Insurance Company to Offer Same-Sex Health Benefits

Story Published: Jul 28, 2008 at 8:30 PM EDT

By John Borsa | WKBW.com

Blue Cross & Blue Shield of Western New York announced on Monday that it would immediately begin offering spousal health insurance benefits to same-sex couples that have been legally married.

The change in policy comes three weeks after the New York Civil Liberties Union filed a lawsuit against the Buffalo-based health insurance carrier on behalf of a Cheektowaga Central School District employee and her same-sex spouse.

Jeanne Kornowicz, a school psychologist, applied for spousal health insurance with the permission of her employer, but was denied by Blue Cross.

NYCLU sued the company, citing a recent victory by an appeals court that unanimously ruled that New York State must recognize the valid out-of-state marriages of gay and lesbian couples.

Kornowicz and her partner, Joy Higgins, were legally married in Ontario, Canada in 2006. Higgins gave birth to the couple’s daughter, Elizabeth Higgins, in July, 2007. Kornowicz legally adopted Elizabeth in January of this year.

“As spouses and parents, Jeanne and Joy deserve the same protections that every other family in New York State enjoys,” said NYCLU attorney Matt Faiella. “We’re so relieved for their family that they will finally know some piece of mind.”

In a statement from Blue Cross, spokeswoman Karen Merkel-Liberatore said, “While this situation brought to light an outdated police that no longer met the needs of our customers, it also presented an opportunity to more more responsive and showed the company ways that, despite being in a highly-regulated industry, we can be more progressive in taking action to please our customers.”

Gay and lesbian rights advocates call the decision by Blue Cross, a major victory.

“If one company can change this police, then all company’s should,” said Bryan Whitley-Grassi, executive director of Pride Center of Western New York.

Many large companies offer domestic partner benefits through their health insurance coverage. Whitely-Grassi said these are not the same benefits offered to married couples.

“Domestic partner benefits are not only lesser benefits,” he said. “But you’re taxed on the income before spending it on your partner’s health care.”

Health care benefits for individuals, spouses and families are tax-deductible.

 

Head to head on health care

Jul. 14, 2008 02:35 PM
The Arizona Republic

	Barack Obama	John McCain
Uninsured	Obama: Advocates a new national health plan that would be similar to the Medicare program that provides coverage for senior citizens. All children would be covered, either through an expanded State Children’s Health Insurance Plan (SCHIP) or private plans. Young adults could be carried on their parents’ insurance until they are 25. His goal is universal health coverage by 2012.	McCain: Would reduce the ranks of the uninsured through a combination of tax credits, promoting health-savings accounts and increased competition among private insurers. He would eliminate the tax exclusion on employer-paid benefits. The federal government would give a $2,500 tax credit for individuals or $5,000 for families to purchase private insurance or sock away in a medical savings account. Also, McCain would work with states to create a “guaranteed access plan” that would provide coverage for people who have had difficulty securing private insurance due to pre-existing medical conditions or other reasons.
Impact on employers	Obama: Employers would be required to help pay for health insurance for employees or contribute a portion of their payroll to a national health plan. Some small businesses would be exempt (based on revenue thresholds).	McCain: It’s unknown what impact McCain’s plan would have on employer-sponsored health plans. Employees would have the option of taking the tax credit and dropping their employer-based health coverage. Some experts believe that would be an appealing option for younger, healthier workers who can purchase inexpensive private insurance.
Private insurance companies	Obama: Private insurers would be subject to oversight by a group called the national health insurance exchange. Insurance companies would be required to issue a policy to every applicant and could not reject applicants based on pre-existing medical conditions.	McCain: His plan to offer tax credits to consumers may bolster private insurance plans, particularly those that sell to individual consumers rather than groups such as large employers.
Consumers	Obama: Consumers could purchase private insurance or the government’s plan.	McCain: People would get tax credits and would have access to portable insurance that provides coverage even if they switch jobs.
Prescription drugs	Obama: Would allow consumers to purchase cheaper prescription drugs abroad if they are proven safe. Wants generic drugs to be made available sooner.	McCain: Would allow consumers to purchase cheaper prescription drugs abroad if they are proven safe. Wants generic drugs to be made available sooner.
Technology	Obama: Would spend $50 billion over five years to establish advanced information technology for health providers to reduce costs, medical errors and inefficiency. Also would advocate federal funding to biomedical research.	McCain: Would spend an unspecified amount to establish advanced information technology for health providers to reduce costs, medical errors and inefficiency. Also would advocate federal funding to biomedical research.

