[Congressional Record (Bound Edition), Volume 147 (2001), Part 7]
[House]
[Pages 9987-9991]
[From the U.S. Government Publishing Office, www.gpo.gov]



        SUGGESTIONS FOR IMPROVING THE ADMINISTRATION OF MEDICARE

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 3, 2001, the gentleman from Iowa (Mr. Ganske) is recognized for 
60 minutes as the designee of the majority leader.
  Mr. GANSKE. Mr. Speaker, since 1965, when Medicare was enacted, 
virtually all senior citizens and most people with disabilities have 
been able to access mainstream medical care. Each working day, Medicare 
beneficiaries make almost 1 million physician visits.

                              {time}  1515

  Medicare serves 39 million Americans, and deals with about 1 million 
health care providers: doctors, nurses, hospitals, nursing homes, and 
others.
  Since 1974 when, as a medical student, I first started seeing 
patients, and for the next 20 years as a physician prior to coming to 
Congress, I saw firsthand how important Medicare was to my patients. 
Medicare has been a very important part of our Nation's health care 
system, and I want to preserve and protect it.
  A couple of years ago, I served on the Bipartisan Medicare 
Commission: I resigned after I became concerned that my very active 
role in the bipartisan patient protection legislation would affect the 
chances of consensus being reached on the commission.
  However, based on my past experience actually working with Medicare 
patients, after culling from my work on the commission, and after 
listening and learning from testimony before the Subcommittee on Health 
and the Environment, on which I sit, I have a few suggestions for 
improving Medicare's administration.
  Mr. Speaker, these suggestions are not about sweeping Medicare 
reform. They do not deal with the long-term solvency of Medicare when 
the baby boomers retire. Those types of ``big picture'' decisions are 
beyond the scope of what my remarks are about today.

[[Page 9988]]

