HERBERT A. HOLDEN, M.D., FAMILY MEDICAL CENTER, P.S., President, American Academy Of Family Physicians, DEAR MR. HOLDEN: I am writing to you as a member of the Academy's Commission on Health Care Services and also as an academy member practicing in a small rural hospital. My concern is the future of the rural hospital as a health care entity in this country in light of the current squeeze between the high cost of doing business, skyrocketing malpractice insurance rates, the increasing federal requirements for utilization review, and most recently the changes in Title 18 and Title 19 reimbursement schedules which, at least for those of us in the western United States, will mean a change from the PAS 75th percentile on a national basis to the PAS 50th western regional percentile. This latter, of course, means that those in the west who have long had the best national record with regard to utilization will be penalized for doing an effective job. You and I and many of our colleagues have all spent hours in meetings where these types of problems have been discussed in general. Almost always someone mentions the fact that someday we will have to consider how all of this applies to the small hospital. As you know, this very rarely gets done. I am concerned that all of our worries and work with regard to manpower distribution and encouragement of family physicians to seek rural areas in which to practice may well be for naught if the rural hospital continues to be in danger of succumbing. A specific problem, of course, is in the area of malpractice insurance premiums which for the smaller hospitals have gone up 400 to 500 percent this year. Another area is the unilateral determination of utilization standards by governmental committees which as you know frequently are based only on requirements for cost containment and rarely reflect consideration for patient needs. It is difficult for any hospital to absorb these types of losses, (expenses) but for facilities of 50 beds or under, it can be disastrous. I would request, if you concur with my feelings, that you and your board specifically address the problems of the small hospital. As yet, to my knowledge, there has been no opportunity for the small hospital to be represented in testimony before any of the several federal committees concerned with health care services. Perhaps the Academy's Commission on Health Care Services might consider this as a priority mission. My concern, and that of many of our colleagues practicing in rural areas, is that should these trends continue it will not be many years before the rural hospital as we know it will be unable to exist financially and that our efforts in the field of rural health, manpower distribution, and the training of residents in family medicine with interest in rural practice will largely have been wasted. Additionally, and directly, those patients for whom these efforts have been expended stand to lose a critical aspect of health care. I would very much appreciate hearing from you and any thoughts you might have on the subject. Very respectfully yours, PHILIP D. CLEVELAND, M.D. STATEMENT OF RICHARD L. DE SAUSSURE, M.D., PRESIDENT, THE AMERICAN ASSOCIATION OF NEUROLOGICAL SURGEONS The American Association of Neurological Surgeons, an organization of 1,359 members and designated spokesman for the neurosurgical community on national affairs wishes to call to the attention of The Committee on Ways and Means of the United States House of Representatives the present inequities in reimbursement of neurological surgeons occasioned by the current malpractice crisis. In recent months, many neurosurgeons have been requested to pay malpractice insurance premiums 200, 300, or 400 percent higher than those premiums in the preceding year. In some instances the requested increase in premiums have been as high as $30,000.00 per annum. The federal government through the current medicare policy revises physician reimbursement profiles only after an interval of two years time. The current malpractice crisis requires a more rapid and equitable revision of provider profiles for those physicians in the high risk specialties who are facing large increases in their professional liability premiums. There are several ways that the federal government may respond to this crisis. One acceptable method is to allow an emergency increase in provider profiles for those physicians in the high risk specialties. A second measure would be for the federal government to impose limits of recoverability in malpractice actions for those individuals who benefit from federally financed health care programs. It is manifestly unjust to require the private sector of the patient population to finance this increase in malpractice premiums and allow the federally financed sector beneficiaries to obtain unlimited judgements. It is requested that the Committee on Ways and Means of the House consider this appeal and take action appropriate to resolve the current dilemma. AMERICAN DENTAL ASSOCIATION, Washington, D.C., June 11, 1975. Hon. DAN ROSTENKOWSKI, DEAR MR. ROSTENKOWSKI: Attached are the comments of the American Dental Association concerning HEW proposed utilization review regulations and proposed regulations to tie allowable charge increases to economic indices. Our