Latest News

Medicare Learning Network Update: New & Revised Codes for Outpatient Hospitals

Posted by on Aug 26, 2015 in Latest News | Comments Off on Medicare Learning Network Update: New & Revised Codes for Outpatient Hospitals

by John Berry Have you heard of the Medicare Learning Network (MLN) and their series of articles, MLN Matters®? What exactly is MLN you may be asking yourself? Simply put, they are an education/information sharing arm of CMS, the Centers for Medicare and Medicaid Services. The MLN Matters® series of articles are intended for physicians, other providers and suppliers who submit claims to Medicare Administrative Contractors (MACs), including Durable Medical Equipment Medicare Administrative Contractors (DME MACs) for services provided to Medicare beneficiaries. In the article titled, “New and Revised Place of Service Codes (POS) for Outpatient Hospitals,” CMS addresses Point of Service (POS) code changes; specifically code 19, the off campus outpatient code, and code 22, the on campus outpatient code.  These code changes are set to go into effect January 1, 2016. POS 19 Off Campus-Outpatient Hospital Descriptor: A portion of an off-campus hospital provider based department which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. POS 22 On Campus-Outpatient Hospital Descriptor: A portion of a hospital’s main campus which provides diagnostic, therapeutic (both surgical and nonsurgical), and rehabilitation services to sick or injured persons who do not require hospitalization or institutionalization. CMS has developed these changes for the purpose of differentiating between on and off campus service providers in order to better pay claims. You will notice the term “bundled” payment in the information below. You will notice it more and more as we move closer to the Value Based Payment Model (VBPM) coming in 2019. These code changes help CMS move closer to bundled payments and VBPM. Points of interest with POS Codes 19 and 22: Payments for services provided to outpatients who are later admitted as inpatients within 3 days (or, in the case of non-IPPS hospitals, 1 day) are “bundled” when the patient is seen in a wholly owned or wholly operated physician practice. The 3-day payment window applies to diagnostic and non-diagnostic services that are clinically related to the reason for the patient’s inpatient admission, regardless of whether the inpatient and outpatient diagnoses are the same. The 3-day payment rule will also apply to services billed with POS code 19. (1) Claims for covered services rendered in an Off Campus-Outpatient Hospital setting (or in an On Campus-Outpatient Hospital setting, if payable by Medicare) will be paid at the facility rate. The payment policies that currently apply to POS 22 will continue to apply to this POS, and will now also apply to POS 19 unless otherwise stated. (2) Reporting outpatient hospital POS code 19 or 22 is a minimum requirement to trigger the facility payment amount under the PFS when services are provided to a registered outpatient. Therefore, you should use POS code 19 or POS code 22 when you furnish services to a hospital outpatient regardless of where the face-to-face encounter occurs.(1) References: (1) (2)...

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Health Insurers Request Large Rate Increases for 2016 — Much to Washington’s Chagrin

Posted by on Aug 19, 2015 in Latest News | Comments Off on Health Insurers Request Large Rate Increases for 2016 — Much to Washington’s Chagrin

In an effort to curtail further outrage over the Affordable Care Act, the Obama Administration is urging states to cut back their requested rate increases for 2016.  Some insurance providers are claiming they lost money on policies sold in the public marketplace due to new customers being sicker than expected. (Who would imagine that someone buying health insurance would get sick? The nerve of some people!) Carriers assert they paid out more in claims than they collected in premiums, leaving them with an unsustainable business model.  They are requesting anywhere from 10% to 50% increases in rates. (BCBS of Minnesota wins the prize for the largest at 50%; if you listen closely you can hear them firing actuaries.) While we all shed a tear and say a prayer for the insurance companies, the Obama Administration has a few counterpoints.  The federal government is arguing that new customers acquired in 2016 will be healthier than past patients.  This group of late arrivers are less likely to be sick than those who used the public marketplace from the beginning. The Obama Administration is further arguing that people who signed up in the past have now received the treatment they had previously put off, leading us to believe they should be healthier from here on out. Another argument is that the increase in the tax penalty for those who choose (like we have a choice) to go without health insurance in 2016 should motivate those who have neglected to sign up to do so.  These are mainly healthy individuals who have not deemed health insurance a necessary expense. There is much uncertainty with insurance companies, but I believe there is a tendency to ask for higher rates than necessary in order to pad the numbers.  It’s just like selling a car; you always ask for more than you think the customer will accept because the worst they can say is NO.  And every now and again they will say yes, and you’ve just made a month’s commission on one sale. Or, in this case, you’ve padded your rate request by a point or two to set a precedent for years to come. The concern is not for the poor, who have the majority of their premiums subsidized by the government; they are largely shielded from rate increases.  As always the burden will fall on the middle class.  Those who are ineligible for federal subsidies will struggle to pay the increase in premiums. It remains to be seen whether any of these preliminary rate hikes will stick. Regulators in many states have the power to reject price increases, and many who don’t are expected to at least pressure insurers to soften their plans. Until then we will wait with bated breath to see who wins this standoff, and in doing so, who will set the standard for rate increases in the foreseeable...

