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New Year Comes with New Challenges in Healthcare Reimbursement


Everyone in healthcare revenue management has been not so quietly “freaking out” for the past six months and it’s going to continue for at least another 24 months.

Everyone in healthcare revenue management has been not so quietly “freaking out” for the past six months. This tension is going to continue for at least another 24 months. There are so many changes happening right now and yet to come that we all know and are totally convinced that this is going to substantially impact cash flow for medical providers.

First the good news, it appears that Congress is going to “fix” the SGR mess with a two-year deal in which physician reimbursement levels are either frozen or there is an up to 2 percent increase in reimbursement from Medicare. As most other contracts that doctors have with insurance companies on reimbursement are dependent on Medicare’s level of reimbursement, many feel that Congress is not going to lose political clout with the AMA and all other medical groups by making the physicians angry. The reason they are making it a two-year “fix” is thought to be because they don’t want to have to deal with the SGR next year during a big election.

Now for the scary news, 5010 is going into effect on January 1, 2012. Many people think that just because CMS stated they won’t enforce the rules for 90 days, the doctors don’t need to worry about filing 5010 claims. THIS IS NOT TRUE. Sure, you won’t get fined for not being able to process claims in the 5010 format. But, you also won’t get paid for claims not in the 5010 format to Medicare. I think that’s a heck of a “fine.”

It gets worse, many state Medicaids have stated that they will not be ready for 5010 on time. All insurance companies and clearinghouses are scrambling like mad to get the 5010 format working. All the practice management software companies are also scrambling. The problem everyone seems to be having is trying to do the testing. Since there are so many entities needing to test, scheduling is proving to be a nightmare. Remember, every practice management software system has to test with each clearinghouse and each insurance as well as any other computer programs with whom they interface. The clearinghouses have to test with all their customers as well as all their customers’ insurance carriers. Then there is the really problematic issue where the different Medicare carriers have to test with the different state Medicaid programs for “cross-over” claims. Let’s see, two government agencies have to communicate effectively. Gives you a warm, fuzzy feeling doesn’t it?

The next factor to throw into the pot is it is a new year and many people have new insurance coverage. Also, it’s time for all those deductibles to be applied. Historically, reimbursement amounts drop in January and February. Some of the drop is due to insurance reimbursements going to deductibles and the patients then being responsible. Other parts of the decrease are due to patients forgetting to give you their new insurance information. This means contacting the patients after the claims have been denied to find out the proper information and then going through that whole submission process again.

Many of us in the healthcare reimbursement world feel that the normal decrease in dollars reimbursed in January and February is just a very small portion of the decrease we will see in the first quarter of 2012. As has been reiterated everywhere, please make sure you have some type of line of credit to keep your office running during this turbulent time. It is better to be prepared for failure on the parts of the different insurance companies and not need it, than to find out you desperately need cash flow and it can’t be found.

The last factor for consideration now is the revised ABN (Advanced Beneficiary Notice of Noncoverage), Form CMS-R-131. This form (that has a release date of 3/2011 printed in the lower left hand corner) is available on the CMS website. This revised form replaces ABN-G, ABN-L, and NEMB. Use of the revised ABN form is mandatory starting January 1, 2012. Any of your old stockpiled ABNs are no longer valid and if you are audited, they will not ‘pass inspection’ and you will have problems. I’ve always been a big fan of being proactive to avoid problems.

If I have not depressed you too much, have wonderful holidays … before the ax falls!!

Find out more about Sue Irwin and our other Practice Notes bloggers.

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