August 28, 2008
By Anne W. Hance*
The U.S. Government Accountability Office (GAO) recently made available a report analyzing the process for premium withholding for Medicare beneficiaries enrolled in Medicare Advantage and Medicare Part D Plans. The GAO found that the Centers for Medicare and Medicaid Services (CMS) and Social Security Administration (SSA) have made significant improvements to the process since Part C and Part D premium withholding became available to Medicare beneficiaries in 2006. Nevertheless, problems continue to delay implementation of correct withholdings, and the GAO issued several recommendations for CMS' and SSA's consideration.
The GAO examined three questions under its October 2007–July 2008 study: (1) How do the processes for withholding premiums from Social Security payments compare for various parts of Medicare? (2) What problems, if any, have been identified with the premium withholding process? (3) What steps have SSA and CMS taken to address these problems? The GAO interviewed officials from SSA, CMS, and the U.S. Department of the Treasury (Treasury); reviewed documents describing the data systems and data exchange policies; examined CMS data on beneficiary complaints; and analyzed time frames for premium withholding processing.
Among the GAO's key findings are the following:
- Tremendous differences exist between the Medicare Part B premium withholding process, which is managed exclusively by SSA (with some CMS and Treasury participation), and the process for Parts C and D, which involves the private plans administering the benefits, CMS, SSA, and Treasury. The latter requires significant data matching at several critical points, and any data inconsistencies (which are not uncommon, given the various origins of the data) result in transaction rejections that delay Medicare beneficiaries' premium withholding.
- The timeframe to process premium withholding requests is necessarily limited by Treasury's schedule for accepting changes to individuals' Social Security payments, resulting in many delays in implementing the withholdings. This delay is exacerbated by the annual enrollment period (November 15–December 31), which extends beyond the "window" for processing withholding requests for the January monthly payment.
- CMS' and SSA's efforts to address the problems resulted in a 38.7% decline in rejected transactions between 2006 and 2007. The agencies should continue to consider solutions, including potentially permitting Medicare Advantage and Part D Plans to bill members until a requested premium withholding is processed, and separating electronic funds transfer (ETF) payments from paper checks for processing through the Treasury's extended "window" for ETF transactions.
Access the GAO report.
*We would like to thank Anne W. Hance (McDermott Will & Emery LLP, Washington, DC) for providing this email alert.