2. Private patient provides total amount necessary to stay in business.-Medicare/ Medicaid reimbursement criteria in no way assumes any support of the community service of standby loss departments such as the nursery and delivery rooms. This was neatly avoided when hospitals of our size were regulated into discontinuing the use of the combination method of reimbursement and utilizing the Departmental R.C.C. method. This change reduced providers reimbursement generally in the range of 1 to 3 percent. Specifically, at Methodist Hospital the reduced reimbursement for 1974 was $102,311. Since the Medicare/Medicaid type programs do not recognize the necessity of an operating margin nor an obligation to help underwrite certain community service loss departments, what does this mean to the private patient? Unless a hospital chooses to remain stagnant and slowly physically deteriorate through lack of replacement or upgrading of depreciating facilities and equipment, the hospital must charge a dwindling private patient population an ever faster accelerating amount. The following relates the experience of Methodist Hospital along these lines: "In 1965, the last year before the Medicare program began, the private patients which exclusively underwrites certain community service loss departments and furnishes total operating margin requirements represented 93% of the total patient population. By 1975, 10 years later, the private segment was down to 59 percent as illustrated by the table below. "Since the Methodist Hospital is a dynamic, progressive unit and a leader in the health care field, no compromise on quality or quantity of care has been made Thus, as has been necessary for all non-profit hospitals who maintain these standards, we have been forced to increase charges at an astonishingly high rate to compensate for the loss of a large segment of full-charge paying patients." III. EFFECT ON THE PATIENT In addition to the aforementioned effects on hospital costs and reimbursements, government regulations also have an adverse effect on the patient's well beingboth his state of mind and his physical health care. A. State of mind As previously stated, the Medicare/Medicaid patient is confronted with a mindboggling array of forms and regulations during and after his hospital stay. He has been led to believe that Medicare/Medicaid is an all-inclusive, "pie-in-the-sky" type coverage. In reality he is faced with an account balance for which he is personally responsible and specific health and medical care needs which are not covered. Many Medicare beneficiaries, thinking Medicare provides complete coverage, have dropped their private insurance coverage which would have paid for these needs. Deductible, co-insurance, life-time reserve, specific exclusions from coverage, provider, intermediary, carrier, and beneficiary are all perfectly good terms for regulation writers, but are like a different language for the aged Medicare patient or the indigent Medicaid patient. Some physicians do not participate directly in the Medicare/Medicaid programs. Patients utilizing these physicians experience the hazards of attempting to file their own Medicare/Medicaid claims. The difficulties encountered with claims filing have already been enumerated as they relate to a well-trained staff accustomed to processing hundreds of claims each month. Imagine the impact of the solitary inexperienced patient having to accomplish this task. In addition, the patient is required to pay the physician full charges for the services, but reimbursement from the program to the patient constitutes 80 percent of the allowable charges. It has fallen upon the hospitals to fully explain possible non-covered services for which the patient may be required to pay. The list of non-coverages is so massive that a maximum effort by the hospital only leaves the patient confused and uncertain. Under the best of circumstances the patient is unsure of the meaning of all the documents he receives from the hospital and the governmental agencies and intermediaries. Any complications arising in connection with his account or his hospital stay contributes to his apprehension and anxiety. When faced with possible loss of benefits both the patient and his family experience a trauma resulting in disillusionment and distrust of the entire system-government, physician, and hospital. Since these patients and their families frequently turn to our chaplains, social service workers, nursing service personnel, and Medicare Department employees for advice and guidance, the hospital can attest to the reality of the reactions of the patients when these circumstances are encountered. B. Physical health care In an effort to comply with the government regulations (and consequently contain the cost to the patient) physicians are placed in an almost untenable position. On the one hand the physician has the regulatory bodies (UR, PSRO) looking over his shoulder during the entire treatment period threatening to deny payment benefits. On the other hand he has to consider patient welfare, patient's family needs and limitations, and his own protection from possible malpractice litigation (malpractice suits and insurance premiums have been in the limelight recently and everyone is aware of the consequences of the present situation). Patients are forced out of the hospital before fully recovered. These patients frequently go to extended care facilities or nursing homes where regulations may or may not provide for payment coverage. Those patients able to go home but requiring some outside assistance to attend to daily needs are not able to do so because coverage of this nature is virtually non-existent under current regulations. Regardless of where the blame lies, today's society is not equipped, educated or prepared for extensive home recovery for sick or injured family members. It is easy to deny benefits for inpatient hospitalization beyond the acute-care needs, but it is extremely difficult to find regulations providing much needed assistance after those benefits have been denied. Denials of benefits are often based on regulations and so called averages or common practice. These denials are