[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]



                  HEALTH CARE FINANCING ADMINISTRATION


                           PAPERWORK BURDENS

=======================================================================2


                                HEARING

                               before the

                      COMMITTEE ON SMALL BUSINESS
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                      WASHINGTON, DC, MAY 9, 2001

                               __________

                            Serial No. 107-6

                               __________

         Printed for the use of the Committee on Small Business

                    U.S. GOVERNMENT PRINTING OFFICE
72-931                      WASHINGTON : 2001




                      COMMITTEE ON SMALL BUSINESS

                  DONALD MANZULLO, Illinois, Chairman
LARRY COMBEST, Texas                 NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado                JUANITA MILLENDER-McDONALD, 
ROSCOE G. BARTLETT, Maryland             California
FRANK A. LoBIONDO, New Jersey        DANNY K. DAVIS, Illinois
SUE W. KELLY, New York               WILLIAM PASCRELL, New Jersey
STEVEN J. CHABOT, Ohio               DONNA M. CHRISTIAN-CHRISTENSEN, 
PHIL ENGLISH, Pennsylvania               Virgin Islands
PATRICK J. TOOMEY, Pennsylvania      ROBERT A. BRADY, Pennsylvania
JIM DeMINT, South Carolina           TOM UDALL, New Mexico
JOHN THUNE, South Dakota             STEPHANIE TUBBS JONES, Ohio
MIKE PENCE, Indiana                  CHARLES A. GONZALEZ, Texas
MIKE FERGUSON, New Jersey            DAVID D. PHELPS, Illinois
DARRELL E. ISSA, California          GRACE F. NAPOLITANO, California
SAM GRAVES, Missouri                 BRIAN BAIRD, Washington
EDWARD L. SCHROCK, Virginia          MARK UDALL, Colorado
GELIX J. GRUCCI, Jr., New York       JAMES P. LANGEVIN, Rhode Island
TODD W. AKIN, Missouri               MIKE ROSS, Arkansas
SHELLEY MOORE CAPITO, West Virginia  BRAD CARSON, Oklahoma
                                     ANIBAL ACEVEDO-VILA, Puerto Rico
                                 ------                                

                            Committee Staff

                      Doug Thomas, Staff Director
                  Phil Eskeland, Deputy Staff Director
                  Michael Day, Minority Staff Director




                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 9, 2001......................................     1

                               Witnesses

Mahood, William, M.D., Gastrointestinal Assocs., Inc.............     5
Morris, Alan, M.D., Metropolitan Orthopaedics....................     7
Cummings, Bruce, CEO, Blue Hill Memorial Hospital................     9
Anderton, Robert, D.D.S., J.D., L.L.M., American Dental Ass'n....    11
Jeffries, Craig, CEO, Healthspan, Inc............................    13

                                Appendix

Opening statements:
    Manzullo, Hon. Donald........................................    29
    Velazquez, Hon. Nydia........................................    32
    Christensen, Hon. Donna......................................    34
    Kelly, Hon. Sue..............................................    38
    Jones, Hon. Stephanie Tubbs..................................    39
    Ross, Hon. Mike..............................................    42
    Udall, Hon. Tom..............................................    44
Prepared statements:
    Mahood, William..............................................    47
    Morris, Alan.................................................    58
    Cummings, Bruce..............................................    72
    Anderton, Robert.............................................   120
    Jeffreis, Craig..............................................   134
Additional Information:
    Dr. Robert Anderton's responses to Post Hearing Questions....   140
    Mr. Bruce Cummings' responses to Post Hearing Questions......   146
    Mr. Craig Jeffreis' responses to Post Hearing Questions......   151
    Dr. Alan Morris' responses to Post Hearing Questions.........   155
    Dr. William Mahood's responses to Post Hearing Questions.....   158
    Statement of the American Academy of Family Physicians.......   164
    Statement of the American Academy of Ophthalmology...........   168
    Statement of the American Physical Therapy Association.......   176
    Statement of the American Society of Clinical Pathologists...   184
    Statement of the Power Mobility Coalition....................   187

