Title XVIII requires that hospitals be reimbursed for their full costs. Dakota Hospital has never, at any time, been reimbursed for its full costs. Medicare has not seen fit to recognize the total financial needs of hospitals. Hospitals have proven that the elderly require considerably more bedside nursing care than the younger patient. The evidence presented in the Federal Register, in no way disproves this fact. I do not consider it advisable to cut the level of health care to the elderly in an attempt to balance the budget, nor is it fair to ask the sick and injured to subsidize Medicare. If we can be of any further help in identifying this most serious problem, please do not hesitate to call on us. Sincerely, COMMISSIONER, D. D. WIGHTMAN, Administrator. ST. GERARD'S COMMUNITY HOSPITAL, Social Security Administration, Department of Health, Education, and Welfare, DEAR COMMISSIONER: I strongly urge you to reconsider your action in removing the 82% Nursing Differential Under Medicare. It affects this hospital quite seriously in that more than 50% of our patient load is Medicare age people. And, we have to "staff" more because of the additional care and attention they require. There are so many things that an 85 year old man can't do for himself that to a much younger person would be quite simple. Besides that, each thing a nurse does for that patient takes much more time. It is difficult to understand the reasoning of your Department and just “what kind" of studies you have carried out to help you with your decisions. It is hoped that you will reconsider this decision. Thank you. GENE HOEFS, Assistant Administrator. [The following letter was forwarded by Congressman Thomas N. Downing of Virginia:] NORTHAMPTON-ACCOMACK MEMORIAL HOSPITAL, Nassawadox, Va., April 30, 1975. COMMISSIONER OF SOCIAL SECURITY, Department of Health, Education, and Welfare, DEAR COMMISSIONER: We are writing to object to the proposed elimination in the Medicare reimbursement formula of the 82% nursing salary cost differential. We object to the exclusion of this cost differential for the following reasons: (1) We will be forced to pass this cost reduction on to other providers which we believe to be directly contrary to the original intent of the Medicare law, which stated, in part, that Medicare was to pay the appropriate costs applicable to the recipients of its program, and was not to pay costs for other patients. (2) The contention that additional persons are now being covered by Medicare is true; however, in our particular case, the impact of people who are covered by Medicare for disability purposes is virtually nil. (3) Based on 1974 costs, the elimination of the 82% nursing salary cost differential will mean that we will have to pass on to other providers of services the sum of $19,562.00 (4) We had a loss during the Year 1974 of the portion of our charges not covered by the Medicare formula, amounting to $199,462.61. In addition, our losses to other providers of care, for which we were reimbursed on a cost formula basis, including the aforementioned Medicare loss, totalled for the Year 1974, an aggregate of $341,840.80, or over $9.00 per patient day. It is inconceivable to us that the Social Security Administration and the Department of Health, Education and Welfare can expect this hospital to continue to render services to the beneficiaries of the Medicare Program at such staggering financial losses. Very truly yours, R. A. CRAMER, Administrator. Hon. AL ULLMAN, [Mailgram] UNIVERSITY OF OREGON HEALTH SCIENCES Center, The Social Security Administration is contemplating the elimination of an allowance for inpatient nursing salary cost differential of at least 8 percent as a reimbursable cost of inpatient hospital nursing care. In recognition of the aboveaverage cost of furnishing care to aged patients, in our opinion this is a valid cost and should not be eliminated. For the University of Oregon Hospitals and Clinics termination of this differential would represent the loss of $35,000 a year in needed service for these patients. We urge you to support and co-sponsor Representative Mark Hannaford's H.R. 7000. MICHAEL D. BAIRD, M.D., Medical Director and Administrator. RICHFIELD, UTAH, June 5, 1975. Re elimination of 81⁄2 percent of nursing differential cost, section 223, category limitsl Hon. DAN ROSTENKOWSKI, Chairman, Subcommittee on Health, House Ways and Mean Committee, Washington, D.C. DEAR REPRESENTATIVE ROSTENKOWSKI: As the administrator of three smal. rural Utah hospitals I am shocked at the attitude expressed by the Secretary of Health, Education and Welfare in interpreting the Congress's intent in providing health care to the aged through the Medicare program. His actions in writing regulations are grossly unfair in their application to providers. We feel this necessitates intervention by elected officials such as your