Statement of the American College of Physicians-American Society of Internal Medicine

The American College of Physicians--American Society of Internal Medicine (ACP--ASIM) which, representing 115,000 physicians and medical students, is the largest medical specialty society and the second largest medical organization in the United States, congratulates the Subcommittee for holding this hearing. Internists provide care for more Medicare patients than any other medical specialty. The most frequent complaint received by the organization is that internists are subject to too much paperwork and, as a result, do not have enough time to devote to patients.

Impact of Medicare Paperwork on Clinical Practice

Time is the most valuable resource in diagnosing and caring for older adults, but it's in short supply due to unnecessary paperwork. Research breakthroughs, new pharmaceuticals and improved diagnostic equipment are of limited value if doctors lack the time to spend with patients.

Visits from Medicare patients typically begin with a surprisingly complex and time-consuming paperwork process. Medicare requires that the physicians and their staffs complete a claim form with diagnosis and service codes and authorizations for items such as wheelchairs and services such as home health care. The Medicare program assumes physicians know what it will and will not cover. There is no single place to find Medicare's rules, however. The regulations are more than 100,000 pages long and different carriers, who process paperwork for Medicare across the country, have their own rules.

Once a claim is filed, Medicare might hold it because it tripped some random criteria. If Medicare finally pays the claim, carriers have four years to change their minds and demand that the physician repay it. Appeals require more paperwork and time to present the case.

Medicare can sample physician's records to determine if certain services, such as office visits, were paid incorrectly. If a certain percentage were paid wrong, the carrier will demand repayment for similar claims -- without looking at the records.

To keep their practices running, many internists simply repay these claims. Opening their practices to a post-payment audit can tie them up for days--essentially shutting down patient care activities.

Medicare patients are the ones who suffer when physicians and their office staff are diverted from patient care activities to unnecessary paperwork. The result can be longer waiting time before being seen by the physician, because he or she is busy answering a demand from Medicare for more information at a time that could have been spent with patients. It can result in the physician seeing fewer patients each day--meaning a longer time to for a patient to get an appointment. It can mean having less time with elderly patients and less time to answer questions and discuss new treatments with them. And in the worst cases, it can literally shut down a practice for days. Is it any wonder that more physicians are deciding that they will no longer see new Medicare patients?

The Need for Legislative Relief

Fortunately, bipartisan legislation, the Medicare Education and Regulatory Fairness Act of 2001 (MERFA), H.R. 868/S. 452, has been introduced in both houses of Congress that would greatly improve this state of affairs. ACP--ASIM has strongly endorsed the MERFA legislation and urges Congress to give it prompt and favorable consideration. The bill, introduced by Representatives Toomey and Berkley and Senators Murkowski and Kerry would address these problems by better targeting current Medicare education dollars to provide needed outreach and education to physicians and by instituting common-sense reforms:

1.  Medicare rules and policies and answers to frequently asked questions would be made more accessible. The bill would require that carriers respond in writing to requests for guidance on how to bill for services. The written advice provided by the carrier would be binding in any subsequent reviews. (This means that if the carrier told a physician how to bill a service correctly, it couldn't later deny payment or audit the physician's practice because he or she did it wrong based on the carrier's original advice). Similarly, the bill would allow physicians to voluntary send medical records to the carrier to get a ruling from the carrier on whether or not the documentation is adequate to support the billed service, and carriers could not use this to subsequently target the physician for review. Carrier employees would also be required to give their true names (first and last) when answering questions to assure accountability. HHS would be required to post responses to "frequently asked questions" submitted by health associations in a way that is readily accessible to physicians. Carriers would be required to make prepayment review criteria (screens) and other coverage and audit criteria available to physicians. Physicians would be given a minimum of 30 days advance notice about changes in rules.

2. Medicare would be required to pay claims, without demanding more paperwork, unless there is evidence that the bill is incorrect. Random audits and pre-payment screens that trigger further review would be prohibited.

3. For a first time post-payment audit, Medicare would be required to actually look at the records, rather than making an assumption that some claims were billed incorrectly based on a statistical sample. (Carriers would be allowed to use statistical sampling--or extrapolation--for subsequent reviews of the same physician.)

4. Medicare and its carriers would be required to invest substantially more money in physician education and outreach.

5. Medicare's ability to investigate fraudulent claims would be preserved--the bill specifically applies only to audits in which there is no allegation of fraud. Inadvertent overpayments due to errors or misunderstanding of the rules would be reduced by educating physicians on how to prevent mistakes in the first place, rather than auditing them after the fact.

6. Medicare would be prohibited from collecting alleged overpayments until all appeals are exhausted and a final determination is made. Physicians would also have the option of entering into several different type of re-payment plans if a final determination is made that they billed incorrectly for certain services (rather than automatically having to pay the money all at once within 30 days, or alternatively, having the money taken out as a reduction in payments for future claims).

