More funds must be allocated to research the cause of AIDS and to find a cure. The current budget request does not contemplate the allocation of new monies for AIDS research but instead relies on reprogramming funds previously designated for other medical research programs. The Mayor has decried this as a form of budgetary triage that pits one disease against another in the battle for research dollars.

Currently AIDS patients are not eligible for Medicare unless they have been categorized and certified as disabled for a two year period. One half of the patients, however, die within the first two years of diagnosis. During this period these patients are usually severely disabled, have exhausted their financial resources, lost their homes, and needed intensive medical care and social services. AIDS patients deserve adequate care during this tragic time and Medicare eligibility should be established at the time of diagnosis.

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There are additional problems with Medicare reimbursement of AIDS. Health Care Financing Administration must closely examine the DRG system as it relates to AIDS, and more accurately define a DRG for this disease. As DRGS are presently constituted, cases positively

identified, with an AIDS diagnosis fall into DRG 398! (Immmity

Disorders, Age Over 69 and/or complication) and DRG 399 - (Immunity Disorders, Age Under 70 without complications). The resource intensity weights of these DRGs are .9753 and .7247 respectively.

Resource intensity weights reflect hospital resources necessary to treat the average patient in a given DRG. Overall, resource intensity weights are set at 1.0 for the average patients. Thus average

resources required by patients in DRGS 398 and 399 are less than those required by the average hospital patient. The average length of stay for DRG 398 and 399 patients--nationwide is 8.1 and 6.4 days respectively, while F:C‹AIDS patients frequently stay as much as 50 days.c

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. Because of the low weights of these DRGS, any relief that might otherwise be gained by a case extending into outlier status will be

portionately low. A case can only be designated a cost outlier if it is not a day outlier. The day outlier thresholds for these DRGs are 23 and 21 days respectively. Thus, most HBC AIDS cases would receive day outlier payments (60% of DRG-specific per diem) and therefore not qualify for cost outlier payments (60% of the difference between actual costs, calculated at 72% of billed changes, and the DRG payment, or $13,000 regionally adjusted, whichever is lower).

The second major problem in DRG classification for AIDS cases occurs when the principal diagnosis (reason for admission) is one of the opportunistic infections occasioned by AIDS. Most, frequent among these is pneumocystis carinii and Kaposi's sarcoma These are assigned, to DRGB 79-80 and 81, for pneumocystis carinii, and DRGS 283 and 284 for Kaposi's sarcoma. The same problems pertain, with variations, for these cases...

A broader strategy of federal support for long term care especially in catastrophic illness situations must be developed. There is a great and growing need for long term care services to meet the needs of AIDS patients who no longer require acute care in the hospital setting, but need continuing care and support in the home or in a structured residential health care setting. The City of New York has been a pioneer in developing comprehensive home care for all patients and institutional long term care services specifically for AIDS patients. While Medicaid, and to a much lesser extent, Medicare and private insurance, can be used to cover some of these services for eligible patients, there are important programmatic limitations and gaps in coverage which must be addressed. Medicare coverage for skilled nursing facility care and home health care is largely restricted to short term, post-acute care for the elderly. This is insufficient to meet the chronic longer term care needs of the younger AIDS patients. Currently, Medicare does not provide for chronic care in the home; homemaker/personal care services are not covered, and home health aide coverage is too limited in terms of hours and duration of service to assure the amount of care necessary to serve the AIDS patient. There

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is a need to provide an integrated and coordinated service plan at home

which combines skilled care including nursing, therapies and home

health aides, and personal care/support services.

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The Medicare hospice program should be adapted for AIDS patients by

easing current eligibility restrictions and by raising the

reimbursement ceiling, which is too low to assure the amount of service needed by AIDS patients.

We strongly support the use of waivers such as those provided under the Section 2176 Bome and Community-Based Services legislation. These waivers would allow states to amend their state Medicaid plans to include coverage for certain community services for defined populations as long as the cost of the service package does not exceed 100 percent of the equivalent costs for care in an institution. The Katie Beckett case provides another program model. If we could use such a waiver, which allows for services at home to certain eligible children without exhausting the financial resources of the family, we could assure services to children with AIDS.

