Mr. SHEINBACH. Val, you would not want us to do anything illegal, would you? Would you want the executive branch of the Government to issue a regulation that was not in keeping with the statutory restrictions?

Mr. HALAMANDARIS. I am not suggesting anything illegal.

Mr. SHEINBACH. Section 1835 of the medicare law refers in talking about home health services, to a patient who needs skilled nursing

care.

Now, people disagree on what "skilled" means. We have attempted to define skilled nursing care as reasonably as we possibly can. To go beyond that, as the chairman suggests, requires a change in 1835, so the ball is in your court.

Mr. HALAMANDARIS. I could not disagree with you more. The statute simply says skilled nursing care, but leaves the definition to you.

"LANDMARK REGULATIONS"

Mr. FRANKLIN. What we should clarify is something Mr. Sheinbach said earlier, as far as supervision. The Department has issued final regulations on skilled nursing care which we think are landmark regulations, and which we feel will make it much easier to deliver effective home health services under medicare.

Mr. HALAMANDARIS. Thank you for the comment.

Dr. Weikel, you have great respect for the General Accounting Office as I do. You went so far as to quote their report in your testimony. I think you cited three problems-obstacles to making home health care services readily more available. I wonder why you did not take their advice as far as solutions.

Don't you think it occurred to the General Accounting Office to recommend allowing for-profit operators to provide home health services? If this were desirable, why did not the GAO recommend it? If you do not like that question, go back to my first one. What is your legal basis for these regulations?

Dr. WEIKEL. The basis for the regulation is an attempt to expand the availability of services under the program. Including proprietaries is one way of doing that.

Mr. HALAMANDARIS. My question is: What is the genesis of this regulation-who gets the credit, within HEW, for the marvelous idea to mandate the participation of for-profit home health agencies under medicaid?

Dr. WEIKEL. The legislative history, is, as you know, that there is a different requirement in the statute for titles 18 and 19 in terms of home health.

Mr. HALAMANDARIS. Since Senator Moss put the provision into title 19, I could almost give it to you by heart.

Dr. WEIKEL. And as I indicated, the best reading of the statute is that the Congress did not intend to have medicaid restrained by the medicare legislation, or they would have put it in the medicaid legislation at that time as well.

Mr. HALAMANDARIS. What is the specific background for this regulation being advanced at this time? Why the hurry now?

Dr. WEIKEL. First of all, I question whether there was a hurry, since the GAO report came out, I believe, in August.

Mr. HALAMANDARIS. That is another point. You use the GAO report as justification but the GAO does not recommend opening the door to for-profit home health providers.

Dr. WEIKEL. No, they do not, but we would have been severely criticized, and I think rightfully so, for not doing a better job of promoting the expansion of home health services, with our State medicaid program.

This is just one mechanism. We were in the process of changing the regulation to try to make 500 to 700 agencies eligible who were not previously eligible in order to expand the services. They were agencies that were providing only nursing services and those are principally in the rural areas, and to a very large extent are the county health departments. At the same time we were doing that, we chose to include the proprietary providers. As you know, based on the discussion within the Department pertaining to medicare, the determination was made to propose a legislative change in medicare, and you would, therefore, have both programs in line.

GOOD SALESMANSHIP NEEDED

Mr. HALAMANDARIS. My friend, I would say this, with all due respect, if you can convince the public that what we really need to provide home health care services to more Americans is to open medicaid up to for-profit operators, you have a promising future in the sales field. In my judgment, what is necessary is simply to make funds available by broadening the definition of skilled nursing care. I will not argue with you whether it is Congress or the administration that is at fault, for not making funds available. However, if we could make more money available, we will not have difficulty in finding home health agencies to provide the needed services.

Mr. FRANKLIN. We do not feel that way. There were a number of discussions with the GAO, and the Under Secretary at the time directed we explore every possible way of expanding services.

Obviously, one of the items to be considered is what funds are available. We did not feel in regard to the medicaid program that funds availability was restricted.

