While I sympathize with the State of Maryland and its financial hardship we must see to it that Medicaid audits are carried out as a cost control. The Federal government yearly contributes more than $14 million to Maryland's Medicaid nursing home program and the Government is entitled to this protection. We also need some better check on duplicate payments between Medicare and Medicaid. Placing the responsibility on the providor to notify the State when he receives duplicate payment is more than ludicrous.

I invite discussion on these questions by our witnesses today.

Senator Moss. We have invited today several distinguished witneses to come before the subcommittee.

I will ask first that the Very Reverend Joseph A. Sellinger, president of Loyola College, Baltimore, Md., chairman of the State of Maryland's board of inquiry convened to investigate the Baltimore salmonella outbreak, to come to the table and if Dr. Tayback, assistant secretary of health and mental hygiene for the State of Maryland. would also come to the table with Reverend Sellinger.

My aide tells me that there may be a delay in Dr. Sellinger's appearance because of some traffic problems. Perhaps we could proceed with you, if you would come forward, Dr. Tayback.

STATEMENT OF MATTHEW L. TAYBACK, M.D., ASSISTANT SECRETARY OF HEALTH AND MENTAL HYGIENE, STATE OF MARYLAND

Dr. TAYBACK. Mr. Chairman, you will recall that 3 or 4 months ago on your invitation, we were asked to appear before you and to answer questions that members of your committee had concerning the event that has now become known as the Gould Convalesarium salmonella outbreak.

At the time that we appeared before you, there were a number of questions which members of the committee had and as a matter of fact, our own inquiry into the matter at that time had not been completed.

We were unable to answer all the questions put before us, but we promised you that certain documents would be presented concerning, (1) issues of safety of water 2 and (2) several other issues. Documents have been sent to your committee in this regard.

In order fully to inquire into the circumstances of this event, the Secretary of Health, Dr. Solomon, convened a special panel consisting of three distinguished members of the Baltimore and Maryland lay and medical community, namely, Father Sellinger, Dr. Rogers, dean of the Johns Hopkins School of Medicine, Dr. Moxley, dean of the University of Maryland School of Medicine.

This was the best manpower to inquire into an event of this type that could be assembled in the State of Maryland. The impartial nature of this group was unquestioned. The special panel had meetings through 2 full days, spent from 2 to 4 weeks considering the evidence accumulated and rendered its report, copies of which have been transmitted to your committee.

2 "Trends in Long-Term Care," Part 9, p. 797.

See app. A, p. 837 "Report of an Investigation into the Salmonella Epidemic at Gould Convalesarium."

41-304-71-pt. 10

In the course of the special panel's inquiry, certain things became apparent and the State department of health and mental hygiene immediately took action in connection therewith.

It became apparent that there seemed not to be a clear focus of departmental authority for the program. Because of the urgency of the matter, the focus of authority has been moved right to the Office of the Secretary. The Secretary of Health, Dr. Solomon, takes a personal interest in these matters and as the Assistant Secretary, I have the full responsibility for what is transpiring now in the nursing homes subsequent to the Gould Convalesarium incident.

So, we have given to the affairs of nursing homes and the patients in nursing homes the highest organizational status within our department. There was evidence fairly early that the inspection system was neither acceptable from a quantitative point of view, nor acceptable from a qualitative point of view.

We have identified four major components to the inspection system: First, inspection of the sanitary nature of the environment of the nursing home; second, the matter of provision of and the supervision of patient care; third, the matter of the preparation of meals in terms of dietary adequacy; and fourth, the safety of the facility from a fire point of view.

Each one of these elements now is defined very carefully in terms of a required inspection system. Four inspections are now required for the environment, one each quarter of the year. Four inspections are now required for patient care. Two inspections are required from the point of view of inquiring into the dietary sufficiency of the meals being prepared for and distributed to patients in our nursing homes. The State fire marshal has the responsibility for the enforcement of the life safety code making recommendations in connection therewith.

We have established a division of licensure where all of the documentation of these various inspections is received. We have now a system where within our own department there will be an internal audit going on in connection with inspections being carried out by sanitarians and nurses.

