W ith the expected 4.4% decrease in Medicare allowables for fiscal year 2003, many dermatologists, and physicians in general, are considering changing their statuses from participating (par) to non-participating (non-par) in an effort to stanch the bleeding caused by decreased reimbursements. If like many physicians you’re considering this move to potentially save money, you’ll need to know some critical information: Making the change to non-par could end up costing you a lot of money. Before you make your final decision, which has been extended this year to Feb. 15 because the Federal Register isn’t yet available, weigh the pros the cons, which I’ll discuss here. Remember, once you make your decision you’re stuck with it for the year. The Non-Par Option The main incentive to claiming non-par status is that you can collect payments based on a limiting charge versus the Medicare allowables. The limiting charge is 9.3% higher than the corresponding Medicare allowable for par providers. This 9.3% differential could make up for the impending decrease you’re facing. But, there’s a lot more to being non-par than picking up the extra 9.3%. Let’s take a look at the specific obligations and benefits of claiming this status. Non-Participating Providers A physician who doesn’t participate is called a “non-par” provider. Many physicians get very confused about what “participating” means. If the physician sees any Medicare aged or eligible patient, he/she must be signed up with Medicare one way or another (e.g., par, non-par, or as an “opt out” provider). A provider can’t see Medicare patients without having one of the three statuses. So in essence, a non-par provider is participating with Medicare. He or she is just signing up for a different relationship with a different set of rules. Non-par physicians have the option of filing Medicare claims on an assigned or non-assigned basis. However, the non-par physician is held to a fee schedule ceiling (or limiting charge) when filing non-assigned claims for Medicare services. Filing on a non-assigned basis. When a non-par physician doesn’t accept an assignment, he or she usually collects the entire amount of his/her fee up front, at the time of service. This amount is based on the Limiting Charge column of the fee schedule. Filing on an assigned basis. An added benefit is that the non-par provider can also decide to accept assignment on a case-by-case basis. This means that if the non-par physician sees a Medicare patient and the total amount of the bill is high, so high that he feels it would be unreasonable to expect the patient to pay this amount in full at the time of service, he can decide to accept assignment on the claim. (In other words the non-par provider will be acting just like a par provider who looks to Medicare to pay 80% of the charges based on the Medicare allowable.) The staff can collect the unmet deductible and the 20% co-payment at the time of service from the patient. Keep in mind that the 20% can also be collected by billing the secondary insurance carrier. In the case of accepting assignment, the non-par provider isn’t restricted to the limiting charge. He can bill whatever he wants realizing that the difference between the amount billed (the regular charge) and the amount allowed/approved by Medicare must be written off. What Are the Obligations of Being Non-Par? In a nutshell, if you’re a non-par provider, you must agree to the following terms: You can collect fees for services at the time of the office visit based on the limiting charge. There are three columns in the Medicare preprinted fee schedule: 1. Participating Fee Schedule 2. Non-participating Fee Schedule 3. Limiting Charge As a non-par, if you don’t accept assignment and decide to collect for the charges at the time of service directly from the patient, look in the column titled “Limiting Charge” to determine the charge. As a non-par, if you decide to accept assignment on a particular patient, you’ll be paid based on the Non-Par Fee Schedule. Therefore, in estimating how to collect the deductible and 20% co-payment, the calculations would be based on the fees listed in the Non-Par Fee Schedule column — not the Limiting Charge column. Keep in mind the following: • Medicare requires the patient to meet the annual deductible of $100 before any payment is made to the provider of care. As a non-par provider, your staff must collect this amount at the time of service. • Medicare pays 80% of the billed amount on assigned claims based on the published fee schedule. (80% is based on 80% of the Non-par Fee Schedule.) • The 20% remaining, after Medicare has paid, must be collected at the time of service from the patient or can be obtained by billing the patient’s secondary or supplemental carrier. You can’t routinely write-off this 20% or the deductible. It’s illegal and can result in your being kicked out of the Medicare program or fined. • You must obtain a proper authorization from the Medicare patient before any claims can be forwarded to the Medicare Part B carrier for payment. The authorization need only be obtained once and is good forever unless the patient revokes such authorization. • As a non-par physician, you must file a claim to the Medicare Part B carrier for all services whether collected at the time of service or whether assignment was accepted. If a non-par physician decides to accept assignment on a particular patient, he or she is not required to submit claims to any supplemental or secondary carriers under Medicare law. The only exception to filing secondary claims is if the practice has signed a contract with a managed care organization (HMO, PPO, etc.) and the contract requires the practice to accept assignment even when that plan is secondary. • You must agree to comply with the elective surgery requirements. (I’ll discuss this later in the article.) What Are the Benefits of Being Non-Par? The first benefit is that you can collect fees at the time of service. Even though the office must submit a claim on