[Federal Register Volume 59, Number 172 (Wednesday, September 7, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-21914]
[[Page Unknown]]
[Federal Register: September 7, 1994]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[BPO-123-GNC]
Medicare Program; Criteria and Standards for Evaluating
Intermediary and Carrier Performance During FY 1995
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: General notice with comment period.
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SUMMARY: This notice describes the criteria and standards to be used
for evaluating the performance of fiscal intermediaries and carriers in
the administration of the Medicare program beginning October 1, 1994.
The results of these evaluations are considered whenever HCFA enters
into, renews, or terminates an intermediary agreement or carrier
contract or takes other contract actions (for example, assigning or
reassigning providers of services to an intermediary or designating
regional or national intermediaries).
This notice is published in accordance with sections 1816(f) and
1842(b)(2) of the Social Security Act. We are publishing for public
comment in the Federal Register those criteria and standards against
which we evaluate intermediaries and carriers.
EFFECTIVE DATE: The criteria and standards are effective October 1,
1994.
COMMENTS: Comments will be considered if we receive them at the
appropriate address as provided below no later than 5 p.m. (EDT) on
October 7, 1994.
ADDRESSES: Mail written comments (1 original and 3 copies) to the
following address: Health Care Financing Administration, Department of
Health and Human Services, Attention: BPO-123-GNC, P.O. Box 26676,
Baltimore, MD 21207.
If you prefer, you may deliver your written comments (1 original
and 3 copies) to one of the following addresses:
Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW.,
Washington, D.C. 20201, or
Room 132, East High Rise Building, 6325 Security Boulevard, Baltimore,
Maryland 21207.
Because of staffing and resource limitations, we cannot accept
comments by facsimile (FAX) transmission. In commenting, please refer
to file code BPO-123-GNC. Comments received timely will be available
for public inspection as they are received, generally beginning
approximately 3 weeks after publication of a document, in Room 309-G of
the Department's office at 200 Independence Avenue, SW., Washington,
D.C., on Monday through Friday of each week from 8:30 a.m. to 5 p.m.
(phone: (202) 690-7890).
FOR FURTHER INFORMATION CONTACT: Bob Loyal, (410) 966-7403.
SUPPLEMENTARY INFORMATION:
I. Background
Under section 1816 of the Social Security Act (the Act), public or
private organizations and agencies participate in the administration of
Part A (Hospital Insurance) of the Medicare program under agreements
with the Secretary of Health and Human Services. These agencies or
organizations, known as fiscal intermediaries, determine whether
medical services are covered under Medicare and determine correct
payment amounts. The intermediaries then make payments to the health
care providers on behalf of the beneficiaries. Section 1816(f) of the
Act requires us to develop criteria, standards, and procedures to
evaluate an intermediary's performance of its functions under its
agreement. We evaluate intermediary performance through the contract
management process.
Under section 1842 of the Act, we are authorized to enter into
contracts with carriers to fulfill various functions in the
administration of Part B (Supplementary Medical Insurance) of the
Medicare program. Beneficiaries, physicians, and suppliers of services
submit claims to these carriers. The carriers determine whether the
services are covered under Medicare and the payable amount for the
services or supplies and then make payment to the appropriate party.
Under section 1842(b)(2) of the Act, we are required to develop
criteria, standards, and procedures to evaluate a carrier's performance
of its functions under its contract. We also evaluate carrier
performance through the contract management process.
We are publishing the criteria and standards in the Federal
Register in order to allow the public an opportunity to comment before
implementation. In addition to the statutory requirement, our
regulations at 42 CFR 421.120 and 421.122 provide for publication of a
Federal Register notice to announce criteria and standards for
intermediaries prior to implementation. Regulations at 42 CFR 421.201
provide for publication of a Federal Register notice to announce
criteria and standards for carriers prior to implementation. The
current criteria and standards were published in the Federal Register
on September 30, 1993 (58 FR 51085).
To the extent possible, we make every effort to publish the
criteria and standards prior to the beginning of the Federal fiscal
year, which is October 1st.
If we do not publish a Federal Register notice before the new
fiscal year begins, readers may presume that until and unless notified
otherwise, the criteria and standards which were in effect for the
previous fiscal year remain in effect.
In those instances where we are unable to meet our goal of
publishing the subject Federal Register notice before the beginning of
the fiscal year, we may publish the criteria and standards notice at
any subsequent time during the year. If we choose to publish a notice
in this manner, the evaluation period for any such criteria and
standards which are the subject of the notice will be revised to be
effective on the first day of the first month following publication.
