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Medicare Claims Adjustments

Effective February 8, 2006, new legislation titled the Deficit Reduction Act (DRA) of 2005 passed into law. This new legislation includes several revisions to payment procedures within the Medicare program. One notable change that providers should be aware of is an update to the 2006 rates for services paid under the Medicare Physician Fee Schedule (MPFS). Essentially, this revision reverses an earlier decision to reduce rates by 4.4%. Under this new legislation, the DRA reinstates the original 2005 rates for all services rendered on or after 1/1/06.

As a result of this decision, Centers for Medicare and Medicaid Services (CMS) is mass adjusting all claims received before 2/08/06 and reprocessing with the updated rates. CMS has also instructed all Medicare and Medigap secondary contractors, including Blue Cross and Blue Shield of North Carolina, to adjust applicable claims for secondary liability.

As part of our compliance efforts with the DRA legislation, it's estimated that BCBSNC will adjust nearly 250,000 claims over the coming weeks. To help keep providers informed, BCBSNC would like to share some important details of the adjustment process:

  • BCBSNC has received the bulk of the corrected claims and began adjustment processing in mid-June.
  • Claims are being processed at an accelerated rate with many claims being paid within the same week, possibly to the same provider.
  • BCBSNC is not issuing "lump sum" payments like CMS. Our adjustments will be issued in the form of several aggregate payments over several weeks.
  • BCBSNC claims payment systems have undergone system enhancements to address this temporary operation. As a result, you may receive checks for very small amounts of money, or checks may appear on unfamiliar stock. Please do not return checks to BCBSNC, this will delay and complicate the settlement process.
  • Some Notification of Payments (NOPs) may also appear in a different format than providers are familiar seeing.
  • Members are held harmless by CMS, BCBSNC and their participating providers for any changes in copayments and deductibles as a result of these adjustments.
  • Not all providers will receive additional payments only those impacted by the Medicare adjustments will have their claims reprocessed.
  • These adjustments apply to CMS 1500 claims submitted through providers Medicare crossover partners.

CMS will not complete submissions to secondary carriers until the end of July 2006, which means providers, may see DRA payments from BCBSNC for the next several months. However, the bulk of the adjustments will be processed in June and July. Please do not resubmit Medicare claims to BCBSNC for adjustment. CMS will submit claims on your behalf.

If you have questions, please contact your local BCBSNC Network Management field office.