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WASHINGTON-Unsuccessful in federal courts, the Health Care Financing Administration is turning to Congress for new authority to recover claims payments that group health care plans-not Medicare-should have made.
HCFA, the federal agency that administers Medicare, is drafting legislation that would give it essentially unlimited time to go after group health care plans and their administrators in order to recover mistaken Medicare payments. That would offset a 1994 court ruling against HCFA.
In addition, HCFA is preparing legislation that would require group health insurers and administrators to provide basic information, such as birthdates, on employees and dependents enrolled in their plans.
The purpose of this proposal would be to give HCFA more health care plan enrollment information up front to reduce the likelihood of the agency paying claims for which employer plans are responsible.
Both proposals are outlined in sketchy detail in budget documents the administration released earlier this month. The actual legislation is not expected to be released until at least March and perhaps later.
The proposals deal with a problem that has been hounding HCFA ever since the 1980s, when Congress first passed legislation shifting to employer plans from Medicare the primary responsibility of paying medical bills of employees who stay on the job after 65.
Those measures were passed to save the financially strapped Medicare program hundreds of millions of dollars each year.
But Medicare, especially in the years immediately after the enactment of the so-called working-aged legislation, has reaped only a fraction of the potential savings.
That is because some hospitals, unaware of how the law had changed, continued to send older workers' bills to Medicare for payment. And Medicare's administrators-chiefly insurance companies-mistakenly paid those bills.
Congress, concerned the government was not realizing the potential for saving billions in Medicare costs, passed legislation in the late 1980s authorizing HCFA to launch a gigantic "Data Match" program.
Under this program, HCFA sent out more than 800,000 questionnaires to employers, insurers and plan administrators as part of an effort to find out if older workers had been covered under employer plans at the time Medicare paid hospital and physician bills.
Armed with this information, HCFA demanded more than $1.6 billion in Medicare overpayments from employers, insurers and plan administrators and recovered at least $400 million.
But courts have delivered what HCFA officials and others say are crippling blows to the Data Match program.
In 1994, the U.S. Court of Appeals for the District of Columbia said HCFA could not demand payment in situations in which a beneficiary, such as an older worker or provider, had not filed a claim within a health care plan's or insurer's deadline (BI, March 27, 1995).
That appeared to be the coup de grace to the Data Match program, as employers and third-party administrators say HCFA's demands for repayment of mistaken Medicare claims usually involve claims that employees and providers never submitted to them.
HCFA is resisting complying with the appeals court ruling. It is arguing before the same appeals court that struck down the original HCFA regulations that the 1994 court decision only applies to the two insurer trade groups-the Health Insurance Assn. of America and the Blue Cross &*Blue Shield Assn.-that challenged the regulation.
While HCFA's appeal is pending, the agency wants legislation to spell out that it is not bound by a plan's claims filing deadline to recover Medicare overpayments.
In a brief description in the budget package, HCFA says the Clinton administration will prepare legislation that "clarifies" Medicare's authority to recover certain overpayments.
HCFA officials said the new provision, which still is being fine-tuned, refers to the HIAA-Blue Cross & Blue Shield decision.
"This strikes me as more than a clarification when courts, in fact, have struck down HCFA regulations," notes Bob Roth, a principal with the law firm of Michaels, Wisher & Bonner in Washington.
If HCFA succeeds in getting its proposal passed, it raises the possibility the agency could seek recovery payments from group plans long after employers have closed their books on a plan year.
"This could create a burdensome recordkeeping problem for employers. Many employers may not have readily available records for old claims. Thus, if HCFA came in and demanded payment for a claim, the employer might no longer have the records to see if, in fact, HCFA's demand was justified," said Henry Saveth, a principal with A. Foster Higgins & Co. Inc. in New York.
The other HCFA proposal is less clear, perhaps a reflection that it still is being drafted. In the president's budget package, HCFA said the provision would require a "beneficiary's other insurance plan to tell Medicare when that beneficiary is covered."
One HCFA staffer said that, under the proposal, insurers and plan administrators would be required to give HCFA the names of those employees and dependents covered in their group plans who are eligible for Medicare. This would give the agency and its administrators ready access to coverage information and reduce the likelihood that Medicare would improperly pay claims for those individuals.
But another HCFA staffer said that under the proposal, insurers or plan administrators would be required to give enrollment information for all their group plans.
While HCFA staffers disagreed on the extent of the proposal, they agreed that the new reporting requirement would not be imposed on employers.
Last year, in fact, Congress repealed a 1993 law-never enforced-that would have required employers to provide coverage information to HCFA to enable the agency to develop a health care plan data bank.
Employers said the requirement was burdensome, while the information provided to HCFA was largely useless as a tool for the agency to spot older workers' health care claims that group plans-not Medicare-should have paid.