Problem Pile-Up

Novitas Issues Persist One Year On

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Medical Economics Feature — March 2014 

By Amy Lynn Sorrel
Associate Editor

Tex Med. 2014;110(3):27-31.

Novitas Solutions Inc. took over from TrailBlazer Enterprises as Texas' Medicare carrier more than a year ago. But ongoing frustrations with customer service shortfalls, enrollment delays, and heavy auditing practices, among other complaints, have Texas physicians giving the contractor a shabby report card. They say the bad grades still add up to too many hassles and payment problems and not enough answers. 

Unbeknownst to one doctor Texas Medicine spoke to (who wished to remain anonymous), Novitas misinterpreted his business and tax status when he renewed his Medicare participation last May. He didn't find out until his office manager was greeted by a letter and a series of rejected claims — $15,000 to $30,000 worth — that piled up after Novitas deactivated his Medicare billing privileges. 

That's a lot of revenue at stake for a solo practitioner with nearly half of his patients on Medicare, says the physician, who also noticed an uptick in document requests and recoupments, even for patients the doctor treated and received payment for years ago under TrailBlazer's watch.

Even the practice's credentialing specialist couldn't get to the bottom of the issue after spending hours on the phone with Novitas representatives. But once the physician enlisted help from the Texas Medical Association's Payment Advocacy Department, his case was resolved in a matter of days. 

"If Novitas' job is to make payments for medical care more difficult to obtain, then it is doing its job, but not in a way that is fair to the physicians providing care," the physician said. TrailBlazer was by no means perfect, but Novitas "is not any more accessible, and they've created more headaches and take-backs [recoupments] than I've seen in the eight years I've been in private practice. So, I hope it gets better. This is not just my career, but the livelihood [of my employees and practice]. I understand and fully agree that we must act with caution when billing anyone, government or not, for health care services. But it's always been true that if it's not good for physicians, eventually it's not good for patients either." 

Similarly, a six-month delay with renewal cost one rural family physician with Texoma Independent Physicians $6,000 in denied claims. It then took another two months to get paid, says Patti Searles, executive director of the independent practice association. Delays in the initial Medicare enrollment process also cost a new dermatologist to the practice more than $250,000 in delayed claims. Ms. Searles spent three months going back and forth with Novitas to get to the bottom of the issue, to no avail. Until TMA stepped in. 

"If you're not enrolled, you don't get paid. And new physicians coming in to practice on their own, with no cash flow and no salary, can't go four to six months without getting paid," she said. "I agree, some providers don't know the proper way to enroll. But we have 189 physicians, and we've been doing this for them for a long time now. We know the proper way to enroll, and that's what gave us an understanding that this is a systemic problem [on Novitas' part]. It is not just the providers."

Thanks to TMA's help, Ms. Searles says the enrollment issues have improved. "But not because there are fewer issues. Fortunately, I am lucky enough to have TMA as an advocate for our physicians. I now have a contact at Novitas who works directly with me to resolve issues. This should be the rule, though, not the exception." 

A Rocky Start

David Vaughan, Novitas vice president and project manager for the region that includes Texas, acknowledges that the carrier still has room for improvement, but says the first year, for the most part, went as expected. "Our experience in many ways was not unlike what typically happens when workload is transferred to another contractor: It is a time of adjustment for the incoming contractor as well as stakeholders, including physicians. For Novitas Solutions, this involved establishing the infrastructure and staffing needed to support a very large workload," he said, adding that the transition was the largest of its kind in the country, representing approximately 10 percent of the national Medicare fee-for-service claims.

Although some unexpected issues did pose challenges —appeals and enrollment-related filings, for example, surged to unprecedented levels nationally — Mr. Vaughan reassures physicians that Novitas is poised to smooth the path for physicians going forward. 

"We have responded aggressively from the beginning in a variety of ways to the changing conditions, which included additional hiring, modifications to our business model, and emphasis on improving the customer's experience. We have made strides, but we are not done," he said. "The gap between where we are and where we expect to be has closed considerably. We know where we need to go and have detailed plans to achieve our goals in 2014."

TMA officials expected that a transition of this scale would mean a period of adjustment. While payment problems with Novitas are not wholesale, TMA Payment Advocacy Director Genevieve Davis says the ongoing and often unnecessary administrative hassles that transform into payment problems have gone on long enough. TMA also urges Novitas to remain transparent about issues that arise so physicians can plan and respond accordingly.

