House Ways and Means Health Subcommittee Clears Medicare Contracting Bill

The House Ways and Means Subcommittee on Health unaminously approved a bill (HR 2768) on Oct. 4 that would reform the process by which the Centers for Medicare and Medicaid Services hires contractors to process and pay Medicare claims and would make it easier for providers to "appeal audits of their Medicare payments," CongressDaily reports. A "substitute amendment" adopted by the committee "included some changes sought by the Bush administration" which wants negligence standards to become "consistent with other laws," and providers to be given 30 days to come into compliance with "substantive changes" in regulations. The bill also would extend the period by which providers could repay overcharges from three years to five years. Providers could also delay "disputed repayments" until after the "second level of external appeal is exhausted," as opposed to the current requirement of repayment after the first level of review. "We cannot tolerate a system that continues to anger, frustrate and annoy providers at the rate this one does," Health Subcommittee Chair Nancy Johnson (R-Conn.) said (Rovner, CongressDaily, 10/4). According to a preliminary analysis by the Congressional Budget Office, the "Medicare Regulatory and Contract Reform Act of 2001" would not lead to any increased costs for the federal government (House Ways and Means Subcommittee on Health release, 10/4).

MERFA
In related news, the sponsors of a "more sweeping regulatory relief bill," the "Medicare Education and Regulatory Fairness Act," (HR 868)" on Oct. 4 endorsed a new measure unveiled by House Energy and Commerce Committee Chair Billy Tauzin (R-La.) on Oct. 3 (CongressDaily, 10/4). Under Tauzin's bill, Medicare officials could only issue regulations one time per month and could not make "substantive policy changes" retroactive. The legislation would also allow providers 30 days to "come into compliance" with new rules and would establish a panel of judges who would hear only Medicare cases and would create an "expedited process" for providers. In addition, the legislation would require improved education and outreach for providers and prohibit punishment for providers who "reasonably rely on written contractor guidance" that "turned out to be incorrect." The legislation also would to give Medicare officials more authority in selecting contractors (Kaiser Daily Health Policy Report, 10/3). MERFA sponsors Reps. Patrick Toomey (R-Pa.) and Shelley Berkley (D-Nev.) appeared with Tauzin and House Energy and Commerce ranking member John Dingell (D-Mich.) to announce their support for the new measure, which Toomey said is "bipartisan ... bicameral and it can be signed into law this year." MERFA has 243 co-sponsors in the House, but Medicare officials had "sharply criticized" the measure, saying it "would strip them of much of their ability to police fraud in the program" (CongressDaily, 10/4). MERFA would allow providers to "challenge" CMS regulations and contest overpayment decisions without losing their right to appeal, prevent the agency from recovering "past overpayments by withholding future payments" and prohibit the government from prosecuting providers who "voluntarily disclose" overbilling errors and return the payments within one year. In addition, the legislation would require CMS to educate providers about proper billing procedures and would "limit" CMS' use of "extrapolation," a process in which the agency assumes billing errors found on sample audits were made regularly and increases repayment amounts accordingly (Kaiser Daily Health Policy Report, 3/8).