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KOMahonyLaw - Law Office of Kevin P. O'Mahony
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Healthcare Provider/Provider & Provider/Payer (Reimbursement) Disputes

At the Law Office of Kevin O’Mahony, we represent healthcare providers and businesses in both provider/provider and provider/payer or reimbursement disputes. Providers are the hospital or health system, physician or physician group, laboratory services provider, ambulatory care center, dentist, chiropractor, optometrist, therapist, nurse or other party that provides healthcare services and seeks payment for one or more claims from a payer.

Payers or “payors” (both spellings are often used) are the health insurance companies or other parties responsible for: (1) paying all or part of a claim relating to the rendering of healthcare services; or (2) administering the payment of such a claim for another entity. Included as payers are third parties who administer self-funded plans on the plan sponsor’s behalf. Not included are employers who sponsor benefit plans.

Disputes between providers themselves (not involving payers) can arise in multiple contexts. Many, if not all, of those contexts are discussed on the other individual Practice Area pages of this website. We invite you to review those pages, and contact us if you wish to schedule a consultation to discuss a dispute in any of those areas. But Provider/Payer disputes, which are discussed here, have some distinct characteristics, including:

  • The provider sector and the payer sector have ongoing, intertwined relationships with disputes that resurface.
  • These parties must interact with each other more than most other sectors of the healthcare industry. For example, there are patients who are members of payer plans who need ongoing services from providers such as hospitals and physicians.
  • And there are details unique to claims for payment dealing with, for instance, physician reimbursement and treatment coding, that lend themselves to more efficient and less costly handling.

Third-Party Payer & Managed Care Contracting

The United States’ third-party payer healthcare system drives most healthcare providers to enter into contracts with health insurers and managed care organizations. “Managed care” generally describes methods that are intended to lower healthcare costs and improve patient care. Theoretically, managed care delivery systems lower costs and enhance quality of care by providing financial incentives to physicians, other healthcare providers and patients to choose less expensive care options, reduce in-patient hospital stays, increase outpatient surgeries, closely monitor utilization and high-cost patient situations, and share in costs. Unfortunately, managed care also has complicated and created some new problems in our healthcare system, which make it difficult for some physicians and other providers to deliver healthcare profitably without what many consider to be unreasonable (if not unbearable) administrative burdens.

There are multiple types of managed care organizations with varying components, business structures and compensation methods. Some managed care organizations are comprised of only physicians, while others are a combination of hospitals, physicians and other healthcare providers. Specific examples are Independent Practice Associations (“IPAs”), Physician Hospital Organizations (“PHOs”), and Preferred Provider Organizations (“PPOs”) (which also include an insurer or third-party administrator).

Typically, physicians or medical groups enter into a series of contracts (directly or indirectly) with managed care organizations that require the doctors to agree to discounted fees for their services. In exchange for the physicians’ agreement to provide services at lower rates, the managed care entities are responsible for “steering” patients to the physicians or group. A physician or medical group may contract with an IPA or PHO that contracts with a PPO, health insurer or large employer in an arrangement that allows for a third-party payer (an insurer or employer health plan who pays for healthcare) to pay the provider when claims are submitted for patient care. The PPO organizes “networks” of providers that may be included in a health insurance plan pursuant to contracts called “network agreements.”

A hospital, medical group or physician may have multiple contracts in order to participate in a particular network. And a hospital, medical group or physician may participate in multiple networks to obtain additional insured patients. Hospitals, physicians and other healthcare providers may also form “alliances,” as another method of managing and (hopefully) improving care, monitoring utilization, and reducing costs.

While managed care contracts can significantly increase a healthcare provider’s patient volume, participating in networks and other managed care arrangements can be complex and pose risks for providers. Indeed, there are both business and legal risks associated with these contracts.

Providers are in the business of keeping their patients healthy. But confusing contracts filled with complicated provisions and legalese can distract providers from their core mission of improving patient outcomes. Consequently, a provider should obtain the assistance of a qualified healthcare attorney with relevant experience before signing any third-party payer or managed care contract.

Key Terms & Components of Payer Contracts Providers Should Know

Payer contracts define and explain a provider’s reimbursement arrangement for delivering healthcare services to patients covered by a specific health plan. The contracts cover everything from reimbursement rates and provider networks to medical necessity and provider credentialing.

Understanding the terms and provisions in a payer contract is essential to ensure correct and timely reimbursement, prevent claim denials, achieve a smooth revenue cycle, and keep a practice running. Knowing the ins and outs of each contract is crucial to drawing patients to the practice or facility, and being able to offer comprehensive and reimbursable healthcare services to those patients.

Despite the importance of payer contract knowledge, providers (and even their practice administrators and financial advisors) often feel less than confident going up against payer organizations with legal departments, financial analysts and advanced computer software systems. The entire process of contracting and renegotiating with payers is complex, lengthy and time-consuming. And this often causes providers to feel they are at a disadvantage.

However, knowledge is power. And the more providers and their practice administrators know about the terms used in payer contracts, the more effectively they can negotiate and renegotiate contracts to maximize reimbursement and avoid disputes.

But when disputes do arise (as they sometimes unavoidably do), our healthcare, business and litigation law firm can help. Below are some of the key terms and issues involved in contracting and resolving disputes with payers – both private and governmental.

Allowed Amount

According to the Department of Health & Human Services (“HHS”), the “allowed amount” on a payer contract is the maximum amount that a payer will reimburse a provider for a covered healthcare service. Some contracts also refer to the allowed amount as an “eligible expense,” “payment allowance,” or “negotiated rate.”

The allowed amount is what the payer will reimburse for services defined as covered or in-network. This rate may not fully cover provider charges. And patients may be responsible for covering the balance between the allowed amount and the provider charges.

Medicare, for example, sets its allowed amounts for specific services in prospective payment systems by care setting and the Physician Fee Schedule (“PFS”). Private payers tend to use Medicare’s rates as the basis for building their own allowed amounts.

Fee Schedule

A “fee schedule” is a list of fees or payments for specific provider services or supplies, according to the Healthcare Financial Management Association (“HFMA”). Each payer contract should have a fee schedule attached, and providers should push payers to provide a complete fee schedule. The list contained in that schedule should define all covered services and the negotiated rates for each service.

The Centers for Medicare & Medicaid Services (“CMS”) manages the Physician Fee Schedule (“PFS”) for Medicare. Using the PFS, CMS reimburses for physician services under Medicare Part B. Medicare Part A, on the other hand, reimburses for hospital, skilled nursing facility, hospice and home healthcare services provided to Medicare beneficiaries.

Each Current Procedural Terminology (“CPT”) code receives a relative value unit (“RVU”), which then is adjusted for the Geographical Practice Cost Index and the national conversion factor. The result is the Medicare allowed amount for a specific covered service. And other payers (health insurers, etc.) use similar processes to determine the allowed amount for each covered service listed on their fee schedules.

Clean Claim

A “clean” claim is a claim that payers can process without needing additional information, according to HFMA. Incomplete clinical documentation and coding, incorrect patient information, missing physician approvals, and other claim errors result in reimbursement delays and claim denials. Failing to ensure a claim is complete and correct, otherwise known as “clean,” can seriously impact provider revenue.

Payer contracts define what a payer needs to ensure timely reimbursement of claims. So, to ensure financial survival and (hopefully) success, providers need to pay close attention to the terms of those contracts to ensure that their claims are clean.

Providers should also track their clean claim rate to evaluate their revenue cycle performance. Higher clean claim rates indicate that medical billing, coding and claim creation processes are running properly and revenue is being collected efficiently.

Medical Necessity

Payers only reimburse providers for services that are deemed “medically necessary.” Payers define medical necessity in their contracts. So, again, in order to ensure financial survival, providers must pay close attention to and understand what types of services will be covered under their payer agreements.

According to HHS, healthcare services or supplies that are needed to diagnose or treat a condition, illness, disease, injury or related symptoms are considered “medically necessary.” Medically necessary services also must meet generally accepted standards of medicine, according to HHS.

Medical necessity clauses may also limit the number of times providers can perform a procedure or deliver specific care in a specified time period. And for Medicare and Medicaid, the National Coverage Determinations and Local Coverage Determinations impose limits on how many times a provider can deliver a medically necessary service within a certain period.

