[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
        THE NURSING HOME RESIDENT PROTECTION AMENDMENTS OF 1999

=======================================================================

                                HEARING

                               before the

                            SUBCOMMITTEE ON
                         HEALTH AND ENVIRONMENT

                                 of the

                         COMMITTEE ON COMMERCE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS

                             FIRST SESSION

                                   on

                                H.R. 540

                               __________

                           FEBRUARY 11, 1999

                               __________

                            Serial No. 106-1

                               __________

            Printed for the use of the Committee on Commerce


                                


                      U.S. GOVERNMENT PRINTING OFFICE
 55-152CC                   WASHINGTON : 1999
------------------------------------------------------------------------------
                   For sale by the U.S. Government Printing Office
 Superintendent of Documents, Congressional Sales Office, Washington, DC 20402



                         COMMITTEE ON COMMERCE

                     TOM BLILEY, Virginia, Chairman

W.J. ``BILLY'' TAUZIN, Louisiana     JOHN D. DINGELL, Michigan
MICHAEL G. OXLEY, Ohio               HENRY A. WAXMAN, California
MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    RALPH M. HALL, Texas
FRED UPTON, Michigan                 RICK BOUCHER, Virginia
CLIFF STEARNS, Florida               EDOLPHUS TOWNS, New York
PAUL E. GILLMOR, Ohio                FRANK PALLONE, Jr., New Jersey
  Vice Chairman                      SHERROD BROWN, Ohio
JAMES C. GREENWOOD, Pennsylvania     BART GORDON, Tennessee
CHRISTOPHER COX, California          PETER DEUTSCH, Florida
NATHAN DEAL, Georgia                 BOBBY L. RUSH, Illinois
STEVE LARGENT, Oklahoma              ANNA G. ESHOO, California
RICHARD BURR, North Carolina         RON KLINK, Pennsylvania
BRIAN P. BILBRAY, California         BART STUPAK, Michigan
ED WHITFIELD, Kentucky               ELIOT L. ENGEL, New York
GREG GANSKE, Iowa                    THOMAS C. SAWYER, Ohio
CHARLIE NORWOOD, Georgia             ALBERT R. WYNN, Maryland
TOM A. COBURN, Oklahoma              GENE GREEN, Texas
RICK LAZIO, New York                 KAREN McCARTHY, Missouri
BARBARA CUBIN, Wyoming               TED STRICKLAND, Ohio
JAMES E. ROGAN, California           DIANA DeGETTE, Colorado
JOHN SHIMKUS, Illinois               THOMAS M. BARRETT, Wisconsin
HEATHER WILSON, New Mexico           BILL LUTHER, Minnesota
JOHN B. SHADEGG, Arizona             LOIS CAPPS, California
CHARLES W. ``CHIP'' PICKERING, 
Mississippi
VITO FOSSELLA, New York
ROY BLUNT, Missouri
ED BRYANT, Tennessee
ROBERT L. EHRLICH, Jr., Maryland

                   James E. Derderian, Chief of Staff
                   James D. Barnette, General Counsel
      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

                 Subcommittee on Health and Environment

                  MICHAEL BILIRAKIS, Florida, Chairman

FRED UPTON, Michigan                 SHERROD BROWN, Ohio
CLIFF STEARNS, Florida               HENRY A. WAXMAN, California
JAMES C. GREENWOOD, Pennsylvania     FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 PETER DEUTSCH, Florida
RICHARD BURR, North Carolina         BART STUPAK, Michigan
BRIAN P. BILBRAY, California         GENE GREEN, Texas
ED WHITFIELD, Kentucky               TED STRICKLAND, Ohio
GREG GANSKE, Iowa                    DIANA DeGETTE, Colorado
CHARLIE NORWOOD, Georgia             THOMAS M. BARRETT, Wisconsin
TOM A. COBURN, Oklahoma              LOIS CAPPS, California
  Vice Chairman                      RALPH M. HALL, Texas
RICK LAZIO, New York                 EDOLPHUS TOWNS, New York
BARBARA CUBIN, Wyoming               ANNA G. ESHOO, California
JOHN B. SHADEGG, Arizona             JOHN D. DINGELL, Michigan,
CHARLES W. ``CHIP'' PICKERING,         (Ex Officio)
Mississippi
ED BRYANT, Tennessee
TOM BLILEY, Virginia,
  (Ex Officio)

                                  (ii)


                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Davis, Hon. Jim, a Representative in Congress from the State 
      of Florida.................................................    10
    Grant, Robyn, Severns & Bennet...............................    49
    Hash, Hon. Michael, Deputy Administrator, Health Care 
      Financing Administration...................................    17
    Martin, James L., President, 60 Plus.........................    42
    Mongiovi, Nelson, Tampa, Florida.............................    33
    Schild, Kelley, Administrator, Floridean Nursing and 
      Rehabilitation Center, on behalf of the American Health 
      Care Association...........................................    45
    Wegner, Nona Bear, Senior Vice President, The Seniors 
      Coalition..................................................    39
Material submitted for the record by:
    Hash, Hon. Michael, Deputy Administrator, Health Care 
      Financing Administration:
        Letter dated February 25, 1999, to Representative Michael 
          Bilirakis, enclosing response for the record...........    57
        Letter dated February 25, 1999, to Representative Tom 
          Coburn, enclosing response for the record..............    59
        Letter dated February 25, 1999, to Representative Sherrod 
          Brown, enclosing response for the record...............    60
    Martin, James L., President, 60 Plus, letter dated February 
      24, 1999, enclosing response for the record................    62
    National Citizens' Coalition for Nursing Home Reform, letter 
      dated February 22, 1999, enclosing response for the record.    60
    Wegner, Nona Bear, Senior Vice President, The Seniors 
      Coalition, letter dated March 16, 1999, enclosing response 
      for the record.............................................    62

                                 (iii)


        THE NURSING HOME RESIDENT PROTECTION AMENDMENTS OF 1999

                              ----------                              


                      THURSDAY, FEBRUARY 11, 1999

                  House of Representatives,
                             Committee on Commerce,
                    Subcommittee on Health and Environment,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:40 p.m., in 
room 2322, Rayburn House Office Building, Hon. Michael 
Bilirakis (chairman) presiding.
    Members present: Representatives Bilirakis, Stearns, Deal, 
Bilbray, Whitfield, Coburn, Cubin, Shadegg, Bryant, Brown, 
Pallone, Stupak, Barrett, Capps, Eshoo, and Dingell.
    Staff present: Marc Wheat, majority counsel: Tom Giles, 
majority counsel; and John Ford, minority counsel.
    Mr. Bilirakis. I call to order this hearing on H.R. 540, 
the Nursing Home Resident Protection Amendments of 1999.
    The subcommittee's consideration of this legislation today 
is an important step in protecting the health and dignity of 
nursing home residents who rely on Medicaid to meet their long-
term care needs.
    Last year, Congressman Jim Davis and I introduced a similar 
bill in response to a heart-wrenching incident that occurred in 
Tampa, Florida. In April 1998, a Tampa nursing home operated by 
Vencor, Inc., attempted to evict over 50 Medicaid residents 
under the guise of remodeling the facility. Thanks to the quick 
and dedicated action of Nelson and Geri Mongiovi, a court 
halted the evictions. Mr. Mongiovi's mother was one of the 
Medicaid residents targeted for eviction.
    At this time, on behalf of the committee, I'd like to 
express my sympathy and condolences to Mr. and Mrs. Mongiovi on 
the recent loss of that great woman, his mother.
    Unfortunately, similar efforts have also been reported in 
other States. To end this outrageous practice, our bill adopts 
a simple and fair approach. It would extend protections against 
eviction to all individuals who reside in a nursing home at the 
time the facility chooses to withdraw from participation in 
Medicaid. It would not force nursing homes to remain in the 
Medicaid Program, and they may continue to decide which 
residents are admitted to their facility in the future.
    If a nursing home decides to voluntarily withdraw from the 
Medicaid Program, our bill requires the facility to provide 
clear and conspicuous notice to future residents that it does 
not accept Medicaid payments. This protection will prevent 
individuals from entering a facility with the expectation that 
they can remain once they exhaust their personal assets.
    H.R. 540 is not a remedy for the broader problems in our 
Nation's long-term care system. However, it does address one 
serious concern by ensuring that nursing home residents and 
their families will not have to live with the fear of eviction. 
Enactment of this legislation will remove that threat and 
protect these vulnerable individuals.
    I'm pleased we were able to draft a responsible bill that 
enjoys the support of both seniors' advocates and the nursing 
home industry. I particularly appreciate the work of my ranking 
member, Mr. Brown, the full committee's ranking member, Mr. 
Dingell, and their staff in developing this bipartisan 
legislation. I also want to commend my Florida colleagues, 
Congressman Jim Davis, and Senator Bob Graham, for their 
leadership on this issue.
    Finally, I want to thank all of our witnesses for taking 
the time to share their views on H.R. 540 with us. Again, I 
would like to extend a special welcome to Nelson and Geri 
Mongiovi, who traveled from Tampa to join us today.
    I'm hopeful that today's hearing will establish a solid 
record of support for the bill and the momentum necessary to 
enact it into law early this year.
    I look forward to working on a bipartisan basis to secure 
committee approval of the bill when the House returns from the 
President's Day district work period.
    The Chair would now recognize Mr. John Dingell, the ranking 
member of the full committee. Mr. Dingell, do you have an 
opening statement, sir?
    Mr. Dingell. Mr. Chairman, you are most kind. Thank you.
    First, let me commend you for this hearing and for your 
leadership in developing the legislation before us today, the 
Nursing Home Resident Protection Amendments of 1999. I 
particularly want to note and commend the efforts of Mr. Davis 
of Florida, who has done an outstanding job in providing 
leadership in this matter, and also Senator Graham for his 
leadership in the other body and for sponsoring a companion 
piece of legislation.
    I also want to thank all of my other colleagues on this 
committee and elsewhere who have worked to ensure that nursing 
homes can no longer evict residents who depend on Medicaid to 
pay their bills as is prescribed in this legislation. Today's 
hearing is a key step toward ending the outrageous practices of 
some nursing home operators.
    I want to thank you again for holding this hearing. I look 
forward to working with you throughout the rest of the 
legislative process.
    The bill was drafted in response to a nursing home vendor 
that began to selectively evict Medicaid residents from a Tampa 
facility last April. The State of Florida, the Health Care 
Financing Administration, the Senior Citizen Advocacy Committee 
all responded and the facility agreed to halt this 
discriminatory and evil practice. All Medicaid residents who 
had been displaced were returned to the nursing home.
    Federal legislation is needed today to ensure that all 1.6 
million elderly and disabled nursing home residents across the 
country are protected from similar egregious and outrageous 
evictions in the future. Currently Medicare and Medicaid 
nursing home residents are protected under the Omnibus Budget 
Reconciliation Act of 1987 against inappropriate transfers and 
evictions. Medicaid residents, however, are not protected from 
eviction if a nursing home voluntarily withdraws from the 
Medicaid Program.
    Protections for Medicaid residents are essential because 
two-thirds of the nursing home residents receive Medicaid 
benefits. Many seniors who are not eligible for Medicaid when 
they enter nursing homes will become eligible during their 
residency. Medicare does not cover custodial care and only pays 
for a number of limited days of skilled nursing care. So 
oftentimes, seniors must pay their own bills. Nearly 90 percent 
of the residents who begin their stay as private payers are 
expected to exhaust their personal resources within 1 year. All 
but the wealthiest seniors live with the possibility of 
eviction from their nursing homes should the facility withdraw 
from the Medicaid Program.
    This bill will end the fear and uncertainty based on 
payment status. All current nursing home residents, both those 
who are Medicaid-eligible at present and those who become 
eligible during their stay would be protected.
    I am pleased that my colleagues and the majority of the 
committee, and my colleagues on the minority have worked 
together so well and that my colleagues in the majority have 
shown that they can react so quickly to a legitimate need. I 
hope are they similarly expeditious in enacting strong, 
comprehensive protections for patients enrolled in managed care 
organizations.
    Mr. Chairman, I again commend you and I thank you.
    [The prepared statement of Hon. John D. Dingell follows:]
    Prepared Statement of Hon. John D. Dingell, a Representative in 
                  Congress from the State of Michigan
    Mr. Chairman, thank you for your leadership in developing the 
legislation before us today, the Nursing Home Resident Protection 
Amendments of 1999. I particularly want to note the efforts of Mr. 
Davis, and I commend Senator Graham for his leadership in the other 
body and for sponsoring a companion bill. I also want to thank my other 
friends and colleagues who have given their time and support to this 
matter.
    This bill would ensure that nursing homes can no longer evict 
residents who depend on Medicaid to pay their bills. Today's hearing is 
a key step toward ending the outrageous practices of some nursing home 
operators. I thank our subcommittee chairman for holding this hearing, 
and I look forward to working with him throughout the rest of the 
legislative process.
    This bill was drafted in response to a nursing home vendor that 
began selectively evicting Medicaid residents from a Tampa facility 
last April. The State of Florida, the Health Care Financing 
Administration, and the senior citizen advocacy community all 
responded, and the facility agreed to halt this discriminatory 
practice. All Medicaid residents who had been displaced were returned 
to the nursing home.
    Federal legislation is needed to ensure that all 1.6 million 
elderly and disabled nursing home residents across the country are 
protected from similarly egregious evictions in the future. Currently, 
Medicare and Medicaid nursing home residents are protected under the 
Omnibus Budget Reconciliation Act of 1987 against inappropriate 
transfers and evictions. Medicaid residents, however, are not protected 
from eviction if a nursing home voluntarily withdraws from the Medicaid 
program.
    Protections for Medicaid residents are essential because two-thirds 
of all nursing home residents receive Medicaid benefits. Many seniors 
who are not eligible for Medicaid when they enter a nursing home will 
become eligible during their residency. Medicare does not cover 
custodial care and only pays for a limited number of days of skilled 
nursing care, so oftentimes seniors must pay their own bills. Nearly 
90% of residents who begin their stay as private payers are expected to 
exhaust their personal resources within one year. All but the 
wealthiest seniors live with the possibility of eviction from their 
nursing home should the facility withdraw from the Medicaid program.
    This bill would end the fear and uncertainty of eviction based on 
payment status. All current nursing home residents, both those who are 
Medicaid-eligible at present and those who become eligible during their 
stay, would be protected. If a facility voluntarily withdrew from the 
Medicaid program, the facility would be required to continue to care 
for all residents admitted to the home up until that date. Residents 
who entered the home after the facility withdrew from the program would 
be provided with clear and adequate notice explaining that the home 
does not accept Medicaid. New residents would be able to prepare for 
alternative arrangements should they became eligible for Medicaid in 
the future.
    I am pleased that my colleagues in the majority on this committee 
have shown that they can move quickly to enact protections for nursing 
home residents. I hope that they are similarly expeditious in enacting 
strong, comprehensive protections for patients enrolled in managed care 
organizations.

    Mr. Bilirakis. I thank the gentleman so very much.
    The Chair now recognizes the ranking member of the 
subcommittee, Mr. Brown.
    Mr. Brown. I'd like to thank Chairman Bilirakis for 
scheduling today's hearing and commend my colleague, Jim Davis 
of Florida, for introducing this important and timely 
legislation that will be the focus of our discussion today.
    H.R. 540, the Nursing Home Resident Protection Amendments 
of 1999 closes a loophole in the Federal protections 
established to ensure fair treatment of nursing home residents. 
Under current law, Medicare and Medicaid nursing home residents 
are protected from inappropriate evictions and transfers. 
However, Medicaid and pre-Medicaid nursing home residents lose 
this protection if a nursing home voluntarily withdraws from 
the Medicaid Program.
    This bill eliminates that exception and says that a nursing 
home cannot retrospectively imply a change in policy in order 
to selectively evict or transfer residents undercutting the 
care they and their families have come to trust.
    The tragic situation H.R. 540 would prohibit is not 
theoretical, it's real. As Mr. Dingell and Mr. Bilirakis said, 
last April a nursing home in Tampa began selectively evicting 
Medicaid residents under the cover of its decision to stop 
accepting reimbursement from Medicaid. Long-term care typically 
means continuity, but not in this case. Fortunately, this 
particular vendor listened to the many voices condemning its 
actions and invited the evicted residents to return to the 
facility.
    While I am grateful to the advocates inside and outside of 
government that helped bring about this reversal, notably Mr. 
Davis and Mr. Bilirakis, the final outcome does not erase the 
trauma that Medicare beneficiaries and their families 
experienced. Unfortunately, what happened in Tampa may not be 
an isolated case. Nursing homes in Florida and Indiana made the 
headlines but we simply don't know how many other facilities 
evicted or transferred Medicaid beneficiaries under 
objectionable pretenses but managed to avoid the spotlight.
    It's our job now to eliminate any gray area and preempt 
future tragedies. There are 1.6 million elderly and disabled 
nursing home residents in the United States. Over 1 million of 
them, about 70 percent, are Medicaid beneficiaries, numerous 
others are pre-Medicaid. That is, they are exhausting their 
limited assets to finance their nursing home care and will 
ultimately qualify for Medicaid coverage. With this bill, we 
can assure that these individuals' nursing home will not use a 
loophole in the law to abandon them.
    I'm proud to be an original co-sponsor of H.R. 540. I'm 
especially pleased the subcommittee was so quick to act on this 
issue in keeping with its leading responsibility for health 
care policy. I hope, Mr. Chairman, that this constructive, 
bipartisan initiative is the first of many this year.
    Mr. Bilirakis. I trust.
    The gentlelady from Wyoming, Ms. Cubin, for an opening 
statement.
    Ms. Cubin. Mr. Chairman, I have a written opening statement 
but I'll just submit it for the record.
    [The prepared statement of Hon. Barbara Cubin follows:]
Prepared Statement of Hon. Barbara Cubin, a Representative in Congress 
                       from the State of Wyoming
    Like every member of this subcommittee, I am very concerned about 
the quality of care afforded to our senior and disabled citizens. Very 
often, these are some of the most vulnerable members of our society. We 
must work to ensure that their rights are protected, while preserving 
the rights of the nursing home owners.
    As a general rule, I favor limiting the role of government in our 
lives. However, I recognize there are areas where government must be 
involved.
    The events at the Rehabilitation and Healthcare Center of Tampa are 
very disturbing to me. I am particularly concerned that Medicaid 
recipients at the center were targeted for eviction. It is also 
disturbing that these residents were not told the real reason they were 
being removed from the center.
    Before tackling this issue, it is vital to know all the facts. I 
look forward to hearing your testimony today, and I appreciate the 
unique perspective each of you will be able to add to this debate.

    Mr. Bilirakis. Thank you.
    Mr. Bilbray, do you have an opening statement?
    Mr. Bilbray. Mr. Chairman, I'd just like to congratulate 
you, the ranking member and the individuals who have drafted 
this law.
    I'd also like to personally thank you for being willing to 
find answers in the west that may be applicable to the problems 
that we find back here in the east, and most importantly, 
admitting that it may have come from the west and may be a good 
idea.
    I think in all reality, I'd like to echo the ranking 
member's statement that I hope this is a good example of the 
type of bipartisan effort. We address a problem, we don't 
demagogue it, we don't try to take political advantage; we just 
try to serve the public and get the job done. I think this 
piece of legislation does it.
    It's not punitive against nursing homes. Let me just say, I 
like it because it really is not punitive against nursing 
homes; it just sends a clear signal to them where the 
boundaries are of proper behavior in a civilized society and 
makes it clear. I hope we see this not just move through this 
committee but make it to the House, get to the Senate and see 
the President's signature on it as soon as possible.
    I yield, Mr. Chairman.
    Mr. Bilirakis. Thank you.
    Mr. Stupak, do you have an opening statement?
    Mr. Stupak. Mr. Chairman, I just want to thank you and Mr. 
Davis and others for bringing this bill forward. I'm an 
original co-sponsor and we'll do what we can to get it passed. 
Thanks again, Mr. Davis, for bringing it to our attention.
    Mr. Bilirakis. Thank you.
    Mr. Deal, do you have an opening statement?
    Mr. Deal. Thank you, Mr. Chairman.
    I appreciate your holding the hearing. I've read the 
statements of the witnesses. I think it's an issue that needs 
to be addressed and I will not have any further opening 
statement.
    Mr. Bilirakis. Thank you.
    Mr. Pallone, do you have an opening statement?
    Mr. Pallone. Mr. Chairman, let me submit my statement for 
the record in full, if I could.
    I just wanted to say again that I think the specific issue 
at hand, protecting Medicaid and likely Medicaid nursing home 
patients from being evicted from nursing homes, is one that 
this Congress could readily fix by passing this bill. 
Therefore, we should simply proceed to get it out of here and 
pass it as quickly as possible.
    I did want to say one thing. I know today we're not going 
to get into other aspects of nursing home care but I wanted to 
mention that there is a lot of discrimination confronting 
Medicaid beneficiaries. I hope that, if not today, at some time 
in the future, we can get into some of those other concerns.
    Some States, for instance, have requirements governing the 
number of Medicaid beds that homes must carry. My home State of 
New Jersey just released a report, the first of its kind in the 
State, which graded all nursing homes in the State based on the 
number of standard violations they had, including discharges of 
residents.
    This type of thing or these approaches to look at some of 
the problems with Medicaid placement and discrimination I think 
need to be looked at more fully, if not today at some other 
time.
    I do want to congratulate Mr. Davis and the chairman for 
introducing this bill and moving on it so quickly.
    Mr. Bilirakis. I thank the gentleman.
    Mr. Bryant, do you have an opening statement?
    Mr. Bryant. Thank you, Mr. Chairman.
    I, too, would like to thank Mr. Davis for bringing this 
bill forward. I think Mr. Bilbray said what I would like to say 
in terms of it not being punitive in nature and therefore, I 
would associate myself with his remarks and yield back the 
balance of my time.
    Mr. Bilirakis. Thank you.
    Mr. Barrett?
    Mr. Barrett. Thank you, Mr. Chairman.
    First, I'd like to thank you for holding the hearing on 
this important bill and to thank Mr. Davis and the others for 
introducing it.
    Given the amount that individuals pay to live in a nursing 
home, it's not shocking that at some point most individuals 
will spend their assets down to the level where they are 
eligible for Medicaid. It's simply wrong for a nursing home who 
has readily accepted an individual paying and then seeing the 
individual move to Medicaid to then force them out.
    Whether the person initially goes into the nursing home as 
a Medicaid patient or as a private pay patient and then 
ultimately relies on Medicaid, I think it's incumbent upon us 
to make sure that they're not throwing these people out on the 
street.
    Mr. Bilirakis. Certainly that's what we're intending to do 
here.
    Mr. Whitfield, do you have an opening statement?
    Mr. Whitfield. Mr. Chairman, thank you very much.
    All of us are looking forward to this hearing which will 
certainly focus upon the needs of Medicaid patients as relates 
to nursing home care. I notice we have eight witnesses, all of 
whom have good stories to tell or bad stories to tell.
    Also, I'm looking forward to the testimony of Mr. Hash, 
particularly as it relates to steps that HCFA is taking to 
provide information so that people can make educated choices 
about nursing home care.
    I want to commend you and Mr. Davis for bringing this 
matter to our attention. I'll file my opening statement for the 
record and look forward to the hearing.
    Mr. Bilirakis. Thank you.
    Mr. Shadegg?
    Mr. Shadegg. Thank you, Mr. Chairman.
    I simply want to commend you for holding this hearing 
today. I will put my full opening statement in the record and 
indicate my interest in hearing the testimony of the witnesses.
    Mr. Bilirakis. Thank you.
    Mr. Stearns?
    Mr. Stearns. Thank you, Mr. Chairman.
    I will make my opening statement a part of the record.
    Mr. Bilirakis. Without objection, the opening statements of 
all members of the subcommittee are made a part of the record.
    [Additional statements received for the record follow:]
 Prepared Statement of Hon. Tom Bliley, Chairman, Committee on Commerce
    Thank you Mr. Chairman for holding this hearing today. I also want 
to thank our colleagues, Congressman Jim Davis and Senator Bob Graham, 
for joining us this afternoon.
    It has been said that the character of a nation is best 
demonstrated by how it cares for the most vulnerable of its population. 
The legislation which Chairman Bilarakis and Mr. Davis have introduced 
is about fairness to our nation's most vulnerable individuals.
    Nursing homes that contract with Medicaid, and then discriminate 
against patients based on the way in which their care is financed is 
unacceptable. Seniors may select a facility because it accepts 
Medicaid. It is unfair for a facility to offer itself as participating 
in Medicaid, accept a resident who may be relying on future Medicaid 
assistance, wait until after a resident settles into his or her new 
surroundings, and then ask them to leave once their personal resources 
are exhausted, and Medicaid starts paying their bills.
    The evictions which spurred the need for this legislation are 
disturbing. I hope this hearing will elucidate some of the 
discriminatory practices nursing home residents are facing, and how 
widespread the problem is. I look forward to hearing the perspective of 
the Health Care Financing Administration on their role in curbing such 
abuse, as well as comments from the other witnesses on the impact this 
legislation will have on addressing the problem before us.
                                 ______
                                 
Prepared Statement of Hon. Diana DeGette, a Representative in Congress 
                       from the State of Colorado
    Thank you for holding this hearing today Mr. Chairman. As a 
cosponsor of this legislation in both the 105th and 106th Congress, I 
am pleased that we are protecting nursing home patients receive quality 
care irrespective of their means of payment.
    I was shocked to learn about the malevolent expulsion of a select 
group of seniors from a nursing home facility simply because Medicaid 
pays for their medical care. At a time when so many Americans in my 
generation are making the difficult decision to place a parent in a 
long term care facility, malicious acts like this are disturbing and 
unacceptable.
    Perhaps what is most troubling is that the victims of these 
expulsions were the most vulnerable residents at this facility. These 
were the patients who had exhausted their personal resources paying for 
nursing home care.
    In Colorado 64% of the overall nursing home population are Medicaid 
beneficiaries. Because of the expense involved in long-term care, many 
seniors rely on Medicaid after other resources run out. It simply makes 
sense that Congress protect nursing home residents on Medicaid from 
this sort of discrimination.
    I look forward to hearing from our panelists today. Congressman 
Davis' legislation is a step in the right direction to protect patients 
residing in nursing homes. It is critical that we ensure nursing home 
residents are not constantly at risk of being thrown out on the street. 
It is also vital that we make sure long-term care does not become a 
two-tiered system where patients who can afford to pay get a higher 
level of care than those who are forced to exhaust their personal 
financial resources.
                                 ______
                                 
Prepared Statement of Hon. Anna G. Eshoo, a Representative in Congress 
                      from the State of California
    Thank you Mr. Chairman.
    I'd like to start by thanking the sponsors of this very important 
legislation--my colleague from Florida, Mr. Davis. Our distinguished 
chairman, Mr. Bilirakis. And, of course, the distinguished Ranking 
Member, Mr. Dingell.
    For many of us here today, this legislation hits home.
    Some of our parents are being cared for in nursing homes.
    The thought that they might be kicked out of their homes because 
they pay for their care with Medicaid rather than with private dollars 
is abhorrent and offensive.
    Our Nation's elders deserve better than that.
    They deserve to live in healthy, secure environments.
    They deserve to know that their nursing home will not abandon them 
if it later chooses to opt out of the Medicaid program.
    They deserve peace of mind.
    Nursing homes, and the companies that own them, must be required to 
honor the promises they make to their residents when they first entrust 
their care to them.
    So, again I thank the sponsors of the Nursing Home Resident 
Protection Amendments and I look forward to hearing the testimony of 
our speakers.

