Noridian Responds to Payment Delays

FARGO, N.D.–Responding to escalating complaints from home
medical equipment providers about delayed or improperly denied
reimbursement, Noridian Administrative Services acknowledged in a
statement Thursday that it has a backlog of more than 1,000 claims
older than 90 days and 27,582 claims older than 61 days.

The Jurisdiction D DME Medicare Administrative Contractor said
the number of claims requiring manual review was greater than it
had projected when it took over from Cigna–the region’s former
DMERC–on Oct. 1, resulting in the backlog.

According to Noridian, from October to December 2006, it
received 3,485,941 claims. In that same time period, it processed
3,508,347 claims.

Of the claims it gets, Noridian said, more than 98 perecent are
electronic. “The timeliness standard for electronic media claims is
that 95 percent or more of clean electronic claims are processed in
31 days,” the statement said. “We fell slightly short of this goal
in December, processing 93.6 percent of electronic claims timely.
However, in October and November we exceeded the EMC timeliness
standard.”

While 80 percent of claims process through to completion without
manual intervention, Noridian said, approximately 20 percent of all
DME claims submitted “suspend” and, therefore, require manual
intervention.

Such manual steps–which include reviewing CMNs and verifying
medical policy guidelines are met–cannot be automated and “require
the expertise of a claim processor to review the claim information
and process the claim accordingly,” Noridian said. Oxygen and power
mobility device claims were given as examples of claims that
require manual intervention.

“We realize our high volume of suspended claims is impacting
cash flow for some suppliers. We assure you that we are working on
ways to reduce our claims inventory,” Noridian said, noting that it
is hiring additional staff and its claims processing team is
working overtime.

That’s small comfort to providers who have reported backlogged
payments ranging from $20,000 to more than $3 million. In recent
weeks, an increasing number of HME providers in the 17-state region
have enlisted the aid of the CMS, state associations, the American
Association for Homecare, buying groups and legislators to put
pressure on Noridian to get their claims paid.

“I think the time has passed for them to tell us why they are
behind. All we really care about is for them to get caught up,”
said Tim Pederson, CEO of Westmed Rehab in Rapid City, S.D.
“They’re supposed to be meeting that 14-day payment. We just want
it met … The short-term solution would be for CMS to tell
Noridian to pay all the claims and audit to their heart’s
content.”

Pederson said his company is down about $100,000 in payments.
“Even a large provider is going to be hurt by that. We’re living
paycheck to paycheck with our payers.”

Angelene Adler, vice president of operations for Care Medical
Equipment, an 11-branch provider based in Portland, Ore., said her
concern is how Noridian is training its new staff. Many of the
MAC’s employees don’t seem to understand common industry terms, she
said. (See HomeCare Monday, Jan. 8.)

Adler, whose company is still waiting for most of the more than
$3 million it is owed, said she would welcome the opportunity to
help Noridian train its staff. “I know providers would be very
willing to help educate them or meet with them to help their
staff.”

Eric Sokol, director of the Power Mobility Coalition, noted that
Noridian has given no timeline for when its problems might be
resolved. For power mobility claims, he said, “this is a double
whammy to suppliers, given that not only are payments being delayed
… but these are payments that are a lot less because they are the
first ones under the new reimbursement as well.” New codes and
pricing for PMDs took effect Nov. 15.

Neal Hansen of Hansen Homecare Specialty Service in Ketchikan,
Alaska, said his small HME is definitely feeling the pinch, and the
$20,000 it is out cannot come too soon. “We’ve had to dig into our
reserves to pay our vendors. But you can’t keep taking it out of
the bag. You have to put it back.”

Hansen’s company covers Ketchikan, its environs and Prince
William Island. The payment delay combined with the cuts has caused
him to rethink whether he can afford to service the island, which
is accessible only by ferry. “We have to pay $600 just to go over
there,” he said. “We have to take the truck over and all the
equipment, and you can’t just come back. You have to stay two or
three days and come back on the ferry.”

Meanwhile, Sarah Hanna, vice president of ECS Billing &
Consulting in Tiffin, Ohio, said her company has heard from
Noridian that “any reopening we do, either over the phone or paper
form, will take anywhere from 90 to 120 days to process.” That’s a
big jump from the 45 days providers had been told previously. “This
extra processing time will hit providers’ cash flow,” Hanna
said.

For its part, Noridian offered these suggestions on how
providers can help reduce the number of aging claims:

–Do not resubmit claims that are aging. Doing so only increases
the claims inventory, and processing of the original claim may be
further delayed.

–Use the Interactive Voice Response Unit to check the status of
claims at (877) 320-0390, available between 6 a.m. and 8 p.m.
Central time. For detailed instructions, download a PDF at http://www.noridianmedicare.com/dme/contact/docs/ivr_guide.pdf.

–Use the Education Status Letter, sent indicating why paper
claims cannot be processed, and the CMS-1500 claim form
instructions to correct paper claims.

For Noridian’s complete DME claims update, click here.