behalf of the Medicare patient, the work of getting large Medicare checks each week with hundreds of patient services to post has been eliminated. Being a non-par physician greatly reduces the amount of time and resources spent on claims processing (but only if the non-par physician acts like a non-par provider and collects the charges at the time of service). A second benefit is that you’ll have less paperwork. Also, and this is a big one, you’ll see a 9.3% increase in payment over the par physician. What Are the Disadvantages of Non-Par? The first disadvantage is that you can’t charge for every service provided to the Medicare patient. Many non-par providers feel guilty about charging for everything they do. Because the non-par provider knows the patient will pay for the entire amount as they leave the office, many non-par physicians develop mental ceilings on the maximum charge for any patient encounter. This guilt is handled two ways: 1. The physician doesn’t charge for everything he/she does. Many services are provided at no charge (for example, no office visit is billed even though it was rendered; five destructions are billed even though 12 lesions were treated). 2. Alternatively, the physician accepts assignment for high-priced visits. The result of these types of actions is that these non-par physicians actually are paid less than the par provider. (The allowable for assigned claims for non-par physicians is 9.3% lower than the allowable for the par provider and 14.3% lower than the limiting charge!) The result is that non-par physicians actually generate less revenue than their par colleagues in spite of the 9.3% differential. A good faith estimate would be that non-par physicians who routinely don’t charge for everything they do and also routinely accept assignment on higher-charged visits, will actually lose 15% to 20%. The second disadvantage is that a non-par status will mean you’ll see fewer Medicare patients — unless the practice is in an area where all other dermatologists are non-par. Obviously, Medicare patients prefer to visit a physician who accepts assignment. This means that their out-of-pocket is limited to the unmet deductible and/or the co-payment. After all, 20% out-of-pocket is better than 100%. And keep in mind that the non-par fees are 9.3% higher than the par dermatologists in the same area. Patients are advised of this charge discrepancy each time they get their explanation of medical benefits (EOMBs). A third disadvantage is that you can’t file Medigap claims for automatic crossover. Non-par providers must file the primary claim with Medicare, wait for a copy of the EOMB, generate a second claim, and forward this claim and copy of the EOMB to the secondary payer. This time-consuming process delays payment by weeks or months. What Will Medicare Pay if I’m Non-par? As a “non-par” provider, you agree to accept the limiting charge Medicare fee schedule as your payment. As mentioned previously, the printed Medicare Fee Schedule contains three columns of fees: 1. Participating (approved amount) 2. Non-participating (approved amount) 3. Limiting Charge. As a non-par provider, you’ll get reimbursed based on the limiting charge if you don’t accept assignment or based on the non-par column if you accept assignment on the claims. Is Anything Wrong with Accepting Assignment on Most of My Claims Even Though I Signed up As Non-Par? Yes! Medicare penalizes non-par providers who accept assignment. If you do this, your payment will be reduced by 14.3%. Look at your limiting charge amount for any procedure or service. Take this amount and subtract the non-par amount for this same CPT code. Divide this difference into your limiting charge, and you will see a 14.3% difference. Unfortunately, most non-par providers accept assignment on the larger charges in their office. This 14.3% payment differential can represent thousands of dollars annually in lost practice revenue. What About My Regular Fee Schedule? Providers frequently want to know if they can bill Medicare their regular fees versus the published fee schedule amounts. Obviously, you can’t pass on the regular charges to the Medicare patient since the limiting charge limits apply to services collected at the time of service from the patient. The charges are restricted to the limiting charge amount. However, if the practice accepts assignment, then you may bill the regular fees. It’s recommended that you don’t bill the regular fees when accepting assignment but rather base fees on the non-par fee schedule. The advantages are the following: • It’s easier for staff to calculate the deductible ($100 annually) and co-payment (20% not paid by Medicare). • The patient doesn’t see an inflated charge. When the patient receives verification that the physician has been paid, the EOMB will show the charges approved at 100%. • The practice’s monthly accounts receivables will be more accurate without inflated, uncollectible balances. What Is a Geographic Payment Locality? Each state is divided into Medicare regions for purposes of payment. Some states have one payment region, wherein all physicians get paid the same in the entire state. Other states may have five or more regions. Each provider within that region will receive identical payments for similar services. Elective Surgery Requirements If you’re a non-par physician, you also must take into consideration some elective surgery requirements mandated by the Omnibus Budget Reconciliation Act (OBRA) of 1986. Under OBRA, if your status is non-par, and you don’t accept assignment for elective surgery on a Medicare patient, you must provide certain information, in writing, to the patient before the surgery. Take the following into consideration. • Elective surgery definition. This requirement only applies to elective surgery for which charges are $500 or more. Elective surgery for Medicare purposes is defined as surgery that can be scheduled in advance, not on an emergency basis, and, if delayed, would not result in death or permanent