Hence, any revised criteria and standards will measure performance
prospectively; that is, we will not apply new measurements to assess
performance on a retroactive basis.
Also, it is not our intention to revise the criteria and standards
which will be used during the evaluation period once this information
has been published in a Federal Register notice. However, on occasion,
either because of Administrative mandate or Congressional action, there
may be a need for changes which have direct impact upon the criteria
and standards previously published, or which require the addition of
new criteria or standards, or that cause the deletion of previously
published criteria and standards. Should such changes be necessitated,
we will issue a Federal Register notice prior to implementation of the
changes.
In all instances, necessary manual issuances will be published each
year to ensure that the criteria and standards are implemented
uniformly and accurately. Also, as in previous years, the Federal
Register notice will be republished and the effective date revised if
changes are warranted as a result of the public comments received on
the criteria and standards.
II. Incentive Payments to Carriers
In accordance with section 1842(c)(1)(B) of the Act, this notice
also describes the current methodology that will be used to award
incentive payments to carriers that successfully increase the
proportion of physicians in the carrier's service area who are
participating physicians, or the proportion of payments to
participating physicians.
Section 1842(h) of the Act sets forth the Medicare participating
physician program. ``Participating'' means accepting assignment on all
Medicare claims. ``Accepting assignment'' means physicians accept
Medicare's approved amount as full payment, with the beneficiary
responsible for only the Medicare deductible and coinsurance amounts.
The main goal of the program is to reduce the financial impact of
medical costs upon beneficiaries by establishing incentives for
physicians to accept assignment on all Medicare claims. The provisions
give all physicians an annual opportunity to enroll or disenroll as a
Medicare participating physician.
Section 1842(b)(3)(H) of the Act requires Medicare carriers to
implement programs to recruit and retain physicians as participating
physicians. These programs include educational and outreach activities
and the use of professional relations personnel to handle billing and
other problems relating to payment of claims of participating
physicians. These programs are also designed to familiarize
beneficiaries with the participating physician program and to assist
the beneficiaries in locating participating physicians. Carriers also
increase participation through the use of public relations, literature,
and training in the physician community. We believe carriers continue
to perform these activities because they are advantageous to their
operations. By properly educating the provider community, carriers save
staff time and produce cleaner claims which result in fewer inquiries
as well as fewer exceptions.
Also, we believe that the implementation of the resource-based
relative value scale (RBRVS) fee schedule has contributed largely to
the increase in the number of physicians participating in the Medicare
program. Nonparticipation is discouraged by the ``limiting charges''
imposed under physician payment reform.
We will continue to pay incentive bonuses to any carrier that
achieves an increase of at least one-tenth of one percent in the
participating physicians' rate or proportion of payments for
participating physicians' services in the carrier's total service area.
Carriers that achieve an increase in physicians' participation or
payments for participating physician services of less than 2 percentage
points will be paid a partial incentive payment. Carriers that achieve
an increase of at least 2 percentage points, but less than 4 points,
will be paid the full incentive payment. Carriers that achieve an
increase equal to or greater than 4 percentage points will be paid a
bonus for each additional 2 percentage point increase over and above
the initial 2 percentage point increase.
As required by section 1842(c)(1)(B) of the Act, the amount of the
total incentive payable to carriers is one percent of the total
payments to carriers for claims processing costs for the fiscal year.
The total incentive pool is calculated by summing the total claims
processing costs reported by each carrier in fiscal year (FY) 1985 and
multiplying the total by one percent. The total claims processing costs
in that fiscal year amounted to $380 million. Therefore, carrier
bonuses in FY 1995 will be one percent of this amount or $3.8 million.
Fiscal year 1985 has been used as a base because it reflects the claims
processing costs and workload at the inception of the participating
physician program.
For the purpose of determining each carrier's eligibility for an
incentive payment, we make two comparisons. We compare the carrier's
physician participation rate after the latest enrollment period with
the physician participation rate after the prior enrollment date. We
make a similar comparison of the proportion of covered charges for
services by participating physicians during the quarter following the
enrollment period with those of the quarter following the prior
enrollment period. We intend to use whichever difference yields the
higher percentage increase to determine eligibility for award of the
incentive payment. Currently, we issue carrier incentive payments by
September 30 following each annual enrollment period. The amount of
these payments will be included in line 11 (other) of the carrier's
Notice of Budget Approval, Form HCFA-1524.
