Washington, DC - November 3, 2005
U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES
TOWN HALL MEETING
THURSDAY,
NOVEMBER 3, 2005
(click here for a pdf version of this transcript)
The Public Meeting was held in the Lower Level
Conference Room of the Washington Court Hotel, 425 New
Jersey Avenue N.W., Washington, D.C., at 10:00 a.m.,
Carol Simon, moderating.
PANELISTS:
CAROL SIMON, Moderator
CHRISTOPHER CONOVER
TED FRECH
MARK HALL
RICHARD LAWLOR
MICHAEL MORRISEY
DAN MULHOLLAND
SPEAKERS PRESENTING COMMENTS:
RENE CABRAL-DANIELS
TOBY EDELMAN
SANDRA FITZLER
WALTON FRANCIS
FRANCIS KIRLEY
LAURENCE LANE
JANET WELLS
MARY ST. PIERRE
TERRY MAGGIO
AGENDA
-
Welcome and Introduction, Carol Simon, Ph.D., Moderator
- Opening remarks by HHS and OMB Officials and the Expert
Panel
- Marty McGeein, Acting Deputy Assistant
Secretary for Planning and Evaluation,
Disability, Aging and Long-Term Care Policy
- Radwan Saade, OMB
- Chris Conover, Duke University
- Ted Frech, University of California
- Mark Hall, Wake Forest University
- Rich Lawlor, CMS
- Mike Morrisey, UAB, School of Public Health
- Dan Mulholland, Horty, Springer & Mattern
- Public comment from the floor
- Lunch
- Public comment from the floor
PROCEEDINGS
10:03 a.m.
DR. SIMON: I think we're going to get
started now. I want to welcome everybody to our first
meeting on the Economic Impact of Health Care
Regulations at our first town hall. My name is Carol
Simon with Abt Associates. I'm going to be moderator
today and general timekeeper and public traffic cop for
the proceedings.
I want to thank you all for coming and
particularly on this gorgeous autumn day in Washington.
We have an important agenda that as you are going to
be hearing from the commentators, from our panelists,
and from our representatives from HHS is that this is a
kickoff of a important process in which HHS in
conjunction with OMB are collaborating to take a good
solid look at the economic costs of health care
regulation.
The purpose of today's meeting is to hear
from you, the stars of today's meeting and the
important information that is coming from the floor.
This is a public forum for us to receive commentary,
receive evidence.
We have assembled a panel of experts who
are going to be here to assist me and to assist our
staff in helping put some of the comments in
perspective, to ask potentially clarifying questions,
and in general to make our day go in what we hope is
actually an informative and somewhat delightful
process.
Without further ado, what I would like to
do is turn over the podium for some opening remarks to
Marty McGeein. Marty is Acting Deputy Assistant
Secretary for Planning and Evaluation or ASPE.
Marty, thank you very much.
MS. McGEEIN: Thank you, Carol. I will be
followed by a representative from OMB. Thanks for
taking part in our initial town hall meeting. It's
sort of like a dinner party with a lot of preparation
and now we are about to eat.
As Carol said, I'm Marty McGeein with the
Secretary's Office for Planning and Evaluation, or ASPE
as we are more commonly known. Many things have
changed over the last decade in health care. The one
thing that never seems to change, however, is
regulation.
The chief complaint, using the language of
my clinical background, is about how Government
regulates and whether it does or does not distort
practice. Would you be doing what you are doing with
or without the regulation.
Oh, you can't hear me? How unusual. When
ASPE accepted the assignment to examine the economic
impact of regulations on the health care sector of our
country, we made some very important decisions.
First was while this examination could be an
academic exercise in that we could look to the
literature for answers, we quickly decided that the
literature that we needed to hear or to examine were
the reports on the charts of the people who live these
regulations every minute of every single day. You, the
providers of health care, and the representatives are
those people.
Our second decision was to ask you what
you think, to ask you basically what the symptoms are.
That led to the Federal Register notice which some of
you read and commented on seeking comment on the
quantification of this issue, the town hall meeting,
this first one, the three that will follow in Chicago,
Oklahoma, and San Francisco, plus numerous, numerous
conversations with what we know as the Washington
health community. These efforts are what I will call
the preliminary lab results. So far the patient isn't
dead.
Our third decision was to make some house
calls. We plan to do a series of case studies in the
field to help us dig really deep into this issue to
find out exactly what is going on on the ground. Abt
Associates will be helping us with that effort as well
as some of the analytical work.
I'm anxious to get started to hear what
you have to say. You are serving as part of our data
gathering process. But I'm also anxious to let you
know what we're doing. I believe that one of our
panelists, Rich Lawlor, will be sharing some of the
exciting and creative initiatives that Dr. McClellan
and Dr. Lawlor are implementing at CMS.
I would like to say let's begin but before
we do, let's have a few words from OMB.
MR. SAADE: Good morning. I just want to
say that we at OMB are very pleased to be part of this
process. We have been linked at the hip, I believe,
with the folks at CMS and we are really pleased to be
part of that process. I'm definitely looking forward
to listening from the community here today and report
back to my office. Thank you.
DR. SIMON: Okay. Before we get started
with introductions on the panel and then the important
public commentary, let me go through a little bit of
the logistics.
For those of you who have signed up to
present comments today. What we are going to be doing
is I'm going to be operating from the public sign-up
list form which means that in the order in which you
arrived today is the order in which I'm going to be
taking for public comment. What I will be doing is
calling you to the microphone, giving a brief
introduction, allowing you to more fully introduce
yourself, and then allowing between five to seven
minutes for presentation of public comment.
At the close of the five to seven minutes,
and I think we have the luxury today of perhaps a
little bit more time so I'm not going to be too strict
of a guardian on the time frame but within the
constraints we want to make sure everybody has a chance
to get their due.
At the close of the public comments I'm
going to be asking our panel if they have any questions
and the questions are meant to be clarifying
extensions, commentary, not an engagement in extended
academic debate. Right, guys? You hear me. Just
remember we control the microphones at this end.
As we said, the important part here is to
hear from the public. The important logistics, there's
water to the side of the room and the converse
restrooms at the back. We are going to be running
until about noon today at which time we are going to
take about a 45-minute lunch break to allow folks to
sort of re-energize themselves and then continuing on
after that.
I'm going to try to let you know where we
stand so if, indeed, you have signed up in advance or
signed up today to present public comment, please make
sure that your name is on this public comment sign-in
list. This is essentially the dance card I'm going to
be pulling from. I'm going to try to let us know in
terms of where we stand so that you can make your own
personal arrangements as to when you need to be here.
I think we can run this pretty not
informally but a little less rigorously than if we had
100 people in the room so there should be ample time
for good discussion and a little bit of question and
answer.
Without further ado, what I would like to
do is introduce our panel and let them introduce
themselves a little bit quickly and then we'll move to
the public commentary.
Our first panelist here is Professor Chris
Conover from Duke University. Chris is with the Center
for Health Policy as well as with the School of Public
Policy at Duke. Chris has an impressive background in
doing regulatory studies on the impact of health care.
Without any further ado, Chris.
DR CONOVER: Good morning. It's a
pleasure to be here. I have done work for various
states on certificate of need regulation, hospital
conversion regulation, and regulation of conversion of
Blue Cross and Blue Shield plans before profit status.
Most importantly, I spent the last three
years under a contract with the Department of Health
and Human Services working on a global estimate of the
cost and benefits of health services regulation.
Preliminary findings from our work are contained in
your handout.
We wanted to know in this study how much
of the phenomenally high cost of medical care in the
U.S. can be attributed to health services regulation.
A related question of interest to me is how many
uninsured might be covered where we could reduce this
sizable regulatory burden.
We examined the literature for nearly 50
different kinds of federal and state health services
regulations including regulation of health facilities,
health professionals, health insurance, FDA regulation,
and the medical tort system. These various regulations
covered the gamut from mandated health benefits to
state certificate of need requirements for hospitals
and nursing homes.
We systematically tallied the benefits and
cost associated with such regulations and found that
the expected cost of regulation in the United States
amounted to $339 billion in 2002. Our estimated
benefits was $170 billion leaving a net cost of $169
billion.
We found that the states and Federal
Government both have roles to play in order to reduce
this regulatory excess. It was not the purpose of our
study to make recommendations on specific regulatory
reforms to be pursued. Instead, we were trying to
provide something that has never before been achieved
previously, a big picture view of the overall impact of
health services regulation with the intent of
identifying areas where regulation might be excessive.
For all of the areas so identified one
would have to rely on further study or experts to sort
through the best approach to reforming that aspect of
regulation. In all likelihood only in some of these
cases would experts conclude that we should dispense
entirely with regulation.
How do these figures relate to the
uninsured? Our figures imply that the net cost of
regulation imposed directly on the health industry is
8.9 percent meaning that health expenditures and health
insurance premiums are at least that much higher as a
result of regulation.
Based on consensus estimates about the
impact of higher prices on how many might drop health
insurance, this increased cost translates into 6.8
million additional uninsured whose plight might be
attributed to excess regulatory cost, or roughly one in
six of the uninsured.
There is a different way of looking at the
burden as well. Although our estimates are still
preliminary and we are engaged in a careful process of
updating them and ensuring that they are accurate, it
seems unlikely that the adjustments yet to come would
alter this central conclusion.
The overall excess cost of regulation in
the U.S. exceeds by several orders of magnitude the
amount that would be required to cover all of this
nation's uninsured. In the context of the Institute of
Medicine finding that 18,000 uninsured die every year
due to lack of coverage, is maintaining our current
regime of health regulation worth letting that
continue?
I think this is a question worthy of
serious consideration as we consider how to strike the
proper balance between the benefits and cost of
regulation. I welcome this opportunity to hear first
hand from you how to do regulation better.
DR. SIMON: Great. Thank you very much,
Chris.
Our second panelist is Ted Frech. Ted is
a Professor of Economics at the University of
California, Santa Barbara. Ted.
DR. FRECH: Thank you. A lot of my
research over the years has been in health economic
issues, way more than half, especially competition and
regulation issues. I have published over 120 books and
articles. Perhaps the most notable one in this context
is Competition and Regulation of Medical Care. It's
AEI Press 1996.
I've also worked as a consultant and
expert witness in health care competition and
regulatory matters at various levels. I've testified
in the Senate, the Massachusetts legislature,
Massachusetts Insurance Commissioner, the FTC and
Department of Justice. The topics I've worked on
include health insurance, hospitals, physicians,
malpractice, and probably some others I haven't thought
of.
DR. SIMON: Thank you, Ted.
Our third panelist and, if you haven't
noticed, we are going alphabetically, not in any other
order, Mark Hall. Mark is a professor of law and
public health. He comes to us today from Wake Forest
University School of Law and also School of Medicine.
Mark.
MR. HALL: I think I have two areas of
activity that are relevant to the focus today. One is
that I have spent several years studying insurance
regulation, initially in the states but also as those
models of regulation have been adopted in federal laws
as well. That is one field. The second is I have
worked with Chris Conover in doing some pilot case
studies, field interviews with hospital administrators
and senior executives about the burden of regulation
attempting to determine to what extent we can document
the burden of regulation through in-depth interviews.
DR. SIMON: Thank you very much. I'll be
technologically savvy by the time this is done.
Our fourth panelist comes to us from CMS,
Rich Lawlor. Rich is the Director of Outreach and
advisor to the administrator at CMS and also runs the
popular Open Door program.
Rich, you want to tell us a little bit
about that?
DR. LAWLOR: Thanks. Yes. I'm probably
the least published of any panelist up here today. I
can count all those publications on less than one
elbow. I do work within obviously an agency that has
to deal with updating and renewing and improving
regulations on a daily basis at a very rapid pace, in
particular since the Medicare Modernization Act was
passed less than two years ago.
The Open Door forums are an outreach
program so as far as considering this a mini
laboratory, as was mentioned earlier, for input, we do
that on an almost daily basis doing almost 200 forums a
year with all the types of providers that we regulate.
I think what I bring here is sort of a tempered ear to
a lot of these concerns that are raised. I hope that
this panel can help address some of your ideas and
point out some of the ways that we can expand the
perspective around any individual concern to make sure
that we are looking at this as holistically as
possible.
One funny thing that I would like to point
out is that I don't know how they choose these
conference rooms but they've got pictures of monuments
all around us and maybe modes of transportation, but
this one looks like there's a blimp about to hit a
building. This one over here is a federal monument
with no head.
It's really hard to say what's going on
here, but CMS is very grateful to be at the table with
these excellent economists to do this discussion with
you under really the charge at the Health and Human
Services Department.
We do work with all the other agencies
within HHS when it comes to developing these
regulations so maybe my perspective of having listened
to you and sort of interacted with all the different
stakeholders that we have can be useful and I'll try my
best.
DR. SIMON: Rich, we are very happy to
have you and CMS here today represented.
Our fifth panelist comes to us from the
University of Alabama at Birmingham. We seem to have
the south very well represented here today. Mike
Morrisey is a professor at the School of Public Health
and an economist as well by training.
DR. MORRISEY: Yes, indeed. Health
economist focusing on issues of hospitals and employer18
sponsored health insurance markets.
With respect to regulation most of my work
has looked at the effects of state regulation focusing
on certificate of need, any willing provider laws,
health insurance mandated benefits, small group reform.
I am currently looking at malpractice reform issues.
In a broader context very interested and have worked on
issues of competition and hospital cost shifting.
DR. SIMON: Very good. Thank you.
Our final panelist, Dan Mulholland, is a
practicing attorney with Horty, Springer & Mattern in
Pittsburgh.
Dan.
MR. MULHOLLAND: Thank you. Hello,
everybody. Our firm does nothing except represent
hospitals, health systems, and their medical staff
leadership around the country. I have the pressure, or
the curse, of having to deal with the regulatory system
day in and day out on the receiving end.
I'm particularly interested in some of the
non-economic cost of health care regulation,
specifically how regulation can change behavior to the
point of preventing efficiencies from being achieved
and delivery and access to health care services.
Two brief examples. We represent a
hospital in Pennsylvania in a small county adjacent to
Allegheny County where Pittsburgh is located. This
hospital was able to build a cardiac surgery program
over the last five years primarily because Pennsylvania
got rid of its certificate of need program in 1996.
In that county there has been a reduction
in cardiac related deaths, avoidable deaths according
to the criteria in the Dartmouth Health Atlas, from 111
in 2000 to 38 this year. Dramatic decrease in deaths
simply because that hospital was able to put in a heart
program.
Whereas in Georgia where we represent a
similar hospital in a similar-sized county, that
hospital was struggling to be one of a few who might be
approved for this C-PORT program which would allow
invasive cardiology without a cardiac surgery program
simply because Georgia has an active certificate of
need program and it would be beyond a realm of
comprehension for a community that size to have a heart
program.
Another issue that we faced in the non
economic cost of health care regulation has to do with
the confusion and sometimes the contempt that people
who are regulated can have for the law. Brief example
here has to do with the EMTALA statute, the Emergency
Medical Treatment and Active Labor Act.
In the last month I've had two different
clients ask me if it was okay to reserve psychiatric
beds for anticipated admissions from some source other
than the chaotic first come first serve that is
mandated by EMTALA. This was not just to get
maximization of reimbursement.
One hospital wanted to have an arrangement
with the community mental health provider to provide
for better transition for people who needed to be
admitted. The other wanted to reserve beds for people
coming out of the emergency room knowing that on a
regular basis the police would bring a lot of people
there.
Neither hospital was able to come to the
conclusion that it could safely do it without risking
legal sanctions simply because they had an obligation
not only to take all comers out of the ER, but also
anyone who would be transferred. As a result, those
hospitals are stymied in terms of what might be a
better way to provide psychiatric service to an
endangered population.