We have shared with your committee and we have shared with the special panel our concern for what constitutes acceptable medical services, the supervision of medical services within nursing homes.

The inquiry into the Gould incident indicated that at the time of the outbreak there were 146 patients, and these were being treated by 44 physicians. It was relatively impossible to pin down a focus of medical authority within the nursing home, in spite of a requirement that we had which we called the principal physician.

In this regard, quite frankly, we have learned from this incident that what existed before the outbreak is not satisfactory, thus we are moving away from the concept of a principal physician, by and large not paid for this role and not giving the necessary time to it. We are moving from this concept to that of a medical director, who will clearly have the responsibility for the supervision of the medical services within the nursing home, presumably will be stipended for that purpose and can be held to account for that purpose.

In connection with the matter of the physician viewing the body after death, frankly, the circumstances which came to the surface as

a consequence of the Gould Convalesarium event, namely, that physicians do not view the body after death was not known to us prior to the Gould Convalesarium incident.

On inquiring into this situation, we find that the law in Maryland does not require a physician to view the body at death or after death in the certification of the cause of death. The law requires a physician attending an individual to certify to the cause of death, but the requirement as to whether he shall be present at the time of death or subsequent to death and view the body is not in the statutes.

I have discussed this matter very carefully with Dr. Russell Fisher, the medical examiner for the State of Maryland, a man renown in his field throughout our country. It is his feeling that it is not necessary, for responsible and good medical care, that the physician view the body after death, that is, under circumstances where the physician has been attending the individual and is fully familiar with the patient's medical condition and is knowledgeable of the patient's status, particularly when the patient is in a terminal condition.

The concern that you have, Mr. Chairman, and members of the committee, for the utmost of care and attention and generosity of attention from a medical point of view, for the patients in the nursing homes, is a concern with which we feel deeply and we hope, through the innovation of the concept of the medical director, that clear instructions guaranteeing the safety of the patient will come to the fore and be the responsibility of the medical director to carry out.

Nurses in nursing homes, the licensed nurses, the registered nurses, are highly skilled and can perform with safety to patients the task of determining whether the patient is dead or alive.

This delegation of authority is permitted by the law in the State of Maryland and is not viewed as contrary to medical practice by the medical examiner.

In connection with financial matters, the conduct of audits in the State of Maryland has been a fairly overwhelming affair and has been placed in the hands of a contracted service, namely, the Hospital Costs Analysis Service. They have had the responsibility to receive documentation as to the costs of care in hospitals, in nursing homes, and in related institutions giving care both under Medicare and Medicaid. Their first task on receiving these cost statements is to test out the cost statements for arithmetic validity.

After this is done, the cost is then certified to the State as being the cost submitted and correct from an arithmetic point of view. There then follows the task of a field audit. The field audits in the State of Maryland have until recently been concentrated on the field audits of hospital costs. They have been delayed in connection with field audits of nursing home costs because there has been some confusion as to what is the permissible cost structure permitted under Maryland's formula for reimbursement to nursing homes.

In the legislation guiding reimbursement to nursing homes for fiscal 1968, the statement which appears in our legislative statutes indicates that the cost elements shall be those included under Medicare and in addition, shall include a 10-percent profit factor.

There was dispute actually by the State department of health as to whether this was an equitable procedure, namely, to reimburse for all cost elements under Medicare which includes a 7.5-percent

return on investment and a 1.5-percent reimbursement for unaccountable expenses and then on top of that, to also permit a 10-percent profit factor.

This was a matter of discussion between the State department of health, the agency prior to the one with which Dr. Solomon and I are now associated, a matter of discussion between the State department of health, the nursing home operators and the Bureau of the Budget, and the legislature.

It was not reconciled for some time. We take to the position that if there is a 10-percent profit factor, then a 7.5-percent return on capital, plus a 1.5-percent return on other unitemized expenses is not a proper method of reimbursement.

At the present time, we have authorized the Hospital Cost Analysis to undertake audits in the field. They are now in the field undertaking such audits.

