TESTIMONY OF TOBY S. EDELMAN

on behalf of
THE CENTER FOR MEDICARE ADVOCACY, INC. and
THE NATIONAL CITIZENS= COALITION FOR NURSING HOME REFORM 

before the

INTRODUCTION

Good morning. I am Toby Edelman, an attorney with the health care Rights Project of the Center for Medicare Advocacy, Inc. and a member of the Board of Directors of the National Citizens= Coalition for Nursing Home Reform. Thank you for the invitation to testify before the Subcommittee on behalf of Medicare beneficiaries and their advocates.

OVERVIEW
Rules promulgated by the Health Care Financing Administration to implement federal Medicare legislation have helped to assure that Medicare beneficiaries have access to high quality health care. In the area of nursing homes, the nursing home reform law and federal rules have improved aspects of quality of care for residents. In addition, the good care practices mandated by the reform law and rules are cost-effective and save Medicare dollars.

THE PURPOSE OF THE MEDICARE PROGRAM IS TO PROVIDE HEALTH CARE SERVICES TO BENEFICIARIES, NOT PAYMENTS TO HEALTH CARE PROVIDERS.

Congress enacted the Medicare program in order to provide health care benefits to older people and people with disabilities. Courts have repeatedly recognized and stated that the program is designed for beneficiaries, not providers. Home Health Services, Inc. v. Currie, 531 F. Supp. 476, 479 (D.S.C. 1982), aff=d 706 F.2d 497 (4^th Cir. 1983) (A[T]he statute was obviously not enacted primarily for the benefit of the provider of services, but rather for the recipients of medical care benefits.@); Gartman v. Secretary of the United States Department of Health and Human Services, 633 F. Supp. 671, 679 (E.D.N.Y. 1986); Mays v. Hospital Authority of Henry County, 582 F. Supp. 425 (N.D. Ga. 1984).

THE ADMINISTRATIVE RULEMAKING PROCESS ENABLES BENEFICIARIES AS WELL AS HEALTH CARE PROVIDERS TO PRESENT ISSUES AND CONCERNS TO THE HEALTH CARE FINANCING ADMINISTRATION.
Due to the complexity of health care programs and the expertise needed to administer them, Congress delegates responsibility to the Department of Health and Human Services to provide the details for its legislative enactments. The Health Care Financing Administration is the component within the Department that has expertise and is given the authority to implement the Medicare statute. HCFA meets its duty to implement federal legislation, including Medicare, through a public rulemaking process.

While the rulemaking process is lengthy and time-consuming, it is also, at its best, both open and highly democratic. The rulemaking process allows all sectors of the public to express their views and to be heard. Beneficiaries and their advocates, as well as health care providers, participate in the rulemaking process in order to bring their experiences and concerns to the attention of HCFA. Through their comments on rules, they explain the impact of rules on all segments of the public and offer suggestions to improve or strengthen rules to achieve their statutory goals. When HCFA publishes final rules, it is required to respond to these public comments and to explain its rationale in making regulatory decisions. HCFA is publicly accountable for its decisions.

MEDICARE BENEFICIARIES AND THEIR ADVOCATES SEE RULES AND THE RULEMAKING PROCESS AS HELPING TO ASSURE BENEFICIARIES= FULL ACCESS TO HIGH QUALITY HEALTH CARE.
While providers may see various aspects of the laws and rules as burdensome and excessive, beneficiaries often view these same laws and rules quite differently. Beneficiaries see the laws and rules as establishing a system that protects their rights and interests in receiving full access to high quality health care.

NURSING HOME CARE
The nursing home reform law enacted by Congress in December 1987 and its implementation by HCFA are a clear example of how law and regulation work effectively both to establish a high level of care as the federal standard of care and to help improve the actual quality of care that residents receive. I follow nursing home law closely, having spent nearly 25 years advocating on nursing home issues on behalf of residents, particularly Medicare and Medicaid beneficiaries.

The 1987 reform law was the most comprehensive revision to federal nursing home law since the Medicare and Medicaid programs were enacted in the 1960s. Congress based the detailed legislation on a series of hearings in 1987 in the three committees with legislative responsibility for the Medicare and Medicaid programs; on the 1986 report of the Institute of Medicine, Improving the Quality of Care in Nursing Homes, which itself was the result of several years of exhaustive research; and on recommendations of the Campaign for Quality Care, an ad hoc coalition of nursing home provider associations, health care professionals working in nursing homes, and residents= advocates, convened by the National Citizens= Coalition for Nursing Home Reform to identify areas of consensus about how best to translate the IoM=s recommendations into federal law.

