Rebuilding Relationships

Physicians Prepare to Switch From TrailBlazer to Novitas  

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Medical Economics Feature – October 2012 

 Tex Med. 2012;108(10):25-32.

 By Amy Lynn Sorrel  
Associate Editor 

There's a new MAC in town, and Texas physicians are waiting to get a glimpse of just what the carrier is made of.

On Nov. 19, the Centers for Medicare & Medicaid Services (CMS) will flip a switch, and Novitas Solutions Inc. will take over from TrailBlazer Enterprises as the new Medicare administrative contractor (MAC) in Texas and other states. As they brace for the glitches that can come with any big change, physicians want to ensure they are not left in the dark. 

Doctors have some important administrative duties to prepare their practices for the cutover. But the bulk of the responsibility for a smooth transition rests in Novitas' corner.

"It's a huge task for Novitas to bring in people who don't know this area and to set up a completely new system without any hiccups. The biggest problem I see is rebuilding the kind of strong relationships we had with TrailBlazer's medical directors, policy nurses, and the people that actually help us file claims and get answers quickly," said Garland ophthalmologist John M. Haley, MD. "It's a different ballgame now, and it takes a long time to develop trust with a new carrier. And that's what it takes for this to run smoothly – trust."

With Medicare patients making up 60 percent to 70 percent of his practice, Dr. Haley is "totally dependent" on a fluid shift. Adjusting to new names, phone numbers, forms, and codes are one thing, and no small hassle at that. But missing a check is not something he can afford.

That's why avoiding payment disruptions is a top priority, said David Vaughan, Novitas vice president and project manager for the upcoming transition.

"Job No. 1 for the transition and beyond is to preserve cash flow, and really closely aligned with that objective is to make this the least disruptive as possible and minimize changes on the provider community," he said. "To the extent we have fewer moving pieces, the less likely things will go wrong. We've done a lot of due diligence and worked with TrailBlazer since the onset, and we are using those differences to fuel our education efforts and make improvements where necessary."

The stakes are high for the contractor, too, to perform well, Mr. Vaughan added. Novitas has a five-year contract with CMS for Part A and Part B fee-for-service claims in Medicare's new Jurisdiction H (JH), which includes Texas, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, and Oklahoma. But the agency does not have to wait the full five years to let the contractor go if it does not live up to its end of the bargain.

"We want to be a good partner and communicate effectively and build relationships. We are not going to disappear from the landscape once we get to the cutover," Mr. Vaughan said.

Novitas Who?  

Novitas is the product of transition, as well, albeit in the health insurance plan market.

The company was formerly Highmark Medicare Services Inc. (HMS), which won the CMS contract for MAC JH on Nov. 8, 2011. Pennsylvania-based health plan Highmark Inc. later sold HMS to a holding company owned by Blue Cross Blue Shield of Florida Inc. The deal, and the name change, closed in January.

Novitas now administers Part A and Part B claims for Jurisdiction 12 (J12), which includes Delaware, New Jersey, Pennsylvania, Maryland, and the District of Columbia.  

The carrier landed in Texas after CMS rebid the contract for JH, which combines former Jurisdictions 4 and 7 under a broader strategy to consolidate Medicare administrative regions from 15 to 10 by 2016.

TrailBlazer, which was the MAC for Texas, Colorado, New Mexico, and Oklahoma for decades, appealed the contract award. The Texas Medical Association, the Colorado Medical Society, the New Mexico Medical Society, and the Oklahoma Medical Association supported the appeal. However, the U.S. Government Accountability Office denied the appeal in March.

TrailBlazer will continue to process claims through Nov. 16, a Friday. Novitas will begin receiving electronic claims that evening.

Come morning on Monday, Nov. 19, Novitas will begin full operations and double its workload; in other words, process twice as many claims as it did when it handled only J12. The contact center opens Nov. 20, when Novitas gains access to the CMS databases needed to respond to inquiries. The company also will process Indian Health Services facility claims for the entire country and support centralized billing by immunization clinics.

In all, Novitas will handle roughly 25 percent of national Medicare fee-for-service Part A and Part B claims – close to the 26 percent maximum CMS sets for any one contractor. Jurisdiction H represents approximately 13.2 percent of national Medicare claims volume, including 147,000 physicians and other health care professionals, and 1,300 Medicare hospitals.

The jump in workload raised physicians' eyebrows.

TMA's Payment Advocacy staff members are closely monitoring the transition and remains in regular conversations with Novitas to prepare physicians for the change.

"We have had a professional experience thus far, and we hope to continue to develop a relationship that enables the association to address issues as they arise," said Lee Spangler, JD, TMA's vice president for medical economics.

