[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]





 
                  THE PRESIDENT'S AND OTHER BIPARTISAN


                      PROPOSALS TO REFORM MEDICARE


                        POST-ACUTE CARE PAYMENTS

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

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                      COMMITTEE ON WAYS AND MEANS
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 14, 2013

                               __________

                          Serial No. 113-HL05

                               __________

         Printed for the use of the Committee on Ways and Means
         
         
         
         
         
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]        






                    U.S. GOVERNMENT PUBLISHING OFFICE
                   
 21-106                    WASHINGTON : 2016       
____________________________________________________________________
 For sale by the Superintendent of Documents, U.S. Government Publishing Office,
Internet:bookstore.gpo.gov. Phone:toll free (866)512-1800;DC area (202)512-1800
  Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001                 



         
         
         
         
         


                      COMMITTEE ON WAYS AND MEANS

                     DAVE CAMP, Michigan, Chairman

SAM JOHNSON, Texas                   SANDER M. LEVIN, Michigan
KEVIN BRADY, Texas                   CHARLES B. RANGEL, New York
PAUL RYAN, Wisconsin                 JIM MCDERMOTT, Washington
DEVIN NUNES, California              JOHN LEWIS, Georgia
PATRICK J. TIBERI, Ohio              RICHARD E. NEAL, Massachusetts
DAVID G. REICHERT, Washington        XAVIER BECERRA, California
CHARLES W. BOUSTANY, JR., Louisiana  LLOYD DOGGETT, Texas
PETER J. ROSKAM, Illinois            MIKE THOMPSON, California
JIM GERLACH, Pennsylvania            JOHN B. LARSON, Connecticut
TOM PRICE, Georgia                   EARL BLUMENAUER, Oregon
VERN BUCHANAN, Florida               RON KIND, Wisconsin
ADRIAN SMITH, Nebraska               BILL PASCRELL, JR., New Jersey
AARON SCHOCK, Illinois               JOSEPH CROWLEY, New York
LYNN JENKINS, Kansas                 ALLYSON SCHWARTZ, Pennsylvania
ERIK PAULSEN, Minnesota              DANNY DAVIS, Illinois
KENNY MARCHANT, Texas                LINDA SANCHEZ, California
DIANE BLACK, Tennessee
TOM REED, New York
TODD YOUNG, Indiana
MIKE KELLY, Pennsylvania
TIM GRIFFIN, Arkansas
JIM RENACCI, Ohio

        Jennifer M. Safavian, Staff Director and General Counsel

                  Janice Mays, Minority Chief Counsel

                                 ______

                         SUBCOMMITTEE ON HEALTH

                      KEVIN BRADY, Texas, Chairman

SAM JOHNSON, Texas                   JIM MCDERMOTT, Washington
PAUL RYAN, Wisconsin                 MIKE THOMPSON, California
DEVIN NUNES, California              RON KIND, Wisconsin
PETER J. ROSKAM, Illinois            EARL BLUMENAUER, Oregon
JIM GERLACH, Pennsylvania            BILL PASCRELL, JR., New Jersey
TOM PRICE, Georgia
VERN BUCHANAN, Florida
ADRIAN SMITH, Nebraska



                            C O N T E N T S

                               __________

                                                                   Page

Advisory of June 14, 2013 announcing the hearing.................     2

                               WITNESSES

Mr. Jonathan Blum, Deputy Administrator and Director, Center of 
  Medicare, Centers for Medicare and Medicaid Services...........     6
Mr. Mark Miller, Executive Director, Medicare Payment Advisory 
  Commission.....................................................    26

                       SUBMISSIONS FOR THE RECORD

American Hospital Association, AHA, statement....................    63
American Health Care Association & National Center for Assisted 
  Living, statement..............................................    69
American Medical Rehabilitation Providers Association, AMRPA, 
  statement......................................................    75
Coalition to Preserve Rehabilitation, CPR........................    84
HealthSouth, letter..............................................    88
National Association for Home Care & Hospice, NAHC, statement....    97
The Nebraska Association of Home & Community Health Agencies, 
  NAHCHA, statement..............................................   103
The Visiting Nurse Associations of America, VNAA, statement......   105


                  THE PRESIDENT'S AND OTHER BIPARTISAN



                      PROPOSALS TO REFORM MEDICARE



                        POST-ACUTE CARE PAYMENTS

                              ----------                              


                         FRIDAY, JUNE 14, 2013

             U.S. House of Representatives,
                       Committee on Ways and Means,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to call, at 9:29 a.m., in 
Room 1100, Longworth House Office Building, the Honorable Kevin 
Brady [Chairman of the Subcommittee] presiding.
    [The advisory announcing the hearing follows:]

                      HEARING ADVISORY

           FROM THE COMMITTEE ON WAYS AND MEANS

                  Chairman Brady Announces Hearing on

The President's and Other Bipartisan Proposals to Reform Medicare Post-
                          Acute Care Payments

    The House Committee on Ways and Means, Subcommittee on Health 
Chairman Kevin Brady (R-TX) today announced the fourth in a series of 
hearings to explore bipartisan proposals, including those contained in 
President Obama's Fiscal Year (FY) 2014 Budget to reform Medicare. This 
hearing will focus on review of proposals to reform post-acute care 
under the Medicare program. The hearing will take place on Friday, June 
14, 2013 in 1100 Longworth House Office Building, beginning at 9:30 
A.M.
      
    In view of the limited time available to hear from 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. A list of witnesses 
will follow.
      

BACKGROUND:

      
    In 2011, Medicare spending on Post-Acute Care (PAC), defined as 
Home Health Agencies (HHA), Skilled Nursing Facilities (SNF), Inpatient 
Rehabilitation Facilities (IRF) and Long-Term Care Hospitals (LTCH) 
totaled nearly $62 billion. Medicare post-acute providers play an 
important role in the continuum of care for Medicare beneficiaries, 
providing recuperation and rehabilitation services to Medicare 
beneficiaries recovering from an acute hospital stay. However, the lack 
of placement guidelines for beneficiaries in PAC settings, the uneven 
availability of PAC providers across markets, and multiple PAC payment 
systems result in wide variation in the use, cost and quality of post-
hospitalization care for Medicare beneficiaries.
      
    To address these and other concerns, the Obama Administration has 
identified several policies to reform PAC within the Medicare program. 
In the President's FY14 Budget, the Administration focused on five PAC 
reform policies: (1) reducing market basket updates for HHAs, SNFs, 
IRFs and LTCHs; (2) creating site neutral payments between IRFs and 
SNFs for certain procedures; (3) modifying the criteria required for 
IRF status (the so-called ``75 percent rule''); (4) establishing a SNF 
readmissions program; and (5) creating PAC bundled payments.
      
    The President's FY14 Budget estimates that these five policies will 
save $94 billion over 10 years. However, the Congressional Budget 
Office estimates these policies will save $53 billion. In addition to 
the President's budget, several other bipartisan policy organizations, 
such as the Bipartisan Policy Center, The Moment of Truth project and 
the Medicare Payment Advisory Commission, have collectively made 
recommendations to reform Medicare's PAC payment systems.
      
    In announcing the hearing, Chairman Brady stated, ``The new 
Medicare Trustees report confirms this important program remains in 
deep financial trouble, with only 13 years left of solvency in the main 
trust fund. Democrats and Republicans recognize one solution to 
extending the life of Medicare is to improve how care is delivered to 
seniors once they leave the hospital. Finding the right reforms in 
post-acute care can both improve care for today's seniors and help save 
Medicare for the future generations.''
      
    Ranking Member McDermott stated, ``The Affordable Care Act put us 
on a path towards reforming post-acute care and many promising ideas 
are being developed and tested. As the Medicare Trustees' Report 
illustrates, the Medicare program is stable and strong, however, we 
should always look for ways to continue to strengthen it and improve 
the quality of care for its beneficiaries. Improvements in post-acute 
care are a better approach for reform than policies that merely shift 
costs to beneficiaries.''
      

FOCUS OF THE HEARING:

      
    The hearing will review proposals to reform post-acute care under 
the Medicare program.
      

DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

      
    Please Note: Any person(s) and/or organization(s) wishing to submit 
for the hearing record must follow the appropriate link on the hearing 
page of the Committee website and complete the informational forms. 
From the Committee homepage, http://waysandmeans.house.gov, select 
``Hearings.'' Select the hearing for which you would like to submit, 
and click on the link entitled, ``Click here to provide a submission 
for the record.'' Once you have followed the online instructions, 
submit all requested information. ATTACH your submission as a Word 
document, in compliance with the formatting requirements listed below, 
by the close of business on Friday, June 28, 2013. Finally, please note 
that due to the change in House mail policy, the U.S. Capitol Police 
will refuse sealed-package deliveries to all House Office Buildings. 
For questions, or if you encounter technical problems, please call 
(202) 225-1721 or (202) 225-3625.
      

FORMATTING REQUIREMENTS:

      
    The Committee relies on electronic submissions for printing the 
official hearing record. As always, submissions will be included in the 
record according to the discretion of the Committee. The Committee will 
not alter the content of your submission, but we reserve the right to 
format it according to our guidelines. Any submission provided to the 
Committee by a witness, any supplementary materials submitted for the 
printed record, and any written comments in response to a request for 
written comments must conform to the guidelines listed below. Any 
submission or supplementary item not in compliance with these 
guidelines will not be printed, but will be maintained in the Committee 
files for review and use by the Committee.
      
