AMA To Congress: Medicare Regulations Burden Physician Small Business Owners

Main Category: Primary Care / General Practice
Also Included In: Medicare / Medicaid / SCHIP
Article Date: 16 May 2008 - 0:00 PDT

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Oral Testimony Attributable to: William A. Dolan, M.D., AMA Board Member

"Thank you, Mr. Chair and members of the Subcommittee. My name is William Dolan. I am a member of the Board of Trustees of the American Medical Association and a practicing orthopaedic surgeon from Rochester, New York.

"I want to thank you for inviting me to testify here today on the impact of CMS regulations and programs on small health care providers.

"Approximately 75 percent of physician practices are composed of fewer than eight physicians. For the majority of these small physician practices, including mine, burdensome regulations can take valuable time away from patient care. We believe this is particularly true with regard to the Recovery Audit Contractor (or RAC) program and the ICD-10 implementation.

"The RAC program employs contractors to analyze and audit physician reimbursement claims for billing errors. The pilot program, which began in 2005, and will expand nationwide this year, has been extremely burdensome on the affected physicians and does nothing to educate them about common billing mistakes. Instead, the program embraces "bounty hunter" techniques that provide RACs with incentives to deny claims.

"While we strongly oppose the RAC program, we believe there are things CMS can do prior to the national rollout that would improve it.

"Specifically, CMS should consult with the AMA on RAC/physician communications. In addition, they should make RAC monthly financial reports public and maintain an accessible list of commonly audited procedures.

"CMS should preclude RACs from reviewing claims from the past twelve months. Failure to do so will result in RACs reviewing claims still under review by carriers and other Fiscal Intermediaries.

"RACs should not be permitted to review billing issues arising from Evaluation & Management services or medical necessity determinations as they are extremely individualized and require extensive clinical review.

"CMS should limit the number of medical records requested from individual physicians. I know of a urologist in California who was hit with 50 RAC requests. CMS should also raise the minimum claim level from 10 dollars to at least 25.

"Finally, CMS should encourage the pursuit of underpayments as well as overpayments by requiring RACs to accept case files from providers for underpayment reviews, and including as an underpayment, those situations where a physician mistakenly neglects to report a delivered service.

"The AMA also has concerns about the rollout of ICD-10, the 10th version of the International Classification of Diseases used in outpatient and inpatient settings.

"While the AMA recognizes the importance of updating the current coding system, ICD-9, we believe that due to the complexity and costs of this extensive transition, a plan and timeline must be developed prior to national rollout. Any transition must take into account the fact that physicians are already struggling to implement the HIPAA electronic transactions standard and the transition to the National Provider Identifier.

"Given the costs and complexities involved with the move to ICD-10, the AMA suggests that the HIPAA electronic transactions standard be upgraded to version fifty-ten prior to the national rollout, as the current standard, forty-ten, is not compatible with ICD-10.

"In addition, the ICD-10 coding system should be pilot tested so that problems can be identified and resolved in advance of the national roll-out.

"Physicians, their staffs, coders, and other health care stakeholders will need adequate education and training early on in the transition process.

"Due to the significant resources, administrative complexities, and advance planning required to retool or replace our systems and processes that currently depend on ICD-9 logic, HHS should work collaboratively with health care industry stakeholders to develop a realistic transition process and timeline.

"The AMA looks forward to working closely with the Small Business Committee to ensure that physician practices, especially the smaller practices, like my own, are able to manage the RAC audit process and prepare for the ICD-10 transition without compromising the delivery of health care."

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