House panel approves Medicare contracting overhaul

Without debate or amendments, the House Ways and Means Health Subcommittee unanimously approved a bill Thursday that would restructure the way Medicare hires contractors to process and pay claims, plus provide regulatory relief to health care providers and give them easier avenues to appeal audits of their Medicare payments.

"We cannot tolerate a system that continues to anger, frustrate and annoy providers at the rate this one does," said Health Subcommittee Chairwoman Nancy Johnson, R-Conn.

The bill, subcommittee ranking member Fortney (Pete) Stark, D-Calif., added, "will improve the program for providers, beneficiaries and taxpayers; and it shows the subcommittee once again working its will as the Board of Directors of Medicare."

The substitute amendment adopted by the panel included some changes sought by the Bush administration, including making negligence standards consistent with other laws, and clarifying a requirement that providers be given 30 days to come into compliance with "substantive changes" in regulations.

In response to complaints from provider groups, the substitute allows repayment of overcharges to be made over five years, up from three, and allows providers to delay disputed repayments until after the second level of external appeal is exhausted. The original bill allowed repayments to be ordered after the first level of review.

Meanwhile, the House Energy and Commerce Committee, which unveiled a similar bill Wednesday, has tapped as lead sponsors of that effort the sponsors of a more sweeping regulatory relief bill, the "Medicare Education and Regulatory Fairness Act," or MERFA.

MERFA sponsors Reps. Patrick Toomey, R-Pa., and Shelley Berkley, D-Nev., appeared at a news conference with Energy and Commerce Committee Chairman Billy Tauzin, R-La., and ranking member John Dingell, D- Mich., to endorse the measure. While it does not go as far as his original measure, Toomey said, the Energy and Commerce bill "is bipartisan, it's bicameral and it can be signed into law this year."

While MERFA had 243 cosponsors in the House, its provisions had been sharply criticized by Medicare officials, who said it would strip them of much of their ability to police fraud in the program.

Wednesday afternoon, Senate Finance Chairman Baucus and ranking member Charles Grassley, R-Iowa, issued a joint statement saying they would be introducing their own measure "in the coming days."