CMS Launches esMD Pilot, Heads Deeper Into Realm of Electronic Health Information

On September 15, 2011, CMS launched its new esMD  pilot program, giving providers a new mechanism for submitting medical documentation.  This launch marks the beginning of phase one of CMS’ initiative and CMS is hoping to make it significantly easier for providers to submit information, as well as easier for CMS’ recovery contractors to identify improper payments by reducing costs and time spent on these transactions.

Out of the 4.8 million Medicare claims processed each day, CMS’ Office of Financial Management estimates that the Medicare Fee-For-Service (FFS) program pays out 34.3 billion annually in improper payments, while the Medicaid FFS program follows with an estimated 22.5 billion annually. The problem is that, to find these improper payments, it takes an individual to compare the claim to the medical documentation.

 CMS employs several types of Medicare review contractors to measure, prevent, identify, and correct these improper payments. Review contractors find the improper payments by requesting medical documentation from each provider who submitted a questionable claim. The review contractor then manually reviews the claims against the submitted medical documentation to verify the providers’ compliance with Medicare’s rules.

During phase one, review contractors will continue to send medical documentation requests via paper mail and providers will have the option to electronically send medical documentation to the review contractor that requested it. Because CMS recognizes that not all providers are adopting HIT solutions at the same pace, it is not mandatory that providers participate in this electronic submission process. Providers may continue to mail or fax documentation to your review contractor. In phase two, scheduled for 2012, contractors will send electronic documentation requests to providers when their claims are selected for review.

 This new esMD Program enables Medicare auditors, including RACs (Recovery Audit Contractors), MACs (Medicare Administrative Contractors), CERT (Comprehensive Error Rate Testing), PERM (Payment Error Rate Measurement) and ZPICs (Zone Program Integrity Contractors), to accept electronic attachments from providers. Over two million requests for medical documentation are sent out annually by these contractors.  A list of review contractors that will accept esMD transactions can be found on the Internet.

 To keep the medical records and other documentation secure during the electronic exchange between the provider and the contractor, esMD will employ the technology of the Nationwide Health Information Network called CONNECT-compatible gateways. Providers will need to obtain access to this gateway.  Certain larger providers, such as hospital chains, may choose to build their own gateway and others may choose to obtain gateway services by entering into a contract or other arrangement with a health information handler (HIH) that offers esMD gateway services. CMS provides an up to date list of HIHs on its website.

There are still a few things providers may want to consider before they participate in esMD. First, it is highly likely that HIHs will charge a fee for the submission of documents through their gateways. Even CMS encourages everyone to shop around and consider pricing.  Also, esMD only accepts information that is in a PDF format. If you are already using an electronic health record system that puts files into PDFs, then there is no need to worry. Otherwise, HIHs may offer scanning and conversion services, but again, at a price.

 This pilot marks one of many ways CMS is easing the way to recover improper Medicare payments, and points towards a future with greater use of electronic health information. As the pilot progresses, it will be clearer just how much of a savings there will be. One this is clear, however, and that is like it or not, providers need to jump in and enter into the world of electronic health information. CMS is clearly moving in the direction of a completely electronic system.

For further information, CMS has issued a special Medlearn Matters  release, as well as created a website for esMD.