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Report to Congressional Committees: 

December 2004: 

MEDICARE: 

Advisory Opinions as a Means of Clarifying Program Requirements: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-129]: 

GAO Highlights: 

Highlights of GAO-05-129, a report to congressional committees: 

Why GAO Did This Study: 

Health care providers are concerned about the quality of Medicare 
guidance issued by the Centers for Medicare & Medicaid Services (CMS), 
an agency within the Department of Health and Human Services (HHS). 
Specifically, they have reported that (1) they receive unclear guidance 
on program requirements and (2) because policies and procedures change 
frequently, they may rely on obsolete guidance, resulting in billing 
errors. 

Some government agencies issue advisory opinions in response to 
specific questions from requesters. These opinions permit agencies to 
apply law and regulation to a particular set of facts and provide 
requesters with specific guidance. 

The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 directed GAO to determine the appropriateness and feasibility of 
establishing in the Secretary of Health and Human Services authority to 
issue legally binding advisory opinions to interpret Medicare 
regulations. GAO (1) identified factors relevant in establishing an 
advisory opinion process and (2) assessed the role such a process could 
play in clarifying program requirements. GAO examined four federal 
agencies’ advisory opinion processes and interviewed officials from 
organizations representing Medicare stakeholders to learn how such a 
process might address their concerns.

What GAO Found: 

GAO identified five common elements in the way four agencies—CMS, the 
Employee Benefits Security Administration (EBSA) of the Department of 
Labor, the Internal Revenue Service (IRS), and HHS’s Office of 
Inspector General (HHS-OIG)—set up their advisory opinion processes. 
While the processes at the four agencies reflected differences in the 
agencies’ respective constituencies and responsibilities, each agency 
cited five key factors as critical. These were (1) establishing 
criteria for submitting advisory opinion requests, to define the scope 
of their processes, (2) developing alternative ways of responding to 
advisory opinion requests, such as providing other forms of written 
communication, (3) determining the time frame for issuing advisory 
opinions, (4) considering anticipated workload, staffing requirements, 
and user fees as a means of offsetting expenses incurred by the 
government, and (5) creating internal review and external coordination 
procedures with other federal agencies with a stake in the outcome of 
an issued opinion. These five factors and lessons learned from other 
agencies that issue advisory opinions may be useful in structuring a 
process for Medicare.

Most of the representatives of provider organizations GAO contacted 
agreed that an advisory opinion process would partially address their 
concerns, for example, by providing them with reliable, written 
responses to their Medicare-related questions. However, they recognized 
that an advisory opinion process would not address all their concerns 
and that it is one of several approaches that could improve Medicare 
guidance. For example, refining existing forms of guidance would also 
be of value.

In commenting on a draft of this report, HHS stated that a more formal 
advisory opinion process for Medicare would be costly to implement, not 
provide quick answers to providers’ questions, and have limited 
applicability. HHS acknowledged that the Medicare program and its 
implementing regulations are inherently complex and underscored its 
efforts to improve stakeholders’ understanding of the program’s 
complexities. 

Advisory Opinion User Fees at Four Agencies in Fiscal Year 2004: 

Agency: CMS; 
User fee: $75 per hour for staff costs, with a $250 nonrefundable 
deposit required when the request is made; 
Charges per opinion: $250[A].

Agency: EBSA; 
User fee: Not applicable; 
Charges per opinion: No charge.

Agency: HHS-OIG; 
User fee: $86 per hour for staff costs, with a $250 nonrefundable 
deposit required when the request is made; 
Charges per opinion: Ranged from $301 to $3,784.

Agency: IRS; 
User fee: $6,000, based on average cost to agency, with special rate 
for qualifying requesters; 
Charges per opinion: $6,000[B].


Sources: Interviews with CMS, EBSA, HHS-OIG, and IRS officials.

[A] In fiscal year 2004 CMS issued four advisory opinions for which it 
charged $250 for each opinion. CMS anticipates that charges for future 
advisory opinions could be higher.

[B] Some taxpayers may be eligible for reduced user fees, depending on 
the issues involved and the taxpayers’ specific circumstances.

[End of table]

www.gao.gov/cgi-bin/getrpt?GAO-05-129.

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Leslie G. Aronovitz at 
(312) 220-7600.

[End of section]

Contents: 

Letter: 

Results in Brief: 

Background: 

Five Key Factors for Establishing an Advisory Opinion Process: 

Medicare Providers Consider Advisory Opinions as a Possible Way to 
Improve Guidance: 

Concluding Observations: 

Agency Comments: 

Appendixes: 

Appendix I: Medicare Stakeholders Contacted: 

Appendix II: Comments from the Department of Health and Human Services: 

Appendix III: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Advisory Opinion Workload and Staffing Levels at EBSA, HHS-
OIG, and IRS in Fiscal Year 2003: 

Table 2: Advisory Opinion User Fees at Four Agencies in Fiscal Year 
2004: 

Abbreviations: 

APA: Administrative Procedure Act: 

CMS: Centers for Medicare & Medicaid Services: 

EBSA: Employee Benefits Security Administration: 

ERISA: Employee Retirement Income Security Act of 1974: 

FTE: full-time equivalent: 

HHS: Department of Health and Human Services: 

HHS-OIG: Department of Health and Human Services-Office of Inspector 
General: 

IRS: Internal Revenue Service: 

MAC: Medicare Appeals Council: 

Letter December 8, 2004: 

The Honorable Charles E. Grassley: 
Chairman: 
The Honorable Max Baucus: 
Ranking Minority Member: 
Committee on Finance: 
United States Senate: 

The Honorable Joe Barton: 
Chairman: 
The Honorable John D. Dingell: 
Ranking Minority Member: 
Committee on Energy and Commerce: 
House of Representatives: 

The Honorable Bill Thomas: 
Chairman: 
The Honorable Charles B. Rangel: 
Ranking Minority Member: 
Committee on Ways and Means: 
House of Representatives: 

The Centers for Medicare & Medicaid Services (CMS), an agency within 
the Department of Health and Human Services (HHS), administers 
Medicare--the federal health insurance program that serves the nation's 
aged and certain disabled individuals. In fiscal year 2003, Medicare 
paid over $271 billion for the health care of approximately 41 million 
beneficiaries. More than 1 million providers submitted about 
950 million claims during that year. As part of its responsibilities, 
CMS issues regulations to implement Medicare laws that govern the 
participation of beneficiaries, physicians, hospitals, medical 
suppliers, and other stakeholders in the Medicare program. Because of 
Medicare's size and complexity, its regulations are written to cover a 
variety of situations. Although it is critical that stakeholders 
understand how the program operates, it may be difficult for them to 
interpret Medicare's many regulations and apply them to their own 
unique circumstances. CMS--with the assistance of the claims 
administration contractors[Footnote 1]--routinely issues various forms 
of guidance to beneficiaries and health care providers. CMS and its 
contractors also respond to questions from interested parties to 
further help them understand program requirements.

