Healthcare Waste and CMS

Healthcare Waste and CMS

One of the primary drivers of healthcare waste is administrative inefficiency. While the industry implements remedies and solutions with electronic prescriptions and electronic claims transfer and processing, the gorilla in the room that no one mentions is CMS. On December 28, 2015, we saw the first of several notices from the MACs that the Medicare Physician Fee Schedule was being removed from their websites. One MAC notice stated:

“On October 30, 2015, the CY 2016 Medicare Physician Fee Schedule (MPFS) final rule was published in the Federal Register. In order to implement corrections to technical errors discovered after publication of the MPFS rule and process claims correctly, Medicare Administrative Contractors will hold claims containing 2016 services paid under the MPFS for up to 14 calendar days, (i.e., Friday, January 1, 2016 through Thursday, January 14, 2016). The hold should have minimal impact on provider cash flow as, under current law, clean electronic claims are not paid sooner than 14 calendar days (29 days for paper claims) after the date of receipt.”

If the corrections were a new problem, we would not be so concerned, but this is the second year of technical errors as the 2015 MPFS was pulled on the last workday of 2014. How technical errors that have existed since October 30, 2015, can go undetected until December 28, 2015, is alarming. These types of late corrections to the MPFS affect the Medicare fee-for-service world but also most payers, providers, and healthcare vendors. Loading the fee schedules is a major end-of-the-year endeavor. But to have to start over again on January 13, 2016, (one day prior to a 14-day timely payment) when the corrected fee schedule was announced, is labor-intensive and caused claim holds for both the payers and providers.

Because the providers and payers did not know the scope of the technical errors, it was a difficult decision by providers on whether to submit claims. Our staff searched the CMS website for a transmittal or notice explaining the technical errors. Were the codes incorrect, the RVU values, the conversion factors? No apparent notice from CMS was found. In fact, after sending all clients notification of the withdrawal of the MPFS, I received some calls that the fee schedule remained on the CMS website. Typically, CMS appends an “R” to designate a change or adjustment (e.g. RVU16AR). Yet, when the new fee schedule was replaced on January 13^th, the file name was the same, confusing everyone until the file was opened and a new date was found.

Comparative analysis by our staff demonstrated thousands of changes in RVU values and of course the conversion factor. Of final note was the further reduction in the MPFS conversion factor to 35.8043 from 35.8279!

Everyone makes mistakes, but when CMS has technical errors in the published MPFS that are not detected for months, it appears that waste is not the important concern as reported by the Feds nor are increased costs for providers, vendors and payers.