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Washington -- The implementation date of a new Medicare enrollment policy that jeopardized timely payment of thousands of claims has been pushed back by three months, allowing physicians and suppliers to determine whether they are properly signed up with the program's Provider Enrollment, Chain and Ownership System, or PECOS.

The Centers for Medicare & Medicaid Services recently announced a new policy stating that physicians and suppliers who order Medicare services or refer them for beneficiaries will start seeing their claims rejected if they are not in the PECOS database. A physician who enrolled in Medicare before 2003, when CMS began using the system, will be required to re-enroll by April 5, 2010, to continue being paid.

The agency says PECOS will speed up the application process, provide more accuracy and security, and reduce paperwork for physicians who are signing up for Medicare for the first time or changing their enrollment information.

The original deadline was Jan. 1, 2010, but CMS pushed the date back at the behest of several physician organizations, including the American Medical Association, which warned that the repercussions of the revision could be drastic.

"Implementing this new policy will negatively impact the vast majority of physicians, suppliers and other health care practitioners engaged in the legitimate delivery of health care and the Medicare patients they serve," the AMA wrote in a Nov. 16 letter to CMS Acting Administrator Charlene Frizzera. The letter was signed by more than 50 organizations, including the Medical Group Management Assn., the American College of Cardiology, the American Academy of Family Physicians and the American College of Radiation Oncology.

Some of the groups said CMS' timing of the policy change was ill-advised, given that physicians also are facing a more than 21% cut in Medicare payments on Jan. 1, 2010, unless Congress acts to avert it. The agency recently informed physicians that they would have an extra month, until Jan. 31, to decide if they will participate in the program in 2010.

"This would have been like the straw that breaks the camel's back," said Melinda Martinson, a physician practice advocate at the Medical Society of New Jersey. "We are grateful that CMS has extended the implementation date. We need this time to work with CMS and our Medicare administrative contractor to understand the requirements and to help our physicians take any necessary actions so that they can continue to treat our seniors."

Some MSNJ members became concerned about the potential havoc the new policy could cause, since most were not even aware of the change, Martinson added. "Physicians must be able to refer patients and order durable medical equipment, and they should be paid for their services."

"Considerable confusion"

The AMA estimated that as many as 200,000 physicians, or 30% of all doctors who see or refer Medicare patients, are not in the PECOS database and will need to re-enroll.

The policy change is being implemented in two phases. The first phase began Oct. 5, 2009, and involved marking electronic Medicare claims for nonpayment if the physician ordering or referring a service had not re-enrolled in Medicare since 2003. Physicians who receive paper remittance did not see any such edits, however.

The first phase caused considerable confusion, the medical organizations noted in the Nov. 16 letter. One contractor reported issuing 300,000 warning edits the first day of phase one. Some doctors became alarmed because they thought the warnings meant the claims had been rejected.

"They were trying to notify you that you were going to have problems, but three months to get that done is way too short of a time frame," said Larrie Dawkins, practice administrator and chief compliance officer for Wake Forest University Health Sciences in Winston-Salem, N.C.

Dawkins estimated that about 50 of the roughly 800 physicians at Wake Forest need to re-enroll in PECOS to become compliant with the new CMS policy. He said he understands that CMS wants to cut down on fraud and abuse, but the agency needs to understand it takes a while for practices to update their information.

"We've got a large practice, and we need some time to carry this out. It involves registering through an electronic file, and you have to go through this entire process," Dawkins said.

Phase two of the policy is when CMS actually will begin denying claims submitted by physicians not in PECOS. The deadline for this phase was to be Jan. 1, 2010, but was pushed back three months.

"We've delayed the implementation to ensure that physicians and nonphysician practitioners have ample opportunity to update their enrollment records," said Jim Bossenmeyer, director for provider and supplier enrollment at the CMS Program Integrity Group.

The agency says a current enrollment record is one that is in the PECOS database and that also contains the physician's National Provider Identifier, or NPI.

The print version of this content appeared in the Dec 14, 2009 issue of American Medical News.

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