2. Question. The concern has been expressed that as intresses in the ping charges are limited by the new regulation, the customary charges of ju I will soon all be at the prevailing fee level. This means in some locates for vailing fee would become a fee schedule. Will this happen? Answer. We cannot predict with certainty whether the corner inte at a slower rate than the economic index, no such fee settle the will rate than the economic index, then the prevailing charges alle mie lis 3. Question. The prevailing fees in rural communites tend to vailing fees generally. What effect will the proposed regulation in prevailing fees in rural communities compared to an Answer. The national index being used does not dirty ad varying inflationary effects on urban and rural pigi For example, physicians in areas where prevailing charges localities will not be able to "catch up" with pants in the p even though local economic circumstances might justify the However, the economic index will be applied unor a vailing charges, and physicians in rural localities and pe will be allowed the same maximum rates of increase 4. Question. What is the extent of the texinical p alendar year 1971 charge data? For instance, the lack of fin a locality, the absence of specialty prodies for 1 edure code terminology. How long will it take canfien or fiscal year 1976 in view of the new teinical pa Answer. Lack of calendar year 1971 curge date fors e a problem since the economic inder limitacion aly (ie., not to customary charges). Prevailing tar 1971 charges made by physicians then in pa esis for implementing the index. The Medicare carriers will encomater some defiation appropriate calendar year 1971 data breed subsequent increases in prevailing charges the locality boundaries used for Metienne minology and coding; and (3) change in mier establishes separate prevailing ding es of specialty practice. However, de carriers for dealing with these prime Wailing charges for fiscal year in the ayed significantly, except perange in e or more complex problems ste Question. Why does the net duction ge and the Medicare-determined to be higher than for signed dind Answer. A study that he Sees mments primarily becaued to be less than the pape r fee than Medicare's sa l of assignment. In eder pay most of his fee, le eian believes his fee in kely to accept assignme Que Carriers are al year. W oge and Answer. See the attached tables from the December 19, 1974, BHI memorandum to all Part B carriers transmitting the Quarterly Report on SMI Carrier Reasonable Charge and Denial Activity, July-September 1974. The pertinent tables are market in red pencil. SOCIAL SECURITY ADMINISTRATION OFFICE OF RESEARCH AND STATISTICS PART B REASONABLE CHARGE AND DENIAL ACTIVITY REPORT.— Reasonable charge reductions Part B carriers reduced charges on 10.4 million claims during July-September 1974, a drop of 6.6 percent from the all-time high of the previous quarter, but still the third highest number of claims ever reduced. The total amount of reductions ($166 million) was second only to the record high of the previous quarter. The net effect of these reductions was a claim reduction rate of 62.4 percent and a money reduction rate of 14.3 percent, both also second only to the corresponding rates of the previous quarter. The average reduction amount per approved claim of $9.93 was also second to that of April-June 1974. Charges (after reduction) by physicians and suppliers rose more from fiscal year 1973 to fiscal year 1974 than they did from fiscal year 1972 to fiscal year 1973. This occurred in spite of the fact that both the claim reduction rate and the money reduction rate also increased over these periods. Table 2 shows that the patterns noted for table 1 also hold for assigned SSA1490's and unassigned SSA-1490's separately. Also, reductions of SSA-1554 and SSA-1556 claims took place at record high levels during July-September, although the claim reduction rate is still far below that for SSA-1490's. Denial activity Part B carriers denied in full or in part 2.6 million claims in July-September 1974, an increase of 23.5 percent over the same quarter of last year (table 3). This increase was due mainly to the rise in the carriers' claims workload since the percentage of processed claims denied in the quarter was only 14.7 percent, the second lowest rate since July-September 1972. The $148 million disallowed in the current quarter was the third highest total ever recorded for this category and represented 11.3 percent of total billed charges. Both the percent of claims processed denied and the percent of billed charges denied appear to be following a seasonal pattern in which they decline from January-March to April-June and from April-June to July-September, after which they begin to pick up again. Tables 4, 5, and 6 show carrier data for July-September 1974 for reasonable charge determinations and denial activity in a form similar to that exhibited in the time series tables 1, 2, and 3, respectively. DIVISION OF HEALTH INSURANCE STUDIES, TABLE 1.-REASONABLE CHARGE DETERMINATION DATA BY QUARTER, JULY 1973 TO SEPTEMBER 19741 1 Data for Social Security Administration excluded for all quarters. Note: Data based on information reported by carriers monthly on Form SSA-1565, Carrier Performance Report, and reflect revisions reported by carriers as well as adjustments made by the Office of Research and Statistics on the basis of information from the reports and from contacts with carriers. TABLE 4.-REASONABLE CHARGE DETERMINATION DATA, BY CARRIER, JULY-SEPTEMBER 1974 10,673, 136 61.2 146, 833, 820 13.0 8.43 11,162,486 65.2 170,395,846 14.7 9.95 60.8 545,780, 409 13.2 8.68 10, 429, 102 62.4 165, 982, 299 14.3 9.93 |