  I make this observation: to ensure the long-term survival of 
Medicare, additional funding will be necessary. And, contrary to the 
intentions of others, ``Medicare reform'' will not pay for a 
prescription benefit and will not ensure the long-term solvency of the 
program without additional funds. The demographics and the costs of 
services and supplies are a factor we will have to deal with when we 
are talking about the baby boomers in Medicare.
  I recently asked Secretary of Health and Human Services, Tommy 
Thompson, who was testifying before my committee, two questions: First, 
``Do you think senior citizens are being overtreated in Medicare''; 
second, ``Do you think Medicare providers are overpaid?''
  He replied that, with the caveat that we always need to be vigilant 
against abuse, it was not his experience as a Governor of Wisconsin 
that senior citizens in general were being overtreated, or that 
providers were being paid too much.
  I agree with him. It is certainly the case in Iowa, where our 
reimbursement rates rank right at the dead bottom of the Medicare 
rates. I believe that anyone who thinks that ``Medicare reform'' is 
going to save much money is going to have to consider either tighter 
price controls or further rationing of care or both.
  Mr. Speaker, that does not mean that we in Congress should not 
consider a more rational way of structuring the program, or that we 
should not learn from other health care delivery systems, or that we 
cannot introduce or maintain choice in the system. It does not mean 
that dealing with Medicare's future cash short-falls is not important. 
It really is. It is one of the big entitlement programs we are going to 
have to deal with.
  However, Mr. Speaker, in addition to the big picture concerns about 
Medicare, there are increasing concerns about Medicare's current 
complexity, the difficulties that both the beneficiaries and providers 
have in understanding its operations and the decision-making processes, 
and its failure to communicate to and to serve them effectively.
  Until we deal with the big picture issues, the traditional fee-for-
service public part of Medicare is going to be around for a long time, 
especially in the less urban areas.
  So I think we need to address the ``little picture'' ways in which 
the Health Care Financing Administration, known as HCFA, implements 
Medicare policy. It would be easy to call HCFA a ``bureaucratic 
monster.'' Having dealt with HCFA from the perspective of a doctor, I 
appreciate the frustration in dealing with this agency that I hear from 
my fellow medical colleagues, from Iowa's hospital administrators and 
from other health care providers.
  There are now over 110,000 pages of Medicare rules, policies, and 
regulations. In a recent AMA survey, more than one-third of the 653 
responding physicians reported spending 1 hour completing Medicare 
forms and meeting administrative requirements for every 4 hours of 
patient care.
  Physicians are now filling up volumes of charts for documentation, 
not for the patient, but for the government. The additional paperwork 
in patients' charts can actually impede or delay necessary care as the 
doctor sorts through voluminous paperwork trying to find the truly 
relevant information.
  I am not here to bash the people who work in the agency, who by and 
large try to do their job. HCFA has been underfunded, and Congress has 
to share some blame for how poorly the system sometimes functions, 
because Congress frequently gives HCFA very complex and sometimes 
conflicting tasks, usually without necessary resources.
  Furthermore, some of the problems are inherent in the way Medicare 
was set up to use the regional intermediaries. Some criticize HCFA's 
lack of national uniformity, but others criticize its lack of 
flexibility and its proscriptiveness. It is not easy drawing the right 
line between all of these concerns. Nevertheless, there are many ways 
that Medicare and HCFA function that not only lack common sense but, in 
my opinion, are blatantly unfair and unjust.
  Take the case of Dr. Taylor, a Florida physician who received notice 
from Medicare requesting a refund of $66,960.01 for an alleged 
overpayment, to be paid within 30 days. So Dr. Taylor sent the refund 
to Medicare, and he requested a fair hearing.
  It was more than 1 year before the hearing date. In the meantime, 
Medicare sent a letter to his patients stating that they had been 
overcharged and that a refund was due them from their doctor. Of 
course, that was pretty bad for that doctor's reputation, and it hurt 
his practice.
  After his hearing 1 year later, it was determined all but $584.91 of 
the claims reviewed were accurate, and he was entitled to $66,357.10 
back from the agency. But, it took another 15 months before he received 
the refund. No letter was sent to his patients explaining HCFA's 
mistake, and he was told by Medicare to forget about collecting any 
interest on his funds that were held by Medicare for 15 months.
  Or take the case of a neurologist in good standing in New York who 
moved to Florida. He has not been able to get a Florida Medicare number 
for 4 months because of bureaucratic red tape. Since 60 to 70 percent 
of his patients are Medicare beneficiaries, he is running out of money 
to keep his practice going.
  Or how about Dr. Wilson, an internist who gave influenza shots to 
patients? Bills were sent to the Medicare carrier and payment was sent 
for the shot, but not for the visit. The carrier was called and Dr. 
Wilson was told to use a number 59 modifier. The carrier agreed that 
the rule had not been advertised in Medicare publications, but that Dr. 
Wilson could buy a subscription to the information for $265. So now he 
has to pay HCFA to get the information he is supposed to have.
  Dr. Wilson asked if he could resubmit the bill. The carrier said no. 
Dr. Wilson's office manager was subsequently told by a Medicare staffer 
that the carrier was in error. After a long time and a lot of hassle, 
he was finally properly reimbursed.
  Or how about the cardiologist who went through prepayment review, 
i.e., an audit, for 793 claims. These claims were worth about $50,000. 
The cost to his practice of processing and producing documentation and 
reprocessing was $44,000. Eight denied claims, for which service was 
provided but for which the physician and his staff ultimately decided 
they did not have sufficient documentation, were ultimately worth $356.
  Or consider this example. In March, 1999, an elderly man in heart 
failure was seen for 50 minutes by his doctor. The physician billed 
Medicare for a level 5 visit based on counseling services and the time 
required. The physician documented the time he spent with the patient. 
It was consistent with HCFA guidelines.
  This service was denied by the carrier in February 2000. When the 
denial was appealed, the HCFA official held that the coding was based 
on time and was irrelevant, and thus, downcoded the service. This 
ruling was made despite a clear directive from national Medicare, from 
the Medicare carrier's manual, that the carrier should pay for 
counseling services when appropriately documented.
  Thus, in this case the physician provided a medically necessary and 
appropriate service. He documented it correctly, and ultimately 
required 2 years and a hearing to be paid part of the appropriate fee. 
By the way, since the amount was for less than the $500 minimum 
required for appeal, the doctor had no administrative appeal rights.
  These inconsistencies are not isolated instances. In Minnesota, for 
instance, there are 107 local medical review policies by the Medicare 
carrier. Just across the river in Wisconsin, there are 244 local 
medical review policies. Minnesota has nine policies for cardiovascular 
disease, Wisconsin has 27. I daresay that the heart care in Minnesota 
is just as good as the heart care in Wisconsin.
  Years ago when I was in reconstructive surgery practice in Des 
Moines, Iowa, Medicare stopped giving prior authorization for certain 
types of reconstructive surgery. For example, some

[[Page 9989]]

elderly patients have such droopy upper eyelids that they cannot see 
laterally. That is a hazard when they drive. They cannot see a car 
alongside them when they are on the freeway. I would point out that 
this hazard is not just to them, but to other drivers on the road as 
well.
  What I would do is I would give a visual field examination; send the 
patient to an ophthalmologist, get a consultation. They do tests to see 
how much vision was lost. Then I would take some pictures. Then I would 
include all of that information in a letter to the HCFA carrier 
requesting prior authorization, just so that the patient would know 
that their surgery would be covered by Medicare and would not be 
considered ``cosmetic.''
  However, a number of years ago, HCFA said, ``We are not doing prior 
authorizations anymore. Tell the patient we will look at the case 
afterwards and then decide whether we will pay for the service.''

