Department  of  Health  and  Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
UNDERSTANDING  MEDICAL  BENEFITS: 

The  Explanation  of  Medicare  Part  B  Benefits 
JUNE  GIBBS  BROWN 
Inspector  General 
APRIL  1995 
OEI-01-93-00120  OFFICE  OF INSPECTOR  GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, as 
amended, is to protect the integrity  of the Department of Health and Human Services (HHS) 
programs as well as the health and welfare of beneficiaries served by those programs.  This 
statutory mission is carried out through a nationwide network of audits, investigations, and 
inspections conducted by three OIG operating components:  the Office of Audit  Services, the 
Office of Investigations, and the Office of Evaluation and Inspections.  The OIG also informs the 
Secretary of HHS of program and managementproblems and recommends courses to correct them. 
OFFICE  OF AUDIT  SERVICES 
The OIGs Office of Audit  Services (OAS) provides all auditing services for HHS, either by 
conducting audits with  its own audit resources or by overseeing audit work done by others.  Audits 
examine the performance of HHS programs and/or its grantees and contractors in carrying out 
their respective responsibilities and are intended to provide independent assessmentsof HHS 
programs and operations in order to reduce waste, abuse, and mismanagement and to promote 
economy and efficiency throughout the Department. 
OFFICE  OF INVESTIGATIONS 
The OIGs Office of Investigations (01) conducts criminal,  civil,  and administrative investigations 
of allegations of wrongdoing  in HHS programs or to HHS beneficiaries and of unjust enrichment 
by providers.  The investigative efforts of 01 lead to criminal convictions, administrative 
sanctions, or civil money penalties.  The 01 also overseesState Medicaid fraud control units which 
investigate and prosecute fraud and patient abuse in the Medicaid program. 
OFFICE  OF EVALUATION  AND  INSPECTIONS 
The OIGs Office of Evaluation and Inspections (OEI) conducts short-term management and 
program evaluations (called inspections) that focus on issues of concern to the Department, the 
Congress, and the public.  The findings and recommendations contained in these inspection reports 
generate rapid, accurate, and up-to-date information on the efficiency, vulnerability,  and 
effectiveness of departmental programs. 
This report was prepared under the direction of Mark R. Yessian Ph.D.,  Regional Inspector 
General, and Martha B. Kvaal, Deputy Regional Inspector General, Boston Region, Office of 
Evaluation and Inspections.  Participating in the project were the following  people: 
Boston  Headquarters 
Barry McCoy  Thomas Noplock 
Michael Sullivan  Barbara Tedesco 
Theodore Wall  Winnie Walker 
For additional  copies of this report, please contact the Boston regional ofice  by telephone at 
617-565-l 050 or by fax at 617-565-3751.  EXECUTIVE  SUMMARY 
PURPOSE 
The purpose  of this  inspection  is to measure the effectiveness  of Medicares  Part B benefits 
notice. 
BACKGROUND 
When  a claim  for  medical  insurance  benefits  is processed, Medicare  sends a notice,  the 
Explanation  of  Your  Medicare  Part  B Benefits  (EOMB),  to the individual  beneficiary. 
The EOMB  informs  the beneficiary  what  services were  involved,  how  much  Medicare 
paid,  why  Medicare  made the decision  it did,  and what  action  the beneficiary  can take 
next. 
The Health  Care Financing  Administration  (HCFA)  has made and continues  to make 
revisions  to improve  the EOMB.  It has used focus groups  and purposive  interviews  to 
evaluate  EOMB  effectiveness,  but has not used survey questionnaires  to systematically 
measure beneficiary  understanding. 
We mailed  a self-administered  questionnaire  to a random  sample of Medicare  beneficiaries 
who  had claims  processed since HCFAs  last major  revision  of the EOMB.  From  the 
respondents  answers we created an overall  index  and four  subindexes  of beneficiary 
understanding.  Additionally,  we collected  and analyzed  respondents  opinions  about how 
easy or difficult  it is to understand  the EOMB. 
SURVEY  RESULTS 
Medicare  beneficiaries  appear  to understand  most of the information  on the EOMB. 
On average, the 288 respondents  we surveyed  answered  72 percent  of the survey  questions 
correctly  (k2.37  percent  at the 95 percent  confidence  level).  They  answered,  on average, 
19 percent  incorrectly,  and they  did not answer  8 percent  of the questions.  The 
percentages  do not  sum to  100 because of independent  rounding. 
Beneficiary  understanding  varies among  different  categories  of information  on the 
EOMB.  It  is highest  with  respect to basic descriptive  information  and  lowest  with  respect 
to follow-up  actions  they  could  take  in  response  to the EOMB. 
The rate of correct  answers differs  among  our four  subindexes: 
Basic  Information:  For  questions  concerning  basic descriptive  information  on the 
EOMB,  such as who  and what  service it is about, respondents  on average answered 
83 percent  correctly. 
i  Cost  Information:  For  questions  concerning  money  amounts  on the EOMB,  such 

as how  much  Medicare  approved  or paid,  they  answered  on average 71 percent 

correctly. 

Context  Information:  For questions  concerning  the reasons why  Medicare  made 

the decision  it explains  on the EOMB,  including  understanding  of key terms  such as 

assignment  and deductible,  respondents  on average answered  68 percent 

correctly. 

Action  Information:  For questions  concerning  what  the beneficiary  could  do next, 

such as appeal rights  and amounts  owed,  they  answered  on average 64 percent 

correctly. 

The lower  level  of correct  answers to questions  having  follow-up  implications  for  the 
beneficiary  reinforces  a statement by Westat Inc.,  introducing  the recommendations  in a 
study  it conducted  on the EOMB  in  1992.  Westat urged priority  for  helping  beneficiaries 
understand  the bottom  line-what  action  they  should  take in response to the EOMB. 
Beneficiaries  regard  the EOMB  as no more,  and  no Less, difficult  to understand  than 
other  notices  they  receive in  the mail. 
Sixty-six  percent  of the 281 respondents  who  expressed opinions  characterized  the EOMB 
as being  neither  easier nor harder  to understand  than notices  such as bank  statements or 
utility  bills.  Another  17 percent  thought  the EOMB  easier; the remaining  17 percent 
thought  it harder. 
RECOMMENDATION 
It  is satisfying  that the rate of understanding  for  basic descriptive  information  is quite  high. 
It is of some concern,  however,  that the rate is lower  for  the subindex  that bears upon 
matters  previously  identified  as most important  to beneficiaries-what  action(s)  to take 
next. 
We recommend  that  HCFA  build  on its prior  efforts  and give major  attention  to 
informational  items having  follow-up  implications  for  the beneficiary. 
As HCFA  continues  to revise the EOMB  it should  aim to facilitate  beneficiary 
understanding  of the following  items: 
.  what  the beneficiary  needs to pay out of pocket, 
.  how  the beneficiary  can get more  information, 
.  how  to appeal Medicares  decision,  and 
.  what  to do if there appears to be fraud  or abuse. 
ii  COMMENTS  ON  THE  DRAFT  REPORT 
We shared a draft  copy  of this report  with,  and invited  comments  from,  the Health  Care 
Financing  Administration  (HCFA)  and the Assistant  Secretary  for  Planning  and Evaluation 
(ASPE.)  We summarize  their  comments  below,  along  with  our responses in italics. 
The HCFA  concurred  with  our recommendation.  It stated that their  Medicare  Summary 
Notice  initiative  includes  plans for  a section that will  explain  the actions necessary for  an 
appeal, and a Customer  Service Information  Box  that will  display  important  information. 
We appreciate  HCFA  s positive  response.  We would  be pleased  to work  with  it in the 
future  to evaluate  the effectiveness of the new summary  notices, perhaps  as an application 
of the methodology  we developed  in this study. 
The ASPE,  in comments  accompanying  its conditional  concurrence  with  our draft  report, 
stated:  ...the report  should  not assert that beneficiaries  appear to understand  most of the 
information  on the EOMB.  It went  on to say: It  is easily  argued that Medicare 
beneficiaries  ... find  [the EOMB]  very  difficult  to interpret  based solely  on the information 
that fewer  than  50%  of them handle their  own  Medicare  paperwork. 
We have revised  the report  to recognize  more clearly  the possible  role  that another  person 
might play  in helping  the beneficiary.  However,  we have retained  in the finding  the 
assertion  about  beneficiary  understanding. 
Our purpose  was to measure the effectiveness of the EOMB  as Medicare  actually  uses it. 
In  mailing  the EOMB  to the beneficiary  Medicare  accepts whatever  informal  support  the 
beneficiary  chooses.  We accepted  as representative  of beneficiary  understanding  the 
answers  returned  by anyone  responding  on the beneficiarys  behalf  just  as Medicare 
accepts the informal  support  that friends,  relatives, physicians,  and representatives  give 
beneJiciaries  in understanding  the EOMB. 
111 
 TABLE  OF  CONTENTS 
PAGE 
EXECUTIVE  SUMMARY 

