Congress Pressures HCFA [*] To Clean Up Red Tape.

It appears to be open season on the Health Care Financing Administration (HCFA), as congressional efforts to reform "Fortress Bureaucracy" intensify. U.S. Representatives Nancy Johnson (RCT) and Pete Stark (D-CA) directed an 18-page letter to Health and Human Services (HHS) Secretary Tommy Thompson outlining suggested "administrative changes" for HCFA. Thompson bad earlier pledged HCFA reform, and the chairperson of the powerful House Ways and Means Health Subcommittee, Johnson, and the panel's ranking Democrat, Stark, made sure that the panel, which has jurisdiction over Medicare, had its say.

The two lawmakers told Thompson, "Providers have expressed frustration with many aspects of the regulatory process, especially with respect to the continuous stream of rules with which they are expected to comply." To help relieve that frustration, they suggested:

* A thorough review of all Medicare policies, including regulations and program manual instructions, to ensure consistency and to promote simplicity.

* A regular schedule for release of all program guidance materials, including program memoranda, notices of proposed rule making, interim final rules and final rules. These regulatory announcements would be made every six months, unless either HHS identified a compelling need for more timely action or earlier action is needed to comply with statutory requirements.

* A regular and adhered-to time line for the progression from proposed rules to interim final rules (as appropriate) to final rules.

* A system of formal consultation with congressional committees of jurisdiction to ascertain whether regulations are consistent with legislative intent.

* A system of formal consultation with beneficiaries, provider groups and other interested parties to solicit their input and guidance prior to release of notices of proposed rule making.

Moving toward HCFA's regulatory enforcement, Johnson and Stark urged the agency to conduct "a more aggressive system of education and technical assistance...to facilitate compliance with the numerous and complicated regulations confronting Medicare providers. This effort should make assistance available to providers to help them interpret and comply with all new laws, regulations, program memoranda, instructions to regional offices, and fiscal intermediary and carrier manual instructions related to billing, coding, cost reporting, and documentation." They also proposed, "HCFA should establish processes to release detailed (but not facility specific) information...such as Minimum Data Set and claims data...and the assumptions underlying the rates used to reimburse providers."

They added, "Electronically submitted cost reports from software that has been approved by HCFA should not be rejected because of errors in the electronic edits.... Instead, there should be alternative processes to resolve issues. For free-standing skilled nursing facilities, HCFA and the providers should evaluate the feasibility through a TEP (Technical Experts Panel) of reducing the cost report to include only the financial data that show assets, liabilities, and owners' equity, known as the trial balance, balance information and a few key Medicare statistics, such as the patient census and bad debt. Data available by other sources, for example, Medicare days by resource utilization group (RUG), should not be part of the cost report, without a compelling reason to include such data."

The U.S. Senate, meanwhile, has chimed in with legislation--specifically, the Murkowski/Kerry bill, formally known as The Medicare Education and Regulatory Fairness Act of 2001 (S.452/H.R.868). Its intent is to reform HCFA Regulatory processes, including those dealing with appeals, overpayment, disclosure, law enforcement and compliance.

(*.) Since these items were set in type, the name of the Health Care Financing Administration (HCFA) was changed to the Centers for Medicare and Medicaid Services (CMS).