CMS Issues Deadlines for Providers Compliance with Version 5010 Standards

The Centers for Medicare & Medicaid Services (CMS) has issued a reminder to healthcare providers, health plans, clearinghouses, and vendors about the approaching compliance dates for a new generation of diagnosis and procedure codes and updated standards for electronic healthcare transactions.

Beginning in January 2011, entities covered under the Health Insurance Portability and Accountability Act (HIPAA) should be ready to test with their trading partners the functionality of the entities’ practice management and/or other related software featuring Version 5010 standards. Use of the Version 5010 standards for HIPAA electronic healthcare transactions—including claims, remittance advice, eligibility inquiries, and referral authorizations—will be mandatory on Jan. 1, 2012. The Version 5010 standards also provide the framework needed to use the revised medical data code sets (ICD-10-CM and ICD-10-PCS) that must be implemented on Oct. 1, 2013.

A fact sheet describing the two regulations governing the ICD-10 code set and Version 5010 electronic transaction standards is available on the CMS website.

Malpractice Insurance Coverage; Personal & Group Exposure

If you take a job with a medical group and the employment contract states that the entity will purchase malpractice coverage for you, it sounds like you’re all taken care of, and you don’t need to worry about anything, right?

Not necessarily.

In a recent New Jersey Appellate decision, the court held that a physician-employee was responsible for purchasing her own “tail” coverage on her medical malpractice insurance policy when she terminated her employment — even though the tail coverage would have covered the time when she was working at the job. The employer medical practice had a contractual obligation to “provide and pay the premium for malpractice insurance coverage covering Employee,” but the contract did not specifically address extended reporting period (tail) coverage. Thus, the doctor was not entitled to recover any of the $146,000 she paid for tail coverage.

Group Exposure

While there is substantial risk placed on the employed physician by a poorly worded employment agreement, there may be even greater risk for the medical practice. Notwithstanding the appellate decision discussed above, a medical practice can have significant exposure when a former employee has a gap in malpractice coverage since, under a legal theory known as vicarious liability, an employer is ultimately responsible for the acts of its employees.

So, even if your contract explicitly and unambiguously states that employees are responsible for their own tail coverage, a practice may still be liable for claims that are not covered, if the employee fails to obtain that coverage. Contractual terms between a medical group and a physician-employee generally have no impact on a plaintiff, and ordinarily will not negate vicarious liability. Consequently, good contracts should spell out who is responsible for purchasing a tail, and address the contingencies in case the employed physician or the employing practice breaches that duty.

For example, a contract that requires an employee to purchase her own tail could also give the employer the right to purchase a tail on that physician’s behalf if she fails to do so on her own. A clause to that effect would give the practice the ability to purchase a tail on behalf of the physician, then seek payment from her for the cost of the premium. Another issue can arise when a physician insured on a claims-made policy leaves a group and transfers coverage to a new claims-made policy. The risk in this instance may not present until years later when the physician may cease practice and again have the need to buy a tail. If the tail is not purchased and coverage lapses, any lawsuit brought that involved the timeframe that the physician was employed by the practice would not be covered.

These issues can be avoided if the medical group secures occurrence coverage, which automatically includes a tail. When occurrence coverage is not a viable or practical option though, good employment agreements are essential. As always, practices should retain specialized attorneys to draft employment agreements so that all contingencies are addressed.

CMS Record Retention & Privacy Guidelines

State laws generally govern how long medical records are to be retained.

However, the Health Insurance Portability and Accountability Act (HIPAA) of 1996 administrative simplification rules require a covered entity, such as a physician billing Medicare, to retain required documentation for six years from the date of its creation or the date when it last was in effect, whichever is later. HIPAA requirements preempt State laws if they require shorter periods. Your State may require a longer retention period.

The Centers for Medicare & Medicaid Services (CMS) requires records of providers submitting cost reports to be retained in their original or legally reproduced form for a period of at least 5 years after the closure of the cost report. This requirement applies to hospitals and not physician practices.

CMS requires Medicare managed care program providers to retain records for 10 years.

Privacy must be maintained even after record retention timelines have expired. While the HIPAA Privacy Rule does not include medical record retention requirements, it does require that covered entities apply appropriate administrative, technical, and physical safeguards to protect the privacy of medical records and other protected health information (PHI) for whatever period such information is maintained by a covered entity, including through disposal.

Additional information:

• Providers/suppliers should maintain a medical record for each Medicare beneficiary that is their patient.
• Medical records must be accurately written, promptly completed, accessible, properly filed and retained.
• Using a system of author identification and record maintenance that ensures the integrity of the authentication and protects the security of all record entries is a good practice.
• The Medicare program does not have requirements for the media formats for medical records. However, the medical record needs to be in its original form or in a legally reproduced form, which may be electronic, so that medical records may be reviewed and audited by authorized entities.
• Providers must have a medical record system that ensures that the record may be accessed and retrieved promptly.

Providers may want to obtain legal advice concerning record retention after CMS-required time periodshave been met.

CMS Delivers Additional Information Regarding Medicare Timely Filing Rule

In the MLN Matters dated July 30, 2010, Change Request (CR) 7080, CMS gives additional instructions on the timely filing rule:

• For professional claims (CMS-1500 Form and 837P) submitted by physicians and other suppliers that include span dates of service, the line item“From” date will be used to determine the date of service and filing timeliness. (This includes supplies and rental items).  For physicians and other suppliers that bill claims with span dates, these span date services cannot exceed one month.
• For institutional claims that include span dates of service (i.e., a “From” and “Through” date span on the claim), the “Through” date on the claim will be used to determine the date of service for claims filing timeliness.
• BE AWARE: If a line item “From” date is not timely, but the “To” date is timely, Medicare contractors will split the line item and deny untimely services as not timely filed.
• Claims having a date of service of February 29th must be filed by February 28th of the following year to be considered as timely filed. If the date of service is February 29th of any year and is received on or after March 1st of the following year, the claim will be denied as having failed to meet the timely filing requirement.

Change request (CR) 6960 specified the basic timely filing standards established for FFS reimbursement, which are a result of Section 6404 of the Patient Protection and Affordable Care Act of 2010 (ACA) that states that claims with dates of service on or after January 1, 2010, received later than one calendar year beyond the date of service will be denied by Medicare.

Average Physician Compensation Increase Was 3.8% in 2009: AMGA Survey

Most specialties saw modest increases in compensation in 2009, but many provider organizations continue to operate at a significant loss, according to findings in the American Medical Group Association’s (AMGA’s) 2010 Medical Group Compensation and Financial Survey. The survey found that 76% of the specialties experienced increases in compensation in 2009, with the overall average increase around 3.8% (in 2008, when 81% experienced an average increase around 3.5%). The primary care specialties (excluding hospitalists) saw about a 3.8% increase in 2009 (same in 2008), while other medical specialties averaged an increase of 2.4% and surgical specialties averaged around 3.8%. The primary care specialties saw about a 3.8% increase in 2008, while other medical and surgical specialties averaged 6%. The survey reports that during 2009, the specialties experiencing the largest increases in compensation were pulmonary disease (10.37%), dermatology (7%), and urology (6.36%).

The section of the survey that examines financial operations found that medical groups were still faced with significant financial challenges. Most regions were doing better than in 2008, but margins are thin. In 2009, organizations in the Eastern and Western regions were operating at break even. Organizations in the Southern region continue to operate at a loss (-$1,034 per physician in 2009, -$120 per physician in 2008). Groups in the Northern region continued to experience significant losses (-$9,943 per physician in 2009, -$3,254 per physician in 2008).