STATEMENT OF MORRIS LEVY, ASSISTANT DIRECTOR, BUREAU OF HEALTH INSURANCE, SOCIAL SECURITY ADMINISTRATION, acCOMPANIED BY GERALD SHEINBACH, DEPUTY ASSISTANT BUREAU DIRECTOR Senator Moss. Mr. Oriol, I think you had two or three questions you wanted to ask of Mr. Levy who is at the table now and represents the Social Security Administration. Mr. ORIOL. Thank you, Mr. Chairman. Mr. Levy. Mr. Chairman. Senator Moss. Yes; did you want to respond? Mr. LEVY. I very much regret that we did not know that Dr. Miller would be making this presentation as we would have had someone here in the event that the Chair wanted to raise some additional questions. So that the record would reflect this, I would like to make one or two comments. Senator Moss. Yes; certainly you may do so. Mr. LEVY. I will first comment on the guidelines on skilled nursing care. The Social Security Administration, and more particularly the Bureau of Health Insurance, does have a medical staff and the medical staff did participate in the development of the guides on skilled nursing care. I might also add for the record that this material was coordinated very closely with the Public Health Service who, as you may know, provides professional advice and consultation to the Bureau of Health Insurance in the development of medical and medical-related policies, and also was shown to the American Hospital Association, the American Association of Homes for the Aged and the American Nursing Association. These associations both reviewed and approved this statement. Thank you. Mr. HALAMANDARIS. I have one question. Mr. Levy, let me confirm, if I can, what Dr. Miller said a while. ago and I am sure you would have knowledge of this. I am referring specifically to the new guidelines that came out earlier this year which require the intermediary to reevaluate the salaries of nursing home personnel. Am I correct in assuming, No. 1, that the guidelines have not been made public? Mr. LEVY. Let me say in response to that, again you are somewhat out of my area and I really don't know whether these have been made public or not. We would be glad to find this out for you and submit this information. Mr. HALAMANDARIS. I am sure they have not been made public. The second question I have, are these new guidelines being imposed retroactively? Mr. LEVY. Again I would have to check. Mr. HALAMANDARIS. The answer is again yes to that. Senator Moss. Mr. Oriol is the Staff Director and he would like to ask a question. Mr. LEVY. Yes. Mr. ORIOL. Mr. Levy, I ask your title. Mr. LEVY. I am an Assistant Bureau Director of the Bureau of Health Insurance. I might also say for the benefit of the committee that I have with me Mr. Gerald Sheinbach who is a Deputy Assistant Bureau Director. Mr. ORIOL. You report directly to Mr. Tierney? Mr. LEVY. Yes. Mr. ORIOL. I would like to ask, do you believe the Medicare extended care is being phased out? Mr. LEVY. No; I don't, sir. Mr. ORIOL. Can you tell us the number of retroactive denials made by intermediaries under Medicare within the past year? Mr. LEVY. Let me respond this way again. We were advised that you wanted to discuss with us the fire safety provisions, and if we had known you wanted to get into this question of retroactive denials, we would have had someone here who could be more responsive. I might say the area of responsibility that both Mr. Sheinbach and I have related to the certification of providers-hospitals, extended care facilities, et cetera-under the Medicare program. Mr. ORIOL. May we now ask for the record for the information I just requested? Mr. LEVY. Yes. Mr. ORIOL. May I also ask for the record copies of all memoranda or directives issued by Medicare to intermediaries relating to denial of benefits and standards that might apply? Mr. LEVY. We would be happy to submit that, sir. (See letter from Thomas M. Tierney, Director, Bureau of Health Insurance, pp. 656-659.) Mr. ORIOL. Can you describe the appeal procedure which takes place when a nursing home questions retroactive denial of benefits? Mr. LEVY. The nursing home itself actually in accordance with the statute does not have an avenue of repeal. The statute provides that the beneficiary who receives the denial of benefit has the right to appeal his case and then there is a provision, there is a certain monetary limitation Mr. ORIOL. Did you say the patient? Mr. LEVY. The patient. Mr. ORIOL. The patient is the one that has to make that? Mr. LEVY. Yes. This is in accordance with the statute. Mr. ORIOL. Can you give us an estimation how many have made such an appeal within the last 18 months? Mr. LEVY. We would be happy to check that and supply it for the record if we have it. (See letter, pp. 656-657.) Mr. ORIOL. The