Medicare Botches January 2024 Telehealth Claim Payments

(By Barbara Griswold, LMFT 

Jan. 28, 2024, (Updated Feb. 24 2024, updates in red)

In my first 2024 newsletter, I discussed the new Medicare coding advice for 2024.

For telehealth sessions DURING THE PANDEMIC and PRIOR TO 12/31/23, you should have been using Place of Service (POS) code 11 FOR MEDICARE CLAIMS. This 11 code designates that the session took place in-person in your office. Why use this code for a telehealth session? Because telehealth POS codes 10 or 02 would have been paid by Medicare at an incorrectly reduced “facility rate.” (Note: If you have been billing with a 10 or 02, check your 2023 payments; you may be able to submit corrected claims within one year for these sessions, this time using POS 11, and get the money you are owed!)

Then, in November 2023, the 2024 Medicare Physician Fee Schedule (PFS) was released. The PFS, which outlines Medicare rules and regulations, directed providers that for sessions after 1/1/24, we should begin billing 2024 Medicare telehealth using POS 10. They said claims billed with POS 10 would now be paid at the correct (“non-facility”) rate — the same rate as would be paid for in-office sessions. They noted that claims billed with POS 02 would be paid at the reduced facility rate (citation). It also said that modifier 95 would no longer be needed for telehealth sessions unless the clinician was at a hospital setting, talking to a client at home.

However, clinicians from across the country have contacted me to tell me that they tried billing Medicare with POS 10 for January and February 2024 sessions, and their reimbursement rates dropped. Their claims were paid at the lower facility rate.

So, the therapists called their Medicare Administrative Contractor (MAC) — the Medicare contractor that they must bill in their state — and got mixed responses. Many clinicians were told that these claims were paid correctly and there was no error. Some were told that POS 11 was still required in order to be paid at the correct rate. One therapist was told coding should be based on when the claim was submitted, not when the session occurred (no Medicare expert I’ve talked to has supported this). A few were told that the MAC would investigate the issue.

One thing to keep in mind here: When we talk about Medicare, there are two types of entities in play here. There is the national Medicare organization (the Center for Medicare and Medicaid Services, or CMS) that made these coding rules, and the regional Medicare Administrative Contractors (MAC) who are supposed to follow them. The MACs deal with processing the claims in your state. Therefore, when you “call Medicare,” you are actually calling the MAC responsible for your state. While they are supposed to be following the dictates from CMS, they may not yet have been trained or updated on new coding regulations.

To make matters worse, the Medicare Learning Network (MLN) released a completely confusing Telehealth Billing pamphlet for providers (click here). On page 5, one paragraph says that in 2024 we should continue to use in-person POS codes for telehealth sessions, while in the very next paragraph it says we should use POS 10.

So what to believe? I have read the relevant parts of the 2024 Physicians’s Fee Schedule (PFS), which is like the Medicare Bible of coding and coverage. I have consulted with many experts including the Center for Connected Health Policy. There is no question in my mind that billing for POS 10 for telehealth sessions is absolutely what the folks at Medicare national intended for us to do. However, the MACS are the ones who process claims and cut provider paychecks, so we need clear policy directives from them.

UPDATE 2/24/24:  As recently as 2/23/24, Medicare national representatives were still stating “we are aware of an issue with reimbursement and are working towards a resolution.”  However, I am getting confirmation that the directive has come down from Medicare to the MACs (or at least to some of them), acknowledging that POS 10 should be paying at the higher, non-facility rate.  Individual MACs seem to be addressing this at different speeds.  Here are some citations you can watch for updates:

• CGS – I could find no mention of this issue on their website as of 2/24/24.
• First Coast (Florida, Puerto Rico) confirmed the issue, but as of 2/22/24 could not give a resolution date: read more here .  They also confirmed an issue with psychologist’s claims being denied in error –– read more here
• NGS – for both Juristictions 6 (Illinois, Minnesota, Wisconsin) and Juristiction K (Connecticut, New York, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont), NGS said as of 2/22/24 that the issue had been corrected, and that “NGS will initiate a mass adjustment of all impacted claims with dates of service 1/1/2024 and after,” and that “no provider action was needed.” – read more here.
• Noridian Juristiction E (California, Hawaii, and Nevada) and Juristiction F states (Alaska, Arizona, Idaho, Montana, North Dakota, Oregon, South Dakota, Utah, Washington, Wyoming) confirmed the situation, but as of 2/13/23 could not give a date when it would be resolved — for Juristiction E states, read more here.  For Juristiction F states, read more here
• Novitas JL states (DC, DE, MD, NJ & PA) and JH states (AR, CO, LA, MS, NM, OK, TX) also confirmed the issue.  As of 2/22/24 it was not resolved, but they said “an update will be made to the system. All impacted claims will be adjusted to the non-facility rate.” Read more here for JL states, or read more here for JH states.    On this same page they indicated they were aware of a separate issue with MFT and counselor claims being rejected as ineligible providers.
• Palmetto: I couldn’t find anything on their website about the POS issue, but they did indicate a separate issue with MFT and counselor claims being rejected as ineligible provider which they say has now been fixed — read more here)
• WPS – I could find no mention of this issue on their website as of 2/24/24.

At this point I recommend that you:

• check all your 2024 claims to be sure they were processed correctly
• contact your Medicare MAC.  Their contact information can be found by clicking here or by clicking here. If needed, be ready to cite the following MEDICARE references:
  • 2024 Medicare Physician Fee Schedule, Federal Register / Vol. 88, No. 220 / Thursday, November 16, 2023 / Rules and Regulations, Regulation 78876, which states “… beginning in CY 2024, claims for telehealth services billed with POS 10 will be paid at the non-facility PFS rate.” (citation)
  • Medicare Physician Fee Schedule Final Rule Summary: CY 2024: “…starting in CY 2024, telehealth services provided to people in their homes will be paid at the non-facility PFS rate. We clarified that modifier ’95’ should be used when the clinician is in the hospital and the patient is in the home…” (citation, page 2)
  • Fact Sheet, Calendar Year (CY) 2024 Medicare Physician Fee Schedule Final Rule: “We are finalizing that, beginning in CY 2024, telehealth services furnished to people in their homes will be paid at the non-facility PFS rate to protect access to mental health and other telehealth services by aligning with telehealth-related flexibilities that were extended via the CAA, 2023.” (citation)
• consider holding off on submitting more claims until you get confirmation from your Medicare MAC that they have resolved the issue.  Submitting claims now might mean they will be paid at the wrong rate, and will need to be corrected.  However, it seems even if you go ahead and submit, you should eventually be paid at the correct rate, and hopefully, the claims will be automatically adjusted without further effort on your part.

Have questions about Medicare billing, enrollment, opting out, etc? Don’t contact me, unless it is about documentation! Instead, reach out to my colleague and Medicare expert Susan Frager — click here

Need help with an audit or records request? Want feedback on your documentation to prevent a clawback? Schedule a consultation — click here