INTRODUCTION  .........................................  1 

SURVEYRESULTS  ........................................  5 

0  Overall Understanding.  ....................................  5 
Subcategoriesof Information.  ................................  5 
l 
Comparison to Other Notices.  ................................  11 
l 
RECOMMENDATION  ......................................  12 
COMMENTS  ON THE  DRAFT  REPORT  ..........................  13 

APPENDICES 

A:  Example of an EOMB  ....................................  A-l 

B:  Sample Selection  .......................................  B-l 

c:  Analysis for NonresponseBias  ...............................  C-l 

D:  Survey Results  ........................................  D-l 
E:  Complete Comments on the Draft Report  ........................  E-l 
F:  Notes  ..............................................  F-l  INTRODUCTION 
PURPOSE 
The purpose  of this inspection  is to measure the effectiveness  of Medicares  Part B benefits 
notice. 
BACKGROUND 
Medicare  is the Federal  program  of health  insurance  for people  aged 65 or older  and for 
certain  disabled  people.  There  are two  parts to Medicare.  Hospital  insurance  (Part A) 
helps pay for  inpatient  hospital  care and for  related  care by a skilled  nursing  facility,  home 
health  agency,  or similar  facility.  Medical  insurance  (Part B)  helps pay for  a doctors 
services, outpatient  hospital  care, and a number  of related  medical  services and supplies  not 
covered  by Part A.2 
This  inspection  addresses only  medical  insurance  benefits  under  Part B.  For most people, 
Medicare  Part B operates as an indemnity  insurance  program.3  When  a Medicare  enrollee 
incurs  an expense for  medical  care, the provider  of service must submit  a claim  for 
reimbursement  through  one of the insurance  companies  that have contracted  with  the 
Federal  government  to act as carriers  for  Medicare  Part B medical  insurance.4  The carrier 
determines  if the service is eligible  for  reimbursement  and issues the appropriate  payment. 
When  the carrier  processes a Medicare  Part B claim  it sends a notice,  the Explanation  of 
Your  Medicare  Part  B Benefits,  or EOMB,  telling  the beneficiary  what  decision  Medicare 
made on the claim.5  Appendix  A  contains  an example  of an EOMB.  The numbers 
correspond  to the questions  in our survey instrument. 
The EOMB  serves two  purposes.  First,  it serves as a formal  notice  to the beneficiary  of 
Medicares  decision.  In  doing  so, it notifies  the beneficiary  of the right  to appeal in the 
event of disagreement,  and the time  limit  for  appeal.  Second, the EOMB  serves as the 
explanation  to the beneficiary  of the reasons why  Medicare  made the decision  it did. 
To  serve these purposes the EOMB  needs to convey  information  to the beneficiary  in four 
categories: 
. 	 Basic  descriptive  information  about the provider,  the medical  service, when  the 
service occurred,  who  was paid,  and who  was the beneficiary. 
. 	 Cost and financial  information  about the amount  of money  charged to Medicare, 
approved  by Medicare,  paid,  and applied  to the deductible  and coinsurance. 
.  Key  terms and contextual  information  about the reasons for  Medicares  decision. 
1 
 . 	 Action  information  about what  the beneficiary  needs to do next to obtain  more 
information,  appeal Medicares  decision,  pay the provider  what  remains  due, or 
recognize  potential  fraud. 
In response to criticisms  that the EOMB  was not effective  in communicating  claim 
information  to beneficiaries,  the Health  Care Financing  Administration  (HCFA)  began a 
series of  substantial  revisions  to the notice,  starting  in  1991.  By  late  1992 all  33 carriers 
had implemented  the first  set of major  revisions.  At  that time  HCFA  contracted  with  the 
research firm  Westat to evaluate the revised EOMB.6  Westat found  that the revision  was 
a substantial  improvement  over the earlier  version  of the EOMB.  But  Westat also found 
that beneficiaries  could  still  be confused  about what  action  they  should  take in response to 
the EOMB.  Westat noted,  particularly,  that beneficiaries  were  confused  about how  much 
they  still  owed  after Medicare  made its payment. 
Westats  methodology  involved  focus groups  of beneficiaries  and their  representatives, 
along  with  purposive  interviews  of HCFA  staff, carrier  personnel,  and Medicare  advocates. 
The  focus  group  discussions  used sample EOMBs,  not real claims.  While  HCFA  was 
generally  satisfied  with  the Westat report,  it felt  that a scientific  evaluation  was 
appropriate,  using  real EOMBs  for  a representative  sample of beneficiaries. 
Since the Westat evaluation,  in  1993 and 1994, HCFA  has continued  to add enhancements 
to the revised  EOMB.  At  the same time  the need for  clear, correct,  and simple 
communication  with  beneficiaries  has come to the fore.  A  report  by the National  Academy 
of  Social  Insurance  in June 1993 recommended  that HCFA  continue  to review  and evaluate 
the efforts  that have been undertaken  to improve  the EOMB.7 
Customer  service improvement  is among the major  themes to emerge from  the National 
Performance  Review.  Along  with  other agencies, HCFA  recently  introduced  new  and more 
user-friendly  brochures  for  Medicare  and related  programs.  A more  user-friendly  EOMB 
remains  a related  goal. 
METHODOLOGY 
Data  Collection 
Ours was a mail  survey using  a self-administered  questionnaire  that asked the beneficiary 
to interpret  information  on the EOMB.  We sent the questionnaire  to a simple  random 
sample of Medicare  beneficiaries,  whose  selection  we describe  in Appendix  B. The first 
mailing  included  a personal  cover letter  seeking the beneficiarys  participation  and a copy 
of their  sample EOMB  printed  on yellow  paper with  the word  COPY  in red letters  across 
the front,  along  with  the questionnaire  booklet.  About  a month  after the initial  mailing  we 
sent a reminder  letter,  and about three weeks  after that we  sent a third  letter  with  another 
copy  of the questionnaire. 
In the cover  letter  we addressed the beneficiary.  We recognized  that many  people  in the 
beneficiary  population  do not handle their  own  business affairs.  The cover  letter  and the 
2  instructions  in the questionnaire  booklet  invited  whomever  handles those affairs  to respond. 
The EOMB  communicates  effectively  if  it conveys  information  to that person  and, through 
him  or her, to the beneficiary. 
In presenting  our results we report  them as measures of beneficiary  understanding,  whether 
the beneficiary  answered  the questions  directly  or through  some other person.  In  a mail 
survey  we  cannot  know  to what  extent another  person may have influenced  a beneficiarys 
responses.  Nor  can we assume that participation  by another  person reflects  difficulty  by 
the beneficiary  in understanding  the EOMB;  it could  be a matter  of convenience  for  the 
beneficiary. 
Our purpose  was to measure the effectiveness  of the EOMB  as Medicare  actually  uses it. 
In mailing  the EOMB  to the beneficiary,  Medicare  accepts on its own  terms whatever 
support  the beneficiary  chooses to seek.  It is always  possible  that another  person  might 
play  a role  in helping  the beneficiary  understand  the EOMB.  We accepted as 
representative  of beneficiary  understanding  the answers returned  by anyone  responding  on 
the beneficiarys  behalf,  just  as Medicare  accepts the informal  support  that friends, 
relatives,  physicians,  and representatives  give to beneficiaries  in understanding  the EOMB. 
We believe  our  survey places no more  limitation  on beneficiary  understanding  than  does 
Medicares  mailing. 
We analyzed  the sample for  possible  age and sex bias.  As detailed  in appendix  C, we 
found  no evidence  for  response bias. 
Data  Analysis 
Our  survey  included  23 factual  questions  that asked for  specific  responses corresponding  to 
information  contained  on the EOMB.  We counted  the numbers  of correct  and incorrect 
responses to each question,  along  with  the numbers  not answered  and, for  seven of the 
questions,  the numbers  of  Dont  know  responses.  We report  in Appendix  D the counts 
and the associated percentages  of 288 total  responses. 
Six other  questions  asked either the beneficiarys  opinion  or preference  in dealing  with 
EOMB-related  matters.  For these we recorded  the respondents  selection  among  the 
multiple  choices.  We report  these counts, and the associated percentages  of respondents 
who  expressed an opinion,  in Appendix  D. 
At  the end of the questionnaire  we invited  additional  comments.  These we analyzed  for 
common  threads,  and for  positive  or negative  characterization  of the understandability  of 
the EOMB. 
We coded and checked  all of the responses and entered them into  a database file.  We used 
a personal  computer  to develop  the counts and percentages that are reported  in Appendix  D. 
Additionally,  we created an overall  index  of understanding  for  each beneficiary  based on 
the number  of questions  answered  correctly,  incorrectly,  or not answered.  In  calculating 
3  this index  we  combined  the raw  number  of incorrect  answers with  Dont  Know  answers 
and report  the sum under  the heading  Incorrect.  This  index,  along  with  four  subindexes 
calculated  similarly  to measure beneficiary  understanding  of specific  categories  of 
information,  forms  the basis for  our analysis of the respondents  collective  understanding 
of the EOMB. 
We completed  our review  in accordance  with  the Quality  Standards for  Inspections  issued 
by the Presidents  Council  on Integrity  and Efficiency. 
4 
 SURVEY  RESULTS 
Medicare  beneficiaries  appear  to understand  most of the information  on the EOMB. 
On average, the 288 respondents  we surveyed  answered  72 percent  of the survey  questions 
correctly  (+2.37  percent  at the 95 percent  confidence  level).  They  answered,  on average, 
19 percent  incorrectly,  and they  did not answer  8 percent  of the questions.  The 
percentages  do not  sum to  100 because of independent  rounding. 
Two  beneficiaries  had the lowest  score for the overall  index;  they  answered  4 percent 
(1 out of 23 questions)  correctly.  Two  other beneficiaries  answered  all 23 questions 
correctly.  Among  individual  questions,  the lowest  rate of correct  answers was 43 percent 
for  a question  about understanding  the words  Your  total  responsibility  on the EOMB. 
The highest  rate of correct  answers was 94 percent  for  a question  about the Medicare 
number. 
Beneficiary  understanding  varies among  different  categories  of information  on the 
EOMB.  It  is highest  with  respect to basic descriptive  information  and  lowest  with  respect 
to follow-up  actions  they could  take in  response  to the EOMB. 
The rate of correct  answers differs  among  our four  subindexes: 
Basic  Information:  For  questions  concerning  basic descriptive  information  on the 

