[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
POST-ACUTE CARE
=======================================================================
HEARING
before the
SUBCOMMITTEE ON HEALTH
of the
COMMITTEE ON WAYS AND MEANS
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
JUNE 16, 2005
__________
Serial No. 109-30
__________
Printed for the use of the Committee on Ways and Means
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COMMITTEE ON WAYS AND MEANS
BILL THOMAS, California, Chairman
E. CLAY SHAW, JR., Florida CHARLES B. RANGEL, New York
NANCY L. JOHNSON, Connecticut FORTNEY PETE STARK, California
WALLY HERGER, California SANDER M. LEVIN, Michigan
JIM MCCRERY, Louisiana BENJAMIN L. CARDIN, Maryland
DAVE CAMP, Michigan JIM MCDERMOTT, Washington
JIM RAMSTAD, Minnesota JOHN LEWIS, Georgia
JIM NUSSLE, Iowa RICHARD E. NEAL, Massachusetts
SAM JOHNSON, Texas MICHAEL R. MCNULTY, New York
ROB PORTMAN, Ohio WILLIAM J. JEFFERSON, Louisiana
PHIL ENGLISH, Pennsylvania JOHN S. TANNER, Tennessee
J.D. HAYWORTH, Arizona XAVIER BECERRA, California
JERRY WELLER, Illinois LLOYD DOGGETT, Texas
KENNY C. HULSHOF, Missouri EARL POMEROY, North Dakota
SCOTT MCINNIS, Colorado STEPHANIE TUBBS JONES, Ohio
RON LEWIS, Kentucky MIKE THOMPSON, California
MARK FOLEY, Florida JOHN B. LARSON, Connecticut
KEVIN BRADY, Texas RAHM EMANUEL, Illinois
THOMAS M. REYNOLDS, New York
PAUL RYAN, Wisconsin
ERIC CANTOR, Virginia
JOHN LINDER, Georgia
BOB BEAUPREZ, Colorado
MELISSA A. HART, Pennsylvania
CHRIS CHOCOLA, Indiana
DEVIN NUNES, California
Allison H. Giles, Chief of Staff
Janice Mays, Minority Chief Counsel
______
SUBCOMMITTEE ON HEALTH
NANCY L. JOHNSON, Connecticut, Chairman
JIM MCCRERY, Louisiana FORTNEY PETE STARK, California
SAM JOHNSON, Texas JOHN LEWIS, Georgia
DAVE CAMP, Michigan LLOYD DOGGETT, Texas
JIM RAMSTAD, Minnesota MIKE THOMPSON, California
PHIL ENGLISH, Pennsylvania RAHM EMANUEL, Illinois
J.D. HAYWORTH, Arizona
KENNY C. HULSHOF, Missouri
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C O N T E N T S
__________
Page
Advisory of June 9, 2005, announcing the hearing................. 2
WITNESSES
Center for Medicare Management, Centers for Medicare & Medicaid
Services, Herb Kuhn, Director.................................. 22
Medicare Payment Advisory Commission, Glenn M. Hackbarth,
Chairman....................................................... 6
U.S. Government Accountability Office, Marjorie Kanof, M.D.,
Managing Director.............................................. 14
______
Acute Long Term Hospital Association, Select Medical Corporation,
Pat Rice....................................................... 61
American Health Care Association, SunBridge Healthcare, Mary
Ousley......................................................... 41
Center For Medicare Advocacy, Toby S. Edelman.................... 69
National Association of Long Term Hospitals, John Votto.......... 55
National Rehabilitation Hospital, Gerben DeJong.................. 48
Visiting Nurse Associations of America, Visiting Nurse Service of
New York, Carol Raphael........................................ 44
SUBMISSIONS FOR THE RECORD
American Medical Rehabilitation Providers Association, Felice
Loverso, statement............................................. 82
American Occupational Therapy Association, Bethesda, MD,
statement...................................................... 89
Next Wave, Albany, NY, John D. Shaw, statement................... 90
POST-ACUTE CARE
----------
THURSDAY, JUNE 16, 2005
U.S. House of Representatives,
Committee on Ways and Means,
Washington, DC.
The Subcommittee met, pursuant to notice, at 1:08 p.m., in
room 1100, Longworth House Office Building, Hon. Nancy L.
Johnson (Chairman of the Subcommittee) presiding.
[The advisory announcing the hearing follows:]
ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON HEALTH
CONTACT: (202) 225-1721
FOR IMMEDIATE RELEASE
June 09, 2005
HL-6
Johnson Announces Hearing on Post-Acute Care
Congresswoman Nancy L. Johnson (R-CT), Chairman, Subcommittee on
Health of the Committee on Ways and Means, today announced that the
Subcommittee will hold a hearing on post-acute care. The hearing will
take place on Thursday, June 16, 2005, in the main Committee hearing
room, 1100 Longworth House Office Building, beginning at 1:00 p.m.
In view of the limited time available to hear witnesses, oral
testimony at this hearing will be from invited witnesses only. However,
any individual or organization not scheduled for an oral appearance may
submit a written statement for consideration by the Committee and for
inclusion in the printed record of the hearing.
BACKGROUND:
Medicare currently pays for post-acute care in four separate
settings: long term acute care hospitals (LTCHs), inpatient
rehabilitation facilities (IRFs), skilled nursing facilities (SNFs),
and in the home. Medicare is currently spending more than $30 billion
annually in these four settings, with spending in SNFs and home health
making up the largest portion.
Medicare reimburses for these services in these settings according
to four separate payment methodologies. In addition, each setting uses
a different patient assessment instrument to evaluate the level of care
a patient requires (or, in the case of LTCHs, no patient assessment
tool at all). Each assessment instrument and payment system was
developed separately and the payment rates and tools have evolved over
time into separate silos of care. As a result of these separate
systems, the current payment methods differ based on the setting in
which a beneficiary receives care.
In its June 2004 report to Congress, the Medicare Payment Advisory
Commission examined some of the significant payment differentials that
exist across post-acute care settings for the same or similar services.
For example, payments for a hip fracture patient in 2004 were $44,633
per case in an LTCH, $18,487 in an IRF, and $10,618 in a SNF. Because
there are no common patient assessment tools or outcomes measures
across settings, it is difficult to know whether patients are being
treated in the most appropriate setting and whether Medicare dollars
are being allocated appropriately.
Congress sought to address this problem in the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, P.L.
106-554). The BIPA required the Secretary of the U.S. Department of
Health and Human Services to submit a report on the development of
standard instruments for the assessment of the health and functional
status of Medicare patients in certain settings. This report has not
yet been received, and the hearing will examine what progress has been
made in this area.
In announcing the hearing, Chairman Johnson stated, ``The
development of a common patient assessment tool for post-acute care
services remains a high priority. In light of the rapid growth in
payments in post-acute settings, the development of a common patient
assessment tool and the creation of a more rational post-acute payment
structure, one that is tied to the services required by the patients
rather than the institutional setting in which patients are placed,
should be a high priority for the Congress and the Medicare program.''
FOCUS OF THE HEARING:
The hearing will focus on current financing for post-acute care
services in Medicare; the services available across the various post-
acute settings; the patient assessment instruments used in each setting
and the commonalities between them; and prospects and suggestions for
moving ahead with a common patient assessment tool and more rational
payment system based on beneficiary need rather than institutional
setting.
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noted above.
Chairman JOHNSON. Good afternoon, everyone. My apologies
for starting a little bit behind schedule. I am very pleased to
be chairing this hearing on post-acute care in the Medicare
program. Medicare currently pays post-acute care in four
separate settings: Long-Term Care Hospitals (LTCH); Inpatient
Rehab Facilities (IRF); Skilled Nursing Facilities (SNF); and
in the home through the home health benefit. Medicare is
currently spending more than $30 billion annually in these four
settings, with spending on SNFs and home health making up the
largest portion. Medicare reimburses for these services, in
these settings, according to four separate payment
methodologies. In addition, each setting uses a different
patient assessment instrument to evaluate the level of care a
patient requires, or, in the case of LTCHs, no patient
assessment tool at all. Each assessment instrument and payment
system was developed separately, and the payment rates and
tools have evolved over time into separate silos of care. As a
result of these separate systems, the current payment methods
differ based on the setting in which a beneficiary receives
care. In its June 2004 report to Congress, the Medicare Payment
Advisory Commission (MedPAC) examines some of the significant
payment differentials that exist across post-acute care
settings for the same or similar services. For example,
payments for a hip fracture patient in 2004 were 44,633 per
cases in an LTCH, 18,487 in an IRF, and 10,618 in an SNF.
Because there is no common patient assessment tool or
standardized outcome measurements across settings, it is
difficult to know whether patients are being treated in the
most appropriate setting and whether Medicare dollars are being
allocated appropriately or efficiently.
We in Congress ought to address the problem. The Medicare,
Medicaid, SCHIP Benefits Improvement and Protection Act, BIPA,
of 2000, (P.L. 106-554) required the Secretary of Health and
Human Services (HHS) to submit a report on the development of
standard instruments for the assessment of the health and
functional status of Medicare patients in certain settings. The
report on this instrument was due on January 1 of this year and
has not yet been received. Today, I strongly hope that we will
learn from the Administration what progress has been made in
this area. I am pleased to have with us today two distinguished
panels of witnesses to help us explore the issues facing the
post-acute care system. On our first panel we welcome back
Glenn Hackbarth, Chairman of MedPAC. Mr. Hackbarth will discuss
the work that MedPAC has done recently in evaluating patient
assessment tools used in different post acute settings, as well
as recommended payment adjustments to post-acute care
providers. Then we will hear from Marjorie Kanof, a managing
director for health at the U.S. government Accountability
Office (GAO). She will discuss GAO's recent report on patient
criteria for IRFs. Finally on our panel we will hear from Herb
Kuhn, director of the Centers for Medicare and Medicaid
Services (CMS). The CMS has done some work, to this point, to
develop a common patient assessment tool, and Mr. Kuhn will
report on those efforts by the agency.
Our second panel is comprised of people working in post-
acute care industries along with a beneficiary representative.
Through this testimony we will begin to understand the range
and diversity of services offered in the post-acute care area.
It is my hope that the witnesses will provide us with greater
understanding of what different settings have in common along
with those services that make each setting unique. I am also
hoping that they will provide us with their ideas as to how we
can move toward a common patient assessment system and more
rational payment structure for post acute services in Medicare.
On this panel we will hear from Carol Raphael, President and
Chief Executive Officer (chief executive officer) of Visiting
Nurse Association of New York; Mary Ousley, Executive Vice
President of Sunbridge Healthcare in Albuquerque, New Mexico;
Dr. Gerben DeJong, a senior fellow at the National
Rehabilitation Hospital; Dr. John Votto, President and chief
executive officer of the Hospital of Special Care in my
hometown of New Britain; Pat Rice, President and Chief
Operating officer of Select Medical Corp. in Mechanicsville,
Pennsylvania; and Toby Edelman, senior policy attorney at the
Center for Medicare Advocacy.
In light of the rapid growth in payments in acute care
settings, it is critical that we carefully examine the patient
assessment tools and payment policies in each of these settings
to ensure that taxpayer dollars are being spent appropriately
and that beneficiaries are receiving the services they need in
the setting that is right for them. The development of a common
assessment tool in the creation of a more rational post-acute
care payment structure, one that is tied to the services
required by the patient rather than the institutional setting
in which the patient finds themselves, must be a high priority
for Congress and the Medicare Program. I look forward to
hearing from all the witnesses on this important issue. I would
now like to turn to Mr. Lewis, who will speak for Mr. Stark.
Mr. LEWIS. Thank you very much, Madam Chair. Madam Chair, I
would like to thank you for having this hearing. I would like
to welcome the Members of our two panels and thank them for
being here today. I am pleased that we are having an oversight
hearing on some of Medicare's basic obligations, because we
have not done enough oversight in recent years. It is important
to review what is happening with post acute services because of
the amount of money being spent in this area and the number of
patients affected. However, I can't help but note that there
are much larger problems that we should be focusing on. Madam
Chair, I hope that we would have oversight hearings on
implementation of the Medicare prescription drug program. While
one-third of hospitalized beneficiaries use post-acute care, 90
percent of all beneficiaries use outpatient prescription drugs.
In addition, Medicare spends more than $30 billion annually for
post-acute care but is projected to spend almost double that in
the first year of Part D.
Last week several troubling stories came to light. The CMS
sent empty envelopes to some low-income beneficiaries. There is
not enough funding to implement the new drug program. It is
clear that oversight is needed. I hope that we would devote
Committee time to real oversight on Medicare Part D. Although
it is not the most pressing issue Medicare faces, today's topic
is important; it is very important. I hope this is the first
small step toward creating a more rational post acute system. I
look forward to today's testimony, and I thank each and every
one of the panelists for being here today. Thank you, Madam
Chair.
Chairman JOHNSON. Thank you very much, Mr. Lewis. Welcome
to the Members of the first panel. Mr. Hackbarth will you
please begin.
STATEMENT OF GLENN M. HACKBARTH, CHAIRMAN, MEDICARE PAYMENT
ADVISORY COMMISSION
Mr. HACKBARTH. Thank you, Chairman Johnson and Mr. Lewis
and other Members of the Subcommittee. About one-third of
Medicare beneficiaries discharged from acute hospitals receive
post-acute care within 1 day of their discharge. That is, care
in a SNF, home health agency, IRF, or LTCH. A little more than
a third of that group go to SNFs, another third receive home
health care, and a final third go to either an IRF, a LTCH, or
a combination of post acute settings. Of course, other
beneficiaries go to hospice to receive end-of-life care. In
2004, Medicare spent $43 billion on post acute services plus
hospice, which represents about 14 percent of total Medicare
spending. MedPAC is concerned about the post-acute care
received by Medicare beneficiaries. Let me be clear. There are
many, many outstanding individual providers of those services.
We fear, however, that we lack an integrated system that helps
assure high-quality appropriate care at a reasonable cost.
MedPAC sees five types of problems with the post-acute care
system. First of all, we lack clear criteria on which setting
is most appropriate for a given patient with a particular set
of needs. This is not an easy problem to solve, especially
given the varying and changing capabilities of different types
of providers. Not all SNFs, for example, have the same
capabilities. Given the wide variation and rates, which
Chairman Johnson highlighted in her opening statement, to the
widely different rates we pay different types of post acute
providers, there is clearly great potential for waste, such as
if a patient being unnecessarily sent to a high-cost type of
institution: a LTCH or IRF, for example. On the other hand,
there is also great potential for harm if a complex patient is
sent to a facility that lacks the necessary capabilities.
A second set of problems with the post acute sector is
that, within a given sector, for example SNFs, payments may not
be properly adjusted for the mix of patients served at a
particular institution. This is definitely an issue, we think,
for SNFs, and quite possibly also an issue in the home health
Prospective Payment System (PPS) as well. A third issue is that
we currently don't adjust any of the payments for the quality
of care provided, which we think is an important thing to do
across all of the Medicare payment systems.Fourth, we don't
collect the data necessary to be able to compare performance
across post acute settings. In some cases we don't even collect
the data necessary to judge performance within that particular
setting of post-acute care. Finally, in at least the case of
home health agencies and SNFs, MedPAC believes that current
payments are high relative to the costs incurred in treating
Medicare patients.
We see three broad potential strategies for improvement.
One is to continue to refine the individual existing payment
systems and establish criteria to guide placement of patients;
in particular, which patients require LTCH services or IRF
services, the most expensive facilities. A second strategy,
which may be in addition to the first, would be to give a case
manager responsibility for guiding the placement decision,
coupled with performance incentives. This would be a concept
similar to what is being piloted in the case of disease
management. Still a third strategy would be to create a post-
acute care capitation payment whereby the dollars are bundled
together. Unlike option two, here the party assigned
responsibility would have risk for the utilization of services
and not just for meeting performance standards. Now, these are
very crude types, and there may well be other models, and there
are certainly many variations on the basic themes. To this
point, MedPAC has been focused on the first model, which is
refinement of the existing individual payments systems. At
least some of us are concerned that a rule-based approach to
proper placement may be simultaneously both too complex and too
crude.
The second and third options, which involve someone
exercising judgment on the scene by introducing human judgment,
could help deal with decisions since often the decision is
influenced by the capabilities of the local providers. In some
communities it may be appropriate to send a particular patient
to an SNF that has unusual capabilities as opposed to an IRF or
an LTCH. Having that human judgment involved could be helpful.
The case manager approach or the capitation approach raises a
host of complicated issues that MedPAC hasn't begun to explore
in detail. Whichever path we choose, MedPAC believes that we
also need to move forward with a common assessment tool. As
discussed in our June report, the current tools used in home
health agencies, SNFs, and IRFs do not collect data that can be
compared across the payment silos and the different types of
providers. In some instances we are not even collecting the
data that we need to judge performance within a given sector.
Thank you very much. I look forward to your questions.
[The prepared statement of Mr. Hackbarth follows:]
Statement of Glenn M. Hackbarth, Chairman, Medicare Payment Advisory
Commission
Chairman Johnson, Ranking Member Stark, distinguished Subcommittee
members. I am Glenn Hackbarth, chairman of the Medicare Payment
Advisory Commission (MedPAC). I appreciate the opportunity to be here
with you this afternoon to discuss post-acute care (PAC) payment issues
in Medicare.
Introduction
Medicare beneficiaries can seek care after a hospitalization in
four different post-acute settings: skilled nursing facilities (SNFs),
home health agencies (HHAs), long-term care hospitals (LTCHs), and
inpatient rehabilitation facilities (IRFs). Many factors influence
Medicare beneficiaries' use of these services. For example, use of home
health and SNF services grew rapidly after the introduction of the
inpatient prospective payment system (PPS) in 1982. That payment system
created an incentive for hospitals to discharge patients earlier. One
strategy for doing so was to provide in a separate setting some of the
recuperation and rehabilitation services that may have been formerly
provided within the hospital stay. In the ensuing years, the four
different post-acute settings have emerged to provide those
recuperation and rehabilitation services. (A fifth type of service,
hospice, overlaps somewhat with post-acute services in terms of
patients and some services, although the goal is not recovery or
rehabilitation.)
The overarching issue in PAC is that there are no clear and
comprehensive criteria for which of these settings are best for
patients with particular characteristics or needs. The recuperation and
rehabilitation services provided are important for Medicare
beneficiaries. Yet, these settings and their payment systems have
developed separately over the years, and it is not clear that together
they form an integrated whole that provides the highest quality, most
appropriate care for beneficiaries or the best value for the Medicare
program and the taxpayers who support it. Indeed, some parts of the
country do not have all of these settings, yet Medicare patients are
still receiving PAC services in those areas. A second issue is that
within the SNF and home health settings payments are not well
calibrated to patients and their conditions.
The Commission maintains that in the post-acute care sector, just
as for the other sectors of Medicare, the services provided should meet
the needs of the beneficiaries, Medicare payments should cover the
costs of an efficient provider of those services, and higher quality
services should be rewarded. Currently in post-acute care, none of
these conditions is fully satisfied. The Commission has made
recommendations for improving the payment systems for several of these
sectors. It has recommended:
Reforming the PPS for SNFs because the current system
does not pay accurately for all of its patients and encourages
providing rehabilitation services at the expense of caring for patients
who have medically complex conditions.
Reexamining the home health PPS because the services now
provided are different than those provided when the system was created
and payments may not be accurate.
Creating facility level criteria to better define LTCHs,
and patient level criteria to better define who should go to those
facilities.
Instituting a pay for quality performance program for
home health, and creating quality measures for SNFs.
Finally, the Commission has recommended zero updates for both SNF
and home health because Medicare overpays these sectors overall. Over
payment makes it even more difficult to determine where cost effective
services are available, in addition to placing unnecessary burdens on
taxpayers and beneficiaries.
However, even if the payment systems were improved as we have
recommended, there would still be a need to evaluate outcomes and the
quality of care and to ensure that beneficiaries are sent to the most
clinically appropriate and cost effective setting. We discuss later in
this testimony patient assessment instruments, which could contribute
to evaluating outcomes and quality. Further efforts will be needed to
assure that payments are balanced across and within settings and, more
importantly, that patients go to the best setting for their conditions.
In the longer term, a seamless PAC sector--with uniform assessments and
payment tied to patients, their conditions, and their outcomes--could
provide better care for beneficiaries and better value for the Medicare
program.
Background
Altogether, Medicare spending on PAC services and hospice totaled
about $43 billion in 2004, accounting for about 14 percent of total
Medicare spending. As shown in figure 1, spending has been growing
rapidly in the last few years. Overall spending has increased by over
50 percent since 2000, with hospice spending increasing by 150 percent
and long-term care hospitals spending by about 80 percent. The number
of providers has grown as well. Home health agencies increased by 10
percent in the last year alone, and there were over 50 percent more
LTCHs in 2005 than in 2000. The increase in spending is the result of
both higher payments and greater use. For example, SNF admissions and
days increased by about 14 percent in 2002.
[GRAPHIC] [TIFF OMITTED] T3928A.001
In 2002, about one third of Medicare beneficiaries discharged from
PPS hospitals went to a post-acute care setting. About one third of
those went to a SNF, one third to home health, and the remainder either
to other or multiple settings. PAC use is not uniform either across or
within diagnoses groups. For some conditions, few beneficiaries use PAC
services. For other conditions, where beneficiaries commonly do use PAC
services, some beneficiaries will not. This lack of uniformity
complicates analyses of this sector.
During the last era of rapid growth in post-acute care, the
Congress passed the Balanced Budget Act of 1997. That act required the
establishment of prospective payment systems (PPSs) for most PAC
settings in the hope of curbing the rapid increase in Medicare spending
for post-acute services. Figure 2 shows the implementation dates for
each of the new PPSs.
[GRAPHIC] [TIFF OMITTED] T3928A.002
As these payment systems have been implemented, and as providers
have in turn reacted to the payment systems, some of the strengths and
weaknesses of the PPSs have become apparent. MedPAC's key findings and
recommendations for three of the individual systems are discussed
below, followed by a discussion of a cross-setting issue--the lack of
comparable patient assessment instruments.
Skilled nursing facilities
Medicare payment levels for SNFs have been favorable. SNFs have
received a full market basket update in both FY 2004 and 2005. In
addition, SNFs received an additional update in FY 2004 to correct for
past market basket projection errors since the implementation of the
PPS. In the past two years, for the 90 percent of SNFs that are
freestanding, margins have been in the double digits. This finding in
conjunction with other factors such as access and growth in use of
services have led the Commission to recommend zero updates for 2003,
2004, 2005, and 2006.
Problems with the SNF case mix system
MedPAC has recommended that the SNF PPS should be reformed for two
reasons: First, the case mix system does not adjust payments for the
costs of certain services that tend to be higher for medically complex
SNF patients. Second, the payment rate is determined, in part, by the
amount of therapy provided rather than by patient characteristics that
predict therapy needs.
Case mix adjustment
Medicare pays SNFs a set amount for each day of care adjusted for
the case mix of the patients. The SNF PPS case mix system, the resource
utilization groups (RUG-III) system, adjusts payments for the services
provided. However it does not properly adjust payments for one category
of services--nontherapy ancillary services (NTAs), such as prescription
drugs and respiratory therapy--that are more heavily used by medically
complex SNF patients. The BBA required that Medicare's prospective
payment for SNFs include payment for NTAs. In compliance with this
mandate, CMS included the cost of NTAs as part of the total costs used
to develop Medicare's SNF base payment rates. However, NTA costs were
not used to develop the RUG--III case-mix indexes that adjust the base
payment rates according to patients' resource use. Instead, the payment
system distributes payments for NTAs using the weights that are used to
allocate payment for nursing care. As a result, the payment system does
not distribute payments for NTAs according to variation in expected NTA
costs across different patient types and thus pays relatively too much
for patients receiving therapy and relatively too little for medically
complex patients.
Payment based on therapy to be provided
Another problem is that the SNF PPS is overly oriented to therapy
and that it determines the payment rate based on the amount of therapy
services the patient uses--or is expected to use--rather than on
patient characteristics and clinical appropriateness. (Therapy includes
physical therapy, speech therapy, and occupational therapy.) The system
pays based on the number of therapy minutes per week. It pays a fixed
rate for ranges of therapy minutes--45 to 149 minutes (low), 150 to 324
minutes (medium), 325 to 499 minutes (high), 500 to 719 minutes (very
high), and more than 720 minutes (ultra high). A SNF simply has to
estimate the amount of therapy a patient will receive to get payments
for the first three categories for the first 14 days. Payments for the
two highest categories require the therapy actually be provided.
This system creates two incentives: The first is to classify
patients into a higher payment category even though the patient may not
benefit from additional therapy. The second is to provide the fewest
number of minutes in the highest achievable payment category because
therapy times at the bottom of the categories have the lowest cost
relative to revenue.
Several studies suggest that SNFs have responded to these two
incentives. First, studies found that the proportion of residents
receiving no rehabilitation therapy declined between 1997 and 2000.
Second, at initial assessment, fewer patients were categorized into the
low group where payments are lowest. More patients were grouped into
the medium and high groups where payments are higher and estimated, not
actual, therapy minutes are sufficient for categorization. (According
to the GAO, providers report payments for these medium and high
rehabilitation groups also had the highest payment relative to costs.)
Fewer patients were grouped into the very high and ultra high groups in
which therapy must be provided for payment to be received. Finally,
consistent with incentives to provide minutes of therapy at the low end
of the range for a given payment category, patients in the medium and
high rehabilitation categories received at least 30 fewer minutes of
therapy per week in 2001 than in 1999; half of the patients initially
categorized into these two groups did not actually receive the minimum
minutes to be classified into these groups.
As a result of this orientation of the payment system towards
therapy, beneficiaries who do not need rehabilitation services but do
need certain nontherapy ancillary services may experience delays in
accessing SNF care because the Medicare payment rates for these
services may not be aligned with their costs. MedPAC and the GAO have
pointed out that the RUG--III classification system may not pay enough
to cover the costs of patients who require nontherapy ancillary
services, such as expensive drugs and ventilator care services. There
is enough money in the payment system to pay more for the care of these
medically complex patients; the money must be redistributed from the
therapy categories, which requires that the case mix system be
reformed, as we have recommended for the past two years. We have also
recommended that CMS focus on developing and improving quality
measures, including collecting necessary information, for skilled
nursing facility patients, and that patients be assessed at discharge
from SNFs.
CMS has described its reform of the SNF PPS in its proposed rule
for the system issued in May. We are studying the proposed rule and
will provide CMS and the Congress with our comments. We will be looking
for reforms that will reorient the payment system as we have described,
and thus provide accurate payment and ensure access to SNF care for
medically complex patients.
Home health
The number of home health users and the amount of services they
used grew rapidly in the early 1990s, prompting the creation of the
home health PPS and other actions by the Secretary and Congress on
integrity standards and eligibility. Margins for home health providers
have been consistently high since the implementation of the PPS.
Initially, agencies were slow to enter the market; however, in the past
12 months, the number of agencies grew by more than 10 percent. CBO
projects annual double-digit growth in spending in the next five years.
In recognition of the high margins and other factors, MedPAC
recommended a zero update for 2004, 2005, and 2006.
A source of concern for some policymakers has been that the number
of home health users fell by about one million in the years preceding
the implementation of the PPS. We do not find that this concern is
justified. Our study found that the greatest decreases in use occurred
among beneficiaries with the lowest predicted need for home health
service, that the areas with the highest use of services (pre-PPS) had
the greatest declines, and that beneficiaries eligible for both
Medicaid and Medicare were not affected disproportionately.
Any decrease in use of home health services does not appear to be
from lack of access to home health agencies. In 2003 and 2004, almost
all beneficiaries (99 percent) lived in an area that was served by at
least one home health agency. Nearly 90 percent of beneficiaries who
responded to a CMS survey about their experience in 2003 said they had
``little or no problem'' accessing services. We found that rural
beneficiaries reported even better access to care than their urban
counterparts.
The home health PPS has moved the payment system from cost-based
reimbursement and introduced an episode-based payment. While this has
encouraged the provision of efficient care, the PPS has its
shortcomings as well. The home health product has changed considerably
since the current PPS was designed. Quality has improved, yet episodes
now contain fewer visits, and the share of therapy and home health aide
visits has shifted towards therapy. The case mix system should be
revisited to make sure it corresponds with the new home health product.
We have found that minutes of service per episode (and hence costs) may
vary widely within the current case mix groups, and that some patient
characteristics that are associated with cost variation are not now
included in the case-mix adjustment.
The Commission has determined that Medicare should pay for higher
quality to encourage better care for beneficiaries and better value for
Medicare. It has also determined that the home health sector is ready
to be paid for quality performance. The sector has a set of well-
accepted, valid measures of the quality of outcomes of care. This
measure set is currently collected by CMS from all agencies; it does
not present an additional data burden. Quality has shown small
improvements since the implementation of the PPS, but there is room for
further improvement. Moving toward pay for performance has a special
benefit in this setting because the product is not well-defined. By
attaching dollars to outcomes, the program can purchase what it seeks--
improvement in physical functioning or healing for wounds for example--
rather than units of services with largely unknown content.
Long-term care hospitals
Long-term care hospitals are licensed as hospitals and are intended
to treat medically complex patients. Medicare's only additional
requirement is that the average Medicare length of stay be more than 25
days. (The average length of stay in hospitals under the Medicare
inpatient PPS is approximately 5 days.) The number of these facilities
has been growing rapidly--at a 12 percent annual rate since 1993.
Medicare spending for LTCHs has been growing even more rapidly--five
fold from $398 million in 1993 to $1.9 billion in 2001; and Medicare is
the predominant payer. LTCHs are also usually the most costly post-
acute care setting.
In our June 2004 report, we found that in general LTCH patients
cost Medicare more than similar patients using alternative settings;
but for patients with the highest severity, the cost is comparable. We
concluded that the growth in LTCHs may be due in part to the financial
incentives in other Medicare payment systems. Hospitals under the
inpatient PPS may want to transfer patients who are stable but have
unresolved underlying complex medical conditions--for example, patients
needing ventilator support for respiratory problems--because of the
fixed payments in that system and the high costs of those patients.
SNFs may find it less profitable to admit these patients than less
complex patients because of the shortcomings in the SNF PPS we
described earlier. These considerations make a new, clearer definition
of LTCH care imperative. Therefore, we recommended that the Congress
and the Secretary should define LTCHs by facility and patient criteria
that ensure the patients admitted to these facilities are medically
complex and have a good chance for improvement. Facility-level criteria
should characterize this level of care by features such as staffing,
patient evaluation and review processes, and mix of patients. Patient-
level criteria should identify specific clinical characteristics (such
as open wounds), and treatment modalities such as need for frequent
intravenous fluid or medication.
We also recommended that the Secretary require the quality
improvement organizations to review LTCH admissions for medical
necessity and monitor that these facilities are in compliance with
defining criteria.
Cross-setting issue: Patient assessment instruments
Patient assessment tools should help providers assess patients'
care needs and evaluate the quality of care and patient outcomes. While
Medicare requires three of the post-acute settings to use patient
assessment tools, each uses a different one. SNFs use the minimum data
set (MDS); HHAs the Outcome and Assessment Information Set (OASIS); and
IRFs the IRF-Patient Assessment Instrument (IRF-PAI). LTCHs are not
required to have a patient assessment tool. Uniform information would
allow comparisons to be made across post-acute settings and provide an
opportunity to assess cost, quality, outcomes and patient placement.
We found that although the tools measure the same broad aspects of
patient care--functional status, diagnoses, comorbidities, and
cognitive status--the timeframes covered, the scales used to
differentiate patients, and the definitions of the care included in the
measures vary considerably. These differences make it very difficult,
if not impossible, to compare the quality of care and patient outcomes
across all settings.
The tools vary substantially in how frequently clinicians must
administer them, how long the assessments take to complete, and what
time period the assessment covers. For example, the MDS is conducted
close to (but not necessarily at) admission and periodically throughout
the patient's stay (but not at discharge); generally asks about the
patient's condition over the past 7 days; and takes about 90 minutes to
complete. In contrast, the IRF-PAI is typically administered on day 3
of the admission and at discharge, captures the patient's status on
that day, and is much shorter (taking about 25 minutes). As a result,
it is impossible to evaluate whether differing assessment information
truly reflects differences in the patients' condition, or just when the
assessment was conducted, or the time period covered by the evaluation.
Further limiting the comparison of information gathered from the
instruments is that even for the common aspects of patient care, the
definitions of the measures are different. For example:
Functional status: The MDS evaluates whether and how
frequently the patient needed weight bearing or verbal encouragement to
walk; the OASIS records a patient's ability to walk safely, once in a
standing position; and the IRF-PAI includes the distances walked.
Cognitive status: These measures and definitions varied
the most across the three tools--including whether the tools
distinguished between short versus long-term memory; how depression and
delirium were evaluated; and the types of decisions patients are able
to make.
Diagnoses and comorbidities: Although these measures are
generally considered straightforward to compare, the tools lack
consistency in how this information is recorded. The MDS does not use
ICD-9 codes to record diagnoses or comorbidities and the OASIS does not
require the use of all 5 digits of the ICD-9 code, limiting the
comparisons of the severity of patients treated in different settings.
Finally, even for measures where the definitions are the same, the
instruments use varying scales and can measure different aspects of a
task (such as independence) to differentiate patients. For example, the
MDS uses a four-point scale and measures the number of times a patient
needs assistance with dressing and the type of help involved (weight
bearing or verbal encouragement), whereas the IRF-PAI uses a seven-
point scale to distinguish what share of the dressing a patient
performs.
Conclusion
Ideally, the program would use a uniform patient assessment tool to
assess whether a patient can go home safely or which post-acute setting
would be most appropriate, and outcomes and quality would be measured
over subsequent assessments. The PPS for each setting would then match
payments to the cost of an efficient provider, and quality care would
be rewarded. Medicare post-acute care is far from this ideal state. The
Commission has made recommendations to improve payment systems in the
individual settings and to bring quality into Medicare payment; but
these recommendations have not yet been acted upon. In addition, a
uniform patient assessment tool is still elusive. Developing a common
instrument will be complex, even if it can build on some aspects of the
current tools. The longer term goal is a seamless PAC sector--with
uniform assessments and payment tied to patients, their conditions, and
their outcomes.
Until a common instrument becomes available, we will investigate
other approaches for improving post-acute care for Medicare
beneficiaries. One approach could be to specify admission criteria for
each setting, as we have recommended for long-term care hospitals. A
different approach would concentrate on developing a ``front-end''
assessment tool to be administered prior to either discharge from the
hospital or admission to a PAC setting on a physician's referral.
Alternatively, care coordination by a case manager for post-acute care
may be feasible. This approach could be modeled on CMS's chronic care
improvement program with case managers assuming risk for achieving
savings and quality targets.
The Commission will continue to inform the Congress as it
deliberates on these issues. MedPAC will also continue to make
recommendations to improve the incentives in the payment systems and
the tools that support getting Medicare beneficiaries to the post-acute
care setting that is right for them--with the objective of getting the
best care for beneficiaries and the best value for the Medicare
program.
Chairman JOHNSON. Thank you very much for your thoughtful
comments. Dr. Kanof?
