As reported previously, Congress acted at the end of December 2007 and passed the Medicare, Medicaid and SCHIP Extension Act of 2007 (S.2499). The planned 10.1% reduction in payments was postponed until the end of June 2008.
Instead, the new law gives physicians a 0.5 percent increase in the overall Conversion Factor for the first six months of 2008. You may or may not see increases in individual services as practice expense RVU changes and other factors come into play.
The fees that had been posted on the Medicare carrier web sites had to be revised to reflect the new rates and the new 2008 Medicare Fee Schedule has been posted at the link below.
These Fee Schedule amounts and Limiting Charges will be effective for dates of service January 1, 2008 and onward until Congress acts again at the end of June 2008. If Congress does not act by that time, a 10.1% decrease is expected for the rest of 2008.
There is normally a deadline of Dec. 31, 2007 for physicians to decide if they would be “participating” or “non-participating” physicians for 2008. However, the new deadline to notify carriers of changes in participation status is February 15, 2008.
CMS had been asked whether participation decisions for 2008 will be binding for the entire year or only for six months, and whether there will be another participation period before the 0.5 percent payment update expires on June 30, 2008.
For now, CMS has indicated that participation decisions made by Feb. 15, 2008, will be binding for the entire year. If new information becomes available we will keep you posted.
NGS NJ
http://www.empiremedicare.com/partbnj/billing/fees/fees2008.htm
In addition, once you have had a chance to review the revised fees, you may need to contemplate your continued participation or some other arrangement.
As a result, please review the next article as it outlines the three billing methods under Medicare.
- Participating physician
- Non-participating physician
- Opted Out (or Private Contracting) physician
For guidance on this issue, contact us through the Third Party Payer Coding Help Program.
There are basically three Medicare billing arrangement options:
- Physicians may sign a participation agreement and accept Medicare's allowed charge as payment in full.
- Physicians may elect to be a non-participating physician, which permits them to bill patients for somewhat more than the Medicare allowance.
- Or they may become a private contracting physician agreeing to bill patients directly and forego any payment from Medicare either to the patient or the physician.
Physicians who want to change their status from participating to nonparticipating or vice versa should do so as soon as possible.
Once made, the decision is irrevocable except where the physician's practice situation has changed significantly, such as relocation to a different geographic area or a different group practice. To become a private contractor, physicians must give 30 days notice before the first day of the quarter the contract takes effect. Those who considered a change in status should have first determined that they were not bound by any contractual arrangements, which require them to be participating doctors.
Participating physicians must agree to take assignment on all Medicare claims, which means that they must accept Medicare's approved amount as payment in full for all covered services for the duration of the calendar year. The patient is still responsible for the Medicare deductible and 20% coinsurance but the physician cannot bill the patient for amounts in excess of the Medicare allowance.
Medicare provides a number of incentives for physicians to participate:
- The Medicare payment amount for participating physicians is 5% higher than the rate for non-par physicians.
- Directories of PAR physicians are provided to senior citizens groups and to individuals who request one.
- Carriers provide toll free claims processing lines to PAR physicians and processes their claims more quickly.
Non-Participation (Non-PAR)
For Non-PAR physicians, the full payment schedule is set at 95% of the full payment schedule for PAR physicians. Non-PAR approved amounts are 95% of the PAR amounts for the same service.
Limiting charges for non-PAR physicians are set at 115% of the Medicare approved amount for non-PAR physicians.
Since Medicare payment schedule amounts for non-PAR physicians are 95% of payment rates for PAR physicians, the 15% limiting charge translates into only 9.25% above the PAR approved amount for the service.
How to Decide
When considering whether to participate, physicians must determine whether their total revenues from balance billing would exceed their revenues as PAR physicians, particularly in light of collection costs, bad debts, and claims for which they do accept assignment. The 95% payment rate is not based on whether physicians accept assignment on the claim, but whether they are PAR physicians; when non-PAR physicians accept assignment for their low-income or other patients, they still receive only 95% of the amount PAR physicians receive for the same service.
A non-PAR physician would need to collect the full limiting charge amount roughly 35% of the time they provided the service for the revenues from the service to equal those of PAR physicians.
Assignment acceptance, for either a PAR or non-PAR physician, also means that the Medicare carrier pays the physician the 80% Medicare payment. For unassigned claims, even though the physician is required to submit the claim to Medicare, the program pays the patient, and the physician must then collect the entire amount for the service from the patient.
Provisions in the Balanced Budget Act of 1997 give physicians and their Medicare patients the freedom to privately contract to provide health care services outside the Medicare system. Private contracts must meet specific requirements:
- The physician must sign and file an affidavit agreeing to forgo receiving any payment from Medicare for items or services provided to any Medicare beneficiary for the following 2-year period (either directly, on a capitated basis, or from an organization that received Medicare reimbursement directly or on a capitated basis);
- Medicare does not pay for the services provided or contracted for;
- The contract must be in writing and must be signed by the beneficiary before any item or service is provided;
- The contract cannot be entered into at a time when the beneficiary is facing an emergency or an urgent health situation.
In addition, the contract must state unambiguously that by signing the private contract, the beneficiary: gives up all Medicare payment for services furnished by the "opt out" physician; agrees not to bill Medicare or ask the physician to bill Medicare; is liable for all of the physician's charges, without any Medicare balance billing limits; acknowledges that Medigap or any other supplemental insurance will not pay toward the services; and acknowledges that he or she has the right to receive services from physicians for whom Medicare coverage and payment would be available.
To opt out, a physician must file an affidavit that meets the above criteria and is received by the carrier at least 30 days before the first day of the next calendar quarter. There is a 90-day period after the effective date of the first opt-out affidavit during which a physician may revoke the opt-out and return to Medicare as if they had never opted out.