PRACTICE RESOURCES > Regulation/AUA Positions, Letters, and Talking Points > MedPAC Regarding Regulatory Burden on Physicians

MedPAC Regarding Regulatory Burden on Physicians

January 18, 2001

Helaine Fingold
Medicare Payment Advisory Commission
1730 K Street NW, Suite 800
Washington, D.C. 20006

Dear Ms. Fingold:

On behalf of the American Urological Association (AUA), representing 9,200 American urologists, thank you for allowing us to submit concerns for MedPAC's upcoming report on Medicare complexity and regulatory burden. I am sure you are aware that physicians in general share many of the same universal concerns with Medicare complexity and regulation when it comes to documentation, fraud and abuse, self-referral and anti-kickback laws. Therefore, we will share a more urology-specific concern with which you may not be as familiar.

Carrier Implementation of Least Costly Alternative Policies

In an effort to curtail Medicare expenditures, many Medicare carriers have implemented least costly alternative (LCA) policies. LCA policies can be applied when Medicare believes there is no demonstrable difference in clinical efficacy between two treatments. In these cases, Medicare will only reimburse at the payment rate set for the least expensive treatment, even if they are billed for the more expensive treatment. Many carriers have LCA policies in effect for Lupron and Zoladex, which are testosterone-suppressing drugs used to treat prostate cancer. These carriers only reimburse for Zoladex (the cheaper drug), which they believe to be equally efficacious.

However, poor carrier implementation of this policy has created undue regulatory burdens for physicians. For example, two carriers implementing an LCA policy experienced problems changing the payment for Lupron in their computer, and thus were overpaying physicians even after they had implemented the policy. When the errors were discovered, letters were sent to physicians demanding repayment within 30 days. Despite the fact that overpayments were caused solely by the failure of the carrier to program its computers to pay the LCA for the correct dates, the letters described why physicians were responsible.

We agree that physicians should be aware of correct claim filing procedures and should use care when billing and accepting payment. However, we also believe it is unrealistic to expect that physicians should have known they were being overpaid based on the information cited in these letters. For instance, the letters cited a January/February 1998 Medicare Memo and a November 25, 1991 Federal Register. The memo does discuss payments for drugs and biologicals and calculation of average wholesale price (AWP) payments, but does not explicitly list the proper payments. I also doubt many physicians have read the 1991 issue of the Federal Register, as their first responsibility and concern is patient care, not scouring through nine-year old regulations to assure the accuracy of a payment for one service.

Although the AUA requested that the carriers extend the period of time in which to repay to at least 180 days with no penalties for interest to guard against cashflow problems, the extension was not granted. We believe this is fundamentally unfair. It is very time consuming for physicians to check back through their records to verify the amount of demanded repayments. The research is also costly, because physicians incur expenses researching the issue and paying for the necessary accounting services to reflect a large repayment into the physician or group practice tax return.

While this is certainly troubling, we are especially concerned with the broader implications of such blatant carrier errors and the way they are handled. Such errors cause physicians to be unduly inconvenienced and could even be misconstrued by federal fraud enforcement authorities to be improper activity by physicians.

Thank you for considering this issue for your report. If you have any questions or need additional information, please contact Robin Hudson, Manager of Regulatory Affairs, at 410-689-3762 or


Irwin N. Frank, MD, F.A.C.S.
American Urological Association


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