Another Attempt to Rein in Medicare

May 1, 2001

George W. Bush’s arrival at the White House has given physicians new hope that a bill easing Medicare mistreatment of physicians will pass Congress this year and be signed by the President. The bill is called the Medicare Education and

George W. Bush’s arrival at the White House has givenphysiciansnew hope that a bill easing Medicare mistreatment of physicianswill pass Congress this year and be signed by the President. The bill is calledthe Medicare Education and Regulatory Fairness Act (MERFA). Rep. Shelley Berkley(D-Nev) is the key House sponsor of H.R. 868 (S. 452 in the Senate). Atrecent hearings in the House health subcommittee, even Rep. Pete Stark(D-Calif), normally an implacable foe of the American Medical Association,admitted that physicians deserve some relief from Medicare nitpicking. He didnot endorse the Berkley bill, however.

The bill’s most radical provisions would limit the ability ofinsurance companies to conduct pre- and postpayment audits of physician billing—acause of great anguish for physicians. Not surprisingly, those provisions willhave the most difficult chance of passage. Bob Doherty, a top lobbyist for theAmerican College of Physicians/American Society of Internal Medicine, said theaudit provisions are "very reasonable." For example, he explained thatMedicare’s current practice is to withhold payment of a physician’s bill,even if it is 100% correct, if that bill is part of a "prepayment"audit during which the insurance carrier randomly selects a predetermined numberof claims to examine more closely. MERFA has a provision that would prohibitMedicare from holding up payment "without cause."

Another irritant isMedicare’s practice of examining, as part of a postpayment audit, a physician’sbillings for a particular CPT code. A sample of bills is scrutinized, and anyerrors are extrapolated to the entire year’s billings for that CPT code—andsometimes for past years. MERFA would not allow Medicare to extrapolate thefirst time a postpayment audit turns up problems.