Section 5: Repeal Harmful Federal Regulations

Administrative costs in the U.S. private and public health care system amount to around $361 billion annually — 14 percent of all health care expenditures. Insurers and government health programs, such as Medicare and Medicaid, require physicians and their patients to follow too many complex, nonsensical, and redundant policies, rules, and procedures. In fact, physicians and health care providers employ more billing and posting clerks than any other industry.[26

Since September 2011, physicians have had to comply with more than 100 new administrative mandates resulting from the Affordable Care Act (ACA). Unfortunately, the ACA was not the genesis of physician regulation, nor are these busy rulemakers limited to the federal government. The huge numbers of state and federal regulations and their haphazard nature place tremendous burdens on physicians’ practices, most of which are small businesses. These rules insert the government between physicians and their patients, frequently do little to improve patient care, and divert physicians’ time and energy away from their patients in the exam room.

Eliminate the adoption of ICD-10 coding system 
Forced adoption of International Classification of Diseases, 10th revision (ICD-10), is an excellent example of a costly regulation that will disrupt practice operations. ICD-10 is a 20-year-old boondoggle of a system that will help only health care researchers. All physicians, hospitals, providers, and insurance companies must shift from ICD-9 to ICD-10 by Oct. 1, 2015.


The number of diagnostic codes that physicians will be required to use under ICD-10 will grow from 13,500 to 69,000. The number of inpatient procedure codes will soar from 4,000 to 71,000. For example, the new system has 480 codes for a fractured knee cap — up from a grand total of 2 in ICD-9. Switching to ICD-10 will mandate extensive revision of physicians’ paper and electronic systems. Transition to the new system is expected to cost solo physicians up to $226,000 each. The cost to a midsize practice with 10 physicians, six administrative staff, and one full-time coder ranges from $213,000 to $824,000; the cost for a large practice with 100 physicians and 10 full-time coders could reach up to $8 million.

The ICD-10 mandate will create significant burdens on the practice of medicine with absolutely no direct benefit to individual patient care. It is a huge weight to place on physicians when they face numerous other administrative hurdles, including implementing and achieving meaningful use of electronic health records (EHRs), meeting quality measures under Medicare’s Physician Quality Reporting System (PQRS) and other programs, the impending creation of accountable care organizations in Medicare, and more. The timing of the transition could not be worse, as many physicians already are spending significant time and resources implementing complex EHRs in their practices. 

ICD-10 is old technology developed during the 1980s and not designed to work in the current electronic world. A new version of the codes, ICD-11, could come as early as 2017. It is being designed for use with EHRs and the Internet, and should be more user-friendly than ICD-10.

After three deadline extensions, TMA is asking the Centers for Medicare & Medicaid Services (CMS) to delay ICD-10 permanently until ICD-11 or another appropriate replacement for ICD-9 is ready for widespread implementation.

Stop Recovery Audit Program bounty hunters  
CMS hires several types of contractors to review and audit medical care delivered by doctors — Recovery Audit Program contractors (better known as RACs), zone program integrity contractors, Comprehensive Error Rate Testing contractors, and Medicare administrative contractors. It’s confusing, burdensome, and expensive for physicians to defend their medical decisions with so many audit programs administered by multiple contractors — especially when many of the RAC claims are erroneous. In fact, the U.S. Department of Health and Human Services’ (HHS’) Office of Medicare Hearings and Appeals recently announced it would no longer accept any physician or provider requests for administrative law judge review, the third level of administrative review in the Medicare appeals process. Citing a backlog of 357,000 cases, HHS said it would not accept new appeals for up to two years. RACs are costing physician practices time and money, and taking their time away from patient care.[27]

Here are just a few of the problems with the Recovery Audit Program:

  • RACs are essentially bounty hunters; they receive a healthy commission on every claim they deny.
  • RACs don’t have a medical license. Personnel with little to no expertise in medical care conduct the reviews, which helps explain why their “overpayment determinations” are being overturned at an alarming rate. Only physicians should be allowed to decide whether a physician service was medically necessary.
  • RACs are not held accountable. According to CMS, the RAC loses 43 percent of the time when a physician or provider appeals an overpayment claim. Physicians should not bear the cost of legal and administrative fees to pursue appeals, especially when they win the appeal. RACs should be penalized for erroneous overpayment determinations and should be required to reimburse physicians for the costs incurred in defending against a recovery audit when the RAC loses the appeal.
  • Extrapolations should not be allowed. RACs should not base their findings on a statistical sample of claims, which is not always an accurate assessment of a physician’s coding and documentation. Instead, RACs should review claims on an individual basis. 

