Medicare: Advisory Opinions as a Means of Clarifying Program Requirements
Published: 2004-12-08T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Health care providers are concerned about the quality of Medicare guidance issued by the Centers for Medicare & Medicaid Services (CMS), an agency within the Department of Health and Human Services (HHS). Specifically, they have reported that (1) they receive unclear guidance on program requirements and (2) because policies and procedures change frequently, they may rely on obsolete guidance, resulting in billing errors. Some government agencies issue advisory opinions in response to specific questions from requesters. These opinions permit agencies to apply law and regulation to a particular set of facts and provide requesters with specific guidance. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 directed GAO to determine the appropriateness and feasibility of establishing in the Secretary of Health and Human Services authority to issue legally binding advisory opinions to interpret Medicare regulations. GAO (1) identified factors relevant in establishing an advisory opinion process and (2) assessed the role such a process could play in clarifying program requirements. GAO examined four federal agencies' advisory opinion processes and interviewed officials from organizations representing Medicare stakeholders to learn how such a process might address their concerns.
section_title: What GAO Found
paragraphs: GAO identified five common elements in the way four agencies--CMS, the Employee Benefits Security Administration (EBSA) of the Department of Labor, the Internal Revenue Service (IRS), and HHS's Office of Inspector General (HHS-OIG)--set up their advisory opinion processes. While the processes at the four agencies reflected differences in the agencies' respective constituencies and responsibilities, each agency cited five key factors as critical. These were (1) establishing criteria for submitting advisory opinion requests, to define the scope of their processes, (2) developing alternative ways of responding to advisory opinion requests, such as providing other forms of written communication, (3) determining the time frame for issuing advisory opinions, (4) considering anticipated workload, staffing requirements, and user fees as a means of offsetting expenses incurred by the government, and (5) creating internal review and external coordination procedures with other federal agencies with a stake in the outcome of an issued opinion. These five factors and lessons learned from other agencies that issue advisory opinions may be useful in structuring a process for Medicare. Most of the representatives of provider organizations GAO contacted agreed that an advisory opinion process would partially address their concerns, for example, by providing them with reliable, written responses to their Medicare-related questions. However, they recognized that an advisory opinion process would not address all their concerns and that it is one of several approaches that could improve Medicare guidance. For example, refining existing forms of guidance would also be of value. In commenting on a draft of this report, HHS stated that a more formal advisory opinion process for Medicare would be costly to implement, not provide quick answers to providers' questions, and have limited applicability. HHS acknowledged that the Medicare program and its implementing regulations are inherently complex and underscored its efforts to improve stakeholders' understanding of the program's complexities.

section_title: Letter
paragraphs: The Centers for Medicare & Medicaid Services (CMS), an agency within the  Department of Health and Human Services (HHS), administers Medicare— the federal health insurance program that serves the nation’s aged and  certain disabled individuals. In fiscal year 2003, Medicare paid over  $271 billion for the health care of approximately 41 million beneficiaries.  More than 1 million providers submitted about 950 million claims during  that year. As part of its responsibilities, CMS issues regulations to  implement Medicare laws that govern the participation of beneficiaries,  physicians, hospitals, medical suppliers, and other stakeholders in the  Medicare program. Because of Medicare’s size and complexity, its  regulations are written to cover a variety of situations. Although it is  critical that stakeholders understand how the program operates, it may be  difficult for them to interpret Medicare’s many regulations and apply them  to their own unique circumstances. CMS—with the assistance of the claims administration contractors—routinely issues various forms of guidance to  beneficiaries and health care providers. CMS and its contractors also  respond to questions from interested parties to further help them  understand program requirements.
In recent years, Medicare providers have become increasingly concerned  about the quality of guidance issued by CMS. For example, they have  criticized CMS for a lack of clarity in regulations and related guidance on a  variety of program issues ranging from the determination of medical  necessity for services covered to the proper use of billing codes. Providers  have also expressed concern that because Medicare policies and  procedures change frequently, program guidance on which they rely may  be obsolete. Consequently, they worry that they may make billing errors  that could trigger a range of possible adverse consequences.
