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Fam Pract Manag. 2003 Sep;10(8):73-74.

Medicare participation

Q

What are the main differences between being a participating Medicare provider and a nonparticipating provider?

Participating physicians receive a higher Medicare-allowed reimbursement amount than nonparticipating physicians, inclusion in Medicare physician directories that are distributed to senior-citizen groups and individuals on request, access to toll-free claims processing lines and faster claims processing. Participating physicians must also agree to take assignment on all Medicare claims, which means they must accept Medicare’s allowed amount as payment in full for all covered services and cannot bill the patient for amounts in excess of the Medicare allowance. However, this does not mean they have to accept every Medicare patient.

Nonparticipating physicians receive 95 percent of the Medicare-allowed reimbursement amount that participating physicians receive. These physicians are not included in Medicare’s physician directories and do not have access to the toll-free claims processing lines. Nonparticipating physicians do not have to take assignment on all Medicare claims. Instead, they can make assignment decisions on a claim-by-claim basis. Unassigned claims must be submitted to Medicare, which will pay the patient directly. The physician must then collect for the service from the patient. For this type of claim, nonparticipating physicians may bill patients for more than the Medicare-allowed amount up to a certain point. That point, known as the limiting charge, is 115 percent of the Medicare-approved amount for nonparticipating physicians. Note that the 95-percent payment rate applies regardless of whether the nonparticipating physician accepts assignment on the claim.

To choose the option that’s best for you, you need to determine whether, as a nonparticipating physician, your total revenues from Medicare, patient co-payments and billings up to the limiting charge would exceed your total revenues as a participating physician, particularly in light of collection costs, bad debts and claims for which you accept assignment. The AMA has estimated that nonparticipating physicians would need to collect the full limiting charge amount roughly 35 percent of the time for a given service to equal participating physicians’ revenues for the same service. (See the example below to determine how the different payment arrangements would apply to a $100 Medicare fee schedule service.)

EXAMPLE: A $100 MEDICARE FEE SCHEDULE SERVICE

View/Print Table

Payment arrangementTotal payment ratePayment amount from MedicarePayment amount from the patient

Participating physician

100 percent Medicare fee schedule = $100

$80 (80 percent) paid by carrier to physician

$20 (20 percent) paid by patient or supplemental insurance (i.e., Medigap)

Nonparticipating physician/assigned claim

95 percent Medicare fee schedule = $95

$76 (80 percent) paid by carrier to physician

$19 (20 percent) paid by patient or supplemental insurance

Nonparticipating physician/unassigned claim

115 percent of $95 (Medicare’s “limiting charge”) = $109.25

$0

$76 (80 percent) paid by carrier to patient $19 (20 percent) paid by patient or supplemental insurance $14.25 balance bill paid by patient

Payment arrangementTotal payment ratePayment amount from MedicarePayment amount from the patient

Participating physician

100 percent Medicare fee schedule = $100

$80 (80 percent) paid by carrier to physician

$20 (20 percent) paid by patient or supplemental insurance (i.e., Medigap)

Nonparticipating physician/assigned claim

95 percent Medicare fee schedule = $95

$76 (80 percent) paid by carrier to physician

$19 (20 percent) paid by patient or supplemental insurance

Nonparticipating physician/unassigned claim

115 percent of $95 (Medicare’s “limiting charge”) = $109.25

$0

$76 (80 percent) paid by carrier to patient $19 (20 percent) paid by patient or supplemental insurance $14.25 balance bill paid by patient

HIPAA and homework

Q

Our director of medical records says that when physicians take billing sheets home to dictate on a portable recorder they are violating patient confidentiality by making identifiable patient information accessible outside the clinic. Is there anything in the Health Insurance Portability and Accountability Act (HIPAA) that forbids this?

No. There is nothing in HIPAA that prohibits a physician from taking health information home from the office, but the regulations do require practices to implement reasonable safeguards against improper disclosures of health information. Allowing a physician to take home health information (which, in your case, includes the information on the billing sheet and the tape) increases the risk of improper disclosure. For this reason, although it is not prohibited, it is generally not a good idea.

Tracking performance

Q

We have a performance evaluation system in place and conduct annual performance reviews, but it’s difficult to summarize a year’s worth of a staff member’s work. Can you offer any suggestions for effective and efficient ways to track performance?

We have found that the most efficient way to track and record employee performance is to use a quarterly performance record that includes a block of space to record the excellent or poor incidents of an employee’s performance each week. (Click below to download a blank record.) It is important to record only the excellent and poor incidents, because those are what you need to share with the employee and use to decide who you can trust with important work; who you should train, retain or terminate; and who should get more money. The large portion of an employee’s work that is satisfactory need not be recorded. When noncritical activities or incidents are recorded, unnecessary minutiae creeps into the record.

 Download in PDF format

Maintaining this record is the most important part of the performance evaluation process. The hard part is remembering to record the critical incidents every week. The record must be updated every Friday, since most physicians or office managers will not remember what happened in the previous week. Each quarterly record should be discussed informally with the employee when completed, and the four quarterly records will make excellent source documents to prepare the annual review.


* Denotes member of FP Assist, the AAFP’s online clearinghouse for consultants and attorneys.


 

Copyright © 2003 by the American Academy of Family Physicians.
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