 
         HEALTH CARE FINANCING ADMINISTRATION PAPERWORK BURDENS

                              ----------                              


                         WEDNESDAY, MAY 9, 2001

                          House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Committee met, pursuant to call, at 10:03 a.m., in Room 
2360, Rayburn House Office Building, Hon. Donald A. Manzullo 
(chair of the Committee) presiding.
    Chairman Manzullo. Please come to order.
    Our hearing today is about Health Care Financing 
Administration regulatory requirements burdening health care 
providers. This hearing will be the first in a series of 
hearings that the Committee will hold on reducing regulators 
burdens on health care providers. The next full Committee 
hearing is scheduled for July 11, when the Committee will 
examine a broad array of regulatory relief options for health 
care providers.
    I would like to thank my colleague, the gentleman from 
Pennsylvania, Mr. Toomey, for the efforts he has made on that 
front, and would hope that he can find the time to testify at 
the July 11 hearing.
    I am going to waive the reading of the rest of my opening 
statement, and defer to Ms. Velazquez and then Dr. Christian-
Christensen. Both will have an opening statement.
    Then I would like to ask Mr. Toomey to introduce his 
witness.
    [Mr. Manzullo's statement may be found in appendix.]
    Chairman Manzullo. Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    Today the Committee begins working towards the 
reauthorization of the Paperwork Reduction Act. This landmark 
legislation was signed into law in 1980 by President Carter 
with the goal of reducing the overall burden and time small 
businesses spend complying with paperwork reporting 
requirements.
    This Committee has long known that the overall Federal 
paperwork burdens fall disproportionately heavily on small 
businesses. Paperwork requirements and the associated costs are 
nearly twice as high for small businesses than corporate 
America.
    The focus of this hearing is on the Health Care Financing 
Administration and the associated paperwork requirements that 
its regulations create. HCFA is the Federal agency charged with 
administering Medicare, and has been referred to as the 
country's largest health insurance provider. Oftentimes, it is 
the only health care option. The services they provide affect 
the lives of 38 million Americans nationwide.
    Because of the nature of its work, oftentimes HCFA creates 
some of the largest and most complicated paperwork 
requirements. Out of the 30-plus Federal agencies, HCFA ranks 
sixth behind Treasury, Labor, and DOD in paperwork burdens.
    While it is easy to simply lay the blame for onerous 
regulations on Federal agencies, the reality is that most of 
the paperwork burden that falls on small businesses are the 
result not of agency mandates, but due to legislative 
initiatives passed by Congress. I believe that if Congress 
truly wants to reduce paperwork burdens on small businesses, we 
need to look first at how we legislate.
    In recent years, a great deal of attention has been given 
to HCFA regulations and the paperwork burden that it places on 
small businesses. It should come as no surprise that the 
industry affected most by these paperwork requirements are the 
medical professions. We often forget that many in the health 
care field are small businesses. As a matter of fact, small 
business loans to medical providers ranks in the top five under 
the SBA 7(a) loan program.
    According to the American Medical Association, HCFA 
produces over 110,000 pages of medical regulations, requiring 
doctors to spend an estimated 20 percent to 50 percent of their 
time filling out forms, meaning many doctors are spending as 
much time with their accountants as they are with their 
patients.
    Hopefully, today's hearing will shed some light on how we 
can streamline these processes, and what changes can be made to 
the Paperwork Reduction Act to ensure agencies report clear and 
concise regulations.
    I look forward to hearing from the witnesses on how this 
Committee can find a balance between the need for accurate 
reporting requirements that do not overburden small businesses.
    [Ms. Velazquez's statement may be found in appendix.]
    Chairman Manzullo. Thank you. We are going to defer Mrs. 
Christensen's statement until after the vote.
    At this time, I would like to have Congressman Toomey to 
introduce his witness, and Congressman Baldacci can introduce 
his witness.
    Mr. Toomey. Thank you, Mr. Chairman.
    Chairman Manzullo. After the introductions, the Committee 
will stand in recess until after the vote.
    Mr. Toomey. Thank you, Mr. Chairman. I want to also thank 
you for your invitation to testify before the Committee on the 
July 11 hearing. I will certainly happily accept that 
invitation. I look forward to speaking with this Committee 
about my bill, H.R. 868, which has over 165 cosponsors already, 
the intent of which is to provide some due process reform for 
health care providers when they are dealing with HCFA in 
matters of dispute.
    Today, of course, our topic is slightly different. I want 
to welcome our first guest on the panel, Dr. William Mahood. 
Dr. Mahood's wife and daughter live in Flourtown, Pennsylvania. 
I am delighted you could be with us today, and I appreciate 
your coming here to be with us.
    I want to tell you a little bit about Dr. Mahood. He has a 
group practice in gastroenterology, has had a long history in 
being involved in public policy issues as they relate to health 
care in particular, and has been involved in numerous medical 
societies and organizations over the last 20 years.
    A couple of noteworthy examples nationally, Dr. Mahood has 
been a member of AMA's board of trustees since 1996, and AMA's 
Council of Medical Service since 1991. He has also been very 
active on the local level. In Montgomery County, Dr. Mahood 
helped to create the county's board of health, and co-chaired a 
health task force for the county.
    Dr. Mahood works in the trenches of providing medical care, 
but also understands our health care system in a broader 
context, so his input today is going to be very helpful. I am 
personally delighted you could be with us to join us and give 
us your views. I would like to welcome Dr. Mahood.
    Chairman Manzullo. Thank you, Congressman Toomey. 
Congressman Baldacci used to be a member of the Small Business 
Committee. We miss his presence. He and I used to exchange 
spaghetti recipes from our family restaurants.
    Congressman Baldacci, will you introduce your guests here?
    Mr. Baldacci. I won't give you the recipe, but I will 
introduce my guest.
    First, I want to thank you, Mr. Chairman and Ranking Member 
Velazquez. It is a pleasure to be here with all of you. This is 
a very important matter, and I commend you for taking this 
issue up and for coming forward with this hearing.
    When we look at health care costs and look at the amount of 
money that is being spent on paperwork itself taking away from 
needed care to people, this is truly an important area that 
needs to be addressed.
    Mr. Cummings is a good friend of mine. He is somebody who 
has been a health care leader in Maine. He has been the CEO of 
the Blue Hill Memorial Hospital. He serves on numerous boards. 
He has been the executive officer of the Blue Hill Memorial 
Hospital for over 10 years, and has contributed to the 
hospital's successes for over 20 years. He has been chair of 
the board of the Maine Hospital Association, and currently the 
director and vice-chair of the Maine Center for Public Health.
    He had been representing the American Hospital Association 
on the Interagency Task Force on Rural Health Clinics, and is 
currently a member of the American Hospital Association Task 
Force on Regulatory Relief.
    Bruce's commitment, his intelligence, tenacity, and energy 
have helped to mold Blue Hill Memorial Hospital into a first 
class hospital and health care provider in the community. He 
has helped other health facilities to meet the needs of the 
people of Maine. I have found his advocacy, especially for 
rural Maine, to be second to none. He truly represents the best 
of his profession. I appreciate his participation at this 
hearing.
    Bruce and I met last week, along with other hospital 
administrators. Bruce had an example, and I am not sure if he 
is going to unfurl that stack of paperwork today, but he 
unfurled it for my benefit. It was good, because it leaves a 
lasting impression in terms of the amount of paperwork that 
people have to go through.
    I want to thank the chairman for the opportunity, and look 
forward to hearing from the witnesses.
    Chairman Manzullo. Thank you very much. We are going to a 
recess so we can approve the Journal of the great things we did 
yesterday. Then we will be back in about 15 minutes.
    [Recess.]
    Chairman Manzullo. The hearing will come to order..
    We are going to have an opening statement from the 
gentlelady from the Virgin Islands and doctor, Mrs. Christian-
Christensen.
    Mrs. Christensen. Thank you, Mr. Chairman.
    I want to thank you and the ranking member, Ms. Velazquez, 
for holding this hearing on the paperwork burdens of the Health 
Care Financing Administration.
    As chairman of the Health Brain Trust, but especially as a 
physician who suffered from the complex and burdensome 
bureaucracy myself, I can say that a close scrutiny of this 
important issue is long overdue. I commend the Chair and the 
ranking member for recognizing the special plight of small 
businesses which are health care providers in bringing the 
issue of HCFA to this Committee.
    It is an honor to welcome my colleagues and all of the 
representatives of health care provider associations who are 
with us this morning. I want to thank them for stepping in and 
providing information to this Committee on behalf of all of the 
health care providers of this country.
    Based on the introduction of bills like H.R. 868, and many 
letters and statements, it seems that help is on the way. 
However, I would caution that to fix and not compound the 
problems, it is important that this Congress not follow the 
lead of HCFA, but instead, hear from and be advised by those 
who know the problems and its impact best, the providers.
    We must be especially cognizant, as we do that, of the fact 
that indeed Congress is responsible for some of the confusion 
itself.
    Several key leaders in both bodies are on record. In the 
House, three chairmen, Chairman Tauzin, Chairman Bilirakis, and 
Chairman Greenwood, in a letter to Secretary Thompson, stated 
their commitment to changing the system so health care 
professionals can better focus on improving quality of care. 
Both the President and the Secretary are on record in favor of 
reform, as well.
    During several testimonies here on the Hill, I have 
committed myself to working on this issue. I have also signed 
on as a cosponsor of H.R. 868.
    It is no wonder this agency is a mess. There are over 
130,000 pages of regulations which, based on my experience, are 
interpreted differently in different parts of this country. 
Just a few examples:
    A Medicare patient, at perhaps the very worst time, in the 
emergency room, can be faced with filling out over eight pages 
of Medicare forms; because of complexity and continuous 
changes, records have to be reviewed by at least four people to 
ensure compliance; OASIS, which is used to assess care at home 
health agencies, asks more than 60 questions; another tool used 
for skilled nursing facilities asks almost 200, which are not 
used for calculating, what the payment should be;
    According to GAO, 40 extra minutes of a nurse's time is 
required just to do the initial OASIS assessment. For every 
hour of health care provided, it takes anywhere from 30 minutes 
to an hour to do the paperwork.
    HCFA is quick to point out that it is not ranked the worst 
in terms of record keeping, it is ranked sixth. But I have a 
feeling, having been a physician and having had to fill out the 
paperwork to take care of patients and do all the rest of the 
best of medicine, that we just do not complain. I don't think 
that the full record from physicians and health care providers 
is there for them to really be ranked as they should be ranked. 
I am sure if all the information was there, HCFA would be 
ranked higher than sixth as one of the worst regulatory 
agencies as far as regulatory burdens are concerned.
    It is, therefore, no wonder that many physicians and other 
medical service providers choose not to participate in the 
Medicare program. Many in my district of the Virgin Islands do 
not, and not only because of the reporting requirements, but 
because of lack of fairness and timely responses, timely 
payments, and then the denials and medical necessity decisions.
    I would like, Mr. Chairman, to ask unanimous consent to 
include in my statement a statement from one of our local 
physicians at home for the record.
    As you have said, this is not going to be our only hearing 
on this issue, and I am really pleased to hear that. I look 
forward to hearing from our guests this morning. Hopefully this 
is the beginning of resolving many if not all of the issues 
that we have with HCFA.
    Thank you, Mr. Chairman.
    Chairman Manzullo. Could you identify the name of the 
physician, for the record?
    Mrs. Christensen. Yes, Dr. Robert L. Booker. He is an 
endocrinologist in the Virgin Islands. He has served in the 
medical society.
    Chairman Manzullo. That statement and the full statements 
of all the witnesses will be admitted in the record, without 
objection.
    Our first witness is Dr. William Mahood.
    One of my constituents is the former head of the 
gastroenterologists. At one time I learned about the ENTs, but 
I am not even going to get into that now.
    HCFA has been referred to as ``Hell Can Find Anyone.'' We 
are coming off a big fight with HCFA back home where they fined 
three chiropractors $250,000. We got it down to $1,500. Then 
HCFA appealed it. Within a short period of time, they withdrew 
that appeal. My staff gave me a set of boxing gloves. On the 
right boxing glove it says HCFA. I should have brought them 
here. We know who the enemy is. We represent people, we don't 
represent the government, so you are among friends here.
    Dr. Mahood, I look forward to your testimony. We are going 
to try to keep the testimony at 5 minutes apiece so we will 
have plenty of time for questions and interactions. Doctor.

              STATEMENT OF WILLIAM H. MAHOOD, M.D.