    Mr. Bilirakis. For those of you who are new to this 
process, the bells that you hear mean there is a vote on the 
floor. So we're going to have to adjourn for just a few 
minutes, run over to the floor, cast our votes. I understand it 
is the last vote of the day so this should be the only 
interruption we will have.
    Then we will start with the first panel consisting of Mr. 
Davis right after we return.
    Thank you.
    [Brief recess.]
    Mr. Bilirakis. The first panel was to consist of Senator 
Bob Graham of Florida and Mr. Jim Davis of Tampa, Florida. Mr. 
Graham, I understand is not able to make it for obvious 
reasons. I think he has a statement which, by unanimous 
consent, will be made a part of the record.
    [The prepared statement of Senator Bob Graham follows:]
Prepared Statement of Hon. Bob Graham, a U.S. Senator from the State of 
                                Florida
    Mr. Chairman: I would like to begin my remarks by thanking you for 
convening this critical hearing and for inviting me to testify. I 
commend you and Representative Davis for your leadership in solving the 
dilemma of how we can best protect one of the most vulnerable 
populations in society--senior citizens in nursing homes.
    I would also like to take a moment to thank Nelson and Geri 
Mongiovi for taking the time and effort to drive all the way from 
Tampa, Florida to participate in today's hearing. The last few months 
have been particularly difficult for the Mongiovi family, having lost 
Nelson's wonderful mother, Adela, over the holidays last year. I know 
that Adela would be proud of her son Nelson and his wife Geri for 
having continued to push for legislation to protect all senior citizens 
who find themselves vulnerable to unscrupulous practices by nursing 
homes.
    Let me recount briefly what has transpired to bring us to this 
point today. On April 7, 1998, the Wall Street Journal ran a story 
which documented several cases of patient dumping across the nation, 
including cases involving seniors in Indiana and Florida. I'd like to 
quote briefly from this story:
    ``On Monday, January 26, [1998], right after lunch, Betty Nelson 
and dozens of other residents of Wildwood Health Care Center in 
Indianapolis were brought into the activity room and told they were 
being evicted. Rumors about an impending change had circulated at the 
nursing home for weeks, but the news delivered on this wintry day 
stunned the elderly patients as they stood at their walkers or sat in 
their wheelchairs. The facility was ending its relationship with 
Medicaid, the state-run health subsidy for the poor. Nearly 60 of its 
150 residents would have to find new places to live.
    ``Most had worked all their lives, and many had started out paying 
their own way at Wildwood, which had charged them $3,000 or more a 
month. But eventually they had run through their savings and had turned 
to Medicaid to help pay their bills.''
    Mr. Chairman, imagine the shock that these residents felt--many 
having saved all they could from years of hard work, having depleted 
all of their savings at Wildwood, only to be told by the nursing home 
to leave because the home decided not to take Medicaid anymore.
    The most egregious case of patient dumping occurred in our own 
State, Mr. Chairman, when a Tampa-based Vencor nursing home--
Rehabilitation and Healthcare Center--attempted to evict 52 Medicaid 
beneficiaries, purportedly due to the need to remodel the facility. One 
of those residents was 93 year old Adela Mongiovi.
    At that time, it looked like Adela would have to spend her 61st 
Mother's Day away from the assisted living facility she had called home 
for the last four years. Nelson and Geri feared that they would have to 
move Adela when officials at the Rehabilitation and Healthcare Center 
of Tampa told them that Adela, who suffered from Alzheimer's disease, 
would have to be relocated so that the nursing home could complete 
renovations.
    As the Mongiovis told me when I met with them and visited Adela 
last April, the real story far exceeded their worst fears. The supposed 
temporary relocation was actually a permanent eviction of all 52 
residents whose housing and care were paid for by the Medicaid program.
    The nursing home chain which owns the Tampa and Wildwood 
facilities, Vencor, wanted to purge some of its nursing homes of 
Medicaid residents, ostensibly to take more private insurance payers 
and Medicare beneficiaries which pay more per resident.
    While Medicaid payments to nursing homes certainly need to be 
revised from time to time, playing Russian Roulette with elderly 
patients' lives is hardly the way to send that message to Congress. And 
while I am always willing to engage in discussions about the equity of 
provider reimbursement rates, I and my colleagues are not willing to 
allow nursing homes to dump patients indiscriminately.
    While the Omnibus Budget Reconciliation Act of 1987 established 
standards to protect federal beneficiaries from patient abuse, nothing 
in current law protects Medicaid or ``spend-down'' residents from being 
dumped by nursing homes. A resident who has spent her life savings on a 
three year stay in a nursing home, for instance, is at the mercy of a 
nursing home which decides to dump that patient based solely on the 
fact that she becomes eligible for Medicaid.
    The legislation that Representatives Davis and Bilirakis have 
introduced, and I am introducing today with Senator Grassley of Iowa, 
my good friend and colleague Senator Mack, and others, would rectify 
this inequity in a narrowly-tailored fashion.
    The bill would prohibit nursing homes which have already accepted a 
Medicaid patient or a private pay patient from evicting or transferring 
that beneficiary based on her payment status. Nursing homes would still 
be permitted to decide which residents gain access to their facility; 
however, they would not be permitted to dump these patients once 
admitted.
    Evictions of nursing home residents have a devastating effect on 
the health and well-being of some of society's most vulnerable members. 
A recent University of Southern California study indicated that those 
who are uprooted from their homes undergo a phenomenon know as 
``transfer trauma.'' For these seniors, the consequences are stark. The 
death rate among such seniors is two to three times higher than that 
for individuals who receive continuous care.
    While the bill is limited in scope, it would protect the 68% of 
nursing home residents who rely on Medicaid at some point during their 
stay. Simply put, families must be assured that their parents and 
grandparents will continue to receive quality nursing home care without 
fear of inappropriate eviction.
    We must remember that people exist behind these statistics. Adela 
Mongiovi was not just a ``beneficiary.'' She was also a mother and 
grandmother. To Ms. Mongiovi, the Rehabilitation and Health Care Center 
of Tampa was not just an ``assisted living facility'' it was her home.
    Mr. Chairman, thank you again for allowing me to testify. I hope to 
work closely with you, Representative Davis, and the rest of our 
colleagues to ensure swift passage of this bill, to provide security 
and peace of mind for all of our nation's seniors and their families.

    Mr. Bilirakis. Jim, why don't you come forward? We will set 
the clock at 5 minutes.

STATEMENT OF HON. JIM DAVIS, A REPRESENTATIVE IN CONGRESS FROM 
                      THE STATE OF FLORIDA

    Mr. Davis. Thank you, Mr. Chairman.
    I also have some newspaper clippings I'd like to submit for 
the record.
    Mr. Bilirakis. Without objection.
    Mr. Davis. Let me thank you again, Mr. Chairman, for being 
an original co-sponsor of this important bill, and particularly 
for pushing action on the bill so early in this 106th Congress.
    I also want to single out Senator Graham who really was the 
first of those of us elected here to act on this and bring it 
to both my attention and your attention.
    I think it's fair to say that what the bill represents, as 
has been discussed already, is a fundamental belief that those 
people who are forced to put their loved ones in nursing homes 
are already under enough stress and anxiety and should not have 
to worry further about the risk that their loved ones will be 
evicted or transferred from that nursing home simply because 
they've been forced to rely upon the Medicaid Program to pay 
their bills.
    As I think has been alluded to here, one very important 
statistic that I have is that half of the people in nursing 
homes today who rely upon the Medicaid Program entered that 
nursing home paying out of their own pockets. For those of us 
who have not had to go through this unfortunate experience of 
worrying about someone in a nursing home, unfortunately, I 
think for many of us it's just a matter of time.
    As was alluded to earlier, there were 52 Medicaid residents 
in a facility in Tampa who would have been evicted with just 30 
days' notice if Mr. Nelson Mongiovi had not gone to court and 
succeeded in getting an injunction against the evictions. I'd 
like to recognize Mr. Mongiovi who is here with his wife Geri 
in the front row. Mr. Mongiovi will testify later this 
afternoon.
    The explanation provided by the nursing home was that 
remodeling was the reason for removing these folks. It was 
later admitted by the nursing home and determined by the 
Florida Agency for Health Care Administration that the reason 
these folks were being evicted was simply because of their 
status as Medicaid beneficiaries.
    There is an enormous temptation on the part of these 
nursing homes to put profits ahead of people. That temptation 
is only increasing and this bill will put a stop to the 
temptation that almost resulted in this terrible situation in 
Florida.
    There are over 40 co-sponsors of this bill. Many of the co-
sponsors are serving on this subcommittee and I thank you for 
your support. There is strong Democratic and Republican support 
for the bill. The bill is supported by many senior citizen 
advocacy groups including the National Senior Citizens Law 
Group, the AARP, and the National Citizens Coalition for 
Nursing Home Reform, among others.
    The nursing home industry through the American Health Care 
Association is also supporting the bill to so.
    This is truly a national issue. The information you've 
admitted to the record, Mr. Chairman, reflects in Indiana, 
California and Tennessee there have been similar incidents. 
What Congressman Bilbray was alluding to earlier was that this 
law is modeled after a California law that has had some of the 
same success we can expect on the national level.
    In 1987, when Congress set up national standards for 
nursing home care, one of the things that was not included in 
that bill was stopping the type of transfer or eviction that 
will be prohibited by this bill. This bill will, in fact, close 
a very important loophole.
    Mr. Chairman, you and other members of the subcommittee, 
have elaborated on the specifics of the bill. Under this 
legislation, nursing homes can continue, if they choose, to 
leave the Medicaid Program. Although if they choose to do so, 
they will be forced to provide a clear and conspicuous notice 
to residents that they will not be protected should they enter 
that nursing home and later have to resort to Medicaid.
    I want to close by thanking Mr. Mongiovi. He fought for his 
mom who is now deceased. He fought for her fellow residents in 
the nursing home and now he's fighting for nursing home 
residents across the country and for those of us who some day 
will probably have to rely upon a nursing home to care for 
ourselves and for our loved ones. It's because he stood up, 
because he fought and because his voice is now being heard here 
that I'm hopeful we will take action and make this law of the 
land this year.
    Thank you, Mr. Chairman. I look forward to working with you 
and members of the committee. I yield back the balance of my 
time.
    [The prepared statement of Hon. Jim Davis follows:]
Prepared Statement of Hon. Jim Davis, a Representative in Congress from 
                          the State of Florida
    Thank you, Mr. Chairman. Let me begin by thanking you for being an 
original cosponsor of this important legislation and for pushing action 
on this bill so early in the 106th Congress. I would also like to thank 
Senator Graham for his commitment to this issue and trying to resolve 
the problem of Medicaid residents being evicted from nursing homes.
    I believe you share my belief that nursing home residents and their 
families should not have to live with fear of eviction based on how 
they pay their bills. I believe it is unfair and flat out wrong that 
our most vulnerable and frail citizens, and their families, must worry 
about being evicted from their nursing homes in favor of people who can 
pay higher rates.
    Our bill provides security for these patients and their families by 
ensuring that they cannot be evicted from a nursing home in favor of 
higher paying patients if the nursing home chooses to voluntarily 
withdraw from the entire Medicaid program. Very simply, Mr. Speaker, 
our bill will ensure that our nursing homes do not put profits above 
patients' rights.
    In April 1998, a Vencor nursing home in Tampa attempted to evict 52 
Medicaid residents under the guise of emptying their facility for 
remodeling. A judge halted the evictions and Vencor subsequently told 
the residents they could stay. At this point, I would like to recognize 
Nelson and Geri Mongiovi. We will hear from the Mongiovis later in this 
hearing. However, I want to make sure that the Subcommittee is aware 
that if it were not for this couple we would not be here today 
discussing this legislation. Their commitment to helping their loved-
one, Nelson's mother, brought this issue to the forefront. Although 
Adelaida Mongiovi passed away late last year, I know that she is proud 
of her son and daughter-in-law for continuing to volunteer at her old 
nursing home every day and for fighting to protect the rights of those 
nursing home residents. I know that I am proud to be associated with 
them.
    Subsequent to the judge halting the evictions, an investigation by 
the Florida agency in charge of Medicaid found that the evictions were 
based solely on the fact that these residents relied on Medicaid to pay 
their bills.
    Senator Graham immediately recognized the severity of this problem 
and the need to address these mass evictions from a federal level. 
Shortly thereafter, Senator Graham and I began working to draft 
legislation to correct this problem. As you will recall Mr. Chairman, I 
then talked to you about the Tampa incident and asked you to join me in 
an effort to resolve this problem in a bipartisan manner. I am pleased 
that today we have 40 cosponsors, both Democrats and Republicans, 
supporting H.R. 540, the Nursing Home Resident Protection Amendments of 
1999.
    In addition to the bipartisan support of this legislation, I am 
pleased Mr. Chairman that our bill is supported by many senior citizen 
advocacy groups, including the National Senior Citizens Law Center, 
AARP, and the National Citizens' Coalition for Nursing Home Reform. The 
nursing home industry, through the American Health Care Association, 
has recognized the importance of preventing mass evictions of nursing 
home residents and also supports our legislation.
    I believe it is very important that Members of this Subcommittee 
understand that this is not just a Florida problem. Rather it is a 
national problem and deserves to be addressed by Congress. After the 
incident at Rehabilitation and Healthcare Center of Tampa, we learned 
that this was not an isolated incident. In fact, there are incidents of 
evictions and improper transfers of Medicaid residents in nursing homes 
in Indiana, California, Tennessee and other states. As a result of this 
problem, California passed legislation prohibiting these mass evictions 
by requiring nursing homes that withdraw from Medicaid to wait until 
patients die or choose to leave the facility. The State of Tennessee 
was challenged in federal court (Linton v. Commissioner, 4/22/90) and 
the challengers were successful forcing the State to require that all 
beds in any nursing home participating in the Medicaid program but 
certify all beds as Medicaid beds. Mr. Chairman, I have copies of the 
articles from the Tampa Tribune, as well as the Wall Street Journal 
regarding ``patient dumping'', which I would ask be included as part of 
the official hearing record.
    While the Omnibus Budget Reconciliation Act of 1987 established 
standards to protect federal beneficiaries from patient abuse, nothing 
in current law protects Medicaid nursing home residents who rely on 
Medicaid from eviction. For example, residents who spend their life 
savings on a lengthy nursing home stay are at the mercy of a facility 
which could later decide to dump them based solely on the fact that 
they have become eligible for Medicaid.
    Although it is not currently the case, there is a valid concern 
that nursing homes will start voluntarily leaving the Medicaid program 
in favor of higher paying private patients. We must address this matter 
to prevent them from dumping Medicaid patients on the street in favor 
of higher paying customers. I believe that our carefully crafted 
legislation is a first step in solving this problem.
    H.R. 540 is simple and fair. This bill prohibits nursing homes who 
have already accepted a Medicaid patient or a private pay patient from 
evicting or transferring that resident based on his or her payment 
status. Nursing homes may continue to decide which residents are 
admitted to their facility and could withdraw entirely from the 
Medicaid program. However, they would not be permitted to dump these 
residents once they are admitted.
    I assure the Members of the Subcommittee that I do not oppose 
nursing homes voluntarily leaving the Medicaid system. However, I do 
believe that residents need some protection once they enter these 
facilities. Many residents enter a facility as a private pay clients 
with the expectation that they will be eligible for Medicaid when they 
have depleted their personal assets in paying for the care they 
receive. H.R. 540 addresses this problem. Our bill allows a nursing 
home to voluntarily withdraw from the Medicaid program but requires 
that all residents who were in the facility at the time of the 
voluntary withdrawal are protected whether their bills are paid by 
Medicaid or personal funds. In other words, if a patient enters a 
nursing home with the expectation that they will be eligible for 
Medicaid coverage in the future, they will, in fact, be protected 
should the nursing home withdraw from Medicaid in the midst of their 
``spend down'' of personal assets.
    Another protection included in our bill is the advance notification 
that the nursing home does not participate in the Medicaid program. 
Under this provision, if a nursing home no longer participates in 
Medicaid, it must provide a clear and conspicuous notice to future 
residents that this nursing home does not participate in the Medicaid 
program and that it does not accept Medicaid payments. Fortunately, I 
have not yet had to deal with placing a loved one in a nursing home. 
However, I can imagine what a trying and stressful time it must be. 
This provision is intended to relieve some of the stress of the 
situation. Under our bill, family members would be warned up-front that 
if they are expecting their loved-one to receive help from Medicaid in 
the future this is not the facility to place their family members in 
because, as clearly stated by the facility, they do not and will not 
accept Medicaid payments for services provided.
    Families with loved ones in nursing homes are under enough stress. 
We must assure families that their parents, grandparents and loved ones 
will continue to receive quality nursing home care without the fear of 
inappropriate eviction. H.R. 540 will do that.
    Mr. Chairman, thank you again for your commitment to this issue. I 
look forward to continuing to work with you to shepherd this bill 
through the legislative process, and I hope that Members of this 
Subcommittee who are not currently cosponsors of H.R. 540 will join us 
in our efforts.
    I yield back the balance of my time.

    Mr. Bilirakis. Thank you, Jim.
    I have here letters from AARP dated February 10, 1999 to 
me, from the National Senior Citizens Law Center dated February 
4, 1999, from the Department of Elder Affairs, State of 
Florida, dated February 8, 1999, from the American Health Care 
Association dated February 3, 1999, and from Vencor Inc. dated 
February 9, 1999, all in support of the legislation, and I ask 
unanimous consent that those be made a part of the record.
    [The letters follow:]
                                              AARP,
                                      Washington, DC 20049,
                                                 February 10, 1999.
The Honorable Michael Bilirakis, Chairman
Subcommittee on Health and Environment
U.S. House of Representatives
2369 Rayburn House Office Building
Washington, DC 20515
    Dear Mr. Chairman: AARP appreciates your leadership in sponsoring 
H.R. 540, a bill that protects low-income nursing home residents from 
discharge when a nursing home withdraws from the Medicaid program.
    Across the country, some nursing home operators have been accused 
of dumping Medicaid residents--among the most defenseless of all health 
care patients. As with similar complaints about hospitals and 
physicians, these violations can be serious threats to people's health 
and safety. Yet, federal and state governments have been limited in 
their oversight and enforcement capacities. H.R. 540 establishes clear 
legal authority to prevent inappropriate discharges, even when a 
nursing home withdraws from the Medicaid program. AARP believes that 
this is an important and necessary step in protecting access to nursing 
homes for our nation's most vulnerable citizens.
    This legislation offers important protections because of the 
documented problems that Medicaid patients face, especially people 
seeking nursing home care. For years, there has been strong evidence 
demonstrating that people who are eligible for Medicaid have a harder 
time gaining entry to a nursing home than do private payers. In some 
parts of the country, there is a shortage of nursing home beds. Under 
such circumstances, only private-pay patients have real choice among 
nursing homes. Medicaid patients are often forced to choose a home that 
they would not have otherwise chosen, despite concerns about its 
quality of care or location.
    Under your proposed legislation, government survey, certification, 
and enforcement authority would continue, even after the facility 
withdraws from the Medicaid program, and the facility would be required 
to continue to comply with it. The bill also protects prospective 
residents by requiring oral and written notice that the nursing home 
has withdrawn from the Medicaid program. Thus, the prospective nursing 
home resident would be given notice that the home would be permitted to 
transfer or discharge a new resident at such time as the resident is 
unable to pay for care.
    Access to quality nursing homes has been a long-standing and 
serious concern for AARP. It is an issue that affects, in a real way, 
our members and their families. The current patchwork system of long-
term care forces many Americans to spend down to pay for expensive 
nursing home care. Therefore, it is unfair to penalize such older, 
frail nursing home residents who must rely on Medicaid at a critical 
time in their lives.
    Thank you for the opportunity to share our views on this important 
issue. If we can be of further assistance, please give me a call or 
have your staff contact Maryanne Kennan of our Federal Affairs staff at 
(202) 434-3772.
            Sincerely,
                                           Horace B. Deets.
                                 ______
                                 
               National Senior Citizens Law Center,
                                      Washington, DC 20005,
                                                  February 4, 1999.
Congressman Michael Bilirakis
2369 Rayburn House Office Building
Washington, DC 20515
    Dear Congressman Bilirakis: Last spring, the Vencor Corporation 
began to implement a policy of withdrawing its nursing facilities from 
participation in the Medicaid program. The abrupt, involuntary transfer 
of large numbers of Medicaid residents followed. Although Vencor 
reversed its policy, in light of Congressional concern, state agency 
action, and adverse publicity, the situation highlighted an issue in 
need of an explicit federal legislative solution--the rights of 
Medicaid residents to remain in their home when their nursing facility 
voluntarily ceases to participate in the federal payment program.
    I have read the draft bill that you will introduce to address this 
issue. The bill protects residents who were admitted at a time when 
their facility participated in Medicaid by prohibiting the facility 
from involuntarily transferring them later when it decides to 
discontinue its participation. As you know, many people in nursing 
facilities begin their residency paying privately for their care and 
choose the facility in part because of promises that they can stay when 
they exhaust their private funds and become eligible for Medicaid. In 
essence, your bill requires the facility to honor the promises it made 
to these residents at the time of their admission. It continues to 
allow facilities to withdraw from the Medicaid program, but any 
withdrawal is prospective only. All current residents may remain in 
their home.
    This bill gives peace of mind to older people and their families by 
affirming that their Medicaid-participating facility cannot abandon 
them if it later voluntarily chooses to end its participation in 
Medicaid.
    The National Senior Citizens Law Center supports this legislation. 
We look forward to working with your staff on this legislation and on 
other bills to protect the rights and interests of nursing facility 
residents and other older people. In particular, we suggest that you 
consider legislation addressing a related issue of concern to Medicaid 
beneficiaries and their families--nursing facilities' discriminatory 
admissions practices.
    Many facilities limit the extent of their participation in the 
Medicaid program by certifying only a small number of beds for 
Medicaid. As a consequence of their limited participation in the 
Medicaid program, they discriminate against program beneficiaries by 
denying them admission. In addition, residents who initially pay 
privately for their care and later become eligible for Medicaid because 
of the high cost of nursing facility care are also affected by limited 
bed, or distinct part, certification. Once such residents become 
impoverished and need to rely on Medicaid to help pay for their stay in 
their facility, they are often told that ``no Medicaid beds are 
available'' and that they must move. Facilities engage in other 
practices that discriminate against people who need to rely on Medicaid 
for their care. We would be happy to work with your staff in developing 
legislative solutions to these concerns.
    Thank you for your work on these important issues.
            Sincerely,
                                           Toby S. Edelman.
                                 ______
                                 
                                  State of Florida,
                               Department of Elder Affairs,
                                                  February 8, 1999.
The Honorable Michael Bilirakis, M.C.
House of Representatives
Congress of the United States
2369 Rayburn House Office Building
Washington, DC 20515
    Dear Congressman Bilirakis: I have reviewed your proposed ``Nursing 
Home Resident Protection Amendments of 1999.'' I applaud and strongly 
support your efforts to provide additional protection to elders. The 
evidence is overwhelming that, without extraordinary preparatory 
efforts that are hardly ever made, any move is harmful for the 
preponderance of the frail elderly; the technical term is ``transfer 
trauma.''
    I am forwarding a copy of your proposed legislation to the Director 
of the Agency for Health Care Administration (AHCA), Ruben King-Shaw 
for his review. As you know, AHCA regulates nursing homes in Florida.
    Again, thank you for your efforts on behalf of elders. If I can be 
of any assistance, please let me know.
    Committed to working together for older Floridians, I am . . .
            Sincerely,
                                  Geme G. Hernandez, D.P.A.
cc: Ruben King-Shaw
   Agency for Health Care Administration, w/encls.
                                 ______
                                 
