Medicare has for years been one of the easiest third party payer systems I have worked with. In 2005, Medicare accounted for 20% of my gross receipts, varying from about 13% to 27% of in the last five years. My specialty training is in neuropsychology. My first salaried position after I became licensed 14 years ago was in a hospital-based rehabilitation medicine department. At least sixty percent of the inpatients were adults with stroke, and most of those were older adults. In addition, working with people with Alzheimer’s and similar brain-related conditions, my independent assessment and treatment practice gradually moved toward older adults, by inclination and in response to obvious opportunity. The work has been extremely satisfying and challenging. One cannot work extensively with older adults without working with Medicare.

Before getting to how to enroll as a psychologist in Medicare — which really only needs to be brief — it might be useful to say why a psychologist should consider this. A year before I was able to wean myself from full-time salaried work to full time independent practice, I posted to the Division 42 email list what at that time I described as my “Top 10 List of Why Medicare is Better.” In my view, most of these still ring true.

“Top 10 Reasons Medicare is Better”

(1) Medicare will accept “any willing provider” who is a clinical psychologist; there is no discrimination in becoming empaneled.

(2) The fee structure is objectively determined based on the technical skill required for the procedure, risk to patient and practitioner, and cost of providing the service, moderated by geographic region.

(3) Based on #2, fees actually tend to be higher for psychologists than are currently being reimbursed under most managed schemes.

(4) Fees have consistently been increased, by ~7% a year, at least in the three years I’ve been paying attention. [That was 1999. That trend continued for another 3 more years but as you likely know, this has changed in the past 3-4 years. Reimbursement in 2006 will apparently remain stable from 2005].

(5) Fees are publicly available, unlike the secrecy surrounding fees reimbursed by managed care outfits.

(6) No pre-authorizations or re-authorizations required. Just learn to use the right ICD/CPT code combinations [Note: under Medicare, a psychologist is not locked in to the DSM — or even mental health conditions — for diagnoses or as a focus in treatment. Using the health and behavior treatment procedure codes, treatment of the full range of physical health conditions in which psychological factors are salient are treatable — and reimbursable].

(7) Minimal intrusiveness for clinician and maximal privacy for patient: no additional paperwork required beyond what is good clinical practice, maintaining consistency and thoroughness at a level required by clearly established “evaluation and management” documentation guidelines. Medicare rarely (in my experience) asks for documentation beyond what is the recommended standard of care in the “Mental Health Consumers’ Bill of Rights”: diagnosis, prognosis, procedure performed, period.

(8) Medicare is non-discriminatory toward psychologists relative to other doctoral level practitioners, i.e., psychiatrists. Psychologists are reimbursed at 100% of the physician fee schedule.

(9) Related to #8, as we have heard, Medicare is now valuing the technical skill required in psychotherapy higher than the technical skill required in doing med checks. [That also was true in 1999 but I have not looked at RVU comparisons as of this writing].

(10) It is a good and necessary thing for psychologists to be taking care of seniors.

How to enroll

Here are some things to think about/plan for before applying.

(1) You will need to identify a physical location where you will be providing services. This may be an issue, for example, for a newly licensed psychologist who might like to enroll in Medicare but who does not yet have an office. You may not simply provide a mailing address to enroll. The location where you have payments sent (your “billing address”) may be different from the location where you provide services.

(2) You will need to indicate on the application where you store patient health care records. This may be at your physical office location or another setting. For example, my long term records storage is in a rented storage facility off premises. Medicare will ask you to provide that information on the application.

(3) Unless you use another identifier number such as a TIN or National Provider Identifier (NPI), your application will be linked to your Social Security Number (SSN), which you will be required to include on the (HCFA-1500) billing form when you bill Medicare. If you have a security concern about that, you will want a different identifier number. The alternatives are to apply for the NPI or a TIN. You may apply for a TIN — a number issued by the IRS that you will use to report tax information to the IRS — with or without incorporating. The latter may be your quickest option. You may easily apply for a TIN by phone, fax, mail or online at the IRS web site at http://www.irs.gov/businesses/small/article/0,,id=97860,00.html. Whichever identifier number you use to enroll in Medicare, you will continue to use that number on the billing form until you change that in writing to Medicare, so this will require some forethought.

(4) You will be asked to send a copy of your license, your degree and, if applying using a TIN, IRS documentation regarding the TIN along with your application. Some carriers will accept a copy of a payment coupon used to make quarterly federal tax payments to obtain the IRS information. Otherwise you may call 800-829-4933 and request a confirmation letter from the IRS documenting your TIN and legal business name. I am told this usually takes ten days to obtain, that you may keep the original and submit a copy with your application.

