September 28, 2001

Health Subcommittee Considers Medicare Reform Legislation

In preparation for a mid-October mark-up, the House Ways and Means Subcommittee on Health conducted a Sept. 25 hearing to discuss the "Medicare Regulatory and Contracting Reform Act of 2001" (H.R. 2768), a bill that offers regulatory relief and audit protections for Medicare providers. Introduced by Subcommittee Chair Nancy Johnson (R-Conn.) and ranking minority member Pete Stark (D-Calif.), the legislation modifies provisions initially proposed in the "Medicare Education and Regulatory Fairness Act of 2001" (MERFA) (S. 452/H.R. 868). The Johnson/Stark bill also addresses Medicare contractor accountability and proposes a competitive, performance-based process for selecting contractors.

While CMS Administrator Thomas Scully was generally supportive of the legislation, he strongly opposed a section in H.R. 2768 that would prohibit the enforcement of regulatory changes for 30 days after their release. According to Rep. Johnson, the 30-day hold is intended to give providers sufficient time to interpret and accommodate the changes. Mr. Scully, however, believed the grace period would encourage fraudulent behavior.

American College of Physicians-American Society of Internal Medicine President William Hall expressed his dissatisfaction with a provision that allows auditors to extrapolate a small sample of inaccurate claims across several years when determining the amount of fraudulent billings.

Leslie Aronovitz, a representative from the General Accounting Office (GAO), praised the Johnson/Stark bill for its contractor reform and accountability provisions. Her support for reform was based on a new GAO study, Improvements Needed in Provider Communications and Contracting Procedures, (GAO-01-1141T) (see related article) which documents how Medicare contractors often give providers regulatory guidance that is inaccurate, incomplete or untimely.

Information: Christiane Mitchell, AAMC Office of Governmental Relations, 202-828-0526.