    1. All submissions and supplementary materials must be provided in 
Word format and MUST NOT exceed a total of 10 pages, including 
attachments. Witnesses and submitters are advised that the Committee 
relies on electronic submissions for printing the official hearing 
record.
      
    2. Copies of whole documents submitted as exhibit material will not 
be accepted for printing. Instead, exhibit material should be 
referenced and quoted or paraphrased. All exhibit material not meeting 
these specifications will be maintained in the Committee files for 
review and use by the Committee.
      
    3. All submissions must include a list of all clients, persons and/
or organizations on whose behalf the witness appears. A supplemental 
sheet must accompany each submission listing the name, company, 
address, telephone, and fax numbers of each witness.
      
    The Committee seeks to make its facilities accessible to persons 
with disabilities. If you are in need of special accommodations, please 
call 202-225-1721 or 202-226-3411 TDD/TTY in advance of the event (four 
business days notice is requested). Questions with regard to special 
accommodation needs in general (including availability of Committee 
materials in alternative formats) may be directed to the Committee as 
noted above.
      
    Note: All Committee advisories and news releases are available on 
the World Wide Web at http://www.waysandmeans.house.gov/.

                                 

    Chairman BRADY. Good morning. The subcommittee will come to 
order.
    And I want to welcome everyone to today's hearing on 
bipartisan proposals, including those in the President's 
budget, to reform how Medicare pays for care after patients are 
hospitalized.
    This is the fifth hearing for our subcommittee this 
Congress and the fourth in a series focusing on bipartisan 
proposals to reform Medicare and Social Security. I am proud to 
say that today's effort is truly a bipartisan hearing, that the 
Ways and Means Health Subcommittee staffs from both majority 
and minority staffs have collaborated on this hearing.
    Today's discussion focuses on reforming how care delivered 
after a hospitalization in the Medicare program is paid for. We 
will focus on five policies from the President's 2014 budget 
that are also supported by several bipartisan organizations.
    Our goal is to discuss the details around the following 
specific policies: one, reducing Medicare market basket updates 
for home health, nursing homes, rehab hospitals, and long-term-
care hospitals; creating site-neutral payments between 
hospitals and nursing homes; establishing more stringent 
criteria for rehab hospitals; tackling readmissions from 
nursing homes; and creating bundled payments.
    The President's budget estimates these five policies will 
save $93 billion over 10 years, and CBO estimates these 
policies would save less, $54 billion. These are real savings, 
in any case, for a program that is facing bankruptcy in just 13 
years.
    The topic for today's hearing was chosen, in part, from 
listening to my colleagues. Mr. McDermott, during our last 
hearing, suggested that we may be cherry-picking proposals from 
the President's budget that only focus on beneficiaries. Though 
we still firmly support redesigning the Medicare benefit, we 
know it is only one factor in the Medicare program that needs 
reform, and we should look at other items in the President's 
budget.
    Today we are exploring after-hospitalization care because 
it is in desperate need of reform. It has been over a decade 
since Congress has made meaningful changes to the way after-
hospitalization care is reimbursed.
    While we recently received some good news from the Medicare 
Trustees Report, which noted the life of Medicare's main trust 
fund was extended by 2 additional years, I think some 
additional perspective is necessary. To me, 2 years is 
equivalent to the Titanic hitting the iceberg an hour later. We 
are still in deep financial trouble for this very important 
program.
    So I challenge this committee and our witnesses today to 
think bolder. A question we should be asking ourselves is, how 
can we extend the life of Medicare for an additional 10 years? 
An additional 20 years? Perhaps an additional 30 years? Because 
we owe it to current and future seniors to meet these goals. 
These will require hard decisions, but making them now will 
ensure a vibrant Medicare for generations to come.
    Before I recognize Ranking Member McDermott for the 
purposes of an opening statement, I ask unanimous consent that 
all Members' written statements be included in the record.
    Without objection, so ordered.
    Chairman BRADY. I now recognize Ranking Member McDermott 
for his opening statement.
    Mr. MCDERMOTT. Thank you, Mr. Chairman. I appreciate your 
willingness to approach this topic on a bipartisan basis 
because I suspect there is quite a bit we agree on.
    Post-acute care is really a broad clinical term for all the 
activities that come after the acute incident or acute 
hospitalization. Their health is stable and the question is, 
what do we do with you now? It is something everyone in this 
room will have or has had at some point a chance to deal with. 
It can be messy. It is sometimes the road to the end.
    My experience with my parents living to 97 and 93 is I had 
quite a bit of time to operate in this area. And when I came to 
Congress, there was a group of about nine of us who would meet 
at the back of the floor when we got off the plane from the 
West Coast and discuss our experiences over the weekend of 
dealing with the problems of our parents' post-acute care.
    And there is no manual for this. You find yourself 
stumbling around, trying to navigate a system, while you watch 
someone you love declining. We all want the same thing for our 
parents and any other loved ones who we have in this situation; 
it is the best care possible. We want them to have the highest 
quality we can get for them, but we also want it to be 
efficient. So when we talk about reform, we have to remember 
the people behind it.
    This sector has a lot of challenges. Double-digit inflation 
margins in several post-acute settings indicate that Medicare 
payments far exceed costs. Some parts of the country--it is 
true, 10 years ago, I remember a hearing just like this on this 
issue--had unusually high use of post-acute care. So there are 
concerns about utilization patterns and, certainly, fraud.
    Providers operate in silos, creating disincentives to 
coordinate care and improve transitions between settings. And I 
am sure our witnesses will talk more about this, so I am not 
going to belabor the point.
    We can be happy that the Affordable Care Act has put 
Medicare on a path toward post-acute reform. CMS is now testing 
the concept of bundled payments, which could break down the 
silos and encourage better-coordinated and more efficient 
delivery of care.
    Providers are starting down the path toward value-based 
purchasing with pay-for-reporting and demonstration projects to 
test that concept. The ACA has also provided new fraud tools to 
weed out the unscrupulous providers and took steps to recoup 
and rein in overpayments.
    But more can and will have to be done. Right now, there are 
billions of dollars of savings that can be had by further 
reconfiguring payments to better match actual costs. And that 
will help us address the extremely high Medicare margins of 
post-acute providers.
    Now, the real savings that will go toward a Medicare 
physician fix rather than loading more costs onto beneficiaries 
with incomes of $22,500 is really, I think, what we have to 
begin thinking about. We can also find longer-term reforms, and 
I look forward to hearing these ideas from CMS and from MedPAC.
    While there are a whole lot of interesting concepts and 
policy in this arena, we need to learn from the A.C. efforts 
under way. We have put them in motion, and we are now watching 
them. I don't think we should move too quickly, because we need 
to let them see if they really work to ensure that models work 
in a way that doesn't compromise access and provides high 
quality for our beneficiaries.
    And then, finally, as Chairman Brady did, I would like to 
address something that the majority has raised. While we agree 
on the need for post-acute reform and much of the problem, I 
have to take issue with the notion that Medicare is broke and 
that post-acute reform is the simple fix. There is no simple 
fix to the question of increasing health care.
    The Supreme Court made a decision yesterday that there is 
no ability to patent genes. And what gene therapy is going to 
do over the next 20 years, it is impossible for us to sit here 
today and predict. Nobody predicted where Medicare would be 
today 20 years ago or 40 years ago because medicine has 
advanced, and it is simply impossible to have any kind of 
system where you have it funded out there for 20 or 30 or 40 
years.
    Reform is a worthy goal in and of itself, but let's not 
cloak it in alarmist rhetoric about the program's finances. 
Medicare's finances are strong. The trustees just announced the 
solvency, as you heard, is extended by 2 years. Medicare 
spending per beneficiary--per beneficiary--grew at the low rate 
of 1.7 percent from 2010 to 2012. And projected spending growth 
will continue to be slower with the overall economy.
    So let's agree that changes to the post-acute system are 
needed, that we can improve quality for our parents and loved 
ones as well as rein in overpayments. We don't need hyperbolic 
statements to motivate to us action. We need to do it for our 
families.
    I yield back the balance of my time.
    Chairman BRADY. Thank you.
    Today, we will hear from two witnesses: Jonathan Blum, 
deputy administrator and director of the Center of Medicare at 
the Centers for Medicare and Medicaid Services; and Mark 
Miller, executive director of the Medicare Payment Advisory 
Commission.
    Thank you both for being here, and I look forward to your 
testimony. You will both be recognized for 5 minutes for the 
purposes of providing your oral remarks.
    Mr. Blum, we will begin with you.