In my practice I often hear clients throw
up their hands and basically say that they have no
respect for the regulations because no one can
understand them and no matter what they do at some
point they could be called to task. To the extent
anyone has any observations on these non-economic
costs, I would be very interested in hearing them.
Thank you.
DR. SIMON: All right. Thank you very
much. I seemed to be glued to the floor.
What we would like to do now is begin the
public commentary portion. What I'm going to do is, as
I said, be operating off of the sign-in sheet that you
may have completed on your way in. I remind you if you
would like to present public commentary, please sign up
on the sheets outside. This is going to be our vehicle
for calling people to the microphone and for
identifying you.
We have two microphones set up. Please
use the one that is most convenient. I would ask you
to identify yourself, identify the organization that
you are with or speaking on behalf of, and then I will
leave the floor to you.
We have a timer here that is going to go
for roughly five to seven minutes. I'm going to be a
little generous around that this morning because I
don't want to cut off anybody who has important things
to tell the audience. If you are still going after 10
minutes strong, then I'm going to get a little bit more
forceful in my role up here just so that we can make
sure everybody has their due. Everybody fine? Very
good.
Toby Edelman.
MS. EDELMAN: Good morning. My name is
Toby Edelman. I'm a Senior Policy Attorney with the
Center for Medicare Advocacy, which is a public
interest law firm that represents Medicare
beneficiaries nationwide. I have quite a different
perspective from members of the panel. For at least
the past 25 years, we have heard from one task force
and committee after another complaining about the
regulatory burden. Advocates for beneficiaries have a
different perspective. Many of us believe that federal
laws and their implementing regulations can serve the
critical function of protecting beneficiaries of
federal health programs.
We also know that to be effective laws and
regulations must be specific and enforced. In the
absence of strong standards that are enforced poor care
often results. Government is then forced to spend
money to try to repair the damage that could have been
avoided and health care providers may be forced to
repay the Government for their reimbursement and then
may be forced to repay beneficiaries for the harm they
caused.
While de-regulatory task forces always
focus on the cost of regulations, from my perspective
they fail to look at the benefits of the regulations or
the burdens on the public in general or on program
beneficiaries in particular of failing to regulate
adequately.
I just offer one example this morning,
nurse staffing standards for nursing homes. The
Federal Nursing Home Reform Law that was enacted in
1987 called for nurse staffing that was "sufficient to
meet the needs of residents." Nearly a decade after
that law went into effect the Department of Health and
Human Services reported that more than 92 percent of
facilities did not have sufficient staff to meet the
standards of the law. The vague statutory and
regulatory language was insufficient to compel good
practice and it was, of course, very difficult to
enforce.
At about the same time that HHS was
reporting that staffing was inadequate, Congress
responded to the nursing home industry's complaints
about changes to the Medicare reimbursement system and
increased reimbursement for skilled nursing facilities.
One increase was specifically focused on
nurse staffing and the nurse staffing component of the
prospective reimbursement system. Despite increased
reimbursement for staffing the Government
Accountability Office found that staffing remained
stagnate. In fact, the numbers of registered nurses
declined after Congress increased reimbursement for
nurse staffing.
The GAO reported that nurse staffing
increased primarily in the handful of states that
mandated specific staffing ratios. The federal
standard was too vague to compel facilities to have
sufficient staff. In other words, Congress and HHS
told nursing homes to hire enough staff and then paid
extra to employ more staff but neither approach was
successful to assure adequate staffing.
What are the consequences of inadequate
staffing? There is universal recognition that staffing
is highly correlated with good care. When staffing is
insufficient residents suffer harm they should never
have suffered. The Government pays for poor resident
outcomes when residents are hospitalized with bad
outcomes. So significant is this cost that the
Government's pay-for-performance demonstration program
for nursing homes is focused on reducing
hospitalizations as a major component.
As for facilities they are sued by the
Government and by resident's families. One example,
last month the United States and the State of Missouri
settled a false claims act case with management in
three of its facilities. The company and facilities
were required to pay $1.25 million in civil penalties.
They are subject to separate litigation to
collect back the money that they received for
reimbursement for care that they did not provide and
the possibility of criminal prosecution is still there.
What did they do wrong? They basically failed to
employ sufficient staff to meet their residents.
This is how the settlement describes the
problems that resulted from poor staffing. "The
facilities failed to provide the required services to
certain residents as evidenced by dehydration and
malnutrition of residents, elopements of residents,
residents contracting preventable pressure sores,
residents being found soaking in their own urine and
feces, residents going for extended periods of time
without cleaning or bathing, insect infestation,
resident abuse, and general lack of quality care." The
management company in all three facilities are now
permanently barred from getting Medicare and Medicaid
reimbursement.
The U.S. Attorney's press release was even
more specific in describing some of the gross practices
and situations in the nursing home. She describes
elopements, a resident being found covered with ants,
and a resident found to have been physically abused by
a staff member.
From my perspective and the perspective of
many beneficiaries' representatives, health care law
and regulations serve a very important purpose in
ensuring good care for beneficiaries. Thank you.
DR. SIMON: Thank you, Ms. Edelman. I
think this is an important comment for us to remember,
to keep a clear eye open from the intent of the
regulation as well as an important discourse on the
policy. May I open this to any of the panelists?
DR. CONOVER: Well, one observation I
would like to make is that when we did some of this
case study work and went out in the field and actually
talked to nursing home operators, the picture that got
painted was that too often regulation is overly
prescriptive in terms of how to achieve an objective
and their claim was that if they had less regulation,
they actually would keep the same staffing levels but
be able to provide better quality care. That's a
little bit different perspective. I think the key is
right. Carol is right. We have to look at what's the
objective of regulation and what's the best way to
achieve that objective.
DR. SIMON: Other comments?
MR. MULHOLLAND: Just one brief comment.
I heard from my cousin who runs an -- she is an
administrator for a nursing home in New Jersey that it
takes her two FTE nurses in administration simply to
comply with all the regulatory requirements they have.
I think you raised a good point, Ms.
Edelman, about nurse staffing being critical to good
patient care but if regulations are too prescriptive,
on the other hand, you could be sapping a lot of talent
that could be delivering care to people and instead
handling the paperwork and other requirements that come
with the regulations that these nursing homes have to
comply with.
I think you raise a good point that if you
are going to try to provide care to people, let the
providers provide care rather than have to spend a lot
of time handling paperwork and other matters that could
be the by-product of regulation that is overly
prescriptive.
DR. SIMON: Thank you very much.
Ms. Edelman, just a reminder to make sure
that we have a copy of your testimony at the front or
submit it through the web for other folks who may also
want to either submit comments at today's meeting or
subsequent to the meeting. There is also a website
available to make it easy for you to send in electronic
comments.
I and my colleagues who are helping HHS
and ASPE in terms of assimilating the information and
analyzing it rely very heavily on receiving your public
commentary. In particular commentary which, as we have
just heard, is specific about the nature of the impact
and offers constructive recommendations and helps us to
get a good handle on both the cost side, the benefit
side, and the barriers. I think the barriers may be
described as barriers to good quality care as well as
barriers that raise explicit costs so I thank you very
much.
MR. HALL: I had a question.
DR. SIMON: I'm sorry, Mark.
MR. HALL: Yeah, sorry. I guess it is my
understanding that the panel can ask questions. Is
that okay?
DR. SIMON: You betcha. That's the game
plan.
MR. HALL: I think the nurse staffing is a
good example so I thought I would spend just a minute
or two thinking about that example. One question is
viewing that as a successful regulation whose benefits
outweighs cost and, therefore, good regulation. Do you
think there is a case to be made that it could be even
more beneficial, that it could be even more cost
effective, and it could continue to achieve 99 percent
of its benefits by reducing some of its cost or is it
at the right level of sort of benefit --
MS. EDELMAN: Are you talking about the
Nursing Home Reform Law in general?
MR. HALL: Yes.
MS. EDELMAN: Well, I think the Nursing
Home Reform Law has had some beneficial effects.
MR. HALL: Sure.
MS. EDELMAN: The reduction of restraints
in this country is an enormous change which also has
saved money. There is considerable amount of research
that indicates that using restraints for people is more
expensive than not using restraints. But that
practice, that good practice of reducing restraints
came about because it was required by law.
I participated in the Commonwealth Fund
meeting when they looked at the restraint reduction
program that they had funded in some facilities and the
question was raised is it worthwhile to have a program
like this when the law already requires restraint
reduction.
The research itself indicated that
providers said they participated in the demonstration
to learn how to reduce restraints because they knew
they were going to be required to reduce restraints
from the law. I think the law was an important
motivating factor for those facilities. I think the
law could be more effectively enforced. That is
probably one of the major shortcomings of the law.
I would just say that the Nursing Home
Reform Law is somewhat unusual as a piece of
legislation because it was based on an Institute of
Medicine Committee Report, numerous hearings, and what
was called the Campaign for Quality Care which was a
coalition organized by the National Citizen's Coalition
for Nursing Home Reform to bring together all the
interested parties, the health care professionals, the
industry, the advocates.
We sat for a year talking about what
should be required by the law and basically the
standards of care which you won't hear nursing homes
generally complain about. The standards are good
practices that were generalized to the whole country.
I think that has been a successful law except for the
enforcement which has been repeatedly criticized by the
GAO. I'm not an academic but I did put a lot of
footnotes for each of the statements I made in my paper
and I will e-mail that do you as well.
DR. SIMON: We appreciate that.
DR. CONOVER: I have a related follow-up
question.
DR. SIMON: Actually, Rich has a question
first.
DR. CONOVER: Oh, I'm sorry.
DR. SIMON: Then we'll circle back to you,
Chris.
DR. CONOVER: Okay.
DR. LAWLOR: Thank you. I don't mind any
order at all but thanks. First thing, of course,
thanks for that example as well as a lot of the
comments that you made going into it. Sort of our
charge today is maybe to consider how regulations work.
It seems to me that your example sort of begs the
question what are the requirements or, more broadly,
the devices in a regulation that can be improved.
I think without a doubt my eyes were
opened five years ago when I entered into federal
service that the purpose of a regulation is always
altruistic and admirable. I've never seen one that's
not. Getting rid of a regulation versus tweaking is
really sort of the primary question a lot of us have
going in at the agency level, too.
You talked about that particular
regulation being insufficient to compel good practice.
Then went on to talk about some of the ramifications
and litigation charges and sort of coming back again to
maybe there is a need for enforcement in between those
two sets of ideas.
Then also you brought up the pay-for6
performance demonstration for nursing homes which I
appreciate. That happens to be one of the particular
discussions we had a separate forum on with the nursing
home community. I think you were listening in on that
recently. Marty McGeein pointed out that I would try
to bring up a couple of things that our agency within
HHS is trying to do as well.
I just want to point out that, No. 1, the
questions that we need to sort of come back from these
examples are in terms of -- and using examples is good
-- what are the things within the regulation, the
devices that sort of provide the checks and balances
for how people react. You pointed out that the funds
were given out and then somebody's investigation said
that it never really -- there was no rubber on the
tires in the end.
The pay-for-performance demonstrations
always start with generally a consensus building
process to figure out what the metrics are that are
going to lead to those payment incentives to make it
improve the health care outcomes of the patients and
their experience, or the residents in this case.
If you have any input as to do you think
that demonstration project right now has an opportunity
to address these staffing requirements or do you think
that we need to look at a regulation now or do we wait
on a demonstration?
MS. EDELMAN: I think HHS, from my
perspective, has sufficient information from the huge
study that it did itself with Abt and other people in
the late '90s and beginning of the 2000s showing that
92 percent of the staff was the simulated part of the
staffing but the facilities didn't have enough staffing
to meet the needs so I think you have sufficient
authority now or sufficient support for putting in
staffing ratios.
The law says sufficient staff and that
really is the way it should be done. Facilities should
have the appropriate staff to meet the needs but it
hasn't worked. If it worked, we wouldn't have 92
percent of facilities not staffing appropriately. I
think the demonstration is considering staffing as one
of the components and that would be important but I
have some other concerns about the pay-for-performance.
Chiefly I think this Missouri case shows
that we already pay for performance. That's what we're
paying for. Why should we pay extra money when we have
already paid for the service. I think what a number of
the states have done, and the U.S. Attorneys in these
False Claims Act and other cases are saying, "You, the
facility, did such an incredibly bad job, the care was
so egregious, that we want our money back. You didn't
perform at all. It's the opposite of paying for
performance. You get paid for performing. If you do a
terrible job we are going to take back our money. Why
would we pay extra for doing what they are already
required to do and paid to do doesn't make sense."
Then the part of the demonstration that
talks about the lowest tier paid for improving. There
was a lot of concern at that open door forum about
paying for facilities that improved but if they are
still way below the standard, does that make sense.
We want to encourage improvement but why
would you pay facilities more when they are still doing
an inadequate job whereas other facilities are already
doing a better job and they are not going to get the
benefit of a pay-for-performance demonstration. I
think pay-for-performance is very complicated. It
sounds appealing. We should pay for what we want to
see happen but there are a lot of difficulties with
this.
DR. LAWLOR: The only thing I was just
trying to point out, and I want to ask anybody else to
include in their remarks, is parallel tracks on
demonstrations versus regulations that are either not
in effect now or haven't been invented yet. Do we just
rebuild and repair regulations or do you consider
running a demonstration and then an all or none
approach on the regulation side?
DR. SIMON: Chris and then we'll go to
Ted.
DR. CONOVER: I wanted to go back to Mark
Hall's question and maybe ask it a little more
pointedly. From your point of view are there any
aspects of nursing home regulation where regulation has
gone too far and is overly prescriptive or anything
like that?
MS. EDELMAN: Anything specifically in the
Nursing Home Reform Law, those regulations?
DR. CONOVER: Yes.
MS. EDELMAN: You know, I really haven't
heard even from the providers that there are problems
with the substantive requirements in the reform law.
Most of the complaints are with the enforcement system.
They don't complain about the substantive
requirements. I don't think they really are at fault.
In fact, there are areas where the law
itself says states can go further. Talking about
quality of life, requiring staff training of nurse
aides, you know, at the time the law was passed half
the states didn't require any training. Now we require
training. I don't think that's anything we object to.
Doing a uniform assessment.
I mean, I think these things are all very
reasonable. They were based on good practices. Maybe
this is an unusual law because it really was based on
the good provider practices that were going on. I
don't think parts of the substantive requirements need
to be changed.
DR. SIMON: Ted.
DR. FRECH: I want to kind of broaden or
raise our level of abstraction, I guess. Seems that
the ultimate goal here is to encourage higher quality
care, particularly at the very lowest levels to get
those up to a reasonable level.
It seems like this interacts with other
regulations that we haven't talked about, particularly
state certificate of need which is, in some states,
very restrictive so it restricts the amount of
competition among nursing homes and makes it even hard
to get into nursing homes.
I wonder if you have a view of relaxing
that would put less pressure on these regulations and
lead to more competition and more availability of
nursing home space.
MS. EDELMAN: Well, actually, most of -- I
don't know how wide spread certificate of need is
anymore. At this point because nursing homes do have
competition from other sources, other places, a lot of
people are living in assisted living. Some of those
people would have been in nursing homes. A lot of
people are getting care at home that never did before.
Occupancy rates are extremely low. I
mean, they can be in the 80s now. In certain places
they are still high, in the high 90s but overall
occupancy rates are very low because of competition
from other choices for people so I don't know if
certificate of need would help in that situation,
reducing or eliminating certificate of need.
DR. SIMON: I think we are going to have
to move on. Thank you very much, Ms. Edelman.