 

L.A. city attorney sues insurer over health policy cancellations

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Liz O. Baylen / Los Angeles Times

Los Angeles City Attorney Rocky Delgadillo, right, meets with Ana Maria and Augustine Simoes and their attorney, William Shernoff, before announcing a lawsuit accusing Blue Shield of California of illegally canceling the health insurance coverage of hundreds of Californians. The couple say they were saddled with $60,000 in medical bills when their policy was rescinded after Ana Maria Simoes had to have emergency gall bladder surgery.

Delgadillo’s suit contends Blue Shield of California has illegally rescinded the coverage of more than 850 policyholders since 2002.

By Lisa Girion
Los Angeles Times Staff Writer
July 17, 2008 | Los Angeles Times

When Blue Shield of California learned that Ana Maria Simoes needed emergency surgery to remove her gall bladder, the company OKd the operation but also turned the case over to its investigative unit, according to corporate records disclosed Wednesday.

A Blue Shield investigator scrutinized Ana Maria’s medical records and compared them to the application she filled out for coverage, the investigator’s notes show. Ultimately, the investigator scribbled “unable to prove” in her notes, and then opened an investigation into Ana Maria’s husband, Augustine.

This time, the investigator concluded the Chino dairy farmer had failed to disclose that he had high cholesterol, and the omission was used to justify canceling the couple’s coverage.

The cancellation was highlighted by Los Angeles City Atty. Rocky Delgadillo as an example of the allegedly abusive practices at the heart of a lawsuit he filed Wednesday on behalf of the residents of Los Angeles against Blue Shield. The suit contends that Blue Shield has illegally canceled the coverage of more than 850 policyholders including people like the Simoeses since 2002.

Blue Shield spokesman Tom Epstein defended the cancellation of the Simoes’ coverage and called the suit “a cheap political stunt” that was “totally without merit.”

In the past, Blue Shield has said that it cancels policies rarely and that the practice is a legal and necessary tool to combat fraud. The Blue Shield suit is similar to those that Delgadillo filed earlier this year against insurers Anthem Blue Cross and Health Net. Like Blue Shield, those companies have denied wrongdoing and say they rescind coverage only when necessary.

The latest suit accuses Blue Shield, a nonprofit company based in San Francisco, of using complex and confusing applications for coverage to trick individuals into making mistakes that can later be used against them. The suit seeks fines and penalties of more than $1 billion.

“For decades, health insurers have gamed the system and reaped billions,” Delgadillo said. “The time has come to . . . set things right.”

The suit also accuses Blue Shield of falsely advertising its coverage, alleging that the company often reneges when its members need substantial medical care.

Dr. Richard Frankenstein, president of the California Medical Assn., and Dr. Robert Bitonte, president-elect of the Los Angeles County Medical Assn., praised Delgadillo’s efforts to stop the practice known as rescission.

“Having health insurance does not mean you will receive healthcare when you need it,” Frankenstein said. “Insurance companies may promise you the moon and a thousand doctors, but if you really need your medical care you can bet they will be looking for a way to deny treatment or cancel your policy.”

Blue Shield’s Epstein said Delgadillo “asserts that we have committed unfair practices regarding the payment of claims for 400,000 individual policyholders without a shred of evidence that our actions were improper. He fails to mention that, since 2002, we have paid nearly $4 billion in claims for those policyholders. He claims that we used intentionally misleading applications, but our applications were reviewed and approved by two state regulators.”

The company also criticized Delgadillo’s consultations with policyholder “lawyers who have a financial interest in rescission cases,” Epstein said, saying that “he never spoke to anyone in our company nor asked for any documents in our files.”

Blue Shield has “always been careful in our underwriting of health coverage policies and in our investigations of the rare contracts that are rescinded,” Epstein said. “This is why we have rescinded a fraction of 1% of individual and family policies.”

