Washington Report – July, 2012 - HBMA



Washington Report – July, 2012

Bill Finerfrock, Pam Jackson, Zhaneta Mansaku, Kelly Sullivan and Kristen Metzger

CMS Issues 2013 Medicare Physician Fee Schedule Proposed Rule

CMS Finalizes EFT Policy

Sequestration is Coming, Sequestration is Coming

SGR – Less Talk, More Action

More ACOs approved by CMS

CMS Releases New Provider Education Information

House GOP moves to Repeal (again) the Patient Protection and Affordable Care Act

FAQs for You

GAO - Medicare Demonstration May Be Illegal

Improvements to the Internet-based PECOS system announced

CMS Transmittals

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CMS Issues 2012 Medicare Physician Fee Schedule Proposed Rule

On July 6th, the Centers for Medicare and Medicaid Services (CMS) released the 2012 Medicare Physician Fee Schedule Proposed Rule (NPRM). Each year in July, CMS announces numerous changes/updates in Medicare payment policy for services furnished under the Medicare Physician Fee Schedule (MPFS). The final rule will be effective for services delivered on or after January 1, 2013. Changes range from technical changes, to major revisions on how and how much physicians and other providers will be paid for providing services to Medicare patients.

This NPRM also announced the projected Sustainable Growth Rate (SGR) related change to the Medicare Physician Fee Schedule Conversion Factor. The projected SGR cut is 27%. This number will be updated in the Fall after more information is available to the actuaries.

Since 1992, Medicare has paid for the services of physicians and non-physician practitioners (NPPs) under the Medicare Fee Schedule. Under MPFS, each code/service is assigned a relative value (RVU) that reflects the amount of physician work, practice expenses, and the malpractice expense associated with furnishing the service.  The RVUs for a particular service are multiplied by a fixed-dollar conversion factor (CF) and a geographic adjustment factor to determine the actual payment amount for each service. 

In recent years, CMS has talked about recognizing primary care and care coordination as critical components in achieving the “triple aim” - Better Health, Better Care, Lower Cost. In this NPRM, CMS is announcing a series of initiatives designed to encourage investment in primary care and care coordination services.

As part of this new approach, for example, CMS is proposing to create new “G” codes to

recognize the additional resources required to coordinate a patient’s care following discharge from an inpatient hospital stay or skilled nursing facility (SNF) stay.

In what is substantially a new policy, Medicare would establish a separate payment for care management services for the beneficiary, which occur outside a face-to-face encounter with the physician.  CMS maintains that recognizing the work of physicians and NPPs with the proposed new code will ensure better continuity of care for these patients and support the agency’s readmission reduction initiatives.  

In describing these new codes (and the values associated with them) CMS analogizes these to the 99211 code.

“…office or other outpatient visit for the evaluation and management of an established patient that may not require the presence of a physician. Presenting problems are usually minimal, and typically five minutes are spent performing or supervising these services.”

As a result of this classification, the reimbursement level associated with this service is quite low and it is hard to imagine how the desired level of care/involvement will occur at the level of payment CMS is proposing.

Some of the other policy areas where CMS is proposing changes include:

Potentially Misvalued Codes

Bundled Surgical Services

Multiple Procedure Payment Reduction Policy

Elimination of Prepayment Medical Review Limitation

Payment for Molecular Pathology Services

Therapy Data Collection

Telehealth Services

Removing Barriers to Midlevel Providers

Quality Reporting

The HBMA Government Relations Committee has been reviewing the NPRM and will be preparing comments. Any individual, organization or company wishing to comment on the proposed changes is invited to do so. Instructions for submitting comments are included in the NPRM. The deadline for submitting comments is September 4, 2012.

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CMS Finalizes EFT Policy

In early January, 2012, CMS issued what is called an Interim Final Rule (IFR) with comment period, announcing new Health Plan standards on the use of electronic fund transfer (EFT) for transmitting payments from Medicare and other health plans (Medicaid, commercial, BC/BS, etc.) to providers. On July 11th CMS issued a notification stating that the IFR was no longer “interim” but had instead, been made final.

