Appendix 1 Appendix 1 COMMUNICATIONS BETWEEN SENATOR FRANK E. MOSS, REPRESENTATIVE CLAUDE PEPPER, AND DAVID MATHEWS, SECRETARY, DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE ITEM 1. LETTER FROM SENATOR FRANK E. MOSS, CHAIRMAN, SENATE SUBCOMMITTEE ON LONG-TERM CARE, AND REPRESENTATIVE CLAUDE L. PEPPER, CHAIRMAN, HOUSE SUBCOMMITTEE ON HEALTH AND LONG-TERM CARE; TO DAVID MATHEWS, SECRETARY, HEW, DATED DECEMBER 12, 1975 DEAR MR. SECRETARY: On October 28 our Subcommittees on Long-Term Care of our respective Senate and House Committees on Aging held hearings jointly to consider the August 21 regulations proposed by HEW which have the effect of facilitating the participation of for-profit home health agencies in the medicaid program. More than 20 witnesses appeared at the hearing representing almost every major organization in the field of health or care for the aged. Mr. Keith Weikel, director of the Medical Services Administration, appeared on behalf of the Department. In the several weeks that have followed the hearing, we have had the opportunity to examine the testimony we received in some detail. As our transcript clearly shows, the regulations as proposed by HEW in the August 21 Federal Register are not in concert with congressional intent and would clearly have a deleterious effect on the quality of home health care in the United States. One of the most objectionable features of the regulations in our view is the preemption of State law. Under present law, for-profit home health agencies are permitted to participate only if the State acts to permit it. Under the proposed regulations for-profit home health agencies would be allowed to participate unless the State acts to prohibit them. Far from being a matter of slight significance as Mr. Weikel suggested, this shifting of the presumption will place a considerable burden on States and a considerable advantage to proprietors' interests. The hearing also raised serious questions about the Department's rulemaking procedures. Testimony indicates that SRS Administrator James Dwight shared advance drafs of the regulation with Mr. Edward J. Wilsmann, president of Homemakers-Upjohn, more than 1 year prior to their being published in the Federal Register and that significant changes were made at his suggestion. Our transcript indicates that other groups learned of Upjohn's access and participation and requested the same privilege which they were denied by Mr. Dwight. Moreover, there are other serious questions raised as to the manner in which these regulations were promulgated. Mr. Weikel admits that the Department has undertaken no studies of any kind which would support the thesis that opening the medicaid door to for-profit home health agencies is either necessary or beneficial. There is, in short, an absence of any factual base for the action taken by HEW. In addition, we are concerned by recurrent rumors that Mr. John Svahn, the Acting Director of SRS who signed off on the regulations, will soon accept a position with Upjohn. We assume the rumor to be false. We assume the Department acted in good faith throughout. Nevertheless, we are concerned and must share our concerns with you. We are disturbed, in short, about rulemaking apparently done in a policy vacuum. We believe studies of the need for for-profit home health care, and the comparative cost and quality thereof should be undertaken and evaluated before regulations are promulgated, not after they appear in print. It is our hope that you will modify HEW rulemaking procedures and that you will not permit the selective advance distribution of draft regulations to industry representatives while consumers and senior citizens groups are denied access and hearing until the day of official notice. Because of these concerns, we ask that you intervene personally and examine the proposed regulations and their likely effects. We ask that you eliminate language facilitating the entry of for-profit agencies in the home health field. We believe this to be critical. The result of this decision, we believe, will determine whether home health care will continue at a high level or whether, a few years from now, we will be confronted with the problems all too familiar from our nursing home experience. We submit it deserves your most careful consideration. For your assistance we are preparing a detailed issue analysis extracted from our October 28 hearings which you shall receive in the next few days. It indicates a marked consensus that the regulations be either withdrawn or restructured. It also raises serious questions concerning the franchising of home health agencies, which we believe HEW has yet to address. If the Department feels proper authority is lacking to deal with this franchising