Like other federal agencies, HHS currently issues advisory opinions as part  of its guidance framework. HHS has two separate advisory opinion  processes for specific provisions of Medicare law, but neither process  covers the wide range of regulations that govern the Medicare program.  Advisory opinions are typically written responses to specific questions that  address whether a requester’s action or proposed action is in compliance  with applicable laws and regulations. The purpose of advisory opinions is  generally to permit people engaging in complex or unprecedented  transactions to act with some confidence that their actions will not later be  found to have been illegal. In general, advisory opinions (1) are issued to a  requesting party, (2) interpret or apply law and regulation to a specific set  of facts, such as an ongoing or proposed business arrangement, and (3) are  legally binding, if at all, only with respect to the requesting party, the specific set of facts described, and the extent set out in the advisory  opinion. An advisory opinion provides the party who requested it with  assurance that, should the party proceed consistent with the opinion, the  agency will not take adverse action against that party to the extent set out  in the advisory opinion. Because advisory opinions may be published, other  interested parties may readily look to them as guidance.
The Medicare Prescription Drug, Improvement, and Modernization Act of  2003 directed us to determine the appropriateness and feasibility of  establishing in HHS the authority to provide legally binding  advisory opinions on the appropriate interpretation and application of  regulations to carry out the Medicare program. As we discussed with the  committees of jurisdiction, we (1) identified factors relevant to the  establishment of such an advisory opinion process and (2) assessed the  role such a process could play in clarifying Medicare regulations.
To identify factors relevant to the establishment of an advisory opinion  process, we selected four federal agencies that have such processes in  place and reviewed the policies and procedures each has instituted to  manage the processes. We obtained information on the workload and  staffing levels related to the advisory opinion process at each agency.  In addition, we obtained information on the user fees charged by these  agencies to those requesting advisory opinions. The information we  obtained was the most current available at the time we performed our  work. We also interviewed officials involved with issuing advisory opinions  at all four agencies. In selecting agencies, we chose the two agencies within  HHS—CMS and HHS’s Office of Inspector General (HHS-OIG)—that  issue opinions on provisions of Medicare law, and two other federal  agencies—the Internal Revenue Service (IRS) and the Employee Benefits  Security Administration (EBSA) of the Department of Labor—that  administer complex programs governed by numerous laws and regulations  affecting large constituencies. In addition, we met with two experts on  administrative law and two private sector attorneys to discuss advisory  opinion processes and factors relevant to the establishment of a new  process at HHS to interpret Medicare regulations.
To assess the role an advisory opinion process might play in clarifying  Medicare regulations, we interviewed officials from 15 organizations  representing various Medicare stakeholders, with an emphasis on  organizations representing providers, including one hospital that we  visited. (See app. I.) We conducted our work from May 2004 through  November 2004 in accordance with generally accepted government  auditing standards.
subsections: section_title: Background
paragraphs: The process of implementing programs established by federal law often  begins with the issuance of rules to guide those who are subject to the law’s  requirements. The requirements for promulgating rules, set out in the  Administrative Procedure Act (APA), usually include the publication of a  proposed rule, an opportunity for public comment, and the publication of a  final rule after taking into consideration the comments received. Final  rules, also referred to as regulations, have the force and effect of law. To  explain and clarify the statutory law and implementing regulations, the  APA also permits agencies to issue orders, which are the result of an  adjudication that resolves a dispute or controversy between the agency and  one or more parties. While orders are typically binding only on the parties  directly involved, agency officials and program participants often use them  for guidance. Because agencies rarely issue regulations or orders that  explain every element of the programs they administer, they also produce a  wide variety of written guidance, which may include advisory opinions.  Although the APA prescribes the process agencies generally must follow to  issue rules and orders, it does not prescribe a process for producing  advisory opinions. In light of this, agencies generally have discretion in  how they can structure their advisory opinion processes, subject to  constraints, if any, in other applicable statutes.
HHS produces written guidance about Medicare in a variety of forms.  For example, it issues “rulings” that, according to the agency, provide  clarification and interpretation of complex or ambiguous provisions of law  or regulations and promote consistency in the interpretation of policy and  adjudication of disputes. Although rulings are not issued in response to  specific requests, they are binding on CMS and Medicare contractors,  among others. In addition, HHS’s Medicare Appeals Council (MAC) issues  written decisions in disputes over Medicare eligibility and specific  Medicare claims. Although MAC is a component of HHS, it functions  independently and is not bound by guidance, such as Medicare program  instructions or memoranda, issued by CMS. MAC decisions are binding  precedent in subsequent disputes and serve as another significant source of  Medicare guidance. Furthermore, HHS provides Medicare guidance  through reimbursement manuals, program transmittals, coverage  determinations, program instructions, CMS publications, program  memorandums, fraud alerts, press releases, and other publications.  In addition, CMS and its claims administration contractors respond to  millions of written and oral questions from providers and beneficiaries  annually.
