Medicare Is Now Charging Enrollment Fees for Institutional Providers

Beginning March 25, 2011, Medicare started charging institutional providers a fee of a little over $500 for new enrollment applications. The money will be used for "program integrity" efforts including the screening of applicants to the program. The fee applies to any new institutional provider - nursing homes, hospitals, etc. - or those that are re-enrolling/re-validating or adding a new practice location. The new fee applies to both paper and online (PECOS) applications.

The fees are not applicable to physicians, non-physician practitioners, physician organizations, and non-physician organizations. They are only applicable to institutional providers of medical services or other items or suppliers for CMS-855A and CMS-855B (not including physician and non-physician practitioner organizations). However, physicians and non-physician practitioners applying for Durable Medical Equipment (DME), using the CMS-855S application, will be charged the fee per application! If your practice is considering adding DME, be sure to include the application fees (per location) in your cost considerations. All future fee price increases will be linked to the Consumer Price Index.

Criminal Background Checks Becoming More Commonplace

Some state license boards already require criminal background checks with license applications and renewals. If the candidate's fingerprints are not on file and a thorough criminal background check accomplished, the license will not be issued or renewed. For example in the state of New Jersey, more than 1,500 physicians had not completed their criminal background checks and their licenses expired 6/30/11. Without a current state license, physicians will not be able to practice! Be sure to heed any & all directions from your State Board regarding license applications and renewals.

Criminal background checks are the norm outside of the healthcare industry. Today, most employers conduct criminal background checks on job applicants in an attempt to avoid "negligent hiring" lawsuits by customers. Hospitals face similar risks in the form of "negligent credentialing" lawsuits by patients. At this time, many hospitals don't obtain criminal background checks.

When considering the addition of criminal background checks to your hospital's credentialing processes, be sure to contact your hospital attorney for state specific guidelines and any changes to the medical staff bylaws that may be required. In addition, the medical staff credentialing committee will need specific direction for dealing with the results of any criminal background checks.

Whether your hospital completes primary source verifications internally or outsources the work, the addition of criminal background checks to the appointment and reappointment process are worthy of consideration. There are many companies available to complete the criminal background check – investigate the company before hiring to ensure their process meets the needs of your hospital & physicians. If you outsource some of the credentialing work, the company can add criminal background checks for your application process.

Similarly, physician practices need to consider the addition of criminal background checks to their hiring processes. It is also recommended to complete primary source verification of the physician's credentials before making a hiring offer to a physician. Countless physician practices have been surprised to find that the physician they hired has an "issue" that will create problems with credentialing and hospital appointments. It is crucial to independently review the physician's history prior to the hiring offer – don't rely solely on what the applicant tells you.

Physician Practices Are Not Immune to Economic Downturn

For many years, the business of medicine was regarded as a bastion of stability, producing steady profits regardless of the direction the economic winds were blowing. People didn't stop getting sick when Wall Street "took a tumble" and they are still getting sick. However, lowering reimbursement rates and the rising costs of practice overhead have changed the dynamics of healthcare, rendering the industry far more susceptible to economic swings.

Two factors are key to ensuring financial stability in the future: maintaining insurance reimbursements at optimum levels and keeping office overhead costs in check.


All physician practices are dealing daily with claims denials and rejections for many, many reasons. The insurers are finding any reason to delay paying a claim or to deny payment all together. In addition, payment reductions may be made if the physician or practice is listed as "out-of-network". Getting physicians accurately credentialed with Medicare and the commercial insurers is the first step in receiving and maintaining proper reimbursement levels. The rules and regulations for credentialing are constantly changing. These changes can significantly affect a practice's reimbursements and in the worst case, cripple a practice.

It is crucial for the practice to maintain copies of contracts with all insurers – the contracts include the reimbursement levels. Knowing the reimbursement rates allows the practice to identify immediately if the insurer is not paying the agreed upon rates. Your billing company should be able to generate reports for you by physician and insurer that indicates payments for claims submitted. In addition, if the reimbursement rates do not cover the practice's costs, you should consider terminating those contracts.

Of course, the insurers need to have updated information for each physician for every location where patients are seen. Submitting claims for a physician who normally practices at "Site A" for services rendered at "Site B" while covering for a vacation or medical leave can lead to disastrous results. In fact, Medicare can deactivate your account if address changes are not communicated to them and mailings to an old address are returned to Medicare.

The front office personnel need to have access to the participation status for each physician for each insurer. That way, patients can be scheduled for physicians participating with the patient's insurer. Be sure to instruct your office personnel in how to read the member's ID card to determine the insurer who is actually paying the claims.

Overhead Costs

Another major factor to consider in trying economic times is the medical practice's overhead costs. The largest segment of overhead cost is related to the office staff. Making sure this important resource is properly and productively deployed is critical. Practice management consultants abound and can help you review your office staffing levels and maximize their productivity.

Credentialing responsibilities usually fall to the office manager or administrator. With the multitude of responsibilities facing the office manager, credentialing is rarely a good use of their time and effort. Unfortunately, many physicians do not appreciate the importance of the credentialing process and can allow applications and requests to be delayed. Outsourcing the time-consuming and arduous task of medical credentialing can result in real dollar savings. Spending time completing mountains of paperwork is not a good use of a physician's or practice administrator's time.

AddVal's solution allows physicians to spend more time with their patients and practice administrators can devote their energies to revenue enhancement and other important financial management activities. AddVal's entire focus is on medical credentialing and has a solid track record for ensuring the proper credentialing of all physicians while reducing practice administrative costs.

Contact AddVal for assistance with any credentialing challenges you are facing (215) 396 - 8972.

Check it out! AddVal Web Site has an Updated Look!

Please take a few minutes to review our new and improved website at In response to client feedback and industry changes, we have streamlined the pages and information so that it is more user-friendly and easier to navigate. Special thanks to our Art Director, Marc Whittemore (, who took the reins for this project from start to finish. Let us know what you think!

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