CMS also has to do its part, he added.

"We continue to encourage CMS to oversee its contractor during the transition, and we are always going to hold CMS accountable for its decision. There are going to be wrinkles, and we want to make sure CMS is on top of things. And we hope Novitas through its experience with other states has learned to avoid those wrinkles," Mr. Spangler said.    

Ramping Up  

Mr. Vaughan acknowledged the extent of the undertaking, but said the carrier is ramping up. Highmark’s experience with the J12 consolidation, which also represented a doubling of claims volume when it took over in 2007, paved the way.  

"We've been through this before: the mechanics of setting it up, making sure we answer phones on day one, and that the first payment cycle processes. It is huge, but there's also a certain predictability to it," Mr. Vaughan said, noting that many of the systems are even more standardized than in earlier transitions. 

Novitas continues to recruit specialists from TrailBlazer to capitalize on their familiarity with the region.

For example, the company hired TrailBlazer's former contractor medical director for Texas, internist Debra Patterson, MD, as Novitas' vice president of clinical affairs and executive medical director. She will oversee medical policy development and reviews in JH and J12.

CMS tasked Novitas with evaluating existing local coverage determinations (LCDs) and choosing "the most clinically appropriate" policies to be applied to the jurisdiction. Novitas turned that over to its medical directors.

"The nonphysicians among us know enough to get out of the way of that," Mr. Vaughan said.

So far, the changes are minimal, and Novitas has adopted about 75 percent of TrailBlazer's policies, the rest from Pinnacle Business Solutions Inc. and Cahaba Government Benefits Administrators LLC, the other former JH MACs, Dr. Patterson said. Novitas did not overlay J12 policies onto JH.

"The most important thing physicians need to do is go to Novitas' website, pick out the LCDs that apply, study them, and go to the end of the policy to find out if it came from TrailBlazer or elsewhere. If it's new, or there is no longer a policy for a particular service, it could affect claims processing," she said. TMA members can find a link to the new LCDs and other key transition information at

For example, Novitas retired a TrailBlazer policy related to drugs and biologics and will handle claims for cancer chemotherapy drugs differently. However, experienced Novitas medical directors made such coverage decisions with advice from the practicing physicians in its jurisdictions, Dr. Patterson said.

In the case of the chemotherapy coverage, she and a Novitas medical director attended the joint American Society of Hematology/American Society of Clinical Oncology national meeting of oncology and hematology Contract Advisory Council (CAC) representatives in June. Novitas leadership and medical directors also plan to meet with other JH oncologists, including The University of Texas M.D. Anderson Cancer Center in Houston.

Novitas will maintain current membership in the CACs, groups of appointed specialists from each state who also help inform LCD policy. Other things that will not change are physicians' access to the LCD reconsideration process and a CMS-imposed moratorium on recovery audit contractor activities when a new MAC takes over, typically 90 days prior and subsequent to the transition date.

Dr. Patterson also will oversee physician outreach and education from a Dallas office, which was slated to open in late September. The facility will largely house Part A auditors, but also will serve as a home base for regional outreach specialists and medical directors.

Novitas will have a learning curve getting to know unique aspects of Texas' health care landscape, she said, such as the large number of physician-owned hospitals and academic medical centers.

"It will take time. But one of the nice things about my being here is that we now have the benefit of the experience here, and we understand here, and we just have to make it work with Novitas," Dr. Patterson said. 

Getting Ready     

If physicians want to see their checks arrive on time, there are few steps they must take, as well. (See "Your Implementation Checklist.")

TMA staff created a website with resources to help physicians and their office managers and administrators become familiar with the transition.

There, physicians also can link to Novitas' dedicated JH transition website with details on the process, important dates, LCDs, and how to create a plan of action. TMA and Novitas recommend physicians check this website regularly for the latest updates.

TMA also is hosting webinars and a tele-town hall meeting with Novitas representatives to answer questions in advance of the cutover.

The TMA tele-town hall meeting will be at 8 pm CDT on Oct. 25.

Novitas representatives will join TMA physician and staff experts to give physicians a quick overview of what the transition means to them and to field questions. 

TMA will call you at your home telephone phone number. If you would prefer TMA call you at another number or if you would like to invite your office administrator or other staff member to participate, contact the TMA Knowledge Center by telephone at (800) 880-7955 or by email.

TMA also will conduct a free webinar from noon to 1 pm CDT Oct. 10 for office managers and administrators. It will examine the details of what must be done before the Novitas takeover. For updates on how to register, visit the TMA website or contact the TMA Knowledge Center.