                              {time}  1530

  Well, this haphazard policy scares a lot of elderly from getting the 
care that they need. If a carrier makes a decision to deny the claim 
after the fact as being noncovered, the provider has no right to appeal 
and then he must bill the patient.
  This is not just about surgery. Cancer, heart disease, hypertension, 
diabetes are common conditions in elderly Americans. Those conditions 
are often treated with medications. In all these conditions, the 
patient's status may remain stable, but it is important to regularly 
evaluate the patient's disease to make certain the medications are 
satisfactory. These services are part of the continuing care of 
patients, and they should not be subject to an arbitrary local decision 
concerning coverage.
  Mr. Speaker, hospitals are in the same position with HCFA as 
physicians: overwhelming paperwork, confusing rules, punitive penalties 
for honest mistakes. Some rural hospitals have almost as many billing 
clerks as they do beds. Memorial Hospital in Gonzales, Texas has 33 
beds, and it has a billing staff of 20 employees.
  Northwestern Memorial Hospital in Chicago spends more than 3,200 
staff hours per month sorting through Medicare billing requirements 
alone. This year alone, Northwestern Memorial Hospital is adding 26 new 
employees solely to ensure compliance with regulations.
  Direct care is affected, too. A cardiologist recounts how when he 
made rounds one day on one of the hospital floors, two nurses were 
taking care of patients and the other six nurses were checking 
documentation to make sure it complied with Medicare regulations.
  A critical care physician whose practice staffs a local hospital 24 
hours a day and who actually advises the carrier on coding issues is 
now going through a post-payment audit. In years past, the carrier has 
cited that physician as providing laudable care. However, the carrier 
has denied the physician's nighttime critical care claims.
  Now, since his practice staffs the hospital 24 hours a day, 7 days a 
week, I would suggest that it is absurd to suggest that patients do not 
require care in the middle of the night. In fact, this 24-hour-a-day 
service resulted in reducing mortality rates in that hospital.
  Secretary Thompson, in his confirmation hearing said, ``Patients and 
providers alike are fed up with excessive and complex paperwork. 
Complexity is overloading the system, criminalizing honest mistakes and 
driving doctors, nurses and other health professionals out of the 
program.'' I agree.
  So what can Congress do? Well, the following is a list of about 25 
suggestions that I have. It is not comprehensive. Some are specific; 
some are general. Many of these are garnered from testimony before my 
committee. But I think if we would implement these, it would go a long 
way towards helping the Health Care Financing Administration work 
better. I will try not to get too technical.
  First, the Medicare Regulation and Regulatory Fairness Act of 2001, 
known on Capitol Hill as MRRFA, H.R. 868, introduced by the gentleman 
from Pennsylvania (Mr. Toomey) and the gentlewoman from Nevada (Ms. 
Berkley) would require HCFA contractors to educate physicians and 
providers as to coding, documentation and billing requirements so that 
fewer billing errors ultimately occur.
  The approach by HCFA should be education rather than heavy-handed 
audits. MRRFA would also provide health care providers with greatly 
needed due process rights in those post payment audits.
  Number two, last August, the previous administration issued 
regulations that would require physician practices to treat Medicaid 
patients and other program beneficiaries to include, at their own 
expense, the cost of hiring trained clinical interpretors to assist 
those patients who have limited English proficiency.
  Mr. Speaker, I was in practice for quite a while. There are a lot of 
immigrants in Des Moines, Iowa: Hispanic, African, Bosnian. Many would 
come to my office without being proficient in English, so we would make 
arrangements to have a translator. It would be a member of the family. 
It would be a friend who spoke English. It would be a person who works 
with a nonprofit agency or a religious institution that was helping 
those immigrants get settled. We could work it out. This regulation 
needs to be looked at.
  Number three, we need to look at the Emergency Medical Treatment and 
Labor Act, or EMTALA. HCFA has been attempting to expand the scope of 
this bill to reach well beyond hospital emergency departments to 
encompass nonemergency inpatient facilities and hospital outpatient 
department care.
  We need to seriously consider the effect of those regulations, and we 
need to look at the EMTALA law itself. We need to and see how well it 
is working and the implications that it has had in terms of our 
oversight and the ability for emergency rooms to staff the type of 
specialty care that they need.
  Number four, Congress should require the Secretary of Health and 
Human Services to publish in the Federal Register, no less than a 
quarterly basis, a notice of availability for all proposed policy and 
operational changes which can affect providers and suppliers. This 
would include, but not be limited to, changes issued through amendments 
in the carrier manuals.
  The Secretary should require contractors to notify all providers and 
suppliers in their service area of such changes within 30 days of the 
Federal registered notice. The Secretary should further provide that 
any changes issued in the final form should take effect no earlier than 
45 days from the date of such final change in the Federal Register.
  Number five, Congress should require the Secretary of Health and 
Human Services to create and distribute a user-friendly manual that 
contains all the information necessary for medical Medicare compliance. 
The manual should be organized and accessible. It should be on-line. It 
should be free. One should not have to pay $265 for a Medicare manual 
when it is required to follow the rules. It should contain, in addition 
to actual regulations, a summary of each issue, including questions and 
answers.
  Number six, Congress should require the Secretary of Health and Human 
Services to develop a site on the Internet, something that people can 
access, where Medicare providers and suppliers can post questions and 
obtain feedback to understand what those regulations are.
  Number seven, Congress should require the Secretary of Health and 
Human Services to furnish all education and training materials and 
other resources and services free of charge to providers, eliminating 
user fees. This Congress, for many, many years, opposed the user fees 
that the Clinton administration wanted to impose on a wide variety of 
areas. This should be no different.
  Number eight, Congress should instruct Health and Human Services to 
provide better oversight of its contractors to ensure a more uniform 
application of national policies and a more efficient administration of 
the Medicare program.
  Number nine, this cuts across a lot of providers, we need to look at 
and fix

