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Thursday, March 7th 2002

The Honorable Tommy G. Thompson
US Department of Health and Human Services
200 Independence Avenue, SW 615F
Washington, DC 20201

Dear Secretary Thompson:

On behalf of our nearly 5,000 hospitals, health systems and other health care provider members, the American Hospital Association (AHA) would like to bring to your attention our concerns that the intent of one of your regulatory relief initiatives is not being followed. We would appreciate your help in communicating your stated intent to the Centers for Medicare and Medicaid Services (CMS). Specifically, revisions to the process for collecting Medicare Secondary Payor (MSP) information were recently made available for public comment after receiving a temporary approval extension last fall in order to pursue streamlining efforts. The MSP's 25 questions must be asked of every Medicare beneficiary every time they obtain services in a hospital in order to determine if another source of coverage should apply first.

As you may recall from our paperwork burden report and our many conversations and meetings on reducing regulatory burden, the MSP information collection and reporting requirement frustrates providers and beneficiaries alike. The same questions must be asked repeatedly, even when a beneficiary is in the midst of a course of outpatient treatment (such as chemotherapy) and with little likelihood of the responses changing. In fact, hospitals are required to search out beneficiaries to obtain the information when they are providing only reference laboratory services and never even see the patient -- only the patient's specimen.

We have asked that this repetitive requirement be streamlined to ask these questions only once every 90 days for patients undergoing a course of treatment. You signaled your agreement at our Annual Meeting last April, when you said it would be "smarter to fill out that form once every quarter instead of once every week." We also objected to the requirement that hospitals obtain this information for laboratory specimens when independent laboratories are not required to do so.

AHA is nearing completion of a detailed review of the paperwork clearance package and we are disheartened by the lukewarm attention that burden reduction is receiving with regard to the MSP. CMS has proposed that the information be collected at least every 30 days for repeat patients (not 90 days as you had suggested) and has retained the requirement that hospital reference labs hunt down beneficiaries to collect the information. We are surprised by the continued requirement to complete these forms for all beneficiaries, when only five percent of beneficiaries might have other coverage. Unlike private health plans, it appears that Medicare has not conducted an analysis of that five percent to develop targeting strategies and avoid unnecessary administrative costs. This may be because Medicare often forces providers to do what is usually a health plan function, thereby, shifting administrative costs to providers.

We will submit more detailed comments and recommendations to the Office of Management and Budget (OMB) and CMS before the comment period closes on March 11. We appreciate your leadership in working to reduce regulatory burden in the health care system, and we would appreciate your help in working with CMS on this matter.


Rick Pollack
Executive Vice President

cc:   Thomas Scully, Administrator, CMS
       Bob Wood, Chief of Staff to the Secretary of HHS
       John Graham, Administrator, Office of Information and Regulatory Affairs, OMB


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