Third Party Newsletter

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1 Volume 2, Issue 11 KEARNEY CONVENTION PRESENTATION HIPAA Interest High Some of it is very important, and some can be skimmed rather than studied. It s worth the time and effort required. NEBRASKA OPTOMETRIC ASSOCIATION Third Party Newsletter Heavier than expected attendance required walls to be moved and chairs to be added for Dr. Quack s HIPAA presentation at the NOA Fall Convention. Dr. Quack was gratified to see strong interest in HIPAA privacy requirements. That means Nebraska Optometry is ready to cooperate, which is the first and most important step in this complex undertaking, Dr. Quack told Duckville reporters afterwards. During his presentation Dr. Quack explained HIPAA terms and concepts, and then briefly explained some basic steps necessary to comply with HIPAA privacy requirements. [For those that missed the presentation, his actual slide program is available on Dr. Quack s new HIPAA web page. It takes a long time to load, however.] Dr. Quack noted that HIPAA privacy is much too complex to explain in one hour, and that all members should read the 31 pages of final HIPAA privacy regulations [also on the new NOA HIPAA site]. It s a two to three hour read, he said. Inside this issue: Compliance: Billing, Fines, and Jail 2 Medicare Hospice Patient Coding 3 DMERC (DMEPOS) Supplier Standards 4 BCBS Routine Care Benefits 5 Medicare Comprehensive Exams 5 Dr. Quack also recommended a number of other references, including the October and issues of the AOA Journal. And he distributed a number of forms: Notice of Privacy Practices (from the AOA) Authorization for Release of Identifying Health Information (AOA) Sample Business Associate Contract Provisions (from the Office of Civil Rights) Office Assessment for HIPAA Privacy Requirements (Draft from Dr. Quack) Dr. Quack said he anticipated additional help from the AOA in the near future, hopefully cookbook in nature. However, he suggested each office get the ball rolling since time is running short. Start out by creating a three-ring HIPAA Privacy binder with sections corresponding to the various HIPAA privacy requirements, he said. Then reflect on how to fill the binder with the required documentation. If nothing definitive comes from the AOA, you ll be on you way to HIPAA privacy success, anyway! See the October and November AOA Journal articles and Dr. Quack s presentation outline for additional suggestions. Special points of interest: HIPAA References & Web Sites: See Page 6. Medicare Billing Penalties Hospice GW Modifier Medicare Comprehensive Exams DMERC Supplier Standards

2 Compliance: Billing Practices, Fines, and Jail The following information was recently published in the Federal Register and entitled Compliance Program Guidance for Individual and Small Group Physician Practices. It directly impacts optometrists. A lengthy document, it has been distilled here for readability, and will be presented as a series of articles in this publication. Continued from last month Physician Billing Practices Third-Party Billing Services Physicians should remember that they remain responsible to the Medicare program for bills sent in the physician's name or containing the physician's signature, even if the physician had no actual knowledge of a billing impropriety. The attestation on the HCFA 1500 form, i.e., the physician's signature line, states that the physician's services were billed properly. In other words, it is no defense for the physician if the physician's billing service improperly bills Medicare. One of the most common risk areas involving billing services deals with physician practices contracting with billing services on a percentage basis. Although percentage based billing arrangements are not illegal per se, the Office of Inspector General has a longstanding concern that such arrangements may increase the risk of intentional upcoding and similar abusive billing practices. This concern is noted in Advisory Opinion No and also the Office of Inspector General Compliance Program Guidance for Third-Party Medical Billing Companies. [Both are available on the OIG website at html&log=linklog&to= A physician may contract with a billing service on a percentage basis. However, the billing service cannot directly receive Medicare payments made to the physician. Medicare payments can only be made to either the beneficiary or a party (such as a physician) that furnished the services and accepted assignment of the beneficiary's claim. A billing service that contracts on a percentage basis does not qualify as a party that furnished services to a beneficiary, thus a billing service cannot directly receive Medicare payments. According to the Medicare Carriers Manual, a payment is considered to be made directly to the billing service if the service can convert the payment to its own use and control without the payment first passing through the control of the