EOMB,  such as who  and what  service it is about, respondents  on average answered 

83 percent  correctly. 

Cost  Information:  For questions  concerning  money  amounts  on the EOMB,  such 

as how  much  Medicare  approved  or paid, they  answered  on average 71 percent 

correctly. 

Context  Information:  For questions  concerning  the reasons why  Medicare  made 

the decision  it explains  on the EOMB,  including  understanding  of key terms  such as 

assignment  and deductible,  respondents  on average answered  68 percent 

correctly. 

Action  Information:  For  questions  concerning  what  the beneficiary  could  do next, 

such as appeal rights  and amounts owed,  they  answered  on average 64 percent 

correctly. 

The lower  level  of correct  answers to questions having  follow-up  implications  for  the 
beneficiary  reinforces  a statement by Westat Inc.,  introducing  the recommendations  in a 
study  it conducted  on the EOMB  in  1992.  Westat urged  priority  for  helping  beneficiaries 
understand  the bottom  line-what  action  they  should  take in response to the EOMB. 
5 
 INDEXES 
Table  I below  summarizes  the survey results for  our overall  index  and four  subindexes  of 
beneficiary  understanding. 
TABLE  1 
BENEFICIARY  UNDERSTANDING 
for  the 
EXPLANATION  OF MEDICARE  PART  B BENEFITS 
Overall  Index 
information  identifying  the EOMB: 
Provider,  service, dates, claim  and 
Medicare  numbers,  and who  was paid. 
Includes  5 survey questions  that ask for 
information  about the money  amounts 
on the EOMB:  amounts  charged, 
applied  to deductible 
information  necessary to understanding 
the reasons for  Medicares  decision  on 
the claim:  Explanatory  notes and 
Includes  6 survey questions  that ask for 
information  bearing  on actions the 
beneficiary  could  take in response to the 
Shading  for Sublndex  Pie Charts: 
SOURCE:  OIG  Mail  Survey,  September  1994 
6 
 QUESTIONS 
Basic 
The  subindex  of basic descriptive  information  includes  seven questions  that address what 
service was provided,  by whom,  and when.  Three respondents  answered  none of these 
questions  correctly;  119 answered  all  7 correctly.  Table  2 below  summarizes  the results 
for  the subindex  and the individual  questions. 
TABLE  2:  BASIC DESCRIPTIVE  INFOIUWATION 
SURVEYRESULTS FOR BASIC SUBINDEX OF 7 QUESTIONS (AVERAGEPERCENT): 
SURVEY RESULTS FOR THE 7 INDIWDUAL QUESTIONS: 
Question  Subiect of Question  Percent 
Number 
Correct  Incorrect  No Answer 
1  Date of EOMB  63  32  5 
2  Claim  ControI  Number  84  10  6 
3  Who Provided the Services on the EUMB  90  5  5 
4  What Kinds of Services Were Provided  82  11  7 
5  When the Services Were Provided  82  8  11 
12  Who Was Paid  86  6  6 
23  Medicare Number  94  3  2 
,NOTE: Percentages may not sum to 100 becauseof independent rounding. 
OURCE:  OIG  Mail  Survey, September 1994 
The highest  rates of correct  answers to basic questions  occurred  for  the Medicare  number 
(that  identified  the beneficiary)  and the provider  of service (that  identified  the provider.)  A 
few  of the incorrect  respondents  chose to ignore  the provider  listed  on the EOMB  and 
wrote  in the names of their  regular  physicians-whom  they  identified  as such.  The small 
number  of these, together  with  the circumstance  that many  sample EOMBs  listed 
laboratories  or other  impersonal  providers,  suggests that the respondents  truly  derived  their 
answers from  the EOMB  copies we  sent them,  as we requested in the cover  letter. 
In  contrast,  the answer  to our question  on the claim  control  number  could  only  be obtained 
by a careful  reading  of the EOMB.  Yet  84 percent  of the responses to this  question  were 
correct.  Respondents  can recover  specific  and very technical  information  from  the EOMB. 
The rate of correct  answers for  who  was paid,  86 percent,  was above average for  the 
questions  in the subindex.  This  may reflect  the direct  statement (added in  1994 and placed 
just  beneath the summary  box)  whether  or not the provider  accepted assignment.  cost 
The  subindex  of cost and financial  information  includes  five  questions  that address the 
money  amounts  charged  to, approved  by,  and paid by Medicare.  Nineteen  respondents 
answered  none of these questions  correctly;  84 answered  all  5 correctly.  Table  3 below 
summarizes  the survey results for  the subindex  and the individual  questions. 
m  COST INFORMATION 
SURVEYRESULTS FOR COST SUBINDEX OF 5 QUESTIONS (AVERAGEPERCENT): 
URVEY RESULTS FOR THE 5 INDIWDUAL QUESTIONS: 
The highest  rates of correct  answers to individual  cost questions  occurred  for  the amounts 

charged  to Medicare  and approved  by Medicare.  These amounts were  displayed 

prominently  in the summary  box  at the upper  right  hand area of the EOMB.  They  were 

also clearly  labeled.  In their  comments,  some respondents  expressed approval  for  this 

mode of displaying  information.  A  few  went  on to suggest that a slightly  expanded 

summary  box  could  convey  almost  all of the information  that ordinarily  interests  a 

beneficiary  on the EOMB. 

The rates of correct  answers to the questions  about deductible  and copayment  amounts, 

59 and 47 percent,  were  among the lowest  in the survey.  The  No  Answer  rates for  these 

two  questions,  13 and  18 percent,  were  among the highest  in the survey.  The word 

copayment  or coinsurance  did not appear directly  on the EOMB.  The word 

deductible  might  appear only  in a separate message telling  the beneficiary  that the 

deductible  had already  been met.  For these questions,  respondents  had to figure  out the 

answers  on their  own,  rather  than associate a clearly  labeled  amount  on the EOMB  with 

the subject  of the question. 

