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Government Payor File Updates: More Important Than Ever To Keep Revenue Streams Alive

The following article is written by Jeanne L. Vance, Esq., Shareholder of Salem & Green.


Few surgery centers can remain economically viable without at least some level of government payor reimbursement. So imagine a scenario where the ASC's Medicare or Medicaid receivables come to a screeching halt without warning; the enrollment has been deactivated. This does happen; sorting out why and how to fix it can take many months.


Both the Medicare and the Medicaid programs require that information on file with the agencies be updated as it changes; failure to do so can cause the enrollment to be deactivated.


Here are a five reasons an ASC's Medicare or Medicaid enrollment may be deactivated because of failure to maintain an up-to-date enrollment record with the agency.


1. Failure to update "special payments" address on file. Certain Medicare correspondence, including the occasional checks that are sent in the mail, are subject to "do not forward" instructions. If the correspondence is sent to an old address, the correspondence is returned to the agency. The Medicare contractor or Medicaid program then deactivates the ASC's enrollment, and payments cease until the time when the ASC can: 1) identify the source of the problem; 2) submit the new information to the Medicare contractor or to the state Medicaid program; and 3) get the contractor or agency to accept and process the changes accurately. This process would take at a minimum several months.


2. Failure to bill for one year. Both Medicare and California's Medicaid program have provisions where the program will deactivate an ASC enrollment if the surgery center does not bill using the enrollment for one calendar year. This issue comes up more frequently than one would think. Typically, when a Medicare or Medicaid enrollment is first issued, it generally takes some time for the supplier to be notified by the agency or its contractor. Thereafter, it generally takes some time for an electronic "submitter" to establish itself to submit electronic claims for the new enrollment. Even large and well-established billing companies tend to take longer to begin to drop claims than it would seem. New providers may not have billing operations sophisticated in billing out new enrollments quickly. Twelve months can pass quickly.


3. Failure to update expired licenses/permits/certificates. Other changes that go unreported can impact an ASC's public payor revenue stream. For example, I had a client whose CLIA certificate had expired and been renewed. Because they had not reported the new expiration date to Medicare, payment for their laboratory claims ceased. In addition to a surgery center license, a surgery center may have a CLIA certificate of waiver, an accreditation, pharmacy permit or other more "minor" permits/enrollments. Updating the expiration dates of each of these government entitlements with Medicare and, when this information is on file with Medicaid, with the Medicaid program, as well, can keep these enrollments active.


4. Failure to report a change in location or expansion of an existing location. I have had several clients report changes of locations or expansions of location to the state licensing authority, but fail to take the additional step of making sure that the information was properly updated with the Medicare and Medicaid agencies. Sorting out after the fact what has been reported to which agencies while minimizing impact on the supplier can be challenging.


5. Failure to update other information in the Medicare and Medicaid file. The Medicare program is authorized to deactivate a Medicare enrollment if any other information is not updated in its files. This could be anything. For example, the contractor calls the surgery center and finds the phone number has been disconnected. The contractor attempts to contact the "managing employee" of the surgery center and determines that the person they have on file no longer works for the surgery center.


How to prevent deactivation

Under healthcare reform, a surgery center experiencing a deactivation of their Medicare enrollment will find its enrollment efforts subject to a higher level of scrutiny by Medicare for 10 years following the event. This would have the effect of requiring fingerprinting and background checks for all individuals who maintain a five percent or greater direct or indirect ownership interest in the surgery center. The surgery center would also be subject to pre- and post-enrollment unannounced site visits.


These problems can be avoided in most instances. The job of keeping these agency files up-to-date should be tended to regularly (e.g., every 30 days to be safe), and the responsibility and accountability for the task should be assigned to one or more surgery center staff members. This person should also be charged with ensuring the Medicare contractor or state Medicaid agency accurately process submitted changes (errors are common). In addition, surgery centers can use the Internet-based PECOS (Provider Enrollment, Chain and Ownership System) to review their Medicare files regularly. See www.cmms.gov/MedicareProviderSupEnroll/Downloads/OrganizationGettingStarted.pdf (pdf) on how to get access to a surgery center's Medicare enrollment record.


The need to keep a surgery center's Medicare and Medicaid files up-to-date suggest the need to maintain copies of all submissions, and relevant correspondence from the agencies and contractors, so that a surgery center can be sure what information needs to be updated with the agencies. In addition, in the event of an error in the agency file, the surgery center will have a basis for getting the error corrected without sanction.


Ms. Vance, JD, is a shareholder of the Sacramento-based law firm of Salem & Green, a professional corporation, where she practices healthcare business law, with a particular focus on healthcare government enrollment matters. Contact Ms. Vance at jvance@salemgreen.com, and learn more about Salem & Green at www.salemgreen.com.

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