In recent years, Medicare providers have become increasingly concerned 
about the quality of guidance issued by CMS. For example, they have 
criticized CMS for a lack of clarity in regulations and related 
guidance on a variety of program issues ranging from the determination 
of medical necessity for services covered to the proper use of billing 
codes. Providers have also expressed concern that because Medicare 
policies and procedures change frequently, program guidance on which 
they rely may be obsolete. Consequently, they worry that they may make 
billing errors that could trigger a range of possible adverse 
consequences.[Footnote 2]

Like other federal agencies, HHS currently issues advisory opinions as 
part of its guidance framework. HHS has two separate advisory opinion 
processes for specific provisions of Medicare law, but neither process 
covers the wide range of regulations that govern the Medicare program. 
Advisory opinions are typically written responses to specific questions 
that address whether a requester's action or proposed action is in 
compliance with applicable laws and regulations. The purpose of 
advisory opinions is generally to permit people engaging in complex or 
unprecedented transactions to act with some confidence that their 
actions will not later be found to have been illegal. In general, 
advisory opinions (1) are issued to a requesting party, (2) interpret 
or apply law and regulation to a specific set of facts, such as an 
ongoing or proposed business arrangement, and (3) are legally binding, 
if at all, only with respect to the requesting party, the specific set 
of facts described, and the extent set out in the advisory opinion.
[Footnote 3] An advisory opinion provides the party who requested it 
with assurance that, should the party proceed consistent with the 
opinion, the agency will not take adverse action against that party to 
the extent set out in the advisory opinion. Because advisory opinions 
may be published, other interested parties may readily look to them as 
guidance.

The Medicare Prescription Drug, Improvement, and Modernization Act of 
2003 directed us to determine the appropriateness and feasibility of 
establishing in HHS the authority to provide legally binding 
advisory opinions on the appropriate interpretation and application of 
regulations to carry out the Medicare program.[Footnote 4] As we 
discussed with the committees of jurisdiction, we (1) identified 
factors relevant to the establishment of such an advisory opinion 
process and (2) assessed the role such a process could play in 
clarifying Medicare regulations.

To identify factors relevant to the establishment of an advisory 
opinion process, we selected four federal agencies that have such 
processes in place and reviewed the policies and procedures each has 
instituted to manage the processes. We obtained information on the 
workload and staffing levels related to the advisory opinion process at 
each agency. In addition, we obtained information on the user fees 
charged by these agencies to those requesting advisory opinions. The 
information we obtained was the most current available at the time we 
performed our work. We also interviewed officials involved with issuing 
advisory opinions at all four agencies. In selecting agencies, we chose 
the two agencies within HHS--CMS and HHS's Office of Inspector General 
(HHS-OIG)--that issue opinions on provisions of Medicare law, and two 
other federal agencies--the Internal Revenue Service (IRS) and the 
Employee Benefits Security Administration (EBSA) of the Department of 
Labor--that administer complex programs governed by numerous laws and 
regulations affecting large constituencies. In addition, we met with 
two experts on administrative law and two private sector attorneys to 
discuss advisory opinion processes and factors relevant to the 
establishment of a new process at HHS to interpret Medicare 
regulations.

To assess the role an advisory opinion process might play in clarifying 
Medicare regulations, we interviewed officials from 15 organizations 
representing various Medicare stakeholders, with an emphasis on 
organizations representing providers, including one hospital that we 
visited. (See app. I.) We conducted our work from May 2004 through 
November 2004 in accordance with generally accepted government auditing 
standards.

Results in Brief: 

We identified five factors that are critical to the establishment and 
management of an advisory opinion process. Officials at each of the 
four agencies whose processes we examined consistently cited these 
factors as critical to their processes. First, all four agencies have 
defined the scope of the advisory opinion process by establishing 
criteria for submitting advisory opinion requests. For example, none of 
the four agencies will provide advisory opinions for requests that are 
based on hypothetical situations. In addition, two of these agencies--
IRS and EBSA--have further restricted the scope of their processes by 
identifying topics on which they will not provide opinions. Second, all 
four agencies use alternative ways of responding to advisory opinion 
requests. For example, these agencies may decide that a request 
concerning a straightforward question that is already clearly addressed 
in other published guidance does not necessitate an advisory opinion. 
In such cases, the agencies may opt instead to respond through a letter 
or by telephone. Third, addressing the issue of a time frame for 
responding to requests was viewed as essential. Statutory requirements 
drive such time frames at CMS and HHS-OIG. However, IRS and EBSA have 
devised their own approaches. IRS has set its own deadline of 
responding to requests within 4 to 6 months. Conversely, EBSA has not 
established a deadline. Instead, in determining when to respond to a 
requester, it considers the significance of the issue addressed by the 
request and also takes into account whether the request involves a 
time-critical matter. Fourth, the four agencies had to consider their 
anticipated workload, staffing requirements, and appropriate user fees. 
An advisory opinion process was viewed as needing an adequate number of 
staff with appropriate backgrounds, such as attorneys and individuals 
with program expertise. Fifth, the agencies stressed that creating 
internal review and external coordination procedures with other federal 
agencies that may have a stake in the outcome of any given opinion was 
important to their programs.

Overall, most of the representatives of provider organizations we spoke 
with agreed that a process for providing legally binding 
advisory opinions would partially address their concerns about the 
guidance that they currently receive from CMS and its contractors. They 
told us that providers often find it difficult to obtain timely and 
reliable answers to their questions regarding Medicare from CMS and its 
claims administration contractors. Most favored the establishment of an 
advisory opinion process to interpret Medicare regulations, in part 
because such a process would provide them with accurate, written 
responses that could offer providers protection from possible adverse 
actions. At the same time, these groups also generally recognized that 
a legally binding opinion may not provide an immediate answer. By their 
nature, advisory opinion processes are not designed to provide 
requesters with answers within a day or a few weeks. As a result, these 
groups concurred that, while beneficial, advisory opinions may not 
address their need to obtain timely responses to their questions. In 
addition, they noted that improving the clarity and accessibility of 
other forms of Medicare guidance would remain important to them, 
regardless of the availability of legally binding advisory opinions.