problem, please advise us and we shall introduce legislation giving you the authority to interevene immediately in what appears to be a misdirection of taxpayers' funds. Additionally, issues were raised concerning possible misuse of title XX funds. Please advise us as well as to the Department's plans for dealing with this problem. Our warm thanks in advance for your assistance. FRANK E. Moss, Chairman, Subcommittee on Long-Term Care. Chairman, House Subcommittee on Health and Long-Term Care. ITEM 2, LETTER AND ENCLOSURE FROM SENATOR FRANK E. MOSS AND REPRESENTATIVE CLAUDE L. PEPPER; TO DAVID MATHEWS, SECRETARY, HEW DEAR MR. SECRETARY: This analysis of issues raised by the August 21, 1975. proposed HEW regulations, mandating the participation of for-profit home health agencies in the medicaid program, is taken from the transcript of our October 28 joint hearing on this subject. The following individuals and/or associations appeared at that hearing. References to these persons or organizations is found throughout this memorandum : -Honorable John B. Martin, American Association of Retired Persons. -Honorable Edward I. Koch, U.S. House of Representatives, 13th District, New York. -Amitai Etzioni, Ph. D., Center for Policy Research, New York, N.Y. -George Warner, M.D., special assistant to the commissioner of the New York State Health Department, Albany, N.Y. -Gerald A. Hawes, audit manager, office of the auditor general, Sacramento, Calif. -Keith Weikel, director, Medical Services Administration, Department of Health, Education, and Welfare. -Edward J. Wilsmann, president, Upjohn Homemakers Home and Health Care Services, Inc., Kalamazoo, Mich. -John Smith, legislative counsel, medical personnel, Personnel Pool of America, Inc., Fort Lauderdale, Fla. -Richard P. Brown, executive vice president, Unihealth Services Corp., New Orleans, La. -Dr. Ellen Winston, National Council for Homemaker-Health Aid Services, New York, N.Y. -Nancy Tigar, assistant director, Council for Home Health Services, National League of Nursing, New York, N.Y. -Eva Reese, director, Visiting Nursing Service of New York. -Helen Rawlinson, director of home care, Blue Cross Association of Greater Philadelphia. -Janet E. Starr, executive director, Coalition of Home Health Services, Syracuse, N.Y. -Mary Ann Pfau, coordinator of ambulatory and home care nursing services of the American Nurses Association, Kansas, City, Mo. -Hadley D. Hall, executive director, San Francisco Home Health Services. -Herb Semmel, Center for Law and Social Policy, Washington, D.C. -Rudolph Dandstedt, assistant to the president, National Council of Senior Citizens, Washington, D.C. -John Byrne, MHA, president of National Association of Home Health Agencies, executive director, Visiting Nursing Association of St. Louis, Mo. -James Terence Prendergast, legislative counsel for Staff Builders, New York, N.Y. -Frederick J. Keeley, Home-Kare, Inc., Campbell, Calif. This memorandum is intended to accompany and augment our letter to you of December 12 in which we expressed serious misgivings about the August 21 regulations and asked that they not be promulgated in their present form. A copy of that letter is attached. We appreciate your attention to these matters. FRANK E. Moss, Chairman, Senate Subcommittee on Long-Term Care. Chairman, House Subcommittee on Health and Long-Term Care. [Enclosure] MEMORANDUM ON ISSUES RELATED TO HEW'S AUGUST 21 PROPOSED REGULATIONS MANDATING THE PARTICIPATION OF FOR-PROFIT HOME HEALTH AGENCIES IN MEDICAID Presented to: Hon. David L. Mathews, Secretary, Department of Health, Education, and Welfare. From: Senator Frank E. Moss, chairman, Subcommittee on Long-Term Care, Senate Special Committee on Aging; Representative Claude L. Pepper, chairman, Subcommittee on Health and Long-Term Care, House Select Committee on Aging I. Do the August 21 proposed HEW regulations pre-empt State licensure laws and mandate the participation of for-profit home health agencies in the medicaid program? Witnesses stated.-Former U.S. Commissioner on Aging, Mr. John Martin, speaking for the American Association of Retired Persons/National Retired Teachers Association, stated his view that the regulations amount to a preemption of State laws. He was supported in this view by Mr. Herbert Semmel of the Center for Law and Social Policy (also representing the National Council of Senior Citizens), Mr. Hadley Hall of San Francisco Home Health Agency, Ms. Eva Reese appearing on behalf of Visiting Nurse Service of New York, Ms. Nancy Tigar of the National League of Nursing, Representative Ed Koch of New York, and four members of the Congressional Subcommittees on LongTerm Care, jointly asembled. The HEW position.