Page images
PDF
EPUB

APPENDIXES

APPENDIX 1

ADDITIONAL INFORMATION OR EXHIBITS FROM

WITNESSES

ITEM 1: EXHIBITS RELATED TO STATEMENT OF DR. MALCOLM C. TODD,* PRESIDENT, CALIFORNIA MEDICAL ASSOCIATION

EXHIBIT A. CALIFORNIA HOSPITAL ASSOCIATION-CALIFORNIA MEDICAL ASSOCIATION

Aim

PROCEDURES FOR REVIEW OF EFFECTIVE UTILIZATION OF HOSPITAL SERVICES

(Adopted by Office of Health Care Services, June 12, 1968)

To provide Medi-Cal with a system of safeguards in the utilization of hospital services; and to assist hospitals to maintain and strengthen standards of care.

Need

Providers of health services have a responsibility for assuring that the public interest is being served in the delivery of hospital services for persons covered by the Medi-Cal program.

Quality is the most important component to effective hospital service. Standards of quality can be best judged by professional peers, functioning expressly to review patterns of hospital practice.

Methods

In cooperation with the California Hospital Association and the California Medical Association and under the provisions of their agreements as the contracting carriers with the State of California, Hospital Service of California and Hospital Service of Southern California will organize and implement the following procedures for reviewing irregular patterns of practices by hospitals participating in the Medi-Cal program:

1. Screening for irregularity

In the conduct of its customary and routine procedures, provider claims for service are reviewed by the contracting carrier for conformity to prevailing standards of practice and Medi-Cal regulations. This work is performed by staff with proven skills for discerning presumptive irregularity. All questionable claims are referred to a special unit of the contracting carrier's organization where specially-trained staff carry out further analyses.

2. Detecting irregularity

When there is reasonable question about the justification of a series of claims, contracting carrier staff collects information needed for clarification. If, after this further evaluation which frequently involves field data collection and direct contact with the provider, questions about suspect patterns are not satisfied, the provider institution is placed under special review. A record of the provider's pattern of practices is developed. Should the record reasonably convince the contracting carrier about provider irregularity and subsequent efforts with the provider fail to correct detected patterns, the contracting carrier, with notice

*See statement, p. 646.

24-798-69-pt. 3—8

to the Office of Health Care Services, shall ask for the establishment of a peer panel to review the problem.

3. Referring for peer review

(a) Panel designation.-Upon request from the contracting carrier, the designated officer of the California Hospital Association and the designated officer of the California Medical Association will appoint appropriate persons from among their respective memberships who agree to function as peer review panelists. Each panel shall consist of at least two hospital administrators and two physicians with a chairman designated by mutual agreement of the respective designated officers. Panel members will serve without compensation but shall receive from the contracting carriers reasonable reimbursement for travel and living expenses. The contracting carrier will serve as staff and attend all meetings of the panel.

(b) Referral to committee. The contracting carrier shall make a written report to the panel, informing them of the nature of the matter to be considered, summary of data collected, and history of efforts to resolve issues presented. At the time of referral, the contracting carrier shall advise the panel members that their findings and recommendations will be reported to the Office of Health Care Services. One of the primary aims in activating a peer review panel is to counsel providers on ways for correcting patterns and irregularities and for improving their services and economic practices, regardless of sources of payment.

(c) Notice of hearing.-The provider shall be given written notice of any meeting at which the peer review panel will receive evidence on the matter submitted. This notice shall be given by the panel no less than 10 days prior to such hearing. The notice shall state the nature of the matter under submission. If particular cases are to be discussed, the provider shall be furnished information needed for identification. If the matter under submission involves a pattern of conduct or if it is impractical to list specific cases, the provider shall be given information sufficient to enable him to identify the period involved and the nature of any procedures in question. The contracting carrier will provide the panel with the facts in support of any alleged irregularities.

