An effort by Medicare to fight fraud has spilled over into doctors' offices across the central San Joaquin Valley—causing payment delays that threaten their practices.

Some doctors haven't been paid since May by the government agency that provides insurance for the elderly and disabled. And they say that over the past seven months it has taken countless hours of staff time -- sometimes to fill out nothing more than change-of-address forms -- so they can receive reimbursements.

Patients should be worried, the doctors say, because some physicians could decide they no longer can afford to treat Medicare patients at all.

More than 4.4 million Californians are on Medicare, including more than 210,000 in the Valley.

Medicare officials say payment problems have been resolved, but doctors aren't so sure.

"This has just become a bureaucratic nightmare that is getting worse every year," said Dr. D. Robert Lewis, a Fresno gastroenterologist who had to wait until Dec. 29 for a $22,000 Medicare payment for claims submitted in October.

And Medicare still owes the doctor more than $60,000 in back payments, said office manager Wendy Williams.

Identification number a key

Several factors created the paperwork bottleneck that led to payment delays. Chief among them: a new provider-identification system the agency created to reduce Medicare fraud.

Doctors were assigned unique identification numbers that had to be submitted in paperwork to the Centers for Medicare and Medicaid Services by May 23 before doctors could receive any payments. Many doctors also needed to update enrollment information on applications on file with Medicare, such as an address change, an addition of a doctor to the group or change in the type of practice.

Increasing concern about Medicare fraud made it necessary to "make some improvement in our provider-enrollment process," said Torris Smith, the San Francisco-based associate regional manager for financial management.

But a change of Medicare administrative contractors in September added to the doctors' paperwork headache. A backlog of more than 22,000 applications from doctors awaited approval when the contractor, Palmetto GBA, took over claims processing for California.

It's not known how much money California doctors have been owed since May, but it could be in the millions of dollars. Medicare and Palmetto officials say the kinks that tied up payments have been worked out, and timely payments can be expected from now on. "We are on track to resolve the issues of provider enrollment," Smith said.

Palmetto Vice President of Operations Mike Barlow said the firm had worked through its backlog as of the end of the year.

Frustrations with the reimbursement system continue, however.

The Fresno-Madera Medical Society has fielded so many calls from doctors about the payment problems that it agreed to host a meeting in its Fresno office with a Palmetto medical director Monday, said Executive Director Sandi Palumbo. Office managers and doctors are invited.

Some doctors drained their reserves while waiting for past-due Medicare payments, she said. "They were having to go out and get loans—if they could get loans and pay interest on that," Palumbo said. One Kern County doctor had $1 million in claims delayed because of an address change, she said.

Red tape not ending

Debbie De Soto has been trying for seven months to change an office address so her bosses, Fresno colon and rectal surgeons John Garry and William Carveth, can get paid by Medicare. "We are just in this limbo," she said.

The form to change the doctors' address is 27 pages long, De Soto said. She's had it returned at least three times for something else to be filled out, she said.

Paperwork demands by Medicare keep increasing each year, De Soto said.

Medicare has to make sure an address for a doctor is correct, said Palmetto's Barlow. "There is a ton of fraud in the Medicare program, and this is the first step in keeping those fraudulent providers out," he said.

It's up to the provider to make sure they fill out the forms correctly, he said. "I used to be a provider. I have been on the other side. I filled out the forms and completed the forms. If I knew it was my responsibility to get it right, I got it right."

Palmetto provides instructions for filling out forms on its Web site, Barlow said. "We think the instructions are very clear."

Gastroenterologist Lewis said Palmetto's stance is to blame providers for the paperwork snafus that have held up millions of dollars in payments to doctors in California.

But the contractor should take responsibility, Lewis said. "These Palmetto people are the most inept organization I have encountered in my lifetime, and that's saying something. They've made a total mess of it," he said.

Just speaking with someone at Palmetto took days of telephone calls, said Williams, the manager in Lewis' office. "I would start calling from home at 6 a.m. on my cell phone trying to get through," she said.

Things have improved, Barlow said.

"Last week, our average wait time was two minutes," he said.

Smith said Palmetto has added staff to handle provider applications. Medicare is sensitive to the financial hardship some doctors have been put under, he said. Doctors who have overdue payments may apply with Medicare for an advance payment, he said.

The Centers for Medicare and Medicaid Services is developing an electronic enrollment application form that should be available sometime this year. The online form should reduce processing times and cut down on mistakes on application forms, Smith said.

Palumbo of the Fresno-Madera Medical Society said the Medicare payment situation appears to have improved lately—but that doesn't count for much, she said. "I don't know when it will get totally resolved," she said.

The problems better be fixed, Lewis said. "There are doctors all over the country who have stopped taking Medicare," he said. "Ultimately, we love our patients but we run a business and we have employees we're responsible for."