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Rural sole community hospitals and large urban hospitals with low-income patient percentages of over 30 percent would receive an exceptions payment of 75 percent of capital costs in excess of 100 - 125 percent (on a sliding scale) of Medicare capital payments.
ALTERNATIVES TO USER FEES
Question. As an alternative to user fees, have you considered proposing that Medicare providers be charged a small claims processing fee, of perhaps one dollar per claim, to help offset the growing cost of Medicare Contractor operations?
Answer. This approach has not yet been considered. We are concerned, however, that physicians would pass on this cost to beneficiaries whose claims are unassigned.
CLAIMS PROCESSING FEES
Question. Would such a claims processing fee be administratively feasible, perhaps by deducting it from reimbursement checks?
Answer. The amount could be withheld from checks in a manner similar to the reductions for deductible and Gramm-Rudman percentage withholdings. Those monies withheld would be considered program dollars saved, but costs would continue to be classified as administrative.
POTENTIAL HARDSHIP CAUSED BY CLAIMS PROCESSING FEE
Question. Would such a fee impose a hardship on certain providers and physicians, such as those with small volumes of services in rural areas?
Answer. Such a fee would certainly be regressive in the sense that ability to pay and volume of Medicare services would not be considered. It would hit harder, in total percentage, small providers billing for inexpensive items. It might provide an incentive to bill for higher priced items.
DELAYS IN MEDICARE CLAIMS PROCESSING
Question. Is it true you expect Part B claims processing times to increase from an average of 17 days to 24 days?
Answer. The average processing time for all Part B claims in FY 1992 in expected to be 20.5 days. This is a 3.5 day increase from the FY 1990 average for all Part B claims. It is expected that the electronic claims will continue to be paid in 17 days, while paper claims will take slightly longer.
Efforts are under way or being developed to increase the electronic media claims (EMC) submission rates among providers. These efforts should aid in reducing the funding required for claims processing and in lowering the average claim processing times.
ADDITIONAL FUNDING TO MAINTAIN CLAIMS PROCESSING TIMES
Question. How much more would have to be added to the Medicare Contractor budget to maintain current claims processing times?
Answer. In order to maintain current 17 day average processing times, an additional $10.2 million would be required ($3.5 million for Part A claims and $6.7 million for Part B claims). Additional funds will also be required for the supporting functions related to the additional claims. These include: $1.6 million for medical review, $1 million for Medicare Secondary Payer and $1 million for hearing and appeals.
PRESSURE ON CLAIMS PAYMENT
Question. Wouldn't you expect a continuing squeeze on Medicare Contractor funding to put greater pressure on just paying claims without reviewing them?
Answer. Inherent in the claims processing system is a responsibility to assure that payments are being made accurately. This responsibility is supported by HCFA as well as its Contractors. Our first priority continues to be prompt payment of claims, but HCFA and its contractors have demonstrated historically that they remain firmly committed to maximizing payment safeguard savings.
Question. I have received correspondence from a physician in Iowa concerning waste in the Medicare program. Apparently Medicare would only pay for antibiotics if the patient remains in some sort of facility, such as a Skilled Nursing Facility, which costs $237 per day: It would save a lot of money to pay for these antibiotics at home. What is the rationale for this policy?
Answer. While the statutory provisions that apply to services provided in hospitals and skilled nursing facilities include coverage of drugs, there is no statutory provision that authorizes an outpatient drug program.
Certain provisions of the Medicare Catastrophic Coverage Act (MCCA) of 1988 amended the Social Security Act (the Act) to provide for an outpatient drug benefit, however, these provisions of the MCCA of 1988 have been repealed.
Although there is no outpatient drug benefit, section 1861(s) (2) of the Act does provide for the coverage of services and supplies, including drugs that cannot be self-administered, that are provided as part of a physician's professional services.
Thus, antibiotics that are furnished to the patient in a form that cannot be self-administered, such as an intravenous (IV) injection, may be covered as part of physician's professional services if provided under the direct supervision of the physician. This coverage would not include pills and other oral medication.
Also, infusion pumps intended for home use covered by Medicare as part of the durable medical equipment benefit, which is defined at section 1861(n) of the Act.
Through an administrative decision, Medicare allows coverage of drugs that are necessary for the effective use of infusion pumps by outpatients in their homes.
In accordance with this policy, antibiotics provided via an external infusion pump in the home setting may be covered by Medicare for those patients for whom Medicare contractors, using their medical consultants, decide that the therapy is safe and effective for home use. Because of safety and effectiveness considerations, coverage is not allowed for antibiotics provided via an implanted infusion pump.
Question. Do you have an estimate of how much could be saved by not having to pay the cost of nursing facility beds for patients who need medications such as antibiotics?
Answer. Patients are admitted to nursing facilities for medical conditions and treatment which may include antibiotics or other types of drug therapy. It would not be an allowable cost under Medicare to admit a patient to a skilled Nursing Facility solely to qualify that patient for the payment of drugs under Medicare. If the drugs could be administered in an outpatient setting, Medicare would not pay for either the drugs or the per diem cost of institutional care. Accordingly, we have no cost estimate of such care.
REDUCED ALLOCATIONS FOR
Question. It is our understanding that the task of implementing physician reform (RBRVS) will be much more difficult and complex than the prospective payment system for hospitals. If that is true, why is the Administration proposing a reduction in the allocation for professional relations? Are we making a mistake in underestimating the need to invest in more educational activities to lay the groundwork for a smoother implementation and transition to the new physician payment system? In some respects shouldn't we view professional relations and education activities as productivity investments, because better understanding of the payment and policy changes can reduce the number of claims processing problems and inquiries?
Answer. We agree wholeheartedly that professional relations and education activities are worthwhile investments. Statutory changes are often complex, if not arcane. If contractors can explain these changes to physicians and providers before claims are submitted and problems arise, then all parties benefit. In FY 1992 we are facing grave constraints on our budget. We must maintain basic standards of claims processing efficiency and must spend money on payment safeguards in order to maintain trust fund integrity. The remaining funds must be carefully allocated and HCFA has chosen to
spend a large portion of them on professional relations at the expense of other, important services. In fact, the requested funding level for professional relations is $20 million in FY 1992, only $100 thousand less than the FY 1991 level.
REVERSAL RATES FOR RECONSIDERATIONS AND HEARINGS
Question. The Administrator's proposal to drastically cut funding for hearings and reconsiderations is a serious erosion of basic due process for Medicare patients, physicians, and other providers. What are the current reversal rates for Medicare denials at the reconsideration and appeal levels?
Answer. Current data from FY 1990 indicates a reversal rate for Part A reconsiderations and hearings of 51.1%, based on 121,957 claims processed. The reversal rate for Part B reviews and hearings is 60.8%, based on 7,056,867 claims processed.
AVERAGE TIMEFRAMES FOR RECONSIDERATIONS AND APPEALS
Question. What are current backlog situations? What is the average time span between an initial denial, reconsideration...and then a formal appeal?
Answer. Based on FY 1990 data the backlog is 20,779 for Part A appeals and 608,951 for Part B Reviews. We do not capture data indicating the average time span between each step in the appeals process (i.e., claim denial, reconsideration, hearing). However, the maximum statutory timeframes for each step are as follows:
Question. Is it true that HCFA is considering charging physicians fees for claims that are rejected, charging Medicare beneficiaries and providers fees for unsuccessful appeals, and