The Next Step

The Medicare Prescription Drug Conference Committee's first accomplishment this summer was agreeing on a package of Medicare regulatory and contracting reform provisions known as the “Medicare Contracting and Regulatory Reform Act.” A mixed bag for the HME industry, the regulatory reform provisions enjoy widespread bipartisan support in both the House of Representatives and the Senate.

Following is a summary of the provisions most relevant to HME providers.

Contractor Reform: In a significant departure from the government's historical process for contracting with entities to process Medicare claims, for the first time the agreement would create a bidding process for Medicare contractors that would take place every five years. In addition, companies other than insurance companies would be able to compete for these contracts.

Regulatory Reform: Among the regulatory reform provisions, the agreement would prohibit the introduction of new material in final rules without an opportunity for public comment; would prohibit retroactive application of new regulations and policies; would require a waiting period of 30 days after the announcement of a substantive change before it becomes effective; and would prohibit sanctions if a provider follows erroneous guidance from the government and its agents.

Claims Review: The conference committee package would provide for a number of positive developments, including establishing standards for random prepayment reviews. Providers would have up to three years to repay overpayments. Medicare could not recover overpayments during an appeal until after an evaluation by an independent party. And, Medicare could not extrapolate to a larger number of claims overpayments based on a small number of claims, unless there is a sustained or high level of payment error.

In other provisions in the package, Medicare contractors would be required to notify providers in writing of post-payment audits, and a full review and explanation of all audits would be made available to providers except where fraud is suspected.

In addition, the Department of Health and Human Services would be required to create a standard method for probe sampling, and HHS would have to develop a process to allow providers to correct minor errors or omissions in submitted claims without having to initiate an appeal.