CMS Shuts Down Retroactive Billing

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Have you filed your Medicare provider application? If not, better read the fine print.

Each year Medicare publishes changes to its fees and rules via the Federal Register. This typically occurs in the November or December edition for the following year. For 2009, the November 19, 2008 edition of the Federal Register included changes to the conversion factor, and some other rules, along with Medicare “adjusting” the time period for which a “provider is allowed to (retrospectively) bill for services…” CMS 2009 Final Rule p.245.

Up until this ruling, once you had your medical license and were credentialed by the hospital, you could start seeing patients, and in the case of Medicare, take several months to apply and receive a provider number. After you received your provider number you could go back as many as 27 months to bill for those patients you saw.


But now, all that has changed. Thanks to the edict, the time frame for submitting bills for those services is now such that you can’t bill retroactively at all!

The impact that this edict will have on reimbursements is major. Take a larger contract management group, for instance, which is bound to have some new physicians whose credentials are lagging. If an EP sees about 4500 patients per year, or 375 per month, and 25% are CMS, that’s 94 CMS patients per month. At $150 dollars in reimbursement per CMS patient, that’s a total of $14,063 in lost reimbursement each month that that EP is seeing patients but doesn’t yet have a provider ID number.

There are two small exceptions to the prohibition of retrospective billing. The first is “if circumstances precluded enrollment in advance of providing services to Medicare beneficiaries, then there is a 30-day period prior to the EFFECTIVE date.” It appears this will require an explanation validating the circumstances.


The second exception is if 90 days prior to their effective date a Presidential-declared disaster precluded enrollment in advance of providing services to Medicare beneficiaries.
In case the original application is deemed incomplete, the contractor issues a “letter of development”. If the letter is not answered appropriately within 30 days, the application is denied. The 30-day timer starts when contractor mails the letter, and the contractor is only required to send one letter. Denial allows appeal rights, which could preserve the original date of filing the application, but is obviously not guaranteed.

The appeal process can take 60 days, and if your appeal is not overturned, you’ll be required to start the whole process over and will NOT be allowed to submit a claim for any Medicare beneficiary you evaluated during that time period. Also, providers may not submit a new enrollment application during the 60-day appeal time line. The original implementation date for the above was January 1, 2009, although at the time of this writing, CMS agreed not to enforce this new rule until April 1, 2009.

CMS has begun offering an internet-based system as a solution to speeding up the enrollment process. Called PECOS (Provider Enrollment, Chain and Ownership System), it allows physicians the option of enrolling, making a change in their Medicare enrollment information, or tracking the status of their Medicare enrollment applications through the internet.

It does require that the physician know his/her NPPES (NPI) user ID and password, and “encourages” physicians to not share their user ID or password with billing agents, clearinghouses, academic medical institutions, or staff within their practice. In fact, the Federal Register noted, “Providers choosing to use billing agents, clearinghouses, academic medical institutions, etc will be required to submit a paper enrollment application to enroll or make a change in their Medicare enrollment record.”


If that isn’t enough, re-validation, or re-enrollment, is required every 5 years. The bottom line is this: Providers need to apply for, and maybe even receive, their provider numbers prior to providing services if they want to get paid.

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  1. Bill Machuga on


    Does this mean that all new physicians will have to have a provider number prior to working a shift?


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