have it shared 50/50. Over the years the premium simply has ot kept pace. But we have also said we would institute a "hold harmless" ause so if the individual does not get a social security increase at is sufficient to cover that increase, then they would not pay ore than the social security increase. If there was a social secuty increase, then the part B premium would increase along with Mr. SMITH. Preventive health care services enable medical people detect chronic disease, treat it early, and thereby insure a ealthier patient for lesser cost. Can you detail for the committee some of the specific preventive are services that offer the greatest hope for more illness-free nior citizens while reducing the burden on medicare's trust fund? Dr. Davis. We, frankly, do not have a good analysis of the kinds preventive services medicare ought to pay for. Right at the oment, medicare pays for the innoculations against pneumoccal fluenza and that is the only preventive service for which we pay per . Recognizing last year that we did not have a good data base on hich to move, and, yet believing firmly in preventive care, we inituted a 3-year series of studies in our research component to look such activities as high blood pressure checks and a series of her things. We have recently gone forth with a request for proposals in the area prevention. And in fact just this weekend, I was reviewing a umber of them, so we probably will be awarding research amountg to a million dollars or so in the area of prevention. It will take us veral years, however, to get the data base. Mr. SMITH. That was going to be my next question. How long are e talking? Dr. DAVIS. Generally speaking, those take about 3 years. Mr. SMITH. Are there any existing studies that we could adopted ow, based, upon preventive medicine that has been around for a ng time? Dr. Davis. Preventive medicine has been around for a long time. nfortunately, they have not kept very good cost and data analys, so it is difficult to assess. If you increase the payment level, we ant to at least assure ourselves that in the outyears it is going to è cost beneficial. And it is that kind of data that has not been pt. Mr. SMITH. Doctor, medicare provides preferential reimburse- Dr. Davis. I cannot give you the dollar figures. That by paying clinic or lize him i Again, next year ample, th because t that sam where if Mr. SM Mr. Ri have bee then I wo tions in for the re Would to one th rity in a action pr Dr. DA what I w from the but obvid for one a cerned a year's tir serious p all the h particula the bene what we this deca welcome Mr. Ri the prob light the us. And gress in ticularly Dr. Da mony an sions as Dr. DA [Writt and the Question under the hospitals. Medical So patients ou (a) In st did HHS o (b) Has t versity, or (c) What to prevent erwise, that would allow us to not have to institutionaan acute care hospital. at is one of the major things we will be looking at this Looking at alternatives to than hospitalization. For exe are occasions when an individual is hospitalized only e kind of therapy he is getting is so expensive, and yet therapy perhaps could be provided more cheaply elsee covered it. H. No further questions. ALDO. Thank you very much, Mr. Smith. Dr. Davis, you very helpful so far. I want to ask one final question, and ld like to, in the interest of time, submit additional quesriting, and we would appreciate receiving your response cord. vou support a bipartisan panel to study medicare, similar at recently reported its recommendations on social secueffort to at least coalesce the Congress into some form of or to the crisis that we see forthcoming? VIS. That is an interesting proposal, Mr. Chairman. I think ould like to do first is to delay until we get our report social security council to see in what direction they go, usly I am sure Congress is concerned about this problem. I m grateful that Congress is becoming aware of it and conabout it. I have been aware and concerned for the last me, since it has become evident that we were facing some problems by the end of this decade. And I would welcome help that I can get, others worrying along with me on this ar program. I think it is important for us to guarantee to eficiaries that they will have access and that we will do e need to do to provide that access for them come the end of cade. And that is what I am determined to do, and we would e that. RINALDO. If the social security package, in addition to solving oblem for a few years, did nothing else, I think it did highne problem with medicare and the fiscal crisis that is upon d it is probably the single biggest problem facing the Conn programs that are designed to benefit the people, and par-ly the aged in this country. Davis, once again, thank you very, very much for your testiand I am sure we will be hearing from you on other occaas we move along with this problem. DAVIS. Thank you, Mr. Chairman. itten questions were submitted to the witness by Mr. Rinaldo he answers subsequently received from Dr. Davis follows:] stion 1. An article in the Star-Ledger of March 27 contained reports that, the state's DRG system, patients were being discharged prematurely from als. The article quoted Dr. Howard Slobodien, President of the New Jersey al Society, as saying that doctors are being pressured by hospitals to get their ts out. In studying the New Jersey DRG system prior to the December 1982 proposal, HS or HCFA study the question of premature discharge? Has the matter of premature discharge of patients been discussed by Yale Unity, or the team of researchers who developed the DRG plan? What safeguards are built into the DRG plan proposed by Secretary Schweiker event premature discharge of patients under the prospective payment system? Answer. (a) Yes. HCFA studied carefully the possibility that patients would be discharged prematurely under a DRG system. However, the evaluation of our New Jersey_experiment provided no evidence that patients were being discharged too early. The data from New Jersey did not