WELCOME!

Welcome to the fall issue of the Leading Edge: this issue is our largest yet, reflecting the many changes underway in medical coding and billing. First, however, you will find a profile of our Salem, New Hampshire and Braintree, Massachusetts offices. They have been part of the AHS team since the beginning of the year and serve many important clients in New England, New Jersey and Florida. Later, you will read about the new Chambersburg, Pennsylvania office, how some Lombard team members are making a difference with their charity efforts, the excitement in the Lombard coding team, and other team members just named Compliance “Super Stars”.

In this issue, we have a feature article on Electronic Health Records (interchangeably referred to as Electronic Medical Records, so EMR or EHR, depending on your preference). The financial incentives available to physicians for installing and using (“meaningful use”) an approved (“certified”) EHR are significant. And despite the poor fit, the incentives are currently available to almost all specialist physicians.

Then we move on to updates on 5010 (critically important as we approach the end-of-year deadline) and Health Care Reform payment models. Our coding article sheds light on the often-confusing area of hospital observation codes, where CMS has just issued new guidance.

As always, we appreciate your feedback and suggestions. In particular, we welcome new topics.

Please call or email me with your suggestions: bgilbert@ahsrcm.com or 908-279-8120

Bill GilbertVice President Marketing

THE LEADING EDGEVol. 5 | Fall 2011Billing Technology Results

WELCOME | page 1

AHS PROFILE: SALEM AND BRAINTREE | page 1

ELECTRONIC MEDICAL RECORDS:IS EVERyONE ON BOARD? | page 2

EHR AND MEANINGFUL USE | page 3

5010 UPDATE | page 5

FEATURED EMPLOyEES | page 6

COMPLIANCE SUPER STAR AWARD | page 7

Health Care Reform | page 8Observation Codes | page 9MedPAC | page 11

In The News | page 7 Did you Know About AHS | page 9Calendar | page 11

RADIOLOGy INSIGHTS | page 11

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Radiology Coding and Billing

AHS PROFILE: SALEM AND BRAINTREE

The AHS Salem office was founded by Marc Bolh in 1982 with the original office located in the Boston area, close to the first two Boston-based radiology clients. Both clients are still with the company today, 29 years later. As business expanded outside of the Boston area, the Salem office was opened in 1988.

The Salem office, where you occasionally see moose and turkeys in the parking lot, currently has 102 employees serving 71 clients. The office serves radiology, cardiology, neurology, primary care, surgery and hospitalists’ practices in New England, New Jersey and Florida. The Salem office has grown from 800 sq. ft. 15 years ago to 14,000 sq. ft. today.

The Braintree office originally began in 1983 serving multiple specialties but narrowed their focus to hospital-based pathologists when they came under the management of the Salem office in 1998. The Braintree office has 34 employees serving 16 practices in Massachusetts.

Both offices are proud of the longevity of their employees. The average length of employment in Salem is 7 years and in Braintree, 10 years.

AHS Salem has a top-notch Customer Care department, dedicated to answering patients’ billing questions, plus computerized credentialing, client bookkeeping and exceptional coding services. All coders have their CPC certification (Certified Professional Coder) and several are RCCB (Radiology Coding Certification Board) certified. The Client Education Manager, Shirley Breslin, started New Hampshire’s “Southern Chapter of the Professional Certified Coders” through the AAPC (American Association of Professional Coders). Shirley also conducts coding classes in the Salem office to prepare coders as well as Client Managers for CPC certification.

In 2006, the IT team developed a new web-based practice management application based on Cache Technology, a technology widely used in healthcare. Over the years, they have added an appointment scheduling system for clients and an internal document imaging system that allows fast access to copies of charge tickets, medical reports and EOBs.

One of the biggest challenges during the past year was to train staff to work on outside billing systems for clients who prefer to have billing done on their EMR system. The office now has billing expertise on the EPIC, MedInformatix and eClinicalWorks systems.

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ELECTRONIC MEDICAL RECORDS: IS EVERyONE ON BOARD?

Providers, hospitals and technology vendors are all scurrying to meet the requirements of the EHR Incentive and Meaningful Use (MU) Program, whether for the purposes of improving healthcare, reaping the payment incentives, avoiding the penalties for non-par-ticipation or all of the above. The EHR Incentive Program was established under the “HITECH Act,” which funded Medicare and Medicaid to provide incentive payments for the “meaningful use” of certified electronic health records (EHR) technology.

While the EHR program has been in place for some time, it still feels new to many providers who have not yet decided to implement an EHR. So how do physicians (Eligible Providers or EP’s) participate in the incentive program? The short answer: obtain a certified EHR system and use the system to meet all of the MU requirements. There are many resources available to EPs to answer these questions. We have listed three of these organizations in our EHR “side-bar.”

Some particularly confusing questions: can all specialties successfully participate in the EHR program? And do Stage I and Stage II allow all providers (specialties) to participate early in the game.

The answers are “Yes” for most specialty physicians. By the CMS definition, unless an eligible profession-al (EP) performs 90% or more of his/her business in an inpatient and/or emergency room setting, they are eligible. In other words, all specialties are eligible to par-ticipate in the incentive program and will be subject to penalties if they do not participate by 2015.