8 
 Context 
The  subindex  of context  information  and key terms includes  five  questions  that address the 
reasons for  Medicares  decision  and beneficiary  understanding  of some key  Medicare 
terms.  Ten beneficiaries  answered  none of these questions  correctly;  62 answered  all 
5 correctly.  Table  4 below  summarizes  the survey results for  the subindex  and the 
individual  questions. 
TABLE  4:  CONTEXT  INFORMATION  AND KEY  TERMS 
SURVEY RESULTS FOR CONTEXT SUBINDEX OF 5 QUESTIONS (AVERAGE PERCENT): 
SSUURRVVEEYY RR EESSUULLTTSS FF OORR  TTHHEE  55  IINNDDIIWVIDDUUAALL QQ  UUEESSTTIOIONNSS: : 
QQuueessttiioonn   SSuubbiieecctt  ooff  QQuueessttiioonn   PPeerrcceenntt  
NNuummbbeerr  
CCoorrrreecctt   IInnccoorrrreecctt   NNoo  AAnnsswweerr  
99   NNootteess   oonn  tthhee  EEOOMM33   6644   2222   88  
2266   UUnnddeerrssttaannddiinngg   ooff  AAssssiiggnnmmeenntt   7755   2222   33  
2277   UUnnddeerrssttaannddiinngg   ooff  DDeedduuccttiibbllee++   8844   1144   22  
2288   UUnnddeerrssttaannddiinngg   ooff  CCooppaayymmeenntt   6688   2288   55  
2299   UUnnddeerrssttaannddiinngg   ooff  YYoouurr   TToottaall   4433   5533   44  
RReessppoonnssiibbiilliittyy  
NNOOTTEESS::   PPeerrcceennttaaggeess  mmaayy  nnoott  ssuumm  ttoo  110000  bbeeccaauussee ooff  iinnddeeppeennddeenntt  rroouunnddiinngg..  
Percent Incorrect  includes the following  percentages answering Dont  Understand: 
Question 9: 0; Question 26: 14; Question 27: 3; Question 28: 17; Question 29: 4. 
OURCE:  OIG  Mail  Survey, September 1994 
sbadiKllgey:  cana 
The lowest  rate of correct  answers for  any of the 23 survey questions,  43 percent,  occurred 
for  the context  question  concerning  understanding  of the words  Your  total  responsibility. 
The highest  rate of correct  answers for  a context  question,  84 percent,  occurred  for  the 
question  concerning  the respondents  understanding  of the word  deductible.  The  NO 
Answer  rate of 2 percent  for this question  was the lowest  for  all the questions  in the 
survey. 
At  least as measured by percent  correct,  beneficiary  understanding  of the deductible  was 
substantially  higher  for  the general  definition  of the term  (84 percent)  than for  the actual 
deductible  amount  on the sample EOMB  (Question  13 had 59 percent  correct.)  Similarly, 
measured understanding  of the general term  copayment  at 68 percent  correct  was higher 
than that for  the actual amount  on the EOMB,  (Question  14 had 47 percent  correct.) 
But  note that,  for  both  deductible  and copayment,  the Incorrect  rates are the same for 
general  questions  27 and 28 and specific  questions  13 and 14.  The gain in  Correct  rates 
in going  from  general to specific  reflects  a decrease in  No  Answers. 
9 
 Action 
The  subindex  of beneficiary  actions  includes  six questions  addressing  how  to obtain  more 
information,  how  to appeal, and what  is still  owed.  Eleven  respondents  answered  none of 
these questions  correctly;  37 answered  all 6 correctly.  Table  5 below  summarizes  the 
survey  results  for  the subindex  and the individual  questions. 
TABLE  5:  BENEFICIABY  ACTION  RWOBMATION 
SURVEYRESULTS FOR ACTION SUBINDEX OF 6 QUESTIONS (AVERAGE PERCENT): 
SURVEY RESULTS FOR THE 6 INDIVIDUAL QUESTIONS: 
Question  Subiect of Question  Percent 
Number 
Correct  Incorrect  No Answer 
6  What To Do If A Service Was Not Received  53  38  10 
15  Total Providers Can Coffect  54  30  17 
16  Amount  You Add To Medicares Payment  69  16  16 
20  Who To Contact With  Questions  78  12  10 
21  How To Appeal  81  x5  4 
22  Closing Date for Appeat  52  32  16 
NOTES: 	 Percentages may not sum to 100 becauseof independent rounding. 
Percent Incorrect  includes the following  percentages answering Dont  Understand: 
Question 6: 7; Question 15: 0; Question 16: 0; Question 20: 0; Question 21: 2; Question 22: 0. 
OURCE:  OIG  Mail  Survey, September 1994 
A  higher-than-average  percent  of respondents  correctly  answered the questions  about who 
to contact  for  additional  information  (78 percent)  and how  to file  an appeal (81 percent). 
Only  52 percent  correctly  answered  the question  concerning  the closing  date for  filing  an 
appeal.  Some respondents  showed  a grasp of the rules for  appeal by writing  six  months 
or the like.  Yet  they  bypassed a clearly  stated specific  date to answer with  a general  rule 
that derives  from  a source other than the EOMB. 
About  half  the respondents,  54 percent,  answered with  the correct  total  amount  the provider 
can collect  for  the services on the sample EOMB.  But  69 percent  answered  with  the 
correct  total  amount  they  needed to add to Medicares  payment  to meet their  total 
responsibility.  Most  of the claims  in the sample were  assigned and one might  easily  guess 
the Your  20%  or Your  total  responsibility  amount  without  understanding  why. 
A  relatively  low  53 percent  of respondents  correctly  answered  what  the EOMB  tells  them 
to do if  Medicare  paid  for  a service they  did not receive.  The EOMB  was less effective  at 
conveying  this  information  than the answers to most of our other  questions.  One 
respondent  commented  that it was necessary to spend 25 minutes  and read through  all the 
information  on the back of the form  to find  out what  to do. 
10  Beneficiaries  regard  the EOMB  as no more,  and  no less, difficult  to understand  than 
other  notices  they receive in  the mail. 
Sixty-six  percent  of the 281 respondents  who  expressed opinions  characterized  the EOMB 
as being  neither  easier nor  harder to understand  than notices  such as bank  statements or 
utility  bills.  Another  17 percent  thought  the EOMB  easier; the remaining  17 percent 
thought  it harder. 
One of the opinion  questions  on our  survey invited  respondents  to rate the EOMB  in 
comparison  to other  notices  they  receive in the mail,  such as bank  statements and utility 
bills.  About  98 percent  of the respondents  (281/288)  answered  this question.  As  shown  in 
Figure  1, a clear majority  considered  the EOMB  about the same as other  notices  for  ease 
of understanding.  We estimate the precision  of this  survey result  as f7  percent  at the 
95 percent  confidence  level. 
Figure 1: 281 Respondents Compare the Ease of Understanding 
Medicares EOMB to Other Mailed Notices (Utility Bills, etc.) 
SAME  (fM%) 
Source:  010 Mail Survey, September  1994 
Those who  thought  the EOMB  was easy to understand  said things  such as: In  my  opinion 
your  explanations  are precise and easy to understand,  or It  is good now.  Leave  it alone. 
On the other  hand, those who  thought  the EOMB  now  was not easy to understand  offered 
comment  such as:  The  more I read about Medicare  the more  confused  I get,  or The 
explanations  are over-done  to the point  of confusion.  Please simplify  our  lives a bit,  not 
complicate  them. 
11 
 RECOMMENDATION 
It is satisfying  that the rate of understanding  for  basic descriptive  information  is quite  high. 
It  is of some concern,  however,  that the rate is lower  for  the subindex  that bears upon 
matters previously  identified  as most important  to beneficiaries-what  action(s)  to take 
next. 
We recommend  that  HCFA  build  on its prior  efforts  and give major  attention  to 
informational  items having follow-up  implications  for  the beneficiary. 
As HCFA  continues  to revise the EOMB  it should  aim to facilitate  beneficiary 
understanding  of the following  items: 
.  what  the beneficiary  needs to pay out of pocket, 
.  how  the beneficiary  can get more  information, 
.  how  to appeal Medicares  decision,  and 
.  what  to do if there appears to be fraud  or abuse. 
12 
 COMMENTS  ON  THE  DRAFT  REPORT 
We shared a draft  copy  of this report  with,  and invited  comments  from,  the Health  Care 
Financing  Administration  (HCFA)  and the Assistant  Secretary  for  Planning  and Evaluation 
(ASPE.)  We summarize  their  comments  below,  along  with  our responses in italics. 
The HCFA  concurred  with  our recommendation.  It stated that their  Medicare  Summary 
Notice  initiative  includes  plans for  a section that will  explain  the actions necessary for  an 
appeal,  and a Customer  Service Information  Box  that will  display  important  information. 
We appreciate  HCFA  s positive  response.  We would  be pleased  to work  with  it in the 
future  to evaluate  the effectiveness of the new summary  notices, perhaps  as an application 
of the methodology  we developed  in this study. 
The ASPE,  in comments  accompanying  its conditional  concurrence  with  our draft  report, 
stated:  ...the report  should  not assert that beneficiaries  appear to understand  most of the 
information  on the EOMB.  It went  on to say: It  is easily  argued that Medicare 
beneficiaries  ... find  [the EOMB]  very  difficult  to interpret  based solely  on the information 
that fewer  than  50%  of them handle their  own  Medicare  paperwork. 
We have revised  the report  to recognize  more clearly  the possible  role  that  another  person 
might play  in helping  the bene$ciary.  However,  we have retained  in the finding  the 
assertion  about  beneficiary  understanding. 
Our purpose  was to measure the effectiveness of the EOMB  as Medicare  actually  uses it. 
In  mailing  the EOMB  to the beneficiary  Medicare  accepts whatever  informal  support  the 
beneficiary  chooses.  We accepted  as representative  of beneficiary  understanding  the 
answers  returned  by anyone  responding  on the beneficiarys  behalf  just  as Medicare 
accepts the informal  support  that friends,  relatives, physicians,  and representatives  give 
beneficiaries  in understanding  the EOMB. 
13 
 APPENDIX  A 

