Following the release of a Government Accounting Office (GAO) report on Medicare contracting reform, Senate Finance Committee Chair Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) have called for the Centers for Medicare and Medicaid Services (CMS) to emphasize quality of service in reforms to claims processing. The GAO report had been requested in 2008.

According to the GAO report, CMS is transitioning claims administration to Medicare Administrative Contractors (MACs), to be completed by October 2011. The GAO had previously determined that CMS' planned acceleration of the transition might cause some significant challenges. In the new report, the GAO reviewed how CMS has implemented Medicare contracting reform, how CMS assessed the performance of MACs and CMS' costs and savings for contracting reform. In its investigation, the GAO reviewed six sample transitions in the ten MAC contracts awarded to date.

In the GAO's results, it did find challenges had arisen during the six transitions, including payment delays for providers, overlapping with other initiatives, and inaccurate workload estimates which led to more backlogs in claims processing and delays in payments. The GAO notes that CMS has already made implementations to handle the challenges.

The question regarding CMS' total costs and savings could not be determined with certainty, the GAO says, because the information isn't tracked. Although significant savings were expected in reduced spending and improved claims, information on the total savings was not available. CMS had some information on reductions in operations spending, but the GAO could not determine what was actually attributable to contracting reform.

Senator Baucus stated in a press release that delays in payment and backlogs in claims results in more hardship both for seniors and health care providers. The senator expressed support for initiatives on streamlining the process, but emphasized that more ideas need to be implemented on quality and cost savings. Senator Grassley also felt that more needs to be done on processing reform and oversight of performance goals.

Adapted in part from a press release from Senators Baucus and Grassley.

The GAO report can be accessed at: http://www.gao.gov/new.items/d1071.pdf

Senator Baucus and Grassley's remarks: http://finance.senate.gov/newsroom/chairman/release/?id=654c652d-a9c1-4bdd-8e89-d2c900ee8389

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