physician. For example, the billing service cannot bill the claims under its own name or tax identification number. The billing service must bill claims under the physician's name and tax identification number. Nor can a billing service have the Medicare payments sent directly to its office or its bank account. The Medicare payments should instead be sent to the physician's office or bank account. Physician practices should review the third-party medical billing guidance for additional information on third-party billing companies and the compliance risk areas associated with billing companies. Billing Practices by Non-Participating Physicians Even though nonparticipating physicians do not accept payment directly from the Medicare program, there are a number of laws that apply to the billing of Medicare beneficiaries by non-participating physicians. Limiting Charges 42 U.S.C. 1395w-4(g) prohibits a nonparticipating physician from knowingly and willfully billing or collecting on a repeated basis an actual charge for a service that is in excess of the Medicare limiting charge. For example, a nonparticipating physician may not bill a Medicare beneficiary $50 for an office visit when the Medicare limiting charge for the visit is $25. Additionally, there are numerous provisions that prohibit nonparticipating physicians from knowingly and willfully charging patients in excess of the statutory charge limitations for certain specified procedures, such as cataract surgery, mammography screening, and coronary artery bypass surgery. Physicians who fail to comply with these sections may be fined up to $10,000 per violation or be excluded from participation in Federal health care programs for up to five years. Refund of Excess Charges Federal code mandates that if a nonparticipating physician collects an actual charge for a service that is in excess of the limiting charge, the physician must refund the amount collected above the limiting charge to the individual within 30 days notice of the violation. For example, if a physician collected $50 from a Medicare beneficiary for an office visit, but the limiting charge for the visit was $25, the physician must refund $25 to the beneficiary, which is the difference between the amount collected ($50) and the limiting charge ($25). Physicians who fail to comply may be fined up to $10,000 per violation or be excluded from participation in Federal health care programs for up to 5 years. Federal code mandates that a nonparticipating physician must refund payments received from a Medicare beneficiary if it is later determined by a Peer Review Organization or a Medicare carrier that the services were not reasonable and necessary. Physicians who fail to refund the payments may be fined up to $10,000 per violation or be excluded from participation in Federal health care programs for up to 5 years. [[Page 36826]] 4 Page 2 THIRD PARTY NEWSLETTER

3 Providing Optometry Services to a Medicare Hospice Patient Revision in Guidelines Within the last few months Dr. Quack has received three queries about filing for services provided to Medicare hospice patients. Claims were denied due to lack of a special modifier required by Medicare for physicians supplying services to the hospice patient. Dr. Quack did some research and found the following information published by Medicare at the end of 2001 that can indeed affect optometry. It is reprinted in its entirety to assist the reader in understanding the concept of the rule. The portion affecting optometry is highlighted. When a Medicare beneficiary elects hospice coverage he/she may designate an attending physician, not employed by the hospice, in addition to receiving care from hospice-employed physicians. The professional services of a non-hospice affiliated attending physician for the treatment and management of a hospice patient s terminal illness are not considered hospice services. These attending physician services are billed to the carrier, provided they were not furnished under a payment arrangement with the hospice. The attending physician codes services with the GV modifier Attending physician not employed or paid under agreement by the patient s hospice provider when billing his/her professional services furnished for the treatment and management of a hospice patient s terminal condition. If another physician covers for the designated attending physician, the services of the substituting physician are billed by the designated attending phy- There are times when the provider/supplier may need to files claims to Medicare for services which are not related to the hospice patients terminal condition. These services should be coded with the GW modifier service not related to the hospice patient s terminal condition. sician under the reciprocal or locum tenens billing instructions. In such instances, the attending physician bills using the GV modifier in conjunction with either modifier Q5 or Q6 modifier. When