Washington Report – May, 2012 - HBMA



Washington Report – May, 2012

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

HHS Announces Innovations Awards

Supreme Court – Watching and Waiting

Medicare Provider Payments MUST Be Made By Electronic Funds Transfer

DOL joins effort to produce more health care workers

PECOS and Medicare Enrollment Getting Better Thanks to HBMA and others

Former CMS/HCFA Administrators – Repeal and Replace SGR

Speaking of SGR fixes

House of Representatives Continues to Seek Repeal of the ACA

CMS moves to reduce regulatory burden on providers

HHS launches new web-based tool to track performance of nation’s health care system

AMA to CMS – Can You Hear Me Now?

May Transmittals

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HHS Announces Innovations Awards

Health and Human Services (HHS) Secretary Kathleen Sebelius has announced the first group of organizations to be selected to receive Health Care Innovation awards. Funding for these awards was made possible by the Affordable Care Act which authorized this initiative. The awards will support 26 innovative projects that will, “save money, deliver high quality medical care and enhance the health care workforce.” 

According to HHS, the projects being undertaken by the grant recipients are expected to reduce health spending by $254 million over the next 3 years. 

In making the announcement, Secretary Sebelius said, “We can’t wait to support innovative projects that will save money and make our health care system stronger. It’s yet another way we are supporting local communities now in their efforts to provide better care and lower cost.”

Grant recipients include hospitals, doctors, nurses, pharmacists, technology innovators, community-based organizations, and patients groups.

In the press release accompanying the announcement, it says, “This initiative allows applicants to come up with their best ideas to test how we can quickly and efficiently improve the quality and affordability of health care.”  

Some of the projects included in this initial phase are:

* Emory University will collaborate with Atlanta area health systems to train health professionals and use telehealth technologies to link critical care units in rural Georgia to critical care doctors in Atlanta area hospitals.  This initiative will save money and improve the quality of care by reducing the need to transfer patients from rural hospitals to critical care units in Atlanta;

* Camp Courage, s a program in Minneapolis-St. Paul serving adults with disabilities and complex medical conditions. The grant will enable Camp Courage to save money and improve the quality of care by creating a patient-centered medical home focused on highest-cost Medicaid patients;

* A University Hospitals of Cleveland initiative to increase access and care coordination for children beyond the walls of the doctor’s office. This initiative aims to save money and improve the quality of care by extending the expertise of an elite children’s hospital to local pediatric practices treating children with complex chronic conditions and behavioral health problems with physician extension teams and telehealth.

According to HHS, “grant recipients were chosen for their innovative solutions to the health care challenges facing their communities and for their focus on creating a well-trained health care workforce that is equipped to meet the need for new jobs in the 21st century health system.”

The initial awards total $122.6 million. The Center for Medicare and Medicaid Innovation will oversee the projects over the next 3 years.

 

To learn more about other innovative models, go to CMS’ Innovation Center.

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Supreme Court – Watching and Waiting

Anyone who has watched any of the Godfather movies or other films glamorizing organized crime is familiar with the term: Omertà. It is an Italian word that refers to the supposed “code of silence” that exists within organized crime circles.

But omertà is not unique to the criminal element, it also exists at the highest level of American Juris Prudence – the Supreme Court of the United States.

A fairly common axiom in Washington when discussing the Supreme Court’s deliberations goes something like this: “those who know don't talk, and those who talk don't know.”

The justices vote in secret with no clerks or secretaries present. Draft opinions are closely held and rejected versions are destroyed. The Supreme Court Clerk, who releases the rulings, does not know the decision until shortly before it is released. Even the people who print the hard copy of the decisions are sworn to secrecy.

In late March, the Supreme Court heard oral arguments on the constitutionality of the individual mandate and the Medicaid expansion included in the Patient Protection and Affordable Care Act (ACA). The lawyers for the 26 states challenging the constitutionality of the mandate and Medicaid expansion and the federal government, defending the mandate and Medicaid expansion, presented their cases to the Justices. The Court devoted an unprecedented amount of time to the case and since the conclusion of the oral arguments, court observers and pundits have filled the airwaves with speculation about how the Justices will decide.