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Why Pathologists and Labs Should Not Celebrate the Proposed Medicare Fee Schedule

Posted by on Aug 14, 2015 in Latest News | Comments Off on Why Pathologists and Labs Should Not Celebrate the Proposed Medicare Fee Schedule

A review of the proposed Medicare fee schedule shows pretty nice increases for some specialties — independent laboratory went up by 9% and pathology went up by 8%. Before we all run off to celebrate this victory, let’s take a closer look.  We must understand these changes are based on certain CPT codes classified by individual provider type and totaled by aggregate.  This does not mean these providers will actually see 8-9% increases in revenue — remember, just because CPT code pricing goes up or down, it does not always mean more or less money. Also, because this is a proposed fee schedule, we find it imperative to wait until the federal register releases its final document in November to see what changes will actually take place. It is then very important to take these actual fees and build a detailed revenue projection for each individual practice.  Don’t forget, these changes from Medicare will also likely be implemented by all the commercial payers. Here is an example of why things look so rosy for pathologists and independent laboratories when in fact the changes are nominal. The CPT code 88342 for TC Immunohistochemistry Antibody Specimen details our example very clearly. 88342 is the technical component of this test.  If you look at the proposed change, it shows this going up 31.10%.  Nice increase right? Not so fast. Several years ago this code was cut 52%, and last year the description was changed on this code to say per specimen instead of per block. In most cases, the billable volume of these tests has decreased. So when it is all said and done, this 31.10% increase is really just a nominal bump that tries to recover from a larger loss of revenue over the past few years. In the global view, this code increase helps to calculate out a total increase of 9% for labs, but it is a false victory.  In the end the bottom line for these providers is still much lower than it was several years ago. The proposed increases for the professional side of the codes are actually going up about 1.4%. This means considering inflation, practices still lose money. In summary, it is important not to get too tied into the proposed changes and to read deeply into the documents.  The bottom line is this: it will be harder to make money in the pathology world over the next few years. This is why so many practices are tightening their belts and increasing their billing diligence. Mick Raich is the President of Vachette Pathology. He can be reached for comment at or...

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An Overview of the New Proposed Medicare Fee Schedule

Posted by on Aug 12, 2015 in Latest News | Comments Off on An Overview of the New Proposed Medicare Fee Schedule

I reviewed the recent 815-page proposed Medicare fee schedule and found some interesting items that pathology practices and labs will want to take note of.  The overall goal of the document is to set the pricing for next year. It also seems to provide a template for future payment models, as it provides more information on the Medicare Access and CHIP Reauthorization Act (MACRA). This act begins the move to bundled payments, the shift to the Value Based Payment Modifier (VBPM) or Value Modifier (VM), and the eventual shift to the Merit Based Incentive Payment System (MIPS). The document details the PQRS 2% penalty for 2018 and the proposed 4% decrease for those missing the VBPM metrics. It does not tell us exactly what the metrics will be for VBPM or how this will be tracked. We only know the goal is to have providers on this program as of January 2017. It does appear the penalties are growing as we get further into the bundling models. The document tries to explain how Medicare will pay claims in the near future.  Starting in 2019 we are going to enter a different world with merit-based MIPS payments.  This program will basically bundle all the other value-based programs, and if you fail to meet the metrics, your Medicare payments will decrease starting at 4%, eventually moving to a 9% decrease. The shift will work this way … Most providers already have a PQRS standard and an Electronic Health Record (EHR).  Starting in January of 2016, MACRA mandates the establishment of a VBP model for selected providers; the remaining providers are to be onboard by January 2017.  This program has to be budget-neutral. In the end it will look like this: (PQRS) + (EHR) + (VBPM) = MIPS (Merit Based Incentive Payment System) By bundling these models, Medicare hopes to clarify how practices are tracked and hold them accountable for missing the metrics. This should be an area of concern for medical practices, as many are currently failing on PQRS reporting.  We have several groups who have already failed to meet this metric and are now taking a 1.5% hit from Medicare. It will be interesting to see how this is actually delayed and how it plays out more directly when the federal register is released in November.  According to MACRA, all providers are supposed to get a .05% increase in payments for 2016; this document does have a clause stating if the programs are not making money, then these increases can be denied. Mick Raich is the President of Stark Medical Auditing and Vachette Pathology. He can be reached for comments at or...

