Like political junkies on election night waiting on returns from a far-flung nation, healthcare industry claims watchers say that it is too early to call whether the enforcement deadline May 23 for the long-planned National Provider Identifier was a winner or a loser for the federal agency that imposed it.
"It's been eerily quiet," said Cyndee Weston, executive director of the American Medical Billing Association.
Weston, the head of the 1,400-member trade group of independent medical billing companies based in Sulphur, Okla., sent a letter last week to HHS Secretary Mike Leavitt, joining a number of other healthcare industry groups, calling for a six-month extension before the requirement that all electronic claims submitted to Medicare contain only the NPI as the provider identifier and no longer carry any previously used "legacy" identifiers.
Those entreaties were rebuffed. The NPI requirement, originally part of the Health Insurance Portability and Accountability Act of 1996, was not committed to fine print and a final rule by HHS until 2004, with an "effective date" of May 23, 2005, and an enforcement deadline of May 23, 2007. But facing now-familiar protests from payers, providers and claims clearinghouses that the NPI was then a bridge too far, HHS issued in April a year ago what it called a national contingency guideline, in effect, extending the date of compliance until May 23 this year. Because HIPAA sets rules and standards for the transmissions of all electronic healthcare claims, the NPI mandate also applies to Medicaid and private insurers and providers paying and sending claims electronically.
So far, Weston said, members who have called or e-mailed have been fraught with panic and uncertainty, and some have outlined serious problems, but its impossible to tell whether the early returns represent minor setbacks or a landslide defeat for the NPI rollout.
"I had one member who e-mailed us and said we had a problemour claims were all getting rejected," Weston said. But when she changed the provider's middle name to a middle initial "they went through just fine."
Another 42-physician California provider group hasnt been so fortunate in getting to the root of their problem, she said. The group has an NPI and doctors an have NPI, but they bill Medicare under the group number, she said. Before May 23, when claims could be submitted with both the legacy identifiers and the NPIs, the claims went through, Weston said.
"Up until Friday, Medicare knew that these doctors and the group were linked," she said. "Now that they are using (only) their new NPIs, somehow, the (linking) information has been lost. Medicare no longer has all of the providers linked. Only 12 of them can actually submit a claim without it being rejected."
Martin Jensen is chief analyst and chief operating officer at the Tulsa, Okla.-based Healthcare IT Transition Group, which produced a 103-page report earlier this month based on an industry survey of providers, payers, claims clearinghouses and other healthcare organizations. The report predicted a train wreck if HHS went ahead with the NPI. Emdeon Business Services, Nashville, also issued two survey reports this month, one based on claims submitted by physician groups and the other by claims from institutions. Both Emdeon reports predicted trouble was looming.
Jensen said he's heard from one official in a state Medicaid program who reported "frightening" numbers.
"In terms of the overall claims volume the last three days before NPI and the three days since NPI, the drop was about 70%," said Jensen, who has been a frequent critic of the decision by HHS to move forward with implementing the NPI in the face of multiple requests from healthcare associations, hospital and physicians groups to extend the implementation deadline for at least six months. So-called crossover claims in that state, those that come from Medicare but get a secondary payment from Medicaid, have dropped from almost 100,000 a day before May 23 to barely 200 per day after, Jensen said his Medicaid program source reported. Jensen declined to identify the source.
Miriam Paramore, senior vice president of corporate strategy at Emdeon Business Services, the claims clearinghouse and IT service provider, said its analysis, based on the earliest returns available, showed the claims processed May 23, tell only the beginning of the story.
"This is like the hanging chad part of it," Paramore said. "The thing hit on a holiday weekend. That introduces some kind of a lag here."
But those early returns dont look good.
For all Medicare plans, were seeing a rejection rate of 24%, she said, or, in dollars, $25.8 million in claims were turned down. That compares with an average rejection rate of 6% or $10.6 million a day, she said.
For Medicaid claims processed by Emdeon, the rejection rate May 23 was 26% compared with a normal average rate of 4%, she said.
For all Blues plans, the rejection rate of claims through the clearinghouse was 6% on May 23 compared with 3%. "It's low (compared with Medicare and Medicaid), but it's more than double what it was."
Other commercial plans were rejecting in the range of about 3% or 4% of claim volume, she said.
"We expected they would be more lenient on the editing," Paramore said. "This in fact proves that they are. I will absolutely not say whether people are complying or not complying with the law. I can say all of our customers are working in good faith to comply with the law and I know we are absolutely compliant with the law."
Emdeon reports released earlier this month estimated there would be significant increases in claims rejection rates for both office-based physicians, hospitals and other institutional providers if HHS went ahead with implementing the NPI as planned.
"As we projected in our prior studies, Medicare's strict interpretation was going to create havoc in Medicare claims," Paramore said.
Paramore serves as chairman of the financial services steering committee for the Healthcare Information and Management Systems Society, the Chicago-based trade association for the healthcare IT industry. As such, Paramore said, she has been in repeated contact with her counterparts at other claims clearinghouses whose customers are experiencing similar problems with claims rejections.
"I know all of their calls have gone up," she said.
While the spike in rejected claims was expected, what remains unpredictable is what impact it will have on providers' cash flow. If the rejection rates don't return to normal, the consequences will be dire.
"This is a predictor that has a lag of anywhere from a few days up to a month," she said. "In the next couple of days, the doctors are going to pull their financial reports and say, 'Holy cow, 25% of my money is gone.' That's why we need to track it over four to six weeks to get an impact."
A CMS official, who spoke on the condition of anonymity, said this morning that there are no plans at this time to rescind the NPI requirement. Several states are not ready and are having trouble complying, the CMS source said, but they have contingency plans in place.
One of the biggest causes of claims rejections has to do with secondary identifiers, the CMS source said. Since May 23, the CMS has required an NPI for any secondary providers be added to claims, where before, the use of so-called "legacy identifiers" in that data field was permissible. The source advised providers to use an online NPI registry to search for the NPIs of these secondary providers, call them on the phone, or, as a last resort, include their own NPIs in the field for secondary providers.
"As a temporary measure we're allowing them to do this and those claims should be coming through," the CMS official said.
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