Medicare contracting reform proposal moves ahead

House Ways and Means Health Subcommittee members Tuesday sparred with Centers on Medicare and Medicaid Administrator Thomas Scully over the details of a popular, bipartisan bill that would overhaul Medicare's contracting system and provide limited regulatory relief for physicians.

Meanwhile, members and lobbyists were lining up in obvious anticipation of adding their pet provisions to what appears the only probable Medicare bill that will move this year.

Scully said the administration has only minor concerns with the legislation, introduced in August by Ways and Means Health Subcommittee Chairwoman Nancy Johnson, R-Conn., and ranking member Fortney (Pete) Stark, D-Calif., and co-sponsored by the rest of the panel's members.

Medicare's contracting system, in which providers have more power to select the companies that process and pay Medicare claims than the federal government does, "is antiquated and has been screaming for reform for the last 20 years," Scully said. "Right now we have very little ability to make sure [contractors] aren't screwing up 85 percent of the phone calls," he said.

Scully referred to a finding in the testimony from GAO in which it made 60 calls to contractors' provider information lines and found that "only 15 percent of the answers were complete and accurate, while 53 percent were incomplete and 32 percent were entirely incorrect."

Scully said that while the administration generally supports the measure, two provisions of the bill are problematic. One would prohibit the agency from enforcing new policies for 30 days after they are promulgated, which Scully said amounts to "an invitation for people to take advantage" of the government for the first month.

Scully said the administration also wants to change the liability standard for Medicare contractors back to the "gross negligence" Medicare officials sought in the first place, rather than the lower "negligence" standard in the bill, which he said might make it difficult to attract new companies who may be fearful of "a lot more legal issues."

Legislators, however, made it clear they want the agency to do a better job informing providers of their responsibilities.

Johnson said the 30-day delay "is specifically related to the lack of clarity in the directives and the amount of paper" providers get from Medicare.

Rep. Karen Thurman, D-Fla., agreed, saying, "What I'm hearing from my physicians is this [paperwork] is costing them 20 to 25 percent more to keep up with."