Healthcare Business News

AHA calls for CMS to fix its own glitch

By Joseph Conn
Posted: January 14, 2013 - 11:45 am ET

Health information technology promoter, heal thyself, the American Hospital Association is telling the CMS concerning a claims processing flaw that the AHA says is preventing some physicians working with critical-access hospitals from receiving electronic health-record incentive payments under the American Recovery and Reinvestment Act.

In a two-page letter (PDF) last week from AHA Executive Vice President Richard Pollack to CMS Acting Administrator Marilyn Tavenner, the AHA called on the federal agency to fix “a claims processing limitation” that could inappropriately exclude hundreds, if not thousands, of physicians who treat patients at as many as 780 critical- access hospitals, according to an AHA analysis.

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The exclusions affect the Medicare and Medicaid EHR incentive payment programs, the AHA said.

Pollack's request is a follow-up to an AHA letter about the same problem sent Dec. 16.

“The physicians in question are those for whom bills are submitted via the optional or 'Method 2' billing approach,” Pollack wrote. Under this method, a critical-access hospital bills Medicare on behalf of the physician for outpatient services covered under the Medicare Physician Fee Schedule. Thus, physician bills are submitted on the hospital's UB-04 form instead of the Form 1500 typically used for physician claims, he said.

“Due to system constraints, the CMS does not include these Method 2 claims when it identifies which physicians are eligible for the incentive programs, resulting in Method 2 physicians being inappropriately excluded from both incentive programs (Medicare and Medicaid) because they are designated as 'hospital-based' when they are not,” Pollack said.

He noted that in response to his December letter, Tavenner acknowledged the problem was due to claims processing limitations, “but stated that CMS does not plan to resolve this issue until 2014.”

This is a multifold problem, Pollack noted, because of timing constraints placed on the program by the CMS.

Under Medicare, physicians “must attest to meaningful use for 2012 in order to receive the full benefit of the Medicare incentives.” That full benefit drops from $44,000 for those physicians who achieve meaningful use in 2012 to $39,000 for those who do so in 2013, and continues to drop in subsequent years.

Physicians and other “eligible professionals” must have had 90 consecutive days of meaningful use of a certified EHR in 2012 to be eligible for the Medicare EHR incentive payment, but they still have until Feb. 28 to complete the attestation process, Pollack noted. “Therefore, the issue is very time sensitive,” he said.

If a physician or other eligible professional (collectively known as EPs) must wait until 2014 for the CMS to fix the glitch, “his or her total incentive payment would drop to $24,000—a loss of $20,000, or almost half of the total incentive,” Pollack said. “Those EPs who are ready to attest already have incurred the costs associated with implementing their EHRs and should receive timely incentive payments.”

The AHA estimates the total impact of the glitch will be substantial. An AHA analysis of claims data indicates that about 60% the roughly 1,300 critical-access hospitals use Method 2, according to Pollack's letter.

“If we assume that each CAH (critical-access hospital) is billing for an average of 20 EPs, a $20,000 loss per physician would amount to missed incentives of $312 million,” Pollack said. “This is an unacceptable loss for financially strapped rural providers who maintain access to care in underserved areas. Therefore, we respectfully request timely action to address this issue.”

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