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THE SECRETARY OF HEALTH AND HUMAN SERVICES «vASmiNGTON O C ?0201 JAN 7 1^4 The Honorable Albert Gore, Jr. President of the Senate Washington, D.C. 20510 Dear Mr. President: am pleased to provide this report consistent with I section 1848 (g)(6) of the Social Security Act (the Act), as added by the Omnibus Budget Reconciliation Act of 1989 (OBRA 89). That section requires me to report annually on participation, assignment, and extra billing in the Medicare program. This is the second annual report submitted pursuant to that statutory provision. Pursuant to our monitoring responsibility under the Act, we reviewed data to determine whether financial liability increased for Medicare beneficiaries under the first year of the Medicare physician fee schedule. We are pleased to report that, during the fee schedule's first year (i.e., during 1992), Medicare beneficiaries experienced few, if any, increases in their overall financial liability. In fact, the contrary is true. In 1992, Medicare beneficiary liability decreased on two fronts. There was a smaller proportion of dollars billed on an unassigned basis (i.e., a 17.2 percent decrease), and for the unassigned dollars remaining, the extra billing rate decreased. From 1991 to 1992, the percent of Medicare allowed charges billed on an assignment-related basis increased from 83.6 percent to 86.5 percent. During that same period, there was also a 7.3 percent Increase in the proportion of charges billed by participating physicians and practitioners. Extra billing is the eunount by which submitted charges on unassigned claims exceed allowed charges. During 1992, extra billing dropped to 22.8 percent. This was a 23.5 percent reduction from the 1991 rate. Similarly, the percentage of physicians who sign Medicare participation agreements continued to increase. I Page 2 - The Honorable Albert Gore, Jr. In summary, we have found no significant decreases in the assignment rate or proportions of charges billed by participating physicians. Nor have we found significant increases in extra billing rates. Therefore, no plan to address such problems is being submitted with this report. am also sending a copy of this report to the Speaker of the I House of Representatives. Sincerely, Donna E. Shalala Donna E. Shalala Enclosure THE SECRETARY OF hEAlTm AND HUMAN SERVICES »vasMminGTON. O Cm20201 1 The Honorable Thomas S. Foley Speaker of the House of Representatives Washington, D.C. 20515 Dear Mr. Speaker: am pleased to provide this report consistent with I section 1848 (g)(6) of the Social Security Act (the Act), as added by the Omnibus Budget Reconciliation Act of 1989 (OBRA 89). That section requires me to report annually on participation, assignment, and extra billing in the Medicare program. This is the second annual report submitted pursuant to that statutory provision. Pursuant to our monitoring responsibility under the Act, we reviewed data to determine whether financial liability increased for Medicare beneficiaries under the first year of the Medicare physician fee schedule. We are pleased to report that, during the fee schedule's first year (i.e., during 1992), Medicare beneficiaries experienced few, if any, increases in their overall financial liability. In fact, the contrary is true. In 1992, Medicare beneficiary liability decreased on two fronts. There was a smaller proportion of dollars billed on an unassigned basis (i.e., a 17.2 percent decrease), and for the unassigned dollars remaining, the extra billing rate decreased. From 1991 to 1992, the percent of Medicare allowed charges billed on an assignment-related basis increased from 83.6 percent to 86.5 percent. During that same period, there was also a 7.3 percent increase in the proportion of charges billed by participating physicians and practitioners. Extra billing Is the amount by which submitted charges on unassigned claims exceed allowed charges. During 1992, extra billing dropped to 22.8 percent. This was a 23.5 percent reduction from the 1991 rate. Similarly, the percentage of physicians who sign Medicare participation agreements continued to increase. Page 2 - The Honorable Thomas S. Foley In summary/ we have found no significant decreases in the assignment rate or proportions of charges billed by participating physicians. Nor have we found significant increases in extra billing rates. Therefore, no plan to address such problems is being submitted with this report. am also sending a copy of this report to the President of the I Senate. Sincerely, Donna E. Shalala Donna E. Shalala Enclosure cc: Louisa Buatti Stan Weintraub ^ Janet McNair