STATEMENT OF MARJORIE KANOF, M.D., MANAGING DIRECTOR, HEALTH,
U.S. GOVERNMENT ACCOUNTABILITY OFFICE
Dr. KANOF. Madam Chairman, Congressman Lewis, and Members
of the Subcommittee, good afternoon. I appreciate the
opportunity to be here today to discuss our report issued in
April, entitled ``Medicare: More Specific Criteria Needed to
Classify Inpatient Rehabilitation Facilities.'' Because
patients treated at IRFs require more intensive rehabilitation
than is provided in other settings such as SNFs, Medicare pays
for treatment at IRFs at a higher rate than it pays for
treatment in other settings. This difference in payment can be
substantial, so we need to make sure that IRFs are correctly
classified, and only patients whose needs are best met in an
IRF should be admitted. To distinguish IRFs from other settings
for payment purposes and to ensure that Medicare patients
needing less intensive services are not in IRFs, CMS relies on
a regulation commonly known as the 75 percent rule, which
states that if a facility can show during a previous 12-month
period that at least 75 percent of all its patients, including
its Medicare patients, require intensive rehabilitation
services for the treatment of at least 1 of 13 conditions
listed in a rule, it may be classified as an IRF. The rule
allows the remaining 25 percent of patients to have other
conditions not listed in the rule. Before admitting a patient,
an IRF is required to assess the patient to ensure they require
the level of service provided, and CMS is responsible for
evaluating the appropriateness of individual admissions, after
the patient has been discharged, through medical reviews
conducted by fiscal intermediaries. Three days after admission,
IRFs are required to complete a patient assessment instrument
that is used to determine Medicare payment.
Our report shows that there are Medicare patients in IRFs
who might not need the level of care. In fiscal year 2003,
fewer than half of all Medicare patients were admitted for
having a primary condition on the list in the 75 percent rule.
Almost half of all the patients with the conditions not on the
list were admitted for orthopedic conditions, and among those
the largest group was joint replacement patients. We found that
relatively few of the Medicare unilateral joint replacement
patients had a co-morbidity that needed IRF level of service.
In fact, more than three-quarters of the patients that were
admitted with a single joint replacement had no co-morbidities.
Experts that we spoke with, including those that the Institute
of Medicine (IOM) convened, told us that uncomplicated
unilateral joint replacement patients rarely need to be
admitted to an IRF. Our study also found that IRFs varied in
the criteria that they used to assess patients for possible
admissions. All IRFs evaluated a patient's function, and half
of them stated that function was the main factor that should be
considered in assessing the need for IRF service. The
assessment, however, did not determine if any other setting
besides an IRF was the appropriate site for the patient's care.
The experts IOM convened questioned the strength of the
evidence for adding additional conditions to the list in the
rule. They found the evidence for certain orthopedic conditions
particularly weak, and some of them reported that there was
little evidence available on the need for inpatient
rehabilitation for cardiac, transplant, pulmonary, or oncology
patients. They called for further research to identify the
types of patients that needed inpatient rehabilitation and,
more importantly, to understand the effectiveness of receiving
treatment within an IRF as opposed to other settings. In
addition, there was general agreement among all the experts we
interviewed that diagnosis alone is insufficient for
identifying appropriate types of patients for inpatient
rehabilitation, because with any condition such as a stroke,
only a subgroup of patients require the level of services that
are needed in an IRF. Other factors such as function should be
considered in addition to condition. As we concluded in our
report, if condition alone is not sufficient for determining
which types of patients are most appropriate for IRFs, more
conditions should not be added to the list. We recommended that
CMS take several actions, including targeted reviews for
medical necessity, and to more clearly define subgroups of
patients within a condition that are appropriate for admission
to IRFs, possibly using functional status or other factors in
addition to condition. These actions could help to ensure that
Medicare does not pay IRFs for patients who could be treated in
a less intensive setting and does not misclassify facilities
for payment. Madam Chairman, this concludes my statement.
[The prepared statement of Dr. Kanof follows:]
Statement of Marjorie Kanof, M.D., Managing Director, Health, U.S.
Government Accountability Office
MEDICARE
More Specific Criteria Needed to Classify Inpatient Rehabilitation
Facilities
Madam Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss our report entitled
Medicare: More Specific Criteria Needed to Classify Inpatient
Rehabilitation Facilities,\1\ which was issued in April 2005. Over the
past decade, both the number of inpatient rehabilitation facilities
(IRF) \2\ and Medicare payments to these facilities have grown
steadily. In 2003, there were about 1,200 such facilities. Medicare
payments to IRFs grew from $2.8 billion in 1992 to an estimated $5.7
billion 2003 and are projected to grow to almost $9 billion per year by
2015.
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\1\ See GAO, Medicare: More Specific Criteria Needed to Classify
Inpatient Rehabilitation Facilities, GAO-05-366 (Washington, D.C.: Apr.
22, 2005).
\2\ IRFs are intended to serve patients recovering from medical
conditions that require an intensive level of rehabilitation. Not all
patients with a given condition may require the level of rehabilitation
provided in an IRF. For example, although a subset of patients who have
had a stroke may require the intensive level of care provided by an
IRF, others may be less severely disabled and require less intensive
services.
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Because patients treated at IRFs require more intensive
rehabilitation than is provided in other settings, such as an acute
care hospital or a skilled nursing facility (SNF),\3\ Medicare pays for
treatment at an IRF at a higher rate than it pays for treatment in
other settings. The difference in payment to IRFs and other settings
can be substantial, and so IRFs need to be correctly classified to be
distinguished from other settings in which less intensive
rehabilitation is provided.
---------------------------------------------------------------------------
\3\ In addition to IRFs, acute care hospitals, and SNFs, other
settings that provide rehabilitation services include long-term-care
hospitals, outpatient rehabilitation facilities, and home health care.
---------------------------------------------------------------------------
To distinguish IRFs from other settings for payment purposes and to
ensure that Medicare patients needing less intensive services are not
in IRFs, the Centers for Medicare & Medicaid Services (CMS) relies on a
regulation commonly known as the ``75 percent rule.'' \4\ This rule
states that if a facility can show that during a 12-month period at
least 75 percent of all its patients, including its Medicare patients,
required intensive rehabilitation services for the treatment of at
least 1 of the 13 conditions listed in the rule,\5\ it may be
classified as an IRF. The rule allows the remaining 25 percent of
patients to have other conditions not listed in the rule. IRFs are
required to assess patients prior to admission to ensure they require
the level of services provided in an IRF, and CMS is responsible for
evaluating the appropriateness of individual admissions after the
patient has been discharged through reviews for medical necessity
conducted under contract by its fiscal intermediaries.\6\ An IRF that
does not comply with the requirements of the 75 percent rule may lose
its classification as an IRF and therefore no longer be eligible for
payment by Medicare at a higher rate.\7\
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\4\ See 42 U.S.C. 1395ww(d)(1)(B) (2000). The 75 percent rule was
initially issued in 1983 and most recently revised in 2004. See 42
C.F.R. 412.23(b)(2) (2004).
\5\ For an annotated list of these conditions, see appendix I.
\6\ Fiscal intermediaries are contractors to CMS that verify
compliance with the rule and conduct reviews for medical necessity to
determine whether an individual admission to an IRF is covered under
Medicare.
\7\ In addition to the 75 percent rule, an IRF must meet six
regulatory criteria showing that it had (1) a Medicare provider
agreement; (2) a preadmission screening procedure; (3) medical,
nursing, and therapy services; (4) a plan of treatment for each
patient; (5) a coordinated multidisciplinary team approach; and (6) a
medical director of rehabilitation with specified training or
experience. IRFs must also meet other criteria identified in 42 C.F.R.
412.22 (2004) and 42 C.F.R. 412.25 (2004).
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IRF compliance with the rule has been problematic, and some IRFs
have questioned the requirements of the rule. CMS data indicate that in
2002 only 13 percent of IRFs had at least 75 percent of patients in 1
of the 10 conditions on the list at that time. IRF officials have
contended that the list of conditions in the rule should be updated
because of changes in medicine that have occurred and the concomitant
expansion of the population that could benefit from inpatient
rehabilitation services.
The Conference Report that accompanied the Medicare Prescription
Drug, Improvement, and Modernization Act of 2003 directed us to issue a
report, in consultation with experts in the field of physical medicine
and rehabilitation, to assess whether the current list of conditions
represents a clinically appropriate standard for defining IRF services
and, if not, to determine which additional conditions should be added
to the list.\8\ In this testimony, I will discuss our April 2005
report, in which we (1) identified the conditions--on and off the
list--that IRF Medicare patients have and the number of IRFs that meet
the requirements of the 75 percent rule; (2) described how IRFs assess
patients for admission and whether CMS reviews admission decisions; and
(3) evaluated the approach of using a list of conditions in the 75
percent rule to classify IRFs.
---------------------------------------------------------------------------
\8\ See H.R. Rep. 108-391, at 649 (2003).
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In carrying out our work, we analyzed data from the Inpatient
Rehabilitation Facility--Patient Assessment Instrument (IRF-PAI)
records on all Medicare patients (the majority of patients in IRFs)
admitted to IRFs in fiscal year 2003 \9\ (the most recent data
available at the time). The IRF-PAI records contain, for each Medicare
patient, the impairment group code \10\ identifying the patient's
primary condition and the diagnostic code from the International
Classification of Diseases, Ninth Revision, Clinical Modification (ICD-
9-CM) identifying the patient's comorbid condition (if any).\11\ We
used these codes to determine whether we considered the patient's
primary or comorbid condition to be linked to a condition on the list
in the rule.\12\ We also spoke to 12 IRF medical directors, 10 fiscal
intermediary officials, and contracted with the Institute of Medicine
(IOM) of the National Academies to convene a 1-day meeting of 14
clinical experts in physical medicine and rehabilitation to evaluate
the approach of using a list of conditions in the 75 percent rule. We
conducted our work from May 2004 through April 2005 in accordance with
generally accepted government auditing standards.
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\9\ We analyzed the 2003 data using the 13 conditions in the
current regulation even though in fiscal year 2003 there were 10
conditions on the list. Effective July 1, 2004, the number of
conditions increased from 10 to 13.
\10\ The impairment group code identifies the medical condition
that caused the patient to be admitted to an IRF, and its sole function
is to determine payment rates. As a result, the impairment group codes
describe every patient in an IRF and include medical conditions that
are on the list in the rule as well as those that are not on the list
since IRFs may treat patients with conditions not on the list. In
contrast, the list of conditions in the rule describes the patient
population that is to be treated in an IRF to ensure that a facility is
appropriately classified to justify payment for the level of services
furnished.
\11\ As used in this report, a primary condition is the first or
foremost medical condition for which the patient was admitted to an
IRF, and other medical conditions may coexist in the patient as
comorbid conditions, or comorbidities.
\12\ Throughout this testimony, the ``list in the rule'' refers to
the list of 13 conditions as specified in the 2004 75 percent rule, and
when we say that condition is on (or off) the list, we mean that we
have (or have not) been able to link the condition as identified in the
patient assessment record to a condition on the list in the rule.
---------------------------------------------------------------------------
In brief, as noted in the report, in fiscal year 2003 fewer than
half of all IRF Medicare patients were admitted for having a primary
condition on the list in the 75 percent rule. Almost half of all
patients with conditions not on the list were admitted for orthopedic
conditions, and among those the largest group was joint replacement
patients. The experts IOM convened told us that uncomplicated
unilateral joint replacement patients rarely need to be admitted to an
IRF, and our analysis suggested that relatively few of the Medicare
unilateral joint replacement patients had comorbid conditions that
suggested a possible need for the IRF level of services. Additionally,
we found that only 6 percent of IRFs in fiscal year 2003 were able to
meet a 75 percent threshold. We also found that IRFs varied in the
criteria used to assess patients for admission, using patient
characteristics such as functional status, as well as condition. We
noted that CMS, working through its fiscal intermediaries, had not
routinely reviewed IRF admission decisions to determine whether they
were medically justified, although it reported that such reviews could
be used to target problem areas. The experts IOM convened and other
clinical and nonclinical experts we interviewed differed on whether
conditions should be added to the list in the 75 percent rule. The
experts IOM convened questioned the strength of the evidence for adding
conditions to the list--finding the evidence for certain orthopedic
conditions particularly weak--and some of them reported that little
information was available on the need for inpatient rehabilitation for
cardiac, transplant, pulmonary, or oncology patients. They called for
further research to identify the types of patients that need inpatient
rehabilitation and to understand the effectiveness of IRFs. There was
general agreement among all the groups of experts we interviewed that
condition alone is insufficient for identifying appropriate types of
patients for inpatient rehabilitation, since within any condition only
a subgroup of patients require the level of services of an IRF, and
that functional status should also be considered in addition to
condition.
We concluded that if condition alone is not sufficient for
determining which types of patients are most appropriate for IRFs, more
conditions should not be added to the list at the present time and the
rule should be refined to clarify which types of patients should be in
IRFs as opposed to another setting. As noted in the report, we
recommended that CMS ensure that targeted reviews for medical necessity
are conducted for IRF admissions; conduct additional activities to
encourage research on IRFs; and refine the 75 percent rule to more
clearly describe the subgroups of patients within a condition that are
appropriate for IRFs, possibly using functional status or other factors
in addition to condition. CMS generally agreed with our
recommendations.
Background
The 75 percent rule was established in 1983 to distinguish IRFs
from other facilities for payment purposes. According to CMS, the
conditions on the list in the rule at that time accounted for 75
percent of the admissions to IRFs. In June 2002 CMS suspended the
enforcement of the 75 percent rule after its study of the fiscal
intermediaries revealed that they were using inconsistent methods to
determine whether an IRF was in compliance and that in some cases IRFs
were not being reviewed for compliance at all. CMS standardized the
verification process that the fiscal intermediaries were to use, and
issued a rule--effective July 1, 2004--that increased the number of
conditions from 10 to 13 and provided a 3-year transition period,
ending in July 2007, to phase in the 75 percent threshold.\13\
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\13\ During the transition period, the threshold increases each
year (from 50 percent to 60 percent to 65 percent) before the 75
percent threshold is effective. The transition period also allows a
patient to be counted toward the required threshold if the patient is
admitted for either a primary or comorbid condition on the list in the
rule. At the end of the transition period, a patient cannot be counted
toward the required threshold on the basis of a comorbidity on the list
in the rule.
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The current payment and review procedures for IRFs were established
in recent years. The inpatient rehabilitation facility prospective
payment system (IRF PPS) was implemented in January 2002. Payment is
contingent on an IRF's completing the IRF-PAI after admission and
transmitting the resulting data to CMS. Two basic requirements must be
met if inpatient hospital stays for rehabilitation services are to be
covered: (1) the services must be reasonable and necessary, and (2) it
must be reasonable and necessary to furnish the care on an inpatient
hospital basis, rather than in a less intensive facility, such as a
SNF, or on an outpatient basis.\14\ Determinations of whether hospital
stays for rehabilitation services are reasonable and necessary must be
based on an assessment of each beneficiary's individual care needs.
Beginning in April 2002, the fiscal intermediaries, the entities that
conduct compliance reviews, were specifically authorized to conduct
reviews for medical necessity to determine whether an individual
admission to an IRF was covered under Medicare.\15\
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\14\ Rehabilitative care in a hospital, rather than a SNF or on an
outpatient basis, is considered to be reasonable and necessary when a
patient requires a more coordinated, intensive program of multiple
services than is generally found outside of a hospital (Medicare
Benefit Policy Manual, chapter 1, Section 110.1).
\15\ Prior to this time, Quality Improvement Organizations had this
authority. CMS Transmittal 21 made clear that fiscal intermediaries
have the authority to review admissions to IRFs.
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Fewer Than Half of All IRF Medicare Patients in 2003 Were Admitted for
Conditions on List in Rule, and Few IRFs Were Able to Meet a 75
Percent Threshold
As we reported in April 2005, among the 506,662 Medicare patients
admitted to an IRF in fiscal year 2003, less than 44 percent were
admitted with a primary condition on the list in the 75 percent rule.
About another 18 percent of IRF Medicare patients were admitted with a
comorbid condition that was on the list in the rule. Among the 194,922
IRF Medicare patients that did not have a primary or comorbid condition
on the list in the rule, almost half were admitted for orthopedic
conditions, and among those the largest group was joint replacement
patients whose condition did not meet the list's specific criteria.
(See figure 1.)
[GRAPHIC] [TIFF OMITTED] T3928A.003
Although some joint replacement patients may need admission to an
IRF, such as those with comorbidities that affect the patient's
function, our analysis showed that few of these patients had
comorbidities that suggested a possible need for the level of services
offered by an IRF. Our analysis found that 87 percent of joint
replacement patients admitted to IRFs in fiscal year 2003 did not meet
the criteria of the rule, and among those, over 84 percent did not have
any comorbidities that would have affected the costs of their care
based on our analysis of the payment data.
Because the data we analyzed were from 2003, when enforcement of
the rule was suspended, we also looked at newly released data from July
through December 2004, after enforcement had resumed, to determine
whether admission patterns had changed. We focused on the largest
category of patients admitted to IRFs, joint replacement patients, and
found no material change in the admission of joint replacement patients
for the same time periods in 2003 and 2004. Across all IRFs, the
percentage of Medicare patients admitted for a joint replacement
declined by 0.1 percentage point.
In conjunction with our finding on the number of patients admitted
to IRFs for conditions not on the list in the rule, we determined that
only 6 percent of IRFs in fiscal year 2003 were able to meet a 75
percent threshold. Many IRFs were able to meet the lower thresholds
that would be in place early in the transition period, but
progressively fewer IRFs were able to meet the higher threshold levels.
IRFs Vary in the Criteria Used to Assess Patients for Admission, and
CMS Does Not Routinely Review IRFs' Admission Decisions
As we stated in our report, the criteria IRFs used to assess
patients for admission varied by facility and included patient
characteristics in addition to condition. All the IRF officials we
interviewed evaluated a patient's function when assessing whether a
patient needed the level of services of an IRF. Whereas some IRF
officials reported that they used function to characterize patients who
were appropriate for admission (e.g., patients with a potential for
functional improvement), others said they used function to characterize
patients not appropriate for admission (e.g., patients whose functional
level was too high, indicating that they could go home, or too low,
indicating that they needed to be in a SNF). Almost half of the IRF
officials interviewed stated that function was the main factor that
should be considered in assessing the need for IRF services.
IRF officials reported to us that they did not admit all the
patients they assessed. Typically, the IRF received a request from a
physician in the acute care hospital requesting a medical consultation
from an IRF physician, or from a hospital discharge planner or social
worker indicating that they had a potential patient. An IRF staff
member--usually a physician and/or a nurse--conducted an assessment
prior to admission to determine whether to admit a patient.
CMS, working through its fiscal intermediaries, has not routinely
reviewed IRF admission decisions, although it reported that such
reviews could be used to target problem areas. Among the 10 fiscal
intermediary officials we interviewed, over half were not conducting
reviews of patients admitted to IRFs. We concluded that the presence of
patients in IRFs who may not need the intense level of services
provided by IRFs called for increased scrutiny of IRF admissions, which
could target problem areas and vulnerabilities and thereby reduce the
number of inappropriate admissions in the future. We recommended that
CMS ensure that its fiscal intermediaries routinely conduct targeted
reviews for medical necessity for IRF admissions. CMS agreed that
targeted reviews are necessary and said that it expected its
contractors to direct their resources toward areas of risk. It also
reported that it has expanded its efforts to provide greater oversight
of IRF admissions through local policies that have been implemented or
are being developed by the fiscal intermediaries.
Experts Differed on Adding Conditions to List in Rule but Agreed That
Condition Alone Does Not Provide Sufficient Criteria
As we reported, the experts IOM convened and other experts we
interviewed differed on whether conditions should be added to the list
in the 75 percent rule but agreed that condition alone does not provide
sufficient criteria to identify types of patients appropriate for IRFs.
The experts IOM convened generally questioned the strength of the
evidence for adding conditions to the list in the rule. They reported
that the evidence on the benefits of IRF services is variable,
particularly for certain orthopedic conditions, and some of them
reported that little information was available on the need for
inpatient rehabilitation for cardiac, transplant, pulmonary, or
oncology conditions. In general, they reported that, except for a few
subpopulations, uncomplicated, unilateral joint replacement patients
rarely need to be admitted to an IRF. Most of them called for further
research to identify the types of patients that need inpatient
rehabilitation and to understand the effectiveness of IRFs in
comparison with other settings of care. IRF officials we interviewed
did not agree on whether conditions, including a broader category of
joint replacements, should be added to the list in the rule. Half of
them suggested that joint replacement be more broadly defined to
include more patients saying, for example, that the current
requirements were too restrictive and arbitrary. Others said that
unilateral joint replacement patients were not generally appropriate
for IRFs. We recommended that CMS conduct additional activities to
encourage research on the effectiveness of intensive inpatient
rehabilitation and factors that predict patient need for these
services. CMS agreed and said that it has expanded its activities to
guide future research efforts by encouraging government research
organizations, academic institutions, and the rehabilitation industry
to conduct both general and targeted research, and plans to collaborate
with the National Institutes of Health to determine how to best promote
research.
There was general agreement among all the groups of experts we
interviewed, including the experts IOM convened, that condition alone
is insufficient for identifying appropriate types of patients for
inpatient rehabilitation, because not all patients with a condition on
the list need to be in an IRF. For example, stroke is on the list, but
not all stroke patients need to go to an IRF after their
hospitalization. Similarly, cardiac condition is not on the list, but
some cardiac patients may need to be admitted to an IRF. Among the
experts convened by IOM, functional status was identified most
frequently as the information required in addition to condition. Half
of them commented on the need to add information about functional
status, such as functional need, functional decline, motor and
cognitive function, and functional disability. However, some of the
experts convened by IOM recognized the challenge of operationalizing a
measure of function, and some experts questioned the ability of the
current assessment tools to predict which types of patients will
improve if treated in an IRF.\16\
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\16\ For example, one fiscal intermediary official reported that
the instrument that is currently used does not adequately measure
progress in small increments, such as a quadriplegic patient might
experience. Another respondent also reported that the current
instrument only measures functional status at a point in time, but does
not predict functional improvement.
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We concluded that if condition alone is not sufficient for
determining which types of patients are most appropriate for IRFs, more
conditions should not be added to the list at the present time, and
that future efforts should refine the rule to increase its clarity
about which types of patients are most appropriate for IRFs. We
recommended that CMS use the information obtained from reviews for
medical necessity, research activities, and other sources to refine the
rule to describe more thoroughly the subgroups of patients within a
condition that require IRF services, possibly using functional status
or other factors, in addition to condition. CMS stated that while it
expected to follow our recommendation, it would need to give this
action careful consideration because it could result in a more
restrictive policy than the present regulations, and noted that future
research could guide the agency's description of subgroups.
Concluding Observations
We stated in our report, we believe that action to conduct reviews
for medical necessity and to produce more information about the
effectiveness of inpatient rehabilitation could support future efforts
to refine the rule over time to increase its clarity about which types
of patients are most appropriate for IRFs. These actions could help to
ensure that Medicare does not pay IRFs for patients who could be
treated in a less intensive setting and does not misclassify facilities
for payment.
Madam Chairman, this concludes my prepared statement. I would be
happy to respond to any questions you or other Members of the
Subcommittee may have at this time.
Contact and Staff Acknowledgments
For further information about this testimony, please contact
Marjorie Kanof at (202) 512-7114. Linda Kohn and Roseanne Price also
made key contributions to this statement.
Appendix I: List of Conditions in CMS's 75 Percent Rule
A facility may be classified as an IRF if it can show that, during
a 12-month period \17\ at least 75 percent of all its patients,
including its Medicare patients, required intensive rehabilitation
services for the treatment of one or more of the following conditions:
\18\
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\17\ The time period is defined by CMS or the CMS contractor.
\18\ See 42 C.F.R. 412.23(b)(2)(iii) (2004).
1. Stroke.
2. Spinal cord injury.
3. Congenital deformity.
4. Amputation.
5. Major multiple trauma.
6. Fracture of femur (hip fracture).
7. Brain injury.
8. Neurological disorders (including multiple sclerosis, motor
neuron diseases, polyneuropathy, muscular dystrophy, and Parkinson's
disease).
9. Burns.
10. Active, polyarticular rheumatoid arthritis, psoriatic
arthritis, and seronegative arthropathies resulting in significant
functional impairment of ambulation and other activities of daily
living that have not improved after an appropriate, aggressive, and
sustained course of outpatient therapy services or services in other
less intensive rehabilitation settings immediately preceding the
inpatient rehabilitation admission or that result from a systemic
disease activation immediately before admission, but have the potential
to improve with more intensive rehabilitation.
11. Systemic vasculidities with joint inflammation, resulting in
significant functional impairment of ambulation and other activities of
daily living that have not improved after an appropriate, aggressive,
and sustained course of outpatient therapy services or services in
other less intensive rehabilitation settings immediately preceding the
inpatient rehabilitation admission or that result from a systemic
disease activation immediately before admission, but have the potential
to improve with more intensive rehabilitation.
12. Severe or advanced osteoarthritis (osteoarthritis or
degenerative joint disease) involving two or more major weight bearing
joints (elbow, shoulders, hips, or knees, but not counting a joint with
a prosthesis) with joint deformity and substantial loss of range of
motion, atrophy of muscles surrounding the joint, significant
functional impairment of ambulation and other activities of daily
living that have not improved after the patient has participated in an
appropriate, aggressive, and sustained course of outpatient therapy
services or services in other less intensive rehabilitation settings
immediately preceding the inpatient rehabilitation admission but have
the potential to improve with more intensive rehabilitation. (A joint
replaced by a prosthesis no longer is considered to have
osteoarthritis, or other arthritis, even though this condition was the
reason for the joint replacement.)
13. Knee or hip joint replacement, or both, during an acute
hospitalization immediately preceding the inpatient rehabilitation stay
and also meet one or more of the following specific criteria:
a. The patient underwent bilateral knee or bilateral hip
joint replacement surgery during the acute hospital admission
immediately preceding the IRF admission.
b. The patient is extremely obese, with a body mass index of
at least 50 at the time of admission to the IRF.
c. The patient is age 85 or older at the time of admission
to the IRF.
Chairman JOHNSON. Thank you very much. Mr. Kuhn.
STATEMENT OF HERB KUHN, DIRECTOR, CENTER FOR MEDICARE
MANAGEMENT, CENTERS FOR MEDICARE AND MEDICAID SERVICES, U.S.
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Mr. KUHN. Madam Chairman, Congressman Lewis, Members of the
Subcommittee, thank you for inviting me here today to discuss
ways to improve coordination in the payment and clinical
assessment of post-acute care. A more beneficiary-centered
system of post-acute care services has the potential to improve
quality of care, access to care, and continuity of care in a
cost efficient way. Post-acute care services are offered in
SNFs and IRFs, in the home, and in LTCHs. Each of these
settings has its own payment system and method for evaluation
of patient functioning. The transition from cost-based
reimbursement to the PPS in post-acute care was a major
milestone for Medicare that resulted in improved cost
containment, while more directly linking payments to the care
needs of each beneficiary. However, since each of these systems
was developed independently, it is time to consider ways of
improving coordination and payment and clinical assessment
across care settings to provide a more seamless system of post-
acute care services. Today, Medicare's benefits and policies
have focused on phases of a patient's illness as defined by
specific site of service rather than on the entire post-acute
care episode. Thus, payments across settings may differ
considerably even though the clinical characteristics of the
patient and the services delivered may be very similar.
Further, each patient assessment instrument collects somewhat
different content and stores the patient's health and
functional status information in different data formats which
are often not compatible. Because of this variation, care may
be disrupted when a Medicare patient moves across settings. We
should focus on the actual patient need and eliminate the
financial incentives for providers to transfer patients from
one post-acute care setting to another based on financial
considerations.
To do so, we should investigate a more coordinated approach
to payment and delivery of post-acute care services that
focuses on the overall post-acute care episode or attempts to
pay more consistently across the different sites of care, an
approach that relies on a single comprehensive assessment of a
patient's needs and clinical characteristics that ensure that
payments are at levels consistent with high quality cost-
effective care, regardless of setting. The CMS has several
initiatives in the planning and implementation phase to develop
a more consistent payment and assessment structure in post-
acute care. More specifically, we are working to study existing
patient assessment instruments and potential for the future. We
are also working with the National Quality Forum to set up a
technical expert group to look at the development and the
functional status framework to identify information we should
be collecting on aspects of relevant functional status.
Furthermore, we are mapping the Minimum Data Set (MDS), to
Consolidated Health Informatics (CHI), to ensure the MDS
conforms to CHI standards. In addition, CMS has twice expanded
the post-acute care transfer policy under which it pays the
acute hospital transferring a patient to a post-acute care
setting under a per diem payment rather than the full Diagnosis
Related Group (DRG) payment. In the most recent inpatient PPS
notice of proposed rulemaking, CMS proposed to expand the
policy even further.
MedPAC has commented on the challenges we face in
coordinating our post-acute care payment methods, and suggested
that it may be appropriate to explore additional options for
reimbursing post-acute care services. We agree that CMS, in
conjunction with MedPAC and other stakeholders, should consider
a full range of options in analyzing our post-acute care
payment methods. In fact, we have recently issued proposed
regulations for SNFs and IRFs in which we discuss the long-
range possibilities for an integrated post-acute care payment
structure. While we have not made any formal proposals, we have
solicited comment on potential models from the industry and
other stakeholders. The CMS is committed to a variety of
activities to develop more consistent payment and assessment
systems for post-acute care. We fully recognize and support the
benefit of having a more comprehensive system where the
incentives are to place the patient in the most appropriate
post-acute care setting rather than a setting where the payment
is most advantageous. Thank you again for the opportunity to
speak to you today about the potential for increased payment
accuracy and patient assessment standardization in post-acute
care. I would be happy to answer any questions you may have.
[The prepared statement of Mr. Kuhn follows:]
Statement of Herb Kuhn, Director, Center for Medicare Management,
Centers for Medicare and Medicaid Services, U.S. Department of Health
and Human Services
Introduction
Madam Chairman Johnson, Congressman Stark, distinguished members of
the subcommittee, thank you for inviting me here today to discuss ways
to improve coordination in the payment and clinical assessment of post-
acute care. A more beneficiary-centered system of post-acute care
services has the potential to improve quality of care, access to care,
and continuity of care in a cost efficient way.
CMS is committed to ensuring that our administrative actions
provide maximum support to further steps toward higher quality post-
acute care and we have numerous initiatives underway to further this
goal. Medicare pays for rehabilitation and other post-acute care
services in a variety of settings, including skilled nursing facilities
(SNFs), inpatient rehabilitation facilities (IRFs), long-term care
hospitals (LTCHs), and home health. Adopting techniques that can
provide greater uniformity in how patients are assessed and quality is
measured can support efforts to pay more consistently for services
across different sites of post-acute care while eliminating
administrative barriers and incentives that impede high quality care.
CMS is actively exploring such approaches as it works to improve its
payment systems under Medicare while supporting quality and access.
Background
CMS began transitioning to the various post-acute care prospective
payment systems (PPSs) in accordance with the Balanced Budget Act of
1997. The transition began with skilled nursing facilities in July of
1998, followed by rural swing beds SNFs in July of 2000, home health
agencies (HHAs) in October of 2000, IRFs in January of 2002, LTCHs in
October of 2002, and finally psychiatric hospitals in January of 2004.
The new administrative pricing models have generated substantial
improvements over the preexisting cost-based systems. Further, the
transition from cost based reimbursement to PPS in post-acute care was
a major milestone for the program that resulted in improved cost
containment while more directly linking payments to the care needs of
each beneficiary. However, since each of these systems was developed
independently, it is time to consider ways of improving coordination of
payment and clinical assessment across care settings to provide a more
seamless system of post-acute care services.
To date, Medicare's benefits and policies have focused on phases of
a patient's illness as defined by a specific site of service, rather
than on the entire post-acute care episode. Thus, payments across
settings may differ considerably even though the clinical
characteristics of the patient and the services delivered may be very
similar. As the differentiation among provider types becomes less
pronounced, it may now be appropriate to explore more coordinated
approaches to the payment and delivery of post-acute care services that
focus on the overall post-acute episode. Initially such approaches
would focus on establishing more consistent payments across different
sites of service where services provided to patients and associated
resource requirements are similar. Ultimately, we should focus our
efforts on developing a system that provides payment and assures
quality for the overall post-acute episode, rather than each individual
component of the continuum of care. In order to accomplish these
objectives, we need to begin to collect and compare consistent clinical
data across various sites of service and use these data as part of our
research efforts to build the components of such a system.
In the long run, our ability to compare clinical data across care
settings is one of the benefits of standardized electronic health
records (EHRs) and other steps to promote continuity of care across all
settings. It is also important to recognize the complexity of the
effort, not only in developing an integrated assessment tool that is
designed using health information standards, but in examining the
various provider-focused prospective payment methodologies and
considering payment approaches that are based on patient
characteristics and outcomes.
MedPAC has recently taken a preliminary look at the challenges in
improving the coordination of our post-acute care payment methods, and
suggested that it may be appropriate to explore additional options for
reimbursing post-acute care services. We agree that CMS, in conjunction
with MedPAC and other stakeholders, should consider a full range of
options in analyzing our post-acute care payment methods.
Post-Acute Care Settings
Post-acute care services are offered in SNFs, in IRFs, in the home
by HHAs, and in LTCHs. Each of these settings has its own payment
system and method for evaluating patient functioning. Each of the
current payments systems is described below.
SNF Per Diem Payments Based on Resource Utilization Groups
SNFs provide short-term skilled nursing and rehabilitative care to
people with Medicare who require such services on a daily basis in an
inpatient setting after a medically necessary hospital stay lasting at
least three days. SNFs receive per diem payments for each admission,
which are case-mix adjusted using a resident classification system,
Resource Utilization Groups (RUG) III, based on data from resident
assessments and relative weights developed from staff time data. SNFs
use the MDS 2.0 instrument to assess care planning as part of the
federally mandated process for clinical assessment of all residents in
Medicare or Medicaid certified nursing homes. This process provides a
comprehensive assessment of each resident's functional capabilities and
helps nursing home staff identify health problems. More specifically,
patients are classified into RUG-III groups based on need for therapy
(i.e., physical, occupational, or speech therapy), special treatments
(e.g., tube feeding), and functional status (e.g., ability to feed self
and use the toilet). Patient status is reviewed periodically to update
the RUG-III grouping.
An interdisciplinary team completes the MDS via several sources,
such as communicating with and observing the resident, reviewing the
medical record, and communicating with family & staff. The assessment
for a SNF patient is completed at a few intervals of his/her stay, on
days 5, 14, 30, 60, & 90 day, although there are times when an off-
cycle assessment may need to be completed. The 5-day assessment covers
payment for days 1--14; 14-day for days 15--30; etc.
CMS requires that once the MDS is completed, it be submitted
electronically to the State database. When the assessment is required
for SNF payment, a Resource Utilization Group (RUG) is assigned to the
assessment. The RUG assignment is based on specific items within the
MDS. The RUG categories are based on time study data, which measured
staff time for medical conditions, disease processes and treatment
interventions. A provider may submit a claim to its FI once the
assessment is submitted and accepted into the State database.
