FYI - copies of news bulletins from the INA for all who don't receive them.

August 5, 2008

MEMO: 085 (08)

TO: IMA Physicians

FROM: Susan Belzer, IMA Reimbursement Director

SUBJECT: Reprocessing of Medicare Claims

The Congressional override of President Bush's veto of the Medicare Improvement for Patients and Providers Act (MIPPA) resulted in the Centers for Medicare and Medicaid Services (CMS) being directed not to enact the July 1, 2008 cut in Medicare fees. However, due to timing of the veto and CMS claims processing standards some Medicare claims were processed and payment reflected the 10.6 percent cut in reimbursement. The Medicare fee schedule was updated in CIGNA Government Services' system on July 23, 2008. CIGNA started processing claims on July 15, 2008. Any claims that processed between July 15 and July 23 will indicate a 10.6 percent reduction on the Medicare remit. CIGNA has started reprocessing claims to pay at the correct fee schedule amount.

Payment amounts for most services will be at the same level as the January to June 30, 2008 rate. Services for some mental health CPT codes will differ. For payment amounts for mental health codes, refer to IMA Memo 083.08 which is posted in the “What's New” section of the IMA website at http://www.idmed.org/.

Participating and non-participating physicians and patients may have concerns relative to the payment and deductible application amounts generated on claims processed during the July 15 to July 23 window.

Participating physicians and assigned claims: Claims processed during the July 15 to July 23 window will be reprocessed and paid at the appropriate payment amount. Since the reprocessed claims will reflect a different (higher) allowable, note that it may be necessary to post back to the patient account part of the write-off taken on the initial claims processing. Note also that multiple secondary payments may be received due to the crossover process for secondary insurance payments. You might want to consider copying and retaining a separate file for all remits that reflect processing during the July 15 to July 23 window for account reconciliation.

The Office of the Inspector General (OIG) has stated that if a physician chooses to waive beneficiary cost sharing for services attributed to the higher allowable, no administrative sanctions will apply. In other words, on assigned claims, you can accept just the Medicare payments and not bill the patient. Note that if the patient has a Medicare secondary insurer that the Medicare payment and the secondary payment should equal the total allowed charge on the reprocessed claims. In no event should the total amount of payment for a service exceed the Medicare allowable reflected on the July to December 31, 2008 fee schedule posted on the CIGNA website.

Non-participating physicians: Patients will receive notification that the physician's bill exceeded the limiting charge for services processed during the July 15 to July 23 window. CMS has been notified that patients who call the 1-800-Medicare call center about the notice of limiting charge violation have been informed that the physician has violated the limiting charge and the Medicare carrier should be notified. CMS will be working with the call center to correct the misinformation.

Once the non-assigned claims are reprocessed, the patient will receive additional payment and there should be no notice of limiting charge violations on the patient EOB. However, CMS has not indicated patients will be informed to disregard the first notice. In the event of a patient complaint, be sure to verify the charge did not exceed the limiting charge.