Local medical review policies create “inequities”
and “inefficiencies,” the U.S. General Accounting
Office concluded recently.
In a May 12 report, titled “Divided Authority for Policies
on Coverage of Procedures and Devices Results in Inequities,”
the GAO recommended that Medicare make all coverage decisions at
the national level.
“We are recommending that [the Centers for Medicare and
Medicaid Services] eliminate claims-administration contractors'
development of new local coverage policies for procedures and
devices that have established codes,” the GAO said. “We
are also recommending that CMS establish a new process for making
national coverage policy.”
While the report described situations wherein beneficiaries in
different Medicare regions received different coverage for the same
procedures, it acknowledged the fact that inequities are far less
frequent among Medicare's durable medical equipment regional
carriers, or DMERCs.
Unlike Medicare's other contractors — Part B carriers and
Part A fiscal intermediaries — “DMERCs don't have the
same types of inconsistencies in coverage, because our policies are
the same, word for word, in each region,” said Robert Hoover,
medical director for the Nashville, Tenn.-based Region D DMERC,
CIGNA Medicare. “It's part of our contract [with CMS] that
our policies have to be a collaborative effort.”
However, this is not necessarily the case for hospital inpatient
claims processed by fiscal intermediaries. “Hospitals are
able to choose the fiscal intermediary that processes their
claims,” and two different fiscal intermediaries could have
two different policies for covering a procedure, he explained.
Another difference between the DMERCs and Medicare's other
claims-processing contractors lies in the development of local
coverage policies, Hoover said. Fiscal intermediaries and Part B
carriers do not collaborate often on coverage decisions. Unless a
contractor has jurisdiction for multiple states, there is no
requirement that fiscal intermediaries or Part B local carriers
develop consistent policies for the same service. Even if a
contractor is responsible for multiple states, policies still may
The DMERCs, on the other hand, collaborate constantly on
coverage policies — soliciting clinical input from numerous
sources, offering proposed policies for public comment, holding
public hearings and publishing final rules before enacting the
policies, Hoover explained.
Despite these differences, the GAO's recommendations could
affect home medical equipment providers, if lawmakers write
legislation to do away with local medical review policies, or
LMRPs. The DMERCs would be included, by definition, Hoover said.
Although the process for developing LMRPs may differ from
contractor to contractor, the name “LMRP” is the
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