WITH ITS INSTRUCTIONS to the carriers on Sept. 18, the Centers for Medicare and Medicaid Services officially blessed electronic certificates of medical necessity and other electronic communication between suppliers and physicians. The key issues that the industry must now address are: How do we facilitate electronic communication with physicians? How do we work with the government to speed up approval of electronic physician signatures? And more broadly, what other cost efficiencies can we gain by replacing electronic communication with paper and facsimile communications?

Let's look at what the CMS instructions actually say. The new Program Integrity Instructions add the word “electronic” to various sections in Chapter 5 of the Program Integrity Manual that explain the various CMN requirements. For example, in Section 3.3 entitled “Certificates of Medical Necessity,” the instructions state that “Suppliers and physicians may choose to utilize electronic CMNs.” There are numerous additional references to electronic CMNs. What this means is that suppliers may send electronic CMNs to a physician for his or her completion, but until the government approves federal standards for electronic signatures, the physician must sign the hard copy CMN and return it to the supplier.

The Program Integrity Manual instructions tell the DMERCs that “A faxed, copied, an original hardcopy, or an electronic CMN must be maintained by the supplier and be available to the DMERCs on request.” As a practical matter, if a DMERC conducts a CMN audit, suppliers should be able to produce electronic CMNs. (And digging up electronic CMNs should prove to be far more efficient than their paper counterparts.)

Further, CMS instructs the DMERCs that “When CMNs are submitted electronically to the DMERC, only information from Sections A, B, and D are required since Section C can not be transmitted electronically. However, suppliers who bill electronically are not exempt from having Section C completed on the original CMN.” As we would expect, electronic CMNs must essentially be identical to their paper counterparts.

What about the physician signature issues with an electronic CMN? While suppliers can send physicians CMNs electronically for completion, and physicians (or their employees) can electronically complete Section B, the physician office must still print out the final CMN and sign a hard copy. That is, until the federal government issues its electronic signature rules. At that point, physicians will be able to electronically sign the electronic CMN, and electronically send back the electronic CMN to the supplier. The supplier will have to maintain an electronic version of that CMN — no more paper CMNs! Therefore, once the Department of Health and Human Servies approves standards for electronic signatures, suppliers, in theory, will be able to completely eliminate paper CMNs. This assumes, of course, that physicians are fully capable of moving to electronic communication.

Importantly, the Program Integrity instructions state that, “E-CMNs must adhere to all privacy, security, and electronic signature rules and regulations promulgated by CMS and DHHS.” As suppliers address the privacy and security requirements of the Health Insurance Portability and Accountability Act (HIPAA), be mindful of all electronic communication, including that with physicians and other referral sources.

Electronic CMNs don't just create efficiencies for suppliers. The government also benefits. From a program integrity perspective, the government fully understands that its job will be a lot easier once CMNs are completely electronic. Electronic CMNs enable an auditor to understand who inserted what information on the CMN at what point in time. The days of examining paper CMNs for white-out marks will be over.

Why is this happening? In 2000, Congress passed the “Millennium Digital Commerce Act.” This electronic signature, or e-sign, law gives electronic records and electronic signatures the same legal effect and enforceability as their paper-based and handwritten counterparts. Under the e-sign law, Congress directed all government agencies to use or accept electronic records or electronic signatures.

CMS makes the Program Integrity Manual accessible only on the Web at www.hcfa.gov/pubforms/83%5Fpim/pim83c08.htm. There you can find CMS directives to the DMERCs that the DMERCs have not yet published in their supplier bulletins.

A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is an attorney with the law firm of Epstein, Becker & Green in Washington. Bachenheimer previously worked at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 202/861-1825 or e-mail at cbachenheimer@ebglaw.com.

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