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B-282777 1 (1999-09-02)

handle is hein.gao/gaocrptajko0001 and id is 1 raw text is: tG A O__ _ _ _ __ United States General Accounting Office Office of the General Counsel Washington, DC 20548 B-282777 September 2, 1999 The Honorable Pete Stark Ranking Minority Member Subc o mmittee o n Health Committee on Ways and Means House of Representatives Subject: Use of Program Safeguard Contractors (PSC) Under the Medicare Integrity Program (MIP) to Establish Local Coverage Policy Dear Mr. Stark: This responds to your May 11, 1999, letter regarding the Health Care Financing Administration's (HCFA's) plans for operating the Medicare Integrity Program (MIP). Essentially, you asked if the law authorizing the MIP permits HCFA to assign responsibility for local Medicare coverage policy to the payment safeguard contractors (PSCs) who will run MIP under contract to HCFA. You also asked if HCFA's proposed MIP regulations would provide an adequate legal basis for HCFA to c o nduc t lo c al c overage po lic y-making thro ugh the PSCs. Whether a particular service or product is reimbursable under Medicare is currently determined through a combination of decision-making by HCFA and its contractors. HCFA sets broad coverage policy on a national level. Within the limits established by statute and HCFA guidance, however, local policies are permitted to vary based on local variations in clinical practice. At present, the medical directors of the Medicare carriers, which are the contractors that administer Medicare for HCFA, set local coverage policy. HCFA has said that it is possible that in the future, the setting of local coverage policy will be done through a unit within the PSC, although the carrier medical directors will remain involved. In our view, while the law establishing the MIP and its legislative history are silent c o nc erning the responsibility for lo c al c overage po licy-making under Medic are, the law can reasonably be read, as HCFA does, to make this a legitimate function under MIP. Section 1893 of the Social Security Act makes medical review of provider activity a function of the PSCs, and medical review has been consistently interpreted by HCFA to include determination of local coverage policy. Similarly, we believe that the proposed MIP regulations provide an adequate basis for HCFA's action. A more detailed discussion follows.

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