Physicians are encouraged to log their complaints with the TMA Hassle Factor Log so TMA can continue to closely monitor Novitas' operations, step in to investigate problems, and work with Novitas to resolve them. Download the Hassle Factor Log online, or contact the TMA Knowledge Center at (800) 880-7955.

TMA also remains in regular conversations with the Centers for Medicare & Medicaid Services (CMS), which approved Novitas as the regional Medicare contractor in 2011. Ms. Davis says CMS must do its part, too, to oversee the carrier it chose to handle Medicare claims in Texas and six other states. 

Overall, CMS officials said the transition "has gone relatively well," consistent with past transitions. But they, too, pointed out some shortcomings that track with the complaints TMA has received and said they continue to monitor Novitas' performance. 

Novitas landed in Texas after CMS rebid the contract for Jurisdiction H (JH), which includes Texas, Arkansas, Colorado, Louisiana, Mississippi, New Mexico, and Oklahoma. According to CMS, JH has more than 255,500 Part B providers — half (126,244) in the state of Texas — making this the largest Medicare administrative contractor jurisdiction and the largest transition CMS has overseen. Novitas, formerly Pennsylvania-based Highmark Medicare Services Inc., took over from TrailBlazer and two other contractors in November 2012. Novitas already administered Part A and Part B claims for Jurisdiction 12, which includes Delaware, New Jersey, Pennsylvania, Maryland, and the District of Columbia. 

At the start of the transition, Novitas representatives told Texas Medicine that the company's No. 1 goal was to not interrupt cash flow. Mr. Vaughan says that overall that stated priority was achieved. "At a high-level look, total payout was consistent with the outgoing contractors. Our claims-processing timeliness was exceptional, hovering around 99 percent of all 'clean' claims paid within 30 days."

He acknowledges that during the transition, Novitas experienced a flurry of fiascos, for example, when some recoupments of overpayments went on longer than expected. The company has since resolved those issues. And as of Sept. 1, 2013, Novitas eliminated backlogs in physician appeals and was in line with the CMS requirements to process those claims within 60 days. Except for a few appeals left by TrailBlazer, Novitas is no longer processing claims and appeals using old TrailBlazer policies, which also streamlines those processes. Doctors do not have to refile old TrailBlazer claims, and that part of the transition is considered to be over, CMS said.

Novitas also continues to improve customer service through its Provider Contact Center, "and we expect the outcome of these improvements will be better, more accurate, and helpful responses for providers, along with response times showing better than industry average," Mr. Vaughan said.

Meanwhile, Novitas underwent a technology transition of its own in September that stymied its overall progress. Recent upgrades, however, will help address issues with Novitas' website — another chief complaint among the practices Texas Medicine interviewed. The carrier is fixing the online alert system and claims issues log so physicians can access them and find information more easily. Other planned enhancements, including a web-based provider portal, will allow physicians to submit claims and appeals online.

"We have adjusted to the new normal … and we believe we are poised to have markedly improved performance in 2014," Mr. Vaughan said. 

Enrollment Issues Top the List

Before CMS approved the transition, Texas congressional leaders, TMA, and other state medical societies expressed serious concerns that Novitas lacked the capability to do the job, which meant taking on twice as many claims as it handled when it served only one region. 

Some physician practices say the carrier's performance so far has done little to alleviate those fears. "I think a year is a fair amount of time [to fix any problems] based on the fact that we as a state and TMA had grave concerns about Novitas taking over such a large state," Ms. Searles said. "You know there are significant issues when I can tell [Novitas representatives] more about what they are doing than they can tell me." 

She says problems with the Medicare enrollment process top the list. In her experience, the process through Medicare's electronic Provider Enrollment, Chain and Ownership System (PECOS) typically takes 60 days. Instead, physician practices report that Novitas, which manages the electronic applications, is processing them in upwards of 90 to 120 days. In some cases, Ms. Searles says she had to do double duty when Novitas asked her to submit paper applications because representatives were unfamiliar with PECOS operations. 

Those hang-ups have significant ripple effects, says Kim Stevens, a credentialing and insurance specialist for physician groups across Texas and across the country. She is a principal for Innovative Health Resources in Austin, a TMA-approved practice management company. 

CMS acknowledges its own technical glitches getting PECOS to run smoothly. But now, PECOS is "foolproof" most of the time, she says, yet Novitas continues to lose applications or return them due to their own errors. "This impacts other areas of business for the providers."

Some physicians can't bill for Medicaid until they are enrolled as a Medicare provider, for example. And with commercial insurance carriers branching out into Medicare and Medicaid managed care, hang-ups in those programs can hold up physicians' private contracts, too. 