                  American Health Care Association,
                                            Washington, DC,
                                                  February 3, 1999.
The Honorable Michael Bilirakis
United States House of Representatives
Washington, DC 20515
    Dear Mike: I am writing to lend the support of the American Health 
Care Association to H.R. 540 which you introduced with Congressman Jim 
Davis. This legislation helps to ensure a secure environment for 
residents of nursing facilities which withdraw from the Medicaid 
program.
    We know firsthand that a nursing facility is one's home, and we 
strive to make sure residents are healthy and secure in their home. We 
strongly support the clarifications your bill will provide to both 
current and future nursing facility residents, and do not believe 
residents should be discharged because of inadequacies in the Medicaid 
program.
    This bill addresses a troubling symptom of what could be a much 
larger problem. The desire to end participation in the Medicaid program 
is a result of the unwillingness of some states to adequately fund the 
quality of care that residents expect and deserve. Thus, some providers 
may opt out of the program to maintain a higher level of quality than 
is possible when relying on inadequate Medicaid rates. Nursing home 
residents should not be the victims of the inadequacies of their 
state's Medi-caid program.
    In 1996, the Congress voted to retain all standards for nursing 
facilities. We support those standards. In 1997, Congress voted 
separately to eliminate requirements that states pay for those 
standards. These two issues are inextricably linked, and must be 
considered together. We welcome the opportunity to have this debate as 
Congress moves forward on this issue.
    Again, we appreciate the chance to work with you to provide our 
residents with quality care in a home-like setting that is safe and 
secure. We also feel that it would be most effective when considered in 
the context of the relationship between payment and quality and access 
to care.
    Finally, we greatly appreciate the inclusive manner in which this 
legislation was crafted, and strengthened. When the views of consumers, 
providers, and regulators are considered together, the result, as with 
your bill, is intelligent public policy.
    We look forward to working with you to further clarify Medicaid 
policy and preserve our ability to provide the best care and security 
for our residents.
            Sincerely yours,
                                             Bruce Yarwood,
                                               Legislative Counsel.
                                 ______
                                 
                                      Vencor, Inc.,
                                Louisville, Kentucky 40202,
                                                  February 9, 1999.
The Honorable Jim Davis
327 Cannon House Office Building
Washington, DC 20515-0911

The Honorable Bob Graham
SH-524 Hart Senate Office Building
Washington, DC 20510-0903
    Dear Representative Davis and Senator Graham, This letter is to 
express my support for the legislation you are sponsoring that 
prohibits transfers or discharges of nursing home residents as a result 
of a facility's voluntary withdrawal from participation in the Medicaid 
program. The proposed bill would protect Medicaid residents' rights 
during and after a nursing home's voluntary decertification from 
Medicaid.
    The legislation is needed because of differences in individual 
state laws and regulations and the lack of specificity in federal law. 
It achieves a proper balance between the rights of nursing home 
residents who are Medicaid beneficiaries and the nursing home's 
voluntary participation in the Medicaid program.
    Litigation against Vencor constrains me from commenting on specific 
allegations concerning events that happened at The Rehabilitation and 
Healthcare Center of Tampa in 1998. For your information, however, all 
claims between both the Health Care Financing Administration and the 
Florida Agency for Health Care Administration and Vencor have been 
settled. All of Vencor's Florida nursing homes continue to participate 
in the Medicaid program.
    I believe that the continued participation of nursing homes in 
Medicaid is now less certain than it has ever been. The Balanced Budget 
Act of 1997 changed Medicare nursing home reimbursement to a 
prospective payment system and reduced Federal funding by 17%. Congress 
had previously rescinded the Boren Amendment which required states to 
set Medicaid rates at a level that was adequate to insure quality care. 
The increase in managed care and these changes in the reimbursement 
system have been driven by public policy. Their effect, however, has 
been to threaten the historically higher Medicare reimbursement, which 
enabled providers to remain financially viable and provide quality 
care, even while receiving inadequate reimbursement for their Medicaid 
residents. Bad public policy has been replaced by worse.
    There is a crisis in the financing and delivery of long term care. 
It will only worsen as baby boomers enter their elder years. The 
solution is not to reduce reimbursement in order to keep Medicaid and 
Medicare solvent. That approach is now affecting the viability of 
providers and reducing accessibility for beneficiaries. Exiting the 
Medicaid program through decertification is a legal but undesirable 
option now facing long-term providers. This country needs the 
leadership of its government to help solve this problem.
    The legislation you are sponsoring does not address this financing 
crisis. At best, it may ameliorate one of its potential consequences. I 
urge you, however, to initiate a search for permanent solutions to this 
most important problem. I extend to you the willing cooperation of my 
company and its assistance in that effort.
            Sincerely,
                                           Edward L. Kuntz,
                                                  Chairman and CEO.
cc: The Honorable Michael Bilirakis

    Mr. Bilirakis. Jim, I think what we have done working 
together on a bipartisan basis with senior citizens' 
organizations and the nursing home industry is an indication of 
what can be done if people are willing to sit down with an open 
mind to accomplish something. I'm very grateful to you for your 
part in all this.
    A question was raised earlier during the press conference 
that we held regarding penalties. I just wondered if you have 
any opinion. The legislation does not establish new penalties, 
however, current law provides for them. The nursing home in 
Tampa, as a matter of fact, was hit with pretty substantial 
penalties by the State, as well as by the Federal Government. 
Are those adequate; do you think we ought to take another look 
at the penalty issue?
    Mr. Davis. Mr. Chairman, I believe the bill contemplates 
that HCFA would have the authority to develop a sufficiently 
substantial penalty of a financial nature. As you pointed out 
earlier, because the industry is so closely regulated by HCFA 
already, I'm sure that would be of sufficient concern to these 
nursing homes that it would deter them from engaging in this 
type of misconduct in the future.
    Mr. Bilirakis. Mr. Hash will be testifying right after you, 
and we can ask him the same question and determine whether he 
thinks it is adequate.
    The Chair would recognize Mr. Pallone for any questions?
    Mr. Pallone. I have none.
    Mr. Bilirakis. Mr. Whitfield?
    Mr. Whitfield. No questions.
    Mr. Bilirakis. Mr. Barrett?
    Mr. Barrett. Just out of curiosity, in the Tampa situation, 
were there non-Medicaid patients that were also evicted?
    Mr. Davis. Congressman Barrett, there were not. In fact, 
when the third floor was opened up to move people, rooms were 
being set aside for the private-paying patients, However, those 
patients who were no longer private-pay and were Medicaid 
beneficiaries were the ones, the only ones, that were being 
asked to leave.
    Mr. Barrett. Okay. That's the only question I had.
    Thank you.
    Mr. Bilirakis. Mr. Shadegg?
    Mr. Shadegg. No questions.
    Mr. Bilirakis. Ms. Capps, who is a new member of this 
subcommittee and the full committee, more than welcome, and we 
look forward to great things from you.
    Ms. Capps. Thank you.
    Mr. Bilirakis. Any questions of Mr. Davis, Ms. Capps?
    Ms. Capps. Not at the moment.
    Thank you.
    Mr. Bilirakis. By the way, I know Ms. Capps has an opening 
statement. The opening statement of all members of the 
subcommittee are made a part of the record without objection.
    Mr. Coburn?
    Mr. Coburn. No, I have no questions.
    Mr. Bilirakis. Jim, thanks so much for your contribution to 
good health for our elders; thanks for being here today.
    Mr. Davis. Thank you, sir.
    Mr. Bilirakis. The second panel will consist of Mike Hash. 
Mike is the Deputy Administrator of the Health Care Financing 
Administration here in Washington. Mr. Hash also worked with us 
on the Commerce Committee for many, many years.
    Mike, I'm going to set this at 5 minutes, but feel free to 
exceed that time.

 STATEMENT OF HON. MICHAEL HASH, DEPUTY ADMINISTRATOR, HEALTH 
                 CARE FINANCING ADMINISTRATION

    Mr. Hash. Thank you, Mr. Chairman.
    Congressmen Bilirakis, Brown and distinguished members of 
the subcommittee, I want to thank you for inviting us here 
today to discuss the need to improve protections for nursing 
home residents.
    We at the Health Care Financing Administration within the 
Clinton Administration are working aggressively to improve the 
oversight and quality of nursing home care. Preventing 
inappropriate evictions of Medicaid residents is an essential 
part of this effort.
    There have been, as you know, Mr. Chairman, intolerable 
situations in which Medicaid residents were transferred or 
discharged on false grounds and without appropriate notice. 
This creates serious disruptions in care, subjects residents to 
transfer traumas and of course takes an untold toll on the 
frail beneficiaries and their families that we are sworn to 
protect.
    Just today I learned--and this is not in my prepared 
statement because it's so new--that we have a report from 
Florida, actually from Brandon, Florida of a facility which has 
apparently engaged in exactly the same kinds of practices that 
were found last year in several facilities.
    On the basis of a recommendation of the survey and 
certification agency in Florida, we have put that institution 
on a fast track termination if they do not correct the jeopardy 
that they have created by inappropriately transferring Medicaid 
patients out of the facility. We will continue to vigorously 
enforce the existing rules.
    I just wanted you to know this is not a problem that has 
been solved. It is a problem that is continuing right today.
    Mr. Bilirakis. This was in Bradenton?
    Mr. Hash. Yes, sir. It's the Integrated Health Services in 
Brandon, Florida.
    Mr. Bilirakis. Oh, Brandon.
    Mr. Hash. Brandon, Florida.
    Both we and the States have tried to take swift and strong 
action to make clear that we are very serious about protecting 
Medicaid residents from inappropriate transfers and discharge, 
but we need to do much more and we need your legislation to do 
it.
    We are taking steps with the authority that we have now. We 
have recently issued new policy stating that a nursing facility 
may, in fact, not decrease the portion of its facilities that 
are available to Medicaid or Medicare residents but one time 
during a calendar year. We are considering further regulatory 
changes in the ability of facilities to change their complement 
of Medicaid-certified beds.
    However, without the legislation that you, Chairman 
Bilirakis, and Congressman Davis, have introduced, we cannot 
prevent the evictions of Medicaid patients if nursing homes 
leave participation in Medicaid. America's nursing home 
residents need this bill to be enacted into law and you have 
the strong support of the Clinton Administration and our 
agency. America's nursing home residents must not live in fear 
that they will be evicted solely because they rely on Medicaid 
to pay for their care. Nursing homes must not be allowed to 
discriminate on the basis of source of payment in terms of 
continued access to their facilities.
    I know that our staff has provided technical assistance to 
your staff and others in the drafting of this legislation. We 
look forward to working with you to further ensure passage of 
this bill and to make sure that we meet the goals of this 
legislation. We may need, as I noted, to address further 
protections of Medicaid residents when nursing homes decrease 
the number of beds available. We look forward to working with 
you on this and other issues as well.
    My written testimony outlines the progress that we've made 
in improving the oversight and quality of nursing home care. 
Our reforms build on the progress that we've made since 1995 
when the Clinton Administration issued and began enforcing the 
toughest nursing home regulations ever. We are doing what we 
can with the regulatory authority that we now have and we are 
working to secure passage of some initiatives proposed by the 
President in his budget to further protect nursing home 
residents.
    There is more we must do. The legislation that you and 
Congressman Davis are introducing today is another critical 
piece we need to protect nursing home residents.
    We thank you for your hard work on this matter. We look 
forward to working with you in all of our efforts to protect 
nursing home residents.
    I'd be happy to respond to any questions that you or other 
members of the subcommittee may have.
    [The prepared statement of Hon. Michael Hash follows:]
 Prepared Statement of Hon. Michael Hash, Deputy Administrator, Health 
                     Care Financing Administration
    Chairman Bilirakis, Congressman Brown, distinguished committee 
members, thank you for inviting us here today to discuss our efforts to 
improve protections for nursing home residents. The Health Care 
Financing Administration (HCFA) is aggressively working to improve the 
oversight and quality of nursing home care. Preventing inappropriate 
eviction of Medicaid residents is an essential part of this effort.
    There have been intolerable situations in which facilities 
transferred or discharged Medicaid residents on false grounds and 
without appropriate notice. This creates serious disruptions in care 
and untold emotional toll on frail beneficiaries we are sworn to 
protect.
    We have taken swift and strong action in these situations, 
including the imposition of $10,000 per day of civil money penalties. 
States have also taken swift and strong action. States and HCFA 
together have made clear that we are very serious about protecting 
Medicaid residents from inappropriate transfers and discharges. But we 
need to do more, and we need legislation to do it.
    Chairman Bilirakis, America's nursing home residents need the bill 
you and Congressman Davis are introducing to be enacted into law. I am 
proud to say that the Clinton Administration and my agency strongly 
support your legislation. America's nursing home resident's must not 
live in fear that they will be evicted solely because they rely on 
Medicaid to pay for their care. We must enact this bill to prohibit 
transfers or discharges of Medicaid residents when a nursing home 
chooses to leave the Medicaid program. I know my staff has provided 
technical assistance to your staff in drafting the legislation. We look 
forward to working with you further to ensure passage and to ensure 
that the goals of this legislation are met. We also may need to address 
further protection of Medicaid residents when nursing homes decrease 
the number of beds available to Medicaid residents, and we look forward 
to working with you on that issue as well.
                               background
    About 1.6 million elderly and disabled Americans receive care in 
approximately 16,800 nursing homes across the United States. Through 
the Medicare and Medicaid programs, the federal government provides 
funding to the States to conduct on-site inspections of nursing homes 
participating in Medicare and Medicaid and to recommend sanctions 
against those homes that violate health and safety rules.
    Medicaid nursing home participation is voluntary, and current law 
allows nursing homes to determine and change the extent of their 
participation. They can designate that only part of their facilities, 
for example a certain number of beds or certain wings, are available to 
Medicaid beneficiaries. If a nursing home wants to reduce the portion 
of its facilities that are available to Medicaid patients, it must give 
30 days notice of its intentions to both the State and the affected 
residents. It also must ensure that any displaced residents 
continuously receive all necessary care as they are moved to other 
appropriate facilities.
                       using regulatory authority
    We are taking steps to address problems created when facilities 
curtail service to Medicaid residents with the authority we have now. 
We recently issued new policy stating that a nursing home may decrease 
the portion of its facilities that are available to Medicaid or 
Medicare residents only once per year. We also are considering whether 
further regulatory changes would help protect Medicare and Medicaid 
residents. However, without the legislation Chairman Bilirakis and Rep. 
Davis are proposing, we do not have authority to prevent evictions of 
Medicaid patients if nursing homes leave the Medicaid program.
                    nursing home initiative progress
    As I said, preventing inappropriate evictions is an essential 
component of our broad initiative for improving the quality of nursing 
home care and oversight. These reforms build on progress made since 
1995, when we began enforcing the toughest nursing home regulations 
ever. We have made solid progress since we announced our new initiative 
last July. We have taken several steps to improve inspections by 
States, who have the primary responsibility for conducting these on-
site inspections and recommending sanctions for care and safety 
violations. We have:

 issued new guidance to States to strengthen their nursing home 
        inspection systems;
 made clear that States will lose federal funding if they fail 
        to adequately perform surveys and protect residents because we 
        can and will contract with other entities, if necessary, to 
        make sure those functions are performed properly;
 established a new monitoring system to ensure that States 
        identify problems and impose appropriate sanctions;
 formally reminded States that they must enforce sanctions for 
        serious violations and may not lift them until an on-site visit 
        verifies that problems are fixed;
 required States to sanction facilities found guilty more than 
        once for violations that harm residents, with no option to 
        avoid penalties by correcting problems during a grace period;
 required States to conduct more frequent inspections for 
        nursing homes with repeated serious violations while not 
        decreasing their inspections for other facilities;
 required States to stagger surveys and conduct a set amount on 
        weekends, early mornings and evenings, when quality and safety 
        and staffing problems often occur;
 instructed States to look at an entire chain's performance 
        when serious problems are identified in any facility that is 
        part of a chain, and begun developing further guidelines for 
        sanctioning facilities within problem chains;
 begun developing new regulations to let States impose civil 
        money penalties for each serious incident and repeal current 
        rules that link penalties only to the number of days that a 
        facility was out of compliance with regulations;
 begun developing new survey protocols to detect quality 
        problems in nursing homes using a systematic, data-driven 
        process, with initial changes to be implemented this year; and
 secured, with strong support from Congress, a fiscal year 1999 
        budget with $171 million for survey and certification 
        activities, including $4 million earmarked for the new 
        initiative, and requested $60.1 million for fiscal year 2000 to 
        enable us and other HHS components to fully implement all 
        provisions of the Nursing Home Initiative. This includes $35 
        million for HCFA to strengthen State inspection and enforcement 
        efforts, $15.6 million in mandatory Medicaid money to 
        supplement State inspection and enforcement efforts, and $9.5 
        million to ensure adequate resources for timely judicial 
        hearings and court litigation.
    We have taken additional steps to help consumers choose facilities, 
help facilities improve care, and help our law enforcement partners 
prosecute the most egregious cases. We have:

 created and begun testing a new Internet site, Nursing Home 
        Compare, at www.medicare.gov, which will allow consumers to 
        compare survey results and safety records when choosing a 
        nursing home;
 posted best practice guidelines at www.hcfa.gov/medicaid/siq/
        siqhmpg.htm on how to care for residents at risk of weight loss 
        and dehydration;
 begun planning national campaigns to educate residents, 
        families, nursing homes and the public at large about the risks 
        of malnutrition and dehydration, nursing home residents' rights 
        to quality care, and the prevention of resident abuse and 
        neglect;
 begun a study on nursing home staffing that will consider the 
        potential costs and benefits of establishing minimum staffing 
        levels; and
 worked with the Department of Justice to prosecute egregious 
        cases where residents have been harmed, and to improve referral 
        of egregious cases for potential prosecution.
Legislative Proposals
    The Clinton Administration's fiscal year 2000 budget includes 
proposals for:

 requiring nursing homes to conduct criminal background checks 
        of prospective employees;
 establishing a national registry of nursing-home workers who 
        have abused or neglected residents or misappropriated 
        residents' property; and
 allowing more types of nursing-home workers with proper 
        training to help residents eat and drink during busy mealtimes.
    The cost of conducting background checks and querying the national 
registry will be financed through user fees. The Administration will 
put forward additional proposals as needed for additional legislative 
authority to further improve nursing home quality and safety.
                               conclusion
    We are making solid progress in our efforts to improve the 
oversight and quality of nursing home care, but there is more that we 
must do. We are doing what we can with the regulatory authority we now 
have. We are working to secure passage of the President's legislative 
initiatives to further protect nursing home residents.
    The legislation that Chairman Bilirakis and Congressman Davis are 
introducing today to prevent inappropriate Medicaid evictions is 
another crucial piece that we need to protect nursing home residents. 
We thank you for your hard work on this matter. We look forward to 
working with you to secure passage of your bill and the President's 
proposals. And I am happy to answer your questions.

    Mr. Bilirakis. Thank you, Mr. Administrator. It's good to 
know that the Administration is solidly behind our legislation. 
Certainly it's going to be very helpful in terms of expediting 
its passage.
    I'm amazed that with all the publicity regarding Vencor's 
Tampa facility, that this is taking place in Brandon. There 
were penalties applied to Vencor in Tampa.
    Mr. Hash. Correct, both by the State and the Federal 
Government.
    Mr. Bilirakis. That really brings up the question again 
that I raised earlier about penalties. Should we take another 
look at those? Is this something HCFA can do without including 
it in legislation? Are they onerous enough to at least keep 
people from indiscriminantly doing something like this?
    Mr. Hash. Yes, Mr. Chairman. We are looking at our 
regulatory reach in this regard. In fact, we have a regulation 
that's in the final stages that should be promulgated within 
the next month or so. The regulation would allow us to levy 
fines, not just for each day that a nursing facility might be 
out of compliance with our requirements, but for each day and 
for each instance of a violation. We can actually apply a fine, 
a civil monetary penalty for each one of those instances under 
this new reg. We can go up to $10,000 now per day. We can apply 
that to per incidence and the multiples could be quite 
substantial.
    We hope to get that out and we think that would be an 
enhanced tool to protect against these inappropriate actions.
    Mr. Bilirakis. When something is as inappropriate as this, 
we certainly are not talking about paperwork mistakes or 
something of that nature?
    Mr. Hash. As you know, Mr. Chairman, these are violations 
that we would characterize as immediate jeopardy. That is to 
say they pose an immediate threat to the health and well-being 
or to the life of residents of nursing homes.
    Mr. Bilirakis. Thank you.
    Mr. Brown, would you like to inquire at this point?
    Mr. Brown. Yes. Thank you, Mr. Chairman.
    Mr. Hash, thank you for joining us again. You mentioned in 
your testimony we may need to address further protection of 
Medicaid residents when nursing homes reduce or decrease the 
number of beds available to Medicaid residents. Is there 
evidence that these reductions in the number of Medicaid beds 
is occurring more frequently now than 2 years, 5 years or 10 
years ago?
    Mr. Hash. I'd be happy to try to get you some data to see 
if we could actually display that. I don't have those figures 
in front of me, but I think it's well known to us and to others 
who look at the nursing home situation that often the pattern 
can be the reduction of the number of beds that they wish to 
have certified for the Medicaid Program as opposed to 
completely exiting participation in the Medicaid Program.
    We're looking at that scenario and would like to work with 
you to look at that potential problem as well.
    [The following was received for the record:]

    Our data systems do not currently provide information on 
the reduction of beds. We do know, however, that over the last 
three years the average number of nursing facilities that 
voluntarily withdrew from the Medicaid program is 58 per year: 
59 Medicaid facilities withdrew in FY1996; 54 in FY1997; and 60 
in FY1998.

