xxAACP Newsletter, Volume 13, Number 2, Spring 1999

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CMHC's have long done business with Medicare, for the most part uneventfully. CMHC's were designed to provide community care of chronically and severely disturbed patients deinstitutionalized from state hospitals in the 1960's and 70's. Medicare became the primary payer for many of them. While the private sector, where it existed, often did a good job with geriatric Medicare recipients, fiscal realities usually made the range of services needed by the severely mentally disabled unavailable there. The CMHC's ability to augment Medicare payments with Medicaid and other fund sources made case management, psychosocial rehab, and other programs economically viable.

Typical operating strategy maximized program capacity by hiring large numbers of social workers and other paramedical staff and limiting numbers of highly paid psychiatrists. This frequently put psychiatrists in a consultative role, rather than the traditional one of personally directing treatment. Although HCFA and its regional agents never really understood the differences between private and public mental health operations, both sides chose to ignore problems with regulations designed to fit medicine as a whole.


THE WAY THINGS ARE

The Kennedy-Kassebaum Health Insurance Portability Act of 1996 coupled with strong political pressure to balance the federal budget without appearing to reduce Medicare services gave HCFA and its regional agents a new set of priorities. Congress sent HCFA on a new and aggressive hunt for "waste, fraud, and abuse" and assisted it by redefining health care fraud, eliminating any need to show intent before criminal charges could be brought. So, in healthcare, there is no longer a legal difference between classical intentional fraud and a pattern of inadvertent technical violations of rules. Recent published reports of HCFA audits seem to be disclosing examples of each. And the rules started to change, not once but several times in the ensuing months. Changes and redefinitions were explained by intermediaries, but answers were frequently conflicting or evolving. CMHC business office personnel arrived at widely varying understandings of the rules. Most tended toward benign interpretations based on the history of good relations. This approach was naïve. HCFA was already, and quite publicly, going after well-respected university hospital programs, reaping millions in paybacks with the so-called PATH audits. The AMA and HCFA are still arguing over documentation requirements for "appropriate" billing of E & M codes. And CMHC's are also on the audit priority list.


THE PROBLEMS

Medicare Part B covers outpatient services and presents two major problems to public psychiatry. The preeminent one for psychiatrists is HCFA's insistence that Part B recognizes only individual Medicare providers, the holders of provider numbers. Any disputes are with individual providers. This makes sense where those providers control billing staff and procedures but not in the public sector. CMHC psychiatrists are employees with no control and often no knowledge of how their agency files claims. To maintain, as HCFA has, that a Medicare provider should never allow others to use the provider number outside his or her control, puts public psychiatrists in a Kafkaesque position. Agency use of physician provider numbers is a condition of employment; but it is the psychiatrists who are liable, even though organizational charts typically blind them to billing operations. Sanctions for repeated error may be as severe as exclusion from the Medicare and Medicaid programs or criminal fraud prosecution. CMHC acceptance of responsibility for its own acts does not protect a physician from sanctions other than by providing payback money.

Redefinition of the term "Physician Directed Clinic" under Medicare is also occurring. North Carolina CMHC's are physician directed clinics under state law, but not according to our Medicare regional carrier. Until recently CMHC's were able to bill Medicare for work done by non-Medicare providers as service provided "incident to" the physician. Under the old definition a physician must to be on-site at the time a service was delivered but need not be personally involved in that service. New interpretations render such billings erroneous two different ways. First, services billed "incident to" are to be only incidental parts of a service delivered. Clients, if asked, should readily identify the physician as the primary provider. In a primary care office for example, a nurse could dress a wound after the physician examines a patient and orders it. That service would be "incident to" physician service, reimbursable under the physician's provider number.

Agencies also must meet the Medicare definition of Physician Directed Clinic. Here the regional carriers were given interpretive latitude. Ours is using a four point definition which has been subject to repetitive modification:

1. The physician and nonphysician personnel must have the same employer;
2. A physician must be present to perform medical (rather than administrative) services during regular operating hours;
3. Each Medicare patient must be under the care of a clinic physician;
4. A physician must be actively involved in the continuing treatment of all Medicare patients.

One recent change has been liberalization of the term "physician" to potentially include clinical psychologists and others with provider numbers except for clinical social workers. Points 3 and 4 have been specified to mean that a physician must perform the initial evaluation, determine the plan of treatment based on his/her evaluation and personally see the patient no less frequently than every third visit thereafter. Finally, a new requirement may have been added. Clinical notes by staff intending to bill the visit as an "incident to" service should end with a statement that the service is provided under the supervision of the physician whose provider number will be used. It seems unlikely that many CMHC's could now qualify as a Physician Directed Clinic.

The only other mechanism for Part B billing is as an individual practitioner. Anyone with a Medicare provider number can bill and be paid independently. HCFA will allow employees to sign payments over to the CMHC prospectively, avoiding employee tax issues. But this would have no effect on provider liability. And agencies lose the possibility of "incident to" billings.


