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Health care executives harried by the previous administration’s unprecedented crackdown on Medicare fraud and abuse issues already are sensing a sea change in the government’s attitude toward and relationships with hospitals and other health care organizations. Many in the industry are pinning hopes on newly appointed Department of Health and Human Services (HHS) Secretary Tommy Thompson, who used his recent confirmation hearing to blast Medicare’s "excessively complex paperwork" that he says "criminalizes honest mistakes" and drives providers from the program.
"Hospitals are drowning in a sea of government rules and regulations," Gary Mecklenberg, president & CEO of Northwestern Memorial Healthcare in Chicago, told the House Ways and Means Health Subcommittee this month. But like many others in the health care community, Mecklenberg now sees light at the end of the tunnel.
"There is definitely a new tone in Washington, and I think a lot of positive change is possible," says Mary Grealy, president of the Healthcare Leadership Council in Washington, DC. According to Grealy, that new tone already is reflected in the new administration’s recent decision to revisit HHS’ final privacy regulation as well as recent Congressional efforts toward finding ways to ease the current regulatory burden and high costs of compliance confronting hospitals and other providers.
Grealy points out that hospitals now have a friendly face heading up the Health Care Financing Administration (HCFA) as well. Last week, Washington lobbyist Tom Scully was appointed the new HCFA Administrator, after a six-year stint at the Federation of American Hospitals in Washington, DC.
American Hospital Association (AHA) executive vice president Rick Pollack says Scully has the perfect mix of "real-world experience" and public service to bring about fundamental change at HCFA. Scully has worked at the Office of Management and Budget and on Capitol Hill, experience that gives him a Washington road map for executing real change, says Grealy.
That may be a good thing, because Pollack and his colleagues are pushing for fundamental reform. Testifying before the Ways and Means Health Subcommittee on behalf of the AHA March 15, Mecklenberg argued that HCFA must do a better job coordinating regulations issued by many different departments and providers should be engaged early to help make regulations more practical.
Mecklenberg said hospitals also should have the right to challenge "questionable" HHS policies that skirt established rule-making procedures. Currently, hospitals seeking judicial review of a regulation must knowingly violate Medicare law and risk exclusion, he explained.
But it doesn’t stop there. The association also wants to see compliance costs factored into payment rates to account for complex regulations such as the Health Insurance Portability and Accountability Act of 1996, which alone will cost hospitals more than $22 billion to implement over the next five years, according to the AHA.
The Republican Congress may yet have something to say about that issue as well. At a third hearing on the subject last week, Rep. Billy Tauzin (R-LA), chairman of the Committee on Energy and Commerce, said that while drafting the privacy regulation was an arduous task, Congress still must find a way to make the final regulation more workable.
Gail Wilensky, who heads up the Medicare Payment Advisory Commission, appeared to bolster the AHA’s arguments when she told the Ways and Means health panel that discrepancies in the program integrity portion of Medicare are now the greatest single source of provider frustration.
While local discretion in payment and coverage is one source of confusion, Wilensky said the larger problem is discrepancies in the policies and behavior among HCFA’s central office, 10 regional offices, and more than 50 private contractors that carry out the actual payment, claims processing, and audit operations for Medicare, she asserted.
According to the former HCFA Administrator, the current environment presumes that billing may be incorrect or inappropriate. As a result, contractors develop a series of automated strategies that deny claims. But while this practice has limited the need to "pay and chase," Wilensky says it has also led to "an explosion of medical review policies" and a heavy reliance on documentation.
Worse yet, Wilensky contends that confusion over how to bill Medicare and fears of false claims allegations by HCFA and the OIG may be creating a pattern of "down-coding" among doctors and hospitals.
Wilensky says a more effective strategy would be to pay properly submitted bills and search for patterns of abuse based on statistical analysis. This shift in focus would mirror a change that began taking place among professional review organizations in the 1990s, when those organizations moved from a case-by-case retrospective review of medical records to a focus on "patterns of care" and "patterns of outcomes."
OIG Deputy Inspector General Paul Grob sharply disputed provider complaints, but added HCFA should have more flexibility in the ways it selects and works with contractors. He also suggested providers can expect an increase in the agency’s use of contractors for specific program safeguard functions in areas such as medical review, fraud detection, and cost report audits.
Grob argued that more resources are needed for quality assurance reviews not only for the 20% of all hospitals that are not accredited by the Joint Commission, but for nursing homes, which are only surveyed once a year, and home health agencies, where surveys have slipped to once every three years.