# Medicare Program; Revised Criteria and Standards for Evaluating Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Regional Carriers' Performance Beginning February 1, 1996 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A96-1262 ## Record - **Collection:** Federal Register - **Document type:** Notice - **Published:** January 26, 1996 - **Citation:** 61 FR 2516 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES [BPO-134-NC] Medicare Program; Revised Criteria and Standards for Evaluating Durable Medical Equipment, Prosthetics, Orthotics, and Supplies Regional Carriers' Performance Beginning February 1, 1996 AGENCY: Health Care Financing Administration (HCFA), HHS. [[Page 2517]] ACTION: Notice with comment period. ----------------------------------------------------------------------- SUMMARY: This notice revises the criteria and standards we use to evaluate the performance of Durable Medical Equipment, Prosthetics, Orthotics, and Supplies regional carriers in administering the Medicare program under their contracts with us. These revisions are necessary to make the performance standards consistent with HCFA's current expectations and to improve service to Medicare beneficiaries. DATES: Effective Date: This notice is effective on February 1, 1996. Comment Date: Comments will be considered if we receive them at the appropriate address, as provided below, no later than 5 p.m. on February 26, 1996. ADDRESSES: Mail written comments (1 original and 3 copies) to the following address: Health Care Financing Administration, Department of Health and Human Services, Attention: BPO-134-NC, P.O. Box 26676, Baltimore, MD 21207. If you prefer, you may deliver your written comments (1 original and 3 copies) to one of the following addresses: Room 309-G, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC 20201, Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850. Because of staffing and resource limitations, we cannot accept comments by facsimile (FAX) transmission. In commenting, please refer to file code BPO-134-NC. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, in Room 309-G of the Department's offices at 200 Independence Avenue, SW., Washington, DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-7890). FOR FURTHER INFORMATION CONTACT: Sue Lathroum, (410) 786-7409 or Rich Morrison, (410) 786-7142. SUPPLEMENTARY INFORMATION: I. Background Section 1842(a) of the Social Security Act (the Act) authorizes contracts with carriers for the payment of Part B claims for Medicare- covered services and items. Section 1842(b) of the Act requires us to publish in the Federal Register criteria and standards for the effective and efficient performance of contract obligations before implementing them. On June 18, 1992, we published in the Federal Register (57 FR 27302) the criteria and standards to be used for evaluating the performance of regional carriers for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) under their contracts with us. The criteria and standards measure the effectiveness and efficiency of the DMEPOS regional carriers in carrying out the requirements of their contracts. The initial evaluation period for the DMEPOS regional carriers was from October 1, 1993 through September 30, 1994. We announced that we will consider the results of these evaluations in entering into, renewing/extending, or terminating contracts or contract amendments with the DMEPOS regional carriers. We also announced that we may revise the criteria and standards if changes are needed because of administrative mandate, congressional action, or performance expectations. The criteria and standards were included in the current contracts with the DMEPOS regional carriers, which were effective beginning January 1, 1993, with option periods extending to September 30, 1996. The criteria and standards are subject to possible revision if the contracts or contract amendments are renegotiated, new contracts are awarded, or different carrier contracts are amended to provide for the performance of the DMEPOS functions. In accordance with section 1842(b) of the Act, we must publish in the Federal Register any revisions to these criteria and standards before their implementation. The criteria and standards published in the June 1992 final rule (57 FR 27302) are structured into six criteria to evaluate the overall performance of the DMEPOS regional carriers. They include: (1) Quality; (2) efficiency; (3) service; (4) fraud and abuse; (5) National Supplier Clearinghouse; and (6) Statistical Analysis DMEPOS regional carrier. The six criteria contain a total of 12 standards. There are two for quality, four for efficiency, three for service, one for fraud and abuse, one for the National Supplier Clearinghouse, and one for the Statistical Analysis DMEPOS regional carrier. II. Provisions of this Notice A. Changes to the June 1992 Criteria and Standards We used the June 1992 criteria and standards to evaluate the performance of the DMEPOS regional carriers for the period October 1, 1993 through September 30, 1994. We have determined through our experience that revisions to the ``Efficiency'' and ``Service'' criteria