EXAMPLE 
of  an 
EXPLANATION  OF  MEDICARE  PART  B  BENEFITS 
(EOMB) 
Front  of EOMB  ..........................................  A-2 
Back  of EOMB  ...........................................  A-4 
NOTE: 	 The  numbers  written  on the  example  correspond  to 
questions  on the  survey  instrument. 
A-l  THIS  IS NOT  A  BILL 
Explanation of Your  Medkare Part  B Benefits 
WI-FA-00001 
Summary of this notice dated March  31, 1994 
JAMES  T  KIRK 

1701  W WARP DR 

Total  charges :  $280.00 
APARTMENT  8C 

ALDEBARAN  US  22222-2003 
 Total  Medicare  approved:  $171.21 
We are paying  you:  $137.57 
Your  total responsibihty;  $196.89 
Your  Medicare number is:  123-45-6789A  Your  provider  did not accent assignment 
Details about this notice (Seethe back for more information,) 
Control  number 0246-8135-79024 
BILL  SUBMITTED  BY:  ENTERPRISE  MEDICAL  GROUP 
Mailing  address:  1722 STARLIGHT  DR  VULCAN  US 33333 
See 
Medicare  Notes 
m  Services and Service Codes  Charge  Approved  Below 
JEAN-LUC  PICARD M.D. 
Ott  16, 1993  1 Biopsy,  abdominal  mass [49180-511  $  140.00  $  53.01  b,c
Ott  16, 1993  1 Biopsy  of urethra  [53200]  {  140.00  +  118.20  d,e
Total  280.00  $  171.21  a 
Your  provider(s)  did not accept assignment.  We are paying you the amount that we owe you.  See#4 on the back. 
Notes: 

a This  information  is being  sent to Medicaid.  They will  review  it to see if  additional  benefits  can be paid. 

b The approved amount is less because this service was performed  with  another surgery on the same day. 
c Your  doctor  did not accept assignment for this service.  Under Federal law,  your  doctor cannot charge more than $  60.96. 
d The approved amount is based on the fee schedule. 
e Your  doctor  did not accept assignment for this service.  Under  Federal law,  your  doctor cannot charge more than $  135.93. 
IMPORTANT:  If  you have questions about this notice, call US Medicare Carrier  Part B at 999-555-1212, 
or toli free at l-800-555-4567 or visit us at 1717 W. Broadway, Downtown,  US 11111. 
You will need this notice if you contact us.  To appeal our decision, you must WRITE  to us before September 30, 1994 
at Medicare Part B, P.O. Box 9999, Downtown,  US 11111.  See#2 on the back. 
A-2 
 WI-F4-00002 
Page  2 of  2 
JAMES  T  KIRK 
Control  number 0246-8135-79024  Your  Medicare number is:  123-456789A 
More details about this notice 
Heres an explanation  of this notice: 
C$;y2$al  charges, Medicare  approved 
 $  171.21  See #4 on the back. 
34.24  We pay 80 % of the approved amount;  you  a  20 % . 
The 80 % Medicare  pays 
 $  136.97  You have already met the deductible for i-93 3. 
Medicare  owes 
 $  136.97 
Plus interest  for delayed processing 
 +  0.60  Processing of these services exceeded set time limits. 
Net payment after interest 
 $  137.57 
We are paying  you 
 $  137.57  Please cash the enclosed check as soon as possible. 
Of the total  charges 
 $  280.00 
Less amount exceeding  charge limit 
 83.11 	 You  are not responsible  for this amount which  is in excess of the 
Medicare  limiting  charge. 
See note(s). 
Your total responsibility  $  196.89 	 The provider  may bill  you  for this amount. 
If you have other insurance,  the other insurance  may pay 
this amount. 
IMPORTANT:  If  you have questions about this notice, caii US Medicare Carrier  Part 3 at 999-555-1212, 

or toil free at l-800-555-4567 or visit us at 1717 W. Broadway, Downtown,  US 11111. 

You will  need this notice if you contact us.  To appeal our decision, you must WRITE  to us before September 30, 1994 

at Medicare Part II,  P-0.  Box 9999, Downtown,  US 11111.  See#2 on the back. 