Enrollment issues also impact physicians' ability to order and refer services to other doctors and for those referral physicians to get paid. As of Jan. 6, Medicare is denying claims for services ordered or referred by physicians not enrolled in the program. (See "Medicare Will Deny Ordered/Referred Claims Without Enrollment.") That means labs that fulfill orders for blood tests or specialists who perform imaging procedures, for example, will not receive Medicare payments if those services were ordered or referred by a doctor not enrolled in PECOS. 

The consequences also could harm physicians' referral relationships, Ms. Stevens adds. If physicians aren't properly enrolled, "it hurts referral patterns, and it impacts physicians financially because they are losing business."

TMA's Payment Advocacy staff are monitoring the enrollment issue, as well as its impact on physicians' ability to order and refer services or receive those orders and referrals. 

Mr. Vaughan said, "Novitas does not believe that any potential delays in provider enrollment will affect a provider's ability to order/refer services." 

He says the majority of new applications processed, including those solely for ordering/referring, are "consistent" with its contract requirements. He added that Medicare processing timeframes vary by application type and whether additional information is required, which CMS also reiterated. Roughly half of the enrollment applications Novitas gets from physicians are incomplete, which causes processing delays. For example, Novitas told TMA that in June 2013, it received more than 150,000 claims with an incomplete, missing, or invalid ordering provider name or national provider identifier (NPI). Novitas processes 80 percent of ordering/referring applications within 60 calendar days, in line with CMS requirements.

"The amount of providers who remain unenrolled in PECOS is limited, and Novitas is prepared to expedite processing of [ordering/referring] applications to mitigate interruption in claim payment," Mr. Vaughan said. 

Audit Pressure

TMA also is tracking concerns from physicians over heavy prepayment audits, particularly when it comes to high-level evaluation and management (E&M) procedures. TMA is aware that CMS has stepped up scrutiny of certain services. But Ms. Davis says that should not translate to across-the-board audits. 

Ahmed Mattar, MD, says his experience demonstrates otherwise. 

Ongoing audits by Novitas pushed the Wichita Falls family physician to the brink of shutting down Wichita Falls Family Health Center last spring. For the past year, the carrier has routinely asked the clinic to produce as many as 50 to 60 charts at a time before paying claims. His staff estimate that six out of every 10 charts are subjected to review.

The heavy audits translated to payment delays that forced the clinic to take out a loan to keep its doors open. Some staff were let go, and physicians forewent their paychecks. Prepay audits are nothing new, but Dr. Mattar's staff say the clinic never experienced this level of auditing with TrailBlazer. And despite regular phone calls to Novitas, the clinic receives little explanation for the ongoing scrutiny.

"We are practicing the same way we did under TrailBlazer. We provide good quality care. Yet we are receiving our pay very late, and we are under more reviews and what seems to me like delay tactics," Dr. Mattar said. As a resident training program, "we produce doctors for the state. And they [Novitas] have to know that we [physicians] count on those payments and the timeliness of payments. Intentional or not, these delays are causing harm to a lot of people and will make the situation worse for patients in Texas if it's not fixed." 

Mr. Vaughan said Novitas "currently reviews a small percent of randomly chosen claims for certain E&M services as part of its prepayment edit process." Reviews are based on error trends, and approximately two-thirds of all payment errors are associated with E&M services, he says. Some reviews may be specific to a provider, others to a service, so "providers who bill large numbers of the particular service will naturally have more claims selected as part of a service-wide review." 

He pointed physicians to a list of services that Novitas reviews on the Medical Review page of its website, along with educational resources for E&M services. He said the resources also address physicians' responsibility to submit accurate and complete Medicare revalidation applications and provide address updates to avoid payment suspension.

Glimmers of Hope

Amid physicians' troubles are some glimmers of hope for improvement. When claims processing is smooth, Ms. Searles says Novitas generally pays them within 15 days. 

Customer service is better, too, Ms. Stevens noted. And when it works, an enrollment status tracking tool on Novitas' website helps her stay on top of physicians' PECOS applications. In the past two months, she noticed that applications were processed more quickly. 

TMA's Ms. Davis added that Novitas helped TMA identify physicians who had not completed their electronic funds transfer forms on time so their payments could be directly deposited without cash flow interruptions. 

Novitas also continues to partner with TMA on its annual Medicare educational seminars in various locations throughout Texas. 

CMS says claims processing and payments were "unencumbered, on the whole," with Novitas processing 99.4 percent of Part B clean claims within 30 days. They confirmed that appeals processing is back on track, and Novitas is handling written inquiries to the Provider Contact Center in a timely manner. 

