Health care payment systems in California are in transition, pressed by market and economic factors as well as health reform mandates. New payment approaches are emerging while traditional ones still exist. During this transitional period, health care stakeholders including providers, public and private payers, purchasers, and policymakers will be making decisions about the future of payment systems in the state.

This report provides information about the historical context of payment systems in California and the current landscape. It discusses seven common payment models and nine emerging models that have already been implemented, are undergoing experimentation, or are likely to advance in the state. Insights about the evolution of the payment system under health reform include the following:

• The transition to future payment models will be evolutionary, not revolutionary.
• There is no “one-size-fits-all” approach.
• Large employers and purchasers of health care are likely to have a dominant role in driving payment reform.

Finally, the report discusses considerations and strategies that stakeholders should take into account as they transition to future payment models. These include:

1. Greater collaboration
2. Service line consolidation
3. Robust analytics around a common patient identifier
4. Incentives that align value and effectiveness
5. Impact of the cost of doing business

The complete report is available under Document Downloads.

Document Downloads

Health Care Payment in Transition: A California Perspective (987 K)

Read more: http://www.chcf.org/publications/2012/01/payment-reform-transition#ixzz1khGmhZPk

On Thursday, the California Department of Managed Health Care ordered Anthem Blue Cross to reimburse hospitals and physicians for outstanding claims dating back to 2007, saying the insurer failed to resolve violations discovered in a state audit, the AP/San Francisco Chronicle reports.

It is unclear how much Anthem would need to pay to comply with the order.

Background

In 2008, DMHC audited California’s seven largest health plans in response to health care providers’ complaints about inappropriate denials and late or inaccurate payments (Tayefe Mohajer, AP/San Francisco Chronicle, 1/12).

In response to the audits, six of the insurers submitted corrective action plans and paid health care providers, but Anthem did not take steps to pay health care providers for violations, according to DMHC.

Details of the Order

DMHC gave Anthem 30 days to submit a plan of correction to the agency.

The department also ordered Anthem to identify claims violations (Robertson, Sacramento Business Journal, 1/12). Claims found to have been wrongly paid would need to be repaid with interest.

Anthem’s Response

According to DMHC spokesperson Rodger Butler, Anthem said it would need to review 2.6 million claims to comply with the order.

Anthem spokesperson Darrel Ng said DMHC’s order was unexpected because Anthem already paid a $500,000 fine associated with the audit in November 2010 (AP/San Francisco Chronicle, 1/12).

At that time, a DMHC letter cited an administrative penalty of $900,000 for Anthem. The agency said it would suspend $400,000 of that figure if Anthem were to show full compliance with laws governing payment of claims (Sacramento Business Journal, 1/12).

DMHC said the fine did not resolve corrective actions required by the audit (AP/San Francisco Chronicle, 1/12).

Read more: http://www.californiahealthline.org/articles/2012/1/13/state-orders-anthem-to-pay-back-providers-for-outstanding-claims.aspx#ixzz1jps4mfSG

On Thursday, House Budget Committee Chair Paul Ryan (R-Wis.) and Sen. Ron Wyden (D-Ore.) unveiled a proposal that would give Medicare beneficiaries “premium support” to purchase traditional Medicare coverage or a private health plan, the New York Times reports.

Details of Proposal

Under the plan, Medicare beneficiaries would receive a subsidy to purchase coverage through an insurance exchange where private plans would compete with traditional fee-for-service Medicare. The subsidy in each region would be set by the cost of the second least costly option, regardless of whether that was a private plan or the fee-for-service plan (Pear, New York Times, 12/14).

According to National Journal, the plan would provide more protection for beneficiaries but potentially less budget savings than a previous Medicare reform plan by Ryan.

The amount of the subsidy would vary based on the cost of the health plan (National Journal, 12/14) Lower-income beneficiaries would receive a full subsidy, while higher-income beneficiaries would receive less. The proposal would not apply to beneficiaries currently enrolled in the program and would take effect in 2022 (Radnofsky/Weisman, Wall Street Journal, 12/15).