STAGE I

HHS (Health and Human Services) Secretary, Kathleen Sebelius, announced on September 12 that more than 80,000 physicians have registered for the EHR incentive payment program since registration began in January 2011 for Stage 1.1

Stage I criteria focus on electronically capturing health information in a coded format, using that information to track key clinical conditions and communicating that information for care coordination and public health purposes. Twenty–five objectives (EPs have to meet 20) and thirty-eight clinical measures (EPs to choose at least 6) were established for EPs to report to qualify for Stage I incentive payments.

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After reviewing the Stage I requirements, which primarily focus on preventive care, screenings and other assessments, specialists are concerned that the program heavily favors pri-mary care/general medical practitioners with little built in for their specialties. This forces some physicians to gather and have access to information irrelevant to their practice—since they must have the technical functionality to capture all information for all objectives, including those from which they are excluded.

These requirements not only make it difficult for Specialists to reap the monetary benefits of the program but includes them in the providers who will be penalized beginning in 2015 if they are not yet participating in the program.

Specialists have written multiple letters and held meetings with HHS, ONC and CMS (one meeting with ONC was represented by 5 specialties; radiology, pathology, ophthalmology, surgery and allergy/asthma/immunology) to offer their proposed changes to the draft Stage II guidelines. They requested objectives be reformed, new measures be created and some even requested to be exempt from both the incentives and penalties because the objectives did not match the functions in their specialty’s environment.

A letter to HHS written on behalf of radiology, anesthesiology and pathology, stated that Radiologists and Pathologists through their RIS, PACS and LIS systems, have been in the forefront in utilizing healthcare information systems that are highly specialized and designed to support requirements unique to their practice environments; yet many of the EHR certification criteria apply to functions that are not applicable to their systems.2

After all of these attempts to make changes, ONC replied this summer that Stage I meaningful use requirements will not be modified for any specialty though specialty-specific needs may be addressed in Stage II.3

The end result is that specialists must find a way to participate in Stage I to reap the full incentive benefits. Specialists should review all of the objectives and clinical measures to determine how they can apply them to their practice, either through the use of “exclusions”, or changing how they practice to incorporate these requirements.

STAGE II – PROPOSED DELAy AND MEASURES

Stage II encourages the “use of health IT for continuous quality improvement at the point of care and the exchange of information in the most structured format possible.”

The final rule for Stage II was originally slated for June 2012, giving EPs and vendors only six months to acquire and update their systems to advance from Stage I to Stage II, which was set

PAyMENTS & PENALTIES

PaymenTSmedicare: Incentive payment equal to 75% of annual Medicare allowed charges for covered services, subject to the maximum payment of $44,000 over 4 years (2011 – 2015)

medicaid: Potential payment of $63,750 over 6 years (2011-2021) (Medicaid population must be a minimum of 30% of Practice)

PenalTIeSMedicare payments to providers not qualified as “meaningful users” will be reduced by 1% in 2015, 2% in 2016, 3% in 2017, 4% in 2018 and 3-5% in subsequent years.

After 2017, if the proportion of providers who are MEHR users is less than 75%, reductions will increase by 1% each year but not by more than 5% overall.

TIME LINES

STaGe IImplementation Time Period: 1/1/2011 – 12/31/2012

October 1, 2011 – Last day for EPs to begin their 90-day reporting period for calendar year 2011 with ending date of December 31, 2011. The reporting period for 2012 is a calendar year.

January 2012 – Temporary EHR Certification to be replaced by the permanent certification program (see below.)

February 29, 2012 – Last day for EPs to register and attest to receive an incentive payment for calendar year 2011

STaGe IIImplementation Time Period: 1/1/2013 – 12/31/2014 – but start date may be delayed until 1/1/2014

STaGe IIIImplementation Time Period: 1/1/2015

EHR & MEANINGFUL USE

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to begin in January 2013. The HIT Policy Committee, realizing that this was a real timing challenge, voted on June 8, 2011 to delay Stage II until 2014, and requested this decision to be part of the proposed rule for Stage ll slated for the last quarter of 2011.

For the development of Stage II, the final rule on the eHR incentive program published in July 2010, CmS stated they would:

•considereveryobjectivethatisoptionalforStage1tobe required for Stage II,

•reevaluate the thresholds and exclusions of all the measures (both percentage based and those currently a yes/no attestation)

•considerapplyingthecriteriamorebroadlytoalloutpatient hospital settings4

On august 5, 2011, in keeping with the final rule, the HIT Policy Committee sent a letter to HHS proposing:

•recommendationsonareportingframeworkthatbuildson the Stage I core plus menu option,

•alistofmenudomainsandmeasurestobedeveloped,and

•alistofmethodologicalchallenges/issuesrelatedto implementation of novel measures in the future.5

The letter recommends that providers be required to report two sets of quality measures, the first to be drawn from a list of core measures including those required for Stage 1 and the second to be drawn from a set of six menus of available relevant measures for each specialty.

