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New PECOS Edits Will Soon Result in Claim Rejections
By: Andrea Stark, Medicare Consultant & Reimbursement Specialist



CMS is expanding the claims editing process for DME MACs to include a new defense against claims containing missing, improper or fraudulent physician orders. The new edits require the verification of a referral source’s Medicare enrollment and were designed to ensure that medical equipment is ordered only by those individuals authorized to do so. However, as an unintended consequence, providers now risk having legitimate claims rejected if their referral sources are not properly registered with the Provider Enrollment Chain and Ownership System (PECOS).



The expanded editing process is supposed to allow the DME MACs to verify whether a claim’s ordering physician/practitioner is actively enrolled in the Medicare program by comparing the NPI on your claim to a national list of NPIs in the PECOS database. However, the process is deeply flawed, as registration in PECOS has only recently become a requirement and the database is incomplete.



As you might expect, physicians are required to enroll with their A/B MAC or Local Carrier to submit their own claims for patient encounters, just like DME suppliers have to enroll with the National Supplier Clearinghouse. Traditionally, this meant the practitioner submitted a paper 855-I or 855-R application package. That is, until 2008 when the PECOS system was developed as a way for physicians to enroll online and update their applications via the internet. The online system was first made available to individual practitioners in December, 2008 and was opened to group practices /organizational providers in April, 2009. (Eventually, PECOS will be expanded to allow DME Providers to update their 855-S applications via the internet as well. However, this is not expected to happen anytime soon.).



Until recently, this internet based approach has been voluntary, and many physicians never setup an online PECOS account. The PECOS database feeds into, but is separate from, the carrier maintained file of approved physicians. The local Medicare contractors have been internally updating the PECOS database when paper applications were received with physician enrollments and changes. But even that process only goes back to November 2003. That means physicians who have been enrolled in the Medicare program in excess of five years and who haven’t made recent updates or changes to their enrollment are not likely to be in the PECOS system. Notwithstanding, CMS has instructed CEDI and the MACs to use this developmental, online database to determine if claims should be processed.



The new editing process is being implemented in two phases.



Phase I:

Effective October 5, 2009, PECOS began providing CEDI and VMS with a list of all Medicare approved physicians/practitioners who are eligible to order and refer beneficiary services as reported in the PECOS database. This list is updated on a daily basis.



During Phase I, claims are being reviewed for the requirement of a Medicare enrolled physician/practitioner by comparing the ordering physician’s NPI on the claim to the list of physician/practitioner’s NPIs in the PECOS database. If a valid NPI number is found, further verification will be made by comparing the first letter of the physician’s first name and the first four characters of the physician’s last name (and these characters must be capital letters to pass the editing process).



Initially, if a name or NPI is found to be invalid, the claim will still be processed and the provider will receive a warning message on their GenResponse report (for electronic claims).



Phase II:

Effective January 4, 2010, claims will be rejected if the ordering physician/practitioner’s NPI is not provided on the claim, not found in the PECOS list, or found to be inactive. Also effective January 4, 2010, providers will no longer be permitted to utilize their own NPI in place of an ordering physician/practitioner’s NPI.



Rejection Messages:

If a claim is flagged for a warning message or eventually rejected, providers will receive a C200, C201 or C202 error code with a “Referring Provider Not Authorized” rejection message on their GenResponse report (for electronic claims) or Remittance Advice (for paper claims).



Most providers are already receiving these error codes on their GenResponse reports, but don’t know what to do with them. Currently, claims with these errors are still being processed; however, they will begin rejecting on January 4, 2010.



Preventing Rejections:

The first step to preventing rejections is to ensure that you are monitoring your GenResponse Reports and capturing all instances where referral sources are rejecting as not registered in the PECOS system.

Unfortunately, the PECOS database is not accessible to DMEPOS providers in a downloadable format at this time, but the PECOS database is used to populate the “Find A Physician” search tool on the www.medicare.gov website. However, there are several steps you can take:

Identify all physicians with NPIs resulting in warning messages (visit http://www.starkvistagroup.com to download a free tool to help parse out this data).
Make sure the physician information contained in your billing software reflects the same NPI and spelling of the physician’s name as reported on the publically available NPPES system: https://nppes.cms.hhs.gov/NPPES/NPIRegistrySearch.do?subAction=reset&searchType=ind. Claims must be billed using the physician’s legal name (i.e. Robert, instead of Bob) and individual billing number, not the NPI for the group practice, and must be reported in all CAPS.
Once your software record is verified to be accurate, contact those physicians and practitioners for which you are receiving rejection warnings, and:
a. Refer them to MedLearn Matters publication SE0194 (page 3) for insight on how to enroll in PECOS and the documentation needed to get started. (http://www.cms.hhs.gov/MLNMattersArticles/downloads/SE0914.pdf.)

b. Provide them with contact information for the CMS External User Services (EUS) Help Desk for general questions about accessing and using the PECOS enrollment system. The Help Desk’s toll-free number is 1-866-484-8049 and their e-mail address is eussupport@cgi.com.

c. Ask them to enroll in PECOS at: https://pecos.cms.hhs.gov/pecos/login.do using the same user ID and password established with NPPES (the NPI contractor).

d. Provide the NPI Enumerator’s phone number and e-mail address for questions about their NPPES user ID and password. The NPI Enumerator may be reached, at 1-800-465-3203 or via email at: customerservice@npienumerator.com.



At this point many referral sources have obtained an NPI (through the NPPES system), but they may or may not have registered with the PECOS system. To make matters worse, many physicians remain unaware of the recent requirement to enroll in PECOS, as their claims are not likely to be affected by these new DME specific edits. This enrollment process appears to go more quickly for individual practitioners, but can be a lengthy process taking up to 60 days for organizational/group practices. In addition to ensuring claims for DME will be processed, physicians should also know that the PECOS database is used to populate the www.medicare.gov website. If they are not currently in the PECOS database, patients that search for a provider on the www.medicare.gov website will not be able to find them. By taking an aggressive, proactive approach to educating your referral sources you can lessen the impact of possible rejections at the first of the year.