Ryan and Wyden said they will not draft legislation for the plan. “There’s no point in drafting legislation if you know it’s not going to pass,” Ryan said. He added that because of more pressing legislative issues, like the payroll tax cut extension, he does not expect any major action on Medicare until a new Congress is seated in 2013. In an interview on Tuesday, Ryan and Wyden said they hope their proposal can help overcome the contentious political climate of late. Ryan said, “We want to demonstrate that there is an emerging consensus developing on how to preserve Medicare,” adding, “We want to move that consensus forward.”

Cost Controls

Ryan and Wyden said that the measure could drive cost down lower than current price controls by forcing private insurers to bid to provide coverage and encouraging beneficiaries to chose the lowest cost plan, the Washington Post reports (Montgomery, Washington Post, 12/14).

The proposal also would cap Medicare growth and prohibit spending from increasing by more than the growth of the economy plus one percentage point. Congress could cut payments to providers and suppliers who overspend or increase premiums for high-income beneficiaries to stay within the limit (New York Times, 12/14).

Ryan Moves Away From Controversial Plan

The Ryan-Wyden plan marks a departure from a controversial Medicare reform proposal Ryan introduced in the spring, The Hill‘s “Healthwatch” reports (Baker, “Healthwatch,” The Hill, 12/14).

Ryan’s original plan — which would alter Medicare from a fee-for-service program to one that would have beneficiaries purchase coverage on the private market — was included in the House-approved GOP FY 2012 budget resolution (H Con Res 34). The plan was widely criticized by Democrats, elderly voters and even prominent Republicans (California Healthline, 5/17).

Bipartisan Implications

Ryan and Wyden’s “unusual alliance” could lead to complications for both parties in the 2012 presidential elections, according to the Post (Washington Post, 12/14).

The GOP gained many House seats in 2010 with a campaign message that the federal health reform law would damage Medicare. Democrats have hoped to retake the House by arguing that Ryan and other House Republicans are pushing to eliminate traditional Medicare, which could increase costs for beneficiaries (New York Times, 12/14).

During debt panel discussions, members of both parties stood behind “premium support” within Medicare, which could lead to major structural changes to the program, according to lawmakers and health policy experts. Some experts say that even though the panel failed to reach a deficit-reduction deal, the group’s work could frame the Medicare debate during next year’s elections and beyond.

Republicans traditionally have supported premium support. GOP presidential candidates Newt Gingrich and Mitt Romney have endorsed variations of premium support in Medicare.

Meanwhile, some Democrats on the debt panel said that a premium support plan could work if it included enough protections for Medicare beneficiaries (California Healthline, 12/28).

Ryan, Wyden Push for Proposal in Opinion Piece

In a Wall Street Journal opinion piece, Ryan and Wyden write that members of both parties “are guilty of exploiting Medicare to frighten and entice voters.” However, they write that their plan outlines how “Democrats and Republicans can work together to ensure that American retirees — now and forever — have quality, affordable health insurance.”

The pair argue that their proposal would give beneficiaries more options and force private insurers “to develop better delivery models and design better ways to care for patients with chronic illnesses” to keep their costs lower than traditional Medicare.

Ryan and Wyden write that they “are under no illusions that [the reforms] will pass tomorrow” but their plan is “proof that Democrats and Republicans don’t have to spend next year making Medicare reform more difficult” (Ryan/Wyden, Wall Street Journal, 12/15).

Read more: http://www.californiahealthline.org/articles/2011/12/15/ryan-wyden-introduce-bipartisan-proposal-for-medicare-subsidies.aspx#ixzz1gcrJszIp

On Tuesday, the House voted 234-193 to pass a payroll tax cut extension (HR 3630), which included a two-year delay to scheduled cuts to Medicare physician reimbursements, the New York Times reports (Pear/Steinhauer, New York Times, 12/14).