    Dr. Mahood. Thank you, Mr. Chairman.
    My name is Bill Mahood. I am a member of the American 
Medical Association Board of Trustees and a practicing 
gastroenterologist from Abington, Pennsylvania.
    We appreciate the Committee's efforts to address the 
burdensome Medicare regulatory requirements, and believe that 
the bipartisan Medicare Education and Regulatory Fairness Act, 
MERFA, will significantly decrease the burdens placed on 
physicians.
    Two-thirds of physician practices qualify as small 
businesses, with less than 25 employees. Thus, these practices 
cannot absorb the costs imposed by the unfunded government 
mandates resulting from burdensome Medicare regulations.
    In fact, in a recent AMA survey, more than one-third of the 
responding physicians spend one hour completing Medicare forms 
and administrative requirements for every one to four hours of 
patient care. These requirements shift physicians' time away 
from patient care.
    Three examples. First, documentation guidelines require 
physicians to record information in a patient's chart that is 
not clinically relevant. These stringent documentation 
requirements force physicians to overload the patient's medical 
record with extraneous information that can actually harm 
patient care.
    When a patient needs emergency treatment, for example, 
physicians must go through volumes of patient records to try to 
quickly determine what treatment is needed. It is like trying 
to find a needle in a haystack.
    HCFA is developing clinical examples to illustrate the 
typical documentation that should be in a medical record. We 
understand that the initial draft of this clinical example is 
already 640 pages long.
    Finally, even though these guidelines are a serious 
Medicare paperwork problem, and we know Medicare relies on them 
to ensure proper payment, the guidelines have never gone 
through the OMB clearance process.
    We urge the Committee to review the paperwork burden 
imposed by the guidelines and to explore whether pilot projects 
using peer review designed to test the clinical relevance of 
the guidelines are not a more appropriate response to ensuring 
clinically relevant documentation standards.
    Next, I would like to discuss the Medicare enrollment 
process. A physician cannot be reimbursed for providing 
treatment to a patient until he or she has a provider number, 
which is issued by Medicare upon completion of the Form 855 
enrollment process. Carriers often take months to approve these 
enrollment applications, even though physicians have already 
undergone tremendous scrutiny to become licensed in the State 
and to have hospital privileges.
    During this approval process, many physicians, especially 
in rural and smaller practices, are effectively precluded from 
treating Medicare patients.
    Carriers should reserve temporary provider numbers, 
allowing licensed physicians to see Medicare patients while 
waiting for their permanent Medicare number.
    Another problem with the enrollment process is HCFA's cost 
and time estimates required by the Paperwork Reduction Act. For 
example, HCFA's estimate for clerical employee wages, and 
attorneys' and consultants' fees for completing this form are 
severely underestimated. HCFA should be required to take into 
account the true costs of the Medicare enrollment process.
    Another problem is a pending HCFA initiative under which 
all physicians would have to enroll in Medicare. Physicians 
also would have to revalidate this every 3 years. This is 
completely unnecessary and burdensome, and we urge the 
Committee to prevent HCFA from expanding the enrollment 
process.
    The final issue I would like to address today is the 
serious conflict in Medicare policy between advanced 
beneficiary notices, or ABNs, and a requirement under the 
Emergency Medical Treatment and Active Labor Act, EMTALA.
    When physicians see Medicare patients, to bill the patient 
for an uncovered or possibly uncovered service, the physician 
must request that the patient sign an ABN. It just states that 
the service may not be covered and that the patient will indeed 
pay if it is not covered.
    Medicare obviously requires these be signed by the patient 
prior to ordering or performing a noncovered service, but under 
EMTALA, the patient must first be stabilized before you can 
even ask about their insurance. EMTALA prohibits a physician 
from complying with the Medicare ABN policy, and therefore, 
although the emergency service must be provided, the physician 
cannot bill or be paid for them.
    We urge the Committee to recommend that HCFA immediately 
resolve this conflict. We thank the Committee for pursuing 
these regulatory relief efforts. We look forward to working 
with you in the future. Thank you.
    Chairman Manzullo. Thank you, Doctor.
    [Dr. Mahood's statement may be found in appendix.]
    Chairman Manzullo. Our next witness will be Dr. Alan 
Morris. He is from St. Louis, Missouri, born in the great State 
of Illinois. We just wanted you to acknowledge that.
    He is a graduate of the University of Illinois, the 
University of Illinois Medical School, and former Captain, U.S. 
Army Reserves. He has a practice in orthopaedic surgery. He is 
here to testify about how he loves to fill out forms.
    Dr. Morris, you were trained to fill out forms and not 
practice medicine, is that correct?

                 STATEMENT OF ALAN MORRIS, M.D.

    Dr. Morris. As I frequently tell my mother, this is not 
what you sent me to medical school for.
    Good morning, Chairman Manzullo and members of the 
Committee. My name is Alan Morris. I am a practicing 
orthopaedic surgeon in St. Louis, Missouri. I have a small 
practice, six partners.
    I am also chairman of the Council on Health Policy and 
Practice for the American Association of Orthopaedic Surgeons. 
On behalf of this association, which represents 18,000 board-
certified orthopaedic surgeons, I would like to thank you for 
the opportunity to testify.
    In our health care system, our number one concern, of 
course, should be to ensure quality patient care. Instead, we 
have managed to create a bureaucratic nightmare of paperwork, 
rather than focusing on spending time with the patients.
    Let me share with you some examples of this onerous 
paperwork burden. Mr. Chairman, it is very important to stress 
to you that Medicare sets the standards, and other payers may 
follow these standards. Our practice is set up to comply with 
Medicare.
    My practice is a rather typical orthopaedic practice. It 
can be characterized as a small business. We have 26.5 FTE 
employees for seven physicians. Seventeen are administrative 
staff. This does not include an outside company to whom we have 
outsourced our billing process. This, in reality, adds 
additional administrative staff to process paperwork. That is a 
lot of people to push paper.
    My associates and I are required to comply with 
requirements, both directed centrally from HCFA and 
independently by Medicare carriers, who enter into contracts 
with HCFA to oversee the coding and billing practices of 
physicians and other Medicare providers.
    These carriers operate with a great deal of discretion, and 
utilize their own specific policies and forms, in addition to 
those of HCFA, and are not required to comply with Federal 
government review. We are required to comply with new and 
revised policies distributed monthly through the bulletins by 
each Medicare carrier. This is in two areas.
    These policies often vary from carrier to carrier, but my 
patients are pleased that my medical journals take priority 
over my reading of these bulletins, which come out every month. 
I am a little behind in reading those bulletins.
    Adding to our paperwork this year, the HHS Office of 
Inspector General distributed to physicians guidelines to 
develop voluntary compliance plans. My practice invested 
significant time to comply with paperwork requirements, and 
took time away from patient care to train our staff to comply 
with these plans.
    To participate as Medicare providers, as my colleague has 
already said, our practice is required to complete several 
lengthy Medicare enrollment applications. Each physician is 
required to apply for a separate individual Medicare provider 
number, and the practice is required to apply for a separate 
group practice number.
    Medicare requires physicians to reapply for Medicare 
numbers each time they move from one practice to another. 
Recently, three members of my practice applied for Medicare 
numbers. Two of these partners just practiced down the street. 
They have been in practice for 20 years. They received their 
Medicare enrollment numbers approximately 6 weeks after they 
reapplied. For one of our orthopaedic surgeons who was applying 
for the first time, it took significantly greater time. In 
addition, the practice had to reapply for a new group number. 
It is important to say that we could treat Medicare patients 
during that time, but we could not submit a Medicare payment or 
could not submit a claim for Medicare payment.
    In contrast, I just recently completed a Veterans 
Administration credentialing online form. It was done online. 
It took me 15 minutes. I received prompt approval. There was no 
hassles. There was no paperwork. It was very streamlined. I 
think HCFA could learn something from the VA.
    I believe HCFA has seriously underestimated, under the 
requirements of the Paperwork Reduction Act, the time and cost 
involved to complete these enrollment forms.
    Finally, I would just like to mention E&M guidelines. This 
is the most onerous paperwork burden in the Medicare program. 
These guidelines have never gone through, as was stated, the 
OMB clearance process. It takes nearly as much time for me to 
dictate the report as I spend face to face with my patient. 
Don't forget the time and cost for my practice's three typists 
to transcribe these reports into the medical record.
    In closing, I don't know all the nuances of legislative and 
statutory approaches to solve these problems. I did try to 
address some of these in my written testimony. But one thing is 
clear, paperwork needs to be reduced, and the requirements need 
to be simplified and standardized. All government agencies, 
HCFA and its affiliates, Medicare carriers, need to come under 
the same requirements.
    We look forward to working with you, Mr. Chairman, and the 
Committee to find solutions to the paperwork burdens that are 
imposed upon us.
    Thank you very much.
    Chairman Manzullo. Thank you very much, Doctor.
    [Dr. Morris' statement may be found in appendix.]
    Chairman Manzullo. Our next witness has already been 
introduced by his Congressman. He is hiding behind that stack 
of paperwork. I am sure you are going to make a notation that 
those papers are not there to balance the table.
    Mr. Cummings.

