TMA, Other Societies Urge CMS to Keep TrailBlazer

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Medical Economics Feature – March 2012


Tex Med. 2012;108(3):45-47.

By Ken Ortolon
Senior Editor

Athens family physician Douglas Curran, MD, is worried.

At a time when the entire health care system is going through huge changes – from the implementation of the Affordable Care Act to the rollout of the ICD-10 coding system – he doesn't need another hassle.

But that's what he's likely to get this summer if the U.S. Centers for Medicare & Medicaid Services (CMS) proceeds with its plans to change the Medicare administrative contractor for the region that includes Texas and six other states.

"I have great anxiety about our cash flow," Dr. Curran said of the impending switch in Medicare contractors from TrailBlazer Health Enterprises to Highmark Medicare Services, which won the contract in November.

Dr. Curran, whose small group practice has a large Medicare patient population, fears disruption of claims processing and payment as a result of the change in contractors, and he's not alone.

"Any time there is a change of this magnitude with complex systems like claims payment there will be administrative hell to pay," said Norman Chenven, MD, chief executive officer and founder of Austin Regional Clinic, a large multispecialty group. "Nothing will work for six weeks, and it will take two years to get back to 'normal.'"

Texas Medical Association officials say the potential hassles and expense the changeover could cause physicians here and in other states are enormous. That is why TMA joined medical societies from Colorado, New Mexico, and Oklahoma to ask CMS to reconsider its decision.

And TrailBlazer has formally appealed the contract award to the General Accountability Office (GAO). GAO could reach a final decision as soon as this month.


Pushing Consolidation

CMS rebid the contract for both Medicare Parts A and B for Texas and six other states as part of an ongoing effort to consolidate Medicare administrative regions from 15 to 10. The new Jurisdiction H combines the former Jurisdiction 4, which includes Texas, New Mexico, Colorado, and Oklahoma, and Jurisdiction 7, which includes Louisiana, Arkansas, and Mississippi.

TrailBlazer is the current contractor for both Medicare Parts A and B for Jurisdiction 4. Pinnacle Business Solutions is the Part A contractor for Jurisdiction 7 and the Part B contractor for Arkansas and Louisiana. Cahaba Government Benefits Administrators holds the Part B contract for Mississippi. Those states will have a new contractor regardless of whether Highmark or TrailBlazer ultimately wins the contract.

In its November announcement of the new contractor, CMS said it "anticipates that implementation of the new contract will go smoothly, with few, if any, disruptions in service for Medicare beneficiaries and providers."

The physicians in the new region, however, disagreed. In December, TMA, the Colorado Medical Society, the New Mexico Medical Society, and the Oklahoma Medical Association wrote Acting CMS Administrator Marilyn Tavenner that the decision to change contractors "is ill considered, and will cause substantial disruption when consistency and stability is needed."

TMA President C. Bruce Malone, MD, of Austin, and the presidents of the three other state societies signed the letter. The four states made up the former Jurisdiction 4.

In the letter, the medical groups raised concerns that Highmark – which already is the contractor for a Medicare region that includes Washington, D.C, Philadelphia, and several other large cities – could not achieve cost savings called for under the contract and may have underestimated the number of additional staff it needs to handle claims from the region.

Highmark plans to add 500 new employees to process the additional claims volume, but even Highmark President Patrick Kiley raised doubts about the company's ability to deal with the workload when he said the company's total fee-for-service claim volume would be "close to the maximum any one company can handle."

"The medical societies believe it is very possible that award of this contract to Highmark exceeds its ability to handle the workload, and respectfully urge the GAO and CMS to review Highmark's actual capabilities," the society presidents wrote.

That's what has Dr. Curran, a member of TMA's Board of Trustees, worried. Medicare patients make up 35 percent to 45 percent of his practice. So any disruption in processing his Medicare claims could mean serious cash flow problems for his practice.


Piling on Hassles

In addition, the medical societies raised concerns about three other issues that will cause significant hassles and expense for physicians. First, Highmark currently uses US Bank to pay Medicare claims while TrailBlazer uses JP Morgan. That means every physician and other health care professional in the four states will have to execute new electronic funds transfer agreements with Highmark's bank before they can get paid.

Also, the societies said Highmark uses a different "front end" claims-processing system than TrailBlazer. That will require physicians to test their practice management software to ensure it's compatible with Highmark before they can conduct electronic transactions.

The medical society presidents said these activities would be an added burden for physicians who already have to test their practice management systems to make sure they are compatible with the new 5010 transaction standards implemented under the Health Insurance Portability and Accountability Act.

"Again, this will introduce delays in claims payment and increase costs in physician practices," they wrote.

Lee Spangler, JD, TMA's vice president for medical economics, say physicians may face the expense of testing their practice management systems and may have to adjust them to work with Highmark's payment system "front end."

Dr. Curran says that could be a significant expense for his 11-physician practice.

Finally, if Highmark gets the contract, it will have to review all of TrailBlazer's local coverage determination policies and likely would issue many new coverage decisions. Under a local coverage determination, a contractor decides whether it will cover particular services on a carrier-wide basis.

Mr. Spangler says that likely will cause considerable confusion about what services are covered while physicians sort out those changing policies.


Timing Is Everything

Mr. Spangler and Colorado Medical Society Chief Executive Officer Alfred Gilchrist say changing Medicare contractors now is just a matter of bad timing.

"Given the fact that doctors are trying to build out medical homes, install health information technology, deal with the new world of care coordination and transparency, and certainly with ICD-10 coming on and all that will entail, we have a problem with the timing of it," Mr. Gilchrist said.

"It's just too much change," Mr. Spangler added.

They also say physicians in the old Jurisdiction 4 already have an established relationship with TrailBlazer and don't want to lose that.

"Our relationship with TrailBlazer has been professional," Mr. Spangler said. "They have been open to listening, we have regular meetings with them, and they're willing to talk to our physicians."

Highmark does not have that reputation among medical societies in its current coverage area, he says.

"We're not saying TrailBlazer is perfect," Mr. Gilchrist added, "but we have every right to be concerned, not just with the details of the transition and the problems it will cause but also with whether the customer service will be there."

Ken Kerns, vice president of program management operations at TrailBlazer, declined to comment on the specific grounds or rationale for his company's appeal of the contract, but said TrailBlazer had appealed the CMS decision to the GAO.

"We very much appreciate the support TMA has given us over the years, and I truly am hopeful we will be working with you for years to come," he said.

Ken Ortolon can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email.


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