Our next commentor is Walton Francis.
Walt.
MR. FRANCIS: This is live, right? Hi.
I'm Walt Francis. I'm an independent consultant and
author. I specialize in consumer advice, particularly
on health insurance, but I'm also allegedly a
regulatory expert and worked for decades as sort of the
regulatory czar in HHS to ensure compliance with all
the requirements for keeping regulatory burden minimal.
I have a whole bunch of points I want to
make almost stiletto fashion about how I think this
exercise should be approached and the kinds of things
you should look at. I'll also follow up a little bit
on our nursing home example because I think it's a
really good illustration of some of the opportunities
you have to do a great job.
We start with Chris' paper which is a
wonderful paper. It is far and away the best job ever
done on totalling up the cost of health care regulation
despite the flaws I'll mention. But I want to urge you
-- it's a score card. Okay? I don't think your
exercise should wind up with a score card.
I think you need to look for targets of
real opportunity for making a difference that matters.
Areas that are big gains possibly in economic wealth
because you can prove the benefits regulations or
reduce their cost, or come up with regulatory
alternatives that will be superior to existing
approaches.
There is also a temptation to focus on
minutiae rather than policy in these kinds of
exercises. I'm a veteran at many of them. I noticed
that you had an estimate of the cost of federal
regulation of organ transplant as $1.815 billion and
the benefits are $1.807 billion.
Leaving aside the fact I couldn't figure
out what -- I'm even an expert in that area and I don't
even know what they are supposed to be but let's skip
over that. The point is that in and of itself, and I'm
not criticizing you for having that estimate but it's
not a helpful kind of thing as a result so I don't want
you to be producing results like that.
The cost estimate and the benefit estimate
in and of themselves tell us absolutely nothing about
whether or not there's a problem, whether there's an
alternative that can improve things or not.
Another general point. It's easy to blame
the bureaucrats for bad regulations. The reality is
far more complex but the most important part of that
reality is that all Government regulations come from
law. It's the Congress and you ought to be careful in
the work you do to distinguish reforms that can be made
by bureaucrats through the code of federal regulations
as opposed to legislative changes that in many areas
are vital and it's silly even to talk about what the
bureaucracy could do differently without changes in
law.
There's also a tendency, and I'm sure
you'll avoid it particularly if this distinguished
group continues with you at other meetings and other
work that's being done, for each new reform effort to
figure we'll review the world and discover the bad
actors. Hey, the bad actors, I submit to you, have
already been discovered. There has been an awful lot
of work on reviewing oversight of federal health care
regulations.
I won't go through the history but just
recently former Secretary Thompson had a massive review
involving providers telling them where they wanted
things fixed and a lot of recommendations were made and
a lot of changes were made. I'm not saying there is no
more gold to be found but in a lot of areas there's
probably not much.
I also think that there are some problems
in dealing with benefits that need to be sort of
frontfully addressed. I noticed in the whole area of
providing regulation Chris' paper estimates some
benefits for nursing home regulation and no benefits at
all from hospital or any of the other categories.
I assume that's because you couldn't find any
credible studies that produced benefit estimates but
there are benefits, okay? There is sort of a danger
here in assuming that the benefits are nonexistent or
much lower than expected.
The other problem, and I have no idea to
what extent you were prey to it, not because of
mistakes you would have made but because it's easy to
make that mistake, there's a lot of federal regulations
that simply ratify best practice, particularly in a
broader area.
One of my favorite examples is we require
hospitals to keep patient charts, the chart at the foot
of the bed. OMB scores -- that's a paperwork burden,
by the way, and it's huge. I mean, there's a lot of
hospital patients. There's a lot of charts.
OMB scores the cost of that regulatory
requirement as zero. Zero in paperwork terms, in
dollars for that matter. The reason for that is they
don't count as regulatory burdens things that people
are going to do anyway. Those charts are going to be
there whether or not our regulation requires it.
I talked a little bit about fruitful
targets. I have some large and small examples. A very
small one but I think it's just ironic and wonderful.
The very same House committee, the Appropriations
Subcommittee, that is mandating this study also is
about to mandate that Medicare advantage and Medicaid
prescription drug plans use Federal Government
contracting procedures designed to encourage small
businesses, set-asides for small and disadvantaged
businesses.
This is the bane of life of places like
the Defense Department and so on. A great deal of
money is spent on complying with set-aside
requirements. I think in the real world in which we
live health plans will, if they survive the
appropriations process, and it is expected to, CMS and
health plans will find ways to live with that at
minimal cost.
Nonetheless, it is on its face ludicrous
and meaningless and unjustified regulatory requirement.
It's sort of if we use the food stamp program to
require the grocery stores because they took food
stamps and agreed to participate in the program would
have to engage in federal contracting practices. Just
bizarre.
DR. SIMON: I see you have a lot of stuff
here. Can I ask you to focus on the big picture items?
MR. FRANCIS: Yeah, I am. I'm sorry. I
think that one of the things you ought to be looking at
are regulatory reforms underway that are likely to pay
big dividends and there are a number of them that are
very important. You have to decide which items you are
going to pick but the health savings accounts and high18
deductible health plans have major implications and
major potential effects on health care in this country.
You could argue that what the Congress did
in enacting that section of the Medicare Modernization
Act, which isn't about Medicare at all, was to level
the playing field in terms of tax preferences. I won't
go into detail on that but that's a major reform.
Another major reform underway is the new
Medicare Advantage Program. Very substantially
restructured. Huge incentives to health plans to both
attract customers and keep cost down. How that plays
out remains to be seen but it is a radical departure
from traditional Medicare. We pay for whatever is
delivered whether it was needed or not.
A few other examples. We have some
regulations on the protection of human subject to
research which I believe have been applied or
interpreted, and I won't get into the details of that,
by some concern as impeding the ability of health care
institutions to initiate reforms within the institution
because the argument is if you say the hospital tries
to institute a new nosocomial control program to see if
it can improve its results.
If they measure those results in terms of
lives saved, they must be engaging in research on human
subjects and why these regulations require that every
single person provide voluntary informed consent, an
impossible requirement to meet if you are making a
systemic change for a large population.
There are lots of regulations that have no
victims that know they are victims and are sort of
hidden. A recent example, I have not researched it but
it's my understanding, and there is actually something
in the CMS website that says an employer may not
provide a voucher to his employees as part of their
compensation to go buy their own health insurance plan.
We ban that. We ban it because that
health plan the employee buys won't meet HIPAA and
COBRA requirements which only could be met by large
group plans. Therefore, the employer can't do it. In
effect, we are directly denying the small employers the
ability to give people a tax preferred benefit that
would enable them to buy insurance. Extraordinary.
DR. SIMON: Walt, can I ask you to take
maybe one more minute?
MR. FRANCIS: Yeah, I'll just name the two
arguments and I won't go into them because they are
well known to almost everyone here. Two huge reform
areas that are worthy of serious attention are the tax
preference for health insurance that exist in the
current income tax laws. The President's commission
just recommended having that tax preference for
policies of roughly $5,000 for individuals and $11,000
for families.
I think that has huge implications. That
is not the first time such a proposal has been made. I
think of it as regulatory reform of the tax laws, of
you will, with huge implications for the cost of
medical care in this country if you look down the road
at behavioral changes.
My final example is the whole question of
why states are, in effect, allowed to burden interstate
commerce by regulating health insurance to the degree
they do. It is illegal for a health policy sold in 49
states to be sold in the 50th state if that 50th state
says, "Nope, you don't meet our requirements, whatever
they may be."
It is literally illegal to sell a policy.
I think that is extraordinary. It's an example, I
think, largely written for a vacuum in the sense that
the Federal Government has not in any way, shape, or
form preempted that field so maybe there is an area
where more regulation is needed.
I'll simply stop with one last point about
nursing homes. Sorry about that but I just want to
comment there is a whole set of alternative strategies
for regulation of institutions. Pay-for-performance is
one example. There are many other ways to pay for
performance than is currently being used.
Information that empowers consumers to
make their own choices. There are ways to get adequate
staffing, I would argue, in nursing homes without
specifying a staff ratio. Thank you very much.
DR. SIMON: Great. Thank you. I hope we
will be able to engage you in more specifics that I
know you have enumerated here in some of the Q&A.
Just, again, so we keep our focus here is that while I
know Walt has commented in a couple areas about
specific state regulation, I would ask us first to deal
with federal regulation issues and then state
regulations as they impact federal boundaries.
Mike, since I cut you off last time you
get property rights first.
DR. MORRISEY: Walt, the discussion of
federal and state laws just ratifying existing
practice, clearly there's been a lot of research that
finds that regulation is ineffective, largely I think
because those regulations do just ratify existing
practice.
So what do we do about that? Does that
mean that these are regulations that we ignore or these
are regulations that should be repealed?
MR. FRANCIS: I think you have to look at
-- I hate to say this but you really need to look at
the particular regulatory area of what is going on.
I'll take a fairly silly example of patient charges in
hospitals. Every now and then there are things that
-- there are hospitals that are bad actors just like
there are plenty of nursing homes that are bad actors
so sometimes you want to close them down. If you don't
have a requirement, it's hard to cite them.
There is a whole question here of how do you
actually enforce standards. If you don't have a
standard, do you have anything to enforce? I think the
whole issue of are we as clever as we can be in
devising standards and then enforcing them through the
survey process is ripe for review but I don't think
you're going to find easy solutions. Just get
rid of all the regs? I don't think that solves
anything.
DR. SIMON: Mark and then Dan and then
Rich.
MR. HALL: Go ahead, Dan.
MR. MULHOLLAND: Thanks. Mr. Francis, you
mentioned survey and cert and that's an interesting
area in terms of how regulations are actually enforced.
Hospitals, for instance, have to comply with Medicare
conditions of participation, they have to comply with
their state licensure requirements, and they have to
comply with informal but very important accreditation
requirements, say the joint commission.
They have three different agencies
enforcing different regulations all aimed at the same
thing, improving the quality of care, but adding layer
after layer of regulatory cost on. I would like to
know what kind of reforms you think might be
appropriate to avoid some of the duplication and some
of the inconsistent enforcement in that area.
MR. FRANCIS: Let me say first I disagree
with the premise of the question, in part, at least.
In that particular case we deemed joint commission
standards so HHS does not directly enforce its hospital
standards on a hospital for participation in joint
commission process. CMS relies extensively on deeming
approaches to avoid the very problem you're talking
about.
Having said that, yes, of course, there
are plenty of institutions that are subject to lots of
regulations. Minimum wage laws, don't hire illegal
alien laws, voting laws.
MR. MULHOLLAND: Not to argue but in terms
of deemed status, deemed status is virtually
meaningless now because if someone complains, for
instance, about an improper restraint or an EMTALA
violation, state surveyors acting on behalf of CMS will
come in and survey for compliance with all the
conditions of participation, notwithstanding the fact
that the hospital's joint commission accredited.
Once that happens the joint commission has
to be notified. They come in and do a resurvey. After
that the inspector general comes in and surveys to see
if the joint commission is doing what it is supposed to
be doing relative to deemed status.
We've had several clients that had a
regulatory pile-on, if you will, as a result of just
one alleged infraction. That has created a lot of
chaos. You basically have to pull your management team
off of whatever they are doing to answer all the
questions, come up with a plan of correction.
There are often times things that need to
be corrected. But when you have to answer to not one,
not two, but three or four masters and you have
somebody else watching all of them in the background,
it becomes a very daunting task and begins to sap a lot
of needed talent away from actually delivering care.
MR. FRANCIS: Let's assume your example is
correct, and I have no reason to challenge it. I'm not
an expert in the actual practice of survey and cert
but, yes, I could easily imagine such a sequence
occurring.
It seems to me you have identified a
wonderful example of sort of mend it as an approach.
If you can identify the realities of real world
administration of survey and cert as a big problem for
health care institutions, I think that's great. If you
come up with some possible solutions, wonderful.
DR. SIMON: Mark.
MR. HALL: You gave two examples at the,
insurance issues. One was the employer vouchers to buy
individual insurance. I just want to clarify to what
extent these examples relate to federal law just so
that's clear on the record. The inability of employers
to give individual vouchers is due to federal law,
right? HIPAA and --
MR. FRANCIS: Yes. Now, let me also
say --
MR. HALL: I understand the example.
MR. FRANCIS: I have not nailed down
precisely is that in the law, is it in the regs, or was
it just some excess of the regulatory zeal on the part
of some bureaucrats or something. I don't know. I'm
sure the purpose is to grant employers from using a
loophole to get out of HIPAA.
MR. HALL: If it's employer sponsored, it
has to meet --
MR. FRANCIS: This is federal, strictly
federal.
MR. HALL: Okay. The second example was,
as you phrased it, burdens on interstate commerce to
the sale of insurance plans. Each state can impose its
own requirements so anybody who wants to sell a plan
nationwide over the Internet or something like that has
this heavy state regulatory burden.
My understanding is that is connected with
federal law to the extent that it results from the
McCarran-Ferguson Act which --
MR. FRANCIS: Oh, yeah. I wanted to just
take a slight exception here. In a whole lot of health
care regulatory areas the states and the feds have
overlapping, which is often a problem, responsibilities
or maybe they have set some boundaries and one is one
side and one is on the other.
In a lot of these areas the Federal
Government is the actor who is ultimately able to set
the boundaries. I mean, in my written testimony I gave
the example of the recent Supreme Court decision on the
interstate sales of wines even in an area where the
constitution provides some very special language
related to the sale of alcoholic beverages, I don't
want to argue the point strongly but I think the
Federal Government has deliberately left a regulatory
vacuum which I would argue -- I know it's in Chris'
paper -- very expensive adverse effects.
MR. HALL: Okay. So in this particular
case the source of that would be the McCarran-Ferguson
Act.
MR. FRANCIS: Yeah. The McCarran-Ferguson
Act is actually a policy statement. It's not a statute
that sort of -- I think it basically says we think the
field of insurance should basically be regulated by the
states and we'll stay out of it as much as we can. It
doesn't specifically provide a statutory framework for
state regulation of insurance is my understanding.
DR. SIMON: Rich.
DR. LAWLOR: Okay. Thanks. First of all,
I know this is the first of four town halls they are
doing so maybe we are all sort of just warming up
looking towards maybe more quantification at times.
This is all very useful, of course, though.
One thing you did way, and I'm not sure
you meant it the way I'm hearing it, but something like
not much change can be made in certain things that
we've already got written in regulations. I think I
definitely disagree with that. I think a lot of
improvement is available for creative regulatory
changes within HHS.
I say that with a grain of salt. Be
careful what you ask for. We all know that once you
start tinkering with the regulation the trickle into
other regulations has to be recognized to the best of
your ability. I think that is when we started hearing
the same thing with state and federal crossing into the
same whelms.
Obviously we live in a dynamic state of
regulations now and how we got here isn't as important
as what we have and what we can do to make changes. At
least to my particular favor, and this is what I really
wanted to bring up, CMS and our other agencies in HHS
are partnering with consensus-building organizations on
measures and processes that can improve outcomes.
Maybe we can take a lot of pressure off of
the regulation's weaknesses by doing these things in
parallel and not necessarily targeting efforts on the
regulatory change itself because when you remove the
pressure from a regulation, it can be a lot more
effective as written.
MR. FRANCIS: I totally agree with what
you said and if I said something that seemed to imply
anything to the contrary, I hereby take it back. I
don't mean there are no improvements that can be made.
Quite the contrary. I believe there are major
improvements that can be made in many, many regulatory
areas. I just think one has to go and take a grain of
salt about how much -- of a thousand regulations how
many are likely to be fruitful targets for change. The
answer is probably a fairly small fraction.
