Get ready for pay cuts on 'actual charges' from HCFA
December 1, 1997 2 minutes read
Get ready for pay cuts on actual charges’ from HCFA
Payer may match MCO rates
If you’ve noticed a gap between the Health Care Financing Administration’s standard reimbursement for specific procedures and what your managed care organizations pay, you’re not imagining things. Experts tell Physician’s Payment Update that HCFA is proposing to eliminate or narrow that gap by adjusting its rates to match what MCOs pay you.
Many providers are becoming increasingly confused about the difference between a "usual" and an "actual" charge under Medicare payment provisions, notes reimbursement expert Alice Gosfield, president of Philadelphia-based Alice Gosfield and Associates and a member of PPU’s editorial advisory board.
Last June, HCFA published a proposed change in its definition of an actual charge. The change boils down to this: "HCFA would require physicians and suppliers to charge a lower amount whenever a patient’s secondary payer has a discount for a particular service or item that is lower than what HCFA would have paid," says Terry Arya of the Healthcare Financial Management Association (HFMA) in Westchester, IL.
If implemented,this new definition would not conform to recognized accounting principles, in turn creating an opportunity for regular errors in billing and payment procedures, HFMA contends.
Meanwhile, physicians and suppliers would have to create a new billing system to identify all patients whose secondary payers have a discount agreement with a supplier, even when a contract is intended for a primary payer, says HFMA. Then, a manually generated claim meeting actual charge requirements would have to be submitted to the Medicare carrier or fiscal intermediary.
"This would be a very inefficient system," says Arya.
Other health care organizations have been less kind. In a letter to HCFA, the American College of Osteopathic Surgeons said the proposed actual charge definition "would be totally unworkable."
There also seem to be inconsistencies between HCFA’s June proposal and a restatement of the proposed definition in a separate Sept. 8th Federal Register notice, says Gosfield.
"I have always believed Medicare is not entitled to most favored nation’ status; Medicare is not guaranteed the lowest price," she says.
For Medicare payments, HCFA can already calculate that the actual charge is really 80% of the charge submitted. As Gosfield observes, "it is not truly a most favored nations clause because it doesn’t say that the charge which must be made to Medicare is the lowest of any charge made. Rather, it says you are at risk of exclusion if you charge substantially in excess of your usual charge."
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