impairment of health. To be considered an emergency, the condition for which surgery is needed must meet the definition of “emergency medical condition” as specified in section 1903 (v)(3) of the Social Security Act. Section 1903 (v)(3) of the Act defines “emergency medical condition” as “a medical condition . . . manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: • placing the patient’s health in serious jeopardy • serious impairment to bodily functions • serious dysfunction of any bodily organ or part. This regulation applies to a single surgery the cost of which is $500 or more or a combination of procedures for which the total cost for a single date of service exceeds $500. If you’re a non-par physician and don’t notify the patient prior to furnishing the services, you must refund any money collected from the patient in excess of the Medicare payment. If you fail to refund the money, you may be subject to civil money penalties and/or exclusion from the Medicare program — or both. Document the patient’s receipt and acknowledgment of the required information contained in the notice by having the patient or his/her representative sign and date the notice. Keep a copy of the notice in your files. The physician is required to produce copies of these notices upon request. This does not need to be submitted with the claim. If the non-par physician is performing surgical procedures with estimated actual charges of at least $500 for which Medicare hasn’t provided the allowed amount, then the physician can contact Medicare and help to identify the procedure for which charge information is needed. (This requirement also applies to anesthesia services personally administered by the primary or assistant surgeon.) Note: The actual billed or collected charge may not be greater than the limiting charge amount — for example, 115% of the Medicare approved amount for non-par physicians. The letter to the patient and the worksheet (which can be downloaded by accessing the Inga Ellzey Practice Web site at www.iepg.com and clicking on forms) should display an amount within the limiting charge. The patient isn’t financially liable for a higher amount even though he or she agrees to the elective surgery on an unassigned basis. Patients are entitled to a refund of money billed or collected above the limiting charge. Don’t Make the Wrong Decision Carefully evaluate the pros and cons of changing your status to non-par. Don’t make a swift non-calculated change without doing your homework. To gather all of the necessary information you’ll need to make this decision, ask yourself: 1. Can I afford to lose a significant portion of my Medicare patient base? 2. Can I replace these patients with other patients? 3. Do I realize that the Medicare patient is the most profitable patient in my practice based on their high utilization of surgical services? 4. Am I the kind of physician who is willing to charge for everything I do and have the patient walk out with a large bill? 5. Do I have the right staff that has the time, professionalism and finesse to collect from these patients at the time of service? (Do they know how to calculate the amount owed realizing that they must reduce surgical services based on the multiple surgery reduction rule?) Medicare has extended the enrollment period through January 31, 2003. Participating physicians will automatically be re-enrolled with the same status unless they specifically decide not to participate. For those who wish to change their status, they must obtain a re-enrollment form from their local Medicare Part B carrier, complete the form and send it in before the Feb. 15, 2003 deadline. Be sure you don’t make a hasty, costly decision and that your status change is based on a thorough investigation of the facts. (To order the 2003 Non-Participating Decision Guide, a 30-page document that walks you step by step though the decision process, call 800-318-3271. The guide is $99.)
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Medicare:Navigating the Best Choice
W ith the expected 4.4% decrease in Medicare allowables for fiscal year 2003, many dermatologists, and physicians in general, are considering changing their statuses from participating (par) to non-participating (non-par) in an effort to stanch the bleeding caused by decreased reimbursements. If like many physicians you’re considering this move to potentially save money, you’ll need to know some critical information: Making the change to non-par could end up costing you a lot of money. Before you make your final decision, which has been extended this year to Feb. 15 because the Federal Register isn’t yet available, weigh the pros the cons, which I’ll discuss here. Remember, once you make your decision you’re stuck with it for the year. The Non-Par Option The main incentive to claiming non-par status is that you can collect payments based on a limiting charge versus the Medicare allowables. The limiting charge is 9.3% higher than the corresponding Medicare allowable for par providers. This 9.3% differential could make up for the impending decrease you’re facing. But, there’s a lot more to being non-par than picking up the extra 9.3%. Let’s take a look at the specific obligations and benefits of claiming this status. Non-Participating Providers A physician who doesn’t participate is called a “non-par” provider. Many physicians get very confused about what “participating” means. If the physician sees any Medicare aged or eligible patient, he/she must be signed up with Medicare one way or another (e.g., par, non-par, or as an “opt out” provider). A provider can’t see Medicare patients without having one of the three statuses. So in essence, a non-par provider is participating with Medicare. He or she is just signing up for a different relationship with a different set of rules. Non-par physicians have the option of filing Medicare claims on an assigned or non-assigned basis. However, the non-par physician is held to a fee schedule ceiling (or limiting charge) when filing