The silence from the court has been deafening. The phrase, “what do you think they’ll do?” has become so common in Washington, DC, that you don’t even need to ask “what will who do about what?” It is understood that you are talking about the Supreme Court.

All we know at this point is that the Justices have decided the case and they will announce their decision “some time in June.” Unlike most of the work that goes on in Washington, DC, the work of the Supreme Court is largely done in private and it is extremely rare that any of the deliberations of the Court get leaked prior to the announcement of their decision.

Once the Court issues its ruling, HBMA will prepare and distribute an analysis on the potential fallout from the decision, regardless of whether the court rules the mandate and Medicaid expansion are Constitutional or Unconstitutional.

Until then, it’s omertà as usual.

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Medicare Provider Payments MUST Be Made By Electronic Funds Transfer

CMS has asked HBMA to remind you that existing federal regulations require that, at the time of enrollment, enrollment change request, or revalidation, providers and suppliers that expect to receive payment from Medicare for services provided must also agree to receive Medicare payments through electronic funds transfer (EFT). 

The Affordable Care Act mandated that federal payments to providers can only be made by electronic means.  As part of CMS’s revalidation efforts, all suppliers and providers who are not currently receiving EFT payments are required to submit the CMS-588 EFT form with the Provider Enrollment Revalidation application.

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DOL joins effort to produce more health care workers

The shortage of physicians, particularly primary care physicians, has been well documented. Considerably less attention has been paid to the shortage of other health workers – both technical personnel as well as administrative staff.

The U.S. Department of Labor, in conjunction with the American Association of Community Colleges, has launched a new online platform to help individuals find jobs in the health care sector. On this site, called the Virtual Career Network (VCN) individuals can find information about more than 80 different careers in healthcare. In addition to providing a brief description of the type of work done by the various workers, the site offers information about the salary ranges for the job as well as the educational requirements (High School Diploma, GED, Associates Degree, etc.)

Medical Records and Health Information Technician (Coder) - Assemble patient health information including medical histories, symptoms, examination results, diagnostic tests, treatment methods. Salary range: $25,570 - $42,170. HS Diploma

or GED.

Patient Representative -Assist patients in obtaining healthcare services, understanding policies, and making choices. Salary range: $24,150 - $38,750. HS Diploma or GED.

Medical Transcriptionist - Listen to dictated recordings made by doctors and other healthcare professions and transcribe these. Salary range: $27,070 - $39,260. Some college (HS + 1-4 years, no degree).

Cardiovascular Technologist and Technician - Assist physicians in testing, diagnosing, and treating heart and blood vessel ailments. Monitor patients. Salary Range: $34,750 - $64,190. Associate's degree (HS + 2 or more years).

Fitness Trainer and Aerobics Instructor - Teach or coach groups or individuals in exercise activities and the fundamentals of sports. Salary Range: $19,870 - $46,130.

Bachelor's Degree (HS + 4 or more years).

To see a complete listing of the careers and information about those careers, go to the VCN portion of the DOL website. You can search for career information by the name of the professional, by educational requirements or type of work. There is also a Frequently Asked Questions section where you can learn more about how careers were chosen for inclusion in the VCN.

According to the website, “Healthcare is among the fastest growing fields in the US economy and offers its workers good salaries and great opportunities for advancement.” 

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PECOS and Medicare Enrollment Getting Better Thanks to HBMA and others

CMS has announced that providers (or billing companies on behalf of providers) can submit the provider’s 855 enrollment application 60 days prior to their start date. The new policy took effect on May 14th and was done in response to requests from HBMA and other healthcare organizations.

Ever since CMS limited provider enrollment to 30 days prior to their start date, the Healthcare Billing and Management Association and other organizations representing physicians and healthcare organizations have lobbied CMS to extend the date. Given that it typically takes a Medicare contractor 60 – 90 days to process and approve the 855, limiting the application submission to 30 days prior to the start date virtually ensured provider payment delays and cash flow problems.