committee to review the overwhelming disregard the Department of Health, Education and Welfare shows for the providers of health care in this country. In establishing specific objections to the specific proposed regulations, I would refer simply to the letter you received from the Utah State Hospital Association dated June 3, 1975 which very adequately describes the unjust action taken by the Secretary. Sincerely, PANGUITCH HOSPITAL. SANPETE VALLEY HOSPITAL. Hon. DAN ROSTENKOWSKI, PAYSON HOSPITAL, Payson, Utah, June 5, 1975. Chairman, Subcommittee on Health, House Ways and Means Committee, Washington, D.C. DEAR REPRESENTATIVE ROSTENKOWSKI: I am writing to you at this time to offer some comments and protests which you possibly could submit to the Subcommittee on Health for the Oversight Hearings being held on June 12, 1975 on Medicare Regulations. I would first like to protest the removal of the 82% nursing differential presently allowed hospitals in the care of medicare patients. As you recall when medicare was initiated, hospitals were allowed a 2% margin. Since that time, supposedly, we are given reasonable costs. However, when you consider all of the items which medicare will not pay for and also consider the fact that our depreciation on equipment and buildings is calculated on the costs with no consideration given for replacement, I think we all agree that the replacement costs have risen so rapidly the past few years that our depreciation, although we may be able to fund it and collect the interest, will not begin to cover the replacement costs either for building or equipment. Also, I have yet to find anyone involved in hospital or nursing administration who does not agree that it costs more to care for patients over age 65. The second item that is a real concern for our hospital are the regulations creating cost categories to limit reimbursement of routine inpatient costs under Section 233 of PL 92-603. While this regulation will discriminate against most of the hospitals in the State of Utah in relation to the hospitals in the surrounding states who operate under similar conditions, it especially discriminates against the hospitals in Utah County. We are listed under category V being a hospital of 89 beds and given limits of $62-$65 per day while hospitals in our neighboring counties to the North, Salt Lake, Davis and Weber, are allowed $86 per day. Our costs are identical to their having to meet the same wage scales and the same costs for materials. I understand that the reason for us being placed in this lower category is because of the lower average wage in Utah County and this wage is affected tremen dously by the fact that BYU, with an enrollment of 25,000 students, lies within our county. All of these students fall into the lower income category. We all recognize that throughout the State of Utah we are penalized because of the greater percentage of large families. It doesn't take a mathematician to calculate that larger families will lower the per capital income and surely this isn't just reason for lowering our reimbursement rate. Our hospital is an 89 bed general hospital owned by Payson City. However, we are serving an area five times as large as the population included in Payson City. Our City government cannot possibly subsidize the operation of our hospital, nor do I feel that we should ask other patients to subsidize the cost of care for medicare patients. I sincerely hope that your committee will give strong consideration to all the protests that have been offered against these regulations. Sincerely, HAROLD HARMER, Administrator. NEW YORK, N. Y., June 5, 1975. Hon. DAN ROSTENKOWSKI, Chairman, Health Subcommittee, House Ways and Means Committee, DEAR SIR: I am writing you in relation to the new Bill to do with the revision of "Medicare Routine Cost Ceiling". The Hospital for Special Surgery is a 200 bed hospital in New York City which has been in existence since 1864. It is also a teaching hospital specializing in complex orthopaedic and rheumatoid diseases. It is affiliated with New York Cornell but has its separate identity in every way and has outstanding educational and research facilities. The Hospital is part of the complex comprising New York Hospital, Memorial Hospital (for cancer), Payne Whitney (for mental diseases) and New York Eye and Ear for its specialty. Therefore, its "routine care" must be intensive and its costs higher than a general hospital in the 100-400 bed Group. For example, 19,000 Medicare patient days at the Hospital will result in a loss of $575,000 in 1975 under its present Classification. The Hospital for Special Surgery, we feel, should be considered in a Group more nearly comparable in nature and intensity of routine services. The Hospital for Special Surgery, as you may know, is internationally famous and has patients that come to it from all over the world