CMS reviewed the comments submitted in response to the IFR (including those by HBMA) and determined that no changes were necessary. Because the agency was not making any changes from the IFR, it was not required to formally publish the “final rule” in the Federal Register.

As part of the new standards, Health Plans are required to “reassociate” the remittance advice and the electronic payment as part of the payment transmittal. There are no requirements in the January 10, 2012 interim final rule that apply directly to providers.  The health care EFT standards set requirements for how health plans transmit health care claim payments to providers via EFT. 

Billing companies may need to work with their clearinghouses and the Health Plans in order to realize the efficiencies that are possible by accepting EFT for health care claim payments.

Although the EFT policy is technically in effect, the compliance date for all covered entities is not until January 1, 2014. 

As of January 1, 2014, whenever a health plan transmits an electronic payment through the ACH Network (Automated Clearing House Network), the plan must do so in accordance with the EFT standards. Health plans are not required to use the ACH Network. Regardless of the network used, however, Plans must make every effort to ensure that reassociation between the payment and the remittance advice can be automated by providers.

In its comments, HBMA supported the EFT policy; however, the Association asked that the compliance deadline be accelerated so that the policy took effect sooner than 2014. CMS opted to stay with the 2014 date announced in the IFR.

CMS has established a Frequently Asked Questions section on its website for EFT related inquiries. If you have questions about the EFT policy, you are encouraged to visit the FAQ site to see if there is a response that addresses your question.

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Sequestration is Coming, Sequestration is Coming

Under the Budget Control Act of 2010 (BCA), most Federal programs face an across-the-board cut in January 2013 if Congress does not enact a plan before then to reduce the national debt by $1.2 trillion. For Medicare, the across-the-board cut will be 2%. This is in addition to any cuts or changes in Medicare payment related to the SGR. In fact, the BCA assumes that the 27% SGR cut is going to take place.

To comply with the statutory budget reduction requirement, the Obama Administration is authorized to use a process known as “sequestration.” Sequestration authorizes the Office of Management and Budget to withhold money Congress has already authorized or appropriated in sufficient amounts to meet the budget target.

Recently, Jeffrey Zients, Acting Director of the Office of Management and Budget (OMB) issued a letter to the heads of every agency alerting them to the potential spending cuts and the prepatory steps the Obama Administration is taking to comply with the sequestration order, should it come to pass.

According to Zients’ letter, OMB will “be holding discussions on these issues with you and your staff over the coming months. In the near term, OMB will consult with you on such topics as the application to your agency's accounts and programs of the exemptions from sequestration… and the applicable sequestration rules…” The letter went on to state that, “OMB will also engage with agencies on anticipated reporting requirements established by Congress that are related to, but separate from, planning for or implementing a sequestration order under the BCA.”

Senator Tom Harkin (D-IA), Chairman of the Senate Labor, Health and Human Services Appropriations Subcommittee released a report prepared by his staff entitled, “Under Threat

Sequestration’s Impact on Nondefense Jobs and Services” outlining some of the cuts that they believe will occur in health programs if the Obama Administration issues the sequestration order. Although most of the health cuts the report focused on had to do with public health programs, there was some mention of Medicare.

With respect to provider/facility survey and certification, the report indicates that sequestration would reduce the amount of money available for survey and certification by approximately $27 Million for Fiscal Year 2013 (October 1, 2012 – September 30, 2013). The report did not address any other specific reductions in Medicare. However, the BCA does cap the sequestration cut that can be made in Medicare at 2%. It is believed that the sequestration order for most programs will be in the range of 9% - 10%.

As the Harkin Report and the OMB letter both note, Congress can pass legislation between now and January 1, that would prevent the cuts from occurring or enact cuts of sufficient magnitude to prevent an across the board cut.

It is most likely that the Congress will deal with the BCA and sequestration during a post-election lame duck session of Congress. It is not clear at this time whether Congress will be able to reach an agreement on legislation during the lame duck that will prevent sequestration.

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SGR – Less Talk, More Action

During the month of July, several Congressional Committees and Subcommittees held hearings on the Sustainable Growth Rate problem confronting the Medicare program. Various organizations and individuals were invited to present their ideas on what Congress should do to “fix” the SGR problem.

