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I am Dr. Lucille A. Joel, President, New Jersey State Nurses Association,

Professor and Director of Clinical Affairs, Rutgers University, College of

Nursing, and Director, Teaching Nursing Home Project. The New Jersey State

Nurses Association appreciates the opportunity to offer testimony on

Medicare to the Select Committee on Aging.

The New Jersey State Nurses Association endorses

the concepts recently

published on Medicare by Dr. Carolyne Davis, in the Federal Register: "To

focus on patient care, to emphasize outcome rather than means used to achieve

those ends, (and) to promote cost containment while maintaining quality care." (Jan. 4, 1983, Proposed Rules, p. 300)

Although quality, access and cost create equal controversy in regard to the

Medicare program, they all converge in the issue of reimbursement: Who is

reimbursable; where can services be delivered; and what is the methodological

model for reimbursement? We have become a reimbursable society. That which the

third party payer subsidizes is mainly used. From the outset, let me assure

you that I believe cost containment efforts are essential. The evolving solution

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to the problem of spiraling costs may be to paradoxically wed deregulation and competition among providers and settings and to require a more controlled approach

to institutional reimbursement.

Our testimony will focus on three major concerns which impact heavily on

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The New Jersey State Nurses Association strongly urges the federal government

to maximize the opportunity for nurses to be major providers of health care services to the Medicare population. For nurses to emerge as dominant health . care providers the Medicare program would have to address services reimbursed as health-care services, not medical services, as presently permitted. Nurses are

licensed to offer health care services, which must be provided for under the

Medicare program, not as medical staff to offer medical care, but as nursing

staff to offer nursing care.

The primary health care nurse traditionally prepared at the graduate level

represents a most cost-efficient and under-utilized provider professional.

Primary health care nurses are exquisitely prepared to diagnose and manage

minor acute illness within a joint practice model with physicians. In 1979, a

HCFA funded study demonstrated that a visit by a primary health care nurse costs half as much as a visit of the same nature executed by a physician. In addition, the quality of care given by the nurse as reflected in client satisfaction and recovery was equal to or superior to physician management.1

These nurses were also proven to be more effective in networking services,

ordered fewer costly procedures, and emphasized self-reliant behavior,

counseling and health education. The competency, cost-efficiency and efficacy

of nurses is extensively documented. Direct access to primary health care

nurses and for the matter, to all nurses, has been denied the consumer because

of the absence of reimbursement. Where reimbursement is at all available,

it is usually contingent on physician prescription or supervision. This

becomes absurd as we realize that nurses are licensed under their own autonomous

practice act in every state in the Union. It seems , at least figuratively, restraint of trade to have one professional serve as gatekeeper to the services

of another. It needs to be emphasized that I am not proposing to offer new

services or to extend existing services to new populations, rather I appeal

to you to seek formalization of nurses' rights to serve as a substitute for

more costly provider professions. Nurses have admirably fulfilled this role

in rural health and with underserved populations such as children and aged.

In addition, we support authorizing maximum flexibility to hospitals in granting privileges and organizing its professional staff. Granting staff privileges to health-care professionals other than those defined as physicians is one key to containing health care cost. We believe such initiatives will serve to permit the substitution of nurses for more costly providers, while at the same time not comprise in quality of care. Volumes have been published citing the efficiency and cost-benefit of nursing as an alternative to higher cost care (Fagin, American Journal of Nursing, 1982, p. 56).

Health Care Settings

While strides have been made in support of alternative health-care settings for the Medicare population, we have not gone far enough in providing other than costly institutional care. Provisions are necessary to expand the

use of community health services and home care as alternatives to long-term

or acute care institutions. Careful monitoring is needed to assure that

these options fill the gap as legitimate substitutions and do not create new

or expanded benefits. A bill recently introduced by Senators Inouye and

Packwood seeks to authorize the establishment of Community Nursing Centers under

Medicare and Medicaid. The proposal builds upon the historically demonstrated

capacity and concern of community based nursing organizations, such as visiting nurse agencies and departments of health. Services would be offered

on an inclusive per capita fee basis to well children, to those in need of

home care, as presently authorized under Medicare, and to individuals, who

without the services of Community Nursing Centers would require institutional

placement. Through such a commitment the Community Nursing Center unifies existing

services and promises to impact costly admission and retention of patients

in hospitals or nursing homes. Assurances to safeguard against both under

utilization and over-utilization of services would mitigate against any income

maximizing techniques.

