Know Your Medicare Carrier

May 1, 2004

Be educated and advocate for yourself when it comes to working with Medicare carriers

Lynne Carr Columbus, DO, has more reasons than most to keep up with edicts and policies of her Medicare carrier in Palm Harbor, Fla. Columbus was once on the wrong side of FBI investigators probing fraud allegations in the practice she joined just after completing her residency.

Columbus, a pain management specialist, did nothing wrong -- in fact, she was fired for refusing to engage in the fraud, which took the form of unbundling claims, and later gave testimony against her former partners. But the experience taught her to be as unerring as possible in her dealings with BlueCross BlueShield of Florida, the insurance carrier that processes her Part B Medicare claims for the Centers for Medicare & Medicaid Services (CMS).

The other reason Columbus is careful is that Medicare makes up 80 percent of her revenues. Both Columbus and her billing manager, Terry Bush, follow a number of strategies to stay involved in Medicare issues and up-to-date with carrier policies, and their efforts seem to be working: Columbus estimates 98 percent of her Medicare claims are paid the first time they're submitted. Because she is a solo practitioner, Columbus is still permitted to bill Medicare on paper; other larger offices must convert to a new electronic format, which is causing some of them difficulty.

"When I sat down with the FBI ... I understood what they were looking for. It taught me not to do creative billing. Another lesson I learned was staying informed. As a physician you have to realize that you have to be up on all these guidelines," whether for government or private payers, says Columbus.

Bush built her own knowledge after 13 years of doing Medicare billings. She reads her carrier's newsletter closely, checks its Web site for information and makes a point of attending at least two conferences per year on Medicare-related issues, which are given by the carrier, the pain management association, or by private coding companies.

For her part, Columbus also attends Medicare conferences and serves on the Medicare committee of her state medical society. She also finds it helpful to consult an attorney when questions arise about submitting claims or appealing denials.

"I think it's really important that offices establish a good relationship with a healthcare attorney. I run a lot of things by attorneys," she says, pointing out that most offices may be able to turn to the same attorney they use to review contracts or conduct other legal business for them. 

In addition, Columbus eschews the hands-off approach some physicians might have when it comes to billing issues. "I sit down personally with Terry. "You really want to have a hand in the billing," she says.

Working with your carrier

As Columbus' example shows, the key to working effectively with a Medicare carrier is simple, says Alan Morris, MD: Be educated and know how to advocate for yourself or your peers.

"[W]hen you can't negotiate the amount, you can understand and know the process," says Morris, former chairman of the American Academy of Orthopaedic Surgeons' Council on Health Policy and Practice.

Keeping up with coverage decisions is important because they sometimes are modified or reversed based on clinical evidence of efficacy, or lack of it. Morris recounts the recent example of CMS imposing limitations on coverage of arthroscopic surgery, deciding to pay for it only in "mild to moderate" cases after research was published showing it was no better than a placebo in patients with severe osteoarthritis. He notes that it is up to the local carrier to interpret what mild and moderate mean.

During his 34 years of practice in St. Louis before retiring in 2001, Morris became quite familiar with his local carrier and with federal Medicare officials. Each Medicare carrier is required to have a group that includes physicians who offer input, called the Carrier Advisory Committee (CAC). In addition, carriers employ a medical director to assist physicians. In each instance there is an opportunity for the physician to be better informed and to volunteer, Morris says.  

Morris not only served on his local CAC, but he also was a member of a national committee impaneled by the American Medical Association, called the Relative Value Scale Update (known as RUC), which advises CMS on increases to Medicare payments. In his case, the RUC he served on in 1997 had a real impact, says Morris, resulting in an increase in physical payment for office visits.

For six years, Gerald Rogan, MD, was the medical director for National Heritage Insurance Company (NHIC), California's carrier, which encompassed 2.5 million beneficiaries, the largest region in the nation. While in that position, which he held until July 2003, Rogan stressed to physicians that, "Medicare coverage decisions at the local level are interactive. Doctors have a voice."


Off-label use of drugs, uses of new tests such as sleep studies, and policies that govern when established tests are reasonable and necessary, such as MRIs for low back pain, are examples of issues about which carriers might issue local coverage decisions, says Rogan, who was in private practice for 25 years before he joined NHIC. All of these may be of interest to physicians, who Rogan encourages to join their carrier's CAC.

