County Files Claim For Medicare Health Providers

April 4, 2007

SAN DIEGO  – The County of San Diego has taken the first step toward filing a suit  against the federal government that seeks millions of dollars in unreimbursed  Medicare costs that should have been paid to San Diego area doctors and healthcare  providers.

The County  of San Diego has joined with four  other counties – Santa Cruz, Santa   Barbara, Sonoma  and Marin – in filing a claim with the U.S. Department of Health and Human Services  that contends that the counties have been reimbursed for Medicare claims at  rates lower than counties with equal costs of living. If the claim is rejected,  it is likely that a suit will be filed.

According to antiquated federal  guidelines, Medicare reimburses doctors up to 24 percent more to treat patients  in “urban” areas than in “rural” areas, which San Diego and the other four counties are  categorized.

“This failed payment system has  caused critical shortages of health care personnel in our region,” said San  Diego County Board of Supervisors Chairman Ron Roberts. “And it is severely impacting  the quality of health care for our disabled and elderly populations.

Medicare is the single largest  purchaser of health services in the United States, spending in excess  of $55 billion each year on physician services alone, for 43 million aged and  disabled Americans.  Payments to  suppliers are calculated by DHHS based on the “geographic fee schedule areas”  where the services are provided.  These  fee schedule areas were first designed in 1966, and have not been updated since  1996, despite significant changes in demographics, and despite numerous  requests from suppliers and state medical associations for restructuring.  As a result of the failure by DHHS to update  the fee schedule areas, as directed by Congress, suppliers in certain counties  in California,  for example, are paid 12-24 percent less than their colleagues in neighboring,  demographically similar counties for providing exactly the same services.

This is a national problem  affecting the quality of health care to which our disabled and elderly are  entitled.  Medicare’s system for payment  to suppliers no longer bears a reasonable relationship between the amount of  payment and the costs incurred by suppliers in providing medical services.  These inequities are causing a reduction in  access to much needed medical care for millions of disabled and elderly  Medicare beneficiaries in many areas of the country.

The claim brought by the five California counties seeks back payments from Medicare for  all underpaid suppliers in the United    States for the past six years, as is allowed  by law.