Regulatory Purgatory

A recent article in Modern Healthcare shows how CMS regulations can tie providers into knots and add administrative costs. Every mail-order company and shipper in America, including USPS, UPS, and FedEx, all work with inexact address data. Apartment or suite numbers are left off, ‘Drive’ is abbreviated as ‘Dr’ or ‘Dr.’, names are misspelled, and yet most of the time, the mail still gets through. Not with CMS, though It has implemented an ‘exact match’ program requiring claims addresses for services provided in off-campus facility addresses to match Medicare enrollment addresses exactly. Any type of misspelling will cause claims to be kicked out of auto-adjudication and returned for manual correction. The reason for this is CMS new site-neutral payment regulation, which pays for services provided in new off-campus ambulatory facilities physician rates, rather than rates CMS pays for services delivered in ‘provider-sponsored’ (i.e., hospital-owned) on-campus or grandfathered off-campus sites.

You might ask why CMS continues to pay ‘provider-sponsored’ rates for the same services that physicians provide in their offices for half the price or less. The answer is POLITICS. Doing away with the ‘technical’ component of reimbursement for hospital outpatient services would force major restructuring on hospital-owned ambulatory facilities. After listening to the outcries about this in its rule-making process, CMS decided to freeze existing off-campus sites and only cut reimbursement for new sites. Another example of why government-funded health care will never be low-cost health care.

Bannow T, ‘Return to sender: CMS won’t pay the claims if off-campus addresses aren’t exact,’ Modern Healthcare, June 3, 2019.