In addition to the Stage I objectives and clinical measures, there are 116 retooled and 24 newly-developed measures submitted for consideration for Stages II and III. More than likely, there will only be a few new measures that will be accepted for Stage II with the majority slated for Stage III, still set to begin in 2015. _____________________________________________________

1Daly, Richard, “Sebelius reports on HER Incentives, Obama proclaims Health IT Week, Septem-ber 12, 2011, www.modernhealthcare.com/article/20110912/NEWS/110919995/&template

2Letter to Kathleen Sebelius, Department of Human Services, December 15, 2010, www.acr.org/.../hhs/ACR-ASA-and-CAP-Letter-to-HHS-Meaningful-Use-Considerations.aspx

3Fields, Rachel, “ONC: Stage 1 Meaninful Use Requirements Will Not Address Anesthe-sia Specifically,” July 15, 2011, www.beckershospitalreview.com/anesthesia/onc-stage-1-meaningful-use-requirements-will-not-address-anesthesia-specifically.html

4“Electronic Health Record Incentive Program; Final Rule”, Federal Register, July 28, 2010

5Letter to HHS from HIT Policy Committee, August 5, 2011, www.healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__policy_recommendations/1815

6Letter to HHS from HIT Policy Committee, August 5, 2011, www.healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__policy_recommendations/1815

SOME REQUIREMENTS AND MyTHS

ReQUIRemenT: 50% Rule “any EP demonstrat-ing meaningful use must have at least 50% of their patient encounters during the EHR reporting period at a practice(s)/location(s) equipped with certified EHR technology capable of meeting all of the MU objectives.”

ReQUIRemenT: Permanent System Certification Required in 2012. EHRs are currently certified under the ”temporary” certification program which is scheduled to be replaced by a “permanent certification” program by January 2012. The transition from the temporary program to the perma-nent program only affects the process by which the EHRs are certified, not the validity of the actual certification.

ReQUIRemenT: EPs must register and attest to imple-mentation and usage of EHR and meaningful use as pre-scribed by CMS.

ReGISTRaTIOn: All EPs must register for the program even if they are not yet on an EHR system. An EP must be registered in PECOS before registering for the EHR Incen-tive Program

aTTeSTaTIOn – EPs must have already registered and have decided which objectives and quality measures they will perform before they can attest they are using a certified EHR Product. EPs must attest by February 29, 2012 to be eligible for 2011 incentive payments

myTH: HOSPITAL-BASED Physicians do not qualify for the Incentive - CMS defined a hospital-based physician as one who furnishes 90% or more of their services in an inpatient or emergency room setting. This means that most Anesthesiologists, Pathologists, Radiologists and other specialists are eligible to participate in the EHR In-centive Program and must do so to avoid penalties.

myTH: Physicians have to enter their own data: Physicians do not have to enter their own patient data. CMS does not indicate how the data is captured by the EHR technology with the only exception in Stage I related to computerized physician order entry; this can only be done by a licensed health-care professional.

myTH: EPs have to own their EHR system: EPs do not have to actually own the certified system but must use a system that has been certified for physicians ( i.e., hospital-based physicians can use their hospital EHR system as long as it has the correct certification. Note that the certification criteria for hospitals are different than for physicians.)

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5010 UPDATE

AHS has been very hard at work all year implementing and testing “5010”. Health plans, clearinghouses, providers and billing companies are required to conform to HIPPA Version 5010A1 standards by January 1, 2012. Implementation of 5010 presents substantial changes to the content on electronic claims as well as the data available to providers in response to electronic inquiries for eligibility or claims status.

The past quarter has seen a big ramp up as most payors are now ready to test. In fact, Christine DaSilva, leading the 5010 effort for AHS, is keeping track of more than 60 testing schedules! The good news is that the testing is going well and Christine expects that production claims with some payors will be live on 5010 in October. The majority are expected to convert in November. Of course, this means that we will be sending 5010 formatted claims to some payors and 4010 to others until the end of the year.

However, there is talk that some health insurance plans will not have all their i’s dotted and t’s crossed come January 1.

The HBma (Health Care Billing management association), in a seminar held this month, stated that:

•AsofJuly2011,only8percentofhealthinsuranceplanshad successfully completed testing

•ManyMedicaidprogramsarenotyetreadyfortestingand if not ready by January, they may require paper claims until their programs are completed

•AsofJuly2011,therewasnoindustrycontingencyplanif the implementation does not go smoothly

•ThereiswidespreadagreementamongpayorsandCMSthat providers should anticipate a minimum of one year of claims disruptions.1

Hidden costs of the 5010 transition imposed by some payors have been requirements for new BAA’s (Business Associate Agreements) and, in some cases, all new submitter ID’s. It appears that some payors are using the conversion as an opportunity to clean up their systems and data bases. Fortunately, Christine and the team are successfully resolving each of the details.

The good news is that AHS clients can be confident that their claims will continue to be paid once the new year arrives by those carriers ready for 5010 and AHS will be in a position to

EHR QUESTIONS FOR PHySICIANS TO ASK:

•AmIaneligibleprofessional?•AmIusingacertified (or certifiable) electronic health record?•DoesmyEHRsatisfytheStageImeaningfulusecriteria?•Iperformout-patientservicesinahospital;willmyfacility add my specialty module so I can use their system?•HowcanIcertifymycurrentRIS,PAC,LISsystemor other specialty system?