In commenting on a draft of this report, HHS stated that an enhanced 
and more formal advisory opinion process for Medicare would not be a 
successful pursuit at this time. HHS said it would be costly to 
implement, would not provide quick answers to providers' questions, and 
would have limited applicability beyond the parties requesting 
advisory opinions. However, HHS acknowledged that the Medicare program 
and its implementing regulations are inherently complex and underscored 
its efforts to improve stakeholders' understanding of the program's 
complexities.

Background: 

The process of implementing programs established by federal law often 
begins with the issuance of rules to guide those who are subject to the 
law's requirements. The requirements for promulgating rules, set out in 
the Administrative Procedure Act (APA), usually include the publication 
of a proposed rule, an opportunity for public comment, and the 
publication of a final rule after taking into consideration the 
comments received.[Footnote 5] Final rules, also referred to as 
regulations, have the force and effect of law. To explain and clarify 
the statutory law and implementing regulations, the APA also permits 
agencies to issue orders, which are the result of an adjudication that 
resolves a dispute or controversy between the agency and one or more 
parties. While orders are typically binding only on the parties 
directly involved, agency officials and program participants often use 
them for guidance. Because agencies rarely issue regulations or orders 
that explain every element of the programs they administer, they also 
produce a wide variety of written guidance, which may include 
advisory opinions. Although the APA prescribes the process agencies 
generally must follow to issue rules and orders, it does not prescribe 
a process for producing advisory opinions. In light of this, agencies 
generally have discretion in how they can structure their advisory 
opinion processes, subject to constraints, if any, in other applicable 
statutes.

HHS produces written guidance about Medicare in a variety of forms. 
For example, it issues "rulings" that, according to the agency, provide 
clarification and interpretation of complex or ambiguous provisions of 
law or regulations and promote consistency in the interpretation of 
policy and adjudication of disputes. Although rulings are not issued in 
response to specific requests, they are binding on CMS and Medicare 
contractors, among others. In addition, HHS's Medicare Appeals Council 
(MAC) issues written decisions in disputes over Medicare eligibility 
and specific Medicare claims.[Footnote 6] Although MAC is a component 
of HHS, it functions independently and is not bound by guidance, such 
as Medicare program instructions or memoranda, issued by CMS. MAC 
decisions are binding precedent in subsequent disputes and serve as 
another significant source of Medicare guidance. Furthermore, HHS 
provides Medicare guidance through reimbursement manuals, program 
transmittals, coverage determinations, program instructions, CMS 
publications, program memorandums, fraud alerts, press releases, and 
other publications.[Footnote 7] In addition, CMS and its claims 
administration contractors respond to millions of written and oral 
questions from providers and beneficiaries annually.

HHS does not issue advisory opinions on the Medicare program except 
where expressly required by statute.[Footnote 8] CMS and HHS-OIG have 
processes that generally focus on two provisions of Medicare law 
concerning specific types of business arrangements.[Footnote 9] 
Specifically, HHS-OIG provides advisory opinions in connection with the 
federal health care antikickback statute,[Footnote 10] which imposes 
criminal penalties for knowingly giving, offering, soliciting, or 
receiving payment for patient referrals, among other things. CMS 
provides advisory opinions related to the so-called Stark Law,[Footnote 
11] which generally prohibits physicians from referring patients to 
heath care facilities in which they have a financial interest. Both 
statutory advisory opinion provisions state that these advisory 
opinions shall be binding only on the agency and requesting party. The 
agencies also advise that other parties are not bound by and cannot 
legally rely on these advisory opinions.

IRS and EBSA differ from CMS and HHS-OIG in the scope, management, and 
history of their advisory opinion processes. While both CMS and HHS-OIG 
have developed their advisory opinion processes within the last decade, 
IRS and EBSA have a long history of providing advisory opinions under 
their authority to administer federal tax and employee benefits law, 
respectively. Unlike CMS and HHS-OIG, the processes in IRS and EBSA 
were initiated by the agencies under their authority to administer laws 
in these areas rather than in response to specific statutory 
requirements. IRS established its advisory opinion process in 1953 to 
answer requests regarding the tax effects of certain acts or 
transactions.[Footnote 12] EBSA established its process in 1976 to 
answer inquiries regarding the Employee Retirement Income Security Act 
of 1974 (ERISA), which is a federal law governing employee benefit 
plans.[Footnote 13] Despite these differences, IRS and EBSA also 
characterize their advisory opinions as binding on the agency, subject 
to the agencies' ability to modify or revoke the opinion, as 
appropriate. The two agencies also advise that the opinions do not 
apply to other parties and situations.

Five Key Factors for Establishing an Advisory Opinion Process: 

The processes at the four agencies we contacted--CMS, HHS-OIG, IRS, and 
EBSA--reflect common elements that merit consideration when 
establishing an advisory opinion process. We identified five key 
factors related to agency planning efforts and allocation of resources 
that each of the four agencies addressed in establishing its advisory 
opinion process. These factors are (1) establishing criteria for 
submitting advisory opinion requests, (2) developing alternative ways 
to respond to advisory opinion requests, (3) determining the time frame 
for issuing advisory opinions, (4) considering anticipated workloads, 
staffing requirements, and user fees, and (5) creating internal review 
and external coordination procedures. The structures of the legally 
binding advisory opinion processes at the four agencies, however, 
reflect differences in their respective constituencies and 
responsibilities.

Establishing criteria for submitting advisory opinion requests: All 
four agencies have defined the scope of their processes by identifying 
criteria for submitting advisory opinion requests. For example, none of 
these agencies will provide advisory opinions for requests that are 
based on hypothetical situations.[Footnote 14] IRS has identified 
circumstances under which it will not issue an advisory opinion, such 
as those concerning issues that it finds frivolous or those that it 
expects will be resolved following the issuance of pending regulations 
or anticipated guidance. IRS has also identified circumstances under 
which it will not ordinarily respond to requests, such as those that 
involve matters already under examination or audit by IRS, or those 
that involve pending litigation. Generally, EBSA will not provide 
advisory opinions for requests where all parties involved are 
insufficiently identified and described, where material facts or 
details of the transaction are omitted, or where the requester is 
seeking an opinion on alternative courses of action. Further, EBSA 
generally only provides advisory opinions for requests on future 
actions, rather than actions or transactions that have already 
occurred. HHS-OIG and CMS also have defined submission criteria for 
their processes. Specifically, they will not provide advisory opinions 
for requests dealing with general questions of interpretation, or 
activities in which the requester is not and does not plan to be 
involved. In addition, HHS-OIG does not issue opinions on matters where 
the same, or substantially the same, subject matter is or has been the 
subject of a government proceeding, or if an informed opinion cannot be 
made, or could be made only after extensive investigation.[Footnote 15]

Two of the four agencies, IRS and EBSA, whose advisory opinion 
processes otherwise involve broad areas of law, have identified 
substantive issues on which they will not provide advisory opinions. 
IRS has developed extensive "no-rule" lists of certain domestic and 
international tax law matters on which the agency will not provide 
advisory opinions, and EBSA has identified sections of ERISA about 
which it will not ordinarily provide advisory opinions. By contrast, 
while the statutory requirements for HHS to provide advisory opinions 
focusing on specific Medicare provisions set out two substantive 
restrictions,[Footnote 16] HHS-OIG and CMS have not identified other 
substantive areas that would eliminate an advisory opinion request from 
consideration, provided that the subject of the request falls within 
the scope authorized by statute.