Background

The bill — developed by House GOP members –- would extend a $1,000 payroll tax break that is set to expire at the end of 2011. Meanwhile, the “doc fix” would stave off a nearly 30% cut to Medicare physician payment rates that is scheduled to take effect on Jan. 1, 2012. Instead, the legislation would increase reimbursement rates by 1% over the next two years.

The plan would pay for the $38 billion fix in part by increasing Medicare premiums for high-income beneficiaries and by redirecting funding from the federal health reform law that was intended for prevention and public health services (California Healthline, 12/13).

Senate Consideration

The bill now moves to the Senate, where its chances for passage are slim, The Hill‘s “Healthwatch” reports (Pecquet, “Healthwatch,” The Hill, 12/13).

Senate Majority Leader Harry Reid (D-Nev.) said the bill is dead on arrival (AP/Washington Post, 12/14). Senate Democrats worry that the cost of the tax break extension will fall on middle-income residents under the House plan and have instead proposed a surtax on high-income individuals to cover the expense (Jackson, USA Today, 12/13).

Politico reports that Senate Democrats originally planned to vote against the House plan and then develop their own proposal for extending the tax break, but now might work to change certain parts of the House bill.

Some lawmakers said that if the GOP agrees to eliminate a provision that would push ahead the stalled Keystone XL oil pipeline project and if Democrats agree not to levy a surtax on high-income individuals, the parties could soon reach an agreement on a revised plan (Sherman/Raju, Politico, 12/13).

President Obama has said he would veto any proposal that includes the oil pipeline provision (USA Today, 12/13).

Hospitals Lobby Against GOP Plan

A group of health care providers recently sent a letter to lawmakers saying the GOP payroll tax break proposal would limit patients’ access to care by reducing Medicare hospital payments by $17 billion, Modern Healthcare reports.

The letter stated, “Specifically, the bill would reduce hospital outpatient payments by drastically cutting payments for evaluation and management services by $6.8 billion.” It added, “These services are among the most common outpatient services provided in hospitals.

House Republicans responded to the letter by noting that the Medicare Payment Advisory Commission endorsed cutting the payments to offset a doc fix. Further, the House Ways and Means Committee provided a summary showing the proposal would reduce beneficiaries’ Medicare Part B premiums by about $1.7 billion and cut their copayments by more than $11 per visit (Zigmond, Modern Healthcare, 12/13).

Read more: http://www.californiahealthline.org/articles/2011/12/14/house-passes-doc-fix-measure-senate-not-likely-to-approve-bill.aspx#ixzz1gWvGpjd8

The use of electronic health record systems helped lower health care costs, according to the results of a three-year pilot program organized by Blue Cross & Blue Shield of Rhode Island, Providence Business News reports (Asinof, Providence Business News, 12/12).

About the Pilot Program

For the pilot program, 79 primary care physicians received partial funding to help purchase an EHR system. They also received monthly stipends during the first and second years of the program to help cover the time spent on EHR implementation and redesigning workflow.

In addition, participating physicians had the opportunity to receive bonus payments based on their performance on 10 quality measures established by BCBS.

Pilot Program Results

According to BCBS, the physician practices participating in the EHR pilot program had monthly health care costs that averaged between 17% and 33% lower per patient than non-participating physician practices (BCBS release, 12/12).

BCBS also noted that the EHR pilot program contributed to improved health care outcomes, including:

• A 44% median rate of improvement in family and children’s health care;
• A 35% median rate of improvement in women’s care; and
• A 24% median rate of improvement in internal medicine (Providence Business News, 12/12).

BCBS officials said they used the pilot program as the foundation for the health plan’s patient-centered medical home model of care (BCBS release, 12/12).

Read more: http://www.ihealthbeat.org/articles/2011/12/13/ehrs-led-to-lower-health-care-costs-ri-pilot-program-finds.aspx#ixzz1gRwQ4Rfi

On “Fox News Sunday,” Senate Minority Leader Mitch McConnell (R-Ky.) said a payroll tax break extension proposed last week by House Republicans likely will receive support from a number of Senate Democrats, the Washington Post‘s “2chambers” reports (Sonmez, “2chambers,” Washington Post, 12/11).