are necessary to reflect current needs. We also believe that some minor clarifications to the ``Quality'' and ``National Supplier Clearinghouse'' criteria are appropriate. Therefore, as described below, we will revise the criteria and standards we use to evaluate the performance of our DMEPOS regional carriers. The revised criteria and standards will be effective February 1, 1996. These criteria will replace those listed in the June 1992 final rule (57 FR 27302). Efficiency Criterion We will retain Standard 1 under the ``Efficiency'' criterion. We will no longer use Standards 2 through 4. Standard 2 for Electronic Media Claims (EMC) is no longer included since DMEPOS regional carriers are no longer assigned specific EMC goals previously measured under this standard. Now that specific goals are no longer being assigned, more focus can be placed on standardization of file formats. Standards 3 and 4 relating to expenditures and costs under these contracts no longer apply because contracts are awarded or contract amendments are entered into on the basis of proposed costs related to the entire DMEPOS regional carrier workload. Consequently, under the ``Efficiency'' criterion, beginning February 1, 1996, the DMEPOS regional carrier is required to: (1) Process 95.0 percent of clean claims within mandated timeframes, and (2) process 97.0 percent of all claims within 60 days. Service Criterion We will retain Standard 1 under the Service criterion. Under Standard 2, we will retain the requirement for DMEPOS regional carriers to ensure that 95 percent of written inquiries are responded to timely and accurately. We will revise the standard to require DMEPOS regional carriers to respond to 97.5 percent of telephone inquiries timely and accurately to increase our ongoing efforts to improve services to Medicare beneficiaries. We will revise Standard 3 regarding responses to beneficiaries and supplier education and training needs. When this standard was established, it was necessary for carriers to publish, as well as update, a supplier manual that explains the program requirements. Now that carriers have a supplier manual in place, they only need to update the manual. Therefore, we will remove the requirement for publishing the manual and retain only the requirement to update the supplier manual. [[Page 2518]] Quality Criterion In Standard 2, concerning measures to improve program effectiveness, we will clarify that the DMEPOS regional carrier is not limited to performing only the listed activities. National Supplier Clearinghouse Criterion We will also clarify under the National Supplier Clearinghouse criterion that the National Supplier Clearinghouse DMEPOS regional carrier function is assigned to one of the DMEPOS regional carriers. B. Complete List of Revised Criteria and Standards The complete list of the criteria and standards for evaluating the performance of DMEPOS regional carriers beginning February 1, 1996 follows: We will use six criteria to evaluate the overall performance of DMEPOS regional carriers. They are: (1) Quality; (2) efficiency; (3) service; (4) fraud and abuse; (5) National Supplier Clearinghouse; and (6) Statistical Analysis DMEPOS regional carrier. The six criteria contain a total of 9 standards. There are two for quality, one for efficiency, three for service, one for fraud and abuse, one for the National Supplier Clearinghouse, and one for the Statistical Analysis DMEPOS regional carrier. 1. Quality Criterion A DMEPOS regional carrier must pay claims accurately and in accordance with program instructions. The DMEPOS regional carrier is required to: Standard 1. Process claims at an accuracy rate of 98.5 percent. Claims are processed accurately with respect to coverage determinations, secondary payer consideration, supplier enrollment, and the correct payment amount. Standard 2. Implement measures to improve program effectiveness. The DMEPOS regional carriers must undertake actions to promote effective program administration with respect to DMEPOS claims. These activities include, but are not limited to the following: overpayment recovery and offsetting of claim payment; assuring the proper submission of certificates of medical necessity; review of the implementation of fee schedules and reasonable charge updates; medical review activities; and implementation of coverage policy. 2. Efficiency Criterion Standard 1. The DMEPOS regional carrier is required to process 95.0 percent of clean claims within mandated timeframes and 97.0 percent of all claims within 60 days. 3. Service Criterion Beneficiaries and suppliers are served by prompt and accurate administration of the program in accordance with all applicable laws, regulations, and general instructions. The DMEPOS regional carrier is required to: Standard 1. Ensure that 95.0 percent of reviews and hearings are accurate and timely. We evaluate the reviews and hearings to determine that decisions are accurate and communicated to the appropriate party within 45 days for reviews and 120 days for hearings. Standard 2. Ensure that 97.5 percent of telephone inquiries and 95 percent of written inquires are responded to accurately and timely. The DMEPOS regional carriers must answer calls within 120 seconds, callers do not get a busy signal more than 20 percent of the time, and responses are accurate. Written responses must be accurate and prepared within 30 calendar days of date of receipt. Standard 3. Respond to beneficiary and supplier education and training needs. The DMEPOS regional carriers must undertake actions that serve the beneficiary and supplier communities by explaining program requirements through up-to-date information, periodic educational training and bulletins, updating the supplier manual, meeting with trade associations, and coordinating with local contractors on DMEPOS issues. 