A-3 
 Important  hfimnation  You Should Know 
About  Your Medicare Part B Benefits 
This  part  of the  notice  answers  some questions  about  receiving  Medicare  aymeqts.  If  you  have  other 
questions,  see your  copy  of  The Medicare  Handbook  or  call  us for  more  mFormatlon. 
1. 	 What  should  I do if  I have questions about this  All  Medicare payments are made on the condition  that 
notice?  you will  pay Medicare  back if  benefits  are also paid 
If you have questions about this notice, call, write,  or  under  insurance  that  is  primary  to  Medicare. 
visit  us and we will  tell  vou the facts that we used to  Examples  of  other  insurance  are  employer  group
decide what and how  m&h  to pay. Turn to the front  health plans, automobile  medical,  liability,  no fault or 
of this notice;  our address and phone number are on  workers  compensation. Notify  us immediately  if you 
the bottom  of the page.  have filed  or could  file  a claim with  insurance that is 
primary  to Medicare. 
2. 	 Can I appeal how much Medicare paid for these 
services?  4.  How can I reduce my medical costs? 
If you do not agree with  what Medicare  approved for  Many  providers  have agreed to be part of Medicares 
these services, you may appeal our decision. To make  participation  program.  That  means  that  they  will 
sure that we  are fair  to you,  we will  not  allow  the  always accept the amount that Medicare  approves as 
same people who  originally  processed these services  their  full  payment. Write  or call us for the name of a 
to conduct this review.  participating  provider  or for a free list of participating 
providers. 
However,  in  order to be eligible  for  a review,  you 
must write  to us within  6 months of the date of this  A  provider  who  accepts  assignment  for  covered 
notice,  unless you have a good reason for being  late  services  can  charge  you  only  for  the  part  of  the 
(for  exam  le, if  you  had an extended  illness  which  annual  deductible  you  have  not  met  and  the 
kept you  K om being  able to file  on time).  copayment  which  is  20  percent  of  the  approved 
amount. 
Turn  to the front  of this notice; the deadline date and 
our  address are on the bottom  of the page. It  may  If  you  are treated by  one of these doctors, you  can 
help your case if you include  a note from your doctor  save money.  See The Medicare  Handbook  for more 
or supplier  (provider)  that tells us what was done and  information  about how you  can reduce your medical 
why.  costs. 
If  you  want  help  with  your  appeal, or if  you  have  Generally  a doctor who has not accepted assignment 
questions  about Medicare,  you  can have a friend  or  may  not  charge  more  than  115  percent  of  the 
someone else help you. There are also groups, such as  Medicare  approved  amount  for  services provided  in 
legal  aid  services,  who  will  provide  free  advisory  1993 or later. This  is known  as the limiting  charge. 
services  if  you  quali?.  In  additio?,  volunteers  at  Contact us if  assignment was not accepted, and you 
Medicare  peer counselmg  programs  m your  area can  think  your  doctor  charges more  than  the  limiting 
also provide  you  with  assistance. If  you  would  hke  charge. 
more  information  on  how  to  get  in  touch  with  a 
counselor, contact us at the address or phone numbers  Some states have laws that could  further  reduce your 
on the bottom  of the front  page of this notice.  medical  costs. Please see The Medicare  Handbook 
published  in  1993 or later for more information. 
3.  How much does Medicare pay? 
The  details  on the front  of this  notice  explain  how  5.  How can I use this notice? 
much Medicare paid for these services. See your copy  You  can use this notice to: 
of  The Medicare  Handbook  for  more  information 
about the benefits  you are entitled  to as a beneficiary  0  Contact  us  immediately  if  you  think 
in the Medicare  Part B program. If you need another  Medicare  paid  for  a service  you  did  not 
copy of the handbook,  call or visit  your  local  Social  receive; 
Security  Office. 
0  Show  your  provider  how  much  of  your 
Medicare may make adjustments to your payment. We  deductible  you have met; 
may  reduce  the  amount  we  pay  for  services by  a 
certain  percentage (Balanced  Budget  Law).  If  your  0  Claim  benefits  with  another  insurance 
provider  acceptgd assignment,  you  are not  liable  to  company.  If  you  send this  notice  to them, 
oav the amount of this reduction.  We nav interest on  make a copy of it for your  records. 
iohe  claims not paid within  the required  time. 
Keep  this  notice  for  your  records 
Health  Care Financing  Administration 
A-4 
 APPENDIX  B 
SAMPLE  SELECTION 
Our purpose  was to measure the effectiveness  of the EOMB,  so it would  be reasonable  to 
select a random  sample from  some population  of EOMBs.  Unfortunately,  no database of 
EOMBs  exists.  Claims  for  medical  insurance  benefits  result  in EOMBs,  so we  selected our 
sample from  a population  of claims. 
We selected claims  from  HCFAs  Common  Working  File  that met the following 
conditions: 
. 	 The last date of service was on or after May  1, 1993.  This  ensures that the EOMB 
was issued after all the carriers  had implemented  HCFAs  major  revisions  that were 
the subject  of the Westat report. 
. 	 The  last date of service was on or before  December  3 1, 1993.  The provides  an S-
month  sample that is large enough to average out most seasonal variations. 
Implicitly,  we also had a condition  limiting  the selection  to claims  that had been processed 
by the carriers  and reported  to HCFA  by March  3 1, 1994.  This  was the most recent data 
available  at the time  of selection. 
Following  discussions  with  HCFA  we placed no restrictions  on the type  of claim  selected. 
Any  claim,  paid  or denied,  assigned or nonassigned,  physician  or nonphysician  for  any 
beneficiary  and for  any amount,  anywhere  in the country  was eligible  for  selection. 
Also  following  discussions  with  HCFA  we planned  to report  the results to a precision  of 
5 percent  at the 95 percent  level  of confidence.  Since the key  questions  in our  survey were 
binary  we made the conservative  assumption  that responses would  be evenly  divided 
between  correct  and incorrect.  These criteria  imply  a sample size of about 400. 
Based upon  OIGs  past experience  in conducting  mail  surveys with  beneficiary  populations 
we  anticipated  a response rate of about 7.5 percent.  In  order to realize  400 responses this 
implies  a sample size of about  540.  But  not all claims  result  in EOMBs,  some are 
suppressed by the carriers.  Following  discussions with  HCFA  we estimated  about 
20 percent  of EOMBs  would  be suppressed.  So we  selected a sample of 675 claims  in 
order  to send out  540 questionnaires  and realize  400 responses. 
When  we requested  EOMB  copies from  the carriers  we found  that the EOMBs  for 
163 (24 percent)  of the claims  had been suppressed.  Carriers  have discretion  to suppress 
the EOMB  for  claims  that do not admit  beneficiary  appeal or require  follow-up  action. 
Examples  include  assigned laboratory  claims paid  at 100 percent,  or claims  for  Medicaid 
B-l  recipients.  We did not mail  questionnaires  to beneficiaries  who  had not received  an 
original  EOMB  during  regular  claim  processing. 
Also,  we  did  not mail  questionnaires  to beneficiaries  who  were  recorded  as deceased in the 
Enrollment  Database at the time  of sample selection.  The following  table  summarizes  the 
sample: 
I/ 
TABLE  B-l:  SURVEY  MAILING  II 
NUMBER 
DESCRIPTION
OF CLAIMS 
675  Entire  random  sample 
163  Claims  with  EOMB  suppressed 
512  Sample with  EOMB  sent originally 
61  Deceased beneficiaries  among  5 12 sent EOMB 
451  Recipients  of the survey questionnaire 
The next table  details  our  experience  with  the 451 surveys we mailed  to beneficiaries. 
(/TABLE  B-2:  MAILING  RESULTS  II 
NUMBER 
DESCRIPTION
OF CLAIMS 
451  Recipients  of the survey questionnaire 
288  Timely  responses, 07/Ol/94-09/23/94 
9  Late  responses, after 09/23/94 
4  Postal Service returns,  undeliverable 
11  18  1 Contacted  OIG,  could  not respond  II 
132  No  contact,  no response 
We completed  our mail  survey with  288 responses, a 64 percent  response rate.  We 
counted  as a respondent  anyone who  returned  a questionnaire  with  at least one question 
answered.  One respondent  answered  only  2 questions,  150 respondents  answered  all the 
questions,  and 259 respondents  answered  at least 75 percent  of the questions  in the survey. 
Overall,  the 288 respondents  answered  7659 out of  8392 questions  in the survey  (29 per 
respondent,  a 92 percent  answer rate),  and 131 (45 percent)  offered  comments. 
B-2 
 Answer  rates for  individual  questions  varied  from  a low  of  81 percent  (231/288)  to a high 
of 98 percent  (283/288).  Taking  the low  value of 231 as the sample size, we can 
conservatively  estimate the measured precision  of the survey results for  categorical 
questions  as slightly  better than 7 percent,  at the 95 percent  confidence  level. 
The  several indexes  of understanding  which  we discuss in the text  are continuous  rather 
than categorical  variables.  We give the precision  of these index  results in the table  below. 
TABLE  B-3:  PRECISION  FOR  INDEXES 
INDEX  MEAN  PRECISION 
VALUE 
Overall  72  f2.37% 
Basic  83  f2.57% 
cost  71  +3.20% 
Context  68  +3.06% 
Action  64  +3.02% 
NOTES: Index  values for percent correct answers. 
Number  of respondents = 288 
Precision  at 95 percent level  of confidence  (t = 1.96). 
B-3 
 APPENDIX  C 
ANALYSIS  FOR  NONRESPONSE  BIAS 
In  a survey  based upon  a random  sample we need to consider  the possibility  that bias may 
be introduced  through  self-selection  by the respondents.  To determine  whether  significant 
differences  exist in this  survey we compared  the two  groups,  respondents  and 
nonrespondents,  by age and sex.  We found  no difference  between  the groups  for  either 
variable  at the 95 percent  confidence  level. 
Analysis  by Age 
Calculated  at July  1, 1994, the average age for  beneficiaries  who  responded  to the survey, 
either  on their  own  or through  a representative,  was 73.5 years.  By  comparison,  the 
average age for  nomespondent  beneficiaries  in the sample was 75.4 years, and the average 
age for  the entire  sample of 451 beneficiaries  was 74.2 years. 
We tested the significance  of age differences  between  respondents  and nonrespondents  by 
using  the t-test  procedure  in the SAS program  package.  The calculated  t value was  1.8 1, 
which  is not  statistically  significant  at the 95 percent  confidence  level.  We conclude  that 
there  is no difference  between  respondents  and nomespondents  by age at the 95 percent 
confidence  level. 
Analysis  by Sex 
The percentage  respondents  and nonrespondents  by sex is: 
We used the chi-square  test to look  for  a difference  between  respondents  and 
nonrespondents  by  sex.  The computed  chi-square  value of 2.6 is not statistically 
significant  at the 95 percent  confidence  level.  We conclude  that there is no difference 
between  respondents  and nonrespondents  by sex at the 95 percent  confidence  level. 
C-l  APPENDIX  D 
UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
. 	 The number  of responses, or survey instruments  returned  with  at least one question 
answered,  equals 288.  The number  of answers varies from  question  to question. 
. 	 On the survey  questionnaire  we referred  to the notice  that was the subject  of this 
study,  the Explanation  of Your  Medicare  Part B Benefits,  or EOMB,  simply  as 
Your  Explanation.  Appendix  A  contains  a sample EOMB  with  answers to the 
survey  questions  marked. 
. 	 Most  (23 out of 30) survey questions  asked for  specific  information  given  on the 
beneficiarys  sample EOMB,  a copy  of which  was included  with  the mailing.  We 
recorded  and give here the numbers  of correct  and incorrect  answers.  For these 
questions  we also give percentages of all the (288)  responses correct,  incorrect,  and 
not  answered.  And  for  the seven of these questions that allowed  a Dont  Know 
answer,  we give the numbers  and percentages for that option. 
Questions  10, 17, 18, 19, 24, and 25 asked for  the beneficiarys  opinion  or 
preference.  We recorded  and give here the numbers  for  each choice.  For these six 
opinion  questions  we give percentages excluding  the respondents  who  did  not 
answer  the question. 
Question  30 invited  comments.  We give here the numbers  who  did  and did  not 
l 
comment. 
.  The  sum of individual  percentages may not equal  100 due to independent  rounding. 
D-l  UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
QUESTION  NUMBERS  PERCENTAGES 
I  , 
IDENTIFYING  YOUR  EXPLANATION 
1. Please write  in the date of your  Explanation. 
Correct  180  63 
Incorrect  93  32 
No  Answer  15  5 
2. 	Please write  in the first  control  number  on your  Explanation. 
Correct  243  84 
Incorrect  29  10 
I  I 
No  Answer 
WHAT  YOUR  EXPLANATION  SHOWS 
3. Who  provided  the health  care services described  on your  Explanation? 
Correct 
I 
Incorrect  13  I  5 
No  Answer  15  5 
4. 	What  kinds  of health  care services did they provide? 
Correct  236  82 
Incorrect  31  11 
No  Answer  21  7 
5. When  did they provide  the health  care services? 
Correct  235  82 
I 
Incorrect  22  I  8 
No  Answer 
D-2 
 UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
QUESTION  NUMBERS  PERCENTAGES 
r  I 
6. What  does your  Explanation  ask you to do if  Medicare  paid  for  a service you  did 
not receive? 
Correct  152  53 
Incorrect  89  31 
Dont  Know  19  7 
No  Answer  28  10 
WHAT  ARE  THE  COSTS  ON  YOUR  EXPLANATION 
7. Please write  in the total  amount  of money  that Medicare  was charged  for  all the 
services on your  Explanation. 
Correct  243  84 
Incorrect  16  6 
No  Answer  29  10 
8. Please write  in the total  amount  of money  that Medicare  approved  for  all the 
services on your  Explanation. 
Correct  259  90 
Incorrect  4  1 
No  Answer  25  9 
THE  NOTES  ON  YOUR  EXPLANATION 

