Medicare Requiring Referring Providers be registered with PECOS

CMS, Centers for Medicare and Medicaid Services, has implemented a new policy regarding payment for durable medical equipment, prosthetics, orthotics, and supplies. In order for a supplier to receive payment for these supplies, Medicare is verifying that the ordering/referring provider on a DMEPOS claim (1) has a current enrollment record in Medicare (i.e., the ordering/referring provider enrolled or updated his/her enrollment record within the past five years and the NPI is in the record) and (2) is of a specialty that is eligible to order and refer.

In order to verify this CMS is requiring that the ordering/referring provider is registered with 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. If the ordering/referring provider is not registered with PECOS the claim for the durable medical equipment, prosthetic, orthotic or supply will be denied.

Many providers are unaware of this new policy. It was first introduced on April 24, 2009 in a one time notification issued by CMS entitled “Change Request (CR) 6421” and it was only followed up with one article in the Medicare Learning Matters. This new policy was implemented in two stages. In the first stage, from October 5, 2009 thru January 3, 2010 CMS began comparing the DMEPOS claims with the PECOS system. If the claims were submitted electronically and the information on the ordering/referring provider was not on the PECOS system, or didn’t match the information on the PECOS system then the provider would receive a warning. However, if the claims were submitted on paper, no warning was issued.

The second phase was supposed to began on January 4, 2010. This deadline has been extended to April 5, 2010. Beginning on that date, any claims that do not contain the ordering/referring provider’s individual NPI and if that provider is not registered on the PECOS system, the claims will be denied. Also, if the information does not match what is on the PECOS system the claims will be denied.

The problem with this new policy is that it is the supplier’s claims that will be denied, even though it is not their information that is not accurate, or not enrolled in the PECOS system. The supplier has no control over whether the referring/ordering provider complies with this new policy. CMS is supposed to be making a national list of eligible referring/ordering providers available online prior to the April 5, 2010 deadline. At least then a supplier can check to see if the referring/ordering provider is eligible before providing the supplies.

This policy is (or should be) a concern for anyone who is a Medicare DME supplier. You will now have to verify that the provider who is referring the patient or ordering the supplies is compliant with this new policy otherwise they will not be paid for there services. This one will be interesting to see.

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One Response to “Medicare Requiring Referring Providers be registered with PECOS”

  1. Charlene Hargrove Says:

    Yes it drastically impacts DME providers!!


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