CMS Delays Implementation of PECOS Enrollment Policy

CMS announced on Nov. 23 that it would delay implementation of new rules that give Medicare the authority to reject claims for services or supplies when the ordering physician or health care professional is not enrolled in the Medicare Provider Enrollment, Chain and Ownership System, or PECOS. The agency is delaying implementation of the new policy until April 5, 2010.

The policy was first made public on Oct. 5 and was designed to be phased in gradually. The original grace period was scheduled to end on Jan. 4, but according to CMS, an extension of the implementation date will give physicians and other health care providers sufficient time to enroll or, if necessary, re-enroll in Medicare; thousands of U.S. physicians enrolled in Medicare before PECOS was activated in 2003.

CMS' decision to postpone the January deadline came on the heels of a Nov. 16 letter (5-page PDF; About PDFs) sent to CMS Acting Administrator Charlene Frizzera by the AMA, the AAFP and more than 50 other medical organizations in which the groups expressed concerns about the policy.

"Since Oct. 5, 2009, hundreds of thousands of otherwise acceptable Medicare claims have been marked for nonpayment," simply because physicians or other health care professionals ordering or referring the items or services enrolled in Medicare before the PECOS database was developed, said the letter.

"Implementing this policy as scheduled will cut off access to care for millions of Medicare beneficiaries, interrupt reimbursement for legitimately provided items and services, interrupt care coordination, and add unfunded administrative mandates on a significant portion of physicians and other health care practitioners who provide care to Medicare beneficiaries," wrote the organizations.

The medical groups estimate that as many as 200,000 -- or 30 percent of all Medicare physicians and providers -- have been affected by the change. Under the new rules, those physicians and health care professionals must re-enroll in Medicare if they want to continue to refer and order. "The repercussions for this ill-advised policy are enormous," said the letter.

"The downstream providers and suppliers of the referred/ordered services/items are at a risk of nonpayment," said the letter. Durable medical equipment companies and medical suppliers have no way of checking to see if a referring or ordering physician is enrolled in PECOS, the letter continued.

The organizations warned that HHS may have overstepped its authority by issuing the policy change.

"Implementing this new policy will negatively impact the vast majority of physicians, suppliers, and other health care practitioners engaged in the legitimate delivery of health care and the Medicare patients they serve," the letter concluded.

Joe Ilcus is the compliance officer for United States Medical Supply, a Miami-based mail-order diabetic supply company. He told AAFP News Now that he's already seeing the downstream effects of the policy change from CMS.

Ilcus said thousands of physicians with whom his company partners have been affected after ordering diabetes supplies, such as lancets, glucose meters and testing strips, for their patients with diabetes.

Those Medicare claims came back with an error message saying the physician was not authorized to order the supplies, said Ilcus. "We're a Medicare business, and 20 percent to 25 percent of our doctors got these error messages," he added.

CMS said that Medicare claims received without the newly required information would be processed and paid during the now-extended grace period, but Ilcus said the warning messages have unnerved and confused both medical suppliers and physicians.

Ilcus said he's communicated with hundreds of physicians in the past few weeks, and most of them understand that if they're not enrolled in PECOS, their patients may not get the products and supplies they need to keep them healthy and out of the hospital or nursing home.

"It was important for us to inform the physician population about the PECOS program," because the PECOS user services help desk is "overwhelmed and understaffed," said Ilcus.

According to CMS, more detailed information about the rules delay will be published soon in MLN Matters, an online publication that is part of CMS' Medicare Learning Network.