Background on GOP Proposal

The plan — the latest in a series of payroll tax break proposals from both parties — would extend a $1,000 payroll tax break that is set to expire at the end of 2011.

It also includes a two-year “doc fix” to stave off scheduled cuts to Medicare physician reimbursement rates. The most recent “doc fix” bill, enacted in December 2010, is scheduled to expire on Jan. 1, 2012, at which point physicians face a nearly 30% payment rate cut. The payroll tax extension instead would increase reimbursement rates by 1% over the next two years.

The plan would pay for the $38 billion fix in part by limiting Medicare benefits for high-income beneficiaries and by redirecting funding from the federal health reform law that was intended for prevention and public health services (California Healthline, 12/9).

McConnell Expects Bipartisan Support

McConnell said, “There are a significant number of Democratic senators and House members who are going to support his package.”

However, some Democratic leaders have criticized the bill for a provision aimed at pushing ahead the stalled Keystone XL oil pipeline project (“2chambers,” Washington Post, 12/11).

Further, the cost of the package could hinder negotiations. Maintaining the tax at the current level for a year would cost about $120 billion, according to the Congressional Budget Office (Pear, New York Times, 12/11).

CMS Could Delay Rate Cut

CMS could briefly delay the impending Medicare physician payment rate cut if Congress appears to be on pace to reach an agreement on a doc fix before Jan. 1, Politico reports. CMS previously has held physician payments for a brief period while lawmakers finalized deals to delay rate cuts.

However, former CMS Administrator Tom Scully, who delayed payments in 2003, said the strategy is “definitely a nightmare.” He said, “Docs don’t get paid, and CMS gets millions and millions of claims backed up.” He said that it is a “bigger nightmare” for CMS to send out reduced claims and then send physicians additional payments later when lawmakers pass a pay increase (Feder, Politico, 12/11).

Read more: http://www.californiahealthline.org/articles/2011/12/12/mcconnell-anticipates-support-for-gop-plan-that-includes-doc-fix.aspx#ixzz1gLbtfqbr

New report suggests reforms needed to reverse the trend

Cesareans increase rates of surgical complications, infections, risks in future pregnancies and spending, according to research from the California Maternal Quality Care Collaborative.

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December 8, 2011

In California, surgical delivery of babies, also known as cesarean delivery, has jumped 50% over the last decade with no demonstrated improvement in outcomes over normal vaginal childbirth, according to a new study released today.

Cesarean deliveries now account for 32% of births in California, raising the potential for increased rates of surgical complications, infections, risks in future pregnancies, and much higher costs to patients and society, the report said.

While cesarean deliveries are often performed for medically necessary reasons, the report from the California Maternal Quality Care Collaborative (CMQCC) identified dramatic geographic variation with rates ranging from 9% to 51% among low-risk women having their first baby. This large variation among California regions and hospitals cannot be explained by medical factors alone and therefore suggests that labor management practices and local attitudes help drive the use of cesareans during labor.

Reasons for the increase also include: physicians’ concerns about medical liability and avoidance of risk, as well as specific labor practices such as the increased reliance on labor induction, early labor admission, lack of patience in labor, and the virtual disappearance of vaginal birth after a prior cesarean, the report found.

“Over the last 15 years, cesarean deliveries have become so common that in some hospitals and communities they are considered ‘normal births’ despite the increased risks,” said Dr. Elliott Main, medical director of the CMQCC and a practicing obstetrician.

“The most serious and often overlooked risk for a woman having a first cesarean is the increased likelihood of having a cesarean delivery in subsequent pregnancies. Currently, in California, if a woman has her first birth by cesarean, over 90% of all her subsequent births will also be by cesarean, each with escalating risks,” said Dr. Main.