I'll give you a small example. One of the
arguably more unfortunate regulatory excursions in the
Federal Government is in the Clinical Laboratory
Improvement Act whereby the Federal Government
regulates laboratories. The impetus of that act
was some bad behaviors by some large laboratories. The
statute as drafted applies to all laboratories
including auto-analyzing machines in physician offices.
I got a secretarial award for minimizing
the burden on physician offices of our regulation.
Okay? I'm not saying that regulation can't be improved
further insofar as it affects those 300,000 medical
practices, but there's probably not a lot more you can
do, but there is an alternative and I wouldn't want to
try to change it to a performance-based system for
physician offices. They've got enough problems. The
alternative is to go to the Congress and say, "That's
silly. Let's change the law."
DR. LAWLOR: I just wanted to get that out
there. If I could just do the last piece and then I'll
please yield.
Another example you've just got to
recognize is this cross-subsidization of payments in
different areas and we've done a lot of work there in
the recent years in the department and the agency to
remove the pressures on one reg that are being confused
by people's concerns about the dollars so we better
target the payments and reduce a lot of the pressures
on some of these regs.
MR. FRANCIS: I'm so glad you mentioned
that. The nursing home issue. A big problem in the
nursing home context is state payment rates for nursing
homes. It's budget pressure, it's Medicaid, and it's
very tough to have adequate staffing if you don't have
a budget.
DR. SIMON: I'm going to take one more
question from the panelists. You guys are getting
warmed up and that begins to concern me as the official
timekeeper so you're going to have to -- this is the
be-careful-what-you-ask-for lesson. What we are going
to try to do just to make sure that we keep somewhat on
schedule so that we can respect the time of the other
folks who are still waiting in the wings is that I've
been asked to keep the Q&A to roughly about the same
period of time as the original presentation. If I cut
you off, you get the first dibs on the next side. I've
got Chris down sort of as next. Then, Ted, you get
sort of the first ballot on the next round.
DR. CONOVER: Okay. I want to thank you
for all your comments about our work. I agree with a
lot of the limitations of what we've done. I do think
the exercise was helpful in terms of identifying
specific domains where the ratio of cost to benefits
was maybe excessive.
I also agree what you really want to
measure is the incremental cost of the regulation, what
would people not have done otherwise. When we did our
case study work, that is exactly the way we were trying
to frame those questions. What I will say is from that
case study work is it's not always easy for these
people in the trenches to articulate what that
incremental cost is but it's a good point. I guess
I'll just leave it at that.
DR. SIMON: Thank you very much.
Walt, thank you. Again, to echo a theme
that you're going to hear from me and probably the
panelists as well throughout is that in submitting your
written comments, which we would welcome any revisions,
to the extent that you can quantify and be precise when
you cite impact, that will be to the benefit of this
entire exercise. I appreciate your comments and thank
you.
Our third speaker is Sandra Fitzler, and I
apologize if I have mispronounced your name. Did I get
it?
MS. FITZLER: No.
DR. SIMON: No.
MS. FITZLER: It's Sandra Fitzler.
DR. SIMON: Fitzler. Oh, I thought that
was an F. I apologize. Thank you.
MS. FITZLER: Senior Director of Clinical
Services from the American Health Care Association. We
are a federation of state health care associations for
long-term care. Our members are about over 10,000
nursing care facilities, assisted living facilities,
sub-acute facilities, and homes for the mentally
retarded and developmentally disabled.
We are a quality and strive for a quality
organization. We commit to quality first which is a
covenant for quality care for the long-term care
profession. Thank you for having me here today so I
can share some comments. My comments are going to be
on some specific examples of where regulation has
impacted the cost of delivering care.
Skilled nursing facilities are subject to
some of the most extreme regulatory oversight in the
nation. Every regulation requires extensive paperwork
and compliance and administrative requirements. In
doing so it does take qualified care givers away from
doing their job of care giving.
We believe that there are more than
130,000 pages of Medicare and Medicaid rules and
instructions. We are just looking at what we are
supposed to do, state operation manuals, clarifying
memos, change memos, etc., etc. This is for skilled
nursing facilities. This is three times the length of
the IRS tax code and the federal tax regulations
combined. When you think about the difficulty of
delivering care and following the rules and getting it
right in long-term care, it is very difficult to do
that.
The Medicare Cost Report is an extensive
time consuming and federally mandated report that
requires many staff hours and individuals who are
trained as accountants to complete it accurately.
However, since the implementation of the prospective
payment system the report is unnecessary if we are
still doing it because reimbursement to long-term care
is based on cost. It is estimated that eliminating
this one reporting mechanism we could save the
profession about $18 million per year.
The original intent of the nursing home
survey and enforcement system was to be resident
centered, outcome oriented. What we have ended up with
is an oversight system that is very subjective, process
oriented, and punitive.
To alter this we recommend that a system
should be developed that recognizes and seeks to
improve and reward quality care. This will foster an
environment of partnership and in the long run it will
save significant dollars to nursing care facilities and
to tax payers.
The Minimum Data Set, the MDS, is an
especially complicated system. It's there to assess
residents but it's also used for reimbursement, care
planning quality measurement, research, and survey uses
it. It is a simple tool that is supposed to do
everything and in the process of doing everything it
really doesn't do anything very well.
It is such a complex process that it
requires the RAI manual in order to code it. That
manual is over 500 pages so, you know, when you are not
sure how you are supposed to code something, you lift
up this heavy manual, you are looking through the
manual trying to find your answer, and then after
you've done that, then you have to ask the question,
"Was there a clarification on this issue that changes
the way I code it?" Now you are going to look for
that. This is so complex a process that even CMS has
hired contract to look at MDS accuracy at a significant
cost to taxpayers.
The MDS and other required record keeping
are so time consuming for providers that our members
report that it requires about 30 minutes for each hour
of patient care so record keeping is 30 minutes of each
hour of patient care.
Since
the introduction of the MDS nurses
that were previously dedicated to direct patient care
are now just doing the MDS all day. Mr. Mulholland,
you talked about being interested in how regulation can
change behavior and MDS is one. I don't believe it was
ever the intent with the MDS that a nurse should be an
MDS nurse.
Because it is so complex, because there
are so many rules associated with coding, we do now
take a nurse away from patient care to make them the
MDS nurse. Even an association has sprung up
supporting the nurses that do this type of work. This
is critical when we talk about an environment where we
have a national nursing shortage. If we have over
16,000 nursing care facilities across the country, we
have now taken 16,000 nurses that we really need doing
patient care and making them do paperwork all day.
The Medicare three-day stay regulation
forces many frail and elderly individuals to remain in
costly hospital settings when the skilled nursing
facility is the most appropriate place of care. We are
forcing them to stay in a more costly care setting just
so they can meet this requirement so their nursing home
stay will be paid for.
Implementation of the new Medicare Part D
prescription drug plan is on the horizon and we believe
it will be considerable on the administrative burden on
skilled nursing facilities. The burden will include
tracking and documenting all the prescription drug
plans that patients are participating in.
Now, when you think about this, this is
not an easy task for long-term care because over 50
percent of our patients have some form of dementia.
It's not just going to the patients and say, "Tell me
what are the drug plans you're on or where do you get
your drugs?" They can't tell you and half the time the
family is not going to have all that information at
hand. This is just rolling out right now and we cannot
quantify the economic impact of this. We feel that the
impact will be significant.
19 The last area is nurse aide training
programs. Currently under regulation a nurse aide
training program can be terminated if the facility is
deemed out of compliance at a certain level on survey.
What is important about this is that out of compliance
can have nothing to do with training, CNA training. It
can be a dietary issue. Yet, the nursing facility
still loses the capacity to train.
This is critical because what we are
trying to do is have trained people and to ensure that
there is a mechanism to have trained people in the
facility. Yet, if we lose the ability to train, that
is very difficult to do. We also have care givers who
are retiring. Again, we have an older work force. We
have a nursing shortage. At the same time we have all
the baby boomers who are going to be retiring and are
going to put demands on long-term care. We have to
straighten out this training issue and this will be a
tremendous cost savings if we can do that.
In addition to that, when facilities lose
their ability to train, we are now forcing individuals
who want to become CNAs to take training programs not
provided by the facility at alternative sites. Many of
these sites are cost prohibitive for these individuals
so they cannot even afford take the training course
even when we want to hire them.
I thank you for the opportunity to share a
few of our concerns about regulation.
DR. SIMON: Thank you for your very
specific testimony.
I'm going to now open this to the folks
who I cut off first so, Ted, you get --
DR. FRECH: I'll pass.
DR. SIMON: You'll pass. Mike.
DR. MORRISEY: I'm curious since you
represent more than just skilled nursing facilities and
the whole range of substitute care providers, I'm
curious as to your thoughts on certificate of need in
the nursing home and sub-acute area.
MS. FITZLER: That is an issue that I know
we've had discussion on. There are pros and cons to
the CON issue and that is state specific but that's as
far as I can tell you about that.
DR. SIMON: Mark and then Chris.
MR. HALL: I don't know anything about
reimbursement and record keeping and what have you in
skilled nursing facilities so this question may be
naive but still, in general, with respect to the burden
that you described regarding coding in the Minimum Data
Set, I'm wondering how different that is from the type
of record keeping and the procedures you need to go
through for private paying patients. Do you do
essentially the same thing or is it much simpler and
more straightforward for private paying patients?
MS. FITZLER: For the private pay
patients, you know, you look at the plan and what are
the requirements of each plan so that can differ. That
is a small population in long-term care. The majority
of the population is Medicaid. That is over 60
percent, about 65 percent. Then Medicare which is
about 20. And then the rest of the patient population
is divided on those who are on an insurance plan or
private pay. What most facilities do is they do
utilize the MDS.
MR. HALL: Across the board.
MS. FITZLER: Yes.
MR. HALL: Now, would you be willing to
speculate as to why that is the case if they don't have
to do that and if it's such a burden, why do they do it
for the ones they don't have to?
MS. FITZLER: That is an interesting question and I really have never given it a lot of
thought, but obviously the MDS is regulated. It's
regulated so when the survey comes into the building,
they are going to look at your MDS and have you done
it. There is a focus on it and it is standardized.
I'm not going to say everything is negative about the
MDS because it's not.
It is a way to standardize assessments at
certain times. Even when they are sent to the state,
those ones that no one else should see are then deleted
from the system. I think it's just an easier system to
handle it that way. I believe that regulation has
impact that area.
MR. HALL: Okay. Thanks.
DR. SIMON: Chris.
DR. CONOVER: Well, a lot of your comments
mirrored what we were hearing in our case study
interviews so that makes me feel good that we were
talking to people who were representative of what's
going on in the industry. Your specific
statistic about 30 minutes of paperwork per hour of
care, what does that come from?
MS. FITZLER: This is what has been
reported but we look at the MDS. Now, if you're a
trained nurse and have been doing this for a long time,
you can do the MDS quicker than someone who is brand
new. With the nursing shortage and the turnover issues
we have, we always have new people so it does take them
longer.
So you do have MDS reporting but then you
have other kinds of reporting and record keeping that
you need to keep as a nurse in the facility. That
would be supporting documentation to support that MDS
because that MDS is only assessment in a particular
period of time so you do need to have daily
documentation that backs up your findings.
DR. CONOVER: Okay. I'm sorry. I was
asking an academic question which is what was the
source of that specific estimate?
MS. FITZLER: Oh, that is a report from
members. No, that is not a study.
DR. CONOVER: Your organization surveyed
your members and that was the average estimate or
something like that.
MS. FITZLER: Yes.
DR. CONOVER: I see.
MS. FITZLER: Can I just -- but I did see
one reference to that in a piece of work completed by
the DOL. That was done under study for the DOL so I
did see something similar to that. I believe that
there are studies out there.
DR. SIMON: Rich.
DR. LAWLOR: We've had a high number of
anecdotal reports on that scale. I appreciate you
bringing that up, Chris because that is a quantifiable
metric that we can start to consider. To try to answer
the question why do all patients -- why would we use
the MDS on all patients, there's a couple of different
reasons there.
No. 1, you pointed to issues with new
staff in training. What that boils down to is the
culture. I mean, you've got to be efficient and if you
use the same measurements over all patients, you can
actually hope to save time, I believe, is one of the
incentives there.
Anyway, you brought up a very important
point relative to the consideration of regulations and
the impact on costs and so forth and that is when you
use the example of the MDS and the RAI manual to
understand it and learn how to use it, you pointed to
the potential for needing to look for changes and
alternative instructions that agencies would put out
whether it's us at CMS or the state even that might
want to tweak things on that.
Maybe it's not the state there. That is
not the regulation talking but that is sort of all the
different information being thrust at you trying to use
the measurement tool. I think that is where a lot of
times, too, we can look for improvements in the system
that aren't regulatory. Thanks for bringing that up.
I lost my train of thought so I'll stop. There was one
more important point but, hey, it can't be that
important.
DR. SIMON: I'll tell you, we turned the
timer on you guys and you fell in right -- you know, a
little bit of empirical feedback makes this better.
MR. MULHOLLAND: It's the effect of
regulation.
DR. SIMON: I don't know. We can start
debating all of this.
Thank you very much for your comments, Ms.
Fitzler.
Our fourth speaker is Fran Kirley. Mr.
Kirley.
MR. KIRLEY: Good morning. I'm Fran
Kirley. I'm President and CEO of a long-term care
company called Nexion Health based in Eldersburg,
Maryland. We operate 41 nursing homes in Louisiana,
Colorado, and Texas.
I can probably answer a lot of questions
about MDSs or whatever. I'll give you kind of -- I
don't have any written comments but just verbal
comments. In terms of the certain survey process, I
have been here since about 10:00 this morning.
I have four surveys in my building today
all on self-reported issues that we called in because
we are a company cognizant of the fact that we want to
make sure the state is aware of what goes on in our
buildings on an ongoing basis. When you call a survey
in you get a follow up survey from the state. All of
those issues we think will be minimal but it takes time
away from providing hands-on daily care.
I operate 40 facilities. I average at
least three surveys per building per year. That is not
level playing field in the hospital industry. I
operated hospitals for 20 years. If I saw a complaint
survey in my 20 years of being in a hospital, I can't
remember it.
We are held to a much higher standard of
performance in terms of survey compliance. The
survey process is subjective and punitive when they
come in regarding a complaint survey that is called in
today that we may have a suspected abuse of a patient,
a patient abuse issue.
For example, today they may come in and
look at the dietary department unrelated to the issue
we called in. They come in and they have full reign of
any opportunity they want to look at. With all due
respect, we run a great organization but we're not
perfect all the time every day. I think the process
needs to be streamlined and effective. We need to
reward organizations that improve quality.
We have spent the last 18 months becoming
a restraint-free company. However, every time I admit
a patient from the hospital I have to educate the
family on why we do not use bedrails. Real issues.
Again, the playing fields of what regulations should be
across the health care continuum and not specific to
individual entities or industries or professions based
upon licensure.
The survey process is difficult. Again,
it's punitive in that they come in and they really try
to implement their personal philosophy of what is going
on in their particular state. We have surveyors come
in and say, "We gave you a tag because we don't like
the forms you're using."
The forms may be effective but it may not
be the forms they like. We changed that particular
form the next time and the next surveyor comes in and
says, "I don't like the form you're using. This is my
recommendation." There is a lot of subjectivity in
that process that causes us to obviously have trials
and tribulations of how to run our business.
I work for a large public company that was
in this industry. We had 70 manuals. We have nine
manuals in Nexion because, again, it's not about the
manuals or about the regulation. It's about the
delivery of the services we provide every day. I'm not
convinced that thousands and thousands of pages of
regulations really are focused on the delivery of care.
