Re: CMS-4021-GNC - Medicare Program; Criteria and Standards for Evaluating Intermediary, Carrier, and Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) Regional Carrier Performance During Fiscal Year 2002 (66 Federal Register 67257)

Liberty Place, Suite 700
325 Seventh Street, NW
Washington, DC 20004-2802
(202) 638-1100 Phone

Monday, January 28th 2002

Thomas A. Scully
Centers for Medicare & Medicaid Services
200 Independence Avenue SW
Room 433-G
Washington, DC 20201

Dear Mr. Scully:

On behalf of our nearly 5,000 member hospitals and health systems, the American Hospital Association (AHA) is pleased to have the opportunity to comment on the criteria and standards for evaluating fiscal intermediary (FI) performance.

We are aware that there are regulatory reform packages moving through Congress that incorporate contractor reform. In anticipation of this effort, we would like to ensure that the Administration does everything within its authority to ensure that FIs and carriers are accountable to the Administration and to providers for their service. Of course, FI accountability is vital even in the absence of contractor reform, as hospitals are integral customers of FIs, and a significant proportion of hospital revenues depends on the FIs operating in a timely and judicious manner.

The AHA believes that FIs must be given specific customer service performance objectives, and providers must be allowed to influence those objectives and to participate directly in the evaluations of contractor performance. Such provider input is even more critical if the Administration continues to support contractor reform provisions allowing the renewal of an FI's contract without competition, as was included in your proposal last year. We were pleased to receive, in recent correspondence from Secretary Thompson, the Department of Health and Human Service's (HHS) commitment to work with us to develop an appropriate and flexible mechanism for provider input. We look forward to engaging in this discussion and are hopeful that a reasonable and effective process can be developed.

We are also aware that contractor reform proposals under consideration by Congress would actually eliminate the requirement that the HHS publish in the Federal Register for public comment the standards and criteria used to evaluate Medicare contractor performance. The AHA is opposed to this proposal and urges the Secretary to work with Congress to ensure that this important opportunity for hospitals to provide input into the process of contractor performance evaluation remains in place. Because hospitals depend on timely and accurate Medicare payments, they must have some opportunity to be part of the selection and evaluation of their FIs.

To improve FI accountability, the AHA supports several other reforms, including:

  • A requirement that HHS solicit comments from providers for performance evaluations and consult with providers with respect to performance requirements for FIs. The contractor reform proposals in Congress make this solicitation and consultation discretionary on the part of the Secretary. We believe that, while this is a step in the right direction, it should be required rather than discretionary.

  • To address any serious problems with FIs, providers should be permitted to provide formal mid-contract reviews of FI performance. Particularly if competitive bidding is enacted by Congress, it is likely that some contractors may bid so low that they may not be able to perform at the level that HHS and providers require. In the Medicaid program, where competitive bidding is often used to select contractors, hospitals have had first-hand experience with contractors who submit "low-ball" bids and then cannot do their job adequately. Therefore, hospitals need some way to have input on both the selection and termination of Medicare contractors.

We strongly urge you to consider these issues as you revise performance standards for FIs. We look forward to working with you to develop a reasonable and effective process that works for patients and providers alike.

The AHA appreciates the opportunity to comment on this important notice. If you have questions regarding these comments, feel free to call me, Ashley Shrader, senior associate director for policy development, at (202) 626-2340, or Roslyne Schulman, senior associate director for policy development, at (202) 626?2273.


Rick Pollack
Executive Vice President


About AHA


Member Constituency Sections

Key Relationships

News Center

Performance Improvement

Advocacy Issues

Products & Services


Research & Trends


155 N. Wacker Dr.
Chicago, Illinois 60606

800 10th Street, N.W.
Two CityCenter, Suite 400
Washington, DC 20001-4956