    Mr. Brown. You could not deal with that administratively 
anymore than you could with this problem?
    Mr. Hash. No. We don't have the authority in the law now to 
prevent a nursing home from actually determining itself what 
complement of its beds it wants to certify for the Medicaid 
Program.
    Mr. Brown. What precisely should we do? How would you write 
a formula? What would you do?
    Mr. Hash. I don't think we yet have the perfect answer to 
this because obviously participation ultimately in the Medicaid 
Program is a voluntary decision on the part of the nursing 
facility. We certainly don't want to take a step that in any 
way is likely to make access to needed nursing home care less 
available.
    On the other hand, I think we are concerned about the 
potential for manipulation of the complement of beds which can 
result in the relocation of patients just as much as the 
complete withdrawal from the program. I think we would like to 
try to explore possibilities for dealing with this problem and 
working with you and Chairman Bilirakis to see if further 
attention to this could not be provided in the legislation.
    Mr. Brown. I can't speak for the chairman but I hope that 
we can address that, not to the point of delaying this 
legislation but I hope that you and all of us can work that 
out.
    Thank you.
    Mr. Bilirakis. The chairman's opening statement will be 
made a part of the record.
    We have placed great emphasis on nursing home quality 
standards in this committee over a period of time. Certainly we 
emphasized that in the last Congress. You can sit back and 
brainstorm all you want and you're just not going to cover 
every conceivable problem that might arise.
    If there's anything this committee can at least consider 
that might be helpful to HCFA in terms of maybe you to do your 
job better, don't hesitate to let us know.
    Mr. Hash. Absolutely. We will do that.
    Mr. Brown. I ask unanimous consent that Ms. Capps', Ms. 
Eshoo's and other statements be admitted by unanimous consent.
    Mr. Bilirakis. That's already been done a couple of times 
but by all means.
    Ms. Cubin to inquire?
    Ms. Cubin. Thank you, Mr. Chairman.
    I'm from Wyoming. There are 480,000 people spread over 
100,000 square miles. We have nursing homes with 12 beds, 20 
beds. I support the legislation that is in front of us, but 
when you talk about doing something about reduction in the 
number of beds when nursing homes have to reduce the number of 
Medicaid patients in beds, when you have only 12 or 20 
patients, you cannot spread out that cost.
    I just implore you to take that into consideration. I think 
my State is the most rural as far as medical care delivery or 
health care delivery is concerned. I would offer our assistance 
in any way.
    I'm married to a physician and he says he's the only person 
that lives in the State of Wyoming that doesn't have a 
Congressman. The reason he doesn't have a Congressman is I will 
not let him talk to me about HCFA regulation but I'm going to 
talk to you about it. I would like to get some peace in my 
life. Usually men say that, but you need to be there.
    There are a couple of things that I want to ask you. I'm 
going to go through them because they'll interrupt me if my 
time runs out but they'll let you answer, so take notes.
    Lots of constituents have gotten in touch with me about 
this. One regulation we don't understand--I know this is about 
nursing homes and I agree. One regulation we don't understand 
is why do we require a 3-day hospital stay before a Medicaid 
patient can be put in a nursing home? My husband is a primary 
care physician and I can personally assure you from my 
relationship with his office that costs us a lot more money 
than it would ever save us.
    Another thing is the drug test bundling where now they are 
not allowed to order tests or have tests done that are not 
being used to rule out a particular diagnosis. They can do a 
blood screen of 15 tests which cost less than 2 single tests. I 
think we all know that negative results tell the doctor 
something.
    Those were easy because you were shaking your head but 
here's two I'm not sure. I think these are proposed regs that 
are coming out now under which a physician has to provide a 
physical exam for every Medicare patient every year and write 
down not only what is wrong but what is not wrong? Those 
examinations can be $100 if they are actually good examinations 
and it has to be done whether the patient is healthy, has had 
any health problems or not, or if the patient hasn't been sick 
all year. I don't understand the benefit of that.
    This is the last one--I know you'll be glad. The physicians 
believe, whether it's true or not, I don't know, but I know the 
physicians in Wyoming believe all across the State that due to 
mistakes in coding, they can face criminal charges and 
financial penalties as you talked about, $10,000 a day for each 
incident.
    Wyoming is different. It's like a different country but I 
want to tell you they're squeaky clean there. We don't have the 
kind of problems fortunately that have been brought in front of 
this committee before. I just really wish that rural health 
care providers could get some special attention because they 
have a special situation and our folks really deserve special 
care. I know you agree with that.
    Sorry, Mr. Chairman.
    Mr. Bilirakis. Not at all.
    Mr. Hash. Yes, ma'am. I'd be happy to address each of those 
issues. Also, I'd like to say some of these are issues that we 
should talk about in more depth and I'd be happy to come at 
your convenience and discuss these in greater depth.
    Let me just say with regard to the 3-day hospital stay 
requirement, I believe that is a statutory requirement, so it's 
not something that we have discretion over in terms of the 
operation of our program.
    Mr. Bilirakis. Should it continue to be?
    Mr. Hash. I'd be willing to take a look at it to see if, in 
fact, it's causing unnecessary hospitalizations in order to 
qualify and see what the evidence shows. I don't have a quick 
answer as to whether we should continue it or not.
    Mr. Coburn. Would the gentlelady yield? I'm amazed you 
don't know the answer to that quite frankly. If we have a 
statutory requirement that says, and I know that's the law 
throughout the land, that a Medicaid patient, regardless of 
their admitting diagnosis, has to stay in the hospital 3 days 
before they can be transferred back to the nursing home and you 
all don't know whether that's an effective law or not since 
you're paying the cost of the hospitalization, one, most often, 
and two, writing the regulations that surround that, I'm 
surprised you don't know the answer to that. Have you all not 
looked at that?
    Mr. Hash. We may have looked at it and I may not be aware 
of it but I would intend that whatever evidence we have, we 
should share with you and we should take a look at it. I 
appreciate that.
    Mr. Bilirakis. The gentlelady's time has expired. Do you 
want answers now, Barbara, or possibly maybe the two of you can 
get together?
    Ms. Cubin. Mr. Chairman, if you're not interested in my 
questions, I'll get together with Mr. Hash.
    Mr. Bilirakis. Oh, I'm very interested. I hear the same 
questions from providers in my district, so it's not just 
Wyoming.
    Ms. Cubin. I know that and I don't want to hold up the 
committee. I'll have my staff get in touch with your office and 
work out a time to meet.
    Thank you so much.
    Mr. Hash. I'd be happy to do that.
    Mr. Bilirakis. Let's have those in writing for the record. 
Can we do that?
    Mr. Hash. I'd be glad to.
    [The following was received for the record:]

    The Medicare statute only allows payment for items and 
services that are medically necessary to diagnose or treat an 
illness, injury or malformed body part. Consistent with this 
rule, for clinical laboratory tests, the statute provides 
coverage only for diagnostic tests--that is, tests used to help 
diagnose or monitor a specific medical condition. Tests used to 
help rule out a particular condition would be covered as 
diagnostic tests if the patient has symptoms that would 
reasonably warrant testing for that diagnosis.
    However, absent any sign or symptom that would suggest a 
test is reasonably related to a particular medical condition, 
it would generally be considered a screening (rather than 
diagnostic) test. The Medicare statute does not allow payment 
for procedures (including lab tests) that are performed for 
purely screening purposes (with a few exceptions, such as Pap 
tests, that are explicitly authorized by the law).
    Laboratories often run certain tests (including blood 
tests) on automated equipment that perform the tests as part of 
a larger group of tests. The lab may then bill for the entire 
``bundled'' group of tests, including some that Medicare is 
prohibited from paying for by law. These would include tests 
that are merely screening tests (performed without any relevant 
sign or symptom that would warrant the test), and diagnostic 
tests that are not medically necessary for this patient.
    Prior to March 1996, Medicare policy did allow payment for 
all tests in an automated profile if any one test in the group 
was medically necessary. This was necessary because older lab 
equipment would only produce results for certain tests if the 
test was performed as part of a larger group. However, the 
testing equipment generally in use today allows specific tests 
to be performed either with or without the larger group. Thus, 
Medicare has revised its policy to more consistently reflect 
its statutory authority. Since March 1996, Medicare pays only 
for those tests that are medically necessary and are not 
routine screening tests, regardless of whether they are 
performed individually or as a group.
    We do not require physicians to provide a yearly physical 
exam to all Medicare patients. In the Medicare+Choice interim 
final rule that was published in June 1998, we stated that 
plans must have the information required for effective and 
continuous patient care and quality review, which includes an 
assessment of each enrollee's health care needs within 90 days 
of enrollment. Based on comments we received, we revised this 
requirement in a February 17, 1999 Federal Register regulation 
to state that a Medicare+Choice organization must make a 
``best-effort'' attempt to conduct an initial assessment within 
90 days of enrollment. We have also clarified that 
Medicare+Choice organizations have the flexibility to choose 
the form of the assessment, e.g., phone call, questionnaire, 
home visit, or physical examination.
    For honest coding errors, physicians would only have to 
repay any overpayment results from the error and our 
contractors would work with the physician to prevent any 
further honest errors. The Health Insurance Portability and 
Accountability Act of 1996 (HIPAA) does allow use of the False 
Claims Act to prosecute fraudulent providers. However, there 
must be a clear pattern or practice of submitting claims based 
on codes they know or should know will result in more payment 
than is appropriate.
    If physicians or their staffs do make billing errors, we do 
want to find those errors, preferably before we make payment. 
We are significantly increasing our efforts to screen claims 
before they are paid, review them afterwards, and audit 
providers with billing patterns that are out of the ordinary. 
We are using increasingly sophisticated claims analysis 
software to search out unusual billing patterns that suggest 
where we need to take a closer look. Our efforts are not 
intended to harass physicians. We know that most physicians are 
honest and conscientious. But we must protect taxpayers who 
demand that we promote quality care, and have zero tolerance 
for waste, fraud and abuse.
    If we find errors after we make payment, we do want the 
money returned. However, we are not interested in prosecuting 
anyone for honest mistakes, and we are not going to refer 
physicians to the Inspector General for occasional errors. 
Before making any referrals, we have to believe there is 
fraudulent intent.

    Mr. Bilirakis. I think it would be a good idea because 
they're pertinent. They are not directly related to the subject 
of today's hearing, but I've already told the gentlelady I 
don't think anybody would object to her line of questioning.
    Mr. Bilirakis. Mr. Barrett?
    Mr. Barrett. I have no questions but I want to thank you, 
Mr. Hash, for all the help you have given us in Wisconsin.
    Mr. Hash. Thank you very much.
    Mr. Bilirakis. Thank you, Mr. Barrett.
    Mr. Whitfield?
    Mr. Whitfield. Thank you, Mr. Chairman.
    I'm actually glad that Ms. Cubin raised some of these 
issues. As a matter of fact, I'd heard a lot of those questions 
asked of me frequently. I hope the Chair might even consider 
having a hearing sometime where we can just ask some questions 
like this because HCFA is such an ominous source of regulations 
out there and there's all sorts of decisions being made. I 
think anyone in Congress recognizes when they go home, doctors, 
administrators, nurses, everyone is asking questions about 
regulations. I hope that is something maybe the chairman would 
consider.
    Mr. Bilirakis. I appreciate the gentleman making that 
point. I've always felt that quite often we don't have the 
opportunity to go into depth on issues, so perhaps we could get 
together informally with HCFA for a roundtable discussion.
    Mr. Whitfield. I think that would be useful.
    Mr. Bilirakis. I think many of you know I favor that sort 
of approach.
    Mr. Whitfield. On the issue at hand, I notice in the 
testimony of the administrator of the Florida Nursing and 
Rehabilitation Center--since I'm not sure how you pronounce the 
last name, I'm not going to say it--but in her testimony she 
said under current laws, nursing facilities are prohibited from 
discharging any resident unless they have secured an alternate 
living arrangement. Evidently under the facts of Mr. Mongiovi 
and his family, there was not an alternate living arrangement 
made at the time they were discharged. Would the nursing home 
have been in violation of current law?
    Mr. Hash. I believe it is and was and it was actually fined 
as a result of that.
    Mr. Whitfield. So the fine was for violation of the 
existing law.
    This is more of a generic issue regarding nursing homes, do 
you have any opinion at all on the repeal of the Boren 
Amendment which was done a couple of Congresses ago?
    Mr. Hash. I think in some respects, the jury is a little 
bit out on the impact of it. Obviously what the Congress did 
was to replace the Boren Amendment with a requirement for 
States to have a public process, to have notice and comment 
from the public about the establishment of their payment rates 
for nursing homes, for hospitals, for that matter, and the 
notion was that having to do this and to actually present the 
methodology and the justification for the payment rates would 
provide a forum in which all interested parties could have an 
opportunity to debate and discuss the appropriateness and 
adequacy of the rates.
    Whether in fact that's proving to be the case or not, I 
think it's still early in the experience with this to actually 
make a judgment on it.
    Mr. Whitfield. You, in your testimony, said that you all 
were looking at further regulations affecting nursing homes 
that might change the percentage of beds devoted to Medicaid 
and you've not finalized that, but you don't think that you're 
going to move away from voluntary decisions?
    Mr. Hash. No. We would not have the authority to force or 
cause a facility to come into the program or to stay in if they 
wanted to exit. It's a voluntary decision on the part of the 
nursing facility.
    Mr. Whitfield. In Florida, what is the entity that has the 
survey and certification authority?
    Mr. Hash. I believe it's the Agency for Health Care 
Financing in the State of Florida. I believe that's the correct 
name of it.
    Mr. Whitfield. Mr. Chairman, I have no further questions.
    Mr. Bilirakis. I thank the gentleman.
    Ms. Capps, to inquire?
    Ms. Capps. Thank you. I appreciate being here. I commend 
our chairman and this committee for introducing this very 
important legislation this early in this Congress and support 
your efforts in doing so.
    I appreciate the testimony that's been given today. I 
realize I'm in the presence of an expert witness and I support 
the suggestion that we have an informal discussion and briefing 
on HCFA. I will be in attendance if possible because this is an 
area that I have many questions regarding and like the others, 
there are many issues in our Congressional districts on HCFA 
topics, not all of which relate to this subject.
    Just reading the briefing given to us on this whole issue, 
I'm astounded by the percentage of residents in nursing homes 
who spend down and become Medicaid eligible in 13 weeks, 63 
percent and in 52 weeks, 87 percent. It makes me think about 
this population and the challenge that nursing homes face in 
providing good care and meeting their costs and all of these 
issues.
    I'm wondering in which direction this percentage is going. 
Are there waiting lists? I know when patients are transferred 
many times they're transferred away from their families and 
that's a particular issue at stake in some of this.
    I'd be happy to defer this but since I have a couple of 
minutes, maybe you would address some of these that pertain to 
our topic today?
    Mr. Hash. I think if there are waiting lists or shortages 
of beds for nursing facilities, they are isolated. It's not a 
systemic problem. There are about 17,000 nursing facilities in 
the country, so I think there's an adequate complement.
    There may be periodic issues about shortages of beds in a 
particular community, particularly in rural areas which I think 
is where it is most acute, as it is in most health care 
facilities. I think in general, our view is we don't have any 
evidence that access to nursing facilities is a systemic 
problem.
    We would also welcome the opportunity to have an informal 
discussion and think it would be a useful opportunity to 
explain and communicate more completely some of the issues that 
you've heard about and other members of the subcommittee have 
been confronted with.
    Ms. Capps. Thank you very much.
    Mr. Bilirakis. I thank the gentlelady.
    Mr. Coburn?
    Mr. Coburn. I've got 5 minutes and I'm going to try to 
sneak all this in.
    For everybody here who doesn't know, would you give a quick 
synopsis of the current requirements on Medicaid transfer out 
in nursing homes so everybody will know what the standard is?
    Mr. Hash. My understanding is a nursing home must give the 
resident a 30-day notice and must assure they have made 
arrangements for the transfer to an appropriate facility and 
that during the pendency of that transfer, all appropriate care 
and services are provided.
    Mr. Coburn. And that sounds real reasonable. I think 
everyone would agree with that.
    Do you have significant knowledge of the actions that 
happened in Florida happening in many other States?
    Mr. Hash. We have incident reports that I personally don't 
know that I could recite all the details but certainly can 
furnish them to you.
    Mr. Coburn. Let me go back and ask the question. What 
percentage of the Medicaid beds that are certified in the 
United States have experienced this kind of problem?
    Mr. Hash. I'll be happy to get that answer for you. I don't 
have that statistic.
    [The following was received for the record:]

    Our data systems are not currently capable of providing 
this data. In an informal survey, HCFA staff polled 47 States 
Ombudsmen in 1997. Fifteen cited transfer and discharge 
violations as highly problematic.

    Mr. Coburn. If, in fact, this becomes law, what new steps 
does HCFA propose to put in place, new regulations that would 
have prevented what happened in Florida?
    Mr. Hash. I think we already have, as I said in my 
statement, the strongest nursing home enforcement regulations 
that have ever been on the record and that we have been taking 
steps, particularly since last July, to strengthen our 
enforcement procedures both in terms of our own regional office 
oversight and more particularly working with the State survey 
and certification agencies to very significantly change the 
approach they're taking, the protocol for the surveys, the 
extent to which they consistently apply penalties.
    Mr. Coburn. I understand that, but what new steps, given 
you have a new law, would you have?
    Mr. Hash. If this became the law, then the issue there 
would be part of the survey or complaint process, either way, 
could come to our attention that a facility had in fact not 
provided proper notice that is required in this bill to new 
residents, that they had not protected adequately the remaining 
Medicaid-eligible residents who were still there and under this 
bill would be guaranteed the opportunity to stay there. Part of 
that guarantee is until the last Medicaid-eligible individual 
is discharged from that facility, they are under all of the 
full obligations of the conditions of participation that apply 
to all nursing home facilities and we would enforce them 
through the survey process.
    Mr. Coburn. But they are under that obligation today?
    Mr. Hash. But this would be a new set of obligations with 
regard to a nursing facility that is withdrawing from 
participation in the Medicaid Program.
    [The following was received for the record:]

    H.R. 540 would allow us to protect residents in the case of 
a facility's voluntary withdrawal from the Medicaid program. 
Residents would be assured that they can stay in their facility 
and that the facility would continue to be subject to the 
Medicaid conditions of participation even though the facility 
has terminated their Medicaid agreement. HCFA was able to 
address the situation that happened in Florida prior to H.R. 
540. The Vencor situation clearly violated existing law, and we 
were able to take swift action. The strong enforcement response 
in this situation sends a clear message to other providers 
across the nation that this behavior is unacceptable.

    Mr. Coburn. Let me ask you another question. How many 
nursing facilities voluntarily withdrew from the Medicaid 
system last year?
    Mr. Hash. I also do not have that answer for you but I'll 
be glad to get it for you.
    [The following was received for the record:]

    Our data indicates that over the last three years the 
average number of nursing facilities that voluntarily withdrew 
from the Medicaid program is 58 per year: 59 Medicaid 
facilities withdrew in FY1996; 54 in FY1997; and 60 in FY1998.

    Coburn. I'm extremely concerned, Mr. Chairman. I see here a 
problem that the law already applies to, that we have 
demonstrated that we have fined, that we have the ability to 
control, and we don't have the data to know, one, how big the 
problem is; two, the number of people who have actually 
withdrawn. We don't even know, we don't have any testimony to 
tell us that and we're going to pass a new law without the 
knowledge of knowing how big the problem is, the severity or 
the frequency of the problem all because it's a feel-good law.
    I'm not against doing the things to protect seniors but I'm 
extremely concerned at how we're going through this without any 
knowledge. HCFA's job is to give us that information. Today we 
have before us the person responsible for that. I know the kind 
of problems you have at HCFA and I'm extremely sympathetic with 
the constraints that have been placed on you by both budget and 
demand but I don't think we should even think about passing a 
bill until we know the extent of the problem, the number of 
firms that have actually chosen to voluntarily--there are many 
that get out but it's because we ran them out, because they 
didn't comply.
    Before we pass a law to pile another set of regulations on 
nursing homes which is going to limit their ability to have 
dollars to care for patients and it's going to increase the 
dollars they're going to put out in terms of compliance with 
paperwork, we ought to know those things.
    I would yield back.
    Mr. Bilirakis. I don't disagree with the gentleman in terms 
of wanting to get some of those answers from HCFA. God knows 
they ought to have those answers and I'm sure they do, it's 
just that you don't have them readily available.
    Of course the hearing is not over and the next panel will 
share with us a number of instances where this has taken place, 
so this is not an isolated incidence.
    Mr. Hash. Mr. Chairman, I can assure you that we will 
respond to Mr. Coburn's questions and we will get the data to 
you for the record.
    Mr. Bilirakis. Sooner than later because in the interest of 
getting this on a fast track?
    Mr. Hash. Yes, sir. I would just say that I think from our 
perspective, anytime a vulnerable, frail individual is treated 
improperly and in violation of the Federal laws and State laws, 
in many respects, even if it's only one, we should take action 
against them.
    Mr. Coburn. But you have.
    Mr. Hash. We don't have the authority that this 
legislation----
    Mr. Coburn. My point is in the instance of the case that's 
brought before us, the history is you all did take action. They 
have been fined, they have been penalized. We did do it. The 
system worked. Correct?
    Mr. Hash. Correct, but there are obviously circumstances 
that this bill addresses where nursing home patients could be 
subjected to transfers that they do not want, are not in their 
best interests.
    Mr. Coburn. Absolutely, and don't get me wrong, I'm not 
against that. I'm just saying every time we lay a dollar, 
compliance dollar on a caregiver today, it's not coming out of 
the caregiver's pocket, it's coming out of the patient's 
provision. We need to remember that. Greed conquers all 
technologic difficulty. The one that's going to benefit in that 
is going to be the person that's in control of the money. So if 
we spend a dollar on compliance, that's a dollar that's not 
going to that patient.
    Mr. Bilirakis. Mr. Hash, in earlier comments, I believe you 
alluded to the fact you didn't want to do anything that was 
going to make even less availability of nursing homes available 
to the elderly, so you take all that into consideration.
    Mr. Hash. That's correct.
    Mr. Bilirakis. In the case at hand, the family had to go to 
court in order to get an injunction to keep them from evicting 
those individuals.
    The gentlelady from California has been very patient this 
afternoon. Ms. Eshoo?
    Ms. Eshoo. Thank you, Mr. Chairman. My gratitude to you and 
to my wonderful colleague, Jim Davis, who is here today. I'm 
sorry I missed your testimony introducing this bill.
    This is directed to my colleague, Mr. Coburn. I always 
thought that hearings were exactly for bringing up the 
questions, to answer the very questions we're posing. I don't 
remember a hearing that I've been in where every single 
question that was posed of the witnesses, that they had the 
complete answer with them, but they do submit things to us. 
Many times they follow up, as Congresswoman Cubin suggested, 
that they come to her office. So that's what this hearing is 
about today and I appreciate what you've put forward, Mr. Hash.
    I don't know whether the rest of my colleagues on this 
important subcommittee have read the most recent HHS news press 
release but it's something we have dealt with in this 
subcommittee. We very often don't focus on good news.
    That is, the Inspector General issued a report relative to 
an issue that we've dealt with, fraud, abuse and waste in the 
system. Obviously, we still have a ways to go to eliminate what 
I just mentioned in terms of improper Medicare payments, but 
there's been a 45-percent reduction in improper payments in 
just 2 years. So I salute the agency and everyone that is a 
part of doing that because I was one of the people originally 
that really climbed on some of the statistics that we had. So I 
salute you and thank you. I'm not here to scold you today.
    About the legislation, the legislation prohibits 
discharging a patient because he or she is on Medicaid. Can you 
outline or give us any idea what we're doing today that would 
prevent discriminatory admissions practices and if you know or 
have anything you can share with us about whether that even 
takes place?
    Mr. Hash. Yes, there have been cases of inappropriate 
discrimination in the admission of patients to nursing 
facilities based on source of payment. When those allegations 
are made to us or evidence comes to us, we and the States go 
out to validate that and if there is a validated complaint of 
that kind, we can take action against the facility.
    Ms. Eshoo. But do you think there is a nexus between it 
happening at the front end, and if we prevent more of that, 
then it wouldn't happen at the other end?
    Mr. Hash. I think there is potentially a connection here. 
There is no question about that. Obviously this legislation is 
not designed to address the front end piece.
    Ms. Eshoo. That's what prompted me to ask the question.
    Mr. Hash. From what I know, there have been cases that we 
have pursued where there has been discrimination based on a 
source of payment. The admissions policy cannot discriminate in 
a Medicaid-certified facility on the basis of source of 
payment.
    [The following was received for the record:]

    With regard to discriminatory admission practices as they relate to 
Medicaid, the situation is actually a bit more complex than my earlier 
statements at the hearing indicate. I was incorrect to say that we 
investigate allegations of discrimination on the basis of source of 
payment for admissions to Medicaid certified facilities. We do have 
some significant Federal protections for current and prospective 
Medicare and Medicaid beneficiaries in nursing home admissions and 
continued stays. However, there is no simple, absolute Federal 
prohibition on discriminating against Medicaid beneficiaries in nursing 
home admissions. Indeed, a facility may admit a private pay person in 
preference to a current Medicaid beneficiary. The protections in our 
regulations prohibit a nursing home from:

--requiring residents or potential residents to waive their rights to 
        Medicare or Medicaid;
--requiring oral or written assurances that residents or potential 
        residents are not eligible for, or will not apply for, Medicare 
        or Medicaid benefits;
--requiring a third party guarantee of payment to the facility as a 
        condition of admission, expedited admission, or continued stay 
        (although an individual who has legal access to a resident's 
        income or resources available to pay for facility care may be 
        required to sign a contract to do so, without incurring 
        personal financial liability);
--charging, soliciting, accepting, or receiving any gift, money, 
        donation, or other consideration, in addition to any amount 
        otherwise required to be paid under the Medicaid State plan, as 
        a precondition of admission, expedited admission, or continued 
        stay by a Medicaid beneficiary (except that the nursing home 
        may charge a Medicaid resident for items and services that 
        resident requested and received that are not covered by 
        Medicaid nursing home payments, so long as the facility gave 
        proper notice of the availability and cost of the services and 
        does not condition admission or continued stay on requesting 
        and receiving the additional services; and the nursing home may 
        solicit, accept and receive a charitable, religious, or 
        philanthropic contribution from an organization or person 
        unrelated to a Medicaid-eligible resident or potential resident 
        to the extent that the contribution is not related to 
        admission, expedited, admission, or continued stay of a 
        Medicaid eligible resident).
    Moreover, States or political subdivisions may apply stricter 
standards, under State or local laws, to prohibit discrimination 
against individuals entitled to Medicaid.

    Ms. Eshoo. How many nursing homes are there in the country?
    Mr. Hash. There are about 16,800.
    Ms. Eshoo. Of that, how many participate in Medicaid?
    Mr. Hash. I think virtually all of them are Medicaid-
certified.
    Ms. Eshoo. Do you think the issue with which the bill deals 
can be characterized as widespread or somewhat contained? The 
reason I ask that question is that anytime we read a story 
about something that's related to a nursing home and it's 
negative, we always think, there but for the grace of God, go 
I. None of us want to go to one. We want to be taken care of at 
home.
    I think we also know, and I've been around these issues 
even before I came to the House, that there are some bad 
characters, there are some really bad players in any given 
industry. That's why I asked the question, because I think what 
we do needs to be a signal to the bad apples.
    God knows we need all the good operators in this country. 
The population continues to age and we're trying to deal with 
social security and what we do to address the babyboomers. God 
knows we need more and more good operators and safe places for 
the care of people in this country.
    Maybe you can tell us something about that statistic, the 
number of bad players? If we have to introduce one solid bill, 
which I think this is a pretty good bill, to go after the bad 
players, do you think professionally this will cure what we're 
trying to affect?
    Mr. Hash. I do believe this legislation will provide 
protection in those instances where a facility has Medicaid 
patients and decides for whatever reason that in the future 
they don't want to participate. There is protection in this 
bill that is very important to that circumstance.
    With respect to how widespread the problem is, I think Mr. 
Coburn makes a good point that we need to take a look at what 
the evidence shows. I think most of us are aware that what 
brought this to light very vividly last year was one particular 
nursing home chain seemed to be taking actions like this in a 
number of different places--in Indiana, in Florida, et cetera--
so that at least there is a recent spate of this.
    I think it would be unfair to say this is a systemic 
problem across all nursing facilities because I don't believe 
that it is but I do think this is an important protection in 
the instances where homes decided that they, for whatever 
reason, don't want to continue to participate in Medicaid. 
Those people who are there and who came there relying on a 
commitment that this facility would continue to keep them and 
serve them, that those people will be protected by this 
legislation.
    Ms. Eshoo. Thank you, Mr. Chairman, for the time and for 
caring about this issue and to you and Mr. Davis for 
introducing the legislation. I think it's a great service to 
the people in this country and we should move on it.
    Mr. Bilirakis. I thank the gentlelady.
    The instance that you referred to which has just come to 
your attention in Brandon, was that the same nursing home chain 
or a different one?
    Mr. Hash. No.
    Mr. Bilirakis. So it was a different nursing home chain?
    Mr. Hash. A different nursing home chain. It's the 
Integrated Health Services.
    Mr. Bilirakis. Anything further?
    Mr. Coburn. Mr. Chairman, I just want to make a unanimous 
consent request that we do have our questions returned in 
writing and specifically the number of cases that occurred like 
this that HCFA is aware of, the number of nursing homes that 
withdrew from Medicaid last year voluntarily, and also, as that 
relates to the percentage.
    Mr. Hash. Of total facilities?
    Mr. Coburn. We really need to know how big of a problem 
this is. I believe this happened; I don't doubt that; and it's 
horrendous that they would try to do this. The point is, how 
big is it and are we going to hit an ant with an atomic bomb 
and is it something we need to do given the cost of compliance 
today? I just want to make sure we get our answers.
    Mr. Bilirakis. Of course there may be additional questions, 
and you're willing to respond to all those in writing within a 
very reasonable period of time?
    Mr. Hash. Yes, sir, Mr. Chairman.
    Mr. Bilirakis. Thank you very much for taking the time to 
come.
    Mr. Hash. Thank you, Mr. Chairman.
    Mr. Bilirakis. The next panel will consist of: Mr. Nelson 
Mongiovi of Tampa, Florida; Ms. Nona Wegner, Senior Vice 
President of The Seniors Coalition located here in Fairfax, 
Virginia; Mr. James L. Martin, President of the 60 Plus 
organization located in Arlington, Virginia; Ms. Robyn Grant of 
Severns & Bennett of Indianapolis, Indiana; and Ms. Kelley 
Schild, Administrator of the Floridean Nursing and 
Rehabilitation Center located in Miami, Florida.
    Ladies and gentlemen, your written statement is a part of 
the record. I'm going to put the clock on 5 minutes. I would 
hope that you would stay as close to that as you can. You're 
welcome to read your statement but by complementing it orally, 
you might be able to get across more information.
    Having said all that, Mr. Mongiovi, why don't we start with 
you, sir?