The Ways and Means Health Subcommittee invited representatives of various physician organizations to share their ideas and opinions on reforming Medicare physician payments. In his opening statement, Wally Herger, (R-CA) Chairman of the Subcommittee, said,

“Our intent is to hear from the physician community about how to reform the physician payment system so that quality, efficiency, and patient outcomes are accounted for in a fair and fiscally responsible manner.  As I have noted before, merely averting Sustainable Growth Rate cuts each year is not a fix.  A permanent solution has been elusive in large part because of the substantial cost associated with repealing SGR—currently estimated at nearly $300 billion over ten years.”

Herger went on to note,

“… this Committee must do more than just simply repeal the SGR. We must also determine how to improve the existing Medicare payment system and work with physicians to develop other payment models that preserve and promote the physician-patient relationship and reward physicians who provide high-quality and efficient care.”

AMA President-elect Ardis Hoven, MD captured the overwhelming sentiment of various witnesses when she said, “The SGR has been plaguing patients and physicians in Medicare and the TRICARE military health program for over a decade, and its repeal is long past overdue.” However, despite near universal agreement on the need to repeal and replace the SGR, no tangible long-term progress has been made on accomplishing that objective. It is highly unlikely that a permanent solution to the SGR problem will be enacted in 2012.

Like many witnesses, rather than providing detailed policy recommendations for replacing the SGR, Hoven talked about the principles that should guide the Congress in seeking a new policy. The AMA recommended:

1. A flexible approach, rather than one-size fits all, is needed during a transition to a new system, including a menu of options to best address patient need of a particular practice, depending on the specialty, practice type, capabilities and community. This menu should go beyond Medicare shared savings and Accountable Care Organizations (ACOs) based on total costs, and should also include innovations such as bundled payments, performance-based payments, global and condition-specific payment systems, warranties for care, and medical homes.

2. Alternative payment and delivery models must cut across Medicare silos. When physician delivery of care achieves overall Medicare program savings, physicians (and the Medicare program) should be able to share in those savings. Part B physicians’ services often are necessary to prevent patients from needing more costly medical care down the road. While this is good for patients and Medicare spending overall, under the SGR, more physicians’ services (even to create overall program savings) drives steeper payment cuts for physicians. This perverse incentive structure has to change as part of a transition to a new system.

3. A positive and stable payment structure is needed as we make this transition so that physicians have the financial ability to make up-front capital investments—such as employing additional staff to improve care coordination and adoption of health information technology.

As stated earlier, no action on a long-term fix to the SGR problem is expected in 2012. At best, Congress will once again enact a short-term fix to buy additional time to develop and approve an alternative to the current SGR formula.

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Public-Private Partnership to Prevent Health Care Fraud Announced

HHS Secretary Kathleen Sebelius and Attorney General Eric Holder have announced the launch of a partnership between the federal government, State officials and several private health insurance companies to prevent health care fraud.

According to a press release announcing the new group, “The partnership is designed to share information and best practices in order to improve detection and prevent payment of fraudulent health care billings. Its goal is to reveal and halt scams that cut across a number of public and private payers.”

It is believed that this collaborative effort will help federal and state law enforcement officials more effectively identify and prevent suspicious activities, better protect patients’ confidential information and “combat and prosecute illegal actions.”

In making the announcement, Secretary Sebelius said “This partnership puts criminals on notice that we will find them and stop them before they steal health care dollars.” 

One objective of the partnership is to share information on specific schemes so that action can be taken to prevent losses to both government and private health plans before they occur. Another potential goal of the partnership is the ability to spot and stop payments billed to different insurers for care delivered to the same patient on the same day in two different cities.

The following organizations and government agencies are part of this partnership:

 

America’s Health Insurance Plans

Amerigroup Corporation

Blue Cross and Blue Shield Association

Blue Cross and Blue Shield of Louisiana

Centers for Medicare & Medicaid Services

Coalition Against Insurance Fraud

Federal Bureau of Investigations

Health and Human Services Office of Inspector General

Humana Inc.