HHS does not issue advisory opinions on the Medicare program except  where expressly required by statute. CMS and HHS-OIG have processes  that generally focus on two provisions of Medicare law concerning specific types of business arrangements. Specifically, HHS-OIG provides  advisory opinions in connection with the federal health care antikickback  statute, which imposes criminal penalties for knowingly giving, offering,  soliciting, or receiving payment for patient referrals, among other things.  CMS provides advisory opinions related to the so-called Stark Law, which  generally prohibits physicians from referring patients to heath care  facilities in which they have a financial interest. Both statutory advisory  opinion provisions state that these advisory opinions shall be binding only  on the agency and requesting party. The agencies also advise that other  parties are not bound by and cannot legally rely on these advisory opinions.
IRS and EBSA differ from CMS and HHS-OIG in the scope, management,  and history of their advisory opinion processes. While both CMS and  HHS-OIG have developed their advisory opinion processes within the last  decade, IRS and EBSA have a long history of providing advisory opinions  under their authority to administer federal tax and employee benefits law,  respectively. Unlike CMS and HHS-OIG, the processes in IRS and EBSA  were initiated by the agencies under their authority to administer laws in  these areas rather than in response to specific statutory requirements. IRS  established its advisory opinion process in 1953 to answer requests  regarding the tax effects of certain acts or transactions. EBSA established  its process in 1976 to answer inquiries regarding the Employee Retirement  Income Security Act of 1974 (ERISA), which is a federal law governing  employee benefit plans. Despite these differences, IRS and EBSA also  characterize their advisory opinions as binding on the agency, subject to  the agencies’ ability to modify or revoke the opinion, as appropriate. The  two agencies also advise that the opinions do not apply to other parties and  situations.
section_title: Five Key Factors for Establishing an Advisory Opinion Process
paragraphs: The processes at the four agencies we contacted—CMS, HHS-OIG, IRS, and  EBSA—reflect common elements that merit consideration when  establishing an advisory opinion process. We identified five key factors  related to agency planning efforts and allocation of resources that each of  the four agencies addressed in establishing its advisory opinion process.  These factors are (1) establishing criteria for submitting advisory opinion  requests, (2) developing alternative ways to respond to advisory opinion  requests, (3) determining the time frame for issuing advisory opinions,  (4) considering anticipated workloads, staffing requirements, and user  fees, and (5) creating internal review and external coordination  procedures. The structures of the legally binding advisory opinion  processes at the four agencies, however, reflect differences in their  respective constituencies and responsibilities.
Establishing criteria for submitting advisory opinion requests: All  four agencies have defined the scope of their processes by identifying  criteria for submitting advisory opinion requests. For example, none of  these agencies will provide advisory opinions for requests that are based  on hypothetical situations. IRS has identified circumstances under which  it will not issue an advisory opinion, such as those concerning issues that it  finds frivolous or those that it expects will be resolved following the  issuance of pending regulations or anticipated guidance. IRS has also  identified circumstances under which it will not ordinarily respond to  requests, such as those that involve matters already under examination or  audit by IRS, or those that involve pending litigation. Generally, EBSA will  not provide advisory opinions for requests where all parties involved are  insufficiently identified and described, where material facts or details of  the transaction are omitted, or where the requester is seeking an opinion  on alternative courses of action. Further, EBSA generally only provides  advisory opinions for requests on future actions, rather than actions or  transactions that have already occurred. HHS-OIG and CMS also have  defined submission criteria for their processes. Specifically, they will not  provide advisory opinions for requests dealing with general questions of  interpretation, or activities in which the requester is not and does not plan  to be involved. In addition, HHS-OIG does not issue opinions on matters where the same, or substantially the same, subject matter is or has been the  subject of a government proceeding, or if an informed opinion cannot be  made, or could be made only after extensive investigation.