services related to a hospice patient s terminal condition are furnished under a payment arrangement with the hospice by the designated attending physician, the physician must look to the hospice for payment. In this situation the physician s services are hospice services and are billed by the hospice to its intermediary. Medicare will pay for covered, medically necessary Part B services that physicians furnish to patients after their hospice benefits are exhausted or revoked even if the patient remains under the care of the hospice. Such services are billed without the GV or GW modifiers. There are times when the provider/supplier may need to files claims to Medicare for services which are not related to the hospice patients terminal condition. These services should be coded with the GW modifier service not related to the hospice patient s terminal condition. For further information related to hospice benefits, refer to the Medical Care section of the Medicare Part B Physician s Manual. This section of the Physician s Manual can be viewed on the World Wide Web address: Reference: Medicare Carriers Manual, Transmittal No. 1728, November 1, 2001, CR# dec01_page4.html

4 DMERC (DMEPOS) SUPPLIER STANDARDS Medicare regulations have defined standards that a supplier must meet to receive and maintain a supplier number. The supplier must certify in its application for billing privileges that it meets and will continue to meet the standards. The supplier standards can be found as part of HCFA's Law, Regulations, Manuals, and CD-ROM and are effective December 11, Following are the new supplier standards as they appear in the Federal Register. The supplier: Operates its business and furnishes Medicare-covered items in compliance with all applicable Federal and State licensure and regulatory requirements; Has not made, or caused to be made, any false statement or misrepresentation of a material fact on its application for billing privileges. The supplier must provide complete and accurate information in response to questions on its application for billing privileges. The supplier must report to HCFA any changes in information supplied on the application within 30 days of the change.; Must have the application for billing privileges signed by an individual whose signature binds a supplier; Fills orders, fabricates, or fits items from its own inventory or by contracting with other companies for the purchase of items necessary to fill the order. If it does, it must provide, upon request, copies of contracts or other documentation showing compliance with this standard. A supplier may not contract with any entity that is currently excluded from the Medicare program, any State health care programs, or from any other Federal Government Executive Branch procurement or nonprocurement program or activity; Advises beneficiaries that they may either rent or purchase inexpensive or routinely purchased durable medical equipment, and of the purchase option for capped rental durable medical equipment, as defined in Section (a) of this subchapter. The supplier must provide, upon request, documentation that it has provided beneficiaries with this information, in the form of copies of letters, logs, or signed notices.; Honors all warranties expressed and implied under applicable state law. A supplier must not charge the beneficiary or the Medicare program for the repair or replacement of Medicare covered items or for services covered under warranty. This standard applies to all purchased and rented items, including capped rental items, as described in Section of this subchapter. The supplier must provide, upon request, documentation that it has provided beneficiaries with information about Medicare covered items covered under warranty, in the form of copies of letters, logs, or signed notices; Maintains a physical facility on an appropriate site. The physical facility must contain space for storing business records including the supplier's delivery, maintenance, and beneficiary communication records. For purposes of this standard, a post office box or commercial mailbox is not considered a physical facility. In the case of a multi-site supplier, records may be maintained at a centralized location; Permits HCFA, or its agents to conduct on-site inspections to ascertain supplier compliance with the requirements of this section. The supplier location must be accessible during reasonable business hours to beneficiaries and to HCFA, and must maintain a visible sign and posted hours of operation; Maintains a primary business telephone listed under the name of the business locally or toll-free for beneficiaries. The supplier must furnish information to beneficiaries at the time of delivery of items on how the beneficiary can contact the supplier by telephone. The exclusive use of a beeper number, answering service, pager, facsimile machine, car phone, or an answering machine may not be used as the primary business