(d) Attendance by the provider.—The provider shall be entitled to attend any panel meeting while evidence regarding him is received. The provider shall have the right to see any documentary material received by the panel. The provider shall be accorded adequate opportunity to present evidence on his own behalf, or to rebut any evidence offered against him, or to offer any explanation to the panel. The provider shall have the right to be accompanied by counsel but counsel shall not be entitled to participate in any hearing unless the chairman or a majority of the panel determines that his participation would be of assistance to the panel. These hearings shall be informal and the rules of courtroom evidence do not apply. Failure of the provider, without reasonable excuse, to attend scheduled meetings shall not preclude the panel from carrying out its proceedings.

(e) Written record.-A summary record shall be prepared in any case where the panel recommends action limiting or denying future or continued participation in the Medi-Cal program, including recommendations for imposition of requirements. In such cases, the record shall:

(1) Indicate the date of any hearings and the persons in attendance; (2) Contain or summarize all testimony;

(3) Include all documentary evidence received;

(4) Describe any other evidence received;

(5) Contain the findings and recommendations of the panel, indicating the vote on each finding and recommendation;

(6) Include copies of notices to the provider.

(f) Findings.-In such cases, the panel shall make specific findings on those issues which have clear and convincing proof in support of any recommendation made. Causes for suspension are enumerated in Medi-Cal Regulations, Sec. 51455 (b) of Title 22, California Administrative Code, and the findings must state which provision or provisions thereof have been violated by the provider. Insofar as is practical, reference should be made to specific testimony or other evidence supporting each finding. All actions of the panel shall be by vote of the majority.

(g) Recommendations.-The panel shall make a written recommendation as to action to be taken. In any case where the recommendation would impose conditions on future payments or participation, the panel shall indicate how and when the recommendation should be implemented.

(h) Notice of decision.-The provider shall be mailed a copy of the panel's findings and recommendations upon issuance, and he shall be advised in writing as to appeal.

(i) Rehearing.-The chairman or a majority of the panel may grant a rehearing when it appears that the provider offers substantial new evidence which he could not reasonably have offered at the hearing, or when it appears that the panel has acted in error.

(j) Report to the Office of Health Care Services.—It will be the responsibility of the contracting carrier to forward the record of the panel, including findings and recommendations, to the Office of Health Care Services and to California Blue Shield. The Office of Health Care Services will initiate appropriate action, with appropriate notification to the provider. The chairman of the panel or a member designated by the chairman will be available and will be present and participate in any hearings conducted by the Office of Health Care Services. Evaluation of the system

After a year's experience, the California Hospital Association and the California Medical Association, working closely with the Office of Health Care Services, will examine the effectiveness of the peer review method and report their conclusion to the Secretary of Human Relations for the State of California.

EXHIBIT B. THE INTERMEDIARY FUNCTIONING OF THE TITLE 19 PROGRAM IN CALIFORNIA WITH RESPECT TO INSTITUTIONAL CARE

HISTORICAL BACKGROUND

When the U.S. Congress enacted legislation creating Medicare, it declared its intent to take full advantage of the experience of private organizations to fulfill the program's goals.

Thus, Medicare adopted methods-such as calculating benefits in terms of days of care; paying for service through cost reimbursement and involving providers of health care services in the professional review and control of quantity and quality of care-all of which were pioneered originally by Blue Cross the country's largest prepayment system.

The California Legislature in passage of A.B.5, December 17, 1965, to set up Medi-Cal under Title 19 (Medicaid), also turned to the private sector. Blue Cross in both Northern and Southern California and California Blue Shield were selected for their respective responsibilities as fiscal intermediaries. The selection was made on February 19, 1966, just nine days before the effective date of Medi-Cal, March 1, 1966.

The knowledge and experience of these three private, nonprofit corporations, in professional health benefits management, their available facilities and their trained personnel were primary factors in getting the program underway in the short time from notification of selection to "start-up" time.