Two of the four agencies, IRS and EBSA, whose advisory opinion processes  otherwise involve broad areas of law, have identified substantive issues on  which they will not provide advisory opinions. IRS has developed extensive  “no-rule” lists of certain domestic and international tax law matters on  which the agency will not provide advisory opinions, and EBSA has  identified sections of ERISA about which it will not ordinarily provide  advisory opinions. By contrast, while the statutory requirements for HHS to  provide advisory opinions focusing on specific Medicare provisions set out  two substantive restrictions, HHS-OIG and CMS have not identified other  substantive areas that would eliminate an advisory opinion request from  consideration, provided that the subject of the request falls within the  scope authorized by statute.
Developing alternative ways of responding to advisory opinion  requests: To have efficient advisory opinion processes, the agencies do  not automatically provide an advisory opinion for every request received,  and may respond through other means. For example, if an agency decides  that a request concerns matters that are not complex, it may find it more  appropriate to provide a response during a telephone conversation.  Although not legally binding, such a response may provide the requester  with a satisfactory and timely answer, prompting the withdrawal of the  request for an advisory opinion. The agencies told us that they respond in  this manner when requests involve relatively straightforward questions that  may have already been addressed through earlier guidance. For example,  an official at HHS-OIG told us that the agency may respond orally to a  hospital’s question on whether a hospital that restocks supplies for local  ambulances violates the federal health care antikickback statute by  providing incentives to the ambulance companies to direct patients to the  hospital. In this case, the HHS-OIG official said the agency could direct the  requester to existing guidance on the matter. However, should a requester  want an advisory opinion after receiving informal guidance, HHS-OIG will  issue an opinion, as required.
IRS and EBSA have also established forms of written correspondence in  addition to legally binding advisory opinions to respond to individual  requesters. Specifically, both agencies provide information letters, which  are written statements that call attention to a well-established  interpretation or principle of law without applying it to a specific factual  situation. The agencies provide such letters in response to requests that  they determine do not merit an advisory opinion and could be addressed by  supplying the requester with general information. For example, IRS may  decide that an advisory opinion request on a certain income tax deduction  is best answered through an information letter describing the general  requirements for claiming these deductions. Neither agency publishes all of  their information letters.
In addition, one agency responds to some requests for advisory opinions by  publishing guidance with broad applicability. IRS publishes general  guidance, which includes revenue rulings that inform the public about IRS’s  position on a particular issue to ensure its uniform application of guidance.  For example, a revenue ruling might conclude that, given a specific set of  facts, taxpayers may be entitled to claim certain income tax credits. IRS  also publishes revenue procedures, which consist of official statements of  internal practices and procedures, such as filing procedures, which affect  the rights and duties of taxpayers. For example, a revenue procedure might  describe filing procedures that taxpayers must follow to claim certain  income tax deductions and credits. IRS officials said that the agency places  a higher priority on issuing more broadly focused guidance, such as  revenue rulings, than on other, more narrowly focused forms of guidance  such as advisory opinions.
Determining the time frame for issuing advisory opinions: The four  agencies varied on how they addressed the issue of a time frame for  providing advisory opinions. HHS-OIG is required by law to issue  advisory opinions within 60 days. CMS’s regulations provide for it to  issue opinions within 90 days or, for requests that it determines involve  complex legal issues or complicated fact patterns, within a reasonable  time. IRS does not have any statutory time frame requirements and has its  own deadlines. According to IRS officials, the agency’s goal is to complete  more than half of the requests received within 4 months, and about 90  percent of the requests received within 6 months. EBSA officials estimate  that they typically provide advisory opinions within 7 to 9 months after  receiving requests. However, EBSA has not established any time frames.  The agency prioritizes its responses to requests after considering the  significance of the issue addressed by a request and whether it involves a  time-critical matter, such as a pending financial transaction.
Agencies have identified concerns associated with establishing time frames  for issuing advisory opinions. EBSA officials told us that their agency has  not developed time frames for issuing advisory opinions because imposing  a deadline creates an artificial requirement that bears no relationship to the  nature of the request. EBSA prefers to have flexibility because of the  uncertainty of the types and number of requests the agency will receive.  Although HHS-OIG is required to respond to requesters within 60 days, an  agency official told us that it is sometimes difficult to complete all of the  research and other necessary steps within the required time frame because  of both the complexity of the issues and the other responsibilities held by  lawyers issuing the opinions. However, regulations provide for the  suspension of time limits in order to compensate for delays that are not  within HHS-OIG’s control, such as those associated with obtaining  additional information from requesters or expert opinions from external  third parties.