Home Health 60-Day Episode Payments Based on National Rate
To qualify for Medicare home health visits, people with Medicare
must be under the care of a physician; have an intermittent need for
skilled nursing care, or need physical therapy, speech therapy; or have
a continuing need for occupational therapy; be homebound; and receive
home health services from a Medicare approved home health agency. Under
the PPS, Medicare pays higher rates to HHAs to care for those
beneficiaries with greater needs. Home health is measured in 60-day
units called episodes, and the amount of payment for an episode is
thenational base rate, adjusted for case-mixand for prices in the area
where thepatient resides. The base payment covers the costs of visits,
to include the costs of routine and non-routine medical supplies, which
is based upon a model with 1998 costs and updated annually using the
home healthmarket basket.
Payment rates are based on relevant data from patient assessments
using the Outcome and Assessment Information Set (OASIS). The OASIS is
a group of data elements that represent core items of a comprehensive
assessment for an adult home care patient and form the basis for
measuring patient outcomes used by CMS to determine appropriate case-
mix adjustment for Medicare payment purposes and by individual agencies
for outcome based quality improvement, or OBQI. Medicare Conditions of
Participation (CoPs) for Home Health Agencies (HHAs) require that
information about a patient's health status be collected by HHA staff
using the OASIS assessment instrument at the start of care, at
discharge or transfer, at follow up (60 day re-certification) and at
resumption of care.
The purpose of case-mix adjustment, like the DRG system for
hospitals, is to adjust payment based on the different levels of
resources used for a unit of service. The home health case mix
methodology uses a combination of scores from 23 OASIS items and an
additional data element measuring the receipt of therapy services that
result in one of 80 case mix weights or home health resource groups,
which in turn determine the payment for the episode of care. These data
elements are organized into three dimensions to capture clinical
severity factors, functional severity factors, and service utilization
factors influencing case-mix.
Inpatient Rehabilitation Facility (IRF) Per Discharge Payments Based on
Cse-Mix Groups
For classification as an IRF, a percentage of the IRF's total
inpatient population during the compliance review period that is
associated with an IRF's cost reporting period must match one or more
of thirteen specific medical conditions. Payments under the IRF PPS are
made on a per discharge basis. Under this system, payment rates are
based on case-mix groups (CMGs) that reflect the clinical
characteristics of the patient and the anticipated resources that will
be needed for treatment.
IRFs use the IRF Patient Assessment Instrument (IRF-PAI) to assess
the functional performance and health status of the patient and changes
in the patient's functional performance status from admission to
discharge. Under IRF PPS, a person with Medicare must be assessed using
the IRF-patient assessment instrument (PAI). The IRF-PAI is a three
page form that captures demographic, medical, and functional
performance data regarding the patient. Using the IRF-PAI, an IRF's
clinicians assess the inpatient at both admission and discharge, and
the combined data is electronically transmitted to CMS only once after
the patient is discharged. Typically the admission assessment is
performed during the first three calendar days of the patient's stay.
The admission data that is recorded by the IRF's staff on the
electronic version of the IRF-PAI results in the patient being
automatically classified into one of the payment groups that are
referred to as case-mix groups (CMGs). The IRF then records the CMG
code on the Medicare claim. As the IRF's Medicare claim is processed by
the fiscal intermediary both case level and facility level adjustments
are automatically applied to the initial unadjusted CMG payment rate
resulting in the adjusted payment amount that the IRF will receive for
care furnished to the inpatient.
Long-Term CareHospital (LTCH) Per Discharge Payments Based on Diagnosis
Related Groups
Long-term care hospitals have an average Medicare inpatient length
of stay greater than 25 days. These hospitals typically provide
extended medical and rehabilitative care for patients who are
clinically complex and may suffer from multiple acute or chronic
conditions. Services may include comprehensive rehabilitation,
respiratory therapy, cancer treatment, head trauma treatment, and pain
management. The PPS for LTCHs classifies patients into distinct
diagnostic groups based on clinical characteristics and expected
resource needs (LTC-Diagnosis Related Groups (DRGs)), which are based
on the existing CMS DRGs used under the acute hospital inpatient PPS
that have been weighted to reflect the resources required to treat the
medically complex patients treated at LTCHs.
Although LTCHs do not have a standard patient assessment tool,
following a rigorous analysis of existing research on the universe of
LTCHs and their typical patients, CMS has a contractor collecting
information from several sources that could be used to develop patient-
level criteria for LTCHs. There are three main types of data sources
for this facet of the project: Claims analysis, Quality Improvement
Organization interviews, and site visits/provider discussions. CMS
expects to receive the final report on this research project from our
contractor by the end of FY 2005.
CMS is taking Action toward Change
CMS has several initiatives in the planning and implementation
phases to further our goals of developing a more consistent payment and
assessment structure in post-acute care. More specifically, we are
working with our stakeholders to study existing patient assessment
instruments and potential for the future. We are also working with the
National Quality Forum (NQF) to set up a technical expert group to look
at the development of a functional status framework to identify
information we should be collecting on aspects of relevant functional
status. Furthermore, we are mapping the MDS to Consolidated Health
Information (CHI) to ensure the MDS conforms to CHI standards. In
addition, CMS has twice expanded the post-acute transfer policy under
which it pays the acute hospital transferring a patient to a post-acute
setting under a per-diem payment, rather than the full DRG payment. In
the most recently-proposed inpatient PPS Notice of Proposed Rulemaking,
CMS proposed to expand the policy even further. Finally, we are
currently evaluating CMS research priorities and anticipate funding
future research to develop payment systems using clinical data
collected across post-acute care settings.
CMS is Working in Coordination with out Stakeholders
Beginning in 2001, CMS has been working collaboratively on an
investigatory effort funded by Assistant Secretary for Planning and
Evaluation (ASPE) to learn more about the current and potential future
design of our patient assessment tools. More specifically, this effort
was designed to hold initial meetings with stakeholder groups, other
Federal agencies, and researchers to identify issues with current
assessment systems, investigate future needs, and to elicit comments on
what is perceived as the government role in the collection and
reporting of assessment data. We met with over 200 different
stakeholders across the continuum of care as well as the Agency for
Healthcare Research and Quality, the Department of Veterans Affairs,
and MedPAC staff.
BMS is Working to Identify Common Measures and Process for the Clinical
Assessment of Patients
A key to developing more consistent payment and quality assurance
methodologies across different sites of post-acute care is the use of
common measures and processes for the clinical assessment of patients.
CMS and the Department of Health and Human Services as a whole are
committed to the development of standardized health information
terminology (e.g. Systematized Nomenclature of Medicine, Logical
Observation Identifiers Names and Codes--Clinical Terms (SNOMED-CT) to
reconcile disparate assessment items collected by the different health
care providers in their particular settings. In addition, CMS has asked
the National Quality Forum (NQF) to convene a group of technical
experts to identify a standard framework for measuring functional
status that could be used in CMS instruments and programs. This
technical group could create a subset of items common to payment (and
quality for continuity of care measures) and allow flexibility for the
other items specific to a particular setting. Factors such as
diagnosis, functional status, activities of daily living (ADLs), prior
hospitalizations, and discharge to community are just a few elements
that could serve as a common set of information collected at admission
and discharge to help structure payment and quality programs. Once
these changes are made, CMS could test the new instrument, and begin
collecting data for use in developing more advanced methods for payment
and quality assurance in post-acute care. In the short term, the
potential exists to recalibrate existing SNF, IRF, LTCH, and home
health payment systems based on the standardized data elements, and use
the data to measure resources and establish payment levels more
consistently across these sites of care.
CMS is Collaborating with ASPE to MAP MDS to CHI Standards
In October of 2004, CMS and ASPE contracted work to begin mapping
of MDS items to the adopted medical terminologies and standards
recommended by the CHI initiative. This work ensures that the future
version of the MDS conforms to CHI standards thus supporting the
adoption and promotion of interoperable electronic health information
systems.
CMS' Expanded Transfer Policy Helps Ensure Accurate Payments
Due to concern that hospitals may be discharging patients as
quickly as possible to post-acute settings, thus substituting post-
acute care for the end of the hospital stay, CMS has proposed expanding
the post-acute transfer provision to help ensure that acute care
hospitals receive accurate payments for cases that those hospitals
transfer to post-acute care. The provision would add additional DRGs to
the existing policy that pays acute hospitals that transfer patients to
a hospital or unit excluded from the IPPS, skilled nursing facility, or
home health agency after a shorter than average length of stay on a
per-diem basis, rather than the full DRG payment. More specifically,
each transferring hospital is paid a per diem rate for each day of the
stay, up to the full DRG payment that would have been made if the
patient had been discharged without being transferred.
DMS is working to Ensure that People with Medicare are Treated in the
Most Appropriate Setting
CMS covers rehabilitation and post-acute care in a variety of
settings. CMS is committed to ensuring that beneficiaries have access
to high quality rehabilitation services in these settings at an
appropriate cost to taxpayers. Generally inpatient rehabilitation
facility payments are much more generous than those paid to acute care
hospitals; therefore it is important to ensure that the majority of
patients treated by inpatient rehabilitation facilities truly require
the higher level of care available at such a facility.
In February of 2005 CMS in collaboration with the National
Institutes of Health, Center for Medical Rehabilitation sponsored a
panel meeting to review available research on the types of patients
appropriate for inpatient rehabilitation care and provide insight into
where additional research may be needed.
Significant Variations across Post-Acute Care Settings Exist
It could be that the current variation in payments across settings
creates incentives that inappropriately affect where providers send
their patients. We should investigate a more coordinated approach to
payment and delivery of post-acute care services that focuses on the
overall post-acute care episode or attempts to pay more consistently
across different sites of care. Payments for particular post-acute care
services should be more consistent regardless of the setting in which
the services are furnished. An approach that relies on a single
comprehensive assessment of a patient's needs and clinical
characteristics could ensure that payments are at levels consistent
with high quality, cost effective care regardless of setting.
The following case example illustrates how the payments under
Medicare for levels of rehabilitative care received in the various
settings may differ for a patient that has a primary diagnosis of a
lower extremity joint replacement, which is a common patient condition.
A 74-year-old woman has experienced a right total knee arthroplasty
(TKA), with a wound infection, fever, and high white blood cell count,
noted on her second postoperative day. A work-up indicates the
existence of staphylococcus aureus septicemia. The patient lacks full
extension and has only 65 degrees of flexion on her third post-
operative day. The chart below demonstrates how the different post-
acute care settings provide different classifications, lengths of stay,
and payments.
----------------------------------------------------------------------------------------------------------------
Setting Classification Length of Stay Payment (2003 rates)
----------------------------------------------------------------------------------------------------------------
IRF Case-mix group 804 (lower 14 days $10,828.60
extremity joint replacement with The existence of staphylococcus
some functional capabilities) aureus septicemia, a comorbid
condition (ICD--9--CM code
038.11), would place this
patient into the tier 2 payment
category.
----------------------------------------------------------------------------------------------------------------
SNF Either the very high (RVB) or 14 days $4,446.82 for RVB and 14 days,
ultra high (RUB) rehabilitation $6,352.60 for RUB and 14 days
group
----------------------------------------------------------------------------------------------------------------
LTCH Patient group 238 14 days $17,671.22 for 14 days or
----------------------------------------------------------------------------------------------------------------
Home Health High/High/Moderate group 60-day episode* $5,165.26 for services
delivered for a 60-day episode
----------------------------------------------------------------------------------------------------------------
*Payment is always based on 60-day episode unless low utilization or other adjustment applies.
In addition to the above-mentioned options, the patient could also
receive outpatient therapy or remain in the original surgical acute
care hospital, both of which would have different classifications,
lengths of treatment, and payments than those mentioned in the chart.
This illustrative example shows the extent to which assessment and
payment across care settings varies substantially when a patient
presents with the same condition in each setting.
Benefits of Standardizing Payment Systems
An integrated payment system for all post-acute care services could
encourage a focus on actual patient need and eliminate the financial
incentive for providers to transfer patients from one post-acute care
setting to another based on financial considerations. We also believe
an integrated post-acute care strategy could help to address the growth
in post-acute care spending. We realize that any site-neutral,
beneficiary-centered system of paying for post-acute care services will
need to allow for certain variations in costs, such as room and board
among different types of providers. However, by providing more
consistent payments for the same treatment in different sites, the
payment structure should not influence clinical decisions about the
appropriate site of care.
As mentioned above, MedPAC has recently commented on the challenges
we face in coordinating our post-acute care payment methods and
suggested that it may be appropriate to explore additional options for
reimbursing post-acute care services. We agree that CMS, in conjunction
with MedPAC and other stakeholders, should consider a full range of
options in analyzing our post-acute care payment methods. In fact, we
have recently issued proposed regulations for SNFs and IRFs in which we
discuss the long range possibilities for an integrated post-acute
payment structure. While we have not made any formal proposals, we have
solicited comment on potential models from the industry and other
stakeholders. This is an action step that we have taken to advance the
issue and initiate a dialogue with our stakeholders. In addition, we
want to encourage incremental changes that will help us build toward
longer-term objectives. An obvious problem in establishing an
integrated post-acute PPS is that the research, like the payment
systems, has been specific to each type of provider. Much work remains
to be done to develop a case mix adjusted payment system that spans the
various provider types.
In addition, ASPE is funding a study examining the relative cost-
effectiveness of post-acute care services provided to Medicare
beneficiaries who have suffered a stroke. This work as well as work
that has been funded by National Institute on Disability &
Rehabilitation Research (NIDRR) in the Department of Education and the
private sector will provide policy makers with needed information to
develop a more patient-focused payment policy.
CMS has existing models of seamless care that may serve as good
examples for post-acute care payment and assessment systems. For
example, through Medicare Advantage (MA), CMS makes up-front capitated
payments to MA plans to provide coordinated beneficiary-focused care.
The plans then determine the best care setting for the person with
Medicare based on his or her health care needs. As we begin to make
incremental changes toward increased standardization and a more
seamless system of post-acute care and as we review public comments,
CMS will consider conducting new demonstrations to evaluate the
effectiveness of different approaches.
Benefits of a Standard Patient Assessment Tool
As CMS considers modifications to standardize payments in post-
acute care settings, it is essential to recognize the relationship
between payment structure and clinical data collected through patient
assessment instruments. By examining the provider-focused prospective
payment methodologies and considering patient-focused payment
approaches while developing an integrated assessment tool, CMS is
taking a necessary first step toward increased system integration.
Increased Standardization Improves Continuity and Quality of Care
The various assessment instruments used by Medicare providers
differ because even if providers are collecting similar information
each instrument collects and stores the patient's health and functional
status information in different data formats, which are often not
compatible (as demonstrated in the chart discussed earlier). Because of
this variation, care may be disrupted when a Medicare patient moves
across settings.
Increased interoperability of data standards would allow providers
to share existing patient information across settings without the
unnecessary burden of data re-entry for Medicare patients already
receiving care in other care settings. It also may reduce the incidence
of potentially avoidable re-hospitalizations and other negative effects
on quality of care that could occur when patients are transferred
between different facility types.
Conclusion
CMS has committed to a variety of activities to develop more
consistent payment and assessment systems because we realize the
benefit of having a more comprehensive system where the incentives are
to place the patient in the most appropriate post-acute care setting
rather than the setting where the payment is advantageous. Standardized
payment and patient assessment data elements would make it possible to
evaluate health and functional status across the range of post-acute
care settings and bring us closer to establishing a single post-acute
care payment system, with uniform payments for clinically similar
admissions and a consistent set of incentives. Greater integration and
coordination in Medicare's post-acute care payment system could enhance
our focus on patient need while at the same time reducing unnecessary
transfers between settings. Ultimately, an integrated patient-focused
model could allow us to gain control of the rapid growth in post-acute
care.
Thank you, Madam Chairman, for the opportunity to speak to you
today about the potential for increased payment and patient assessment
standardization in the Medicare program. I would be happy to answer any
questions you may have.
Chairman JOHNSON. I thank the panel for their comments. It
does seem a simple thing to create a single assessment tool,
but as you read through the testimony it clearly is not going
to be an easy thing to do. There are also some things happening
that raised a lot of questions about what we are currently
doing, and I would like to share with you a sentence or two
from the testimony of Carol Raphael of the Home Health Services
of New York, New York. She says, ``In addition, the report
shows that from 1996 to 2001, post-hospital discharge home
health care utilization fell from 108,000-plus episodes to
59,000-plus episodes, yet SNF utilization increased from 52,000
to 67,000 episodes.'' Now, I don't know to what extent--this
raises in my mind the question of whether, when we went to an
episode payment, PPS under home health, whether or not we
didn't incentivize the institutionalization in nursing homes of
certain patients, that in some states were in home health on a
very long-term basis, and by cutting off the home health option
for long-term care, we actually ended up putting them in a more
expensive setting and a setting less harmonious with their
personal health and other needs. So, I would be interested in
your commenting on that, because if our payment system is
already driving certain adjustments, then we need to be aware
of that, as we begin to look at how we make sure that this is a
more patient-centered system and not a facility-centered system
or a payment-structured system. Anyone? Mr. Hackbarth.
Mr. HACKBARTH. We have spent some time looking at those
issues and, of course, a lot of time discussing them with
Carol, a Member of MedPAC. Our analysis suggests that the
decline in home health users was greatest among patients with
the lowest expected use of home health services, number one,
and greatest in those States that had the highest levels of
home health utilization to begin with. We also looked at the
question of whether there was a relationship between the
decline in home health, on the one hand, and the increased
utilization of SNFs on the other hand, and we looked at that by
State. There was not a clear relationship at a State level, at
least between those two things. So, we didn't see home health
go down dramatically and SNF jump way, way up in the same
States. So, the pattern is--if there is a relationship, it is a
more complicated one than that.
Chairman JOHNSON. Thank you. Anyone else care to comment on
that?
Mr. KUHN. I would just make an observation that I couldn't
agree more with your assessment, the fact that we can look at
the episode of care of the patient rather than the specific
site of service, is something we all aspire to, and I think
your comments are right on point. Also with the different
silos, the providers act individually and not in concert with
one another to consider the seamless transition of the patient
through their entire episode of care. So, some of the fractures
that you are talking about right now are evident in the system,
and there is no question that we need to look at those
opportunities where we can do better.
Dr. KANOF. They are not just in home health or SNF. There
is evidence, such as, if you look at SNF versus the IRF, you
are seeing the same type in shift in utilization depending upon
what is in the community. So, you could have certain patients
in community X being admitted to an IRF, but in another
community, where there might be more SNFs, they are going
there.
Mr. HACKBARTH. Could I just add one other point, Chairman
Johnson? In evaluating the decline in home health, which was
quite dramatic, we also need to take into account that the
rules changed. There were some statutory changes in refining
the definition of eligibility for the benefit. In addition to
that, there was a major effort in HHS to make sure that the
benefit was only going to patients who properly qualified for
it. So, there were some factors outside the system that we
think were major contributors and probably appropriate
contributors to the significant decline in home health users.
Chairman JOHNSON. In Dr. Votto's testimony later on, he
points to the Quality Improvement Organizations (QIO) and their
work in looking at appropriateness of discharges, at least in
the LTCH area, but also mentions hospital discharge planners.
Have you looked at the effectiveness of discharge planners in
terms of selecting the appropriate patient placement and how
effective is that mechanism? Who else is doing it? How else are
they getting into the system? Is there always somebody in
charge of planning? To what extent is planning influenced by
factors like the availability of someone at home to--if they
are discharged to home--to help? In other words, how effective
are the systems that we have there that we can call on? How
much of the problem--because, actually, in the fine print, of
your testimony, Mr. Hackbarth, you say there has been a 50-
percent increase in spending since 2000 and 80-percent increase
in spending for LTCHs. Now, those are just extraordinary
amounts in terms of the size of the increase. When you think of
the developments--not developments in medicine--but in terms of
rehabilitation of stroke victims and cardiac victims and so on;
how much of that is medically driven; how much of that is
driven by the change in family structure, where most family
members are working, so there isn't anyone home, so you don't
have a choice of home care? How much is influenced by the
availability of care providers? In Connecticut we are very
strong on home care providers because we have had a cap on
nursing home beds for several decades. So, has there been any
attempt to analyze what is driving this? What are levers and
why haven't we used the ones in the system more effectively?
Mr. HACKBARTH. We fear that the current system does not
work well. Two reasons that it doesn't work well are, number
one, there are not clear criteria on how patients should be
assigned to different types of facilities. Number two, the
incentives are often not right; for example, for the hospital
discharge planner. So, without clear criteria and incentives
pointing in the proper direction, the potential is great for
patients to go to facilities that are not appropriate.
Sometimes that may be a facility that is way more intensive,
more costly than they need. There is also a risk in the other
direction as well, that a patient could be discharged from an
acute care hospital and sent to an SNF that doesn't have the
capabilities that are necessary to care for that patient. So,
there is a lot of work to be done to get it right.
Chairman JOHNSON. Mr. Lewis.
Mr. LEWIS. Thank you very much, Madam Chair. Let me thank
each panel Member for your testimony. Mr. Director, MedPAC
recommends that CMS continue to use clinical criteria to
determine the most appropriate setting for patients, where the
common patient assessment tool has been developed. Do clinical
criteria exist for all post acute setting to determine the best
placement for patient? If so, can you please provide us with
some examples of the clinical criteria for each setting?
Mr. KUHN. I don't have the exact information here in terms
of the clinical information for each setting. We would be happy
to get that information to you, Mr. Lewis. At least with the
different settings that are out there, the MDS is what is used
primarily in SNFs, and it really tries to look at the highest
function of the patient or the resident. The Outcome and
Assessment Information Set (OASIS) is used right now for home
health agencies, and that looks at a different level of
functionality. So, you have two different assessment
instruments looking at two different things for patients, one
staying at the home, one in SNFs. Another instrument called the
Inpatient Rehabilitation Facility Patient Assessment Instrument
(IRF-PAI), is what is used in IRFs, and is a different
assessment instrument. Then, as we heard in opening comments, I
think Madam Chairman stated that, in LTCHs, we do not have a
patient assessment instrument.
Mr. LEWIS. Do you plan to develop plans? Or, if so, when?
Mr. KUHN. Yes. That is the key here, and the real linchpin
of this whole discussion is that you need a standard patient
assessment instrument that can look at those common dimensions
that we need to be looking at for patients, whether it is co-
morbidities, functional status, diagnosis, and so forth, so we
can pull that information together and have it in a rather
seamless system. We have begun to work on electronic data
interchange where we can begin sharing that information. We
need to now start looking at those other elements. We hope to
be in a position that we can be testing products early next
year. It is something that is long overdue and that we are
working on at the agency right now.
Mr. LEWIS. Your agency has been looking to issues related
to post-acute care since the early nineties. Can you please
tell us what you have learned over the past 15 years and what
changes the agency has made to address the issues that have
been identified over the years?
Mr. KUHN. The big changes that have been made in the
nineties and particularly in the late nineties for which Mr.
Hackbarth provides some pretty good information in his
testimony, included some really rapid growth in these areas.
Within the Balanced Budget Act 1997 (P.L. 105-33), Congress
gave CMS the authority to begin moving to PPSs in these areas.
The agency has now completed transitioning to the PPS, and we
think that has really begun to put the brakes on this area in
terms of spending, trying to get better utilization, and trying
to get better classification of facilities, to make sure we get
the patients to the right place, but obviously we need to do
more. I think we are at a mature place now in terms of our PPS,
because we finished transitioning the last one at the beginning
of this year and that was the inpatient psychiatric facility
PPS. Now, while that is not a post-acute care setting, we have
now finished implementing all the PPSs. So, I think it is an
appropriate and timely hearing to begin thinking about the next
steps to move forward. All of us need to focus on post-acute
care right now.
Mr. LEWIS. Thank you very much. Doctor, thank you for being
here. The CMS has provided a three-year transition period to
phase in the 75 percent threshold. Based on your study, based
on your finding, RFs, do you think a transition period is
justified?
Dr. KANOF. Well, what you want to make sure is that CMS
(Medicare) is paying for the appropriate patient, and you want
to make sure that the payments are medically necessary. What
our data showed for looking at fiscal year 2003, was that in
fact if we were to use the transition rules, about 60 percent
of the patients had a condition that was on the list and also
had a co-morbidity, so that in fact it would have matched the
rules as played through in their transition. If, however, we
did not include the co-morbidities, then payment would have
been much lower, and less than 40 percent of the facilities
would have been able to be receiving payment as Medicare IRFs.
So, there is value in having this transition as--as we have
said both in our report and today, that we believe CMS needs to
do some refinement and clarify what are the appropriate
subgroups and go beyond just using diagnose for admissions.
Mr. LEWIS. Chairman, how about do you have anything to add?
Mr. HACKBARTH. MedPAC supports the concept of the 75
percent rule. The purpose is to assure that only appropriate
patients receive this intense and relatively high-cost form of
care. We have urged CMS to establish the criteria and the
proper diagnostic groups with a transparent process involving
clinicians that have experience in the field and also
clinicians that have experience with other types of post acute
facilities. We have suggested that it might be appropriate for
there to be a brief halt in the transition to allow that sort
of public process. We would also concur that it may well be
true, as GAO points out, that just a diagnosis level statement
is not precise enough and that there ought to be a more
detailed set of criteria to really make sure that the right
patients get there.
Mr. LEWIS. Thank you very much. My time is up. Madam Chair,
thank you for being so patient.
Chairman JOHNSON. Thank you. Mr. McCrery.
Mr. MCCRERY. Thank you, Madam Chair. I would like to pursue
this questioning Mr. Lewis started on the IRFs. Dr. Kanof,
Chairwoman Johnson and I wrote a letter several years ago
asking GAO to do a report on this subject; and indeed you did--
GAO did a report. Since then, I think the Chairman and I have
heard from some who have complained about the report, as you
might expect. One of the specific complaints, and I would like
for you to address it if you can, was that in the course of the
study, GAO only spent 1 day with the IOM and interviewed just
14 clinicians, the implication being you just didn't do your
homework. Is that true? If so, how do you justify that?
Dr. KANOF. Well, in fact, we too have heard some similar
questions, so I can answer that one. I know that specifically,
as you go through the methodology and the report, yes, we did
speak to many clinicians. We convened experts at, but we spoke
with many experts in the field and we spoke with IRFs and we
spoke with fiscal intermediaries, and we spoke with a total of
106 individuals, and 65 of them--so over half of them--are
clinicians. So, we really do believe that we have a wide
breadth of individuals that we spoke with.
Mr. MCCRERY. Do you think that you should conduct any
additional clinical research to further assess the needs?
Dr. KANOF. One of our recommendations in the report is
that, in fact we do believe that there is a need for more
clinical research. The CMS are working with the National
Institute of Health (NIH) to clearly convene more individuals,
not as much because the evidence really is not there to say
that there should be more conditions and the evidence isn't
there to show that you have different outcomes if you are in an
IRF or a SNF, but actually more to begin to think about what is
the research and how to find out the important question as to
who should be admitted to an IRF.
Mr. MCCRERY. Thank you for that explanation. Continuing on
this, you use the percentages that the GAO concluded regarding
how many IRFs could comply based on 2003 data. One piece of
data that we have been provided with is that only 6 percent of
IRFs could meet the 75 percent criteria in 2003. Does that
comport with your----
Dr. KANOF. That is true. That was if you--Mr. Lewis was
asking me--I believe he was asking me how many would work,
comply if we were using the transition.
Mr. MCCRERY. Phase-in.
Dr. KANOF. Right. So, in the phase-in it is about 60
percent. If there is no phase-in and you just go to the 13
conditions, it is 6 percent.
Mr. MCCRERY. Well, that would lead us to the conclusion,
wouldn't it, that when it is fully phased in, only 6 percent
would be able to comply.
Dr. KANOF. No, because you would have to assume that there
is no change in anybody's behavior between the phase-in and
2007. I am not disagreeing with you that it would probably be a
relatively lower number, potentially, than 75 percent, but in
fact the way that the phase-in is, is that there are these 3
years of the additional co-morbidities. In fact, many of the
IRF medical directors that we spoke with did acknowledge that
if they were to be paying closer attention to the diagnoses
that they were being admitted, they would be paying closer
attention to--in fact looking at the diagnoses that they were
being admitted for. In 2003 you have an environment where CMS
is not really -has not looked at the 75 percent rule. As Mr.
Hackbarth explained, there is really no incentive for anybody
to be thinking twice about where somebody should be admitted.
That is why I am not sure that the 6 percent is correct.
Mr. MCCRERY. Well, in any event, I think one thing that we
need to consider is the financial viability of these rehab
centers if they have to make the changes necessary to come
under compliance under the 75 percent rule. That is the big
question. Do they go away if they have to comply, or are
constraints so severe that they can't get enough patients under
those conditions to sustain themselves financially? Given
that--just one last question on this, Madam Chair--do any of
you think that the rule should be reexamined with an eye toward
more leniency for more than 3 years as we get more data? Or do
you think the three-year phase-in is exactly the right path
that we should be on?
Dr. KANOF. I think one of the important points, though,
that I said in my oral statement, too, is that--and I
understand the question you are asking--is, though a
significant amount of the patients from the 2003 data that were
being admitted to IRFs are single joint replacements of knee
and hip, there is evidence that those are individuals that do
not need to be admitted to IRFs. So, I think that in addition
to the question in terms of the transition, I think clearly
also that what we need to consider is are we spending
appropriate dollars for individuals in these settings.
Mr. MCCRERY. I don't question that. You didn't really
answer my question.
Dr. KANOF. I think that the transition as proposed gives--
CMS gives IRFs the ability to process patients, learn to do
assessments, allows CMS the ability to develop finer refinement
of the rule. So, the answer, as I said to Mr. Lewis, would be
yes.
Mr. MCCRERY. Mr. Kuhn, would you agree?
Mr. KUHN. It is a little bit premature to judge whether
additional leniency needs to be built into the system. We did
build additional leniency in the system when we published the
rules last year, when we moved from ten conditions to thirteen
conditions. I think, as Dr. Kanof said, there are going to be
behavioral changes by these facilities. I think we need to see
more data, see how they are transitioning, seeing how they are
working as they move forward. The key here, as she said, is
that we don't want Medicare to be at risk of overpayments for
these services, because I think that clinical evidence in the
area of orthopedic joint replacement, as she indicated, is
rather weak concerning whether individuals should be in these
facilities.
Anecdotally, I recently saw a news article about a
particular facility that decided to convert itself from a
rehabilitation facility to a sub-acute care facility, an SNF.
Most of the employees were able to transfer over to the new
facility, but I think it is pretty clear that the patients are
still getting the same level of services they need but in the
right setting. The behaviors and payment systems, are driving
us to change here rather gradually. I think more data is
needed. We need to all monitor it closely, because I think your
concern is genuine that these patients should get the care that
they need and we want to continue to work with all the
stakeholders to make sure that that happens.
Mr. MCCRERY. Thank you very much. Thank you, Madam
Chairman.
Chairman JOHNSON. Mr. Thompson.
Mr. THOMPSON. Thank you, Madam Chair. Thanks to the panel
Members for being here. Mr. Kuhn, MedPAC says, and I think I am
quoting you correctly, that the system doesn't work well. We
just heard that in the testimony. Your agency has been looking
into issues related to post-acute care for the past 15 years or
so. Can you give us an idea of what you may have learned and
what recommendations your agency has made to improve matters?
Mr. KUHN. That is a good question. I think we have got our
arms around a couple of things. First I think we have really
been able to slow some of the growth in some of the areas of
spending that has been out there, and I think that has been
effective, although we still see growth in this area. We have
also learned that there is the need for additional research in
a lot of these areas, particularly for LTCHs, and also for IRFs
and others.Importantly, what we have really seen is that, now
that we have finished the work with all the PPSs, it is time to
move the whole system forward and think about a site-neutral
payment, one that focuses on the patient instead of the name on
the door of the facility. Currently, if it is one kind of
facility, you pay one rate and you pay another facility another
kind of rate, but the money really needs to focus on the
patient for the entire course of care. That is one of the big
lessons here, and all of us need to be thinking about this in
the future.
Mr. THOMPSON. Thank you. Mr. Hackbarth--and I didn't ask
them to say that--but the site-neutral payment issue is
something that has interested me a lot. When we talk about care
versus the site, how much of the site part of it is determined
by regulatory changes or even State law in some instances? It
seems to me we have the same patients, we are just moving them
around to follow the money, and not in a negative sense.
Everybody that is providing health care today is struggling to
do so, and they are trying to figure out what works best for
them and how they can maximize their reimbursements to continue
to provide quality health care. If in fact that is what we are
doing, it seems to be in conflict with what you had said
earlier about the high quality and appropriateness of care at a
reasonable cost.
Mr. HACKBARTH. Well, let me go back to your first question:
How much of a difference in cost is attributable to a
difference in regulatory requirements and the like? I can't
give you an answer to that. Surely some of it is.
Mr. THOMPSON. Not so much the cost, but the care versus the
site; where you are taking care of the same people, just you
are doing it in a different location----
Mr. HACKBARTH. The issue oftentimes is whether a given
patient needs that particular type of care that may be more
intensive and, therefore, more costly. You can have--we did an
analysis of care of patients with knee and hip replacements,
that some of them go home and receive home health care or
outpatient therapy, some of them go to IRFs, and some go to
SNFs. Well, in fact although they all have the knee replacement
in common, they are very different in other respects, in terms
of things like care givers at home to support them, in terms of
their clinical characteristics. So, a diagnosis alone, a common
diagnosis doesn't tell you all you need to know about the
differences in patients. So, if we have a patient that could go
home--and orthopedic surgeons tell us that most patients,
Medicare patients with a single knee replacement can go home.
If they end up in an IRF, they may not get poor-quality care,
but they may get much more expensive care than they need. That
is our concern.
Mr. THOMPSON. Thank you. A question--and I guess, Dr.
Kanof, I don't want you to feel left out, so I will ask you.
How do we balance that need for data vis-a-vis the need for
health care, and, at the same time, try and consider the morale
of the health care providers? I can't tell you how many times I
have heard from providers that they feel like they are data
collection employees, and they are spending most of the time at
their home health visit collecting data. I am sure some of it
has got to be valuable, but how do you balance that need to
make sure it doesn't conflict with the health care part of it?
Dr. KANOF. Well, I think that one of the common things we
have all said is that one way to balance this all is in fact to
try to create more of a uniform assessment tool that we could
then use regardless of what setting you were in, so that from a
health care provider they don't need to sit there and say,
okay, this is my home health patient and this is my Durable
Medical Equiptment (DME) patient and this is my SNF patient,
but that in fact there is one tool that might have certain
questions on it that you might ask or not ask, depending upon
the setting, but that there is more of a uniform way of asking
the question. One of the interesting distinctions between all
the current tools is that they all have, in fact, different
grading scales, so on one you have to remember that the lowest
number is the high and the high is the low. So, I don't think
from a health care prospective or a health care provider
prospective you can eliminate the work involved with the tool,
but there are many ways that we could develop tools that are
more user friendly, client specific, patient specific, and
would still give us the information for both payment and
quality. I don't want to forget quality.
