August 27, 2014

ACA IRS Rules and Reporting Requirements

The Internal Revenue Service has been working hard to arm us with some ACA navigational tools.  The most recent of which came in the form of... well... forms... both new and revised, which they issued in draft format.  We are hopeful that the instructions will be released by the beginning of September.  The AICPA will be reviewing these forms closely and offering recommendations to the IRS for ways to make them easier to use.

Here’s a snapshot of the new information reporting forms:

New Information   Reporting Forms



Form 1095-A,   Health Insurance Marketplace Statement

Marketplaces will report   information on coverage provided to each enrollee


Filing begins in the 2014   tax year

Form 1095-B, Health   Coverage

Insurers will report   information on coverage provided to each enrollee


Optional for the 2014 tax   year and mandatory for 2015

Form 1094-B, Transmittal   of Health Coverage Information Returns

To be used to report all   Forms 1095-B with the IRS


Optional for the 2014 tax   year and mandatory for 2015

Form 1095-C, Employer-Provided   Health Insurance Offer and Coverage

Applicable large   employers will report information on coverage for each employee

Optional for the 2014 tax   year and mandatory for the 2015 tax year


Form 1094-C, Transmittal   of Employer-Provided Health Insurance Offer and Coverage Information Returns

This form will be the   method of transmitting all Forms 1095-C to the IRS. 


See filing requirements   for Form 1095-C


And, the new/revised forms to be filed with a taxpayer’s federal income tax return, beginning in 2014 are:

New or Revised   Tax Return Related Forms


Form 1040

Line 46 - report the   excess of any Premium Tax Credit received throughout the year.


Line 61 - report whether   the taxpayer has minimum essential coverage or owes a penalty


Line 69 – report the   amount of PTC


Form 8941, Credit   for Small Employer Health Insurance Premiums

Updated to accommodate   the recently released final regulations


Form 8962, Premium   Tax Credit (PTC)

New form to be used to   claim the PTC or to reconcile any advanced PTC amounts received during the   year to cover health insurance premiums


Form 8965, Health   Coverage Exemptions

New form to be used to   report an exemption from the insurance requirements


August 25, 2014

Reminder to conduct background checks for new medical practice employees

In addition to conducting reference checks when hiring new medical practice employees, you should also do a complete background check. Background checks can include the following:

• Social security verification • Criminal records • Driving records • Professional license verification • Credit reports • Education verification

Many vendors offer this service. One you might want to check out is PreCheck at:

August 22, 2014

Billed charge and related payer allowable

When I negotiate managed care contracts on behalf of clients, one part of the process is to take a practice's top 20 CPT codes and then pull the most recent EOBs from that payer showing these codes. An excel spreadsheet is then created showing the payer's allowable for each of the 20 codes and a comparison to current Medicare rates.

When looking at these EOBs, I still find sometimes (like this week!!) billed charges that are approved 100% for payment by the payer. THIS MEANS THE PRACTICE FEE IS TOO LOW AND THE PRACTICE IS LOSING REVENUE!!! Posters should be instructed that any EOB that comes across their desk where the billed charge is approved for payment in its entirety, that this EOB should immediately be copied and given to the practice administrator for review and a related fee adjustment.

I just wish medical practice's would quick losing money simply as a result of poor internal processes and oversight management.

August 20, 2014

A quick way to increase patient volume

The following was from a recent post to one of the MGMA listservs:

I fully agree that once you have your fixed overhead covered it is good business to try to fill up the rest of your capacity with "lesser reimbursement" patients. Once those fixed expenses are met you just have variable incremental expenses on the remaining credence to the theory that "you can make profit from volumes of lesser payors."

I too agree with this. Why complain about physician productivity if you can increase it simply by adding additional managed care plan participation to the practice? Of course you would want to add an "out" mechanism if the other contracts in place become more profitable and/or additional patient steerage occurs.

Of course people will say that additional overhead will occur by adding certain payors to the practice (ex. HMOs) but I have found that statement might not be true, especially if you negotiate out some of the related "red tape" that causes overhead to rise accordingly.