III. Criteria and Standards--General
Basic tenets of the Medicare program are to pay claims promptly and
accurately and to foster good beneficiary and provider relations.
Contractors must administer the Medicare program efficiently and
economically. We have developed a contractor management program for FY
1995 that sets expectations for the contractor; measures the
performance of the contractor; evaluates the performance against the
expectations; and, takes appropriate contract action based upon
evaluation of the contractor's performance. The goal of performance
evaluation is to ensure that contractors meet their contractual
obligations. We measure contractor performance to ensure that the
following objectives are met: contractors do what is required of them
by law, regulation and HCFA directive; do it well; and continually
improve what they do. We have restructured contractor evaluation into
five criteria, designed to meet those objectives. This restructuring
effort considered comments from HCFA components as well as beneficiary
and provider groups which have commented on past Federal Register
notifications.
The first criterion in the FY 1995 contractor performance
evaluation is ``Claims Processing'', which measures contractual
performance against claims processing accuracy and timeliness
requirements. Within the Claims Processing criterion, we have
identified those performance standards which are mandated by either
legislation, regulation or judicial decision. These standards include
claims processing timeliness, the rate of cases reversed by an
Administrative Law Judge, the timeliness of intermediary
reconsideration cases, and the accuracy and timeliness of carrier
reviews and hearings. Further evaluation in the Claims Processing
criterion may include, but is not limited to, the accuracy of bill and
claims processing, the level of electronic claims payment, and the
accuracy of intermediary reconsideration cases.
The second criterion is ``Customer Service'', which assesses the
completeness of the service provided to customers by the contractor in
its administration of the Medicare program. Mandated standards in the
Customer Service criterion include the accuracy of Explanations of
Medicare Benefits, and the accuracy and timeliness of carrier replies
to beneficiary telephone inquiries. In FY 1995, customer feedback may
be used to collect comparable data on customer satisfaction and
identify areas in need of improvement. Among the specific contractor
services that may be included in the evaluation process under the
Customer Service criterion are: beneficiary relations; provider
education; appropriate telephone inquiry responses; and the tone and
accuracy of all correspondence.
The third criterion is ``Payment Safeguards'', which evaluates
whether the Medicare trust fund is safeguarded against inappropriate
program expenditures. Intermediary and carrier performance may be
evaluated in the areas of medical review, Medicare secondary payer,
fraud and abuse, and audit and reimbursement. Mandated performance
standards in the Payment Safeguards criterion are the accuracy of
decisions on skilled nursing facility (SNF) demand bills, and the
timeliness of processing Tax Equity and Fiscal Responsibility Act
(TEFRA) target rate adjustments, exceptions, and exemptions. Further
evaluation in this criterion may include, but is not limited to, the
efficient and effective compilation and analysis of data to bring about
continuous improvement in contractor efforts to safeguard Medicare
program dollars.
The fourth criterion is ``Fiscal Responsibility'', which evaluates
the contractor's efforts to protect the Medicare program and the public
interest. Contractors must effectively manage Federal funds for both
payment of benefits and cost of administration under the Medicare
program. Proper financial and budgetary controls must be in place to
ensure contractor compliance with its agreement with HHS and HCFA.
Additional functions reviewed under this criterion may include, but are
not limited to, bottom line unit cost, compliance with the Budget and
Performance Requirements, adherence to Chief Financial Officer's Act.
The fifth and final criterion is ``Administrative Activities'',
which measures a contractor's administrative management of the Medicare
program. A contractor must efficiently and effectively manage its
operations to assure constant improvement in the way it does business.
Proper systems security, ADP maintenance, and disaster recovery plans
must be in place. A contractor's evaluation under the Administrative
Activities criterion may include, but is not limited to, establishment,
application, documentation, and effectiveness of internal controls.
Internal controls include all aspects of a contractor's operation. It
can include implementation reviews of corrective action plans, task
management plans, data and reporting requirements, and management
improvement plans.
We have also developed separate measures for evaluating unique
activities of Regional Home Health Intermediaries (RHHIs).
Section 1816(e)(4) of the Act requires the Secretary to designate
regional agencies or organizations, which are already Medicare
intermediaries under section 1816, to perform bill processing functions
with respect to freestanding home health agency (HHA) bills. The law
requires that we limit the number of such regional intermediaries
(i.e., RHHIs) to not more than ten; there are currently nine (see 42
CFR 421.117 and the Federal Register published on May 19, 1988 (53 FR
17936) for more details about the RHHIs).
