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[Congressional Record Volume 141, Number 74 (Friday, May 5, 1995)]
[Senate]
[Pages S6216-S6217]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HARKIN:
  S. 762. A bill to implement General Accounting Office recommendations 
regarding the use of commercial software to detect billing code abuse 
in Medicare claims processing, and for other purposes; to the Committee 
on Finance.

            the medicare billing abuse preventon act of 1995

 Mr. HARKIN. Mr. President, I am introducing the Medicare 
Billing Abuse Prevention Act to implement recommendations of the 
General Accounting Office concerning abusive and improper billing 
practices that are costing the American taxpayer and individual 
Medicare beneficiaries billions of dollars. There is controversy over 
what should be done concerning Medicare. But, I am hopeful that we will 
all agree that medical providers should receive what they are entitled 
to and should not receive payments based on improper billings.
  Last year, I along with the chairman and ranking member of the Budget 
Committee asked the GAO to look at how much Medicare loses because of 
its inability to prevent and detect abusive and inappropriate billings 
by health care providers. We specifically asked them what savings the 
taxpayers and Medicare beneficiaries might realize if Medicare was to 
use the commercially available state of the art computer programs to 
detect and stop abusive payments.
  GAO has done their usual excellent work. The results of their review 
are dramatic. Medicare's system for detecting abuse is failing and it's 
costing American taxpayers and senior citizens millions every day. 
Taxpayers and those on Medicare could save roughly $4 billion over the 
next 5 years if Medicare harnessed the power of the private sector and 
used state of the art anti-abuse equipment.
  Although I believed we had a problem, the GAO has uncovered losses 
from improper billings that are far larger than I expected. They also 
suggested a straightforward solution that will conservatively save the 
Medicare trust fund about $640 million per year and Medicare 
beneficiaries over $140 million a year in their out of pocket costs. 
Those estimates are based on four separate samples of 200,000 actual 
filed claims each that were processed with commercially available 
software developed by four separate computer companies that now provide 
the software to commercial users, primarily insurance companies.
  I was pleased to hear that the great majority of medical care 
providers billed the Government correctly. The losses were the results 
of billings submitted by 8 percent of providers. I do want to point out 
that all errors are not purposeful. But, whatever the reason, the 
Medicare trust fund should have the best protections against improper 
payments.
  In a hearing held by the Subcommittee on Labor, Health and Human 
Services, Education and Related Agencies today, I believe that a solid 
case was made for immediate action. Losses are mounting by about $2 
million for every day we wait.
  Many in Congress are proposing dramatic cuts in Medicare and Medicaid 
to pay for tax cuts and reduce the deficit. They are suggesting that 
senior citizens and the disabled, most of whom live on limited, fixed 
incomes, pay more for Medicare. And they are suggesting dramatic cuts 
in payments to doctors, hospitals, and other health care providers--
cuts that will either reduce health care access and quality of care for 
older Americans, or simply be shifted on to the millions of working 
Americans who have private health insurance.

  While Medicare for years led the health care field in technology, 
today it has been left in the dust. While most of the Nation's leading 
private health insurers and managed care plans are saving billions by 
using this state of the art equipment, Medicare lags behind. In fact, 
many of the same private health insurers that Medicare contracts with 
to process its claims use this new technology on their private sector 
business but can't use the same to bring American taxpayers and seniors 
Medicare savings. This is part of the reason why Medicare's costs are 
rising faster than private sector health care costs.
  The GAO had four private companies that have developed sophisticated 
computer technology to detect and stop billing abuse run a 
representative sample of doctors bills Medicare had already checked and 
paid through their systems. The private sector systems found instance 
after instance where Medicare, with its outdated computer technology, 
paid abusive or inappropriate bills that should have been denied. The 
most common form of billing abuse identified was unbundling, where a 
doctor performs a procedure and bills Medicare not only for the full 
procedure, but also for components of the procedure. For example, a 
doctor bills Medicare $5,000 for gall bladder surgery, but also bills 
Medicare $1,000 for the incision and closing the wound. Medicare is 
paying twice for the same service. Other examples of unbundling abuses 
identified include: billing for multiple visits to the same patient on 
the same day; billing separately for injections and chemotherapy 
administration when those injections are simply a component of the 
chemotherapy administration; and, billing for excessive numbers of Pap 
smears for the same woman on the same day.
  Billing abuses that the commercial computer systems would identify 
include mutually exclusive procedures, the use of an inappropriate 
assistant at surgery, duplicate billings, and global fee period 
violations where one charge might cover a physician's services for 30 
days after surgery and the doctor separately charges for services 
provided during that time period. [[Page S6217]] 
  The GAO indicates that it would cost around $20 million or less to 
install the private sector technology in Medicare. And they have 
clearly demonstrated that such an investment would save Medicare 
taxpayers and beneficiaries over $3.9 billion in 5 years. So, for every 
dollar we invest, taxpayers will get a $200 return. I call that a 
bargain. I want to reiterate: for every day we fail to invest, 
taxpayers will lose about $2 million. And more will be lost by 
individual Medicare patients, sometimes thousands of dollars by a 
single individual. I call that a scandal.

  The Billing Abuse Prevention Act will do three things.
  First, it will provide a definite time when commercially available 
computer systems shall be in actual use to catch billing code abuses by 
all of the 32 Medicare contractors who examine Medicare billings so 
errors and abusive billing practices can be caught. HCFA has been given 
90 days from the date of enactment to set out the exact requirements 
under which the 32 Medicare contractors shall have a computer checking 
system in place. And, it requires that the contractors actually have 
the system in use within 180 days after enactment.
  It is my hope and expectation that this can be done more quickly than 
that. HCFA should now begin the process to develop the criteria without 
waiting for the legislation to pass. With the full cooperation of the 
agency, I am hopeful that the HCFA implementing requirements could be 
ready by the time the President signs the bill. That will allow the 
contractors to move more quickly as well.
  Many of the 32 contractors are already using the commercially 
available systems to review private insurance claims. But, some 
modifications of the systems will be needed to modify the program to 
match HCFA billing practices. And, the contractors will want to review 
all of the systems that are available that meet HCFA's criteria and go 
through the appropriate procurement practices.
  Second, the legislation provides that the Secretary of Health and 
Human Services may keep information about the system confidential. If 
that is not done, detailed information about the system could be used, 
to some degree, to get around the system's safeguards. The legislation 
also provides that the proprietary information about the systems are 
not to be released. If it became available, the companies that created 
it might lose a significant part of their investment since other 
companies could acquire the technical details of the systems. The 
Secretary is expected to release appropriate information about the 
system which is in the public interest.
  It is important to use commercially available systems because we 
already know they work and we can put them into place relatively 
quickly with minor modifications. We save time which results in real 
savings and we avoid what might be a large development cost if HCFA 
tried to create their own system. Another advantage of commercial 
systems is that they will be continually improved as the private 
development companies work to further improve their systems to acquire 
a larger share of the private marketplace.
  Third, the Secretary shall order a review of all of the existing 
regulations and guidelines governing Medicare payment policies and 
billing code abuse to see what modifications might be appropriate to 
maximize the benefits of the computer checking systems and avoiding 
improper payments.
  I urge that this legislation be rapidly considered and 
passed.

                          ____________________
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