G. N. WILCOX MEMORIAL HOSPITAL & HEAlth Center, Hon. SPARK. M. MATSUNAGA, U.S. House of Representatives, Cannon House Office Building, Washington, D.C. DEAR CONGRESSMAN MATSUNAGA: On behalf of the G. N. Wilcox Memorial Hospital and Health Center and the patients we serve, I urge you to direct the Social Security Administration to withdraw its proposal to terminate the nursing salary cost differential for aged Medicare patients, as noted in 40 Federal Register 14934, April 3, 1975. With the implementation of the Medicare Law, P.L. 89-97, Congress mandated that Medicare costs are to be borne by the Medicare program; Medicare costs are not to be shifted to non-Medicare patients or to providers of health care. By proposing to eliminate the nursing salary cost differential for aged Medicare patients, the Social Security Administration apparently intends to do what Congress has forbidden it to do: it proposes to shift the estimated $120 million of Medicare costs per year to non-Medicare patients or to hospitals. Such a step would be inequitable and unlawful. Non-Medicare patients and the hospitals throughout the country cannot afford to assume the financial burden of the Medicare program. We are opposed to the elimination of the 82% nursing salary cost differential for these reasons: 1. Studies have indicated that aged Medicare patients continue to require disproportionately large amounts of nursing care; they continue to incur greater than average routine nursing costs. 2. Serious financial problems for our hospital may result from the elimination of the differential and affect cost to Medicaid, to other third-party payers, to direct payers; our charge structure and financial solvency; and our ability to provide charity care and continue vital community services. 3. The 1971 regulations initially authorizing the nursing care cost differential (retroactive to July 1, 1969) provided that the Social Security Administration would conduct further studies with respect to nursing care, prior to any revision in the 8% formula. No such studies have been undertaken by the Social Security Administration. We ask your consideration and support in urging the Social Security Administration to withdraw the proposal to terminate the nursing salary cost differential. Sincerely, RICHARD VIERRA, HOSPITAL ASSOCIATION OF HAWAII, President GERALD R. FORD, Washington, D.C. DEAR MR. PRESIDENT: On behalf of Hawaii's hospitals, and the patients they serve, I urge you to direct the Social Security Administration to withdraw its proposal to terminate the nursing salary cost differential for aged Medicare patients. The Congress has mandated that Medicare costs are to be borne by the Medicare program; Medicare costs are not to be shifted to non-Medicare patients or to providers of health care. The Medicare law, PL 89-97, clearly states that "the costs with respect to individuals covered by the [Medicare] insurance programs. . . will not be borne by individuals not so covered . . .” (Section 1861 (v)(1).) By proposing to eliminate the nursing salary cost differential for aged Medicare patients, the Social Security Administration (SSA) apparently intends to do what Congress has expressly forbidden it to do; it proposes to shift, according to its estimates, $120 million of Medicare costs per year to non-Medicare patients or to hospitals. Such a step would be inequitable and unlawful. Non-Medicare patients and the hospitals of this nation can ill afford to assume the financial burden of the Medicare program. SSA has recognized that aged Medicare patients require greater than average amounts of routine nursing care. Indeed, this fact of hospital life has been an important feature of the Medicare program since July 1, 1969. Because "of the above average cost of inpatient routine nursing care" furnished to aged Medicare patients, the Medicare regulations have provided an 8% salary cost differential on routine nursing provided to these patients. What SSA acknowledged in 1971 remains true today. Aged Medicare patients continue to require disproportionately large amounts of nursing care; they continue to incur greater than average routine nursing costs. Yet SSA now proposes to terminate this necessary 8%2% nursing care differential-without apparent benefit of a single study or a single fact which justifies such action. The nursing care differential is now paid only where it is required, that is, to reimburse hospitals for the disporportionately large amounts of routine nursing care required by aged Medicare beneficiaries. If the Medicare program is to function in accordance with intent of Congress and the Medicare law, if Medicare is to pay its rightful share of hospitals costs, then this differential must be retained. When the nursing care differential was first adopted, SSA proposed to undertake further studies "to ascertain what variations in differentials should be established" in the future and "to obtain other pertinent data on nursing care costs" in order to assess the continued appropriateness of the 8% factor. SSA stipulated that such studies would be a condition precedent to any modification of the differential. To our knowledge, SSA has not conducted any such studies. The Hospital Association of Hawaii and the American Hospital Association stand ready to cooperate with SSA in planning