9. Your  Explanation  may  include  some Notes that tell  you  how  Medicare  decided  the 
amounts  to approve  for  each service. 
Please mark  the one box that most closely  describes how  Medicare  decided  the 
approved  amounts  on your  Explanation. 
Correct  200  69 
Incorrect  64  22 
Dont  Know  1  0 
No  Answer  23  8 
D-3 
 UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
QUESTION  NUMBERS  PERCENTAGES 
I  I 
10. How  strongly  do you  agree or disagree with  the statement that the Notes  on your 
Explanation  are clear and easy to understand? 
Strongly  Agree  130  49 
Somewhat  Agree  106  40 
Somewhat  Disagree  13  5 
Strongly  Disagree  14  5 
No  Notes 
No  Answer  25  -- 
WHAT  MEDICARE  PAID 
11. Please write  in the total  amount  of money  that Medicare  paid  for  all the services on 
your  Explanation. 
Correct  223  77 
Incorrect  39  14 
No  Answer  26  9 
12. Who  did  Medicare  pay for the services on your  Explanation? 
Correct  249  86 
Incorrect  17  6 
No  Answer  16  6 
WHAT  MEDICARE  DID  NOT  PAY 
13. Please write  in the amount  Medicare  applied  to the deductible  for  the services on 
your  Explanation. 
Correct  169  59 
Incorrect  82  28 
No  Answer  37  13 
D-4 
 UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS  A 
II
QUESTION  I  NUMBERS  1 PERCENTAGES  I/ 
14. Please write  in the amount  of the copayment  for  the services on your  Explanation. 
Correct  134  47 
Incorrect  101  35 
No  Answer  53  18 
WHAT  YOU  OWE 
15. Please write  in the total  amount  the health  care providers  are entitled  to receive  for 
the services on your  Explanation. 
Correct  155  54 
Incorrect  85  30 
No  Answer  48  17 
16. Please write  in the total  amount  you need to add to Medicares  payment  in order  to 
pay your  total  responsibility  (even if  other  insurance  will  pay some or all of it 
for  you). 
Correct  198  69 
Incorrect  45  16 
No  Answer  45  16 
17. Your  Explanation  may contain  a calculation  of your  total  responsibility.  If  your 
Explanation  has a calculation,  how  strongly  do you  agree or disagree with  the 
statement that it is clear and easy to understand. 
Strongly  Agree 
 116  50 
Somewhat  Agree 
 88  38 
Somewhat  Disagree 
 19  8 
Strongly  disagree 
 8  3 
No  Calculation 
 0  0 
No  Answer 
 57  -- 
D-5 
 UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
QUESTION  NUMBERS  PERCENTAGES 
USING  YOUR  EXPLANATION 
18. Who  usually  takes care of your  Medicare  Explanations  and other  health  care paper 
work? 
I Do  It Myself  121  45 
A  Friend  or Relative  71  27 
Health  Care Providers  42  16 
Someone Else  28  11 
Dont  Know/Understand  4  2 
No  Answer  22  -- 
19. What  do you  usually  do with  your  Explanation  when  you  get one from  Medicare? 
Read Myself  183  66 
Someone Explains  70  25 
Try,  No  One Helps  7  3 
Keep  for  Later  14  5 
Discard  0  0 
Dont  Know/Understand  4  1 
No  Answer  10  -- 
APPEALING  MEDICARES  DECISION 
20. 	Who  does your  Explanation  ask you to contact  if you  have a question  about your 
Medicare  benefits? 
Correct  225  78 
Incorrect  34  12 
No  Answer  29  10 
D-6 
 UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
QUESTION  NUMBERS  PERCENTAGES 
I 
1 
21. 	What  does your  Explanation  tell  you to do to appeal Medicares  decision,  if  you  do 
not agree with  it? 
Correct  234  81 
Incorrect  36  13 
Dont  Know/Understand  6  2 
No  Answer  12  4 
22. 	What  is the latest date you  could  appeal Medicares  decision  on your  Explanation? 
Correct  150  52 
Incorrect  93  32 
No  Answer  45  16 
SOME  GENERAL  INFORMATION 
23. Please write  in your  Medicare  number. 
Correct  272  94 
Incorrect  10  3 
No  Answer  6  2 
24. 	How  do you  prefer  to contact  Medicare? 
Phone  231  84 
Write  29  11 
Personal  Visit  15  5 
No  Answer  13  -- 
D-7  II 
UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS  II 
/I
QUESTION  I  NUMBERS  1 PERCENTAGES  /I 
25. 	How  do you  rate Medicares  Explanation  compared  to other  notices  you  get in the 
mail,  such as bank  statements and utility  bills.  The Explanation  is: 
Easier to Understand  48  17 
About  the Same  185  66 
Harder  to Understand  48  17 
No  Answer  7  -- 
SOME  MEDICARE  DEFINITIONS 
26. 	Please mark  the one box that best matches what  you  understand  by Medicares 
word  Assignment. 
Correct  216  75 
Incorrect  23  8 
Dont  Understand  41  14 
No  Answer  8  3 
27. Please mark  the one box that best matches what  you understand  by Medicares 
word  Deductible. 
Correct  241  84 
Incorrect  33  11 
Dont  Understand  9  3 
No  Answer  5  2 
28. 	Please mark  the one box that best matches what  you  understand  by Medicares 
word  Copayment. 
Correct  195  68 
Incorrect  31  11 
Dont  Understand  48  17 
No  Answer  14  5 
D-8 
 II 
II 
UNDERSTANDING  MEDICAL  BENEFITS 
SURVEY  RESULTS 
II
QUESTION  I  NUMBERS  PERCENTAGES 
I 

