Focus on Health Care Reform: Program Integrity

There are several initiatives being undertaken by the Department of Health and Human Services to implement the program integrity provisions found in the Affordable Care Act (ACA).

PECOS, Referrals and Orders

Physicians who refer or order (except those who have opted out) are required to be enrolled in the Provider Enrollment, Chain, and Ownership System (PECOS) database. This includes physicians who have been enrolled for decades, but are not in the PECOS database.

All physicians will need to re-enroll if they are not currently in the PECOS database or have opted out. Other physicians who never bill Medicare—TRICARE physicians for example—will also need to enroll if they want to continue referring and ordering services for patients who see Medicare doctors.

Practice-based compliance programs

The law directs HHS to establish the essential elements of a compliance program that physicians must meet in order to enroll in Medicare, Medicaid and other federal health care programs. On September 21st HHS issued a proposed rule for the establishment of these essential elements.

The proposed rule would:

  • Screen physicians participating in Medicare, Medicaid and the Children’s Health Insurance Program, including licensure and database checks, unannounced site visits, and criminal background checks and fingerprinting for those in the highest risk category.
  • Impose a $500 application fee for hospitals beginning March 23, 2011.
  • Allow the government to place a temporary moratorium on the enrollment of new Medicare physicians if high-risk fraud trends are detected.
  • Suspend payments in cases where there is a credible allegation of fraud against a physician or supplier.
  • Require state Medicaid programs to deny or terminate a physician who had billing privileges revoked under Medicare, CHIP, or another state’s Medicaid program.

Comments on the proposed rule are due to CMS by 5 PM on November 16, 2010. View the posting in the Federal Register here.

Exception to prohibition on self-referral and mandatory notification and disclosure

As part of the health system reform law, physicians who rely on the in-office ancillary services exception to the prohibition on physician self-referral will be required to inform patients in writing at the time they order magnetic resonance imaging, computed tomography and positron emission tomography that the patient may obtain these services elsewhere.

They must also provide the patient with a written list of those who furnish such services. In the recently released proposed fee schedule rule, HHS issued proposed regulations that would require covered physicians to provide the disclosure for services furnished on or after the effective date of the final regulation which is anticipated to be Jan. 1, 2011.


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