Providers should be sure they understand each payer’s definition of medical necessity, because definitions may vary (at least slightly) by contract. And the provider’s own definition or understanding may be different than the payer’s. Being on the same page is important not only to receive reimbursement for services. It is also crucial to avoid civil liability and even criminal penalties. That is because billing payers for services that are known to be medically unnecessary can result in healthcare fraud investigations and punishment.

Providers need to keep in mind that what they may consider to be an “innocent mistake” or mere “billing error” may be characterized by the government or a private payer as “fraud.” So, careful attention to submitting clean claims for only medically necessary and appropriately delivered medical services is crucial for providers to survive financially and legally.

It is also important to bear in mind that federal regulations have long barred the routine waiver of coinsurance and copayments for federal healthcare program beneficiaries. Providers who routinely discount or waive patients’ copayments or deductibles (collectively referred to as coinsurance or copayment obligations) can, for example, violate the federal anti-kickback statute (42 U.S.C. § 1320a-7b), or be accused of false billing by private insurers not receiving the discount. Consequently, providers must be careful and take certain steps before offering or allowing any such discount or waiver to a patient.

Although CMS and HHS’ Office of Inspector General (“OIG”) may not react to an occasional waiver of copayment obligations due to financial hardship or uncollectibility, routine waivers of copayment obligations under Medicare is clearly problematic. The federal anti-kickback statute prohibits the offering of any remuneration to induce a person to purchase or order any service for which payment may be made under Medicare. The routine waiver of a patient’s copayment obligations implicates this prohibition because it reduces the amount that the patient pays for services, and may therefore induce the patient to seek more services that are payable by Medicare.

The OIG has promulgated regulations defining and further specifying those payment practices which will not subject providers to penalties under the anti-kickback statute in what are known as “safe harbors.” But when discussing the propriety of discounts, the OIG stated unequivocally that safe harbor protection does not apply to any discount offered to beneficiaries in the form of “a reduction in price offered to a beneficiary (such as a routine reduction or waiver of any coinsurance or deductible amount owed by a program beneficiary).” (See 42 C.F.R. § 1001.952(h)(5)(iv).)

Moreover, private health insurers often take the same position with regard to their beneficiaries, believing that such routine waivers indicate or lead to provision of unnecessary services or services in excess of patients’ needs. Like CMS and the OIG, private insurers and courts are generally not alarmed by occasional waivers, discounts or write-offs for individual patients with documented financial difficulties. But health insurers have successfully challenged routine waivers of copayment obligations in the courts on numerous occasions.

Courts dealing with challenges to discounts of copayment obligations have been concerned with two basic issues. First, a provider who discounts established fees for some patients but not others, without a valid distinction for the differing treatment, can be subject to claims of false billing by a party not receiving the discount or consideration, including claims by insurance carriers. Second, the routine waiver of patient copayment amounts can be viewed as a breach of contract.

Almost without exception, insurers impose a contractual duty on providers to make a reasonable effort to collect applicable copayment amounts from patients, and benefits are only available when the charge for the service submitted by the provider is the actual, and the usual, reasonable and customary charge. The reasoning in these cases is that frequent discounting or waiver of patients’ copayment portion of a provider’s fee shows that the provider really only intends to collect that portion of the fee which is not discounted, making it improper to claim that the fee is the full undiscounted fee.

Therefore, routinely offering discounts to patients is extremely risky and not advised. It can implicate multiple federal and state laws, and may attract the scrutiny of government investigators, as well as private insurance audits. Under certain limited circumstances, providers may occasionally waive or discount patient co-pays, based on legitimate financial need, hardship or uncollectibility. But the individualized circumstances warranting such a discount or waiver must be well documented. And the the provider’s billing practices should be consistent, reasonable and set forth in a written policy.

Network Requirements

Network requirements are another key component of payer contracts. Such provisions detail the networks in which provider organizations can participate, as well as the credentialing requirements providers must meet in order to join a network.

Providers should ensure that they join appropriate networks for their practice to generate revenue and increase patient volume. Network requirements in payer contracts are becoming even more important as the number of value-based contracts increases.

“Value-based care” (reimbursement that ties payments for care delivery to the quality of care provided and rewards efficiency and effectiveness, as opposed to fee-for-service reimbursement, which pays providers retrospectively for services delivered based on bill charges or annual fee schedules) is producing different networks for different products. And there almost always is language in contracts that pertains to credentialing criteria that providers have to meet in order to be included in a network.

However, a contract may also have language that enables the payer to pick and choose which physicians or individual providers can participate in which networks. From the provider’s perspective, a payer contract should not contain language that allows the payer to select a provider organization’s network. And network changes should be tied to legitimate credentialing criteria only and not arbitrary selection of physicians.

Unilateral Amendments

Payer contracts that contain unilateral amendments mean that payers can change contract provisions without the consent of (and sometimes without even notifying) the provider. If a contract contains unilateral amendment language, payers can change anything from reimbursement rates to clean claim definitions, and even network participation.

Most payer contracts state that the payer can amend the contract at any time. In the worst cases, they state that no approval is required from the provider at all. In even the best cases, they usually indicate that a provider has only a limited period of time, typically 10 to 30 days, to object to a proposed amendment in writing.

Otherwise, the amendment automatically goes into effect. Providers should therefore be aware of unilateral amendment language in their contracts, and attempt to negotiate with payers to exclude (or at least improve) such language in future contracts, to the extent possible.


Payer contracts should clearly define the contract’s period and the circumstances under which the provider and payer can terminate the agreement. There can be an initial “term” (typically one year) before the contract automatically expires. Or, it may automatically renew unless specifically terminated. And there usually are both termination “for cause” and termination “without cause” provisions.

With regard to terminations for cause, there normally is a “right to cure” provision, providing a limited time to remedy or fix a material breach or violation of the contract. But for serious enough breaches (such as license suspension or revocation, conviction of a crime, etc.), the termination can be automatic and immediate. Termination without cause provisions normally specify a set number of days (typically anywhere from 15 to 180 days) in which a contract can be terminated for any or no reason at all, by simply providing written notice of termination to the other party. Post-termination duties for both parties should also be specified in the contract, including obligations for the payer to pay any outstanding compensation to the physician or true-up based on a pro rata portion of the performance year, etc.

Dispute Resolution

Statistical analyses have shown that a significant percentage (up to 10% or more) of both hospital and physician charges initially result in claim denials by payers. Therefore, providers need to ensure that their payer contracts have clear dispute resolution processes. Dispute resolution language can include anything from informal resolution processes to formal litigation.

In a payer contract, dispute resolution language normally sets out at least some of the terms for mediating, arbitrating, or (if necessary) litigating in court, provider-payer disputes. In the event of a claim denial or a disputed claim, dispute resolution provisions in the payer contract will direct a provider on how to try to resolve the claim(s) in question, and (hopefully) receive reimbursement if it is owed.

Once again, as the number of value-based contracts increases, dispute resolution language is becoming even more important, because value-based reimbursement criteria often present even more opportunities for claim denials and disputes over claims. In general, providers should try to avoid or negotiate away as much as possible language in a contract that legally binds them to a specific dispute resolution process to the exclusion of others. That is because providers (more than payers) may need the leverage of litigation to get a fair resolution of a dispute.

As the American Medical Association has observed, “in contractual disagreements between physicians and payers, the aggrieved party is often the physician.” “And the absence of language stating that these [alternative dispute resolution proceedings, such as mediation and arbitration] provisions are binding [or mandatory] may give some wiggle room for this leverage. This isn’t the place, therefore, to argue for hard-nosed [mandatory] language.”

Resolving Provider-Payer Disputes & Denied Claims Litigation

In the healthcare industry, providers and payers often have claims for both underpayment and overpayment arising from ongoing contracts or other healthcare services rendered. When claims arise between a provider and a payer, they often are aggregated and combined for purposes of litigation, sometimes totaling thousands of claims in a single action. When the parties are unable to resolve the claims informally, they often become the subject of either a civil action or arbitration proceeding. In either case, the parties usually try to settle those claims and do so often in mediation. But at least occasionally, a trial and even appeals are required to resolve a dispute.