[[Page 9990]]

some of the costly and needlessly burdensome HPPA medical privacy 
regulations. I am encouraged by Secretary Thompson's decision to re-
open the privacy rule for comments and urge him to spend the effective 
date and fix the rule. I believe a better privacy rule would benefit 
patients and providers alike. Many provisions in the time rule and the 
aggressive implementation schedule were written without consideration 
of the impact on patient care.
  Number 10, emergency services needed to stabilize patients should not 
be denied payment. Participating providers in the Medicare program are 
required to screen any individual who comes to the emergency department 
to determine whether that person has an emergency medical condition or 
is a woman in active labor, and if so, to stabilize him or her. To 
adequately screen and stabilize a patient, hospitals often employ 
ancillary services that are routinely available to the emergency 
department. Medicare sometimes denies payment for the services 
furnished in the emergency department because they exceed the ``local 
medical review policies or utilization guidelines for coverage.'' We 
need to look at that.
  Number 11, we need to limit data collection to what is necessary for 
payment and for quality. Prospective payment systems should be simple, 
predictable and fair. Unfortunately, the patient assessment tools for 
skilled nursing, rehabilitation and home health are far from ideal. In 
fact, HCFA has devised three separate instruments, the outcome and 
assessment information set, the minimum data set, and the MDSPAC, which 
collects a lot of extraneous information. They lack statistical 
reliability and are extremely burdensome to many providers. We need to 
look at that.
  Number 12, we need to provide adequate and stable funding levels to 
the HCFA carriers. We need to assure adequate funding levels so that 
the contractors can perform the range of functions necessary for an 
efficient operation of the Medicare program.
  If I, as a physician in Des Moines, Iowa, have to deal with my local 
Medicare carrier, and they only are provided enough funds for a couple 
of employees, then I am going to have long waits, and my patient are 
too. This is something that Congress needs to look at.
  Number 13, we need to avoid counterproductive reforms. We need to 
look at the way that we award contracts for the carriers. I am 
concerned about fragmenting and weakening the Medicare administration. 
This has broader implications as well. Some people are proposing that 
we break apart certain functions from Medicare. I would be very careful 
of that, particularly on the bigger issue of prescription drugs.
  Number 14, we need to direct HCFA to utilize a consistent standard 
for the calculation and application of the ``low cost or charges'' rule 
during the transition from cost reimbursement to the prospective 
payment system for home health care.
  Number 15, we need to eliminate the inappropriate demands for 
documentation to support reimbursement claims by requiring fiscal 
intermediaries to adhere to professional auditing standards and 
generally acceptable account practices. That should be a no-brainer.
  Number 16, we need to restrict HCFA's ability to demand financial 
records from commonly owned or controlled organizations that do not 
have financial transactions with a Medicare home health agency. It is 
not their business.
  Mr. Speaker, some of these will be a little bit more generic, and 
some of these are suggestions that were made before my committee by 
Bruce Vladick. Dr. Bruce Vladick, is the recent administrator for the 
Health Care Financing Administration. Mr. Vladick and I served together 
for a while on the Medicare Commission. I respect his opinions a lot. 
Many of these suggestions are ones that he has made to Congress.
  Number 17, despite significant improvements through the Medicare 
handbook, the beneficiary hotline and Medicare Internet site and the 
program of the size of Medicare, the beneficiaries need, not just the 
providers, they need better customer service.

