CMS is cracking down on claims for services that are ordered or referred by physicians who don’t participate in Medicare, even if the services themselves are Medicare-approved.

Starting October 2009, Medicare will have a new claims edit to prevent payment for services (e.g., consultations, MRIs) that are ordered by physicians and nonphysician practitioners (NPPs) who aren’t enrolled in Medicare, according to Medicare Transmittal 510 (Change Request 6417).

That sounds like a nightmare for hospitals that train residents, since they routinely order and refer patients for services under the supervision of teaching physicians. Residents have a national provider identifier (NPI), although they aren’t enrolled in Medicare Part B. But don’t sound the alarm, experts say. CMS has acknowledged it didn’t take into account the transmittal’s impact on teaching hospitals, and says it will rectify the problem in forthcoming guidance on the claims edit, says Julie Chicoine, compliance director for Ohio State University Medical Center.

According to Medicare Transmittal 510, physicians and NPPs must have an NPI to bill Medicare. But having an NPI doesn’t mean you can bill Medicare. HIPAA established NPIs to uniquely identify health care providers in standard transactions. In many academic medical centers, residents receive NPIs because they write orders for patient care. An NPI merely lets providers enroll in Medicare, which is necessary for billing purposes. To actually bill Medicare for Part B services, physicians and NPPs must complete CMS enrollment Form 855I (or 855R if joining a group practice). Assuming they’re accepted, physicians and NPPs then submit claims for services they render to Medicare beneficiaries and appear as the ordering or referring physician on another provider’s claim.

The underlying policy on ordering and referring physicians is not new.The Social Security Act has always required physicians and NPPs who bill Medicare for a service or item to show the name and unique identifier of the ordering/referring provider on the CMS 1500 form for Part B services if that service or item was the result of an order or referral. But now CMS is implementing a claims edit to curtail monkey business with ordering and referring providers. Enrollment, after all, falls under the program integrity division, so it’s safe to assume this is a strategy by CMS to safeguard the Medicare program, which should not be paying for services ordered or referred by nonparticipating providers.

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