IF yOU ARE READy TO REPORT OR ARE ALREADy REPORTING MEANINGFUL USE ON A CERTIFIED EHR SySTEM:

•Focusonachievingmeaningfuluseassoonaspossible, then decide when to attest•BesureyoucanbuildoffyourStageIsystemtoaccommo date changes in Stage II•SinceStageIIwillmakeStageIrequirementsmandatory, review those objectives you are deferring in Stage I and be sure you can meet them in Stage II.

PRACTICES WHO PROVIDE OUT-PATIENT SERVICES INSIDE HOSPITALS HAVE SEVERAL OPTIONS TO UTILIzE EHR CERTIFIED SySTEMS:

•Usethehospital’sEHRsystem(as longastherearethe certified physician components), •Integratethepractice’sowncertifiedITsystemswiththe hospital’s EHR,•CertifyitsownITsystemsindependentlyor•Purchaseanew,alreadycertifiedsystem

The CmS website has an abundance of information includ-ing the registration and attestation requirements. www.cms.gov/ehrincentiveprograms/30_Meaningful_Use.asp

Regional extension Centers will give advice in purchasing and installing EHRs among other IT consulting services. www.regionalextensioncenters.com/

OnC (Office of the National Coordinator for Health Information and Technology) website which lists the certification organizations and all currently certified systems: http://healthit.hhs.gov/portal/server.pt/community/healthit_hhs_gov__home/1204

EHR RESOURCES

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submit appropriately to those carriers who may be working on a contingency plan. Press reports suggest that not all practices will be so fortunate. The Medical Group Management Association recently released results of a survey which showed that of 356 practices surveyed in June, 45 percent had not even started preparing for Version 5010A1 implementation.2 _____________________________________________________1 Louie, Holly and Mulaik, Melody, “Living In a Fantasy World,” August 31, 2011, from a slide

show at the HBMA Conference, September 14, 2011. 2 Email from MA/RI MGMA to MA/RI MGMA, “HIPAA 5010 testing,”, September 19, 2011.

LOMBARD EMPLOyEES IN THE NEWS

Employees and family members of the Lombard office participate in many area charity events close to their hearts throughout the year. We would like to recognize those who have participated or are participating in recent events.

WALK TO END ALzHEIMER’S

Sarah Luszczyk in the Coding Department and Bonnie Tempinski in the Posting Department are both participating in the upcoming “Walk to End Alzheimer’s”, the nation’s larg-est event to raise awareness and funds for Alzheimer’s care, support and research. There are 30 walks planned this fall within Illinois and 1,735 Teams have signed up for participation. Since 1989, this “all age, all-ability” walk has mobilized millions to join the fight against Alzheimer’s disease, raising more than $347 million for the cause. Events are held annually in the fall in nearly 600 communities nationwide.

For Sarah, the walk is a family affair. She walked with her mother, father, and boyfriend on September 18 in the Montrose Harbor, Chicago walk. Sarah states: “My grandfather was diagnosed with Alzheimer’s several years ago and my family and I didn’t know anything about the disease. All we thought was that he would forget old memories. I went online and Google searched Alzheimer’s and it brought up ALZ.ORG. This website was the best thing I could have found for our situation. It has several articles about the disease, what to expect next, informa-tion on the walk and places for families and caretakers to chat and find groups to talk to.”

Bonnie’s daughter, Christine, walked with co-workers on September 11 in the Bloomingdale walk. Christine and her team are in a unique position of understanding the effects of Alzheimer’s – they work at an assisted living home that takes care of people diagnosed with the disease. Christine’s team will be hard to miss – they will be wearing brightly colored t-shirts with the word “Sunrise” proudly displayed on their shirts. (Sunrise is the name of the assisted-living facility).

AMERICAN CANCER SOCIETy Tina Emeritz, Team Leader in Lombard’s Posting Department, has just finished a successful summer of fund-raising events for the Society. She worked on the “Relay for Life” fundraiser in June (the Society’s annual national fundraiser) and assembled a team of people who participated in the 12-hour overnight “Can-cer Never Sleeps” event. Her team was awarded 3rd place for their efforts, which included a raffle, dinner, and chili cook-off.

Tina says that her reason for backing the society is simple: they spend a larger percentage of fundraising money on cancer re-search than any other organization, and they offer resources to help individuals after the diagnosis, including medication as-sistance, rides to medical appointments, wigs, and other types of funding. They also provide an 800 number (1-800-227-2345) that can be a lifeline to anyone dealing with disease either them-selves or as a result of a loved one’s diagnosis. Tina plans to continue her involvement every year.

LOMBARD CODERS CELEBRATE AACP CERTIFICATION

There have been a lot of balloons and streamers in the aHS lombard coding department lately. Birthdays? no…It’s the celebration of fellow team members passing the aaCP (american association of Professional Coders) certification.

In the last eight months, three department team members have moved up the ranks from positions where they prepped medical records and paperwork for certified coders to appren-tice coders with completed AACP certification. The majority of the newly certified coders have been with AHS at least two years.