Independence Blue Cross

National Association of Insurance Commissioners

National Association of Medicaid Fraud Control Units

National Health Care Anti-Fraud Association

National Insurance Crime Bureau 

New York Office of Medicaid Inspector General

Travelers

Tufts Health Plan

UnitedHealth Group

U.S. Department of Health and Human Services

U.S. Department of Justice

WellPoint, Inc.

For more information on this partnership, you are invited to visit:



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More ACOs approved by CMS

On July 9, HHS Secretary Kathleen Sebelius announced the approval of 88 new Accountable Care Organizations (ACOs) serving 1.2 million people with Medicare in 40 states and Washington, D.C.  These newly approved ACOs are organizations formed by groups of doctors and other health care providers to work together to coordinate care for people with Medicare. 

 

These new ACOs, as well as those previously approved by CMS, have entered into agreements taking responsibility for the quality of care they provide to people with Medicare in return for the opportunity to share in savings realized through high-quality, well-coordinated care.

 

The Medicare Shared Savings Program (MSSP), was authorized by Congress as part of the Patient Protection and Affordable Care Act.  According to a press release issued by the Department, “savings from this initiative could be up to $940 million over four years.”

 

The total number of organizations participating in Medicare shared savings initiatives now stands at 154. This includes the 32 ACOs testing the Pioneer ACO Model by CMS’s Center for Medicare and Medicaid Innovation (Innovation Center) announced last December, and six Physician Group Practice Demonstration organizations that started in January 2011.  As of July 1, approximately 2.4 million beneficiaries were receiving care from providers participating in Medicare shared savings initiatives.

                                                                       

Approximately half of the ACOs are physician-driven organizations serving fewer than 10,000 beneficiaries.

 

For 2012, CMS has established 33 quality measures relating to care coordination and patient safety, appropriate use of preventive health services, improved care for at-risk populations, and patient and caregiver experience of care.

 

Applications for ACO status are accepted at various times throughout the year. For organizations that wish to participate in the shared savings program beginning in January 2013, the application deadline is September 6, 2012. 

For more information, including application requirements, go to the CMS Shared Savings Program Application web page.

 

To see a list of the new ACOs, go to Fact Sheet.

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CMS Releases New Provider Education Information

The Centers for Medicare and Medicaid Services (CMS) has released new and/or revised educational information for providers and medical billing company staff. CMS has asked HBMA to share this information with the membership in hopes of insuring that billing staff are fully aware of CMS policies.

The documents are:

1. “How to Protect Your Identify Using the Provider Enrollment, Chain and Ownership System (PECOS)” Fact Sheet — Revised - The “How to Protect Your Identify Using the Provider Enrollment, Chain and Ownership System (PECOS)” Fact Sheet (ICN 905103) has been revised and is now available in downloadable format. This fact sheet is designed to provide education on identity protection when using Internet- based PECOS. It includes step-by-step instructions on how providers can protect their identity while using Internet-based PECOS.

 

2. “The Basics of Medicare Enrollment for Physicians and Other Part B Suppliers” Fact Sheet — Revised - “The Basics of Medicare Enrollment for Physicians and Other Part B Suppliers” Fact Sheet (ICN 903768) has been revised and is now available in downloadable format. This fact sheet is designed to provide education on basic Medicare enrollment information and how to ensure physicians and other Part B suppliers are qualified and eligible to enroll in the Medicare Program. It includes information on how to enroll in the Medicare Program, how to report changes, and a list of resources.

3. “Medicare Secondary Payer for Provider, Physician, and Other Supplier Billing Staff” Fact Sheet — Revised - The “Medicare Secondary Payer for Provider, Physician, and Other Supplier Billing Staff” Fact Sheet, (ICN 006903) was revised and is now available in downloadable format. This fact sheet is designed to provide education on the Medicare Secondary Payer provisions. It includes information on Medicare Secondary Payer (MSP) basics, common situations when Medicare may pay first or second, Medicare conditional payments, and the role of the Coordination of Benefits Contractor.