Developing alternative ways of responding to advisory opinion requests: 
To have efficient advisory opinion processes, the agencies do not 
automatically provide an advisory opinion for every request received, 
and may respond through other means. For example, if an agency decides 
that a request concerns matters that are not complex, it may find it 
more appropriate to provide a response during a telephone conversation. 
Although not legally binding, such a response may provide the requester 
with a satisfactory and timely answer, prompting the withdrawal of the 
request for an advisory opinion. The agencies told us that they respond 
in this manner when requests involve relatively straightforward 
questions that may have already been addressed through earlier 
guidance. For example, an official at HHS-OIG told us that the agency 
may respond orally to a hospital's question on whether a hospital that 
restocks supplies for local ambulances violates the federal health care 
antikickback statute by providing incentives to the ambulance companies 
to direct patients to the hospital. In this case, the HHS-OIG official 
said the agency could direct the requester to existing guidance on the 
matter. However, should a requester want an advisory opinion after 
receiving informal guidance, HHS-OIG will issue an opinion, as 
required.

IRS and EBSA have also established forms of written correspondence in 
addition to legally binding advisory opinions to respond to individual 
requesters. Specifically, both agencies provide information letters, 
which are written statements that call attention to a well-established 
interpretation or principle of law without applying it to a specific 
factual situation. The agencies provide such letters in response to 
requests that they determine do not merit an advisory opinion and could 
be addressed by supplying the requester with general information. For 
example, IRS may decide that an advisory opinion request on a certain 
income tax deduction is best answered through an information letter 
describing the general requirements for claiming these deductions. 
Neither agency publishes all of their information letters.

In addition, one agency responds to some requests for advisory opinions 
by publishing guidance with broad applicability. IRS publishes general 
guidance, which includes revenue rulings that inform the public about 
IRS's position on a particular issue to ensure its uniform application 
of guidance. For example, a revenue ruling might conclude that, given a 
specific set of facts, taxpayers may be entitled to claim certain 
income tax credits. IRS also publishes revenue procedures, which 
consist of official statements of internal practices and procedures, 
such as filing procedures, which affect the rights and duties of 
taxpayers. For example, a revenue procedure might describe filing 
procedures that taxpayers must follow to claim certain income tax 
deductions and credits. IRS officials said that the agency places a 
higher priority on issuing more broadly focused guidance, such as 
revenue rulings, than on other, more narrowly focused forms of guidance 
such as advisory opinions.

Determining the time frame for issuing advisory opinions: The four 
agencies varied on how they addressed the issue of a time frame for 
providing advisory opinions. HHS-OIG is required by law to issue 
advisory opinions within 60 days.[Footnote 17] CMS's regulations 
provide for it to issue opinions within 90 days or, for requests that 
it determines involve complex legal issues or complicated fact 
patterns, within a reasonable time.[Footnote 18] IRS does not have any 
statutory time frame requirements and has its own deadlines. According 
to IRS officials, the agency's goal is to complete more than half of 
the requests received within 4 months, and about 90 percent of the 
requests received within 6 months. EBSA officials estimate that they 
typically provide advisory opinions within 7 to 9 months after 
receiving requests. However, EBSA has not established any time frames. 
The agency prioritizes its responses to requests after considering the 
significance of the issue addressed by a request and whether it 
involves a time-critical matter, such as a pending financial 
transaction.

Agencies have identified concerns associated with establishing time 
frames for issuing advisory opinions. EBSA officials told us that their 
agency has not developed time frames for issuing advisory opinions 
because imposing a deadline creates an artificial requirement that 
bears no relationship to the nature of the request. EBSA prefers to 
have flexibility because of the uncertainty of the types and number of 
requests the agency will receive. Although HHS-OIG is required to 
respond to requesters within 60 days, an agency official told us that 
it is sometimes difficult to complete all of the research and other 
necessary steps within the required time frame because of both the 
complexity of the issues and the other responsibilities held by lawyers 
issuing the opinions. However, regulations provide for the suspension 
of time limits in order to compensate for delays that are not within 
HHS-OIG's control, such as those associated with obtaining additional 
information from requesters or expert opinions from external third 
parties.[Footnote 19]

Considering anticipated workloads, staffing requirements and user fees: 
All four agencies addressed staffing issues to make their advisory 
opinion processes effective. For example, EBSA officials told us that 
EBSA's process needs to be supported by an adequate number of staff 
with appropriate backgrounds, such as attorneys and individuals with 
program expertise. As shown in table 1, agencies vary in the size of 
their workloads and the number of staff they assign to their advisory 
opinion processes. In fiscal year 2003, EBSA and HHS-OIG provided 17 
and 18 opinions, respectively. In contrast, IRS provided about 3,000 
advisory opinions and used about 69 full-time equivalent (FTE) staff to 
respond to requests. Agencies also differed in the number of opinions 
issued per FTE. At EBSA and HHS-OIG, 1 FTE staff member was required 
for every 8 to 9 opinions provided, while IRS needed 1 FTE staff member 
to process 42 opinions on average. Agency variation in the number of 
advisory opinions generated by an FTE may reflect differences in case 
complexity as well as in the proportion of requests that are withdrawn 
prior to issuance of an opinion. For example, an HHS-OIG official 
estimated that two-thirds of requests submitted to the agency are 
withdrawn before an opinion is issued. In some instances, the 
requesters terminated the process after HHS-OIG staff had performed all 
of the legal research and analysis necessary to issue the opinions.

Table 1: Advisory Opinion Workload and Staffing Levels at EBSA, HHS-
OIG, and IRS in Fiscal Year 2003: 

Agency: EBSA; 
Number of opinions provided: 17; 
Number of FTE staff: 2; 
Average number of opinions per FTE: 8.5.