What makes provider-payer disputes unique is that there often are multiple issues or categories of issues involving decision makers from different departments within the same organization (i.e., claims people vs. contracts people vs. case administrators, etc.). Moreover, each issue group may contain hundreds or thousands of separate claims which arise under the same contractual relationship. Because the claims are individually small, the provider usually waits until it has gathered a sufficient number of claims to make filing a legal action or mediating a case pre-litigation worthwhile.

These types of claims fall into several categories, such as lack of authorization, medical necessity, usual and customary rates, and the like. Typically, they span a range of dates of service. Then during the pendency of an action, there may accrue additional claims for additional dates of service or claims that were not part of the original claim(s), but which arose under the same contractual or non-contractual relationship as the original claim(s).

At the same time, the existing contract may be expiring, may have expired, or may be in the process of being renegotiated during the pending action. So by the time of a mediation, arbitration or trial, there are “original” claims, “accrued” claims, “future” claims certain to arise from the relationship, and often contract issues that need to be addressed since the relationship between the parties is ongoing. So the sooner a dispute can be resolved, the better for both parties from a financial and risk management standpoint.

The Medicare Secondary Payer Act

Medicare Secondary Payer (“MSP”) is the term generally used when the Medicare program does not have primary payment responsibility – that is, when another entity (i.e., a health insurer or other payer) has the responsibility for paying before Medicare. When Medicare began in 1966, it was the primary payer for all beneficiaries’ claims except for those covered by Workers’ Compensation, Federal Black Lung benefits, and Veteran’s Administration benefits.

In 1980, Congress passed legislation that made Medicare the “secondary payer” to certain primary plans in an effort to shift costs from Medicare to the appropriate private sources of payment. The MSP provisions have protected Medicare Trust Funds by ensuring that Medicare does not pay for items and services that certain health insurance or coverage is primarily responsible for paying. The MSP provisions apply to situations when Medicare is not the beneficiary’s primary health insurance coverage. The Medicare statute and regulations require that all entities that bill Medicare for items or services rendered to beneficiaries must determine whether Medicare is the primary payer for those items or services.

“Primary payers” are those that have the first responsibility for paying a claim. Medicare remains the primary payer for beneficiaries who are not covered by other types of health insurance or coverage. Medicare is also the primary payer in certain instances, provided several conditions are met. CMS develops Conditions of Participation (“CoPs”) and Conditions for Coverage (“CfCs”) that healthcare organizations must meet in order to begin and continue participating in the Medicare and Medicaid programs. These health and safety standards are the foundation for improving quality and protecting the health and safety of beneficiaries. They are a core set of patient health and safety requirements that often represent congressional prerogatives and/or the informed judgment of public health and other policy experts. CMS also ensures that the standards of accrediting organizations recognized by CMS (through a process called “deeming”) meet or exceed the Medicare standards set forth in the CoPs/CfCs.

When there is more than one payer potentially responsible to pay a claim, coordination of benefits (“CoB”) rules decide which one pays first. The “primary payer” pays what it owes on patient bills first, and then sends the rest to the “secondary payer” to pay. In some cases, there may also be a third or “tertiary” payer. The insurance that pays first (the primary payer) pays up to the limits of its coverage. The one that pays second (the secondary payer) only pays if there are costs the primary insurer did not cover. The secondary payer (which may be Medicare) may not pay all the uncovered costs. If the insurance company does not pay the claim promptly (usually within 120 days), a provider may bill Medicare. Medicare may then make a “conditional” payment to pay the bill, but will seek to recover any payments the primary payer should have made.

In providing services to Medicare beneficiaries, providers need to keep these Medicare Secondary Payer rules in mind, to the extent the patient may have other coverage, which may be primary. And disputes over such issues are another area where we, as healthcare counsel, may be of assistance.

Medicare Provider Reimbursement Review

The Provider Reimbursement Review Board (“PRRB”) is an independent panel to which a certified Medicare provider of services may appeal if it is dissatisfied with a final determination by its Medicare contractor or by CMS. See regulations at 42 C.F.R. § 405, Subpart R.

If you have questions about filing an appeal, the status of a current appeal, etc., you can contact the PRRB via its main telephone line at 410-786-2671 or by e-mail at Or, we would be happy to assist you.

Accountable Care Organizations

Hospitals and health systems continue to test and adopt alternative payment and delivery models besides fees-for-service, such as Accountable Care Organizations. Accountable Care Organizations (“ACOs”) are groups of clinicians, hospitals and other healthcare providers who come together voluntarily to give coordinated high-quality care to a designated group of patients. While some private insurance plans have contracted with ACOs, this section refers mainly to Medicare ACOs.

Coordinated care seeks to ensure that patients, especially the chronically ill, get the right care at the right time, while avoiding unnecessary duplication of services and preventing medical errors. Under Medicare, when an ACO succeeds both in delivering high-quality care and spending healthcare dollars more wisely, it will share in the savings it achieves for the Medicare program.

The ACO model was included in national healthcare reform legislation as one of several demonstration programs to be administered by CMS. Participating ACOs assume accountability for improving the quality and cost of care for a defined patient population of Medicare beneficiaries. ACOs in turn receive part of any savings generated from care coordination as long as quality was also maintained.

Medicare offers several different types of ACO programs, including:

  • Medicare Shared Savings Program ( – works to achieve better health for individuals, better population health, and lowering growth in expenditures for fee-for-service beneficiaries
  • ACO Investment Model – for ACOs to test pre-paid savings approaches to support Medicare Shared Savings Program in rural and underserved areas
  • Advance Payment ACO Model – for certain eligible providers already in or interested in the Medicare Shared Savings Program
  • Next Generation ACO Model – for ACOs experienced in managing care for populations of patients; allows providers to assume more financial risk than other ACO programs
  • Pioneer ACO Model – for healthcare organizations and providers already experienced in coordinating care for patients across care settings
  • Comprehensive ESRD Care Initiative – for beneficiaries receiving dialysis services

Under the Medicare Shared Savings Program (“MSSP”), ACOs are held accountable for the total cost of care and quality outcomes for an assigned beneficiary population. In the one-sided model, ACOs receive a share of any savings, but don’t take on any financial risk if spending exceeds their benchmark. ACOs in the two-sided model have downside financial risk, meaning they must pay Medicare for any losses. At the same time, these ACOs share a larger portion of any savings.

In December 2018, CMS issued a final rule  that redesigned the MSSP, including accelerating the pace for participating ACOs to take on financial risk. The final rule lowered shared savings rates from 50% to 40% for one-sided models in the basic track. For all two-sided models in the basic track, the savings rate was set at a maximum of 50%.

In July 2020, CMS announced the release of a new toolkit highlighting strategies used by ACOs to engage providers. Specifically, the toolkit explores how ACOs:

  • Communicate with providers about the ACO as a value-based care organization;
  • Use data to identify and address opportunities for improving care;
  • Offer customized support to primary care providers and specialists; and
  • Implement financial incentives.

The provider engagement toolkit is the third in a broader series designed to educate the public about the strategies ACOs use to provide value-based care while also providing actionable ideas to current and prospective ACOs to help them improve or begin operations. CMS released the first toolkit on care coordination in April 2019 and the second toolkit on beneficiary engagement in November 2019. More information on the toolkits, including the previously-released care coordination toolkit and beneficiary engagement toolkit, can obtained by visiting the ACO General Information web page.

On July 24, 2020, House lawmakers introduced a bipartisan bill that would make “commonsense changes” to requirements for Medicare’s Alternative Payment Models (“APMs”) and ACOs in an effort to increase participation in these value-based payment programs. According to a summary of the legislation, the “Value in Health Care Act” would increase the percent of shared savings that new ACOs in the MSSP receive.

“The vast majority of ACOs begin in shared savings-only models before advancing on the path to risk-bearing models, and models need to remain attractive enough to create a pipeline for ACOs to assume risk,” the legislative summary states. The bill would raise the MSSP basic track shared saving rates for one-sided models back to 50% and for two-sided models to between 55% and 60%. It also would modify risk adjustment to “better reflect factors participants encounter like health and other risk variables in their communities”; remove barriers to ACO participation; modify performance metrics so participants aren’t competing against their own successes in improving care; and extend the annual 5% participation bonus for Advanced APMs for an additional six years.

Thirteen national health care groups announced their support of the measure, including the National Association of ACOs, American College of Physicians, the American Medical Association and the American Hospital Association. According to its supporters, the Value in Health Care Act would make sensible modifications to the existing APM parameters and encourage more providers to participate. This ultimately would help patients by improving the quality of care and outcomes.