      STATEMENT OF JONATHAN BLUM, ACTING PRINCIPAL DEPUTY 
   ADMINSTRATOR AND DIRECTOR, CENTER FOR MEDICARE & MEDICAID 
                            SERVICES

    Mr. BLUM. Chairman Brady, Ranking Member McDermott, Members 
of subcommittee, reforming Medicare's post-acute-care policy 
should be one of our highest priorities to improve the delivery 
of care and to reduce overall costs of the Medicare program. We 
thank you for the opportunity to offer our thoughts and 
perspectives.
    Payment for Medicare post-acute-care services has 
challenged the program for many, many years. Patients with 
similar needs overlap the current silos of post-acute care. We 
don't have a great definition for what constitutes a SNF 
patient or an LTC patient, for example. We don't know what the 
right mix of post-acute-care services are for a given 
condition. As a result, post-acute care is one of our fastest-
growing areas.
    Over the past several years, CMS has spent much time 
analyzing geographic differences in health spending and 
outcomes, particularly for the Medicare fee-for-service 
program. Our work complements efforts performed by the 
Institute of Medicine, the Dartmouth Atlas, and MedPAC.
    While there are many drivers for these spending 
differences, several conclusions are clear to us.
    One, what really drives differences in Medicare fee-for-
service spending is what happens to the patient after he or she 
leaves the hospital. For example, for a 30-day episode of care 
for a common heart procedure, the costs across the country can 
vary by a factor of two to one, with the differences being 
driven by the degree of post-acute-care services provided and 
whether there is a high probability for a hospital readmission.
    Two, higher quality of care is not associated with this 
degree of higher spending in some areas of the country. For 
example, high overall spending levels of post-acute-care 
services are not correlated with lower hospital readmissions. 
Despite some arguments from the industry, more spending on 
post-acute-care services over current levels will not 
necessarily reduce spending in other health care channels. 
Indeed, many of our highest-performing areas of the country, in 
terms of quality and cost, use relatively few post-acute-care 
services following a hospital stay.
    In short, we have to pay for post-acute-care services in a 
better way to improve the quality of care and reduce overall 
costs. Developing these better payment policies will require a 
combination of interventions and approaches.
    Over the long term, we are hopeful that our new payment 
approaches and pilot programs will lead to new care-delivery 
models that better integrate post-acute-care services with 
hospital services and community services to better manage 
patient transitions and episodes of care. For example, we are 
in the process of implementing four bundled payment models. Two 
of them will have a distinct focus on aligning financial 
incentives of post-acute-care providers with the overall cost 
of care. We are confident these models will lay the groundwork 
for a permanent payment policy.
    We also believe that a key success factor for our more than 
250 ACOs, or accountable care organizations, will be to 
establish better models for delivery of post-acute-care 
services. However, while we establish new models of payment and 
delivery, we also believe that we must take incremental but 
forceful steps to make our current payment systems more 
accurate and to ensure that post-acute-care providers treat 
patients that are most appropriate for their care setting.
    Over the past several years, we have made changes to our 
post-acute-care payment systems to rebalance them to have 
stronger incentives to care for the sickest patients. We have 
taken significant steps, some required by the Affordable Care 
Act, to reduce spending where there is clear evidence the 
program overpays relative to the cost of care.
    And we have also put in place new requirements to ensure 
that benefits are being provided consistent with clinical need 
and care planning. For example, beneficiaries now receiving 
home health benefits must be seen by a physician in a face-to-
face encounter to better ensure the integrity of the service.
    This year's President's budget also proposes some 
additional changes that we feel are very important to achieve 
the President's goal of reducing Medicare spending by about 
$371 billion over the next 10 years without compromising the 
quality of the care the program provides.
    Given the current growth trends and Medicare post-acute-
care payments, we believe it is very important to take more 
steps, but careful steps, to further reduce spending to ensure 
these payment systems remain sustainable while better serving 
our beneficiaries.
    I would be happy to answer your questions.
    Chairman BRADY. Thank you, Mr. Blum.
    [The prepared statement of Mr. Blum follows:]
    
    
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]    
    


                                 
    Chairman BRADY. Mr. Miller, you are recognized.

    STATEMENT OF MARK E. MILLER, PH.D., EXECUTIVE DIRECTOR, 
              MEDICARE PAYMENT ADVISORY COMMISSION

    Mr. MILLER. Thank you.
    Chairman Brady, Ranking Member McDermott, and distinguished 
Members of the Subcommittee, I would like to thank you for 
asking the Commission to testify here today.
    MedPAC's work in this area has been guided by three 
objectives: to assure that the beneficiary gets high-quality, 
coordinated care; to protect taxpayers' dollars; and then to 
pay providers in a way to achieve those two goals. MedPAC has 
been trying to move the payment systems away from fragmented 
fee-for-service that encourages volume growth and discourages 
coordination toward systems that focused on payment and 
delivery that are organized around patient need.
    But post-acute-care reform is difficult. There are few 
clinical guidelines regarding the services that are necessary, 
and as you have already heard, there are wide variations in the 
utilization of services. For example, in McAllen, Texas, there 
are seven times more home health services per person than the 
national average. In Miami, there are five times more home 
health services than the neighboring county.
    Related to that, there is not a uniform way to assess 
patient needs or outcomes. Some of our payment systems require 
a common assessment instrument, but they are different in each 
setting, and we cannot compare outcomes and needs across 
setting. And some settings don't have an assessment instrument. 
This is extremely important. It encumbers the process of 
linking payment to quality and the process of developing a more 
rational payment system.
    Another issue is that providers select the patients they 
care for. And on the one hand, this really makes sense; you 
want to pair up patients with providers who can provide the 
necessary care. But in our payment systems, this means 
providers can select patients for financial reasons. We believe 
that, over time, certain SNFs in home health, skilled nursing 
facilities, and home health agencies, have focused on basic 
rehab patients and avoided medically complex patients because 
the former are more profitable than the latter.
    As Jon has mentioned, we pay different rates for similar 
services and similar patients. This creates incentives to move 
patients across payment systems, involving unnecessary 
transitions and additional costs. For example, long-term-care 
hospital payments are generally higher than acute-care hospital 
payments for the same patient, but a recent analysis suggests 
that as many as 50 percent of the patients in long-term-care 
hospitals could be treated in different settings.
    If you think in terms of time frames, MedPAC's efforts in 
the past and in the short term have been focused at improving 
fee-for-service and encouraging movement to better systems. 
This involves reforming the underlying payment system to pay 
providers fairly; limiting and reducing payment rates to 
protect beneficiaries out of pocket, and the taxpayer; 
expanding program integrity to focus on bad actors; and linking 
payment to quality.
    Let me illustrate a couple of these principles. The 
underlying skilled nursing facility payment system, as I have 
mentioned, encourages providers to take basic rehab patients 
and avoid medically complex patients. We have recommended 
changes that would pay the provider more accurately based on 
the patient that they take.
    We also believe that the original base rates for skilled 
nursing facilities were set too high, and this has contributed 
to very high profit margins for more than a decade, currently 
running about 14 percent. We have recommended reducing the 
payment rates to be more consistent with the level of effort.
    Now, if you think about these two ideas together, this 
allows you to lower the rates but not to harm the agencies that 
are taking the most complex patients. We have made similar 
recommendations for home health.
    In the near term in order to encourage a more coordinated 
system, we have called for a unified assessment instrument that 
can be used to assess the patient regardless of what setting 
they go to. We have recommended for skilled nursing facilities 
with excessive readmission rates back to the hospital. And we 
have just begun our discussions of a site-neutral payment 
system for long-term-care hospitals and acute-care hospitals, 
but those discussions have just begun.
    In the long run in order to move to more fully coordinated 
care, we have recommended demonstrations to bundle payments 
around hospitalizations and post-acute care. And we have given 
extensive guidance to both Congress and the CMS on the design 
and implementation of two-sided risk accountable care 
organizations.
    In closing, I think what the Commission is looking for is a 
post-acute-care system with a unified patient assessment 
instrument, a payment that matches resources to needs, but puts 
the provider at risk for unnecessary services, but then clears 
out unnecessary fee-for-service rules to allow that provider to 
determine the ideal mix of post-acute-care services.
    Thank you for your attention. I look forward to your 
questions.
    Chairman BRADY. Thank you, Mr. Miller.
    [The prepared statement of Mr. Miller follows:]
    
    
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
    
    