We further felt it was the capacity of the home health industry had been inadequate, and we wanted to know what the alternatives. are to strengthen the capacity. We concluded the prohibition of proprietaries was unnecessarily restrictive, and we think the proprietaries can be a very important key to the expansion.

I feel it can be done effectively, monitored, and controlled. Mr. HALAMANDARIS. My next question is this: You mentioned that there is a 65-page regulation which is the same standard, and applies to home health agencies equally to nonprofit agencies, for the for-profit and nonprofit.

Dr. WEIKEL. I indicated I did not know what the 65 pages werethe 65 pages of regulation defining nonproprietary. I do not know what the individual was referring to.

Mr. HALAMANDARIS. I understand the reference is to the provider manual for home health agencies participating in the program.

Dr. WEIKEL. If it is, our intention would be to include every requirement on the part of the proprietary agencies that we require for nonproprietaries.

Mr. HALAMANDARIS. Do you propose promulgating new regulations which would apply specifically to for-profit home agencies, or are you saying we will go with what we have?

Dr. WEIKEL. There are new standards in our proposed regulations. In all of the regulations, the standards are spelled out, apply to nonprofit as well as the for-profit agencies.

Mr. HALAMANDARIS. I understand that. I just was asking the question, will there be any new or higher regulations that will apply specifically to for-profit home health agencies?

Dr. WEIKEL. That is a different question. I think you are getting to the potential for overexpansion of services, and one of the things that the Department has under study now is the possibility of asking for certificate-of-need legislation, which would apply specifically to the home health agency field, to prevent the overexpansion. We have been through that in the hospital sector, and we do not want. to go through it with other groups.

STATES RIGHTS ISSUE

Mr. HALAMANDARIS. One last comment. On the States rights issue, your regulations seem to be saying, on one hand, "Don't worry; nothing is changing; we will not preempt the rights of the States." But on the other hand, "These regulations are absolutely necessary because the GAO and others say things must change." You describe this process as a clarification.

Dr. WEIKEL. It clearly is a change. I would not quibble with you, but it does not preempt the need; it does not preempt the State from making the decisions, because the States can make the decisions on the matter of licensing.

One of the things that concerned us is only 11 States have made that decision, and in terms of administering the medicaid program, we clearly have different agencies making the determination on the need of providers. Licensure is handled by different agencies, and in fact, many times by different committees, in the State legislature, and they do not seem to get it together all of the time.

Mr. HALAMANDARIS. Thank you, gentlemen.

Representative PEPPER. Dr. Weikel, Mr. Franklin, all of you ladies. and gentlemen, thank you very much.

Dr. WEIKEL. Thank you.

Representative PEPPER. Our next panel is made up of Edward J. Wilsmann, president, Upjohn Homemakers Home and Health Care Services, Inc., Kalamazoo, Mich.; accompanied by Mr. John Smith, legislative counsel, Medical Personnel Pool of America, Inc., Fort Lauderdale, Fla.; and Richard P. Brown, executive vice president, Unihealth Services Corp., New Orleans, La.

Gentlemen, we are sorry we have to run off, but we have to meet the 5-minute rule.

You can put your whole statement in the record, and then summarize, if you will, your direct statement.

70-652-76-6

STATEMENT OF EDWARD J. WILSMANN, PRESIDENT, UPJOHN HOMEMAKERS HOME AND HEALTH CARE SERVICES, INC., KALAMAZOO, MICH.

Mr. WILSMANN. Thank you, Mr. Chairman.

My statement has been submitted for the record for the subcommittees, and I would like the material and the prepared statement to be made a part of the record.*

Mr. HALAMANDARIS [presiding]. If there is no objection, it will be done.

Mr. WILSMANN. I would like the subcommittee members to pay particular attention to the tables, to the maps, and the case histories. My testimony is an excellent background for the subcommittees, but now let us get down to the issues.

I am prepared to summarize the prepared statement, and that is what I propose to do now.

Speaking specifically to the issue, I would like to discuss and try to clear up some of the obvious misconceptions here today.