I'll give you some specific examples in a few minutes.
MDSs. I have 40 buildings. I have 45 MDS
nurses. I only have 40 Director of Nurses. The MDS
nurses need to be RNs, a skill set that is hard to find
in our industry. Yet, we have to hire those people
because it is mandated that in every patient in all of
our buildings have to have MDSs done because, again,
when they come in to do the survey, they will look at
the MDS data to identify potential patients that they
like to pull records on so that they want all of the
patients in all of our facilities under the MDS model.
It is extremely time consuming and in
buildings where we have high acuity, high Medicare
utilization, we sometimes have to have two to three MDS
coordinators. In addition to that I also have a
regional MDS team that makes sure their focus is to
train the MDS people to be able to do their job every
day. I think 30 minutes a day for an hour of care is
probably a realistic estimate. We are basically in our
company paying the second highest position RNs to do
administrative work and not provide direct hands-on
care.
MDS coordinators do not do direct care in
our institutions. They do nothing but document that
the care is being provided and making sure that the
nurses in the care delivery system are making sure they
are doing the documentation effectively. The MDS model
is not an effective tool. I don't have a solution for
you of what it should be.
A couple of other comments. Cost reports.
We are paid prospectively in state operated as well as
federally. Yet, we do cost reports. I have an auditor
sitting in my office today who will be there for two
weeks to do nothing but do a Medicare Cost Report and,
yet, that data does not do anything in terms of
prospective payment.
It is a bureaucratic ureaucratic process that I think
is a waste of time and money. It is also done on a
federal basis and it is also done in each of the states
I operated in. They come in and they spend a nice two
weeks up here in Baltimore. He says he loves to come
to our building -- this is a Louisiana auditor --
because it's a great time of year to see the foliage.
I'm not sure he is providing any value to anyone at
this particular point in time. Nice gentleman but,
again, I'm not sure it's of value.
Let me talk about some regulations. I'll
give you a great example. We have a regulation in our
industry that says you will have to provide meals at
five hours between breakfast and lunch and lunch and
dinner and 14 hours from dinner to breakfast. Sounds
like a great rule.
We offered as a new company -- we've only
been in existence five years -- that we were going to
do freedom of choice. These residents should have the
ability to decide some basic things in their life like
when to eat breakfast. We went to the state of Texas
and said, "We would like to implement a program that
would say we are going to offer breakfast from 5:00
a.m. in the morning to 8:30 a.m. Then we are going to
offer lunch from 11:30 to 2:00 and dinner respectful of
those hours."
They said, "You can't do that. The rule
says you have to serve dinner five hours after lunch
and breakfast needs to be 14 hours after dinner." We
basically did a lot of work with the state and
convinced them that are freedom of choice to allow the
resident, who is a mature 65, 55, 85 year-old mother of
most of us, should be able to make the decision of when
they want to eat because maybe they get up at 5:00 in
the morning. Maybe they get up at 9:00.
We put this program together called
freedom of choice for dining in our Huntsville, Texas
building. We said we are going to start it on a
particular day. The survey team came in with four or
five surveyors to make sure that we weren't going to do
anything to harm the feeding of these folks. We've
been doing that now for about two years.
I have no more weight losses in my
building. I have no more weight gains in my building.
People can have what they want to eat for breakfast
between 5:30 a.m. and 8:30 in the morning and, yet,
guess what's happened? The building now has a waiting
list. The residents are much more content and happy
because they have some control about what they are
doing.
I will now roll that out in all my
buildings in Texas and every single building I have to
write and get a waiver of the regulation to be able to
do that. I'm not sure that is effective regulation in
terms of providing effective care. I think that is
kind of one example.
Other examples of freedom of choice is we
don't allow freedom of choice for our residents.
Residents that live in our nursing homes should be able
to decide a lot of things about their daily activities
but, yet, we've regulated and, again, there may be
reasons why we've regulated that. The meal is the best
example I can give you.
Restraints, again, is a good example. We
are restraint free but it's difficult to educate
families when they come back from the hospital and say,
"Why does my mother in the hospital have bedrails?"
Good question. I can't answer why they do that. There
are a lot of freedom of choices issues. I think we as
a body need to look at regulations to allow people the
freedom of choice. The other issue I have is
really leveling the playing field.
DR. SIMON: Mr. Kirley, I'm just warning
you that we are running a little short on time so
if --
MR. KIRLEY: Two minutes. Leveling the
playing field. We need to make sure everybody is held
to the same expectations of quality and outcome.
Again, as you look at regulatory issues, we shouldn't
be looking at -- we should be looking at regulatory
issues from health care, not hospitals, assisted
living, nursing homes, hospices, etc. I think we've
got to look at how we can standardize and use the best
practices from each of those entities to make everyone
successful. Thank you.
DR. SIMON: Thank you very much. Chris
and then Dan and we'll go from there.
DR. CONOVER: I understood you to say that
the surveyors want you to do the MDS on all your
patients and so I'm confused because I thought the
other testimony was saying they don't have to but maybe
for efficiency reasons they choose to.
MR. KIRLEY: Some states mandate that MDS
is done on all admissions in nursing homes. It's
state-operated and mandated because they like to
collect the MDS data to identify which patients they
will then come in and do an evaluation on. When they
do their annual survey, they will come in and give us a
list of patients that they would like us to pull
records on. They pull that data off the MDS.
DR. CONOVER: So from the standpoint of
federal regulation this problem isn't coming from the
federal side of the fence.
MR. KIRLEY: Not that I'm aware.
DR. CONOVER: Okay.
MR. KIRLEY: No. It's mandated by the
state.
MR. MULHOLLAND: Just a quick question,
Mr. Kirley. I imagine your program or corporation has
a corporate compliance program?
MR.
KIRLEY: Yes.
MR. MULHOLLAND: What would you estimate
you spend annually on your corporate compliance
program?
MR. KIRLEY: Well, we have a team of --
not only do we have a corporate compliance officer but
we also have field individuals. I would say we have
three full-time equivalents probably. Our general
counsel runs it all the way down to two clinical
nurses. I would say it's about a quarter of a million
dollars a year in a 40-company organization.
DR. SIMON: Mark.
MR. HALL: Could you give either now or
later an FTE estimate on how much staff time is
consumed with responding to inspections over the course
of the year and that sort of thing? Better to do it
more precisely than off the hand.
MR. KIRLEY: Today in Huntsville when the
surveyors walked in today everybody in that
organization is focused on the surveyors so, again, it
totally consumes every facility so I would tell you
it's probably 10 percent of my annual cost or greater
is spent on just managing the survey process.
It's an enormous amount of time, energy,
and resources because what happens is when they come in
they can go anywhere so everybody needs to be prepared
within the facility. We always like to have a
corporate person if it's really a critical survey at
the location so that's not counting the corporate
support that is there as well.
DR. SIMON: Rich.
DR. LAWLOR: Thanks. I think that was a
good question that Chris clarified on states mandating
that MDS in this case example. But then I don't think
the answer is as simple as saying is this a federal
requirement because we've got a sort of momentum going
where states and private payers in general mimic
federal regulatory standards so that's kind of food for
thought there.
Then you pointed out getting a waiver for
the dietary schedule issues. Is that a state waiver?
MR. KIRLEY: Yeah. Every state that we've
rolled out that freedom of choice we have asked the
state that we will not be in compliance with a fiveNEAL
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hour and 14 hour meal issues.
DR. LAWLOR: Okay. Maybe considering
yourself a pioneer in that area and then asking the
question is that a fair process to go through. I mean,
has it been streamlined at this point? It is easy for
you to get that waiver?
MR. KIRLEY: No, because every time the
surveyors come in we have to prove to them that we've
got a waiver and then we have to educate them to
understand why we are providing that particular meal
time in a different model. They are trained over here
as you will do it a certain way.
They survey in Texas 1,600 facilities and
they come to my 23 and then we have to educate them and
spend a fair amount of management time explaining to
them why our process is different. Then they always
don't have the waivers. They always don't have the
information and, therefore, it is somewhat of a
bureaucratic nightmare for us each time we get a
survey.
They can come in for an unrelated issue
and they say, "How come everybody is eating meals?
It's now 9:30. You are supposed to eat the meal at
7:00." We've got to go through that process every
single time so there's not a good methodology to manage
that waiver method.
DR. SIMON: Other questions from the
panel? Mr. Kirley, thank you very much.
MR. KIRLEY: Thank you.
Our next commentor is Rene Cabral-Daniels
MS. CABRAL-DANIELS: Good morning. I
don't know if this is on. Can you hear me okay? Okay.
First thing I would like to say is -- my
name is Rene Cabral-Daniels. I'm the Director of the
Office of Health Policy and Planning with the Virginia
Department of Health. I thank you for inviting me for
comments today.
The first thing I would like to say is I
have an appreciation for the hard work that is involved
with federal regulations. I used to work for Health
and Human Services in the Office of General Counsel
attached to CMS. I know that a number of the regs that
came across my desk were very well researched and of
high calibre.
I don't think sometime some of the issues
are with the written word with regard to regulations
but what I'm finding now that I've left the dark side -
- just kidding -- with the state, what I found is that
it's sometimes the implementation of the regulations by
the different agencies that pose the greatest problems.
I'm glad to hear, first of all, that the
issue is not to look at where so much the regs are
excessive but looking more at quality. I think the
biggest problem is sometimes looking at where the regs
are inappropriate. We'll talk about that in a minute.
I think that maybe there should be a campaign looking
at the quality of regs.
I know the feds often talk about having
things evidence-based and maybe some of the regulations
should be evidence-based in looking at whether they
have quality. But the three areas where I think it's
very difficult, at least as a state policy maker, is
with regard to designations when you are looking at the
regulations.
Here is where the states are really
helpful to providers. There are regulations that say,
"If your area has been designated as a geographic
primary care health professional shortage area, then
all the physicians that practice in that area get an
automatic 10 percent Medicare incentive payment bonus."
Now, because the states are responsible
for administering that process, all the questions come
to our office regarding -- they will be addressed to
the states and not to the federal policy makers that
make the rules regarding how those designations are
set.
I think with regard to any time when
states are asked to be a partner in the process that
they also be asked to be involved in the NPRM decision
making process. I know people will say that will
violate FACA. I really, first of all, don't think it
will if you do it right. Second of all, if getting
your partner involved in a process before it becomes
law violate FACA so maybe you should look at the
Federal Advisory Committee Act, revising that to some
degree.
The same is true for the Title VI with
regard to the linguistic appropriate services, making
sure that providers have interpreters. Here is another
area where we find in the state of Virginia doctors are
very willing. There is not an unwillingness to want to
comply with the regulations. Resources are
really a big issue here, to have an interpreter
available for every language that might walk in the
door. Especially when you consider a state like
Virginia is ranked 8th in terms of refugee resettlement
so we've got people from all over the country and here
are the doctors that are trying to comply. This is
becoming a greater problem throughout the nation as
more states that traditionally did not have a lot of
immigrants now do.
I worked in a hospital in Boston for a
while and I spent more time trying to serve as an
unofficial translator and interpreter in the emergency
room that I had to take my name off the list because I
spent so much time down there. I know this is really a
big issue for providers.
Another where states have some challenges
with regard to being an advocate for providers and
really helping providers is looking at health resources
and services administration with the state offices of
rural health.
With the different federal regulations
there are over 200 different definitions depending on
the program, I think, at the last count for the
definition of rural. Some of the more popular
definitions of rural will show that parts of the Grand
Canyon are not considered rural by that definition.
I think, once again, maybe in looking at
when you are drafting the regulations that I think
state policy makers could be really wonderful advocates
but they need to be involved early on and not once the
regs are out. That's it.
DR. SIMON: Thank you very much, Ms.
Cabral-Daniels. I would ask if you don't have written
comments to submit currently if you could submit them
to us through the website or other means subsequently.
Can I open this to the panel? We are
wearing you guys out.
MR. HALL: Getting close to lunch.
DR. SIMON: Yes, it is, indeed. Any
questions? Okay. Thank you. Actually, this gives me
an opportunity before our official lunch break to make
a couple more announcements. If there are folks in the
audience who have not signed up and intend to give
testimony, I encourage you to do so. As a matter of
fact, I require you to do so because that is the way in
which we identify who in the audience wants to give
written testimony -- verbal testimony. It is getting
close to lunch, isn't it?
There is now coffee in the other room as
well, as well as water, so we are sort of racheting
ourselves up the luxury chain here, but not so much as
to get under the microscope of the Federal Government
which is funding this. We are going to take -- I think
this is probably an opportune time for us to take a
approximately 45-minute lunch break.
We have folks who are signed up to present
their comments after the lunch break. I apologize if
you have been sitting through the morning. I hope that
you have found this as instructive as I have but we are
going to be taking a break. We will be reconvening at
-- we are leaving a bit on the early side -- 12:45 as
planned. I will see you back there. Thank you.
(Whereupon, at 11:41 a.m. off the record
for lunch to reconvene at 12:53 p.m.)
AFTERNOON SESSION
12:53 p.m.
DR. SIMON: I want to welcome everybody
back to the afternoon portion of our program. We have
had a chance to enjoy at least a little bit of the
sunshine and pleasant weather.
We are going to pick up where we left off.
While I still have your attention and before the post14
lunch sort of low hits in, I want to remind you of a
couple of very important things. First of all, I
encourage you all to take a look at the ASPE website
where the townhall meetings are posted. There is a lot
of important information on there not only about this
meeting and the process, an opportunity to submit
public commentary, written commentary.
Again, even for folks who are not speaking
today, I strongly encourage you because I know you all
have an interest in being here. You wouldn't be here
if there wasn't some strong interest and probably some
very solid evidence that brings you to this room. I
encourage you to submit it to us because that is really
the stuff that is going to get this process going.
It's where the rubber hits the road to use
a phrase that has been used a lot of times. It makes
our job a lot easier and a lot more salient in terms of
bringing your interests to the light so I encourage you
to submit testimony.
Also this is the first of three more
meetings and they are geographically dispersed. We
have another meeting coming up on December 8th in
Chicago. Chicago is a lovely city. They actually have
a baseball team that won the championship recently.
Near and dear to my heart. That's my home.
I encourage any of you who either
personally, or who are representing organizations,
particularly who are sitting in the midwest, to come
visit us on December 8th as well and there will be
another opportunity to present comment as well as to
hear comment.
From there we move to Oklahoma City the
first week of January. From there to San Francisco so
this is the beginning of a process that is designed to
pick up a diverse audience across the country but we
encourage you to participate in our subsequent meetings
as well.
Again, we have water and coffee and I'm
going to continue with the format that we had the last
time where I'm going to be asking presenters to spend
approximately seven minutes in their discussion and
then open it to questions from the floor. Again, I
encourage you to the extent possible to focus on strong
evidence, quantifiable evidence, and federal regulation
but I think we did a really good job this morning.
The next person on my list is Terri
Maggio.
MS. MAGGIO: Good afternoon. Is this
working?
DR. SIMON: Is it working, technical
people? I think we're fine.
MS. MAGGIO: We're okay? Good. My name
is Terri Maggio and I'm involved with the Jersey
Association of Medical Equipment Services. We are the
folks that are at the end of the food chain in health
care. I've been involved -- my background is medical
records so I'm this detail freak. If it's not in 5 writing, it didn't happen.
However, I've been involved in this
industry for about 25 years and over that time period I
have witnessed technology that allows us to literally
bring a mini-ICU into somebody's home so we facilitate
the discharge from the facility whether it be a rehab
facility or a hospital, nursing home, etc.