The manager of the department, Chris Walters, believes that this is the best approach to finding the highly qualified, certi-fied coders for her team. Chris states, “We believe we can identify the best by first hiring people who are interested in the field, showing them what is involved, and then preparing and supporting them through the certification process.” Chris is a local chapter president for the AACP, and knows a lot about developing coding specialists. One of her tasks as local chap-ter president is to strengthen the training programs for certi-fication, as well as preparing her local chapter for the coming ICD 10 wave.

The entire department becomes involved when a fellow team member expresses an interest in becoming certified. The de-partment’s existing certified coders cheer them on, helping them with sample tests, encouraging them during some of the tougher sections, and throwing a celebration party when the certification is passed.

Next on the department’s plate? Developing specialized cer-tifications and preparing for ICD-10. With the team and sup-portive approach and environment, Lombard’s coding team is ready for the challenge.

The OIG Compliance Program Guidance for 3rd Party Medical Billing Companies emphasizes that a billing com-pany’s obligation is to promote a culture of compliance by preventing, detecting and resolving instances of misconduct. The Compliance Office of AHS introduced a special award in 2011 acknowledging an employee who prevents incidents from hap-pening

The following three employees from the Salem office have been given the Super Star Award for their efforts in this regard.

Karen Daniels, a/R Representative, on a regular and repeat basis, has stopped requests from clients to change denied CPT codes to payable ones without supporting clinical documentation.

lynn Jardin, Client manager, consistently reaches out to the Compliance Office with potential compliance issues that she sees in her regular communications with clients. The AHS Compliance Office has been very busy with Lynn’s very good compliance “catches”.

Katie Thuotte, IT Coordinator, received the award for iden-tifying a request to override an edit in the system based on information received from a commercial payor represen-tative that if the place of service was changed for a par-ticular CPT code, it would be paid every time used in the fu-ture. On occasion, payor claim representatives say things that are not correct from a compliance point of view. Yes, claims may be paid based on this information, but may run afoul of federal, state or payor contract rules or regulations.

Two of the risk areas that apply to this are (a) billing for items or services not actually documented (includes the place of ser-vice indicator) or (b) software programs that encourage billing personnel to enter data into fields indicating services were fur-nished though not actually performed or documented correctly. Predetermined fields related to billing in a data entry field is an example of this. In this case, Katie believed that establishing a default may not be appropriate.

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COMPLIANCE SUPER STAR AWARD

IN THE NEWS

In August, Inc. Magazine published its annual Inc. 500/5000 with AHS on the list for a third consecutive year. The list is Inc.s’ annual, exclusive list of the fastest-growing private companies in America.

In August, AHS announced a new partnership with Kaplan University, Hagerstown, Maryland which allows top performing Kaplan Health Information Technology and Medical Billing and Coding students to participate in AHS’ compliance training.

In September, AHS announced that the company has hired two industry veterans to join the AHS executive team. John A. (Jay) Roberts has been appointed Chief Financial and Administrative Officer and Michael Youmans has joined as Senior Vice President of Sales and Marketing.

DID yOU KNOW?

There are 90,650 active registrations of eligible provid-ers (EPs) in the Medicare and Medicaid EHR Incentive Programs.

As of August 31, 2011, the total of Medicare EHR Incentive Program payments to both providers and hospitals is over $264,306 million.

There are 2,129 EPs who are successfully demonstrating meaningful use in the Medicare EHR Incentive Program.

As of August 31, 2011, twenty-three (23) states have launched Medicaid EHR Incentive Programs

As of August 31st, over $389 million has been paid to 4,772 providers in Medicaid EHR incentives since the program began in January to both EPs and Hospitals.

This information was first published in CMS’ August 2011 EHR Incentive Program Report.

Do you know an aHS employee who has prevented a significant compliance mis-take from being made? Contact your Compliance Ombudsman or the AHS Compliance Office in Warren or Salem and tell us about it so that we can make that person a Compliance Super Star!

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Health Care Reform: Payment Model Update

Health care reform through the Affordable Care Act (ACA) was designed to improve quality of care and lower medical costs by expanding access and improving care coordination. The ACA started many “experiments” that attempt to deal with some of the perceived limitations in today’s “fee-for-service” payment model.

As healthcare reform advances, care delivery will be-come ever more reliant on pay-for-performance and other mechanisms aimed at rewarding greater continuity of care, provider cooperation, and improved outcome quality.1

Hospitals and providers are plotting their next moves in guaranteeing themselves a spot in this changing medical world.

As a result, AHS is watching how doctors, hospitals and insurers are forging alliances and creating new models for delivering healthcare. Here are some of the organizations that are springing up around the country, designed to fulfill health care reform initiatives.

aCCOUnTaBle CaRe ORGanIzaTIOnS (aCO) CmS/medicare - In our Summer Issue of The Leading Edge, we reviewed CMS’ version of an ACO model as defined in the March 2011 proposed rule, as well as some of their recent demonstration projects.

Other Carriers – insurance carriers other than Medicare are partnering with hospitals and physicians to coordinate servic-es and align incentives. Private carriers believe they have the flexibility in providing data and differential reimbursement to build sustainable ACO models. Some examples:

PaTIenT-CenTeReD meDICal HOme A team-based model of care led by a personal physician who provides continuous and coordinated care throughout a pa-tient’s lifetime to maximize health outcomes. The PCMH prac-tice is responsible for providing all of a patient’s health care needs or appropriately arranging care with other qualified pro-fessionals. PCMH’s can manage population health and costs by following up with patients post-treatment and providing alter-natives to costly emergency room visits.

