Don't Fall Victim to Medicare's Provider Drop Rule

There is a problem with Medicare's Provider Enrollment, Chain, and Ownership System, commonly known as PECOS, which is meant to provide a secure database of Medicare providers. As noted in the May 24 edition of Psychiatric Practice and Managed Care, starting next January Medicare will not pay for orders or referrals by physicians who are not registered in PECOS. (The Centers for Medicare and Medicaid Services [CMS] had moved the compliance date to July 6, 2010, as had been specified by the Affordable Care Act, but then CMS announced the rule would not be enforced until January 2011, as originally planned.) The problem is that even though you may have enrolled in Medicare or opted out since 2003 and were included in PECOS, if you don't file at least one claim every 12 months, you are supposed to be deleted automatically from PECOS, that is, disenrolled from Medicare.

Since CMS enrollment officials recognized that this rule created a serious problem for doctors who opt out of Medicare—the opt-out period is two years at a time—and thus may not file claims then, these doctors are supposed to have a special code attached to their file that keeps them from being kicked out of the system for that period. Each time they opt out, they will be added to PECOS for the two-year opt-out period.

Unfortunately, there is no such protection for doctors who don't see Medicare patients very often but wish to remain Medicare providers. This is the case, for example, for child psychiatrists who on rare occasions may wish to see a Medicare patient or for physicians who don't generally see Medicare patients but wish to continue to see a patient who has aged into Medicare.

Currently doctors who haven't filed any claims for the past year receive no warning when they're about to be disenrolled from Medicare. Instead, they receive an after-the-fact notice from Medicare telling them that they are no longer part of the system, and that if they wish to see Medicare patients, they must file Form 855 and re-enroll. Once they file the 855, they may retroactively file claims going back 30 days from the date an accepted 855 was filed.

What does this mean for you? If you don't re-enroll promptly, you may not get paid for Medicare claims. This is also true for any claims for services you provided before you were deactivated, since the law says that you may file claims that go back only 12 months.

Here's the take-home message: File your claims in a timely manner, and if you get a notice from Medicare, pay attention to it.

Ellen Jaffe of APA's Office of Healthcare Systems and Financing has discussed this issue on several occasions with CMS officials. She was told that CMS is aware that the abrupt dropping of physicians from Medicare is a problem and that CMS is working to develop a way of warning providers so that those who wish to remain in Medicare can take steps to ensure they are not disenrolled.