Medicare News
| For Immediate Release: | Contact: |
| Thursday, April 10, 1997 | CMS Office of Public Affairs 202-690-6145 |
For questions about Medicare please call 1-800-MEDICARE or visit www.medicare.gov. |
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HCFA TO SAVE MORE THAN $1.1 BILLION FROM MEDICARE SECONDARY PAYER INITIATIVES
The Health Care Financing Administration announced today that more than $1.1 billion will be saved in 1997 because of new initiatives that help Medicare avoid paying bills that should be paid by other insurers. The Initial Enrollment Questionnaire and Prospective Data Sharing initiatives are both identifying Medicare beneficiaries who have other health insurance coverage.
"Medicare resources are a precious commodity that must be expended with care," said HHS Secretary Donna E. Shalala.
"These two activities are providing significant savings to Medicare," said HCFA Administrator Bruce C. Vladeck. "Claims are paid correctly the first time because Medicare has the appropriate information it needs to make accurate payments."
Under Medicare Secondary Payer (MSP) laws, other insurers covering Medicare beneficiaries often must pay claims before Medicare. This applies, for example, to beneficiaries with coverage through current employment.
INITIAL ENROLLMENT QUESTIONNAIRE
Since 1995, all new Medicare beneficiaries are being asked to complete the Initial Enrollment Questionnaire and list any other health insurance they have. This helps HCFA determine when Medicare should not be the primary payer for health care services.
Two-thirds of all new beneficiaries are voluntarily completing the questionnaire. This has helped HCFA document 110,000 cases each year in which new beneficiaries have other coverage, for an estimated annual savings of approximately $425 million to Medicare.
PROSPECTIVE DATA SHARING
The Prospective Data Sharing initiative involves some insurers who notify HCFA if a Medicare beneficiary is insured through one of the insurer's plans. This helps eliminate "pay and chase," in which Medicare erroneously pays a claim that should be paid by the primary insurer and then has to try and recover the payment.
This initiative is a result of a settlement agreement reached in 1995 with several major insurers over disputed payments for Medicare beneficiaries. HCFA has been receiving prospective data from these insurers since November 1996. Since then, HCFA has identified almost 300,000 cases where Medicare beneficiaries had other coverage. HCFA's preliminary analysis indicates that erroneous Medicare payments avoided due to this initiative will translate into approximately $720 million in savings to Medicare in fiscal year 1997.
"This is a win, win situation," said Vladeck. "It gets HCFA off the pay and chase treadmill. It also lets private insurers know when Medicare should be the primary payer."
HCFA estimates that collectively, the Initial Enrollment Questionnaire and Prospective Data Sharing will save more than $1.1 billion in fiscal 1997.