In addition to advocating for the additional time for filing the 855, HBMA has been working closely with CMS to improve the Provider Enrollment Chain of Ownership System (PECOS) to make it more efficient and user friendly. Sherri Dumford, CHBME, HBMA Director of Operations has been serving on a “PECOS Power Users Group” which meets regularly with senior CMS officials involved in provider enrollment. The purpose of these monthly meetings has been to solicit ideas for improvement, test those ideas in a controlled environment and then, when appropriate, incorporate those improvements into the PECOS system.

HBMA anticipates that several PECOS improvements will be rolled out at various times over the next 12 months but there are no specific dates set for when new features will be activated.

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Former CMS/HCFA Administrators – Repeal and Replace SGR

There’s an old saying from the Theater that goes like this: “Any critic can kill a play, but very few can write one.” That observation seemed particularly appropriate when listening to four former CMS/HCFA administrators discuss the SGR formula problem. All were equally critical of the SGR formula and all were equally devoid of concrete ideas when it came to designing a policy to replace the SGR. That conclusion, however, should not have come as a surprise given that none of the former Administrators who were in a position to propose ideas for fixing the SGR problem took the opportunity to do so while serving as HCFA/CMS Administrator.

Four former Medicare administrators, Gail Wilensky (George HW Bush Administration); Bruce Vladek (Clinton Administration), Tom Scully (George W. Bush Administration) and Mark McClelland (George W. Bush Administration) all told a panel of Senators that the sustainable growth rate budget mechanism and fee-for-service payment system must be replaced.

In comments reflective of the entire panel, former HCFA Administrator Gail Wilensky said, “There is no alternative ready for prime time right now.”

The Senate Finance Committee invited the former Administrators to present testimony on how the SGR problem came about and what Congress could do to replace what is universally recognized as a broken system.

The effort to use budgetary targets as a means of controlling Medicare spending began in the early 1990s. Data at the time suggested that physicians, in response to lower than expected payment updates, would increase Medicare volume to offset what were perceived as per visit losses under Medicare. This resulted in Congress mandating the adoption of what was initially called the Medicare Volume Performance Standards or VPS. Under VPS, if volume increased at a rate higher than projected, then subsequent payments under Medicare would be reduced to offset this volume phenomenon. After a few years of VPS, however, providers complained that the formula was unfair and a different mechanism was sought to deal with this perceived volume offset problem. This led to what we now know as the Sustainable Growth Rate formula or SGR.

According to Bruce Vladeck, HCFA administrator when the SGR formula was mandated by Congress in the late 90’s, the SGR formula has not operated as advertised and has produced “counterintuitive” decreases in physician payments. He urged senators to abolish the SGR and start over. A sentiment echoed by many witnesses.

One of the key components of the then new SGR formula was the inclusion of factors that accounted for changes in the national Gross Domestic Product (GD). For the first few years of its existence, the SGR formula appeared to work fine and the physician community was largely pleased with how the updating formula was working. This was partly due to the GDP factor and the booming economy that existed in the late 90’s.

However, beginning with the recession at the end of the Clinton Administration, the SGR formula began to produce negative results because of the poorly performing economy. The same GDP factors that were partly responsible for payment increases in the 90s, were now having the opposite effect in a “down” economy. Since 2002, instead of increases in physician payments, the SGR formula has produced reductions in physician payments.

Now, after a decade of failing to either fix or replace the SGR the “cost” of eliminating the SGR is estimated to be more than $300 billion over a 10 year period according to the Congressional Budget Office (CBO).

Current estimates indicate that the SGR related cut that is scheduled to go into effect on January 1, 2013 will be somewhere between 30 and 32 percent. This means that unless Congress passes legislation to prevent this cut from taking place between now and the end of the year, Medicare physician fee schedule payments will be cut by nearly 1/3 from their current levels.

Each of the former Administrators embraced some form of integrated care delivery system bundled payments, ACOs, etc.) as part of a long-term strategy to reform how Medicare pays for services. But none had any concrete recommendations for how to “pay for” the SGR related expenses that have been incurred over the past 10 years.