4. “Medicare Quarterly Provider Compliance Newsletter [Volume 2, Issue 4]” Educational Tool — New - The “Medicare Quarterly Provider Compliance Newsletter [Volume 2, Issue 4]” Educational Tool (ICN 908064) was released and is now available in downloadable format. This educational tool is designed to provide education on how to avoid common billing errors and other erroneous activities when dealing with the Medicare Program. It highlights the top issues of the particular Quarter. Visit the Medicare Quarterly Provider Compliance Newsletter Archive to download, print, and search an index of previously-issued newsletters.

 

5. New MLN Provider Compliance Fast Fact - A new fast fact is now available on the MLN Provider Compliance page. This web page provides the latest Medicare Learning Network® (MLN) products designed to help Medicare Fee-For-Service providers understand – and avoid – common billing errors and other improper activities. A list of previous fast facts is available on the MLN Provider Compliance Fast Fact Archive page. Please bookmark this page and check back often as a new fast fact is added each month.

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House GOP moves to Repeal (again) the Patient Protection and Affordable Care Act

Depending upon how you count the votes, the House yesterday voted on July 11th for either the 31st or 33rd time to repeal the Patient Protection and Affordable Care Act.  By a vote of 244 – 185, the House passed H.R. 6079, the Repeal of Obamacare Act.  239 Republicans were joined by 5 Democrats in voting to repeal the entire law.  185 Democrats voted against repeal.  Two Members (1 GOP and 1 Democrat) did not vote.

 

Like the previous repeal efforts, this one is not going anywhere.  The Senate is unlikely to consider the legislation, let alone approve it. 

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FAQs for You

CMS posted several new Frequently Asked Questions (FAQs) on their website in the past few weeks. There are 43 new Frequently Asked Questions related to “Bundling of Payments for Services Provided to Outpatients Who Later Are Admitted as Inpatient:  3-Day payment Window. In addition, there are new FAQs on how this affects physician offices that are either Wholly Owned or Wholly Operated by hospitals.” 

CMS has also posted Frequently Asked Questions from the March 28, 2012 Medicare Preventive Services National Provider Call on the Initial Preventive Physical Exam and the Annual Wellness Visit.

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GAO - Medicare Demonstration May Be Illegal

The Patient Protection and Affordable Care Act (PPACA) required CMS to provide quality bonus payments to Medicare Advantage (MA) plans using a rating system developed by CMS In November 2010, CMS announced that it would waive the PPACA quality bonus provisions and instead determine quality bonus payments for 2012 through 2014 under a demonstration in which all MA plans would participate unless they affirmatively opt out. Compared with the quality bonus program established by PPACA, the Medicare demonstration provides larger bonuses and to more MA plans. It is believed that this initiative is the largest dmonstration project ever undertaken by the Centers for Medicare & Medicaid Services (CMS).

In a strongly worded letter to Health and Human Services (HHS) Secretary Kathleen Sebelius, the Government Accountability Office (GAO) said “HHS failed to show that it had the legal authority for its $8.3 billion Medicare Advantage quality bonus demonstration program (MA QBP).”

These comments were also delivered during testimony GAO presented before the House Committee on Oversight and Government Reform.

Senator Orrin Hatch (R-UT), Ranking Member on the Senate Finance Committee said upon hearing of GAO’ finding, “What GAO found is a rebuke of how the Obama Administration used this demonstration program to divert attention away from cuts to the popular Medicare Advantage program. The White House does not have the authority to green light spending on whatever program it wants.”

In its letter to Secretary Sebelius, GAO wrote:

“These facts, in combination with the demonstration’s $8 billion cost, resulted in

our recommendation that HHS cancel the demonstration. …we remain concerned

about the agency’s legal authority to undertake the demonstration.”

Medicare law has long provided the Secretary of HHS broad authority to modify methods of payment under Medicare via a demonstration to establish additional incentives to “increase the economy and efficiency of services provided under the program” by carrying out experiments and demonstration projects.

Demonstrations must, at least on paper, attempt to test a new delivery model or payment model that will cost no more than the system already in place. In the case of this demonstration, it would seem, according to GAO, that MA plans would receive higher payments than they would have otherwise received and total expenditures would exceed what Medicare would have paid had the demonstration not been undertaken.