          STATEMENT OF NELSON MONGIOVI, TAMPA, FLORIDA

    Mr. Mongiovi. Distinguished panel, committee members, I'm 
proud to be here today and thank you for inviting me.
    My name is Nelson Mongiovi.
    Last April, 10 months ago, my mother was one of 53 nursing 
home residents that Vencor tried to evict from their facility 
in Tampa, Florida. Evictions of Medicaid residents occurred in 
13 homes in 9 separate States with a corporate plan underway to 
withdraw an additional homes from the Medicaid Program. After 
10 residents had already been evicted from the facility in 
Tampa, an immediate injunction was served to stop all further 
evictions in order to prevent irreparable damage to the 
residents.
    There are 1.6 million nursing home residents in our Nation 
at risk of eviction unless legislation to prevent this is 
approved. Senator Bob Graham, Congressman Jim Davis, and 
Congressman Michael Bilirakis joined us in our fight to ensure 
that this dumping would never occur again.
    A $5 million renovation had taken place from the end of 
1996 and was completed at the end of 1997. During this period, 
residents were accommodated on all other floors in the 
facility. After renovations were completed, all residents had 
returned to their original setting and began another period of 
readjustment.
    It was a necessity to visit this facility on a daily basis 
to ensure that my mother was clean, fed, turned and taken care 
of on a daily basis. When my wife went to the facility on March 
30, 1998, she heard from another caregiver that the facility 
was going to undergo yet another renovation and everyone on the 
fourth floor would be moved. This caregiver was offered a room 
on the third floor for her daughter, a private-pay resident, 
and she was going to be moved the next morning.
    My wife immediately went to the third floor and discovered 
46 empty beds were available, including the room directly 
beneath my mother's room. She immediately went to the 
administrator's office to see if this move was just a rumor and 
was told the fourth residents would be moved out of this 
facility. My wife asked if my mother could be moved to the 
available third floor room because the floor plan was identical 
to her room and we did not want to traumatize her again.
    The administrator said a team from corporate had been sent 
to handle these moves. We met with the team member the next day 
and she informed us my mother would definitely be moved out of 
this facility. We realized the private-pay residents had been 
moved to the third floor and only Medicaid residents were being 
evicted.
    Residents and their families were in a panic when the 
official notice was received stating the safety of individuals 
in the facility is endangered by the residents being here. The 
injunction forced the return of the ten residents who had been 
moved and prevented further evictions. When someone is moved 
into a nursing facility, it becomes their home; it's not just a 
building to warehouse people until they die. Medicaid dumping 
must not be allowed in our Nation. Our loved ones need a place 
to live their final years with dignity if they need total care. 
Medicaid residents must be protected and not subjected to 
physical and emotional harm, irreparable damage and even death 
if evictions are allowed to continue.
    Out of the 53 original Medicaid residents, only 33 remain 
today; 16 have died. My mother died in November 1998 but we 
continue this effort because nursing home residents and their 
families must be protected and must never have to endure the 
suffering we have gone through. I am here on behalf of every 
nursing home resident in our Nation and we respectfully request 
your unanimous support in making this bill a law.
    Thank you very much.
    [The prepared statement of Nelson Mongiovi follows:]
                 Prepared Statement of Nelson Mongiovi
Rehabilitation and Healthcare Center of Tampa

Chronology of Events

RE: Resident--Adelaida Mongiovi
Date of Birth--3-16-05
AGE: 93
    November 7, 1996--Letter mailed to all residents of the 
Rehabilitation and Healthcare Center of Tampa indicating that the 
Facility would undergo ``major renovation beginning 12-2-96,'' 
``Construction is scheduled to last approximately one (1) year,'' and 
``We will be asking residents to relocate to other rooms.'' In 
addition, they said in this letter that we would have a ``new and 
beautiful home to return to.''
    February 1, 1997--Letter mailed to all residents of the 
Rehabilitation and Healthcare Center of Tampa thanking everyone for 
their patience during the ongoing renovation. (Note: The major 
renovation was completed at the end of 1997.)
    March 30, 1998--Letter mailed to all residents on the 4th floor of 
the rehabilitation and Healthcare Center of Tampa indicating that they 
would be remodeling the 4th floor and the short hall of 3rd floor and 
stating, ``We need to discuss placement options outside of this 
facility,'' additionally stating, ``but we will assist you in finding 
alternate placement.''
    March 30, 1998--Statement in Notice of Transfer or discharge ``The 
safety of individuals in the facility is endangered by the resident's 
being here.''
Monday--March 30,1988--5:30 p.m.
    1. I (Geri Mongiovi) went to the nursing home, Rehabilitation and 
Healthcare Center of Tampa to check on my mother-in-law, Adelaida 
Mongiovi (Room 416). When I was leaving, I was asked by another 
resident's mother if my mother-in-law was also being moved to 3rd 
floor. She said that she had been contacted by the Facility and told 
that her daughter's move was going to take place the next day. I 
questioned her about the reason she had been given for this move. She 
was told that it was for upgrading the wall paper and carpet 
installation. Also, because her daughter was a ``Private Pay'' 
resident, she would be moved to the 3rd floor. She was told that all of 
the 4th floor residents would be moved.
    This caregiver was extremely upset and could not understand why the 
move was occurring, since family members had just returned to the 4th 
floor after the extensive Five Million Dollar ($5,000,000) remodeling 
job. She indicated she had just finished redecorating her daughter's 
room and that her daughter was finally relieved to be back in her own 
room. She told me that she did not want her daughter to be moved to 
another room in this Facility again. During the extensive remodeling, 
which encompassed approximately one year, the residents had been 
accommodated on other floors in the Facility.
    2. I immediately went to the 3rd floor to determine how many rooms 
were vacant. I was in a panic about having to displace my mother-in-law 
again. I discovered that the room directly under my mother-in-law's 
room was vacant (Room 316). 1 was slightly relieved and hoped that she 
could be moved to that room. All of the 4th floor residents were going 
to be required to leave the floor. Since there were empty beds on the 
3rd floor, I felt that if I spoke up immediately, before any of the 
moves took place, I would have an opportunity to move my mother-in-law 
to that floor.
    I was extremely upset about what was occurring and fearful of what 
my husband's reaction would be if his mother were moved again. The 
uncertainty of where we would place her if it became necessary to move 
her to another nursing home led me to panic. If this occurred, it would 
be impossible for me to visit her daily, as I have done for almost four 
years.
    3. As I left the Facility, I saw the Administrator, Marie 
Panapolis, and asked her if I could speak with her about the remodeling 
and the possibility of having to move the residents again. I wanted to 
determine if this was just a rumor or if this was really going to take 
place. We sat in her office and she confirmed that this re-renovation 
was going to take place and that the 4th floor residents would have to 
be moved. Ms. Panapolis would be leaving her position as Administrator 
of this facility on April 17, 1998. I then asked Ms. Panapolis if my 
mother-in-law could be moved to Room 316 as this room was vacant and 
because it was located directly under the room which she now occupied. 
The room on the 3rd floor (Room 3l6) was exactly like my mother-in-
law's room. If she would be able to occupy this room, she would not be 
as traumatized by another move. I reminded her that I came to the 
Facility every day to see my mother-in-law, that my husband was able to 
walk to this Facility since no automobile was available for him when I 
worked, we live five blocks away, and that I work just a few blocks 
away. Ms. Panapolis said she was not involved in the relocation 
decisions and that Vencor had sent a Team down to assist with this 
matter. When I asked her who in the Vencor Team was making these 
decisions, she told me ``Amanda Clark is making the decisions about who 
will be moved to 3rd floor.'' I then asked if Amanda Clark was in the 
Facility and if I could meet with her regarding moving my mother-in-law 
to the 3rd floor. She knocked on the door across from her office and 
returned to tell me that Amanda Clark was in a meeting at the time. I 
asked her if she would relay my concern about not being able to visit 
the Facility daily and the fear that my mother-in-law would not survive 
yet another relocation. Additionally, I asked her if she could inform 
me immediately the following day whether or not we could move my 
mother-in-law to Room 316.
    Upon arriving home this evening and telling my husband about the 
series of events that had taken place, he became extremely upset. I 
tried to calm his fears, telling him that Ms. Panapolis had assured me 
she was going to talk with Amanda Clark when the meeting was over and 
she would give me an answer tomorrow regarding the possibility of 
moving his mother to 3rd floor. I was also well aware that, along with 
Room 316, there were other openings on the 3rd floor.
Tuesday--March 31
    1. While at work, I began to get an uncomfortable feeling that more 
was going on at this Facility than I was aware of. The fact that a 
``Vencor Team has been sent down to assist us'' and the statement that, 
``Corporate will be making these decisions'' really began to worry me. 
Instead of going directly to the Facility from work as I sometimes do, 
I called Nelson and told him to be ready so I could pick him up and we 
could go to the nursing home together.
    2. When Nelson and I arrived at the Facility, we immediately went 
to the 3rd floor and, much to our surprise, noticed that the three 
``Private Pay'' Residents who had been on the 4th floor yesterday had 
been relocated to the 3rd floor on this date (one moved to Room 316 and 
two moved to Room 323). The fourth ``Private Pay'' Resident that had 
been offered the opportunity to relocate to the 3rd floor had decided 
that she was going to leave this Facility. Nelson and I walked up and 
down the hall trying to determine which rooms still had beds available. 
Three residents remained in rooms in the short hall, on the 3rd floor.
    3. Nelson and I asked if Amanda Clark was available to speak to us. 
She made herself available and we asked if Ms. Panapolis had relayed 
our concerns to her. She indicated that she had spoken with her. We 
told Ms. Clark that we wanted to know if we would be able to move 
Adelaida Mongiovi to the 3rd floor, because we had seen available beds. 
She stated that this would not be possible and said that Mrs. Mongiovi 
``would be required to move out of the Facility.'' She mentioned that 
she would be happy to assist us in finding another facility. We asked 
her ``who in Vencor can we speak with regarding the decisions that are 
being made'' and she replied, ``Corporate is making the decisions.'' We 
then inquired about whom we could contact at the Corporate level 
regarding the decisions which were being made. We also asked her ``If 
there are still remaining beds on the 3rd floor, why would we not be 
able to move Adelaida Mongiovi?'' She reiterated, ``Corporate is making 
the decisions.'' We were also told that the beds which remained on the 
3rd floor were going to be held for ``Insurance Patients and hospitals 
which had contracts with Vencor.''
    At this point, it became evident to us that the ``Private Pay'' 
Residents were being moved to the 3rd floor while the ``Medicaid'' 
Residents were being farmed out to other facilities. Becoming extremely 
angry as we realized what was happening and trying to get some clear 
answers, we asked Amanda Clark if she could give us the names of 
Corporate personnel that would be able to answer our questions. She 
said that she had no available names, but would attempt to get answers 
for us.
    The following questions were posed to Amanda Clark:

1. Why had only the ``Private Pay'' Residents from the 4th floor been 
        offered the opportunity to move to the 3rd floor?
2. Why were only the ``Medicaid'' residents on the 4th floor going to 
        be relocated to other facilities?
3. Was there any possibility that we would be able to move Adelaida 
        Mongiovi to the 3rd floor until this re-renovation was 
        completed?
4. If we did have to move out of this Facility, would the Resident be 
        able to return when the re-renovation was completed?
5. What type of re-remodeling would they be conducting in the facility 
        after a five million dollar ($5,000,000) renovation had just 
        been completed and the residents had recently been returned to 
        the 4th floor?
6. Is this facility going to go private and, if so, was this the reason 
        they were re-wallpapering the newly wallpapered walls with 
        ``upgraded wallpaper?''
7. We asked if she could advise us as to how to contact the President 
        of Vencor or the Corporate personnel making these decisions so 
        we would be able to call someone directly to discuss our 
        concerns? TO EACH AND EVERY ONE OF OUR QUESTIONS, AMANDA 
        CLARK'S ANSWER WAS, ``I DON'T KNOW, CORPORATE IS MAKING THE 
        DECISIONS,'' HOWEVER, I WILL TRY TO GET SOME ANSWERS FOR YOU. 
        Amanda Clark informed us that Vencor was based in Louisville, 
        Kentucky, and she said she had no telephone numbers available 
        for us to contact the Corporate personnel making these 
        decisions. She did report that she would relay our concerns to 
        them and attempt to get answers to our questions. She indicated 
        that we would not be able to contact Vencor Corporate Personnel 
        directly regarding these concerns, but again reiterated that 
        ``The Team is here to help you in any way we can.'' She also 
        told us that she would be happy to assist us in ``finding a new 
        home.'' We left at that time, extremely angry and frustrated, 
        indicating to her that we would see her on the following day. 
        Ms. Clark informed us that we would be receiving a letter 
        ``very shortly.'' This letter had also been mailed to all 4th 
        floor Residents who were on Medicaid.
Wednesday--April I
    After arriving at work, I began feeling more and more uncomfortable 
about what Nelson and I felt was occurring. Our fear was that if we did 
not take immediate action, there would be no nursing home availability 
in Tampa because we were one of fifty-three Residents who were being 
discarded and knew the panic that would arise after these letters were 
mailed.
    After a short time at work, I asked if I could take the rest of the 
day off because I had some critical issues to attend to immediately. 
Nelson and I were well aware of the quality of nursing homes in this 
area, the lack of availability for new residents and the inconvenience 
of so many locations with some being a great distance from our home. We 
had, upon my mother-in-law's initial entry into the nursing home, 
visited almost every existing facility in Tampa. At this time, we knew 
we had to relocate, but experienced a feeling of impending doom 
regarding the possibility of ever being able to return. I left work and 
Nelson and I went immediately to the nursing home closest to this 
Facility, Tampa Health Care Center, 2916 Habana Way, Tampa, Florida. We 
spoke with a woman in admissions and told her about our situation. She 
said that Rehabilitation and Healthcare Center of Tampa had already 
contacted her and had sent her ``Face Sheets'' on some residents they 
would like to move. We discussed my mother-in-law's situation with her 
and, at that time, she indicated to us that there was only one 
available bed for a female resident. We asked if she could obtain the 
Face Sheet on my mother-in-law and determine if she could take this 
bed. We had decided at this point that since we had to make a move, 
this was the closest nursing home and we would just have to adjust 
until my mother-in-law was possibly given the opportunity to return to 
the Rehabilitation and Healthcare Center of Tampa.
    From that nursing home, we went to The Home Association, 1203 22nd 
Avenue, Tampa, Florida, to see if they had any available beds. Again, 
we were told they needed to evaluate her to see if they would be able 
to accept her. They said this would be done on Friday.
    We then went to the Rehabilitation and Healthcare Center of Tampa 
to see if Ms. Clark had gotten any answers for us. She said she did not 
know what criteria had been used for moving patients and still did not 
know whether or not we would be able to return. Nelson and I again went 
to the 3rd floor to see if the remaining available beds had been filled 
and were astonished to see that openings still remained.
Thursday--April 2
    In the morning, Nelson visited as many nursing homes as possible 
while I was at work. The same story was repeated over and over, we have 
no beds available at this time.
    In the meantime, many of the other families had received their 
letters and panic had set in. As we have become friends with so many 
families on this floor, as so many families are unable to communicate 
in English along with so many being unable to understand what was 
occurring, in general, we all banded together in an effort to get some 
answers. Many had called all of the numbers listed on the discharge 
letter, attempting to get some answers about what was happening. They 
questioned whether Vencor could really remove all the 4th floor 
``Medicaid'' Residents, did we have any rights, and whether anything 
could be done about the situation. We had so many family members 
contacting us that we decided at that time that we would try to get 
some more answers.
    The Home Association made a visit to the Facility to evaluate my 
mother-in-law and decided that they would accept her in their nursing 
home. Within one hour after the evaluator left Rehabilitation and 
Healthcare Center, the Home Association was contacted by Amanda Clark 
to see if my mother-in-law could be transferred immediately. The Home 
Association told them that the room had not even been cleaned and that 
she understood we had thirty days to accomplish this discharge. The 
Home Association called me immediately to tell me what had happened and 
asked what the big rush was.
    At 5:00 p.m., Nelson picked me up from work and we again went to 
see Marie Panapolis. As soon as Amanda Clark saw us in her office, she 
approached us saying ``I see you already found a place'' and wanted to 
know when the arrangements for transfer would be made. Nelson told her 
that he would let her know.
    By now, we had received our letter. This letter stated ``The safety 
of individuals in the facility is endangered by the resident's being 
here.'' We stated this was definitely not true and were told by Marie 
Panapolis that Alice Adler, Agency for Healthcare Administration had 
decided on the wording that was to be used in the Notice of Transfer or 
Discharge and that this discharge of patients had been approved by the 
state.
    We then asked her if any decision had been made about whether or 
not the 4th floor Residents that would be moved from this Facility 
would be able to return when the re-remodeling was completed. She told 
us at that time that Vencor had now said, when this remodeling was 
completed, depending upon availability of beds in the Facility and by 
priority, the displaced residents might be allowed to return. We asked 
her what priority method would be used to allow returns and she said 
they were trying to determine whether it would be the age of resident 
versus the years the resident had resided in the Facility before 
displacement, but that this determination had not yet been made. This 
verbal decision was made after numerous calls had been made to all of 
the telephone numbers on the Notice of Transfer or Discharge form. When 
we left the Facility, Nelson and I continued to visit as many other 
nursing homes as we could visit in one day. Upon returning home that 
evening, we agreed that a verbal statement from Vencor saying that we 
might be able to return if there were available beds was as useless as 
the paper it was written on. We wanted it in writing.
Friday--April 3
    Nelson and I went to the Facility approximately 9:00 a.m. and met 
with Marie Panapolis. I had scribbled down some ideas for a possible 
letter to be written by Vencor to the residents if, in fact, they were 
really going to allow us to return. We also told her that verbal 
promises meant nothing to us and we needed this in writing. She read my 
rough draft and said she would be meeting with Vencor personnel and 
would try to have an answer for me by the next Friday, April 10, 1998, 
as to whether or not they would put this in writing.
    The Agency for Healthcare Administration, the State Long Term Care 
Ombudsman, the DD Advocacy Center for Persons with Disabilities, Inc., 
and the MI Advocacy Center for Persons with Disabilities, Inc., had all 
been called by the 4th floor Residents and/or their family members, 
with additional calls having been made to Bay Area Legal Services and 
different attorneys. The universal answer given by all resources were: 
IF THE STATE APPROVED IT, THEN THERE IS NOTHING THAT CAN BE DONE ABOUT 
IT, OR WE WILL CHECK INTO THE MATTER FOR YOU. Nelson and I then decided 
that we really needed to leave no stone unturned to determine what our 
rights were. We then remembered an article, ``Nursing Homes often 
violate law'' which we had read a while back describing ``Medicaid 
Dumping.'' This article depicted the many different tactics by which 
this is accomplished. We wondered whether this was what was happening 
to all of the 4th floor ``Medicaid'' residents so we decided at this 
time to go to the newspapers and television stations hoping that we 
might expose their actions.
Saturday, April 4, 1998/Sunday, April 5, 1998/Monday, April 6, 1998
    Nelson and I visited sixteen nursing homes in the area, from 8:00 
a.m. to 10:30 p.m. during the course of these three days.
Tuesday--April 7,1998
    The Tampa Tribune printed the story of the plight of the 4th floor 
``Medicaid'' Residents who were being evicted from their home and, 
coincidentally, the Wall Street Journal printed a story on this same 
date regarding ``Vencor'' and ``Medicaid Dumping''.
    Nelson went to the Facility and saw many residents being moved out 
so rapidly that no one knew what was going on. The Residents were 
crying hysterically, not knowing what was happening or where they were 
going. Within two days, ten residents had been evicted from this 
Facility. The Residents' family members were also devastated, wondering 
how they would be able to see their loved ones if moved to other 
facilities. Many of these family members depended on rides every day as 
they did not drive, some walked to see their loved ones and still 
others were only able to navigate the familiar streets without having 
to drive on major thoroughfares. There was utter chaos at the Facility 
at this time with everyone, residents and family members, trying to 
determine what, if anything, would we be able to do.
    Realizing that our loved one, along with our fellow residents, 
would be subjected to physical and emotional harm, irreparable damage, 
and even the possibility of death if these moves would continue to take 
place, Nelson immediately contacted the Law Firm of Wilkes and McHugh. 
Bennie Lazzara, Esquire, from this Law Firm, accompanied Nelson to the 
Courthouse to file a Petition for Temporary Injunction which was 
granted immediately. This prevented any additional removals of 
residents from this Facility pending resolution of this matter by the 
Court.

    Mr. Bilirakis. Thank you very much, sir.
    Ms. Wegner?