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Speaking of SGR fixes

New bi-partisan legislation has been introduced by Representatives Alyson Schwartz (D-PA) and Joe Heck (R-NV) to repeal and replace the SGR formula. The bill, entitled, “Medicare Physician Payment Innovation Act, would immediately repeal the SGR formula, temporarily freeze the Medicare conversion factor, then provide specific annual updates for 5 years while an alternative payment system is developed.   Their proposal would continue the current Medicare fee-for-service payment system; however, once the new payment models are in place, the existing Medicare fee schedule rates would be frozen.

Representatives Schwartz and Heck would “pay for” this fix by using unspent money from the wars in Iraq and Afghanistan that Congress had previously budgeted but which now will likely not be spent.

Schwartz and Heck (an orthopedic surgeon prior to being elected to Congress) argue that the long-term freeze in fee schedule payments, and the payment certainty their proposal offers, is far better than a future of annual payment reductions.

The legislation would implement positive pay updates for all physicians, including temporary higher annual increases for primary care services. Physicians can choose to remain in a fee-for-service system, but rates under that model would be reduced after 2018 and then frozen in 2021.The legislation has been endorsed by the American College of Physicians and American College of Cardiology. Although the AMA has been very complimentary of the proposal, the AMA has not officially endorsed the Medicare Physician Payment Innovation Act of 2012.

Some key components of the bill are:

1. Immediately repeal the sustainable growth rate formula

2. Use $300 billion in savings from the reduction in military operations in Iraq and Afghanistan to pay for SGR repeal.

3. Increase Medicare non-primary care physician fees by 0.5% annually for four years (2014 – 2017).

4. Increase Medicare primary care physician fees by 2.5% annually between 2014 and 2017.

5. Test new payment and care delivery models by 2016.

6. Create an alternative fee-for-service system that relies on quality measures or a value-based purchasing modifier by 2018.

7. Reduce payments for those remaining in traditional fee-for-service by 2% in 2019, 3% in 2020, 4% in 2021 and 5% in 2022.

8. Freeze payments for those in traditional fee-for-service at 2022 level in subsequent years.

HBMA leaders will be meeting with Representative Schwartz’s office in mid-June to discuss her proposal.

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House of Representatives Continues to Seek Repeal of the ACA

Since the Republicans took control of the House of Representatives in January, 2011, they have passed a series of bills aimed at the repeal or all or parts of the Patient Protection and Affordable Care Act (ACA).

On Thursday, May 31, the House Ways and Means Committee approved three bills that repealed or revised various healthcare taxes authorized under the ACA. Although it is expected that each of the following bills will pass the full House, none are expected to make their way to the President’s desk for his consideration due to the current make-up of the Congress.

The Protect Medical Innovation Act of 2011

The ACA created a tax on medical devices. Beginning December 31, 2012, a tax equal to 2.3 percent of the sale price will be imposed on the sale of any taxable medical device by the manufacturer, producer, or importer of such device. H.R. 436 would repeal this medical device tax.

Restoring Access to Medication Act

Since enactment of the ACA, a Health FSA or an HRA has only been permitted to reimburse an

employee for the cost of medicine if the medicine is prescribed by a physician. Distributions from an HSA or an Archer MSA used to purchase over-the-counter medicine do not qualify as a medical expense. This proposal repeals the change to the definition of medical expenses made by the Affordable Care Act and restores the ability to obtain reimbursement from an FSA or HSA for OTC drug purchases.

Medical FSA Improvement Act of 2011

Under the proposal, a flexible spending arrangement to reimburse medical expenses (either a Health FSA under a cafeteria plan or an HRA) is permitted to provide that any amount remaining at the end of the plan year (or grace period if applicable) that is not used to reimburse medical expenses incurred during the plan year (plus the plan's grace period, if any) may be distributed to the employee. The distribution must be made no later than the end of the seventh month after the close of the plan year.

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CMS moves to reduce regulatory burden on providers

On May 16, the Centers for Medicare & Medicaid Services (CMS) announced a final rule identifying several “unnecessary and obsolete” Medicare and Medicaid regulations that the agency now considers excessively burdensome on health care providers and beneficiaries.

 

Some of the major provisions to this final rule are as follows:

• Re-enrollment Bar for Providers and Suppliers: the punitive enrollment bar for providers and suppliers that is based on the failure of a provider or supplier to not respond timely to revalidation or other requests for information has been eliminated and considered unnecessary.