29. 	Please mark  the one box that best matches what  you  understand  by Medicares 
words  Your  total  responsibility. 
Correct 
 123  43 

Incorrect 
 142  49 

Dont  Understand 
 11  4 

No  Answer 
 12  4 

COMMENTS 
30. 	Wed  appreciate  your  suggestions  on ways to make Medicare  Explanations  easier to 
understand. 
Comments  Made  131  45 

No  Comments  157  55 

D-9 
 APPENDIX  E 

COMPLETE  COMMENTS  ON  THE  DRAFT  REPORT 

Comments  from  the  Health  Care  Financing  Administration  ................  E-2 

Comments  from  the  Assistant  Secretary  for  Planning  and  Evaluation  .........  E-4 

E-l  DEPAHTMENT  OF HEALTH  PLHUhlAN  SERVICES  Health  Care  financq  Admmtstrat~on 
The  Admtrwstrator 
Washtngton.  D.C.  20201 
TO 	 JJuunnee  GGrrbbbbss  BBrroowwnn  
IInnssppeeccttoorr   GGeenneerraa11  
FFRROOMM  	 BBrruuccee   CC..  VVllaaddeecc  
AAddmmiinniissttrraattoorr  
SUBJECT 	 Office  of Inspector  General  Draft  Report:  Understanding  Medical 
Benefits:  The Explanation  of Medicare  Part B Benefits 
(OEI-01-93-00120) 
We reviewed the subject report which  presented results. from  the survey OII  beneficiary 
understanding  of the Expianation  of Medicare  Part B Benefits.  Our  comments are 
attached for your  consideration. 
Thank you for the opportunity  to review and comment  on this report.  Please advise US 
if you would  like  to discuss our position  on the reports  recommendation. 
Attachment 
E-2 
 Comments  of the Health  Care Financing Administration  fHCFA)1 

on Office  of Inspector  General  (OIG)  Draft  Report: 

Understanding  Medical  Benefits: 

The Exuianation  of Medicare  Part B Benefits 

JOEL01-93-001201 

OIG  Recommendation 
HCFA  shouid build  on its prior  efforts and give major  attention  to informational  items 
having followup  implications  for the beneficiary.  As HCFA  continues  to revise the 
Explanation  of Your  Medicare  Part B Benefits it should aim  to facilitate  beneficiary 
understanding  of the following  items: 
What  the beneficiary  needs to pay out of pocket, 
0 
how the beneficiary  can get more information, 
0 
how to appeal Medicares  decision, and 
0 
what  to do if  there appears to be fraud or abuse. 
0 
HCFA  Resuonse 
HCFA  concurs.  We have begun our initiative  to redesign all  beneficiary  notices into 
one, easy to read, Medicare  Summary Notice  (MSN).  As part  of the MSN  initiative, 
HCFA  consulted with  Medicare  beneficiaries  who provided us with  feedback on the 
current  beneficiary  notices. 
In response to our  beneficiaries  comments, we plan to incorporate  into  the MSN  a 
section that will  explain  the actions necessary to request an appeal.  For clarity,  we will 
include a special Customer  Service Information  Box that will  display important 
information.  To help  us combat fraud.  we will  revise the fraud  language to include 
examples of fraudulent  activities  and provide instructions if our  beneficiaries  suspect 
fraud. 
The improvements  described reflect  our current plans and ideas.  However,  we wiI1 
solicit  more beneficiary  input  once we complete  the draft design. 
Additionally,  we are currently  reviewing  the HCFA  publications  with  regard to 
beneficiary  information. 
E-3 
 i 
DEPARTIYIENToFHEALTHLHUMANSERVICES  Offkeof  the  Secretary 
washlngron.  O.C.  20201 
TO: 	 June  Gibbs  Brown 
Inspector  General 
FROM: 	 Assistant  Secretary  for 
Planning  and  Evaluation 
SUBJECT: 	 OIG  Draft  Report:  "Understanding  Medical  BetifLss"  -
CONDITIONlG  CONCURRENCE  WITH  COMMENTS 
This  inspection  was  intended  to  measure  benef&ciary  understanding

of  Medicare's  Explanation  of  Your  Medicare  Part  B  Benefits 

(EOMB).  It  follows  changes  in  the  EOMBmade  by  HCFA in  response 

to  recommendations  from  a  Westat  Inc.  study  in  1992.  It 

indicates  that  HCFA'S continuing  efforts  to  improve  the  EOMB are 

producing  a  more  user-friendly"  form. 

Throughout  the  report  OIG  refers  to  "communicating  claim
information  to  beneficiaries," when  the  survey  was  not  limited  to
beneficiaries.  The  report  notes  that  "[OIG]  recognized  that  many 
[beneficiaries]  do  not  handle  their  own business  affairs"  and 
The  survey 
invited  whoever  handled  those  affairs  to  respond. 
results  indicate  that  fewer  than  50% of  those  surveyed.take  care 
of  their  own  Medicare  Explanations.  Therefore  the  report  should 
not  assert  that  "beneficiaries  appear  to  understand 
most  of  the  information  on  the  EOMB." 
It  is  easily  argued  that  Medicare  beneficiaries,  in  Spite  Of 

improvements  to  the  EOMB,  still  find  it  very  difficult  to 

interpret  based  solely  on  the  information  that  fewer  than  50% of 

Further,  given  this 

them  handle  their  own Medicare  paperwork. 
information,  it  would  be  useful  to  analyze  the  data  based  on 
whether  the  respondent  was  the  beneficiary  or  another  person. 
I  look  forward  to  seeing  these  data  in  the  revised  report. 
Jg  im 
David  T.  Ellwood 
Prepared  by:  C.  Colladay,  690-7770 
E-4 
 APPENDIX  F 

NOTES 
1.  The  statutory  basis for  Medicare  is located  at Title  XVIII  of the Social  Security 
Act,  as amended,  42 U.S.C.  1395 ff.  The implementing  regulations  are at 42 CFR 
Part 400 et seq. 
2.  An  elegant  summary  of the structure .and operation  of Medicare  is contained  in  The 
Medicare  1994 Handbook,  published  by the Health  Care Financing  Administration 
and provided  to all beneficiaries. 
3.  Major  exceptions  include  beneficiaries  who join  a health  maintenance  organization, 
those entitled  to Medicaid,  and those with  medical  benefits  through  the Department 
of Veterans  Affairs. 
4.  The provider  of service is always  required  to submit  the claim  to Medicare  (to the 
carrier).  The provider  may choose to receive payment  directly  from  Medicare  for 
its portion  of the amount  due (accept assignment  of the Medicare  payment).  Or the 
provider  may choose to have Medicare  make payment  to the beneficiary  (not  accept 
assignment)  and look  to the beneficiary  for  full  payment. 
5.  In  other  words  the EOMB  sets the stage for  administrative  finality.  Because some 
claims  present no issue for  appeal, Medicare  suppresses the EOMBs  on these. 
Assigned  laboratory  claims  paid  in full  are a common  example.  Currently  Medicare 
suppresses the EOMB  for  about 20 percent  of Part B claims. 
6.  Evaluation  of Revised Medicare  EOMB,  Final  Report  on Beneficiary 
Understanding.  Report  submitted  by Westat, Inc.  to the Health  Care Financing 
Administration  under  contract  500-92-0006,  dated March  3 1, 1993. 
7.  Medicare  Claims  Handling:  The Consumer Perspective.  Report  of a Study  Panel of 
the National  Academy  of  Social Insurance,  Washington,  DC,  April  1993. 
F-l