News in brief - Aug. 22/29, 2005

Medicare drug option delayed - HIPAA compliance deadline - N.C. Medicaid creates new fraud unit

Medicare drug option delayed

The Centers for Medicare & Medicaid Services postponed launching a program designed to give doctors an alternative purchasing system for physician-administered drugs.

The competitive acquisition program, which would give doctors the option to obtain chemotherapy treatments and other Medicare Part B drugs from one of several vendors selected through a bidding process, will now start in July 2006. It was to start in January 2006. CMS has been promoting the initiative as an attractive option for doctors who don't have the time or resources to find the lowest drug prices on the open market.

Federal officials suspended the bidding process after an insufficient number of drug vendors decided to participate in the current competitive system, said pharmaceutical industry experts. CMS will start collecting bids about a month after it issues a final rule on the program later this year. Comments on an interim final rule issued earlier this year are due Sept. 6.

HIPAA compliance deadline

The few physicians who still submit Medicare claims that don't comply with HIPAA regulations won't receive reimbursement for the claims after Oct. 1, federal officials recently announced.

The vast majority of Medicare participants submit electronic claims in a format adopted for national use and mandated by a regulation that took effect in October 2003. Officials continued to accept noncompliant claims under a contingency plan that is now coming to an end.

Doctors and other medical professionals have been diligent in getting on board with the requirements, said the Centers for Medicare & Medicaid Services. Fewer than 4% of all Medicare participants still need to become compliant, and more than 99% of all claims are in the correct format.

N.C. Medicaid creates new fraud unit

To control escalating costs for the low-income insurance program, the state agency that runs North Carolina's Medicaid program in July created a 10-person task force to investigate fraud and abuse.

Members of the state's Division of Medical Assistance will comprise the task force, which will investigate potential abuses by visiting physician and other medical professional offices that accept Medicaid patients. The task force will determine what services and costs are reasonable and will take a tougher stance when it comes to dealing with suspected abusers while the state's attorney general's office investigates.

Allen Dobson, MD, the state's assistant secretary for health policy and medical assistance, said the state immediately would suspend Medicaid payments to physicians and others if an administrative review and hearing determines that there is fraud and abuse that should be referred to the attorney general's office. Also, those physicians and health professionals will not be allowed to accept new Medicaid patients.