AHA Advocates for Incentive Payments for CAH Physicians Using Billing Method 2

In a recent letter to the Acting Administrator for CMS, the American Hospital Association (AHA) strongly urged CMS to correct what it deemed the unfair exclusion of certain physicians from receiving incentive payments from the Medicare and Medicaid Electronic Health Record (EHR) Incentive Program (AHA Letter to CMS on Physician Payments, January 9, 2013). Specifically, the affected physicians provide services in outpatient departments of critical access hospitals (CAHs) and bill for services using Method 2. Under the Method 2 billing approach, a CAH bills Medicare on behalf of the physician using Form UB-04, instead of the Form 1500. Physicians who use Method 2 are not identified by CMS to be eligible for Medicare and Medicaid incentive programs because they are designated as “hospital-based” when they are not.

The AHA had previously written CMS on December 16, 2011, about the very same issue and requested resolution since the issue was time sensitive. CMS acknowledged the first letter and attributed the problem to claims processing limitations, stating that the process for determining which physicians were hospital-based was flawed; however, CMS did not plan to resolve the issue until 2014. The AHA pointed out physicians must attest to meaningful use for 2012 by February 28, 2013, in order to complete the attestation process. If an eligible professional (EP) does not meet the attestation deadline, every year of delay will decrease the EP’s total incentive payment.

The AHA also emphasized that the flaw in CMS’ claims processing system will be very significant for the rural communities served by CAHs. AHA estimated a financial loss of $20,000 per physician, if the physician was not recognized as being eligible for incentive payments because of Method 2. AHA stated it understood CMS uses only Form 1500 claims to set the incentive payment amounts and pointed out some Method 2 physicians, who may have some claims filed on a Form 1500, may be deemed eligible but would receive a smaller incentive payment than they actually deserve. AHA requested that CMS to resolve this issue immediately.