Blue Shield believes that it is the responsibility of applicants to tell the truth, Epstein said.

“If there were no consequences for applicants who misrepresent significant medical conditions, insurance rates would skyrocket for the vast majority of Californians who complete their applications accurately,” he said.

The Simoeses say the cancellation saddled them with $60,000 in unpaid medical bills. They say they were harassed by collection agents, and Ana Maria’s credit was ruined.

“I hope that nobody else has to go through this, and I hope there will be somebody out there who can stop the insurance companies,” Ana Maria said in an interview after standing next to Delgadillo at a news conference. “It is so upsetting to me and my family.”

The Simoeses said they were as honest as they knew how to be on the application. English is a second language for the Portuguese immigrants, and they went to an insurance agent to buy their coverage. They said the agent filled out the application.

They said they gave the agent their physicians’ names and telephone numbers as he was filling out the application. They signed the application, giving Blue Shield permission to review their medical records before issuing coverage and, they said, that is what the agent told them would happen.

Delgadillo contends that, to save money, Blue Shield routinely fails to pull records and verify information on applications.

Augustine Simoes said he was not aware he had an elevated cholesterol level. He said his doctor prescribed Lipitor, a cholesterol controller, and explained only that men his age often needed it.

“The records of everything were at the doctor’s office,” he said. “I don’t know why they are accusing me of lying. I didn’t make anything up.”

Blue Shield’s Epstein said the insurer acted properly throughout. “When all the evidence is in, it will be clear that both Simoeses misrepresented significant facts on their applications,” he said.

William Shernoff, a lawyer for the Simoeses and other policyholders, is cooperating with Delgadillo’s office on the litigation. He criticized regulators at the Department of Insurance and the Department of Managed Health Care for “simply not doing their job.”

But Cindy Ehnes, director of the Department of Managed Health Care, defended that agency’s actions.

“We have protected consumers and restored coverage quickly to more than 1,200 consumers to date,” Ehnes said.

Noting Anthem Blue Cross’ and Blue Shield’s failure to reissue coverage on rescinded policies, she said, her agency was “going back through each of their approximately 2,170 rescission cases to pursue individual fines in each case.”

“The terrible practice of rescissions has caused irreparable harm . . . by making some individuals responsible for large medical bills and hindering their ability to get and keep health coverage,” she said.

lisa.girion@latimes.com

 

Acute Cost and Growth Pressures to Drive Large-Scale BPO and ITO Outsourcing/Offshoring in Healthcare Sector over Next Three to Five Years

July 08, 2008 09:30 AM EDT | BUSINESS WIRE

HOUSTON — The slumping economy may be slowing deal flow in some sectors, but it is accelerating adoption of outsourcing in the healthcare industry as it struggles to streamline its back-office and ramp up to meet increased demand for services as the U.S. population ages, according to EquaTerra, a leading business advisory firm. In its newly released poll of leading outsourcing service providers on the state of the healthcare outsourcing market, EquaTerra expects these competing macro economic trends to drive large-scale outsourcing and offshoring deals over the next three to five years, especially in business process and information technology outsourcing (BPO and ITO).

Half of the respondents to EquaTerra’s 2Q08 Healthcare BPO/ITO Service Provider Pulse Survey* report demand is up quarter over quarter and 70 percent expect an increase next quarter. The scope of healthcare outsourcing is expanding too as healthcare organizations attempt to gain efficiencies through greater automation, self-service capabilities and improved IT infrastructure and functionality.

Typically, healthcare companies that are currently outsourcing have already reduced labor costs. Now, they want to achieve business process improvements via technology, business process reengineering and implementation of Six Sigma methodologies. As a result, they are prioritizing their outsourcing goals and focusing on functions and processes core to healthcare front and back-office operations. Seventy percent of healthcare services providers polled cited vertical healthcare business service areas, like claims administration and revenue cycle management (RCM) as the top areas of outsourcing demand in the market today.

Outsourcing buying patterns also appear to be changing. There is an emerging trend toward consolidating work sourced to several providers (e.g. claims imaging, data entry and claims processing) to a single, large vendor that can handle the entire claims function. In addition to standard BPO services, the clear expectation from this single-source solution is overall business transformation plus value-added knowledge services, including claims analytics, collections and reserve forecasting.