Agency: HHS-OIG; 
Number of opinions provided: 18; 
Number of FTE staff: 2; 
Average number of opinions per FTE: 9.

Agency: IRS; 
Number of opinions provided: 2,919; 
Number of FTE staff: 69; 
Average number of opinions per FTE: 42.

Sources: EBSA, HHS-OIG, and IRS.

Note: We excluded CMS from this analysis because it did not issue any 
advisory opinions during fiscal year 2003.

[End of table]

Despite differences in workload and productivity, all three agencies 
employ flexible staffing arrangements to process advisory opinions. For 
instance, IRS selects staff from a pool of approximately 500 to 600 
attorneys who, in addition to processing advisory opinions, also 
provide other guidance to individual taxpayers. Similarly, HHS-OIG 
draws from a group of staff who are assigned to respond to requests for 
advisory opinions in addition to other responsibilities. EBSA staffs 
its advisory opinion processes by assigning personnel to work on 
opinions on an as needed basis.[Footnote 20]

Three of the four agencies we contacted charge a fee to process their 
advisory opinions. These user fees enable the government to recoup some 
of its costs. CMS and HHS-OIG charge an initial nonrefundable fee to 
accept a request for an advisory opinion and impose hourly fees for the 
time staff spend responding to a request for an opinion. IRS has 
implemented a fee schedule and charges fees that vary depending on the 
type of requester. The fee is $6,000 with a reduced fee for qualifying 
requesters.[Footnote 21] Table 2 summarizes the user fees charged by 
the four agencies in fiscal year 2004.

Table 2: Advisory Opinion User Fees at Four Agencies in Fiscal Year 
2004: 

Agency: CMS; 
User fee: $75 per hour for staff costs, with a $250 nonrefundable 
deposit required when the request is made; 
Charges per opinion: $250[A].

Agency: EBSA; 
User fee: Not applicable; 
Charges per opinion: No charge.

Agency: HHS-OIG; 
User fee: $86 per hour for staff costs, with a $250 nonrefundable 
deposit required when the request is made; 
Charges per opinion: Ranged from $301 to $3,784.

Agency: IRS; 
User fee: $6,000, based on average cost to agency, with special rate 
for qualifying requesters; 
Charges per opinion: $6,000[B].

Sources: Interviews with CMS, EBSA, HHS-OIG, and IRS officials.

[A] In fiscal year 2004, CMS issued four advisory opinions for which it 
charged $250 for each opinion. CMS anticipates that charges for future 
advisory opinions could be higher.

[B] Some taxpayers may be eligible for reduced user fees, depending on 
the issues involved and the taxpayers' specific circumstances. 

[End of table]

Although three of the four agencies charge user fees, only IRS has 
authority to apply those fees to fund its advisory opinion 
process.[Footnote 22] However, although CMS and HHS-OIG do not retain 
the user fees charged, they may have been able to absorb the costs of 
issuing opinions because they receive relatively few requests per year. 
According to legal experts we interviewed, the amount of user fees 
charged, and an agency's ability to use them to offset costs, could be 
critical to the success of a large advisory opinion process.

Creating internal review and external coordination procedures: In 
addition to reviewing its response to an advisory opinion request 
internally, an agency issuing an advisory opinion may also need to 
coordinate its response with other federal agencies. The agencies said 
that this is particularly important if those entities have a stake in 
the outcome--for example, if the advisory opinion involves laws 
affecting another agency. Internal review and external coordination 
permit other entities to bring their perspectives to the issue and to 
raise matters that may not have been previously considered.

All four agencies have developed internal review and external 
coordination procedures for their advisory opinion processes. Both 
CMS's and HHS-OIG's internal reviews consist of obtaining comments from 
one another as well as from the HHS Office of the Secretary and the HHS 
Office of the General Counsel. In addition, their external coordination 
includes consultation with the Department of Justice.[Footnote 23] CMS 
officials said that, in certain cases, there may need to be additional 
coordination because it has overlapping jurisdictions with other 
agencies such as HHS's Public Health Service and Indian Health Service, 
as well as the Department of Veterans Affairs. EBSA's internal review 
consists of coordination between the office drafting the 
advisory opinions and the agency's legal counsel. Depending on the 
issue and whether it may have relevance to other laws, EBSA may also 
coordinate with IRS, the Pension Benefit Guaranty Corporation, and the 
Securities and Exchange Commission. In contrast, IRS has a limited 
internal review process that usually involves the attorney writing the 
opinion, a reviewing attorney, and the branch chief of the office 
issuing the opinion. IRS also rarely coordinates with external entities 
due to significant limitations in IRS's ability to share taxpayer data.

Medicare Providers Consider Advisory Opinions as a Possible Way to 
Improve Guidance: 

Representatives of most provider organizations we spoke with told us 
that providers seeking clarification of Medicare rules and procedures 
often find it difficult to obtain reliable or timely written responses 
to their inquiries. As a result, most of these organizations viewed the 
establishment of an advisory opinion process to interpret Medicare 
regulations positively, particularly if the opinions were legally 
binding. However, representatives for some organizations told us that 
an advisory opinion process is only one way to address their concerns; 
improving existing CMS and contractors' guidance was also viewed as 
important. In addition, some recognized that advisory opinions may not 
always be appropriate, given that questions related to Medicare 
regulations may sometimes require a quick response--something that an 
advisory opinion process may be unable to provide.

Medicare Providers Are Concerned about Unreliable and Untimely Answers 
to Their Questions from CMS and its Contractors: 

Officials from most provider organizations we contacted[Footnote 24] 
told us that providers are concerned that they often do not receive 
reliable or timely responses to their questions. They said that 
Medicare providers frequently have questions about a variety of issues 
related to Medicare regulations, including matters relating to billing, 
coverage of services, medical necessity, and beneficiary eligibility, 
particularly if a beneficiary is eligible for both Medicare and 
Medicaid.[Footnote 25] However, half said that they have difficulty 
obtaining the necessary clarification. For example, some told us that 
the claims administration contractors--who are generally the first 
point of contact for providers with questions--often respond to 
identical questions from providers with substantially different 
answers. In addition, about half of the provider organizations we 
contacted said that providers cannot rely on CMS to respond to their 
questions in a timely manner, particularly in writing. For example, 
representatives of one provider organization told us that they have 
been trying for about a year to obtain guidance from CMS concerning 
whether physicians in a state that has reduced its Medicaid benefits 
can bill beneficiaries who are eligible for both Medicare and Medicaid, 
to compensate for this reduction, without violating federal law. 
Similarly, officials at the hospital we visited told us that it took 
CMS about 6 months to reply to the hospital's inquiry about the 
findings of a recently completed audit by the hospital's claims 
administration contractor. The audit determined that procedures that 
the hospital had followed for 12 years--at the instruction of its 
contractor--were now considered by the contractor to be in violation of 
Medicare regulations. The hospital requested CMS to clarify whether it 
would be held liable for its past practices and how it should respond 
to the contractor's audit findings. We have also recently reported on 
shortcomings in the way CMS and its contractors communicate with 
providers. Specifically, we identified problems in both the accuracy 
and timeliness of CMS's written guidance and in its oral responses to 
providers who contact call centers operated by contractors with 
billing-related and other types of policy-oriented questions.[Footnote 
26]