Considering anticipated workloads, staffing requirements and user  fees: All four agencies addressed staffing issues to make their advisory  opinion processes effective. For example, EBSA officials told us that  EBSA’s process needs to be supported by an adequate number of staff with  appropriate backgrounds, such as attorneys and individuals with program  expertise. As shown in table 1, agencies vary in the size of their workloads  and the number of staff they assign to their advisory opinion processes. In  fiscal year 2003, EBSA and HHS-OIG provided 17 and 18 opinions,  respectively. In contrast, IRS provided about 3,000 advisory opinions and  used about 69 full-time equivalent (FTE) staff to respond to requests.  Agencies also differed in the number of opinions issued per FTE. At EBSA  and HHS-OIG, 1 FTE staff member was required for every 8 to 9 opinions  provided, while IRS needed 1 FTE staff member to process 42 opinions  on average. Agency variation in the number of advisory opinions generated  by an FTE may reflect differences in case complexity as well as in the  proportion of requests that are withdrawn prior to issuance of an opinion.  For example, an HHS-OIG official estimated that two-thirds of requests  submitted to the agency are withdrawn before an opinion is issued. In some  instances, the requesters terminated the process after HHS-OIG staff had  performed all of the legal research and analysis necessary to issue  the opinions.
Despite differences in workload and productivity, all three agencies employ  flexible staffing arrangements to process advisory opinions. For instance,  IRS selects staff from a pool of approximately 500 to 600 attorneys who, in  addition to processing advisory opinions, also provide other guidance to  individual taxpayers. Similarly, HHS-OIG draws from a group of staff who  are assigned to respond to requests for advisory opinions in addition to  other responsibilities. EBSA staffs its advisory opinion processes by  assigning personnel to work on opinions on an as needed basis.
Three of the four agencies we contacted charge a fee to process their  advisory opinions. These user fees enable the government to recoup some  of its costs. CMS and HHS-OIG charge an initial nonrefundable fee to  accept a request for an advisory opinion and impose hourly fees for the  time staff spend responding to a request for an opinion. IRS has  implemented a fee schedule and charges fees that vary depending on the  type of requester. The fee is $6,000 with a reduced fee for qualifying requesters. Table 2 summarizes the user fees charged by the four agencies  in fiscal year 2004.
Although three of the four agencies charge user fees, only IRS has authority  to apply those fees to fund its advisory opinion process. However,  although CMS and HHS-OIG do not retain the user fees charged, they may  have been able to absorb the costs of issuing opinions because they receive  relatively few requests per year. According to legal experts we interviewed,  the amount of user fees charged, and an agency’s ability to use them to  offset costs, could be critical to the success of a large advisory opinion  process.
Creating internal review and external coordination procedures: In  addition to reviewing its response to an advisory opinion request internally,  an agency issuing an advisory opinion may also need to coordinate its  response with other federal agencies. The agencies said that this is  particularly important if those entities have a stake in the outcome—for  example, if the advisory opinion involves laws affecting another agency.  Internal review and external coordination permit other entities to bring  their perspectives to the issue and to raise matters that may not have been  previously considered.
All four agencies have developed internal review and external coordination  procedures for their advisory opinion processes. Both CMS’s and  HHS-OIG’s internal reviews consist of obtaining comments from one  another as well as from the HHS Office of the Secretary and the HHS Office  of the General Counsel. In addition, their external coordination includes  consultation with the Department of Justice. CMS officials said that, in  certain cases, there may need to be additional coordination because it has  overlapping jurisdictions with other agencies such as HHS’s Public Health  Service and Indian Health Service, as well as the Department of Veterans  Affairs. EBSA’s internal review consists of coordination between the office  drafting the advisory opinions and the agency’s legal counsel. Depending  on the issue and whether it may have relevance to other laws, EBSA may  also coordinate with IRS, the Pension Benefit Guaranty Corporation, and  the Securities and Exchange Commission. In contrast, IRS has a limited  internal review process that usually involves the attorney writing the  opinion, a reviewing attorney, and the branch chief of the office issuing the  opinion. IRS also rarely coordinates with external entities due to significant  limitations in IRS’s ability to share taxpayer data.