Undergoing multiple cesarean deliveries markedly increases the chances for complications, such as life-threatening hemorrhage due to placental implantation problems.

There is also strong evidence that babies born by cesarean delivery, without the contractions of labor (i.e., scheduled), have significantly higher rates of neonatal respiratory problems than those born vaginally.

The cost of a cesarean is nearly double that of a vaginal birth — $24,700 compared to $14,500. The Pacific Business Group on Health (PBGH), a co-author of the study, estimates that these additional cesareans cost public and private payers in California at least $240 million in 2011 alone. An effort to reduce cesareans could save California between $80 million and $441.5 million a year, depending on the number of cesareans prevented.

However, the study says that reducing cesarean deliveries will not be easy and a multi-pronged set of strategies will be required. The study recommends that hospitals, doctors, and insurance companies (including Medi-Cal, which pays for over half of the births in California) band together to develop quality improvement efforts to reduce first-birth cesareans among low-risk women.

The program would need to include sharing best practices with real-time benchmarking; public reporting on a balanced set of quality measures; payment reforms to eliminate incentives for cesarean delivery; and broad-based, statewide educational outreach to foster a balanced view of cesarean delivery and its short- and long-term consequences.

With planning grant funds from the California HealthCare Foundation (CHCF), which also funded this report, CMQCC is leading an effort to develop a California Maternal Data Center to achieve these goals. The project has recently received major funding for statewide implementation from the US Centers for Disease Control and Prevention’s Division of Reproductive Health.

“To help hospitals and doctors in their efforts to improve pregnancy outcomes, we need a robust source of timely maternity care data,” said Dr. Main. “Once the data are vetted, we will want to share the results with women so they can make informed decisions.”

The report, Cesarean Deliveries, Outcomes, and Opportunities for Change in California: Toward a Public Agenda for Maternity Care Safety and Quality, is available on the CMQCC website through the External Link below.

About the California HealthCare Foundation

The California HealthCare Foundation works as a catalyst to fulfill the promise of better health care for all Californians. We support ideas and innovations that improve quality, increase efficiency, and lower the costs of care.

Contact Information

Emma Dugas
Communications Officer
California HealthCare Foundation
510.587.3159

External Links

California Maternal Quality Care Collaborative — Cesarean Deliveries

Read more: http://www.chcf.org/media/press-releases/2011/cesarean-births-continue-to-rise#ixzz1gLc2D4YM

Pilot project proves viability of joint registries

The more than 770,000 Americans who have hip and knee replacements each year, and the surgeons who perform them, lack important comparative information on the quality of artificial joint devices and data — both positive and negative — on the outcomes of those procedures.

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November 16, 2011

The more than 770,000 Americans who have hip and knee replacements each year, and the surgeons who perform them, lack important comparative information on the quality of artificial joint devices and data — both positive and negative — on the outcomes of those procedures.

Responding to this information vacuum, the California HealthCare Foundation (CHCF) joined with the Pacific Business Group on Health (PBGH) and California’s leading group of orthopaedic surgeons, the California Orthopaedic Association (COA), to establish the California Joint Replacement Registry (CJRR).

Building Blocks

Over the past year, the CJRR worked with three hospitals to build the registry software and pilot data collection on total hip and knee replacements, including patient demographics, device information, clinical data on other patient conditions that could affect the results of their surgery, and patients’ self-reported outcomes.

A hallmark of the registry is its ability to survey patients before and after their surgeries, providing doctors and hospitals with valuable information about patients’ physical progress. The project, which is governed by a board with a majority of surgeons, is now poised to expand to more hospitals.

Informed Choices

Registries like the CJRR help physicians, hospitals, and device manufacturers discover and respond quickly to problems that can arise with the devices or the medical techniques used to replace knees and hips, noted Mark D. Smith, MD, MBA, president and CEO of CHCF, which is funding the project. PBGH manages the CJRR’s day-to-day operations.

