Attachment 3 MEASURES OF EFFICIENCY Answer 7. We currently utilize a number of performance indicators which help identify the least efficient contractors in areas of cost, timeliness, and quality. Attached are copies of six recurring reports (Exhibits 1 thorugh 6) presenting performance indicators, as well as some summary workload data, most commonly used by BHI for statistically detecting those contractors which need to improve their operations. In measuring the efficiency of Part B carriers, the four performance indicators described in the attached Part B Performance Indicators Report (Exhibit 1) are designed for purposes of comparing carriers with respect to their major function processing claims. Elements of two of the performance indicators-adjusted unit cost per claim processed and adjusted claims productivity per 100 hours-are collected from two separate reports submitted by the carriers. Information on carrier administrative cost and productive hours are picked up from the carrier's quarterly Interim Expenditure Report. Claims processed are extracted from the carrier's monthly Carrier Performance Report, Form SSA-1565. Also collected from the carrier's monthly Carrier Performance Report are data on time distribution of processed and pending claims. This information is used to calculate the workload processing and pending index by applying selected weighting factors for type of claim distribution and timeliness of processing. The value of the index score indicates the relative position of the carrier's timeliness of claims processing performance in relation to the mean program performance (100). Performance above the mean program performance are assigned scores higher than 100 while performance below the mean program performance are assigned scores lower than 100. The last remaining performance indicator shown in the report is the query reply reject rate. This indicator is derived from data collected centrally in SSA on replies to carriers' queries to the health insurance computerized data files maintained at Social Security Headquarters for information on beneficiary's Part B eligibility and deductible status. Certain responses to these queries are considered rejects in that they are usually associated with carrier procedural problems. These rejects are divided by the total number of query replies to obtain the query reply reject rate. We have developed and are in the process of finally testing an end-of-line quality assurance program in Part B. This system is based on a scientific sample of claims processed which is reviewed by carrier staff to identify procedure and actual dollar errors. There is a subsample review by the BHI Regional Offices of each carrier's sample review which serves to validate and adjust any significant errors in the carrier's sample review. This system when fully operational will provide a valid comparative measure of the quality of the claims processing by Part B carriers. It does not address the professional medical judgments with respect to the physician services and utilization which is performed on an individual basis by the carrier's medical consultant staff through addressing aberrancies in the physicians' profiles and cases identified through prepayment screens. This is an area in which the PSRO's will eventually exercise primary responsibility. We expect the system to be fully operational in 1977. On the Part A intermediary side, we are currently developing a report similar in many respects to the Part B Performance Indicator Report. This new report will include the pertinent performance indicators currently published in a series of separate reports (Exhibits 2 and 6). Two of these performance indicators are very similar to two of the Part B performance indicators on unit cost and productivity and are published quarterly in the Analysis of Intermediaries' and Carriers' Administrative Costs Report (page 22 of Exhibit 2). They are "adjusted unit cost per bill" and "adjusted production per 100 man-hours." Data are extracted from the Intermediary Workload Report, SSA-1566, for purposes of presenting an indicator form the status of the intermediary's pending bill workload. These performance indicators-weeks' work on hand and percent of bills pending over 30 days by type of bill—are published monthly in the Intermediary Workload Report (Exhibit 3). See table 10 and the appendix of the report for a monthly summary of these indicators and for a definition of the terms, respectively. Timeliness of intermediary bill processing are measured by comparing selected dates on the billing forms submitted by intermediaries to SSA. This information collected centrally in SSA is summarized in our quarterly HI Intermediary Bill Processing Times Report (Exhibit 4). Both the average and median processing times for each type of bill are displayed for each intermediary in tables 4 and 5 of this report. Also collected centrally are data on errors found in bills submitted by individual intermediaries. Bills found to contain errors are rejected by SSA and sent back to the intermediaries for correction. The ratio of bills with errors to total bills submitted is used as an indicator of performance in the area of quality of bill processing. These rates are published quarterly in tables 7 and 8 of the Errors in Health Insurance Bills Processed by SSA report (Exhibit 5). A description of the various types of error rates can be found in the report's appendix. Another major activity intermediaries engage in is the auditing of provider cost reports. For purposes of measuring the timeliness in settling cost reports, a performance indicator is calculated for each intermediary comparing the total number of settlements with cost reports due for the three most recent accounting periods. Information used in these calculations is obtained from the Provider Audit Activity Report, Form SSA-1822, submitted by Part A intermediaries monthly. These calculated performance