MEDICARE: Administration Slows Down Provider Payments
The Clinton administration is "slowing the payment" of Medicare claims to save money, the New York Times reports. According to federal officials and government documents, the Medicare agency has "ordered insurance companies that review and pay Medicare claims on behalf of the government, to send fewer notices to beneficiaries and to make greater use of telephone voice mail to answer inquiries from doctors checking the status of unpaid claims." In addition, the Times reports that these cost-cutting measures "illustrate" the "fiscal problems" that Medicare is having. The Times reports that the "decision to slow payments reflects an assessment by career civil servants about how best to manage Medicare in the aftermath of budget cuts voted by Congress."
Gary Kavanagh, director of Medicare's contractor management group, sent a memo to Medicare contractors saying they needed to "reduce the number of check runs that are performed on a weekly basis." He said, "We recognize that some of these changes eliminate services that both the beneficiary and provider communities have come to expect from Medicare." Kavanagh said Medicare's "1998 budget and performance requirements" would be reduced "to keep within the budget set by Congress." This means, according to Kavanagh, that "doctors and hospitals will be paid less frequently."
Check Is In The Mail
Doctors and insurers said "the effects of the changes were already being felt." United Health Care, a Medicare contractor, sent out a bulletin outlining the changes which said "doctors may have to wait up to 20 days for payment of electronic claims, 6 days more than in the past." And Sens. Ron Wyden (D-OR) and Gordon Smith (R-OR) "said the new Medicare contractor for their state had delayed or denied many legitimate claims." Wyden said, "Patients are getting understandably upset about their bills not being paid. They call their doctors and ask what they should do." These delayed payments could mean the government has to pay interest on these claims, the Times reports. But Kavanagh said the cost in extra interest would still be less if checks for claims were cut less frequently. Marti Mahaffey, vice president of Blue Cross and Blue Shield of Texas, said "We process more than 50 million claims a year. We really don't think there would be any savings if you reduce the number of check runs or delay the mailing of checks." Bruce Davidson, senior vice president of Florida's Blue Cross and Blue Shield, said, "It is simply not possible to manage the Medicare program without significant new funds" (Pear, 4/27).