-Mr. Keith Weikel, Administrator of the Medical Service Administration, stated: "We believe that these regulations provide the States with an alternative. They can still make the determination that they do not want a nonprofit to participate. We are simply removing the requirement that in order for for-profit agencies to participate they must have licenses." Comment.-Under present regulations, for-profit home health agencies may not participate in medicare and medicaid unless a State has enacted a licensure law. The new regulations would require the participation of for-profit agencies in medicaid unless States specifically act to prohibit this. This is far from a semantic difference; it is far from a clarification of existing law. It represents a major policy change, a policy change which should only be made by Congress if at all. Under the proposed changes, HEW would be giving its support to for-profit home health agencies. The States would be in the difficult position of opposing Federal will by enacting laws of prohibition-an oppressive burden particularly in the smaller States. It is hard to imagine a more complete preemption of State authority. As Mr. Semmel testified, the statement that the proposed regulations leaves States with a choice of whether to license proprietaries or not is at best a "half truth." As Mr. Semmel correctly pointed out, it is important to consider what kind of option is left with the States, under these regulations, or, as he said: "What happens if these regulations become effective January 1, and on January 2, 50 or 100 agencies, proprietary agencies, apply for medicaid certification in a particular state?" If a State does not have a law at that point specifically forbidding proprietary participation-and at this point no State has such a prohibition-then all those applying must be certified under the regulations proposed. In other words, the only way the State could prevent participation of for-profit agencies is if the State legislature happens to be in session and in a full third of the States, the question could not be addressed for minimum of a year and in some cases as much as 2 years. At this point and with succeeding difficulty thereafter, those States wishing to prohibit proprietary involvement would have to mount an affirmative action against an entrenched entity (participating for-profit home health providers). In our opinion, before such a burden is placed on the States, in the words of Representative William Cohen, "There must be a clear and compelling case why our judgment from the Federal point must be superimposed." We have no such indication here. There is firm feeling on this point within the many States because, as Congressman Pepper pointed out: "A State's decision to deny licensure would mean nothing if HEW provides Federal reimbursement regardless of licensure." Such a situation would be intolerable and inconsistent with medicare and medicaid regulations in other contexts (i.e., nursing home care), which specifically require State licensure as a prerequisitie to medicare/medicaid certification. II. Are the proposed regulations in concert with congressional intent? Witnesses stated.-The consensus of the witnesses was that the proposed regulations constitute a major policy change, one that would be outside the realm of administrative discretion. The HEW position. Mr. Weikel stated: "(T)hese regulatory changes are, in a sense, clarification and definition of the services that were mandated by Congress." He added that the authority for the change was derived from the statute authorizing home health services under medicaid. Comment.-We differ sharply with HEW's interpretation. Senator Charles Percy put it well: "I believe the new HEW directive amounts to a major policy decision. A change of this importance should be made by the Congress after appropriate hearings and deliberations. Our experience with proprietary nursing homes suggests that we should move slowly and carefully before endorsing for-profit home health services." Congressman Pepper concurred: "The regulations now proposed are effectively superseding past legislative history and congressional authority. In my judgment, any such change should first be approved by the Congress." In short, the regulations purpose to make a major policy change-a change which is within the realm and responsibility of the Congress. The regulations are in direct contradiction to congressional intent. Any doubts HEW had along these lines should have been resolved by reading the October 28 opening statement of Senator Frank E. Moss, the sponsor of section 224 of Public Law 90248 which authorized payment for home health services under the medicaid program in 1967. III. Did HEW conduct any studies relating to the need to mandate the participation of for-profit home health agencies in medicaid or of the possible effects of such changes? Did HEW conduct any studies of the comparative cost and quality of for-profit home health services? The witnesses stated.