In addition, section 1816(e)(4) of the Act requires the Secretary
to develop criteria and standards in order to determine whether to
designate an agency or organization to perform services with respect to
hospital affiliated HHAs. We have developed separate measures for RHHIs
in order to evaluate the distinct RHHI functions. These functions
include the processing of freestanding HHA, hospital affiliated HHA,
and hospice bills. Through an evaluation using these criteria and
standards we may determine whether the RHHI functions should be moved
from one intermediary to another in order to ensure effective and
efficient administration of the program benefit.
Below we list the criteria and standards to be used for evaluating
the performance of intermediaries and carriers. In a number of
instances, we identify a HCFA manual as a source of more detailed
requirements. Intermediaries and carriers have copies of the various
Medicare manuals referenced in this notice. Members of the public also
have access to our manualized instructions.
Medicare manuals are available for review at local Federal
Depository Libraries (FDLs). Under the FDL Program, government
publications are sent to approximately 1400 designated libraries
throughout the United States. Interested parties may examine the
documents at any one of the FDLs. Some may have arrangements to
transfer material to a local library not designated as an FDL. To
locate the nearest FDL, individuals should contact any library.
In addition, individuals may contact regional depository libraries,
which receive and retain at least one copy of nearly every Federal
government publication, either in printed or microfilm form, for use by
the general public. These libraries provide reference services and
interlibrary loans; however, they are not sales outlets. Individuals
may obtain information about the location of the nearest regional
depository library from any library.
Finally, all HCFA regional offices maintain all Medicare manuals
for public inspection. To find the location of the nearest available
HCFA regional office, individuals may contact the individual listed at
the beginning of this notice. That individual can also provide
information about purchasing or subscribing to the various Medicare
manuals.
IV. Criteria and Standards for Intermediaries
Claims Processing Criterion
The Claims Processing criterion contains 4 mandated standards.
Standard 1--95% of clean electronically submitted non-Periodic
Interim Payment (PIP) bills paid within statutorily specified time
frames. Specifically, clean, non-PIP electronic claims can be paid as
early as the 14th day (13 days after the date of receipt) and must be
paid by the 31st day (30 days after the date of receipt).
Standard 2--95% of clean paper non-PIP bills paid within specified
time frames. Specifically, clean, non-PIP paper claims can be paid as
early as the 27th day (26 days after the date of receipt), and must be
paid by the 31st day (30 days after the date of receipt).
Standard 3--Reversal rate by Administrative Law Judges (ALJ) is at
or below 5.0%.
Standard 4--75% of reconsiderations are processed within 60 days
and 90% are processed within 90 days.
Additional functions may be evaluated under this criterion. These
functions include, but are not limited to:
Accurate Bill Processing;
Attainment of Electronic Media Claims goals;
Accurate processing of reconsideration cases with clear
responses and appropriate customer-friendly tone and clarity;
Management of shared processing sub-contract;
Relationship with Common Working File Host;
Data analysis and validation.
Customer Satisfaction Criterion
We may review the intermediary's efforts to enhance customer
satisfaction through the use of customer feedback. Results of the
feedback may be used to establish comparable data on customer
satisfaction and to identify areas in need of improvement. The results
may be summarized for publication in the report of contractor
performance and shared with individual contractors.
We may also evaluate, but are not limited to, the following
functions:
The accuracy, timeliness and appropriateness of responses
to telephone inquiries;
The accuracy, clearness and timeliness of responses to
written inquiries with appropriate customer-friendly tone and clarity;
Relationships with professional and beneficiary
organizations and use of focus groups;
Educational and outreach efforts.
Payment Safeguards Criterion
The Payment Safeguard criterion contains 2 mandated standards.
Standard 1--Decisions of SNF demand bills are accurate.
Standard 2--TEFRA target rate adjustments, exceptions, and
exemptions are processed within mandated timeframes.
