AMA in
Washington 
The Congress
The White House
and Federal Agencies AMA GrassrootsAction Center AMA PoliticalEducation Programs
Statement to the Practicing Physicians Advisory
AMA Statement re: Medicare Reforms and HCFA Rulemakings--March 27, 2000
of the
American Medical Association
to the
Practicing Physicians Advisory Council
RE: Advanced Beneficiary Notices; Medicare Provider
Enrollment Form 855; and Collection of Outpatient
Encounter Data for Medicare+Choice Risk Adjustment
March 27, 2000
The American Medical Association (AMA) appreciates the opportunity to submit this written statement to the Practicing Physicians Advisory Council (the Council) concerning Part B advanced beneficiary notices (ABNs), the Medicare provider enrollment Form 855 and collection of encounter data for Medicare+Choice risk adjustment. We have also raised issues for the Council’s consideration with respect to physician education and HCFA’s recently proposed rule on the Negotiated Rulemaking on Coverage and Administrative Policies for Clinical Diagnostic Laboratory Services.
We congratulate Derrick Latos, MD, who has been appointed by Secretary Shalala as the new chair of the Council. We look forward to his leadership of the Council and his continued and valuable input into issues impacting the physician community. We also welcome the new members who have been appointed by the Secretary to the Council - Joseph Heyman, MD, Angelyn Moultrie, DO, Amilu Rothhammer, MD, and Doug Wood, MD. Dr. Heyman has made significant contributions to physicians and the AMA through his work as a member of and as Chair-elect of the AMA’s Council on Medical Services, and we look forward to further collaboration with him as a member of the Council. Dr. Wood is also an AMA member who has made significant contributions to physicians and the AMA in his position as Chair of the Research Task Force for the CPT-5, and we know he will have a strong impact as a member of this Council as well. We look forward to working with each new member of the Council and appreciate your time and service to the Council and to physicians.
Further, we wish to comment on an ongoing matter of concern to the AMA. We are disappointed that the Health Care Financing Administration (HCFA), despite inviting public testimony, did not provide the public with any supplemental information concerning the intended focus of the carrier advisory committee discussion, nor the ABN discussion. These are extremely important issues, yet we are unclear what information HCFA may expect to elicit from today’s discussion. We hope for future meetings that HCFA will identify the specific issues on which the agency wants the Council to focus during its discussion. We have made repeated attempts for this meeting, as well as past meetings, to obtain such information from HCFA. While we appreciate the advance information that has been provided regarding certain Council discussion topics, we recommend that the Council urge HCFA to more diligently provide such information in advance for future meetings. This will only serve to enhance the effectiveness of the Council and of the testimony that is heard.
ADVANCED BENEFICIARY NOTICES
Current law dictates that if a physician (or other health care provider) wants to bill a patient for a service not paid by Medicare, then the physician must request that the beneficiary sign an ABN stating that (i) the service may not be covered and (ii) the beneficiary will pay for the service in full if Medicare does not cover it. This requirement imposes a barrier in the physician-patient relationship as well as an administrative burden on physicians. That is, it causes patients to refuse certain medically necessary services when Medicare uses such terminology as “not medically necessary” to indicate why a given service will not be paid. Patients often then refuse needed services because they think the services are unnecessary and because the program will not pay.
ABNs are used most frequently with respect to clinical laboratory services ordered by the physician, but billed by the laboratory. Many laboratories want physicians to routinely obtain an ABN. Such “routine use” would violate Medicare policy. Thus, we were disappointed that a revised ABN was not negotiated as part of the clinical laboratory negotiated rulemaking. HCFA did put discussion of ABNs on the Council agenda for the September 28, 1998 meeting, but we are disappointed in the lack of progress. As a result of that meeting, the Council made the following recommendations to HCFA, which the AMA supports:
- That any new ABN language be kept simple, non-threatening, and free
of legalistic and threatening terminology; also, that the phrase “not
reasonable and necessary” be dropped;
- That beneficiaries, physicians, and carriers be surveyed for an
in-depth understanding of their objections, perceptions, and language
needs regarding ABNs; and
- That the Council be an early-warning “sounding board” for any draft ABNs.
