Wide disparities exist in Medicare claims reimbursement in different areas of the country and could be reduced by developing uniform standards to determine which treatments are proper, the General Accounting Office said last week.
The GAO said it was studying HCFA-developed medical practice standards that could provide carriers with guidelines to suggest what Medicare would reimburse.
Current regulations cover a few specific procedures, like mammograms, but in general the ultimate criteria is medical necessity, a standard that's open to interpretation.
At a congressional hearing last week, the GAO released a study showing that the number of Medicare Part B claims denied by private carriers varies significantly from one location to another.
For example, 18.3 out of every 1,000 claims for chiropractic services were denied as medically unnecessary in Wisconsin. In North Carolina, the rate is nearly 174 denials for every 1,000 claims for the same service. Echocardiograms were denied at a rate of 140 per 1,000 in Southern California, while in Northern California only 4.1 of every 1,000 such claims were denied.
"Medicare is not a local initiative; it is a national program under which beneficiaries should not receive different benefits solely because their place of residence differs," said Eleanor Chelimsky, the GAO's assistant comptroller general, in testimony before the subcommittee on regulation, business opportunities and technology of the House Small Business Committee.
The subcommittee chairman, Rep. Ron Wyden (D-Ore.), who released the report, said it had "profound implications for the national healthcare reform debate in Congress.
"GAO makes it clear that enactment of a national standard benefits package*.*.*. *will not be enough to ensure uniform coverage of healthcare," he added.
Medicare uses 34 private insurance carriers to administer the more than 576 million Medicare Part B claims made each year by physicians, laboratories and other medical providers.
In 1993, 119 million claims, or 19%, were rejected in whole or in part, although less than 10% of those were denied because the carrier said the service was medically unnecessary.
The GAO study looked at six of the regional carriers, focusing on 71 of the most common-and most costly-services provided to Medicare beneficiaries.
For some time, GAO and HCFA have been considering the development of medical standards as a basis for provider reimbursement under Medicare. Ms. Chelimsky called on HCFA to, "define a greater number of parameters for what is medically necessary."
Federal officials and insurers told the GAO that the discrepancy in rates was partly a result of the fact that fraud and abuse varies around the country.