The paperwork requirement on the part of
manufacturers who developed the technology that we use
in the home is a whole process unto itself. Once those
products are recognized and coded, then there is a
medical criteria attached to them.
Once that has taken place, I've seen an
increase in the paperwork and the burden on the
provider in their requirements to justify the medical
need for the item. My comments relate to the
documentation requirements for services that are both
covered and not covered by the Medicare program.
I will also talk about the provider's cost
involved in what I call transparent services which are
the services we have to provide that are never
reimbursed to do it right. First we need to identify
the players and I refer to them as the five Ps. They
are the partners and the partners equal the physician,
the patient, the provider, and the payer.
It is important to note that the physician
prescribes the orders without much detail. The patient
expects the very best that American technology can
bring to them in their home. And the payer has an
expectation for documentation with detailed information
and that varies from payer to payer.
Then the provider is responsible and
liable to obtain, retain, and provide upon request
proof of medical necessity. Since 1993 the Certificate
of Medical Necessity, a form created by the Centers for
Medicare and Medicaid Services and approved by the
Office of Management and Budget, has been used to
document and transmit the medical information or
coverage criteria to support the services provided to
the patient.
Providers use that tool to document
medical need and providers must obtain medical
information beyond that. It was always necessary that
tool be supported by the medical record. CMS has
recently removed the CMN as a tool to document this and
providers must obtain medical record information to
maintain supporting information for claims submission.
This will increase the paperwork burden not only for
the provider but for the folks the providers need to go
to to get that information. While we
understand the Medicare trust funds must be protected,
we found that the information is duplicated many times.
When requests are made for medical record
documentation, they are sometimes many, many years old.
In order to protect themselves from
liability providers would be forced to risk an audit
that would be detrimental to them, or to delay the
facilitation of services. It needs to be noted that we
are the folks that get the call from the hospital that
the patient is being discharged today. We have a two21
hour window sometime to coordinate lots of care.
A suggestion to reduce the burden of the
paperwork would be for the program to set policy that
don't duplicate information. In other words, why is it
necessary for me to get information from medical
records at the hospital and medical records from the
doctor's office when the hospital already determined
there is a medical necessity on admission? I'm
duplicating that whole process by asking for it again.
A clear example is the hospital discharge
and that is what we're talking about here. When a
patient is hospitalized the services provided by the 11 home medical equipment rider are in coordination with a
treatment plan that's upon discharge.
There's two things that really need to be
established at the time of discharge. The first thing
is to get the equipment right and all of the DME
providers do a home evaluation and they do a patient
evaluation and assessment to find out what the patient
really needs. They work with PTs, OTs, and other
clinicians.
What we need to determine is is this a
short-term need? That means the patient is
recuperating from an illness or injury and we're needed
short term. Or is it an irreversible condition that
they would need something longer term? Those two
things can be determined at that time.
The other thing is to have the diagnostic
information so that you get it right. I believe that
it's not necessary to duplicate all that medical record
information over and over again each time a patient
receives a service. A discharge summary that
contains the information for continuum of care should
meet those needs and it shouldn't be getting an entire
medical record which is what is going to be happening.
When a patient is in the home, of course,
when they are seen in the home by their physician, then
medical necessity needs to be established and then we
need to have the physician, who is our partner by the
way, provide the information we need and they need to
understand the coverage criteria because in some
instances it's very limited and very stringent.
It would be no different than the
physician knowing the indications for prescribing a
medication. The amount of documentation required here
must substantiate the level of service and the
regulation 1 clearly requires that the least costly
alternative be provided and we al understand that.
3 There is a cost associated with the
provider's cost of doing business. However, to
increase the burden by requiring more than a detailed
written order shifts the cost burdens to the physician,
the provider, and other ancillary providers. I think
that it would be sufficient for us to develop
mechanisms to document medical need without duplicating
that paperwork.
Carriers are requesting medical records
under review. Under HIPAA many times health care
facilities won't release those medical records to
everyone. As a consumer of health care I don't know
that I want my medical records in 17 different places.
I think the medical record needs to be in the place
where I'm being seen.
Beneficiaries who are also partners in
this need to understand that the Medicare has stringent
coverage criteria and we don't always educate them.
They are told when they call the carrier that if you
have a prescription from your doctor it's covered so
that's misleading to them. Sometimes they drive a want
for something not understanding that they have to need
it.
After all, their congressman or
congresswoman has told them that their Medicare
coverage is protected and they believe politically that
they can have everything they want. We are the people
that face those folks and say, "No, no, no. It can't
be." They need to understand what the benefit is and
how it's limited based on that medical necessity.
Payers must not use medical necessity as a
catch phrase because they do. Usually what happens is
that the services or the medical necessity criteria,
whatever Medicare does, trickles down to all the other
carriers and that usually ends up being a problem.
So we are concerned about duplicate
paperwork, the coordination of coding which under HIPAA
we have not had coordinated coding so, therefore, we
have one carrier using one code and another using
another code which reduces us to a paper claim instead
of an electronic claim.
The last issue is getting a claim through
the system when we know it's not going to be covered
and carriers routinely will ask for additional
documentation that really isn't necessary. We know
it's not covered. We just need to get to the secondary
carrier.
I see the light blinking. I'm from New
York and I should talk faster. Anyhow, to move on
here, we understand the complexity of the program and
certainly appreciate the need to support claims
submitted for services rendered. However, we believe
the process should not require duplicative information.
We also believe that we don't have to have multiple
things on multiple pieces of paper in multiple places.
We hope that the comments will be
considered. I do have analyses of respiratory care and
rehab care, the time it takes to do that, that I will
provide later.
DR. SIMON: I would appreciate that.
Thank you very much.
MS. MAGGIO: Thank you.
DR. SIMON: Mark.
MR. HALL: In addition just to the time of
filling out the paperwork, I'm interested in a point
you made about possible delay in starting service while
the paperwork is being completed. That delay might
occur when a patient is in the hospital and
transferring to home care or something.
MS. MAGGIO: Yes.
MR. HALL: What would be the consequence
of the delay? Would the patient be stuck in the
hospital longer than they needed to or would they
actually be left without care?
MS. MAGGIO: I think what happens is the
patient doesn't stay in the hospital because we are at
the mercy of a referral source who says, "Do it today."
Most of us are contracted with insurance companies and
other carriers who say, "Do it today." If it's a
Medicare choice plan, for example, we have contracts
that say we have to do it in two hours.
Sometimes there would be delay when the patient
is at home, but the delay of the discharge really the
provider I think under the new rules without the
Certificate of Medical Necessity the providers are
going to be gun shy and there might be actually a delay
in the patient actually being discharged because
sometimes the equipment actually goes to the hospital
to facilitate the discharge. They can't go home
without it. There is a coordination of care factor
here with regard to that.
MR. HALL: Is there any -- is this just
sort of a general risk or is there any documentation of
delay actually harming anyone or some degree of cost
caused by the delay?
MS. MAGGIO: I think we might have some
documentation with delay with regulations on a state
level with Medicaid because there is a prior
authorization process so there might be. Of course,
the regulations with Medicare and Medicaid funnel down.
The other issue is the cost involved just
in the cost of gathering information based on the
patient's needs, gathering that information correctly.
When you are dealing with respiratory high tech
patients or dealing with rehab patients, you do have
issues that are different than grandma needs a walker
to go home from the hospital. I think we need to
quantify the level of service and the level of care.
DR. SIMON: Chris.
DR. CONOVER: I just wanted to clarify.
You said you have some analyses of existing
technologies. Going back to a comment that had been
made in the morning, are your estimates going to be
estimates for sort of the cost of the whole process or
just the cost of what you would regard as the excess
paperwork associated with the process?
MS. MAGGIO: How we have it broken down is
broken down for a small ticket item and then we build
on it until you get to the high tech equipment and we
can correlate that to the actual cost of the equipment
as well so it's how you correlate that. Most providers
if it's respiratory they will have respiratory
therapists on their staff that do the clinical
evaluation. If it's rehab technology, they may have
certified rehab technicians that actually evaluate a
patient. I think you have to look at the incremental
levels of the service being provided.
DR. CONOVER: But all I mean is that even
with that regulation, wouldn't you go through -- just
in terms of providing quality service wouldn't you be
going through some process in any case? The issue is
whether regulation is making you do more things that
you think are unnecessary.
MS. MAGGIO: And we can show that the
regulation has increased the number of things we must
do in order to deliver a service.
DR. SIMON: I think particularly
identifying those which are duplicative would be
extremely useful.
MS. MAGGIO: Okay. Thank you very much.
DR. SIMON: Other questions? Rich.
DR. LAWLOR: Thanks.
MS. MAGGIO: I thought I was going to get
away.
DR. LAWLOR: This is a great topic. A
couple of things you brought up included the
elimination of CMN and how that, in your opinion,
increases your paperwork burden requirements. In that
vane you talked about the expectations of your
documentation, what you carry, the requirements. They
are very payer to payer and we are just one of those
payers, as Medicare, for example.
I think the question also needs to be when
you look at the regulations is who has the paperwork
and documentation burden really versus who has the
payment accountability because you brought up the idea
of carriers or medical directors looking for
documentation to support products and then you have to
step back and say what is a regulatory agency's ability
to impact potential fraud and abuse concerns.
You have to sort of determine whether we have
the authority to require previous paperwork generators
to sort of be at odds for your payment. I think you
brought up a good point about carrying multiple pieces
of paper. Nobody disagrees with that redundant
paperwork issue. The promise of IT is not here yet and
we think the more we can incorporate that, that
redundancy can be reduced. I think, again, look at the
regulation versus what's our authority to do something
about the problems that would happen if the regulation
wasn't there.
MS. MAGGIO: And we understand that. I
understand the protection of the Medicare trust funds.
I understand that wholly. It's just a matter of do I
need to have 35 pieces of paper and if I don't spell
out -- if the regulation -- it's implementation.
If the implementation doesn't spell out
clearly exactly what I need, then how do I gather that
and if from provider to provider it's different, we are
all in a bad learning curve and then there's no
accountability and then your trust funds are not
protected. That's the concern I have.
DR. SIMON: Other questions? Thank you
very much, Ms. Maggio.
MS. MAGGIO: Thank you.
DR. SIMON: Our next commentor is Janet
Wells.
MS. WELLS: Hi. I'm Janet Wells. I'm the
Director of Public Policy with the National Citizens ’
Coalition for Nursing Home Reform. Listening to Mr.
Kirley this morning I felt again that consumers and
providers live in a different universe when it comes to
nursing home regulation.
Our statement, too, deals with regulation
in Texas and a very, very different perspective. Our
organization has been working for 30 years to try to
improve 1 the quality of care in nursing homes. We are
very active in passage of the Nursing Home Reform Act
in 1997 and have worked very hard over the years with
providers and labor groups, health care professionals
to implement that law.
In 2003 we worked with one of our member
groups in Texas, Texas Advocates for Nursing Home
Reform, to document 83 cases of nursing home residents
who had been severely neglected and abused in their
nursing facilities. We are attaching a copy of that
report to our testimony today and would urge the panel
to look at it.
In this report, which we call Faces of
Neglect - Behind the Closed Doors of Texas Nursing
Homes, we found that the cases typically involved under
staffing, always a serious problem in nursing homes;
failure to prevent or treat pressure sores or the
unrelenting pain that went with the pressure sores;
failure to notify patient's doctors of changes in their
condition or to follow doctor's orders; and
falsification of medical records.
Although pressure sores were the primary
outcome of neglect in the cases that we featured in
this book, it also includes half a dozen cases of
sexual assault and two deaths by bites due to fire
ants. As horrendous as the situations were, rarely did
the Texas Health Care Department take any action
against the facility that was involved.
It's rather amazing to look at the cases
that we documented versus the situation that Mr. Kirley
described this morning where the facilities felt that
they were being harassed for even small deviations from
regulation.
For example, Kalinia C. was an 89-year-old
homemaker from Tyler, Texas, who had Alzheimer's
disease. She was admitted to a nursing home with no
pressure sores. The facility virtually ignored
doctor's orders to reposition her and she developed
nine pressure sores. Although she was in extreme pain,
the staff also violated her doctor's orders for pain
medication. The Texas Health Department never took
enforcement action against the facility which had
routinely falsified wound treatment records for
hospital expenses for over $76,000.
Gertrude H. was 87, also a homemaker, when
she was admitted to a Longview nursing home. She also
had no pressure sores at admission. She developed
eight pressure sores including one 10 inches in
diameter and three-quarters of an inch deep. Gertrude
H. was hospitalized four times for dehydration, lost 90
pounds in one year, and died from infected pressure
sores. The state denied payment for new admissions to
the facility as a result of the neglect of Gertrude H.
but it never sought reimbursement for the cost of her
care. Her hospital expenses totaled almost $96,000.
These were relatively inexpensive
hospitalizations. We had one case where the cost of
care was $231,000, another $272,000. Earl D. of Corpus
Christi, who was a Baptist minister, was only 60 when
he was admitted to the facility with Alzheimer's
disease and diabetes.
His doctor testified that his gangrenous
pressure sores, 61-pound weight loss, five
hospitalizations for dehydration, and death due to
infected pressure sores, constitute a knowing abuse of
the elderly. His hospitalizations cost over $143,000.
Jesus S., who was 80 was a retired
rancher, had his leg amputated because of severely
infected pressure sores. His hospital expenses
including three admissions for dehydration were over
$115,000. These cases just go on and on.
In none of these cases did the Texas
Regulatory Agency attempt to recover the cost of the
abuse and neglect. In very few of the cases did it
exercise any of its enforcement authority under
Medicare and Medicaid Nursing Home Reform Act
regulations.
While these cases may appear to be
extreme, the latest Government Accountability Office
report on nursing home care reported that 20 percent of
nursing homes in the country have been cited for actual
harm to residents or for immediate jeopardy of harm.
However, the GAO, the Inspector General,
and others who look closely at nursing home enforcement
doubt the accuracy of the 20 percent figure because
other research has demonstrated so often that
facilities are not cited when harm occurs or, if they
are cited, there is not an appropriate penalty.
There 1 is also another troubling footnote
to Faces of Neglect. If you look at the book a lot of
the faces are African American or Latino. Last year
the researchers at Brown University published a report
that I don't think has gotten nearly enough attention
in the discussion of racial disparity and health care.
They found that 40 percent of African American nursing
home residents are in the 15 percent worse facilities,
the ones with the worse staffing, the poorest care, the
most likely to close voluntarily.
This is a critical problem that has been
very overlooked. These researchers are concerned about
going to a pay-for-performance type of reimbursement
system that rewards some facilities and penalizes
others because of the quality of care may decline even
worse in those facilities that are not recognized.
Faces of Neglect suggest that the
cumulative cost of failure to enforce quality of care
regulations is causing extraordinary suffering by
nursing home residents is also placing an economic
burden on taxpayers. We would strongly urge that
ASPE and OMB examine the high cost to Americans of
under staffing and noncompliance and poor enforcement.
DR. SIMON: Thank you very much. Mike?
DR. MORRISEY: Thank you. We heard this
morning the discussion that the nursing home market has
seen less occupancy in the last few years with the
advent of assisted living and the expansion of the
continuum of long-term care. I'm curious whether
you've seen or have been able to document whether the
quality of care in nursing homes has gotten worse,
gotten better, or largely stayed the same as a result
of the change in the market?
MS. WELLS: I don't think I can answer
that. I think you could suppose that might have
occurred. People who can afford to pay privately for
care clearly are going in great numbers to assisted
living facilities where there are more options for at
least an attractive facility in a private room which is
rare in nursing homes.
