The Medicare system is simply collapsing under its own regulatory weight. The consequence is a denial rate that is reflective of the flaws in the process, not necessarily in the honest work of the caregivers. The APA now has proposed to work with HCFA to develop national standards for review. But even as provider groups protest the analysis that led to the charges of waste and abuse, the rules are changing. The cost-based reimbursement formula under which the questioned claims were submitted has been replaced by a new prospective reimbursement formula, with a new set of regulations and guidelines.
Providers appear to be in favor of the changes.
It's good because it is a predictable payment system that should reduce some of the administrative complexities. From the standpoint of providers, the predictability and simplification make it a positive thing. From the government's standpoint, it creates incentives for higher-cost providers to reduce their costs. There are incentives built in to provide the service in the most efficient way possible. It's good for the beneficiary, who will be getting the service for a cost-effective price.