telephone for purposes of this regulation; Has a comprehensive liability insurance policy in the amount of at least $300,000 that covers both the supplier's place of business and all customers and employees of the supplier. In the case of a supplier that manufactures its own items, this insurance must also cover product liability and completed operations. Failure to maintain required insurance at all times will result in revocation of the supplier's billing privileges retroactive to the date the insurance lapsed; Must agree not to contact a beneficiary by telephone when supplying a Medicare-covered item unless one of the following applies: The individual has given written permission to the supplier to contact them by telephone concerning the furnishing of a Medicare-covered item that is to be rented or purchased. The supplier has furnished a Medicare-covered item to the individual and the supplier is contacting the individual to coordinate the delivery of the item. If the contact concerns the furnishing of a Medicare-covered item other than a covered item already furnished to the individual, the supplier has furnished at least one covered item to the individual during the 15- month period preceding the date on which the supplier makes such contact. Must be responsible for the delivery of Medicare covered items to beneficiaries and maintain proof of delivery. The supplier must document that it or another qualified party has at an appropriate time, provided beneficiaries with necessary information and instructions on how to use Medicare-covered items safely and effectively; Must answer questions and respond to complaints a beneficiary has about the Medicare-covered item that was sold or rented. A supplier must refer beneficiaries with Medicare questions to the appropriate carrier. A supplier must maintain documentation of contacts with beneficiaries regarding complaints or questions; Must maintain and replace at no charge or repair directly, or through a service contract with another company, Medicare-covered items it has rented to beneficiaries. The item must function as required and intended after being repaired or replaced; Must accept returns from beneficiaries of substandard (less than full quality for the particular item or unsuitable items, inappropriate for the beneficiary at the time it was fitted and rented or sold); Must disclose these supplier standards to each beneficiary to whom it supplies a Medicare-covered item; Must comply with the disclosure provisions in Section of this subchapter; Must not convey or reassign a supplier number; Must have a complaint resolution protocol to address beneficiary complaints that relate to supplier standards in paragraph (c) of this section and keep written complaints, related correspondence and any notes of actions taken in response to written and oral complaints. Failure to maintain such information may be considered evidence that supplier standards have not been met. This information must be kept at its physical facility and made available to HCFA, upon request. Must maintain the following information on all written and oral beneficiary complaints, including telephone complaints, it receives: The name, address, telephone number, and health insurance claim number of the beneficiary. A summary of the complaint, the date it was received, the name of the person receiving the complaint, and a summary of actions taken to resolve the complaint. If an investigation was not conducted, the name of the person making the decision and the reason for the decision. Provides to HCFA, upon request, any information required by the Medicare statute and implementing regulations. Page 4 THIRD PARTY NEWSLETTER

5 Dr. Quentin Quack s Queries and Questionable Quotes ~~~~~~~~~~~~~~~~~~~~~~~~~~ Third Party Questions from NOA Doctors and Staff ~~~~~~~~~~~~~~~~~~~~~~~~~~ BCBS BluePreferred Groups with Routine Benefits Dr. Quentin Quack Dear Dr. Quack, Which BCBS groups currently have routine vision benefits? Dr Quack s Quote: Cindy Rutledge of BCBSN was kind enough to send the following list: Carlson Systems Inc. Centris Federal Credit Union City of Falls City Commercial Federal Bank Community Hospital Falls City Conagra Foods Eagle Enterprises EFJ, Inc. Father Flanagan s Boys Home Fiedler Eye Clinic PC Foundation for Educational Funding Gordmans, Inc. Judah Caster Co. Kawasaki Motors Mfg. Corp Lozier Corp. MUD Nebr. Machinery Co. NEITO Groups Business Growth International Byco Connely & Pflug Md, PC Fllod Comminications LLC Futureware Distributing, Inc Gangwish Seed Farms, Inc Goracke & Associates, PC Heart Consultants McClung Aerial Spraying, Inc West Omaha Daycare Westering Distributing Norfolk Livestock Market NPPD Nucor Steel & Vulcraft Pacemaker Pools Physicians Mutual Insurance Co. Quebecor World Rehab Visions The Buckle Village of Boys Town Westview Retirement Community Z & S Architectural Woodworking Comprehensive Exam and Is a New Diagnosis Required by