American College of Physicians: Internal Medicine — Doctors for Adults ®


College joins new efforts to reform HCFA's policies

From the April 2001 ACP-ASIM Observer, copyright 2001 by the American College of Physicians-American Society of Internal Medicine.

By William Hoffman

The College is supporting Congressional efforts to force HCFA to ease the Medicare hassle factor that physicians say is crippling their practices.

The College joined several other medical societies at a March 7 press conference to back the Medicare Education and Regulatory Fairness Act (MERFA) of 2001. The legislation, proposed by Sens. Frank H. Murkowski (R-Alaska) and John F. Kerry (D-Mass.), would force HCFA to implement some common-sense reforms, including curbing what many physicians say are abusive billing audits. A companion bill was introduced in the House by Reps. Pat Toomey (R-Pa.) and Shelley Berkley (D-Nev.)

Sen. Kerry told a standing-room-only crowd of physicians, health industry lobbyists and trade group representatives that he could not think of another agency that is as inflexible and has misconstrued Congress' intents as much as HCFA. Sen. Murkowski described the bill as an attempt "to make sure that the providers are treated with the respect they deserve."

College President William J. Hall, FACP, said that if the bill is passed, it will reduce paperwork and free up physicians' time so they can "take care of Medicare patients and not the bureaucracy."

Under the bill, HCFA would have to do the following:

  • Give physicians easier access to Medicare rules and answers to frequently asked questions.
  • Notify physicians in advance about changes to Medicare rules.
  • Pay physicians' claims without demanding more paperwork unless evidence indicates that the claim is incorrect.
  • Review patient records instead of assuming that some claims were billed incorrectly based on a statistical sample.
  • Reduce overpayments to physicians by teaching physicians how to avoid billing errors.


While the bill would address a variety of concerns, the press conference focused on the unfairness of HCFA audits. Physicians and other providers at the press conference complained that HCFA and its regional carriers too often conduct arbitrary, intrusive billing audits based on flimsy evidence. They also said that HCFA uses confusingly complex rules that mischaracterize honest billing errors as fraud.

Some at the press conference complained that HCFA audits have "reversed the presumption of innocence." Thomas R. Reardon, MD, immediate past president of the AMA, noted that MERFA would give physicians the same types of rights that Congress gave taxpayers when it reformed the IRS in 1998.

Dr. Reardon said that HCFA's technique of extrapolating assumed overpayments based on statistical sampling methods is "similar to the IRS identifying an error on one year's tax return, assuming that you made that same error on every return you ever filed, then requesting that you pay back taxes on every return." MERFA would prohibit HCFA from extrapolating alleged overpayments from unaudited claims the first time a physician or provider is assessed.

James T. Dove, FACP, president of Prairie Cardiovascular Consultants Ltd. in Springfield, Ill., told how his practice challenged 793 different Medicare audits. In the end, he said, only eight billing errors were confirmed for a total overpayment of only $356. (HCFA had claimed that his practice overbilled by $50,000.)

He said that his practice spent roughly $15,000 submitting the original claims. Challenging HCFA's audit (visiting hospitals, copying and reviewing records for completeness, shipping them to the carrier) cost his practice $44,000. "You can't stay in business long if you do this," he observed.


The MERFA legislation would also require HCFA to complete at least four pilots to test new evaluation and management documentation guideline programs before implementing any new guidelines.

The bill would also require HCFA to educate physicians about Medicare rules and pay special attention to small practices. "Medicare assumes that we really know the rules," Dr. Hall said, "but there isn't a single place in an office or in a library to find Medicare rules."

Dr. Dove added that most physicians don't even understand what rules they have violated when HCFA finds a billing error. "When we say, 'Tell us what we did wrong so that we won't do it wrong again,' we're not given that information." He said his practice was once told to file a Freedom of Information Act request for billing advice.

The MERFA bill would also prohibit HCFA from using attendance lists from HCFA's training programs to identify audit subjects, a controversial topic at the press conference.

Rep. Berkley, who cosponsored the companion bill in the House, told the story of a physician-friend who questioned Medicare rules and procedures during a HCFA-sponsored seminar on billing procedures. A week later, his office was filled with billing auditors.

"He is absolutely convinced that he was selected to have all his records for the last 10 years reviewed simply because he asked questions at this meeting," Rep. Berkley said.

William Hoffman is a freelance writer in Fairfax, Va.


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