next witness will inform us that in his experience there has been a marked increase in the number of retroactive denials within the past few months to roughly this: That over the prior year perhaps there were a dozen such denials. Within the last 3 months there have been 50 such denials, 18 of which took place on the same. day. We would like any information that can be provided on the increase in tempo of denials. Mr. LEVY. Yes. (See letter, pp. 657-658.) Mr. ORIOL. Now perhaps you can tell me to your knowledge who in the intermediary agency makes the decision on retroactive denial benefits. Mr. LEVY. The general pattern in the intermediaries is that they have a staff of so-called claims adjudicators, although this title can vary. The cases are reviewed by them. Mr. ORIOL. What constitutes a review? What information do you insist that they have when they make a review? Mr. LEVY. Well, they receive various documentation that the facility submits. Mr. ORIOL. What is that? Mr. LEVY. This could be a description from the attending physician and additional copies of pertinent clinical records from the facility. Mr. ORIOL. What constitutes pertinent clinical records? Mr. LEVY. Again these could be excerpts from the medical records which the facility wishes to use to support the claim or information supplied by the attending physician. Mr. ORIOL. Do you insist that all such pertinent excerpts be provided? Mr. LEVY. Again I would have to say that the area of intermediary review or bills is not my province, I am just speaking as a general observation. Mr. ORIOL. May we have a statement on that? Mr. LEVY. Yes, sir. (See letter, pp. 658–659.) Mr. ORIOL. These questions, by the way, are based on information which caused Senator Harrison Williams of this committee great concern within the past weeks. Mr. LEVY. So I understand. Mr. ORIOL. I believe Senator Williams has a statement to submit for the record. Let me ask you here for your personal opinion on whether something is wrong in the situation I will now read." This relates to a patient who was transferred to the Cranford Health and Extended Care Center, Cranford, N.J., from Elizabeth General Hospital on January 21, 1970, after a hospital stay of 20 days. The diagnosis was diabetes mellitus with insulin shock, arteriosclerotic hypertensive heart disease with pulmonary congestion and left lower lobe pneumonia. The patient was a poorly controlled diabetic with heart failure involving lungs and peripheral circulation to the point of ulcers on both legs. This patient had been admitted a year previously for similar very poor cardiac status. This patient was improving steadily and continuously with a program of medical and skilled nursing care. It was proposed to discharge him by the beginning of April. On March 31 the intermediary cut this patient off retroactive to March 1. Judging by the facts presented here, do you think there is something wrong with the situation? Mr. LEVY. I would like our medical staff to take a look at that and give you a response. Mr. ORIOL. Let me give you another very brief one. This patient was transferred from St. Elizabeths Hospital on January 17, 1970, after a hospital stay of 26 days. Diagnoses was fracture of the right hip. Elevated sed. rate; anemia; advanced ASHD: cystitis, requiring medication. Complete program of rehabilitative physiotherapy. Certified by the attending physician as definitely able to be rehabilitated if continued on skilled nursing care and physical therapy. Approved by Utilization Review Committee for stay until April. Cut off on March 11 retroactive to February 1, allowing only a 14 days' stay. No patient records were requested by the intermediary before making this decision. Do you think that something is wrong with this situation, judging by the information given here? Mr. SHEINBACH. May I ask a question. Did Cranford protest that denial with the intermediary? Mr. ORIOL. I get a definite yes from Dr. Offenkrantz who is our next witness. Dr. Offenkrantz in his statement will also say that they have never once been given an appeal. Excuse me. Dr. OFFENKRANTZ. Once, by protesting to the Senator of the State involved. Mr. LEVY. That is usually a very effective way of getting an appeal. Dr. OFFENKRANTZ. The only way. Mr. ORIOL. May I ask what training, what background Medicare insists that the staff person who works for the intermediary have before they can decide on retroactive denial of benefits? Mr. LEVY. We have indicated to the intermediaries that these cases should be reviewed by a nurse and/or a physician. Mr. ORIOL. You have recommended that? Mr. LEVY. We have indicated this. Mr. ORIOL. How has it been indicated? Mr. LEVY. Again I would have to check with our