We understand, however, that HCFA plans to revise the ABNs in a manner similar to a proposed ABN for home health services. Since we received this information only several days prior to the Council meeting, we are not in a position to comment substantively or thoughtfully about the home health ABN. Nevertheless, upon brief review, the form is much too long (4 pages) and complicated and thus likely will further confuse beneficiaries and physicians. We prefer a simpler approach, as the Council had recommended in 1998. The Council may want to consider alternative language that is more descriptive of why the physician believes Medicare may not pay for the service and that avoids referring to services as “not reasonable or necessary.”
We urge the Council to recommend that HCFA make Part B ABN revisions an agency priority, implement a standard ABN form with language that is more acceptable to both patients and physicians, and consult with patient and physician organizations to determine the most appropriate language to be used in the form prior to finalizing a new form. We would encourage HCFA to consult with the Council prior to forwarding any final version to the Office of Management and Budget for clearance consistent with Paperwork Reduction Activities.
ENROLLMENT FORM 855
General Discussion and Objections to Form 855 Re-enrollment
We have had numerous detailed and thorough discussions with HCFA about Medicare enrollment Form 855, and have informally provided HCFA with extensive comments regarding needed revisions to the form as well our objections to requiring physicians to re-enroll after their initial enrollment in the Medicare program using Form 855.
Because of the AMA’s strong concerns, discussed below, regarding the anticipated expansion of the HCFA’s Form 855 enrollment requirements for physicians, the AMA urges the Council to recommend that HCFA refrain from applying the new re-enrollment requirements to physicians.
To date, HCFA has not offered a convincing rationale for requiring every physician to re-enroll in the Medicare program. Since HCFA agrees that physicians inappropriately enrolling in the Medicare program are not a significant source of fraudulent activity, it appears that the agency is unnecessarily including physicians in a program expansion that will only create additional bureaucratic hassles for physicians.
The AMA is also concerned that if this new enrollment process is implemented as HCFA currently envisions, HCFA will be forced to redirect resources to administer the enrollment program. HCFA needs additional resources to strengthen its carrier oversight and to implement more effective physician education programs, as discussed above. If all physicians are required to re-enroll in the Medicare program, HCFA will be flooded with applications and change of information forms that carriers will not be able to process in a timely manner. As a result, HCFA will be forced to shift resources away from important activities to cope with the new applications.
New physicians have substantial difficulty enrolling in the Medicare program. It is not unusual for a carrier to take six months or more to process a new physician’s Form 855. During this time period, the Medicare program will not reimburse the physician for care rendered to patients. This puts a tremendous financial strain on the physician and the practice the new physician is joining. The inefficiency in HCFA’s existing enrollment system forces practices to frequently limit the number of new physicians they hire and unnecessarily penalizes physicians who have been in practice and who move from one state to another. The AMA is extremely concerned that expansion of the enrollment process would further exacerbate these problems.
The AMA has appreciated HCFA’s willingness to consider the institution of temporary provider numbers for physicians during the enrollment application period. By the time a new physician submits Form 855 to enroll in the Medicare program, he or she has already submitted to a tremendous amount of scrutiny to become licensed in a state. With respect to currently practicing physicians, the carriers have even less reason to withhold payment. At a minimum, the AMA recommends that the Council urge HCFA to establish quickly a system of temporary provider numbers for physicians to use while they are waiting for the carrier to process their applications.
Physicians are struggling to understand and comply with complicated federal and state rules and regulations and are attempting to provide patient care, even when confronted by the federal government’s “waste, fraud, and abuse” rallying cry. The AMA believes it is unwise to add this additional administrative burden when no clear enrollment problem exists with respect to physicians. Such an expansion for physicians of the enrollment program at this time will only serve to widen the divide between physicians and the Medicare program.
HCFA Questions
With respect to the Council discussion about HCFA’s Medicare enrollment Form 855, HCFA has provided us with several questions to be discussed. They are as follows:
- How clear is the form?