non-assigned claims for Medicare services. Filing on a non-assigned basis. When a non-par physician doesn’t accept an assignment, he or she usually collects the entire amount of his/her fee up front, at the time of service. This amount is based on the Limiting Charge column of the fee schedule. Filing on an assigned basis. An added benefit is that the non-par provider can also decide to accept assignment on a case-by-case basis. This means that if the non-par physician sees a Medicare patient and the total amount of the bill is high, so high that he feels it would be unreasonable to expect the patient to pay this amount in full at the time of service, he can decide to accept assignment on the claim. (In other words the non-par provider will be acting just like a par provider who looks to Medicare to pay 80% of the charges based on the Medicare allowable.) The staff can collect the unmet deductible and the 20% co-payment at the time of service from the patient. Keep in mind that the 20% can also be collected by billing the secondary insurance carrier. In the case of accepting assignment, the non-par provider isn’t restricted to the limiting charge. He can bill whatever he wants realizing that the difference between the amount billed (the regular charge) and the amount allowed/approved by Medicare must be written off. What Are the Obligations of Being Non-Par? In a nutshell, if you’re a non-par provider, you must agree to the following terms: You can collect fees for services at the time of the office visit based on the limiting charge. There are three columns in the Medicare preprinted fee schedule: 1. Participating Fee Schedule 2. Non-participating Fee Schedule 3. Limiting Charge As a non-par, if you don’t accept assignment and decide to collect for the charges at the time of service directly from the patient, look in the column titled “Limiting Charge” to determine the charge. As a non-par, if you decide to accept assignment on a particular patient, you’ll be paid based on the Non-Par Fee Schedule. Therefore, in estimating how to collect the deductible and 20% co-payment, the calculations would be based on the fees listed in the Non-Par Fee Schedule column — not the Limiting Charge column. Keep in mind the following: • Medicare requires the patient to meet the annual deductible of $100 before any payment is made to the provider of care. As a non-par provider, your staff must collect this amount at the time of service. • Medicare pays 80% of the billed amount on assigned claims based on the published fee schedule. (80% is based on 80% of the Non-par Fee Schedule.) • The 20% remaining, after Medicare has paid, must be collected at the time of service from the patient or can be obtained by billing the patient’s secondary or supplemental carrier. You can’t routinely write-off this 20% or the deductible. It’s illegal and can result in your being kicked out of the Medicare program or fined. • You must obtain a proper authorization from the Medicare patient before any claims can be forwarded to the Medicare Part B carrier for payment. The authorization need only be obtained once and is good forever unless the patient revokes such authorization. • As a non-par physician, you must file a claim to the Medicare Part B carrier for all services whether collected at the time of service or whether assignment was accepted. If a non-par physician decides to accept assignment on a particular patient, he or she is not required to submit claims to any supplemental or secondary carriers under Medicare law. The only exception to filing secondary claims is if the practice has signed a contract with a managed care organization (HMO, PPO, etc.) and the contract requires the practice to accept assignment even when that plan is secondary. • You must agree to comply with the elective surgery requirements. (I’ll discuss this later in the article.) What Are the Benefits of Being Non-Par? The first benefit is that you can collect fees at the time of service. Even though the office must submit a claim on behalf of the Medicare patient, the work of getting large Medicare checks each week with hundreds of patient services to post has been eliminated. Being a non-par physician greatly reduces the amount of time and resources spent on claims processing (but only if the non-par physician acts like a non-par provider and collects the charges at the time of service). A second benefit is that you’ll have less paperwork. Also, and this is a big one, you’ll see a 9.3% increase in payment over the par physician. What Are the Disadvantages of Non-Par? The first disadvantage is that you can’t charge for every service provided to the Medicare patient. Many non-par providers feel guilty about charging for everything they do. Because the non-par provider knows the patient will pay for the entire amount as they leave the office, many non-par physicians develop mental ceilings on the maximum charge for any patient encounter. This guilt is handled two ways: 1. The physician doesn’t charge for everything he/she does. Many services are provided at no charge (for example, no office visit is billed even though it was rendered; five destructions are billed even though 12 lesions were treated). 