    STATEMENT OF BRUCE D. CUMMINGS, CEO, BLUE HILL MEMORIAL 
      HOSPITAL, ON BEHALF OF AMERICAN HOSPITAL ASSOCIATION

    Mr. Cummings. Thank you, Mr. Chairman.
    I am Bruce Cummings, the CEO of Blue Hill Memorial Hospital 
in Blue Hill, Maine. I am here today on behalf of the American 
Hospital Association's nearly 5,000 hospitals, health system 
network, and other health care provider members. We welcome the 
opportunity to testify before you on the complexity and burden 
of HCFA's paperwork requirements.
    Blue Hill Memorial Hospital is a 25-bed hospital. It was 
established in 1924 to serve the residents of a small coastal 
village of Blue Hill. Since I am from a State with a long 
maritime tradition, I am going to borrow a cue from last 
summer's hit movie, the Perfect Storm, to frame my remarks.
    The Perfect Storm is the true story of a small fishing 
vessel, the Andrea Gail, that was caught up and ultimately 
destroyed by the confluence of three major storms. Like the 
Andrea Gail, hospitals are facing an assault. It is an assault 
born of the confluence of several bureaucratic engines. First 
and foremost are the Federal Medicare regulations, and then a 
myriad of State and local laws; and last but not least, 
requirements from private payers and accreditation bodies.
    Unlike the movie, this perfect storm is not a cataclysmic 
event, but an insidious assault gradually eroding the 
effectiveness of health care staff, driving caregivers from the 
field, and wounding the ability of hospitals, home health 
agencies, and other providers to care for patients.
    To illustrate this problem, I have brought some examples 
with me. I would like to tell you about one of them right now. 
This is the largest one before me. It is known as the Medicare 
cost report. It costs us about $100,000 to prepare this report 
in a 25-bed hospital.
    Chairman Manzullo. Could you describe how thick that is for 
the record, Mr. Cummings?
    Mr. Cummings. I am not good at guessing. I would say at 
least a foot. Over a foot.
    Chairman Manzullo. Thank you.
    Mr. Cummings. Recently, Congress sought to improve the 
financial viability of small rural primary care facilities by 
creating the Critical Access Hospital Program. These hospitals, 
however, have continued to experience serious cash flow 
problems because of long delays by some fiscal intermediaries 
in settling the annual Medicare cost report.
    Some fiscal intermediaries may not settle cost reports for 
2 or more years. Our cost report, the one you see before you 
here, was filed last summer, and we still have not had it 
settled by our fiscal intermediary, even though it was declared 
complete months ago.
    Worse yet, Blue Hill Memorial Hospital, which is operating 
at a deficit, is owed more than $2\1/2\ million over a period 
of 3 years. To compensate, we have had to take out a bank loan 
to meet our current obligations. These interest charges on the 
loan are approximately $120,000 a year. Those expenses, by the 
way, are disallowed by Medicare in the cost report. They are 
all avoidable. That is money we could have used to replace 
outdated equipment, start new programs for our community, or to 
help recruit and retain scarce health care personnel.
    You have asked us to estimate the total paperwork burden 
imposed by HCFA on small hospitals. The AHA recently 
commissioned Price Waterhouse Coopers to ask some of America's 
hospitals about their paperwork experience. Their findings may 
shock you.
    They found that physicians, nurses, and other hospital 
staff spend on average at least 30 minutes on paperwork for 
every hour of patient care provided to a typical Medicare 
patient. In the emergency department, as you have heard 
already, about every hour of patient care generates at least an 
hour of paperwork.
    We have provided a copy of that study for the record. While 
some paperwork is necessary for clinical purposes, there has 
been a significant increase in paperwork to document regulatory 
compliance. The problem is growing. Since 1997, more than 100 
regulations affecting health care have come online.
    We know Congress intended to address some of these issues 
when it enacted the Paperwork Reduction Act. What Congress did 
not anticipate is how some agencies would get around the law. 
For example, it is our understanding that HCFA violated the 
Paperwork Reduction Act by not receiving final clearance from 
OMB for the Medicare Secondary Payer form, which I have here.
    The MSP form is intended to determine when a patient has 
insurance other than Medicare. As a result of this violation, 
HCFA does not formally require hospitals to complete the form. 
It merely requires that the hospital ask the patient the same 
25 questions contained in the form at every patient encounter. 
If a patient comes every day to the hospital to receive 
outpatient treatment and related testing for, say, cancer, or a 
serious infection, he or she will be asked the same questions 
each and every day.
    We recommend that Congress create an intergovernmental task 
force to review the Paperwork Reduction Act, other similar 
laws, and make recommendations for corrective measures.
    In conclusion, some regulations contribute to our efforts 
to provide quality patient care, but others simply drain 
resources away from that goal. Where Congress can make a 
difference is in reducing paperwork and bureaucracy. To assist 
you, the AHA has developed a list of reforms, both general and 
specific, for your consideration. We look forward to working 
with you to achieve meaningful regulatory relief.
    Thank you for this opportunity, and I look forward to 
showing you additional forms, if you would like, during the 
question and answer period.
    Chairman Manzullo. I appreciate that.
    [Mr. Cummings' statement may be found in appendix.]
    Chairman Manzullo. Before we get to our next speaker, let 
me make this announcement. If there are individuals in 
positions within HCFA that are not answering your 
correspondence, that are sitting on it, would you let us know? 
This Committee has the power of subpoena. I am not at all 
embarrassed to use that power in order to make these Federal 
agencies accountable, and to answer before this Committee and 
the Nation why it takes so long to do that.
    I would also encourage the associations here to write to 
the Members, and not be hesitant to contact your Members of 
Congress; to have a continuing dialogue going on with your 
Members of Congress and people at HCFA.
    What we have found out is in our last experience with HCFA, 
for 3 months they never answered a letter, for 3 months. Then 
we had to have an office meeting back in my district. That is 
when we found out that the Wisconsin Physician Service, WPS, 
that administers health care for the State of Illinois, really 
did not know the difference between an x-ray and the X files. 
It was totally embarrassing to see representatives from the 
government that had no idea what was going on. The only way you 
are going to able to get HCFA to move on some of these things 
is to contact a Member of Congress and to continually call and 
do everything possible you can to dislodge those forms that are 
there.
    Dr. Robert Anderton from Carrollton, Texas, is a dentist, a 
Doctor of laws, a Master of laws, and probably a master of 
paperwork, which is one of the reasons why he is here to 
testify today. He has been a member of the Dallas County Dental 
Society, has obviously very impressive credentials, and Doctor, 
welcome to our Committee. I look forward to your testimony.

      STATEMENT OF ROBERT M. ANDERTON, D.D.S., J.D., LL.M.

    Dr. Anderton. Thank you, Mr. Chairman.
    I am Dr. Robert Anderton, President of the American Dental 
Association. While these issues that affect dentistry are not 
quite as heavy in volume as those affecting the hospitals, they 
are quite critical to our practitioners. As you may know, 
dentists generally have very small practices. Most offices have 
only four or fewer employees, so excessive paperwork is always 
a problem for us.
    I would like today to discuss three areas where significant 
problems exist. One issue is in Medicare, the other in 
Medicaid, and yet another of our concerns is with the recently 
finalized HHS privacy rules.
    The vast majority of dental services are not covered by 
Medicare. In fact, they are expressly excluded by statute. 
However, some dentists have been forced to file Medicare claims 
fornoncovered services when requested to do so by one of their 
patients. These patients often mistakenly believe the services are 
covered. Other dentists have filed claims as a favor to their patients 
because supplemental dental coverage plans require a Medicare denial.
    For whatever the reason, requiring dentists to submit a 
claim that they know will be denied is a waste of resources for 
all concerned. HCFA expends scarce agency resources on 
needlessly processing claims, patients are inconvenienced, and 
dentists are forced to spend staff time processing Medicare 
claim forms, which are very different, in most instances, from 
medical insurance claim forms.
    More important, these dentists will also have to take the 
time to file applications to become Medicare providers just in 
order to process the claim. This is an important distinction 
because, unlike physicians, the vast majority of dentists do 
not participate in Medicare.
    This predicament has occurred because of HCFA's rules that 
give each beneficiary an absolute right to cause the 
practitioner who has provided a service to file a Medicare 
claim. This can easily be fixed if HCFA would amend its rules 
so categorically excluded services are exempted from these 
requirements.
    Dentists should be able to opt out of the Medicare program, 
also. At the present time, Medicare's private contracting law 
does not apply to dentists. Once providers have opted out of 
Medicare, they are no longer subjected to Medicare's rules. A 
simple expansion of the definition of ``provider'' to include 
dentists would not alter the mechanics of private contracting, 
but it would give dentists a simple means of avoiding the 
unnecessary paperwork requirements currently imposed by HCFA, 
especially in view of the fact that most dental services are 
not covered by the program, anyway.
    With regard to HCFA's role in the Medicaid program, 
excessive paperwork requirements are a disincentive to 
participation in the program. Therefore, they present a 
needless barrier to appropriate health care for underserved 
populations.
    Misinformation and confusion concerning HCFA rules and 
regulations remain, but the solution is simple: HCFA should 
clarify for the States exactly what their requirements are, and 
then encourage the States to simplify those requirements that 
are left to the States' discretion.
    HCFA could assist States by facilitating the establishment 
of systems to ensure rapid confirmation of children's 
eligibility under Medicaid, or the State Children's Health 
Insurance Program.
    Lastly, I would like to briefly explain our concerns about 
the final rule regarding medical records privacy. While the ADA 
generally supported many of the provisions of the proposed 
privacy rule, the final privacy rule contains many new features 
that were added without input from the health care industry.
    Frankly, we are concerned that the final rule generates 
more questions about compliance than it answers, and creates 
unnecessary paperwork. The final rule expanded coverage of the 
privacy provision to include oral communications. This 
provision could have the unintended consequence of limiting 
doctor-patient discussions at chairside, where proper patient 
care demands detailed communication.
    Dental offices are designed to be patient-friendly, with 
most having open operatories. It would cost thousands of 
dollars to soundproof schools, clinics, and the average dental 
office just to comply with the privacy rule if these 
operatories had to be enclosed.
    In addition, receptionists are usually located in waiting 
room areas where follow-up phone calls are made to patients 
after extensive procedures, and calls are also made to remind 
patients of their appointments and discussions concerning 
payment for treatment, which also take place at the 
receptionists' desk.
    All of these are oral communications that would now be 
subject to the privacy rule. To comply with the rule, it 
appears that dentists would have to reconfigure treatment rooms 
and the manner in which the receptionist area opens up to the 
waiting rooms.
    Finally, changes to the rule are so vague dentists may be 
uncertain as to how to comply. Many would have to go to great 
lengths to avoid potential criminal penalties. The ADA believes 
the final rule must be modified so dentists and other providers 
better understand their obligations and are not subject to 
unreasonable burdens.
    Mr. Chairman, I want to thank you for the opportunity to be 
with you today. I would be happy to answer any questions, if I 
can.
    Chairman Manzullo. I can see why you had to go to law 
school to practice dentistry, Doctor.
    [Dr. Anderton's statement may be found in appendix.]
    Chairman Manzullo. Our next witness is Craig Jeffries from 
Johnson City, Tennessee. He is the President and CEO of 
HEALTHSPAN Services, Incorporated, in Johnson City. They 
provide regional coordinated health and pharmacy service 
operations.