The survey also indicates more healthcare industry work is moving offshore to both India-based and multinational service providers. IT infrastructure monitoring and support along with RCM were identified as the two functions using the highest levels of offshore talent. Cost reduction continues to be a major impetus, but there’s also a significant shift to more strategic activities, according to 65 percent of the survey participants. As a result, outsourcing buyers are migrating from a contract labor model to longer-term, project-based work and multi-year outsourcing efforts that require greater control over functions and processes. Service providers cited the top two drivers for the increased use of offshore resources as immediate access to expertise and talent (50 percent) and knowledge services (42 percent).

To compete for this upscale work, outsourcing providers are developing more compelling offerings, according to Mark Voytek, healthcare industry practice lead for EquaTerra. “Healthcare companies need tools that support effective fiscal management and IT applications that can automate clinical processes and assist in improving quality, especially reducing medical errors. The low upfront costs associated with outsourcing versus a total-cost-of-ownership model is especially attractive in the current economy.”

Voytek’s thoughts are echoed by an executive from a leading healthcare service provider who says escalating costs and cuts in Medicare and Medicaid payments coupled with the increased demand of an aging population threaten the solvency of many U.S. hospitals. “Sixty percent of U.S. hospitals are already unprofitable and rely on charity and donations for supplemental funding. Cuts in claims payouts will further shrink revenues just as more Americans will utilize health services. The number of hospitals that are highly unprofitable will grow unless they adopt large-scale outsourcing and offshoring to reduce overall cost levels.”

Top-line finds from the 2Q08 Healthcare Service Provider Pulse Survey:

• Outsourcing service providers (82 percent) said the healthcare payer industry exhibits the greatest demand for BPO and ITO services. The healthcare provider market ranked second (73 percent.)
• Costs savings are still paramount, but 75 percent of the service providers polled report buyers are putting greater emphasis on process improvement, innovation and transformation.
• EquaTerra estimates approximately 75 IT and BPO deals were initiated from 2004 through 2007 with a total contract value (TCV) of $50 million. Of these, 75 percent were ITO deals and 25 percent were BPO. To date, healthcare represents less than five percent of total outsourcing deals in the market, highlighting the relative immaturity of the healthcare outsourcing market as compared to other industries like banking, financial services and manufacturing. But the healthcare outsourcing market is expected to grow at close to 10 percent over the next five to seven years, faster than overall market growth of seven to eight percent.

“The use of offshore and global resources in healthcare outsourcing is accelerating,” said Stan Lepeak, managing director of research for EquaTerra. “In fact, deteriorating economic conditions will likely drive more outsourcing in the healthcare market over the next several quarters.”

*About the 2Q08 Healthcare Industry Pulse Survey

EquaTerra recently polled top outsourcing service providers in the healthcare market. Based on these findings and its own direct market experience, the company mapped the level of buyer demand across several sets of emerging BPO and ITO functions and processes specific to the healthcare space. The demand-level ranking is based on a 1 to 10 scale, with 1 equating to low buyer demand, 5.5 to moderate demand and 10 to high levels of demand. Service providers were asked to comment on current demand and projected levels for the balance of 2008. For more details or to obtain a copy of this survey, please contact Stan Lepeak.

About EquaTerra

EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported over 2000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, Middle East, Africa and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions. For more information, please contact Lee Ann Moore at +1 713.669.9292; leeann.moore@equaterra.com; www.equaterra.com.

 

Billings Used Dead Doctors’ Names

By Christopher Lee, Washington Post Staff Writer
washingtonpost.com | Wednesday, July 9, 2008

Medicare has paid as much as $92 million since 2000 to medical suppliers who billed the government for wheelchairs and other home equipment purportedly prescribed by physicians who, according to records, were dead at the time, congressional investigators said yesterday.

The Centers for Medicare and Medicaid Services (CMS) honored about 500,000 such claims despite pledging six years ago to correct the problem, which was identified by the Health and Human Services Department‘s inspector general in 2001.