Additional functions may be evaluated under this criterion. These
functions include, but are not limited to:
Medical Review: We may assess the ability of the Medicare
contractors to apply their analytical skills and focus resources on
particular providers or claim types which represent unnecessary or
inappropriate care. We may review contractor efforts in developing
local and national data that identify aberrancies and form the basis of
corrective actions, such as educating the provider, and/or become the
basis of medical review policies or review screens as directed by the
Medicare Intermediary Manual (MIM) Sec. 3939 and Budget and Performance
Requirements. We may also review the effectiveness of the contractor's
identification and corrective action. We may also review a sample of a
contractor's medical review decisions to assure that the decisions
comply with current coverage guidelines and that the contractor's use
of each medical review screen is supported by sufficient documentation.
We may assess contractors' medical review efforts at developing
effective means of addressing aberrancies identified during the
analysis of all local and national data, and take action to assure that
the focused medical review procedures and systems designed and utilized
by the contractor have allowed it to meet program requirements. We may
also review a contractor's efforts to review information or
documentation located in the fraud unit.
Audit and Reimbursement: We may assess the quality of
fiscal intermediaries' activities in the audit and settlement of
Medicare cost reports. We may assess the timeliness of Medicare cost
report settlements and the accuracy by which fiscal intermediaries have
established interim provider payments.
Medicare Secondary Payer: The Medicare Secondary Payer
(MSP) program may use the MSP review guide to review the intermediary's
MSP processes in administering the program and for identifying and
recovering mistaken Medicare payments in accordance with MIM, Part 3,
Secs. 3400ff and 3600ff, and pertinent HCFA instructions and
transmittals. We may develop outcome measures to assess the
intermediary's accuracy in reporting savings and to determine if claim
development procedures are followed. We may also evaluate the accuracy
and timeliness of claims payment and determine if the Common Working
File, internal systems and required software are utilized as
prescribed. We may also evaluate the contractor's ability to prioritize
and process recoveries in compliance with instructions, determine if
recoveries of all payers are processed equally, and ensure that audit
trail documentation exists.
Fraud and Abuse: The Fraud and Abuse program may use the
formally established mechanism to review the intermediaries in the
basic level of fraud detection, deterrence and development as described
in MIM, Part 3, Sec. 3950ff, and pertinent HCFA instructions and
transmittals. We may assess the ability of the contractor to identify
fraud cases that exist within its service area, and to take appropriate
action to dispose of these cases. We may review the contractor's
efforts in investigating allegations of fraud made by beneficiaries,
providers, HCFA, OIG, and other sources. We may develop an outcome
measure to assess the contractor's ability to put in place an effective
fraud detection and deterrence program.
Fiscal Responsibility Criterion
We may review the intermediary's efforts to establish and maintain
appropriate financial and budgetary internal controls over benefit
payments and administrative costs. Proper internal controls must be in
place to ensure that contractors comply with their agreements with
HCFA.
Additional matters to be reviewed under the Fiscal Responsibility
criterion may include, but are not limited to:
Bottom line unit cost;
Compliance with the Budget and Performance Requirements;
Adherence to Chief Financial Officer's Act;
Overall control of administrative cost and benefit
payments.
Administrative Activities Criterion
We may measure a contractor's administrative ability to manage the
Medicare program. We may address the efficiency and effectiveness of
their operation, their system of internal controls and the compliance
with HCFA directives and initiatives. A contractor's evaluation under
the Administrative Activities criterion may include, but is not limited
to, implementation reviews of:
Proper systems security;
ADP maintenance;
Disaster recovery plan;
Corrective action plans;
Task management plans;
Data and reporting requirements;
Management improvement plans.
V. Criteria and Standards for Carriers
Claims Processing Criterion
The Claims Processing criterion contains 4 mandated standards.
Standard 1--95% of clean electronically submitted claims processed
within statutorily specified time frames. Specifically, clean
electronic claims can be paid as early as the 14th day (13 days after
the date of receipt) and must be paid by the 31st day (30 days after
the date of receipt).
Standard 2--95% of clean paper claims processed within specified
time frames. Specifically, clean paper claims can be paid as early as
the 27th day (26 days after the date of receipt) and must be paid by
the 31st day (30 days after the date of receipt).
Standard 3--95% of reviews are accurate and clear with appropriate
customer-friendly tone and clarity and are completed within 45 days.
Standard 4--90% of carrier hearings are accurate and clear with
appropriate customer-friendly tone and clarity and are completed within
120 days.
Additional functions may be evaluated under this criterion. These
functions include, but are not limited to:
Accuracy of Claims Processing;
Attainment of Electronic Media Claims goals;
Management of shared processing sub-contract;
Relationship with Common Working File Host;
Data analysis and validation.