  STATEMENT OF CRAIG JEFFRIES, PRESIDENT AND CEO, HEALTHSPAN 
 SERVICES, INCORPORATED, ON BEHALF OF THE AMERICAN ASSOCIATION 
                          FOR HOMECARE

    Mr. Jeffries. Thank you, Mr. Chairman. Thank you for 
inviting us to testify this morning.
    My name is Craig Jeffries. I am president and CEO of 
HEALTHSPAN Services. I am testifying today also on behalf of 
the American Association for Home Care.
    Healthspan is an independent, for-profit regional provider 
of home health care in the northeastern section of Tennessee, 
southwestern Virginia, and western North Carolina. A lot of our 
business is Medicare and Medicaid. Approximately 35 percent is 
Medicare, and 25 percent is with the Tennessee Medicaid 
program, so we feel the burdens from the requirements from HCFA 
very strongly with that percentage of our business.
    The home health care that we provide is providing nurses 
and physical therapists in individuals' homes so that they are 
receiving the therapy in their own homes. We also provide 
medical equipment such as wheelchairs and respiratory equipment 
to those patients in their homes. In any one month, we are 
serving approximately 3,000 patients in that northeastern 
Tennessee area.
    We appreciate the Committee for initiating this in-depth 
review and analysis of the regulatory requirements imposed by 
the Health Care Financing Administration. Mr. Chairman, I have 
heard from my folks in my office when they get a memorandum 
from HCFA that ``Here come the Feds again,'' a different 
analogy than yours.
    What I would like to do is focus on two areas. The first is 
the unfair burdens documenting medical necessity to support 
payment for medical equipment.
    The CMN, Certificate of Medical Necessity, is a form to 
document the medical necessity of certain items. It is required 
by statute. The CMN forms were approved by the Office of 
Management and Budget in accordance with the Paperwork 
Reduction Act.
    A supplier, however, that submits a properly executed CMN, 
while they have satisfied its legal obligation to document 
medical necessity, HCFA and its contractors, the DMERCs, or 
theMedicare carriers, often require additional documentation. This 
additional documentation has not gone through the process of approval 
by OMB pursuant to the Paperwork Reduction Act. This additional 
documentation of medical necessity is a tremendous burden.
    Mr. Chairman, you asked us to make comparisons with the 
private sector. I asked our folks at Healthspan. They estimate 
that an additional FTE is required for every 80 new Medicare 
patients per month that we are providing medical equipment to 
just to handle this burdensome CMN documentation requirement.
    For example, after we receive an initial order from the 
physician, we need to call back that prescribing physician to 
get additional information for the CMN approximately 70 percent 
of the time for our Medicare patient. That compares to only 50 
percent of the time for private orders. So it gets a margin of 
difference between private insurers and Medicare.
    Additionally, once the prescription or the CMN is provided 
back to us from the physician's office, we need to call back or 
spend additional time; 95 percent of the time for private 
insurance it comes back complete, whereas only 70 percent of 
the time does it come back complete from Medicare patients.
    This burden obviously is one that is imposed on us, but it 
also is a tremendous burden on the physician's office. I am 
sure the physicians here, while they did not specifically 
address this CMN requirement, would agree that there is a heavy 
burden imposed by that paperwork requirement.
    The second area that I would like to address is for our 
home health agencies, which are providing nursing and therapy 
to patients in the home. They are required to fill in a new 
form, which was mentioned earlier by the Congresswoman and Dr. 
Christian-Christensen, called OASIS.
    HCFA requires home health agencies to collect extensive 
sensitive personal information on an 80-question survey form, 
and they need to get this from every patient, regardless of 
whether they seek Medicare or Medicaid coverage. We need to get 
this on admission of the patient, every 60 days when they are 
still on service, after any hospital discharge, and whenever 
there is a significant change in the condition of the patient.
    There are two areas we are concerned with this OASIS form. 
One is that it is asking 80 questions when it appears that 18 
to 23 are sufficient to support the claim for payment, so the 
additional questions do not seem to serve any purpose. The 
other requirement on OASIS that is extremely burdensome is that 
HCFA is extending the burden of collecting OASIS information to 
our non-Medicare and non-Medicaid patients.
    In Healthspan's business, we specialize with a lot of 
patients who are young pediatric patients or developmentally 
disabled patients. None of those populations were considered 
when addressing the development of the OASIS form, so it really 
becomes a form that is irrelevant.
    Mr. Chairman, I appreciate the opportunity to testify this 
morning. I look forward to answering questions.
    Chairman Manzullo. Thank you.
    [Mr. Jeffries' statement may be found in appendix.]
    Chairman Manzullo. Ms. Velazquez.
    Ms. Velazquez. Thank you, Mr. Chairman.
    I want to thank all of the witnesses for the important 
information and experiences they have shared with us.
    Dr. Mahood, my first question is for you. You stated that 
you are encouraged by President Bush's and Secretary Thompson's 
commitment to decrease regulatory burdens on physicians, and 
that the President has acknowledged that Medicare is driving 
physicians from the program.
    What are some of the President's initiatives to alleviate 
the burden that you support?
    Dr. Mahood. To look at the privacy rule, for example, we 
are very concerned about that. While the rule was allowed to go 
into effect, Tommy Thompson has said that he will indeed take 
cognizance of the many problems that we still have with that 
privacy rule and make the needed changes before the effective 
date comes up in 2 years. That is one example.
    Ms. Velazquez. It seems like there are a lot of complaints 
against private insurance companies who contract with HCFA. In 
light of this, would you support privatizing Medicare?
    Dr. Mahood. The American Medical Association has a policy 
which would indeed favor individually-owned and individually-
selected health insurance, which essentially would eliminate 
the interference of the third party between the patient and 
physician. In essence, there would be long-term support for 
that.
    Ms. Velazquez. The American people benefit because of 
important regulations in the area of health and safety, the 
environment, and consumer protection, but we have to be very 
sensitive to the aggregate impact of those regulations. We need 
to make certain that they are done properly and the burden is 
minimized.
    Congress creates the laws from which these regulations 
originate. Should Congress be reassessing these regulations on 
a periodic basis to determine if they are creating more 
benefits than burdens?
    Dr. Mahood. Absolutely. We feel very strongly that--for 
instance, the proposed recommendation which HCFA is looking at 
to expand the enrollment of physicians and to have them 
recertified every 3 years is a perfect example of where the 
rule would far exceed the problem. It is absolutely a monstrous 
recommendation for an incredibly small problem in that area.
    Let me show you, if I can, an example of a form which we 
use in our office to record a patient visit. The form is a 2-
page form, and I seem to have misplaced it, but it is a 2-page 
form for each visit. In my practice, for many years I was able 
to accurately document the interval history between a visit, 
say, 3 months earlier, record my physical findings and my plan 
of treatment in 2 inches or 3 inches of written information on 
my chart. Thus, I could look at a page of my chart and see 
pretty much a year of the history of that patient. Now I have a 
form front and back filled out for every visit. I have another 
form for each telephone call that we receive. Thus, my chart 
quickly becomes inches thick of papers. Trying to find 
something in there is very difficult.
    So the regulations definitely need to be looked at. We 
think Congress does have an oversight responsibility, and we 
encourage you to take a very close look at that.
    Ms. Velazquez. Thank you, Dr. Mahood.
    Dr. Morris, you stated in your opening statement that your 
association would like to encourage our Committee to evaluate 
the possible regulatory reforms under the Regulatory 
Flexibility Act, in addition to the Paperwork Reduction Act.
    Would you support bringing HCFA within the scope of SBREFA?
    Dr. Morris. I am not that familiar with the abbreviation 
that you used.
    Ms. Velazquez. The Small Business Regulatory Enforcement 
Fairness Act.
    Dr. Morris. Thank you, very much. Yes, in a very short 
answer. Yes.
    Ms. Velazquez. Let me ask a follow-up question.
    In SBREFA, it is the kind of review process that applies to 
OSHA and EPA. Now we passed legislation last year in this 
Committee to include the IRS--the legislation was stalled in 
the Committee on Ways and Means, not by the Democrats, but by 
the Republicans. But that is another story. Whenever the EPA or 
OSHA is going to issue any regulations, they have to hear from 
the business community that it is going to impact.
    My question is, how could we assure that HCFA's role on 
under SBREFA would not delay important activities to improve 
patient care under Medicare, Medicaid, and CHIP?
    Dr. Morris. I think that regardless of the regulations, we 
as physicians, and my associate next to me, the hospital, are 
going to continue to take care of our patients. We are going to 
continue to submit the claims. Those claims may be very long in 
being responded to, but we are going to continue to take care 
of the beneficiaries and take care of our patients.
    But I agree with you that HCFA should be aware of the 
regulations and the impact not only on we as providers and 
physicians, but also the patients, as we have also tried to 
point out.
    Ms. Velazquez. And I guess that Members of Congress, 
whenever we pass legislation that will mandate agencies such as 
HCFA to produce such regulations.
    Dr. Morris. Absolutely.
    Ms. Velazquez. Thank you.
    Mr. Cummings, when agencies circumvent the normal 
rulemaking process, small businesses have less opportunity to 
comment and participate in the process. How can we make certain 
that agencies follow the normal rulemaking process and not 
avoid executive and congressionally-mandated regulatory 
requirements?
    Mr. Cummings. I am aware of only the MSP form that I can 
point to as a specific circumvention of the Paperwork Reduction 
Act by HCFA, although I think it would be very instructive to 
have Congress, perhaps through the GAO or through an 
intergovernmental task force, really examine this question more 
fully. We think there are undoubtedly other examples.
    I think for many of us in the field, whether we are 
practicing physicians or trying to run small hospitals, the 