The nursing home reform law was based in large part on good practices that had been tried and proven effective in states. Requiring the training of nurse aides (who provide the majority of direct care to residents) and comprehensive assessment and care planning, guaranteeing residents= rights, and authorizing a broad range of intermediate sanctions that survey agencies could impose against facilities that failed to meet care standards were among the innovations of the legislation. These good practices involved both the care practices that nursing homes had developed and used with success as well as survey and enforcement practices that states had successfully used. The reform law made these good practices mandatory for all states and all facilities that chose to participate in the Medicare and Medicaid programs.

The Law and Implementing Regulations Promulgated by HCFA Have Promised Residents High Quality of Care and Have Led to Some Significant Improvements in Care.
The nursing home reform law and regulations and guidelines published by HCFA to implement the law have led to demonstrable improvements in the care that residents receive. While the series of hearings held by Senators Charles Grassley and John Breaux in the Senate Special Committee on Aging, between July 1998 and September 2000, documented that grave and unconscionable problems remain in the quality of care provided by too many nursing homes, the hearings demonstrated that these problems result primarily from the lack of strong public enforcement of the care standards, not from the statutory and regulatory standards themselves.

The Reform Law Required Reduction in the Use of Physical and Chemical Restraints.
The requirement to reduce the use of physical and chemical restraints was based on good care practices in some nursing homes that had reduced or entirely eliminated restraints. At the time the law was enacted, however, a more common view in the nursing profession and the nursing home industry was that restraints would protect residents from injuries and falls. As a consequence, in the late 1980s, an estimated 41% of all residents were physically restrained.

The reform law adopted the best practice from the restraint-free movement (which recognized that restraints in fact caused more injuries to residents than restraint-free care), changed the paradigm of care on a national scale, and led to a reduction in restraint use for residents. The most recent national data indicate that in 1999, 11.2% of residents were restrained. Freeing residents from restraints was documented to be not only better from residents= perspective, but also a less costly way of providing care.

As Joani Latimer, a nursing home residents= advocate, wrote in the Journal of the American Society on Aging, Agood law takes everyone to a higher standard.@ The reform law set a new standard regarding restraints. When the New York-based Commonwealth Fund supported a project several years ago on restraint reduction in nursing homes, project staff asked facility staff why they participated in the research. Many answered that since the reform law now required reduction of restraints and facilities would be evaluated by the survey agency by this different standard of care, they were motivated to learn how to comply with the new rules most effectively. The project gave them that opportunity.

In a report issued this year, the Institute of Medicine attributed the reduction in the use of physical and chemical restraints nationwide, which it called Athe greatest improvement in nursing home care,@ to the requirements of the reform law:

[M]any facilities have successfully reduced the inappropriate use of physical and chemical restraints. The focus of increased regulatory scrutiny on these two areas of care was a major contributing factor in reductions in both of these.

Reducing the use of restraints is good care; it is also a less expensive way to provide care to residents.

The new survey process that was put in place in July 1999 included six new investigative protocols addressing adverse drug reactions, pressure sores/ulcers, hydration, unintended weight loss, dining and food service, and sufficient nursing services. With the restraint experience as a model, it can be hoped and expected that the new regulatory attention on these care areas will also lead to improvements in care outcomes for residents.

The Reform Law Required Standardized Resident Assessments.
Another beneficial aspect of the 1987 reform law was the requirement that all facilities assess residents using a comprehensive, standardized, reproducible assessment instrument. The assessment would identify Apotentially treatable or reversible causes of functional impairment@ and would be used to plan each resident=s care in the individualized care-planning process.

The new resident assessment instrument, known as the minimum data set, or MDS, was developed through an intensive public process that involved all sectors of long-term care and included extensive testing. Although the nursing home reform law explicitly permitted states to develop their own assessment instruments, all states have chosen to use the assessment instrument and process that were developed by HCFA.

