Medicare Too Adversarial, APA Tells Congress

How physicians feel about Medicare was summed up at a congressional hearing last month titled “The Regulatory Morass at the Centers for Medicare and Medicaid Services (CMS): A Prescription for Bad Medicine.”

The management of Medicare by CMS, formerly known as the Health Care Financing Administration, has come under intense scrutiny by Congress this year. The House of Representatives’ Small Business Committee, chaired by Donald Manzullo (R-Ill.), held three hearings on the regulatory problems at CMS in July. APA submitted a written statement for the second hearing on the regulatory morass.

Health care clinicians and health care organization representatives testified at the first two hearings, and CMS Administrator Thomas Scully testified at the last hearing.

APA Medical Director Steven Mirin, M.D., said, “Our physicians in the field and patients they serve feel they are under siege by a Medicare administration that is too often unresponsive, insensitive, and hostile.”

Mirin blamed much of the problem on the autonomous nature of CMS insurance carrier operations. Medicare uses roughly 24 private contractors (carriers) to administer Part B claims, and they are encouraged to develop their own local medical review policies (LMRPs). These are the criteria and standards for determining whether a service is covered, reasonable, necessary, and appropriate, said Mirin.

The LMRPs create widespread variation between carriers in the treatment of claims and often restrict or conflict with national Medicare coverage policy.

For example, patients with a primary diagnosis of Alzheimer’s disease are entitled to psychiatric services according to the Medicare Carrier Manual, but several carriers have routinely denied these services, according to Mirin.

APA members have also reported that some carriers deny claims for family therapy, another covered service under Medicare.

Local carriers are also increasingly developing LMRPs that subject all claims above a set number, usually 20, to an intensive review, according to Mirin. “These claim reviews create a major hardship for psychiatric physicians who often practice in a solo office. These reviews are a significant detriment to quality patient care,” said Mirin.

APA also complained that local carriers are instructed to develop LMRPs when CMS finds that certain codes are being used more often in their regions compared with the national average for use of those codes.

“CMS appears to make no effort to determine why the variation exists. For example, carriers may be instructing physicians to use different codes for the same procedure, or a few individual physicians or health care providers are outliers,” said Mirin.

To remedy these and other problems, Mirin recommended CMS take the following actions:

• Conduct a systematic review of carrier operations to remove widespread variations in coverage and review practices.

• Work with local and national physician organizations to understand why outliers exist and craft an appropriate solution.

• Conduct analyses of the cost impact a proposed regulation will have before putting it into effect.

• Conduct nationwide physician education workshops to reduce errors on submitted claims.

• Provide clear written guidance on filing claims and explanations of coverage decisions.

• Reduce the adversarial nature of communications with physicians.

Mirin added that psychiatrists’ problems with Medicare are not confined to carrier interface. He mentioned the 50 percent discriminatory copay that beneficiaries are required to pay for outpatient psychotherapy services, for example.

Although a 1990 federal budget law requires Medigap insurance to cover the 50 percent copayment, “we continue to hear from psychiatrists who are having difficulty in persuading Medigap insurers that they are in fact liable for coverage of the 50 percent copayment,” said Mirin.

He reiterated APA’s support for the Medicare Education and Regulatory Fairness Act (MERFA) introduced by Representatives Pat Toomey (R-Pa.) and Shelley Berkley (D-Nev.) and Senators Frank Murkowski (R-Alaska), John Kerry (D-Mass.), and six other senators in March (Psychiatric News, April 6). Their bills, HR 868 and S 452, would give physicians more due-process protections when they are alleged to have been overpaid by Medicare and would educate doctors about coding, documentation, and billing requirements, according to Mirin.

HR 868 had 232 cosponsors at press time, including Manzullo, who made it clear at the hearing that he would push for MERFA if CMS doesn’t take administrative actions to resolve the problems.

Mirin said, “We are heartened by your committee’s discussions with CMS as well as the Ways and Means Health Subcommittee’s discussions to find ways that CMS can take administrative actions to alleviate some of the problems mentioned in this testimony. But we continue to believe that legislative action is necessary to ensure that Medicare carriers and CMS address the regulatory morass that discourages physicians from sticking with the Medicare program.”

MERFA would also require CMS to issue final rules. Mirin stated, “We are still waiting for the final rule on seclusion and restraint clarifying numerous elements of the 1999 interim rule that applies to acute medical and psychiatric settings.”

Mirin’s statement on Medicare reform is available on the APA Web site at www.psych.org/pub_pol_adv/mirintestimony71201.cfm. ▪