and executing such studies. But our members cannot accept elimination of the differential without so much as a single study or other credible evidence showing that it should be modified in any fashion. On behalf of our hospitals, I respectfully urge you, Mr. President, to withdraw this baseless, unlawful proposal. Sincerely, Mr. JOHN M. MARTIN, Jr., WISCONSIN HOSPITAL ASSOCIATION, Chief Counsel, Committee on Ways and Means, Washington, D.C. DEAR MR. MARTIN: This letter is written in connection with the public hearing to be conducted by the Subcommittee on Health of the Committee on Ways and Means on June 12, 1975, relative to selected issues in Medicare policy and program implementation. The Wisconsin Hospital Association represents some 165 general hospitals and related health care institutions in Wisconsin. The Association has a long record of involvement in the development of state and federal legislative/regulatory proposals and we appreciate the opportunity to comment on several issues of current concern to Representative Rostenkowski's Subcommittee. Utilization review procedures, FR, November 29, 1974, and April 1, 1975 The Association understands the desire of the federal government to assure high quality and cost effective hospital services for patients covered under federal programs such as Medicare. There is a point, however, when the increased extent of federal regulatory activities can become both counter productive in terms of their effectiveness and incredibly burdensome to implement at the local hospital level. If they have not already reached this point, the new utilization review procedures, it seems to us, are very close to doing so. Two specific areas of concern may serve to illustrate the problem. The first has to do with the unique problems faced by small, rural hospitals in attempting to comply with this new condition of participation. In the case of such hospitals with extremely small medical staffs (perhaps three to six physicians), time and distance factors related to the delivery of health services, and severe cost restraints it becomes virtually impossible to comply with the letter of these new regulations. On March 25, Secretary Weinberger in announcing a delay to July 1 in the effective date of the regulations specifically recognized the problem of small rural hospitals having difficulty in meeting the requirements of the regulations. In his announcement, the Secretary indicated, "State survey agencies and Departmental personnel will be available to work with the small facilities on these alternatives so that they can develop review systems that comply with the regulations." Unfortunately, to the best of our knowledge, such assistance in the form of consultation, guidelines, suggestions for model review systems, etc., have not been forthcoming. It is our strong suggestion that those who would regulate the health industry do so with considerably greater emphasis on making available meaningful suggestions and assistance for compliance. As you are no doubt aware, the promulgation of the UR regulations occurred simultaneously with the increased pace of development of Professional Standards Review Organizations. We are gratified to see the consistency between the review requirements of the regulations and those contemplated under PSROs. As hospitals make their best efforts to comply with the UR regulations, however, they are handicapped by the lack of clear and unequivocal statements describing the point in time at which PSRO review authority will supercede the requirements of the UR regulations. This uncertainty degenerates into a situation where those who must respond to both sets of requirements see only a confusing bureaucratic struggle between numerous agencies and organizations within HEW. If congressional intent in terms of the review of health care services is to be accomplished, then both the Congress and the administrative branch must commit themselves to clear, orderly, coordinated and workable implementation of these requirements. Termination of 82% nursing differential, FR, April 3, 1975 The decision by the Social Security Administration (SSA) to delete the 8%% nursing salary differential has caused great concern among Wisconsin hospitals and is an action we believe to be contrary to the intent of the original Medicare act. The differential was originally instigated based on a comprehensive study by SSA and we believe to arbitrarily delete it represents an unacceptable deviation from the reasonable cost reimbursement mandated by Congress in 1965. The effect of this action in Wisconsin will be extremely detrimental, especially for those hospitals least able to afford it. Population patterns in Wisconsin are such that elderly patients (those receiving Medicare) are distributed with greater concentration in small communities in the northern part of the state and, in the central core of our larger cities. Hospitals serving these patients thus have a higher Medicare utilization and are more dependent on the Medicare program for paying reasonable cost. The deletion of the differential will badly hurt these institutions and force them to increase charges to their non-governmental patients many of which are poor. We don't believe Congress ever intended for poor, self-pay patients to subsidize Medicare patients and