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CMS Announces Delay to PECOS Phase 2 Ordering or Referring Provider Denial Edits

On Thursday, April 25, 2013, the Centers for Medicare and Medicaid Services announced that it would delay implementing Phase 2 of its Ordering and Referring Physician Claims Editing program due to technical difficulties. CMS has delayed implementing phase 2 of the program before and it is unclear when it will resolve the technical issues.

The Ordering and Referring Provider program is designed to ensure that claims from Laboratories; Imaging Centers; Durable Medical Equipment, Prosthetics, and Orthotics Suppliers (“DMEPOS”); and Home Health Agencies were appropriately referred or ordered by an eligible provider. Once Phase 2 is implemented, claims from the providers and suppliers listed above will be reviewed to ensure that they include:

1. The name and National Provider Identifier (“NPI”) of a referring physician/non-physician provider;
2. That the referring/ordering provider is registered with the Internet-based Provider Enrolment, Chain and Ownership System (“PECOS”); and
3. That the ordering/referring provider is eligible to refer/order the supplies or service at issue in the claim.

If a claim does not meet the requirements, the claim will be denied.

As a result of the announced delay in Phase 2 implementation, CMS has instructed its Contractors to continue providing educational edits to inform providers/suppliers when a claim lacks the appropriate information or when the referring/ordering provider is not eligible to order/refer that particular service or supply.

This delay in implementation is a good time for referring and ordering providers to verify that they are properly enrolled in PECOS, and, likewise, for the entities listed above to review their billing practices to ensure they are capturing the required information from the referring and/or ordering providers.

The Health Law Partners will continue to monitor CMS for updates on Phase 2 implementation and will provide an update in this blog.

In the meantime, for more information about this issue or other Medicare enrollment, billing, or compliance issues, please contact Adrienne Dresevic, Esq., or Carey Kalmowitz, Esq., at (248) 996-8510, (212) 734-0128 or visit The HLP Website.

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