Association continues to have serious concerns with both of these issues. I would appreciate having the attached comments included in the Record of your hearings on these regulations. Sincerely yours, Enclosures. L. M. KENNEDY, D.D.S., President. Hon. J. B. CARDWELL, AMERICAN DENTAL ASSOCIATION, Commissioner of Social Security, Department of Health, Education, and Welfare, Washington, D.C. DEAR MR. COMMISSIONER: The American Dental Association offers these comments on proposed amendments to 20 CFR, Part 405 (Regulations No. 5) of the Social Security Administration as published in the January 9, 1974 issse of the Federal Register. These proposed amendments are mainly directed to evaluating the necessity for admitting Medicare and Medicaid beneficiaries to hospitals and skilled nursing facilities. The Association confines its comments to the proposed revision of paragraphs (a) and (e) of Section 405.1035 and of paragraph (d) of Section 405.1137. In each instance a dentist or physician would have to submit extensive documentation to justify the admission of his patient to a hospital or skilled nursing facility, in advance of the admission date for elective procedures or within "one working day" after the admission date for emergency procedures. The American Dental Association objects to the proposed procedure for reviewing the necessity of hospitalization for Medicare and Medicaid beneficiaries. The Association's objections are based upon the following: (1) unwarranted interference with the patient-doctor relationship and with the professional judgment of dentists and physicians, (2) unjustified diminishment of the rights of Medicare and Medicaid beneficiaries and (3) the absence of any legal basis for the proposed review procedures. The dentist or physician admits a patient to a hospital as an inpatient because the doctor is convinced that treatment of that patient requires the use of services only available at the hospital. The doctor makes his decision to hospitalize, furthermore, only after an intensive scrutiny of his patient's physical and even psychological needs. No review of diagnostic charts and other documents by a committee can substitute for the doctor's intimate awareness of his patient's needs. The proposed amendments are also a distinct threat to the entitlement of Medicaid and Medicare beneficiaries and even to their physical well-being. An elderly patient who is suddenly faced with notice that his hospitalization costs are not covered by his Medicare or Medicaid entitlement is not likely to return to good health as readily as otherwise. Even more critical would be the dilemma faced by the elderly patient when told that if he or she is hospitalized, the Medicare or Medicaid authority may decline to pay the costs of his or her hospitalization. Finally, the statutory basis for the proposed revision of 20 CFR, Part 405, is a 1972 amendment to Section 1861 (k) of the Social Security Act (Medicare). That amendment merely authorizes the HEW Secretary to apply the stricter utilization review requirements of a state's Title XIX program (Medicaid) to Medicare patients. In the opinion of the American Dental Association, no language in Section 1861 (k) or any other provision of Titles XVIII or XIX of the Social Security Act would give legitimacy to the proposed amendments to CFR, Part 405, as set out in the January 9 issue of the Federal Register. Sincerely yours, Mr. JAMES CARDWELL, BERNARD J. CONWAY, Commissioner of Social Security, Department of Health, Education, and Welfare, Washington, D.C. DEAR COMMISSIONER CARDWELL: I am writing to express the views of the American Dental Association in opposition to proposed regulations published in the April 14, 1975 Federal Register which review possible procedures for the determination of reasonable charges for physicians under medicare. Although it is not spelled out in the regulations, we understand that these requirements would also be imposed under the medicaid and maternal and child health programs. The dental profession has a significant concern with procedures for determining reasonable charges under medicare, medicaid, and maternal and child health. We are opposed to the concept of tying allowable reimbursement rates to economic indices. The experiences of practitioners of the various health professions under the price control programs which were in existence from August 1971 until May 1974 point out clearly the inequities of a system which controls fees according to an arbitrary standard. The requirements of the law and the regulations would define reasonable charges as the prevailing charge in a locality as of December 31, 1970, which obviously would be an inappropriate basis five years later, or the prevailing charge level that covers 75% of the customary charges in a locality as of June 30, 1973 with increases allowed on the basis of appropriate economic index data. The regulations as proposed would carry forth this criteria but do not indicate what the appropriate economic indices would be. Although examples are given of how a determination for an allowable increase might be made, there is nothing in the regulations to provide certainty to physicians and dentists as to how in fact these determinations will be made over a course of time. We feel very strongly that