we would request that your Committee take action forcing the Social Security Administration to reconsider the dropping of the 82% nursing salary differential. Section 223 of Public Law 92–603, FR, April 17, 1975 Section 223 of P.L. 92-603 is intended to limit reimbursement under the Medicare Program to inefficient and luxury hospitals, a goal that we in Wisconsin certainly support. One would expect that in carrying out this section, the Social Security Administration would develop a system that would measure the efficiency of hospitals and identify those factors felt to constitute "luxury" services. A system doing this would, in our opinion, carry out the intent of Congress. The system developed by SSA, on the other hand, doesn't even attempt to measure efficiency or to determine what the Medicare Program considers to be services of a luxury nature. The system developed by SSA looks only at costs and assumes that cost is directly related to efficiency and the provision for luxury services. There is obviously some rationale to SSA's system, but we would like to point out that factors such as teaching involvement, labor costs, sophistication of services, low occupancy, and inappropriate groupings of hospitals can also impact substantially on cost comparisons. We don't feel it was ever the intent of Congress to limit reimbursement because of these factors, and we would suggest that your Committee direct SSA to develop regulations for Section 223 carrying out the intent of Congress. Sincerely, WARREN R. VON EHREN, President. Hon. CHARLES J. CARNEY, Washington, D.C. YOUNGSTOWN HOSPITAL ASSOCAITION, DEAR MR. CARNEY: I am writing to you in reference to the possible rescinding of the 8.5% Medicare Nursing Cost Differential for the fiscal year beginning on or after July 1, 1975. This regulation was established in order to provide additional cost differential for nursing care for those patients who were 65 years of age or more in hospitals. I am sure you are well aware that a patient who is 65 years of age or older requires more intensive care than those patients who are not of that age and, in our experience here at The Youngstown Hospital Association, this has proven so. Also, in discussions with administrators of other hospitals, we find that this has been substantiated. On April 3, 1975 the Social Security Administration issued a temporary termination of the Inpatient Routine Nursing Cost Differential with justification that the differential could no longer be justified because of: 1. Expansion of the scope of Medicare coverage to include a significant number of persons under age 65-disabled persons and those with chronic kidney disease. 2. A marked increase in the number of special care units in operation and a substantial shift of the intensely ill Medicare patient from general routine care o these special units. 3. Changes in Medicare cost apportionment requirements, effective January 1, 1972, permitting a separate cost finding for special care units for which the 8 nursing cost differential was not applicable. Under item 3, we agree that Medicare does, in fact, give special reimbursement consideration to its utilization in the special care units and that the current formula for calculating the nursing salary cost differential does not apply to these units. However, this does not support the termination of the nursing salary cost differential because it does not address the central issue-the comparable cost of nursing care in the general routine nursing care areas for patients 65 and over and for those under 65. We here at The Youngstown Hospital Association still realize that the routine care of the elderly patient does require more nursing care than the younger patient. In support of this statement, the elderly patient has a longer stay and requires a longer recovery period, especially if they have had surgery. It takes more time to prepare the elderly patient for diagnostic tests and more time to teach and work with the patient or the family when giving treatments. The patient reacts slower and, therefore, the nurse must spend more time when she gives medicine and treatments. Frequently the elderly patient is not responsible for themselves and if they have to be helped, they require more nursing time to feed, to help out of bed, etc. It is also a known fact that every precaution must be exercised to prevent injyry. It is agreed that there has been an increase in the support that beds allowed for the intensely ill patients and the amount of care needed in these units does differ sufficiently for the elderly patients vs. the younger patients. On May 14, 1975, Representative Mark W. Hannaford introduced H.R. 7000, a bill which would require the Social Security Administration to continue to provide for the allowance for an inpatient routine nursing salary cost differential of at least 82%. We are asking that you, as our representative, support this bill and, if possible, be a co-sponsor to it. Any further information you may desire in reference to the above, Mr. Careny, we will be glad to provide to you. Your cooperation in this matter would be of great assistance to this Association and also to other hospitals in the Youngstown area and in the State of Ohio. Very truly yours, WILLIAM B. ESSON, [Whereupon, at 5:56 p.m., the hearing was adjourned.] о |