made in a remote location by persons having no direct contact with or observation of the patient. Individual human rights take a back seat to bureaucracy and regulation. SUMMARY In conclusion, Mr. Chairman, we have brought to your attention many of the specific regulatory problems with which we are confronted on a daily bais. We urge that you and your committee relay these facts concerning regulation created costs; inadequate and discriminatory reimbursement formulas; and other deterrents to patient well being to your colleagues in Washington and introduce appropriate legislation. This will relieve the health care field from undue criticism, relieve the private patient from an unjust burden and conform to the intent of Congress to assure quality health care for all American citizens. EXHIBIT A All claims filing and payment requires a certain number of documents. The following comparisions are based on average third party pay accounts and demonstrate the amount of paperwork necessary to support those accounts from the dates of admission through the dates of third party payment posting. Attached are copies of the forms described. Blue Cross account 1. Admission Form. 2. Detailed Final Bill. 3. Claim Form. 4. Final Diagnosis Printout. 5. Payment Listing/Data Card from Blue Cross for Posting Payment. Commercial insurance account 1. Admission Form. 2. Detailed Final Bill. 3. Claim Form. 4. Final Diagnosis Printout. 5. Assignment of Benefits/Authorization to Release Information. 6. Check for Payment from Insurance Company. 7. Receipt for Posting. Medicare account 1. Admission Form. 2. Detailed Final Bill-All Charges. 3. Detailed Final Bill-Part B Charges Only. 4. Medicare Admission Agreement. 5. Medicare Admission Notice/Approval Form (SSA1453-A). 6. Certification/Recertification Form. 7. Final Diagnosis Printout. 8. Claim Form-Part A (SSA1453). 9. Claim Form-Part B (SSA1554). 10. Medicare Account Summary-Calculation of Discount and Payment. 11. Transaction Form-Medicare Contractural Discount. 12. Part A Statistical Log. 13. Part B Statistical Log. 14. Part B Non-Allowable Statistical Log. 15. Part A Payment Listing/Data Card for Payment Posting. 16. Pathology-Part B Payment and Explanation of Benefits.1 STATEMENT OF SISTER MARIE MOORE, R.S.M., ADMINISTRATOR, ST. MARY'S MEMORIAL HOSPITAL, KNOXVILLE, Tenn. 525 Licensed beds; 20,000 annual admissions; 1,430 employees; 134 active medical staff; and 140 courtesy medical staff. I. Strongly urge a moratorium on additional bills relating to National Insurance at this time. During the past 3-4 years, additional regulatory bills have added pressures to the management and delivery of quality health care. Some of these include: Economic stabilization programs-several phases; Public Law 92-603; Public Law 93-641; amendments of medicare regulations; Taft-Hartley amendments; and E.R.I.S.A.-(pension reform). Most of the regulations for Public Law 92-603 and Public Law 93-641 have not yet been completed at this date. I would hope and ask that all of these regulations be in operation at least 2-3 years before additional laws and regulations place more restraints on delivery of health care. Also, some form of evaluation of the present laws regarding their costs for administration and their effect on health care, increase use of services, etc., should be made before new ones are added. II. When National Health Insurance is written, I would recommend the following concepts be considered and included: A. Administration of the system 1. Funds for patient care should be maximized and those for program administration should be minimized. This is not the case with Medicare and Public Law 92-603. 2. The present multiplicity of programs for the indigent, elderly, children and disabled fosters high administrative costs and should give way to a single coordinated program. 3. The program should be structured on the principle that in any system of financing there should be an appropriate sharing of fiscal responsibilities by all parties involved-government, consumers, employers, providers and those serving as private carriers and fiscal intermediaries. 4. Sufficient lead time to develop administrative structures and mechanisms essential to effective and efficient program implementation must be provided. 1 Items 16 to 25 vary from patient to patient depending upon the types of professional services rendered. 5. There should be periodic research and evaluation component to review program operations systemically, and, with active participation by those with responsibilities under the program, formulate recommendations to enhance program effectiveness. (Evaluation of cost of present programs should be done before new ones are added.) 6. Appeals mechanisms should be provided, beginning with an informal basis, advancing to a formal knowledgeable appellate body independent of the regulatory and payment mechanisms, with ultimate access to judicial review explicitly provided. 7. Any national health program should be as specific as practicable and the 'ntent of Congress should be clearly delineated. B. Financing of the NHI 1. A pluralistic health care delivery system based on multiple (private and governmental) methods of financing and administration is needed to instill requisite competition so that the consumer will be the recipient of a more efficient delivery of services. 2. Specific provision should prohibit insurance carriers or state governments from discriminating against any provider or delivery system meeting quality standards for participation in the program. 3. A federally mandated standardized structure for minimum health insurance benefits to assure coverage for consumers and providers of necessary financing. 4. Requirements for some direct payment for services, in form of deductibles and co-insurance, will help to discipline consumer demands on the scarce and costly resources of the health care system. But must be simplified. 5. The program must be financially workable and provide continuation and enhancement of high quality health care. C. Structure of benefits 1. Beneficiary eligibility and coverage should be simple and presumption of eligibility for all people should be considered. 