To continue getting paid, at the top of physicians' to-do list should be completing a new electronic funds transfer (EFT) agreement for those already enrolled in the program.

The form authorizes Novitas' bank, U.S. Bank, to directly transmit payments to physicians in place of TrailBlazer. CMS in late July sent letters to physicians outlining the requirement. A copy is on the TMA website

Physicians will need to mail paper claims to a new address. And TMA staff recommends that physicians who may need to enroll in Medicare or make changes to their current Medicare enrollment complete their enrollments online to avoid the potential for lost paperwork during the switch.

Informing practice managers, administrators, and third-party vendors – anyone involved in the billing process of – the impending changes also is key.

So Far So Good?  

Arkansas and Louisiana were the first in JH to undergo the Novitas transition in mid- to late August. At press time, no major problems had surfaced, according to medical and hospital associations in those states.

"We had no major blow-ups in the first few days, but we haven't had a significant enough operational time frame to make a judgment," said Kevin Bridwell, Louisiana Hospital Association vice president of health care reimbursement. "Novitas has done a decent job of communication, and that speaks well of the job they've done so far on the front end. But that changes tomorrow if claims don't get paid. That's where the rubber meets the road."

CMS regional office officials report that Novitas experienced "some delays" in receiving Part B claims on its first day of operations in Arkansas and Louisiana, Aug. 14. Since then, all claims receipts and payments have occurred without interruption, and "workload processing indicators appear normal." 

The issue affected few physicians and did not involve any flaws in the electronic claims-processing system (EDI) itself, Mr.  Vaughan says. As a precaution, Novitas temporarily disabled the system, fixed the affected files in a few hours, and notified physicians when it was up and running.

CMS officials said Novitas must meet the same "stringent" standards as any other MAC, which include "myriad" performance and service level metrics – more than 200 according to Mr. Vaughan – for various functions, such as claim processing, appeals adjudication, and overpayment collections. That means, for example, making sure physicians do not get a busy signal when they call, answering calls speedily, and processing a minimum of 95 percent of clean claims – those that contain all the necessary information – within 30 days.

In addition, Novitas is subject to hourly, daily, and weekly monitoring and must submit regular reports to CMS at various points during the transition.

"CMS is very sensitive to the disruptions that MAC operations may have upon providers and their ability to afford beneficiaries with access to care," regional officials said. "We have developed detailed oversight plans that help us plan for contingencies and detect anomalies quickly so as to ensure that transitions occur as seamlessly as possible." 

The agency said it did consider Novitas' workload in the contract award decision and found the company passed muster: In calendar year 2011, Novitas processed 103 million Part B claims in J12, with 99.55 percent of clean claims processed within 30 days. TrailBlazer had similar performance numbers.

CMS has miscalculated before, however. A 2010 GAO report highlighted obstacles in the early MAC transitions elsewhere in the country, including CMS' underestimation of pending appeals cases and telephone calls that resulted in service issues for the incoming MACs.

CMS said it has since learned from those errors. Novitas continues to adapt, too, Mr. Vaughan says.

For now, Dr. Haley is tracking Novitas' website and the LCDs to prepare. But the uncertainty of the transition, coupled with a looming 27-percent cut in Medicare payments and a new physician fee schedule around the corner, have him playing it safe, too. Dr. Haley said he shored up some cash "just in case" there are payment interruptions.

"What I expect [from Novitas] is good channels of communication so we can have an avenue to fix the inevitable problems that will occur and so we can talk to people without having to jump through hoops," he said. "We [doctors] have to be involved, but they also have to listen to us. If they do that, this will go smoothly."

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


 Your Implementation Checklist 

The Nov. 19 deadline for the transition to Novitas Solutions Inc. as the new Medicare contractor for Texas is around the corner. Here are some steps physicians and practice managers can take to get ready and get paid. 

  • Check the Novitas JH transition website frequently and sign up for the email list for Segment 5 (TrailBlazer Part B, Texas, Colorado, New Mexico, and Oklahoma). 
  • Submit the electronic funds transfer (EFT) agreement, CMS Form 588 (see the TMA website).  
  • Change post office box addresses for paper claims. 
  • Check new local coverage determinations. 
  • Notify relevant office staff and third parties – practice managers, electronic billing systems clearinghouse (EDI), software vendors – and create a comprehensive action plan 
  • Perform EDI testing before the cutover.  
  • Note new telephone numbers and call flow for claims and eligibility status, payment information, EDI assistance, and medical policy departments. 

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 Where to Get Help 

Here are some important email addresses, websites, and telephone numbers you should keep handy if you have questions about the transition from TrailBlazer Health Enterprises to Novitas Solutions:

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