We have informed HCFA that the form, as drafted, is extremely unclear and needs further clarifying revisions. For example, in certain cases the directions for a particular question in the form are inconsistent with the actual question. These inconsistencies will only exacerbate the already complicated form and extend the amount of time required to get a Form 855 application approved. We note that while a physician’s application is pending before HCFA, that physician (or the organization with which the physician is affiliated) is not being paid by Medicare for services provided.
- Is any of the requested information of questionable use?
The AMA appreciates that HCFA has worked with the medical community regarding the specifics of Form 855 and has agreed to allow physicians to apply for and set up electronic billing and payment through Form 855. However, in addition to physicians not being able to generate this Form through their computers, the latest drafts of Form 855 still contain several components which would prove very burdensome for physicians and to which we strenuously object. The AMA’s objections include, but are not limited to, the following:- Physicians should not be required to submit information regarding
themselves or their employees beyond the information listed in the
Health Integrity and Protection Data Bank (HIPDB). Any other
information may be highly sensitive or misunderstood, and should not
be submitted to the carriers or any other government entity where it
would be subject to the Freedom of Information Act.
- Physicians should not be required to submit new enrollment
information every time they hire a new managing employee. High staff
turnover in physician offices would result in physicians repeatedly
having to file new Form 855s during which time they may be unable to
receive Medicare payments.
- Physicians should not be required to list overpayments from the Medicare program unless there has been final resolution of the disputed claim and that claim exceeds a significant dollar amount.
- Physicians should not be required to submit information regarding
themselves or their employees beyond the information listed in the
Health Integrity and Protection Data Bank (HIPDB). Any other
information may be highly sensitive or misunderstood, and should not
be submitted to the carriers or any other government entity where it
would be subject to the Freedom of Information Act.
- Is there any information that is not asked for that should be?
We already have voiced to HCFA our objections to re-enrollment generally, and to Form 855, specifically, when used by new physicians. We believe it is too lengthy and complicated, and thus we do not recommend that the form request any additional information.
- How long does it take to complete the application?
We do not know how long it takes to actually fill out the application, but we know in the case of new physicians, it takes at least 6 months (during which time the physician is not paid by Medicare) to complete the application process. This is in part due to the amount of time it takes a physician to obtain a state license(s) and hospital(s) privileges, which he or she must list on the form. This waiting period, in addition to the carriers’ lag time in approving the physician’s Medicare enrollment, adds a huge administrative burden to physician practices.
If physicians are required to use the form for re-enrollment purposes, this will amount to one more “regulatory hassle” with which physicians must comply without any substantive rationale for the necessity of the burden.
Under the Balanced Budget Act of 1997 (BBA), HCFA is required to implement a risk adjustment methodology that accounts for variations in per capita costs based on health status and other demographic factors for payment to Medicare+Choice plans (plans). To assist in developing this methodology, BBA also provided HCFA with the authority to collect physician and hospital outpatient encounter data from plans. Collection of this data for services provided outside a hospital will not begin until October 1 of this year.
The AMA has several concerns about this process and has recommendations for the Council to take into consideration. First, we are concerned about accuracy of the encounter data reported by plans to HCFA. An early study conducted in California compared the data in physician records to the data on the charge forms transferred to the plans and then further compared the physician records to the plan’s records. There was an exact match in only 10 percent of cases. The problem with accurate data may be further compounded when there is a management company or other similar organization between the plan and the physician. This adds yet another layer through which the data must pass before ultimately being reported by the plans to HCFA, and thus provides one more opportunity for the data to be modified.
HCFA’s risk adjustments will, of course, be based on the encounter data, and, thus the data will have a significant impact on plan payments. Plans may have some incentive to modify the data and it is our understanding that HCFA and/or the Office of the Inspector General will conduct audits to ensure that the data is accurate. Accordingly, we recommend that the Council urge HCFA to allow physicians to obtain upon request any encounter data submitted to HCFA on their patients. This will give physicians an opportunity to confirm the accuracy of the data and avoid an audit later. In addition, it will provide physicians with an indication of the risk adjustment that HCFA eventually will make on their patients so that they may negotiate appropriate payment rates with plans.