Mr. THOMPSON. Please hurry. Thanks.
Chairman JOHNSON. Mr. Hulshof.
Mr. HULSHOF. Thank you, Madam Chairman. Listening to the
discussion about home health a little bit ago, while I wasn't
honored to serve on this Subcommittee, I remember the
discussions about the Balanced Budget Act 1997 as a freshman
Member on the full Committee. I remember, Mr. Hackbarth, you
touched on this, that there were some substantive changes that
we made. We saw the rapid growth in home health, and we saw--
let me characterize--some particular States where the growth
was really going. So, we painted with a very broad brush to try
to rein those in, and, as a result of that, though, there were
many efficient good home health agencies that folded their
tents in the aftermath of that as well. Just a parenthetical
comment.
I do want to ask you, though, Mr. Hackbarth, because as we
look now at the rapid growth in long-term care, I think--and my
characterization of what you said was, number one, no clear
criteria, and number two, the incentives are skewed, in my
characterization. Is that a conjunctive or disjunctive? In
other words, if there were clearer criteria, would the
incentives be okay? Or is it clear incentives and the
incentive--excuse me, clear criteria and, by the way, the
incentives don't really fit?
Mr. HACKBARTH. That is a good question. MedPAC's initial
recommendation on LTCHs was to develop the criteria. So, if you
can't change the incentives, at least have criteria on who it
is that needs this expensive type of care. We thought that
there ought to be both patient criteria and facility criteria.
This is what it means. These are the services that LTCHs should
be delivering. So, we thought that is the easiest first step.
As I said in my opening statement, that doesn't deal with the
incentive issue. If we really want the decisions made properly,
we need to address that as well. There are a couple different
paths that you might take. One is to bundle all the post-acute
care payments in a lump, and then give somebody responsibility
for managing that and holding them accountable for both quality
and cost performance. Another approach would be to establish a
case manager that doesn't bear the utilization risk, but they
are an impartial party evaluated under quality performance in
getting patients to the right settings. So the first step is
criteria. We don't think you can stop there. In the longer run
we have got to do something about the incentive issue as well.
Mr. HULSHOF. I appreciate that. Mr. Kuhn, we sought some
information from my home State of Missouri, tried to get some
data, and so we turned to the Missouri IRFs. What they did was
to take the last six months and then extrapolate to a full year
to come up with an annual estimate. What they told us was that
17,000 patients would be treated over a one-year period. As all
of us have expressed, as the 75 percent rule is being phased
in, there is a lot of concern about how that is going to impact
the 17,000-plus folks that are receiving this care.
I have got the--Mr. McCrery referenced the April 2005 GAO
report, and we have batted that around a little bit. The
report's suggestion--and Dr. Kanof echoed that in her testimony
today--that a patient's medical condition or diagnosis in
isolation is not, in my view, a fully sufficient measure by
which to classify IRFs. In fact, let me--I almost applauded
what you said a moment ago when you said let us focus on the
patient, the patient's functional status, functional decline,
motor and cognitive function, functional disability. These
things in a best-case scenario would be taken into account. Let
me just even--a quick personal note. Two years ago my mother-
in-law, 57 years of age, an active Licensed Practical Nurse,
one night, brain aneurysm. So, our families experienced in a
very real way--and I would even say that not just the initial
diagnosis after this aneurysm, but even to see the functional
changes over the last two years in this case. So, what is CMS--
give us some wisdom as far as CMS trying to incorporate some of
these functional measurements into the rule.
Mr. KUHN. I'd like to provide a couple of quick
observations. First, concerning the data, we have been looking
at some data elsewhere that others have been bringing forward
to us. Remember in 2002 we suspended the enforcement--a
moratorium on the 75 percent rule. Between then and July of
2004, when we implemented the two-year moratorium of the new
rule, and there was no enforcement of the rule, we saw
utilization spike. So, for those that are saying that we are
seeing this rapid reduction in terms of the number of people
being served in IRFs, during the moratorium there was a spike
in admissions. If you go back to maybe a baseline in 2002, you
might come out with a different number. This is just a
cautionary note on the interpretation of those data.
Second, when we talk about the folks that aren't being
served in rehabilitation facilities now, when you ask the
industry where they are going, it appears that they are getting
services elsewhere, for example, in an SNF or through home
health services. They are not going without services. I think
that is an important issue. To address the key point that you
raised in terms of what we are going to do next, we have this
classification system with 13 categories that we are using with
IRFs. We are looking at research in this area. We convened a
panel with the National Institutes of Health in February of
this year; we will receive a recommendation from them about
next steps so we can begin to look at functionality with some
of these issues. We think further research is an important next
step, and that is how the Agency plans to proceed. We have the
effort to enforce the classification system, but we are not
stopping there. The research will continue, because we will
continue to look in more detail at this area. As Dr. Kanof
said, there is not a lot of research in this area, so we all
need to step up to the plate to help support that and make that
happen.
Mr. HULSHOF. Thank you.
Chairman JOHNSON. Thanks. I am going to ask a couple of
summary questions because we have this vote and then we have
ten or eleven five-minute votes. So, I am sorry to
inconvenience the next panel, but I think we will start you all
at once after this series of votes. Actually, if there is
anyone who can't stay, because that is an hour's delay, would
you--would one of the staff members go back? Kathleen will come
back and let you know; maybe we can get in one or two before we
leave. I think in kind of wrapping up--and we have all
acknowledged that there are big problems in the system, that
our payment system doesn't assure that patients get to the
setting in which they get the care they need, for the least
amount of public dollars. Five years ago we did ask CMS to do a
report on this, and it was due in January. Now, recognizing
that CMS has had a lot of other responsibilities as well,
nonetheless you have all been concerned about it, and we have
got bits and pieces. Why aren't we closer to a single
assessment tool and to a structure that uses that tool to at
least direct the first level of flows, and then to pick up at
the institutional level the more precise detail that we need
for payment?
Mr. KUHN. I would just make this observation, Madam
Chairman, that sometimes progress is measured in inches rather
than feet. We are making progress in this area, perhaps not as
rapid as some would like to see, but we are making progress in
terms of things that we are doing. In terms of the report, you
are absolutely right. We owe the Congress a report and we did
not meet the deadline that we had out there. We are doing well
on the report. It is a much more complicated issue than we had
originally thought. I wish I could give you a certain time when
we could have it deliverable to you; I can commit to you that I
will have CMS staff follow up with Committee staff on a regular
basis to give updates, and as we get information we will make
that available to you as well, because this is an important
topic, and the sooner we can give information to you all so you
can have good data from which to make decisions, we would like
to do that for you. So, we will continue to work to get that to
you as soon as possible.
Chairman JOHNSON. Thank you. I appreciate that. I hope that
you will continue to work as you have with the LTCH on the
material that they are developing, which is probably more
specific patient-based material than I think anything I am
aware of the Federal Government doing. So, I think that would
be useful.
Mr. KUHN. One quick thing about LTCHs. Just to let you
know, as part of the effort we are doing the research.
Actually, in the next week or two we will be in the field with
that research, visiting the facilities. We hope to have a
report by the fall, and we hope to be able to include that in
next year's regulation cycle. So, we are making progress there
as well.
Chairman JOHNSON. I wonder how you view your 25 percent
rule for the LTAC in the context of this discussion about
patient-centered health needs.
Mr. KUHN. When we looked at the LTHC issue, we saw a real
incentive to unbundle services in these facilities when they
were co-located in the same facility. To a degree, we were
seeing two payments for the same episode of care, and that
concerned us a great deal. So, we tried to phase into this new
system at the 25 percent level. We made a number of exceptions
to consider whether they triggered outlier payments, whether
they were in rural facilities and whether they were the
dominant hospital in a marketplace, and we tried to create as
many opportunities there as well. Importantly, we said we
needed to move pretty aggressively on research dealing with
patient-specific criteria, things that MedPAC had brought
forward. Again, we hope to have that report in the fall and
move that into the immediate regulation cycle. So, I think we
will hit our milestones on this one and keep the process moving
forward.
Chairman JOHNSON. I hope when we get to that point we can
eliminate the 25 percent rule, because it is absolutely
arbitrary and there are examples of pairing long-term care
institutions with institutions that do a lot of heart surgery
or other kinds of procedures that clearly will result in a
referral to an LTAC and to require that we pay the $850
ambulance fee to ship them someplace else, so that the other
hospital can pay $850 to ship someone else into that LTAC bed a
few miles down the road. You get into that kind of bizarre
dance because you are looking at the source from which the
referral came rather than the patient's need. If the patient is
qualified and is going to get that care here or ten miles down
the road, we should not be insisting that they be shipped ten
miles down the road. So, the arbitrary impact of the current 25
percent rule is, in my mind, anti-patient-centered health care,
but also just one more thing that pumps our costs up without
any benefit to the patient.
So, I hope that we will be able to move to a criteria-based
system and get rid of some of these kind of arbitrary policies
that we put in place during the years when we had inadequate
criteria. Thank you very much for your testimony. I look
forward to your input as we move down this road. We must move
down it, and we cannot actually move down it as slowly as some
of the testimony sort of implies that we have in the past and
we will in the future. The future cannot repeat the past in
regard to the criteria-based system that we need to develop for
post-acute care. Thank you very much for being here. The
Committee will reconvene five minutes after the last vote. So,
for those of you on the next panel it will be at least an hour.
Thank you. My apologies.
[Recess.]
Chairman JOHNSON. The hearing will reconvene. Other Members
are on their way, but in deference to the witnesses who have
been waiting such a long time, my apologies again, on the
record, for having had to take such a long break for the votes.
We are reconvening now, and we would like to start first with
Ms. Ousley.
STATEMENT OF MARY OUSLEY, EXECUTIVE VICE PRESIDENT, SUNBRIDGE
HEALTHCARE, ALBUQUERQUE, NEW MEXICO, ON BEHALF OF AMERICAN
HEALTH CARE ASSOCIATION
Ms. OUSLEY. Good afternoon, Madam Chairman and Members of
the Subcommittee. I appreciate the opportunity to be here today
to provide a perspective and recommendations on how to improve
the efficiency, quality and reimbursement uniformity of post-
acute care. I am the immediate past Chair of the American
Health Care Association, representing over 11,000 Members and
the 1.5 million individuals that we serve each day and the two
million care givers that provide that care. I would like to
thank the Chair for her leadership on this issue and her
commitment to ensuring America's seniors receive the highest
quality care. Like many of the policy debates regarding the
financing of our Nation's health care system, the problem we
are discussing today relates to the fragmented and sometimes
irrational nature of our health care services payment
structure. In post-acute care, it seems that we really have it
backward. Our post acute payment structure is tied to where the
patients receive care, not the actual services that they
require. As highlighted and talked about earlier, in the June
2004 report to Congress, MedPAC examined all of these
significant differentials and distinctions in care across the
post acute continuum. Not only does CMS require different
patient assessment instruments for three of the four post acute
providers, the law also requires each provider type to be
certified under different criteria. The CMS ensures patient
safety and quality in each setting through different regulatory
structures.
Obviously, the physical settings where patients receive
care are very different, from the home to the nursing facility
to the hospital. Post-acute providers, physicians and others,
involved in patient care believe in hierarchy of acuity among
the different settings and assume that patients with the
highest clinical needs will actually receive care in the
highest acuity setting. Research and experience show that
different post acute settings actually serve very similar
patients. An overlap in patient population can occur for
legitimate non-clinical reasons or clinical reasons that are
not measurable by research. However, that overlap is many times
inappropriate. For certain DRGs, IRF payments can be up to
three times more than skilled care, and for LTCHs, as much as
ten times more than skilled care. Some of this is clearly due
to variations in severity of illness of our patients, but
because there is no common patient assessment tool or outcome
measures across all settings, it is absolutely impossible to
ascertain whether patients are being treated in the most
appropriate setting and whether resources are being allocated
efficiently and appropriately.
We believe that it is essential for CMS to develop a
patient-centered core uniform screening and assessment tool for
post-acute care and a uniform integrated payment system based
on this comprehensive assessment tool. Until CMS can finalize
and apply a uniform system, we do believe we can do a better
job today in placing post acute patients. We support, and the
American Health Care Association supports, the continued use of
the QIOs to review the appropriateness of placement for
patients with hospital stays, CMS should continue to apply
hospital discharge planning that is required today by law and
regulation, and it should do so as a starting point to
standardize post acute assessment tools. We also believe it is
very important to implement the 75 percent rule to ensure IRFs
are treating appropriately placed patients.
Madam Chair, you have heard from us on many occasions and
you have heard actually from me on several different occasions
regarding the importance of sustaining our quality initiatives.
HHS has noted in several recent reports they are working. The
quality of care and services in our Nation's nursing homes is
improving. Nursing facilities currently publicly disclose the
information to patients and their families on quality
indicators. All providers should disclose comparable
information. This will include increased patient knowledge and
improve the quality of care and services delivered. Also, we
believe that any system we construct should allow for
flexibility so that clinical judgment can be used effectively.
A beneficiary's clinical profile may indicate a need for home
health, but home health may not be available or they may not
have the capacity to take a new patient. Therefore, the system
must be flexible to allow for facility or market limitations.
In the final analysis, there are many potential changes
that would better align financial incentives with clinical
placement. Tightening and enforcing the new and existing
certification requirements are one, and enhancing--enhancing
the role the QIOs are playing in reviewing the appropriateness
of placement. Madam Chairman, at a time when the President and
Congress are being forced to consider budget cuts in health
care programs, the first priority must be to ensure that we are
using existing resources efficiently and effectively by
establishing a post-acute care structure that is patient
centered, not site centered, we believe that can happen. We
believe that this Congress must and should make the development
of the common patient assessment tool one of its highest
priorities, and we look forward to working with you and this
Committee on this issue. Thank you very much.
[The prepared statement of Ms. Ousley follows:]
Statement of Mary Ousley, R.N., Executive Vice President, SunBridge
Healthcare, Albuquerque, New Mexico
On behalf of
The American Health Care Association (AHCA)
Good morning Madame Chair, and members of the Subcommittee. I
appreciate the opportunity to be with you here today, and to provide
you with perspective and recommendations on how to improve the
efficiency, quality and reimbursement uniformity of post-acute care.
My name is Mary Ousley--and I am immediate past Chair of the
American Health Care Association. I speak today on behalf of all
members of the American Health Care Association (AHCA). We are a
national organization representing nearly 11,000 providers of long term
care, providing critical long term care services to more than 1.5
million elderly and disabled people every day and employing more than 2
million caregivers.
I have been in the care giving profession for nearly three decades.
I am a registered nurse and a licensed administrator. I am intimately
familiar with the challenges of being on the front lines of care
giving--and highly cognizant that providing quality care to our
seniors, necessarily, is a collective and collaborative effort.
I have worked formally and informally with the Centers for Medicare
and Medicaid Services (CMS) and its predecessor, the Health Care
Financing Administration (HCFA), in various capacities on many issues
representing the long term care profession.
I'd like to thank the chair of this distinguished subcommittee for
her leadership on this issue, and for her commitment to ensuring
America's seniors receive the highest quality health care our great
nation has to offer.
Like many of the necessary policy debates we now see on Capitol
Hill regarding the financing of our nation's health care system, the
problem we are discussing today relates to the excessively fragmented
and irrational nature of our collective health care services payment
structure.
When it comes to post-acute care, we now have it backwards: our
post-acute payment structure is tied to the institutional setting in
which patients are placed--not to the services required by patients.
In its June 2004 report to Congress, the Medicare Payment Advisory
Commission (MedPAC) examined the significant payment differentials and
distinctions in care provided across the post acute spectrum.
CMS requires different patient assessment instruments for three of
the four post-acute care provider categories. The law requires that
each provider type be certified under separate criteria. CMS ensures
patient safety and quality in each of these settings through vastly
different regulatory structures. In addition, the physical settings in
which patients receive care greatly differ, ranging from a patient's
home to a nursing home to a hospital.
Most post-acute care providers, physicians and others involved in
patient care believe in a hierarchy of acuity among the different
settings and assume that patients with the highest acuity clinical
needs will receive care in the highest acuity setting. Some research as
well as provider experience shows that different post-acute care
settings sometimes serve similar patients. This overlap in patient
populations can occur for legitimate non-clinical reasons or clinical
reasons that are not measurable by research; however, the overlap is
sometimes inappropriate and results in Medicare overpayment.
For certain DRGs, IRF payments can be up to three times more than
SNF payments, and LTCH reimbursements can be up to ten times more. Some
of this is clearly due to variations in severity of illness, but
because there are no common patient assessment tools or outcomes
measures across all settings, it is not possible to ascertain whether
patients are being treated in the most appropriate setting, and whether
resources are being allocated efficiently and appropriately.
First and foremost, it is essential for CMS to develop a patient
centered core uniform screening and assessment tool for post acute
care, and a uniform integrated payment system based on this
comprehensive assessment tool.
But until CMS can finalize and apply a uniform system, it can do a
better job of placing post acute patients in the most appropriate care
settings. For example, AHCA supports the use of hospital discharge
planning as a starting point to standardize post acute assessment
tools.
For patients with prior hospital stays, CMS should continue to
apply hospital discharge planning that is already required by law and
regulations. AHCA also supports continued Quality Improvement
Organization (QIO) review of the appropriateness of patient placement.
CMS should also implement the ``75 percent rule'' to ensure IRFs
are treating appropriately-placed patients and not those who could be
effectively treated in SNFs.
Madame Chair, you have heard from us on many occasions regarding
the need to maintain and sustain our quality initiatives--which, as HHS
has noted in several recent reports, are working. Nursing facilities
currently disclose information to patients and their families on
various quality indicators. All providers, across the board, should
disclose comparable information. This will increase patients' knowledge
base and improve the quality of care delivered by all providers.
As this Committee will readily agree, any system we construct
should allow for flexibility, so that clinical judgment can be
effectively exercised in the best interests of patients. Even though a
beneficiary's clinical profile is a good match for home health care, a
home health agency may not be available or may not have capacity to
take a new patient. Therefore, the system must be flexible enough to
allow for facility or market limitations in post-acute care supply.
In the final analysis, there are many potential changes we could
make within the existing system that would better align financial
incentives with clinical placement decisions. These include ideas such
as tightening and enforcing new and existing certification criteria for
IRFs and LTCHs, and enhancing the role of QIOs in reviewing
appropriateness of patient placement.
Madame Chair, at a time when the President and Congress are being
forced to consider budget cuts in many essential health care programs,
the first priority must be to ensure we spend existing resources wisely
and efficiently--and in a manner that best serves our seniors as well
as our taxpayers.
By establishing a post-acute care structure that is patient
centered, not site-centered, we can indeed do so.
Despite all of the big picture changes now being sought on the
Medicaid and Social Security fronts, the development of a common
patient assessment tool for post-acute care services must be a high
priority in this Congress--and we look forward to working with you and
this Committee to ensure this issue receives the focus and action it
deserves.
Chairman JOHNSON. Thank you very much, Ms. Ousley. Ms.
Raphael.
STATEMENT OF CAROL RAPHAEL, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, VISITING NURSE SERVICE OF NEW YORK, NEW YORK, NEW
YORK, ON BEHALF OF THE VISITING NURSE ASSOCIATIONS OF AMERICA
Ms. RAPHAEL. Good afternoon, Madam Chairwoman. I am pleased
to be here on behalf of the Visiting Nurse Associations of
America, the national association for nonprofit, community-
based Visiting Nurse Agencies (VNA) across the country. I
appreciate the opportunity to help the Subcommittee review the
current Medicare post-acute care system and determine whether
some areas, in fact, are in need of reform. As you pointed out,
post-acute care is a very important part of the health care
system, not only because because of what we heard, that one-
third of people who leave hospitals go on to post-acute care,
not only because it is likely to grow, but also because what
happens in post-acute care affects what happens in the rest of
the system. We know the first 60 to 90 days after someone has
an acute episode are really pivotal. We know that we can do a
lot to prevent re-hospitalizations and those costly transitions
in and out of acute care. Basically, the VNAs have two
recommendations.
Like my colleague, we believe the post-acute care system
should be built around the patients, their needs, and not
around facilities. Second, I think we have to move to enable
Medicare to be what I would call a ``value purchaser'' in the
future of post-acute care. We know the system is very complex,
not only because of what we have heard about the difficulty of
commonalities across sites, but also because of what you, Madam
Chair, pointed out this morning. We bring home 1,000 people
from hospitals every week, and I can tell you that often the
process of decisionmaking is very compressed. A family will get
a call in the morning that their family Member is being
discharged that day and all of the decisions have to be made
within a few hours. The pressure upon discharge plans is
enormous, and many patients and families really are not
educated about what their options are; and I think this is the
context in which we currently operate. We do believe we need to
move toward a common assessment system. I call it a ``system''
because it is more than a tool. We need a common assessment
process, and we really need to build that on a foundation of
understanding how similar are the patients who were cared for
in these different sites, what are the services, and what is
the mix and intensity, because we don't really have solid
evidence that will inform us as to the degree of overlap in
suitability.
I can speak for home care. Thirty-1 percent of the patients
that we take care of at VNAs are in rehab, but I believe that
for nursing homes it is 75 percent and for rehab facilities it
is probably 100 percent. Many of the people that we see do not
have conditions that require the standard rehab. Many of them
have congestive heart failure, complex diabetes, pulmonary
disease, and so forth. So, I think we need to start with
understanding the patients. Now, much of what we do in a home
care setting is similar. If someone has had a stroke, we
continue the treatment on anticoagulants. We do work on rehab,
physical, occupational rehab, and dealing with language
impairment. We do monitor patients to try to prevent someone
from landing back in the hospital, but some of what we do is
very different because we are focused on the care giver,
supporting that wife, husband, daughter, son, and so forth. We
are also focused on teaching the patient because that patient
has to live with some degree of impairment for the rest of his
or her life. We are focused on the underlying diseases, like
hypertension, which contributed to the stroke in the first
place. So, I think we really need to devote time and research
to understand how these sites actually compare.
I also am a believer in involving the patient in
assessment. I always say, ``Quality is in the eye of the
beholder,'' and we need to find out from the patient whether
they think they have made progress and have had a good result.
I do believe that a common assessment instrument has to
complement what we do in our own sites. We use OASIS. It is a
system that measures outcomes and has a mechanism for payments
which I think is unique; we want to hold on to that. You need
that instrument to do care planning, to monitor and change the
care plan as the person's condition changes. We believe that
the implementation of OASIS, albeit painful at times, has
really caused us to focus on outcomes. We no longer provide a
visit; we are really taking care of a patient to produce the
best possible result. That has been an important change, and it
has also enabled us to move toward public disclosure and
compare outcomes in the home care field. So, I believe that we
need to really not replace what we have, but find a way to
supplement it.
I think that as we look to Medicare as a purchaser of post-
acute care, we heard this morning that there are substantial
differences in costs in these settings, and we do not know what
the outcomes are for the same patients who are cared for in
each of these settings. This is what we do know: We do know
that people prefer to be in their own home whenever possible.
We do know that the States are trying very hard, as we speak,
to rebalance their systems to move from institutionalization to
home- and community-based care wherever possible and wherever
appropriate. So, I believe that in order for Medicare to get
the best value for the dollars it spends, we should have as our
guidelines to always be able to help patients make choices that
will be the least restrictive, least intense and least costly.
I would like to conclude by saying that I do not believe that
decisions are always made, nor should they always be made,
solely on clinical grounds because, legitimately, people make
decisions based on proximity, capacity, confidence in an
institution or an organization, availability of care givers,
and cognitive status. All of those need to be knit together to
create the post-acute care system of the future. Thank you very
much for the opportunity, Madam Chairman.
[The prepared statement of Ms. Raphael follows:]
Statement of Carol Raphael, President and Chief Executive Officer,
Visiting Nurse Service of New York, New York, New York
Madam Chairwoman, Congressman Stark and Members of the
Subcommittee:
Good afternoon. My name is Carol Raphael and I am the President and
CEO of the Visiting Nurse Service of New York (VNSNY). VNSNY is the
largest non-profit home health agency in the United States. Based on
112 years of experience in serving the diverse population of New York
City, VNSNY has an in-depth understanding of the health care needs of
some of the most vulnerable individuals in our country and on how to
cost-effectively meet those needs. In 2004, VNSNY had an active daily
census of 24,000 patients and delivered more than two million home
visits.
I am pleased to be here today on behalf of the Visiting Nurse
Associations of America (VNAA), which is the official national
association for non-profit, community-based Visiting Nurse Agencies
(VNAs) across the country. For over one hundred years, VNAs have shared
several common goals: to care for the sick and the disabled, to help
people recover their strength and independence, to partner with their
communities in improving public health care, and to assure that all
people, rich or poor, have access to the home care they need.
VNAs created the profession of home health care over a century ago,
and it is our hope and intention to provide high quality home care for
at least the next one hundred years. That is why we are grateful to
help the subcommittee explore current Medicare policies for post-acute
care and determine whether some of those policies are in need of
reform. This is particularly important in light of the anticipated
pressure that will be placed on the health care delivery system as the
baby boom generation retires and begins to access post-acute and long-
term care services on a large scale.
At the outset, the VNAA agrees with the subcommittee that post-
acute care should be more patient-focused rather than facility-focused.
Decisions about where individuals receive post-acute care should be
determined by patient characteristics and needs. Medicare currently
pays for post-acute care in four separate settings--Home Health
Agencies (HHAs), Skilled Nursing Facilities (SNFs), Long Term Care
Hospitals (LTCHs), and Inpatient Rehabilitation Facilities (IRFs). Each
payment system uses different eligibility criteria, units of payment,
quality measurements and assessment instruments. We believe it is
important to conduct research on patient characteristics of those
served in each setting in order to better understand their common needs
and understand the degree to which services overlap among the different
settings.
The VNAA therefore recommends that a mechanism be developed that
compares patient characteristics, patient outcomes and costs across
settings. We further recommend that a uniform assessment process be
developed to assess patients at the same points in time, such as at
admission and every 60 days.
A post acute care assessment process should not replace OASIS
(Outcome Assessment Information Set) or perhaps any other existing
tool, but should have the specific purpose of identifying upfront what
type of post acute care would produce the best outcomes for an
individual for the least amount of money based on standard criteria and
patient choice. In order to do this, VNAA believes that it is essential
to begin comparing patient characteristics (in order to identify the
overlap of such characteristics), outcomes and payments across post-
acute care settings. Once the best setting for post-acute care is
identified, an assessment instrument specific to that setting can then
be used.
Current patient assessment and payment systems
CMS's conversion of the four different provider settings to
prospective payment systems during the past six years happened
sequentially rather than concurrently. Each assessment tool had its own
purpose and often the original purpose for the tool was different than
its primary function today. In the case of home health care, the OASIS
instrument was conceived as a joint effort by CMS and the home health
community to develop an outcome measurement tool rather than a tool for
predicting costs and reimbursement. The goal was to select the best
variables to measure the positive outcomes of home health care. It was
also developed to assess an individual's ability to function in his or
her own home. When the Congress mandated the creation of the home
health PPS system in the Balanced Budget Act of 1997, OASIS was adapted
for payment purposes because it was the best tool for predicting costs
available at the time and would enable CMS to implement PPS
expeditiously.
The assessment instruments that have been employed in other post-
acute settings were adopted for specific purposes unique to those
settings as well. Each was designed with an eye toward the unique
aspects of the care model involved rather than with consideration of
commonality in patient description across care settings. For example,
the IRF assessment tool was shaped to evaluate only rehab outcomes.
Therefore, each assessment tool carries with it unique metrics that are
not necessarily compatible in other settings.
During my six year tenure as a MedPAC commissioner, I was a
proponent of ascertaining the degree to which a uniform patient
instrument could be developed. I thought that given MedPAC's concerns
around the SNF instrument (MDS), which was originally designed for care
planning for long-stay patients, and concerns about the RUGs III
system, it made sense to use those concerns as an opportunity to do
more standardization across post-acute care settings. However, MedPAC
staff found that the definitions of care, the time periods for
assessing patients, and the scales used varied to such a degree that it
would be difficult to move toward consolidation.
Uniqueness of Home Health Care
A thorough understanding of the differences of the various post
acute care settings will help Congress and CMS understand what is
comparable across provider settings and recognize which aspects of each
care model are integral to that care model and therefore not
comparable. Each of the settings has unique characteristics. With
respect to home health care, we cite the following salient features:
Home health clinicians operate independently in patients'
homes and treat multiple acute and chronic conditions. They must be
trained to independently intervene in emergency situations, such as
kidney failure or congestive heart failure. They are responsible for
overseeing and implementing a patient's entire plan of care as
specified by the physician and in consultation with the physician.
Most beneficiaries express a strong preference for home
care rather than institutionalization. Home health agencies have
enabled millions of people to stay in the comfort of their own homes
who might have otherwise been in more restrictive settings.
Home care is cost-effective; the Administration and the
National Governors Association want to ``rebalance'' Medicaid
expenditures in favor of home and community-based care. The differences
in cost in post-acute settings can be substantial. IRFs are paid on a
per case rate and costs can range from about $5,000 to $17,000
depending on functional status and co-morbidities.
According to the 2004 Annual Statistical Supplement to the Social
Security Bulletin, the average cost to Medicare for 60 days of home
health care in 2004 was $2,213. In contrast, the average cost to
Medicare for 60-days of skilled nursing facility care was $28,560. And,
the average cost to Medicare for only one day in the hospital was
$3,608 in 2004.
However, recent data from MedPAC demonstrates a downward trend in
the use of home health care following hospital discharge. A June 2003
MedPAC report states,'' we find substantial declines in the use of home
heath care, increases in the use of skilled nursing facilities and
other post-acute providers, and some substitution of SNFs for home
health services following hospital discharges.'' In addition, the
report shows that from 1996 to 2001, post-hospital discharge home
health care utilization fell from 108,529 episodes to 59,101 episodes,
yet SNF utilization increased from 52,710 to 67,647 episodes. All other
post acute providers' post-hospital discharge utilization increased
from 23,517 to 31,163 episodes.
Development and Benefits of OASIS
Recognizing the challenges of developing one assessment tool for
all post acute care settings, it is important to note that OASIS has
become a very valuable assessment tool for home care. For the first
time, OASIS has given the home health industry and the government
national data on publicly reported outcomes for home health care.
Before OASIS, there was absolutely no national data to benchmark our
clinical and operational practices in order to improve outcomes. Most
importantly, OASIS is a motivator for internal quality improvement
efforts and for focusing on patient outcomes because an agency can
clearly see progress between the admission assessment and the discharge
assessment.
Significant amounts of resources and time have been invested by
home health agencies in implementing OASIS into their businesses. The
complexity of the instrument creates a constant need for training and
retraining staff. Now that home health agencies are beginning to see
the value of the thousands of dollars that they have individually
invested on average in implementing OASIS into their practices, the
idea of transitioning to a wholly new assessment system would be
difficult to contemplate. In addition, OASIS is the result of over 10
years of research and testing and, therefore, no small cost or effort
on CMS's part. We hope that you will consider these issues and allow
considerable time and additional resources as part of any major
transition.
Other factors in determining post acute care setting:
Despite the desire for some uniformity based on a common assessment
process, there remain a number of reasons why an individual might go to
one post acute care setting as opposed to another and why a uniform
assessment tool would not necessarily capture these factors. These
include:
geographic variation in availability of facilities and/or
staff;
prevalence of different post acute care settings in
particular regions and their capacity;
patient and family choice;
patient's co-morbidities, obesity or cognitive
impairments; and
availability of family or informal caregivers.
VNAA recommends that the following occur:
1. The federal government should move forward in developing a
uniform assessment process for post acute care where there is overlap
in the types of patients served by different types of provider. To
achieve that goal, VNAA believes that it is essential to begin
comparing patient characteristics, outcomes and payments across all
post-acute care settings.
2. To ensure patient choice, patients must be made aware of their
options for all appropriate post acute care, preferably in advance of
hospital discharge.
3. There is a need to expand opportunities for patients to select
home and community-based alternatives to institutional care both as a
matter of cost-efficiency and patient preference. In general, patients
should go to the least intensive, least restrictive, and least costly
setting. This, of course, is dependent on reliable and ongoing data on
outcomes and cost-effectiveness. If the same type of care that is
provided in a SNF or IRF can be provided in the home at a lesser cost,
it would make sense for home and community-based care to be the first
consideration in the decision tree for patient placement after
hospitalization.
4. Implementation and transition costs of any new process must be
considered. The enormous expense of adopting new assessment
technologies cannot be ignored. This includes not only the development
and testing costs and crosswalks between existing payment and quality
systems, but also the additional investments that providers will have
to make for new technology and staff training.
5. The development of a system where different providers can
electronically access standardized medical records will inevitably
require greater uniformity in patient assessment and outcome reporting.
Perhaps these efforts could take place simultaneously. Standardized
descriptions for assessment could potentially be included in electronic
medical records. This would not only achieve economies of scale and
reduce duplication of effort, but could lead to ongoing improvement in
assessment, evaluation and payment policy.
Thank you once again for the opportunity to testify today. I would
welcome the opportunity to respond to your questions.
For more information, please contact Kathy Thompson or Bob Wardwell
at 240/485-1856(5).
Chairman JOHNSON. Thank you very much for your testimony.
Dr. DeJong.
STATEMENT OF GERBEN DEJONG, SENIOR FELLOW, NATIONAL
REHABILITATION HOSPITAL, AND VICE PRESIDENT, AMERICAN CONGRESS
OF REHABILITATION MEDICINE, INDIANAPOLIS, INDIANA
Dr. DEJONG. Thank you, Madam Chairman, Mr. Lewis and
Members of the Committee. My name is Gerben DeJong and I am a
Senior Fellow at the National Rehabilitation Hospital here in
Washington, D.C. I am a clinical and health services
researcher. I do not speak for any organization, constituency
or industry here today. I am a long-time student of American
post acute health care. I have studied it across all the
different industries: IRFs, SNFs, home health agencies and
LTCHs. We have been asked to address two main topics this
afternoon. One is the development of a common patient
assessment tool, and the second is the development of a more
rational post acute payment system. I would like to address
both of these.
First, with regard to a common patient assessment tool, I
believe that we do need a common patient assessment tool. The
MedPAC report that came out yesterday really underscores the
shortcomings of the present system. What it said is that we
have different tools with different purposes with different
time periods with different types of clinicians doing the
assessments using different scales and addressing sometimes
similar, but different domains and using different diagnostic
coding. I would caution us against a one-size-fits-all, all-
inclusive measure. There is an overlap in types of patients
across the four post acute industries, but there is also a
great diversity in the types of patients seen in post-acute
care. My great fear is that we will end up with a very large
and unwieldy assessment tool that tries to be all things to all
people. We have already been down this road. Back in 2000-2001,
CMS, at that time known as Health Care Financing Administration
(HCFA), was trying to come up with an MDS for post-acute care
that would eventually apply across all four industries. It
included about 400 data elements and 20 pages. I do not think
we really want to go there again.