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Vachette Pathology Newsletter – Summer 2015

Posted by on Jul 12, 2015 in Latest News | Comments Off on Vachette Pathology Newsletter – Summer 2015

Our quarterly newsletter is out! To download this collection of our best articles and social media updates from the past few months, please join our mailing list. We promise not to share your email or send you spam, and you can unsubscribe at any time. You’ll be one of the first to know when we publish the next Vachette Pathology newsletter. First Name (required) Last Name (required) Your Email (required) You can also find our past newsletters here: Winter 2015 Fall...

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Medicare auditors’ authority to upcode or downcode has an upside and downside

Posted by on Jun 14, 2015 in Latest News | Comments Off on Medicare auditors’ authority to upcode or downcode has an upside and downside

“With great power comes great responsibility” ~ Voltaire I doubt that Voltaire had medical coding on his mind during the Age of Enlightenment. But in the Age of Coding, his maxim certainly rings true. Starting on May 4th, Medicare auditors added a new dimension to their authority. With the implementation of Transmittal 585, auditors now have the autonomy to change the level of codes billed and still pay the claim; they are able to upcode or downcode claims when a payable service was rendered, yet they believe the provider has selected the wrong code. This is in effect for MACs (Medicare administrative contractors), RACs (recovery auditors), ZPICs (zone program integrity contractors), SMRCs (supplemental medical review contractors) and CERTs (comprehensive error rate testing contractors). This new level of power brings with it advantages and potential drawbacks. On the upside, providers can receive some payment for a service without the need to appeal. A decrease in denials and appeals is certainly advantageous. A potential flaw is that MAC auditors could target providers who bill a high number of multiple services. If this were to occur, then legitimate claims could suffer; providers may be inclined to select lower units from the outset knowing the auditors will be keeping a close eye. Another disadvantage is the cost to contest a one-level variance can exceed the amount to be gained. This would produce a lose-lose scenario, even when you are correct in contesting the changed claim. This extension of power was given to find a means of paying claims that would otherwise be denied for a small or obvious mistake. The question remains, is that the only reason this power will be exercised? Claims will forever remain subjective in nature, but hopefully the increased latitude given to Medicare auditors will only be used to make changes that, upon further inspection, are blatantly necessary and in the best interest of all parties involved. Auditors, are you ready for the responsibility that comes with...

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UnitedHealthcare Pressures Pathology Groups to Participate

Posted by on May 31, 2015 in Latest News | Comments Off on UnitedHealthcare Pressures Pathology Groups to Participate

Are you familiar with UnitedHealthcare’s Extended Non-Network Reimbursement Program (ENRP)? If you are a pathology group practicing in Texas, Arizona, Florida or Missouri, and you are not participating with UnitedHealthcare, this program applies to you. Here’s the scenario — a patient goes to an in-network facility, yet receives services from an out-of-network pathology provider.  Under ENRP, UnitedHealthcare will pay based on out-of-network rates. Payment will not be 100% of billed charges, and patients could be balanced-billed the difference. This “program” was extended into Missouri on January 1, 2015.  A recent article in the St. Louis Post-Dispatch headlined “Patients on the hook for bills” leaves readers concerned about balance-billing and high, out-of-network bills from pathology specialists within in-network facilities. According to the article, UnitedHealthcare stated it is “deeply concerned that some hospital-based physicians are establishing out-of-network strategies to seek excessively high reimbursement levels, sometimes more than 10 times what an in-network physician would charge for the same service.” Given this notice from UHC, what will the effects be?  Will your facility pressure your pathology group into participating with UnitedHealthcare to avoid fallout from patient complaints?  What’s your game...