burden of just getting through the day, in terms or meeting our 
clinical and administrative responsibilities, is such that we 
rarely have the time to look up in the Federal Register or 
participate in rulemaking.
    Ms. Velazquez. Mr. Cummings, the SBA National Ombudsman 
Program was developed by SBREFA to provide small businesses an 
opportunity to comment on agency enforcement activity. Through 
this provision, we have provided small businesses a forum in 
which to express their views and share their experiences about 
Federal regulatory activities. The national ombudsman receives 
these comments and reports these findings each year to us, to 
Congress. I am interested to know if you have utilized the 
regional advocates, and how do you think they could be more 
effective in reporting HCFA's enforcement activities?
    Mr. Cummings. I appreciate the Congresswoman bringing this 
up. I was unfamiliar with the SBA National Ombudsman Program, 
so no, we have not used this resource. Thank you for mentioning 
it to me.
    Ms. Velazquez. Have any of you had any experience with 
this?
    Mr. Jeffries. I would note, I don't know what the current 
experience at HCFA is, but back at the 1980s there was an SBA 
liaison that was housed at the Health Care Financing 
Administration whose responsibility was to coordinate and act 
as a liaison for that. He served as a lightning rod, in some 
respects, because he received the input that you are suggesting 
should be provided from small businesses that are burdened by 
the activities of HCFA. So I would suggest looking at that.
    Ms. Velazquez. Thank you.
    Thank you, Mr. Chairman.
    Chairman Manzullo. Thank you, Ms. Velazquez.
    Let me submit this to you. I don't think there will ever be 
one package of legislation that can address every problem or 
just a portion of the problems that we are facing here. What I 
would suggest is this: If you get a form that is 25 or 28 pages 
of questions and you think you can do it in five or less, I 
would encourage you to contact my Committee. We will take that 
form plus your form and we will send it to the agency saying, 
``The Committee on Small Business has jurisdiction over the 
Paperwork Reduction Act. As far as we are concerned, you are 
violating that. This is the suggested form. Would you comment 
on that in 7 days or less?''.
    We are going to have to pick away at this animal. This 
thing is totally out of control. The experience that I had with 
HCFA, it was not good at all.
    To think that--she is not here, but the Democrats wanted to 
have HCFA in charge of pharmaceuticals for seniors. That is 
enough to raise the hair on the back of your head. Of course, 
Republicans want to create another agency. There is not much--I 
don't know where you are going to go on that.
    But I would recommend you--you can do it on a one-by-one 
basis. Take one issue that you can identify, and please don't 
hesitate to use our Committee.
    And in addition, the Small Business Administration has what 
is called the Office of Advocacy. Ms. Velazquez and I, along 
with another Committee, were able to use that office to 
complain to the Department of Defense that the 104,000 hats 
that the Air Force had requested should not have been 
contracted out to the Government Printing Office because the 
Air Force thought that hats are printed and not manufactured. 
We were able to cancel a contract with the manufacturer, who 
was going to have a Chinese factory manufacture those American 
hats.
    So the SBA has an in-house law firm. We also have I think 
about six lawyers on staff with the Committee on Small 
Business, and we really want to help you out question by 
question, and inch away, regulation by regulation, to get you 
back into the business of providing for health care.
    I just have a couple of questions. I want to give a 
tremendous amount of time to Dr. Christensen because of her 
background. Mr. Toomey will be after her.
    Mr. Jeffries, my mother was a home health care patient, a 
great beneficiary of a tremendous way to utilize experts as 
they came to her assisted living center at a fraction of the 
cost had she been hospitalized: I am distressed about the fact 
that every time you pick up 80 patients, you have to hire a 
full-time employee. First of all, those full-time employees are 
difficult to train, they are hard to find.
    I don't know if home health care has been picked out or 
singled out for all of these onerous forms, but fill me in, is 
there some kind of a program to eliminate home health care by 
drowning you in all these forms?
    Mr. Jeffries. One would think so from the forms that are 
required by the Health Care Financing Administration. I think 
home health care, as you well know, is well-liked by patients. 
I think physicians see it as a very viable way of keeping the 
independence of that individual.
    Chairman Manzullo. It worked with my mom, because she went 
from home health care to hospice, and she passed away at the 
assisted living center, which was her home for years.
    What forms are not necessary?
    Mr. Jeffries. Part of what you have heard here--and I can 
reemphasize, when a form goes through the process of approval 
and then HCFA, through its Medicare carriers, the DMERCs, 
allows them to add additional requirements, it is very 
difficult to meet those requirements. You think you have done 
it when you have the OMB-approved form, but then they require 
all those things.
    I think just focusing, from an oversight function, the 
spotlight on what are those additional documentations--and I 
will work with the American Association of Home Care to provide 
you some specific examples of that--I think that would be an 
important investigatory area, who are those additional 
requirements and why don't they go through the Paperwork 
Reduction Act process?
    Chairman Manzullo. My point person on staff is, to my 
right, Barry Pineles. He is an expert on regulations. He stays 
up on Saturday nights in front of the fire and he reads all 
these books on regulations. He has a real heart for people that 
are hit heavy by it. He is an expert on regulations and 
regulatory reform.
    Dr. Christensen, let us use the 5-minute rule, and then 
when everybody here has completed their time, I would like to 
go back to you for additional questions after that.
    Dr. Christensen.
    Mrs. Christensen. Thank you.
    I think we have had some great questions already, as well. 
That cuts down some of the questions I have to ask. I am really 
impressed with some of the very concrete recommendations, 
though, that we have from this panel on how we can proceed to 
address some of the burdensome HCFA regulations.
    Let me start with Dr. Mahood. I know we are going to 
discuss H.R. 868 later on, but I see an article that indicated 
that the IG at the Department of Health and Human Services had 
criticized very strongly this bill, saying that it would 
dramatically reduce accountability for Medicare claims.
    Are you familiar with statements made by the Inspector 
General at the Department of Health and Human Services? If so, 
how would you respond to those criticisms?
    Dr. Mahood. It does not change the accountability at all. 
What it does is it limits the preclaim audits so that they are 
not random. They can still do audits and they can do prepayment 
audits, but they should do them for cause or for a rational 
reason, not just randomly.
    There is no intention of any part of the act to interfere 
with the search and identification of true fraud or abuse. So I 
would say that they are off the mark.
    Mrs. Christensen. All right.
    There has been a lot of discussion about medical errors. I 
would ask the first three panelists, Dr. Mahood, Dr. Morris, 
and Mr. Cummings, to what extent do you think the burden of 
paperwork and the regulatory burden in general impacts on 
quality of care? Can there be a relationship between the amount 
of paperwork burden and the medical errors that have been 
reported?
    Dr. Mahood. I don't think there is any doubt about it. As a 
gastroenterologist, I am called on in the middle of the night 
to see a patient who has suddenly started to have a massive 
gastrointestinal hemorrhage. I have not seen the patient 
before. I am a consultant.
    I go to the chart. While the patient is bleeding and 
receiving blood transfusions, I have to find out the best I can 
what might be the cause and what the appropriate next step is, 
whether it is an emergency endoscopy or what. It often takes 20 
or 30 minutes or longer to go through just the last few days of 
the patient's care, because every physician who sees that 
patient has to fill out such an extensive documentation.
    So there is no doubt in my mind that it does interfere with 
proper care.
    Dr. Morris. I would respond to that by saying I don't think 
it adds the additional paperwork. That is not going to prevent 
a medical error. Many of the errors are due to process, but it 
is not due to the medical records.
    The Orthopaedic Association has instituted a sign-your-site 
program several years ago wherein, when we are seeing the 
patient before surgery, we write with an indelible pen on the 
area where we are going to do our surgery. We don't depend on 
looking through the pages of the chart to be sure which side we 
are going to operate on.
    It may seem very simplistic, but it is extraordinarily easy 
to do and effective.
    Mr. Cummings. Congresswoman, in your opening statement you 
alluded to the OASIS form. Mr. Jeffries also spoke to this 
during his remarks.
    I brought a copy of it with me, and with the chairman's 
permission, I would like to be able to just show it to members 
of the Committee. Then I will answer your question about how it 
affects patient care.
    This is the form that our home health agency must complete. 
It takes our nurses, if they were to do this by hand, about 90 
minutes. We have provided them with laptop computers so they 
are able to do this in only an hour. There are 43 additional 
pages of forms not attached here that they also must fill out 
for that initial patient visit.
    As Mr. Jeffries mentioned, home health agencies must do 
this, whether the patient is a Medicare beneficiary or not. 
Where we see this affecting patients is that our nurses are 
unable to provide any care to the patient until they have 
completed this form.
    Being in a rural area, the average distance between our 
home health patients is 20 miles. The average age of our 
patients is 78. They typically have two or three chronic 
conditions. Congestive heart failure is the leading diagnosis. 
The patients often have skin lesions, and 33 percent have 
severe anxiety.
    Before the nurse can lay a hand on that patient, she must 
complete this OASIS assessment. The patient can beg for help 
and she cannot help him. So I think that is where we see this: 
with frail, elderly, uncomfortable patients for whom that nurse 
cannot provide any assistance until she has completed this 
paperwork.
    Chairman Manzullo. Is this one form? It appears that page 7 
of 11--it gets down to what is your favorite color, those types 
of questions.
    Mr. Cummings. Mr. Chairman, it combines several forms 
required by Medicare. One is the OASIS form, which is the 
lion's share of this.
    Chairman Manzullo. This has to be asked of one person?