EARLY PROBLEMS

The short lead-time made it difficult for the State Government to adequately describe the Medi-Cal requirements in advance to the providers or the public. As Medi-Cal began, many administrative details had not been worked out. In the early weeks there were often clarifications, interpretations and actual changes in regulations. All such changes were communicated, interpreted, and fed into the system by Blue Cross on a day-to-day basis.

A FOSTERING RELATIONSHIP

A major factor in the ability of the fiscal intermediaries to perform has been the excellent guidance and cooperative support given by the Department of Health Care Services of the California Health and Welfare Agency. The program's success might have been considerably diminished without the capable assistance provided by this agency of the California Government with its obvious awareness of the affected public's health care needs.

Medi-Cal is in fact an excellent example of how well such a program can operate when policy guidelines are laid down by a government agency and carried out operationally by a private organization. It is a prime example of

government and the private sector of our society working together in the public interest.

BLUE CROSS GOALS

It may help here to outline the Blue Cross goals in its fiscal intermediary role under Title 19. These are:

1. To handle, process and pay claims and to pay them on the same basis as in all other sectors of Blue Cross operations;

2. To interpret correctly and carry-out governmental objectives to the satisfaction of both the government and the contracting parties;

3. To recognize problems and areas of potential problems in providing services and to communicate such knowledge to the government as needed. This, of course, requires Blue Cross to represent two parties-the providers— hospitals, nursing homes, extended care facilities, rehabilitation centers, home health agencies, and others-which offer the institutional services, and the government, which provides the benefits to the ultimate recipient, the public.

4. To assist the providers of the service the institutions concernedto operate in an optimal manner in all specific and collateral services rendered.

5. Finally, in the administration of the program, to make Blue Cross responsive in seeing that the public's right to good health is recognized and respected.

These goals are consistent with the services Blue Cross provides to the public and to the institutions with which it works. They are also consistent with Blue Cross' major corporate goal, which is to provide all segments of the population with the means of obtaining the highest quality of medical care in the most effective and economical manner with continued dedication to the preservation of the voluntary health care system.

WHAT BLUE CROSS PROVIDES

The State Government was able to take maximum advantage of Blue Cross' capabilities and unique services. These include:

1. Experience in private, prepaid health care programs, particularly in those providing service benefits;

2. Existing facilities with related equipment and trained personnel;

3. Experience in cost-related reimbursement programs;

4. Long-established relations with providers of covered services;

5. Experience with the coordination needed for the requirements of both Medi-Cal and Medicare;

6. Long history of cooperation with Blue Shield (physician prepayment agency similar to Blue Cross' role in providing prepaid hospital care);

7. Control mechanisms, i.e. fiscal claims and utilization of review procedures and systems.

Blue Cross helps to safeguard the tax dollars of the public. It does this in the course of its normal procedures in its review and audit activities. There are two broad categories of this activity:

The first is preventive and is covered by carefully detailed individual billing instructions with on-the-scene visits to smooth out eligibility and processing problems and also various group educational programs, institutes and seminars. The second could be called correctional, i.e., the creation of safeguards against abuse and follow-up regarding appropriateness of activities in connection with the Medi-Cal program, through audits and utilization reviews.

These two categories of activity are carried out by the seventy-six Blue Cross field people who routinely and regularly visit all hospitals, nursing homes, home health agencies, and other providers. These are trained representatives who are specialists in professional relations utilization review and reimbursement. Their primary purpose is to help the facilities concerned comply with the operational requirements of Medi-Cal.

It is clear, however, that in the process of doing this they create a network of communications and a clearing-house for interpretation and cross-reference which helps prevent and/or correct potential abuses under Title 19.

There are 566 acute care facilities, 1,215 nursing homes, and 122 home health agencies and free-standing clinics, for a total of 1,903 providers in California. These are furnished information regarding the Medi-Cal program through Blue Cross bulletins, workshops, routine and special visits, provider visits to the inter

« PreviousContinue »