My recommendation would be to keep it simple: Develop a
core instrument with the elements that are essential to
assessment, payment and outcome; allow for some auxiliary data
modules to be added to the core instrument to meet the needs of
individual sites and different types of patients, but do not
try to impose the whole thing on everybody. It is not going to
work; it will be overly burdensome. My written testimony
outlines several different steps in developing a more
parsimonious, well-grounded, valid, and reliable instrument,
and I will not go into that at this time. If Congress and the
Administration believe they need to do something quickly and
does not have time to do all the development work for a new
instrument, I would encourage them to seriously consider the
most parsimonious of instruments now in post-acute care and
that would be the IRF-PAI as a potential point of departure for
a system-wide instrument.
On to payment systems for a moment: Yes, we do have a very
irrational post acute payment system with four very different
PPS methodologies that differ in terms of unit of payment, type
of case-mix adjuster, number of case-mix groups, and type of
patient assessment tool. Some of the payment systems, in my
view, are very convoluted, especially the SNF-PPS based on the
MDS and the Resource Utilization Groups (RUG). I do not know
how anyone can live with that particular system. In going
forward I would urge caution. First, do no harm. I believe that
the post-acute care system has gone through a lot of upheaval
over the last decade. We had tremendous consolidation from 1993
to 1997. We went through the managed care revolution in the
mid-nineties. We had the Balanced Budget Act 1997 and its long
lasting effects. We have had the collapse of several large post
acute chains in 1998 and 2000. Some parts of the post acute
system are still implementing the PPS. For example, both IRFs
and the LTCHs started implementing a PPS as recently as 2002,
and LTCHs are still in the process of phasing in their new
payment system.
So, what are our options? Our options are really threefold.
First is to pick the best of existing post acute payment
systems. The leading candidate in my opinion, is the IRF-PPS. I
say that in part because it is a function-based system that is
aligned with restorative goals of the Medicare post-acute care
system. I say it for other reasons as well. I would, even now,
add on a pay-for-performance component. Something that is
lacking in all four post acute payment systems. The payment
systems are supposed to be based on the characteristics of the
patients, but it also needs to take into account clinical
performance. A second option is to consider bundling acute and
post acute payment. That idea has been around for more than 20
years. I think, however, that it poses some very difficult
implementation issues, and is likely to have several unintended
consequences. A third alternative is to develop an Internet-
based bidding system where providers bid for patients on price
and outcome with some risk sharing for more difficult patients.
I think this option has some promising possibilities that
deserve to be explored. I would also encourage the development
of one or more demonstration projects as an interim step, and I
could perhaps share some ideas, should there be more time to do
so. Ultimately, we need an integrated post acute payment system
that competes effectively on price and quality. Let me say
something about that here.
We talk about payment systems and we talk about patient
assessment instruments, but we cannot have an effective payment
system unless payment is also linked to quality. What we need
is a more effective system of public disclosure of outcomes and
quality indicators so that all post acute stakeholders--
consumers, family Members, payers, and providers alike--can
make the informed choices that they need to make. The CMS has
already taken some important steps in this direction,
particularly with the nursing home quality initiative and the
home health quality initiative, but I think there is still a
lot more work to be done in this area. Other than that, I just
want to say that when we look at different sites of care, we
need not only consider whether or not one site is more
effective than another, we also need to consider what actually
occurs in the process of treatment and care; what are the
active ingredients each site provides. It is not good enough to
say that an SNF is better than an IRF or better than home
health or whatever the case may be. We need to take that bundle
of services apart. We need to find out what really goes on
there. What are, in fact, the active ingredients at each site
of care? I believe that purchasers and payers alike need to
know what it is that they are buying; they cannot be informed
buyers unless we peer into the black box and find out what in
fact is making the difference in each site of care. Thank you
very much.
[The prepared statement of Dr. DeJong follows:]
Statement of Gerben DeJong, Ph.D., Senior Fellow, National
Rehabilitation Hospital
Good afternoon. My name is Gerben DeJong. I serve as a senior
fellow at the National Rehabilitation Hospital in Washington, DC.
I want to thank the Subcommittee for inviting me to testify. I want
to make clear that I do not speak for any particular organization,
constituency, or industry. I am first and foremost a clinical and
health services researcher who has been a long-time student of American
post-acute care. I have been tracking industry growth and development
in post-acute care for about 25 years. I have tracked the spurts in
growth across all four major sectors of post-acute care--inpatient
rehabilitation facilities (IRFs), skilled nursing facilities (SNFs),
home health agencies (HHAs), and long-term care hospitals (LTCHs). I
have watched how these industries have waxed and waned in response to
the changing needs of Medicare beneficiaries, changes in Medicare
payment policy, and the vagaries of the larger national economy.
I should also disclose that I am the vice president of the American
Congress of Rehabilitation Medicine (ACRM)--a group of 800 researchers
and clinicians devoted to enhancing evidence-based practice in
rehabilitation and health care for individuals with disabilities. ACRM
is also committed to the concept of evidence-based health policy. Many
observers have been critical about the lack of evidence-based practice
in health care but the lack of evidence-based policy is equally
striking. In this regard, I believe it is important that, when we
embark on potential changes in post-acute assessment and payment, these
changes be anchored in solid research. I want to compliment the
Subcommittee for taking on these difficult topics and hope that, as we
move forward, we do so considering all the evidence and, where evidence
may be lacking, we defer judgment and garner the evidence still needed.
The Subcommittee has requested that we address two main topics, the
development of a common patient assessment tool and a more rational
payment system for post-acute care. I will address both and add a
couple of additional comments.
Common Patient Assessment Tool
Three of the post-acute settings--IRFs, SNFs, and HHAs--have their
own patient assessment instrument and a fourth setting, LTCHs, use none
for purposes of patient placement, outcome, and payment. I want to
express some caution here. There is a presumption in some quarters that
there is considerable overlap in the types of patients seen in various
post-acute settings and that we need to develop a uniform patient
assessment tool to address patients regardless of post-acute setting. I
agree that some or similar patients are seen in different post-acute
venues, but I would also submit that there is a diversity of patients
and that it will be difficult to find or create one tool that can
capture the full range of patient need across all settings of care. By
trying to create an all-inclusive instrument, we run the risk of
developing an unwieldy instrument, many elements of which, will not
apply to many patients.
We have been down this road before and backed away. Recall that in
2000-01, the Health Care Financing Administration, now Centers for
Medicare and Medicaid Services (CMS), then proposed the Minimum Data
Set for Post-acute Care (MDS-PAC) as uniform instrument for all post-
acute settings as the basis for both payment and quality monitoring.
This effort failed for many reasons but the chief among them was that
the MDS was a huge instrument (20 pages) that consisted of over 400
data elements many of which simply did not apply to the care and
management of many patients. It was anything but ``minimum'' and it was
a clear case of overreach in an attempt to develop a one-size-fits-all
instrument.
If we choose to go forward in developing a common patient
assessment tool--and I would recommend that we do, I would make several
recommendations:
1. Purpose. Be clear as to what the patient assessment tool is for.
Is it for making post-acute patient placement decisions? For
determining payment level? For quality monitoring? For developing
quality indicators that payers and consumers can use in making informed
choices? For all of the above?
2. Theoretical framework. Choose a theoretical or conceptual
framework that is consistent with the purpose of the Medicare-supported
post-acute care. The purpose is restorative care, not custodial care.
Yet, MDS 2.0, for example, is replete with references to the
``resident'' and contains a strong custodial or nursing home bias that
is not congruent with the functional enhancement goals of
rehabilitation. Medicare does not pay for custodial nursing home care.
3. Parsimony. Do not try to develop an all-inclusive, one-size-
fits-all instrument. Focus on some core variables or indicators of
patient need, progress, and outcome. If one were to build on an
existing patient assessment instrument, consider using the IRF-PAI as
the point of departure, not the MDS. The IRF-PAI is the most
parsimonious of the three post-acute patient assessment instruments.
4. Validity and reliability. Test for relevance, clarity, validity,
inter-rater reliability, internal consistency, redundancy, and
respondent burden. These are fundamental instrument development steps
many of which were not satisfactorily addressed when the MDS was
developed. Consumers, taxpayers, and providers alike expect instruments
to provide a valid and reliable basis for patient care and the payment
of public dollars. The careful scientific process of validity and
reliability estimation must be completed before a new instrument is
implemented for an entire post-acute system. The implications of a
common assessment instrument are too far-reaching to short-change these
instrument development processes--especially when we are talking about
the allocation of more than $30 billion of Medicare resources.
5. Computer-aided ``dynamic assessment'' technologies. Consider
using computer-aided dynamic testing technologies that enable one to
measure functional status using fewer data points. We have already
greatly reduced respondent burden in the administration of well-know
tests such as the SAT and the GRE by using computers to vary the degree
of difficulty each question presents and then pin-pointing the
respondent's capacity based on this hierarchy of difficulty without
having to ask each question. We can do the same in post-acute
functional assessment because there is a hierarchy of functional tasks
where the ability to do one task presumes the ability to complete less
demanding tasks. Such technologies allow us to address a broader range
of human function across more settings of care than a setting-specific
instrument that may present ``floor'' or ``ceiling'' problems for
another setting of care. Some excellent work in this area is occurring
in places such as Boston University, Northwestern University, and the
University of Florida.
If the Subcommittee or CMS believes that it needs to proceed more
quickly in implementing a uniform patient assessment instrument, I
would strongly recommend using the IRF-PAI with only modest changes.
Some SNFs and LTCHs already use the FIM embedded in the IRF-PAI and
thus are already familiar with the functional concepts that undergird
the IRF-PAI.
Rational Post-acute Care Payment System
Apart from care obtained from outpatient centers, each of the four
major post-acute settings of care has its own payment system. From a
system-wide point of view, the current multi-setting payment system
appears irrational and reflects as much about the setting of care as it
does about the patient. Moreover, there is a concern that we are using
different payment systems when patients in one setting of care may, in
some instances, be similar to patients in other settings of care. At
another level, the current state of affairs is not as irrational as it
may appear since each payment system contains features that speak to
the strengths and traditions of each setting. The accompanying table
compares each of the four post-acute payment systems in terms of their
unit of payment, case-mix adjuster, number of case-mix groups, and
effective dates of implementation following the passage of the Balanced
Budget Act of 1997 (BBA'97) and the Balanced Budget Refinement Act of
1999 (BBRA'99). To date, we have had research that examines the effects
of individual payment systems but no research that attempts to look at
the interactions across all four systems especially at the market level
in terms of their effects on market entry and exit, market supply and
mix of facilities, with-in market referral patterns, access, patient
case-mix, utilization, and practice patterns across all four settings.
In going forward, I would argue for proceeding cautiously and
carefully. First, do no harm. I say this because payment systems can
result in unintended consequences that may be adverse to the needs of
patients and the overall system and cost of care. Over the last 8
years, the nation's system of post-acute care has undergone tremendous
upheaval some of which came in the wake of managed care in the 1990s,
the BBA'97, and also with the collapse of several large provider chains
from 1998-2002. More upheaval and instability are not what this sector
needs in its immediate future. Some venues such as IRFs and LTCH's
began implementing their respective PPSs as recently as 2002 following
years of research, development, and planning that proved arduous for
both CMS, its contractors, and the affected post-acute industries.
In developing a more integrated post-acute payment system, there
are several options, some of which will require several years of
careful work and implementation.
The most immediate option is to take the best of the existing post-
acute payment systems and apply it to the other settings of post-acute
care--with perhaps some additional features such as a pay-for-
performance provision. The leading candidate among the existing payment
systems is the function-based IRF-PPS. As a function-based system, it
is perhaps best aligned with Medicare's restorative model of care and
would relieve SNFs, for example of its awkward and burdensome MDS and
RUGs-based PPS that is derived from a more custodial model of care.
Prospective Payment Systems for Post-acute Care
----------------------------------------------------------------------------------------------------------------
Inpatient Skilled
Rehabilitation Nursing Home Health Long-term Care
Feature Facilities (IRF- Facilities Agencies (HHA- Hospitals (LTCH-
PPS) (SNF-PPS) PPS) PPS)
----------------------------------------------------------------------------------------------------------------
Unit basis Per case / per Per diem \1\ Per 60-day Per Case / per
hospitalization episode of care hospitalization
----------------------------------------------------------------------------------------------------------------
Case-mix adjuster Function-related Resource Home Health Diagnosis-related
groups (FRGs) or Utilization Resource Groups groups (DRGs)
case-mix groups Groups III (HHRCs) specific to LTCH
(CMGs) (RUGs III) patients
----------------------------------------------------------------------------------------------------------------
No. of case-mix groups 95CMGs X 4 44 80 540
comorbidity
subgroups / CMG =
380 groups
----------------------------------------------------------------------------------------------------------------
Input document / information Source Patient Assessment Minimum Data Outcome & ICD-9-CM codes
Instrument Set (MDS) Assessment recorded on pt
(IRF-PAI) \2\ Information Set claims
(OASIS)
----------------------------------------------------------------------------------------------------------------
Effective dates & phase-in period Jan 2002 67% or 1999 25% Oct 2000 100% Oct 2002 20%
100% 2000 50% (no phase-in Oct 2003 40%
Oct 2002 100% 2001 75% period) Oct 2004 60%
2002 100% Oct 2005 80%
Oct 2006 100%
----------------------------------------------------------------------------------------------------------------
\1\ Based on assessments made on the 5th, 14th, 30th, 60th, and 90th days after admission to a SNF.
\2\ The MDS is completed on the 5th, 14th, 30th, 60th, and 90th days after admission to a SNF.
What the IRF-PPS lacks, however, is an explicit incentive for
outcomes and performance. The IRF industry already has many of the
requisite measures that can be used as the basis for a partial payment
that is linked to performance. I could envision a system in which a
part of each facility's payment might be tied to specific performance
measures on either an individual patient basis or on the basis of the
facility's aggregate performance on patient outcomes.
There are many other potential integrated post-acute payment
systems. The concept of ``bundling'' acute and post-acute payment has
been around for more than two decades although I believe it has
significant implementation problems. Another alternative is to
construct an Internet-based bidding system in which providers might bid
for patients on the basis of price and outcome with some risk-sharing
to induce providers to take on the most difficult patients. All of
these different systems require advanced thinking, research, and
planning.
The Subcommittee and CMS should also consider sponsoring one or
more demonstration projects. For example, CMS should consider how
multiple levels of care might be provided in a step-down fashion within
a single provider system that cannot be fully accommodated within the
existing silo-by-silo post-acute payment system. One of the challenges
we now have is that a patient may start at one level of need at the
outset of their post-acute experience but may require a very different
mix of services as he or she progresses. The challenge is to design a
payment system that allows a single provider system to better optimize
the mix of services over time in a way that provides continuity of
care, maximizes outcome, and minimize costs.
Ultimately, we need to work toward a more integrated market-based
system that competes effectively on both price and quality. Making
health care conform to market-based principles has bedeviled even the
most ardent advocates of market-based health care including myself.
When patients are in medical crisis, they or their family members are
not always price sensitive nor do they always know how to get the
information to make choices they need to make in selecting a provider
or course of care and often depend on the advice of their physician,
other family members, or friends. Moreover, their choices are often
preempted by the decisions of third-party payers who may have
prearranged provider networks that limit choice.
Nonetheless there are steps that can be taken regardless of the
payment systems that might evolve in the years to come. One key to any
reform is effective quality competition that will allow providers to
compete on quality as well as price and mitigate the potential effects
of stinting that may result from fixed payment systems.
Central to such competition is the public disclosure of outcomes
and quality indicators that will enable payers, consumers, and family
members to make the post-acute choices they need to make. This clearly
takes us back to the issue of a common patient assessment system. In
its 2001 landmark report, Crossing the Quality Chasm, the Institute of
Medicine identified 10 cardinal rules to govern the transformation of
the American health care system. Rule 7 is the need for transparency:
``The health-care system should make information available to
patients and their families that allow them to make informed decisions
when selecting a health plan, hospital, or clinical practice or
choosing from among alternative treatments. . . .''
Fortunately, some steps in this direction are already being taken
in both acute and post-acute care. In post-acute care, CMS has launched
the Nursing Home Quality Initiative, which provides 10 quality measures
on every nursing home in the nation. One can now go to the Web and
check any nursing home's performance on these 10 measures. CMS is
continuing to develop an analogous Web-based quality initiative for the
home health industry.
The current indicators for nursing home and home health care are
only a start. They are fairly crude and not adequately sensitive to the
functional restoration goals of post-acute care. CMS and its companion
agencies in the federal government need to capitalize on the functional
status and outcome measures already used in rehabilitation and consider
their applicability to other portions of the post-acute care system.
They are not perfect and much work needs to be done.
The development of an effective integrated post-acute payment
system requires the development of outcome measures and quality
indicators that are publicly disclosed and support decision making by
all post-acute care stakeholders. There are several steps that CMS and
its companion federal agencies, e.g., AHRQ, can start to take now that
will serve the needs of future integrated payment system regardless of
the exact payment system chosen. CMS needs to foster buy-in across the
different types of post-acute providers that a quality-indicator and
outcome disclosure system is in fact needed and is integral to the
development of an integrated payment system. And working with all post-
acute stakeholders, including consumer groups, CMS needs to create
rules for a fair outcome disclosure system that provides for a level
playing field among providers. This includes consensus on standardized
reporting methods, research on risk--or case-mix adjustment, and
methods to prevent gaming and cheating. Finally, CMS needs to test
multiple reporting formats that will make the information usable for
different stakeholders.
Other Issues Related to an Integrated Post-acute Care System
Lurking behind the discussion of the need for a more integrated
post-acute system of care are issues and concerns that I believe need
to reframed if we are to have a more informed discussion about the
future of post-acute care. For example, there is an abiding concern
that the same kinds of patients are being served in multiple settings,
some at lower costs than in other settings, with similar outcomes. As a
researcher, I am especially concerned that we are not always comparing
apples with apples and oranges with oranges particularly in our
characterizations of patient populations and in our computation of
costs associated with each site of care. This testimony is not the
venue to go into the particulars but I would urge caution.
These issues come into their sharpest focus when we address
questions regarding the efficacy of care for certain patients in one
setting versus another as in the case of IRFs versus SNFs. We usually
frame the question as follows: Do stroke patients do better in an IRF
or a SNF? Do joint replacement patients do better in an IRF or a SNF?
Instead, we need to ask which stroke patients do better in an IRF and
which do better in a SNF? Or, which joint replacement patients do
better in an IRF or in a SNF? One's research may find that one setting
or another does consistently better with one patient group or subgroup
than another but we should not start with the presumption that one
setting has an exclusive franchise with a particular impairment group.
In examining the differences in outcomes and costs between IRFs and
SNFs, we also need to be able to characterize the differences in the
care received in these two settings. One needs to look at all
interventions and processes of care from basic medical support to
individual therapies. Moreover, one needs to characterize these
differences in terms of timing, intensity, frequency, and duration.
Without these characterizations, both settings remain black boxes and
prudent purchasers, both government and health plans, cannot fully know
what it is that they are purchasing. Nor can they discern the active or
inactive ingredients in the IRF and SNF rehabilitation process that
shape outcomes. Purchasers and providers alike, need to know which
clinical activities and interventions make the biggest difference for
which patients and in what setting these activities and interventions
are most likely to be found. It is not enough to say one setting is
more effective than another without stating what it is about that
setting that accounts for difference.
Most controversial at this time is the best venue for the post-
acute rehabilitation of joint replacement patients especially in the
wake of the 75% rule that requires IRFs to have 75% of its patients
come from one of 10-13 impairment groups (10 under the old rule; 13
under the new rule). Over the last decade (1994-2003), the number of
joint replacement patients discharged from acute care hospitals
increased 51%, from 241,410 to 364,824 patients and a corresponding
increase has been seen in post-acute care. If we are to have an
effective integrated post-acute system of care, we will still need to
sort out which patient groups and subgroups do better in one setting
versus another. In short, there is a huge need to conduct research that
will enable us to refine the placement and treatment decisions in post-
acute care even if we are to achieve a more integrated system of post-
acute assessment, placement, treatment, and payment. In fact, answering
these types of questions is essential to a more integrated post-acute
system. CMS and its companion agencies need to make a significant
investment in the research that can undergird a more rational system.
Chairman JOHNSON. Thank you very much. Dr. Votto.
STATEMENT OF JOHN VOTTO, PRESIDENT AND CHIEF OF STAFF, HOSPITAL
FOR SPECIAL CARE, NEW BRITAIN, CONNECTICUT, ON BEHALF OF THE
NATIONAL ASSOCIATION OF LONG TERM HOSPITALS
Dr. VOTTO. Thank you, Madam Chair, and Congressman Lewis,
for inviting me here today to speak on these very important
issues. I am here representing the Hospital for Special Care
and the National Association of Long Term Hospitals. My name is
John Votto. I am a practicing pulmonary physician; I have been
practicing for approximately 20 years at the Hospital for
Special Care and the Veteran's Affairs (VA) hospital in
Connecticut. I am currently President of the Hospital for
Special Care and Chief of Staff, and I am active in the
National Association of Long Term Hospitals in the sense that I
am Chairman of the Physician Committee and the Criteria
Development Committee. The Hospital for Special Care is a 228-
bed LTCH which has been around for 65 years. During that time,
we have developed our programs based on the community needs in
the area. Our major programs are those of ventilator weaning,
brain injury, complex medical, wound care, and pediatrics. We
also have a spinal cord injury program, which is the only
Commission on Accreditation of Rehabilitation Facilities
(CARF)-accredited program in the State of Connecticut. The
hospital also operates a 282-bed nursing facility, SNF, and so
I feel that I am keenly aware of the issues that are talked
about at this meeting. I know that the Committee is very
concerned about overpayments and inappropriate payments, and so
in this regard I will have some comments. In regards to the
patient assessment tool for LTCHs, as we have all heard, we
don't have our own patient assessment tool, and the rehab
hospitals do, the SNFs do. These, I don't feel, are appropriate
for the LTCH industry, having done both of these things and
been involved in both of these things. I do believe, though,
that data does exist which could help develop a patient
assessment tool for the LTCH industry.
One of the things that we recently did in the National
Association of Long Term Hospitals is we just completed a two-
year study looking at 1,419 ventilator-dependent patients who
came to LTCHs especially for weaning. They came from 23
different LTCHs across the country. We did not direct how they
were weaned, we just directed that they came in for weaning.
This is a prospective study. What we did was look at many
outcome measures, including time to wean, length in the acute
care hospital prior to discharge to the LTCH, mortalities,
outcomes, functional status, and many, many other things that
we have studied. In addition, we also looked at the cost of
care, and in 963 of these patients we were able to come up with
costs of care and get the data that included that. During the
course of the study we did share some of this outcome data with
CMS and MedPAC. I believe, though, that the results of this
study would be at least some basis for developing a patient
assessment tool, and I think that, given the way this study was
done, we could develop patient assessment tools for other
programs and other diagnostic categories like wound trauma and
medically complex.
We are obviously interested in the appropriateness of the
patient setting and the appropriateness of care, and I believe
that in the short term, QIO review is probably the best remedy
to do that. The QIO did review only 1,400 cases, as many of you
know, in 2004, and there was a very high denial rate,
indicating that maybe there was inappropriate placement of
certain patients. I don't believe that 1,400 cases across the
entire industry in 1 year is probably a good measure. The
example given of the hip fracture patient where the payments
were so different, I don't know if they took the short-stay
policy into account in the LTCH that the LTCH industry has in
place, but I can assure you that the Hospital for Special Care,
first of all, rarely admits these types of patients because
they have to have uncontrolled diabetes, uncontrolled
congestive heart failure, or other things before we would take
that patient, but I can assure you that we aren't getting
$44,000 for that patient. Although I am very much in favor of
the QIO review, I think that the screening process could be
improved. I don't believe that the criteria sets that are
available now are aligned with the PPS that we have right now.
MedPAC's report to Congress did indicate that screening
criteria were a priority, and we have at the National
Association of Long Term Hospitals just completed the
development, after 2 years, of screening criteria which we feel
are quite good and appropriate for the industry; we are in the
process of having professional validation this summer, and
should have that completed by this fall. We have also shared
drafts of these criteria with MedPAC and CMS. In the long term,
I believe the Secretary should participate in the construction
of a database which, if the work was done with MedPAC and the
industry, probably could be very helpful in developing a
patient assessment tool. I am concerned about the payment
systems, the combinations and the difficulties of counting
Medicare days and overlap of patients. This could be a very
difficult problem, as has already been noted, but I think it
probably could be overcome, and we could develop a patient
assessment tool. In conclusion, I think in the short term QIO
and screening criteria could stabilize at least the payments to
LTCHs, and, in the long term, a comprehensive database, which I
believe may have to be done with more than a 5 percent sample,
which is what is proposed, could be used as a patient
assessment tool or help in the development of a patient
assessment tool. Thank you for your attention.
[The prepared statement of Dr. Votto follows:]
Statement of John Votto, D.O., National Association of Long Term
Hospitals, New Britain, Connecticut
Chairman Johnson and members of the Subcommittee, thank you for
inviting me to speak before you today on the important questions
presented in the notice of this hearing which concern the status of
assessment tools and payment issues related to long-term care hospitals
and other post acute Medicare providers. My name is John Votto. I am a
physician with a specialty in pulmonary medicine. For the past
seventeen years I have practiced medicine at the Hospital for Special
Care in New Britain, Connecticut. Currently I am the President of the
Hospital for Special Care and also maintain an active practice caring
for patients at the Hospital. Additionally, I care for pulmonary
patients at the Veterans Hospital located in Newington, Connecticut. I
am active in the National Association of Long Term Care Hospitals and
serve as the Chairman of the Association's Physician Committee and
Committee on Criteria Development. The hospitals which comprise the
National Association of Long Term Hospitals account for approximately
one third of all Medicare beneficiaries who receive services in long-
term care hospitals. While many of my remarks today are made on behalf
of the National Association of Long Term Care Hospitals they also
relate to the Hospital for Special Care. The Hospital for Special Care
is a relatively large long-term care hospital with 228 beds and an
active outpatient department. The hospital provides a wide range of
clinical services, including ventilator weaning services to patients
who have complex medical care needs. The hospital provides
rehabilitation services and maintains the only certified spinal cord
injury unit in the State of Connecticut. The Hospital for Special Care
also operates a free standing 282 bed skilled nursing facility.
Accordingly, I am keenly aware of the issues related to the
appropriateness of services provided to inpatients in the settings
which are the subject of this hearing.
The focus of the this hearing is to explore issues related to the
establishment of patient assessment tools and particularly a common
assessment tool which could be used across post-acute Medicare provider
types. Additionally, I understand the Committee is concerned that the
Medicare program makes inappropriate payments where patients who
require the same or similar medical resources receive care in different
Medicare provider settings at different rates of payment. The National
Association of Long Term Hospitals strongly supports the creation of
appropriate patient assessment tools and the use of safeguards which
assure that Medicare beneficiaries receive care in the most appropriate
cost effective and safe setting. I will focus my specific comments on
these questions by reviewing policy initiatives that the Medicare
program could undertake in both the short and long term to achieve
these goals.
Actions the Secretary can undertake now
The National Association of Long Term Care Hospitals is unaware of
any ongoing activities which have been undertaken by the Secretary to
establish a patient assessment tool or patient outcome measures for
patients who use long-term care hospitals. The patient assessment tools
which currently exist for other types of post acute hospital providers
are not adequate to assess patients who receive care in long-term care
hospitals. The Minimum Data Set (MDS) which is used as an assessment
tool for skilled nursing facilities does not measure physician directed
services and related medical complexity of hospital level patients. The
MDS measures routine care needs of patients on a per day basis and,
therefore, can only be used with a per diem payment system. Long-term
care hospitals and inpatient rehabilitation facilities are reimbursed
by the Medicare program on a per discharge basis and not on a per diem
basis. Functional related groupings (FRGs) which are used by inpatient
rehabilitation facilities contain functional measures and are not
appropriate for the medically complex cases which are admitted to long-
term care hospitals.
Studies and data do exist which the Secretary could consider to
establish a patient assessment tool for Medicare beneficiaries who use
long-term care hospitals. For example, a significant segment of
patients admitted to long-term care hospitals are in respiratory
failure with ventilator support. The National Association of Long Term
Care Hospitals is sponsoring a study of the characteristics of these
patients, including ventilator weaning rates. The final report on this
study is expected in a few weeks. This multi-site study was conducted
by the Barlow Respiratory Hospital Research Center which is located in
Los Angeles, California. The study included data on 1,419 patients who
were admitted to 23 long-term care hospitals located throughout the
country with active ventilator weaning programs. The study contains
survey instruments and outcome data which could readily considered in
the development of an assessment instrument which then could be applied
across all post acute Medicare provider types. This data include:
1. Days on a ventilator prior to admission to a long-term
care hospital.
2. Demographic and patient characteristic data such as sex
and pre-morbid domicile;
3. Pre-exiting co-morbid diagnoses and comorbidities.
4. Patient location prior to admission (e.g. ICU, step-down
or monitored unit, rehabilitation unit).
5. Patients with and without a surgical procedure;
6. Length of stay in transferring hospital;
7. Percentage of cases admitted with single and multiple
pressure ulceration together with stage and description of
ulcer;
8. Functional status at the beginning and end of a long-term
care hospital stay: Zubrod score.
9. Procedures and treatment provided at the long-term care
hospital or on a ``same day'' basis at an acute care
hospital.\1\
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\1\ All ``same day'' services received by long-term care hospital
patients are ``bundled'' within the long-term hospital DRG and remain
the financial responsibility of the long-term care hospital. The cost
of acute hospital services for these patients is not separately billed
to the Medicare program.
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10. Complications arising at the long-term care hospitals by
frequency of occurrence.
11. Outcome of long-term hospital stay, i.e. weaned,
ventilator dependent, deceased.
12. Hospital specific cost of care based on cost to charge
ratios.
13. Twelve month post admission status.
During the course of conducting this study the National Association
of Long Term Care Hospitals provided CMS, as well as MedPAC, with
interim reports and study outcome data. The Secretary could consider
the results of this study in developing a patient assessment tool for
ventilator dependent patients who are admitted to long-term care
hospitals and perhaps other post acute Medicare provider settings. The
data which have been collected and analyzed on patient functional
status as well as ventilator weaning rates may also provide a basis for
outcome measures. Moreover, the Secretary could consider whether these
same data should be used to study whether patients admitted to any
other classes of post acute Medicare providers have similarities to
those admitted to long-term care hospitals.
The Secretary could also make an assessment whether the data
collection instrument used in this study could form a basis to collect
data for wound care, cardiac, and other classes of patients admitted to
long-term care hospitals. I wish to underscore that a basic patient
assessment tool which records data including patient diagnosis,
comorbidities, functional status on admission and discharge as well as
readmission rates, should be attainable by the Secretary within the
short term.
I now wish to turn my attention to the very important question of
the appropriateness of placement of patients in post acute care
providers and in particular in long-term care hospitals. This issue is
at the heart of the Medicare payment questions presented in the notice
of this hearing. It is important that at least since the early 1990s,
until 2004 the Secretary has omitted from the annual scope of work for
Quality Improvement Organizations (``QIO''), review of the medical
necessity and appropriateness of services provided to Medicare
beneficiaries in long-term care hospitals.
Historically there has been no ongoing professional review of
whether patients selected for admission to long-term care hospitals
required medical resources of the type and frequency which are provided
in another, lower cost setting. As part of implementation of the long-
term care hospital prospective payment system the Secretary included
review responsibilities for the appropriateness of admission to a long-
term care hospital for a small sample of 1,400 Medicare cases in the
QIO scope of work for 2004. The reported denial rate from this review
process was 29%. The Secretary has retained this small sample size for
the 2005 QIO scope of work. The denial of a patient admission by a QIO
means there has been a finding that the patient could have been treated
in a lower cost more appropriate Medicare provider setting such as a
skilled nursing facility or by a home health agency. In every case
where there is a final denial by a QIO the long-term care hospital
receives zero payment for the case at issue. The National Association
of Long Term Care Hospitals has closely followed the review of Medicare
cases by QIOs and believes that QIOs can effectively and efficiently
distinguish between cases that require the medical resources and
programs provided by long-term care hospitals and those provided by for
example, skilled nursing facilities. The differences in payment across
post acute settings recited in the notice of this hearing do not
consider the effect of QIO review and especially the effect of
continued stay review on payments to long-term care hospitals. The
example given is a $44,633 payment to a long-term care hospital for a
hip fracture while payments to a rehabilitation facility and skilled
nursing facility would be significantly less. The long-term care
hospital prospective payment system has a short stay payment policy
where patients with stays less than 5/6th of the geometric
mean length of stay for the applicable LTCH-DRG are paid on a per diem
and not a full case basis. The Secretary may properly consider
expanding QIO review responsibilities to include the appropriateness of
continued stay and discharge. This would result in review for medical
necessity and length of stay the two factors which effect payment under
the long-term care hospital prospective payment system.
I do wish to point out an important area where review by QIOs could
and should be improved. QIOs use ``screening criteria'' to
differentiate cases which can be approved by nurse reviewers from those
which are referred to physicians for further review. Commercially
available screening criteria authorize a patient discharge whenever a
patient, during a stay qualifies under a criteria set for another
provider type. These screening criteria sets are not designed to be
used for payment purposes. One of the objectives of a prospective
payment system is to include the full course of care within fixed LTCH-
DRG reimbursement. MedPAC review of long-term care hospitals together
with its report to Congress in June of 2004 focused the National
Association of Long Term Care Hospitals on the need to develop
appropriate screening criteria for the Medicare program. The National
Association of Long Term Care Hospitals over a two-year period, has
developed long-term care hospital screening criteria and is in the
process of engaging in a professional validation of these criteria \2\
The Association has shared drafts of these criteria with the
Subcommittee staff, both CMS and MedPAC. Current care plans are to
present the criteria for review by payors, including the Medicare
program, on a pilot basis this summer. Final validation is projected to
be concluded in the fall of this year.
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\2\ These criteria sets include: cardiovascular, complex medical,
respiratory, ventilator weaning, wound care and rehabilitation.
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Longer term steps actions and issues
In the longer term the Secretary should participate in the
construction of a post acute data base which would allow for the
establishment of a post acute patient assessment instrument. A valid
post acute assessment instrument is an essential prerequisite to the
establishment of a patient classification system which, in turn, would
allow for consideration of whether a uniform payment system could
account for the variation in patient cost and resource use across post
acute provider types. The National Association of Long Term Care
Hospitals understands that MedPAC has established a post acute data
base which is comprised of a 5% sample of Medicare beneficiaries who
are discharged to post acute providers. The Association recommends that
this sample size be expanded as it is unlikely that a sufficient number
of discharges from long-term care hospitals are included in the data
set. Expansion of the data set is necessary to establish a common
patient assessment tool. The Secretary should consider working closely
with MedPAC and industry representatives in the establishment of this
data base to ensure that assessments made under a uniform payment
system are appropriate and feasible.