August 14, 2014

IRS Releases Draft Forms Health Care Information Reporting

The IRS has released draft versions of the long-anticipated information returns that employers and insurers will use to meet the reporting requirements mandated by health care reform. Form 1095-B (and the related transmittal Form 1094-B will be filed by insurers and plan sponsors of self-insured plans to report information on health coverage provided to individuals, as required by IRC Sec. 6055. This information will assist the IRS in administering the individual shared responsibility penalty. Form 1095-C (and the related transmittal Form 1094-C will be filed by applicable large employers to report on coverage offered to employees, as required by IRC Sec. 6056 . The IRS will use information from this form to enforce the employer shared responsibility penalty and identify individuals that are ineligible for premium assistance credits. The draft forms are available at: .

August 13, 2014

Providers Enrolled as a ‘Sole Practitioner’, or ‘Private Practice’– Medicare Claim Submission Requirements for the Billing and Rendering Information

If a physician is are enrolled as a ‘Sole Practitioner’, or ‘Private Practice’ Provider, only the Billing NPI assigned should be submitted on the claim to Medicare. It is not required to also report an NPI as the Rendering Provider. Incorrectly reporting a Rendering Provider NPI that is not required, the system will automatically reject the claim based on the system editing for the Billing and Rendering information.

Please note that Organizational Groups who are enrolled are required to submit the Billing NPI and a Rendering NPI.

August 12, 2014

Another human resource idea for physician practices

The Austin American Statesman a while back ran an article about Jack Welch, the former CEO of GE. In the article, he was asked about GE's approach to managing people, which focuses on rewarding stars - the top 20% or so - and easing out the bottom 10%, the low performers: "It's differentiation, and I believe in it to my toes. It's somewhat controversial at times." said Mr. Welch.

Mr. Welch advises to take the top 20% as your most important people and "kiss them, hug them, and reward them." For the middle 70%, show them what they are good at  and where they can improve and try to move them up. For the bottom 10%, bring them in and tell them they ought to find work elsewhere.

My question is: Why don't physicians and their management team follow the same philosophy as Jack Welch? Medical practices I must admit do a terribly job at human resources, whether it be hiring, training, mentoring, terminating, etc. Seems like everybody is just too busy. I also do not understand why most medical practices tolerate mediocrity within its employee group.

In the Medical Group Management's annual Best Performing Medical Practices survey each year, it is no surprise that the best performing practices have one thing in common - They do the best at hiring and managing employees.  They do the best job at keeping employees happy and wanting to come to work. They do the best job at retaining employees.

From a business standpoint, it is the employees who will make or break a medical practice, not necessarily the clinical activities of the physicians. A medical practice can have the the most busiest physicians on the planet but without a strong employee group it, it will never be as financially successful as it can be.

Think about all this seriously..............and start identifying and replacing the low performers now.

August 07, 2014

ICD-10 Testing Opportunities for Medicare FFS Providers

On July 31, HHS issued a rule (CMS-0043-F) finalizing October 1, 2015 as the new compliance date for health care providers and health plans to transition to ICD-10.  ICD-10 represents a significant code set change that impacts the entire health care community.

CMS is taking a comprehensive four-pronged approach to preparedness and testing for ICD-10 to ensure that CMS, as well as the Medicare Fee-For-Service (FFS) provider community, is ready:

• CMS internal testing of its claims processing systems

• CMS Beta testing tools available for download

• Acknowledgement testing

• End-to-end testing

For more information, see MLN Matters® Special Edition Article #SE1409, “Medicare FFS ICD-10 Testing Approach.”

Acknowledgement Testing

This past March, CMS conducted a successful ICD-10 acknowledgement testing week. Providers, suppliers, billing companies, and clearinghouses are welcome to submit acknowledgement test claims anytime up to the October 1, 2015 implementation date. In addition, special acknowledgement testing weeks in November, March, and June of 2015 will give submitters access to real-time help desk support and allows CMS to analyze testing data. Registration is not required for these virtual events. Contact your Medicare Administrative Contractor (MAC) for more information about acknowledgment testing.