The venerable HCFA-1500 billing form is being revised to have a space for the NPI, which will link to the standardized electronic billing format. This was one of the main reason for HIPAA changes to begin with (to standardize electronic transmission of health care/billing information). The NPI is designed to be “information neutral” meaning that, other than identifying you, it carries no information about what state you are in, your specialty, when you applied, or similar information. You might also apply for your NPI before you apply to enroll in Medicare. Medicare began accepting the NPI on claims, along with the “legacy” UPIN (“Unique Provider Identification Number”), as of 1/3/2006 (but you should check with your local carrier if they are ready to go on this, many are not). As of 10/2/2006, Medicare will begin accepting claims with only the NPI and beginning 5/23/2007 the NPI will be required. My experience obtaining the NPI was that I received it within 24 hours of applying online. The NPI will become the provider identification number required by all insurers in the very foreseeable future. You may apply online at https://nppes.cms.hhs.gov/NPPES/Welcome.do

Enrolling

Your key online location for resources is http://www.cms.hhs.gov/MedicareProviderSupEnroll/. You can download forms directly from links there. The Enrollment Applications page will tell you which form you need, but here are some brief guidelines.

If you are applying as an individual for the first time under your SSN, or with an TIN that is not related to a corporation, you will submit form 855I, “Application for Individual Health Care Practitioners.” This will establish you as an individual practitioner with Medicare.

If you are incorporated and will use the corporation TIN to apply, e,g., as an LLC, PC, SC, Inc. PLLC or similar entity, you will submit form 855B, “Application for Health Care Suppliers that will Bill Medicare Carriers.” This establishes the corporation with Medicare, and requires information about the corporation such as where it is located, who the owner is, and where reimbursement checks are to be sent. As above, you also will submit the 855I to establish yourself as an individual practitioner. Additionally, you will submit form 855R, “Application for Individual Health Care Practitioners to Reassign Medicare Benefits.” This “reassigns” benefits back to corporation. Under this arrangement, when you bill Medicare, both the individual practitioner’s number (which is linked to the corporation) and the corporation ID number go on the billing form. The reimbursement checks will be made out to the corporation. For example, this occurred when I was in a hospital-based salaried position. The hospital paid my salary, billed for me when I saw Medicare patients (and all other payers), and collected the reimbursement, which I reassigned to the hospital.

If you are applying as a psychologist in a group which already has established with Medicare and has a group number under which you will bill, you will submit the 855I to establish yourself with Medicare, and 855R to reassign reimbursement to the group.

If you are applying using an unincorporated TIN under which multiple practitioners will bill (possible to do, but an unlikely scenario), you would submit the 855B. Each practitioner billing under that TIN would submit an 855R if previously enrolled in Medicare, or an 855R and 855I if not previously enrolled.

You may also need to submit form CMS460, the “Medicare Participating Physician or Supplier Agreement,” which identifies you as a Medicare participant, defines “accepting assignment” (of Medicare payments), and establishes the term of the agreement which essentially lasts until you or Medicare terminate the agreement in writing. My understanding is that you would need to check with your local carrier whether this form is required or not. In many states you will automatically be considered to be “participating” upon acceptance of your application, but it cannot hurt to complete and submit this brief form with your application.

A few points:

(1) Do not be intimidated by the apparent length of the applications. The 855I packet is 31 pages, but less than half require information and even fewer will likely apply to you (e.g., some are related to adverse legal events associated with health care delivery/billing you or employees you manage may have had, any company(ies) that manage(s) your practice, any electronic billing clearinghouse you may use). The information requested is straightforward, and the instruction pages actually are intelligible.

(2) Submit your application to the Provider Enrollment Unit of your local carrier, not directly to CMS (Centers for Medicare and Medicaid). You will find your local carrier’s address and much other related information at http://www.cms.hhs.gov/medicareprovidersupenroll/PSEC/list.asp.

“Individual results may vary.” While most of this information is generic, application requirements may vary among carriers. Before you embark on completing and submitting an application I would urge you to verify the above information and any idiosyncratic requirements with the Provider Enrollment Unit of your local carrier. This will also give you an opportunity to get a feel for how helpful or vague they will be, perhaps even to establish a good working relationship with that one person who may just help you through the application process. Complete contact information is available for every state at the web address given just above.

What to Expect

As long as you are a clinical psychologist by Medicare’s definition (and haven’t had any prior adverse events related to health care services billing) your application will be approved (remember “Top 10 Reason” #1 above? Medicare will accept “any willing provider” unlike the stone wall erected by most every other insurer.

Carriers may take up to 60 days to process your application if they have all the information they need, longer if they have to request additional information, and depending on your location and how backlogged the system is. However, turnaround typically is quicker than that, in the 30-45 day range. You will receive a UPIN (by mail) when you apply. The UPIN registry tends to issue these numbers even before you receive confirmation of your application to Medicare. You will receive a written confirmation from Medicare that your application has been approved along with your billing number and its effective date.

You may see Medicare patients between the time you apply and your application is approved. That is not uncommon, for example, in situations in which recently licensed or relocated practitioners immediately get up to speed providing services, such as medical residents under supervision or locum tenens physicians. However, you will not be able to bill Medicare for those services until your application is approved and you receive your billing number (or, more accurately, if you do bill Medicare without your number this will simply cause a denial). Once that number is received you may bill for services previously provided. Of course be aware that, if for some unforseen reason your application is not approved, you will not subsequently be able to bill patients directly for those services.

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