the use of a system which is tied to any arbitrary indexing mechanism will result in inequities for dental practitioners. However, to propose a system which does not even make clear for the practitioner what these economic indices will be and how he can determine appropriate fee increases is totally unacceptable. The American Dental Association, we repeat, is opposed to the concept of controls and indexing in these proposee regulations. As we have indicated the Association also has strong concerns with their vagueness. Therefore we urge that implementation of these proposed regulations be held in abeyance. Sincerely yours, LYNDON M. KENNEDY, D.S.C., President. Hon. DAN ROSTENKOWSKI, AMERICAN FORK HOSPITAL, American Fork, Utah, June 10, 1975. Chairman, Subcommittee, Committee on Health, House Ways and Means Committee, Washington, D.C. DEAR REPRESENTATIVE ROSTENKOWSKI: Both regulations to eliminate the 81% nursing differential costs, and to revise the limits on routine inpatient costs deliberately avoid Section 1861(V)(1) of the law, PL 89-97. Regulations creating cost categories to limit reimbursement of routine inpatent costs under Section 223 of PL 92-603 are illegal and illogical. These regulations create artificial cost reimbursement limits according to board categories of hospital size and sub-groups determined by per capita income in the area where the hospital is located and are the only criteria for limiting Medicare payments. Rural hospitals in the same size non-SMSA categories (1 to 169) in surrounding states have these limits: Colorado, Idaho, Wyoming-$75-80, Montana and Arizona-$89-90, New Mexico $67, and Nevada $76-83, contrasted to Utah's $62-65, which is 18.7% lower than the average of these surrounding states. Utah hospitals are unfairly penalized in comparison to other hospitals not because of inefficiency, but because of HEW premises. The cost of supplies, services, and wages faced by Utah hospitals, and comparable sized rural or metropolitan hospitals in neighboring intermountain states, does not vary much. Average daily costs for Utah hospitals are at the norm for both intermountain region and national statistical comparisons maintained by the American Hospital Association, not at the bottom, like the HEW limits. This regulation is unjust as well as in conflict with the intent of Congress. We feel that these regulations are unjust and discriminatory, and they are not in accord with either the law or congressional intent. We ask that the committee institute legislative remedies to correct these injustices and defects, and that the committee urge the secretary of HEW to likewise change and correct the regulations. Your interest and concern in this important matter are greatly appreciated. Sincerely, WAYNE R. McTAGUE, Administrator. STATEMENT OF WILEY M. CRITTENDEN, JR., PRESIDENT, AMERICAN HEALTH CARE ASSOCIATION Mr. Chairman and members of the subcommittee, I am pleased to have this opportunity to comment on the issues which are the subject of your hearing today. The American Health Care Association and its 8,000 member long-term care facilities are committed to the principle of partnership with Federal and state government to help carry out the intent of Congress in the implementation of the Medicare and Medicaid programs. Our largest constituency is the infirm elderly. Our responsibility to that constitutency is to provide quality care in safe surroundings with fair payment for services. It is in the light of this responsibility, and with an understanding of the intent of Congress, that we judge the wisdom of various administrative actions taken by the Department of Health, Education, and Welfare. Herewith our comments on the questions before you today. Utilization review The only legitimate purpose of any program of professional review of services rendered to program beneficiaries is to assure that these individuals are receiving services of high quality in the appropriate setting as determined by the application of sound medical judgment. We believe that on the whole the Congress included adequate flexibility in the statute for the Secretary to provide for or approve a number of alternative arrangements to accomplish effective utilization review of skilled nursing and intermediate care services, including the option of approving state procedures which are superior in their effectiveness. To date, the Department has chosen to follow only the most restrictive course of offering undifferentiated uniform Federal regulations which, if implemented, would inundate physicians and other professional personnel with time-consuming paperwork. In some rural areas where medical personnel are in short supply, the addition of the responsibilities inherent in the UR regulations is a pipe dream. Any attempt to rigidly enforce these requirements in rural areas could very well result in the closing of small hospitals and nursing homes, and the loss of the few doctors who presently practice in these areas. But these problems are not necessarily limited to rural areas. Provisions in these regulations which would prohibit persons employed by or financially interested in a nursing home from serving on a UR committee would, in my judgment, disqualify a substantial number of medical professionals available in many areas. Statutory