indicate any increase in hospital readmissions due to premature discharge. (b) No. Yale University did not address the issue. (c) Under the system proposed by former Secretary Schweiker, admission pattern monitoring would be used to detect inappropriate discharge practices. If inappropri ate practices were identified, the medical review agent would take action ranging from communication and education efforts with the provider to preadmission review of hospital admissions. If necessary, sanctions would be applied. Question 2. In submitting the prospective payment plan to Congress last December, Secretary Schweiker considered peer review to be a vital component of ensuring the program's success. (a) Can you describe in detail HCFA's plans for promoting and continuing peer review under the DRG system? (b) Do you envision any strengthening of the current PSRO system under DRG? Answer. Below is a combined response to your two-part question. Since our hearing in New Jersey, the Social Security Amendments of 1983, H.R. 1900, was passed by Congress and has been signed into law (Public Law 98-21). This legislation has a number of provisions that require peer review activities under prospective payement. First of all, it requires hospitals by no later than October 1, 1984 to contract with a peer review organization as a condition of payment in the Medicare program. These new peer review organizations have a number of medical review responsibilities including, but not limited to, admissions pattern monitoring, DRG validation, and quality of care studies. Second, Public Law 98-21 also specifies certain functions to be performed by peer review organizations. Third, Public Law 98-21 specifies a minimum funding level for peer review (no less than the 1982 PSRO budget adjusted for inflation), mandates funding from the trust funds, and removes the budget from the appropriations process. We have activities underway to implement these legislative requirements. As we are still in our initial planning period, it is too soon to specify the shape of the new peer review program under the prospective payment system. Question 3. The New Jersey DRG system, unlike the Federal plan recently enacted, provides for prospective payment for all payors, not just Medicare patients. Some economists have warned that this could result in cost-shifting from Medicare patients to private patients. (a) Has HCFA done any analysis of such a possible cost-shifting and how to guard against it? (b) Do you envision extending the prospective payment system to all patients in hospitals? Answer. (a) HCFA believes that the DRG system particularly guards against cost shifting. The DRG system directly associates the hospital treatment received by the beneficiary with a fair and identifiable price for that care. Consequently, it will be more difficult for providers to inflate the price they charge for this service to other payors. (b) We do not require extension of this system to all hosptial inpatients. However, private insurers and States may elect to use this system for the inpatients that they cover. Question 4. There has been continuing interest in home health care in Congress. (a) Could you describe in detail the Department's or the Administration's current policies with respect to home health care, including ongoing demonstration projects, their goals, and expected completion dates, along with funding levels? (b) Do you envision any proposals from HCFA or the department to increase home health care, either through tax incentives, demonstration projects, or policy changes within Medicare and Medicaid? Answer. (a) The following provides a summary of home health care coverage and demonstration activity under the Medicare and Medicaid programs. HOME HEALTH CARE UNDER MEDICARE Covered Services.-Medicare covers the following services: Part-time or intermittent nursing care provided by or under the supervision of a registered professional nurse; physical, occupational, or speech therapy; medical social services which include services necessary for assisting the patient to adjust to social and termittent and biolog There is and there Coverag ices to be home (hor or physica services m rectly or t care. The Me home. Sin living acti Mandat services a under the Nursing appliances The hon dence doe care facilit diate care ices must written pla Optiona services un speech pat censed by Reimbur home age rates, fees Home a Budget Re grant waiarray of h Medicaid c aides, pers ices reques clude, for apy, speec. portation, In order the health services un or ICF car tion annua As of Ma services w from 31 St quests ha and discus otional conditions related to his/her health problem; part-time or invices from a home health aide; and medical supplies (other than drugs s) and medical appliances. limit on the number of home health care visits that may be provided o requirement for deductible, coinsurance, or prior hospital stay. equirements.—The Medicare law limits payment of home health servciaries who are 1) under the care of a physician; 2) confined to their ound); and 3) in need of skilled nursing care on an intermittent basis r speech therapy. The care must be prescribed by a physician and the t be provided by a participating home health agency (HHA), either diough arrangements, in accordance with the physician's written plan of are home health benefit was specifically designed for situations where ry to provide medical care in the home. An exception is made in inre required medical equipment cannot readily be made available in the arly, Medicare home health benefits are oriented toward a need for and were not designed to cover services related to assistance in daily ties unless the patient also requires skilled nursing care or physical or apy. ement.-Home health agencies are reimbursed the lower of the reasonboth direct and indirect, of providing covered services (subject to the ection 223 cost limits for HHAs) or the customary charges of the home cy for the services. HOME HEALTH CARE UNDER MEDICAID ory Services.