    Chairman BRADY. To both of you, the last time Congress 
mandated comprehensive reform of Medicare payments was in 1997 
with the Balanced Budget Act. We are considering changes and 
reforms to extend the life of Medicare similar or greater in 
magnitude to those reforms. Many believe Congress took reform 
too far in 1997 and consequently gave back some of those 
reforms in 1999 and beyond.
    So a broader question in the beginning: How does Congress 
aggressively pursue reform that extends the life of Medicare 
without repeating some of the mistakes of the past?
    Mr. Blum.
    Mr. BLUM. So, a couple points.
    I mean, one, I think Congress should recognize that there 
was many changes made to the Affordable Care Act to reduce 
spending on post-acute-care savings. Of the Medicare savings 
that were included in the Affordable Care Act, home health, 
skilled nursing, all the different payment systems did 
experience payment reductions.
    I believe that over the long term what we need to do is to 
shift the system, as Mark suggested, to ensure more accountable 
total care models. And I think what Congress can do is to 
provide clear direction, clear roadmaps for how that system 
should change over time.
    The President's budget set a goal or a target for post-
acute-care bundling by 2017. Really, our intent there is to 
send a clear signal, give a direction of how the health 
delivery system should move.
    We also feel in the interim that we have to take other 
payment steps in the short term to ensure that our payments are 
more accurate relative to the cost of the care. The President's 
budget has several ideas how to achieve that.
    But I think the most important thing long term is to ensure 
that we can achieve more of a site-neutral payment or realign 
the incentives of post-acute-care providers----
    Chairman BRADY. Got it. All right.
    Mr. Miller.
    Mr. MILLER. The things I would say is you want to probably 
move in steps. So when you are taking rates down, because they 
are overstated, you move in a series of steps over time.
    As I said in my opening comments, you try and also get the 
underlying payment system to follow the payments to the complex 
patients so that you are not taxing the facilities that are 
going after the most difficult payments.
    And then I agree with the comment over here that if you can 
get to payment systems that are more population- or episode-
based, you give the provider flexibility and allow them to move 
the resources around, as long as you have protected the risk to 
the program.
    Chairman BRADY. Mr. Miller, you referenced MedPAC's work on 
neutral payments in your original testimony. We have a real 
interest in that area.
    Why have you focused on that policy area? How important is 
it that we pursue that?
    Mr. MILLER. I think the Commission believes it is very 
important. This has been a problem that has been around for 15, 
20, 30 years. When I started, people talked about it, and it is 
still--I think the fundamental problem is twofold.
    One is, at the seams of these payment systems, you create 
odd incentives. So if one payment system pays more than another 
for the same service or the same patient, then people begin to 
behave in ways that are not clinically driven and, instead, 
driven to maximize payments. And you get behaviors that affect 
the beneficiaries out of pocket and behaviors that affect the 
program expenditures, but you also stimulate changes in the 
environment.
    We think that some--ambulatory care--one second, off-
point--we think that that payment has stimulated purchase of 
physician practices, for example.
    One quick, well, you know, wrap up, the Commission has 
talked about site-neutral payments in the ambulatory setting, 
with more of that coming out in our report today. Here, we are 
looking at the site-neutral payment between hospitals and long-
term-care hospitals and just beginning to think about some of 
the relationship between the in-patient rehab facility and 
skilled nursing facilities.
    Chairman BRADY. Tell us about the unified assessment tool 
that you referenced in your testimony, how does that work? How 
far along is it? What kind of insight does it provide us as we 
are looking at reimbursement issues?
    Mr. MILLER. And I may throw this over to Jon because he 
will probably know more about what the current state of play 
is.
    But the fundamental situation is, and particularly in post-
acute care, the two things you are generally looking for is the 
diagnosis and condition of the patient, but beyond that what 
you want is their functional status--their ability to walk, 
their ability to do things like that.
    What we have are these instruments in different settings 
that measure that different ways. And, in some settings, they 
don't have a consistent instrument. And that means you can't 
compare the patients across settings and figure out whether the 
payments and the outcomes are calibrated.
    There was a demonstration done by CMS. And we had called 
for this a long time back, that an instrument needed to be 
created. And CMS developed one and did a demonstration. And my 
view of it is that demonstration is pretty promising in saying 
that you can measure patients consistently across a lot of 
these categories.
    Its status, et cetera, I would hand off.
    Chairman BRADY. What is the status, Mr. Blum?
    Mr. BLUM. The status is that we have spent the past several 
years demonstrating, working with providers, the CARE tool. We 
feel confident that the CARE tool shows promise in how we push 
it out to all our different payment systems. Through our Center 
for Innovation Projects, we intend to use the CARE tool, to 
some degree, to assess how patients fare once you integrate the 
payments.
    So we are at a point where we feel confident within the 
CARE tool that it still needs refinement, but we believe that 
it holds tremendous promise, as Mark said, to assess patients 
across different care settings. And CMS plans to deploy it for 
the first time through our payment innovation----
    Chairman BRADY. Would you, by letter, share with us how the 
tool works and methodologies----
    Mr. BLUM. Absolutely.
    Chairman BRADY [continuing]. For arriving at it and the 
status of it? That would be very helpful.
    Mr. BLUM. Absolutely.
    Chairman BRADY. One of my concerns, that you referenced 
earlier on, is that we don't have criteria in the SNFs and 
rehab hospitals, and we are getting to bundling payments. But 
my impression has been that CMS has had the requirement and 
direction from Congress for many years to develop these 
criterias and to move toward bundled payments. I guess my 
overall question is, why is it taking so long?
    Mr. BLUM. Well, I think, to me, there are several 
challenges.
    Number one is that post-acute-care marketplace has been 
established over time very differently across the country. 
Different parts of the country have a different mix of 
services. So defining one unifying definition to what an 
episode is is challenging, given the current marketplace.
    The other challenge, is who gets the money? Does the 
hospital get the money and then decide where the patient goes 
and then pays the provider, versus having a locus of payment 
being more with the post-acute-care provider system.
    Those are very important questions that we are testing. 
Through our current work on bundled payments, we are, for the 
first time I think, really establishing common payment 
episodes, testing four different models. And there really is no 
off-the-shelf model that we know of that CMS can simply put to 
our payment systems.
    We are working very collaboratively with the hospital 
industry, post-acute-care industry, to define those episodes. 
And I think for the first time, the agency is building the 
infrastructure, not for just micro-tests but for large-scale 
transformation, to move to a more integrated post-acute-care 
system.
    So it is challenging, to be sure, but we feel confident 
that for the first time the industry, the health care delivery 
system, is building the platform to develop a very extensive 
bundled payment system.
    Chairman BRADY. Thank you, Mr. Blum.
    Before I recognize Mr. McDermott, at some point, Mr. 
Miller, during the hearing I hope you will address the 
President's budget's focus on market basket updates. MedPAC has 
included rebasing as part of your recommendations, as well. At 
some point, I would like to hear why.
    Mr. McDermott is recognized.
    Mr. MILLER. If you don't get to that, make sure that you 
come back to me.
    Chairman BRADY. Okay.
    Mr. MCDERMOTT. Thank you, Mr. Chairman.
    One of the issues--we have made reforms since 1997. It was 
called the Affordable Care Act. And that has made real changes 
in what is going on, I think. And we shouldn't ignore the law 
of the land, as the Supreme Court has now described it.
    One of the questions that Mr. Brady raises and I would like 
to follow a little bit is, if you look at the numbers, it is 
Florida, it is Texas, it is Mississippi, it is Louisiana, it is 
Oklahoma, where there is higher home health use and aberrant--
they are outliers in the system.
    Explain to me from a clinical point of view why that is. 
Why do you have that part of the country that has this outlying 
status, while all the rest of us are kind of clustered in the 
middle?
    Mr. BLUM. I think there are many reasons for the extensive 
variation that we see in health care spending. And I think you 
really have to break it down by different payment systems and 
different spending categories. There is no one uniform rule----
    Mr. MCDERMOTT. I think it is 25 counties in those 5 States 
are the furthest out. It is very clustered. So is it just who 
is practicing in those counties? Is that what is going on?
    Mr. BLUM. I believe, and based upon our work with law 
enforcement, there is tremendous fraud going on in certain 
parts of the country, particularly with home health areas. That 
has been an extensive focus for our work, to reform payments, 
to do more HEAT Task Force, working very closely with our 
partners in law enforcement.
    To respond to the variation, that a payment solution or an 
integrated payment bundle is not going to be the only solution 
that I believe that we need to consider. For different areas of 
the country, for different sectors, there are different 
responses. Some might be law enforcement responses, some might 
be better coverage policies, some might be payment reforms, but 
there are different reasons that drive different spending 
variations.
    And I think the home health example that you cite, 
particularly in some parts of the country, are not due to 
payment incentives but due to fraudulent behavior.
    Mr. MCDERMOTT. I remember when we had this debate in 1997. 
The State of Washington had an average of 17 home health visits 
per year, or per patient, and Louisiana had a 125 or 140 or 
something. And it was very hard to see what the difference was, 
I mean, why that was going on.
    So you are telling me that same thing is going on now, 15 
years later, and we haven't figured out a way to get to it. Is 
that a fair estimate of where we are?
    Mr. BLUM. I think that it is clear to us that the higher 
uses of home health services, particularly in the areas of the 
country that you cite, are not correlated with better quality 
of care or lower hospital readmissions. The parts of the 
country that we see that have really managed readmissions well 
use relatively few home health services compared to the areas 
that you cite.
    So the long-term strategy really is to build the global 
payment incentive, but the short-term strategy is to respond 
through fraud and abuse controls, payment reductions, to ensure 