Customer Satisfaction Criterion
The Customer Satisfaction criterion contains 2 mandated standards.
Standard 1--98% of Explanations of Medicare Benefits (EOMBs) are
properly generated.
Standard 2--Telephone inquiries are timely answered.
Telephone calls are to be answered within 120 seconds and callers
are not to get a busy signal more than 20% of the time.
We may review the carrier's efforts to enhance customer
satisfaction through the use of customer feedback. Results of the
feedback may be used to establish comparable data on customer
satisfaction and to identify areas in need of improvement. The results
may be summarized for publication in the report of contractor
performance and shared with individual contractors.
We may also evaluate, but are not limited to evaluating, the
following functions:
The accuracy and appropriateness of responses to telephone
inquiries;
The accuracy, clearness and timeliness of responses to
written inquiries with appropriate customer-friendly tone and clarity;
Relationships with professional and beneficiary
organizations and use of focus groups;
Educational and outreach efforts.
Payment Safeguards Criterion
Carrier functions that may be reviewed under this criterion
include, but are not limited to:
Medical Review: We may assess the ability of the Medicare
contractors to apply their analytical skills and focus resources on
particular providers or claim types which represent unnecessary or
inappropriate care. We may review contractor efforts in developing
effective means of addressing aberrancies identified through analyzing
data to target prepay and postpay review. This forms the basis of
corrective actions such as educating the provider and/or become the
basis of medical review policies or review screens as directed by the
carrier manual and Budget and Performance Requirements. We may also
review a sample of the contractor's use of medical coverage guidelines
to determine if the contractor's use of each medical review screen is
supported by sufficient documentation. We may assess the effectiveness
of contractors' medical review efforts at developing means of
addressing aberrancies identified during the analysis of all local and
national data and take action to assure that the focused medical review
procedures and systems designed and utilized by the contractor have
allowed it to meet program requirements. We may also review a
contractor's efforts to review information or documentation located in
the fraud unit.
Medicare Secondary Payer: The Medicare Secondary Payer
(MSP) program may use the MSP review guide to review the carrier's MSP
processes in administering the program and for identifying and
recovering mistaken Medicare payments in accordance with the Medicare
Carrier Manual (MCM), Part 3, Secs. 3375, 4306.3, and 4307-4308.1, and
pertinent HCFA instructions and transmittals. We may develop outcome
measures to assess the carrier's accuracy in reporting savings and to
determine if claim development procedures are followed. We may also
evaluate the accuracy and timeliness of claims payment and determine if
the Common Working File, internal systems and required software are
utilized as prescribed. We may also evaluate the contractor's ability
to prioritize and process recoveries in compliance with instructions,
determine if recoveries of all payers are processed equally, and ensure
that audit trail documentation exists.
Fraud and Abuse: The Fraud and Abuse program may use the
formally established mechanism to review the carriers in the basic
level of fraud detection, deterrence and development as described in
MCM, Part 3, Sec. 14000ff, and pertinent HCFA issued instructions and
transmittals. We may assess the ability of the contractor to identify
fraud cases that exist within its service area, and to take appropriate
action to dispose of these cases. We may review the contractor's
efforts in investigating allegations of fraud made by beneficiaries,
providers, HCFA, OIG, and other sources. We may develop an outcome
measure to assess the contractor's ability to put in place an effective
fraud detection and deterrence program.
Fiscal Responsibility Criterion
We may review the carrier's efforts to establish and maintain
appropriate financial and budgetary internal controls over benefit
payments and administrative costs. Proper internal controls must be in
place to ensure that contractors comply with their agreements with
HCFA.
Additional matters to be reviewed under the Fiscal Responsibility
criterion may include, but are not limited to:
Bottom line unit cost;
Compliance with the Budget and Performance Requirements;
Adherence to Chief Financial Officer's Act;
Overall control of administrative cost and benefit
payments.
Administrative Activities Criterion
We may measure a carrier's administrative ability to manage the
Medicare program. We may address the efficiency and effectiveness of
their operation, their system of internal controls and compliance with
our directives and initiatives. A carrier's evaluation under this
criterion may include, but is not limited to, implementation reviews
of:
Proper systems security;
ADP maintenance;
Disaster recovery plan;
Corrective action plans;
Task management plans;
Data and reporting requirements;
Management improvement plans.