“We lack comprehensive, scientific assessment of these devices, treatment protocols, and surgical techniques,” said PBGH CEO David Lansky, PhD. “This paucity of quality information can lead to suboptimal care, poor outcomes, and added costs.”

“With an active registry, providers, patients, and those who pay for the replacements will have the information they need to make informed choices and surgeons will be able to track and improve care,” said Smith of CHCF. “Our goal is to inform the decisionmaking process for both providers and patients, ultimately helping to improve the quality of care in California.”

Improving Decisionmaking

The project will promote the use of quality information for joint replacements to enable better decisionmaking by patients, physicians, other providers, and purchasers. It will also provide insight into how often surgeries have to be repeated and examine the trends of specific surgical complications.

“Physicians, hospitals, device manufacturers, health plans, and patients are all seeking objective information to help guide their decisionmaking,” said Kevin J. Bozic, MD, MBA, chair of the CJRR steering committee and first vice president of the COA. “By creating an infrastructure for data collection, the CJRR will facilitate a better understanding of how patient, surgeon, hospital, and device factors influence joint replacement patient outcomes.”

In August, the registry successfully completed a pilot at Cedars-Sinai Medical Center (Los Angeles); Hoag Orthopedic Institute (Newport Beach); and the University of California, San Francisco. In the coming year, the CJRR will be streamlining registry data-collection efforts and adding six new hospitals.

Recent Research Points to Need

Recent CHCF research on the wide variation of regional rates for 13 elective procedures in California also highlights the need for the registry. In Joint Replacement in California: A Close-Up of Geographic Variation, the rates of elective hip and knee replacements varied markedly with residents in several communities undergoing such surgeries at rates significantly higher or lower than the state average.

The variation research poses many questions. The CJRR aims to provide some answers. Because the registry tracks patient condition before and after joint replacement, the data gathered from the project could ultimately help explain when (and for which patients) the procedure helps to relieve symptoms and where it may not, as well as inform device selection and surgical techniques.

About the California HealthCare Foundation

The California HealthCare Foundation works as a catalyst to fulfill the promise of better health care for all Californians. We support ideas and innovations that improve quality, increase efficiency, and lower the costs of care.

Contact Information

Alexandra Matisoff-Li
Senior Communications Officer
California HealthCare Foundation
510.587.3154

Related CHCF Pages

Read more: http://www.chcf.org/media/press-releases/2011/california-joint-replacement-registry-gets-off-the-ground#ixzz1fsDJ0rSJ

Q: Who do we provide credentialing service for?

A: MEDELECT offers credentialing service for all medical provider types.

Q: What types of credentialing service do you provide?

A:  MEDELECT provides credentialing services for providers wherever they practice: private practice, group practice, hospital, ambulatory centers, rural health centers, emergency physician groups, alternative birth centers, etc.

Q: Who can help me with this process?

A: MEDELECT employs full time Credentialing Coordinators. Their job is to make sure each physician stays on course to complete their credentialing paperwork as quickly as possible. For more information call us at 877-543-2824.

Q: What will the credentialing process require?

A: We will send you a Provider Information Packet which is list of all documents and paperwork we will need. This includes but is not limited to (dependent on entity type, state you render services in) a copy of your state driver’s license, medical diploma, internship and residency diplomas, a passport-sized photo, a current CV, your medical license from all states in which you have worked, your Controlled Substance Permit for the state you are rendering services in, your federal DEA permit, your board certificate, your ACLS, ATLS, and PALS or BLS certificates and your NPI number and confirmation letter, tax identification letter and Articles of Incorporation, etc. Your Credentialing Coordinator will send this checklist to you with your applications.

Q: How long will my credentialing take?

A: The credentialing process can be a long one. Many organizations require extensive proof of work history, references, hospital affiliations and medical schools to ensure the quality of their doctors.

Let our coordinator give you an estimate of how long the process will take.

Once you have your state license credentialing can take up to 9 months. However, your state license may take as long as six months to acquire, and some hospitals require you to have your state license to even be considered for a position. Please be patient and thorough with your paperwork to expedite the process.