Health Care Reimbursement

Finally, are our recommendations for a reimbursement system that truly addresses quality care outcomes while containing costs.

We strongly oppose increasing Medicare user's co-payment as we believe

that budgets should not be balanced on the backs of those least able to bear

the costs.

The prospective payment system, currently under discussion by HCFA, is

a logical mechanism to contain cost. Further, a case-mix reimbursement system

is a useful model to implement prospective payment. However, NJSNA is fearful that implementation of a case-mix model without addressing nursing

intensity resource use on a patient-specific basis will jeopardize patient care, since adequate nursing resources may not be allocated. A result of seven years of funding, the methodology on Relative Intensity Measures of nursing care (RIM) developed in New Jersey with HCFA funding, provides a workable allocation


The DRG model as conceived by Medicare includes no sensitivity to the

intensity of nursing resource use on a patient-specific basis. It will never

achieve the control it desires without this patient-specific measure of nursing.

Thrity-five percent of a hospital's budget is concentrated in the department of nursing; 55% of the manpower budget exclusive of hospital based physician cost is devoted to nursing service personne1.3 Nursing reports a yeoman's share

of hospital finance, and while it is costed out on a per diem basis and quite

arbitrarily patient-to-patient, maximum budget control is impossible. The

relative intensity measure methodology (RIMs) is the only allocation statistic

of its kind and is currently pending incorporation into rate setting for 1984.

In summary, the New Jersey State Nurses Association supports a Medicare

program that gets quality care to the ageú and selected populations. We believe

that nursing can offer excellent cost-efficient resources as health-care

providers in settings where nursing is reimbursed to the fullest, without con

straints of health care gatekeepers.

We believe that the prospective payment system holds promise for cost

containment, while offering quality care, but are adamant that nursing intensity

resource-use must be addressed as a separate cost unit.


1. Joseph Romm, et al. Survey and Evaluation of the Physician Extender Reimbursement Experiment: Productivity and Cost, Washington, D.C.: Health Care Financing Administration, 1979.

2. Virginia Cleland, "Perspectives for Nursing: 01d Dreams, New Visions", Perspectives for Nursing: A symposium, Hyattsville, Md; US Deparment of Health and Human Services, Health Services Administration, Bureau of Health Division, Division of Nursing, August 1980. 3. Russell Caterinicchio and Pearl Morrison, "Case-Mix Reimbursement", The New Jersey Nurse, Sep/Oct 1980.

22-020 0-83--13



Congressman Rinaldo and Members of the Advisory Council,
I am Doris Fullerton, President of Practice Insight, Inc.,
a management consulting firm serving physicians and den-
tists and President of HERE TO HELP, INC., a medical claim
service which assists individuals, attorneys, estates and
small businesses to obtain the maximum reimbursement un-
der their policies. I have been the Administrator for
multi-physician medical groups for over fourteen years.
I have tau ht courses and seminars in Medical Office Man-
agement for physicians and their office personnel.

Over the years I have witnessed numerous insurance reimbursement problems for health claims. I will address only the problems of the elderly at this time.

Many of our Medicare clients are covered by additional health insurance policies but are not aware of the benefits or limitations of each policy or what should be claimed from which carrier:

Some of our clients have so many health problems that they simply cannot sort out or deal with the maze of forms and bills. Many are procrastinators who readily pay their hills but become confused when it comes to forms.

They do file their claims on top of the refrigerator or in a desk drawer. Others simply cannot remember what has been filed, reimbursed or paid. Very few Medicare beneficiaries have the insight or perseverance to investigate or challenye unwarranted Medicare denials.

Our clients come to us because their claims are so complex that they cannot reasonably expect their physicians or huspital business office personnel to assist them further. They

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