that we both control the integrity of the payment system 
against the long-term vision.
    Mr. MCDERMOTT. Let me ask you about the--now, Mr. Brady has 
asked about the issue of an instrument to measure who should go 
where. And we have this rule, this 3-day rule. And I have never 
understood what the clinical basis for the 3-day rule was. Is 
there such a clinical basis?
    Mr. BLUM. Well, my understanding is that the 3-day rule is 
set by statute. It was set a long time ago. And I believe that 
the rationale when Congress established the 3-day rule was to 
ensure that patients who are discharged to a skilled nursing 
facility have a high clinical demonstrated need for therapy 
services.
    Mr. MCDERMOTT. And that requires 3 days in the hospital to 
establish that; is that correct?
    Mr. BLUM. Correct.
    Now, that is a statutory requirement. And we are very 
interested in testing models that give more flexibility to the 
3-day stay. But our belief is that those should be tested in 
contexts where we have global payment accountability, to ensure 
that we don't overuse services.
    But, you know, within those contexts, like ACOs, for 
example, we are very interested to test more flexibility for 
the 3-day stay, to give more clinical discretion to discharge 
direct, for example, to the skilled nursing facility. But it 
has to be with a common assessment tool, to our belief, and 
also in a global payment arrangement.
    Mr. MCDERMOTT. Now, tell me the difference, if two patients 
are standing here before us, and one of them is going to go to 
a nursing home because they--or they need skilled nursing 
care--they both need skilled nursing care. One of them goes 
into the hospital and gets admitted, and one of them goes into 
the hospital and goes into observational status.
    What is the difference? And who pays for what? Would you 
please explain that for me?
    Mr. BLUM. Sure. Well, I think we are definitely seeing a 
growing trend in outpatient observational services.
    Mr. MCDERMOTT. You have a huge spike.
    Mr. BLUM. Huge spike. And there are different reasons for 
that. And I think some hospitals argue that it is because of 
the RAC, recovery audit reviews, to ensure they get it right 
the first time. Some argue that a patient walks into the ER, 
has no place to go, doesn't merit an in-patient stay, but the 
physician doesn't feel comfortable sending that patient home.
    But it is clear to our rules that to qualify for the 3-day 
stay, the observation services do not count, that the in-
patient stay does count.
    Chairman BRADY. Thank you.
    Mr. Johnson is recognized.
    Mr. JOHNSON. Thank you, Mr. Chairman.
    Mr. Miller, MedPAC is focused on both reducing market 
basket updates and rebasing for home health and skilled 
nursing. Can you articulate why MedPAC has focused on rebasing 
in addition to market basket reductions and the Obama 
administration has only focused on market basket reductions?
    Mr. MILLER. Okay. There are a couple of sets of arguments.
    So, on the skilled nursing side, as I said, there has been 
a decade of very high profits. There does not appear to be a 
relationship between profitability and patient characteristics. 
What drives cost does not seem to be very clear.
    And when we look at the data, we can organize the data into 
efficient providers, providers that have low cost and high 
quality, and they can make higher profits at lower payment 
rates. We also noticed that, in managed care, many managed care 
plans don't pay at these rates for skilled nursing facilities. 
So our argument is, don't continue to inflate a rate that is 
already too high; stop inflating and reduce the rate. And that 
is what we call rebasing.
    But our concern, and this is what I tried to say in my 
opening 5 minutes--and I am trying to answer your question, Mr. 
Chairman, as well--our concern is, let's make sure that if 
there are certain skilled nursing facilities that are focused 
on the most complex patients, that we are also changing the 
underlying payment system so that the dollars move to those 
kinds of providers, so when the rate is reduced, that you don't 
harm the facilities taking the complex patients.
    Now, just let me--one other thing. On home health, the 
story is a little bit different. In home health, when the base 
rate was created, there were about 30 visits provided over 60 
days, and the base rate was based on 60 days. Over time, home 
health agencies now provide about 22, 20-some-odd visits per 60 
days. They are tilted a little bit more to more skilled visits, 
but it was based on many more visits.
    And, again, here is a situation where the profit margins 
for the home health agencies have been very high for a decade. 
And so, once again, we have suggested that the rate should come 
down. And, just like I told you on the skilled nursing facility 
side, alter the underlying payment system so you don't harm the 
home health agencies that take the complex patients.
    I am sorry that was so long.
    Mr. JOHNSON. That is all right.
    Nearly a decade ago, when CMS implemented the modified 75 
percent rule, it did so partly based on the high number of 
relatively simple joint replacement cases being treated instead 
of less intensive settings.
    Isn't it true that the number of these types of patients 
treated in IRFs has declined substantially? And isn't it the 
case that IRFs are treating more medically complex patients 
than they were 6 or 8 years ago?
    Mr. MILLER. It is true, those types of patients have moved 
to skilled nursing facility and home health settings in the 
data that we see. In-patient rehab facilities are treating a 
different mix of patients over time as a result of--I think it 
is actually the 60 percent rule. That used to be the 75 percent 
rule.
    Mr. JOHNSON. So we cut their reimbursement because they are 
treating more complex cases?
    Mr. MILLER. I think, actually, their margins are still in 
the 7, 8 percent range, if I am not mistaken. I think that what 
went on there is there were strong incentives given to have a 
different mix of patients as opposed to a rate reduction.
    Mr. JOHNSON. What can Congress do to make sure that 
patients are getting the right care in the right setting?
    Mr. MILLER. I think what both of us have been saying is, 
you know, like your 3-day rule question and the 75 percent 
rule, or 60 percent rule, whichever it is at the moment, these 
are all things that, you know, we as Congress and Jon as CMS 
have to put in place because you have this fee-for-service 
system and you are sort of chasing these payment systems 
around, which are all siloed.
    I think Jon was saying and I think the Commission would 
agree, if you could get to a more bundled payment, either on an 
episode basis or a population basis, you could step back from 
these rules, have the provider decide what the actual mix of 
services is, as long as the Government's risk has been--and the 
beneficiary's out-of-pocket risk has been managed for the 
episode or for the population.
    Mr. JOHNSON. Thank you for your response.
    Mr. Chairman, I yield back.
    Chairman BRADY. Thank you, Mr. Johnson.
    Mr. Kind.
    Mr. KIND. Thank you, Mr. Chairman.
    I want to thank our witnesses for your testimony.
    I think this is an important hearing. I think there is 
tremendous opportunity to enhance the quality of care in the 
post-acute-care setting, at a substantial cost savings as well. 
But it is frustrating, because this is really a subset of a 
larger issue that we are trying to get at, overall health care 
reform. I think MedPAC has done a good report, and CMS has been 
dialed in on the utilization variation that exists throughout 
the country and certain outliers, as Dr. McDermott just pointed 
out.
    My question is whether or not we can address that issue 
with a scalpel as opposed to a hatchet, as opposed to just rate 
reduction, so that we are not penalizing those areas that 
aren't overutilized and still producing great results, and 
whether or not we have the wisdom to distinguish between the 
two.
    I mean, I reviewed again last night MedPAC's report of 
March of this year, page 199. And you highlighted Wisconsin 
being way below the national average on episodic care and yet 
producing great results. And the fact that 25 counties with the 
highest utilization had an average utilization of 88 episodes 
per 100 beneficiaries.
    If the policies to reduce fraud could lower utilization 
just 18.5 episodes in those areas, it would have declined by 
290,000 episodes, or about 80 percent, at a cost savings of 
close to $800 million in 2011 alone.
    You indicated, Mr. Blum, that there may be some fraud 
involved with that, but there is also, I would assume, a high 
concentration of providers in those areas, too, which is 
driving a lot of the utilization patterns, as well.
    Is that part of what is going on in these outlier areas, is 
the intense concentration, and therefore you are going to get a 
lot more episodes of care and prices being driven that way?
    Mr. BLUM. I think it is clear in our data, and I think this 
is also mirrored in data by MedPAC, the IOM, that there are 
certain parts of the country that use a distinctively different 
mix of services, particularly for post-acute-care services, and 
seem to have the same outcomes, if not higher outcomes. And our 
data that we see for a given DRG episode of care, that total 
cost over a 30-day episode can vary from a factor of two to 
one, sometimes even more.
    And it is really the post-acute-care services, not what 
happens to the patient in the hospital per our payment rates, 
but what happens after that patient leaves the hospital. Is 
there a high probability for readmission?
    There are parts of the country that demonstrate that the 
program can do a lot better overall to reduce hospital 
readmissions, better manage care transitions. But if you run 
the correlation between post-acute-care spending, even 
controlling for the patient risk, there is no correlation for 
the quality of the care that the patient receives that we can 
see.
    So I think there is tremendous opportunity to change the 
payment system over time. It will take a transition. But what 
is clear is that certain parts of the country use relatively 
few post-acute-care services and seem to have better outcomes, 
measured by readmissions, for example.
    Mr. KIND. Well, it seems like we need better data, too. And 
it sounds like the Center on Innovation has been dialed in on 
this.
    Are there any comparative effectiveness research studies 
going right now in post-acute-care settings to get us better 
evidence-based practices and protocols out there?
    Mr. BLUM. I mean, I think, to our analysis, there is some 
very good work that says when you really target those services 
really well--a home health visit for the patient that has just 
been discharged--that there are better outcome. We need to 
figure out what can be scalable, and that is the work that the 
Innovation Center is doing.
    But it is clear that some parts of the country really have 
figured this out well, and we need to understand that and then 
disseminate it through more parts of the country.
    Mr. KIND. I think the key is trying to figure out what the 
proper setting is, what the proper treatment is, to get better 
results at a better price.
    Mr. BLUM. Absolutely.
    Mr. KIND. I mean, that is really the name of the game here.
    You have just mentioned the four bundled payment models 
that you are moving forward on right now. But it is my 
understanding that, even under the bundled payment being 
tested, it typically retains the existing fee-for-service 
payment rates with kind of a virtual bundle above that.
    Isn't that kind of counterintuitive to where we need to go?
