Brace Yourselves

Brace yourselves we are in for a bumpy ride. As most of you are aware, NHIC has lost its contract with CMS Medicare. Effective September 1, 2008, Palmetto GBA will take over the function of claims processing and payments for Medicare claims. If the name Palmetto is familiar to most of you it’s because these are the folks that have been processing Medicare Railroad claims for years. They are owned by Blue Cross Blue Shield of South Carolina, with currently 2,700 employees. Currently, they are handling all the Medicare claims for the states of Ohio, South Carolina, and West Virginia. I hope they are planning to add more staff!

On August 31, 2008, at midnight the switch will be made, and Palmetto will take over hundreds of millions of claims for all of California. They are calling the California jurisdiction J1. I think the J stands for.... well never mind… According to the Bureau of Statistics, the population of Ohio is 11 million, of which 1.4 million are over the age of 65- (Medicare Patients). The population of South Carolina is 4.3 million and 183,000 people over 65, and the population for West Virginia is 1.8 million with the over 65 as 278,000 people for a total of 1.8 million persons over the age of 65....... Who said I don’t do math? Give or take a person here or there. Now in comparison, California has 36 million persons, with 3.6 million persons over the age of 65. See where I am going with this? So basically, Palmetto has been able to process claims for 1.8 million people. That is roughly equivalent to the population of San Diego. What is the rest of our state going to do?

Now if any of you doctors are nostalgic for the good old days? We have lived through such a switch before. Transamerica used to adjudicate claims for Southern California. When the switch was made to NHIC, which basically maintained the same operations locally in Los Angeles, kept the same employees (both good and bad), and operated seamlessly the average delay for payment at the time of the switch was 30 days. For some providers, it took much longer before claims were paid. As far as I have been informed Palmetto is not planning to maintain any local offices here in Sunny California, set your alarm, you will have to call at 5 am to reach the east coast for questions, Actually, that may not be altogether true they will do what Dell does and have call centers on the hours consistent with Pacific Time- we hope. So far, they have implemented a call center for questions. When you call the number, you get a recording that says if you’re calling about California — don’t. They are not taking any incoming calls at this time.

So, Palmetto has already started bombarding us with more paperwork. Providers and billing companies will have to complete new electronic interchange applications, and providers are required to send new paperwork for the electronic transfer of funds. This may just be the beginning. Complete as much paperwork as they send you as soon as possible, even though they are not ready to receive it yet. Do everything you can do on your end to make sure the electronic interchanges are in place. Then cross your fingers. I hate to sound like Chicken Little running through medical offices proclaiming that the “Sky is Falling”, but I suggest you start saving for a rainy day. We are about to have a monsoon.