VI. Regional Home Health Intermediaries (RHHIs) Criterion
The following standards are mandated for the Regional Home Health
Intermediaries criterion:
Standard 1--95% of clean electronically submitted non-PIP HHA/
hospice bills paid within statutorily specified time frames.
Specifically, clean, non-PIP electronic claims can be paid as early as
the 14th day (13 days after the date of receipt) and must be paid by
the 31st day (30 days after the date of receipt).
Standard 2--95% of clean paper non-PIP HHA/hospice bills paid
within specified time frames. Specifically, clean, non-PIP paper claims
can be paid as early as the 27th day (26 days after the date of
receipt) and must be paid by the 31st day (30 days after the date of
receipt).
Standard 3--75% of HHA/hospice reconsiderations are processed
within 60 days and 90% are processed within 90 days.
We may use this criterion to review a RHHI's performance with
respect to handling the HHA/hospice workload. This includes processing
HHA/hospice bills timely and accurately, properly paying and settling
HHA cost reports, and timely and accurately processing reconsiderations
from beneficiaries, HHAs, and hospices.
VII. Action Based on Performance Evaluations
A contractor's performance is evaluated against applicable program
requirements for each criterion. Each contractor must certify that all
information submitted to HCFA relating to contractor management
process, including without limitation all records, reports, files,
papers and other information, whether in written, electronic, or other
form, is accurate and complete to the best of the contractor's
knowledge and belief. A contractor will also be required to certify
that its files, records, documents, and data have not been manipulated
or falsified in an effort to receive a more favorable performance
evaluation. A contractor must further certify that, to the best of its
knowledge and belief, the contractor has submitted, without withholding
any relevant information, all information required to be submitted with
respect to the contractor management process under the authority of
applicable law(s), regulation(s), contracts, or HCFA manual
provision(s). Any contractor that makes a false, fictitious, or
fraudulent certification may be subject to criminal and/or civil
prosecution, as well as appropriate administrative action. Such
administrative action may include debarment or suspension of the
contractor, as well as the termination or nonrenewal of a contract.
If a contractor meets the level of performance required by
operational instructions, it meets the requirements of that criterion.
Any performance measured below basic operational expectations
constitutes a deficiency. The contractor may be required to develop and
implement a corrective action plan when performance problems are
identified. The contractor will be monitored to assure effective and
efficient compliance with the corrective action plan and improved
performance where requirements are not met.
The results of performance evaluations and assessments under all
five criteria will be used for contract management activities and will
be published in the contractor's annual performance report. We may
initiate administrative actions as a result of the evaluation of
contractor performance based on these performance criteria. Under
sections 1816 and 1842 of the Act, we consider the results of the
evaluation in our determinations on:
Entering into, renewing, or terminating agreements or
contracts with contractors.
Decisions concerning other contract actions for
intermediaries and carriers (such as deletion of an automatic renewal
clause). These decisions are made on a case-by-case basis and depend
primarily on the nature and degree of performance. More specifically,
they depend on:
+ Relative overall performance compared to other contractors;
+ Number of criteria in which deficient performance occurs;
+ Extent of each deficiency;
+ Relative significance of the requirement for which deficient
performance occurs within the overall evaluation program; and
+ Efforts to improve program quality, service, and efficiency.
Decisions concerning the assignment or reassignment of
providers and designation of regional or national intermediaries for
classes of providers.
We make individual contract action decisions after considering
these factors in terms of their relative significance and impact on the
effective and efficient administration of the Medicare program.
In addition, if the cost incurred by the intermediary or carrier to
meet its contractual requirements exceeds the amount which the
Secretary finds to be reasonable and adequate to meet the cost which
must be incurred by an efficiently and economically operated
intermediary or carrier, such high costs may also be grounds for
adverse action.
VIII. Response to Public Comments
Because of the large number of items of correspondence we normally
receive on Federal Register documents published for comment, we are
unable to acknowledge or respond to them individually. We will consider
all comments we receive by the date and time specified in the DATES
section of this preamble, and, if we proceed with a subsequent
document, we will respond to the comments in the preamble of that
document.
In accordance with Executive Order 12866, this notice has not been
reviewed by the Office of Management and Budget.
(Catalog of Federal Domestic Assistance Program No. 93.778, Medical
Assistance Program)
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)
Dated: August 11, 1994.
Bruce C. Vladeck,
Administrator, Health Care Financing Administration.
[FR Doc. 94-21914 Filed 9-6-94; 8:45 am]
BILLING CODE 4120-01-P