2. There should be an orderly phasing in of mandated benefits according to priorities determined by relationships between the health care needs of the public and resources for financing and supplying services. 3. Claims processing should be simplified. 4. Some catastrophic protection is needed. 5. Meeting needs of those who cannot afford adequate medical care without some assistance must be a top priority. D. Payment to providers/reimbursement 1. Provisions to pay for institutionally based health services should implement the principle that the nation's hospital system must remain viable and selfsupporting, and that rates of payment for institutional services should be uniform in their relationships to costs. 2. The total financial requirements of providers of service must be considered and met under the program. 3. All purchasers of services from a provider should pay the same amount for similar services. 4. Health care institutions must be assured of an adequate, orderly and timely flow of payments for services sensitive to all of the components of direct and indirect costs entering into institutional operation, and sufficient to maintain an adequate working capital and cover credit losses, depreciation, amortization, etc. 5. In the payments to institutional providers, the net costs incurred for educational functions should be explicitly recognized and included. 6. Retrospective rate determination should be continued until prospective systems are thoroughly developed and tested. Incentives for efficient management should be inherent. 7. Techniques which utilize comparisons between providers as a basis for determining rates should be applied judiciously. Also, any rate review body should be required to operate under deadlines, so as to permit providers to more effectively and efficiently operate their institutions. E. Accountability-performance; financial, etc. 1. A continuing refinement of techniques for monitoring the performance of those who are responsible and accountable for the delivery of personal health services. 2. Broadly based informational services are essential to systematic review of professional and institutional performance; institutional participation in these services should be mandatory, and the costs should be included in the charges for patient care. 3. Under a national health insurance program, the responsibilities for delivering personal health services should be linked together in a coherent structure of public accountability for performance of all components in the private and governmental sectors. 4. There should be decentralized administration of the system for financing medical and hospital care. Accountability to the public should be assured by appropriate mechanisms of surveillance at each level of decision-making responsibility in both the private and governmental sectors. The structure of controls must include workable exception and appeal procedures and access to judicial review in order to protect professional and institutional providers from arbitrary and rigid regulations. 5. At the federal level, the funding of governmental obligations under a national health insurance program should be visible, predictable and continuous. F. Delivery of service 1. Public funds should be used to enhance the capabilities of the health care system to respond to the needs of the public for accessible and comprehensive services, rather than employed to enforce into being untested and artificial structures lacking integration with the existing system. 2. Organizational development for health services delivery should proceed on the principle that there are distinct but interpenetrating responsibilities for the professional practice of medicine and for the management of health care institutions. 3. There should be full utilization of the capacity of hospitals to serve as organizational centers of comprehensive health services systems. 4. The special problems in both rural and urban areas require special solutions for which long range commitments to funding and program development are essential. G. Planning 1. A pluralistic health care delivery system based on multiple (private and governmental) methods of financing and administration is needed to instill requisite competition so that the consumer will be the recipient of a more efficient delivery of services. 2. Each licensed hospital should be mandated to prepare and update periodically short-medium, and long-range plans for facility and service development. 3. With the goal of NHI as enhancement of the quality of life or highest level of health available for every person, it is much broader than present dimension of the health care system. Therefore, it requires a permanent and high-level structure for strategic planning, providing balance and continuing participation by consumers, health care professionals and professionals in health services administration. 4. To be effective in the development of comprehensive health services systems, planning must be directed to the service requirements of populations in geographically defined communities and regions. 5. For the implementation of national health policy, comprehensive health planning should be mandatory in health services areas throughout the country, with funding as required from federal and state sources. 6. Planning agencies should be independent bodies; they should have no vested interest in the delivery of services, and they should be insulated from the political processes of government. III. I am not speaking for or against any of the present bills before Congress at this time. STATEMENT OF W. DAVID NAPARSTEK, COUNCIL OF HOME HEALTH AGENCIES AND COMMUNITY HEALTH SERVICES, NATIONAL LEAGUE FOR NURSING Mr. Chairman and distinguished members of the subcommittee on health, my name is J. David Naparstek and I serve as the health planner for the Chattanooga-Hamilton County Health Department. I am testifying in behalf of the National League for Nursing. This council represents 385 agency members, 1,663 individual members, and 1,080 agency enrollees and includes the Chattanooga-Hamilton County Health Department, which is an accredited home health agency. 73-599-76-pt. 268 |