    Mr. Cummings. Yes. There are also certain State laws that 
must be fulfilled during this initial assessment visit, and 
certain accreditation requirements. So this represents, then, 
the confluence of these various requirements.
    So although not all of them are OASIS-related, all must, in 
fact, be completed on every patient when they are first brought 
in for care to an agency.
    Chairman Manzullo. There is duplicative material, 
questions?
    Mr. Cummings. Yes.
    Chairman Manzullo. Can I throw out a challenge to you? 
Could you create your own form that would consolidate all this 
information into one and get that to us, and we will send it 
over to HCFA and challenge them to accept that form, as opposed 
to this one?
    Mr. Cummings. I would be happy to go back to my nurses and 
confer with the Visiting Nurse Association of America and the 
National Association of Home Care.
    Chairman Manzullo. Then we can bring that before the 
Committee and bring you back again, and explain why it takes 
all of this to perhaps put down in 10 or 12 pages what you 
would like.
    Mr. Cummings. Thank you. We will try.
    Mrs. Christensen. Let me just ask a follow-up question.
    Chairman Manzullo. Sure.
    Mrs. Christensen. I am sure it is going to take a brief 
answer.
    Mr. Jeffries, is there any justification at all--has any 
justification at all been given for questions that are not 
related to calculating payment?
    Mr. Jeffries. Job security has been talked about a lot. 
There are a lot of people at HCFA that probably benefit by the 
additional questions, because there is additional analysis.
    I think it is hard to justify the additional information. 
As others have testified, there is probably some value at some 
point, but it is a question of cost and resources, and 
diverting focus to what we are all trying to do, and that is, 
maximize patient outcomes by providing good care.
    Mr. Chairman, just to follow up on this form, remember that 
this is being imposed by HCFA for us to use with non-Medicare 
and non-Medicaid patients.
    Chairman Manzullo. That is interesting, because there is no 
jurisdiction for that. Would you send us a letter on your 
letterhead, and we will get that to the SBA Office of Advocacy, 
and have HCFA give us a legal opinion as to whether or not that 
is possible?
    One of the things we want to do at the Office of Advocacy 
in this Congress, hopefully, is to give it the power to start a 
class action lawsuit, class action lawsuits against Federal 
agencies. Of course, it costs $1 million every time you 
challenge a regulation.
    Mr. Toomey.
    Mr. Toomey. Thank you, Mr. Chairman.
    If I could just comment briefly on this outrageous 
absurdity of paperwork that is required, from what I have heard 
from the physicians in my district about E&M forms and other 
documentation, I cannot help but reflect on the fact that this 
obviously detracts from the time that physicians could be 
spending with patients.
    It is obviously an effort by HCFA to verify that these 
services were, in fact, provided. We have to step back and 
recognize, I think, that we have such a profoundly flawed 
system that this kind of battle will always go on. We have to 
keep fighting it, but we are never going to win this until 
patients are the people that are in control of this process in 
verifying that services were provided. The patient knows. A 
third party bureaucrat in Washington will always demand 
unreasonable and excessive information to try to verify 
something they cannot know but something that the patient 
knows.
    If we move in the direction of giving the patient the 
control of the money that is spent on their behalf, putting the 
patient in the role of the consumer, so many of these problems 
go away. I hope we will move in that direction. I realize that 
is beyond the scope of this hearing today.
    Let me ask a more direct question. I would direct this 
first to Dr. Mahood, but anyone else may make a comment and 
would be welcome.
    When you consider the magnitude of this regulatory burden, 
I was wondering, Doctor, if you could share with us your 
thoughts on the extent to which solo practitioners and small 
group practices are basically forced to join large groups or 
become employees of hospitals.
    To what extent do you see the gradual reduction, if not the 
elimination, of the solo practitioner and the small group 
practice that so many patients prefer to have?
    Dr. Mahood. Let me give you a quick example. We did refer 
to, in our testimony, the enrollment form for Medicare 
participation.
    This is a copy of the application. It is over 30 pages in 
length. As I implied----
    Chairman Manzullo. Excuse me. Is that per person, per 
patient?
    Dr. Mahood. No, this is an enrollment form for physicians 
to be a participating provider in the Medicare program.
    Chairman Manzullo. Thank you.
    Dr. Mahood. For a physician going into private practice by 
themselves, or particularly in a rural area where there are 
more Medicare or Medicaid patients percentagewise--they would 
be in practice for anywhere from 2 to 6 months before they 
could submit a bill for reimbursement for the patients they 
have seen. That is prohibitive. So physicians coming out today 
do indeed tend to join larger practices.
    Our practice is 14 gastroenterologists just outside of 
Philadelphia. We recently had a world class gastroenterologist 
from Temple, head of a program there, join our practice. We 
were flattered. She had to get a new enrollment number. It took 
our practice 4 months before we could finally submit any bills 
for her care to the Medicare population.
    Now, that was possible in our practice, with some 
difficulty, because of the work of other physicians supporting 
her income. But clearly, it could not have been carried out by 
her alone. So that is an example of how it interferes in the 
individual or small group development.
    Dr. Morris. If I might follow up on that, I have with me an 
HMO application form which is standardized in the State of 
Missouri. This is double-sided, but this is eight pages. It is 
the same information, to allow a physician to be credentialed.
    I would also like to follow up, if I might, about the home 
care issue. That I think is a real detriment to patient care. 
The home care nurse, the person out at the home, if they have a 
question about this form and they have to call the physician, 
they have to speak with the physician personally. They cannot 
get the information, according to Medicare regulations, from an 
office nurse or a PA, a physician's assistant, or any sort of 
physician's extender.
    Also, if you are a private practitioner, be it primary care 
or a surgeon, you are obviously not in the office all the time. 
So I ask you, what happens with that home care nurse who is out 
in the home at that time trying to fill out this form, and has 
a question about a diagnosis or about something that has been 
happening? She cannot take that information or that order from 
a physician extender and has to wait for the doctor. The doctor 
is not there. The doctor is in surgery.
    That happens all the time. That has been explained to me 
very clearly as a real problem to the home care nurses. Thank 
you.
    Mr. Toomey. Thank you, Doctor. I yield the balance of my 
time.
    Chairman Manzullo. Dr. Anderton.
    Dr. Anderton. I would comment also on the small, solo 
practitioners. As you know, about 80 percent of the practicing 
dentists in this country are solo practitioners. They are 
overburdened with this same type of paperwork.
    If I can shift gears for just a minute and go to Medicaid, 
where most dentists are involved, we have some States that 
require an application that is 50 pages long just to 
participate in Medicaid. This is causing severe problems for us 
in getting providers to even sign up for the programs. Not only 
is the paperwork burdensome and voluminous, it is the contracts 
these providers have to sign.
    It was mentioned earlier about fraud and about probable 
cause. Most of you are aware, in order for a provider to sign 
up to participate in these programs, they have to essentially 
sign away their fourth amendment protection against 
unreasonable search and seizure.
    This allows the Justice Department to come in, as was 
mentioned earlier, on random audits to seize records and to do 
those kinds of things. In fact, there are instances where 
physicians have been handcuffed in their offices and their 
records seized for no probable cause. Those things are unduly 
burdensome, and it is really hindering our efforts to go in and 
provide access to care for people who really need it.
    Also, as I testified earlier, a dentist very often has to 
sign up for Medicare just to file a claim for a patient who 
requests it. By HCFA rules, they are required to do so, even 
when they know the claim is going to be denied. They have to go 
through all of this paperwork with only four or fewer employees 
in their office. So it is a critical situation.
    Mr. Cummings. I wonder if I could respond to Mr. Toomey's 
question, also, an additional perspective.
    In my rural area, we, the hospital, employ all of the rural 
physicians. There are 14 of them. They used to be in private 
practice. They were unable to continue to be in private 
practice primarily for two reasons. One is the dearth of health 
insurance in our area. We have no large employers--almost 45 
percent of the patients who came to this small practice had no 
insurance of any kind.
    But the other reason was to deal with the paperwork. We 
were able to obtain something called a rural health clinic 
designation for each of our practice sites, for which we are 
very appreciative, and this helps improve the payment from 
Medicare and Medicaid to these rural primary care doctors.
    But the paperwork burden has not gone away. This is the 
manual that each rural health clinic must have. I have taken 
this from one of our sites, the Island Medical Center. By the 
way, for reasons I don't understand, we are never to take the 
manual from the premises, so I am sure I have committed some 
egregious HCFA violation by bringing it here.
    We have to have one of these, regardless of the size of the 
practice, so each----
    Chairman Manzullo. Could you describe the dimensions and 
the pages, the number of pages, for the record, approximately? 
It is about eight inches thick?
    Mr. Cummings. Six inches thick, maybe, and several hundred 
pages.
    Dr. Morris. It weighs about 10 pounds.
    Mr. Cummings. The smallest practice we have is one doctor 
and a family nurse practitioner. The largest we have are four 
doctors and a nurse practitioner, so you can see, we are 
talking about very small practices, but each of them have to 
have one of these.
    Chairman Manzullo. Thank you.
    Mr. Phelps.
    Mr. Phelps. Thank you, Mr. Chairman. Thank you for calling 
this hearing and these distinguished people to be here to give 
us input.
    I don't think there is a Federal official who is not aware 
of overregulation, especially in the health care industry. I 
have chaired the Health Care Committee in the Illinois House 
for 4 years, and was astonished at what we found in many of our 
investigations there.
    I represent an extremely rural area, the largest 
