By: Andrea Stark
Managing Member, MiraVista, LLC

In closing out 2006, there are six items of interest that will affect most Medicare DME providers in the upcoming months: Competitive Bidding, Medicare Contractor Reform, New CMNs/DIFs, NPIs/855-S Form, New1500 Claim Forms, and Diagnosis Code Updates. Planning ahead and understanding the implications of these changes will save you time, money and the inevitable headache.

Competitive Bidding: CMS is rapidly publishing more proposals, rules and regulations to expedite the competitive bidding process. Ready or not, it is coming. The first steps CMS is taking relate to setting up contractor(s) to implement the program and start the bidding process. The selection process is expected to be completed by the end of October 2006 so the contractor(s) can begin the bid selection and education efforts. Secondly, because competitive bidding will require suppliers to be accredited, CMS has also published a proposal on selecting approved accrediting bodies. However, CMS had not announced any official accrediting body for DME competitive bidding at the time this article was submitted. Additionally the final accrediting bodies will have to enforce new quality standards which were published on August 15. These new standards resulted in a total of 14 pages which includes both general instruction and 3 categories of product specific instruction as they relate to mobility, respiratory and customized prosthetic and orthotic devices. The final standards are significantly less burdensome than the previous draft of 104 pages. With future accreditation based on these new quality standards, and mandatory compliance by ALL suppliers, even small DME companies should be able to comply without a significant implementation cost. The final major components yet to be decided are the 10 official cities for 2007 and affected product categories.

Medicare Contractor Reform: The first two DMERCs (Regions A and B) made the transition to Medicare Administrative Contractors (MACs) in July. Now that the ruling has been made with regard to the CIGNA protest against the awards to Region C and D, Region D will make its transition to Noridian Administrative Services (NAS) by the end of this year. At the time of this publication, the final Region C contractor still had not been announced. For those regions yet to transition, a few tokens of wisdom to prepare:

• When changing contractors, take into consideration address changes when mailing hardcopy claims, processing reviews and hearings, and reporting fraud and abuse.
• You may have to complete additional paperwork to ensure uninterrupted service and claims processing such as new contracts for direct deposit and new EDI and ERN contracts.
• Until the national EDI contract (MEDIS) is awarded, you may have to set your computer to download and upload files to a new Medicare contractor. Consider contacting your software vendor to ensure that your systems are configured to dial the correct number for claims submission.
• The transition to a new contractor will affect not only the transmission of claims, but also the downloading of reports and EOBs.
• When submitting claims electronically, you will have to update your billing software to make contractor number modifications. Currently your software uses a DME contractor number to send claims to the DMERC, however once the transition to the MAC is complete you will need to assign a new MAC identification number. This identifier is required to further identify who should be receiving your claims.

New CMNs/DIFs:
CMS recently published new rules affecting the certificates of medical necessity. The new instructions completely eliminated two of the current CMNs for Hospital Beds and Group 3 Support Surfaces. Three other CMNs were consolidated into two DME MAC Information Forms (DIFs) which will be completed by the supplier. (Remember, even though the CMNs are eliminated and/or replaced by supplier completed forms, Medicare still requires compliance with the written medical policy and a detailed written order from the physician for billing purposes.) This leaves only five traditional CMNs with minor changes and modifications. There will be a transition period for providers to use either the old CMNs or the new versions between October 1 and December 31, 2006. Only the five new CMNs and two DIFs will be accepted as of 1/1/07. Because the effective date is based on transmission date, and not date of service, suppliers should take proactive steps in implementing the new forms. Consider utilizing the newer CMNs prior to October 1 for inaccessible physicians as some physicians take upwards of three months to return CMNs (at which time the form would be invalid and the process must start over).

NPIs/855-S Form:
You have no doubt heard a lot about the National Provider Identifiers or (NPIs), and that these new numbers will eventually replace doctor UPINs, and DME provider numbers. While the numbers are not mandatory until May 23 of next year, Medicare has begun the “push” to get DME providers to enroll for their NPIs, by making it a required identifier on all changes and additions to the Medicare National Supplier Clearinghouse 855-S application form. Therefore if you have not obtained your NPI, you must apply for that number prior to submitting a new application, making any changes or reenrolling (this includes address changes). You can apply for your NPI online at https://nppes.cms.hhs.gov. The process is very simple, and I would encourage you to apply and utilize the NPI as quickly as possible. Several providers have already found themselves with restricted cash flow after having to delay an address change with Medicare due to lack of an NPI. Medicare is now accepting claims with NPI’s as long as the NPI is accompanied by your existing NSC provider number. You will need to check with your software vendor to see where this number should be indicated in your billing system. Beginning October 2, 2006 you will be able to use EITHER your existing provider number OR your NPI number.

New1500 Claim Forms:
Effective 10/1/2006 a new 1500 claim form will be available to bill the Medicare program. The new form will be revised to accommodate the reporting of National Provider Identifiers (NPIs) for both physicians and DMEPOS suppliers. According to a printing source, the new forms will not be printed or available prior to Oct 6; however, some printers are taking pre-orders. For Medicare purposes, the new claim form should only be used by providers that are excluded from the mandatory electronic claims submission requirements. The current version of the 1500 claim form can be used through April 1, 2007 (this is an extension of the previously published date of Jan 31, 2007). Effective April 2, 2007, only the new 1500 claim form will be accepted.

Diagnosis Code Updates:
With the ICD-9 updates that take effect on 10/1/06, you must ensure that none of the deleted codes appear in any of the diagnosis fields on your claims. If a deleted/non-compliant code appears in the diagnosis header or in a diagnosis pointer, you will receive a front-end rejection. Fortunately, the deleted codes this year do not impact major benefit groups. However, throughout the month of October it is important to watch the Medicare EDI, 48-hour report as rejected claims will not process or appear on any Medicare EOB.