Finally, I wish to point out that a merger of payment systems could
present a host of policy challenges. For example, the Medicare program
provides different benefit day coverage depending on whether a
beneficiary receives services in a hospital or skilled nursing
facility. Also, the placement of a beneficiary in a skilled nursing
facility triggers a new co-insurance obligation. Currently, if a
patient remains in a hospital at a skilled nursing facility level of
care waiting placement in a skilled nursing facility, days of hospital
service are not counted toward the limited 100 day skilled nursing
facility benefit. If the beneficiary has not reached DRG cost outlier
status, days of care in excess of those used to reach the geometric
mean length of stay for the applicable DRG are not countable towards
the beneficiary maximum hospital day benefit of 150 days. These
policies exist for the fundamental reason that it is important to
include as much services as is reasonably possible and appropriate in a
fixed per discharge DRG payment system. Skilled nursing facilities are
reimbursed on a per diem payment system where, unlike day of care in a
hospital, beneficiary days are counted on a consecutive day basis.
Additionally, due to the per discharge basis of the long-term care
hospital and inpatient rehabilitation facility prospective payment
systems, the Medicare program does not make an additional payment when
a patient stay qualifies for full DRG payment. There is no additional
payment until the patient qualifies for high cost outlier payment. The
per diem nature of the skilled nursing facility payment system results
in payment for each day of care. It is important that any future
changes to post acute payment systems carefully consider consequences
to the count of beneficiary benefit days, beneficiary co-insurance
liability and the no payment zones which exist under current patient
discharge based long-term care hospital and rehabilitation hospital
prospective payment systems. I have included as Attachment A to this
statement a number of similar issues related to the potential
integration of post acute payment systems.
I wish to thank you again and the Committee's staff for inviting me
here today and for your courtesy and attention to these important
questions.
Attachment A
Questions Related to Merger of Post-Acute Providers and Payment Systems
1. What are the payment objectives of the policy? Should budget
neutrality is to be preserved within each payment system and if not
then across all effected payment systems.
2. Which provider types are included in this policy initiative?
NALTH assumes long-term care hospitals, IRFs and SNFs are included.
Should psychiatric hospitals and units also included? Patients admitted
to all of these provider types may, during a stay, have characteristics
of patients admitted to one of the other provider types. For example,
patients who access an IRF or long-term care hospital and who are at an
appropriate hospital level of care upon admission may at the end of a
stay or intermittently during a stay appear to be at a SNF level of
care. These patients, however, use and require hospital resources
(physician and, many times, hospital technology). Also, based on
Medicare claims data patients may appear similar across settings at
times during their stay but in fact, may be treated very differently
during the stay as a whole. These patients benefit from hospital
resource use to maintain and improve their health status and,
importantly, to maintain functional and clinical stability upon
discharge. This is consistent with MedPAC finding that patients who
access long-term care hospitals have a 26 percent lower acute hospital
readmit rate than patients who do not access long-term care hospitals.
3. What administrative data, or alternative special instruments,
would be used to identify patients (or portions of stays) which overlap
between provider types, i.e. LTCH, SNF, and IRF? The current
administrative data which is available to the Medicare program are:
cost reports, Medpar files etc. Examples of special instruments are the
MDS and FRGs. Existing administrative data and special instruments do
not appear to be designed or adequate to identify or define patients
subject to the new policy. Also, these data/instruments are not
reported on a timely basis for the policy to operate efficiently. A
brief example is the MDS which does not collect information on
physician interaction but, instead is directed at routine care needs of
nursing home patients. NALTH understands the MDS is only compatible
with a per diem and not per discharge payment system.
4. Consideration of the proper accounting of benefit days? The
Medicare program accounts for benefit days based on the provider type
where a beneficiary receives services. Days are assigned to a
beneficiary's Part A hospital benefit based on days spent in a
hospital. If a beneficiary uses SNF services in a hospital these days
accrue toward the limited hospital day benefit and not the SNF benefit.
The program allows beneficiaries to remain in a hospital while they are
at a SNF level of care to allow for a nursing home search. It is widely
known that some of these patients will never be placed in a SNF due to,
e.g. infectious and behavioral issues. A new Medicare policy which pays
days spent in a hospital as SNF services, must carefully consider the
effect on the accounting of benefit days, co-insurance and deductible
amounts. Payment for these services as provided in a hospital as SNF
services would seem to result in substitution of SNF benefit days for
hospital benefit days. If so, beneficiaries would be required to pay
additional co-insurance and may have a reduction in total available
Part A days. Also, beneficiary days are counted consecutively when
providers are paid on a per diem. The count of beneficiary days is
suspended in a hospital when a beneficiary has reached the geometric
ALOS for the applicable DRG and is only resumed when the patient
qualifies for cost outlier status. The interaction of a per discharge
per diem payment system could reduce part A coverage days and also has
implications for the time of exhaustion of benefits and related
liability for supplemental payments, including beneficiary personal
liability.
5. Will relative weights of PPS systems and other PPS payment
adjusters be affected by a change in payment policy? A policy which
transports payment between payment systems e.g. paying an IRF or long-
term care hospital at a SNF rate for some patients or portions or stays
would seem to distort payment weights and, as a related issue, budget
neutrality within PPS payment systems. We believe that a deviation from
established PPS payment rates would result in consistent underpayment
of hospital resources. Similarly, a policy which paid SNFs at hospital
rates would distort and overpay SNFs by making payments which reflect
hospital resources. It is important that federal law imposes different
Medicare certification requirements and related costs on hospitals and
SNFs. NALTH believes it is important that any new policy not distort
PPS payment weights. As a related matter it is important to consider
how PPS adjusters, which are not uniform across payment systems, would
be affected. For example, IRFs are entitled to a DSH adjustment while
long-term care hospitals and SNFs are not. The loss required before
cost outlier payments accrue is after other applicable PPS adjusters,
which are different depending on provider type and may or may not
include DSH, IME and a loss threshold have been reflected in payments
due to a provider. If a LTCH or SNF is paid at IRF rates could those
rates be inclusive of DSH and other IRF adjustments?
Chairman JOHNSON. Thank you very much. Ms. Rice.
STATEMENT OF PAT RICE, PRESIDENT AND CHIEF OPERATION OFFICER,
SELECT MEDICAL CORP., MECHANICSBURG, PENNSYLVANIA
Ms. RICE. Thank you, Chairman Johnson and Committee
Members, for allowing us to talk about the post-acute care
continuum today. I have had about 37 years of health care
experience as a Registered Nurse (RN) and also as a health care
administrator, and during that period of time have worked in a
number of the post-acute care continuum facilities, including
20 years in inpatient rehabilitation, 2 years in hospital
skill-based centers, and 9 years in LTCHs. I am currently the
President of Select Medical Corporation. We operate 99 LTCHs
across the country, and we also operate Kessler Rehabilitation
Hospital in New Jersey. So, we have a large amount of
experience both in LTCHs and in rehabilitation. I also speak on
behalf of the Acute Long Term Hospital Association that
represents over 300 LTCHs all across the country, with Select
and also Kindred Healthcare being a large portion of their
membership. Kindred operates the third largest number of SNFs
across the country as well. So, I have quite a bit of
experience, as you might see.
First of all, I would like to address what we believe are
the guiding principles and the--as you look at the post-acute
care continuum is, with that first guiding principle being that
there really is a distinct and unique difference in each of the
sectors in the post-acute care continuum. Policy should seek
definition of these distinct roles based upon patient
characteristics, patient clinical characteristics, and
patients' needs. The LTCHs provide care to a very small segment
of the acute care patient population, patients that are very
high in severity of illness that have multiple complex medical
conditions. These patients require a very intense level of
intervention during the healing process. The LTCH patients are
less than 1 percent of the Medicare beneficiaries discharged
from general acute care hospitals. They are the patients with
the highest severity of illness regardless of diagnosis, and
are nearly four times more likely to be admitted to an LTCH
because of the severity of their diagnosis.
Certainly, IRFs serve a very important role in the post-
acute care continuum, providing comprehensive, goal-directed
rehabilitation in a team format, with the access to
physiatrists to be able to make very aggressive decisions about
care on a short-term basis. The SNFs also provide a very
important role in the post-acute care continuum through the
provision of restorative care, through skilled nursing and also
through skilled therapy. There are some similarities in these
venues of care, but there are more differences than there are
similarities. The differences include the reason for patient
admission, the severity and acuity of the patient that is being
admitted to each one of these levels of care, the risk of
mortality, the intensity of monitoring and of services that the
patients require, the type and availability of services that
are available in each venue; and also the knowledge,
specialization, and the amount of time that is afforded
patients based on the patients' actual individual needs.
So, we do believe that there is a difference in the level
of care. That difference in regulatory requirements has not
been outlined as significantly as it should be, and because of
that, you do see some overlap within the treatment that is
provided. Not only would we recommend that there be patients'
differences outlined, that separate what these sectors of care
are, but we also recommend and agree with the development of a
common, comprehensive patient assessment instrument that could
differentiate the appropriate level of care for patients, as
well as determining which patient should go into a specific
level of care. Currently, there does not exist a common,
comprehensive patient assessment tool that would adequately
reflect the complexity of care and the acuity of care of the
LTCH patient. Now, certainly, LTCH patients are assessed. They
are assessed at the time of admission by physicians and by the
team that is caring for them, but there is not an instrument
that is provided. We would recommend that an instrument be
developed that addresses the complexity of those patients as
well as clearly differentiating that.
We also do believe that the third guiding principle should
be that the patient should be cared for and paid for in the
appropriate setting. If a patient meets SNF criteria, they
should not be cared for in an LTCH, but right now there is not
specific criteria out there. The only regulatory requirement
for LTCHs is that you have a 25-day length of stay. That 25-day
length of stay does not indicate the complexity of the care
that the patients require or the specific patients that should
be admitted to the LTCH as well. There has been much made about
the patient that has a fractured hip and what level of
treatment they should go into. I want to specifically talk
about the stroke patient. You cannot look at diagnosis alone as
you look at where a patient can go. It is much more complicated
than the 13 diagnostic categories that the IRFs have to contend
with. It is very complicated in which specific locale the
patient should be admitted to. The stroke patient that leaves
the acute care hospital that has unstable blood sugars requires
very frequent monitoring as far as an RN is concerned; that
requires a higher ratio of RNs in a facility than might be
required in an SNF. That patient could potentially be on
dialysis because they also have renal failure, be receiving
respiratory treatments, or even potentially be on a ventilator.
Those patients clearly are patients that should be cared for in
a long-term care facility, an LTCH. The stroke patient that
would be most appropriately cared for in an IRF, is a patient
that can tolerate 3 hours of therapy a day, is essentially
relatively stable, and is able to participate in therapy and is
able to make progress toward being able to go home. Another
stroke patient with a specific diagnosis that should be
considered for either an SNF or being treated at home is the
patient that, as far as an SNF is concerned, is the stroke
patient that cannot participate in three hours of therapy,
still requires therapy, or potentially has a cognitive
disability that does not allow learning or comprehension or
follow-through. Those patients clearly should not go to an LTCH
and should not go to a rehab hospital. Certainly, if the
patient can be cared for at home by their families, that is the
situation where they should be cared for. So, we do believe
that a system should be developed that clearly outlines who the
patients are, what their needs are, and where they should go
for treatment. That decision should be made by the physician
and by the patient based upon what the individual patient's
needs are.
The fourth guiding principle should be that post-acute care
providers must have the capacity to care for the needs of the
patients that they are admitting. All post acute providers are
not created equal and all patients' needs are not created
equal. This is not a situation of one-size-fits-all when you
talk about the post-acute care patient. It is a situation
whereby the patient, depending upon what their individual needs
are, should go to the level of care that can meet those needs.
In the LTCH situation, RNs are at a higher ratio per patient
because of the potential instability of the patient's medical
condition than it currently is in a SNF situation. So, we
firmly believe that there are different levels of care, that
those levels of care can be defined, that the common patient
assessment that could be developed would assist us in making
that definition of what patient should go to the specific
location. We do not believe that these levels of care are
interchangeable. Thank you for allowing me to speak with you
today. I would request that if you have not been to these
different levels of care, there can be visits made to them, so
that you can see on a first-hand basis what the differences in
the patients are that are cared for at each of these levels,
and what should be done to differentiate those specific levels
of care. Thank you.
[The prepared statement of Ms. Rice follows:]
Statement of Pat Rice, BSN, MSN, President/Chief Operating Officer,
Select Medical Corporation, Mechanicsville, Pennsylvania
Representing
The Acute Long Term Hospital Association (ALTHA)
Madam Chair, Members of the Committee:
Thank you for convening this hearing on post-acute care and for
involving providers in these discussions. By way of background, I have
served as a registered nurse and healthcare administrator for the past
37 years in a variety of settings including seven years at a university
medical center, twenty years in inpatient rehabilitation, two years in
hospital based skilled nursing and nine years in long term care
hospitals. Currently, I am the President/Chief Operating Officer of
Select Medical Corporation, operator of 99 long term care hospitals
(LTCH), in 26 states and Kessler Rehabilitation Institute in New Jersey
that is recognized as a premier rehabilitation hospital. U.S. News and
World Report ranks Kessler the leading rehabilitation hospital in the
East--and 4th best nationwide--marking the 13th
consecutive year that Kessler has been named to this prestigious list.
I am also a Board member of the Acute Long Term Hospital
Association (ALTHA). ALTHA represents over 300 LTC hospitals across the
United States, constituting over two-thirds of LTC hospitals
nationwide. ALTHA's member hospitals provide care to severely ill,
medically complex patients with multiple comorbidities who require
hospitalization for extended periods of time. Both Select Medical and
Kindred Healthcare, another leading LTCH provider who also is the third
largest operator of skilled nursing centers, are ALTHA members. ALTHA
represents the vast majority of the LTCH industry.
Introduction
I commend the Committee for convening a hearing to discuss the
critical role that post-acute providers play in meeting the needs of an
important patient population. To be sure, there is a continuum of post-
acute care that can create confusion among policymakers, payers and
patients about which setting is most appropriate for patients with
certain medical conditions. The purpose of my testimony today--as a
nurse and operator of LTCHs and rehabilitation hospitals--is to assist
the Committee in understanding the similarities and differences between
the settings so that policy decisions can be made to achieve the goals
of fiscal responsibility, patient access to care, and quality care.
In general, I believe the Committees deliberations should be guided
by four overriding principles.
First, each provider in the post-acute sector plays a critical and
distinct role in meeting the needs of the post-acute patient
population. Policy should seek clearer definitions of those distinct
roles but should recognize that a certain amount of overlap is
inevitable and necessary to ensure continuity of patient care across
settings.
Second, both ALTHA and Select support the Committee's efforts to
explore and evaluate development of a comprehensive post-acute
assessment tool. Development of such an instrument is an important
prerequisite to integrating care, and possibly payment, across the
post-acute setting. I caution the Committee, however, that development
of an common instrument is a very complicated and important task. As
described more fully in my testimony, the range, depth, and content of
clinical information necessary to evaluate and treat LTCH patients is
more comprehensive than is captured in the assessment instruments used
by other post-acute providers. Accordingly, policy makers should
proceed carefully in developing a common instrument and ensure active
participation by clinicians involved in treating patients across the
post-acute continuum.
Third, we support the principle that patients should be cared and
paid for in the appropriate setting. MedPAC's recommendations and CMS's
current research on revised certification criteria for LTCHs are
designed to achieve this goal. While determination of appropriate
setting is a complicated decision requiring extensive input from
treating physicians in consultation with patients, we agree with the
premise of MedPAC's recommendation that the decision should be made
based primarily on patients' clinical characteristics and needs.
Patients who can be safely and effectively cared for in SNFs should not
be treated and paid for in LTCHs or IRFs. Conversely, severely ill,
medically complex patients with multiple co-morbidities should have
access to the intensive interventions only available in LTCHs. Again,
from a clinical perspective, these determinations are not always clear.
Policy should allow for some flexibility so that clinical judgment can
be effectively exercised in the best interests of patients.
Fourth, as noted by MedPAC, policy should also require not only
that patients be placed in the appropriate setting, but that providers
in the post-acute sector have the capacity to meet the needs of the
patients. As summarized below, staffing levels, staff skill mix,
availability of diagnostic tests, sophistication of technology and
intensity of service vary significantly across post-acute settings.
While tempting for policy to encourage patients to be placed in the
least intensive and least costly setting, this decision must be made in
light of patient needs and quality of care, as measured by the
providers' capacity to effectively treat patients with certain clinical
conditions.
Differences in Post Acute Levels of Care
In the past 20 years, health care provided after the general acute
hospitalization has become known as post acute services or the post
acute care continuum. Included as post acute are long-term care
hospitals (LTCH), inpatient rehabilitation facilities (IRF)--whether
rehab unit or freestanding rehabilitation hospitals, skilled nursing
facilities (SNF), hospices and home health. Although they tend to be
categorized together, each setting is unique and there should be unique
definitions of each that support the clinical care they are organized
to deliver. They have few similarities and many differences.
Similarities between post acute settings include providing for the
health care needs of patients and doing so through medical personnel
such as physicians, nurses and therapists. Each is regulated by state
and federal authorities, and each is paid by CMS at a different rate
for Medicare patients if the service is medically necessary and
admission and continued stay criteria are met.
Differences between each of these levels of care include:
1) Reason for patient admission
2) Severity and acuity of illness
3) Risk of mortality
4) Intensity of monitoring services
5) Type and availability of services
6) Knowledge, specialization, amount of staff
Reason for Admission
The reason for admission for each level of care is:
LTCH: Medical observation and intervention for complex multiple
medical conditions.
IRF: Comprehensive rehabilitation requiring rehabilitation
physicians, nurses, therapists.
SNF: Restorative, requiring skilled nursing and/or skilled therapy.
HH: Skilled or unskilled care managed safely in home environment
when patient/primary care giver demonstrates ability to manage care at
home.
Each of these locations has the potential to care for the patient
with a specific diagnosis(es). The placement decision should be based
upon: patient needs, patient acuity, complexity of multiple conditions,
stability, intensity of monitoring/observation required, knowledge and
intensity of services required, staff expertise and knowledge, staff
time required, and availability of technology and equipment.
For example, the patient who has experienced a stroke has the
potential of being admitted to an LTCH, IRF, SNF or returning home with
home health. The potentially unstable medically complex stroke patient
who has multiple co-morbidities such as unstable diabetes, renal
failure with dialysis, and/or respiratory insufficiency requiring
respiratory therapy, will require multiple physicians' specialists,
frequent laboratory tests, dialysis, nutritional support and acute
frequent nursing observation and interventions would most appropriately
be admitted to an LTCH.
The stroke patient with functional impairments in eating, dressing,
bathing who is aphasic and has progressed to sitting, is medically
stable, and can participate in a minimum of three hours of therapy a
day, would most appropriately be admitted to an IRF where the patient
would receive a comprehensive rehabilitation program that is medically
directed. The patient would have a goal directed rehab treatment plan
that is aggressive, rapidly responsive to change in the patient status,
and delivered by the highly trained, experienced and licensed rehab
team.
The stroke patient with functional impairments who is medically
stable, but whose endurance is insufficient to participate in an active
three hour a day program, or who has cognitive impairment that prevents
learning would most appropriately be admitted to a SNF if she/he cannot
be cared for safely at home with home health care.
LTCH Characteristics
Severity and Acuity of Illness; Complexity of Care
Patients with medically complex conditions that are severely ill
tend to utilize more staff time and clinical resources/interventions
and be more medically unstable. In the post acute continuum, these
patients are typically treated in LTCHs. These patients have multiple
co-morbidities and many of these are being actively treated along with
the primary diagnosis. LTCH care requires frequent, often daily
physician assessment and intervention due to the high risk nature of
the patients and multiple medical conditions that exist and have
potential for rapid or unpredictable deterioration. Overall, severity
of illness is significantly higher in LTCH than in other post acute
settings.
Risk of Mortality
The risk of mortality is increased when the severity of illness is
greater. The LTCH patient typically has multiple medically complex
conditions, and the acuity of illness is high. When risk of mortality
is higher, the need for intensity of monitoring services is greater.
Intensity of Monitoring Services
Intensity is established by a list of treatments, medications,
interventions and therapy required by the patient based on the
patient's needs and condition. When the patient's condition requires
more frequent monitoring, intervention procedures, invasive treatment,
intravenous medication and/or nutrition, the level of care required is
of greater intensity and LTCH care is indicated.
Types and Availability of Services
The need for the availability of on-site services increases with
the acuity and complexity of the patient's condition. Continuous
cardiac monitoring, on-site pharmacy, diagnostic services, dialysis,
intensive care or high observation units, emergency rescue services,
i.e., code team are common services in LTCHs. Patients in IRF's and
SNF's tend to be more stable, so available services on-site vary based
on patient programs.
Knowledge, Specialization, Amount of Staff
The knowledge, specialization and amount of staff vary greatly in
the different post acute levels of care. The medical staff in the LTCH
is comprised of multiple specialists including pulmonologists;
cardiologists; gastroenterologists; general, plastic and vascular
surgeons; infectious disease and internists. These physicians see
patients daily and consult routinely at the LTCH. The medical staff at
the inpatient rehabilitation facility is also an organized staff model.
The attending physician is typically the physiatrist. Consultants may
see the patient at the hospital or in his or her office. The SNF
typically does not have an organized medical staff. The attending
physician may be the patient's family physician or a physician
contracted with the nursing home to see patients. Consultants, when
required, see the patients in his or her office.
The amount of nursing hours required by the patients, the ratio of
RNs to other nursing staff, and the clinical expertise required is
different in each setting. LTCHs require acute care nurses with
emphasis on monitoring and managing potential and actual acute events
with a higher number of nursing hours per patient day and a higher
ratio of RNs. Advanced cardiac life support is paramount. Inpatient
rehabilitation requires nurses with rehabilitation training with
emphasis on mobility, cognitive and elimination, etc.
Rehabilitation therapists at inpatient rehabilitation facilities
specialize in neurological treatment, spinal cord injury and traumatic
brain injury. The level of specialization they need in rehab is not
required in the LTCH or SNF.
Respiratory therapists in LTCHs utilize ventilator weaning
protocols jointly developed with the pulmonologist to facilitate
weaning. This level of expertise may not be required in a SNF with
chronic ventilator management or in inpatient rehabilitation.
Assessment Tool
Developing a common assessment tool for post acute providers is an
important but difficult task. Inpatient rehabilitation utilizes
Inpatient Rehabilitation Facility--Patient Assessment Instrument (IRF-
PAI) as their assessment tool. SNFs utilize Minimum Data Set--Resident
Assessment Instrument (MDS-RAI), home health utilizes OASIS. These
tools are specific to that level of care and not usable for the other
or LTCHs. The current tools, (MDS-RAI,OASIS, IRF-PAI), are not
sufficiently comprehensive to capture the severity of illness/acuity,
the intensity of the services and the complexity of the needs of the
medically complex patient with multiple co-morbidities requiring
multiple interventions The focus of these tools is the level of
disability and the amount of help a person needs from others to perform
basic activities of daily living. If one tool is to be created,
clinicians from each of the post acute levels of care must be involved.
Adequate trials of the tool must be completed before implementation. At
the individual hospital level, when IRF-PAI was implemented, a new
position of PPS coordinator was created and with MDS-RAI a MDS
coordinator was created to ensure compliance and timely completion.
Both positions are typically filled by registered nurses in a time of
nursing shortages taking more nurses from the bedside and increasing
cost to comply.
Key elements of a patient assessment tool that would adequately
assess LTCH patients would include:
Indicators of severity of illness and intensity of services, such
as
Emergency management
Medical complexity of care
Infectious disease monitoring and management
Intravenous interventions including medication and/or
nutritional support through TPN
Blood and blood products
Medication titration
Respiratory interventions, respiratory therapist time
frequent suctioning
brochoscopy
tracheostomy care
Potential for instability
Lab monitoring
Intensity of observations required in rapidly changing
medical condition
Hemodynamic monitoring
Cardiac monitoring
Frequent physician specialty consults
Radiology diagnostic procedures
Special procedures
CT scans, MRI, EKG
Summary
Again, on behalf of Select Medical and ALTHA, I commend the
Committee for convening hearings on this important topic and soliciting
the input of providers across the post-acute continuum. We urge the
Committee to use as a guide the four principles summarized at the
beginning of my testimony. ALTHA and Select Medical stand ready to
assist the Committee in any way we can. Specifically, we urge Committee
members and staff to visit LTCHs, IRFs and other post-acute providers
to learn more about the fundamental differences in patients served in
these settings and the capacity of different provider types to meet
patient needs.
POST ACUTE LEVELS OF CARE
------------------------------------------------------------------------
LTCH Rehabilitation SNF
------------------------------------------------------------------------
Reason for Medical and Comprehensive Restorative
Admission Respiratory rehabilitation requiring
Needs requiring therapy skilled nursing
for functional and/or skilled
impairments therapy
------------------------------------------------------------------------
Licensure/ Acute Acute or SNF
Registration Rehabilitation
(State)
------------------------------------------------------------------------
Provider Number LTCH Rehabilitation SNF
------------------------------------------------------------------------
Medicare Excluded Excluded Hospitals SNF
Classification Hospitals CMS CMS 412.23
412.23
------------------------------------------------------------------------
CMS Exclusion 25-day Length 75% of ----
Criteria Stay admissions
within 13
diagnoses
Pre-
admission
screening
Team
Conference
Medical
Director
Full-time
Experienced/
trained
in rehab
------------------------------------------------------------------------
Medicare Payment LTCH-PPS Rehab MDS-RAI
Basis IRF-PAI RUGS
Case Mix Groups
Rehab
Impairment
Category (RIC)
FIM
Age
Comorbidit
ies
4 Tiers
------------------------------------------------------------------------
Admission/ Interqual or Functional Requires either
Continued Stay Mass Pro deficit due skilled nursing
Criteria (Designated by to acute or skilled
QIO) condition therapy daily
Intensive,
multi-
disciplinary
rehab
24-hour
availability
MD
Rehab Nurse
Able to
tolerate 3 hours
of therapy a
day, 5
days a week
2
disciplines
required
(PT, OT, Speech)
------------------------------------------------------------------------
Severity of Actual/Potential Stable Stable
Illness Instability
------------------------------------------------------------------------
Intensity of High Medium Low
Interventions/
Services
------------------------------------------------------------------------
Physician Daily 3x week to Monthl
Assessment/ or more daily y by
Intervention frequent Physiatrist regulation
Multipl MD/PA/
e Physician NP
Specialists
Pulmono
logist
available
24 hours
------------------------------------------------------------------------
Nursing Acute Care Nurse Rehab Nursing Skilled Nursing
8.5h-12h PPD 6.2h-6.5h PPD at least daily
High RN ratio 3-4h Low RN
ratio
------------------------------------------------------------------------
Respiratory Active weaning As needed ----
management
24h/7d
------------------------------------------------------------------------
Pharmacy On-site On-site Delivered from
Services off-site
------------------------------------------------------------------------
Diagnostic On-site Varies Off-site
Services
------------------------------------------------------------------------
Rehabilitation Varies based on 3 hours/day 1 hour/day
Therapies (PT, patient needs
OT, Speech) Averages--1h/day
------------------------------------------------------------------------
Interventions Continu Rehab Skille
ous cardiac Therapies d Nursing
monitoring Psychology Skille
Acute Cognitive d Therapy
intubation Therapy
Ventila Urological
tor weaning Management
Mechani
cal
ventilation
Compreh
ensive
Medical
Assessment/
Consultations
IV
Medications/
TPN
Renal
Dialysis
Wound
Assessment/
Management
including
Enterstomal
Therapist
------------------------------------------------------------------------
Assessment Tools No standardized IRF-PAI MDS-RAI
assessment
required by
regulation
------------------------------------------------------------------------
LOS 27 13 Approximately
40
------------------------------------------------------------------------
Chairman JOHNSON. Thank you very much, Ms. Rice. Ms.
Edelman.
STATEMENT OF TOBY S. EDELMAN, SENIOR POLICY ATTORNEY, CENTER
FOR MEDICARE ADVOCACY, INC.
Ms. EDELMAN. Madam Chair and Members of the Committee,
thank you for the invitation to testify today. My name is Toby
Edelman; I am a Senior Policy Attorney with the Center for
Medicare Advocacy, a private nonprofit organization that
provides education, analytical research, advocacy, and legal
assistance to help older people and people with disabilities
obtain necessary health care. Since 1977, I have represented
and worked on behalf of nursing home residents. Most recently,
I was a Member of the technical advisory panel that made
recommendations to CMS about refinements to the Medicare
reimbursement system for SNFs. The idea of using a uniform
assessment instrument for post-acute care has been discussed
for many years. A single comprehensive instrument might produce
benefits of assuring appropriate care and improved care
outcomes for beneficiaries; however, another key purpose of
uniform assessment instrument is saving public money. It
appears to make little sense to pay vastly different amounts
for the same services based solely on the setting of care.
While this point has validity, we need to keep in mind the
unintended consequences of similar cost containment efforts in
the past. Cost shifted from one setting to another: uniform
rates gave windfalls to some providers, eliminated other
providers, and did not improve care for beneficiaries, and
beneficiaries and providers each lost the opportunity to make
choices about the site of health care. I would like to discuss
these, each very briefly.
First, cost-shifting: 20 years ago, Congress enacted PPS
for acute care hospitals. Research on the treatment of
beneficiaries with hip fractures found enormous changes
following implementation of the new reimbursement system. One
study found that before PPS, patients received rehabilitation
in the hospital and generally went home either directly or
following a short stay in a SNF. After PPS, hospital lengths of
stay declined from 22 days to 13 days in this study, and the
percentage of residents discharged to SNFs increased from 38
percent to 60 percent. Nothing surprising here. The expectation
was that patients would get the same rehabilitation services in
SNFs that they had received in acute care hospitals, but at
lower cost. This did not prove true. Researchers found that,
for various reasons--and these are their words--
``Rehabilitation therapy within the nursing homes was less
effective than inpatient therapy before PPS.'' Instead of
getting therapy and returning home, patients were more likely
to be in the nursing home a full year after their hip fracture.
There was a 200-percent increase in the rate of nursing home
residence 1 year after hospitalization after PPS. Not only were
the care outcomes worse for beneficiaries with hip fractures,
but expected cost savings also did not materialize as costs
moved elsewhere. After PPS, although people with hip fractures
spent less time in the hospital, they then became Medicare
patients in SNFs, and then, as the researchers found, long-term
care residents in nursing homes. So, the savings in Medicare
acute care costs were accompanied by increases in post acute
costs for both Medicare and Medicaid. Care was worse; costs
shifted. I promised my friend, Mary Ousley, that I would say
that the study does not reflect care in nursing homes today,
which we would agree is better following implementation of the
nursing home reform law.
Second point: Recent experience in nursing home
reimbursement following enactment of the PPS in 1997
illustrates some consequences of establishing uniform rates.
The PPS system for SNFs eliminated the longstanding payment
differential between reimbursement rates for free-standing and
hospital-based SNFs. All SNFs now receive the same rates, based
on assessed needs of their residents. The CMS used both sets of
rates when it computed the new uniform rates, however, and so
hospital-based SNFs wound up with lower rates and free-standing
SNFs got a windfall. The GAO reports that hospital-based
facilities had extremely negative margins. Twenty-6 percent of
the units closed between 1998 and 2000. On the other hand,
free-standing facilities increased their Medicare margins from
8.4 percent in 1999 to 18.9 percent in 2000. Paying uniform
rates across SNF settings did not assure necessary care was
provided to beneficiaries. The GAO reported that SNFs changed
their care practices in response to the PPS system so that the
majority of residents, in fact, received less therapy than
before.
The last point is about choices for beneficiaries.
Generally, Federal law guarantees beneficiaries the right to
choose among post acute providers that are certified to provide
them with care and that agree to serve them. Use of the uniform
instrument raises some questions. Would such an instrument
eliminate beneficiary choice and automatically limit
beneficiaries to the least expensive care setting? Some years
ago, beneficiaries in a western State were denied the right to
choose a hospital-based SNF when a lower cost, free-standing
SNF was available. Beneficiaries objected when they were told
they would have to move great distances from their families.
Post-acute care for many people becomes a permanent placement.
While people may choose short-term care in distant locations,
they usually want to be near families and friends if a
placement turns into the rest of their lives. We need to be
concerned if a uniform assessment instrument precludes
beneficiary choice among appropriate providers. The evidence is
in conflict whether the different post-acute care settings
actually serve the same or different populations, and whether
they provide the same or different services or intensities of
services. We do know that people become more different from
each other as they age; and the combination of various chronic
and acute conditions, mental functioning, and social factors
may make people with similar post acute conditions very
different from each other in significant ways that may justify
different post acute settings.
Finally, I think assuring accurate and comprehensive
assessments so that Medicare beneficiaries get the care and
services they need in the appropriate setting of their choice
is an important public goal of uniform assessments and could
certainly be an improvement over today's system. If paying the
lowest rate possible is the primary goal of uniform
assessments, beneficiaries may not be well served, and it may
create a false sense of savings if costs are simply shifted
elsewhere. I don't have simple answers to these concerns, and I
am not suggesting that change isn't needed, but I am
encouraging you to proceed with caution in this highly complex
area of post-acute care. Thank you.
[The prepared statement of Ms. Edelman follows:]
Statement of Toby S. Edelman, Senior Policy Attorney, Center For
Medicare Advocacy, Inc.
Madam Chairwoman and Members of the Committee:
The idea of using a uniform assessment instrument for post-acute
care has been discussed for many years.\1\ As Congress has recognized,
there are many potential benefits from using a single instrument. A
single, comprehensive instrument might lead to more uniformity, more
accuracy, and less confusion if it captured all relevant information
about patients that health care providers needed in order to assure
appropriate post-acute care for Medicare beneficiaries. Improved care
outcomes for Medicare beneficiaries could result.
---------------------------------------------------------------------------
\1\ Joan L. Buchanan, Ph.D., et al, ``An Assessment Tool
Translation Study,'' Health Care Financing Review 24(3): 45-60 (Spring
2003) (describing benefits from comparable measures across settings,
but difficulties in developing a single assessment tool for long-term
care); MedPAC, Report to Congress: Medicare Payment Policy 93 (March
2001) (noting 1999 and 2000 MedPAC recommendations to develop a common
core set of assessment data elements for post-acute care).
---------------------------------------------------------------------------
In addition to planning care for beneficiaries, however, another
key purpose of a uniform assessment instrument is saving public money.
It appears to make little sense to pay vastly different amounts for the
same services, based solely on the setting of care. While this point
has validity, we need to remember the unintended consequences of
similar cost-containment efforts in the past. Costs shifted from one
setting to another; uniform rates gave windfalls to some providers,
eliminated other providers, and did not improve care for beneficiaries;
and beneficiaries and providers lost the opportunity to make choices
about health care.
Cost-shifting. Twenty years ago, Congress enacted a prospective
payment system for acute care hospitals. One explicit purpose was
reducing hospital costs. A considerable amount of research found, as
expected, that hospital lengths of stay were reduced following the
introduction of PPS. There is certainly a benefit to that result, in
and of itself, both for public payment systems and for beneficiaries.
But some less predictable and less beneficial results also occurred.
Research on the treatment of beneficiaries with hip fractures found
enormous changes in care settings and costs following the
implementation of PPS. One study found that before PPS, patients
received rehabilitation in the hospital and generally went home, either
directly from the hospital or following a short stay in a SNF. After
PPS, hospital lengths of stay declined from 22 days to 13 days and the
percentage of residents discharged to SNFs increased from 38% to 60%.
