Finally, we believe that hurdles slowing the start of the demonstration have been cleared and we are now moving forward with all due speed to begin the full demonstration. QUESTIONS SUBMITTED BY THE SUBCOMMITTEE Senator SPECTER. Thank you very much. Thank you, Mr. Chair man. Senator HARKIN. Thank you, Senator Specter. Thank you very much, Dr. Wilensky. There will be some additional questions from various Senators which we will submit to you for your response. [The following questions were not asked at the hearing, but were submitted to the Department for response subsequent to the hearing:] QUESTIONS SUBMITTED BY THE SUBCOMMITTEE PROCEDURES FOR POCKET ROCKET TESTS Question. What procedures have you put into effect to make sure that Medicare Contractors deny payment for pocket rocket tests? Answer. All Medicare carriers conduct postpayment medical review to detect overutilization, fraud and abuse. If a provider billed Medicare for an excessive number of ultrasound diagnostic procedures, or a carrier suspected him or her of program fraud or abuse, the provider would be selected for postpayment review. In addition, if the carrier determined that payment had been made for a pocket doppler at the same rate as a more complex ultrasound service, it would recover the overpayment. In HCFA's response to the OIG's draft report, "LowCost Ultrasound Equipment," we agreed to investigate the possibility of revising procedure codes and reimbursement rates to distinguish among tests performed using ultrasound equipment of varying sophistication. A revision of the procedure codes would facilitate prepayment medical review of ultrasound services. OTHER DEVICES SUBJECT TO ABUSE Question. Do you know of any other devices (other than the pocket rocket) that might be subject to similar abuse? If a Answer. Carriers conduct postpayment medical review to detect overutilization. This review entails profiling provider utilization rates. carrier observes an unusual increase in the utilization of a type of service, it reviews the practices of providers exhibiting the increase to evaluate the medical necessity of the services provided. In addition, each carrier conducts an annual special study on an area of suspected fraud or abuse. The topics and results of each study are shared with all carriers through an electronic bulletin board maintained through HCFA's central office. Medical devices subject to abuse are frequently selected as special study topics. During the last few months we have been informed about the potential abuse of durable medical equipment and prosthetic devices. One recent example is the use of drugs with a nebulizer. Companies with no relationship to nebulizer suppliers may submit claims without any certification of medical necessity or prescription. To correct the situation, we have encouraged the carriers to request a copy of the certification of need for the oxygen equipment with annotation of the need for the drug or other physician prescription of need. This has reportedly greatly reduced the number of such claims. MEDICAL EQUIPMENT ABUSE There is bound to be a continuing development of technologies with potential for overcharging Medicare, such as we have seen with pocket rockets, TENS units, and seat-life chairs. Question. Do you have a routine assessment program to identify these devices as they come on the market? Answer. No, the FDA approves devices for marketing. We can only determine that abuse has occurred after the fact. Question. Might there be another 10 or 15 medical devices out there abusing the Medicare reimbursement system? Answer. We cannot say how many other devices may be contributing to Medicare abuses. Our policy is to pay only for items that are reasonable and necessary. When Medicare Contractor postpayment medical review indicates potential abuse, we investigate and institute appropriate corrective actions. IDENTIFICATION OF PROBLEMS BY THE OIG Question. Why do you have to wait for Inspector General's reports to identify problems before you move in, when the problems often were developing for years, wasting considerable amounts of money? Answer. We do not wait for reports from the Inspector General to identify problems. Normally, corrective action plans are already designed to correct problems, long before any report is made by the Inspector General. In the case of seat lift chairs, HCFA was first to inform the Inspector General about suspected abuses. In some cases, even though our carriers and regional offices have already identified problems, we are restrained by the Congress from addressing them, such as in the Congressional moratorium on inherent reasonableness pricing for durable medical equipment or in the Congressional mandate that fees paid for parenteral and enteral nutrients not be lowered. HIGHER COSTS FOR HOSPITAL OUTPATIENT DEPARTMENTS The Inspector General's Office found that Medicare payments for certain surgical procedures were higher for hospital outpatient departments than for ambulatory surgery centers. An estimated $141.5 million in payments annually would be saved by decreasing reimbursement of hospital outpatient departments to levels paid ambulatory surgery centers. Question. Why should there be a difference in Medicare payments for identical procedures performed in various outpatient facilities? Answer. The reason for different payment methodologies for procedures performed in different settings is historical. When payment for services provided in ambulatory surgical centers and other centers was developed, hospitals were still being paid based on reasonable costs. The statute has since been modified to specify a blended payment methodology for most surgical, radiology, and diagnostic procedures performed in a hospital outpatient department based in part on the hospital's reasonable costs and in part on rates that would be paid if the procedure were performed outside of a hospital. The FY 1992 budget proposal would eliminate the variation in payment across settings and create uniform prospective rates for surgical, radiology, and diagnostic procedures. Question. Would your "uniform payment" legislative proposal, estimated to save $50 million, achieve parity in Medicare payments between hospital outpatient departments and ambulatory surgery centers? Answer. Yes. The FY 1992 budget proposes to create prospective rates for surgical procedures based on the lower of average hospital costs and ASC rates. These new prospective rates would apply in both the hospital outpatient and ASC setting. 38-711 0-91-9 POTENTIALLY EXCESSIVE NUMBER OF IMAGING TESTS Question. Do you have any evidence that doctors who self-refer are ordering an unnecessary amount of imaging tests? Answer. At present, HCFA has only anecdotal evidence that doctors who self-refer are ordering an unnecessary amount of imaging tests. However, we have been mandated by Congress to conduct a study regarding the incidence of self-referral of imaging tests and will provide a statistical summary by April 30, 1992. This statistical profile will compare service utilization rates for beneficiaries that receive care from entities in which referring physicians have some financial interest to rates for those whose physicians have no financial interest. It is therefore somewhat broader than the question of self-referral, looking at situations of any physician financial interest. We are required to survey a minimum of ten states and six types of service providers, such as diagnostic imaging services. We are considering focusing somewhat on the high cost services like magnetic resonance imaging (MRIs) and ultrasound, and on those services with a high potential for being furnished by other than the ordering physician. This should capture information beyond the more limited question of self-referral. OVERUTILIZATION OF IMAGING TESTS Question. Concerning self-referrals of patients by a physician who performs his or her own imaging examinations, isn't such self-referral a potential conflict of interest? Answer. Diagnostic imaging tests that are being performed by the medical community today include a wide assortment of studies such as x-rays (primarily skull and bone examinations), ultrasound, computerized tomography (CT) scans, and magnetic resonance imaging (MRI). Based on information available to us, we believe that most non-radiologist physicians participating under the Medicare program have been limiting their own use of imaging equipment to the least expensive x-ray and ultrasound equipment, if for no other reason than the cost of purchasing or leasing other items is very expensive. |