I don't know that we've seen large
increases in the proportion of residents who are on
Medicaid but I think it is possible that to the extent
that private pay residents may drive quality in
facilities because people who can afford to pay for
their own care are demanding more that there could have
been a decline but I don't know. I think that is
certainly an issue for research.
DR. SIMON: Dan?
MR. MULHOLLAND: Thank you. Ms. Wells, do
you see any difference in the incidence of these kind
of adverse outcomes between for-profit and nonprofit
nursing homes or nonprofit and governmental nursing
homes? Any statistics on that that you are aware of?
MS. WELLS: There have been several
studies including one by Charlene Harrington at the
University of California at San Francisco who has shown
that by using surveys as indicators that private pay
facilities -- excuse me, nonprofit facilities
statistically do provide better care and Government
facilities also. Investor-owned facilities, according
to the statistics, provide a lower quality of care.
DR. SIMON: Rich and then Chris and then
Ted.
DR. LAWLOR: I think it's clear that you
are making a point on the front end -- rather than
maybe what the regulations actually say or ask people
to do. My question is when you think about the
compliance of the facility relative to the regulations,
and you brought up demographic issues on residents, you
have to be concerned about management performance
issues, the availability of the staff and the region
where the facility is located, too.
It seems to me that you're pointing to the
weak link being enforcement in the final analysis
rather than the regulation requirements on the facility
and maybe the facility's inability to do it is not as
much important as that. Is that correct?
MS. WELLS: As I said, we worked very hard
for the Nursing Home Reform Act and it took a long time
after we were founded to actually get that legislation
in place and we have worked very hard on the
regulations. We think it's a very good law and we
think the regulations are good.
We think the nursing home industry and
consumers and health care workers all worked together
to pass that law and we have all worked together
collaboratively on the regulations. We don't think
it's a problem of the law except in one area and that
is the failure of the Government to require minimum
staffing ratios.
The Government has been talking about
doing that for over 30 years without success and have
done a great deal of research which I also cite in our
written statement showing that below a certain minimum
level of care, which is about 4.13 hours of nursing
care per day, facilities have the problems that I
referred to. They are pretty much unavoidable so we
certainly think the next step is to have Government12
required minimum staffing ratios.
DR. SIMON: Chris.
DR. CONOVER: Aren't assisted living
facilities largely unregulated right now?
MS. WELLS: At the federal level and often
at the state level as well.
DR. CONOVER: So if I take your argument
at face value it would seem like we would have all
sorts of quality problems in assisted living facilities
because, after all, they are not regulated and they
aren't required to have minimum staffing ratios, etc.
Is that what we observe out there?
MS. WELLS: We certainly are observing it.
As with nursing homes we are not observing it in every
facility but if you just do a Google search on assisted
living, you'll turn up many, many problems that are
exactly the same as the problems you're having in
nursing homes.
As people are admitted who require a
heavier level of care, there are not enough staff. The
staff who are there are not adequately trained to work
with people who have multiple health care problems and
medical needs so we are seeing a industry that seems
like a turnover. We are almost back to 1965 in terms
of regulation in the long-term care facilities where a
lot of people are going.
DR. CONOVER: Okay. So if I understand
your argument correctly, the problem on the nursing
home side is predominately an enforcement issue so we
have a lot of regulations. We're just not enforcing
them well enough in your judgment. On the assisted
living side apparently we don't have sufficient
regulation.
MS. WELLS: In most states, no.
DR. CONOVER: Okay.
MS. WELLS: Assisted living really started
out as housing for people who could largely take care
of themselves with a little bit of assistance but it's
really changing. A lot of the assisted living
facilities really look like nursing homes.
DR. SIMON: Ted.
DR. FRECH: This is, again, a question of
other instruments that affect nursing homes. Does
Texas have certificate of need for nursing homes?
MS. WELLS: I'm not sure about that. I
know that Texas historically was over-bedded so I think
probably not.
DR. FRECH: Okay. That leads to the next
question. Do you know if there are waiting lists to
get into nursing homes for Medicaid patients?
MS. WELLS: I think at this point the
occupancy rates are -- I can't remember the latest
statistic I've seen but I think nursing homes in most
states tend to have open beds and that's why we're
seeing another problem in nursing homes which is the
admission of people who are totally inappropriate in a
nursing home facility with elderly people. People with
a history as sexual predators or with mental illnesses
which cause violence and former felons and various
other people who are being dumped into nursing homes.
MS. WELLS: I would like to add one more
thing just in response to Mr. Kirley's presentation
that CMS is taking seriously the complaints of
providers that when they try to provide resident10
directed care that surveyors are interfering. Karen
Schoenemann at CMS is actually asking for examples of
where this has happened. There is also a study being
done by Rosalie Kane funded by the Rothchild Foundation
that's looking at these kinds of issues. These issues
are on the table and we are all concerned in looking at
them.
DR. SIMON: Thank you very much for your
thoughtful testimony. We look forward to the report
that you are going to be attaching as well.
At this time I am going to just remind
anybody I have one more individual who has signed up to
present comment. We have the luxury of a little bit of
time, although I'm sure that you all have competing
uses for it, but I would encourage folks that may not
have spoken that if you wish to provide some comments,
to please sign up and we have the luxury of being able
to let you do so at this point.
Mary St. Pierre.
MS. ST. PIERRE: Thanks for the
opportunity to give my comments. Although I came here
unprepared, I was encouraged to comment and I will do
so. I represent the National Association for Home Care
and Hospice and our members are all types of home care
providers, hospice providers, for-profit and not-for13
profit hospital-based. I have been with the national
association for 13 years but did spend 24 years before
that with a home care agency.
I feel almost apologetic in making
comments about the regulatory requirements that I'm
going to address after the comments of the previous
speaker. Maybe that is really a reflection of where
the focus of the emphasis is on the regulations.
Maybe if we look at the conditions of
participation we see that many of the requirements are
really structured requirements and they talk about
quantifying and how often you do something and what do
you do as opposed to addressing the quality of care.
The issues that I'm going to talk about
are those things that seem to be almost unimportant in
light of the prior comments that were made. I feel
that maybe if we can get our regulations geared more
toward quality as opposed to these day-to-day must do
this, must meet these time lines, must do certain
things at a certain frequency and focus in another
direction, we'll be much better off.
I'm going to just address topics and I
promise in my written comments I will quantify the cost
to providers. I also want to be sure to mention,
though, that I'm not only going to talk about the
monetary cost but the cost in retaining health care
personnel and particularly nurses.
A study was just released on the basis of
loss of nurses from the field and their top complaints
and their top stressors and No. 1 was paperwork. So
I'm going to start with talking about OASIS. OASIS is
the data set that is required.
It must be embedded in a comprehensive
assessment that is completed by home health care
clinicians, nurses, and therapists. It has along with
the demographic items close to 100 items that must be
collected. That is not an entire assessment.
There are many other components of a
patient assessment that aren't part of OASIS. OASIS
provides us with 41 outcome measures and my question is
do we really need 41 outcome measures, many of which
have to do with a person's ability to keep house and
shop? Not medical measures, not measures of medical
care provided.
Right now the OASIS is required for
Medicare and Medicaid patients. However, APSE is in
the process of analyzing a study they did on the
benefits and cost of OASIS for the non-Medicare and
Non-Medicaid patients so we might see that imposed on
us again in the future.
There are issues related to the actual
completion of the OASIS and who can complete it. There
is a regulation that says that a nurse or a therapist
can complete the OASIS unless nursing is ordered. If
nursing is ordered, even though the primary focus of
care might be therapy, the nurse must complete the
OASIS.
In addition, the nurse must complete the
initial assessment but the initial assessment must be
done before the OASIS started care assessment so unless
the nurse and therapist actually visit at the same
time, we might have to have a nursing visit for an
initial assessment and an OASIS visit to do the
comprehensive assessment after the therapist admits the
patient.
Now, we are also talking about people
going out to patients’ homes to carry out these
assessments so the issue that is in all of our minds
these days is the cost of gasoline.
Another issue regarding the OASIS is that
it is required every 60 days. Now, in our request for
streamlining we have been given permission to cut down
the OASIS data items for Medicare patients to the 25
needed for payment. However, for Medicaid patients
they must go out and collect all of the OASIS data
items even though on the 60-day recertifications that
data is not used to assess the quality of care.
The only time the OASIS is used is for two
time points: admission and admission to the agency and
transfer to a facility; or admission to agency and
discharge from the agency. All of that data collected
on those Medicaid patients is of no use.
Other requirements, beneficiary notices
are now required and our concern, although we firmly
believe that beneficiaries should be notified of when
services are going to be discontinued or Medicare
coverage is discontinued, there are times when two
notices are required at the same event. We are
going to be faced very soon with having to give a
written notice to beneficiaries whenever the numbers of
visits are reduced as opposed -- in addition to
whenever services are terminated.
We have a problem with aide supervisory
visits every 14 days but the aide doesn't have to be in
the home so we have nurses running out to the patients'
homes every 14 days, to what benefit we really don't
know. Also, who can do that aide supervision? If
nursing isn't involved, the therapist can do it but if
nursing is ordered, the nurse must go out and do it
even though she doesn't have a visit scheduled during
that time.
Then, finally, all of the information
that's required to give to a patient on admission. An
example I can use of how long an admission visit can be
is when even though I've been in home care the best
example I have is when my mother was admitted to home
care and the nurse spent two and a half hours in the
home and another two hours at her own home afterwards
completing documentation.
Before she could even start my mother's IV
she had to go through the release of information,
permission to treat, the OASIS privacy rule, the HIPAA
privacy rule, the advanced directives, the bill of
rights, and the hotline number, and written
notification of who the payer was. Just to give you a
quick overview of what these requirements are.
Someone mentioned this morning about
limited English proficiency and cultural linguistic
standards and the cost of those. One provider sent me
an e-mail not too long ago saying that her small home
health agency spent $20,000 for interpreters to meet
those requirements just last year. That's it.
DR. SIMON: Thank you very much. Open to
the panel. Dan.
MR. MULHOLLAND: I would just like your
comments, Ms. St. Pierre, on federal regulation that
might inhibit integration between different types of
health care providers which seems to possibly address
some of the issues that you raised about having to
capture data two or three times in different forms for
different purposes.
There's a Medicare rule and there's also
some anti-trust rulings that limit the ability of
hospitals to prefer their own affiliated home health
agencies for referrals which puts a bit of a barrier in
integration. Then there's the anti-kickback rules that
pretty much silo every different type of health care
provider, physicians, hospitals, home health, nursing
homes, whatever.
I just want to know generally your
comments from your experience and people that you've
worked with as to whether these federal rules that
inhibit integration could possibly be reformed somehow
to allow between flow of information or closer
integration of care from start to finish rather than
the siloed system we have now.
MS. ST. PIERRE: Certainly they could.
The whole problem I see in terms of the referrals and
hospitals favoring their own home health agencies is
just a creature of competition in any business that is
out there. Whether changing those rules, adding new
rules, the requirement that hospitals give patients a
list of home health agencies that are available in
their community certainly then gives them the
opportunity to have freedom of choice.
I don't know that in the end it really
results in more patients choosing a free-standing home
health agency as opposed to a hospital-based agency.
Or the regulation once it's completed that will require
its proposed rule now, the final rule probably will not
happen in November so that means a new proposed rule
and that would be that the hospitals must report the
number of referrals that go to their own agency as
opposed to the community agencies. Again, I don't know
how much good this will do in having a more level
playing field as far as where patients receive their
home care.
MR. HALL: The example you gave at the end
of the small agency that spent $20,000 on language
proficiency, in that number and other numbers that you
know they may give us, it's always nice to have a
denominator, in other words, so if you could quantify
in the information you send just the size of the agency
in terms of its total revenues or total expenses that
helps put the number in proportion.
MS. ST. PIERRE: Definitely. I will also
try to get comparable figures from other providers of
varying sizes. That is just for the translators. They
also have to do staff training. Someone commented this
morning that they used to help with translating. That
is not permissible unless you have according to the
regulations medical background training so that you are
theoretically interpreting appropriately for medical
needs. And in home care we are not permitted to ask
families to translate.
DR. SIMON: Chris and then Rich.
DR. CONOVER: I'm just curious. In your
industry I'm curious what your view is of the patient
information strategy as a way of improving quality as
an alternative to regulation. Do you see that as
promising? What are the limitations of that, etc.?
MS. ST. PIERRE: Are you saying in terms
of educating patients, educating consumers about their
rights and about --
DR. CONOVER: And also putting out
information about the use of quality metrics and
putting that information out for consumers to use when
they make a decision.
MS. ST. PIERRE: I think that is critical.
I certainly used that information for my family
members when looking at Nursing Home Compare and Home
Health Compare. The only concern I have is whether, in
fact, there are ways in place to assure that truly is
accurate and correct information.
Certainly as far as survey goes you do
have the official reports of the surveyors but when you
get into MDS and OASIS, is there potential for gaming
and is gaming going on? Are patients made to look
worse on admission and better on discharge?
And the comment that was made this morning
about the humongous manual for MDS, we have the same
thing with OASIS along with 150 plus questions and
answers on how do you really answer this particular
OASIS item. Part of my job is every day taking
questions from providers, "If a patient has this and
appears this way, how do I answer OASIS?"
DR. LAWLOR: Hi, Mary.
MS. ST. PIERRE: Hi, Rich.
DR. LAWLOR: I loved the way you opened it
up sort of talking about process requirements versus
trying to focus on outcomes for the patient. Of
course, that is a big theme that our Administrator
targets whenever possible in regulations. Then, of
course, we hear different perspectives like the speaker
before you on, "These are good regulations and these
requirements are just what we need. They just need to
be enforced." There are good ways -- I mean, ways to
see good from both perspectives.
I guess I just wanted to hone in on one
thing and ask you a question. You talked about the
requirements of the level of staff needed to do
assessments and that's a cost. You have to pay more
for better staff, certain levels of training for that
staff.
Don't our comment periods to regulations
in Government and HHS in particular allow for agencies
and advocates to -- don't they allow for the agency to
respond with our reasoning to concerns that people have
when we do a proposed rule? Obviously we try these
efforts now ad hoc and we have Open Doors, for example,
to get input before you write proposed rules but is
there an issue with the reasoning that comes back to
the comments from stakeholders?
MS. ST. PIERRE: I'll allow the
opportunity and I have to say I did comment some years
back on why can't -- if a physical therapist can do an
OASIS assessment and a comprehensive assessment on
recertification and discharge and on start of care if
there is no nursing ordered, then why can't a physical
therapist do that on start of care if they happen to be
there? Timing wise that is the most appropriate thing.
CMS has certainly determined that they are qualified
to do those assessments but the answer to my comment,
they didn't change their mind. It stuck.
DR. LAWLOR: My question is don't agencies
like CMS and others provide appropriate reasoning in
the depth that's required to respond? Why don't they
stick with something versus changing it, for example?
MS. ST. PIERRE: I can't remember the
rationale behind CMS sticking with, for example, that
particular example. I just read the update for home
health PPS for the next year and I have to say in
reading through it, and I did it fairly quickly last
evening after I got home, but I was left with the
impression that the answer sometimes is "because."
DR. SIMON: Any other questions from the
panel? Thank you very much.
MS. ST. PIERRE: Thank you.
DR. SIMON: We'll look forward to
receiving your written comments.
At this point I would ask is there anybody
else who has not signed up who is going to make a
beeline for the back to sign up? I think we can
perhaps make that process a little more efficient and
streamline some of the paperwork at this point. Apart
from that, we have come to the close of our public
commentary. I want to thank you all very much.