• Appeals of Part A and Part B Claims Determinations: The pre-BIPA regulations that apply to initial determinations, re-openings, and appeals of claims under the original Medicare have been removed and considered obsolete. This has been done in an attempt to eliminate confusion by Medicare beneficiaries, providers, and suppliers regarding which appeals rights and procedures apply.

• E-prescribing: Older versions of e-prescribing transactions for Medicare Part D have been retired and newer versions have been adopted to be in compliance with the current e-prescribing standards.

 

The changes made by this final rule will be effective on July 16, 2012. Go to the May 16 Federal Register to view the final rule.

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HHS launches new web-based tool to track performance of nation’s health care system

HHS has launched the Health System Measurement Project.  The Health System Measurement Project brings together health-related datasets from across the federal government that span topical areas, such as access to care, cost and affordability, prevention and health information technology and it presents these indicators by population characteristics, such as age, sex, income level, insurance coverage, and geography.

HHS officials believe that this site will be very helpful to policy-analysts and stakeholders, particularly in compiling reports, responding to requests for information, and drafting memos and talking points.   The site allows users to break information down by population characteristics, such as age group, income level, and insurance status.  The “data for you” section contains information specifically for state policymakers, health care providers, medical billing companies and employers.

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AMA to CMS – Can You Hear Me Now?

According to a new report in Health Affairs, CMS adopts the recommendations made by the Relative Value Scale Update Committee (RUC) 87.4% of the time.

 

Researchers from Columbia University’s Mailman School of Public Health, the University of Illinois and University of California at Los Angeles analyzed the CMS’ decisions on updating physician work values between 1994 and 2010 and found that the agency accepted 2,419 out of 2,768 work value recommendations proposed by the RUC.

Over the years, the adoption rate has fluctuated from a high of 99% in 2006 to a low of 62% in 2007. Despite being able to calculate the adoption rate (or rejection) the researchers were unable to ascertain the specific reasons for the CMS decisions or the dramatic fluctuation between years.

The study appears to substantiate the complaints of specialist physicians who have long argued that the RUCs (and CMS) were much more sensitive to payment concerns of primary care providers and less so of specialty providers. The study found that CMS was far more likely to accept recommendations for decreases in Specialists payments than they were likely to accept recommendations for the lowering of primary care specialist payments.

The basic structure of the RUC/CMS process, however, appears to create the environment that pits one group of physicians against another. In effect, the RUC process is a “zero-sum game” when it comes to raising physician pay. If CMS determines that some physicians should be paid more, then other physicians will automatically get paid less. CMS is prohibited from making changes in payment policy that would result in increased outlays of more than $20 million without first obtaining Congressional approval. Any payment change that would result in such an increase must be offset by a decrease elsewhere in the Medicare program to account for this change.

The RUC is made up of physicians from many different specialties (primary care and non-primary care).

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May Transmittals

The following Transmittals were issued by CMS during the month of May.

|Transmittal Number| |Subject |Effective Date | | | |

|R2477CP | |Modifying the Timely Filing Exceptions on Retroactive Medicare Entitlement and Retroactive Medicare |2012-08-27 | | | |

| | |Entitlement Involving State Medicaid Agencies | | | | |

|R422PI | |Request Records Related to the Claim Being Reviewed |2012-06-26 | | | |

|R2479CP | |July 2012 Update of the Ambulatory Surgical Center Payment System (ASC) |2012-07-02 | | | |

|R86MSP | |Clarification of Medicare Conditional Payment Policy and Billing Procedures for Liability, No-Fault |2013-01-07 | | | |

| | |and Workers - Compensation Medicare Secondary Payer (MSP) Claims | | | | |

|R1093OTN | |Automated Tracking and Reporting of Recovery Audit-Associated Reopenings and Appeals |  N/A | | | |

|R2476CP | |Screening for Sexually Transmitted Infections (STIs) and High Intensity Behavioral Counseling (HIBC) |  N/A | | | |