But the carrier continues to struggle when it comes to the phones, with average call wait times and completion rates "well below" CMS standards. Meanwhile, backlogs in enrollments are "growing," CMS said. Novitas received more applications than what it had projected and was staffed to handle, although CMS confirmed that enrollment increases are affecting several Medicare carriers throughout the country.

Still, these two areas — the Provider Contact Center and enrollment — represented the "most persistent, recurring complaints we have heard directly regarding Novitas' operations in Texas," CMS said.

The agency has not issued any corrective actions, but says Novitas proactively submitted its self-improvement plans. The technology transition in September caused some setbacks, but Novitas has since hired outside consultants and temporary staff help to move forward.

"The CMS recognizes the frustration during the transition. Since then, we've routinely held monthly face-to-face meetings with Novitas senior management to stay apprised of their progress in overcoming the setbacks they had during the transition period," officials said. "Yes, improvement in a contractor's performance is a fair expectation for the provider community. We are very active in monitoring Novitas' functions and performance on a daily, weekly, and monthly basis … through ongoing meetings, daily/weekly reports, and periodic site visits."

As with all Medicare carriers, CMS says, Novitas was due for a formal evaluation of its performance. The one-year contracts are not automatically renewed. At press time, though, officials anticipated Novitas was here to stay for at least the next year. 

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.


Five Steps to Smoother Claims

Here are the top five things Novitas says physicians can do to help claims processing run more smoothly:  

  • Don't send Medicare revalidation applications until requested. Sending them in advance can lead to processing delays.
  • When enrolling, use the forms and reference materials provided on Novitas' website to aid in submitting accurate documents. Novitas says about half of initial applications require more information, which means delays in issuing a Medicare provider number. 
  • Consider using the electronic Provider Enrollment, Chain and Ownership System (PECOS) application rather than paper forms for enrollment. 
  • When applicable, use the forms Novitas provides on its website, particularly for appeals (redeterminations and reopenings), which facilitates accuracy.
  • Check periodically for podcasts, events, and other educational activity on Novitas' website for the latest Medicare updates. For example, the transition to ICD-10 in 2014 will be a significant change for physicians. 


Medicare Will Deny Ordered/Referred Claims Without Enrollment

As of Jan. 6, Medicare will deny claims for services ordered or referred by a physician who is not enrolled in Medicare. 

The requirement was included in the Affordable Care Act to address multiple issues, including combating fraud and abuse by making sure only those physicians who are appropriately enrolled in Medicare are providing services to Medicare beneficiaries; ensuring that nonphysician providers are not ordering and referring services they are not allowed to under the Medicare rules; and making sure that physicians maintain updated enrollment records with Medicare.

Here are some steps you can take to make sure your claims aren't denied:  

  • Verify enrollment. To avoid denied claims for you and for those to whom you refer, use TMA's free PECOS lookup tool to make sure you and physicians from whom you receive orders/referrals have an enrollment record in the Centers for Medicare & Medicaid Services (CMS) Provider Enrollment, Chain and Ownership System (PECOS). You also can check the Medicare Ordering and Referring File. (TMA's tool is based on the CMS data file.) Or, contact Novitas at (877) 252-8782 (choose option 4), and ask if you have an enrollment record in PECOS. 
  • Enroll in PECOS, if necessary. If you order and refer, and you do not have a record in PECOS, you need to submit either an electronic application through PECOS or a paper enrollment to Medicare. More information on enrollment guidelines is available on the TMA website above. 
  • Submit claims properly. TMA staff also recommend that physicians monitor claims closely for any rejections indicating the ordering/referring physician is not enrolled, and, if necessary, contact the physician and ask that he or she enroll in Medicare to prevent future denials.

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TMA Hassle Factor Log to the Rescue

Physician members can get help with their Novitas issues by using the TMA Payment Advocacy Department's Hassle Factor Log. The program helps doctors bring their insurance-related issues to TMA's attention so staff can investigate problems and work with private health plans, Medicaid, and Medicare to get claims paid correctly. 

The Payment Advocacy Department's work has paid off over the years. In 2012 alone, the department helped TMA members recover nearly $50 million.

Physicians can use the Hassle Factor Log to document their dispute, the type of payer they are dealing with, and the reasonable attempts they have made to resolve claim issues, including the appeals process.

Download the Hassle Factor Log and learn more about the program online, or email the TMA Payment Advocacy staff for assistance. You also may contact the TMA Knowledge Center at (800) 880-7955 or by email


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