    Mr. BLUM. Well, I think we are testing different models. 
And I think we are also testing how fast we can establish these 
models.
    And similar to the accountable care organization model, a 
very quick way for us to move forward, given our current 
infrastructures, payment systems, and just the marketplace 
realities, is to continue to pay on a fee-for-service basis but 
then do kind of post-episode, post-year-end reconciliations to 
determine savings and quality of care.
    But the tradeoff really is speed versus----
    Mr. KIND. Do you know, of the $15 billion we have been able 
to recapture under the ACA on Medicare fraud, how much of that 
came from the PACS, post-acute-care setting?
    Mr. BLUM. I don't have that number offhand. But what I can 
tell you, Congressman, is that a lot of the fraud that we see 
in the program really comes from those providers that are very 
mobile: home health, durable medical supplies. And, really, 
that is, you know--we see less fraud in permanent institutions.
    Mr. KIND. Okay. Thank you.
    Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Mr. Roskam.
    Mr. ROSKAM. Thank you, Mr. Chairman.
    Mr. Miller, a couple minutes ago, you mentioned that we 
shouldn't be taxing those providers going after the medically 
complex patients. Isn't that sort of implicitly what is 
happening with the 75 percent rule? In other words, there is 
this burden that is being placed upon these institutions; it is 
a limitation upon them.
    Shouldn't we move away from the 75 percent rule, you know 
what I mean, and just make sure that it is something that is 
not revisited?
    Mr. MILLER. I want to deal with two things, because the end 
of your comment I agreed with, but I wanted to do the set-up at 
the beginning.
    I think the intent of the 75 percent rule is that the in-
patient rehab facilities were taking patients that didn't need 
to be there, that could have been treated elsewhere. And so I 
think the intent of the rule, clunky and, you know, regulatory 
as it was, was to do that.
    Now, to the second part of your question, I think, which 
is, yes, I think that objective is to get away from rules like 
that. And, again, I think you are hearing a fairly consistent 
message, which is, set the payment, allow the provider to 
manage within that patient, and if it is a couple of days in 
the IRF and then 2 weeks of home health versus a different 
patient has a different mix, fine. But the payment has been 
tied to what the patient needs, and then the exact mix the 
provider will execute.
    Mr. ROSKAM. What I am hearing from a Tier 1 rehab facility 
in my district is sort of the--really the heartache of stories 
of, look, we can't care for this person, who desperately needs 
our help, based on our census. And so I am sensing from you, 
look, let's move away from this.
    Mr. MILLER. Move away from that, but also remember those 
rules. It is not that each and every patient has to meet that 
criteria; 60 percent of the patients have to meet that 
criteria.
    So there is some flexibility to pick up a patient that you 
say, well, they might be on the other side of the line, but I 
am going to take them because of their need because my overall 
census, to use your word, falls within the rule.
    But, again, that is clunky and not the ideal place to be.
    Mr. ROSKAM. And even the 60 percent, that is not driven by 
any data, is it? I mean----
    Mr. MILLER. Well----
    Mr. ROSKAM [continuing]. What is the argument for 59? What 
is the argument against 58?
    Mr. MILLER. Oh, the actual percentage. My understanding of 
how the rules got set up is that clinicians came together and 
sort of looked at what types of patients needed to be in these 
types of facilities and struck a rule. Whether it is 60 percent 
or 75 percent, I don't think there is a lot of science in that.
    Mr. ROSKAM. Right. And the other thing is, the clinicians 
were induced based on what? Either we are going to make a rule 
or you are going to make the rule, so come up with the rule?
    Mr. MILLER. Hit me one more time?
    Mr. ROSKAM. In other words, there is one thing to say, 
let's come up with some sort of artful way. There is another 
thing to say, there is going to be a rule that is going to be 
imposed, come up with the percentage. Do you follow me? How 
they are prompted and the environment in which a rule is 
created.
    So I am not necessarily satisfied that even this 60 percent 
rule is something that they would come up with on their own. 
They were told, look, there is going to be a number, on the bus 
or under the bus. You write the number, or we are going to 
write the number.
    Mr. MILLER. And I will say this. And I understand your 
thinking here, and it is thinking that was very consistent with 
my own. But, for example, I don't know how many years ago now, 
I am going to say 7 or 8 years ago, the Commission has been 
pushing on the need for criteria for long-term-care hospitals. 
I have many times sat with the industry and said, where are the 
criteria? And it has been pulling teeth.
    And the criteria, bluntly, that have come forward are, in 
many instances, very self-serving. They basically codify 
exactly what is out there.
    Mr. ROSKAM. Right. I have heard some of that. I get that 
vibe.
    Mr. Blum, just quickly, CMS is proposing to pay rehab 
hospitals a nursing home rate based on certain types of 
conditions. What animates your hope that that is ready for 
prime time? And if you are proposing to do that as a cost-
saving measure, what are you proposing to reduce in terms of 
regulations to allow them to administer that service at that 
price?
    Mr. BLUM. Well, I think, as Mark and others have said, 
there are clear areas where we can see overlap, where patients 
with similar needs, similar clinical characteristics, are 
treated in different silos of payment that we currently 
operate. And I think what we are trying to get to is payment 
that is neutral.
    And what I believe the President's budget says, for a very 
small step, to neutralize the payment, given the payment 
differences, for conditions that we see a lot of overlap. This, 
to me, as small step until we get to a more permanent, longer-
term payment policy.
    I think it is a fair question for Congress to ask; well, 
how do we assess that the patients are kind of treated 
similarly? I think one area for consideration is that, if this 
change were authorized, to direct us to use the CARE tool as a 
step to ensure that we do see consistent outcomes.
    But I personally would frame this policy as one small step 
towards site-neutral payments, but one that we are comfortable 
proposing.
    Chairman BRADY. Thank you.
    Mr. Pascrell.
    Mr. PASCRELL. Thank you, Mr. Chairman.
    And thank you to the witnesses. You have been clear, 
succinct.
    I am astounded, Administrator Blum, as to how candid you 
have been, not just today, about fraud in the system. And I 
wasn't going to talk about this, but the amount of money, when 
we know that health care is part of the entire economy, and it 
is growing, that we are losing every day because of these 
mobile, for instance, providers.
    Do we know who they are?
    Mr. BLUM. I think we are much better able today than 
previously to spot fraud before it happens. And one of the 
things that we have built at CMS that was mandated by the 
Congress was what we called the fraud prevention system, where 
we now, before claims are paid, we can spot patterns, we can 
see things, we can refer them to further investigation.
    But I think, to us, the key is to use claims systems much 
more smartly, more wisely, so we can spot behavior that is 
problematic. Because we know that behavior that is fraudulent 
isn't isolated, that it moves; once we bring in law enforcement 
resources, that it tends to move.
    So we have to be smarter, we have to get away from pay-and-
chase, and much more about predictive data----
    Mr. PASCRELL. Most of the fraud is still on the side of the 
providers, not the folks that are getting the care; isn't that 
correct?
    Mr. BLUM. I think, traditionally, we have been focused on 
the providers. I think there are some instances where the 
beneficiaries are complicit, whether they know it or not, that 
their IDs got stolen. But I think, to us, we have to move away 
from the past pay-and-chase system and move toward a smarter, 
wiser system to stop payments before they happen.
    Mr. PASCRELL. One of the elements of the Affordable Care 
Act--I had a personal interest in it, a professional interest 
in it--is the Innovation Center. I think it is very, very, very 
critical in terms of moving forward, as you have used the term 
before, both of you.
    I am very excited about the promising payment and delivery 
reform models that can transform both Medicare and Medicaid, as 
CMMI takes time to test and evaluate these models.
    While I understand that the Innovation Center is an 
important avenue for us to collaborate with health care 
providers and partners in the private sector to improve how our 
health care system works, I strongly advocated for the 
continuing care hospital pilot in ACA, and Congress ultimately 
authorized the pilot with the goals.
    Now, can you tell me what the status specifically is of the 
implementation of the continuing care hospital model?
    Mr. BLUM. We are happy to provide you with a more complete 
response through writing. But my understanding is that our 
bundled payment models, the four models that I talked about, 
permit the same kinds of care model that I think the 
legislation calls for. So we believe that the spirit, the goals 
of the continuing care hospital model are being established 
through our bundled payment systems.
    We are working with a wide range--I think it surprised us, 
the interest--of hospitals' post-acute-care providers. We plan 
to test more models over time. We have four that we have now 
established. I think the goal is----
    Mr. PASCRELL. But we haven't implemented them, correct?
    Mr. BLUM. They are in the process of being implemented, and 
our target is to have them up and running by October 1st.
    Mr. PASCRELL. And the Congress directed CMS to test the 
model. CMS does not have the discretion on this matter, as I 
understand it. To be clear, Section 3023 mandates that the 
Secretary implement the CCH pilot as well as the national 
bundling pilot.
    Can you tell me when we expect CMS to begin pilot testing 
the CCH model?
    Mr. BLUM. I think what I can say to you today is that there 
are four models. To me, they include the spirit of that 
language. And I will be happy to get back to you with a more 
precise answer.
    Mr. PASCRELL. Thank you very much.
    And I yield back. Thank you, Mr. Chairman.
    Chairman BRADY. Thank you.
    Dr. Price.
    Mr. PRICE. Thank you, Mr. Chairman. And I want to thank you 
as well for holding this hearing.
    And I want to thank our witnesses.
    I always like to try to talk about patients, and just as a 
little, maybe a non sequitur, but there is an urgent issue, Mr. 
Blum, as you well know, with the whole issue of DME and going 
to phase two and round two of the competitive bidding model, 
that many of us believe--in fact, a letter was sent to Ms. 
Tavenner, signed by a 226 bipartisan group from Congress, to 
urge a delay in this, because real people in real communities 
across this land, we believe, are going to be harmed in very 
specific ways. And so I would draw your attention to that 
letter and urge you to take that message back to Ms. Tavenner, 
please.
    A delay of 6 months, we believe, would be a zero cost, 
because the current requirement is to have it done by the end 
of the year, so we can move toward a positive system, market 
price purchasing system.
    I do want to follow up on the issue of fraud, obviously, 25 
