New provider user fees would finance HCFA fraud and abuse probes
New provider user fees would finance HCFA fraud and abuse probes
Agency to shift audit focus to prepayment reviews
Tucked away in President Clinton’s 2,600-page federal budget proposal for fiscal year 2000 are some $200 million in new annual user fees that would be charged to providers participating in the Medicare program. The money would finance a Health Care Financing Administration (HCFA) effort to double the number of audits and medical reviews it conducts of provider claims. The overall goal is to reduce inappropriate payments, as well as underwriting the launch of the new Medicare+Choice program.
This marks a new focus that HCFA sources say will focus more attention on prepayment audits than on post-payment reviews.
Last year, HCFA tried to inaugurate a similar set of user fees, only to see Congress cut them out of its final budget in response to intense opposition from provider groups. "Like last year, we’ll fight the institution of these user fees," says Dennis Barnhardt, communications director for the Englewood, CO-based Medical Group Management Association.
Under the proposed user fees:
— Physicians, other providers, and suppliers would be charged a registration fee to participate in the Medicare program. That would produce $20 million.
— Providers would be charged $1 for each claim submitted on paper rather than electronically, raising $55 million.
— Providers would be charged $1 for each duplicate and unprocessable claim submitted, producing $17.8 million.
— Medicare+Choice plans would be charged a fee to underwrite beneficiary education programs, raising $5 million.
— Medicare managed care organizations would be charged a fee when submitting initial applications and renewing annual contracts, producing $36.7 million.
— Home health agencies and skilled nursing facilities would be charged initial certification and recertification fees, raising $65 million.
The budget asks for an additional $11.5 billion in overall Medicare funding to increase Medicare payouts to $216.4 billion. Out of this, the White House wants to cut provider payments by some $9 billion — the bulk of which would come from freezing FY 2000 hospital payment updates.
The President’s proposed budget also projects saving $2.9 billion over five years through implementation of various measures to cut waste, fraud, and abuse in federal health programs (see Physician’s Payment Update, January 1999, p. 1). Under these antifraud initiatives, HCFA will:
— limit Medicare payments to providers for outpatient drugs to 83% of the average wholesale price;
— reduce the lab fee schedule ceiling from 74% to 72%;
— pay market prices for Epogen, a drug used to treat anemia in chronic renal failure;
— expand Medicare’s authority to contract with "Centers of Excellence"
— require that insurers report to HCFA all Medicare beneficiaries they insure;
— grant HCFA authority to fine private insurers twice the amount owed if they intentionally allow the government to pay claims for which the private insurer is responsible;
— impose stricter controls on Medicare’s partial hospitalization benefit to ensure the government pays for therapy actually provided to beneficiaries.
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