PECOS Policy Could Bring January Denials
December 2009 Issue
O&P businesses are receiving warnings from CMS due to a major Medicare policy change that could bring denials based upon the prescriber's Medicare status.
According to Peter Ashkenaz, a spokesperson for the Centers for Medicare and Medicaid Services (CMS), the policy was first introduced on April 24 in a CMS one-time notification titled Change Request (CR) 6421 and was quickly followed by a Medicare Learning Network "MLN Matters" article about it, which can be accessed at www.cms.hhs.gov/mlnmattersarticles/downloads/mm6421.pdf
According to the policy, in order for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) claims to be paid, the physician or non-physician referrer/prescriber (described as the "ordering/referring provider") must be enrolled in Medicare and registered on the database of a program titled the Medicare Provider Enrollment, Chain, and Ownership System (PECOS). The ordering/referring providers must be listed in the PECOS database with their individual National Provider Identifier (NPI) number and must have enrolled or updated their entry in the database since November 2003. Ordering/referring providers who were previously not enrolled in Medicare, including those whose services are not covered by Medicare, such as Department of Veterans Affairs (VA) and Public Health Service physicians, are included in the mandate, and if they do not enroll in Medicare and join the PECOS database, they will no longer be able to refer their patients for DMEPOS through Medicare.
The policy will be implemented in a two-stage policy, phase 1 of which began on October 5. On that date, CMS began to compare DMEPOS claims against the PECOS database, checking whether the claim included the ordering/referring provider's NPI number, whether that person's name was correctly formatted, and whether both of those items matched the provider's entry in the PECOS database. If any of those conditions were not met, either because the ordering/referring provider was not listed in the database or the claim did not contain the correct information, the claim was processed, but the DMEPOS provider may have been sent a warning message; if the supplier claim was a standard electronic claim, the DMEPOS supplier received the warning message, but if the claim was a paper CMS-1500 claim, the DMEPOS supplier received no warning, even though the claim failed the editing process.
The second phase of the process will begin on Monday, January 4, 2010. Then, claims will be rejected if they do not contain the referring/prescribing provider's individual NPI number and correctly formatted name, if the referring/prescribing provider is not listed in the PECOS database with an NPI number, or if the referring/prescribing provider is in the database but is not of the specialty to order or refer. According to Mobility Management, in an October 21 CMS Open Door Forum, CMS spokesman Jim Bossenmeyer stated that physicians' own Medicare prescriptions will continue to be paid in January whether they are PECOS-registered or not.
CMS has stated that the PECOS database is currently being updated daily and that claims rejected in January on the basis of PECOS problems can be resubmitted once the ordering/referring provider is correctly listed. CMS has also stated that it will make publically available an online national list of eligible ordering/referring providers before phase 2 is implemented. CMS has not stated specifically when this will become available.
Andrea Stark, DMEPOS consultant and reimbursement specialist at MiraVista LLC, wrote in a statement to her customers, "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."
Best Practices to Help Offset PECOS Denials
Stark recommends that businesses take "an aggressive, proactive approach" to educating their referral sources in order to reduce potential rejections. Stark, CMS, the Michigan Orthotic and Prosthetic Association (MOPA), and others have compiled ideas for heading off these potential denials before they happen. Following are some of these practices:
- First, carefully monitor all electronic claims paperwork for notifications that ordering/referring providers are being rejected.
- Look up each rejected provider on the publically available NPI search provided by NPPES, the NPI contractor. To search the database, visit tinyurl.com/y9fhsqk
- Check that the provider information submitted on your claim includes the provider's correct individual NPI number (not the NPI for a group practice) and name. The name must be in all capital letters and be the person's legal name exactly as shown in the NPPES system. It may not contain credentials, titles, or punctuation, except for the hyphen in hyphenated names.
Correct: CHRISTINE WANG-OCONNOR
Incorrect: Chris Wang-O'Connor, Dr. Christine Wang-O'Connor, Christine Wang-O'Connor MD
- If your listing of a rejected provider's name and NPI number is correct, or the provider is not listed in the NPPES database, notify the rejected provider as soon as possible about CR 6421 and how it may affect his business and yours. Request that he enroll in PECOS as soon as possible so that he may continue to prescribe and refer through the Medicare program. Your request may be more effective if you do the following:
1. State that he or she must enroll in PECOS using the user ID and password established with NPPES.
2. Provide the link to the Medicare Provider-Supplier enrollment information page for Internet-based PECOS: www.cms.hhs.gov/medicareprovidersupenroll/04_internetbasedpecos.asp#ofpage
3. Provide the link to the enrollment page for Internet-based PECOS: pecos.cms.hhs.gov/pecos/login.do
4. Provide contact information for the CMS External User Services (EUS) Help Desk for information about using the PECOS enrollment system: Telephone 866.484.8049; e-mail:
5. Provide contact information for the NPI enumerator who can answer questions about their NPPES user ID and password: Telephone 800.465.3203; e-mail:
6. Provide a link to the "MLN Matters" publication SE0194, Guidance on Using Internet-based Provider Enrollment, Chain, and Ownership System (PECOS): www.cms.hhs.gov/mlnmattersarticles/downloads/se0914.pdf
Morgan Stanfield can be reached at