2. Alternatively, the physician accepts assignment for high-priced visits. The result of these types of actions is that these non-par physicians actually are paid less than the par provider. (The allowable for assigned claims for non-par physicians is 9.3% lower than the allowable for the par provider and 14.3% lower than the limiting charge!) The result is that non-par physicians actually generate less revenue than their par colleagues in spite of the 9.3% differential. A good faith estimate would be that non-par physicians who routinely don’t charge for everything they do and also routinely accept assignment on higher-charged visits, will actually lose 15% to 20%. The second disadvantage is that a non-par status will mean you’ll see fewer Medicare patients — unless the practice is in an area where all other dermatologists are non-par. Obviously, Medicare patients prefer to visit a physician who accepts assignment. This means that their out-of-pocket is limited to the unmet deductible and/or the co-payment. After all, 20% out-of-pocket is better than 100%. And keep in mind that the non-par fees are 9.3% higher than the par dermatologists in the same area. Patients are advised of this charge discrepancy each time they get their explanation of medical benefits (EOMBs). A third disadvantage is that you can’t file Medigap claims for automatic crossover. Non-par providers must file the primary claim with Medicare, wait for a copy of the EOMB, generate a second claim, and forward this claim and copy of the EOMB to the secondary payer. This time-consuming process delays payment by weeks or months. What Will Medicare Pay if I’m Non-par? As a “non-par” provider, you agree to accept the limiting charge Medicare fee schedule as your payment. As mentioned previously, the printed Medicare Fee Schedule contains three columns of fees: 1. Participating (approved amount) 2. Non-participating (approved amount) 3. Limiting Charge. As a non-par provider, you’ll get reimbursed based on the limiting charge if you don’t accept assignment or based on the non-par column if you accept assignment on the claims. Is Anything Wrong with Accepting Assignment on Most of My Claims Even Though I Signed up As Non-Par? Yes! Medicare penalizes non-par providers who accept assignment. If you do this, your payment will be reduced by 14.3%. Look at your limiting charge amount for any procedure or service. Take this amount and subtract the non-par amount for this same CPT code. Divide this difference into your limiting charge, and you will see a 14.3% difference. Unfortunately, most non-par providers accept assignment on the larger charges in their office. This 14.3% payment differential can represent thousands of dollars annually in lost practice revenue. What About My Regular Fee Schedule? Providers frequently want to know if they can bill Medicare their regular fees versus the published fee schedule amounts. Obviously, you can’t pass on the regular charges to the Medicare patient since the limiting charge limits apply to services collected at the time of service from the patient. The charges are restricted to the limiting charge amount. However, if the practice accepts assignment, then you may bill the regular fees. It’s recommended that you don’t bill the regular fees when accepting assignment but rather base fees on the non-par fee schedule. The advantages are the following: • It’s easier for staff to calculate the deductible ($100 annually) and co-payment (20% not paid by Medicare). • The patient doesn’t see an inflated charge. When the patient receives verification that the physician has been paid, the EOMB will show the charges approved at 100%. • The practice’s monthly accounts receivables will be more accurate without inflated, uncollectible balances. What Is a Geographic Payment Locality? Each state is divided into Medicare regions for purposes of payment. Some states have one payment region, wherein all physicians get paid the same in the entire state. Other states may have five or more regions. Each provider within that region will receive identical payments for similar services. Elective Surgery Requirements If you’re a non-par physician, you also must take into consideration some elective surgery requirements mandated by the Omnibus Budget Reconciliation Act (OBRA) of 1986. Under OBRA, if your status is non-par, and you don’t accept assignment for elective surgery on a Medicare patient, you must provide certain information, in writing, to the patient before the surgery. Take the following into consideration. • Elective surgery definition. This requirement only applies to elective surgery for which charges are $500 or more. Elective surgery for Medicare purposes is defined as surgery that can be scheduled in advance, not on an emergency basis, and, if delayed, would not result in death or permanent impairment of health. To be considered an emergency, the condition for which surgery is needed must meet the definition of “emergency medical condition” as specified in section 1903 (v)(3) of the Social Security Act. Section 1903 (v)(3) of the Act defines “emergency medical condition” as “a medical condition . . . manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: • placing the patient’s health in serious jeopardy • serious impairment to bodily functions • serious dysfunction of any bodily organ or part. This regulation applies to a single surgery the cost of which is $500 or more or a combination of procedures for which the total cost for a single date of service exceeds $500. If you’re a non-par physician and don’t notify the patient prior to furnishing the services, you must refund any money collected from the patient in excess of the Medicare payment. If you fail to refund the money, you may be subject to civil money penalties and/or exclusion from the Medicare program — or both. Document the patient’s receipt and acknowledgment of the required information contained in the notice by having the patient or his/her representative sign and date the notice. Keep a copy of the notice in your files. The physician is required to produce copies of these notices upon request. This does not need to be submitted with the claim. If the non-par physician is performing surgical procedures with estimated actual charges of at least $500 for which Medicare hasn’t provided the allowed amount, then the physician can contact Medicare and help to identify the procedure for which charge information is needed. (This requirement also applies to anesthesia services personally administered by the primary or assistant surgeon.) Note: The actual billed or collected charge may not be greater than the limiting charge amount — for example, 115% of the Medicare approved amount for non-par physicians. The letter to the patient and the worksheet (which can be downloaded by accessing the Inga Ellzey Practice Web site at www.iepg.com and clicking on forms) should display an amount within the limiting charge. The patient isn’t financially liable for a higher amount even though he or she agrees to the elective surgery on an unassigned basis. Patients are entitled to a refund of money billed or collected above the limiting charge. Don’t Make the Wrong Decision Carefully evaluate the pros and cons of changing your status to non-par. Don’t make a swift non-calculated change without doing your homework. To gather all of the necessary information you’ll need to make this decision, ask yourself: 1. Can I afford to lose a significant portion of my Medicare patient base? 2. Can I replace these patients with other patients? 