I am told by Hospital Cost Analysis even this morning-and there is a representative from the Hospital Cost Analysis here, its director, Mr. Rutherford Holmes-I am told that as of this date, 24 extended care facilities have been audited and these extended care facilities rendering care under Medicare are also rendering care under Medicaid, so that we now have information on these 24 which is pertinent to the Medicaid program.

We are launched into a systematic review by field audit of the costs and the reimbursement of cost in the Medicaid program.

So far as the duplication of payment of Medicare and Medicaid, this comes about as follows: The patient admitted, 65 years of age and over, presumably is eligible for Medicare.

At the time that the patient is admitted, it is not clear whether Medicare will consent to payment or not.

The nursing home operator with the patient undertakes to secure payment from Medicare. Early in the period of care, there is a notion that such payment will not be approved. The patient is also eligible under Medicaid. Then the forms are initiated for payment under Medicaid.

We have a system which will catch up with this on the 21st day or on the 100th day. The 21st day constitutes a time at which the patient must move from 100-percent funding under Medicare to a coinsurance funding. The coinsurance funding for a Medicaid eligible is continued under Medicaid; that is, the coinsurance is under Medicaid while the direct and major payment will be under Medicare.

For the coinsurance to take place under Medicaid, the Medicaid program is informed that Medicare is making payments. This kicks off a signal to our staff who then inquires into whether, in the first 21 days, there is overlap in payment.

Medicare ceases at the 100th day. In this connection, there must then be an application made to Medicaid for reimbursement for care. In its application, it must be noted what has been the prior funding of

care.

If the notation is that it is under Medicare, then this once again signals us to determine whether there is duplication in payment.

I do not make a statement that at this time all of our forces and all of our procedures and all of our methods are of such a nature that

every single feature of this program is in excellent shape. That isn't true.

The committee, I am sure, Mr. Chairman. is learning from these events and we are learning from these events.

In the conduct of field audits, we are going to inform our Hospital Cost Analysis Service to go through a careful audit of all individuals who have died, with a view toward coming to grips with excess payments made to nursing homes for individuals subsequent to death.

I would call to your attention one further action which has ensued as a result of the recent events.

I have the sincere and fundamental point of view that never will elderly people receive the sensitive and generous care of which they are deserving, in a nursing home-it is impossible. There are circumstances where there is no alternative.

One solution for the nursing home situation is to create all possible options of care.

The major option is to have families take care of their elderly people. The care of the elderly when they are disabled is very burdensome. Families break under the burden. The question is: Can we create services and indeed, can we create a reimbursement to families so that they will be able to carry out and carry on longer in the care of the elderly at home than at the present time?

In this connection, our procedure launched since our last hearing with you is as follows:

The medical side of nursing homes has been turned over to a part of our department which we call the Directorate of Services to the Aged and for the Chronically Ill. This department is under Dr. Edyth Schoenrich, who is present here this morning and is eminent in her field, the field of geriatrics and the care of long-term illness.

We have told her, "Develop a spectrum of services, the purpose of which is to preserve as long as possible the care of the elderly in the community and their homes." We have authorized her to establish geriatric screening centers. These centers now exist in Baltimore, in Baltimore County, and we propose to establish them on a regional basis in the other areas of the State of Maryland.

Through these centers will pass elderly individuals and their families. When the elderly individual is being considered for institutionalization, either in nursing homes or in State mental hospitals, the fullest possible examination will be given and all possible options will be entertained before there is a recommendation for such institutionalization. That is one thing.

The second thing. We will develop a more ambitious program of home care. These programs in the State of Maryland and throughout the country are far from what they ought to be.

Third, already we have introduced the concept of temporary care for the elderly. Families will be encouraged to take care of their aged relatives. They will be given respite through weekend care and through up to 15 days of care so that they can carry on with the burden, but in a place that is best for the family and best for the aged individual.

We have one such instance of respite here already underway that is on the Eastern Shore of the State of Maryland at which is known as Pine Bluff Hospital.