In closing, I would like to stress that AIDS is a national problem. The Federal Government must demonstrate a leadership role and develop a comprehensive and coherent strategy for dealing with this major public health care. crisis. Local governments must be relieved of bearing the entire burden of funding-AIDS-related program. HBC and the City of New York will continue to lobby for increased funding for health care, social services and housing for persons with AIDS as well as for disease: surveillance, public health education and documentation of AIDS related discrimination. We will continue to assist you in developing alternative approaches to the problem of financing the delivery of medical services to AIDS patients.

Thank you again for the opportunity to present the views of the New York City Health and Hospitals Corporation on this critical public health care issue.

STATEMENT OF DR. ALFRED J. Katz

Good morning, Mr. Chairman and members of the Committee.

I

am Dr. Alfred J. Katz, Vice President for Research, Development and Marketing of the American Red Cross. Thank you for this opportunity to testify concerning the impact that transfusionassociated AIDS has had on the nation's blood supply, and to offer an opinion regarding the research still needed if we are to be totally effective in the eradication and management of any possibility of transmission of AIDS by blood transfusion.

The American Red Cross is a nonprofit, nonsectarian, nonpolitical organization chartered by the U. S. Congress to provide a variety of health and emergency support-related services. In this capacity, Red Cross annually collects more than six million units of blood from four million volunteer donors, and provides more than half of the blood and blood components transfused in the United States. Our responsibility is two-fold: to ensure the adequacy of the nation's blood supply, and to provide blood products that are as safe as possible. The recent emergence of AIDS compromised our ability to ensure the latter.

As of September 13, 1985, 225 instances of transfusionassociated AIDS, plus an additional 98 cases among hemophiliacs, had been reported to the Centers for Disease Control. Although these 323 patients represent barely 2.5% of all reported AIDS cases, transfusion-transmitted infections account for 20%

of AIDS in childhood, and 10% of the AIDS in women.

Transfusion-associated AIDS, perhaps because of its occurrence in infants, perhaps because of the vulnerability of any of us, has received high media visibility. There is

widespread understanding that AIDS may be transmitted by blood transfusion, which has resulted in considerable public anxiety. This knowledge has led a small number of people to defer surgery, or otherwise avoid medically necessary transfusions.

Fear of AIDS from transfusion has led some prospective blood recipients to recruit donors from among friends and family, and to avoid the community volunteer donor supply.

Anxiety about AIDS has also extended to the process of blood donation. The frequent association of AIDS with transfusion has created the impression that the disease can be acquired by blood donors. In a survey conducted last year by the American Association of Blood Banks, 43% of the adult Americans interviewed stated their belief that AIDS could be transmitted via the blood collection needle. This is a totally incorrect belief, but it probably has had negative impact on the ability of the blood collecting organizations in the United States to provide an adequate blood supply. Donor recruitment staff in many regions report increased difficulty in meeting collection goals, and there clearly have been intermittent shortages.

Under these circumstances, how have the blood collecting and transfusing agencies responded? Before the cause of AIDS was known, blood donor selection criteria were changed in 1983 to exclude those at high risk of AIDS, based on the presumption that AIDS was infectious.

Recent scientific advance has been of benefit of the hemophiliacs who depend upon coagulation factor concentrates prepared from pooled plasma. Most of the patients who received this material between 1980 and 1984 have evidence of exposure to the AIDS virus. However, it recently became apparent that HTLV-III can be neutralized by short exposure to heat. Today, all factor concentrates used in routine hemophilia care are heated, and we believe that for newly diagnosed, or previously untreated hemophiliacs, the danger of acquiring AIDS has been largely eliminated.

By far the most important, most effective response has been the implementation of a test for antibody to HTLV-III a remarkable achievement made possible in large part by Federal funds provided to Dr. Gallo and his associates at the National Cancer Institute of NIH.

The availability of the HTLV-III antibody test has greatly improved our ability to screen for, and eliminate potentially infectious blood donors. There is clear evidence that the screening test now in use, when confirmed by a more specific technique, does identify individuals whose blood contains the AIDS