-The Medicaid State agency must ensure that home health re provided to all individuals entitled to skilled nursing facility services State plan. Home health services must include, at a minimum: services; home health aide services; and medical supplies, equipment, and s suitable for use in the home. me health services must be provided at the recipient's residence. A resies not include a hospital, skilled nursing facility (SNF), or intermediate ity (ICF) (except that home health services may be provided in an intermee facility if the facility is not required to provide those services). The servalso be provided on the orders of the recipient's physician as part of a lan of care that the physician reviews every 60 days. al Services.—States may also provide the following types of home health under the Medicaid State plans: physical therapy, occupational therapy, or pathology and audiology services provided by an HHA or by a facility liy the State to provide medical rehabilitation services. ursement.—States determine the method and level of reimbursement for gency services under their Medicaid programs. These include negotiated e schedules, cost-based reimbursement, and other methods. and Community-based Services Waivers.-Section 2176 of the Omnibus Reconciliation Act of 1981 (Public Law 97-35) authorizes the Department to waivers of Medicaid requirements in order to permit States to offer a wide f home and community-based services that an individual may need to avoid id coverage for such services as case management, homemaker/home health personal care, adult day health care, habilitation, respite care, and other servquested by the State and approved by the Secretary. Other services may infor example, medical equipment and supplies, physical and occupational therpeech pathology and audiology, minor physical adaptations to the home, transon, and hospice care. rder to receive a waiver, States must provide adequate assurances concerning ealth and welfare of individuals under the waiver, the cost-effectiveness of es under the waiver, the need for such services for individuals entitled to SNF care, and financial accountability. States must also agree to provide informannually to the Department on the impact of the waiver. of March 31, 1983, the Department has received 66 home and community-based ces waiver requests from 40 different States. Of these, 38 separate requests 31 States have been approved. There have been six disapprovals and three reEs have been withdrawn. The remaining requests are currently under review discussion. -020 0-83--3 RESEARCH AND DEMONSTRATION ACTIVITY Evaluation of coordinated community oriented long-term care demonstration Period: September 1980-December 1983. Funding: $1,999,980. Contractor: Berkeley Planning Associates Berkeley, Calif. Description: This long-term care project evaluates a series of demonstration proj ects on the delivery of coordinated community care services. The demonstrations test whether care tailored to a client's needs can preclude moving them out of the community into expensive institutional care settings. Status: The contractor has completed draft case studies for the participating projects. These studies highlight the history and origin of the project, describe project organization, and operation issues. A final report is expected in December 1983 and will focus on quality of care and cost-effectiveness issues. National long-term care channeling demonstrations Period: September 1980-May 1985. Description: This is a major national research and demonstration program. It is a combined effort of three components within the Department of Health and Human Services: HCFA; the Office of the Assistant Secretary for Planning and Evaluation, Office of the Secretary; and the Administration on Aging, Office of Human Development Services. The program is testing whether and to what extent the long-term care needs of elderly impaired persons can be met in a cost-effective way through a community-based system of comprehensive needs assessment, care planning, and case management. These components are the core channeling services. Five of the projects were designated as "complex model projects." These projects alter the basic channeling model by adding three program elements under HCFA waivers: expanded Medicare and Medicaid service coverage, authorization to approve reimburse ment for services, and limitations on per capita expenditures. Funding: $932,896. Contractor: Florida Department of Health and Rehabilitative Services. Grantee: Tallahassee, Fla. Status: The Miami Jewish Home and Hospital for the Aged has been designated as the organization responsible for implementing the Florida project. This site has been selected as a complex model project. The project catchment area includes the City of Miami and several surrounding communities. The project began serving clients in May 1982. Currently, this site has more than 200 clients. The organization hopes to reach a caseload of 429 clients by the end of June 1983. Funding: $700,000. Contractor: Kentucky Cabinet for Human Resources, Frankfort, Ky. Status: The Kentucky Department for Social Services has been designated as the agency responsible for implementing the Kentucky project. This site has been selected as a basic model project. The project catchment area covers eight rural counties in eastern Kentucky. The project began serving clients in February 1982. Currently, this site has 140 clients. The Department hopes to reach a caseload of 160 clients by the end of June 1983. Funding: $609,839. Contractor: Maine Department of Human Services, Augusta, Maine. Status: The Maine demonstration site is a basic model project administered under Contractor: Massachusetts Department of Elder Affairs. Status: The Massachusets channeling demonstration is a complex model site oper- Status: The Rennselaer County Department for the Aging has been designated as the agency responsible for implementing the New York project. This site has been selected as Period: O term care d oped for th |