Coronavirus/COVID-19 Pandemic Reimbursement Updates

Provider Reimbursement Review Board Alert 19 Amends Procedures in Light of Coronavirus Pandemic

(This update came from the American Health Law Association’s Regulation, Accreditation & Payment Practice Group, and Kenneth R. Marcus of Honigman LLP.)

On March 25, 2020, in response to the COVID-19 pandemic, the Provider Reimbursement Review Board issued Alert 19 (the numbering is entirely coincidental), which suspends what the PRRB calls “Board Set Deadlines” and provides other special instructions regarding Board procedures during the pandemic. In issuing Alert 19 “[t]he Board recognizes that the immediate focus and priorities of Providers should be on caring for their patients. Likewise, the Board wants to ensure the health and safety of all relevant parties before the Board, while continuing to operate in the most efficient manner possible.” Recognizing the fluidity of the crisis, “the Board plans to continuously reassess its response and will issue additional updates through Board Alerts, as necessary.” Providers and their representatives are well advised to review Alert 19 and, as always, to remain vigilant regarding filing deadlines. Additional details are available here.

CMS Promotes Telehealth & Expands Accelerated & Advance Payment Program & Medicare Telehealth Services Benefit

In a March 24, 2020 FAQ, CMS stated that “[t]he widespread availability and usage of telehealth services is vital to combat COVID-19” and expressed support for the promotion of telehealth by issuers, saying: “We strongly encourage all issuers to promote the use of telehealth services, including by notifying policyholders and beneficiaries of their availability, by ensuring access to a robust suite of telehealth services, including mental health and substance use disorder services, and by covering telehealth services without cost sharing or other medical management requirements.

In the individual and small group markets, CMS will permit “any service provided through telehealth that is reimbursable under applicable state law and otherwise meets applicable risk adjustment data submission standards” to be used for purposes of the risk adjustment program.” (See CMS’s Risk Adjustment FAQ on COVID-19, Apr. 27, 2020, here.) On March 28, 2020, CMS announced an expansion of its accelerated and advance payment program for Medicare participating healthcare providers and suppliers to ensure they have the resources needed to combat COVID-19. CMS’s fact sheet appears here. On April 2, 2020, CMS provided the AHA and hospitals additional details on the accelerated/advanced payment program. See the AHA advisory here for details.

On April 3, 2020, CMS released a video providing answers to common questions about the Medicare telehealth services benefit. CMS is expanding this benefit on a temporary and emergency basis under the 1135 waiver authority and Coronavirus Preparedness and Response Supplemental Appropriations Act. (See CMS’s News Alert, Apr. 6, 2020, here.) CMS provided technical guidance including the telehealth codes eligible for inclusion in risk adjustment, such as:

  • HCPCS codes G0425, G0426, G0427, G0406, G0407, G0408, G0459, G0508, and G0509;
  • Other services may be eligible for inclusion by using modifier codes such as 95, GQ, or GT, or with a place or service code “02”; and
  • Six e-visit codes will be designated to expand the use of telehealth and virtual care and valid for risk adjustment purposes—CPT Codes 99421-00423 and HCPCS codes G2061–G2063.

Helpful information about telehealth for both healthcare providers and patients can be viewed at Other telehealth and virtual care guidelines can be accessed at The AMA also continues to update its Quick Guide to Telemedicine in Practice, a resource designed to help mobilize remote care with implementation tips, as well as a reference to CPT codes for reporting telemedicine and remote care services.

Georgia Emergency Waivers & Flexibilities to Help Fight COVID-19 Approved by CMS 

On March 28, 2020, Governor Kemp and the Department of Community Health (“DCH”) submitted a request to CMS for an 1135 Medicaid waiver. Concurrently, the Georgia Hospital Association (“GHA”) submitted a request to CMS for an 1135 Medicare waiver. These waivers are intended to increase healthcare providers’ ability to care for patients as they fight COVID-19 by reducing federal regulations.

The 1135 Medicaid and Medicare waivers are a significant step toward easing administrative burdens on Georgia hospitals and healthcare providers during the public health emergency without compromising quality of care or patient safety. “Additionally, these requests would make it easier for patients to be treated at home when possible, remove any red tape to allow for transferring patients to appropriate care settings, and expedite credentialing of providers to reinforce the healthcare workforce across the state,” according to Earl Rogers, GHA’s president.

“Pending CMS consideration and approval, Georgia’s 1135 waiver is designed to provide a number of flexibilities for Medicaid and PeachCare for Kids® providers and members. Some examples of requested flexibilities include modifying the Medicaid authorizations process to enhance fee-for-service prior authorization requirements by extending certain pre-existing authorizations; expediting long-term care services and supports process for pre-admission screening and annual resident review; extending fair hearings and appeal timelines for managed care and fee-for-service enrollees; streamlining provider enrollment, recredentialing, and revalidation processes, including for out-of-state providers; modifying reporting and oversight requirements in certain healthcare facilities; and expanding provider settings to help ensure our providers can deliver care in non-traditional settings. These waiver requests, in addition to a recent expansion of telehealth options for patients and providers, will help to promote access to care during this unprecedented public health emergency,” according to DCH Commissioner Frank Berry.

By March 30, 2020, CMS had approved GHA’s 1135 Medicare waiver request. The list of approved waivers can be viewed here. On April 1, 2020, CMS approved Georgia’s section 1135 waiver request on the temporary checklist, granting the state a number of flexibilities for Medicaid and PeachCare for Kids® providers and members to combat the COVID-19 public health emergency. CMS’s “Coronavirus Waivers & Flexibilities” webpage can be accessed here. And CMS’s Medicaid Telehealth and Substance Use Disorder Prevention Guidance can be viewed here. CMS has also issued new guidance to states to allow temporary COVID-19-related modifications in provider payment methodologies and capitation rates under Medicaid managed care plans. States would be allowed to use directed payments to increase provider payments within managed care arrangements. (See the AHA bulletin.)

On May 20, 2020, CMS approved Georgia’s emergency Medicaid state plan amendment (“SPA”), which modifies certain policies and procedures under Georgia’s Medicaid state plan for the period of the national COVID-19 public health emergency (“PHE”). Among other things, the SPA suspends all copayments for individuals covered by Medicaid for the duration of the PHE; permits telehealth services that are provided via telephone to be reimbursable under Medicaid for the duration of the PHE; and provides for periodic interim payments to be made to skilled nursing facilities for the duration of the PHE.

Coverage for COVID-19 Testing/Health Insurers Temporarily Waive Treatment Cost-Sharing During Crisis

On March 30, 2020, health insurers Cigna and Humana announced that they would waive consumer costs associated with COVID-19 treatment. And just before that, CVS Health announced a more limited change — that Aetna would waive costs to patients for hospital admissions related to the coronavirus. So far, Aetna and Cigna are pledging to waive COVID-19 treatment costs through qualified medical bills that are incurred until June 1, 2020. As of this writing, Humana’s policy does not yet have an end date.

Anthem announced that effective April 1, 2020, plan members being treated for COVID-19 will have their cost sharing waived. The for-profit Blue Cross/Blue Shield insurer said the expanded coverage would continue through May 31, 2020, and it is encouraging self-funded employers to do the same. “During these challenging times, Anthem stands by our legacy and commitment to living our values and supporting those we serve,” said Anthem President and CEO Gail  Boudreaux, in a statement.

Shortly thereafter, UnitedHealthcare became the latest big-name insurer to waive members’ cost-sharing for COVID-19 treatments. UHC said it would waive the associated costs for members in its fully insured commercial, Medicare Advantage and Medicaid plans. The insurer added that it is working with interested self-funded employer plans to offer the same waivers. The UHC waivers will be available through May 31, 2020. UHC also announced that it will waive cost-sharing for in-network telehealth visits that are not for COVID-19-related needs through June 18, 2020. This is in addition to existing waivers for telehealth visits for COVID-19 testing and for virtual visits with the insurers’ preferred partners.

On April 1, 2020, Centene, the parent company of Peach State Health Plan’s Medicaid, Medicare and exchange plans, also announced that it is waiving cost shares for testing and treatment related to COVID-19. Centene also announced a number of efforts to support communities and safety net providers, including FQHCs, behavioral health and long-term care providers. And other health plans are taking similar steps.

