CMS underfunded, report states

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Saturday, August 31, 2002

WASHINGTON – A new report on Medicare recommends more money be funneled to the Centers for Medicare & Medicaid Services, but that doesn't mean HME providers should get their hopes up for higher reimbursement.

At first glance, one could conceivably get that impression because the 18-month study advocates funding hikes for the program. But upon closer inspection, it's clear that's not the case. Instead, a blue-ribbon panel convened by the National Academy of Social Insurance gives a ringing endorsement to the job CMS has done with Medicare and stipulates that the extra funds should be earmarked for an agency faced with an overwhelming to-do list.

"Medicare must have more money for the heavy burden of administering such a complex program, including processing a staggering load of nearly one billion claims a year, [along with] communicating with beneficiaries and writing regulations," NASI officials said in a published statement.

In asserting that Medicare needs "repair, not revolution," the panel also suggested that CMS be given more administrative latitude from Congress on policymaking. Since 1996, the federal legislature has directed CMS to implement more than 500 Medicare mandates.

"The panel is certainly right about CMS — there is a huge amount of work," said Cara Bachenheimer, counsel for the Washington-based legal firm Epstein, Becker & Green. "Congressional meddling is what keeps the program from progressing. When change is the only constant, it makes things very difficult."

The over-strapped agency's heavy workload could bulge even more if Medicare competitive bidding is rolled out on a national scale. AAHomecare has ascertained that if the initiative is adopted, CMS administrative demands would increase by 35%.

"The report falls right in line with that," Bachenheimer said. "When Congress makes changes, legislators don't think about the administrative cost of making it happen."

Approximately $240 billion was allocated to Medicare in fiscal 2001, and appropriations for the program have remained stagnant for years while CMS is constantly being asked to do more, panel member and former HCFA Administrator Gail Wilensky told HME News.

"There has long been enormous pressure to keep the budget [for CMS] low," she said. "The struggle to have appropriators approve a reasonable sum has been an issue for the agency for decades. As a result, many of the program safeguards weren't in place the way they needed to be because of inadequate funding." HME

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