An evaluation of the impact of the MDS in 1996 found that the new assessment process improved care outcomes for residents. The study found, among other changes:

Aa 24 percent increase in the accuracy and comprehensiveness of information in the residents= nursing home records.@

Aa 17 percent increase in the number of problems that are addressed in residents= care plans.@

Aa 30 percent increase in the use of hearing aids for persons with hearing difficulty.@

Aa 27 percent increase in the use of behavior management programs for residents who wander, display physical aggression, or resist nursing care.@

AResidents with bowel incontinence were almost twice as likely to receive a toileting program.@

Aa 29 percent decrease in the use of indwelling urinary catheters.@

Aa 28 percent decrease in the proportion of residents with little or no activity.@

The increase in positive care outcomes and decline in negative care outcomes that resulted from implementation of the MDS had a price tag B they saved Medicare dollars. Providing good care to residents and more accurately identifying and meeting residents= care needs also led to reduced instances of hospitalization. Dr. Catherine Hawes reported that introduction of the MDS led to a 26% reduction in hospitalization of residents, resulting in an annual estimated savings to the Medicare program of two billion dollars in hospital costs in 1992 alone.

While use of the MDS led to an increase in positive health outcomes for residents and, at the same time, significantly reduced costs to the Medicare program, administrators and nurses who were questioned about the MDS reported mixed feelings about the new assessment tool. Dr. Charles Phillips, et al., reported that 43% of clinical staff were Aresistant@ to using the MDS and that 68% of administrators complained about the Aexcessive paperwork burden.@

However, a majority of both administrators and nursing directors agreed that the RAI had positive effects on quality: some 59 percent of nursing directors reported that the RAI improved the quality of residents= clinical assessments, 69 percent that their staff=s assessment of residents= functional status improved, and 75 percent acknowledged that the RAI was more useful than the assessment system used in the past. Finally, 78 percent of nurses reported that the RAI improved their ability to detect clinically meaningful changes in resident functioning.

Health care providers may find fault with regulations even when they recognize the improved health care for beneficiaries (and cost savings to the Medicare program) that result.

ACCESS TO CARE
Some of the Medicare regulations that health care providers complain about are intended to assure that beneficiaries receive the health care benefits that Congress mandated.

In the area of home health care, for example, home health agencies have recently been critical of the home health advance beneficiary notice (HHABN) issued by HCFA through a program memorandum. Effective March 1, 2001, HCFA requires home health agencies to use a standard form to notify beneficiaries when they believe that the Medicare program will not cover particular home health benefits. This substantive requirement is not new. In fact, HCFA has required home health agencies to provide beneficiaries with notices under these types of circumstances since at least 1975. The recent program memorandum is different from prior notices only in its specification of the actual language that home health agencies must use in the HHABNs that they give to beneficiaries to advise them of their rights under the Medicare law.

Home health agencies were well-informed in advance that HCFA intended to mandate use of the HHABNs and were fully involved in the process. The model notice was issued through the Paperwork Reduction Act process, which requires public comment and review by the Office of Management and Budget. Beginning in September 1999, transmittals and draft notices were issued and withdrawn several times, in large part, in response to comments from home health agencies. OMB and HCFA held a public hearing in July 2000, in which representatives of the home health industry actively participated and expressed their concerns about the burden imposed by the HHABNs.

Receiving notices about non-coverage of care is critical to beneficiaries, however, and outweighs the minimal burden imposed by using a standard notice form. Beneficiaries who are able and willing to pay for home health services can do so after receiving a notice of non-coverage from their home health agency. If they choose, they can also require their home health provider to submit what is called a Ademand bill@ to the Medicare program. Once the Fiscal Intermediary receives a demand bill, it makes a formal determination whether a particular home health service is covered by the Medicare program.

Beneficiaries who request that a home health agency submit a demand bill are often successful in getting Medicare coverage of their home health services. According to HCFA data, between 1994 and the first three months of 1998, beneficiaries who had demand bills submitted on their behalf were fully or partially successful at the initial claims stage in getting home care coverage in 50.2% of the cases.

Without the HCFA-mandated notice from the provider and the demand bill process that enables them to request that Fiscal Intermediaries review their health care needs, beneficiaries would be unable to pursue their rights to receive their statutory entitlement to home health care under the Medicare program. As the court said in Healey v. Shalala, AA demand bill is the key to the administrative process.@

A second example illustrates the importance of the Medicare program=s providing information to beneficiaries about their rights under the Medicare statute. A recent report by the Office of Inspector General recommends that HCFA Aeducate beneficiaries on the options and consequences of assigned and non-assigned claims and purchasing medical equipment and supplies from participating and non-participating suppliers.@

Under Part B of the Medicare program, suppliers of medical equipment may choose to submit assigned or non-assigned claims. For assigned claims, where suppliers agree to accept the amount allowed by Medicare as payment in full, Medicare pays 80% of the allowed amount and the beneficiary pays 20% of the allowed amount (plus any outstanding deductible). For non-assigned claims, Medicare pays 80% of the allowed amount, but sets no limit on the charge that the supplier may charge the beneficiary. The beneficiary must pay all the supplier=s charges after Medicare pays its amount. Balance billing is the term used to define Athe portion of the charge in excess of the Medicare allowed amount.@ Suppliers may also Aparticipate@ in Medicare or not. Participating suppliers submit assigned claims for all items and services provided to beneficiaries; non-participating suppliers submit either assigned or non-assigned claims to Medicare, decided on a case-by-case basis.