section_title: Medicare Providers Consider Advisory Opinions as a Possible Way to Improve Guidance
paragraphs: Representatives of most provider organizations we spoke with told us that  providers seeking clarification of Medicare rules and procedures often find  it difficult to obtain reliable or timely written responses to their inquiries.  As a result, most of these organizations viewed the establishment of an  advisory opinion process to interpret Medicare regulations positively,  particularly if the opinions were legally binding. However, representatives  for some organizations told us that an advisory opinion process is only one  way to address their concerns; improving existing CMS and contractors’  guidance was also viewed as important. In addition, some recognized that  advisory opinions may not always be appropriate, given that questions  related to Medicare regulations may sometimes require a quick response— something that an advisory opinion process may be unable to provide.
subsections: section_title: Medicare Providers Are Concerned about Unreliable and Untimely Answers to Their Questions from CMS and its Contractors
paragraphs: Officials from most provider organizations we contacted told us that  providers are concerned that they often do not receive reliable or timely  responses to their questions. They said that Medicare providers frequently  have questions about a variety of issues related to Medicare regulations,  including matters relating to billing, coverage of services, medical  necessity, and beneficiary eligibility, particularly if a beneficiary is eligible  for both Medicare and Medicaid. However, half said that they have  difficulty obtaining the necessary clarification. For example, some told us  that the claims administration contractors—who are generally the first  point of contact for providers with questions—often respond to identical  questions from providers with substantially different answers. In addition,  about half of the provider organizations we contacted said that providers  cannot rely on CMS to respond to their questions in a timely manner,  particularly in writing. For example, representatives of one provider  organization told us that they have been trying for about a year to obtain  guidance from CMS concerning whether physicians in a state that has  reduced its Medicaid benefits can bill beneficiaries who are eligible for  both Medicare and Medicaid, to compensate for this reduction, without  violating federal law. Similarly, officials at the hospital we visited told us  that it took CMS about 6 months to reply to the hospital’s inquiry about the  findings of a recently completed audit by the hospital’s claims  administration contractor. The audit determined that procedures that the  hospital had followed for 12 years—at the instruction of its contractor— were now considered by the contractor to be in violation of Medicare  regulations. The hospital requested CMS to clarify whether it would be held  liable for its past practices and how it should respond to the contractor’s  audit findings. We have also recently reported on shortcomings in the way  CMS and its contractors communicate with providers. Specifically, we  identified problems in both the accuracy and timeliness of CMS’s written  guidance and in its oral responses to providers who contact call centers  operated by contractors with billing-related and other types of policy- oriented questions.
CMS officials acknowledged that because the agency receives thousands of  inquiries every year, it is sometimes difficult to respond to all of them in a  timely manner. The time it takes the agency to answer can vary based on  the nature of the inquiry and the type of reply that is necessary. While basic  or routine questions may receive a relatively quick response, more involved  and complex questions, such as the one presented by the hospital, require  extensive research and internal review, which could delay the agency’s  response. CMS has taken steps in recent years to improve communications  with providers. For example, it has held town hall meetings on new  initiatives and developed provider-specific Web pages and listservs. In  response to our recommendations to improve the accuracy of information  given to providers from call centers operated by contractors, CMS has  agreed to create a process to routinely screen, triage, and route provider  calls to specialty staff by fiscal year 2005.
section_title: Medicare Providers View Advisory Opinions as One of Several Approaches to Enhance Guidance
paragraphs: Overall, representatives from most of the provider organizations we spoke  with agreed that an advisory opinion process would partially address their  concerns about the guidance that they currently receive from CMS and its  contractors. Specifically, most said that such a process would provide them  with useful answers that they could rely on to appropriately interpret  Medicare regulations. Their reasons included that such a process would  establish a central place to submit questions and that they would feel more  confident about the accuracy of responses received because an advisory  opinion process would, presumably, involve extensive legal research. In  addition, written documentation that such a process would provide could  later help to protect them from adverse actions if it is subsequently  determined that they billed incorrectly or are otherwise found to be  noncompliant with program rules. However, representatives recognized  that while an advisory opinion process guarantees a response to an inquiry,  it may not address providers’ need for quick answers. Some said that  providers generally seek relatively rapid responses to their questions on  Medicare regulations—for example, they told us that for billing questions,  providers often need responses within 24 hours. However, CMS officials  said that short time frames may be unrealistic because of the extensive  research necessary to prepare an advisory opinion.