counties that have the highest level of fraud. And the 
providers get whacked with this. There is a significant number 
of just fraudulent actors, not even providers, who take the 
Government for significant amounts of money and then move on 
when they get identified.
    Mr. Blum, do you know what that percent is?
    Mr. BLUM. I think it is hard for us to quantify what a 
precise rate of fraud is. The Congress did direct us to try and 
calculate that. What we do know is that there is a substantial 
number, too high a number, to our minds, of bad actors that 
bill the system.
    We are moving the system from the pay-and-chase model. We 
are trying to find those actors. But I do agree with you that 
it is a small percentage but that it is one that creates 
vulnerabilities that we have to respond to.
    Mr. PRICE. Most of the providers out there that are trying 
to care for these patients in oftentimes very, very difficult 
situations and decreased reimbursement that has challenged them 
to a significant degree are just trying as hard as they can.
    Reducing market basket updates. It seems to me that 
modifying this payment that CMS is talking about is being done 
more with the budget in mind as opposed to patients in mind.
    And what are your metrics that relate to being able to 
determine the cost of compliance with the regulations and the 
rules for the folks? Is that part of your equation for what you 
pay in a market basket?
    Mr. BLUM. Well, I think the main metric that we look to is 
margins and how are the Medicare payment rates relative to the 
cost of care. And what we see in all of our post-acute-care 
payment systems, SNF and home health and in-patient rehab, is 
very high margins.
    Mr. PRICE. But what is a margin that CMS finds acceptable? 
How much?
    Mr. BLUM. We don't have a defined standard, but I think 
when we see margins that are in the double-digit rates, that 
gives us very strong concerns that our payment rates are too 
high relative to the cost of care.
    Mr. PRICE. Is CMS the one defining the cost, or are the 
folks actually paying the bills defining the cost?
    Mr. BLUM. Well, we have cost report processes where we 
collect costs based upon the costs of care that are submitted 
to us by CMS. But it is really the cost of--excuse me, to CMS. 
But it is really the cost of the care provided to that 
beneficiary.
    We have to be mindful that our regulations don't--I mean, 
are smart, that are wise. We have taken regulations off the 
books in the last couple of years to create more flexibility. 
But, to our analysis, when we see margins that are in the 
double-digit rate, that is a clear signal that the program 
overpays relative to----
    Mr. PRICE. And I appreciate that. I think it is important 
for people to make certain that we are hearing what is being 
said, and that is that the Federal Government believes that 
there is a certain amount of a margin that is correct and a 
certain amount that is not. Many of us find that fairly 
chilling.
    I want to move to the issue of the unified assessment rule 
and this CARE tool that is being considered. Do you know the 
cost of the compliance with this CARE tool that is being set 
up?
    Mr. BLUM. One thing that we do hear from providers that 
have tested the CARE model, that there are many questions, too 
many questions. And we don't have a set number of questions in 
mind. We are very, I think, open to refining the tool based 
upon----
    Mr. PRICE. But do you know the cost--is there a target cost 
to the provider that CMS is looking at for compliance with the 
CARE tool?
    Mr. BLUM. Not that I am aware of. But I think our goal is 
to make sure of two things: number one, that we, the Congress, 
MedPAC, all of us, can assess patients that are treated in 
different settings to assess, does it make sense for this 
patient to be in home health versus SNF----
    Mr. PRICE. It is a different question, though, Mr. Blum. 
The providers have to comply with what you dictate. And if 
there is a cost to that compliance, if that is not being 
factored into what you are paying, then you are not paying 
attention to what happens out there in the real world.
    Mr. BLUM. What I can say is that all of our payment systems 
today require an assessment. SNF has their own system. Home 
health has their own system. IRF has their own system. So that 
is, to my analysis, already built into the system.
    Our goal is to simplify. Many post-acute-care providers 
both own SNF, home health, and long-term-care facilities, for 
example. So, hopefully, one common assessment should reduce 
provider burden, particularly those that have multiple care 
settings.
    Mr. PRICE. Thanks, Mr. Chairman. I look forward to 
following up.
    Chairman BRADY. Thank you. Thank you, sir.
    Mr. Buchanan.
    Mr. BUCHANAN. Thank you for holding this important hearing.
    And I also want to thank our witnesses for taking their 
time today.
    Mr. Blum, with regards to in-patient hospitals that provide 
rehab, I want to go back to the 60 percent rule. How do we 
know, from your standpoint, that it is not working? I guess 
that is the first thing.
    And the second thing, I am just concerned about a lot of 
patients. I am from Florida. It is a big issue in our area. I 
am very concerned about patients having access to quality care 
and that a lot of them might be exempt as a result of going 
from 60 to 75 or whatever that number might be. So I would ask 
you that question.
    Mr. BLUM. I think our starting principle for post-acute-
care payment systems is that we recognize that each of our 
payment silos has a distinct need and a distinct focus in the 
care delivery system. And so we feel that all of them are 
important and that serve beneficiaries well.
    We also know there is overlap. And given, as Mark 
described, differences in cost of care--quite significant 
between those patients, for example, who are treated in a 
skilled nursing facility and those in an in-patient rehab 
facility--that while we develop this longer-term strategy, that 
we need to do more to ensure that patients get treated in the 
right care setting, given the payment differentials.
    Mr. BUCHANAN. But you are confident that people will have 
the same quality of care in terms of access to facilities by 
raising that bar?
    Mr. BLUM. Well, I think we know there is overlap, we know 
that quality varies across the country. As during the previous 
question, the question was, how did the agency come to the 60 
percent? That was done with the collaboration of clinical 
input. And I would say that if the Congress chooses to 
authorize this policy to change the 60 percent to the 75 
percent, one thing the Congress might want to consider is to 
make sure that change does have clinical validation and input.
    But we do think it is appropriate for us to take some more 
incremental steps to make sure patients are treated at the 
right place at the right time while we develop more of the 
longer-term strategies.
    Mr. BUCHANAN. And, Mr. Miller, in your written testimony, 
you conclude that post-acute-care spending has doubled since 
2000. What are the biggest contributors to that, based on your 
statement?
    Mr. MILLER. I think, you know, at a conceptual level, I 
think probably the biggest contributor is how difficult it is 
to define the need for the service. And so it is very hard to 
decide when to start and when to stop.
    If you want to get more mechanical about what is going on, 
the underlying trends, there has been in some of the post-
acute-care providers a large influx of providers, and I think 
that that is, in part, because some of the rates are so 
attractive, that people come in. You have more users of the 
service and more services per user. So if you think about the 
growth-driving factors, that is what has been happening in a 
lot of the environments.
    But I think the fundamental concern is the payment rates 
have been set very high in some of these settings and providers 
have come in.
    Mr. BUCHANAN. Mr. Blum, real quick, I want to echo a little 
bit what Dr. Price mentioned about competitive bidding. I can 
tell you that it is a big issue. I have talked to a lot of 
people across the State of Florida. But I have one person in my 
district, they are looking at a 40 percent cut on one product 
that they sell. Talking about 500 employees; probably going to 
have to lay off half of them.
    This is a big issue all over Florida. I know that Dr. Price 
mentioned there are 227 Members on a bipartisan basis. Someone 
like myself that has been in business 30 years, the whole 
concept of competitive bidding or bidding, you have to make 
sure these are legitimate bids, and ``legitimate'' meaning 
people can deliver based on what they are talking about under 
these contracts.
    But there are a lot of people that are going to be 
negatively affected with this bidding process if this isn't 
done in the proper way. And I know locally we are talking about 
a lot of jobs, not just in my district but across Florida, 
because of this process.
    And I hope that you guys--and I just don't know how you cut 
someone 40 percent. That is not staged in a whole industry, and 
this is just one industry. So I would just like to have you 
respond quickly to that.
    Mr. BLUM. We understand that the competitive bidding model 
is a transition and one that is complex and one that is a 
significant change from the current way that the Medicare 
program pays for durable medical supplies.
    I would say there are three things why we think this 
program is so vitally important. Number one, the program 
currently overpays relative to what we know private payers pay. 
The program will save substantially relative to the current 
payment rates.
    Number two, I think, going back to the fraud issue that was 
raised previously, by working with a better-screened set of 
suppliers, we are confident that we can reduce the error, the 
fraud that historically we have seen in the program.
    And I think, number three, what I would say is, we have 
tested this program in nine parts of the country. And the 
arguments that we are hearing today we heard before we started 
the nine areas of the country: Beneficiaries would go without 
supplies, there would be waits for supplies. That hasn't 
happened. And we have tracked this program more carefully than 
the Medicare program has tracked ever before. We have not seen 
the disruption that the industry argued would happen back in 
2011. That gives us great confidence we can move forward.
    We will pledge to work with this committee, with the 
Congress to share the same data we look at, 100 percent claims 
analysis, to ensure that our beneficiaries have the supplies 
they need and have the best possible care delivery.
    Mr. BUCHANAN. Thank you, Mr. Chairman.
    Chairman BRADY. Mr. Smith.
    Mr. SMITH. Thank you, Mr. Chairman.
    And thank you to our witnesses here today for sharing your 
insight and your recommendations.
    As well, I am concerned about the sustainability of 
Medicare and want to look at not only the short-term but the 
long-term solutions so that we can see Medicare in a more 
sustainable fashion.
    We know that there is a large difference in terms of 
delivery to urban areas compared to rural areas. Obviously, I 
represent a very rural constituency. And I want to ensure the 
changes we make to Medicare do not further limit access to 
critical services to people living in rural areas.
    Mr. Miller, when MedPAC was looking at ways to reform 
payments to post-acute-care services, did you research whether 
these reforms would impact access to our rural communities? And 
if so, how?
    Mr. MILLER. We did.
    And we recently, I think it was in June 2012, did a fairly 
extensive report on rural services, access, quality, that type 