The Inspector General=s recent report indicated that Medicare beneficiaries paid $41 million above the Medicare-allowed amounts for equipment and supplies and that most beneficiaries are unaware of the cost implications of purchasing equipment and supplies from participating and non-participating suppliers. Informing beneficiaries about the cost implications of their purchases could help beneficiaries reduce their health care costs. Since non-participating suppliers are unlikely to advise beneficiaries that they could purchase the same supplies for less money elsewhere, only the government is likely to inform beneficiaries of their rights under the Medicare law.

QUALITY OF HEALTH CARE
Rules and regulatory systems also require and promote high quality of care for beneficiaries. This purpose of the regulatory system is also of critical importance to beneficiaries.

Ms. Latimer reports that regulation is necessary in the health care area, particularly in long-term care, because market forces may be unable, alone, to assure high quality of care for beneficiaries. The factors that may make the marketplace work as a mechanism assuring high quality of products are largely absent in health care. Health care consumers may be inadequately informed; may have little choice among health care providers (because of insurance limitations or provider discrimination against program beneficiaries); and may be required to make decisions at a hurried, stressful time. Moreover, the consequences of their decisions often cannot be reversed. People can choose to buy a different television set if the one they buy breaks. Similar opportunities are unlikely in health care. Health care that is denied or inadequately provided may not be able to be fixed or corrected.

The Institute of Medicine=s 1986 report on nursing home quality rejected reliance solely on market forces to improve the quality of long-term care:

[H]istorical experience hardly supports an optimistic judgment about the effects on quality of care of allowing market forces to exert the primary influence over nursing home behavior. Nursing homes were essentially unregulated in most states prior to the late 1960s. Their operations were governed almost entirely by market forces, and the quality of care was appalling.

As noted above, the IoM=s report was the blueprint for the nursing home reform law that Congress enacted in December 1987. Fifteen years later, the Institute of Medicine reiterated its support for a regulatory model to assure quality in long-term care.

The value of a regulatory system to assure quality of care for nursing home residents was also firmly recognized by the California Supreme Court. In a 1997 decision, the Court recognized that regulatory systems are intended to prevent avoidable bad outcomes for residents: Athe very purpose of the statutory scheme@ is Apreventing injury from occurring.@

Public support for regulation of nursing homes to address quality continues. The New England Journal of Medicine reported this month that a strong majority of Republican voters (57%) and Democratic voters (68%) in 2000 supported increasing regulation of nursing home quality.

Although Medicare beneficiaries and their advocates recognize HCFA=s ability to implement federal legislation in ways that improve access and quality of care, we are concerned that the agency at times defers excessively to the health care providers it regulates.

In the nursing home area, HCFA had difficulty implementing the strong enforcement approach of the nursing home reform law in the face of fierce and aggressive opposition by the nursing home industry. The weak enforcement system initially established by HCFA=s guidelines tolerated high levels of facility non-compliance with federal standards of care, leading to the care crisis that Senator Grassley=s and Senator Breaux=s hearings vividly documented. Strong Congressional oversight and the Administration=s Nursing Home Initiative have now redirected the agency=s approach to enforcement, making it more consistent with the law and more likely to achieve its goals of assuring correction of deficiencies and sustained compliance by facilities. 

While beneficiaries and their advocates would not disagree that HCFA has experienced problems and delays in implementing federal legislation, we would contend that some of the agency=s difficulties result from the increased numbers of mandates from Congress and inadequate resources to meet those mandates. HCFA and the state regulatory agencies need more money to do their jobs well. HCFA should not be asked to do more work with insufficient funding and then be criticized for not doing it well. The agency needs adequate financial support to do its work.

HCFA underwent an extensive reorganization just a few years ago. Another reorganization would consume considerable agency resources without sufficient benefit. Any organizational structure is always inherently artificial to some extent because of the agency=s extensive and overlapping areas of responsibility. What is needed is good coordination within the agency and adequate support for the staff who work there.

Thank you for the opportunity to appear before you today.

© Center for Medicare Advocacy, Inc. 01/08/2010