In a related report released in March, which preceded the review to determine the legal authority to carry out the Demonstration, GAO found that the MA QBP is the most costly demonstration program ever undertaken by HHS. Furthermore GAO opined that it will fail to yield any meaningful data for the Center for Medicare and Medicaid Services (CMS) to evaluate the new initiative for potential application in all settings. The ability to evaluate a project is central to the goal of any demonstration program.

GAO is the independent audit, evaluation, and investigative arm of Congress. The agency exists to help improve the performance and accountability of the federal government. GAO conducts non-partisan examinations of the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to Congress.

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Improvements to the Internet-based PECOS system announced

Over the last year, CMS has been working with industry stakeholders, including HBMA, to solicit feedback about Internet-based PECOS and make improvements in the system in response to that feedback. CMS is pleased to announce that the following upgrades are now available:

First, the layouts of the Internet-based PECOS homepage and log in screen have been re-designed.  For example, the homepage is now easier for users to register for a PECOS account and update personal information.  It also features additional links that allow access to multiple sites and reference information.

There is a new link to PECOS enrollment tutorials, the Ordering and Referring List, and the Revalidation Notice Sent List. Some of the other new features CMS has put in place:

• Users are now able to see if their revalidation application has been received and processed by the Medicare Administrative Contractor (MAC).  In addition to a “Revalidation Notice Sent” date, a “Revalidation Received” date and a “Revalidation Complete” date will be displayed on the “My Enrollments” page. This “sent” and “received” information will remain on display on the My Enrollment page for 120 days whereas the “Revalidation Complete” date will display on the My Enrollments page indefinitely. (At this time, the quickest way to see if a revalidation letter was mailed to you is to check the Revalidation Notice Sent List link on the PECOS homepage.)

• A reassignment report is now available for all organizations and individuals that are accepting reassignments. The option to view this report is only available if the enrollment has current reassignments. The reassignment report is accessible via the Application Questionnaire page and displays the following columns: 

o Provider Name,

o National Provider identifier (NPI),

o Current Enrollment Status,

o Enrollment State,

o Revalidation Notice Sent Date, and

o Revalidation Status. 

The report displays up to 50 records on the report screen.  For reassignment reports containing more than 50 records, the authorized user will be prompted to download the report into an excel spreadsheet by clicking the Generate Report button at the bottom of the screen.  

HBMA continues to work with CMS to improve the PECOS on-line experience and we appreciate the responsiveness CMS has demonstrated on the ideas and suggestions we’ve made as part of the stakeholder workgroup.

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CMS Transmittals

The following Transmittals were issued by CMS in the month of July.

|Transmittal Number |Subject |Effective Date |

|R2500CP |Clarification of the Use of the Electronic Claim Format to Indicate Where a Service Was |07-27-2012 |

| |Performed. 2012-08-27 7871 109 . This is the initial release of New Chapter 21, Compliance | |

| |Program Guidelines. 2012-07-20 | |

|R108MCM |This is the initial release of New Chapter 21, Compliance Program Guidelines 2012-07-20   N/A |07-20-2012 |

| |R2496CP 2012-07-20 New Waived Tests 2012-10-01 7868 MM7868 | |

|R2497CP |Update to Hospice Payment Rates, Hospice Cap, Hospice Wage Index and the Hospice Pricer for FY |07-25-2012 |

| |2013 2012-10-01 7857 MM7857 | |

|R1101OTN |Reporting of Recoupment for Overpayment on the Remittance Advice (RA) with Patient Control |2012-07-19 |

| |Number   N/A 7499 | |

|R2495CP |Systematic Validation of Payment Groupu Codes for Prospective Payment Systems (PPS) Based on |2012-07-18 |

| |Patient Assessment.   N/A 7760 | |

|R211FM |Notice of New Interest Rate for Medicare Overpayment and Underpayments - 4th Notification for FY|2012-07-11 |

| |2011 | |

|R2494CP |Extracorporeal Photopheresis (ICD-10) 2012-10-01 7806 R1099OTN 2012-06-28 Reporting of |2012-07-10 |

| |Recoupment for Overpayment on the Remittance Advice (RA) with Patient Control Number   N/A 7499 | |

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