Q: What can I expect in the process?

A: Once your Credentialing Coordinator receives your file, you will be sent a pre-populated Standardized Credentialing Application and the any other credentialing packet necessary to complete your process along with a return envelope. All forms will be flagged and highlighted for your convenience. You need to return your packet within two weeks to stay on track for your credentialing process to proceed smoothly.

When we receive the packet back in our office, we will review it for accuracy and completeness and forward it on to the appropriate entities. You may require further vetting from an organization which will include back ground checks, verifications for your education, previous work history, past and current hospital affiliations, and peer references.

Please note that each entities credentialing process is different, and more documentation or less work may be required of you depending on the type of credentialing you have selected.

In addition to the provider packet, you will be asked for financial credentialing for billing purposes so we will need any and all provider identification numbers for all states and offices you have worked for or under.  The billing office will submit the paperwork necessary to assign Medicare, Medicaid and Blue Cross Blue Shield numbers that will be needed to bill patients and receive reimbursements, as well as specific insurances you indicate.

Q: What is the difference between work history and hospital affiliation?

A: Work history refers to the group that employed you, while hospital affiliation is the facility at which you practiced.

MLN Matters® Number: MM7580 Revised
Related Change Request (CR) #: 7580
Related CR Release Date: October 28, 2011
Effective Date: May 9, 2011
Related CR Transmittal #: R2337CP
Implementation Date: April 2, 2012

Note: This article was revised on November 15, 2011, to correct the implementation date (above) to show April 2, 2012. All other information remains the same.

Provider Types
Affected Providers and physicians submitting claims to Medicare contractors (Fiscal Intermediaries (FIs), Part A/B Medicare Administrative Contractors (A/B MACs), and/or Regional Home Health Intermediaries (RHHIs)) for influenza vaccines provided to Medicare beneficiaries are affected by this article.

What You Need to Know
Effective May 9, 2011, claims with influenza virus vaccine code 90654 (influenza virus vaccine, split virus, preservative-free, for intradermal use, for adults ages 18 – 64) will be payable by Medicare for claims with dates of service on or after May 9, 2011, if submitted on or after April 2, 2012. HCPCS code 90654 was added to the 2011 HCPCS file effective January 1, 2011. However, 90654 didn’t become payable by Medicare until May 9, 2011. Please make sure your billing staff is aware of these changes. Medicare contractors will not adjust claims submitted prior to May 9, unless you bring such claims to their attention.

Background
Change Request (CR) 7580 advises that payment for this code to institutional providers is as follows:

• Hospitals (Types of Bill (TOB) 12X and 13X, Skilled Nursing Facilities (SNFs) (TOBs 22X and 23X), Home Health Agencies (HHAs) (TOB 34X), hospital-based Renal Dialysis Facilities (RDFs) (TOB 72X) and Critical Access Hospitals (CAHs) (TOB 85X) are paid on reasonable cost;
• Indian Health Service (IHS) hospitals (TOB12X and 13X) and IHS CAHs (TOB 85X) are paid based on the lower of the actual charge or 95% of the Average Wholesale Price (AWP); and
• Comprehensive outpatient rehabilitation facilities and independent RDFs (TOB 72X) are paid based on the lower of the actual charge or 95% of the AWP.

Additional Information
The official instruction, CR7580, issued to your carrier, RHHI, FI or A/B MAC regarding this change may be viewed at http://www.cms.gov/Transmittals/downloads/R2337CP.pdf on the CMS website.

Disclaimer
This article was prepared as a service to the public and is not intended to grant rights or impose obligations. This article may contain references or links to statutes, regulations, or other policy materials. The information provided is only intended to be a general summary. It is not intended to take the place of either the written law or regulations. We encourage readers to review the specific statutes, regulations and other interpretive materials for a full and accurate statement of their contents. CPT only copyright 2010 American Medical Association.