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Provider Enrollment, Chain and Ownership System (PECOS) Edits

CMS instructed contractors to turn on Phase 2 ordering physician denial edits for dates of service on/after January 6, 2014 for DMEPOS claims.

Background

Only physicians and certain types of non-physician practitioners are eligible to order or refer items or services for Medicare beneficiaries. They are as follows:

  • Physicians (doctor of medicine or osteopathy, doctor of dental medicine, doctor of dental surgery, doctor of podiatric medicine, doctor of optometry),
  • Physician Assistants,
  • Clinical Nurse Specialists,
  • Nurse Practitioners,
  • Clinical Psychologists,
  • Interns, Residents, and Fellows,
  • Certified Nurse Midwives, and
  • Clinical Social Workers.

Medicare will only reimburse for specific items or services when ordered by providers or suppliers authorized by Medicare statute and regulation to do so. Claims that a billing provider or supplier submits in which the ordering provider is not authorized by statute and regulation will be denied as a non-covered service. The denial will be based on the fact that neither statute nor regulation allows coverage of certain services when ordered or referred by the identified supplier or provider specialty.

Interns or residents who have been assigned an NPI must also be registered and active in PECOS for their NPI to be used on Medicare claims and for the claim to be paid. See more guidance below:

Orders or referrals by interns or residents: The IFC (interim final rule with comment period) mandated that all interns and residents who order and refer specify the name and NPI of a teaching physician (i.e., the name and NPI of the teaching physician would have been required on the claim for service(s)). The final rule states that State-licensed residents may enroll to order and/or refer and may be listed on claims. Claims for covered items and services from un-licensed interns and residents must still specify the name and NPI of the teaching physician. However, if States provide provisional licenses or otherwise permit residents to order and refer services, CMS will allow interns and residents to enroll to order and refer, consistent with State law.

  • Chiropractors are not eligible to order or refer supplies or services for Medicare beneficiaries. All services ordered or referred by a chiropractor will be denied.
  • Optometrists may only order and refer DMEPOS products/services, and laboratory and x-ray services payable under Medicare Part B.

Claim Submission

Implementation

If the ordering/referring provider:

  • Is on the claim, Medicare will verify that the ordering/referring provider NPI is in PECOS and eligible to order and refer.
  • Is not in PECOS or is in PECOS but is not of the specialty to order or refer, the claim will be denied.
  • If the name submitted on the claim does not match the provider's name in PECOS, the claim will be denied.

The remittance advice will display the following codes when claims are denied due to an error in the ordering physician NPI:

N265 Missing/incomplete/invalid ordering provider primary identifier
N276 Missing/incomplete/invalid other payer referring provider identifier

Take the following steps in the order listed to correct the claim and avoid claim rejections:

  1. Check to see whether the provider is a specialty that can order DMEPOS.
    • Noridian has seen claims ordered by physical and occupational therapists, massage therapists, opticians and others who are enrolled in PECOS or may have an NPI, but these heath care personnel are not allowed by statute to order DME for Medicare purposes.
  2. Verify that the ordering physician NPI is on the list of physicians and other non-physician practitioners enrolled in PECOS. This can be done by:
    • Calling the Noridian IVR, 1-877-320-0390 and selecting Option 6 to enter the NPI and name of the referring provider. The IVR will then respond if the individual is or is not enrolled in PECOS.
    • Checking the CMS ordering/referring provider downloadable report This link will take you to an external website. containing the NPI, first name, and last name of providers enrolled in PECOS.
    • Note: This .pdf file contains approximately 800,000 records. A new file will be made available periodically that will replace the posted file; at any given time, only one file (the most recent) will be available. The file can be viewed online or be downloaded by users with technical expertise and further sorted or manipulated. It can also be used to search for a particular physician or non-physician practitioner by NPI or by name. Additional notes about this list:
      • Records are in alphabetical order based on the surname of the physician or non-physician practitioner.
      • Name suffixes (e.g., Jr.), if they exist, are not displayed.
      • There are no "duplicates" in the file. Many physicians or non-physician practitioners share the same first and last name; their corresponding NPIs are the assurance of uniqueness.
      • Deceased physicians and non-physician practitioners are not included in the file.
      • If a user is unsure of a physician or non-physician practitioner's NPI, he or she can look it up in the NPI Registry This link will take you to an external website..
  • Ensure you are correctly entering the Ordering/Referring Provider's name on the claim as listed in PECOS.
  • Do not use "nicknames" on the claim, as their use could cause the claim to fail the edits.
  • Do not enter a credential (e.g., "Dr.") in a name field.
  • On paper claims (CMS-1500), in item 17, enter the ordering provider's first name first, and last name second (e.g., John Smith).
  • Special characters, such as ' or - appear in some names on the PECOS list and should be submitted on the claim as such. Spaces must also be present as depicted on the CMS PECOS list.
  1. Ensure that the name and the NPI entered for the ordering provider belong to a physician or non-physician practitioner and not to an organization, such as a group practice that employs the physician or non-physician practitioner.
    • Ensure that the qualifier in the electronic claim (2310A NM102 loop) is a 1 (person). Organizations (qualifier 2) cannot order and refer.
    • Make sure on electronic and paper claims that you are not submitting the last name in the first name field and vice versa.

Resources

Last Updated Sep 13, 2016