WASHINGTON--A new Government Accountability Office report is recommending that CMS delay the implementation of its new claims contracting process, saying that the plan is incomplete and that estimated savings are uncertain.
As mandated by the Medicare Modernization Act, CMS is putting all fee-for-service claims processing business up for bid--including Part A, Part B, DME and home health and hospice. The agency will award four "specialty" DME Medicare Administrative Contractors--or DME MACs--along with 15 primary MACs and four other specialty MACs serving home health and hospice providers. The bid winners, currently scheduled to be announced by December, will cover geographic areas that resemble current regions of the four durable medical equipment regional carriers, but with a few realignments (see HomeCare Monday, Feb. 28).
Although the MMA does not require the current contractor workload to be transferred to the new MACs until 2011, CMS is tackling DME claims processing first--and the GAO has expressed concerns that the agency has speeded up its timeline to implement the plan in 2009. According to the Aug. 17 report, the plan lacks a detailed schedule and other information about the claims processing transfer.
"CMS has never before undertaken a project of this scope and magnitude--one that affects more than 35 million beneficiaries and one million health care providers," the report stated. "If transitions do not run smoothly, operational disruptions could lead to delayed payments to providers and increased improper payments by contractors."
Furthermore, the proposed savings--which CMS has estimated at $1.4 billion over six years--are based on "questionable evidence and assumptions that were never validated by knowledgeable CMS staff," the report said. CMS estimates that it will cost $666 million to implement the changes.
In 2004, the DMERCs processed more than 68 million claims, with total program payouts of more than $9 billion. The GAO report suggests that CMS extend its implementation schedule to 2011 to be better prepared, but CMS has said that it disagrees with the recommendation.
More information, including a map of all new MAC jurisdictions and a timeline for contract awards, is available at www.cms.hhs.gov/medicarereform/contractingreform.
To view the GAO report, click here.