3. Do I realize that the Medicare patient is the most profitable patient in my practice based on their high utilization of surgical services? 4. Am I the kind of physician who is willing to charge for everything I do and have the patient walk out with a large bill? 5. Do I have the right staff that has the time, professionalism and finesse to collect from these patients at the time of service? (Do they know how to calculate the amount owed realizing that they must reduce surgical services based on the multiple surgery reduction rule?) Medicare has extended the enrollment period through January 31, 2003. Participating physicians will automatically be re-enrolled with the same status unless they specifically decide not to participate. For those who wish to change their status, they must obtain a re-enrollment form from their local Medicare Part B carrier, complete the form and send it in before the Feb. 15, 2003 deadline. Be sure you don’t make a hasty, costly decision and that your status change is based on a thorough investigation of the facts. (To order the 2003 Non-Participating Decision Guide, a 30-page document that walks you step by step though the decision process, call 800-318-3271. The guide is $99.)
W ith the expected 4.4% decrease in Medicare allowables for fiscal year 2003, many dermatologists, and physicians in general, are considering changing their statuses from participating (par) to non-participating (non-par) in an effort to stanch the bleeding caused by decreased reimbursements. If like many physicians you’re considering this move to potentially save money, you’ll need to know some critical information: Making the change to non-par could end up costing you a lot of money. Before you make your final decision, which has been extended this year to Feb. 15 because the Federal Register isn’t yet available, weigh the pros the cons, which I’ll discuss here. Remember, once you make your decision you’re stuck with it for the year. The Non-Par Option The main incentive to claiming non-par status is that you can collect payments based on a limiting charge versus the Medicare allowables. The limiting charge is 9.3% higher than the corresponding Medicare allowable for par providers. This 9.3% differential could make up for the impending decrease you’re facing. But, there’s a lot more to being non-par than picking up the extra 9.3%. Let’s take a look at the specific obligations and benefits of claiming this status. Non-Participating Providers A physician who doesn’t participate is called a “non-par” provider. Many physicians get very confused about what “participating” means. If the physician sees any Medicare aged or eligible patient, he/she must be signed up with Medicare one way or another (e.g., par, non-par, or as an “opt out” provider). A provider can’t see Medicare patients without having one of the three statuses. So in essence, a non-par provider is participating with Medicare. He or she is just signing up for a different relationship with a different set of rules. Non-par physicians have the option of filing Medicare claims on an assigned or non-assigned basis. However, the non-par physician is held to a fee schedule ceiling (or limiting charge) when filing non-assigned claims for Medicare services. Filing on a non-assigned basis. When a non-par physician doesn’t accept an assignment, he or she usually collects the entire amount of his/her fee up front, at the time of service. This amount is based on the Limiting Charge column of the fee schedule. Filing on an assigned basis. An added benefit is that the non-par provider can also decide to accept assignment on a case-by-case basis. This means that if the non-par physician sees a Medicare patient and the total amount of the bill is high, so high that he feels it would be unreasonable to expect the patient to pay this amount in full at the time of service, he can decide to accept assignment on the claim. (In other words the non-par provider will be acting just like a par provider who looks to Medicare to pay 80% of the charges based on the Medicare allowable.) The staff can collect the unmet deductible and the 20% co-payment at the time of service from the patient. Keep in mind that the 20% can also be collected by billing the secondary insurance carrier. In the case of accepting assignment, the non-par provider isn’t restricted to the limiting charge. He can bill whatever he wants realizing that the difference between the amount billed (the regular charge) and the amount allowed/approved by Medicare must be written off. What Are the Obligations of Being Non-Par? In a nutshell, if you’re a non-par provider, you must agree to the following terms: You can collect fees for services at the time of the office visit based on the limiting charge. There are three columns in the Medicare preprinted fee schedule: 1. Participating Fee Schedule 2. Non-participating Fee Schedule 3. Limiting Charge As a non-par, if you don’t accept assignment and decide to collect for the charges at the time of service directly from the patient, look in the column titled “Limiting Charge” to determine the charge. As a non-par, if you decide to accept assignment on a particular patient, you’ll be paid based on the Non-Par Fee Schedule. Therefore, in estimating how to collect the