indicators are published quarterly in the Medicare Part A Intermediary Provider Audit Activity Report (see last table of Exhibit 6). The Bureau of Health Insurance is developing procedures for measuring the accuracy of the cost report settlement process in addition to this timeliness measure. All of these performance indicators are used by BHI regional offices to help identify areas in which carriers or intermediaries need to make improvements. They provide important leads for followup in the Contractor Inspection and Evaluation Program (CIEP). The objective of CIEP is to improve contractor performance through a system of review and appraisal of the performance of Medicare functions by each contractor. This is done by the BHI regional office developing and operating a well-organized plan of contractor surveillance directed toward identifying and following up on improvement opportunities. Also in most cases, a contractor's daily operations are monitored by onsite representatives of the Bureau whose responsibility it is to assist the contractor in identifying problem areas and instituting corrective action. In those cases where excessive workload causes the problem, reassignment of geographical portions of the claims processing workloads is given consideration. This type of action has already been utilized in the past. The ultimate action, of course, is termination of contract. Attachments: (Exhibits 1 to 6). [Since the attachments are voluminous and became rapidly dated, they are deleted from the hearing record.] Attachment 4 CONTRACTOR AGREEMENTS NOT RENEWED As indicated below, the following agreements with intermediaries and carriers have been subject to nonrenewal, termination, or modification since 1966: INTERMEDIARY AGREEMENTS NOT RENEWED The nonrenewal date is shown in parentheses. Hamilton Life Insurance Co., of New York:1 Agreement terminated by mutual consent (5-31-68). Community Health Association (Highland Park, Michigan):1 Agreement terminated by mutual consent (6–30–69). New York State Department of Health: Agreement terminated by mutual consent (10-31-69). Cooperative de Salud de Puerto Rico: Agreement terminated by mutual consent (12-31-69). The contractor was replaced by Cooperativa de Seguros de Vida de Puerto Rico. Blue Cross of Puerto Rico: Agreement not renewed due to inadequate conformance to program requirements (6-30-72). The contractor was replaced by Florida Blue Cross. Inter-County Hospitalization Plan, Inc.: Agreement not renewed due to inadequate performance in the audit/reimbursement area (6-30-75). 1 Upon notification of the nonrenewal of a provider's intermediary, the provider could nominate another available intermediary. CARRIER AGREEMENTS NOT RENEWED The nonrenewal date is shown in parentheses. Nebraska State Department of Public Welfare: Agreement terminated by mutual consent (5-5-67). The contractor was replaced by Mutual of Omaha. Pilot Life Insurance Company: Agreement terminated by mutual consent (6-30-69). The contractor was replaced by the Prudential Insurance Company of America. John Hancock Mutual Life Insurance Company: Agreement terminated due to inadequate conformance to program requirements (4-5-70). The contractor was replaced by the Prudential Insurance Company of America. Medical Mutual of Cleveland, Inc.: Agreement terminated due to inadequate conformance to program requirements (6-30-71). The contractor was replaced by Nationwide Mutual Insurance Company. REDUCTION IN SERVICE AREAS OF CARRIERS The effective date is shown in parentheses. California Physicians' Service: Jurisdiction for seven counties was transferred to Occidential Life Insurance Co. (12-31-69). The purpose for the change was to bring about a greater balance of workloads between the two Medicare carriers in California and to provide improved service to beneficiaries, physicians, and other suppliers of services. Illinois Medical Service: Jurisdication for four counties was transferred to The Continental Casualty Company (6-30-71). The purpose for the change was to bring about a greater balance of workloads between the two Medicare carriers in Illinois and to provide improved services to the public. Blue Shield of Florida, Inc.: Jurisdiction for two counties was transferred to Group Health, Inc. (6-30-75). The purpose for the change was to ameliorate the effects of a substantial increase in workload and program administration problems which are unique to the State. ATTACHMENT 5 1975 CONTRACTS HOSPITAL INSURANCE BENEFITS FOR THE AGED AND DISABLED (Agreement with Intermediary Pursuant to Sections 1816 and 1842 of the Social Security Act, as Amended) AGREEMENT NO.. AGREEMENT The Secretary of Health, Education, and Welfare and The Blue Cross Association (To carry out the provisions of sections 1816 and 1842 of the Soocial security Act as amended) INTRODUCTION The Secretary of Health, Education, and Welfare, hereinafter referred to as the Secretary and the Blue Cross Association, hereinafter referred to as the Intermediary, pursuant to the authority contained in sections 1816 and 1842 of the Social Security Act, as amended (providing for the use of private organizations to facilitate payments required to be made under Part A and Part B of Title XVIII of the Social Security Act, as amended), hereby agree to the following: INDEX TO BCA AGREEMENT Article Title Page No. I Definitions and Delegations... II Functions and Duties to be Performed by Intermediary III Functions and Duties to be Performed by the Secretary IV Payment for Covered Services.... V Advance of Funds and Transfer of Funds Through Letter of Credit. VII Compliance with Regulations and General Instructions.. 1 1 3 4 5 6 8 XII Confidential Nature and Limitation of Use of Information and Records ... 10 10 XIV Prior Approval and Prior Notice for Subcontracting and Data Processing 11 XV Subcontracting. 12 XVI Data Processing. 14 XVII Nomination, or Withdrawal of Nomination by a Provider of Services.. |