7. Medicare would be required to conduct at least four pilot tests of the evaluation and management documentation guidelines that would include a variety of settings. The bill specifies that one of the goals of the pilot tests should be to reduce the need to document non-clinically relevant information.

The Need for Administrative Relief

There are other changes that can and should be made by the administration to reduce administrative red tape, changes that can be implemented by HHS--directly or through instructions to its contractors--without the need for new legislation. The following is a list of recommendations that fall outside the scope of MERFA and can be implemented by HHS Secretary Thompson:

1. The Secretary of the Department of Health and Human Services should create a single source document explaining Medicare regulations that combines the Medicare provider manual, Medicare operational policy letters, and other regulatory documents to clearly communicate to physicians and other medical providers the rules of the Medicare program. This document should be made publicly available via the internet and contain links to local Medicare carrier policies as well.

2. The Secretary of the Department of Health and Human Services should develop a clear mechanism to assess complaints about Medicare policies, make the complaints subject to public scrutiny, and address these complaints in a timely manner. The complaints should be cataloged by type and regulatory response to measure frequency of problems and their solutions.

3. The Secretary of the Department of Health and Human Services should change the regulations governing Medicare post-payment review to reflect the following:

• Review procedures should provide the audited physician the right to review the post-payment audit sample with the actual personnel responsible for the review.

• HCFA should encourage Medicare carriers to utilize as Hearing Officers, licensed physicians of the same specialty and in the same geographical area as that of the physician who requests a Fair Hearing, and to make known to the requesting physician prior to the Fair Hearing the educational and medical credentials of the Hearing Officer.

• HCFA should prohibit carriers from seeking recoupments on "overpayments" made more than two years earlier except in cases of fraud.

4. HCFA should establish a single Medicare liaison office in each region for medical societies and consumer organizations to work with in order to facilitate communication within the existing Medicare regions.

5. State medical societies and Medicare Carrier Advisory Committees (CACs) should be invited to place items on the agendas for CAC meetings--sufficiently in advance of the CAC meeting--to allow for sufficient discussion and resolution of valid physician problems with their Medicare carrier's application of medical review criteria and related issues.

6. Carriers should provide a 60-day public comment period for all proposed policy changes. (The comment period provided by carriers is now limited to 45 days.) Once the comment period is over, the carrier should be required to state, in writing, its reasons for accepting or rejecting the comments made in making the final policy. The written rationale should be shared with the CAC and be made publicly available via the internet.

7. Once a policy is made final, the carrier should release it to the medical community before it takes effect and conduct educational forums, when necessary, to ensure proper implementation of the new policy. Adequate notice (a minimum of 90 days) also should be given before the policy is effective.

8. If local medical review policies (LMRPs) continue to be proposed, they should be required to go through Carrier Advisory Committees to allow for proper input of practicing physicians.

9. HCFA should create a mechanism to coordinate information sharing between the regional Medicare Carrier Advisory Committees. All CAC meeting agendas and minutes should be posted to a single HCFA-maintained website within five business days of the publication of the written materials. This website should also give CAC members in different regions the ability to query each other about carrier policies.

10. The Health Care Financing Administration (HCFA) must ensure that its carriers are held accountable to established Medicare criteria and standards, especially in the areas of claims processing and customer satisfaction, after carrier responsibilities for claims processing and payment safeguards (program integrity) are split under the Medicare Integrity Program (MIP).

11. HCFA should increase surveillance and monitoring of the performance of carriers to assure their accountability to questions and concerns raised by patients and physicians about coverage and other issues.

12. HCFA should enforce its power to penalize carriers for failing to meet established criteria and standards

13. HCFA should solicit local physician input on the adequacy of carrier performance--for both claims processing and program integrity.

14. Physicians should be allowed to request and receive an administrative law hearing to challenge carrier performance of administrative and other policy requirements if earlier resolution attempts cannot solve the problem.

15. Carriers should use color-coded communications. (e.g. red envelop for extremely urgent requests that require a response).

16. Carrier staff must be better trained; HCFA should consider mandating that claims processors be required to be certified and pass a course in applying HCFA payment rules.

ACP--ASIM will be seeking an opportunity to discuss our proposals for administratrative relief with Secretary Thompson, and once confirmed, a new HCFA administrator. We are encouraged that Secretary Thompson has expressed agreement on the need for HCFA to reduce unnecessary red tape.

Conclusion

ACP--ASIM is pleased that the subcommittee is addressing the serious problems that the Medicare regulatory burden poses for physicians and others attempting to care for patients. We strongly urge the Subcommittee to report MERFA to the full Ways and Means Committee for action. We also urge the Subcommittee to exercise oversight over HCFA to assure that necessary administrative changes are also made.