-Ellen Winston of the National Council of HomemakerHome Health Aide Services sounded a recurrent theme endorsed by practically everyone at our hearings (except Homemakers-Upjohn) that the proposed regulations "need to be held in abeyance until careful study of their impact not only in quantity but in quality of homemaker-home health service has been made." The HEW position.-The following exchange appears on page 123 of the hearing transcript: Senator Moss: "In my letter of September 3, I asked HEW if any studies had been undertaken about the comparative quality of home health services, nonprofit and for-profit agencies, and I asked also for any information which forms the basis for HEW's decision. I have received no data at all as of this time. Have studies been undertaken, and is there any data you can share with us?" Mr. Weikel: "There are no studies comparing profits and nonprofits that HEW has undertaken." Senator Moss: "Do you intend to make such a study?" Mr. Welkel: "We would intend to monitor if these regulations were put in place." Senator Moss: "Would it not have been more logical to make this study first, rather than authorize the for-profit agencies and then make the study?" Mr. Peter Franklin for HEW: "Mr. Chairman, it is very difficult. There is very little utilization of the proprietaries at this time, and through a pure statistical valid figure, it would be somewhat difficult." Comment. Subsequent to HEW's testimony, Mr. Ed Wilsmann, president of Homemakers-Upjohn, informed the committee that his organization had been in business as a proprietary provider of homemaker-home health services for 10 years, employing 30,000 people out of 200 offices. He volunteered that Upjohn was, in fact, "the largest single supplier of home health care in the Nation." He added, "Homemakers-Upjohn is bigger than all of the nonprofit certified agencies combined. Over 500,000 people sought our services in 1974 when we delivered 17 million hours of needed services in the home." In light of this testimony, the statements of Mr. Weikel and Mr. Franklin (as to why HEW has conducted no studies of any kind) are even more difficult to understand. Some 10 States have enacted laws requiring licensing for-profit home health agencies and thus allowing them to be certified for participation in medicare and/or in medicaid. Homemakers-Upjohn does business in most of these 10 States, thus participating in medicare and medicaid. This being true, it is difficult to understand how HEW could claim difficulty in rounding up an appropriate sample which would yield "statistically valid figures." Viewed in the abstract, the fact that HEW did not undertake a single study of the need for mandating the participation of for-profit home health agencies or the effects of such action is truly incredible. It is difficult to see how HEW could determine what, if any, action was needed. It is impossible for HEW to know if the proposed regulations would accomplish the desired goals. It is very possible that there might have been more appropriate methods to achieve whatever goals HEW had. These lapses by HEW have done little but fuel the notion that HEW exercises its rulemaking authority without adequate information. Senators Moss and Percy, Congressmen Pepper, Heinz, and Koch concurred that if (hypothetically) HEW were to make administrative changes of this serious nature, then it would be incumbent upon HEW to undertake intensive study of the need for and the ramifications of its proposed August 21 regulations. We believe the regulations should be withdrawn until HEW has completed such a study and established a factual base to support its decision. Even then the results of this study should be presented to the Congress for its determination and action along with HEW's recommendations. IV. Is mandating the participation of for-profit home health agencies in medicaid necessary to bring home health services to greater numbers of older Americans who need such help? HEW position.-"Even large voluntary and official home health agencies readily admit they are not meeting the total needs for home care in their urban communities. One visiting nurse association recently reported that it estimated it was reaching between one-fourth and one-fifth of the patients discharged from the hospital and needing home health care services." Mr. Weikel cited U.S. General Accounting Office reports which have indicated a need to make home health care under both medicare and medicaid more generally available to older Americans. |