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Medicare already posed enough problems for hospitals, physicians and other healthcare providers with the cost of care usually higher than reimbursement. For example, a 2006 study showed that Medicare reimbursed hospitals at a rate that was 4.8 percent less than cost.

Medicare is in the process of instituting new National Provider Identifier (NPI) numbers that are required as part of the Health Insurance Portability and Accountability Act (HIPAA) Administrative Simplification Standard. Medicare is switching over to the NPI for health care providers to use for reimbursement. NPIs, required by May 23, are replacing the prior legacy provider identifiers used for many years.

But the switchover is causing problems such as a spike in the number of claims rejected. The American Medical Association (AMA) has expressed deep concerns about Medicare’s ability to appropriately match a physician’s NPI number(s) to the appropriate legacy number and the significant claims rejections practitioners are experiencing when there is a mismatch.

“Immediate outreach to physician practices is needed in order to avert further claims processing interruptions,” the AMA has told Medicare.

David Wroten, executive vice president of the Arkansas Medical Society, said the society shares the concerns of AMA.

“First and foremost, as with any major change the federal government decides to impose, they are always a day late and dollar short,” Wroten said. “They give very little assistance to the Medicare and Medicaid administrators about how to implement the changes. They always fail to understand the intricacies of the practice of medicine and how life happens in the real world of a doctor’s clinic. They always assume everyone’s clinic is the most technologically advanced and sophisticated with their billing systems, which is far from case.”
One of the biggest problems with NPIs not matching Medicare legacy numbers is that a physician may have had that legacy number for 25 years, and has no idea exactly what was put on the form 25 years ago.

“Simple things like leaving out the doctor’s middle initial could foul things up,” Wroten said. “The solution was for the doctor to re-enroll in Medicare and, of course, that is a time-consuming proposition. It is a lot of paperwork. As usual, the federal government does not give enough lead time, and doesn’t do enough work on the front end to make sure it works. It is never as simple as they want to make it.”

The concept behind the NPI is that is every doctor or other health care provider would have a specific number that would identify him or her, and no one else. But it is often not that easy. One provider can have more than one number. For example, a doctor might practice in several different locations. A doctor can have a number and the clinic another number.

“It is far, far from the simple solution it sounded like,” Wroten said. “It is one additional headache. Once everybody gets through it, it will probably be okay. But I don’t know if it will work any better than the old system. In fact, I doubt it will work any better than the old system. In the meantime, it has cost a lot of time for people to get it all straightened out. Hopefully, that has been occurring so when the day comes and there is no choice but to use NPI number on claims, there won’t be nearly so many claims rejected. But there will be some. There is no question about it. Those clinics could experience cash flow problems that mean they have to wait weeks or months to get paid. So they need to make sure their NPI numbers are accurate and their crosswalk works. If they haven’t done it, they need to do it now. Most everyone has done it.”

The reimbursement problems could cause some healthcare providers to stop serving the Medicare population. It has been an increasing problem across the country that because of unpredictable and insufficient reimbursement, increasing numbers of healthcare providers aren’t seeing Medicare patients. It can make it difficult for people to obtain care.

“The formula Medicare uses to determine physicians’ payments has built-in flaws that have resulted in projected reductions in reimbursement for each of the past five to six years,” Wroten said. “At the same time physicians’ office expenses are up 20 to 25 percent. Yet Medicare, because of the formula it uses, has projected cuts in what they will pay. At the last minute each year Congress puts it off for another year. It creates an environment where physicians can’t feel comfortable that Medicare will pay for their services at an adequate amount.”
Adding to the problem is that Arkansas has the lowest Medicare reimbursement of all 50 states even though Medicare recipients pay the same Medicare premiums no matter where they live in the country.

“With these threatened cuts every year, it is making it more and more difficult for physicians to continue to see Medicare patients,” Wroten said. “When you add that Arkansas has such a high percentage of Medicare population, it makes it even more difficult. The people who end up suffering because of all these federal policies are the Medicare beneficiaries, the patients.”



March 2008

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