CMS' authority limited

One of Medicare's top physicians agrees that providers can take steps to be better informed. Since he was named director of CMS' Physicians' Regulatory Issues Team in October of 2002, William Rogers, MD, has traversed the country meeting with providers. The emergency medicine physician senses that while most understand the channels to communicate with their carriers and receive information, he's been surprised by how many have basic misconceptions about coverage and payment decisions.

"When I talk to doctors, the deficiencies I see in their understanding of the Medicare program mostly have to do with coverage and payment," two big issues, he acknowledges. He says many assume the CMS decides what it will pay for -- and how much; neither is true. The agency is permitted to pay only for services or items that meet the definition contained in the original Medicare legislation, namely those that are "reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member."

In addition, payment is possible for services that fall into benefit categories that have been added by Congress; screening procedures were generally not covered until recently, for example.
"Physicians didn't understand why we couldn't pay for screening. Doctors always think it's that the Medicare officials are too dumb to care about this" type of care, when they were powerless to cover it, Rogers says.

"The other thing they don't understand is that for doctors' payments, Congress created RBRVS (Resource-Based Relative Value Scale)," he adds. "Every year [CMS has] a pool of money to pay Part B, and we have to allocate that pool between X-ray, lab, and physicians, and the amount we pay is based on the RUC."
For information and assistance, Rogers recommends that physicians start with their carrier's Web site. Like Morris, he encourages physicians to contact their carrier's medical director, and to use all avenues open to make their concerns heard, even beyond the carrier level.

"If a physician felt a local coverage decision was inappropriate or wasn't able to change it, that doctor should ask CMS for a national coverage decision," Rogers says. "Anybody can request a national coverage decision. You can force the whole agency to respond to you just by writing a one-page letter." 

Practicing physicians might disagree about exactly how responsive Medicare is, but it's worth knowing that national review is an option.

HIPAA complications

Six billing staff, including two coders, support the eight-physician Women's Clinic in Boise, Idaho, and like Columbus' office, they take steps to keep up-to-date on the carrier's policies and procedures, says Cathy Treadway, clinic administrator.

The office handles 2,900 patient visits per month, filing close to 4,000 claims per month to an amazing 1,300 different payers, including Medicare. While Medicare billings make up less than 10 percent of the practice's total, they nonetheless want to be able to collect all they are owed.  

"[The coders] are very involved in the Idaho Medical Association, which has done a good job of sponsoring 10 to 12 audio conferences a year," Treadway says. "On top of that we really encourage continuing education. We use publications to help [such as those sold by Medicode] and we get an e-mail newsletter [from the local Medicare carrier] that comes once a month. There is a local coders group that they go to monthly. The combination of readings and seminars keep them in tune with what's going on."
Treadway herself has testified before Congress about compliance with the Health Insurance Portability and Accountability Act (HIPAA).

And her staff's efforts had been paying off. The office was getting "clean" claims (submitted electronically) paid in 10 days.

More recently, that success has been hindered by HIPAA. She's had to work through a clearinghouse -- at an additional per-claim fee -- to be able to send the new claims format electronically, even to Medicare. The office's practice management software vendor was not able to upgrade its systems to continue direct billing to Women's Clinic payers.

"We are seeing more rejections; each [payer] has a little different interpretation of what is required. It is a constant battle. We've had some really rough months of collection," says Treadway.


For dealing with large Medicare issues like HIPAA compliance, Morris suggests contacting the Washington, D.C., office of a medical society; most associations maintain some presence in the capital so they can lobby for changes. "Find out who's involved in advocacy with CMS and Congress," he advises. "That's another avenue for being involved in the process." Don't be shy about asking for help or even offering to testify before Congress or meet with federal officials as Treadway did, he adds.

Theresa Defino is a freelance medical writer with 15 years' experience covering economic, legislative, and clinical aspects of healthcare issues. She has written for WebMD and edited such publications as Managed Care Week, Medicare and Managed Care Strategies, and Practical Guidance on HIPAA and E-Health for the Physician Practice. She can be reached at editor@physicianspractice.com.

This article originally appeared in the May 2004 issue of Physicians Practice.