as well as from American cities. In these days of struggle and competition for dollars for the deficits incurred by rising costs Voluntary Hospitals, such as Special Surgery, need Medicare's assistance to the Hospital as well as to the patient more than ever. Respectfully yours, ELEANOR LANGLEY PENDLETON STATEMENT BY THE HOSPITAL ASSOCIATION OF PENNSYLVANIA, JAMES R. NEELY, PRESIDENT Encompassing the problems for hospitals in the implementation of the regulations on; 1) Utilization Review, 2) Termination of the 8%% nursing salary differential, 3) Section 223 regulations reducing limits on hospital routine service costs. I. UTILIZATION REVIEW The recent ruling by Judge Julius Hoffman to issue a temporary injunction against the Department of Health, Education and Welfare on the implementation of the utilization review regulations under Medicare/Medicaid published November 29, 1974, causes considerable confusion on how we should comment on these regulations as proposed. However, in the event this ruling is reversed at a later date and regulations of this nature are to be implemented, we suggest the following revisions: 1. While the composition of the Utilization Review Committee requires membership of other health professionals in addition to physicians, the regulations should more clearly state that the ultimate decisions of the Committee should rest with the physician component and be based only on their vote. 2. Additional guidance is needed from HEW regarding the process and definitions to be used in development of admission criteria. Thus far, HEW has provided very minimal support to clarify or provide specific guidance to the health care industry for defining the meaning of the norms, standards and criteria listed in these regulations. We have also found that the use of the fiftieth percentile of the established regional norms is difficult to define and has not proved to be very realistic. It is particularly important to recognize in the regulations that norms will vary within each region by type of institution and services rendered. 3. Selected categories of patients, such as maternity, coronary care and intensive care admissions, should be excluded from the mandatory 24-hour admission review requirement. This is time consuming, costly and unnecessary because the need for acute care for these patients is obvious. 4. Additional clarification is needed on the appellate procedure available to the physician, the hospital and the patient. The regulations as presently written suggest a certain finality within a 48-hour time frame from point of admission. 5. The requirement for physician certification and recertification on the 12th and 18th days should be eliminated completely under a concurrent review system. Under the new system, all patients are reviewed at the time of admission and continually throughout their hospital stay and, therefore, no specific regulations are necessary regarding a mandated review on an established time schedule. II. COMMENTS REGARDING UTILIZATION REVIEW REGULATIONS PERTAINING TO SKILLED NURSING FACILITIES 1. Pg. 41605 of the Federal Register cites Section 1903(g)(1)(c) of the Social Security Act. This section of the law states in part, “. . . who are not themselves directly responsible for the care of the patient or financially interested in any such institution or, except in the case of hospitals, employed by the institution; ." Page 41607, § 405.1137(b)(3) of the regulations states in part ". . . who is employed by or who is financially interested in any skilled nursing facility HAP legal counsel states that the regulations are going far beyond the law by stating any SNF. A specific example of what this will do to an existing functioning utilization review program; two large county facilities (235 beds and 176 beds), 36 miles apart had difficulty in finding physicians who were not involved in the care of the patient to perform the U.R. function. They resolved this by having the employed Medical Director of one facility serve on the U.R. Committee for the other facility. The regulations as written would appear to prohibit this. 2. What is the interpretation of the word, "staff" (committee) in § 405.1137 (b)(1)? Does it mean "staff" of the facility, which ordinarily refers to salaried personnel, or does it mean "staff" as used in the term, "medical staff", which ordinarily refers to those physicians who are authorized by the governing body to treat patients in the facility but who are not employed by the facility? If the meaning is the former, how could there be a "staff committee" when another part of the regulations prohibits using employees? 