The expectation was that patients could get the same rehabilitation
services in SNFs that they had received in acute care hospitals, but at
lower cost. This did not prove true. After PPS, the researchers found
that, for various reasons, ``rehabilitation therapy within the nursing
homes was less effective than inpatient therapy before PPS.'' The
outcomes for patients with hip fracture were worse following PPS.
Instead of getting therapy and returning home, patients were more
likely to be in the nursing home a full year after their hip fracture;
a 200% increase in the rate of nursing home residence was reported by
the study after PPS was implemented.\2\ The researchers called this
finding ``alarming'' and their most important finding. Services were
not the same in the different settings.
---------------------------------------------------------------------------
\2\ John F. Fitzgerald, M.D., et al, ``The Care of Elderly Patients
with Hip Fracture,'' New England Journal of Medicine 319(21):1392-1397
(Nov. 24, 1988).
---------------------------------------------------------------------------
Not only were care outcomes worse for beneficiaries with hip
fractures following PPS, but expected cost savings also did not
materialize as costs moved elsewhere. After PPS, people with hip
fractures spent less time in the hospital, but these patients then
became Medicare patients in SNFs and then, frequently, as the
researchers found, long-term residents of nursing homes. Medicare
payments to SNFs increased in the years following implementation of PPS
for hospitals.\3\ And patients who would have gone home from the
hospital now found themselves living in nursing facilities on a long-
term basis, generally, as Medicaid beneficiaries. Savings in Medicare
acute care hospital costs were accompanied by increases in Medicare and
Medicaid post-acute costs. Costs shifted from one setting to another,
with worse care outcomes for beneficiaries. Lessons learned from this
experience are that lower-cost settings do not necessarily provide
comparable services and that new health care costs may emerge in other
settings.
---------------------------------------------------------------------------
\3\ MedPAC reported that Medicare spending in SNFs increased from
$3.6 billion in 1992 to $13.5 billion in 2003. MedPAC, A Data Book;
Healthcare Spending and the Medicare Program 142, Chart 9-2 (June
2004). Other factors also contributed to the growth in SNF care during
this period, including new SNF coverage guidelines issued in 1988,
enactment of the Medicare Catastrophic Coverage Act of 1988 (which
revised rules for SNF coverage), and Medicare's use of cost-based
reimbursement prior to 1998. ``A Review of Issues in the Development
and Implementation of the Skilled Nursing Facility Prospective Payment
System'' 2 (May 2004).
---------------------------------------------------------------------------
The consequences of uniform rates: Recent experience in nursing
home reimbursement following enactment of a prospective payment system
in 1997 illustrates the consequences of establishing uniform rates. The
PPS system for skilled nursing facilities eliminated the long-standing
payment differential between Medicare reimbursement rates for free-
standing and hospital-based SNFs. All SNFs now receive the same rates,
based on the assessed needs of their residents. In developing these
rates, the Centers for Medicare & Medicaid Services used both free-
standing and hospital-based rates. When the rates were combined,
hospital-based SNFs wound up with lower rates and free-standing SNFs
got higher rates (i.e., the financial benefit of the higher rates that
hospital-based SNFs had received). As a consequence of these changes,
the Government Accountability Office has repeatedly found that free-
standing facilities have increased their Medicare margins--from 8.4% in
1999 to 18.9% in 2000--and hospital-based facilities have had extremely
negative margins,\4\ with 26% of the units closing between 1998 and
2000.\5\
---------------------------------------------------------------------------
\4\ GAO, Medicare Payments Exceed Costs for Most but Not All
Facilities, GAO-03-183 (Dec. 2002).
\5\ ``A Review of Issues in the Development and Implementation of
the Skilled Nursing Facility Prospective Payment System'' 29 (May
2004).
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Paying uniform rates across SNF settings did not assure that
necessary care was provided to beneficiaries. In a series of reports,
the GAO found that SNFs changed their care practices in response to the
PPS system so that residents received less therapy than before.\6\ And
SNFs failed to increase nurse staffing, despite a statutorily-mandated
increase in the nursing component of the Medicare rates.\7\ These
reports demonstrate that reimbursement systems alone are not sufficient
to assure that facilities provided appropriate care and services to
Medicare beneficiaries. A strong regulatory system, with incentives
that are consistent with, and complemented by the reimbursement system,
is necessary.
---------------------------------------------------------------------------
\6\ GAO, Skilled Nursing Facilities; Providers Have Responded to
Medicare Payment System By Changing Practices, GAO-02-841 (Aug. 2002).
\7\ GAO, Skilled Nursing Facilities: Available Data Show Average
Nursing Staff Time Changed Little after Medicare Payment Increase, GAO-
03-176 (Nov. 2002).
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Choice for beneficiaries: Generally, federal law guarantees
beneficiaries the right to choose among post-acute providers that are
certified to provide them with care. As long as the provider agrees to
serve the beneficiary, the beneficiary can choose among providers.
As we think about a uniform assessment instrument, questions arise.
Would such an instrument restrict beneficiary choice and limit
beneficiaries to the least expensive care setting, regardless of
beneficiary and provider choice to the contrary? Some years ago,
beneficiaries in a western state were denied the right to choose a
hospital-based SNF when a lower-cost free-standing SNF was available.
Some beneficiaries objected when they were told they would have to move
great distances from their families to a free-standing facility. Post-
acute care, for many people, becomes a permanent placement. While
people may choose short-term care in distant locations, they usually
want to be near families and friends if a placement turns into the rest
of their lives. An assessment instrument should not be used to limit
beneficiary choice among appropriate post-acute providers.
Finally, do various post-acute settings in fact serve the same
populations and provide identical services? The evidence is in
conflict.
Some evidence indicates a clear overlap in the populations served
by different post-acute care settings and in the services these
settings provide. The increasing acuity of SNF residents is
demonstrated by the proposed Medicare reimbursement rules for SNFs,
published last month, which modify the 44 assessment categories and add
nine new high-cost categories to reflect residents who are medically
complex and also need rehabilitation.\8\ On the other hand, some
studies indicate that post-acute providers may serve different people
or provide different intensities of services, or both.\9\
---------------------------------------------------------------------------
\8\ 70 Federal Register 29070 (May 19, 2005).
\9\ MedPAC, Report to Congress: Medicare Payment Policy 91-92
(March 2001).
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Geriatricians tell us that people become more different from each
other as they age. The combination of various chronic and acute
conditions and health care needs may make people with similar post-
acute conditions different from each other in significant ways that
justify different post-acute settings. While government payers do not
want to pay for more expensive services when less expensive services
would work equally well, older people may have different needs, or may
suddenly and unexpectedly develop new needs, and require different
settings as a result.
Assuring accurate and comprehensive assessments so that Medicare
beneficiaries get the care and services they need in the appropriate
setting of their choice is an important public goal of uniform
assessments and could be an improvement over today's system. However,
if paying the lowest rate possible is the primary public goal of
uniform assessments, beneficiaries may not be served well and it may
create a false sense of savings if costs are simply shifted elsewhere.
Thank you.
The Center for Medicare Advocacy is a private, non-profit
organization founded in 1986, that provides education, analytical
research, advocacy, and legal assistance to help elders and people with
disabilities obtain necessary healthcare. The Center focuses on the
needs of Medicare beneficiaries, people with chronic conditions, and
those in need of long-term care. The Center provides training regarding
Medicare and healthcare rights throughout the country and serves as
legal counsel in litigation of importance to Medicare beneficiaries
nationwide.
Toby S. Edelman is a Senior Policy Attorney with the Center for
Medicare Advocacy in the Washington, DC office. Since 1977, she has
represented and worked on behalf of nursing home residents. She was a
member of the Medicare SNF Technical Advisory Panel that considered
refinements to the Medicare SNF reimbursement system (2004).
Chairman JOHNSON. Thank you. Thank you. It is interesting
to hear the unintended consequences of past policy changes.
There are two issues I want to plumb. First of all, on this
issue of uniform assessment tool, it does seem to me from
listening to the testimony of both the first panel and the
second panel that there is some definable body of information
that could be used to make that as a common base; though
clearly, there is a need for additional assessment in each
setting. It does seem to me that if you did that, you would end
up altering the OASIS and MDS and everything else. If you have
something that takes the first piece of it and then you add on,
depending on the institution's focus, you would change all
tools. Now, is that where you think we are heading, those of
you who are much closer to this than I am? Dr. DeJong.
Dr. DEJONG. Yes, I think so. I think that one of the
difficulties we are going to have is getting consensus on the
core elements. Each post acute sector is highly vested in its
particular instrument and its approach. All these instruments
were developed over long periods of time through consensus
building and research. The silos that are represented in these
institutions, and these post acute industries, are not just the
facilities themselves; it goes much deeper. With the skilled-
nursing industry, for example, there are people who are trained
in long-term care who have had their entire professional
careers in the area of long-term care, and that has spilled
over into skilled nursing. You have got people in the
rehabilitation community who have come through their particular
traditions and whatnot. Each of these silos has certain
cultural and intellectual traditions that are reflected in the
instrument that each uses. To obtain consensus across the
different sectors and different silos, I think is going to be
quite a challenge. I think we are going to need to do that. I
think one option is to allow people to retain certain elements
of what they currently have, but make it auxiliary to the core
instrument.
Chairman JOHNSON. Ms. Ousley.
Ms. OUSLEY. Having the assessment instrument, actually I
think that has been in place the longest in skilled nursing. I
firmly believe that there is a core set of data elements that
can go across all settings. Now, for MDS, CMS is in the process
now of looking at an update, which is overdue. To me, it seems
that the time is right to be able to look at what is the core
set of data elements that can go across the settings. The three
things that we can't lose sight of are that, whatever this
instrument looks like, it must be able to define the care, link
it to payment, and we have to be able to define outcome
measures. I am not so wedded to MDS that I don't see the need
for change. We have, I think, the best database in the Nation
of MDS-derived quality indicators over the years that we have
used it, and would love to be able to see that continue and,
again, go across all post acute settings. I think it is doable.
Ms. RAPHAEL. I was struck when MedPAC took a look at this,
and, in fact, we all are looking at the same things, for
example, mobility. When you looked, one person was saying,
``Did you walk 20 feet?`` Another one was looking, ``Did you
walk 100 feet;'' ``Did you walk unassisted?`` So, I think we
are all looking at the same things to some degree; it is just
how we are defining and when we are measuring. I think that
there could be consensus here on what we think is important in
trying to make these determinations.
Chairman JOHNSON. Then just to focus on the nursing home
for a moment. I recently visited a nursing home that is part of
the Evercare program, and they don't use MDS, they just have a
case manager and outcomes--just outcomes focused. The person is
in the nursing home, working with a nursing home staff, but it
is an Evercare patient. So, I was interested that they could
just not do the MDS forum. So, I do think we need to think
clearly about this base data. Dr. Votto, you mentioned in your
testimony that you thought that from the trial program--and I
want to come to you, Ms. Rice, to see if you are familiar with
this research that they are doing, because that seems very
promising to me. It is the only tangible, concrete, fairly
comprehensive effort being made right now, as far as I can
tell.
Dr. VOTTO. Right. The point I would like to make is that I
think we can have a basic patient assessment tool. I think one
of the things about the silo concept is that in many of the
programs that we have in the LTCH industry, you do need a
critical mass of patients. You can't just have a weaning
program and have three patients a year or ten patients a year.
You have to have a program. A spinal cord program is very
similar, brain injury is very similar. If you want to have a
comprehensive program which is multidisciplinary, you do have
to have a core or critical mass, I believe. If you had a
patient assessment tool which would separate out those small
groups of patients, then maybe geographically you don't have
many of these programs. I think that that has to be--that point
has to be made.
Interestingly, in the study that we did with the ventilator
patients, we had thought that the patients that ended up on
prolonged mechanical ventilation would be the very sick; coming
out of nursing homes, just going into a hospital Intensive Care
Unit (ICU) and not getting better. It turns out, 86.5 percent
of those patients were independently living before they ever
ended up on prolonged mechanical ventilation, and 82 percent of
them were very functional out in the community before they
ended up on prolonged mechanical ventilation. So, we are not
talking about a patient population that is at the end of life
and at the end of the rope, and they come in and we are doing
all these things to them; they were actually very functional,
most of them. So, that kind of data is important to have, I
think.
We also found that 42 percent of them had bed sores when
they came to our hospitals. Also, some very interesting data
was that the Acute Physiology and Chronic Health Evaluation
(APACHE) scores--which is an acute physiology score, an acuity
score which measures your likelihood of dying--when compared to
ICUs in multiple patients, thousands of which were in one
study, the APACHE scores of patients going into the ICUs was
41. The higher, the worse it is, and the range is zero to 115.
The scores in our study were 35, meaning that our patients that
were coming into the LTCHs for weaning were just about as
critically ill as the patients going to the ICU the first time.
So, you do get very interesting information when you do study
subpopulations.
Chairman JOHNSON. Interesting.
Ms. RICE. I am familiar with that study, and it is--the
tool that will have to be developed to be usable by the LTCH
industry, as well as post acute, is a tool that will have to
look at complexity. Whereas most of the tools that have been
developed thus far, IRF-PAI, MDS, they look at functional
independence measure as it relates to Activities of Daily
Living (ADL). The patients that we are seeing, we are more
concerned about if they are going to survive the
hospitalization, their risk of mortality because of the level
of illness. Although it would be nice to know that, it is not
the primary thing that we treat during the long-term acute care
hospitalization. So, for admission, we use criteria currently
in our hospitals and in most of the LTCHs, because most of the
QIOs are now using it; we use InterQual criteria for admission
and continued stay. That is more oriented toward the acute
care, acute hospital, rather than toward the post-acute care
arena, so that the two will have to be significantly different
than the tools that are currently out there.
Chairman JOHNSON. Dr. Votto, do you have any comment on the
InterQual criteria?
Dr. VOTTO. My biggest concern about the InterQual criteria
are the mutual exclusivity that is inherent in them. In other
words, if you qualify for an IRF, you don't qualify for an
LTCH. If you qualify for an LTCH, you don't qualify for a SNF.
If you qualify for an acute care hospital, you don't qualify
for either of the other two. I am concerned about that as the
payment following the criteria that InterQual has. That is one
of the problems that I have with it. There are a few other
things that I think are very rigid about their criteria, but I
think that that is the major issue that I see with them. I
don't think they really differentiate patients correctly.
Chairman JOHNSON. Interesting.
Dr. VOTTO. They don't follow the PPS, as far as I am
concerned.
Chairman JOHNSON. Ms. Edelman.
Ms. EDELMAN. Yes. Thank you. I wanted to say one thing
about the MDS that is used in Medicare SNFs, because the 1987
Nursing Home Reform Law (P.L. 100-175) made the same standards
basically for Medicare SNFs and Medicaid Nursing Facilities.
The assessment instrument that is used, the MDS, has a lot of
information that is important for a long-term care stay, for
somebody who will be living in an institution for a prolonged
period of time. The part that is unique about the MDS, or one
of the parts that is unique, is the section on customary
routines. This section tries to understand who that person is,
when the person likes to get up, go to bed, things that might
not be as relevant for other settings. I would not want to lose
that part of the assessment process because it has been a very
important part of nursing home reform and is really making care
better for residents.
Chairman JOHNSON. Interesting. Mr. Lewis, would you like to
inquire?
Mr. LEWIS. Thank you very much, Madam Chair. Madam Chair, I
want to be very brief and apologize to you for being a little
late, but a group of young students from Connecticut hijacked
me, or maybe they tried to kidnap me, on the steps of the
Capitol and I had to speak to them. So, I didn't think you
would mind. Thank you very much. I want to thank each and every
one of you for being here. I know you have been so patient and
it has been a long afternoon for you. I know you hadn't planned
to be here so late. I have been trying to peruse each
statement, and really appreciate all the wonderful information
that you have provided, so I would be very, very brief. I just
want to say, higher SNF reimbursement under Medicare appears to
be cross-subsidizing Medicaid's lower rates. Medicaid isn't
before our Committee. We deal with it indirectly and remain
concerned about the potential cuts this year on behalf of the
people we serve and with respect to how it could affect
Medicare. Now, if Medicaid is on the table, with all due
respect, you hope that Congress will find the big money. Are
you concerned about Medicaid cuts this year? What might that
mean to your patients and facility?
By the way, you are here, and while you are here this is an
oversight hearing, and maybe I can just--this may be sort of
off message and maybe not complete, Madam Chair, in compliance
with the hearing--but I want to ask you, do you have any
concern about how the new Medicare prescription drug program
will impact you, your patient, your facilities? Anyone. Each
one can say something.
Ms. OUSLEY. To your first question. Any potential cuts in
skilled nursing today, be they from Medicare or from Medicaid,
would be very difficult for us to deal with. We have--I think
we do have a high acuity level of patients, and we are, of
course, looking at individual States all across the Nation and
hoping that Medicaid cuts will not hit us in such a way that
will compromise our ability to provide that care. As we are
learning on a daily basis now what the impact of the Medicare
prescription drug benefit is going to be, I quite honestly have
to tell you that even though we are very few months away from
implementation, in our nursing facilities we are still trying
to figure out exactly how we are going to manage that process,
how we are going to make sure that the residents have the
appropriate choice, the cost containment, if appropriate. All
of those details are simply not available to us now today. I
will tell you that there is a high level of apprehension in
nursing facilities and by managers such as myself of being able
to administer this in an appropriate way to meet the needs, the
intent of the statute and meeting the needs of our residents.
Mr. LEWIS. Thank you.
Ms. RAPHEL. We see about 24,000 patients a day, and a
number of them are dual-eligibles.
Mr. LEWIS. You say you see 24,000 patients a day?
Ms. RAPHEL. Right. A number of them are dual-eligibles.
Mr. LEWIS. For both Medicare?
Ms. RAPHAEL. They are both Medicare- and Medicaid-eligible.
I would say that at this point we really don't know enough
about how the implementation is going to evolve. We are working
with a number of groups in our community to make sure that
people are educated and informed and know how to go through the
process, but it is not yet clear. Our greatest concerns are
about those people who have depression or anxiety and who have
finally been stabilized on medication regimes and who cannot
afford any destabilization period, and trying to make sure that
they don't miss a beat as we move to the new system.
Mr. LEWIS. Thank you.
Dr. DEJONG. I am concerned about the new prescription drug
benefit because I think it is extraordinarily complicated and
confusing with the various deductibles, the doughnut hole, and
whatnot. I am trained in health policy, and I don't fully
understand it, and I pity the beneficiary who is going to cope
with it. The kinds of beneficiaries that are in the types of
facilities represented here, are not necessarily people who
have the wherewithal to fully understand the benefit and how it
is going to affect their lives. I think a massive education
process is needed, and I would suspect that no education will
ever be adequate to the complexity of the benefit. I am deeply
concerned that a lot of people are not going to understand the
benefit and are not going to be able to use it appropriately.
Mr. LEWIS. Doctor, do you have any recommendations or
suggestions that Members of this Committee or the Congress
could take?
Dr. DEJONG. Well, I think it is inherent in the structure
of the benefit itself. I don't know how you get around it. With
the doughnut hole, the deductibles, and the record keeping that
people are going to have to do to figure out whether or not
they are over the deductible or in the doughnut hole, and when
the full coverage starts kicking in upon reaching the
``catastrophic'' threshold. I don't have a solution. I don't
think there is any amount of education that is going to help
beneficiaries get through all that complexity.
Mr. LEWIS. Others?
Dr. VOTTO. I don't know that the drug bill will affect the
inpatient, the LTCH, at this point. I am not sure of that. I do
know that Medicaid cuts could be a major problem for us. About
60 percent of our revenue is from Medicaid, from the hospital
standpoint, and about 80 percent at the nursing home. So, I
think that Medicaid cuts are going to be a major problem for
us. Any Medicaid cut would be a major problem. I hope that
there is a--I don't know the transition for the drug program,
but we hope that that will be a smooth transition, and that is
all.
Mr. LEWIS. Thank you. Yes, ma'am.
Ms. RICE. As a hospital we are reimbursed under Medicare
part A, so drugs are included as part of our overall PPS
reimbursement system. So, on an inpatient hospital basis we
really should not be affected by the drug bill essentially. As
far as Medicaid is concerned, we do see relatively large number
of Medicaid patients that require LTAC in patient care.
Certainly cuts in the Medicaid program would adversely affect
our ability to care for those patients.
Mr. LEWIS. Thank you. Yes, ma'am.
Ms. EDELMAN. Most nursing facilities in the country
participate in both Medicare and Medicaid. Medicare is
generally ten or twelve percent of facilities' reimbursement.
Mostly facilities rely on Medicaid. That is the major payer,
so, there are concerns if cuts are very steep. This could be
very, very difficult. I think the Medicare Part D is a very
complicated benefit for nursing home residents in particular.
When residents come into an SNF as Medicare beneficiaries, they
are covered by part A, and that includes drugs. Once Medicare
ends, which is usually 20 days, 30 days--very few people get
the full 100-day benefit--then they would need a Part D drug
plan. They might have to change drugs right then. What CMS has
said is that the way to get a medically necessary drug that is
not covered by the formulary of the plan that the person is in
is to go through the exceptions process. That is going to be a
very difficult and confusing process for people.
Many people in nursing homes are dually eligible--that is,
they are eligible for both Medicare and Medicaid. Once Medicare
coverage ends, they are then covered by Medicaid. What CMS is
going to do is randomly assign people in the fall to a
prescription drug plan to make sure that there is coverage for
their prescription drugs once they are on Medicaid. When CMS
does this random assignment, because it is random, it is not
going to take into account what drugs the person needs. As a
result, the person could be assigned to a Prescription Drug
Plan (PDP) that has a formulary that does not include that
person's drugs, or the PDP may not have the pharmacy that the
nursing home uses. There can be tremendous complexities to make
sure that people don't have gaps in coverage when January 1st
comes. We have been meeting collectively with CMS and with the
provider associations, with the pharmacists, various health
care professionals, but it is complicated. Part D is not really
ready to be implemented at this point.
Mr. LEWIS. I want to thank each of you for being here, and
adding so much needed information as we wrestle with some of
these tough and hard decisions. Thank you. Thank you, Madam
Chair.
Chairman JOHNSON. I thank my colleague, Mr. Lewis of
Georgia. The Subcommittee will have a separate briefing on
this. It is not surprising. You don't--you aren't informed
about it, since we are almost seven months out from the program
beginning. There is--the administration has a very logical and
very direct and I think quite simple program planned. They are
already communicating with the States. All the people who are
in Medicare and dual-eligible will find it very easy, a much
easier experience. Sometimes, by accident, you do something
really brilliant. The discount plan proved to be really
brilliant in the sense it gave us all a lot of experience with:
how do you communicate; how do the different levels of
government communicate; how does the private sector and the
public sector communicate; how did the seniors understand? So,
we come to this--this will challenge with a much greater body
of experience. Now, the nursing homes have a unique problem,
because they usually have their own pharmacy capability, and
that has been a subject of discussion between the
administration and the nursing home industry to try to make
sure that that works smoothly -that they are discharged, and
that that will work smoothly.
These problems were inevitable, but they--in my mind, the
choice between seniors having a prescription drug coverage and
having to solve problems is a no-brainer. So, I am interested
in the heavily negative tone at the table. For me, I am just
thrilled that so many seniors will have really good drug
coverage. Now, I am very pleased that the administration also
recently made very clear that the offerings for people with
mental health problems and problems like that are going to be
very broad. So, we shouldn't have these problems of an appeals
process by people who are in multiple complex groups of drugs
and would not be in a good position to appeal. Always when you
put a new program in place--when an employer puts a new program
in place if they have several thousand employees, there are
always some rough spots. I believe we will be able to work out
the problem with the nursing homes to everybody's satisfaction.
It is moving along. One thing that is unique about this
administration, having served under four Presidents of both
parties, I can tell you that I have never, ever, served under
an Administration that had the time, energy, and respect for
the constituents and the providers that this administration
does.
So, people do come in. They do talk, there is dialog. There
is a lot of dialog between the Federal government and the State
government about the dual-eligible population. On the
experience of the discount program, we are going to be able to
move that, I think, very easily and without a lot of concern by
the seniors themselves. I think the nursing home problem will
work out. The conversations between the employer sector and the
government are going well, because that is a different, unique
wrap-around issue, and you see many categories of seniors
aren't affected by the structure of the program. The structure,
with its period of personal responsibility--I prefer to call it
personal responsibility as opposed to a doughnut hole because,
frankly, my husband and I can afford $3,500 if we need to, and
my children can't. In the long run, that is why there is a
personal effort thing. The personal effort is not at the
beginning, because then people who couldn't afford $3,000 off
the bat get no program. So, we provide enough programs so that
about 60 percent of seniors will have all of their drugs
covered. Then there is a personal effort. Cut out from the
personal effort people are all the Medicare/Medicaid. They
don't have personal effort.
All the people in Connecticut's Program of All-Inclusive
Care for the Elderly (PACE) or Pennsylvania's PACE program or
the six or eight States that have subsidy programs--we saved
Pennsylvania just for the discount card, someone was telling me
on the floor today, $90 million last year. They were able to up
the income program of their PACE program because under the law
the PACE contributions count toward the $3,500. So, in
Connecticut where our PACE program income is now approaching
200 percent of poverty income--maybe it is more than that, I
have forgotten--you might know, John. We will be able to use
our savings to attune that income level, because it has to be
higher in the Northeast where the cost of living is higher.
Mississippi wouldn't need as high a one. So, from this savings
the States will be able to attune that State program level to
the point where, people who can't afford the $3,500 are never
exposed to it. People on the integrated plans, advantage plan,
can be protected from the $3,500 till probably they will never
need it. So, this is a flexible structure that provides, for
$400 billion, an absolutely extraordinarily good benefit. The
idea of a benefit with no doughnut hole was $1.3 billion, and
that is to start.
So, we have to be realistic in today's world. We have got a
good, solid program to implement any new benefit to seniors,
and all of the circumstances they find themselves in is really
difficult. I know for an absolute fact, because I circulate the
senior citizen centers a lot, that I have seniors paying the
most extraordinary amount of money for Medigap insurance. I am
just shocked. I know they are going to have many lower-cost
alternatives for more integrated care and for those with
chronic illnesses, that will absolutely be a big boon--and the
integrated drug program into either integrated care or fee-for-
service care. So, while I appreciate you don't know all that
you need to know now, I hope you will remember that this is a
giant step forward. There are so many middle-class seniors who
can't afford Medigap insurance who are going to be able to
afford $37 a month, $35 a month. They will be integrated plans
that will probably have lower premiums than that--remember the
old zero premium plan--they seem to be coming back. Some of
those will include a very small payment premium for drugs,
because with integrated care, you and I know, you can keep
people out of hospital, you can keep money out of emergency
rooms, and that money flows back to the patient. In the
government, we keep people out of the hospital and it flows
back to us.
So, there are some interesting, new and tremendously
positive possibilities in bringing prescription drugs into
Medicare. The biggest, most important, new possibility is this
possibility of integrated comprehensive chronic disease
management which will, in the end, flow right into the kind of
basic assessment we are talking about. Because as people manage
chronic illness, and when we get that electronic health
record--it is one question I meant to ask them earlier--we
really need to think as we move toward a basic assessment and a
series of new assessment tools in a rather complicated area, we
ought to try to coordinate this with the implementation of
electronic capability, because we have got to have better
electronic capability in health care for accuracy, for patient
safety, for everybody's well-being. This will be much less
complicated to implement if we think about it from the
beginning and we structure it from the beginning with the
electronic capability in mind.
So, quality is the real challenge in health care; in a
health care sector that is developing new and remarkable
treatments and diagnostic capabilities and care capabilities
that were simply never imagined. So, we have to have the help
of the electronic records. We have to have medications, we have
to know people can get them. This is a first giant step toward
that. I hope all of you at the table--because every one of you
have the brains enough to be a font of information about this
program--make it your business to not say oh, this is so
complicated; make it your business to say, just tell me your
zip code and I will tell you what is available.
Mr. LEWIS. Madam Chair.
Chairman JOHNSON. Yes.
Mr. LEWIS. I want to be sure that I heard you correctly.
Did you suggest that we would hold a briefing on the Medicare--
--
Chairman JOHNSON. Oh, yes, we will.
Mr. LEWIS. Would we also consider holding an oversight
hearing on the program?
Chairman JOHNSON. We will see the right time for that--
certainly we need to do that. Whether we hold a public hearing
at this time, we will decide. Certainly I want the Committee to
see the rollout that the agency has now put in place. We hope
to do that before the August recess; maybe before the July
recess.
Mr. LEWIS. Thank you.
Chairman JOHNSON. Thank you all for participating. My
heartfelt apologies for having this hearing dragged on so long,
but it is a big issue. Remember, your thoughts are welcome
throughout the process, because this is going to be a
challenging process. Thank you very much. The hearing is
adjourned.
[Whereupon, at 5:35 p.m., the hearing was adjourned.]
[Submissions for the record follow:]
Statement of Felice Loverso, Ph.D., American Medical Rehabilitation
Providers Association
The American Medical Rehabilitation Providers Association (AMRPA)
is the leading national trade association representing over 450
freestanding rehabilitation hospitals, rehabilitation units of acute
care general hospitals and numerous outpatient rehabilitation services
providers. Our members serve over 450,000 patients per year, and most,
if not all, of our members are Medicare providers. We appreciate the
Subcommittee's focused attention on post-acute care services in
Medicare. Rehabilitation hospitals and units are a crucial part of the
spectrum of post-acute care providers, and we believe it is important
to examine the issues surrounding this complex area of care.
An ongoing debate exists among policymakers, providers and various
organizations about whether skilled nursing facilities (SNFs),
inpatient rehabilitation facilities (IRFs) and possibly long term care
hospitals (LTCHs) provide the same programs and activities with
equivalent outcomes to patients needing medical rehabilitation
services. Facilities should be compared both by their physical
attributes, and the complete nature of the care and services they are
organized to provide. Comparing facility performance solely by patient
diagnoses or cost provides an extremely limited picture of the patients
treated in these settings, the nature and value of the care they
receive. One must look at additional patient information to truly
appreciate the patients and their characteristics.
IRFs provide programs of care that utilize skilled rehabilitation
services to Medicare patients at a pace, intensity, and sophistication
that cannot be obtained in other health care settings. IRFs provide
intense rehabilitation medicine and therapy to patients with 24-hour
nursing and physician services. Patients receive a high-quality,
coordinated program of care with the goal of achieving the maximum
level of function possible and a rapid return to the community.
ARMPA shares the Committee's interest in examining the complicated
issues surrounding assessment tools and looking at other ways to
address payment across post acute providers, and we appreciate the
opportunity to present our recommendations to the Committee.
75% Rule
One overarching concern facing all post-acute care rehabilitation
providers is the dramatic impact implementation of the 75 Percent Rule
on patient access to rehabilitative care. The 75% Rule is
unquestionably having a more severe impact on patients and providers
than CMS or OMB originally estimated. The Medicare program originally
estimated that implementation of the 75% Rule would reduce payments to
IRFs by $10 million in FY 2005 and $30 million in FY 2006. However, the
President's FY 2006 Budget revised these estimates to show a savings of
$50 million in FY 2005 and $70 million in FY 2006. AMRPA's own data
suggest that Medicare is likely to save $165 million dollars in the
first year alone. Clearly, CMS did not anticipate such a dramatic
decline in patient services as a result of implementing this
regulation.
Most alarming is the impact the rule is having on patients' access
to treatment. Clear evidence now exists that IRF discharges have
started to decline, and this change is orders of magnitude greater than
CMS estimated. ERehabData, AMRPA's data service, estimates that in the
first year alone, over 39,000 patients will be refused admission to
inpatient rehabilitation facilities in order for hospitals to maintain
compliance with the new 75% Rule. For the first three quarters under
the new 75% Rule, volume is down 5.8% from the comparable three
quarters in 2003 and 2004, meaning that approximately 20,000 Medicare
patients have been denied admission since July 1, 2004. By the fourth
year of the 75% Rule, IRFs will be forced to turn away one out of every
three patients in order to remain compliant. As noted in the GAO Report
entitled ``More Specific Criteria Needed to Classify Inpatient
Rehabilitation Facilities,'' only 6 percent of IRFs will be able to
meet the 75 percent threshold required at full implementation ofthe
rule at the end of the transition period. Without any direction from
Congress, the 75% Rule is eliminating intensive inpatient
rehabilitation as a treatment option for a significant number of
Medicare beneficiaries.
At the core of the 75% Rule seems to be a mistaken reliance on the
assumption that one site of care can be substituted for another with no
impact on quality or outcomes. In particular, CMS, in promulgating
changes to classification criteria for IRFs, assumed that SNF and other
post-acute care settings can be substituted for IRFs if patients are
denied care due to the exclusion criterion in the 75% Rule, and that
this is clinically acceptable and economically desirable. AMRPA
strongly disagrees with this premise. IRFs provide a very unique,
specialized, intensive form of rehabilitative care that cannot be
duplicated in other Medicare settings. Given the enormous impact the 75
Percent Rule has had on inpatient rehabilitative care, AMRPA urges the
Ways and Means Committee to consider legislation that would hold the
50% threshold for compliance for two additional years. Moreover, to
facilitate collaborative relationships with federal policymakers, AMRPA
urges consideration of a federal advisory council on medical
rehabilitation that would work with CMS to properly characterize IRFs
and separately establish workable guidelines to distinguish appropriate
patient selection criteria.
Current Financing for Post-Acute Care Services
Current Medicare program post-acute care policy is focused on
providing care based on types of providers, with the key post-acute
care institutional providers being LTCHs, IRFs and SNFs. While all of
these sites provide post-acute care to Medicare beneficiaries, each
site of care currently utilizes its own prospective payment system. The
SNF PPS began in 1998 and is based on a per diem payment unit. SNFs use
a patient classification system called resource utilization groups
(RUGs), of which there are 44 groups. On May 19, CMS issued a proposed
rule to change the RUGs and increase the number to 53. In contrast, the
LTCH PPS is based on a per discharge payment unit and uses LTCH DRGs,
of which there are currently 550. The LTCH PPS is being phased in over
5 years. Finally, the IRF PPS was initiated in January 2002 and is also
based on a per discharge payment unit. There are 21 Rehabilitation
Impairment Categories (RICs) and 95 case mix groups (CMGs) with four
payment tiers, for a total of 380 possible CMGs and separate HIPPS
codes. Each system is based on research reflective of the costs of care
in a base year used to calculate the payment rates.
CMS, MedPAC and others have expressed concern that the post-acute
care payment systems provide incentives for engaging in behavior solely
to enhance reimbursement, without regard to quality or appropriateness
of care, patient outcomes or cost. Policymakers must realize that
looking at payments in the context of diagnoses only, without looking
at other factors, can be quite startling but does not reveal much about
patient differences and reasons why a particular setting (1) best suits
the need of that patient and/or (2) contains the resources necessary to
obtain the optimum patient outcome. For example, payment for a stroke
case may vary from $31,496.00 in an LTCH to $8,905 in a SNF according
to a MedPAC report in June 2004 examining the most severe stroke cases
(Chapter 5, June 2004 report on LTCHs). However, since those figures
are for the most severely ill types of patients in that diagnosis, the
numbers cited do not reflect the average payment, which is considerably
lower. For example, the average Medicare payment for a stroke in an IRF
in 2003 was $16,769.00 according to AMRPA's eRehabData.