HOSPITal-PHySICIan InTeGRaTIOn Hospitals and physicians are forming new and different rela-tionships based on models to meet the unique goals of both the hospital and physicians. Some of these integration model options are:3

ReTaIl ClInICS Some groups have partnered with walk-in clinics at the local CVS or Wal-Mart as patients are looking for low level medical care near their home with more flexible hours than the doctor’s office or going to medical centers.

URGenT CaRe CenTeRS (UCC) UCC’s can be low-cost alternatives to the ER and have mostly been set up by ER physician groups. They must accept walk-in patients of all ages during all hours of operation. They can treat a “broad-spectrum” of illnesses and injuries, as well as have the ability to perform minor procedures. An urgent care center must also have on-site diagnostic services.

CIGna has been focusing on helping medical groups form coalitions resembling ACOs and already has at least nine groups up and running and hopes to have about 30 by the end of 2011 and over 100 by the end of 2012.2

medicaid aCO – New Jersey is expected to launch a Med-icaid ACO in early 2012 which may include “high-utilizer” teams that seek to intervene and provide better primary care to individuals who have been high users of emergency room care.

massachusetts Blue Cross Blue Shield – Alternative Qual-ity Contracts: This program was introduced in 2009 and is made up of solo or small practices and joint ventures between physicians and hospitals. A global budget is set for the providers that will be used later to determine extra payments for reducing costs.

Stipends: stipends paid by the hospital to provider groups in exchange for specific services or duties.

Gain-sharing: physician groups agree to manage the hospital’s specialty-specific service line.

Real estate ventures: working together to purchase, lease or develop property thereby maximizing their investment while spreading the risk.

Centers for excellence: hospital and physicians divide responsibilities in a center of excellence with the physi-cians providing the expertise and management and the hospital providing equipment, physical assets, and marketing support.

Professional Services agreements: hospitals can create performance standards without having to directly employ physicians and the physicians are not made to relinquish control of their practice to the hospital.

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FReeSTanDInG emeRGenCy DePaRTmenTSAn alternative for augmenting services in areas where transport to an ER is a challenge. Unlike urgent care centers, which are limited in their hours and services, freestanding EDs are generally open 24/7 and are capable of handling most emergencies and are generally operated by larger health care systems. They are staffed by emergency physicians and nurses, and typically have lab and radiology services on site. They can stabilize and provide initial treatment to patients with a wide range of emergent problems.

amBUlaTORy SURGeRy CenTeRSSpecialists in providing surgery, including certain pain management and diagnostic services, in an outpatient setting. ACOs with sufficiently large panels may be able to direct a steady stream of contracted business to the ASC at guaranteed rates and actuarially-determined volumes. ASC’s are an attractive option for ACO’s and PCMH’s since their costs are significantly lower than Hospital Outpatient Departments.

HOme Home is rapidly becoming the preferred venue for monitoring, testing and follow-up to identify problems before the need arises to access the care system. Telehealth and web-based programs can track the trending of patient status and improve post-discharge compliance.4 _____________________________________________________1.Chew, Keith E., “Multiple Integration Options Benefit Physicians and Hospitals, RBMA Bulletin, May-June 2011, www.rbma.org.

2.Walker, Emily P., AHIP: ACOs Emerge as Hot Topic Among Insurers,”, June 18, 2011, MedPage Today:, http://www.medpagetoday.com/tbprint.cfm?tbid=27134

3.Chew, Keith E., “Multiple Integration Options Benefit Physicians and Hospitals, RBMA Bulletin, May-June 2011, www.rbma.org

4.Edmonson, Bob, 5 Essential Outpatient Venues for Accountable Care, August 8, 2011, http://

www.beckershospitalreview.com/hospital-physician-relationships/5-essential-outpatient-

venues-for-accountable-care.html

OBSERVATION CODES: WHEN AND HOW TO REPORT THEM

Many of us have experienced denials from insurance carriers when our physicians have billed inpatient visit codes for ser-vices performed and approved by carriers as observation ser-vices. It is not always evident to physicians if a patient has been admitted or is in observation.

In order to bill appropriately for hospital evaluation and man-agement (E & M) services, it is important for our physicians to know the status of a patient’s stay in the hospital and to bill the correct CPT code for those services, in order to reduce denials and receive the correct payment.

This summer, the Chambersburg office moved to a larger office of 21,000 sq. ft., adding about 9,000 more sq. ft. of production versus the previous location. The new office, which is in Chambersburg less than 6 miles from the previous location, can also be expanded to add another 15,000 to 20,000 sq. ft., if needed. The move took about 60 days from beginning to end. AHS staff moved in stages over 4 weeks, with everyone in place by the first week of June.

The office installed roughly 7 miles of network cable along with new Shoretel phones. This new phone system now connects Chambersburg with the Salem and Braintree offices and will eventually connect all offices to a central phone system.

Currently, 55 people work in the Chambersburg office with enough space to allow for the addition of another 100 team members.