Division of Intermediary Operations who are directly responsible. Mr. ORIOL. We would like to have anything in writing. Mr. LEVY. Yes. (See letter, p. 659.) Mr. ORIOL. Is it your opinion that it should be a person with medical training? Mr. LEVY. I would think generally a person with some paramedical background on a case where we are as involved the type of case you were indicating. Mr. ORIOL. Can you give us whatever information the Social Security Administration has on how many of those persons do have medical background? Mr. LEVY. Yes, we would be happy to submit this to you, sir. (See letter, p. 656.) Mr. HALAMANDARIS. May I ask, Mr. Levy, that you remain at the table and when Dr. Offenkrantz is finished I would like to ask a few questions. Mr. LEVY. Sure, I would be happy to. Senator Moss. Thank you very much. (Subsequent to the hearing, the following letter was received from Thomas M. Tierney, Director, Bureau of Health Insurance:) DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE, Baltimore, Md., June 3, 1970. DEAR MR. ORIOL: Listed below are answers to several questions you asked about intermediary procedures relating to denial of extended care facility claims because of non-covered level of care. Regarding our review of the numerous denial cases from Cranford Health and Extended Care Center, Cranford, New Jersey, we are near completion of our report and will mail it to you sometime during the week of June 7. The questions you asked, and our information, are as follows: 1. What proportion of the claims reviewers in the intermediaries serving the State of New Jersey and the New York City area have medical or paramedical backgrounds? Hospital Service Plan of New Jersey: 12 lay people. 3 nurses (either practical or registered nurse). 1 M.D. NOTE: Nurses review all extended care facility (ECF) and home health agency (HHA) bills as well as hospital bills for stays over 17 days. The lay people only review hospital bills for stays under 17 days. In any case where a potential denial appears on the short hospital stay cases, the bill must be reviewed by both a nurse and the physician. Associated Hospital Service of New York: 14 lay people. 3 registered nurses. 2 M.D.'s. NOTE: The R.N.'s review all HHA bills. The M.D.'s review all ECF bills plus any questionable hospital bills. The lay people review only hospital bills, but cannot deny any for medical reasons without review by one of the physicians. Prudential: NOTE: All potential denials (i.e., the bill processor believes the bill should be denied for medical reasons) must be reviewed by one of the nurses. Only if she agrees, can the bill be denied. The physician is available for consultation and for contacts with billing physicians. 2. How many retroactive denials (ECF claims) have there been in the last year? In the last 3 months? Information on retroactive claim denials is not available. The most pertinent available data is reflected in the following table which refers to admissions and bill denials. The bill count is substantially higher than the number of beneficiaries admitted to ECF's because in many instances more than one bill is submitted per patient, depending on the length of stay and the particular ECF's billing cycle. During calendar year 1969, there were 517,819 ECF admissions and 1,129,401 processed bills of which 63,756 or 5.6% were denied fully or partially because of a non-covered level of care. For the quarter ending 3/31/70 there were 116,876 admissions, 236,970 bills processed, and 19,390 or 8.2% bill denials. The number of denied bills is a combined total of bills which were denied both fully or partially because all or part of the care was determined to be not covered under the provisions of the law. There is no separate breakout of the full and partial denials. Neither is there a count of how many denials covered a retroactive period. However, there is one category which constitutes from one fourth to almost one third of all denials which would not involve retroactive denials. These involve admission notices submitted under a special assurance of payment privilege granted to ECF's which in the opinion of the intermediary understand and conscientiously apply the level of care guidelines. When such an ECF admits a patient whose prescribed level of care is not clearly covered or noncovered, the ECF submits pertinent medical information with the admission notice to the intermediary. In these cases the intermediary makes a prompt decision on the bases of medical information submitted with the admission notice and notifies the ECF whether the case is covered. Even if the level of care were not covered, payment would be assured until the date the notice is received by the ECF. Thus |