   STATEMENT OF NONA BEAR WEGNER, SENIOR VICE PRESIDENT, THE 
                       SENIORS COALITION

    Ms. Wegner. Thank you, very much.
    I'm Nona Bear Wegner, Senior Vice President of The Seniors 
Coalition, a non-partisan, nonprofit advocacy organization 
representing approximately 3 million older Americans and their 
families. It is a pleasure for us to have the opportunity to 
testify today in support of the Nursing Home Resident 
Protection Amendments of 1999, which Mr. Bilirakis and Mr. 
Davis have put together. We thank them for their leadership on 
this issue and for the work the subcommittee does to protect 
the health of older Americans.
    The nursing home industry provides an invaluable service to 
the most frail and vulnerable in our society, as well as being 
an enormous relief to family members who trust nursing home 
operators to care for their families in their absence. It's 
essential that we have conditions which allow private 
enterprise to operate nursing homes and to encourage investors 
to invest in nursing homes so that these facilities will 
continue to grow and develop in proportion to the aging of our 
society.
    At the same time, we must offer protections to families 
from being suddenly and unfairly denied access to care. Finding 
the right balance between protecting the rights of operators 
and investors and protecting the rights of patients and their 
families is a very difficult process and the fact there is a 
strong bipartisan support for this bill, and the fact there are 
consumer and operator groups in support today is a testament to 
the painstaking manner in which this bill has been crafted.
    There are three points I'd like to make about H.R. 540. 
First and foremost, the most basic premise of our free market 
society rests on the fact that consumers must have accurate 
information. The aspect of full disclosure in this bill is 
critical in order for marketplace forces to work.
    Second, it is a fact of life that Medicaid currently pays--
estimates say as much as 70, others say as much as 40 percent--
of all care. We in no way condone the outrageous activities 
that led to Mr. Mongiovi and other families undergoing the 
things they experienced and therefore, the writing of this 
bill, but we must face the simple fact that when any operator 
is asked to provide care for half or more of their population 
at a reimbursement rate which does not allow them to meet their 
costs, they are going to look for an alternative. That is the 
real crux of this issue.
    Third, as I have said, and most importantly, nursing home 
residents and their families cannot be faced with being turned 
away without notice and without alternatives. That is 
intolerable.
    Clearly then, the kinds of practices and safeguards 
outlined in this bill must be enacted in law. It recognizes the 
realities of the industry while at the same time building on 
the safeguards that are needed.
    There is one more point I really feel I have to make. Far 
too many Americans are not prepared to face the cost of long-
term care. Neither the Medicaid budgets of all 50 States or the 
entire Federal Treasury are going to be able to absorb the 
impact of that cost. Industry projections say that in 30 years, 
the number of nursing home patients will double, but the total 
outlay for nursing home costs will quadruple reaching $330 
billion. This only looked at the economic impact of that cost. 
What about the cost of human pride and dignity of people who 
have spent their entire lives building a country and building a 
family and accumulating assets only to find their only 
alternative for caring for themselves or their spouse, parent 
or other loved one, is to turn to Medicaid.
    We have arguably the best system of health care delivery in 
the world. Long-term care is a part of that, but the advances 
that we have enjoyed have outstripped our ability to pay for 
them and there are not mechanisms in place. Just consider the 
fact that the fastest growing segment of our population is the 
age group of 85 and above. When the mechanisms in place today 
were developed, we never foresaw that kind of dynamics. They 
were developed in the 1940's, 1950's and 1960's and we have 
jerry-rigged them to bring them to the future.
    Therefore, the assumptions and rationales for current 
reimbursement strategies were not created with current dynamics 
in mind and we need to rethink them and find solutions that are 
based on both the demographic and economic realities of the 
21st Century.
    The current system must be modified to empower individuals 
to plan for and provide for their own long-term care. 
Government must create a public policy environment that 
encourages Americans to protect themselves and the private 
sector has to step up to the plate not only with affordable 
long-term care insurance but with other products that will also 
allow for the protection of assets and the protection of 
consumers.
    Thank you very much.
    [The prepared statement of Nona Bear Wegner follows:]
  Prepared Statement of Nona Bear Wegner, Senior Vice President, The 
                           Seniors Coalition
    Good afternoon. My name is Nona Bear Wegner and I am Senior Vice 
President of The Seniors Coalition. The Seniors Coalition is a non-
partisan, non-profit advocacy organization representing older Americans 
and their families. On behalf of the more than 3,000,000 members and 
supporters of the Seniors Coalition, I thank you for the opportunity to 
offer our remarks before the Health and Environment Subcommittee. I 
have come to testify in support of H.R. 540 which has been introduced 
by Mr. Bilirakis and Mr. Davis. I would like to take this opportunity 
to thank both of you for your leadership on this issue, and for the 
continuing work of this Subcommittee in helping to protect the health 
of older Americans.
    I would, for just a moment, also like to offer thanks to the 
ranking minority member of this Subcommittee, Representative Henry 
Waxman, a cosponsor of this bill, for the leadership he has provided on 
this matter and in making safe, effective low-cost generic medicines 
available in the marketplace. They have been lifesavers both medically 
and financially for so many of our members, and indeed all Americans.
    The nursing home industry is a vital element in the continuum of 
care available to Americans of all ages, particularly the elderly. It 
provides an invaluable service to the most frail and vulnerable, as 
well as enormous relief to the families who trust nursing home 
operators to care for their family members. Consequently, it is 
essential that we have conditions that both encourage private operators 
to make the investment necessary to operate these vital facilities and, 
at the same time, protect the patients and their families from being 
suddenly and unfairly denied continued access to such care. Finding and 
striking the right balance between the rights of operators and their 
investors and the rights of consumers and their families is a difficult 
process. The fact that such a wide array of consumer and operator 
associations are supporting this bill is a tribute to the careful, 
painstaking manner in which Congressmen Davis and Bilirakis have 
labored to craft this measure.
    Now let me return to the legislation under consideration here 
today. H.R. 540 would prohibit transfers or discharges of residents in 
nursing homes when the operator voluntarily withdraws from the Medicaid 
program. Additionally, it provides for disclosures--in writing--to 
clients and prospects concerning the intentions of operators in regard 
to Medicaid participation. Let me address several aspects of this 
package.
    First, consumers must have adequate information to make informed 
decisions. The most basic premise of our free market economy rests on 
this simple fact.
    Second, it is unfortunately a fact of life that the nursing home 
industry operates in a marketplace environment in which Medicaid is 
responsible for more than 40% of all financing. Naturally, private 
operators will respond or not respond according to the adequacy of 
government compensation rates. When Vencor or any other operator's 
asked to provide both care and medical support to its patients at a 
cost significantly above the reimbursement rate, we should not be 
surprised that eventually it and other operators will look for 
alternative--and more adequate compensation.
    Third, nursing home residents and their families cannot be faced 
with being turned away without notice, warning, or alternative. That is 
intolerable.
    Clearly, it is essential that the kinds of practices and safeguards 
outlined in the Bilirakis-Davis proposal be enacted into law. This bill 
recognizes the realities of this fragile and volatile industry, while 
building in safeguards against unfairness by establishing a threshold 
of full-disclosure. Through this, nursing home residents and their 
families will receive the information necessary to carry out the 
difficult planning and decisions which must be made in caring for 
elderly parents and friends.
    A feature contained in the legislation proposed last year called 
for a five-year study to assess the impact of this law and of 
reimbursement rates on Medicaid participation by and consumer access to 
nursing homes. My initial reaction was that this was too long a period 
of time. I know that the current version of this legislation has 
deferred that study in light of another on-going study which will be 
reported to the Congress. I believe it is essential that this on-going 
study be comprehensive enough to answer all of the questions 
surrounding industry trends, and the impact of full-disclosure and 
reimbursement rates on the availability of Medicaid beds for elderly 
residents in nursing homes. I would not want any provision of this law 
to delay that study, but I think it is important that all the questions 
anticipated in last year's five year study provision be answered. 
Except for that one caveat, I believe the present form of the 
legislation constitutes a reasonable measure providing necessary 
information, full disclosure, and consumer protection. I am especially 
glad to see that it does so without plunging into the trap of counter-
productive over-regulation and burdensome micro-management by 
bureaucratic fiat we so often see and experience.
    Finally, it must be said that the anguish of the families who are 
faced with situations like those in Tampa are perhaps the tip of the 
iceberg, for their plight is symptomatic of a far greater problem. In 
fact, it is a symptom which points to a reality we are only just now 
beginning to face: Far too many Americans are not prepared to face the 
cost of long term care, and neither the Medicaid budgets of the 50 
states nor the federal treasury can continue to absorb the impact of 
such costs. Industry projections suggest that in just 30 years, the 
number of nursing home residents will double. This dramatic increase in 
the number of patients combined with the increased costs of providing 
services suggest that total expenditures for nursing home care will 
quadruple--reaching $330 billion. Moreover, this looks only at the 
economic reality of the aging of our society, not the human cost. What 
of the dignity of proud Americans who, after spending a lifetime 
building our country and providing for their families, find they must 
turn to Medicaid to provide for their loved ones or themselves?
    The American system of health care delivery, including our network 
of long-term care, may well have no equal in the world. But it is also 
true that our advances in medical care for both chronic and acute 
illness have expanded explosively, and in many cases are beyond the 
adequacy of mechanisms available to pay for this care. Just consider 
that the fastest growing segment of our population is the cohort age 85 
and above, and by some estimates the number in this age group will 
triple in the next thirty years. The assumptions and rationales for 
current reimbursement strategies were not created with this dynamic in 
mind. We must rethink our assumptions--and find new solutions to the 
problem, solutions that take into account the demographic and economic 
realities of the 21st century.
    Just as the Bipartisan Commission on the Future of Medicare is 
looking at ways to save Medicare and make it responsive to the needs of 
seniors in the next century, we need a new solution for solving the 
problem of financing long-term care. In the latter half of the 20th 
century we have relied upon public-private sector partnerships that 
have evolved over time. The staggering number of those who will need 
long term care and the equally staggering costs of such care means 
that, under current economic realities, fewer and fewer individuals 
will be able to foot the bill privately. Nor is there enough money 
available in federal and state budgets to pay the cost of long-term 
care over the next thirty years.
    The current system must be modified to empower individuals to 
address, plan for, and provide for their own long-term care. It is a 
task that can be done through a new public private partnership. 
Government must create public policy which encourages Americans to 
protect themselves against the costs of nursing home care. Similarly 
the private sector must step up to the plate with a variety of products 
which will provide this protection for the consumer. In short, there 
must be new and better tax incentives for the purchase of long term 
care insurance and similar products if we are to avoid disaster.
    We urge this Subcommittee and this Congress to move beyond finite 
aspects of the problem and to utilize tax credits and other measures to 
encourage today's ``middle-agers'' and ``Generation Xers'' to acquire 
the necessary financial and insurance instruments to provide for their 
own long term-care.
    Thank you.

    Mr. Bilirakis. Thank you very much, Ms. Wegner.
    Mr. Martin?

        STATEMENT OF JAMES L. MARTIN, PRESIDENT, 60 PLUS

    Mr. Martin. Thank you.
    Good afternoon. I'm Jim Martin, President of the 60 Plus 
Association and I enthusiastically endorse what Ms. Wegner has 
just said.
    Thank you, Mr. Chairman, for holding this important 
hearing. I bring greetings from a colleague of yours, former 
Congressman Roger Zion of Indiana, who is the 60 Plus 
Association's honorary chairman. Congressman Zion has asked 
that a news article from his hometown paper, the Evansville 
Courier Press, be made a part of this record. The article 
highlights another nursing home problem.
    Mr. Bilirakis. Without objection.
    [The article follows:]

         [Tuesday, February 2, 1999--Evansville Courier & Press]

      Legislators Call Treatment in Nursing Home Case ``Inhumane''
            By Roberta Heiman, Courier & Press Staff Writer
    To force William Lockard or any other elderly person to leave a 
nursing home, after having required them to sell their own home, 
``would be inhumane,'' say Evansville's four state representatives.
    The legislators Monday asked Gov. Frank O'Bannon to review how his 
administration is enforcing Medicaid continuing-eligibility rules in 
nursing homes and to consider other alternatives.
    Their action came in response to the dilemma of 86-year-old Lockard 
and his wife, Pauline, 82.
    The Lockards, married for more than 65 years, have both been 
patients at Pine Haven Nursing Home in Evansville for two years. She is 
blind and bedfast. He has heart problems and early stages of dementia, 
but Medicaid reviewers add he doesn't need nursing home care anymore 
and must leave.
    But he has no home to return to, because under state Medicaid rules 
a couple has to deplete their resources to only $2,250--including their 
home and life's savings--to pay the nursing home bills themselves 
before Medicaid will help.
    ``We have several concerns about the state's actions and state 
policy in this situation,'' State Reps. Jonathan Weinzapfel, Dennis 
Avery, Vaneta Becker and Brian Hasler said in a letter to O'Bannon.
    ``. . . As you are aware, one must impoverish oneself to become 
eligible for Medicaid assistance for nursing home care,'' the 
legislators wrote. ``Once that happens, does the state not have an 
obligation to continue providing Medicaid assistance for that person to 
remain in a nursing home even though their medical condition may 
improve?
    ``Once impoverished, such a person would have nowhere to go if they 
did not have a supportive family. Such action would be inhumane,'' they 
concluded.
    They said they hope Medicaid's ruling on Lockard will be reversed 
by an administrative law judge who conducted a hearing Friday on the 
family's appeal. The judge's ruling will come later.
    In addition, the legislators asked O'Bannon to find out if Medicaid 
reviewers were following the guidelines he called for more than a year 
ago--to consider socioeconomic factors, not just medical factors, when 
determining eligibility for continued nursing home care.
    Elder-law attorneys and Medicaid officials said the Lockard case is 
unusual, because it isn't common that both a husband and wife would 
have to enter a nursing home at the same time.
    But when it does happen to elderly Hoosier couples, they said, 
Indiana forces them to deplete their assets to only $2,250--spending 
all they've worked for and saved over the years--before Medicaid will 
help pay the nursing home bill.
    And if one of the couple improves in health a few years later and 
has to leave the nursing home, he or she has no home to go back to and 
no resources to start over with.
    ``The rules obviously need to be changed,'' said attorney John 
Buthod, a member of the Evansville Bar Association's elder law 
committee,
    Buthod said in most cases only one of the spouses has to enter a 
nursing home, and state law allows for protecting the other spouse 
against impoverishment.
    But when both spouses have to enter a long-term care facility, or 
when the person is single and has no spouse, the law doesn't provide 
for protecting or sheltering most of their assets, he said.
    ``The law is trying to achieve some sort of balance--to make sure 
people are provided for but protect taxpayers from an undue burden,'' 
Buthod added. ``But a lot of work needs to be done. It's not a very 
good system yet.''
    The state no longer places a lien on a couple's home when just one 
enters a nursing home, said Cindy Stampler, state Medicaid eligibility 
manager.
    But the rules are different when both spumes need nursing home 
care, or when there is no spouse and a single person enters a nursing 
home, she said.
    Stampler said it's possible for a couple or individual in good 
health to transfer their assets to their children at least three years 
before they might have to enter a nursing home.
    But Buthod said that's not advisable. ``That isn't really 
protecting their assets,'' he said. ``It would not only rely on the 
good will of the kids, but would subject the home to potential 
creditors of the children. It's not generally a good idea.''
    He said one allowable step is to buy a prepaid funeral plan, which 
Medicaid doesn't count against the asset limits.
    Indiana's assets limits of $1,500 for an individual and $2,250 for 
a couple are among the lowest in the country and haven't been increased 
for at least 15 years, Stampler said.
    Regulations vary from state to state.
    Most states allow at least $3,000 for a couple, and some allow 
more. But Buthod said none are really adequate to provide for a 
situation like the Lockards.
    In their letter to O'Bannon, the legislators said part of the 
problem is Indiana's limited program of room-and-board assistance and 
other alternatives to nursing home care.

    Mr. Martin. On behalf of 60 Plus, I appreciate this 
opportunity to testify and while I have a formal statement, Mr. 
Chairman, I would like to make a personal observation.
    I came to Washington, D.C. as a young reporter way back in 
1962 for a group of newspapers, including the Tampa Tribune, 
which I was pleased to learn uncovered this nursing home 
scandal. I started reporting on Congress back then when John 
Kennedy was in the White House and yes, I covered that tragic 
moment in our history, his assassination; Neil Armstrong's walk 
on the moon; and Strom Thurmond was still a Democrat, he was 
even South Carolina's junior Senator. My point being that while 
others here today have touched on the details of this nursing 
home scandal--and my official testimony does likewise--I would 
like to make an observation from the perspective of 37 years 
working on and around Capitol Hill.
    I've seen a lot of pitched political battles, perhaps none 
more contentious than the one which is hopefully ending as we 
meet here today. I believe that Congress has a window of 
opportunity, as has been expressed by the chairman and others, 
with this type of legislative initiative, H.R. 540, to start a 
bipartisan process, as the new Speaker has said, to work for 
the common good.
    Clearly Democrats such as Jim Davis of Florida, Senator Bob 
Graham, and you, Mr. Chairman, a Republican, all of Florida and 
many of the other bipartisan co-sponsors are showing what 
working together can produce.
    As Mr. Mongiovi has said, nursing homes become just that, 
homes. They are not a hospital room nor a hotel room. They are 
home to these patients. California and Tennessee have adopted a 
similar proposal: attrition, not eviction, should be the rule 
so indigent patients do not suffer relocation trauma. In short, 
if you take 'em, keep 'em.
    60 Plus is a national, nonpartisan seniors group with half 
a million seniors, 30,000 in Florida, including my favorite 
senior, my mom who is in her 80's, lives in Okeechobee and she 
still works part-time.
    60 Plus publishes a Congressional scorecard of key votes 
which is the basis of our Guardian of Senior Rights Award that 
is given to Democrats and Republicans alike. H.R. 540 is a 
shining example of the type of legislation that 60 Plus will 
consider for its scorecard. Kudos to Congress and we urge its 
immediate passage.
    Thank you.
    [The prepared statement of James L. Martin follows:]
 Prepared Statement of James L. Martin, President, 60 Plus Association
    Mr. Chairman and Members of the Subcommittee, I am pleased to be 
here today to testify in support of H.R. 540, the Nursing Home Resident 
Protection Amendments of 1999. I bring greetings from the 60 Plus 
Association Honorary Chairman, former Congressman Roger Zion, a member 
of this body from Indiana for eight years, 1967-1975, who is unable to 
attend today's hearing.
    60 Plus is a six-year old national, nonpartisan senior citizens 
advocacy group with half a million members nationwide, an average of 
1,000 per Congressional District. We pursue efforts to give them a 
greater voice in their destiny and the spending of their money.
    60 Plus publishes a Congressional Scorecard based on key votes 
affecting seniors. The scorecard is the basis for our ``Guardian of 
Seniors'' Rights Award'' given each session to Members of Congress, 
Democrats and Republicans alike, who are ``senior friendly.'' This 
proposal, H.R. 540, with strong bipartisan support, is the type of 
proposal which 60 Plus strongly supports and urges that it be reported 
out of committee and voted on by Congress. It is the type of 
legislation which we will consider including as a key vote for our next 
scorecard.
    I note that Chairman Bilirakis has been a recipient of our highest 
honor, the ``Guardian of Seniors' Rights Award'', in previous 
Congresses and it is this type of legislative initiative that endears 
the Chairman to senior citizens. Martin/Page 2
    While 60 Plus seeks a reduction of federal government controls and 
less regulation, we recognize that there are certain abuses which 
require some new legislation and/or regulations to protect our senior 
citizens. One instance is the current situation with nursing homes and 
the abuse of Medicaid patients.
    We are dealing with a vulnerable population. Seniors may reside in 
these homes for many years and they begin to identify the nursing home 
as part of their own community. This is becoming more of an issue as a 
greater number and percentage of that population lives on into their 
80's and 90's and beyond. I know I was alarmed to read and hear of 
nursing homes and nursing home chains taking the action of evicting 
seniors from nursing homes. Though reimbursement may be lower for 
Medicaid patients, we need to preserve their rights. Even with the 
lower reimbursement, it is still beneficial for nursing homes to 
provide assistance to these patients, rather than to have empty beds.
    This legislation protects Medicaid patients and it also protects 
the property rights of nursing home owners. As I understand it, it does 
not require any nursing homes to accept Medicaid patients. However, 
once a nursing home does accept Medicaid patients, it would protect 
those patients from being evicted by these nursing homes or 
transferring that resident. We don't want ``granny'' or ``grandpa'' 
arbitrarily sent away or evicted from a nursing home for no legitimate 
reason.
    We must halt this discrimination against Medicaid patients. We must 
not allow nursing homes to empty their beds of Medicaid patients. This 
bill is fair to the owners and the chains running nursing homes in that 
if they decide not to accept Medicaid patients, such nursing homes can 
follow a procedure to terminate voluntarily their participation in the 
Medicaid program. New residents then must be notified of such a policy 
and that they might be transferred or discharged at some later date.
    I want to thank you again, Mr. Chairman and members of this 
subcommittee, for inviting me to testify before you on this important 
legislation. In closing, in accordance with the Truth in Testimony 
regulations, I am pleased to announce that we neither accept nor 
solicit federal funds or federal grants for the 60 Plus budget. 60 Plus 
depends 100% on voluntary donations from its supporters.

    Mr. Bilirakis. Thank you very much, Mr. Martin.
    Ms. Schild?

 STATEMENT OF KELLEY SCHILD, ADMINISTRATOR, FLORIDEAN NURSING 
  AND REHABILITATION CENTER, ON BEHALF OF THE AMERICAN HEALTH 
                        CARE ASSOCIATION

    Ms. Schild. Hello, Chairman Bilirakis. Good afternoon, 
members of the subcommittee.
    My name is Kelley Schild and I am the Administrator of a 
nursing home in Miami named Floridean. I operate a small, 
independently owned, family run nursing facility that cares for 
60 residents. I am here on behalf of the American Health Care 
Association to give you our perspective on H.R. 540 introduced 
by Congressman Davis and Senator Graham, called the Nursing 
Home Resident Protection Amendments of 1999.
    When I heard the plight of the residents that were 
discharged from the nursing home in the Tampa area, I was sad 
and angry. Let me state at the outset that we do not condone 
the action taken by the nursing home and are gratified to hear 
that all the discharged residents were readmitted. They paid 
fines to the State and Federal Government and made changes in 
their company to prevent this from happening again.
    As providers of care, I make it my life's work to provide 
an environment that is safe and happy and secure for my 
residents. We know better than anyone else that our facility is 
really their home. In fact, under current nursing home law, 
facilities are prohibited from discharging residents for any 
reason unless secure and alternate living arrangements have 
been provided.
    We are a critical part of our Nation's social safety net. 
It is our responsibility to make sure they are cared for and we 
do that well. I will state up front that we firmly support your 
legislation. I commend your leadership and foresight in 
addressing the issue in a straightforward and inclusive manner.
    It is important to note though that this discussion must 
look deeply enough beyond the emotional arguments and 
litigation to find the root cause of why we are sitting here 
today. In my view, most caregivers know it's illegal to 
discharge a resident just because they spend down and become 
Medicaid-eligible. Your legislation lays out a policy and 
process which is clear and provides both providers and 
residents when a discharge may occur. Importantly, it also sets 
up a process by which new residents are notified of a 
facility's decertification and providers can still withdraw 
from participation in Medicaid if they must. In many cases, the 
reasons to decertify are compelling. Let me explain.
    It runs counter to everything we do day in and day out to 
think someone would transfer a resident against their best 
interests. So the question is, why does it happen? The answer 
lies in the Medicaid system itself, its requirements and its 
policies.
    If you really want to help nursing home residents, we need 
to fix Medicaid today. Let me lay out two brutal facts about 
Medicaid in Florida. One, Medicaid reimbursed does not cover 
the full cost for caring for Medicaid residents in over 80 
percent of Florida's nursing homes. Two, 68 percent or over 2 
out of 3 nursing home residents rely on Medicaid to pay for 
their care. This is true, but rather than talk about Medicaid 
programs and policies, I would prefer to talk about the people 
involved and the effect it has on their lives. I'd like to talk 
to you about my residents and our struggle to provide them with 
high quality care.
    Let me tell you about Mary. She's going to be 95 in July 
and she's one of my favorite residents. My father and her son 
flew together for many years. She came to our facility 
approximately 2 years ago when her family could no longer care 
for her because of advanced Parkinson's. Her disease causes her 
difficulty in speaking and especially in swallowing. She needs 
to see a speech therapist to help her. She needs help at 
mealtimes, bathing, toileting and wheeling around the home and 
in virtually everything she does. Medicaid inadequacies limit 
the time we can give to her, to have her face there every day.
    She also has muscle contractures which are painful. She 
needs a nursing rehab assistant to exercise her arms and legs 
so these contractures don't develop.
    Mary loves to interact with me and my staff but we need to 
take time to sit and talk to her because she has difficulty 
getting her thoughts into words. She's alert and enjoys 
communicating. She cannot participate in any other activities.
    Unfortunately, the State of Florida pays my facility $87 a 
day for Medicaid patients. Mary's care costs us $133 per day, 
so while I'm blessed to have Mary with me and would never dream 
of discharging her, my family business loses $45.95 every day 
because that's what Medicaid dictates. So it goes with 68 
percent of the residents nationwide who rely on Medicaid to pay 
for their care.
    How do nursing facilities stay in business when Medicaid 
does not cover the cost of the care? Fortunately, my facility 
has a balance between Medicaid and private-pay residents. 
Because of that balance, I'm able to provide quality care to 
all of my residents regardless of their pay source, but other 
facilities face a crisis. If they have 80 to 90 percent 
Medicaid, those residents may be very sick and have high, acute 
needs. Medicaid is not paying for the kind of care these 
residents need. They can't economize by spending less on food, 
they cannot cut back on staff, they cannot diminish the quality 
of care provided. These facilities are in a Catch-22. Their 
facilities are filled with Medicaid residents, they can't 
afford to subsidize their care and they can't afford to go 
without them. This bill, H.R. 540, will set up the process by 
which facilities which need to decertify from Medicaid can do 
so without either discharging current residents or being 
perpetually stuck in Medicaid due to the constant stream of 
residents spending down to eligibility.
    While I firmly believe that Congress must do much more in 
the area of Medicaid reform and long-term care planning for the 
babyboomers, this legislation eases a difficult situation and 
protects residents from involuntary discharge.
    Thank you for your consideration.
    [The prepared statement of Kelley Schild follows:]
 Prepared Statement of Kelley Schild, Administrator, Floridean Nursing 
    and Rehabilitation Center on Behalf of the American Health Care 
                              Association
    Hello Chairman Bilirakis, good afternoon members of the 
subcommittee, my name is Kelley Schild, and I am the administrator of 
the Floridean Nursing and Rehabilitation Center in Miami. I operate a 
small, 60-bed home which is the last independently-owned, family run, 
nursing facility in Miami. I am here on behalf of the American Health 
Care Association, to give you our perspective on H.R. 540, introduced 
by Congressman Davis, and Senator Graham called the Nursing Home 
Resident Protection Amendments of 1999.
    When I heard of the plight of the residents who were discharged 
from the nursing home in the Tampa area, I was shocked. Let me state at 
the outset that we do not condone the action that was taken by the 
nursing home, and we were gratified to hear that they had invited all 
the discharged residents back, paid fines to the state and federal 
government, and made changes in their company to prevent this from 
happening again.
    As providers of care, we make it our life's work to provide an 
environment that is healthy, happy, and secure for our residents. We 
know better than anyone that our facility really is their ``home'', and 
we do everything in our power to make sure that those we care for are 
secure that the home we provide will be there for them. In fact, under 
current law nursing facilities are prohibited from discharging any 
resident unless they have secured an alternate living arrangement. We 
are a critical part of our nation's social safety net, it is our 
responsibility to make sure they are all cared for, and we do that 
well.
    I'll state up front that we firmly support your legislation, I 
commend your leadership and foresight in addressing the issue in a 
straightforward, and inclusive manner. It is important to note though, 
that this discussion must look deeply enough beyond the emotional 
arguments, and litigation, to find the root cause of why we are sitting 
here today.
    In my view, most caregivers know it is illegal to discharge a 
resident just because they spend down their assets and hence become 
Medicaid eligible. However, your legislation lays out a policy and 
process which is clear to both providers and residents as to when a 
discharge may occur. Importantly, it also sets up a process by which 
new residents are notified of a facility's decertification, and 
providers can still withdraw from participation in the Medicaid program 
if they must. And in many cases, the reasons to decertify are 
compelling. Let me explain.
    It runs counter to everything we do, day in, and day out, to think 
that someone would transfer a resident against their best interests. So 
the question is, why does it happen? The answer lies in the Medicaid 
system itself, its requirements and its policies. If you really want to 
protect nursing home residents, you must fix Medicaid now.
    Let me lay out two brutal facts about Medicaid in Florida. Number 
one: Medicaid reimbursement does not cover the cost of caring for the 
Medicaid residents in over 80% of Florida's nursing homes. Number two: 
68% (over two out of every three) nursing home residents rely on 
Medicaid to pay for all of their care. This is true, but rather than 
talk about government programs, I'd prefer to talk about the people 
involved, and the effect on their lives. I'd like to talk to you about 
my residents, and the struggle to provide them high quality care.
    Indulge me briefly, and let me tell you about Mary. She is turning 
95 years old this year, and is one of my favorite residents. She's a 
friend of my family, and I feel lucky to have her with me. Mary's son 
was a pilot, and he and my father flew together and were good friends. 
A few years ago, Mary's advanced Parkinson's disease became too much 
for her family, and she came to Floridean Nursing and Rehab Center. Her 
disease causes great difficulty for her in speaking, and especially 
swallowing. She needs to see a speech pathologist frequently, and has 
trouble at meal time. But the things she needs most are for us to give 
her our time and TLC. This is true at meal time, bathing, toileting, 
wheeling her around the home, and in virtually anything else she does. 
Medicaid inadequacies limit the time we can give to her, and I have to 
face that everyday.
    She also has muscle contracture, which is painful and makes her 
daily activities very difficult. She needs range of motion therapy two 
times a day to help her contracture.
    Mary loves to interact with me, my staff, and the other residents. 
She's very alert and tries hard to communicate. She asks to be wheeled 
to the activities room and, though she can't participate, she just 
likes to watch her friends as they do the activities we plan. You 
should see her face light up when her great-grandchildren come to 
visit. I feel lucky to have Mary with us in so many ways.
    Unfortunately, the state of Florida has a flat rate for all 
Medicaid residents of $94.38 per day. This is the price that they are 
willing to spend for Mary's care regardless of her needs. On the other 
hand, being as efficient and prudent as I can afford to be, the cost of 
providing care for Mary is $133.00 per day. So, while I am blessed to 
have Mary with me, and would never dream of discharging her, my family 
business will lose $38.62 every day because that's what Medicaid 
dictates. So it goes with 68% of nursing home residents nationwide who 
rely on Medicaid to pay for their care. Despite the fact that the 
Federal Government pays for over 60% of Medicaid program costs through 
the state match, you have removed yourselves completely from 
responsibility in the area of payment adequacy. This, in my opinion, is 
at the heart of the problem.
    How do nursing facilities stay in business when Medicaid does not 
cover costs on 80% of its beneficiaries, you may ask? Well, I am 
fortunate. My facility has only 50% Medicaid residents, about 2% are 
paid by Medicare, 4% are paid through VA or private insurance, and the 
other 45% are spending their life savings in the cruel requirement that 
they become impoverished before they can receive underfunded government 
long term health care through Medicaid. In brutal honesty, I cost-shift 
to make it work for everyone. Unfortunately, with half of my residents 
on Medicaid, and another 45% spending down, the effect of cost shifting 
is that they go broke faster and qualify for Medicaid sooner. This is a 
terrible way to treat our elderly during what are supposed to be their 
``golden years''.
    Now, a facility less fortunate than mine may have as many as 80%-
90% Medicaid residents, and those residents may be very sick and have 
high acute care needs. With some residents, the medication costs alone 
exceed $94.38 per day. This facility will not be able to shift costs, 
and may be on the verge of bankruptcy. What is this facility to do? 
Should they provide less care and incur bad ratings and with $10,000 
per day fines levied through the annual HCFA inspections, or face 
millions of dollars in jury awards from the rampant litigation in 
Florida? Should they try to economize by spending less on food? heat? 
staff? The answer is No. This facility has no choice. In order to 
provide quality care to tier residents, they must get out of the 
Medicaid program. They must take residents with other payor sources 
that actually do cover the cost of care. Medicare is adequate unless 
the resident is very sick, but it only covers 21 days fully. Private 
insurance pays adequately, but only 3% of people are covered, and most 
of the others are spending their lifesavings, eventually surrendering 
their dignity and independence as they become destitute enough to 
qualify for Medicaid.
    So you can see that a facility in Florida which cannot cost shift 
must get out of the Medicaid program. Unfortunately, providers are in a 
``catch 22''. With 68% of all nursing home residents on Medicaid, 
decertification is not an option for most facilities due to the 
difficulty of filling the empty beds that would result. Those that can 
cost shift some may only be able to provide minimal staff time and 
therapies to those that need them. When you repealed the Boren 
amendment in 1997, you took away the requirement that payment through 
Medicaid be adequate to meet costs. This has steepened the grade of a 
very slippery slope for providers.
    This bill, H.R. 540, will set up a process by which facilities 
which need to decertify from Medicaid can do so, without either 
discharging current residents, or being perpetually stuck in Medicaid 
due to the constant stream of residents spending down to eligibility.
    While I firmly believe that Congress must do much more in the area 
of Medicaid reform, and long term planning for the care of the baby 
boomers, this legislation makes a difficult situation more navigable, 
and protects residents from any involuntary discharge. Thank you for 
your concern and consideration.