deductible and 20% co-payment, the calculations would be based on the fees listed in the Non-Par Fee Schedule column — not the Limiting Charge column. Keep in mind the following: • Medicare requires the patient to meet the annual deductible of $100 before any payment is made to the provider of care. As a non-par provider, your staff must collect this amount at the time of service. • Medicare pays 80% of the billed amount on assigned claims based on the published fee schedule. (80% is based on 80% of the Non-par Fee Schedule.) • The 20% remaining, after Medicare has paid, must be collected at the time of service from the patient or can be obtained by billing the patient’s secondary or supplemental carrier. You can’t routinely write-off this 20% or the deductible. It’s illegal and can result in your being kicked out of the Medicare program or fined. • You must obtain a proper authorization from the Medicare patient before any claims can be forwarded to the Medicare Part B carrier for payment. The authorization need only be obtained once and is good forever unless the patient revokes such authorization. • As a non-par physician, you must file a claim to the Medicare Part B carrier for all services whether collected at the time of service or whether assignment was accepted. If a non-par physician decides to accept assignment on a particular patient, he or she is not required to submit claims to any supplemental or secondary carriers under Medicare law. The only exception to filing secondary claims is if the practice has signed a contract with a managed care organization (HMO, PPO, etc.) and the contract requires the practice to accept assignment even when that plan is secondary. • You must agree to comply with the elective surgery requirements. (I’ll discuss this later in the article.) What Are the Benefits of Being Non-Par? The first benefit is that you can collect fees at the time of service. Even though the office must submit a claim on behalf of the Medicare patient, the work of getting large Medicare checks each week with hundreds of patient services to post has been eliminated. Being a non-par physician greatly reduces the amount of time and resources spent on claims processing (but only if the non-par physician acts like a non-par provider and collects the charges at the time of service). A second benefit is that you’ll have less paperwork. Also, and this is a big one, you’ll see a 9.3% increase in payment over the par physician. What Are the Disadvantages of Non-Par? The first disadvantage is that you can’t charge for every service provided to the Medicare patient. Many non-par providers feel guilty about charging for everything they do. Because the non-par provider knows the patient will pay for the entire amount as they leave the office, many non-par physicians develop mental ceilings on the maximum charge for any patient encounter. This guilt is handled two ways: 1. The physician doesn’t charge for everything he/she does. Many services are provided at no charge (for example, no office visit is billed even though it was rendered; five destructions are billed even though 12 lesions were treated). 2. Alternatively, the physician accepts assignment for high-priced visits. The result of these types of actions is that these non-par physicians actually are paid less than the par provider. (The allowable for assigned claims for non-par physicians is 9.3% lower than the allowable for the par provider and 14.3% lower than the limiting charge!) The result is that non-par physicians actually generate less revenue than their par colleagues in spite of the 9.3% differential. A good faith estimate would be that non-par physicians who routinely don’t charge for everything they do and also routinely accept assignment on higher-charged visits, will actually lose 15% to 20%. The second disadvantage is that a non-par status will mean you’ll see fewer Medicare patients — unless the practice is in an area where all other dermatologists are non-par. Obviously, Medicare patients prefer to visit a physician who accepts assignment. This means that their out-of-pocket is limited to the unmet deductible and/or the co-payment. After all, 20% out-of-pocket is better than 100%. And keep in mind that the non-par fees are 9.3% higher than the par dermatologists in the same area. Patients are advised of this charge discrepancy each time they get their explanation of medical benefits (EOMBs). A third disadvantage is that you can’t file Medigap claims for automatic crossover. Non-par providers must file the primary claim with Medicare, wait for a copy of the EOMB, generate a second claim, and forward this claim and copy of the EOMB to the secondary payer. This time-consuming process delays payment by weeks or months. What Will Medicare Pay if I’m Non-par? As a “non-par” provider, you agree to accept the limiting charge Medicare fee schedule as your payment. As mentioned previously, the printed Medicare Fee Schedule contains three columns of fees: 1. Participating (approved amount) 2. Non-participating (approved amount) 3. Limiting Charge. As a non-par provider, you’ll get reimbursed based on the limiting charge if you don’t accept assignment or based on the non-par column if you accept assignment on the claims. Is Anything Wrong with Accepting Assignment on Most of My Claims Even Though I Signed up As Non-Par? Yes! Medicare penalizes non-par providers who accept assignment. If you do this, your payment will be reduced by 14.3%. Look at your limiting charge amount for any procedure or service. Take this amount and subtract the non-par amount for this same CPT code. Divide this difference into your limiting charge, and you will see a 14.3% difference. Unfortunately, most non-par providers accept assignment on the larger charges in their office. This 14.3% payment differential can represent thousands of dollars annually in lost practice revenue. What About My Regular Fee Schedule? Providers frequently want to know if they can bill Medicare their regular fees versus the published