4. Fraud and Abuse Criterion Standard 1. The DMEPOS regional carrier is required to conduct an effective program integrity program. We evaluate the DMEPOS regional carriers on a number of activities including: effectiveness in identifying and developing cases of fraud and abuse, bringing the cases to conclusion and collecting inappropriate payments, promoting beneficiary education in referring questionable suppliers or practices, and searching out supplier practices that are inappropriate. 5. National Supplier Clearinghouse Criterion (The National Supplier Clearinghouse DMEPOS regional carrier function is assigned to one of the DMEPOS regional carriers. It performs the functions measured under this criterion.) Standard 1. The National Supplier Clearinghouse DMEPOS regional carrier is required to properly administer the National Supplier Clearinghouse. We review the National Supplier Clearinghouse activities to ensure the National Supplier Clearinghouse DMEPOS regional carrier meets various requirements such as: processing new and renewal applications for billing numbers, maintaining supplier files, matching Office of the Inspector General sanctioned suppliers, and enforcing supplier standards. In addition, we evaluate the National Supplier Clearinghouse DMEPOS regional carrier's performance in conducting statistical analysis of data to identify potential areas of overutilization, overpayments, fraudulent or abusive claims practices, and other areas of concern we identify. 6. Statistical Analysis DMEPOS Regional Carrier Criterion (The Statistical Analysis DMEPOS regional carrier function is assigned to one of the DMEPOS regional carriers. It performs the functions measured under this criterion.) Standard 1. The Statistical Analysis DMEPOS regional carrier is required to properly administer the Statistical Analysis DMEPOS regional carrier program. We review the activities of the Statistical Analysis DMEPOS regional carrier to ensure it meets various requirements such as: Analyzing national reports to identify trends, aberrancies, and utilization patterns; generating reports according to our specifications; serving as the HCFA Common Procedure Coding System definition resource center; and developing national parental and enteral nutrition pricing and national floors and ceiling for DME prices. III. Response To Comments Because of the large number of items of correspondence we normally receive on Federal Register documents published for comment, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, if we proceed with a subsequent document, we will respond to the comments in the preamble to that document. IV. Waiver of Prior Notice and 30-Day Delay in the Effective Date We are publishing this notice as a final notice without prior publication of a proposed notice for public comment. For the reasons discussed below, we believe that publishing a proposed notice is unnecessary. This notice only makes minor revisions to the criteria for evaluating [[Page 2519]] DMEPOS regional carriers' performance and has no major impact on public interest. Therefore, we believe that publication of a proposal is unnecessary, and we find good cause to waive the procedure. We also normally provide a delay of 30 days in the effective date. However, if adherence to this procedure would be impractical, unnecessary, or contrary to public interest, we may waive the delay in the effective date. As a practical matter, if we allowed a 30-day delay in the effective date of this notice, those DMEPOS regional carriers would not be in compliance with the performance standards for fiscal year 1996. This would be contrary to public interest. Therefore, we find good cause to waive the usual 30-day delay in the effective date. In accordance with the provisions of Executive Order 12866, this notice was reviewed by the Office of Management and Budget. Authority: Section 1842(b) of the Social Security Act (42 U.S.C. 1395u). (Catalog of Federal Domestic Assistance Program No. 93.778, Medical Assistance Program; No. 93.773, Medicare--Hospital Insurance Program; and No. 93.774, Medicare--Supplementary Medical Insurance Program) Dated: August 14, 1995. Bruce C. Vladeck, Administrator, Health Care Financing Administration. Note: This document was received at the Office of the Federal Register on January 22, 1996. [FR Doc. 96-1262 Filed 1-25-96; 8:45 am] BILLING CODE 4120-01-P --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A96-1262. Public record. Not legal advice.