Chambersburg Expands Due to Growth

CALENDAR FALL 2011

Oct 1 - Last day to begin EHR reporting 2011 incentive Oct 15-19 - ASA Anesthesiology 2011 ChicagoOct 16-19 - RBMA Fall Conference Las VegasOct 20 - New Jersey AASC EdisonOct 27-29 - Becker’s ASC Conference Chicagonov 1 - Physician Fee Schedule Final Rulenov 16-18 - HBMA EHR Summit Scottsdalenov 19 - New Jersey CAP Holmdel

Dec 31 - eRx deadline to avoid 2013 penalty & register for Advanced Imaging Accreditation

Jan 1 - Voluntary Medicare ACO Program starts

Feb 1 - Last Day to register & attest for 2011 EHR Incentive

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On August 28, 2011, CmS issued a coding clarification for reporting observation codes in their CmS Claims Processing manual R2282CP, Pub 100-04 Transmittal 2282 – Clarifica-tion of evaluation and management Payment Policy, which is effective as of January 2011 and will be implemented November 28, 2011. Highlights of this transmittal are presented in this article to simplify observation coding.

WHAT IS OBSERVATION CARE?CMS describes observation care as “a well-defined set of specific, clinically appropriate services, which include ongo-ing short term treatment, assessment, and reassessment”, that are furnished while a decision is being made regarding whether patients will require further treatment as hospital inpatients or if they are able to be discharged from the hospital. Observation services are commonly ordered for patients who originally present to the emergency department.

WHO CAN BILL FOR OBSERVATION CODES? •Only the physician who ordered hospital outpatient observation services and was responsible for the patient during his/her observation care can bill observation codes,

•Aphysicianwhodoesnothaveinpatientadmittingprivileges but who is authorized to furnish hospital outpatient observation services,

•Allotherphysicianswhofurnishconsultationsoradditional evaluations or services must bill the new (99201-99205) or established (99211-99215) outpatient visit codes as appropriate.

What documentation is needed to bill observation services? The physician must satisfy the E/M documentation guidelines for furnishing observation care. In addition to meeting the documentation requirements for history, examination and medical decision making; documentation in the medical report must include:

•The medical observation record for the patient which contains dated and timed physician’s orders regarding the observation services the patient is to receive. Documentation should further note that the stay for observation care or inpatient hospital care involves 8 hours but less than 24 hours.

•Documentationthatthebillingphysicianwaspresentand personally performed the services.

•Documentation identifying the order for observation services, progress notes, and discharge notes were written by the billing physician, and

•Anynursingorotherpractitioner’snotes.

This record must be in addition to any record prepared as a result of an emergency department or outpatient clinic encounter.

HOW TO CODE FOR OBSERVATION SERVICESLike inpatient visit coding, observation services are billed according to initial and subsequent days in observation status. The following observation codes are to be used only by the or-dering physician who renders the patient care.

Observation care less than 8 hours on the same calendar date

•InitialObservationCareshouldbereportedwithCPTcode range 99218 – 99220

•TheObservationCareDischargeService,CPTcode99217, shall not be reported for this scenario.

Observation care minimum of 8 hours but less than 24 hours on same calendar date (Discharge Same Day)

•ObservationorInpatientCareServices(IncludingAdmission and Discharge Services) from CPT code range 99234 –99236 shall be reported.

• The observation discharge, CPT code 99217, shall not be reported for this scenario.

admitted for observation then discharged on a different calendar day

•Report Initial Observation Care, from CPT code range 99218 – 99220, and

•CPTobservationcaredischargeCPTcode99217 Patient is in Observation for a minimum of 3 Days

•Reportaninitialobservationcarecode(99218-99220)forthe first day of observation care, and

• A subsequent observation care code (99224-99226) for each day between the first day of observation care and the discharge date, and

•Anobservationcaredischargecode(99217)fortheobserva tion care on the discharge date

Patient is admitted to inpatient status following observation careMedicare and most other insurance carriers will only pay for one (E & M) visit code for a patient seen by the same physician on the same date of service.

If the same physician who ordered hospital outpatient observa-tion services also admits the patient to inpatient status before the end of the date on which the patient began receiving hospi-tal outpatient observation services, the physician may only billan initial hospital visit for the E & M services provided on that date (99221-99223). The payment for the initial hospital visit in-cludes all services provided to the patient on the date of that admission, including all services provided while the patient was in observation.

If the patient is admitted to inpatient status from hospital out-patient observation care subsequent to the date of initiation of observation services, the physician must bill an initial hospital visit for the services provided on that date. The physician may not bill the hospital observation discharge management code (code 99217) or an outpatient/office visit for the care provided while the patient received hospital outpatient observation ser-vices on the date of admission to inpatient status.

Hospital observation services during global surgical periodThe global surgical fee includes payment for all hospital ob-servation services unless the criteria for use of CPT modifiers “-24,” “-25,” or “-57” are met. Medicare contractors must pay for these services in addition to the global surgical fee only if both of the following requirements are met:

•Thehospitalobservationservicemeetsthecriterianeeded to justify billing it with CPT modifiers “-24,” “-25,” or “-57” (decision for major surgery); and

•Thehospitalobservationservicefurnishedbythesurgeon meets all of the criteria for the hospital observation code billed.

