    • Disability insurance programs
    • Prison Health Systems
icd 10 cpt
ICD-10 & CPT
  • No impact on
    • Current Procedural Terminology (CPT) or
    • Healthcare Common Procedure Coding System (HCPCS)
  • Applies only to
    • Diagnosis coding
    • Inpatient procedural coding (hospital)
  • Have you looked at or started training on ICD-10?

A. Yes

B. No

  • If you answer is no, when do you plan to start?
    • Plan to start training in 2012
    • Plan to wait until 2013
why do we need a new coding system
Why Do We Need a New Coding System?
  • ICD-9-CM Limitations
    • ICD-9-CM does not provide:
      • necessary detail for patients’
      • medical conditions or the procedures and services performed on hospitalized patients
    • 30 years old
    • Uses outdated codes that produce inaccurate and limited data
    • Does not accurately describe the diagnoses and inpatient procedures of care delivered in the 21st century
    • Running out of room for new codes
benefits of adopting the new coding system
Benefits of Adopting the New Coding System


benefits of adopting the new coding system1
Benefits of Adopting the New Coding System
  • Incorporates much greater specificity and clinical information, which results in Improved ability to measure health care services
  • Flexible enough to quickly incorporate emerging diagnoses and procedures
  • Includes updated medical terminology and classification of diseases
  • Provides codes to allow comparison of mortality and morbidity data
  • Provides better data for:
    • Measuring care furnished to patients
    • Designing payment systems
    • Processing claims
    • Making clinical decisions
    • Tracking public health
    • Identifying fraud and abuse
    • Conducting research
icd 10 how to prepare
ICD-10 – How to Prepare
  • Know the transition timeline
  • Identify the personnel involved
  • Establish communications (internal and external)
  • Test vendor systems
  • Analyze budget impact
  • Develop training & education programs
  • Prepare for impact on processes, policies & systems
  • Implement the transitions
detailed considerations
Detailed Considerations
  • Identify current systems and work processes that use ICD-9 codes.
    • NCDs and LCDs
    • encounter forms/superbills
    • practice management system
    • electronic health record system
    • contracts
    • public health and quality reporting protocols
  • Talk with your practice management system vendor about Version 5010 and ICD-10 codes.
    • Have they installed Version 5010
    • When they expect to have it ready to install
    • Testing timelines and options
detailed considerations1
Detailed Considerations
  • Contact organizations you conduct business with
      • payers
      • clearinghouse
      • billing service
      • Ask about their plans for the Version 5010 and ICD-10 compliance
      • Ask when they will be ready to test their systems for both transitions
  • Talk with your payers about how ICD-10 implementation might affect your contracts
    • ICD-10 codes are much more specific than ICD-9 codes as a result payers may modify
      • terms of contracts,
      • payment schedules, or
      • reimbursement.
detailed considerations2
Detailed Considerations
  • Identify potential changes to work flow and business processes
    • clinical documentation
    • encounter forms
    • quality and public health reporting
  • Assess staff training needs
    • Identify the staff in your office who code, or have a need to know the new codes.
    • Coding professionals recommend that training take place approximately 6 months prior to the October 1, 2013, compliance date.
detailed considerations3
Detailed Considerations

Budgetary Impact Considerations

Education and Training






Staffing and Overtime


Ancillary Staff

Productivity Loss

  • Information Systems
    • Practice Management System Upgrade
    • Electronic Medical Record upgrade
    • Coding Software
    •  IT and Consulting
  • Auditing/Review/Crosswalking
    • General Consulting/Audits @
    • 500.00 per provider 2 x year
    • General Consulting/Training
    • Review of System Process
    • Crosswalking & Mapping
detailed considerations4
Detailed Considerations
  • Testing is critical
    • Need to test with
      • Payers
      • Clearinghouses
      • Other business partners
    • Check to see
      • When they will begin testing
      • Test days they have scheduled
    • Allow enough time to
      • Test Version 5010 transactions (internal and external)
      • Test Claims containing ICD-10 codes ensure
        • They are being successfully transmitted
        • They are being received
mapping icd 9 to icd 10 codes
Mapping ICD-9 to ICD-10 Codes

Not a one-to-one match:

  • New concepts in ICD-10
  • No matching code
  • Multiple ICD-9-CM for one ICD-10 code
  • Multiple ICD-10 for one ICD-9-CM code


icd 9 cm examples
ICD-9-CM Examples
  • 788.20 Retention of urine, unspecified
  • 788.21 Incomplete bladder emptying
  • 788.29 Other specified retention of urine
icd 10 cm examples
  • R33 Retention of urine

Excludes 1:psychogenic retention of urine(F45.8)

  • R33.0 Drug induced retention of urine

Code first (T36-T50) to identify the drug

  • R33.8 Other retention of urine

Code, if applicable, any casual condition first, such as:

enlarged prostate (N40.1)

  • R33.9 Retention of urine, unspecified
code specificity
Code Specificity
  • Codes can be specific with 3 – 7 digits
  • Make sure to code to highest specificity for family
  • Pay attention to notes for qualifiers and select codes accordingly
    • eg, 7th characters
    • placeholders
how should the gems be used
How should the GEMS be used?
  • Beneficial to programmers to update software, systems
  • Payers for cross walking diagnosis in existing policies
  • Can help offices for updating superbills and other established documents
    • the maps are not always correct or
    • Use as a guide,
what is the best way to learn
What is the best way to learn?
  • Practice, practice, practice!
  • There is no simple fix
  • Best practice will be to work directly with ICD-10 Code set to identify codes
  • The basics are not that different in concept and design from ICD-9-CM
    • Look in the Alphabetic Index or relevant table first
    • Always double check selection in the Tabular List
icd 10 resources

Centers for Medicare and Medicaid Services (CMS) (coming soon)

American Health Information Management Association (AHIMA)

American Academy of Procedural Coders (AAPC)