On April 1, 2020, the American Hospital Association urged the nation’s five largest private health insurance companies – Aetna, Anthem, Humana, Cigna and UnitedHealthCare – and organizations that represent insurers to support stable cash flow, eliminate administrative processes that delay payment, provide adequate coverage and reimbursement, and expedite processing of outstanding claims. AHA’s letters to the insurers can be viewed here.

On April 11, 2020, it was reported that the Administration said “it will require health insurers to provide free antibody tests that could provide better insight into the scale of the U.S. coronavirus outbreak.” Congress has “required that all Americans, including people without health insurance, receive free diagnostic tests to determine whether they are sick with coronavirus.” The Administration “said it had authority from recent emergency rescue packages to mandate private insurers also provide antibody testing without out-of-pocket costs.”

Also on April 11, 2020, CMS, DOL and the Treasury Department issued guidance to health plans clarifying coverage requirements for private payers in the CARES Act and the FFCRA. Under the bills, commercial health plans are required to provide access to COVID-19 testing and visits for care related to the virus through doctors’ offices, urgent care centers, and emergency departments available at no cost. CMS also said that the mandates will extend to antibody testing once it is made more readily available. And in response to questions, on April 21, 2020, CMS encouraged health insurers to relax otherwise applicable utilization management processes, as permitted by state law, to ensure that staff at hospitals, clinics and pharmacies can focus their limited time and resources on care delivery.

On May 29, 2020, Bloomberg Law reported that “At least five insurers … have decided to lengthen the period for which they would waive out-of-pocket costs related to the coronavirus past the initial June 1 end date, according to America’s Health Insurance Plans (AHIP), an industry trade group.” The “insurers’ decisions on whether to continue to waive patient costs come as the nation begins to emerge from a months-long lockdown. Public health officials see widespread testing, as well as contact tracing, as critical to states being able to contain outbreaks.” An AHIP summary of how health insurers are responding to the pandemic can be accessed here.

In the wake of large anti-racism demonstrations and increased group gatherings around the country, public health officials have been encouraging protesters and more people in general to get tested for the coronavirus. However, as such precautionary testing has become more common, some health insurers are arguing they cannot pay for everyone who is concerned about their risk to get tested. While the Families First Coronavirus Response Act passed by Congress and effective April 1, 2020, requires health plans to fully pay for testing deemed “medically necessary,” as testing continues to expand to allow people without symptoms to be tested, a “gray area” has emerged. CMS’s guidance says full coverage is required “when medically appropriate for the individual, as determined by the individual’s attending health care provider in accordance with accepted standards of current medical practice.” But that guidance leaves room for argument between payers on the one hand, and providers and patients on the other.

Moreover, according to guidance released by the Trump administration on June 23, 2020, “insurers are not required to cover COVID-19 tests that employers may mandate as they bring employees back to work.” While the Families First Coronavirus Response Act required insurers to cover COVID-19 tests without patient cost-sharing, the guidance clarified that “the law only applies to tests that are deemed ‘medically appropriate’ by a healthcare provider.”

On June 19, 2020, CMS instructed Medicare Administrative Contactors and notified Medicare Advantage plans to cover COVID-19 laboratory tests for nursing home residents and patients. This instruction follows the CDC’s recent update of COVID-19 testing guidelines for nursing homes that provides recommendations for testing of nursing home residents and patients with COVID-19 symptoms, as well as for asymptomatic residents and patients who have been exposed to COVID-19. Original Medicare and Medicare Advantage plans will cover COVID-19 lab tests consistent with CDC guidance.

As of August 2020, COVID care testing and treatment are covered by most payers with no cost sharing. Moreover, nearly all insurance payers continue to cover the costs of virtual visits, and many have no copay for primary care visits performed using synchronous audio-video devices. However, more than a third of people with individual and fully insured group coverage are in plans in which cost-sharing waivers for COVID-19 treatment have already expired, or are slated to by the end of September 2020.

CMS Issues New Guidance for Providers Seeking Payment for Treating Medicare Patients with COVID-19

On August 17, 2020, CMS issued new guidance intended to update how providers get paid for treating COVID-19 starting as early as September 1. According to several reports, beginning in September 2020, “providers that want to get Medicare payments for treating a patient with COVID-19 must include a positive test in that patient’s medical record.” “The impetus for the new change is to combat fraud,” the agency said. According to the guidance, “The test must be performed either during the hospital admission or prior to the hospital admission.” The guidance indicates that if the “patient has been diagnosed with COVID-19 and needs to be admitted to a hospital, the payment to the hospital is increased by 20% to reflect the additional costs of treating a patient with COVID-19.” (See, e.g., 8/18/20 articles by R. King in FierceHealthcare and S. Morse in Healthcare Finance News.)

CMS’s updated guidance relates to the 20% add-on to the inpatient prospective payment system (“PPS”) diagnosis-related group (“DRG”) rate for patients diagnosed with COVID-19 for the duration of the public health emergency. In other words, for inpatient admissions occurring on or after September 1, 2020, claims eligible for the 20% add-on will be required to have a positive COVID-19 laboratory test documented in patients’ medical records. Positive tests must be demonstrated using only the results of viral testing. The inpatient PPS Pricer will continue to apply the 20% adjustment based on appropriate diagnosis codes; however, CMS may conduct post-payment medical review to confirm the presence of a positive COVID-19 test in the medical record. If no such test is present, the additional payment resulting from the 20% add-on may be recouped.

COVID-19 Coding Guidance & Telehealth Toolkit

The American Medical Association released two CPT codes(86328 and 86769) for reporting antibody testing for COVID-19 and revised its CPT code for SARS-CoV-2 nucleic acid tests (86318). Providers can manually upload the code descriptors into their EHR systems. (See additional guidance on the CPT codes.) And on April 23, 2020, CMS announced that the Trump Administration released a new toolkit for states to help accelerate adoption of broader telehealth coverage policies in Medicaid and CHIP during the COVID-19 pandemic. The objective “is to make it easier for Medicaid and CHIP enrollees to receive health care at home rather than at a doctor’s office or emergency room, where they could become exposed to – or pass along – the virus.”

On April 27, 2020, HHS, through the Health Resources and Services Administration (“HRSA”), launched a new COVID-19 Uninsured Program Portal, allowing healthcare providers who have conducted COVID-19 testing or provided treatment for uninsured COVID-19 individuals on or after February 4, 2020 to submit claims for reimbursement. Providers can access the portal at Providers can request reimbursement starting May 6, 2020 if they have treated or tested an uninsured patient for COVID-19, but only if they agree not to balance bill the patient.

Providers can register on HRSA’s website. The program will be administered by United Health Group, so providers must have an Optum ID to register. (See Optum’s summary of key points for claims submission.) Coding for COVID-19 testing and diagnoses answers questions about which codes will be recognized as shown in the Billing Codes section of HRSA’s website. (See the COVID-19 Uninsured Program FAQ for more information.)

Also, the American Health Information Management Association published an article explaining coding for COVID-19 testing and diagnoses that answers many questions about the codes that will be recognized as shown in the Billing Codes section of HRSA’s website. And CMS has developed two HCPCS codes that healthcare providers and laboratories can use to bill for certain COVID-19 diagnostic tests. (See more information and updates on these codes.)

CMS continues to amend and update its lengthy guidance on Medicare Fee for Service Billing as it relates to the COVID-19 pandemic. On May 27, 2020, CMS added language that addresses questions regarding the CARES Act and how it affects the Inpatient Prospective Payment System (“IPPS”). The update included information on how discharges for individuals with COVID-19 should be identified, including different diagnosis codes for discharges between January 27 and March 31, and for discharges occurring on or after April 1 through the duration of the public health emergency period. CMS also clarified that the CARES Act “directs the Secretary to increase the IPPS weighting factor of the assigned diagnosis-related group by 20 percent” for diagnosed COVID-19 patients discharged during the public health emergency period.

On June 1, 2020, CMS provided an update that clarifies when providers must use modifier CR (catastrophe/disaster related) and/or condition code DR (disaster related) when submitting claims to Medicare. The update includes a chart of blanket waivers and flexibilities that require the modifier or condition code.