In more than half the cases studied, the doctor listed as having ordered the equipment had died more than five years earlier, said a report by the Senate Homeland Security and Governmental Affairs Committee’s permanent subcommittee on investigations.

“We discovered that some medical equipment suppliers have scammed the Medicare system — and the American taxpayers — out of massive amounts of money,” Sen. Norm Coleman (Minn.), the panel’s top Republican, said in a statement. “Using the ID numbers of dead doctors, these scam artists have treated Medicare like an ATM machine, drawing money out of the government’s account with little fear of getting caught.”

The report is part of the committee’s ongoing investigations into waste, fraud and abuse in the fast-growing federal health program, which serves more than 43 million elderly and disabled Americans. Medicare pays annually more than $400 billion in benefits and is a fixture on the Government Accountability Office‘s “high-risk” list of troubled programs.

Last year, the government established a Medicare Fraud Strike Force to crack down on a problem that officials estimate costs taxpayers tens of billions of dollars annually. The program’s durable medical equipment component, in particular, has been a frequent target of companies seeking to bilk the government. The subcommittee has scheduled a hearing on the problem today. When the system works properly, a physician writes a prescription for home medical equipment for a Medicare beneficiary. He takes the order to a supplier, who sells or rents the equipment to him. The supplier, in turn, submits a claim for payment to a Medicare contractor for processing. The claim includes a number issued by Medicare that identifies the prescribing physician.

Senate investigators obtained from the American Medical Association a computer file of physicians who had died between 1992 and 2002. They selected 1,500 at random and asked Medicare officials to turn over medical-equipment claims filed with those doctors’ Medicare ID numbers between 2000 and 2007.

During that time, the review said, ID numbers for 734 deceased doctors were used to file 21,458 claims that totaled $3.4 million. Investigators counted the claims only if the equipment was bought more than a year after the doctor’s death.

Extrapolating from the sample, investigators estimate that 384,730 to 572,238 such fraudulent claims were submitted during that period, and Medicare paid an estimated $60 million to $92 million. There are still active ID numbers in Medicare’s system for as many as 2,895 dead physicians, investigators said.

They examined separate data for Florida, home to many retirees and a perennial leader in Medicare fraud. They found that more than a quarter of deceased Medicare doctors there still have active ID numbers in Medicare’s system.

The ID for one doctor, who died in 1999, appeared on 83 claims submitted by Professional Gluco Services Inc., a Miami company, between November 2005 and September 2006. A federal grand jury indicted two of the company’s owners last year on charges of defrauding the government of $1.3 million for equipment that had never been ordered or delivered. Both men pleaded guilty.

Medicare officials had promised to do a better job screening claims after the 2001 inspector general’s report found that the agency had paid $91 million for medical supply claims with invalid or inactive physician ID numbers in 1999.

Medicare officials said several new steps should help, including a plan to match monthly Social Security Administration data about U.S. deaths against a revamped Medicare provider-identification system. They also pointed to new accreditation requirements for suppliers under a new program, opposed by the industry, that sets some equipment prices through competitive bidding.

“Fraud and abuse in the context of Medicare-covered durable medical equipment has been a focal point of ours in recent years,” said CMS spokesman Jeff Nelligan. “Before this program, anyone could become a supplier, but now they must be fully accredited based on strict financial and quality standards.”

 

Muscling in on Medicare

Legislative fight in Washington puts patients in midst of doc-insurer struggle

July 8, 2008 | Newsday.com

A Medicare tweak on the table in Washington is pitting doctors against insurers – with patients in the middle. Doctors are facing a steep cut in Medicare payments, and many say that if that happens, they’ll reduce or end their participation in the program. And that will make it harder for elderly patients to get care.

The alternative is to trim what Washington pays private, Medicare Advantage plans. Insurers, some of whom underwrite those plans, are airing television commercials warning that will mean patients losing coverage or paying more.

For patients, this all sounds like heads you lose, tails you lose. But things aren’t that bleak. Not if Medicare Advantage plans take the hit, as they should.

The problem is that doctor reimbursements will be slashed 10.6 percent unless Congress acts to stop it. A cut that deep is unrealistic. The House voted June 24 to increase payments to physicians by 1.1 percent. But the bill is stalled in the Senate and, should it pass, President George W. Bush has threatened a veto. The sticking point is cost.