| | |to Prevent STIs (ICD-10) | | | | |

|R2473CP | |Extracorporeal Photopheresis (ICD-10) |2012-10-01 | | | |

|R421PI | |General Update to Chapter 15 of the Program Integrity Manual (PIM) - Part VI |2012-06-19 | | | |

|R143NCD | |Extracorporeal Photopheresis (ICD-10) |2012-10-01 | | | |

|R2469CP | |Instruction for Downloading the Medicare ZIP Code File for October 2012 |2012-10-01 | | | |

|R1075OTN | |Medicare Fee – for Service (FFS) Editing and Flat File Utility |  N/A | | | |

|R78GI | |Quarterly Update to the CMS Standard File for Reason Codes for the Fiscal Intermediary Shared System |2012-10-01 | | | |

| | |(FISS) | | | | |

|R2470CP | |Quarterly Update for the Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) |2012-10-01 | | | |

| | |Competitive Bidding Program (CBP) – October 2012 | | | | |

|R2474CP | |Handling Misdirected Claims for Part B Item and Services |2012-07-20 | | | |

|R210FM | |Validation of Recovery Audit Program New Issues |2012-06-19 | | | |

|R2472CP | |Coding Changes to Ultrasound Diagnostic for Tranesophageal Doppler Monitoring |2012-10-01 | | | |

|R2471CP | |Common Edits and Enhancements Modules (CEM) Code Set Update |2012-10-01 | | | |

|R2475CP | |Internet Only Manual (IOM) Update for Laboratory Services and Durable Medical Equipment, Prosthetics,|2012-06-19 | | | |

| | |Orthotics, and Supplies (DMEPOS) Claims Processed under the End Stage Renal Disease Prospective | | | | |

| | |Payment System (ESRD PPS) | | | | |

|R1091OTN | |Enhancements to the Recovery Audit Mass Adjustment/Reporting Process in the Fiscal Intermediary |2012-04-02 | | | |

| | |Shared System (FISS) | | | | |

|R2465CP | |Assigned Codes for Home Oxygen Use for Cluster Headache (CH) in a Clinical Trial (ICD-10) |2012-10-01 | | | |

|R1089OTN | |Implement Fraud Prevention Predictive Modeling Prepayment Edits |  N/A | | | |

|R2466CP | |Calendar Year 2013 and After Payments to Home Health Agencies That Do Not Submit Required Quality |2012-08-13 | | | |

| | |Data | | | | |

|R2467CP | |July Quarterly Update for 2012 Durable Medical Equipment, Prosthetics, Orthotics, and Supplies |2012-07-02 | | | |

| | |(DMEPOS) Fee Schedule | | | | |

|R2468CP | |July 2012 Integrated Outpatient Code Editor (I/OCE) Specifications Version 13.2 |2012-07-02 | | | |

|R1088OTN | |Reporting of Recoupment for Overpayment on the Remittance Advice (RA) with Patient Control Number |  N/A | | | |

|R2463CP | |New Fiscal Intermediary Shared System (FISS) Edit to Review Medicare Outpatient Prospective Payment |2012-10-01 | | | |

| | |System (OPPS) Payments Exceeding Charges. | | | | |

|R2464CP | |Enhance the Multi-Carrier System (MCS) and ViPS Medicare System (VMS) to maintain five full years of |  N/A | | | |

| | |pricing data and to automatically price claims/adjustments at the rates in effect at the dates of | | | | |

| | |service. | | | | |

|R1087OTN | |Expand Place of Service Address to Include Full Address |  N/A | | | |

|R85MSP | |Clarification of Medicare Conditional Payment Policy and Billing Procedures for Liability, No-Fault |  N/A | | | |

| | |and Workers’ Compensation Medicare Secondary Payer (MSP) Claims. | | | | |

|1085OTN | |Establish an Automated Process between ViPS Medicare System (VMS) and the Provider Enrollment Chain |  N/A | | | |

| | |and Ownership System (PECOS) to Post Payment Suspension Alert Codes and Related Data to All Four | | | | |

| | |Durable Medical Equipment Medicare Administrator Contractors (DME MAC) Jurisdictions | | | | |

| | | | | | | |

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