Providers’ representatives also noted additional benefits that can be  associated with the advisory opinion process. For example, even though  these opinions may only be binding to the requesters, if published, they  could also provide instructive guidance to the provider community at large.  However, 8 of the 12 provider organizations we contacted suggested that,  to maximize the usefulness of an advisory opinion process, the process  should be structured to also permit an advisory opinion to be applied to  similarly situated parties with similar questions, instead of just a single  requester. One added that, unlike HHS-OIG’s process, which often requires  requesters to provide proprietary information that could alert their  competitors to their business plans, advisory opinion requests on Medicare  regulations are more likely to involve day-to-day activities that are common  to many providers. Along the same lines, three organizations suggested that  an advisory opinion process also be open to entities representing  providers, so that they could submit questions on behalf of larger  constituencies. Even though it might not be possible for more broadly  applicable advisory opinions to be legally binding, representatives of some  provider organizations indicated that such an approach would make the  process more efficient and responsive to those participating in Medicare.
Representatives of provider organizations told us that an advisory opinion  process should not be used in place of, or precede other efforts, to improve  the communication of guidance. They stressed that clarifying existing  guidance to address common provider questions is important. They also  told us that receipt of reliable and timely written responses to their  questions would go far to reduce their interest in an advisory opinion  process. While such responses may not carry as much weight as  advisory opinions, these representatives said that they would help  providers better understand regulations.
Representatives from one provider organization we contacted were  opposed to instituting an advisory opinion process because they said such  a process might disrupt the effective dialogue that the organization has  established with CMS in recent years. Specifically, they were concerned  that an advisory opinion process may prevent them from obtaining more  informal and timely guidance from the agency on an as needed basis. In  addition, officials from a beneficiary advocacy organization expressed  concern that an advisory opinion process could negatively affect  beneficiaries. Anticipating that providers would be the primary users of an  advisory opinion process, this organization was concerned that  beneficiaries’ interests would not be fully represented.
section_title: Concluding Observations
paragraphs: The Medicare program and its implementing regulations are inherently  complex. It is critical that Medicare providers receive correct and complete  answers to their questions about program rules. An advisory opinion  process to interpret Medicare regulations could provide an avenue for  providers to receive this information in the form of legally binding answers  to complicated questions about their unique circumstances. Although  providers have expressed concern about the lack of timeliness of CMS’s  responses to their questions, it would be unreasonable to expect that  advisory opinions could be issued in a matter of a few days or even a few  weeks, given the complexity of the questions and the significance of  obtaining legally binding responses. However, it is important that the  establishment of such a process not preclude CMS or its contractors from  responding promptly to providers with relatively straightforward questions  that do not necessitate an advisory opinion. If established, an advisory  opinion process to interpret Medicare regulations should not serve as a  substitute for enhancing existing forms of CMS guidance. In addition, the  lessons learned by other federal agencies may be useful in structuring a  process for Medicare.
section_title: Agency Comments
paragraphs: In written comments on a draft of this report, HHS stated that an enhanced  and more formal advisory opinion process for the Medicare program would  not be a successful pursuit at this time. Specifically, HHS said such an  effort would be costly to implement and noted that fees collected for its  advisory opinions are not paid to or retained by HHS, and thus do not offset  the costs of the staff time allocated to this work. Further, HHS said that  such a process would not provide quick answers to providers’ questions,  and would have limited applicability beyond the parties requesting  advisory opinions. However, HHS acknowledged that the Medicare  program and its implementing regulations are inherently complex and  underscored its efforts to improve stakeholders’ understanding of the  program’s complexities. HHS also provided us with technical comments,  which we incorporated as appropriate. We have reprinted HHS’s letter in  appendix II.
We also provided excerpts of the draft to EBSA and IRS. The excerpt that  each agency received consisted only of statements pertaining to its  respective advisory opinion processes. We received technical comments  from both agencies, which we incorporated as appropriate.
We are sending copies of this report to the Secretary of Health and Human  Services, the Administrator of CMS, and other interested parties. We will  also make copies available to others upon request. In addition, this report  will be available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staffs have any questions about this report, please call me at  (312) 220-7600. An additional GAO contact and other staff members who  made major contributions to this report are listed in appendix III.
section_title: Medicare Stakeholders Contacted
section_title: Comments from the Department of Health and Human Services
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Acknowledgments
paragraphs: Pauline Seretakis, Richard Lipinski, Janet Rosenblad, and Craig Winslow  made key contributions to this report.
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subsections: section_title: Order by Mail or Phone
section_title: To Report Fraud, Waste, and Abuse in Federal Programs
section_title: Congressional Relations
section_title: Public Affairs