CMS officials acknowledged that because the agency receives thousands 
of inquiries every year, it is sometimes difficult to respond to all of 
them in a timely manner. The time it takes the agency to answer can 
vary based on the nature of the inquiry and the type of reply that is 
necessary. While basic or routine questions may receive a relatively 
quick response, more involved and complex questions, such as the one 
presented by the hospital, require extensive research and internal 
review, which could delay the agency's response. CMS has taken steps in 
recent years to improve communications with providers. For example, it 
has held town hall meetings on new initiatives and developed provider-
specific Web pages and listservs. In response to our recommendations to 
improve the accuracy of information given to providers from call 
centers operated by contractors, CMS has agreed to create a process to 
routinely screen, triage, and route provider calls to specialty staff 
by fiscal year 2005.

Medicare Providers View Advisory Opinions as One of Several Approaches 
to Enhance Guidance: 

Overall, representatives from most of the provider organizations we 
spoke with agreed that an advisory opinion process would partially 
address their concerns about the guidance that they currently receive 
from CMS and its contractors. Specifically, most said that such a 
process would provide them with useful answers that they could rely on 
to appropriately interpret Medicare regulations. Their reasons included 
that such a process would establish a central place to submit questions 
and that they would feel more confident about the accuracy of responses 
received because an advisory opinion process would, presumably, involve 
extensive legal research. In addition, written documentation that such 
a process would provide could later help to protect them from adverse 
actions if it is subsequently determined that they billed incorrectly 
or are otherwise found to be noncompliant with program rules. However, 
representatives recognized that while an advisory opinion process 
guarantees a response to an inquiry, it may not address providers' need 
for quick answers. Some said that providers generally seek relatively 
rapid responses to their questions on Medicare regulations--for 
example, they told us that for billing questions, providers often need 
responses within 24 hours. However, CMS officials said that short time 
frames may be unrealistic because of the extensive research necessary 
to prepare an advisory opinion.

Providers' representatives also noted additional benefits that can be 
associated with the advisory opinion process. For example, even though 
these opinions may only be binding to the requesters, if published, 
they could also provide instructive guidance to the provider community 
at large. However, 8 of the 12 provider organizations we contacted 
suggested that, to maximize the usefulness of an advisory opinion 
process, the process should be structured to also permit an advisory 
opinion to be applied to similarly situated parties with similar 
questions, instead of just a single requester. One added that, unlike 
HHS-OIG's process, which often requires requesters to provide 
proprietary information that could alert their competitors to their 
business plans, advisory opinion requests on Medicare regulations are 
more likely to involve day-to-day activities that are common to many 
providers. Along the same lines, three organizations suggested that an 
advisory opinion process also be open to entities representing 
providers, so that they could submit questions on behalf of larger 
constituencies. Even though it might not be possible for more broadly 
applicable advisory opinions to be legally binding, representatives of 
some provider organizations indicated that such an approach would make 
the process more efficient and responsive to those participating in 
Medicare.

Representatives of provider organizations told us that an advisory 
opinion process should not be used in place of, or precede other 
efforts, to improve the communication of guidance. They stressed that 
clarifying existing guidance to address common provider questions is 
important. They also told us that receipt of reliable and timely 
written responses to their questions would go far to reduce their 
interest in an advisory opinion process. While such responses may not 
carry as much weight as advisory opinions, these representatives said 
that they would help providers better understand regulations.

Representatives from one provider organization we contacted were 
opposed to instituting an advisory opinion process because they said 
such a process might disrupt the effective dialogue that the 
organization has established with CMS in recent years. Specifically, 
they were concerned that an advisory opinion process may prevent them 
from obtaining more informal and timely guidance from the agency on an 
as needed basis. In addition, officials from a beneficiary advocacy 
organization expressed concern that an advisory opinion process could 
negatively affect beneficiaries. Anticipating that providers would be 
the primary users of an advisory opinion process, this organization was 
concerned that beneficiaries' interests would not be fully represented.

Concluding Observations: 

The Medicare program and its implementing regulations are inherently 
complex. It is critical that Medicare providers receive correct and 
complete answers to their questions about program rules. An advisory 
opinion process to interpret Medicare regulations could provide an 
avenue for providers to receive this information in the form of legally 
binding answers to complicated questions about their unique 
circumstances. Although providers have expressed concern about the lack 
of timeliness of CMS's responses to their questions, it would be 
unreasonable to expect that advisory opinions could be issued in a 
matter of a few days or even a few weeks, given the complexity of the 
questions and the significance of obtaining legally binding responses. 
However, it is important that the establishment of such a process not 
preclude CMS or its contractors from responding promptly to providers 
with relatively straightforward questions that do not necessitate an 
advisory opinion. If established, an advisory opinion process to 
interpret Medicare regulations should not serve as a substitute for 
enhancing existing forms of CMS guidance. In addition, the lessons 
learned by other federal agencies may be useful in structuring a 
process for Medicare.

Agency Comments: 

In written comments on a draft of this report, HHS stated that an 
enhanced and more formal advisory opinion process for the Medicare 
program would not be a successful pursuit at this time. Specifically, 
HHS said such an effort would be costly to implement and noted that 
fees collected for its advisory opinions are not paid to or retained by 
HHS, and thus do not offset the costs of the staff time allocated to 
this work. Further, HHS said that such a process would not provide 
quick answers to providers' questions, and would have limited 
applicability beyond the parties requesting advisory opinions. 
However, HHS acknowledged that the Medicare program and its 
implementing regulations are inherently complex and underscored its 
efforts to improve stakeholders' understanding of the program's 
complexities. HHS also provided us with technical comments, which we 
incorporated as appropriate. We have reprinted HHS's letter in 
appendix II.

