NCPA - National Center for Policy Analysis

Critics Say Medicare Agency Jeopardizes Medical Progress

October 11, 2000

Physicians, patients, developers of high-tech medical devices and even members of Congress are assailing the Health Care Financing Administration for delaying or denying reimbursements for new medical therapies. They charge that the agency -- which administers Medicare -- sometimes sets reimbursement rates so low doctors and hospitals can't afford to use the new remedies.

The complaints come from a bipartisan group of 31 members of the House of Representatives, who have petitioned the House Ways and Means Committee to impose reforms on the agency. Also, 19 patient and professional medical groups have sent a similar appeal -- and Sen. Orrin G. Hatch (R-Utah) has introduced a companion reform measure in the Senate.

  • HCFA has been chided many times by the General Accounting Office -- with one report stating that it "falls short in addressing weaknesses repeatedly cited in audits and other reviews."
  • Although Congress last year passed a measure requiring the agency to create a new payment method to cover innovative medical technologies, critics say that for the most part that still hasn't happened -- even though HCFA protests that it has a "new, open and accountable coverage process" that will "facilitate prompt coverage."
  • HCFA's reimbursement policies have implications far beyond Medicare -- since they frequently set the standard for private insurers and influence what medical products will be developed, marketed and used.
  • Although the agency makes coverage and policy decisions that apply throughout the country, actual implementation is left to 51 "local contractors" -- which means that approvals may vary from one community to another.

Critics say the HCFA's unexplained requirements, paperwork delays and repeated demands for documents and clinical data cause confusion -- while adding to costs.

Source: August Gribben, "Critics Say Medicare Is Not Part of the Cure," Washington Times, October 11, 2000.


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