End-to-End Testing

CMS plans to offer providers and other Medicare submitters the opportunity to participate in end-to-end testing with MACs and the Common Electronic Data Interchange (CEDI) contractor in January, April, and July of 2015. As planned, approximately 2,550 volunteer submitters will have the opportunity to participate over the course of three testing periods. The goals of this testing are to demonstrate that:

• Providers and submitters are able to successfully submit claims containing ICD-10 codes to the Medicare FFS claims systems

• CMS software changes made to support ICD-10 result in appropriately adjudicated claims

• Accurate Remittance Advices are produced

Additional details about end-to-end testing will be available soon.

Check the ICD-10 Medicare FFS Provider Resources web page for the latest information and educational resources to implement and transition to ICD-10 medical coding.

August 04, 2014

Deadline for ICD-10 Allows Physicians Ample Time to Prepare for Change

On July 31, HHS issued a rule finalizing October 1, 2015 as the new compliance date for health care providers, health plans, and health care clearinghouses to transition to ICD-10. This deadline allows providers, insurance companies, and others in the health care industry time to ramp up their operations to ensure their systems and business processes are ready to go on October 1, 2015.

The ICD-10 codes on a claim are used to classify diagnoses and procedures on claims submitted to Medicare and private insurance payers. By enabling more detailed patient history coding, ICD-10 can help to better coordinate a patient’s care across providers and over time. ICD-10 improves quality measurement and reporting, facilitates the detection and prevention of fraud, waste, and abuse, and leads to greater accuracy of reimbursement for medical services. The code set’s granularity will improve data capture and analytics of public health surveillance and reporting, national quality reporting, research and data analysis, and provide detailed data to enhance health care delivery. Health care providers and specialty groups in the United States provided extensive input into the development of ICD-10, which includes more detailed codes for the conditions they treat and reflects advances in medicine and medical technology.

Using ICD-10, doctors can capture much more information, meaning they can better understand important details about the patient’s health than with ICD-9-CM. Moreover, the level of detail that is provided for by ICD-10 means researchers and public health officials can better track diseases and health outcomes. ICD-10 reflects improved diagnosis of chronic illness and identifies underlying causes, complications of disease, and conditions that contribute to the complexity of a disease. Additionally, ICD-10 captures the severity and stage of diseases such as chronic kidney disease, diabetes, and asthma.

The previous revision, ICD-9-CM, contains outdated, obsolete terms that are inconsistent with current medical practice, new technology, and preventive services.

ICD-10 represents a significant change that impacts the entire health care community. As such, much of the industry has already invested resources toward the implementation of ICD-10. CMS has implemented a comprehensive testing approach, including end-to-end testing in 2015, to help ensure providers are ready. While many providers, including physicians, hospitals, and health plans, have completed the necessary system changes to transition to ICD-10, the time offered by Congress and this rule ensure all providers are ready.

For additional information about ICD-10, please visit the ICD-10 website.

July 30, 2014

HIPAA Phase 2 audits about to begin

The U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) will soon begin a second phase of audits (Phase 2 Audits) of compliance with Health Insurance Portability and Accountability Act of 1996 (HIPAA) privacy, security and breach notification standards (HIPAA Standards) as required by the Health Information Technology for Economic and Clinical Health (HITECH) Act. Unlike the pilot audits during 2011 and 2012 (Phase 1 Audits), which focused on covered entities, OCR will conduct Phase 2 Audits of both covered entities and business associates. The Phase 2 Audit Program will focus on areas of greater risk to the security of protected health information (PHI) and pervasive noncompliance based on OCR’s Phase I Audit findings and observations, rather than a comprehensive review of all of the HIPAA Standards. The Phase 2 Audits are also intended to identify best practices and uncover risks and vulnerabilities that OCR has not identified through other enforcement activities. OCR will use the Phase 2 Audit findings to identify technical assistance that it should develop for covered entities and business associates. In circumstances where an audit reveals a serious compliance concern, OCR may initiate a compliance review of the audited organization that could lead to civil money penalties.