We are also concerned that plans may use collection of the encounter data as an opportunity to impose unnecessary and burdensome requirements on physicians that may be unrelated to collection of the data. We know of at least one instance, for example, where a Medicare+Choice plan has attempted to unilaterally impose egregious and costly requirements on a physician based on the plan’s claim that the new requirements were mandated by HCFA regulations implementing the BBA Medicare+Choice program. In fact, neither the BBA nor HCFA mandated some of the requirements the plan had tried to impose on the physician. The plan had simply used the BBA and HCFA regulations as an excuse to negotiate unfairly with the physician.
Thus, we urge the Council to recommend that HCFA exercise strong oversight of plans that might attempt to use the collection of encounter data as an opportunity to unfairly impose on physicians needless requirements unrelated to the collection of such data.
Finally, we understand that HCFA has held conference calls with the managed care industry regarding problems that may arise in the process of collecting encounter data. In addition, a number of regional educational sessions have been scheduled for plan personnel. We recommend that the Council request that HCFA include national physician organizations in their conference calls with industry trade groups and that the appropriate state medical society personnel be invited to attend the regional training seminars that are planned. Both of these actions would help raise physician awareness regarding the encounter data requirement and facilitate a cooperative environment where plans and physicians could work together to achieve a smooth, well-run data collection process.
HCFA officials have told us that they also intend to provide training materials to physicians. We are pleased that the agency recognizes the need to train physicians on this massive new data collection endeavor. However, we have not yet seen any of the materials that will be used and are not yet certain whether the planned educational effort is adequate. We urge the Council to recommend that the agency invest significant resources and work with medical organizations to ensure that physicians understand what they and the plans will be required to do when the new data collection effort begins.
PHYSICIAN EDUCATION
We would also like to comment on physician and health care provider education and training, which the Council also will discuss today with respect to data collection requirements. We note that the Administration has proposed in its fiscal year 2001 budget to allocate only $15.8 million of its total Medicare contractor budget of $1.3 billion, less than 1 percent, for provider education and training activities. This is the same amount of funding allocated for these activities in fiscal year 2000. We have communicated in writing to the Senate Appropriations Subcommittee on Labor, Health and Human Services, and Education that this proposed funding amount is woefully inadequate and does not ensure that physicians and health care providers learn more about new changes to Medicare laws and billing and coding requirements. We have urged the Subcommittee to significantly increase funding for physician and provider education to ensure that fewer widespread and physician specific billing errors occur and to help minimize the adversarial relationship between HCFA and physicians. We urge the Council to make this same recommendation to HCFA.
HCFA PROPOSED RULE ON CLINICAL
LABORATORY NEGOTIATED RULEMAKING
We wish to bring to the Council’s attention as issue raised by HCFA and about which the agency has requested public comment is its proposed rule on the recent negotiated rulemaking for coverage and administrative policies for clinical laboratory services. 65 Fed. Reg. 13090-91, Mar. 10, 2000.
HCFA states in the Federal Register as follows-
The [negotiated rulemaking] Committee discussed the impact of frequency screens on laboratories furnishing services to beneficiaries who use multiple laboratories. Several Committee members suggested proposals for notifying beneficiaries of frequency details and requesting that they advise their physicians of the denial in an effort to encourage the physician to obtain an advance beneficiary notice. Such a notification mechanism would be costly to Medicare, would frequently and inaccurately identify potential denial situations due to time lags between receipt of services, and may be confusing to beneficiaries. Some members of the Committee expressed concern that such a mechanism may have the unintended effect of beneficiaries failing to receive necessary services. The Committee could not agree to a specific proposal and therefore we are soliciting new ideas for addressing this problem from Committee members as well as others. We are especially interested in ideas that include shared responsibility for solving the problem.The Council may wish to consider this matter and comment accordingly to HCFA.
We appreciate the opportunity to present our views to the Council and look forward to working further with the Council on these and other important matters affecting physicians.
Printer-friendly version
Published Mar 30 2000
Return to Regulatory Relief