Eliminate costly administrative and payment schemes  
In addition to reducing costs of existing administrative requirements, TMA wants to prevent the government from placing new burdens on physician practices, such as electronic funds transfer (EFT) fees.  

TMA became aware of certain companies that were acting as middlemen in EFT transactions. One company told physicians they must “act quickly” to “continue to receive payments” through EFT at a charge of 1.5 percent per claim. 

The most scurrilous aspect of an EFT percentage fee is that the amount paid may increase greatly with no corresponding increase in the actual cost of funds transfer. For instance, at 1.5 percent, an EFT for a $200 service would cost $3, while an EFT for a $10,000 surgery would be $150. According to the U.S. Treasury, it costs the government “10.5 cents to issue an EFT payment.” To charge even $3 is an outrageous overcharge for an EFT. TMA opposes charging physicians percentage fees for using EFTs.[28

This is just one example of the many problems that, when taken together, plague physician practices and create administrative complexity and excess expenses. 




  • Require government agencies to consider the disruption that new regulations and penalties introduce into medical practices and refrain from introducing new hurdles.


  • Put ICD-10 on permanent hold until ICD-11 or another appropriate replacement for ICD-9 is ready for widespread implementation. 

Recovery Audit Program

  • Direct Recovery Audit Program contractors (RACs) to focus only on practices with demonstrated inappropriate billing patterns and provide due process and fair procedures for physicians who are subject to a RAC audit.

  • Create a threshold or safe harbor for physicians who are overpaid by a small amount to ensure they are not subject to fraud prosecution. 

Administrative Simplification

  • Oppose efforts to charge physicians fees for using electronic funds transfers (EFTs).

  • Require, after an initial face-to-face encounter, the Centers for Medicare & Medicaid Services (CMS) to pay for patient phone and email consultations. 

  • Require health plans to have a standardized, electronic format by which physicians can obtain their entire fee schedule. 

  • Establish uniform and enforceable standards so insurers pay the required first-dollar coverage of preventive care. 

  • Update formats for electronic eligibility verification (270/271) to standardize all information required as a result of the Affordable Care Act (ACA). 

  • Repeal the ACA requirement that a prescription is necessary for health savings account or flexible savings account reimbursement for over-the-counter drugs. 

  • Eliminate the Clinical Laboratory Improvements Amendment (CLIA) certificate requirements for Centers for Disease Control and Prevention (CDC)-approved items sold over the counter, such as pregnancy tests. 

  • Eliminate the CLIA certificate requirements for physician-performed microscopy. 

  • Prohibit CMS from recovering overpayments from physicians after one year from date of service when CMS has committed a processing error and the physician has made no misrepresentation. 

Medicare Advantage Plans

  • Prohibit termination of physicians from Medicare Advantage (MA) networks within six months of the enrollment period to protect the rights of patients who chose a plan based on its published list of participating physicians.

  • Reverse the new mandate that requires a physician ordering a referral from another physician to be enrolled in Medicare for the referred physician to be paid for his or her services. 

  • Require MA plans to pay physicians any bonus they would earn under CMS incentive programs, such as for e-prescribing, without regard to the MA plan contract with the physician. 

  • Prohibit MA plans from departing from the National Correct Coding Initiative code edits established by CMS. 

  • Mandate that MA plans abide by state insurance prompt pay laws. 

Medicare Administrative Contractor

  • Require all Medicare administrative contractors (MACs) to recognize all Medicare-enrolled physicians.

  • Require CMS and its MACs to accept a death certificate as proof of the true date of death even if it differs from the date provided by the Social Security Administration. 

  • Require CMS to develop a standard Medicare enrollment contract letter for MACs to use that must be accepted by state Medicaid as proof of enrollment. The Texas Medicaid program will not accept the current MAC enrollment letter as proof of Medicare participation. 

  • Require MACs to track and post on their websites the current work/lag time for appeals of claims, claims processing, and enrollment processing. 

Prior Authorizations  

  • Require MACs to track and post on their websites the current work/lag time for appeals of claims, claims processing, and enrollment processing.

  • Stop CMS from using or developing claim submission and payment rules that require non-standard coding for consultation and other services.  


TMA Healthy Vision 2020  

Last Updated On

February 02, 2017

Originally Published On

May 10, 2012