The bill would take the money from those private plans – which is where it should come from. Medicare Advantage plans were pushed by private marketers who said they would save taxpayer dollars. But Washington pays the plans 13 percent more per beneficiary than it would cost to cover that same person under government-run Medicare.

Pitting private plans against traditional Medicare is a sound idea. Competition should make each better. But a fair contest requires a level playing field, and right now it isn’t. Not with private plans being paid more per patient.

The pending legislation wouldn’t end that disparity. But it would reduce it and free up money to pay doctors. That would be a win for most Medicare patients and taxpayers.

 

FACTBOX: McCain and Obama on health care and retirement

Mon Jul 7, 2008 9:41am EDT | REUTERS

(Reuters) – Health care has ranked among the top issues with U.S. voters in this presidential election cycle, and the Social Security retirement program is a perennial issue for the country’s influential elderly population.

Both Barack Obama, who has claimed the Democratic nomination, and John McCain, the presumptive Republican nominee, have offered health care and retirement proposals. Here is a summary of their positions.

HEALTH CARE

McCain would end tax breaks for employer-provided health insurance and instead provide a refundable tax credit of $2,500 per person, or $5,000 for families, to help people buy health policies. He would promote competition by allowing people to buy insurance across state lines and he would make it tougher to sue doctors in some cases.

Obama has proposed a national insurance program to allow individuals and small businesses to buy affordable health care similar to that available to federal employees, funded by a tax on employers who don’t provide coverage. Individuals would not lose coverage when they switch jobs.

He would lower premiums through a program that would reduce the exposure of employer health plans to the costs of a catastrophic illness. Drug costs would be lowered by allowing patients to buy drugs from abroad and letting the government negotiate for lower prices.

SOCIAL SECURITY

McCain has said he would work with Congress to rein in the growing costs of retirement programs and has suggested changing the way benefits are indexed to inflation. He has also supported creating private retirement accounts for younger workers.

Obama opposes private retirement accounts. Affluent workers would pay more in taxes to ensure that Social Security is fully funded.

Obama wants to automatically enroll workers in retirement plans to boost savings, though employees could opt out if they choose.

(Compiled by Andy Sullivan, Donna Smith and JoAnne Allen; editing by David Wiessler)

 

Healthcare groups use ads to lobby lawmakers on Medicare bill

July 03 2008 | McKnight’s Long Term Care News

Congress may be on break this week, but two industry groups launched ads spurring the Senate to take action on a Medicare bill that affects nursing home residents and other older adults when it returns from the Fourth of July recess.

The American Medical Association unveiled an advertising campaign to encourage passing the bill, H.R. 6331. Targeted towards opponents of the legislation, the ads say the issue boils down to a choice: insurance company profits, or seniors and disabled vets who will lose their access to healthcare. Meanwhile, insurance lobbyists are working on their own anti-H.R. 6331 advertising blitz. They argue that the cuts to Medicare Advantage plans that would fund the bill would limit choices, reduce benefits and pass on higher costs to seniors.

This week, two harmful actions went into effect: the expiration of the exceptions process for Part B outpatient therapy caps, and a freeze on Medicare physician payments. Therapy caps, which affect nursing home residents, impose a $1,810 limit on physical therapy and speech therapy combined and $1,810 on occupational therapy for nursing home residents. Residents in Medicare-certified beds at a skilled nursing facility will not have therapeutic services covered past $1,810, according to a note from the Centers for Medicare & Medicaid Services. Others who exceed the cap, however, may obtain medically necessary therapy services at a hospital.

 

EDS unit to process Medicare claims in four states

07/02/08 — 01:37 PM
By David Hubler | Washington Technology

NHIC Corp. will process Medicare payment claims from health care providers in four Northwestern states under a $148 million contract from the Centers for Medicare and Medicaid Services.

The contract, which has a one-year base period and four one-year options, will serve about 54,000 physicians and health care practitioners and 233 hospitals in Alaska, Idaho, Oregon and Washington state.