                              {time}  1545

  So we should improve the customer service by ensuring that each 
beneficiary has access to an individual to assist with Medicare 
problems. We should contract for at least one Medicare representative 
for every Social Security office in the country. That is like an 
ombudsman.
  Number 18, we should reduce uncertainty and unplanned spending by 
requiring carriers to provide beneficiaries and providers advance 
guidance on certain procedures and services. This gets directly to what 
I was talking about earlier on the issue of prior authorization.
  Number 19, beneficiaries are subjected to too much and confusing 
paperwork, particularly if they have Medigap coverage. So a solution 
would be to reduce paperwork by requiring Medicare and Medigap health 
insurance carriers to transfer information and claims to one another 
electronically.
  Number 20, this is really important. A lot of providers for Medicare 
are operating in an atmosphere of distrust and fear because of 
accelerated fraud and abuse activities. Make no mistake, we need to be 
firm and strong on preventing fraud and abuse. However, at the same 
time, we need to be fair; and we should not be counterproductive. And 
so to increase the comity and the provider confidence in the Medicare 
program, we should eliminate, in my opinion, the application of the 
False Claims Act to bills submitted by providers. We are talking about, 
in some of these situations, the mere slip of a finger, where one 
number could be recorded wrong on a form and then that physician could 
be held criminally at risk. That needs to be looked at.
  Number 21, many providers cannot obtain assistance with their 
Medicare questions. So to fix that we should improve customer service 
by assigning each provider an account executive and increasing the 
number of contractor and HCFA staff to interact with the provider. We 
should provide the patient an ombudsman, and we ought to provide the 
providers a similar service.
  Number 22, the paperwork requirements for physicians, particularly 
surrounding the documentation of evaluation and management activities, 
is very, very onerous. I hear this from my colleagues all around the 
country. Oh boy, you ought to read the volumes to try to figure out how 
you code and then bill for an office visit. We should reduce paperwork 
by replacing those EMM codes with a simpler classification system. 
There are a number of ways we could look at doing that.
  Number 23, HCFA's response to issues and problems is slowed 
considerably because of the multiple layers of bureaucracy in the 
Department of Health and Human Services and competing constituencies. 
So in order to improve responsiveness and timeliness, we should, I 
think, at least consider establishing HCFA as an independent agency. I 
am not, however, in favor of splitting functions away from HCFA.
  Number 24, I have mentioned this before in this talk, but Medicare 
operations are severely underfunded. It reduces the efficiency, 
timeliness and customer service. To improve customer service and 
efficiency we should fund HCFA operations from a trust fund similar to 
that of the Social Security Trust Fund.
  Number 25, with new life-enhancing technologies, the Medicare process 
to determine whether a new item or service will be covered is slow, 
confusing, and very contentious. We had testimony before Congress from 
Art Linkletter. He said it is just a shame that it can take up to 5 
years to get an authorization for a new treatment or a new medical 
technology, and I agree. And we ought to assure availability of up-to-
date but effective technologies by looking at an independent advisory 
board.
  Number 26, the efficient organization, performance, and oversight of 
Medicare fiscal intermediaries and carriers is hampered by legislative 
prohibitions against competition and financial incentives for good 
performance. We should improve contractor performance by modernizing 
the legislative authorities, including the authority to

[[Page 9991]]

compete for contracts and to financially reward good performance.
  Well, Mr. Speaker, that is a lot of detail, but my committee, the 
Subcommittee on Health of the Committee on Energy and Commerce, is 
working on HCFA reform bill now. We are putting together a bill on 
this.
  I want to finish this special order with a quote from Dr. Bruce 
Vladeck, former director of the Health Care Financing Administration. 
Mr. Vladeck said this. ``While debate about the future shape of the 
Medicare program rages on around us, tens of millions of beneficiaries 
and providers are interacting with Medicare on a daily basis, often in 
a suboptimal manner. As these big picture discussions continue, taking 
incremental steps to improve those interactions can significantly 
improve the lives of Medicare patients and the persons and institutions 
who serve them. Our citizens deserve nothing less.''

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