Dr. WEIKEL. That would be determined in your State by a State agency responsible for administering medicaid.

Now, in some States, the medicaid program in the State passes the responsibility down to the county.

Representative PEPPER. Then it would be up to the State agencies to determine whether they render these services through proprietary agencies or nonprofit agencies?

Dr. WEIKEL. That is correct. It would be the State agency that would work with the survey and certification agency, which usually is not a single State agency, to determine whether or not the home health agencies meet the standards that are laid out in the Federal regulations, or more stringent State regulations.

Representative PEPPER. Are you requiring these agencies that do render these services, let us say the proprietary agencies, to render comprehensive services, or just one or two services that are needed by the elderly?

Dr. WEIKEL. Under the regulations as proposed right now they could render a single service, or they could render comprehensive services.

Representative PEPPER. It would be up to the local State agencies to determine whether they are eligible?

Mr. FRANKLIN. Whether they are eligible, and that the services required by the Federal Government are rendered. For example, in Dade County, Fla., if the wish were that comprehensive services must be provided by all agencies who participate, that is within the prerogative of a State or county to establish such criteria.

NATIONAL PROPRIETARY AGENCIES

Representative PEPPER. I have one other question, you have stated here, I believe, that some of these proprietary agencies are national agencies.

Now, we know the power of a nationwide agency in competition maybe with a local group, maybe a local nonprofit agency, by which most of the services are now rendered.

Would the possibility exist of a strong proprietary agency coming in, let us say to my community, and underbid the nonprofit agencies, until they put them all out of business, and then they would be largely the only one available to render the services, and then be able to do what monopolies usually do, when they get monopolies established, raise the rates again?

Dr. WEIKEL. That is certainly possible under the regulations we propose.

On the other hand, other outcomes are also quite conceivable. Having competition can change the nature of the voluntary nonprofit agency. It may make them more responsible to the needs of the people they serve. We believe that, whether proprietary or nonproprietary, if they are not meeting the needs of the local citizens requiring services for home health, they should try to change that. Sometimes competition will have that effect, so it does not always have a negative effect in terms of running agencies out of business. It may stimulate other agencies, whether they are for profit or nonprofit, to include more services.

ROUND-THE-CLOCK SERVICE

Mr. FRANKLIN. Mr. Chairman, I think it is important to stress that one of the greatest problems of inadequate comprehensive delivery in home health service systems has been the small agencies that can only give service perhaps from 9 to 5, 5 days a week. If people are to be adequately served, home health services cannot be given just on an 8-hour a day, 5 days a week basis, but you must have ability to provide service around the clock, 7 days a week, depending on the nature of the service, so I feel very strongly this would serve as a great impetus to some of the agencies to expand.

I would very much predict that we would have a situation where there are viable proprietary and nonproprietary home health providers, and I think this is the result we are looking forward to, should our regulations be implemented in their current form.

Representative PEPPER. In Britain, under the national program, the national government puts up 60 percent of the money for social programs, and the local council 40 percent, and the administration is at the local level, by a local bureau. In that way, they do have single administrative responsibility, whereas over here, we have a vast pro-. liferation of all sorts of agencies that are trying to render these services.

Would you think it desirable that we try to move toward some sort of a simplification of administration, so that it would be more or less essential authority at the local level, that would have the responsibility for rendering these services, and then we would use the agencies and personnel that would seem appropriate to execute the program? Dr. WEIKEL. That is merely one of the areas we are experimenting with.

We are experimenting with that concept, the community care organizations. We have two or three experiments underway now where they try to package all of the services that are available to maintain an individual in his home, either prior to hospitalization, or at a time after institutionalization. We think that is one of the areas worth exploring, and the results so far are fairly encouraging.

You would then have an administrative structure within the agency where they pull together within the community all of the programs that can provide services, and they try to coordinate them. If the individual only needs meals, they provide his meals. If he needs transportation to go to his physician, as an outpatient, this they provide. Representative PEPPER. You have that sort of program?

Dr. WEIKEL. We have two or three experimental programs where the Department is involved with community care organizations.

H.R. 1354

Representative PEPPER. I would like you to take a look at my bill, H.R. 1354, which provides in substance for the bringing together of the medicare and medicaid programs in the area of providing for the elderly. H.R. 1354 provides that all of the money that is not raised by the present social security tax shall be implemented out of the treasury, so that it will not impose any additional cost. The bill also provides, at the local level, for a council, part of which is elected by

the elderly, part of which is representative of local public authority, thereby creating a representative local body. That body has the responsibility of providing, just as you say, for proper assignment of the elderly. If they need the outpatient care, they are routed to that; if they need home care, they are routed to that line of service; if they need home nursing care, or hospital care, they are directed by the board into the area where they should go.

Dr. WEIKEL. That is precisely the type of experimentation we have underway.

Representative PEPPER. I gladly want to work with you on that, because it seems to me that is something we need to work on.

Let me ask one more question: What can we do to provide comprehensive home care for all of the elderly in the country? If we wanted to provide such a comprehensive system that would provide in every neighborhood of the country outpatient clinical care and other medical care to the elderly who need it, what would we have to do to make that possible?

Dr. WEIKEL. I frankly have not really addressed that before. Representative PEPPER. Would you address to me any suggestions you may have?

THREE OBJECTIVES

My subcommittee right now is working on three objectives; one is comprehensive home care for all of the elderly who need it; the second, multiple-purpose senior centers in every neighborhood for the elderly; and third is, in every neighborhood where it is needed, an outpatient clinic to be available for the elderly.

Those are our three priorities. Will you send us a memorandum on what is necessary to make it possible to do so?

Dr. WEIKEL. Fine. We would be happy to.*

Representative PEPPER. Mr. Halamandaris, do you have any questions?

Mr. HALAMANDARIS. Dr. Weikel, it is nice to have you here today. As you know, we have a great respect for you. We think you are one of the most capable people in HEW. It seems to be one of HEW's schemes to send people that I like up here to help me keep my temper within bounds.

I want to comment that you are doing a wonderful job in the area of medicare and medicaid fraud, and I want to encourage you to do that good work.

This is where we come to the "however," and the other shoe comes down.

Dr. WEIKEL. I was wondering what was coming.

Mr. HALAMANDARIS. I just want you to know that I am delighted to hear there is money now available for home health care.

In the past, there has been a surplus of rhetoric and a shortage of dollars. I wonder if that holds true for medicare. Mr. Sheinbach, is there any possibility that we will see a change with respect to medicare? Will the term "skilled nursing" be opened up and more money be made available for home health under medicare?

See statements of Arthur S. Flemming and Peter Franklin, appendix 4, items 1 and 2, pp. 207 and 209.

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.