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Have you seen a decrease in your Anthem payments? This may be why

Posted by on May 20, 2015 in Latest News | Comments Off on Have you seen a decrease in your Anthem payments? This may be why

If you are a provider in the following states, be aware: OH, KY, IN, MO, WI, CT, NH, ME, VA Anthem Blue Cross and Blue Shield began migrating their Medicare Advantage members to a new claims processing system starting in January of 2015. Providers, this new processing system could impact your claims receipt.  Claims are validated as received through the clearinghouse, but Anthem is unable to identify claims submission via their online portal or through customer service. If you have seen a recent spike in your Anthem accounts receivable, and a decrease in payments, this may be the reason why! Who is working with your billing agency to ensure they are identifying these types of issues? Who is helping you work toward...

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Billing Transition Issues Concerning Old Receivables

Posted by on May 4, 2015 in Latest News | Comments Off on Billing Transition Issues Concerning Old Receivables

Every year we assist 15 to 20 clients as they transition from one billing firm to another.  The reasons for these transitions are varied; usually it boils down to a lack of performance followed by a lack of communication, sometimes both. One of the big issues we see in these transitions is the handling of old receivables from the previous billing company.  Often the original biller works these claims for three months, then rolls them off to collections. But what next? You should ask yourself: What does your billing contract state regarding transition of old receivables to a new billing agency? Many billing contracts have a clause indicating they will follow up on old receivables and transfer these accounts once completed. However, be mindful that the information to transition those receivables must be in an acceptable format, i.e. an electronic data file with clear indicators as to patient demographic and account detail.  If that format cannot be provided, and the accounts are transferred over as hard copies, labor costs may be incurred.  The labor costs (and the increased collection rate) involved may outweigh the actual payments received on the old AR. In most cases, billing contracts stipulate that the original biller will transfer the files in a format designed by that biller. This means the previous biller could theoretically drop the accounts into a 1997 Quattro Pro file, or a similarly antiquated format, leaving the practice and their new biller to figure out the file format and how to collect on these older accounts.  You would be surprised at how many billing companies become less user friendly in this way once their contract is terminated. Being aware of these problems is just part of managing your practice correctly during these transitions.   Remember, if you decide to terminate your billing contract, work with a professional who understands the complexities of these issues. Contact us if you have questions:  Mick Raich, President, Vachette Pathology,...

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Out-of-Network Labs, Pathologists May Have Some Recourse Against Insurers

Posted by on Apr 30, 2015 in Latest News | Comments Off on Out-of-Network Labs, Pathologists May Have Some Recourse Against Insurers

Out-of-network (OON) laboratories and pathologists who have been underpaid by insurers now may have some recourse. Two recent court rulings appear to clear the way for OON providers to sue insurers in federal court. As insurers increasingly narrow their networks, more and more providers find themselves on the outside looking in, fighting to receive appropriate payment for the services they provide. For years now, insurers have tried to limit payment to providers and discourage out-of-network utilization through higher patient deductibles and co-pays. Insurers have even threatened to revoke the in-network status of physicians who refer to OON providers. In one of the most recent examples, United Healthcare has started capping what is paid out of network in certain areas, including Missouri, Florida, Arizona, and Texas. In November, the Federal Court of Appeals for the Ninth Circuit ruled that under the Employee Retirement Income Security Act (ERISA), out-of-network providers had the right to sue UnitedHealth on behalf of patients. More recently, on March 11, the Fifth Circuit Court of Appeals ruled against Cigna in a decision that is consistent with the ruling against United. The rulings give OON providers the right to sue for ERISA violations in federal court and allow OON patients the right to both ERISA discounts and PPO discounts. ERISA is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry, providing protections for individuals in these plans. In the most recent case, North Cypress Medical Center in Houston sued Cigna for failing to comply with plan terms and underpaying for services. Cigna countersued, saying that North Cypress, as an out-of-network provider, did not charge patients the full coinsurance amount, but billed Cigna as if it had. Essentially, North Cypress would collect a substantially reduced amount from the patient in exchange for prompt payment. Cigna was concerned when it learned of North Cypress’ prompt pay discount, believing the program would undermine its own incentives designed to encourage providers to join Cigna’s network and to encourage patients to seek care within that network. Cigna subsequently began reimbursing North Cypress at drastically reduced rates based on the lower rates the patients were paying. The Fifth Circuit ruled that the hospital has a right to sue Cigna under ERISA and outlined legal steps under the law to determine if an ERISA plan truly requires full deductible collection and balance billing. In what appears to be good news for OON providers, the ruling seems to signal a shift toward providers in disputes over out-of-network reimbursement. Still, providers who decide to waive all or part of the cost-sharing amount owed by OON patients may want to consult legal counsel before implementing such a...

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