Electronic Medicare system may lose millions

Medicare may lose $140 million annually in earned interest if a system is

created to pay doctors more quickly, the General Accounting Office warned

Congress on Tuesday.

Looking at the benefits and problems of modernizing Medicare's payment system,

GAO told the House Government Reform Committee's Information and Technology

Subcommittee that a faster turnaround may benefit health care providers,

but it will hurt the government, which makes money by delaying payments.

Legislation moving through Congress calls for developing a new architecture

to speed up the processing of Medicare payments, inform doctors exactly

what is covered and allow for electronic payment of claims.

GAO said that the government could lose even more than the estimated $140

million annually if the average turnaround time drops below five days.

"Consequently, a decrease in interest earnings could prompt the need for

additional appropriations or increases in beneficiaries' premiums to compensate

for the interest that the trust fund would otherwise have earned," GAO said.

Gary Christoph, the CIO for the Health Care Financing Administration, which

administers the health care program for the elderly and disabled, also told

the committee that doctors may face the additional cost of paying for an

electronic system to process claims.

"We must remember the lessons of past efforts at our agency and others in

attempting to build a single, "big-bang system,' [and instead] plan our

modernization carefully, proceed incrementally and build modularly," Christoph

said.

Nevertheless, Sen. Richard Lugar (R-Ind.) co-sponsor of the bill, said it

is time to build an infrastructure that would process the "vast number of

basic transactions that now clog the pipeline and drain scarce health care

resources."

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