congressional geographic district east of the Mississippi. It 
covers 27 counties, and small counties, as much as 4,000 and 
5,000 population only, so I am aware of the value, and could 
say nothing better about how I feel about home health care.
    I know it is a challenge to try to balance how we have 
access, create access, for especially senior frail elderly 
people who need to have care at the most vulnerable time of 
their lives, and make it affordable and make it protected to 
the consumers and the taxpayers.
    I guess what I am interested in asking, for fear of 
duplicating what has already been explored and maybe will be 
gotten into, how did we arrive at where we are? We make the 
laws. We ask agencies that we create by appropriations, by law, 
to carry them out.
    Now, in the Illinois legislature, there was one time when I 
actually voted to repeal my own bill, because by the time the 
agencies that made the rules to implement the bill that I 
passed, with the intent that I made clear on the House floor, a 
matter of Journal record, I did not even recognize my own bill.
    I guess my point is, has there ever been what you feel, and 
maybe not you individually, but the associations you represent, 
any clear inclusion of people talking to make it clear to HCFA, 
now, this law has passed by Congressman whoever, and we need to 
know from the standpoint of those of you who deal with it every 
day in the field, how can a health care provider that wanted to 
rip off the taxpayer through fraud and abuse--that is what I 
assume these laws were made to try to protect from happening. 
We need professionals, people that know--the FBI, the way they 
know about counterfeit is they call in those convicted 
counterfeiters and learn from them how they were able to do 
this.
    I guess what we need to know is from people who can help us 
identify what we can prevent from happening without stacks of 
regulations. Can you, in this form, tell someone in HCFA, that 
there are about 10 pages or less that actually get to the heart 
of what you are after. The rest of it is enough, or makes no 
sense and creates too many jobs for taxpayers to subsidize, and 
could possibly hurt funding for the home care program itself.
    I happen to believe that home care can be proven to prevent 
costs in both the government and the private sector. I have 
seen it happen.
    Is there not that kind of inclusion, and could we not 
prevent some of this nonsense?
    Dr. Mahood. If I could respond to that, you know, your 
point is well made. Speaking for the physician community, a 
large number of physicians are scared. They get reports like 
this from their carrier four times a year. They get bulletins 
monthly. They get special letters. Each one has rules and 
regulations buried in them, and they don't know what they are 
responsible for, and they can't find out easily.
    They can make a phone call to the carrier, and the person 
on the other end of the line says, this is the way to do it. If 
they do it that way, they may subsequently find that it was the 
wrong way, and they have no evidence, no proof. We rarely get 
anything in writing with a signed statement. It is a cottage 
industry.
    Mr. Phelps. I don't want to cut you off, but I know you are 
answering the question as vaguely as I put it.
    But what I want to know is before it becomes regulation and 
law--and we know there is some sort of congressional effort 
because of 60 Minutes or 20/20 or some news that brought it to 
our attention--people are getting ripped off; these old people 
are paying, in their matching funds as well as the government--
they are getting ripped off. We all rush up here and have a 
press conference and say, as a good guy, here is what I am 
going to do. No one ever asks, after we pass that, what are the 
consequences for carrying out and enforcing what we have passed 
into laws.
    Before that becomes implemented, one of the reasons how it 
should be implemented would be to include people like you to 
sit around the table with HCFA and say, ``Instead of getting 
those notices, you had better be doing this right. Before we 
put this in implementation, what do you think?'' that has not 
ever been done, as far as you know?
    Mr. Jeffries. Congressman Phelps, I would suggest that as 
part of your review of the Paperwork Reduction Act, one of the 
requirements in that process might be to have HCFA look at what 
the private sector does.
    There is an encouraging trend, it is not overwhelming, but 
an encouraging trend to go back to the simple reliance on what 
the physician wants in the prescription, and stop second-
guessing from home health prescribing or DME prescribing. I 
think that is a good private sector initiative that HCFA ought 
to address when they are coming up with new rules pursuant to a 
new law.
    Dr. Mahood. Just a quick response. Participating in the 
process with HCFA, people within the HCFA program who have 
medical backgrounds understand the need to make things simple, 
but they are outvoted by other departments within HCFA; for 
instance, the program integrity group. We have different 
departments within that very agency which add layers and layers 
of complexity on the forms. So it is a very difficult problem 
to resolve when you are dealing with an agency of that size.
    Mr. Phelps. Yes, sir.
    Dr. Morris. My members would have two words to answer that: 
oversight and accountability.
    Mr. Phelps. Thank you very much, folks.
    Mr. Cummings. Mr. Phelps, if I could add to my colleagues' 
comments, in the report prepared by the American Hospital 
Association, a copy of which is being made available to all of 
you, are eight specific recommendations to improve the process 
by which regulations are created. We have six recommendations 
on specific regulatory in need of reform.
    One of those eight is the very issue that you have just 
raised, which is to have greater input from the field, from 
hospitals, have health nurses and practicing physicians before 
a form is generated. That does not happen right now.
    The other is that there is really no one in charge of the 
regulatory apparatus. These are created by different divisions, 
bureaus----
    Mr. Phelps. What I was getting to----
    Mr. Cummings. Divisions within HCFA, and no one is looking 
at them in terms of the totality.
    Mr. Phelps. We need to know somewhere in the oversight 
process, once there are those who are capable of giving input 
and pointing out things, instead of being outvoted, there needs 
to be a process where they come back to a Committee such as 
this to say, ``Why is this not being accepted? What are your 
reasons?'' we need more oversight.
    Ms. Velazquez. Congresswoman Tubbs Jones.
    Mrs. Jones. Good morning. I want to give you a quick 
background and ask you some quick questions.
    I come from Cleveland, home of the Cleveland Clinic, the 
University Hospital. We are in the midst of a competitive issue 
on hospitals. I spend a lot of time working with the physicians 
in my community, in the health care area.
    For the record, I just have to say that a number of the 
physicians have said to me the reason they have gone out of 
private practice is because hospitals often make it 
inconvenient for you to be in private practice, other than to 
be associated with the hospital in your community, because of 
the competitive issues. I need to lay that on the record.
    I empathize with each of you about this paper process. I 
came to the Committee on Small Business for the purpose of 
trying to assist you. I wonder if you would contemplate how 
terrible it is for the senior citizens in our communities 
across this country to deal with the medical process, as well? 
Is universal health care a solution for much of the paperwork 
that you put on the table or raise?
    I need short answers, because I have all of 5 minutes.
    Dr. Mahood. If universal health care is a single-payer, 
absolutely not, because what that would be expanding the 
regulatory hassles throughout the whole medical system.
    Mrs. Jones. Let me back up. What percentage of your 
practice comes through the process we are talking about right 
now?
    Dr. Mahood. Approximately 60 percent of my practice is 
Medicare. Now, a percentage of that is managed Medicare, so it 
is not all the regular Medicare.
    Mrs. Jones. Health maintenance organizations?
    Dr. Mahood. Yes.
    Mrs. Jones. In my community, a health maintenance 
organization has no requirement to enter into a contract, so 
what has been happening to the people in my community is all of 
a sudden, the health care maintenance organization goes out of 
business and the people have no health care.
    What happened when a hospital closed down in my community, 
it had a health maintenance organization. The hospital left. 
There are people running around with no place to go, and two 
hospitals within 2 miles of that one hospital that closed down 
because there was no HMO service there, and these people had no 
health care service.
    Is that the result, to have an HMO that can come and go 
whenever they want to and not give people any health care?
    Dr. Mahood. No. I think the insurance commissioner should 
have more oversight and responsibility for plans that develop 
programs within areas so that they do have the resources to 
serve those clients.
    Mrs. Jones. I don't mean to make light. I hope you 
understand. The issue is so much more complicated than the 
paper reduction process that we are discussing here. The health 
care issue is so much more complicated.
    I would hope that in addition to the paper reduction 
process that we are talking about here, that we can come to the 
table to talk about the delivery of health care and access to 
health care for all folk, with or without money, being 44 
million out there without any health care at all.
    I am supportive, and I am going to do what I can to help 
you reduce paper, but also I am asking you to step up and say 
what are we going to do to deliver health care to the folks?
    I guess I am out of time. I am sure you had an opportunity. 
I have your preparation.
    I am from Cleveland, Ohio, with the University Hospital, 
the Cleveland Clinic. If you are ever in the area and I can be 
helpful, please call me.
    One more question, are any of you from urban centers? Two 
of you. Do you do diversion when an emergency room closes down 
for lack of beds in your hospitals?
    Dr. Mahood. Infrequently, but yes.
    Mrs. Jones. Is that a practice? And this is not only for 
me, but is that a practice that is put together by a panel of 
physicians or health care providers as to how you do that 
diverting process, and when you open up and close back down?
    Dr. Mahood. I am unfamiliar with how it works in the 
hospital. I believe it is an administrative decision based on a 
lack of beds, as you said. But it is very infrequent in our 
hospital that that happens.
    Mrs. Jones. Thank you so much. I look forward to working 
with you on future issues.
    Ms. Velazquez. Do you have any other questions?
    On behalf of the chairman and myself, I want to thank you 
all for being here today.
    This meeting is adjourned.
    [Whereupon, at 11:54 a.m., the Committee was adjourned.]

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