We also provided excerpts of the draft to EBSA and IRS. The excerpt 
that each agency received consisted only of statements pertaining to 
its respective advisory opinion processes. We received technical 
comments from both agencies, which we incorporated as appropriate.

We are sending copies of this report to the Secretary of Health and 
Human Services, the Administrator of CMS, and other interested parties. 
We will also make copies available to others upon request. In addition, 
this report will be available at no charge on GAO's Web site at 
[Hyperlink, http://www.gao.gov].

If you or your staffs have any questions about this report, please call 
me at (312) 220-7600. An additional GAO contact and other staff members 
who made major contributions to this report are listed in appendix III.

Signed by: 

Leslie G. Aronovitz: 
Director, Health Care--Program Administration and Integrity Issues: 

[End of section]

Appendixes: 

Appendix I: Medicare Stakeholders Contacted: 
 
American Ambulance Association: 
American Association of Family Physicians: 
American Association of Home Care: 
American College of Physicians--American Society of Internal Medicine: 
American Health Information Management Association: 
American Hospital Association: 
American Medical Association: 
Center for Medicare Advocacy: 
HCPro: 
Health Care Billing Managers Association: 
Medical Group Management Association: 
Medicare Rights Center: 
National Association of Home Care: 
National Association of State Medicaid Directors: 
Northwestern Memorial Hospital: 

[End of section]

Appendix II: Comments from the Department of Health and Human Services: 

Department of Health & Human Services: 
Office of Inspector General: 

NOV 22 2004:

Ms. Leslie G. Aronovitz: 
Director, Health Care-Program Administration and Integrity Issues: 
United States Government Accountability Office: 
Washington, D.C. 20548:

Dear Ms. Aronovitz:

Enclosed are the Department's comments on your draft report entitled, 
"Medicare-Advisory Opinions As A Means of Clarifying Program 
Requirements" (GAO-05-129). The comments represent the tentative 
position of the Department and are subject to reevaluation when the 
final version of this report is received.

The Department provided several technical comments directly to your 
staff.

The Department appreciates the opportunity to comment on this draft 
report before its publication. 

Sincerely,

Signed by: 

Daniel R. Levinson: 
Acting Inspector General:

Enclosure:

The Office of Inspector General (OIG) is transmitting the Department's 
response to this draft report in our capacity as the Department's 
designated focal point and coordinator for Government Accountability 
Office reports. OIG has not conducted an independent assessment of 
these comments and therefore expresses no opinion on them.

COMMENTS BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (HHS) ON THE 
U.S. GOVERNMENT ACCOUNTABILITY OFFICE'S (GAO) DRAFT REPORT ENTITLED 
"MEDICARE: ADVISORY OPINIONS AS A MEANS OF CLARIFYING PROGRAM 
REQUIREMENTS (GAO-05-129):

The HHS appreciates the opportunity to review and comment on GAO's 
draft report. We appreciate GAO's efforts to assess the role that a 
broader advisory opinion process might play in clarifying Medicare 
regulations.

In its concluding observations on page 21, the draft observes that the 
Medicare program and its implementing regulations are "inherently 
complex," and we agree. We do currently engage in numerous efforts to 
assist stakeholders' understanding of the program's complexities, the 
most important of which are described below. Included among these 
efforts are targeted advisory opinion processes conducted by our Office 
of Inspector General (OIG) and also within our Office of General 
Counsel. As the draft also acknowledges, however, advisory opinion 
processes are limited in their ability to provide quick answers to 
pressing problems. We agree.

We believe that an enhanced and more formal process of developing 
advisory opinions would not be a successful pursuit at this time. We 
believe such a process would be costly and just as slow as the current 
processes, which have been streamlined to the extent possible, given 
the large volume of pertinent guidance, which is constantly (and 
necessarily) in flux. Given the complexity and broad scope of the 
Medicare program, an enhanced effort to provide advisory opinions would 
require a far larger professional staff than is available under current 
resource constraints. It is also important to note that current HHS 
opinions specifically state that they are limited in scope to the 
specific arrangement described in the request and have "no 
applicability to other arrangements, even those which appear similar in 
nature or scope" and "may not be introduced into evidence in any matter 
involving an entity or individual that is not a requestor of this 
opinion." We believe that the usefulness of a broader set of opinions 
would be similarly constrained.

Additionally, the GAO draft states that the presence of user fees is 
among the critical factors in making currently operational advisory-
opinion processes effective. It is important to note that fees 
collected for our advisory opinions are not paid to or retained by HHS, 
and thus do not offset the costs of the staff time allocated to this 
work.

We cite the following as important existing sources of the guidance 
needed by Medicare stakeholders:

The Center for Medicare and Medicaid Services (CMS)'s customized 
provider web pages allow physicians, hospitals, ambulances, and other 
providers quick access to relevant Medicare information. These web 
pages, found on www.cms.hhs.gov/providers, have associated Listservs 
that ensure providers will get new information as it becomes available.

CMS has a Medicare Coverage Database on the CMS website, 
www.cms.hhs.gov, that contains all I national and local coverage policy 
and articles produced by contractors that provide additional coverage 
guidance. CMS has also implemented a new web page, allowing for easier 
provider and public access to recent Administrator decisions regarding 
the Provider Reimbursement Review Board and issued by the Office of the 
Attorney Advisor.

CMS publishes a Quarterly Provider Update on the first business day of 
each quarter on the CMS web site to inform the public about regulations 
and major policies currently under development during this quarter; 
regulations and major policies completed or cancelled; and new/revised 
manual instructions. This Update, makes it easier for providers, 
suppliers, and the general public to be aware of impending program 
changes.

In fiscal year 2004, CMS implemented an On-Line Manual System, located 
at www.cms.hhs.gov/manuals, to consolidate and update its manuals, 
policy and billing instructions, eliminate duplicate policy across 
manuals, and establish a single source to obtain information on the 
Medicare and Medicaid programs. Additionally, a related Monthly 
Bulletin is communicated to Medicare Contractors via email and is 
posted on the CMS On-Line Manual System.

In 2001, CMS began an initiative to improve provider communications 
when the agency required contractors to institute toll-free phone 
service to answer inquiries from providers who bill for services under 
fee-for-service Medicare. CMS also now issues nationally consistent 
provider education materials to accompany contractor instructions that 
implement new or revised policy. "Medlearn Matters ... Information for 
Medicare Providers" contains educational articles, written in 
consultation with clinicians, billing experts, and other medical 
professionals, and tailored in content and language to the specific 
provider types who are affected by the program change. These articles 
explain in plain English content of the program instructions, and, more 
importantly, the specific impact that the change has on the affected 
providers. The articles are housed in one central, easily accessible 
location (www.cms.hhs.gov/medlearn/matters).