changes might be necessary in this regard to allow some flexibility in these provisions. We would suggest at a minimum that persons who are private practitioners retained by a facility on a consulting basis be allowed to perform UR functions. Also, the prohibition against financially-interested persons should apply only to those with a substantial financial interest. These changes would greatly ease the process of compliance for many facilities. But even these modifications are of little value in areas where personnel with available time to serve on a UR committee simply do not exist. In those instances, Mr. Chairman, we respectfully suggest that the state be allowed to submit alternative procedures to the Secretary which will satisfy the intent of Congress that a regular program of utilization review be implemented. The statute presently provides the UR procedures established by the state for Title XIX may be adopted with prior approval by the Secretary. AHCA strongly requests, particularly in view of the confusion surrounding the recent court injunction, that DHEW suspend planned implementation of its regulations, and proceed to review and expedite approval of alternative state utilization review procedures for implementation in Title XVIII and XIX. I believe this action can assure that effective and flexible UR procedures remain in effect until such time as PSRO's are able to assume the major responsibility for reviews. The larger question which we must address, Mr. Chairman, is whether present review methods result in better patient care. Our association has long been concerned that review decisions have been based on arbitrarily defined levels of care which have little relation to the total needs of individuals. These criteria have served as devices for manipulating people in and out of the system or downgrading coverage to a less expensive level of service solely on the basis of costs. There is an urgent need for a more scientific approach to inpatient utilization review in long-term care facilities. A number of so-called patient assessment instruments have now been offered, including a system developed by the Harvard Center for Community Health and Medical Care. The latter system includes a user's manual which provides for a comprehensive assessment medical, health, and social factors bearing on an individual's need for health services. I would strongly suggest that this committee give serious consideration to the possibility of requiring, at the appropriate time, the adoption of patient assessment systems in all utilization and medical review of patients receiving long-term care services under Medicare, Medicaid, or a future national health insurance program. Nursing differential As the committee is aware, the Medicare program has been of relatively little consequence in the area of long-term care because of very narrow restrictions on coverage. Therefore, I do not pretend that the removal of the 8%% nursing differential will have a catastrophic impact on nursing homes in this country. At the same time, Mr. Chairman, neither can I accept the prima facie finding of DHEW that this payment differential is no longer justified in any circumstances. While the cost differential attributable to Medicare beneficiaries is more pronounced on the hospital side, there are a number of nursing facilities which provide a rather intensive level of service to a substantial number of Medicare patients. This process has become more common due to earlier discharges from hospitals and more timely approvals of coverage by the intermediaries. Under these circumstances, it is not unusual for Medicare patients to require significantly greater nursing care than the longer term Medicaid and private paying patients. For this reason, Mr. Chairman, we believe that the nursing differential payment should be continued for Medicare-participating facilities which are able to substantiate such a cost differential. We believe that present procedures are adequate to assure that documentation of this cost differential is submitted. Clearly, a blanket discontinuation of the provision would be inequitable under the circumstances I have described. However, I must admit Mr. Chairman, that an issue such as this strikes me as a bit irrelevant to the total issue of provider reimbursement. As our association has said to this Committee on several occasions, we believe that the present cost reimbursement system in Medicare is a farce and a shambles. I strongly urge this Subcommittee to take immediate action, prior to consideration of national health insurance if need be, on prospective payment legislation such as was embodied in H.R. 13641, introduced by Congressman Mills in the last session. We must begin as soon as possible to implement provider reimbursement methods which anticipate the full financial requirements of facilities, and provide suitable incentives for quality care and cost containment. This action should not be delayed until some future time when agreement might be reached on a national health insurance bill. CONCLUSION Mr. Chairman, I appreciate this opportunity to include the views of the American Health Care Association in the record of your hearing. I ask for the careful consideration of our recommendations by the entire subcommittee. |