Medicare Provider Enrollment:

Opportunities to Enhance Program Integrity Efforts

GAO-03-185: Published: Mar 17, 2003. Publicly Released: Mar 17, 2003.

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Staffing companies that contract with physicians to staff hospital departments--including emergency departments--are not permitted to bill Medicare. In the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000, Congress directed GAO to assess the program integrity implications of enrolling these companies and allowing them to bill Medicare. GAO reviewed about 2.8 million emergency department claims for 2000 from five states and assessed whether contractor physicians retained by staffing companies billed Medicare comparably to other emergency department physicians. GAO also evaluated how the lack of information on staffing companies affects efforts to assure Medicare program integrity.

Contractor physicians associated with staffing companies billed Medicare for complex and costly, higher-level emergency department services at rates similar to emergency department physicians with other affiliations, such as those practicing in partnerships, medical groups, or employee-based staffing companies. In addition, the patients treated by contractor physicians received diagnostic tests, were admitted to the hospital, and used ambulance transport at rates similar to patients treated by other emergency department physicians. Staffing companies that retain contractor physicians remain largely invisible to the oversight efforts of the Centers for Medicare & Medicaid Services (CMS) because these companies are not enrolled in Medicare. Although CMS has information on the individual physicians, it has no information on the companies themselves. This may hinder oversight because contractor physicians provided a significant share of emergency care to Medicare beneficiaries. For example, in four of the five states studied, 27 to 58 percent of the physicians with substantial emergency department practices were contractor physicians retained by staffing companies. CMS does not permit the enrollment of staffing companies that retain contractor physicians because, under current law, these companies may not be reassigned Medicare benefits. This limits CMS's ability to monitor claims. CMS cannot identify claims submitted by these companies on behalf of their contractor physicians nor can it subject the claims to the same systematic scrutiny given to enrolled groups. Consequently, it cannot evaluate the billing patterns of specific companies nor assess the aggregate impact of these companies on Medicare program integrity.

Status Legend:

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  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Matters for Congressional Consideration

    Matter: In order to enhance Medicare's program integrity, Congress may wish to amend the Social Security Act to permit the reassignment of benefits to staffing companies that retain contractor physicians to treat Medicare beneficiaries so that CMS may enroll these companies if they meet appropriate criteria.

    Status: Closed - Implemented

    Comments: The recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), included a provision permitting the reassignment of benefits to staffing companies that retain contractor physicians.

    Matter: In order to enhance Medicare's program integrity, Congress may wish to amend the Social Security Act to require these staffing companies to seek enrollment in Medicare.

    Status: Closed - Not Implemented

    Comments: The recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), included a provision permitting, but not requiring, the reassignment of benefits to staffing companies that retain contractor physicians.

    Recommendation for Executive Action

    Recommendation: To facilitate improvements in program integrity, the CMS Administrator should propose legislation permitting the reassignment of benefits to staffing companies that retain contractor physicians to treat Medicare beneficiaries and requiring that these companies seek enrollment in Medicare.

    Agency Affected: Department of Health and Human Services: Centers for Medicare and Medicaid Services

    Status: Closed - Not Implemented

    Comments: The recently enacted Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (P.L. 108-173), contained a provision permitting the reassignment of benefits to staffing companies that retain contractor physicians. As a result, there is no need for the CMS Administrator to propose legislation.

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