In its June 2, 2020 update, CMS added or revised nine new provisions to the guidance contained in the FAQ. The revisions include clarifications regarding national coverage determinations and when telehealth may satisfy certain face-to-face requirements. CMS stated that as it continues to thoroughly assess the CARES Act, new and revised guidance will be released as implementation plans are announced. Therefore, additional updates from CMS are expected. Providers should carefully monitor the guidance contained on the COVID-19 FAQ page to evaluate the impact of new guidance on facility operations and finances.

Telehealth Coding Tips

Below are some tips healthcare reimbursement experts suggest for coding various types of telehealth services so as to help ensure compliance.

Telephone (Audio-Only) Services

When social distancing is needed, telephone (audio-only) services have become a practical way to improve patient access and prevent spread of COVID-19. Telephone services (which generally require a minimum of five minutes of medical discussion) can be ideal for minor health problems that don’t require visual examination by a healthcare provider, such as medication refills, etc. For audio-only services, consider the codes listed below that Medicare accepts during the current public health emergency. Commercial payers may accept these codes, as well. Once the PHE has concluded, Medicare may only accept G2012 (virtual check-in) for telephone services.

  • Document verbal consent, including patient acknowledgement and acceptance of any copayments or coinsurance amounts due.
  • Only count time spent on the phone engaging in medical discussion with the patient or caregiver. Do not report these codes for conversations lasting less than five minutes.
  • Clearly document what was discussed, as well as the outcome of the conversation (e.g., medications prescribed, referrals to specialists, additional steps for the patient to take).
  • Don’t report these codes when the telephone service ends with a decision to see the patient in 24 hours or the next available appointment.
  • Don’t report these codes when the telephone service relates to a related E/M service performed within the previous seven days or within the postoperative period of a previously completed procedure. (“E/M” stands for “evaluation and management.” E/M coding is the process by which physician-patient encounters are translated into five digit CPT codes to facilitate billing.)
  • Only use or provide 99441-99443 and 98966-98968 for established patients. During the PHE, Medicare permits providers to bill G2012 for new and established patients.
  • To operationalize these codes, set up a process in your practice management system that flags or pends claims for manual reviews to determine whether and which services are ultimately billable.

Telehealth (Audio-Visual) Services

In the last few months, providers have adopted telehealth to improve patient access and generate revenue during COVID-19. Among the services physicians can render via telehealth to patients with Medicare during the current PHE are Medicare annual wellness visits, new and established patient office visits, prolonged services, smoking and tobacco cessation counseling, annual depression and alcohol screenings, advanced care planning and more. Medicare covers more than 200 services via telehealth, many of which were added for temporary coverage during the current PHE. Commercial payer coverage of these services may vary. So, providers should check individual payers’ policies and requirements.

Reimbursement experts advise the following steps for billing telehealth services:

  • Check audio-only vs. audio-visual requirements. Medicare requires the use of audio-visual technology for certain telehealth services and permits audio-only for others. For example, physicians can render a telehealth visit for advanced care planning using audio only, but they must use audio-visual technology for a new patient telehealth office visit. Private commercial payers may also have their own specific requirements.
  • Do not render Medicare’s Initial Preventive Physical Exam via telehealth. Medicare does not permit it.
  • Document verbal consent for telehealth, including patient acceptance of any copayments or coinsurance amounts due.
  • Use place of service (“POS”) code 11 and modifier -95 when billing Medicare. Note that commercial payers may require a different POS code (e.g., POS 2 or POS “other”) and modifier.
  • Document, document, and document some more. Physicians and other providers need to be able to prove via proper and adequate documentation that they met all of the code requirements, even when rendering a service via telehealth. For example, experts counsel against ever submitting a problem list if you did not treat or manage all of the problems on the list, and say physicians need to link diagnoses with assessments and treatment plans. Another caveat is that during the current PHE, physicians can bill 99201-99215 rendered via telehealth based on time or medical decision-making. But documenting the total time spent in direct medical discussion with the patient is extremely important.

Online Digital E/M Services

Though online digital evaluation and management (“E/M”) services are relatively new, they also can help practices increase patient access during COVID-19 for non-urgent medical issues. Generally, such services are provided as follows: an established patient initiates a conversation through a HIPAA-compliant secure platform (e.g., electronic health record portals, secure email, secure texting, etc.). A physician or other qualified healthcare professional reviews the query, as well as any pertinent data and records. Then the healthcare provider(s) develop a management plan and subsequently communicate that plan to the patient or their caregiver through online, telephone, email or other digitally supported communication.

To maintain compliance in coding for such services, experts suggest the following:

  • Use these codes when physicians or other qualified healthcare professionals make a clinical decision that would otherwise occur during an office visit. Do not use them for scheduling appointments or non-evaluative communication of test results.
  • Use these codes only for established patients.
  • Do not use these codes for fewer than five minutes of E/M services.
  • Document verbal consent, including patient acknowledgement and acceptance of any copayments or coinsurance amounts due.
  • Do not report these codes when the online digital E/M service ends with a decision to see the patient in 24 hours or the next available urgent visit appointment.
  • Do not report these codes when the online digital E/M service relates to a related E/M service performed within the previous seven days or within the postoperative period of a previously completed procedure.

Additional information regarding upcoming 2021 adjustments to the Evaluation and Management CPT codes, and how to assess potential impacts on physician compensation and productivity, can be viewed here and here.

Remote Patient Monitoring

Remote patient monitoring (“RPM”) is a relatively easy way for providers to keep track of patients’ status or progress without requiring patients to come into the office. Medicare covers RPM for patients with one or more acute or chronic conditions, and private payer coverage may vary. Normally, Medicare permits RPM only for established patients (whom the provider has previously examined in person). But during the PHE, physicians can initiate RPM for not only established, but also new patients.

RPM consists of two forms: monitoring data through either a non-manual or manual data transfer. For example, physicians can remotely monitor a patient’s pulse oximetry, weight, blood pressure or respiratory flow rate using a device that transmits daily recordings or programmed alerts. Physicians can purchase them directly from manufacturers or patients can purchase the devices themselves. Patients are advised to use Bluetooth-enabled devices or devices that include a built-in Global System for Mobile Communications (“GSM”) transmitter. The former requires an Internet connection, while the latter automatically transmits data to an internet cloud service through an encrypted bandwidth. Physicians may be able to bill for the initial setup, cost of the device itself (when applicable) and data monitoring.

Another example is self-measured blood pressure monitoring. When patients supply their own blood pressure device that a physician calibrates, physicians may be able to bill for patient education, device calibration, reviewing the data that the patient provides, and communicating a treatment plan to the patient or caregiver.

Monitoring patients’ physiologic data remotely through such devices can substantially reduce exacerbations of patients’ chronic conditions, emergency room visits, and hospitalizations. It can also be a good source of revenue for providers, especially during a pandemic, when in-person patient visits are reduced.

Experts suggest the following for compliant RPM billing:

  • Document patient consent. Patients must opt in for these services.
  • Document total time spent rendering these services to support time-based requirements.
  • Know when these codes are appropriate. It is unclear whether Medicare will pay physicians for monitoring physiologic data derived from internal devices (devices placed within the patient’s body) or data derived from wearable fitness devices.
  • Only bill 99457 when the provider renders at least 20 minutes of live, interactive communication with the patient or caregiver.

CMS Plans To Eliminate 74 Emergency Codes Related To Telehealth Services

In an article by Eric Wicklund dated August 14, 2020, mHealth Intelligence reported that CMS plans “to eliminate most of the temporary codes created during the coronavirus pandemic to expand connected health.” The “proposed 2021 Physician Fee Schedule released last week” includes “nine codes added during the COVID-19 crisis” and 13 new codes, “but 74 codes are slated to end when the public health emergency is over.” According to the article, “The 13 new codes proposed for inclusion in the Physician Fee Schedule are grouped in a new category, Category 3 (the Category 1 codes are slated to remain in place, and the Category 2 codes are scheduled for elimination).”

Because coding for such services is changing constantly, reimbursement and coding experts advise providers to check CMS’s and commercial payers’ websites on practically a daily basis for updates. Providers should also seek expert advice or legal counsel whenever they are uncertain about how to properly document, code or bill for a particular service – preferably before a dispute with a payer arises.

