The Centers for Medicare & Medicaid Services once again has delayed the implementation of a Medicare enrollment policy that threatened the timely payment of thousands of Medicare claims. The new deadline gives physicians more time to make sure they are signed up with PECOS, the Provider, Enrollment, Chain and Ownership System.  CMS reports that PECOS edits haves “been indefinitely postponed”, such that there is effectively no new target date for the implementation of front-end rejections.


This is the third time CMS has pushed back the deadline.  Originally CMS had said physicians and group practices — with few exceptions — had to be enrolled in PECOS by April 5, 2010 if they wanted to continue having their Medicare claims accepted, but that deadline had been extended to Jan. 3, 2011. The agency said its new enrollment system speeds up the application process, reduces paperwork, and helps cut down on fraud and abuse. But the American Medical Association and other physician organizations pushed for more time, estimating that thousands of doctors still need to enroll in PECOS. Many of these doctors did not know that they needed to re-enroll because they first signed up for Medicare before 2003, when CMS began using the new system.


The announcement from CMS came as a relief to the AMA and other physician organizations. They had been imploring the agency to recognize the constraints the doctor community was under already, including preparing for a 23% cut[1] in Medicare pay and facing uncertainty over the ongoing health system reform debate.  The AMA stated it would continue to work with CMS on how to educate physicians on an enrollment process that many consider complex. One particular point of confusion and concern centers on the Medicare requirement that referring physicians, and not just treating physicians, also must establish a current enrollment record in PECOS for claims to go through.  Essentially the “performing physician” would not get paid if the referring physician was not in the database.  Also in the loop:  dentists and those who see or refer patients through the Dept. of Veterans Affairs and Tricare, and group practices that need to enroll multiple physicians.


For now, if a Medicare claim lists a treating or referring physician who is not properly enrolled in PECOS, Medicare will approve payment but will send back the claim with informational edits warning that it has been marked for nonpayment because of the enrollment issue. After the policy implementation (finally) kicks in on a date to be determined, Medicare will start denying payment for claims on which physicians are still not PECOS-compliant. A current enrollment record is one that has been entered in the PECOS database since 2003 and that contains the physician’s National Provider Identifier.

The effect on HME

Under the Patient Protection and Affordable Care Act (PPACA), only Medicare-enrolled physicians or eligible professionals can certify or order home medical equipment and supplies, orthotics and prosthetics, in addition to home health services for beneficiaries.  These physicians are allowed to refer Medicare patients HME and supplies if the physician is enrolled in PECOS (by the deadline) or have officially opted out of Medicare. This includes physicians who are currently enrolled in Medicare and are able to bill for physician services. Eventually all physicians must register through PECOS in order to refer Medicare patients for home health and DMEPOS even if they are currently enrolled via Medicare. All claims submitted for services must contain the physician’s name and NPI number. This information must exactly match the files in the PECOS database, and suppliers will no longer be permitted to use their NPI in place of the physician’s NPI in regards to claims.

Both DMEPOS suppliers and the physician groups had worried not only that claims submitted after  Jan. 3 would be rejected,  but also that they would be subject to recoupment if the certifying or ordering physician was not enrolled in the online system. Some suppliers commented that they may even face false claims act liability in addition to non-payment by Medicare for billed services if they knowingly or unknowingly bill Medicare services from a physician not enrolled in PECOS.