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MEDPAC MAKES SGR RECOMMENDATIONS TO CONGRESS

Everyone knows that this summer’s debt ceiling compromise resulted in a “default” federal budget effective January 1, 2012 unless the “Super Committee” proposes, and Congress accepts, an alternative. What may not be as well known is that the default budget incorporates an SGR cut of 29.5% to the Medicare Physician Fee Schedule.

On September 15, the medicare Payment advisory Commission (medPaC) made a proposal to:

•RepealthecurrentSGRpolicy,

•FreezecurrentMedicarepaymentstoprimarycare physicians for 10 years, and

• Reduce Specialists’ Medicare payments by 5.9% for 3 straight years, followed by 7 years of no change.

MedPAC’s proposal is one of several recommendations to replace the current SGR policy.

aHS will provide more information on the SGR rate and other potential medicare cuts in our next edition of Washington news, to be published the first week of October.

ARE TELERADIOLOGy AND OTHER SPECIALTIES TAKING yOUR BUSINESS?

The Spring and Summer issues of our newsletter began the discussion why your radiology reimbursement may be declining and offered suggestions to improve your revenues. This is the third and last article in our series suggesting two more changes radiologists might make to their practices to increase volume and revenues. The first article asked if you were the radiology of choice for referring physicians in your area; the second article asked if you are the radiology practice of choice for patients.

THIS THIRD aRTICle aSKS TWO QUeSTIOnS:Has your practice lost business by farming out night and weekend call coverage to teleradiology firms?

Are other providers in your area, such as cardiologists and surgeons, performing more of their own tests?

HaS yOUR PRaCTICe lOST BUSIneSS By HIRInG TeleRa-DIOlGy FIRmS FOR nIGHT anD WeeKenD Call COveRaGe?The teleradiology industry provides many advantages to radi-ology practices, such as reducing on-call hours, improving ac-cess to subspecialty expertise, providing supplemental radiol-ogy services and offering fast turnaround times. However, in an article published in the February 2011 issue of the Journal of the American College of Radiology, David Levin, MD, and co-author Vijay Rao, MD, both of Thomas Jefferson University, argue that farming out night and weekend call coverage to teleradiology firms contributes to the “commoditization of radiology, lowered reimbursement, displacement from hospital and outpatient reading contracts, greater encroachment by other specialties, and lowered quality.”1

A survey of AdvantEdge Healthcare Solutions’ radiology clients showed that the majority currently use teleradiology firms for night and/or weekend coverage. The reasons cited include having staff avoid night or weekend call, efficiency, and improving the ability to recruit.

In a 2007 session at an RSna meeting, Dr. James P. Borgst-ede stated that a full radiology service should properly include four components:

1. Pre-examination evaluation of the request for appropriate ness and necessity

2. Supervising and monitoring the examination to ensure its quality

3. Exam interpretation

4. A post-examination evaluation with the referring physician and perhaps the patient

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Dr. Borgstede argued that one or more of these elements has disappeared with the use of teleradiology services resulting in radiology service purchasers treating interpretations as an assembly line commodity that they can buy from the lowest cost provider.2 There is also a belief that the lower fees charged by some teleradiology companies has contributed to govern-ment and commercial payers’ reductions in reimbursement for radiology services.3

Radiology practices which currently don’t cover their night and weekend business should consider how much business they are giving up and if it is worth a few nights of on-call work to keep their business intact and profitable. A quote from Dr. Borg-stede: “The short-term perspective is to have someone take night call so I can sleep. The long-term perspective is to have a secure practice so I can sleep at night for the next 20 years.”

Under the direction of Board of Chancellors’ Chairman John A. Patti, MD, the American College of Radiology (ACR) has devel-oped a Night Coverage Registry that contains in-practice night coverage models from 320 practices. These models can serve as templates and best practices for radiology practices.

aRe OTHeR PROvIDeRS In yOUR aRea, SUCH aS CaRDI-OlOGISTS anD SURGeOnS, PeRFORmInG mORe OF THeIR OWn TeSTS? David C. Levin, MA, professor of radiology at Thomas Jeffer-son University in Philadelphia, compared Medicare noninvasive medical imaging payments from 1998 to 2008. Part B payments to radiologists grew at 24 percent per year from $2.56 billion to $4.65 billion.4 But non-radiologist payments grew at over 60 percent from $2.02 billion to $4.81 billion. As another example, the Government Accountability Office (GAO) found that in 2006 cardiologists obtained 36 percent of their total Medicare rev-enue from in-office imaging, compared with 23 percent in 2000.5

AHS’ survey of radiology practices revealed that about 40 percent have lost business during the past two years to other specialties, including orthopedics and OB/Gyn. Respondents also indicated that they expect losses this year and next. When asked what steps practices have taken to reduce the impact, the primary answers were “better marketing” and “publicizing services.”

What options exist for radiologists wanting to slow or reverse this trend? The first is to be aware of changes taking place with the practice’s referring physicians. Communicating your practice’s expertise and how it can help referring physicians provide better diagnoses is the next step. It should be possible to identify specific types of cases where an overread is warranted. Specific, targeted expertise is a key asset for these discussions.

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