New Regulatory Waivers and Rule Changes to Support U.S. Healthcare System During COVID-19 Pandemic

On April 30, 2020, CMS issued another round of regulatory waivers and rule changes to support healthcare providers during the COVID-19 pandemic. Changes included increased access to telehealth for Medicare and Medicaid patients and expanding at-home and community-based testing to minimize COVID-19 transmission among Medicare and Medicaid beneficiaries. (See details of the new waivers and the interim final rule.)

Under the temporary waivers and rule changes, Medicare beneficiaries can be tested for COVID-19 without a physician’s order. Instead, Medicare will cover COVID-19 tests when ordered by any healthcare professional authorized to do so under state law.

CMS also is allowing pharmacists to perform certain COVID-19 tests if they are enrolled in Medicare as a laboratory. According to CMS, the changes will open the door for more “point-of-care” testing. Medicare and Medicaid also will cover antibody tests that are authorized by the Food and Drug Administration.

Beyond its efforts to expand testing, CMS is waiving limits on the types of practitioners who can provide telehealth services and is allowing hospitals to bill Medicare as the originating site for services furnished remotely by hospital-based practitioners to registered outpatients, including when the patient is at home. CMS will now also allow nurse practitioners, clinical nurse specialists, and physician assistants to provide home health services, as mandated by the CARES Act.

On May 19, 2020, CMS authorized local Medicare Administrative Contractors (“MACs”) to set the payment amount for COVID-19 testing, both diagnostic and serology, until Medicare establishes national payment rates. CMS noted that for dates of service on or after April 14, Medicare has established a $100 payment rate for laboratory tests using high throughput technologies for rapid results.

Many services for behavioral health and patient education may now be conducted by audio-only telephone between beneficiaries and clinicians, CMS said. The agency also is increasing payments for telephone visits from the current $14-$41 to $46-$110, in line with payments for similar office and outpatient visits. The payments are retroactive to March 1, 2020.

CMS Finalizes Changes for Medicare Advantage, Part D Plans

On May 22, 2020, CMS finalized changes to the Medicare Advantage (“MA”) and Part D programs aimed at expanding access to telehealth and increasing plan options for beneficiaries in rural communities. CMS finalized only certain provisions from the February proposed rule so they would be in place before MA and Part D 2021 plan year bids, which were due on June 1. The agency plans to issue subsequent rulemaking to address the remaining proposals—including policies to lower seniors’ out-of-pocket expenses for pricey prescription drugs—which will apply no earlier than January 1, 2022.

“We understand that the entire healthcare sector is focused on caring for patients and providing coverage related to coronavirus disease 2019 (COVID-19), and we believe this approach provides plans with adequate time and information to design the best coverage for Medicare beneficiaries,” CMS said in a fact sheet.

CMS expects the changes in the final rule to reduce Medicare spending over the next ten years by an estimated $3.65 billion. The final rule was published in the June 2, 2020 Federal Register

Network Adequacy, MLR

The final rule gives MA plans more flexibility to count telehealth providers in certain specialties towards network adequacy standards. The policy is aimed at encouraging use of telehealth services and increasing plan choices for beneficiaries, particularly in rural areas.

In rural areas, CMS is reducing the required percentage of beneficiaries that must reside within the maximum time and distance standards from 90% to 85%. CMS also is giving MA plans a 10% credit towards the percentage of beneficiaries that must reside within required time and distance standards for specialty areas such as Dermatology, Psychiatry, Cardiology, Ophthalmology, Nephrology, Primary Care, Gynecology, Endocrinology, and Infectious Diseases, the fact sheet said.

CMS also finalized its proposal to allow MA organizations to broaden the definition of “incurred claims” for purposes of the medical loss ratio (“MLR”). In addition, the final rule adds a deductible-based adjustment to the MLR calculation for MA medical savings account (MSA) contracts receiving a credibility adjustment. CMS said the adjustment “removes a potential deterrent to the offering of MSAs by MA organizations that may be concerned about their inability to meet the MLR requirement as a result of random variations in claims experience, the risk of which is greater under health insurance policies with higher deductibles.”

On June 10, 2020, the Centers for Disease Control and Prevention also issued guidance entitled “Using Telehealth to Expand Access to Essential Health Services During the COVID-19 Pandemic.” It describes the landscape of telehealth services and provides considerations for healthcare systems, practices, and providers using telehealth services to provide virtual care during and beyond the COVID-19 pandemic.

COVID-19 Public Health Emergency Extension

On June 29, 2020, an HHS spokesperson indicated that HHS intended to extend the COVID-19 public health emergency that was set to expire on July 25. And on July 23, 2020, HHS officially extended it for another 90 days.

Significant funding and regulatory relief for hospitals and other healthcare providers are tied to the emergency, so the extension is important. Healthcare industry participants were concerned that the decision could get caught up in politics and pressured the administration to continue the emergency.

Several key policies linked to the public health emergency are the Medicare inpatient 20% add-on payment for COVID-19 patients, increased federal Medicaid matching rates, requirements that insurers cover COVID-19 testing without cost-sharing, and waivers of telehealth restrictions. Adjustments CMS made to the Medicare Shared Savings Program for accountable care organizations are also tied to the length of the public health emergency. The number of months the emergency lasts affects the amount of shared losses an ACO must pay back to CMS.

Even with the public health emergency extension, some changes the administration has made to help healthcare providers are also dependent on a separate Stafford Act national emergency declaration remaining active. These changes include CMS Medicaid waivers that allow bypassing some prior authorization requirements, temporarily enrolling out-of-state providers, delivering care in alternative settings, and pausing fair hearing requests and appeal times. But the renewal gives the healthcare industry at least some certainty through the fall to assist with the COVID-19 response.

CMS Assessing Telehealth Reimbursement Rates to Potentially Make Medicare Telehealth Expansions Permanent

On July 21, 2020, in an article by Jacqueline LaPointe, RevCycle Intelligence reported that “Telehealth reimbursement rates is one area CMS is assessing in order to make Medicare telehealth expansions permanent after the COVID-19 pandemic, according to the agency’s administrator.” Recently, in a “Health Affairs blog post, CMS Administrator Seema Verma indicated that Medicare telehealth expansions implemented during the pandemic, including payment for telehealth services delivered to non-rural patients and the delivery of telehealth care in patient homes, may be made permanent.” However, three areas will need to be examined by CMS “before finalizing any permanent telehealth expansions, including telehealth reimbursement rates.”

“During the public health emergency, Medicare paid the same rate for a telehealth visit as it would have paid for an in-person visit, given the unique circumstances of the pandemic,” wrote Administrator Verma. “Outside the pandemic, by law Medicare usually pays for telehealth services at rates similar to what professionals are paid in the hospital setting for similar services.” “Further analysis could be done to determine the level of resources involved in telehealth visits outside of a public health emergency, and to inform the extent to which payment rate adjustments might need to be made,” Verma said.

For instance, CMS will need to determine supply costs for telehealth services in order to decide on telehealth reimbursement rates. Medicare reimbursement rates for in-person care take into account the costs for patient gowns, cleaning, disinfectants, and other supply expenses. Telehealth services do not have these costs.  But new processes and workflows created to facilitate telehealth visits do have associated costs. Those costs would need to be examined in order for CMS to reimburse providers appropriately for permanent Medicare telehealth expansions, Verma indicated in her blog post.

Other areas CMS would need to examine to make Medicare telehealth expansions permanent included patient safety and clinical appropriateness, as well as healthcare fraud and Medicare program integrity. “We are monitoring program integrity implications such as practitioners who may be offering shorter telehealth visits with patients to maximize payment, or billing more visits than are possible in a day,” Verma wrote. “We know the path forward to expanding telehealth relies on CMS addressing the potential for fraud and abuse in telehealth, as we do with all services.”

On August 3, 2020, the president signed an executive order, seeking to expand the use of telehealth visits, and make some of the changes made when the coronavirus pandemic struck permanent. The order directs HHS to issue rules within 60 days making some of the revisions permanent. The order also calls on HHS to propose a new model that can be tested for how Medicare will pay for some health services in rural areas, with the goal of improving care in rural areas. It is unclear when any of the changes proposed by the order will take effect, however, given that there are still regulatory processes that will take time to play out. (CMS’s announcement that it is proposing changes to expand telehealth permanently, consistent with the Executive Order, can be viewed here.) The agency is also simplifying billing and coding requirements for office and outpatient visits.

