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


Washington Perspective

In an effort to cut Medicare’s red tape, Congress is proposing tough new legislation

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

By Robert B. Doherty

Time is the most valuable resource in a physician’s office. It is also the one that is most likely to be in scarce supply, according to calls unhappy internists have made to the ACP–ASIM Medicare hotline (800-338-2746, ext. 4533).

Internists tell us that the ability to spend time with patients is a critical factor in delivering high-quality medical care, particularly for older patients. They also say that without adequate time with patients, research breakthroughs, new medications and improved diagnostic equipment have limited value. Medicare paperwork eats up time physicians could be spending with patients.

Navigating the Medicare maze

The root cause of internists’ dissatisfaction with Medicare is the Byzantine maze they must navigate to be paid for a claim.

The process goes like this: An internist has a question about how to bill for a particular service, such as what codes to use and what documentation is required. The doctor (or a staff person) calls the Medicare carrier, only to be put on hold. When the caller finally gets through to an employee, the person gives a confusing answer. When the physician or staff person asks for a name and a direct phone number to call with future questions, the employee refuses to supply them.

The physician submits the claim, based on what the carrier employee suggested was the correct procedure. The carrier may still refuse to pay the claim without more documentation—not necessarily because there was anything wrong with the claim, but because it triggered a random “prepayment” audit screen.

This means that the physician and billing staff must take time to pull the patient’s chart, make a copy of the record and send it back to the carrier. The carrier may then decide to pay the claim or deny it because medical necessity was insufficiently documented. The physician can then appeal the denial—but that takes more precious time.

Even if the claim is paid, that’s not necessarily the end of the story. Medicare has up to four years to conduct a “post-payment” audit of the internist’s practice. A post-payment audit can tie up a practice for days as Medicare auditors comb through office records. Based on a sampling of as few as 15 claims, auditors may then extrapolate the results to all claims the physician has submitted for similar services during the previous four years.

For example, the auditor might conclude that three of the 15 sampled claims were “not medically necessary.” If the internist submitted claims for 3,000 similar services during the past four years, Medicare will rule that 20% of all similar claims—600 claims in this example—were medically unnecessary, even though the carrier never actually examined records for any of the additional claims.

At this point, Medicare will demand repayment plus interest within 30 days. If the physician appeals the denial, Medicare holds the money, which can add up to thousands of dollars.

Appeals can take years to resolve, during which time physicians are out their money. Knowing this, the internist may simply cave in and settle with Medicare rather than spend another minute navigating the Medicare maze.

Is relief on the way?

Is this any way to run a health program? Fortunately, many in Washington are beginning to answer “no.”

Tommy Thompson, the new Secretary of the Department of Health and Human Services, recently told Congress “that we must recognize that patients, providers, and states have legitimate complaints about the scope and complexity of the regulations and paperwork that govern these programs .... We will consider any and all options for improving [HCFA] and making it a more responsive and effective organization.”

Key members of Congress are not waiting for Secretary Thompson to act. On March 7, the Medicare Education and Regulatory Fairness Act (MERFA) was introduced at a packed press conference on Capitol Hill. (For more information, see “College joins new efforts to reform HCFA’s policies,” page 1.) Original sponsors of the bill include Sens. Fran Murkowski (R-Alaska) and John Kerry (D-Mass.) and Reps. Pat Toomey (R-Pa.) and Shelly Berkley (D-Nev.). The College, along with the AMA and other specialty societies, had a direct hand in drafting the MERFA bill.

MERFA will help eliminate unnecessary paperwork by focusing on education and prevention of errors rather than intrusive paperwork audits. The bill would require Medicare carriers to provide physicians written advice on how to bill for services, whenever requested.

The carrier’s advice would be binding in future audits. If a carrier told an internist how to bill correctly for a service, it could not later change its mind and deny the claim. Employees of carriers would be required to give their true names when answering questions.

HHS would have to make answers to “frequently asked questions” readily available to physicians. Prepayment review screens and audit criteria would have to be made available to physicians. Physicians would be given at least 30 days’ advance notice of changes to Medicare rules.

MERFA would also prohibit carriers from holding up claims for further review without cause, and random prepayment screens would be banned. For a first-time post-payment audit, Medicare would be required to actually look at the records rather than extrapolate the results of a statistical survey. Medicare would also be prohibited from demanding alleged overpayments until all appeals were exhausted and a final determination made.

The MERFA bill would require HCFA to conduct at least four pilot tests in a variety of settings before implementing any new evaluation and management documentation guidelines. MERFA requires that these pilot tests be designed to evaluate ways to eliminate the need to document “nonclinically relevant” information—the major source of physician complaints about the current guidelines.

Finally, HCFA and its carriers would be ordered to invest a substantially larger share of funding in educational, nonpunitive activities.

MERFA will not solve all of internists’ complaints about Medicare. It offers the hope, though, of easing some of the most annoying and time-consuming practices that frustrate internists. Most importantly, it would allow internists to spend more time taking care of patients rather than the bureaucracy.

Robert B. Doherty is ACP–ASIM’s Senior Vice President for Governmental Affairs and Public Policy.


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