NHIC, a subsidiary of EDS Corp., will provide a variety of administrative functions for hospitals, skilled nursing facilities and physicians in those states and will be the providers’ first point of contact for processing and payment of Medicare Parts A and B fee-for-service claims.

The company will also handle appeals, audits and reimbursements, provider enrollment, educational outreach, print and mail services, financial and accounting services, contact-center support, electronic data exchange, mailroom operations, and medical and utilization reviews.

The contract will help CMS meet the requirements of the Medicare Modernization Act of 2003, which requires the agency to transition Medicare fee-for-service claims from fiscal intermediaries and carriers to Medicare administrative contractors, NHIC said in a statement.

NHIC is one of the largest Medicare Part B contractors in the country, serving more than 150,000 health care providers in California, Maine, Massachusetts, New Hampshire and Vermont.

EDS, of Plano, Texas, ranks No. 10 on Washington Technology’s 2008 Top 100 list of the largest federal government prime contractors.

 

Medicare Payment Fiasco Causes Delay in Claims Processing

Action Should Not Mean Delayed Payments

By James Arvantes | AAFP News Now
7/1/2008

The Bush administration has announced it will delay the processing, but not necessarily the payment, of Medicare claims to give Congress more time to pass a bill blocking a 10.6 percent reduction in the Medicare payment rate. However, the administration’s action should not result in delayed Medicare payments to physicians, said Kent Moore, the AAFP’s manager of health financing and delivery systems.

CMS is required by law to hold Medicare claims it receives for 14 days before issuing payment on the claims. In normal circumstances, the agency starts to process claims within a few days of receiving them, paying them by the end of the 14-day time frame, Moore said. CMS now plans to hold Medicare claims for 10 business days before processing them to give Congress more time to pass Medicare payment legislation that is expected to negate a 10.6 percent payment cut effective July 1.

“CMS will use that 14-day window they have statutorily and refrain from processing the claim,” Moore said. “Instead of processing (a claim) at the front end of that 14 days, they will process it 10 days later on the hope that Congress will act within the first days of July,” said Moore. “Physicians should not see a delay in payment,” he added.

In late June, the House overwhelming passed an 18-month Medicare physician payment bill that would have prevented the 10.6 percent reduction scheduled for the remainder of this year, along with a 5.4 percent cut scheduled for 2009. But the Senate failed to pass the legislation, allowing the 10.6 percent cut to take effect on July 1. Congress adjourned for a weeklong July 4 recess on June 27 and will return on July 7. Senate Majority Leader Harry Reid, D-Nev., in a prepared statement, said the Senate would address the Medicare legislation shortly after returning from the July 4 break.

Many physicians, meanwhile, are upset and angry, said Moore, thinking CMS will withhold Medicare payments, a perception that he characterizes as a misunderstanding.

“CMS is simply saying that they are going to take advantage of the 14-day payment floor they already have by law,” Moore said. “They still intend to pay claims in a timely manner.”

Although physicians will experience a reduction in their Medicare payment levels if Congress and the Bush administration cannot agree on a Medicare payment bill by mid-July, there is an expectation that they will agree on a payment bill by then and will make the legislation retroactive to July 1.

CMS has said that physicians should submit their Medicare claims for services on or after July 1 using the pre-July 1 scheduled amount. Claims submitted after June 30 that reflect the 10.6 percent reduction will be paid based on that amount, and “will likely require providers to resubmit a revised claim,” said CMS in a June 30 press release.

Submitting claims with pre-July 1 amounts “will facilitate reprocessing of the claims by CMS, if needed, and will ensure that physicians are able to collect the full pre-July 1 allowed amount, when or if the cut is retroactively negated,” said Moore.

However, noted Moore, “physician practices may only collect copayments and deductibles from Medicare beneficiaries based on the reduced (Medicare) rate, even if they are charging the pre-July 1 rate to Medicare.”

Physician practices wishing to avoid confusion may choose to hold their Medicare claims in-house until it becomes clear that new legislation will be enacted or until cash flow becomes a problem, said Moore. “This will reduce the need for (physicians) to reconcile two payments — the initial claim and the reprocessed claim — and it will simplify physician billings of beneficiary co-insurance and payment calculations for payers that are secondary to Medicare,” said Moore.