fee schedule amounts. Obviously, you can’t pass on the regular charges to the Medicare patient since the limiting charge limits apply to services collected at the time of service from the patient. The charges are restricted to the limiting charge amount. However, if the practice accepts assignment, then you may bill the regular fees. It’s recommended that you don’t bill the regular fees when accepting assignment but rather base fees on the non-par fee schedule. The advantages are the following: • It’s easier for staff to calculate the deductible ($100 annually) and co-payment (20% not paid by Medicare). • The patient doesn’t see an inflated charge. When the patient receives verification that the physician has been paid, the EOMB will show the charges approved at 100%. • The practice’s monthly accounts receivables will be more accurate without inflated, uncollectible balances. What Is a Geographic Payment Locality? Each state is divided into Medicare regions for purposes of payment. Some states have one payment region, wherein all physicians get paid the same in the entire state. Other states may have five or more regions. Each provider within that region will receive identical payments for similar services. Elective Surgery Requirements If you’re a non-par physician, you also must take into consideration some elective surgery requirements mandated by the Omnibus Budget Reconciliation Act (OBRA) of 1986. Under OBRA, if your status is non-par, and you don’t accept assignment for elective surgery on a Medicare patient, you must provide certain information, in writing, to the patient before the surgery. Take the following into consideration. • Elective surgery definition. This requirement only applies to elective surgery for which charges are $500 or more. Elective surgery for Medicare purposes is defined as surgery that can be scheduled in advance, not on an emergency basis, and, if delayed, would not result in death or permanent impairment of health. To be considered an emergency, the condition for which surgery is needed must meet the definition of “emergency medical condition” as specified in section 1903 (v)(3) of the Social Security Act. Section 1903 (v)(3) of the Act defines “emergency medical condition” as “a medical condition . . . manifesting itself by acute symptoms of sufficient severity (including severe pain) such that the absence of immediate medical attention could reasonably be expected to result in: • placing the patient’s health in serious jeopardy • serious impairment to bodily functions • serious dysfunction of any bodily organ or part. This regulation applies to a single surgery the cost of which is $500 or more or a combination of procedures for which the total cost for a single date of service exceeds $500. If you’re a non-par physician and don’t notify the patient prior to furnishing the services, you must refund any money collected from the patient in excess of the Medicare payment. If you fail to refund the money, you may be subject to civil money penalties and/or exclusion from the Medicare program — or both. Document the patient’s receipt and acknowledgment of the required information contained in the notice by having the patient or his/her representative sign and date the notice. Keep a copy of the notice in your files. The physician is required to produce copies of these notices upon request. This does not need to be submitted with the claim. If the non-par physician is performing surgical procedures with estimated actual charges of at least $500 for which Medicare hasn’t provided the allowed amount, then the physician can contact Medicare and help to identify the procedure for which charge information is needed. (This requirement also applies to anesthesia services personally administered by the primary or assistant surgeon.) Note: The actual billed or collected charge may not be greater than the limiting charge amount — for example, 115% of the Medicare approved amount for non-par physicians. The letter to the patient and the worksheet (which can be downloaded by accessing the Inga Ellzey Practice Web site at www.iepg.com and clicking on forms) should display an amount within the limiting charge. The patient isn’t financially liable for a higher amount even though he or she agrees to the elective surgery on an unassigned basis. Patients are entitled to a refund of money billed or collected above the limiting charge. Don’t Make the Wrong Decision Carefully evaluate the pros and cons of changing your status to non-par. Don’t make a swift non-calculated change without doing your homework. To gather all of the necessary information you’ll need to make this decision, ask yourself: 1. Can I afford to lose a significant portion of my Medicare patient base? 2. Can I replace these patients with other patients? 3. Do I realize that the Medicare patient is the most profitable patient in my practice based on their high utilization of surgical services? 4. Am I the kind of physician who is willing to charge for everything I do and have the patient walk out with a large bill? 5. Do I have the right staff that has the time, professionalism and finesse to collect from these patients at the time of service? (Do they know how to calculate the amount owed realizing that they must reduce surgical services based on the multiple surgery reduction rule?) Medicare has extended the enrollment period through January 31, 2003. Participating physicians will automatically be re-enrolled with the same status unless they specifically decide not to participate. For those who wish to change their status, they must obtain a re-enrollment form from their local Medicare Part B carrier, complete the form and send it in before the Feb. 15, 2003 deadline. Be sure you don’t make a hasty, costly decision and that your status change is based on a thorough investigation of the facts. (To order the 2003 Non-Participating Decision Guide, a 30-page document that walks you step by step though the decision process, call 800-318-3271. The guide is $99.)