Telehealth has been a critical part of COVID-19 response strategies. Through telehealth and telephonic care, providers have been able to keep seeing patients without exposing them or their staff to the highly contagious novel coronavirus. Remote or virtual care has also been key to ensuring patient and provider safety within hospitals and other healthcare facilities. With the use of smartphones, tablets, and other mobile technology, hospitals and physician practices have been able to minimize contact with infected patients while still examining and rendering care to patients.

Temporary payment flexibilities enabled providers to deliver telehealth services in a short period of time. Early in the pandemic, Medicare implemented a wide range of payment flexibilities to spur greater telehealth utilization. The flexibilities included temporarily expanding the scope of Medicare telehealth to allow more beneficiaries to benefit from virtual care services and the scope of providers eligible to bill for telehealth services.

CMS also added 135 allowable services, more than doubling the number of services that providers could bill via telehealth. The services included telephonic care for beneficiaries with limited access to video capabilities. But Congress must sign off on any broader expansion of telehealth coverage, including expanding the types of providers who may bill Medicare for telehealth services and amending the originating and distant site requirements.  

Telehealth utilization among Medicare beneficiaries has surged during the pandemic. Over 9 million beneficiaries received a telehealth service between mid-March through mid-June, according to Medicare fee-for-service claims data. According to Verma, that number could grow, since providers have 12 months after they furnish a service to submit claims to CMS.

Telehealth utilization has similarly skyrocketed among the privately insured as private payers implemented similar telehealth expansions. A recent analysis of the privately insured population found that telehealth claim lines increased by 8,336 percent between April 2019 and April 2020, and the presence of telehealth claim lines nearly doubled the 4,347 percent increase observed from March 2019 to March 2020.

In light of such significant growth in utilization of telehealth services, CMS will consider making some temporary Medicare telehealth expansions permanent to encourage innovation while also ensuring “gold standard, in-person care.” “During these unprecedented times, telemedicine has proven to be a lifeline for health care providers and patients,” Verma said. “The rapid adoption of telemedicine among providers and patients has shown that telehealth is here to stay. CMS remains committed to ensuring that the government supports innovation in telehealth that leverages modern technology to enhance patient experience, providing more accessible care.”

Reimbursement rules and guidance from regulators continue to evolve as the situation develops. To the extent possible, providers should stay informed and monitor for updates. Please see our Medical & Professional Licensing Board Matters webpage for additional details regarding COVID-19 Emergency Practice, Telehealth & Teleprescribing Measures. See our HIPAA, Health Information Privacy & Security Compliance webpage for details regarding HIPAA Compliance & Waivers During the COVID-19 Pandemic. And see our Stark, Anti-Kickback, Civil Monetary Penalty & False Claims Act Issues webpage for details regarding COVID-19 Fraud Enforcement & Telehealth. (A summary of CMS’s blanket waivers of certain self-referral prohibitions contained in the federal Stark Law also appears here. And a summary of all of CMS’s COVID-19 Emergency Declaration Blanket Waivers for Health Care Providers is here.)

Audits in the Wake of COVID-19

Most payer audits have been suspended or postponed during the public health emergency. (OIG’s COVID-19 FAQs can be read here.) But according to its July 2020 FAQ document on provider burden relief, CMS is ending its suspension of Medicare claims audits effective August 3, 2020, regardless of the status of the federally declared COVID-19 national emergency. The department suspended most fee-for-service claims audits on March 30 due to the pandemic. The suspension applied to prepayment medical reviews conducted by MACs and post-payment reviews. CMS cited changes in states’ reopening policies and the importance of the reviews as reasons for resuming the audits.

CMS’s FAQ states that if providers impacted by the pandemic are selected for review, they should discuss with their MAC any COVID-19 related hardships that may affect the timeliness of their audit response. Since CMS permitted several exceptions to its regulatory compliance rules for healthcare providers during the pandemic, CMS will apply any waivers and flexibilities in place at the time of the dates of service.

Healthcare coding and reimbursement experts have been predicting that once the pandemic is no longer raging, “audits will be coming fast and furiously.” For one thing, with spending soaring and revenue plummeting during the emergency, the government and health insurers will need money more than ever once the pandemic abates. And both reimbursement consultants and government enforcers agree that virtually all providers will be in the cross hairs.

For example, one retired HHS-OIG Senior Special Agent warned online: “CMS put out an FAQ this month advising it will stop audits during the PHE. Understand that when that is lifted, audits will commence, and likely at a feverish pace. Are providers prepared for the audits to come, particularly with some of the ‘relaxed’ telemedicine and telehealth rules? Probably not. Be proactive and do internal probe reviews to ensure compliance, so in three years you do not see an overpayment letter for hundreds of thousands of dollars. Getting the education needed to stave off a large overpayment [allegation] is a basic compliance measure.”

In short, it is never too soon to assess your risks and determine how best to mitigate those that could lead to damages (civil or criminal). Do not assume your practice won’t be a target. Be proactive and audit both retrospectively and prospectively. If you have sufficient staff to conduct internal audits, do them. If not, hire a reputable firm to help. Be sure you can fully support with adequate documentation any claims you submit for reimbursement. Adequate documentation is crucial. Even when rules seem more relaxed, documenting properly now can save you in an audit down the road. Also be sure that your audit is conducted under the supervision of an attorney, so as to protect privileged communications and work product to the extent permitted by law.

The regulatory landscape continues to change rapidly. During the onset of the pandemic, agency enforcement discretion allowed for a more relaxed regulatory approach. However, the same enforcement discretion can shift quickly to the return of a more rigid regulatory framework. It now appears that pre-pandemic enforcement practices are resuming, even as the public health emergency continues. Providers therefore need to be prepared.

How We Can Help & Services We Provide

Certain provisions in third-party payer contracts and governmental rules can have a great impact upon a provider’s revenue stream and financial viability. Hospitals and physicians often write off tens of thousands – sometimes even millions — of dollars due to payers improperly denying or underpaying claims. Our healthcare and business law firm can help by:

  • Negotiating and reviewing health insurer plan documents.
  • Negotiating and reviewing IPA, PHO and PPO network agreements.
  • Negotiating and reviewing provider contracts with third-party payers.
  • Negotiating with plan sponsors regarding potentially unlawful plan terms.
  • Representing providers in disputes that arise under documents such as those listed above.
  • Representing providers in disputes with insurers, including terminations of provider agreements.
  • Evaluating denied claims against the terms of provider-payer contracts and government regulations, and helping clients determine next steps in proceeding against payers’ improper denials.
  • Reviewing and evaluating fact questions like prior authorizations and legal questions like potential violations and penalties.
  • Enforcing insurer and payer compliance with preferred provider arrangements, third-party network contracts and treatment agreements.
  • Challenging payers who violate the MSP Act and other coordination of benefits rules.
  • Challenging audit findings, overpayment demands and recoupment actions issued by third-party administrators, insurers and health plans.
  • Challenging plan fiduciaries for failing to follow proper claims and appeals procedures.
  • Representing providers in investigations, audits, pre-suit claims, mediations, arbitrations and lawsuits.
  • Helping providers recover damages caused by improperly denied or underpaid claims.

Claims denied improperly by managed care payers fall within the scope of the provider participation agreement signed by the provider and payer. Therefore, any wrongly denied claims are subject to the terms of the signed agreement, as well as applicable laws relating to contract breaches. A health plan’s breach of its own contract is subject to the dispute resolution terms of the signed contract, which allow for either an arbitration demand or a lawsuit to be filed against the payer.

Even if the contract or related provider manual contains specific terms not met by a provider, some denials may be unenforceable as illegal penalties. Therefore, healthcare providers who have rendered valuable services to a health plan’s members should not give up on improperly denied claims without first consulting legal counsel.

Our healthcare and business law firm helps healthcare providers by reviewing, negotiating and drafting contracts. We assist hospitals, physicians, physician groups and other providers in negotiating and contracting with health insurance payers, plans and managed care entities. And we represent healthcare providers in investigations, audits, administrative proceedings, mediations, arbitrations and lawsuits when disputes arise with payers, managed care plans or other entities over reimbursement or other matters. Please call or email us if you need assistance in any of these areas.

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