3. What is the interpretation of the word, "employed" in § 405.1137 (b) (3) ? III. TERMINATION OF THE 8 NURSING SALARY DIFFERENTIAL When Congress established the Medicare program they specifically mandated that costs of the program should be paid by the program and not be subsidized by other programs. Since that time a systematic series of events has subverted the intent of Congress by arbitrarily restricting payments for services rendered Medicare beneficiaries, and causing these costs to be assumed by other patients or third party payors. 54-804 0-75-30 The proposed elimination of the routine nursing salary cost differential is a case in point. A thorough study was undertaken in hospitals nationwide to determine the nature of care required by Medicare patients. The results demonstrated that additional nursing costs and service were required for Medicare patients, and the 82% routine nursing salary cost differential was implemented. Now, without any rationale or supporting data, this cost is no longer recognized as appropriate by the Department of Health, Education and Welfare. Refusing to recognize the cost, however, does not make it disappear. If the Medicare program does not pay for services rendered to its beneficiaries, payment must come from non-Medicare patients. We find this to be inequitable and unjust both to patients who must absorb these costs and to the hospitals who will be criticized for increasing the costs of health care. The explanation given for elimination of the routine nursing salary cost differential appears to be based on HEW's assumption that the Medicare program is too expensive, therefore arbitrary reductions must be made. Again, we emphasize that the original 82% agreement was reached after extensive studies conducted in hospitals throughout the United States with support data which clearly indicated that Medicare patients required this additional level of care. By initiating this action, the Department of Health, Education and Welfare is demonstrating that it can take unilateral action to prohibit payment for whatever justification it chooses to use, regardless of fact. Since the additional costs were proved to exist, demonstrated as necessary in the proper delivery of care to Medicare patients, and accepted by HEW and paid from the inception of the program, we urge that the intent of Congress be implemented through withdrawal of the regulations eliminating the routine nursing salary cost differential. IV. SECTION 223 OF P.L. 92-603 The Schedule of Limits establishing a ceiling for Medicare reimbursement of routine costs at the 80th percentile plus 10% of the median of like hospitals will adversely affect 15 Pennsylvania hospitals according to the government's projection. Our projections indicate that approximately 25 Pennsylvania hospitals will be adversely affected under the new Schedule. This is another example of HEW taking unilateral action designed to reduce the total cost of the Medicare program without any supporting data. Using a formula which is designed to penalize the high-cost hospital is a simplistic approach to a very complex subject. Hospital costs are the result of services rendered to patients. The fact that a given hospital has a high cost does not in itself mean that this institution is inefficient. This matter has been studied extensively, and the primary conclusion has been that the high cost hospital is typically the one providing major referral services of a highly specialized nature designed to serve a broad region, and that since these services are provided, other hospitals do not have to duplicate them. By establishing arbitrary limits in this manner, many of the major referral hospitals, particularly the major teaching institutions in this country, will be forced to reevaluated-and probably drop-some of these referral service centers in order to bring their costs in line with these newly established formulas. Our nation is now in the process of implementing Public Law 93-641, The National Health Planning Resources and Development Act. This Act is designed to implement effective, comprehensive health planning in this country. It is extremely important that financial formulas not be the primary motive for beginning or terminating health services. The regulations as written make it extremely difficult to judge the fairness of the schedules proposed because no rationale for changing the groupings or the ceiling was given. In addition, we have no knowledge of the effect on reimbursement the current ceiling has had. We also anticipate another negative effect of the new schedule. Borrowing will become more difficult because of the uncertainty in the financial community over whether hospitals will be able to generate the funds to repay the loans. This uncertainty will result in a drop in loans given to hospitals, and the loans that are provided will carry higher interest charges. This will simply increase the cost to be borne by all patients. The schedule appears to have a particularly adverse affect on teaching hospitals, which tend to be the high-cost institutions in our country. Again we emphasize |