Medicare Compliance & Reimbursement

Sustaining a government-sponsored monopoly could cost $51 billion in savings.

Department of Health and Human Services (HHS) secretary Mike Leavitt has reiterated his commitment to consumer-driven health care, but critics allege that he is taking choices away from the very consumers he seeks to empower.

On Oct. 16, 2006, the Centers for Medicare & Medicaid Services (CMS) killed a project that Leavitt's predecessor, Tommy Thompson, initiated before his resignation at the end of President Bush's first term. Thompson had authorized Alternative Link, the parent company of ABC Coding Solutions, to use ABC codes for billing purposes in Alaska and New Mexico.

"ABC codes and related solutions allow more than 3 million health care practitioners to file electronic claims for health care services that are not adequately described in other national code sets," ABC officials said in a statement. And these codes reportedly reduced costs in both the New Mexico and Alaska trials.

"The pilot project was an amazing success, providing stunning statistics in a report showing the need for a revised billing code system--one that would include billing codes for all health practitioners," said Tim Bolen, a crisis management consultant for Jurimed.

For Alaska's 4,000 patients and 500 paraprofessionals who participated in the program, ABC codes created 50 percent savings in bush and rural communities, according to Bolen.

New Mexico also demonstrated the potential benefits of alternative billing methods. Insurance companies participating in the pilot program concluded after three years that seniors who participated in the program cost less than those who did not, Bolen said in a statement.

Despite the trial's apparent achievements, the CMS denied ABC's October 2006 request for a continuation of its right to use ABC codes in electronic claims transactions. Individuals using ABC billing codes must now file claims using manual transactions; this reversion to labor-intensive paper filing comes even as HHS officials tout the cost-saving potential of advances in health IT.

Melinna Giannini, president of ABC, wrote a letter to Daniel Levinson, HHS Inspector General, requesting an investigation into CMS' refusal to extend ABC's ability to file electronically. That decision could cost the United States $51 billion in health IT savings, Giannini alleges--a steep price to pay for the privilege of restricting competition in the medical billing field. Does The AMA Suppress Alternative Treatments? The current controversy over ABC's right to file electronic claims extends from an agreement between the American Medical Association (AMA) and the Health Care Financing Agency (HCFA), an organization which has since become CMS. "HFCA in 1983 granted the AMA what has been characterized as a 'statutory monopoly' by agreeing to exclusively use and promote the AMA's copyrighted CPT code for the purposes of reimbursing Medicare and Medicaid bills from doctors for outpatient [...]