While federal policymakers understandably look closely at payment
differentials, these payments encompass costs that are larger than the
individual patient being treated. All of the payment systems discussed
are based on historical costs that reflect not only patient care but
also the setting-specific requirements and different Medicare
Conditions of Participation each type of entity must meet. These
requirements vary considerably by setting in the length, depth, scope
and cost of compliance. Each system also relies on some patient's
diagnosis information and varying amounts of functional information.
AMRPA has closely analyzed cost reports for SNFs and IRFs,
examining both routine costs and ancillary costs in order to determine
any differences between the two settings and whether such differences
are representative of varying levels of services delivered. When the
SNF PPS and IRF PPS were under development in 1998, AMRPA analyzed the
available costs reports for 1996 to see what the impact of a
prospective payment system would be on SNFs. AMRPA found that there
were higher costs in hospital-based SNFs than freestanding SNFs, a
finding later reaffirmed by MedPAC reports. These findings suggested
that a different type of patient was being treated with more complex
needs in the hospital-based SNF setting. At the time of the analysis,
the average length-of-stay (ALOS) for the hospital-based SNFs was 16.56
days, in contrast to 45.03 days in the freestanding SNFs.
AMRPA also examined routine and ancillary cost differences between
IRFs and SNFs. It was clear that both the routine costs and ancillary
costs were higher in the IRF setting, reflecting the greater intensity
of care. IRFs had higher ancillary costs per day ($274 per day for
rehab units; $134.74 for SNF hospital based units; $268 for rehab
hospitals; and $118.96 for freestanding SNFs), as were specific therapy
charges. However, we believe that ancillary costs have decreased in
response to the SNF cuts and therapy cuts in the Balanced Budget Act of
1997 and the implementation of the SNF PPS. Such a decrease would
reflect a reduction in the amount of therapy delivered and the
intensity of care. AMRPA is currently working on updating this
information using 2002 costs reports.
The cost differential between SNFs and IRFs is significant, but the
cost variation represents differences in prospective payment systems
and the greater intensity of care provided in the inpatient
rehabilitation setting. Thus, the faulty belief that care is equivalent
among post-acute care settings is also leading CMS to argue that
Medicare is paying too much for some patient care provided in IRFs. In
its September 9, 2003 proposed IRF rule, CMS assumed that the average
payment for an IRF was $12,525 and that by substituting care at a
payment of $7,000 per case it would ``save'' approximately $5,525 per
case. It is clear now that the cases being denied access to IRF care
due to the 75% Rule are primarily lower extremity joint replacement
cases whose payments on average in 2004, based on eRehabData, were
approximately $9,151. Hence the actual difference in payments is only
$2,151 per case. Additionally, these numbers may also be misleading
because of differences in lengths of stay. If the average Medicare SNF
stay for similar cases is 31 in 2001 and 33 days in 2003 according to
MedPAC, at an average daily rate of approximately $400, then the
payment is closer to $12,000 thereby further reducing Medicare's
alleged savings. We would be pleased to provide the Committee with the
AMRPA analysis.
Services Provided in IRFs Compared to Other Post-Acute Care Settings
One frequent discussion in comparing settings is whether a nursing
home or skilled nursing facility can substitute for IRF care and
provide equivalent services and outcomes. Practitioners find that in
general, nursing homes and skilled facilities do not have all the
characteristics of an IRF. Facilities may share some characteristics
with IRFs, but this varies widely geographically. IRFs are subject to a
number of standards that no other post-acute care setting must meet,
including: (1) close medical supervision by a physician with
specialized training in rehabilitation; (2) patients must undergo at
least 3 hours a day of physical and/or occupational therapy; and (3) a
multidisciplinary approach to delivery of the rehabilitation program.
(Please find attached a chart delineating a comparative analysis of SNF
and IRF coverage criteria). There are no comparable specific standards
for other facilities relating to rehabilitation services (such as the
``three hour rule'' for IRFs), and, therefore, each nursing home or SNF
must be evaluated individually.
A good illustration of the difference in services provided in these
rehabilitation settings can be seen in the Spring 2005 MedPAC analysis
examining single hip and knee joint replacements in IRFs and SNFs.
MedPAC commissioned the RAND Corporation to study outcomes across
settings for hip and knee replacement cases in response to changes to
the 75% Rule that would force fewer hip or knee replacement patients to
be treated in IRFs each year. MedPAC staff conducted two studies and
presented the results at the April 2005 meeting. The first study
involved a physician panel of six (6) orthopedic surgeons and five (5)
specialists in physical medicine and rehabilitation. The physician
panel noted that close to 50-80% of such patients go home with home
health care or outpatient services, and therefore not to institutional
settings. The panel said that patients who could not go home should
have the following characteristics for referral to a SNF or IRF:
Be limited in weight bearing or unable to walk 100 feet;
Be obese or have comorbidities;
Have an impairment of one or more joints (not replaced);
Have diminished pre-surgery functioning; or
Have architectural barriers or no informal caregiver at
home.
Panelists also said that patients who need extra medical attention
should go to IRFs, while patients who need convalescent care or cannot
tolerate 3 hours per day of therapy should go to SNFs. In some
communities, surgeons refer based on the qualifications of specific
facilities that are available, such as how the facilities are staffed,
whether they follow rehabilitation protocols or are convenient for the
surgeon to follow-up.
Another point MedPAC has clearly established is that the types of
patients treated in each setting are considerably different. MedPAC
recently examined the types of patients in SNFs, IRFs and home health
agencies (HHAs) receiving care for single joint replacements.
Specifically, it found that:
Patient Populations Differ Across PAC Sites
Acute Care Hospital
------------------------------------------------------------------------
Home (35%) IRF (35%) SNF (30%)
------------------------------------------------------------------------
Youngest Older Oldest
------------------------------------------------------------------------
Least coMore complications Most complications
------------------------------------------------------------------------
Least coMore comorbodities Most comorbidities
------------------------------------------------------------------------
Highest SES Lower SES Lowest SES
------------------------------------------------------------------------
Most knees More knees than SNFs Most hip replacements
------------------------------------------------------------------------
Replacements Shortest acute LOS Longest acute LOS
------------------------------------------------------------------------
Higher functional Higher functional
scores scores
at discharge (than at admission (than
SNFs) IRFs)
------------------------------------------------------------------------
* MedPAC Staff Handout, April 2005 Meeting
RAND presented a number of conclusions about the differences in
cost and care among settings. Generally, RAND found that the functional
level of patients in IRFs was lower at admission than in SNFs, but
patients ultimately had greater functional gains, suggesting that the
greater intensity of therapy in IRFs improves functional status. In
addition, after controlling for a number of variables, RAND found that
SNF and IRF patients were more likely to be institutionalized compared
to patients sent home. However, 2.5 times more patients in SNFs were
institutionalized or died (0.46%) than those in IRFs (0.18%). Further,
as expected, SNFs and IRFs were paid more than patients discharged
home. RAND found that SNFs cost $3578 and IRFs cost $8,023 for total
post-acute payments as opposed to home care. Note, however, that these
figures are misleading and understated for home health costs and SNF
costs because they do not include any Part B outpatient services
provided.
AMRPA is particularly concerned that patients referred to LTCHs and
IRFs are being pressured by Medicare into staying in acute care longer
or treated in SNFs. This view has become much more prevalent as CMS
issues regulations that are detrimental to certain sites of care, such
as CMS's FY 2005 LTCH rate year update, the IPPS FY 2005 proposed rule
proposal pertaining to hospitals within hospitals, and the various
proposed and final rules pertaining to the 75% Rule for IRFs. Many
post-acute care LTCH and IRF providers are left with the impression
that a federal bias in defining LTCHs and IRFs more narrowly is
designed to: (1) close many of these facilities; and (2) force patients
to be treated in skilled nursing facilities (SNFs). Many post-acute
care providers and physicians believe that while SNFs may be able to
treat a percentage of such patients successfully with respect to
outcomes, many are not able to successfully treat these patients
because of serious differences in a patient's medical and functional
abilities and the significantly more limited resources provided in
SNFs.
CMS and Congress should actively initiate research on how these
sites of care provide treatment to Medicare beneficiaries and how each
site's functional outcomes vary by patient diagnosis. As noted by the
National Institutes of Health's February 2005 panel on medical rehab
and by MedPAC, there is little evidence on the different care provided
by these entities and how outcomes differ by site of care. The Agency
for Healthcare Research and Quality (ARHQ) conducted a literature
review and found after reviewing 4600 studies, few studies are
available on this topic\1\] We call the Committee's attention to one
timely published study that compared the outcomes of hip fracture
patients treated in SNFs and IRFs. The study, ``Effect of
Rehabilitation Site on Functional Recover After Hip Fracture,'' by
Munin et. al.\2\ found that IRF patients had superior functional
outcomes compared to those treated in SNFs when the same measurement
tool was used. The improved outcomes occurred during a significantly
shorter rehabilitation length of stay and remained even when
statistically controlling for baseline differences between groups. The
study called for further research to more fully understand the
differences between rehabilitation treatment settings. Notwithstanding
current available research, there is a significant need for prospective
studies examining the provision of care among various settings
providing medical rehabilitation services, SNFs, IRFs and LTCHs, to
better determine how outcomes and treatment differ among these
settings. We would be pleased to work with the Committee in developing
these studies as well as working with our colleagues in the medical
rehabilitation field to engage in research efforts.
---------------------------------------------------------------------------
\1\ An Assessment of Medical Literature Evaluating Patient
Rehabilitation facility programs on conditions of interest, Agency for
Healthcare Quality and Research, March 2005.
\2\ Effect of Rehabilitation Site on Functional Recovery After Hip
Fracture, Munin et.al, Archives Physical Medicine & Rehabilitation, Vol
86, pg. 367, March 2005.
---------------------------------------------------------------------------
Patient Assessment Instruments
While post-acute care payment systems generate considerable data
about each setting of care, the data is difficult to compare because
each payment system uses a different data collection tool. At its March
2005 meeting, MedPAC examined the various data sets and realized that
they cannot be easily cross-walked with each other in order to compare
the patients, outcomes, and costs, other than to observe broad outcomes
such as mortality and readmission to acute care. The LTCH PPS uses the
standard UB 92 claim form. The IRF PPS requires each facility to
complete the inpatient rehabilitation facility patient assessment
instrument (IRF PAI) as well as the UB 92 for each case. The SNF PPS
requires each facility to complete the Minimum Data Set (MDS) form for
each patient and the UB 92. The UB 92 form, while common to all
settings, collects information solely on diagnosis codes and does not
include any functional information.
Because these settings serve different populations and do not have
any common functional assessment tools, outcomes at this point can only
be measured at a broad level that is not truly representative and fails
to measure the full impact of a rehabilitation program. As noted above,
certain observations can be made about mortality, readmission to acute
care and institutionalization of patients for the long term when
referred to certain settings, such as SNFs. However, in comparing these
settings, there are significant limitations that were studied and
acknowledged by MedPAC in its March 2005 discussion of post-acute care
and patient assessment tools. RAND repeatedly cautioned about some
significant deficiencies in the obtainable data that limited the
findings of the study. First, controlling fully for selection is
extremely difficult, and it is unclear whether the models capture this
data in an accurate manner. Second, RAND was unable to conduct a
substantive analysis of patient function; thus, the outcomes analyzed
are not the ideal outcomes measures for joint replacement patients.
Similar to variances discussed in conjunction with the different
payment systems, each tool used to assess diagnoses, comorbidities and
medical functional status and cognitive status uses significantly
different measurement items. As a result, today it is simply impossible
to assess outcomes and quality of care at the level necessary to
accurately and fairly compare the various sites of care.
Recommendations
We think the issues facing policy makers, providers and patients
relating to post-acute care payment and services would best be
addressed through a broad, cross-site prospective study of these sites
of care and the outcomes provided by their distinct treatment
resources. Not only do Congress and CMS need to have comprehensive and
accurate data before engaging in any sweeping payment structure
changes, such data will be crucial if the federal government intends to
take any substantive, meaningful action that will save the Medicare
system money while still protecting the quality of care given to
beneficiaries nationwide.
We recommend a multi-step approach to evaluating the state of post-
acute care across settings for rehabilitation patients and implementing
a new payment structure to capture the true costs of patient care. As
mentioned above, measuring function is the critical aspect of
understanding a patient's rehabilitation needs. The approach outlined
below should be viewed as a framework and could be amended or added to
other studies designed to lead to creation of a new payment structure:
1. Data Collection: CMS should use the IRF-PAI for data collection
throughout the treatment sites in order to collect data and compare
costs, patient characteristics, and medical and functional outcomes
across sites. Such a uniform data collection tool is necessary to
eliminate the problems with the various existing tools and create one
assessment instrument to cross walk to the three different tools
currently used in post-acute settings. Data should be collected at
admission, discharge, and for a follow-up period.
2. Creation of new Rehab Post-acute Care Groups (RPACGs): New
patient groups would be created using an expanded version of CMGs that
would reflect function, age, diagnosis, LOS, and comorbidities for
medical status, and the ICF conceptual approach. Expanded CMGs would
then be matched with costs to create new Rehab Post-acute Care Groups
(RPACGs) and to develop appropriate weights. The RPACGs would use a per
discharge model using a discharge as the payment unit and episode of
care. SNF and LTCH patients who are not discharged and who exhaust
their Medicare days should be tracked separately even after they
exhaust their care and go on private pay or Medicaid for one year in
order to establish total costs for that period. Facility adjusters
would be provided (wages, low income, rural, others), as well as
special payment rules such as transfers, short stay, interrupted stay
and outliers. The groups would be matched with cost to develop the
complete set of new payment groups reflecting payment rates for various
types of patients receiving medical rehabilitation. Payments would
reflect patient characteristics (such as age, diagnosis, function,
comorbidities, complications, length of stay, etc.) and resource use in
whatever setting, eliminating the need to distinguish patients by
current institutional sites or ``silos'' of treatment.
3. Adjustments: Adjustments would be made for facility specific
costs as are currently recognized in all prospective payment systems
(e.g. wages).
4. Revision of Payment System: Finally, after initial
implementation, revision of the payment system would take place in
order to provide bonuses for better functional outcomes.
As we know, therapy services, physician services and nursing
services of varying intensity, length and costs are provided currently
in these three inpatient settings. These three sets of services,
especially the intensity of therapy services, are key to the success of
a rehabilitation program. From a policy perspective it makes the most
sense to reexamine this situation and realign the policies with the
providers, payers and, most importantly, patients in mind.
AMRPA acknowledges that these ideas may appear quite radical, but
we firmly believe that the study recommended here would help settle the
current debates and assumptions and remedy recent action by CMS that is
jeopardizing patient care. CMS and Congress should continue its efforts
to engage all the stakeholders, public and private, state and national,
involved in this issue. Each such entity has its own priorities and
perceptions that will need to be addressed for any proposal to be
effective and successful.
Conclusion
AMRPA cautions against adopting a simplistic viewpoint that growth
in post-acute care is simply a function of substitution of care, or
adopting the attitude that ``if you build it they will come.'' CMS's
rationale to date in making these assertions about substitutability has
been that since there are few studies on point, the assumption must be
correct (e.g., the absence of proof is the proof of absence). Most
post-acute care providers vehemently disagree. We urge Congress to
recognize that the federal government cannot adopt the improper
assumption that these settings can provide similar outcomes at similar
costs. One only needs to look at the enormously detrimental effects of
the 75 Percent Rule to see that such a policy will ultimately be
grossly adverse to patient outcomes.
We again commend the Committee for its interest in rehabilitation
and post-acute care, and we look forward to working with you and your
staff on these issues.
Inpatient Rehabilitation Facilities Provide a Rehabilitation Setting
Distinguishable from Skilled Nursing Facilities
COVERAGE CRITERIA
CMS assumes that post-acute rehabilitation care settings are readily
interchangeable. In doing so, CMS ignores the enormous difference
between the two care settings and the improved outcomes that occur at
IRFs.
------------------------------------------------------------------------
Inpatient Rehabilitation Skilled Nursing
Requirements Facilities Facilities
------------------------------------------------------------------------
Medical Supervision IRFs are required to A SNF patient's care
provide close medical would usually require
supervision by a only the general
physician with supervision of a
specialized training or physician, rather than
experience in the close supervision
rehabilitation. which rehabilitation
patients need
------------------------------------------------------------------------
Availability of IRFs are required to While a SNF patient
Rehabilitation supply 24-hour may require nursing
Nursing rehabilitation nursing. care, specialized
This degree of rehabilitation nursing
availability represents is generally not as
a higher level of care readily available in
than is normally found such a facility.
in a SNF.
------------------------------------------------------------------------
Intensity of Care IRFs must offer a SNFs are only required
relatively intense level to offer services on a
of rehabilitation ``daily basis,'' with
services. The general no requirement as to
threshold for amount of patient
establishing the need care.
for inpatient hospital
rehabilitation is that
the patient must require
and receive at least 3
hours a day of physical
and/or occupational
therapy.
------------------------------------------------------------------------
Multidisciplinary Team IRFs must use a No such
Approach to Care multidisciplinary team multidisciplinary
approach to delivery of approach is required
the rehabilitation at a SNF hospital.
program. At a minimum, a
team must include a
physician,
rehabilitation nurse,
commonly registered
nurse, social worker and/
or psychologist, and
other therapists
involved in the
patient's care.
------------------------------------------------------------------------
Coordinated Program of IRF patient records must SNFs must only
Care reflect evidence of a maintain a complete
coordinated program of and timely clinical
care, i.e. documentation record of the patient
that periodic team which includes
conferences were held diagnosis, medical
with a regularity of at history, physician's
least every two weeks to orders, and progress
assess the individual's notes.
progress and consider
the rehabilitation goals
of the patient.
------------------------------------------------------------------------
Significant practical Hospitalization after Services must be
improvement the initial assessment reasonable and
is covered only in those necessary for the
cases where the initial treatment, be
assessment results in a consistent with the
conclusion by the nature and severity of
rehabilitation team that the illness or injury,
a significant practical and must be reasonable
improvement can be in terms of duration
expected in a reasonable and quantity.
period of time.
------------------------------------------------------------------------
Realistic goals The most realistic Rehabilitation
rehabilitation goal for services must be
most Medicare ``reasonable and
beneficiaries is self- necessary'' to the
care or independence in ailment being treated.
the activities of daily The SNF manual makes
living; i.e., self- no reference to
sufficiency in bathing, rehabilitation goals.
ambulation, eating,
dressing, homemaking,
etc., or sufficient
improvement to allow a
patient to live at home
with family assistance
rather than in an
institution. Thus, the
aim of the treatment is
achieving the maximum
level of function
possible.
------------------------------------------------------------------------
Sources: IRF--Medicare Benefit Policy Manual 110.4
(Rehabilitation Hospital Screen Criteria)
SNF--Skilled Nursing Facility Manual, Pub. 12, 214 (Covered
Level of Care)
Statement of American Occupational Therapy Association, Bethesda,
Maryland
The American Occupational Therapy Association (AOTA) represents
nearly 35,000 occupational therapists, occupational therapy assistants,
and students of occupational therapy to promote the interests of the
profession and patients. AOTA submits this statement for the record of
the hearing on June 16, 2005 on the current financing and assessment of
post-acute Medicare providers. Occupational therapists and therapy
assistants work in post-acute care settings to increase the
independence and quality of life of their patients.
Occupational therapy practitioners provide services in a variety of
settings, including, long term acute care hospitals (LTCH), inpatient
rehabilitation facilities (IRF), skilled nursing facilities (SNF), and
in the home (HHA). Occupational therapy is a health, wellness, and
rehabilitation profession working with people experiencing stroke,
spinal cord injuries, cancer, congenital conditions, developmental
delay, joint replacements and surgeries, mental illness, and other
conditions. It helps people regain, develop, and build skills that are
essential for independent functioning, health, and well-being.
AOTA strongly supports maintenance of the full spectrum of post-
acute care settings to assure that patients have choice, that health
care dollars are used most efficiently, and that the best possible
outcomes are achieved. With that said, AOTA also supports efforts to
develop more consistent and comprehensive methods to determine patient
needs for post-acute care and continuing research on best practices and
protocols.
Occupational therapy professionals assist those with traumatic
injuries--young and old alike--to return to active, satisfying lives by
showing survivors new ways to perform activities of daily living,
including how to dress, eat, bathe, cook, do laundry, drive, and work.
It helps older people with problems like stroke, arthritis, hip
fractures and replacements, and cognitive problems like dementia. In
addition, occupational therapists work with individuals with chronic
disabilities including mental retardation, cerebral palsy, and mental
illness to assist them to live productive lives. By providing
strategies for doing work and home tasks, maintaining mobility, and
continuing self-care, occupational therapy professionals can improve
quality of life, speed healing, reduce the chance of further injury,
and promote productivity and community participation for Medicare
beneficiaries.
Medicare provides health insurance for nearly 35 million people
over 65 years old and 6 million people under 65 years old with
permanent disabilities. Medicare benefits are expected to total $325
billion in 2005, accounting for 13% of the federal budget. In post-
acute care settings, Medicare expenditures are currently more than $30
billion annually. It is critical for Congress to determine whether
patients are being treated in the most appropriate post-acute care
setting and whether Medicare dollars are being allocated appropriately.
LTCHs, SNFs, IRFs, and HHAs have all experienced major changes over the
past 10 years.
The multiple and ongoing changes to Medicare post-acute care
payment policies creates a unique environment in which measuring the
effect of service delivery is particularly difficult. One of the
biggest changes is the implementation of new prospective payment
systems (PPS) for each post-acute care setting. Each PPS varies in
terms of key design features such as the unit of payment (per diem, per
discharge, every 60 days), classification schemes (RUGs, HHRGs, and
case mix groups), and patient assessment instruments and processes used
for patient classification (MDS, OASIS, and IRF-PAI). Each of these
payment systems were installed on different timetables, and each is
being modified in different ways and at different times. Such
fragmentation could affect the quality and outcomes of patients in
post-acute care.
The policy concern that Medicare may be paying different amounts to
different types of post-acute care providers for patients with similar
care needs raises important questions for AOTA. How are we judging
effectiveness? Have post-acute care providers worked to achieve the
highest functional outcomes possible for its beneficiaries? What are
the prospects and problems for moving ahead with a standardized
assessment tool to evaluate the level of care a patient requires in
each post-acute care setting? Will we create a system that does not
have enough variation in options to achieve optimum goals for patients?
The focus of post-acute care includes medical stabilization as well
as practical improvements in function, with discharge determined by the
speed in which the person returns to a reasonable level of
independence. Occupational therapists and therapy assistants work in
different post-acute care settings providing varying intensities of
therapy to best meet the needs of their patients. Occupational therapy
services are considered reasonable and necessary when it is expected
that the therapy will result in significant improvement in the
patient's level of function within a reasonable amount of time. With
speedy discharge to return to normal activities an important aspect of
post-acute care, function should be the governing assessment component
across all settings. Where will the patient best regain medical
stability but also regain ability to fully recover and return to
activities? Occupational therapy is not only focused on lost function,
but also improves a patient's ability to remain independent and sense
of well-being which can contribute to better recovery following post-
acute care. It is imperative that occupational therapy be an integral
part of the development of the plan of care of people transitioning
into post-acute care, in determining readiness for discharge and in
developing discharge plans. Occupational therapists' and therapy
assistant's success can be measured by the quality of life and level of
independence of their patients once they are discharged. This should
also be the measure of the effectiveness of Medicare dollars.
Each post-acute setting provides different levels of therapeutic
intervention combined with differing levels of other care. Each setting
has advantages for different types of patients. However, each post-
acute care setting uses a different patient assessment instrument to
evaluate the level of care a patient requires. This makes it difficult
to know whether patients are being treated in the most appropriate
setting and whether Medicare dollars are being allocated appropriately.
Any standardized assessment should look at the distinct aspects and
benefits of the services provided in that setting. A standardized
assessment would need to focus on the differences in each post-acute
care setting and the services provided there. A standardized assessment
should also recognize the distinct differences and contributions of
each needed service.
One significant problem faced by occupational therapists in post-
acute care settings is the financial limitations on therapy imposed by
Congress in the Balanced Budget Act of 1997. The legislation imposed a
$1500 annual cap on Medicare Part B outpatient occupational therapy
alone and physical therapy and speech-language pathology combined. A 2-
year moratorium was included in the Medicare Modernization Act of 2003
(P.L. 108-173), however, that moratorium will expire on December 31,
2005. Congress currently has before them a piece of legislation that
repeals these therapy caps. However, current discussions have included
a number of different options on how to address this piece of bad
policy. AOTA has stressed the need to keep occupational therapy
distinct and separate because of the uniquely beneficial service that
occupational therapists and therapy assistants provide. Financial
limitations to proper therapy services impede the therapists' ability
to care for their patients appropriately and use professional judgment
effectively.
Another critical issue for occupational therapy is the limitation
experienced by occupational therapy practitioners in home health field
because of an outdated and obsolete eligibility criterion.
Beneficiaries must need one of three qualifying services--nursing,
physical therapy, speech-language pathology services--to be eligible
for the full home health benefit. Occupational therapy cannot be an
initial qualifying service. As far back as March 1997, the former
Medicare Prospective Payment Commission said that the ``lack of a
clearly defined benefit compromises'' the program's ability to pay only
for services that are reasonable, necessary and medically appropriate.
AOTA believes that a key problem in the definition of the home health
benefit is the qualifying service issue which may cause some patients
to receive unnecessary physical therapy, for instance, when their need
is for occupational therapy. The failure to recognize occupational
therapy as an initial qualifying service limits the use of occupational
therapy to conduct important activities including the initial OASIS.
Legislative action is necessary to correct this; AOTA urges further
study of how this could be changed in a cost effective manner.
Finally, AOTA commends the Subcommittee for taking the time to
debate and learn more about the post-acute care system. Congress is in
a position to create a system more tailored to the services required by
patients rather a system that favors the setting in which patients are
placed. AOTA looks forward to working with the Committee to better our
nation's healthcare system.
Statement of John D. Shaw, Next Wave, Albany, New York
I am a health systems researcher and policy analyst located in
Albany, New York. Since the early '70s, I have been involved in the
design, development, implementation, and evaluation of patient
assessment, payment, and quality measurement systems for both acute and
post-acute care. These projects have ranged from national pilot
projects to develop the initial Diagnosis Related Group (DRG) and
Resource Utilization Group (RUG) payment systems and Quality Assurance/
Quality Indicator (QA/QI) tools, to the design, evaluation, and
refinement of state payment systems on the behalf of state Legislative
and Regulatory branches, insurers, provider groups, and individual
providers. We have also worked at the individual provider level to
refine and implement internal Information Technology (IT) and manual
systems and procedures to collect accurate data to support the payment
and quality processes. My comments represent a synthesis of viewpoints
gleaned from all of the stakeholders for whom I have worked over the
years and a review of Subcommittee testimony--but as stated below, they
are my own.
First, I agree with the Subcommittee that Congress and the
Medicare/Medicaid programs must place a high priority on a payment
system that focuses on meeting the individual patient needs rather than
institutional settings that deliver services. Tool(s) common to all
settings to assess patient needs and align payment for services to meet
these needs are critical. We recommend:
Payments based on the patient episode, with the same
total payment regardless of setting for the same patient
characteristics, including the acute care component where feasible.
A family of screening plus in-depth assessment tools,
with common definitions across all settings, can balance the need for
precision to plan, provide, and pay for individual care needs, while
NOT requiring an in-depth assessment of areas that do not apply.
Second, added features are critical to incorporate into the details
of the above to overcome and avoid major controversies such as ``cream
skimming'' (e.g. Physician Owned Specialty Hospitals), inconsistent
payments for similar services (e.g. 75% Rule), and cost shifting to
others (e.g. annual debates over Federal/State/Provider/Consumer share
of cost.) These include:
Incorporate into the assessments--all data fields needed
to provide an evidence base to address the above controversies, rather
than the current ``battle of the hypotheticals.''
Mandate timely, transparent access to de-identified data
details to all key stakeholders to:
Overcome distrust of any findings that cannot be
independently verified and
Allow for reconciliation of any conflicting findings
from all viewpoints.
Include measures for program focus and regional health
care delivery environment as well as setting, e.g. a hospital-based
Skilled Nursing Facility (SNF) in one region may be similar to an
Inpatient Rehabilitation Facility (IRF) in another region, while others
differ.
Incorporate elements from all current assessment tools to
facilitate accuracy and buy-in.
Some examples from current controversies help illustrate the need
for the above recommendations. We focus on Hip and Knee Joint
Replacement since it is a source of controversy in recent years, is a
high volume and growing component of total health care expenditures,
has a significant Post Acute Care (PAC) fraction, and spans multiple
settings.
Consistent Time Frame and Case Mix Adjustment for Comparisons
While the patient experiences (and Medicare/Medicaid pays for) an
entire episode, policy comparisons over the past few years have been
limited to selected portions of the episode, without appropriate
adjustment for earlier and later contributors to overall episode costs.
Some trade-offs that stakeholders assert include:
Extending stays (and hospital payments) for 1-2 days so
that some Knee replacement patients can negotiate stairs and go
directly home could save institutional PAC costs.
Patients also receive Home Health Care and Outpatient
Rehabilitation after discharge from both IRFs and SNFs. The cost and
frequency of these non-institutional services affect total payments and
should be included in any policy debate.
Consistent data to identify and predict the appropriate
patient trajectory and costs are either lacking or not reported today.
Missing Data for Consistent Comparisons
Major controversy is focused on post acute care for joint
replacements in IRF/SNF settings.
Obesity, particularly morbid obesity (BMI>40) is a
major determinate of costs and quality risks. IRFs indicate that they
have more of these patients than SNFs, who are a large driver of
functional scores. SNFs indicate that they are not reimbursed for the
higher care needs of these patients. However, the IRF-PAI lacks height
and weight and the MDS lacks the detailed functional scores needed to
measure and validate either claim.
Analysis to date to inform the controversy is inadequate
to do so. Not only are comparable outcome measures unavailable, volumes
to compute materiality and consistent cost components are also
unavailable for comparison:
Examples of dollar differences between each setting
lack volume data. We need this to differentiate whether the
hypothetical patient represents all, most, some, few, or one-
in-a-thousand. A difference that applies to handful of patients
somewhere is very impact on the overall Budget than most
patients everywhere. For example, a recent comparison uses a
patient with septicemia, which appears to represent a fraction
of one percent of joint replacement cases in either setting.
Also, since SNF rates are per day, length of stay assumptions
used in comparisons should be stated, and should be validated
to confirm they are representative.
Costs included in bundled rates in each setting
differ widely. For example, respiratory therapy and high cost
pharmaceuticals used to treat patient clinical needs generate
NO additional SNF reimbursement, while IRFs are typically paid
an additional $ 1,500 per case for clinical needs identified by
``tier'' payment add-ons. Economic realities and facility
claims indicate wide variations; however, data to validate
these claims are unavailable.
Transparent Access to Data Facilitates Reduction of Controversy
We strongly believe that if more detailed evidence were shared
between all stakeholders, they would have already have validated each
others' findings and reconciled differences. This sharing, however, may
require further Congressional mandate.
Measures of Program Focus and Regional Health Care Delivery
Environments
Rehabilitation professionals identify two major subpopulations:
Patients who desire and tolerate Intensive (3+ hours per
day) rehab in 9-14 days are typically treated in IRFs, but a few SNFs
also have short stay programs.
Patients who can only tolerate lower impact (0.5-1.5
hours per day) rehabilitation Extended over 3-4 weeks are typically
treated in SNFs.
In addition, if family caregivers and safe housing
resources are available, some patients can safely recover using
home care and outpatient rehabilitation services.
In assessing PAC programs in both settings over the years, total
costs for either approach in an institutional setting appear similar
regardless of program and setting; however, payments could differ
widely today. Failure to differentiate these program approaches makes
overall comparisons of costs/outcomes invalid.
For example, in reviewing post acute care statewide in New York, we
found that the predominate PAC setting for joint replacement patients
in the New York City Metropolitan area, while hospital-based SNFs are
the predominate setting in Rochester and Syracuse. Programs are fairly
similar; however, the setting difference is driven by factors other
than post acute care. Other payors, for example Blue Cross, have
supported the programs historically, while currently these programs are
cross subsidized by the hospital. In the New York City area, however,
other payors have not supported PAC until recently, and there are few
hospital based facilities to cross subsidize significant SNF losses.
There is even potential for Home Care, which is the predominate PAC
setting in the Binghamton and Elmira areas. In these predominately
rural areas, there are typically several generations of extended family
living close by to provide assistance. In our own community around
Albany, there is no predominate setting, rather, there are award
winning free standing and hospital-based IRF and SNF programs, and
quality home care services. In talking to patients and their families,
only the program matters--most are not aware of the difference between
an IRF or SNF based program. A number of recent studies in the
literature have found similar patterns nationally. Any solution that
assumes program availability in all settings in all geographic
locations is contrary to available evidence and will cause local access
problems for taxpayers in these areas.
Family of Comprehensive Assessments
Screening tools to identify where added assessment is needed should
incorporate major elements of existing setting tools the IRF-PAI for
IRFs, the MDS for SNFs and the OASIS for Home Care, including for
example:
Case Management (including the patient's own cognitive
capabilities and desires) should combine local program availability
with elements of all existing tools, with key additions such as height,
weight, and smoking status,
Housing needs and supportive assistance (home vs.
institutional bed) from OASIS,
Personal Care needs (ADL's and IADL's) from MDS and
OASIS,
Functional Status and Rehabilitation needs from IRF-PAI,
and
Medical/Clinical needs (therapy and non-therapy ancillary
services, medical monitoring).
Case management can apply the overall screening tool and the
appropriate detailed assessments to find the best ``fit'' for each
individual resident, while at the same time providing consistent data
for evaluation and future policy refinements.
The Institute of Medicine (IOM) recommended that financial and
quality incentives be aligned in order to transform health care.
Currently in today's fragmented system of setting ``silos'', the
strategy for financial success is to identify flaws in today's
inconsistent regulatory structure, and then seek out windfall
opportunities, while avoiding any underpayment gaps (and/or to shift
the cost to someone else.) Where inconsistencies are identified between
stakeholder estimates today, and lacking complete evidence, they are:
At best--good faith estimates that are incomplete,
inconsistent, wrong, and
likely to continue controversy
At worst--``Spin Wars'' where the best hypothetical
example wins
Regardless of what is good for the patient and the Budget
Fixing these flaws will both close the gaps and reduce the ability
and need to shift costs elsewhere. Providing consistent and complete
evidence measures transparently to Congress, the Centers for Medicare
and Medicaid Services (CMS), providers across all settings, and
consumers will help focus the attention of all on pursuing quality and
safe outcomes efficiently.
Thank you for the opportunity to contribute to moving toward
setting evidence-based policy in this important area.