    Mr. Bilirakis. Thank you very much, Ms. Schild.
    Ms. Grant?

           STATEMENT OF ROBYN GRANT, SEVERNS & BENNET

    Ms. Grant. My name is Robyn Grant and I'm here today as an 
advocate representing the National Citizens Coalition for 
Nursing Home Reform known as NCCNHR. NCCNHR is a nonprofit 
organization of consumers, residents and their advocates who 
define and achieve quality for residents in long-term care 
facilities.
    For 8 years, I served as the Indiana State long-term care 
ombudsman and am currently a resident advocate for an elder law 
firm in Indiana.
    I want to thank the committee members for holding this 
important hearing. NCCNHR strongly supports H.R. 540. This 
proposed legislation is urgently needed to ensure that 
residents on Medicaid are not arbitrarily evicted by providers 
who wish to convert to private pay status.
    As has been noted here already today, many residents start 
off a nursing home stay by paying privately. However, with the 
high cost of nursing home care, they quickly exhaust their 
resources and have no choice but to rely on Medicaid. I would 
add that nursing homes often attract potential residents 
precisely because they participate in the Medicaid Program. In 
fact, many facilities assure private-pay individuals that they 
can remain even after they become Medicaid-eligible.
    No one forces a facility to participate in Medicaid. It 
does so voluntarily. Medicaid-certified facilities cannot be 
allowed to simply abandon their Medicaid beneficiaries if they 
decide to withdraw from the Medicaid Program. H.R. 540 would 
protect residents in the facility who are or will become 
dependent on Medicaid for their care.
    While there are laws that regulate transfer and discharge, 
as you have heard, there is nothing that requires a facility to 
continue to care for its current Medicaid residents or 
residents who shortly will come to be on Medicaid when it 
withdraws from the Medicaid Program.
    I'd like to share with you what residents experience when 
those adequate protections don't exist. Beginning in January 
1998, residents on Medicaid at Wildwood Health Care, a Vencor 
facility in Indianapolis, Indiana, were told they were being 
transferred to other nursing homes solely because they were 
Medicaid recipients.
    I was the State ombudsman at the time and had the 
opportunity to speak with several residents and their families. 
These residents told me that they were devastated when they 
learned they had to leave. They said that residents throughout 
the entire facility were crying inconsolably at the news. They 
were all extremely upset and distressed. Many residents had 
lived at Wildwood for several years and explained to me they 
had established important friendships with other residents and 
strong relationships with staff. They told me the nursing home 
was like a family and indeed, for some, it was their only 
family.
    One resident's daughter eloquently summarized this in a 
letter she wrote to Vencor. She states, ``You have destroyed 
lives and emotions and torn apart families. Yes, many of these 
people, though not blood-related, considered their companions 
and friends as family. Your facility was their home. Physical 
and emotional health was gravely endangered by the insensitive 
actions of Vencor.''
    The residents I talked to also recounted how embarrassed 
and humiliated they felt at being evicted because they couldn't 
pay privately. Their self-esteem was badly affected by being 
singled out in such a public way for something they could not 
help.
    Once this eviction process was set in motion, it moved 
forward inexorably. It was only as a result in Indiana of 
outspoken residents and family members, the work of United 
Senior Action, which is a citizens advocacy organization and a 
NCCNHR member group, and attention from the media that Vencor 
reversed its policy, but not until all but 7 out of 60 Medicaid 
residents had relocated.
    The effects of forced eviction on Medicaid residents are 
long lasting. Wildwood residents continue to suffer even after 
the evictions were stopped. Months after they were relocated, 
residents were still upset and distressed. The effects are also 
far-reaching and insidious. I recently just this month spoke 
with a daughter whose mother is in a different Vencor nursing 
home in Indiana. She told me that she's afraid now to raise any 
concerns at all about her mother's care because her mother is 
on Medicaid and she's fearful that complaining in any way could 
lead to eviction.
    While the efforts of residents, families and strong 
citizens' advocacy groups, combined with media coverage ended 
in a consumer victory that time around, it was certainly too 
late for Wildwood residents. Moreover, nursing home residents 
are too frail, too vulnerable and the impact on them is too 
devastating to rely on such an ad hoc approach to adequately 
protect them. H.R. 540 would add much needed protection for 
residents who depend on Medicaid for all or part of their care.
    There are other ways, as noted here, in which residents on 
Medicaid are discriminated against and we also believe those 
issues need to be addressed, but H.R. 540 is an important step 
in fighting Medicaid discrimination. Passing this bill is 
critical to guaranteeing that nursing home residents don't 
become disposable pawns in corporate gains to maximize profit.
    On behalf of NCCNHR, thank you once again for the 
opportunity to make these remarks in support of H.R. 540.
    [The prepared statement of Robyn Grant follows:]
 Prepared Statement of Robyn Grant on Behalf of the National Citizens' 
                   Coalition for Nursing Home Reform
    My name is Robyn Grant and I am here today as an advocate 
representing the National Citizens' Coalition for Nursing Home Reform 
known as NCCNHR. NCCNHR is a non-profit organization of consumers--
residents and their advocates--who define and achieve quality for 
residents in long term care facilities. The National Long Term care 
Ombudsman Resource Center, funded by the Administration on Aging, is a 
NCCNHR program.
    I am currently the manager of Resident Advocacy Services for 
Severns and Bennett, an elder law firm in Indianapolis, Indiana. In 
that capacity I work to educate and empower family members to advocate 
for good care for loved ones in nursing homes. Prior to assuming this 
position, I served as the Indiana State Long-Term Care Ombudsman for 8 
years and as president of the National Association of State Long Term 
Care Ombudsman Programs for two years. The Long-Term Care Ombudsman 
Program is a federally mandated advocacy program that represents the 
interests of residents of long-term care facilities.
    I want to thank the committee members for holding this hearing. 
NCCNHR strongly supports H.R. 540 which would prohibit nursing homes 
that accept Medicaid reimbursement from transferring or discharging 
residents solely because they are Medicaid beneficiaries.
The Need for H.R. 540--The Nursing Home Resident Protection Amendments 
        1999
    The proposed legislation in front of you today is urgently needed 
to ensure that residents on Medicaid are not arbitrarily and 
capriciously evicted by providers who wish to convert to private pay 
status. It allows nursing homes to withdraw from the Medicaid program, 
while allowing Medicaid beneficiaries to remain in their home.
    Today it is estimated that more than 60% of the residents in our 
nation's nursing homes receive assistance from the Medicaid program. 
Many residents start off a nursing home stay by paying privately. 
However, with the average annual cost of nursing home care between 
$40,000-$50,000, most people cannot continue such payments for very 
long. They quickly exhaust their resources and have no choice but to 
rely on Medicaid.
    Nursing homes often attract potential residents precisely because 
they participate in the Medicaid program. In fact, many facilities 
assure private pay individuals that they can remain even after they 
have become Medicaid eligible.
    No one forces a facility to participate in Medicaid. It does so 
voluntarily. Medicaid-certified facilities cannot be allowed to simply 
abandon their Medicaid beneficiaries if they decide to withdraw from 
the Medicaid program. This bill would protect residents in the facility 
who are or will become dependent on Medicaid for their care.
The Devastation Experienced by Residents Evicted From Their Homes
    I'd like to share with you what residents experience when nursing 
facilities are allowed to evict residents simply because they are on 
Medicaid. Beginning in January 1997 residents on Medicaid at Wildwood 
Healthcare, a Vencor facility in Indianapolis, Indiana, were singled 
out and told that they were being transferred to other nursing homes 
solely because they were Medicaid recipients. I was the State Long-Term 
Care Ombudsman at that time and had the opportunity to speak with 
several of those residents and their families.
    These residents told me that they were devastated when they learned 
they had to leave. They were extremely upset and distressed. One family 
member told me her mother was thrown into a deep depression upon being 
informed she could no longer live at Wildwood. The residents I talked 
with said that everywhere they looked, they saw other residents crying 
inconsolably at the news. The people, many of whom had lived there for 
several years, explained to me that this facility had become their 
home. As we all do in our homes, they had put down roots. They had 
established important friendships with other residents in the facility 
and strong relationships with staff. They told me that the nursing home 
was like a family. Indeed, for some, it was their only family. Being 
forced to move destroyed their family. One daughter of a resident 
eloquently summarized this in a letter she wrote to Vencor. She writes:
        You have destroyed lives and emotions and torn apart families. 
        Yes, many of these people though not blood related, considered 
        their companions and friends as family. Your facility was their 
        home. Physical and emotional health was gravely endangered by 
        the insensitive actions of Vencor.
    The residents I talked to recounted how embarrassed and humiliated 
they felt at being evicted solely because they couldn't pay privately. 
They reported to me that they had never in their entire lives been 
thrown out of any place. They were mortified. Their self-esteem was 
badly affected by being targeted in such a public way for something 
they could not help.
    The effect on residents was magnified by the atrocious and 
deplorable way the transfers were handled by the administration at 
Wildwood. Once this eviction process was set in motion, it moved 
forward inexorably. Outcries from residents and families did little 
good. Complaints to the state survey agency were of no help. In fact, 
that agency stated that deciding not to keep residents on Medicaid was 
a business decision which the facility had every right to make. It was 
only as a result of outspoken residents and family members, the work of 
United Senior Action, a citizens' advocacy organization in Indiana 
which is a NCCNHR member group, and attention from the media that 
Vencor reversed its policy and agreed to stop the Medicaid evictions.
    The residents who were forced to move continued to suffer even 
after the evictions were stopped. I visited several of these residents 
months after they were relocated. They were still upset and distressed, 
and some began to cry during our conversations. They had clearly left 
an important part of their lives at Wildwood. On a poignant note, they 
told me they missed the gazebo that they had worked so hard to pay for 
in the other facility. As active members of the resident council they 
had themselves raised the money to build an outdoor gazebo at Wildwood. 
The gazebo that they had so loved and of which they were so proud 
served as a sad and lonely reminder of all that they had to leave 
behind and could never recapture.
    The effects of forced eviction of residents on Medicaid also are 
far-reaching and insidious. I recently spoke with a daughter whose 
mother is in a different Vencor nursing home in Indiana. The daughter 
told me that she is afraid to raise any concerns about her mother's 
care because her mother is on Medicaid and she is fearful that 
complaining in any way could lead to eviction.
Public Outrage Stopped the Spread of Corporate Insensitivity
    While the efforts of residents, families, and a strong citizens 
advocacy group, combined with media coverage, ended in a consumer 
victory that time, it was certainly too late for many Wildwood 
residents. Moreover, nursing home residents are too frail, too 
vulnerable and the impact on them is too devastating to rely on such an 
ad hoc approach to protect them.
    Once again I thank you on behalf of NCCNHR for the opportunity to 
make these remarks in support of HR 540, which would add much needed 
protection for residents who depend on Medicaid for all or part of 
their care.
Other Corporate Discriminatory Practices Faced by Medicaid 
        Beneficiaries
    Unfortunately, being involuntarily transferred from their home is 
just one of numerous discriminatory practices that Medicaid eligible 
residents face. Often it is difficult for a resident on Medicaid to 
gain admission to a nursing home or to remain in a home because the 
facility has chosen to limit the number of Medicaid beds available. In 
other instances, facilities assess the finances of potential residents 
and will only admit them if they have enough money to pay privately for 
a certain period of time. These are just a few examples of the 
discrimination that advocates hear about daily from residents and their 
families. NCCNHR, which has witnessed these issues for over twenty 
years, stands ready to help the members of this committee and staff 
identify and address these and other problems that Medicaid 
beneficiaries encounter.
    We applaud both the House and the Senate for their work on the 
Nursing Home Resident Protection Amendment. Medicaid eligible nursing 
home residents must not have to live their lives in fear of being 
evicted solely because they can't pay or continue to pay privately. 
Passing this bill is the only way to guarantee that nursing home 
residents do not become disposable pawns in corporate games to maximize 
profits.
    Thank you for the opportunity to talk with you today about this 
important issue.

    Mr. Bilirakis. Thank you very much, Ms. Grant.
    Mr. Mongiovi, was your mother a private-pay resident at any 
time during her stay at the Vencor nursing home?
    Mr. Mongiovi. No, sir. She entered as a Medicaid resident.
    Mr. Bilirakis. She entered as a Medicaid patient.
    Mr. Mongiovi. Four years prior to her eviction notice.
    Mr. Bilirakis. Are you familiar with friends of your mom, 
other residents there who had been prior private-payers? Mr. 
Davis and others have noted that a large majority of patients 
start off as private-pay and then spend down to become 
Medicaid-eligible?
    Mr. Mongiovi. If you enter as a private-pay resident, 
$40,000 to $50,000 a year, it doesn't take very long for your 
finances to be exhausted and you are going to be a Medicaid 
recipient sooner or later. So they use your assets or your 
private insurance well. Once they use it, they dump you for 
higher-paying beds. That's cruel, unjust, criminal in nature 
and should not be allowed.
    Mr. Bilirakis. Ms. Wegner, your testimony indicates that 
providing tax incentives to encourage people to purchase 
private insurance is one of the key ways of trying to fix the 
problems that Ms. Schild and others have mentioned regarding 
inadequate reimbursements?
    Ms. Wegner. Yes, Mr. Chairman. It's certainly not the only 
one and I'm not here to say that I have all the answers. But as 
you know, in a number of States, there are some partnership 
arrangements which have been tried in which there is an 
incentive to purchase long-term care insurance and in some 
cases, it's a dollar-for-dollar exchange in terms of the amount 
the insurance pays and assets that can be protected.
    As is often the case, when there is an opportunity in the 
marketplace for creative solutions, they do arise and certainly 
with the aging of our society and the number of people who will 
live well into their 80's and 90's, the incidence of chronic 
illness is going to arise and the incidence of nursing home 
need is going to rise. There just will not be enough tax 
dollars to cover it, so we have to look for private solutions 
too.
    Mr. Bilirakis. I'm not sure whether Mr. Coburn will get 
into this in more detail or not, but he has great interest in 
that proposed solution. I'll let him speak for himself.
    Ms. Schild, you've told us that low payment levels are the 
root of the problem and you expressed it quite well, I might 
add.
    By the way, I would like to place in the record the fact 
that Congressman Jim Davis has stayed throughout this entire 
hearing. I think that is really very good of you to do that, 
Jim. We all appreciate that.
    Mr. Davis. You bet.
    Mr. Bilirakis. How many facilities does the American Health 
Care Association represent?
    Ms. Schild. Mr. Chairman, 11,000.
    Mr. Bilirakis. You state in your written testimony that 
Florida has a flat rate for all Medicaid residents. Aren't 
payment rates facility-specific and not uniform across the 
State?
    Ms. Schild. Correct. It's a flat rate for each facility. It 
is facility-specific but a flat rate for each facility.
    Mr. Bilirakis. Do you feel that the Federal Government 
should propose or mandate a uniform rate across States. How 
would you try to solve that problem?
    Ms. Schild. I don't honestly believe that we can solve that 
problem today and with the parties here I would be more than 
willing to work with the committee to look at the global 
problem, as has been the case with Medicare and Social Security 
because we know the babyboomers are coming and it's going to be 
a larger problem.
    Mr. Bilirakis. I guess my time is up.
    Mr. Brown?
    Mr. Brown. Mr. Martin and Ms. Wegner, I'm not particularly 
familiar with your organizations. I saw your membership numbers 
and all. Where does your funding come from, if I could ask each 
of you?
    Ms. Wegner. Our organization was begun in the late 1980's 
from a grassroots movement to repeal the Medicare catastrophic 
insurance tax. Over 97 percent of our funding comes from 
contributions of our members.
    Mr. Brown. Small amounts?
    Ms. Wegner. Yes, $10 or $15.
    Mr. Brown. Mr. Martin?
    Mr. Martin. In fact, in my official testimony, I point out 
under the truth and testimony provisions that we neither seek 
nor accept Federal grants but we are 100 percent funded by 
voluntary donations.
    Mr. Brown. Is most of that from small membership dues?
    Mr. Martin. Yes, 99.9 percent exactly. We have about a $15 
average from people that believe in what we're trying to do 
here. As I said before, we neither accept nor solicit Federal 
funds.
    Ms. Wegner. That is true, Mr. Brown of my organization as 
well.
    Mr. Brown. Ms. Grant and especially Mr. Mongiovi, thank you 
for sharing your particularly difficult stories with us. That 
was very helpful.
    Ms. Schild, you talked about $87-a-day reimbursement and 
obviously nursing home-Medicaid rates have been lower over the 
last few years, have continually been reduced. How have nursing 
homes in Florida responded to that? How have they been able to 
continue to operate with lower rates?
    Ms. Schild. I can give you the specifics about my facility 
and as I said in my testimony, I make sure there is a balance 
between the private-pay patients and the Medicaid patients.
    Mr. Brown. You have a much higher percentage of private-pay 
than the average nursing home, correct?
    Ms. Schild. I have a much higher percentage of private-pay, 
about 45 percent private-pay, while we have about 50 percent 
Medicaid.
    Mr. Brown. How do you imagine that others have done it that 
don't have that mix? Is there a compromise in quality to do it?
    Ms. Schild. Congressman, honestly, I do not know how a 
facility that is 80-90 percent Medicaid can provide the quality 
of care that the residents deserve. I honestly do not.
    Mr. Brown. If the rates at $87 a day, as they squeeze those 
nursing homes and make it more and more difficult and the 
reasons to withdraw from Medicaid seem so compelling, why have 
not more nursing homes withdrawn from Medicaid?
    Ms. Schild. Again, I cannot answer that. In my area in 
Miami, only one nursing home that I know of does not 
participate in Medicaid. As I said, it is almost a Catch-22 
because a lot of facilities do rely on Medicaid for private-pay 
residents that spend down so that they don't have to be 
discharged.
    Mr. Brown. How are you able to keep your proportion closer 
to 50-50, the private pay-Medicaid, much closer than the 
national average? How have you been able to do that?
    Ms. Schild. We are a facility that's been in the community 
for 55 years and it's been run by my family for that length of 
time. Therefore, referrals come from within the community, 
friends, family and that is the pool I suppose that we draw a 
higher percentage of private-pay residents from.
    Mr. Brown. Do you actively recruit private-pay patients 
more than Medicaid patients?
    Ms. Schild. We currently have a waiting list and private-
pay residents are on the waiting list as well as Medicaid 
residents. We do not really recruit. We're known in the 
community and residents seeks us out because of the quality of 
care provided.
    Mr. Brown. Is the waiting list chronological when you 
select from it?
    Ms. Schild. When I make decisions to admit residents, it's 
based on the care that they need, the staffing we have at the 
time and Medicaid and private does factor into that to be quite 
honest.
    Mr. Brown. So you can keep the percentage about where it 
is?
    Ms. Schild. Correct.
    Mr. Brown. You are a for-profit operation?
    Ms. Schild. Yes, we're a corporation.
    Mr. Brown. Is there any chance that as some nursing home 
operators watch what Jim Davis is doing and see this bill is 
going through this process with a reasonable good chance of 
becoming law in the next few weeks or months, as fast as 
anything can ever move here, is there any chance that some 
nursing homes would leave the Medicaid Program between now and 
the time this bill goes into effect? Are we creating some 
incentive to accelerate that movement out temporarily before 
this bill becomes law?
    Ms. Schild. Congressman, I don't think I can answer that. I 
know it wouldn't be the case in my facility.
    Mr. Bilirakis. Mr. Coburn.
    Mr. Coburn. Ms. Schild, I just want to clarify. Your answer 
to the gentleman from Ohio, the implication was that your 
Medicaid rates have gone down. Is that correct?
    Ms. Schild. My Medicaid rate has gone down?
    Mr. Coburn. Yes, your reimbursement under Medicaid has gone 
down over the last few years. Is that correct?
    Ms. Schild. No, it has not.
    Mr. Coburn. I think we need to correct that for the record 
because in fact, the rates probably have gone up somewhat, is 
that not true?
    Ms. Schild. Correct, yes.
    Mr. Coburn. The implication in the question being that we 
have cut Medicaid. In fact, I think most Medicaid 
reimbursements for most nursing home beds have gone up. I think 
we need to be aware of that. It is still far too low to provide 
for adequate care but they have not gone down.
    Mr. Mongiovi, I have a lot of sons and daughters who have 
their parents in nursing homes. One of the things that really 
bothers me about what you said is still a real issue. 
Oftentimes my friends on the other side of the aisle have been 
better at attacking that issue than we have.
    You said in your statement, not in your printed statement, 
but you said in your statement today that your wife would have 
to go there daily to make sure she got the care she needed. Is 
it true you said that?
    Mr. Mongiovi. That is correct.
    Mr. Coburn. Was there not anywhere else that you all could 
find for your mother that you didn't have to do that to make 
sure she got the care?
    Mr. Mongiovi. No, sir. My wife and I visited personally 16 
nursing homes in 3 days, nonstop, from 8 a.m. to 10 p.m., and 
there was not one better facility that we would have put my 
mother in. The one that we chose, the atrocities occurred.
    Mr. Coburn. But it's your opinion that had you not been 
there to provide supplemental care, she would not have had 
adequate care?
    Mr. Mongiovi. That is correct.
    Mr. Coburn. I just want to make the statement for this 
committee, that is a real problem. As a physician who used to 
go to a number of nursing homes, and I don't any longer now 
that I'm in Congress, I saw that every day. The far greater 
problem that we have than this one is that problem. We should 
have a hearing on the inadequacy of the care that is now being 
given in some, not all, but in some nursing homes. Part of this 
is economic. As Ms. Schild said, she doesn't know how they do 
it. The way they do it is by limiting care, rationing care.
    My contention is the more the Government gets into that, 
the more care will be rationed and the less care there will be. 
Unless we put marketplace incentives for people to buy long-
term care insurance and to create their own future and not 
penalize them where they end up being in a position where they 
have to depend on a government program for substandard care 
because there really is a difference. If you have the means, 
then you can get better care. If you're on Medicaid, many times 
you don't get care that compares.
    Mr. Mongiovi. I agree with you fully, sir, but we have no 
control on how much care we are going to need.
    Mr. Coburn. Right, but the point is if we change the system 
to where we design the marketplace to help us determine that 
and to provide an incentive to let market drive that, rather 
than the Government and regulations drive that, we may in fact 
see that we can offer better care, higher quality to more 
people in the future. That's my point.
    We've had testimony here today, in fact, Ms. Schild makes a 
conscious decision if she wants to eat, that she's going to put 
people in her nursing home that are private-pay because the mix 
she's required to do that, if she wants to make a profit, she's 
going to have to do that. If she wants to keep a salary for her 
family and her business, she's going to have to do that.
    What that means is that somebody that doesn't have private-
pay isn't going to get into her nursing home which means there 
is a dual standard of care if she's a high quality, well though 
of nursing home. So why shouldn't everybody have the potential 
to determine that themselves through their own private plan. 
The Government should create an incentive so that kind of long-
term care would have provided your mother the choice to go 
wherever she wanted.
    Mr. Mongiovi. Your issue is well taken but we are speaking 
of a problem that has not been addressed by this country and it 
needs to be looked at. But that is a different subject matter 
than why we're here today.
    I think the protection issue is essential to address 
immediately because we cannot afford to dismiss it. I for one 
would not want to play Russian roulette with the people out 
there right now.
    Mr. Coburn. But we've had the testimony from HCFA that in 
fact the nursing home that ejected or attempted to eject all 
those in association with your mother was violating the Federal 
law.
    Mr. Mongiovi. Yes, they were.
    Mr. Coburn. You had to go to court to stop that.
    Mr. Mongiovi. Exactly.
    Mr. Coburn. That says two things to me. It says, the State 
of Florida failed in its supervision actions for the nursing 
home industry, one and two, so did HCFA.
    Mr. Mongiovi. Are you not addressing the major reason why 
this occurred, because it is still occurring and as we speak, 
the laws are still being broken because no matter what you just 
said, they are still going to break the law unless there is 
enough protection out there to say don't do it because you're 
not going to get away with it.
    Mr. Coburn. So it's your opinion that the only way to stop 
what happened to your mother is this piece of legislation?
    Mr. Mongiovi. That is correct.
    Mr. Coburn. That is the only way to stop it?
    Mr. Mongiovi. That is correct.
    Mr. Coburn. Thank you.
    Mr. Bilirakis. I thank the gentleman.
    Your coming here today and supporting this legislation as 
strongly as you all do is obviously going to make quite a 
difference. Ms. Wegner and Mr. Martin represent organizations 
that are conservative, but they still feel there is a need for 
Government involvement. We need to spend more time with many of 
you in order to learn more. The idea Ms. Wegner mentioned, the 
tax incentive, should be considered along with other ways to 
attack the problem. Thank you so very much for coming.
    There probably will be questions offered to you in writing 
from members of the committee and we would appreciate your 
responding to those as quickly as you can.
    The hearing is adjourned.
    [Whereupon, at 4:50 p.m., the subcommittee was adjourned, 
to reconvene subject to the call of the Chair.]
    [Additional material submitted for the record follows:]