of thing. And when you look at service use, whether we are 
talking about physicians, hospitals, skilled nursing 
facilities, home health, ESRD drugs--we looked at a range of 
different things--the utilization rates between urban and rural 
areas are not all that different.
    The only real place that we found a difference is, in the 
most frontier counties of the country, there is a lower home 
health utilization rate. But everything else, pretty 
consistent.
    Mr. SMITH. Can you elaborate on ``most frontier counties''?
    Mr. MILLER. I may get this wrong. I think it is six persons 
per square mile, something like that.
    Mr. SMITH. Okay.
    Mr. MILLER. And I may have that all wrong. I can tell you, 
just not this second.
    Mr. SMITH. Okay. Thank you.
    Mr. MILLER. The thing to keep in mind that I want to get 
across to you and the committee, it is not about urban and 
rural. If you go to Louisiana, the highest utilization rates in 
the country in Louisiana, Texas, areas like that, it is urban 
and rural. If you go to South Dakota, you have low utilization 
urban and rural. It is much more a phenomenon of practice 
pattern and sort of entrepreneurial service utilization than it 
is an urban and rural phenomenon.
    And I just want to get this last thing in here. I am sorry, 
I know you want to go again. But, you know, our view is, if you 
find a problem and you think that there is an access issue, 
target the solution to that, as opposed to saying, okay, here 
is a payment for anybody with ``rural'' in their name and then, 
you know--for example, in home health agencies, the rural 
margin is actually higher than urban. So our point is really 
about targeting it to access problems.
    Sorry.
    Mr. SMITH. Okay. Thank you.
    Mr. Blum, in your opinion, would any of these proposals be 
detrimental to providers in rural communities?
    Mr. BLUM. I think we always have to be mindful of that and 
to make sure that beneficiaries throughout the country have 
access to quality services.
    As Mark said, home health, for example, that we see high 
margins consistently throughout the entire industry, for-
profit, not-for-profit. So that gives us confidence that we can 
lower payments without compromising quality of care.
    But I think it is a fair demand that Congress should put on 
the agency to monitor what happens to beneficiaries realtime 
with these payment changes. I talked about the work that we 
have done on dialysis care, for example.
    So I think, if Congress were to adopt these policies, one 
recommendation that I would have is for Congress to demand CMS 
to monitor what happens realtime to make sure the quality of 
care throughout the country is not compromised.
    Mr. SMITH. Okay. Thank you.
    I yield back.
    Chairman BRADY. Thank you.
    Mr. Gerlach.
    Mr. GERLACH. Thank you, Mr. Chairman.
    Gentlemen, let me go back to this 60 percent rule issue 
just so I can get some clarity in my mind over it.
    As I understand it, the in-patient rehabilitation 
facilities receive their reimbursements based upon a 
prospective payment system. Is that correct? That was 
transitioned into being somewhere around 2000? Is that right?
    Mr. BLUM. [Nonverbal response.]
    Mr. GERLACH. Okay. So if that prospective payment system is 
properly structured, in terms of identifying the types of 
services that would be necessary for a patient with a certain 
diagnosis, and the bundling of the care that goes into that 
payment mix is appropriate, why is there a percentage rule at 
all as to how many patients overall that facility has that 
might be Medicare-eligible for certain services versus a 
patient that comes in needing rehab for a broken leg because of 
a motorcycle accident who is 23 years old? Why is there any 
percentage rule applied in any way, as long as the PPS payment 
system is appropriately structured?
    Mr. MILLER. I am sure Jon has things to say here, too, so I 
will try to keep it short.
    The issue that you always get with a prospective payment 
system is, if you set up a payment, what a provider may do--and 
I am not saying all of them do it--may try and figure out how 
do you maximize payment with minimum amount of effort. And so 
you have a set of categories, you classify a patient, you 
assign a dollar, but if I can figure out how to get a lower-
severity patient in there, I can increase my revenue.
    And this isn't just in-patient rehab facilities. You see 
this throughout the post-acute-care setting. I mentioned 
earlier, home health was built on the assumption of 30 visits. 
They are now delivering 22, on average.
    So, in a sense, and this is what is clunky and unhappy 
about these silos and fee-for-service, is you will observe 
patterns and then you will put in criteria trying to reorient 
the incentive structure for the provider.
    Mr. GERLACH. But, on that point, if I can--and, Mr. Blum, I 
would like your comment, too. On that point, you are saying 
that the provider is trying to, based on that payment 
structure, determine what the nature of the patient is coming 
in to get the service and trying to get a less-severe patient, 
from a health care conditions situation, into the facility, 
knowing you are going to get a better reimbursement out of 
that, versus taking on a more----
    Mr. MILLER. Complicated.
    Mr. GERLACH [continuing]. Complicated situation.
    Mr. MILLER. Uh-huh.
    Mr. GERLACH. But the point still stands. As long as 
whatever the service is being provided meets the criteria, what 
difference does it make overall to the total patient mix? 
Whoever the patient is that comes into that facility needs a 
certain amount of care for a certain condition.
    Mr. BLUM. I would agree with you.
    Mr. GERLACH. And if the bundling payment is a fair payment 
for the service provided, why is that an issue for you as to, 
what, it is 60 percent, 75?
    Mr. MILLER. It is whether it is fair based on who is coming 
in at that point in time versus when it was fair when it was 
set up. So you may have set it up and said this is the mix of 
patients and here is the payment, and then you find yourself 5 
years down the road and there is a different mix of patients in 
there but the payment has continued to reflect the higher 
complexity. That is the problem.
    Mr. GERLACH. Mr. Blum.
    Mr. BLUM. I would agree with what Dr. Miller just said, is 
I think that if we have payments that were neutral to the 
patient's conditions, that it shouldn't matter which setting 
that they would be served in. But because we have such 
differentials in payments between skilled nursing facility 
payments versus in-patient rehab versus hospital, in order to 
protect the trust funds and also to ensure patients get served 
in the best setting, we have to think about these criteria, 
like the 75 percent rule, to make sure that the right patient 
gets treated at the same time.
    The rules also say that, for an in-patient patient, they 
have to withstand very intensive therapy, they have to 
withstand, you know, very intensive services. So we have to 
have determinations of who goes to the right place at the right 
time, both to make sure that the care is appropriate, but, 
given the payment differentials, that the trust funds are 
protected.
    We believe over the long term we need to move away from 
these more crude and clunky measures like 3-day stay, 75 
percent rule. If we can figure out what the right mix of site-
neutral payment is long term--we don't have that definition, 
and no one does that I am aware of right now--that we can phase 
out some of these more clunky definitions.
    But until we can figure this out longer term, then I 
believe we need to have these definitions, but can test ways to 
relax them, so long as we have total cost accountability built 
into the system.
    Mr. GERLACH. Okay.
    And real quickly on home health care, if I can--and I would 
like to have both your comments.
    I had a constituent that went in for 3 days of home--or had 
3 days of home health care services. He was billed $1,500 for 
the services and turned that over to CMS. And the CMS folks 
reimbursed the home health care agency $3,000 for those 3 days 
of care--in essence, reimbursed the agency double what they 
billed for the service. And the explanation we got from CMS was 
that, well, over the course of a 30-day episode of care, a pro-
rational reimbursement amount was $3,000.
    Why are you paying double what is billed in this system? 
Why don't you have it in your regulations, it is that 30-day 
episode of care that determines the amount or what is billed, 
whatever is less?
    Mr. BLUM. I think that is a helpful suggestion. I would 
have to become more familiar with this case. We do have short-
stay outlier mechanisms in our home health payment system. But, 
as Mark said, the current home health payment system is based 
upon a visit assumption that is no longer valid.
    CMS is working, consistent with the Affordable Care Act, to 
rebase the home health payment system. So I hope that our 
future payment system won't have the effect that you just 
described.
    Mr. GERLACH. Thank you.
    Chairman BRADY. Thank you.
    Mr. McDermott, for a brief follow-up.
    Mr. MCDERMOTT. Mr. Smith asked a question, and I want to 
just follow up a second.
    On the home health care issue, the ACA gave you the ability 
to put a moratorium on any more organizations in an area. Have 
you used that anyplace in the United States? If not, why not? I 
would like to hear your answer to that question.
    Chairman BRADY. And briefly, please.
    Mr. BLUM. We have not used it yet. We continue to receive 
recommendations from the industry associations, law 
enforcement, but we have not used it yet.
    Mr. MCDERMOTT. So you have not used it.
    Mr. BLUM. Yet.
    Mr. MCDERMOTT. Thank you.
    Chairman BRADY. I want to thank both of our witnesses and 
our Members here, as well, for their testimony today and the 
questioning. Your experience and ideas on how to reform 
Medicare's payment for after-hospitalization care to keep the 
system solvent are appreciated.
    As a reminder, any Member wishing to submit a question for 
the record will have 14 days to do so. If any questions are 
submitted, I ask the witnesses to respond in a timely manner.
    Chairman BRADY. With that, the subcommittee is adjourned.
    [Whereupon, at 10:47 a.m., the subcommittee was adjourned.]
    [Submissions for the Record follow:]
    
    
                   American Hospital Association, AHA
                   
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                               
 American Health Care Association & National Center for Assisted Living

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                                 
      American Medical Rehabilitation Providers Association, AMRPA
      
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]      
      



                                 
               Coalition to Preserve Rehabilitation, CPR
               
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]               
               




                                 
                              HealthSouth
                              
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]     




                                 
           National Association for Home Care & Hospice, NAHC
           
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]           
           




                                 
  The Nebraska Association of Home & Community Health Agencies, NAHCHA
  
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]  
  





                                
            The Visiting Nurse Associations of America, VNAA
            
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]