CMS has held fourteen individual Open Door Forums and town hall 
meetings for physicians to discuss new initiatives. CMS has also 
established a provider partnership network with provider associations 
and organizations, whereby providers give input on products and CMS 
information tools, and assist in the dissemination of CMS information.  

[End of section]

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Geraldine Redican-Bigott (312) 220-7678: 

Acknowledgments: 

Pauline Seretakis, Richard Lipinski, Janet Rosenblad, and Craig Winslow 
made key contributions to this report.

(290380): 

FOOTNOTES

[1] Among other things, the claims administration contractors assist 
CMS by processing and paying claims and by communicating billing 
guidance to the provider community and Medicare beneficiaries.

[2] Adverse consequences may include having submitted claims denied or 
subjected to additional scrutiny, which could delay payment. In 
addition, providers are concerned that even when their billing errors 
are inadvertent, they may be subjected to legal action under the False 
Claims Act (31 U.S.C. §§ 3729-3733 (2000)), which imposes substantial 
financial liability for "knowingly" submitting improper claims. The 
statute defines "knowingly" to mean that a person has actual knowledge 
of the false claim or acts in deliberate ignorance or reckless 
disregard of its truth or falsity; the statute states that no proof of 
specific intent to defraud is required.

[3] The extent to which an agency considers itself legally bound by an 
advisory opinion it provides may be stated in the advisory opinion 
itself. An advisory opinion provided under a statutory requirement for 
an agency to provide binding advisory opinions is likely to be accorded 
considerable weight by courts, at least with respect to the party who 
requested it. Emphasizing facts similar to those at issue in the 
advisory opinion, others may argue that the advisory opinion should 
govern agency actions involving them as well. 

[4] Pub. L. No. 108-173, § 904, 117 Stat. 2066, 2377.

[5] 5 U.S.C. § 553 (2000). This process is referred to as informal 
rulemaking. Agencies are not required to use this process when 
establishing interpretative rules, general statements of policy, or 
rules of agency organization, procedure, or practice. In addition, 
agencies may issue rules without notice and comment when they for good 
cause find that the process is impracticable, unnecessary, or contrary 
to the public interest. Also, statutes sometimes require rules to be 
made "on the record" after the opportunity for an agency hearing. This 
is referred to as formal rulemaking.

[6] 42 U.S.C. § 1395ff(d)(2) (2000).

[7] Proposed and final rules are published in the Federal Register and 
final rules are incorporated into the Code of Federal Regulations. 
Other forms of HHS written guidance are, for example, posted on the HHS 
Web site, distributed through mailing lists, or provided only upon 
request.

[8] Generally, HHS may prescribe statements of policy, interpretative 
rules, or rules of agency organization, procedure, or practice 
necessary for the Medicare program. 42 U.S.C. § 1395hh (2000). Experts 
we consulted, as well as HHS officials, acknowledged that the agency 
may issue advisory opinions. In 1998, we addressed the potential use of 
advisory opinions in connection with the False Claims Act and a 
Medicare rule concerning hospital inpatient costs. We concluded that 
advisory opinions did not seem necessary or helpful with respect to the 
False Claims Act generally or the particular rule. B-279893, July 22, 
1998.

[9] In addition, HHS-OIG is required to provide advisory opinions on 
whether an activity or proposed activity could otherwise trigger 
certain administrative actions, including civil monetary penalties, as 
well as criminal penalties. 42 U.S.C. § 1320A-7d(b)(2)(D) and (E) 
(2000).

[10] 42 U.S.C. § 1320a-7d(b) (2000).

[11] 42 U.S.C. § 1395nn(g)(6) (2000).

[12] IRS uses the term letter rulings to describe its 
advisory opinions.

[13] 29 U.S.C. §§ 1001 et seq. (2000).

[14] ERISA Procedure 76-1 states that EBSA generally does not issue 
advisory opinions for hypothetical situations.

[15] 42 C.F.R. § 1008.15(c) (2003).

[16] The restrictions prohibit HHS from providing advisory opinions on 
fair market value or an individual's status as an employee under 
federal tax law. 42 U.S.C. §§ 1320a-7d(b)(3) and 1395nn(g)(6)(B) 
(2000).

[17] 42 U.S.C. § 1320a-7d(b)(5)(B) (2000).

[18] 42 C.F.R. § 411.380(c)(1) (2003). HHS-OIG and CMS begin counting 
these days only after requests have been "formally accepted." 42 C.F.R. 
§§ 1008.41(e) and 411.379(b) (2003).

[19] 42 C.F.R. § 1008.43(c)(3) (2003).

[20] EBSA assigns staff with legal backgrounds and at least 3 years of 
relevant experience to work on advisory opinions on a part-time basis.

[21] Some taxpayers may be eligible for reduced user fees, depending on 
the issues involved and the taxpayers' specific circumstances.

[22] Treasury, Postal Service and General Government Appropriations 
Act, 1995, Pub. L. No. 103-329, tit. I, § 3, 108 Stat. 2382, 2388. 
Current law provides that no fee may be charged with respect to 
requests after December 31, 2004. Act of Oct. 1, 2003, Pub. L. No. 108-
89, sec. 202(a), § 7528(c), 117 Stat. 1131, 1133. In general, agencies 
may impose user fees to offset the government's cost of providing a 
service. Without specific authorization, however, agencies may not 
retain or use fees collected, but must deposit them into the 
U.S. Treasury as required by section 3302 of Title 31 of the United 
States Code.

[23] With respect to its advisory opinions, HHS-OIG is required to 
consult with the Department of Justice. 42 U.S.C. § 1320a-
7d(b)(1) (2000).

[24] We spoke to representatives of organizations representing 
providers, suppliers, and billing companies as well as officials from 
one hospital. For convenience, we have used the term provider 
organizations to refer to these entities collectively.

[25] Medicaid is a jointly funded federal and state program that 
provides health care coverage for certain individuals and families who 
meet eligibility criteria. 42 U.S.C. §§ 1396 et. seq. (2000). Medicaid 
is the largest source of funding for medical and health-related 
services for people with limited income.

[26] GAO, Medicare: Communications with Physicians Can Be Improved, 
GAO-02-249 (Washington, D.C.: Feb. 27, 2002) and Medicare: Call Centers 
Need to Improve Responses to Policy-Oriented Questions from Providers, 
GAO-04-669 (Washington, D.C.: July 16, 2004).

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