              Department of Health & Human Services
                       Health Care Financing Administration
                                                  February 25, 1999
Representative Michael Bilirakis
Chairman
Commerce Subcommittee on Health and the Environment
2125 Rayburn House Office Building
Washington, DC 20515
    Dear Chairman Bilirakis: Thank you for the opportunity to testify 
before the House Commerce Subcommittee on Health and the Environment on 
nursing home evictions and H.R. 540. As discussed during the hearing, I 
am responding in writing to questions you raised regarding nursing home 
evictions and other HCFA programs.
    Question 1. How will H.R. 540 complement HCFA's efforts in 
safeguarding nursing home residents?
    Answer 1. If passed, H.R. 540 would complement HCFA's efforts by 
strengthening our existing rules to ensure Medicaid residents can 
continue to stay in their nursing facility. HCFA has been working 
within the existing statutory authority on safeguarding nursing home 
residents from unnecessary transfers. We have released a program 
memorandum on the frequency by which nursing facilities can change the 
number of Medicaid beds in their facility. These safeguards compliment 
H.R. 540 by protecting beneficiaries from unnecessary transfers in the 
cases of where a facility frequently reduces the number of beds 
available to Medicaid beneficiaries without actually closing the 
facility over the course of a year. H.R. 540 addresses the similar 
issue when the facility decides to withdraw from participation in 
Medicaid.
    HCFA released a program memorandum to our Regional Administrators 
on January 25, 1999 stating that nursing home providers that 
participate in Medicaid or Medicare by designating a limited portion of 
their beds for these program beneficiaries may only change their extent 
of participation once per cost reporting year. Before we issued this 
guidance, many States had noted that some providers changed their 
designated beds for Medicare and Medicaid on a weekly or even daily 
basis. In some cases, this see-sawing back and forth was used as 
grounds to evict Medicaid residents and make way for more lucrative 
clients, or to be rid of selected residents.
    HCFA's once-per-year policy gives more protection against 
discharges based on frequent reductions in the extent of a facility's 
participation. However, the policy is not a complete solution. Under 
current law, the facility may still choose to downsize participation or 
to withdraw from Medicaid entirely. In the case of Vencor, the company 
announced its intent to have a portion of its facilities withdraw from 
Medicaid entirely in the Wall Street Journal article that precipitated 
the public's awareness of this problem. If Vencor had proceeded to 
withdraw legally rather than using illegal means to evict its 
residents, HCFA would not have been able to protect their current 
Medicaid residents from being transferred to other facilities.
    Question 2. How do nursing homes adjust their participation in 
Medicaid for their facilities, and why would they do so?
    Answer 2. Under HCFA policy, once a year nursing facilities are 
allowed to designate a specific number of beds to be Medicaid-only. 
Facilities must request the change in writing and identify its current 
configuration and the proposed configuration 120-days in advance of its 
cost reporting year. Some nursing facilities cite Medicaid payment 
rates that are lower than either private pay or Medicare rates to 
explain their decisions to reduce participation.
    Question 3. H.R. 540 is a measured response to a significant 
problem in the nursing home sector. According to the written testimony 
of some of the witnesses on panel three, some nursing homes are opting 
out of Medicaid because the payment levels may be lower than the costs 
incurred by the nursing home. Do you agree that reducing provider costs 
would help increase the number of Medicaid beds?
    Answer 3. Reducing provider costs would not necessarily increase 
the availability of Medicaid beds. We also do not believe there is any 
shortage of beds right now. And, States are required to conduct an open 
process for the development of Medicaid payment rates. Public input 
should ensure that payment rates are adequate.
    Question 4. Which of the new initiatives that the Administration 
proposes would help reduce provider costs?
    Answer 4. None of our proposals in FY2000 are expected to reduce 
provider costs, rather, these proposals are designed to improve the 
overall quality of care and quality of life provided in nursing homes. 
The initiatives in nursing home care include legislative proposals for 
requiring a mandatory criminal background check of all nursing home 
employees, and a national abuse registry, and allowing more nursing 
home staff to help residents eat and drink during busy mealtimes.
    Question 5/6. What purpose is served by the HCFA policy that ``a 
nursing home may decrease the portion of its facilities that are 
available to Medicaid or Medicare residents only once per year''? When 
did this regulation go through a notice and comment period? If it has 
not gone through a notice and comment period, by what legal authority 
was this new regulation imposed?
    Answer 5/6. This once-per-year restriction is a policy included in 
HCFA's manual instructions to States. It does not appear in the Social 
Security Act or the corresponding regulations. This change in policy 
did not go through a notice or a comment period. The legal authority 
for this policy, like many of the technical aspects of the nursing home 
program, stems from the Secretary's general administrative authority.
    HCFA has two manuals that provide policy guidance in the area of 
nursing facilities--the Provider Reimbursement Manual (PRM) and the 
State Operations Manual (SOM). The PRM is used by providers and the SOM 
is used by State survey agencies. The policy in the two manuals 
differed. This one per year restriction was included in the PRM, but 
not the SOM.
    After hearing evidence that the flexibility in the SOM was being 
abused, we decided to rectify the conflict between HCFA policies by 
reaffirming the once-per-year restriction in the PRM. A program 
memorandum was released on January 25, 1999 to clarify this policy for 
the HCFA regional offices. We plan to change the SOM instructions to 
conform with this policy. The once-per-year policy provides an 
opportunity for providers to change extent of participation as 
necessary, but guards against excessive fluctuations and undue 
disruption to residents.
    Question 7. If HCFA will allow nursing homes only one opportunity a 
year to adjust their ratio of Medicaid or Medicare beds to those that 
are privately funded, will that result in more or fewer beds available 
to Medicaid or Medicare patients?
    Answer 7. We do not believe that limiting facilities' changes in 
extent of participation to once per year will have any net effect on 
the availability of Medicare or Medicaid beds. More importantly, this 
policy reduces the substantial health and safety risks that are 
associated with the transfer of frail elderly and disabled 
beneficiaries.
    Question 8. In your written testimony, you state that HCFA has 
taken swift and strong actions against facilities who have discharged 
Medicaid residents on false grounds and without appropriate notice. In 
how many instances have you imposed civil money penalties on 
facilities? How much have you collected? Where does the money go? Is 
this an effective enforcement tool.9
    Answer 8. In the Vencor situation, HCFA imposed civil money 
penalties (CMPs) on both the Tampa, Florida, and Savannah, Georgia 
facilities. HCFA imposed and collected $100,000 from the Tampa 
facility. The Savannah nursing home case is under appeal.
    From July 1, 1997 to June 30, 1998, we imposed CNOs on 469 nursing 
homes. During FY 1998 we imposed $9,762,742 in civil money penalties 
and collected $7,520,638 of these. Our current database does not 
distinguish between Craws assigned specifically for transfer/discharge 
violations and those assigned for other types of deficiencies.
    After collection, CMPs are split into Medicare and Medicaid 
portions, depending on the ratio of Medicare to Medicaid residents in 
the fined facility. In accordance with Section 1919(h)(2)(A)(ii) of the 
Social Security Act, the Medicaid monies are put back into the State's 
Medicaid program, to ``be applied to the protection of the health or 
property of residents of nursing facilities . . . including payment for 
the costs of relocation of residents to other facilities, maintenance 
of operation of a facility pending correction of deficiencies or 
closure, and reimbursement of residents for personal funds lost.'' 
Medicare monies, consistent with Section 1128(A)(f)(3) of the Act, are 
deposited as miscellaneous receipts of the U.S. Treasury.
    CMPs are among the most important tools we have for bringing 
facilities into compliance and protecting vulnerable nursing home 
residents.
    During the hearing, you and other Committee Members mentioned an 
interest in meeting with HCFA staff to discuss a variety of health 
related issues. Carleen Talley of our Office of Legislation will be 
contacting your Committee staff to coordinate a roundtable discussion 
for Subcommittee Members and their staff in the near future. Thank you 
for your interest in our programs.
    If you have any additional questions, please contact me.
            Sincerely,
                                            Michael M. Hash
                                               Deputy Administrator
                                 ______
                                 
              Department of Health & Human Services
                       Health Care Financing Administration
                                                  February 25, 1999
The Honorable Tom Coburn
429 Cannon House Office Building
Washington, DC 20515
    Dear Congressman Coburn: I am responding to your questions raised 
during the House Commerce Subcommittee on Health and the Environment 
hearing on ``H.R. 540, the Nursing Home ResidentProtection Amendments 
of 1999.''
    Question 1. What percent of Medicaid beds experience eviction (or 
Vencor situation) in the U.S.?
    Answer 1. Our data systems are not currently capable of providing 
this data. In an informal survey, HCFA staff polled 47 States Ombudsmen 
in 1997. Fifteen cited transfer and discharge violations as highly 
problematic.
    Question 2. If H.R. 540 becomes law, what does HCFA propose that 
would prevent the situation as seen in Florida from happening again?
    Answer 2. H.R. 540 would allow us to protect residents in the case 
of a facility's voluntary withdrawal from the Medicaid program. 
Residents would be assured that they can stay in their facility and 
that the facility would continue to be subject to the Medicaid 
conditions of participation, even though the facility has terminated 
its Medicaid agreement.
    HCFA was able to address the situation that happened in Florida 
prior to H.R. 540. The Vencor situation clearly violated existing law, 
and we were able to take swift action. The strong enforcement response 
in this situation sends a clear message to other providers across the 
nation that this behavior is unacceptable.
    Question 3. How many nursing homes voluntarily withdrew from the 
Medicaid program last year?
    Answer 3. Our data indicates that over the last three years the 
average number of nursing facilities that voluntarily withdrew from the 
Medicaid program is 58 per year: 59 Medicaid facilities withdrew in 
FY1996; 54 in FY1997; and 60 in FY1998.
    During the hearing, you also mentioned an interest in meeting with 
HCFA staff to discuss a variety of health related issues. Our Office of 
Legislation will be contacting the Chairman to coordinate a roundtable 
discussion for the Subcommittee Members and their staff in the near 
future. Thank you for your interest in our programs.
    If you have any additional questions, please contact me.
            Sincerely,
                                            Michael M. Hash
                                               Deputy Administrator
                                 ______
                                 
              Department of Health & Human Services
                       Health Care Financing Administration
                                                  February 25, 1999
The Honorable Sherrod Brown
328 Cannon House Office Building
Washington, DC 20515
    Dear Congressman Brown: I am responding to your question raised 
during the House Commerce Subcommittee on Health and the Environment 
hearing on ``H.R. 540, the Nursing Home Resident Protection Amendments 
of 1999.''
    Question 1. Requested data on whether the reducing of Medicaid beds 
is occurring more now than in the past.
    Answer 1. Our data systems do not currently provide information on 
the reduction of beds. We do know, however, that over the last three 
years the average number of nursing facilities that voluntarily 
withdrew from the Medicaid program is 58 per year: 59 Medicaid 
facilities withdrew in FY1996; 54 in FY1997; and 60 in FY1998.
    During the hearing, you and other Committee Members mentioned an 
interest in meeting with HCFA staff to discuss a variety of health 
related issues. Carleen Talley of our Office of Legislation will be 
contacting the Chairman and your Committee staff to coordinate a 
roundtable discussion for Subcommittee Members and their staff in the 
near future. Thank you for your interest in our programs.
    If you have any additional questions, please contact me.
            Sincerely,
                                            Michael M. Hash
                                               Deputy Administrator
                                 ______
                                 
     National Citizens' Coalition for Nursing Home 
                                             Reform
                                             Washington, DC
                                                  February 22, 1999
Chairman Michael Bilirakis
Subcommittee on Health and Environment
Room 2125, Rayburn House Office Building
Washington, D.C. 20414-6115
    Dear Chairman Bilirakis: The National Citizens' Coalition for 
Nursing Home Reform (NCCNHR) thanks the Committee members and staff for 
the opportunity to have Robyn Grant testify in support of H.R. 540, the 
Nursing Home Resident Protection Amendments of 1999. The information 
from those who testified and additional facts elicited as a result of 
the members' questions allowed many viewpoints on the bipartisan bill. 
The two follow-up questions from your office are another opportunity to 
provide the consumer perspective on issues related to H.R. 540. 
NCCNHR's response to the two questions follows.
    Question 1. How do nursing homes adjust their participation in 
Medicaid for their facilities, and why would they do so?
    Response. Our information is based on the experiences shared with 
the NCCNHR by residents, family members, advocates and ombudsmen. In a 
number of states, facilities have the option of certifying and 
decertifying their beds at will. They can do so in order to accept or 
deny access to residents on Medicaid as it meets their own financial 
and caregiving needs. They would do so because when a Medicaid bed is 
available they are obligated to keep a resident who spends down to 
Medicaid eligibility. However, if they have no Medicaid bed, then they 
can transfer or discharge the person who has exhausted his/her funds 
and fill the bed with a person who pays privately or one whose care is 
paid for by the higher paying Medicare program.
    From a consumer perspective requiring dual certification of all 
beds in the Medicare and Medicaid programs would diminish access 
problems experienced by those whose care is paid for by Medicaid. Only 
two states have dual certification of all facilities: Rhode Island and 
Alaska of facilities. None of the states, however, require dual 
certification of all the beds.
    An historical perspective illustrates the precarious status of 
residents once they become dependent on Medicaid for all or part of 
their care. In Linton v. Tennessee Commissioner of Health & Environment 
(M.D. Term. April 20, 1990), the court found that the facility had 
violated Medicare law by denying the resident services under Medicaid. 
The court also said that the facility denied the resident her civil 
rights under Title VI of the Civil Rights Act, since minorities 
disproportionately use Medicaid to pay for care. The Linton case found 
that the Health Care Financing Administration, when it approved state 
plans, consistently required all beds to be certified, and states did 
not have the authority to approve a facility's request for 
certification of fewer than all the certifiable beds.
    The Final, Final Regulations of 1991 changed the definition of 
``nursing facility'' to ``the entity that participates.'' HCFA 
explained that change in definition allowed residents to have the full 
protection of the law on transfers by calling a change from a Medicare 
distinct part to a Medicaid distinct part an inter-facility (not an 
intra-facility which has less protections) transfer. The effect has 
been to allow facilities to change bed designations at will, denying 
access to residents dependent on Medicaid for all or part of their 
care. HCFA testified that such changes are only allowed once a year, 
although NCCNHR has not seen an official copy of this new policy.
    Question 2. Both The Seniors Coalition and the 60 Plus witnesses 
were asked how they were funded at the hearing, but your organization 
was not. How is the National Citizens' Coalition for Nursing Home 
Reform, the group on whose behalf you testified funded? Does the 
organization solicit or receive funding from governments at the local, 
state, and federal level?
    Response. The National Citizens' Coalition for Nursing Home Reform 
signed the required form detailing the government grants we receive. It 
was attached to the testimony as suggested in the written directions 
for the hearing. NCCNHR received $250,000 from the Administration on 
Aging in 1997 through March of 1998 and received $290,000 from the 
Administration on Aging in 1998. This grant ends on March 31, 1999. 
NCCNHR receives no grants from local or state governments.
    Other monies come from donations, memberships, sales of 
publications and subscriptions, and small grants from private 
foundations.
    Please contact me if you have additional questions.
            Sincerely,
                                        Sarah Greene Burger
                                                 Executive Director
                                 ______
                                 
                                   The 60 Plus Association,
                                                 February 24, 1999.
The Honorable Michael Bilirakis
Chairman, Subcommittee on Health and Environment
Committee on Commerce
U.S. House of Representatives
2125 Rayburn HOB
Washington, D.C. 20515
    Dear Chairman Bilirakis: I am responding to your request to answer 
two questions in your letter of February 12, 1999 regarding my 
testimony on H.R. 450, the Nursing Home Resident Protection Amendments 
of 1999.
    Question 1. According to the letter of endorsement from AARP, H.R. 
540 ``offers important protections because of the documented problems 
that Medicaid patients face . . .'' It is not often that your 
organization agrees with AARP. Why do you agree on the support of H.R. 
540?
    Answer. Rather than agreeing with AARP, we believe this is a case 
of the AARP agreeing with Chairman Bilirakis and the 60 Plus 
Association. The abuse cited in the nursing homes situation with 
Medicaid patient is a real problem and the solution does not require a 
change or expansion of the Medicaid program or an increase or decrease 
in funding. It is a loophole in the law which has allowed certain 
unintended consequences occur to senior citizens on Medicaid, e.g. 
discrimination against seniors in nursing homes on Medicaid. The 
proposed legislation seeks to correct this situation as a matter of 
fairness and equity. In this sense both the 60 Plus Association and 
AARP see this as a protection for seniors through a correction in the 
present law regarding Medicaid, rather than a new or expanded program.
    Question 2. On what other areas do you find common group with AARP? 
On what matters do you differ?
    Answer. Both 60 Plus and the AARP have testified on the same panel 
before a House Subcommittee investigating telemarketing fraud, with 
seniors often times the victims, with both groups calling for a 
crackdown. Both AARP and 60 Plus favor a discussion of the current 
problems with Social Security, though 60 Plus was the first to call for 
such a discussion. We favor a privatization or personalization of 
Social Security while AARP has been at least ambivalent in that 
direction. Overall, AARP favors an expansion of federal government 
programs while the 60 Plus Association favors less government, less 
regulations, more tax relief, and greater emphasis on the free market 
system to solve problems in our society. The AARP supported the Clinton 
budget which hiked taxes on middle class Social Security recipients (50 
percent to 85 percent) while 60 Plus Association opposed it. In fact, 
we favor repeal of this tax hike. 60 Plus Association favors the repeal 
of the federal estate or ``death'' tax while AARP opposes this reform.
            Sincerely,
                                           James L. Martin,
                                                         President.
                                 ______
                                 
                                     The Seniors Coalition,
                                                    March 16, 1999.
Congressman Michael Bilirakis
Chairman, Subcommittee on Health and Environment
Committee on Commerce
U.S. House of Representatives
Room 2125 RHOB
Washington, DC 20515-6115
    Dear Mr. Chairman: On behalf of the three million members and 
supporters of The Seniors Coalition, I wish to thank you for inviting 
us to participate in the hearing on H.R. 540 and for allowing me to 
amplify our remarks through the questions you provided.
    Again, thank you for your leadership on this and so many other 
issues. We look forward to working with you and your staff throughout 
this session.
            Sincerely,
                                          Nona Bear Wegner,
                                             Senior Vice President.
                         responses to questions
    Question 1. According to the letter of endorsement from AARP, H.R. 
540 ``offers important protections because of the documented problems 
that Medicaid patients face . . .'' It is not often that your 
organization agrees with AARP. Why do you agree on the support of H.R. 
540?
    Answer. There are a variety of issues on which all seniors groups 
can agree. Protecting the welfare of older Americans is both bi-
partisan and non-partisan. The problems addressed by the Nursing Home 
Protection Amendments fit this description. Under no circumstances 
should nursing home residents and their families be subjected to 
misleading and unfair treatment.
    The Seniors Coalition believes firmly that a free market system can 
help solve problems facing the body politic. However, the market system 
only works if accurate information is available to consumers, 
information upon which they can base their planning and decisions. 
Additionally, all supporters of capitalism look to government and the 
courts to prevent and punish fraud and deception.
    The legislation introduced by Congressman Davis and co-sponsored by 
Chairman Bilirakis and so many other members of this Subcommittee in no 
way does harm to the private sector. In fact it buttresses the sound, 
fair, and efficient operation of the private sector by making certain 
that consumers receive full and timely information and disclosure of 
essential facts about nursing home care and operation so consumers can 
carry out sensible planning and make fully informed decisions. Any 
operators who do not want to operate within this equitable ethical 
framework can make choices that take their operations to other 
activities, but not by misleading current and future nursing home 
residents and their families.
    Question 2. On what other areas do you find common ground with 
AARP. On what matters do you differ?
    Answer. In many cases, AARP and The Seniors Coalition may both 
agree that a problem exists--whether that be quality of care in 
Medicare, adequate benefits for retirees, or prevention of crime 
against older Americans or any number of a host of other important 
issues facing seniors and their families. Where we often disagree is 
how these problems can best be solved. AARP often seems to advocate for 
a greater role for government in solving these societal ills, while The 
Seniors Coalition believes decreasing the involvement of government in 
the daily lives of Americans of all ages is a better approach.
    For example, we also believe the government has made promises to 
our older Americans in both the Social Security and the Medicare 
programs which amount to contractual commitments. To accomplish this, 
we believe that the future requires bringing free market options and 
solutions to bear on these problems without compromising the benefits 
that existing recipients are receiving. However, simply pumping more 
money into old ways of doing things will only stave off but not 
eliminate impending crisis and bankruptcy in both Social Security and 
Medicare. Therefore, we want to use free market approaches and 
mechanisms to empower consumers and harness the innovative energies of 
the private sector to find solutions in both of these programs.