Oh, maybe we haven't. I'm getting a
signal from the back. While we figure out whether we
have another name on the back, I will sort of give you
again a little bit of an overview of where we go from
here. Physically we go to Chicago, as I've said, and
we are looking for comments at this point. The public
comment period is going to be held open through the web
and for written commentary.
These are not the only forms under which
you can provide commentary. You need not be present at
the meeting. There are web-based and other based
systems for providing commentary. I encourage you to
go to the web and you may submit them electronically.
That is going to be held open through the
middle of February so both for folks who are not here
who you want to engage in this process -- thank you
very much. A just-in-time delivery -- engage in this
process I encourage you to do so and encourage them to
submit through the web on the public comment period.
This will be held open through I believe
the second week of February so we are able to retain
your comments. In particular I have also heard from
some individuals who are awaiting reports, who are
awaiting other pieces of information that may be
produced periodically. I encourage you to submit those
as well.
We have another individual who would like
to present comment, Laurence Lane. Thank you very
much.
MR. LANE: Thank you very much. I
expected to have a moment or two to put my thoughts
together. I was at a meeting this morning.
DR. SIMON: I can ramble longer if you
want.
MR. LANE: I'm Laurence Lane, Vice
President of Government Relations, Genesis HealthCare.
We provide nursing home, assisted living, rehab
services, physician services in 12 states stretching
from North Carolina to West Virginia up through New
England. Genesis employs 36,000 individuals. The
corporation is headquartered in Kennett Square,
Pennsylvania.
A number of Genesis employees, especially
members of our clinical operation staff, assisted in
the drafting of the formal comments to the Advisory
Commission on Regulatory Reform that was submitted by
the American Health Care Association. I assume those
documents are part of the record.
That March 5 2002 submission identifies a
number of specific areas that should be evaluated. I
really just wanted to focus on five basic points to
bring to the Commission's attention.
I've been involved in the health care side
for over 40 years. I would say my first key concern is
there appears to be a pervasive disregard for the
protection to the Administrative Procedures Act. We
are seeing increasing use of web-based transmittals,
web-based information, and most recently under the
implementation of Medicare Part D things called
subregulatory guidance that provide no number, no date,
sort of instructions from manna, from Heaven above,
that all of a sudden materialize.
Perhaps the most classic example would be
the marketing guidelines for the Medicare Part D PDPs
that clearly one has to question whether it has any
weight of rule by interpretation. It conflicts in many
cases with regulatory guidance. In this case it
significantly conflicts with the regulatory and
statutory requirements for nursing homes in terms of
pharmacy management.
I would say this pattern of moving to
informal communications is a serious one that
undermines the integrity of the Administrative
Procedures Act. I commend Rich and the people at CMS
for the open door forums but still there is -- I come
from the old school and the rules are the rules are the
rules and there really should be comment periods.
I'm concerned for the sheer volume of
regulatory guidance. I just looked back through my
weekly reports on program transmittals issued in the
last three months. It is not unusual to see an average
volume of 20 to 25 program transmittals posted on the
web-based CMS site per week which essentially says if
you multiply that on a weekly basis, guidance is coming
in streams with no one quite sure who reads it on the
other end.
My third concern is directly related to
that and that is concern for the e-communications have
empowered lower levels of Government to generate
guidance absent quality control and absent a serious
venting of the issue. If you look at those 20
transmittals per week that have flowed out over the
last three months, and that's an average every week,
you will find at least two or three of them rescind
guidance given within a three to four-week period.
What that suggest to me is nobody has read
them before they have been posted. Or if they have,
they didn't read them carefully and that suggest that
access to e-commerce has created a sort of going around
what used to be -- again, I'll say I'm old school --
general counsel used to read things, used to advise on
things. Actually what we posted ended up being right
and not interpretations.
Fourth concerns restructuring and tax20
focused management has undermined managerial and legal
oversight of regulatory guidance. Classic example --
Rich is well aware of this because he's had to sit
through several open door forums where this has been
the key topic -- there has been a new set of rules to
deal with beneficiary notification of appeal rights.
The 59-page clarification of what was the initial
three-page memo has even those of us who think we knew
what they meant absolutely mystified. One could go on
for longer on that.
My fifth concern, the agency forgets that
regulatory guidance is only paper when issued by
Government. It becomes effective when we, the
providers, are capable of interpreting guidance in the
policy and procedures and in the day-to-day operations.
Again, a classic example.
We ended up with rule promulgated related
to immunization for nursing homes on a 15-day comment
period with the rules being finalized on the second
week of October, the web-based instruction in place on
the 1st of October. We are now on the third change in
the Raven software interpreting that guidance.
When you've got 36,000 employees across
215 sites, at least give us a day or two to take and
help put our instructions in place. Another example,
we will have -- I realize some of this is law driven
and some is regulatory driven -- the new grouper for
the RUG-53 payment structure which probably means
nothing to most of you, but the reality begins to be
that will come out on November 21 but must be in place
by our facilities to use on November 22. That is our
complete payment structure system.
I would just say in closing the worm's eye
view of the bird is significantly different than the
bird's eye view of the worm. Stability is necessary
for day-to-day operations. Instability caused by
unclear Government guidance must be overcome.
Government by silo is distorting care delivery.
Government by e-communication undermines the
ability for concerned parties to be meaningfully
involved in participation and comment, particularly
when they avoid the Administrative Procedure Act
protection, and the OMB rulemaking process. Government
by hit or miss transmittals, which is one of my big
bugaboos, leaves confusion. No one knows what the rule
is.
I would appreciate the effort of the
Commission. I unfortunately have testified before
these commissions for the last 25 years and I must
admit I have not necessarily seen a reduction in rules
and regulations. We do give care in spite of the rules
and regulations, not necessarily because of it. Thank
you.
DR. SIMON: Thank you, Mr. Lane. Let me
guess, Rich.
DR. LAWLOR: We should all respond to this
because of the value and humor alone. You know, the
Government from time to time has been criticized as
being too slow so when I hear about this failure to
follow the Administrative Procedures Act because we are
doing things in an ad hoc process informally as much as
possible, increasing the volume of participation before
and during rule development, I find it a big disconnect
or dichotomy in your point there.
All the different roles of external stake
holder involvement that we are trying to integrate and
agreeably not perfectly yet but trying to find the
effective sweet spots in these roles that we bring
people in to work with us. Obviously the Internet has
a parallel to that, using it more often more rapid
information deployment and exchange and so forth.
I must argue the counterpoint that this is
good. It's going to speed up. It doesn't necessarily
change the scale or the burden of regulations but it
does increase information flow between the outside and
the inside of the agency.
I would comment back that I had the
pleasure of going down to South Africa when the Mandela
government first came into play to spend some time on
personal leave to help get the new South African
government organized.
I remember visiting with a comedian who
was spectacular. He pointed out that during apartheid
we knew nothing and nobody knew what was happening.
Now we have seven official languages. The news runs in
seven different languages in 15-minute clips and we're
not sure what the hell is happening.
As you look at the Open Door forums I will
commend CMS. Probably the major, major change that CMS
has done is its openness of communication and the Open
Door forum. As Rich knows, because I participated in
several of these whether they want me to or not, if you
were to itemize the number of tasks that are discussed,
it's like any business. There is a lot of activities
under way but if you are focused on what your primary
purpose is, and our primary purpose is care giving,
then you scale back activities that don't support the
care giving function.
I would just suggest that if one cataloged
the number of issues that come up in the Open Door
forum in any one of the 12 or 15 panels, one would walk
away with a litmus list of projects that from a
managerial perspective says, "Are these necessary and
do they help us on the primary mission of our agency?"
You compound that by 50 states -- I happen to operate
in 12 states -- and you can begin to see where the
level of change that is occurring is not integrated as
well as is our care mission at bedside.
DR. SIMON: Dan and then Chris.
MR. MULHOLLAND: You are kind of preaching
to the choir as far as I'm concerned, Sir. One of the
problems I have consistently had as a lawyer advising
clients is trying to find what the rules are. I
remember 15 or 20 years ago it took a lawsuit to force
the Government Printing Office to publish an index to
the Code of Federal Regulations in the Federal
Register.
One of the problems I have with the
Internet, it's a sword and a shield. It's a great
thing in terms of getting information out. The open8
door forums are an example of that. I think some of
the access that people have to the regulators now is
helpful for clarification. But the big problem I see
is simply trying to find where all the rules are. If
you try to search for transmittals on the CMS website,
it's just a basic key word search.
Unless you are very adept at it you get a
lot of junk in trying to sort through all the
information. It would seem to me that the technology
is at the point where at least somebody could publish a
concordance of all Medicare rules, transmittals,
regulations, whatever, so at least we would know what
the rules are. I find, and I would like your comments
on this, it sometimes breeds contempt for the law that
people throw up their hands figuring no one understands
it.
Somebody is going to get me no matter what
I do so I'll do whatever I want. I don't know if
you've seen this either in your facilities or reaction
in some of the folks you work with in your organization
to this avalanche that is really hard to go through to
find out what a rule is when there is a rule as opposed
to situations when it's whatever somebody says in the
last audio conference.
MR. LANE: Well stated. Again, I have two
bookcases in my home of CCH that used to publish this
stuff in printed form at an affordable price. Through
'98 I actually did know what the handbook provisions
were. Since then it has gone to the computer and it
does create some interesting issues.
And it creates some dilemmas, and that is
you'll have fiscal intermediaries that will apply rules
of thumb. When you ask, "Help me understand where is
that," they sort of look at you and say, "Oh, was there
supposed to be something there?" You are correct and I
would give the classic example of when they converted
the SNF manual over to the electronic version.
It took six months for CMS to realize that
it left the whole section on how you bill for SNF
services out of the new electronic version. What is
more frightening that no one in the industry knew that
until CMS actually published it which basically said
nobody had looked at what was online.
DR. SIMON: Chris.
DR. CONOVER: I just want to be clear. I
understand your concerns about circumventing proper
procedures in terms of giving advance notification and
sufficient time frames for comment and things like
that. That is the downside of having instant access to
the web.
On the other hand, assuming that the
procedures were done correctly, am I to understand your
concern to say don't ever use the web and we really
ought to stick with the print because the print worked
pretty well and that is what's reliable and we know
where things are?
MR. LANE: No, quite the contrary. I
would say that in my old age I have gotten adept at
looking up stuff on the web. What I am suggesting is
there appears to be some need for better quality
control. Secondly, more involvement of the Office of
General Counsel in saying, "Um, this is not a
clarification. This is policy."
That delineation between what is an
interpretation of what is rule and statute which is
generally a fairly bright line versus that which is
murky guidance that is sort of moving beyond
interpretation and becoming reg. really is something
that needs to be looked at.
I'll give you -- the thing that perhaps
most excites or incenses me is this beginning process
of using subregulatory guidance that is pervasive
through the implementation in Medicare Part D which
essentially has no regulatory number on it so I can't
say to you this is transmittal 37444503 and date. It
is just paper with no office taking responsibility for
issuing it and nothing that looks like an OMB number
that deals with guidance.
We are implementing perhaps a trillion
dollar benefit with such subregulatory guidance and as
it relates to nursing homes it's very clear the
subregulatory guidance that has been issued back in
March doesn't have a number, doesn't have a weight, and
you don't know whether this means contractual
obligation or interpretation. You don't know how it
applies to the issue of must a PDP do this or should a
PDP do this.
The regulatory marketing guidance that
came out again, even though it was circulated for
comment, in this case is deceptive and, in fact,
counterproductive. We as a nursing home under reg. and
law have an obligation, and under a new 185-page draft
coming out of certification and survey as to what is
the F tag for pharmacy management, at least something
we've read, that says that's our
obligation.
Yet, when one reads the substance of the
subregulatory guidance, there is no reflection that we
have a regulatory obligation to manage pharmacy in our
buildings and no tool in that guidance to give us a
role to exercise our responsibility.
DR. SIMON: Other questions from the
panel? Mr. Lane, I am going to thank you for your
comments.
MR. LANE: Thank you.
DR. SIMON: I would also sort of to be a
broken record encourage you to the extent possible when
you prepare your written testimony if you can help us
by quantifying from your firm's perspective the
additional work that you have to go through as a result
of some of the issues that you've raised. That would
be most helpful.
Rich.
DR. LAWLOR: Can I ask our panelists a
question?
DR. SIMON: Sure. Actually, you can do
that and then I actually have had a request from
somebody that I cut off in the field to ask one more
question -- to raise one more point. I promised him 30
seconds and also the question of not to make me regret
that. I'm going to defer to Rich first and then to
Walt.
DR. LAWLOR: I didn't necessarily -- it's
not very often that I get to sit next to smart people
in economics which I find is extremely enjoyable. I
wanted to ask you guys relative to the idea of
subregulatory guidance, and we have used a good bit of
it in the recent past.
We have tried to vet it through
interaction with everybody involved through a lot of
dynamic conference types whether it's teleconference in
person or combination, etc., etc. What should become
of subregulatory guidance at this point that we've
developed? What's the next step? What do we do? Do
they become artifacts or should somebody say do
something with this? Not necessarily codified in
regulations but what should happen?
DR. SIMON: Dan.
MR. MULHOLLAND: If I could just comment
on this as a practicing attorney, I think it should be
very clear what subregulatory guidance is, what it
means, and how far it goes. I find it helpful
somewhat, too. A lot of different agencies give it but
what you worry about is that it suddenly becomes law or
the perception is that if somebody in the Government
said something, then you better do what they say even
if it isn't correct.
I think if there were appropriate
disclaimers saying this is how we are interpreting this
and it has a limited shelf life and if there are
additional questions, there should be a fairly
streamlined advisory opinion process. I know a lot of
agencies have it. Some don't. Some have resisted
it.
I think CMS resisted it even though the
FTC, the OIG, the IRS all have procedures, albeit
cumbersome to give specific guidance, but I think if
there could be a streamlined guidance procedure that
someone can rely on saying, "Okay, I have a letter from
CMS that says I can do this. Nobody is going to get me
if I do something wrong."
That would be preferable to the kind of
amorphous subregulatory guidance that you sometimes see
and nobody knows whether it's going to be in effect
next week or who said it or how long it's good for.
DR. LAWLOR: I just want to point out that
we have on our website an input mechanism right now. I
believe it's still open. We are asking comments on how
to produce guidance. FDA has done it. We were there.
A lot of the focus is 1 s in the coverage area but these
are issues that are very parallel to the guidance we
have used with Part D so thanks.
DR. SIMON: Other comments? Okay.
Walt, I give you 30 seconds.
MR. FRANCIS: Very quickly the two last
commentors especially but some others, I know of a
serious case of subregulatory guidance. There are
apparently a lot of people who believe that there is a
federal regulation that requires that health care
providers pay for language interpreters. There is no
such federal regulation and there probably never will
be.
There is no regulation that says a family
member can't interpret. There is guidance out there,
some of it quite official looking, issued in the later
part of the Clinton administration but there is no such
regulation. You might want to explore, because I
really think this is a big problem for a lot of people
just what is official, what's required, what isn't, and
that might be one regulatory area to specifically look
at because it is a continuing problem.
DR. 1 SIMON: Comments? Thank you. You did
very well, 30 seconds.
We have reached the end of our program. I
want to thank you all for your attention, for your
contributions, and most importantly look forward to
additional input from you, from your colleagues, and
from the public because this is your opportunity and
this is what our study rests on is getting solid
evidence of cost and benefits of regulation so that we
can put this into perspective. I look forward to
seeing some of you in Chicago. In the meantime I
encourage you to have a very nice day. Thank you very
much.
(Whereupon, at 2:06 p.m. the meeting was
adjourned.)
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