POLITICAL AND CLINICAL CONSEQUENCES

These problems have significant implications for State policy, treatment of Medicare eligibles in the public sector, and for agency staff working with Medicare clients, particularly psychiatrists. On the State level, the CMHC's have been the primary source of outpatient mental health, substance abuse, and developmental disability services to Medicare recipients under 65 years of age. Medicaid has often filled gaps for non-Medicare services. But Medicaid does not pay when Medicare refuses payment for services covered by both programs. Participating agencies that don't bill Medicare have no Medicaid recourse for services which would have been Medicare eligible, rendering Medicare clients medically indigent except for services covered by Medicaid only. Assertive Community Treatment Teams, (ACTT programs) are an example. It has also been determined that CMHC withdrawal from Medicare participation would not allow Medicaid billing for services to dual eligibles. Assuming agency participation, it might be possible to bill Medicaid when non-Medicare staff provide potentially billable Medicare services to a dual eligible client. Six months of negotiation have yielded no final answer.

So for now, North Carolina's CMHC's find themselves in a tough spot with Medicare clients. Even if everything now in debate goes in favor of the CMHC's, loss of Medicare revenues will not be made up by Medicaid payments. In many areas private alternatives, however limited, don't exist. Outcries from clients, advocacy groups, MHC staff, and CMHC Boards would contest any move to restrict CMHC access or service to Medicare clients, but such moves could become necessary if money in the system doesn't cover expenses. Alternatively, Medicare clients may be retained at the expense of other indigent groups. Where private alternatives do exist, transfers of Medicare clients may jeopardize Medicaid revenues for the non-Medicare services used by those clients unless treatment splitting schemes can be arranged. This might threaten the continuing existence of ACTT and other Medicaid funded programs within CMHC's.

These issues and historical precedent provide strong incentives at both State and agency levels for finding a way to continue provision of Medicare service within CMHC's. There are no indications that HCFA or CIGNA, its regional carrier in North Carolina, actually believe that public sector psychiatrists are criminals. But there is every reason to infer that the PATH audit intimidation by example approach to saving money is considered a legitimate tool. And while it goes without saying that no CMHC or State office desires to expose its workers to unnecessary liability risk, it is likely that Medicare audits in CMHC's will continue. Early audits indicate that CMHC psychiatrists have been and may continue to be inadvertently left in harm's way in the service of maintaining revenue streams.


WHAT PSYCHIATRISTS CAN DO NOW

Public sector psychiatrists need to familiarize themselves with Medicare and the CPT code system. They should be aware that CPT codes have specific definitions and that audits will look at compliance with those definitions. It is important to also realize that these definitions and their regulatory context are subject to interpretive change on short notice without fanfare. Ignorance of these changes is not an accepted excuse.

Secondly, psychiatrists need to familiarize themselves with billing/business office operations. This may be difficult due to administrative segregation of clinical from financial operations. It is also a multifaceted problem. Finding out who the relevant players are and where their competencies lie is essential. Do they really understand the CPT codes, their definitions, and how the agency checks to ensure that services delivered match the codes billed? Who would know if the rules changed, and how would the psychiatrist find out? It is not enough to rely on assurances from senior management, no matter how well-meaning. Systematic errors by billing personnel cause liability to the psychiatrist, not them.

Is the CMHC doing "incident to" billings? If so, how does the program qualify as a Physician Directed Clinic? Convoluted schemes designed to circumvent the definition should be considered potential audit targets, again with liability to the psychiatrist. Has the regional carrier been contacted? Has it agreed that the Area Program's plan is legitimate? Where is the documentation of that understanding?

How does a local service billing code, if different from CPT codes, crosswalk to CPT code? It is quite possible that agency codes may have more than one potential CPT translation. A single psychotherapy service code might, for instance, translate into various CPT codes based on duration of the service. Medicare generally does not recognize that as a legitimate practice any longer, at least not without specific additional documentation requirements. In situations where there is a guaranteed translation between a service code and a specific CPT code, how would a psychiatrist be notified if the business office changed that crosswalk for any reason?

Unfortunately it is likely that current agency answers to these questions may do more to increase than to decrease concern. It may well take a substantial and time consuming modification of business procedures to achieve real provider oversight of Medicare billings. While CMHC reluctance to undertake this is understandable, particularly while there are no final answers to some of the key questions, psychiatrists are at risk now. There may or may not be any guidance from any definitive authority to spell out a standardized and appropriate response to these issues. If there is to be one, it is crucial that psychiatrists, as the highest profile Medicare providers, have their concerns effectively addressed. That will not happen without knowledge of the problem and a willingness to speak up loudly and unequivocally in their own defense.

Dan Gerber, PhD
Mike Hopping, MD
Blue Ridge Center, Asheville, NC


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