Second, because we are interested in case histories, I would like to give you some interesting case histories on home health care specifically-not on nursing homes, not on prepaid health plans, or anything else, but specifically on home health.

First, some ideas of what we feel are definitely needed in the standard, and I would like to talk about cost a little bit, and very definitely speak to fiscal responsibility.

A small bit of background on Upjohn Homemakers. I am Edward J. Wilsmann, president of Homemakers Home and Health Care services, a wholly owned subsidiary of the Upjohn Co., headquartered in Kalamazoo, Mich.

On a Sunday morning, 121⁄2 years ago, I had an auto accident. My wife was killed. I was unconscious, my 7-year-old son was unconscious, and my 4-year-old daughter had a broken collar bone. My two other girls, aged 11 and 9, were unhurt, but frightened.

The hospital assured me that the local Homemaker-Home Health Aide service would send someone out to take care of the girls. But it was Sunday. The agency was closed. You have to have your emergency between the hours of 8 and 5 and Monday through Friday.

Out of that hurt and frustration, I resolved to start an organization that would take care of people at whatever time they needed help, whether it be Sunday or 3 o'clock on a Tuesday morning.

I would also provide whatever service they needed-from a registered nurse to a driver to take a client shopping, when they couldn't do it on their own.

Our pilot project was already operating in Joliet, Ill., when the medicare law was passed in 1965.

Now, 10 years later, we have 200 offices and are the largest single supplier of home health care in the Nation. In fact, with 52,000 employees last year, Homemakers Upjohn is bigger than all of the nonprofit certified agencies combined.

The certified agencies have less than 30,000 employees, and half of those agencies have less than three three or fewer employees. With

*See appendix 4, item 4, p. 226.

the inclusion of Homemakers Upjohn alone, Government programs could almost triple the home health work force.

Over 500,000 people sought our services in 1974 when we delivered 17 million hours of needed services in the home. If a half million people were willing to take us on in 1974, then we figure we must be doing something right.

Why not ask our clients about the quality of service they receive? As you will recall, Congressman Heinz said, "Let us look at the track record." I invite you to look at our track record.

We delivered 17 million hours of care-paid for out of the private pocketbook. We are talking here about free choice. These very people could turn to any one of the nonprofit services, but they chose us.

There is no need to belabor the need for an expanded Governmentsupported home health program. You have already been bombarded with GAO, Comptroller General, HIBAC, AMA, and AHA reports, all detailing the current statutory and regulatory restrictions on home health benefits.

We heard the need for study this morning. We have had 10 years of experience in home health care. It has been studied. They all have studied it. We know that within the 2,248 approved certified agencies within the last year, there were only 20 that happened to be proprietary.

Dr. Weikel just reported 43. I am happy to add a number of those are mine, because we have additional State laws allowing proprietaries in, and we have been certified where it is available to us. But, within what has been delivered, until these regulations came out August 21, that care was delivered by the Queen Mary, when home health care ought to be delivered more appropriately by a tug boat. We have been paying for the Queen Mary when we should not have to.

VARYING LEVELS OF SKILL

The regulations we are talking about here today carry us down through the various levels of skill, which was Senator Moss' intention when he wrote it into the bill initially, recognizing there are various levels of skill, and when we talk about these regs being less stringent than the medicare regulations, this is not so.

What these regs do is describe-they definitely describe-the lesser levels of skill, which are appropriate, and definitely needed for proper delivery of home health care.

Some of the misconceptions we listened to this morning, when Congressman Heinz talked about Upjohn-and I would prefer to call it Homemakers Upjohn, because it was Homemakers long before it was Upjohn-underbid the VNA in his home county for home health care delivery.

There could be nothing further from the truth than that. He was not talking about home health care. He was talking about title XX. There is a big difference. Title XX has just come on the books. That is a homemaker chore service.

What is the VNA bidding on homemaker chore service for?

I am sure if you look at the VNA, they do not have home health aides to deliver home health care. Title XX is not home health.

Another point, I think, has just been clarified through your questions, Mr. Halamandaris, of Dr. Weikel, that the provider manual,