Medicare? Dear Dr. Quack, I understand that you must initiate diagnostic testing and a treatment program in order to charge a Medicare patient for a comprehensive examination. You also said in response to a previous question that a new diagnosis is inferred in the CPT example. But this inquiring mind wants to know: is a new diagnosis actually required? Dr. Quack s Quote: Good News! According to a recent to Dr. Quack from Medicare Director Pat Price M.D., the answer is NO! In order to use code or you must initiate (i.e., start, not continue) a diagnostic procedure (e.g., fields, refraction in limited circumstances, CBC). Dr. Price has previously stated this procedure need not be done the same day nor done at the optometrist s office, but it should be a billable procedure. In addition, a new treatment (i.e., not continued) must be instituted (e.g., antibiotics, lid scrubs, artificial tears, glaucoma drops). Does CPT actually require a new diagnosis for these codes? It doesn t say so directly, but so infers with the example given. However, with some trepidation, Dr. Quack asked Dr. Price directly if a new diagnosis was required. (Dr. Quack generally doesn t like to ask questions the answers to which could have untoward long-term implications ). He was pleased when Dr. Price replied that a new diagnosis was NOT required. All things considered, Dr. Quack still recommends considering the use of the codes instead of the codes. A is easier to document than the 92014, and the initiation of a diagnostic and treatment program is not a requirement. One final note: Remember not to confuse routine vision comprehensive exams for VSP and Eyemed patients with CPT comprehensive exams. They use the same code numbers but have different requirements. Check your provider handbook for each routine vision care third party s definition of comprehensive. VOLUME 2, ISSUE 11 Page 5

6 NEBRASKA OPTOMETRIC ASSOCIATION 201 n. 8TH Street, Suite 400 P.O. Box Lincoln, NE NEW!! NOA HIPAA WEB PAGE NOW ON LINE Dr. Quack added a special HIPAA web page accessible from the Members section of the NOA Web Site. It contains all of the information listed in the box below plus more resources. Take a look! HIPAA RESOURCES Joanne Lax, J.D., is a partner in the law firm of Dykema Gossett PLLC, the general counsel to the AOA. Dykema Gossett PLLC is a Michigan-based law firm having offices in Detroit, Ann Arbor, Bloomfield Hills, Lansing and Grand Rapids, Michigan, as well as offices in Chicago, Illinois and Washington D.C. Ms. Lax practices in the Bloomfield Hills office in the firm's Health Care Practice Group. She is responsible for the following forms. Notice of Privacy Practices Form: Authorization Form: AOA Web site: Copy of the HIPAA Privacy Rules from the Office of Civil Rights: Standards for Privacy of Individually Identifiable Health Information, (45 CFR Parts 160 and 164), Regulation Text, (December 28, 2000), as amended: Part 160, (May 31, 2002), Parts 160, 164, (August 14, 2002) Business Associate Agreement: The Nebraska Strategic National Implementation Process (SNIP) Task Group is a collaborative healthcare industry-wide process resulting in the implementation of standards and furthering the development and implementation of future standards. The Nebraska HIPAA SNIP Task Group has been established to meet the immediate need to assess continued HIPAA Administrative Simplification implementation readiness and to bring about the coordination necessary for successful compliance. Web site: index.htm. O ccasionally Dr. Quack s fax machine or contains a question that is inte resting, but may not pertain directly to third party care. Dr. Quack feels that he should share some of these more creative questions along with his insights on the topic. check on the boy after he had been in bed for a while. She talked to him about the importance of not playing in the street, then asked, "Honey, what did you learn from your talk with Daddy today?" The boy answered, "I learned that when you die, you turn into a squirrel." Whenever Dr. Quack reflects upon the importance of clear communication he is reminded of an incident that occurred when his children were quite young. One day his son found a dead squirrel out in front of the house, and was quite upset by it. Dr. Quack, seeing that the squirrel had been hit by a car, decided to seize the moment to teach his son a safety lesson. He talked to his son about the mysteries of life and death. Then he mentioned that the same thing could happen to him if he was not careful when he crossed the street. That evening, his mother went to The NOA Third Party Newsletter is published monthly by the Nebraska Optometric Association with the assistance of Ed Schneider, O.D., Third Party Consultant. Nebraska Optometric Association 201 North Eight Street, Suite 400 P.O. Box (68501) Lincoln, Nebraska Phone: Fax: NOA@assocoffice.net Ed s Fax & Voic Ed s Address: SchneiderEd@msn.com Ed s Emergency Pager: