[Congressional Record Volume 143, Number 139 (Wednesday, October 8, 1997)]
[Extensions of Remarks]
[Pages E1978-E1979]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             MEDICARE PARTIAL HOSPITALIZATION INTEGRITY ACT

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                       Wednesday, October 8, 1997

  Mr. STARK. Mr. Speaker, on behalf of Representative Karen Thurman and 
myself, I am today introducing legislation to reform Medicare's partial 
hospitalization benefit.
  The partial hospitalization benefit is an important addition to 
Medicare, helping people with substantial mental health needs, who in 
the absence of this service would need to be hospitalized.
  Unfortunately, Congress' effort to provide this improved benefit has 
become prey to some unethical and corrupt ``health care providers.'' In 
some areas, the benefit is being badly abused. I include an article 
from the Miami Herald of September 2, 1997, which describes the 
situation in Florida.
  The bill we are introducing today will deny coverage of services in 
home and nursing home settings; establish quality standards that will 
prevent fly-by-night operators from being eligible to participate; 
establish a prospective payment system for the partial hospitalization 
benefit, so that costs are brought under control; and provide a 
demonstration project to determine whether more comprehensive services 
by quality providers can indeed save Medicare some revenues.
  The administration proposed most of these changes this summer, but 
the partial hospitalization problem was new to Congress and we did not 
have time to consider these proposals in this summer's Balanced Budget 
Medicare Title.
  I hope that these provisions can be considered early in the next 
session of Congress, so that this abuse of the system can be stopped. 
The situation in Florida indicates that we cannot afford to wait.
  The partial hospitalization benefit--when done right--is an important 
and cost-effective tool to reduce the length of stay of an inpatient 
hospitalization and to prevent the need for inpatient hospitalization 
altogether. The reforms we are suggesting have the support of the 
partial hospitalization, who are as anxious as we are to expel the bad 
actors from this specialty.
  Why partial hospitalization is a useful service is well described in 
the following materials provided by the Association of Behavioral 
Healthcare, Inc.

               [From the Miami Herald, September 2, 1997]

              Medicare Abuses Spark Cry for Anti-Fraud Law

                           (By Peggy Rogers)

       Florida's notorious Medicare cheats have yet another type 
     of record--abusing a special psychiatric program out of all 
     proportion to the rest of the nation.
       Patient snatching is among the homegrown scams employed in 
     this ``partial hospitalization'' program, which is supposed 
     to provide several hours a day of intensive psychiatric care. 
     The unwitting elderly and mentally ill, often told they are 
     going on recreational outings, are lured from boarding homes 
     each day to be used as patients.
       The boom is astounding. In 1993, Florida outfits billed 
     federal insurers $2.9 million for partial hospitalization. 
     Last year, Florida's total was $112 million--half of the $220 
     million Medicare spent nationwide for partial 
     hospitalization, federal anti-fraud authorities say.
       So ``aberrant'' and ``alarming'' are Florida's numbers that 
     state health-care administrators are proposing a state law to 
     clamp down on abusers. If authorities with the Florida Agency 
     for Health Care Administration secure a sponsor, the law 
     requiring licensure of partial hospitalization programs would 
     be considered during the next legislative session.
       At the same time, federal authorities in Miami this summer 
     have recommended a moratorium on Medicare billing by new 
     companies.
       In 1991, Washington expanded partial hospitalization 
     payments to facilities outside of hospitals. It was intended 
     to save mentally disturbed patients from full hospitalization 
     and save taxpayers money. Services include therapy and 
     stabilization, several hours a day, several days a week.
       While Florida consumes half of the program's entire 
     national budget, the state has 26 percent of the private 
     companies providing the service and only 6 percent of the 
     recipients inapplicable Medicare plans, according to a recent 
     report by a Miami-based Medicare anti-fraud squad, Operation 
     Restore Trust.
       Eighty percent of the Florida companies are in Dade, 
     Broward and Palm Beach counties.
       ``We believe that the situation in Florida . . . warrants 
     immediable action,'' warned Dewey Price, leader of Operation 
     Restore Trust's Miami office.
       A moratorium and other recommended actions ``should be 
     adopted as quickly as possible to protect both the [Medicare] 
     Trust Fund and the beneficiaries who are supposed to receive 
     partial hospitalization services at these facilities.'' Price 
     urged policymakers in this report earlier this summer.
       Audits in Florida report a ``high incidence'' of kickbacks 
     to boarding homes for use of their residents, as well as 
     other ``wide-spread, fundamental abuses''--including a lack 
     of medical eligibility by most of the people purportedly 
     receiving treatment.
                                                                    ____

       A temporary ban on admitting new companies to the program 
     would allow Medicare time to regain control of the situation 
     and create lighter policies, authorities say.
       One policy now allows partial hospitalization programs to 
     provide care outside their centers. One review found billings 
     for patients from locations as distant as 150 miles.
       The companies, typically for-profit outfits, are virtually 
     unregulated.
       They are supposed to provide patients with several hours a 
     day of therapy and stabilizing treatment. But spot federal 
     audits found that ``none of the group sessions are being led 
     by licensed staff as required by state law to provide 
     psychotherapy'' and that ``no active treatment is being 
     provided.''.
       The state does not pay for partial hospitalization and has 
     lost little money. But controlling quality is a big concern, 
     along with helping Medicare safeguard public money, said 
     spokeswoman Colleen David of the Agency for Health Care 
     Administration.
       ``Our fundamental problem is that these programs are not 
     licensed, and licensing is a proxy for monitoring quality,'' 
     David said. ``The program has clearly grown exponentially 
     over a very short period of time.''
       The number of partial hospitalization centers billing 
     Medicare in Florida grew from none in 1991, the year the 
     federal government expanded the category, to 87 in 1994.
       Since then, the number has tripled. Of the 259 Florida 
     companies today, Dade County alone has 167, Broward County 
     has 22 and Palm Beach, 20.
       There is also a nationwide problem with increases in 
     spending per patient. Operation Restore Trust's Dewey Price 
     noted, ``and nowhere is the situation more alarming than in 
     the state of Florida.''
       In 1993, three of the state's partial hospitalization 
     programs ranked among the 30 nationwide with the highest per-
     patient claims. A year later, Florida had 10 of the 30 
     highest billers. And in 1995, Florida had 22 out of 30.

[[Page E1979]]

       ``Data for 1996 has been requested, and we expect even more 
     aberrant results,'' Price reported.
                                                                    ____


 [Excerpts from recent publications of the Association for Ambulatory 
                      Behavioral Healthcare, Inc.]

       The huge and expanding older adult population continues to 
     pose a tremendous challenge to the mental health delivery 
     system, including payers, providers, and purchasers. As the 
     elderly cohort grows, the demands on all levels of services 
     grows exponentially. Depression and other later life 
     psychiatric issues such as anxiety secondary to loss of 
     health or a permanent change in physical condition, 
     difficulty coping with dementia in a spouse, severe grief and 
     loss, and panic over the inability to live independently and 
     the subsequent placement in a nursing home facility are all 
     common events. These problems are generally acute and 
     debilitating and frequently present themselves simultaneously 
     as well as in the context of a limited or nonexistent social 
     support system. At the same time, it has been well documented 
     that the elderly tend to underutilize mental health services 
     because of stigma surrounding psychiatric care, cost and 
     transportation limitations, and both patient and professional 
     bias and misunderstanding that surrounds the detection, need 
     for treatment, and cooperation with follow through for care.
       Geriatric partial hospitalization programs are a viable 
     option to improve the mental health services available to the 
     elderly population. First, partial hospitalization addresses 
     the problems of accessibility and acceptability. Generally 
     transportation for patients is provided, and since patients 
     return home each day the stigma associated with an inpatient 
     stay in a psychiatric care facility is averted. Additionally, 
     the treatment takes place in the environment of an age-
     similar group which has been shown to foster cohesion, 
     therapeutic learning, and consistent application to daily 
     life problems. Second, a geriatric partial hospitalization 
     program is able to respond to diverse patient needs on both 
     the individual and group level, as each patient receives a 
     specifically tailored personalized treatment plan, and the 
     therapy provided in the groups is relevant to a wide variety 
     of patient problems. Treatment specifics are flexible within 
     the standards set forth by the Joint Commission on 
     Accreditation of Healthcare Organizations (JCAHO, 1995) and 
     the Medicare revisions of the guidelines for partial 
     hospitalization (HCFA, 1995). Third, the availability of 
     intensive treatment in partial hospitalization will often 
     avert the need for inpatient care. This fact allows the 
     health care provider to treat the patient at the most 
     appropriate level of care, maintain him or her in the least 
     restrictive environment, and places less stress on the 
     patient, as the partial hospitalization program allows the 
     patient to participate in an intensive psychiatric care 
     program while still maintaining outpatient status. Finally, a 
     geriatric partial hospitalization program is designed to 
     reduce and control psychiatric symptoms, prevent relapse or 
     exacerbation of problems, and improve mental, emotional, and 
     physical functioning, all of which contribute to building in 
     the patient the ability to live as independently as possible 
     while enjoying the highest level of health.
       A geriatric partial hospitalization program should be a 
     separate, identifiable, organized unit that provides a 
     significant link within a comprehensive continuum of mental 
     health services, and thus, improves the overall continuity of 
     care for the elderly patient. It is defined as a distinct, 
     organized, time-limited, ambulatory, coordinated, active 
     treatment program that offers structured, therapeutically 
     intensive clinical services, less than 24 hours per day, to 
     elderly patients. . . . The partial hospitalization program 
     is a complex treatment that is intended for patients who 
     exhibit profound or disabling conditions related to an acute 
     phase of mental illness or an exacerbation of a severe and 
     persistent mental disorder. The program generally operates as 
     an outpatient unit in a hospital or as a part of a community 
     mental health center and is to operate under the direct 
     supervision of a physician. The program is to provide 
     regular, coordinated, diagnostic, medical, psychiatric, 
     psychosocial, occupational therapy, and multi-disciplinary 
     treatment modalities on a more intensive level than is 
     generally provided in an outpatient clinic setting.
       Geriatric partial hospitalization programs are designed to 
     serve elderly patients with appropriate clinical diagnoses, 
     diverse medical problems, and a broad band of variability in 
     socioeconomic and educational backgrounds. The 
     geriatric partial hospitalization program must provide 
     active psychiatric treatment and should be clearly 
     distinguishable from an adult day care program, which 
     provides primarily social, custodial, and respite 
     services. An appropriate geriatric partial hospitalization 
     program employs an integrated, comprehensive, and 
     complementary schedule of active treatment approaches that 
     are behaviorally tied to the identified problems and the 
     specific goals contained in the individualized patient 
     treatment plan. Specifically, active treatment refers to 
     the ongoing provision of clinically recognized therapeutic 
     interventions which are goal-directed and based on a 
     written treatment plan. For treatment to be considered 
     active the following criteria must be met:
       1. treatment must be directed toward the alleviation of the 
     impairments that precipitated entry into the program, or 
     which necessitate this continued level of intervention,
       2. treatment enhances the patient's coping abilities, and
       3. treatment is individualized to address the specific 
     clinical needs of the patient.
       Geriatric partial hospitalization programs typically serve 
     individuals 65 years of age and older who are experiencing 
     acute psychiatric problems or decompensating clinical 
     conditions which markedly impair their capacity to function 
     adequately on a day-to-day basis. Usually outpatient therapy 
     has not been effective, and without the ongoing structure, 
     support, and active treatment provided by the geriatric 
     partial hospitalization program these patients would require 
     inpatient psychiatric care.
       Ambulatory behavioral health services are designed for 
     persons of all ages who present with a psychiatric and/or 
     chemical dependency diagnosis and the need for treatment 
     which is more intensive than outpatient office visits and 
     less restrictive than 24-hour care.
       Ambulatory behavioral health services consist of a 
     coordinated array of active treatment components which are 
     determined by an individualized treatment plan based upon a 
     comprehensive evaluation of patient needs.
       Ambulatory behavioral health services treat patients 
     requiring intensive therapeutic intervention in a manner 
     which simulates real-life experience and with the least 
     amount of disruption to their normal daily functioning.
       Ambulatory behavioral health services are available to 
     patients on a consistent basis and are augmented with 24-hour 
     crisis backup.
       Ambulatory behavioral health services require active 
     involvement of the service team and patient with both 
     community and family resources.
       Finally, due to the matching of patient needs with targeted 
     interventions, the provision of treatment in the most 
     appropriate, least restrictive environment, and the reliance 
     on patient strengths, resources and family and community 
     support systems, ambulatory behavioral health services are 
     cost efficient.
                                                                    ____


         [From Medicare Explained, 1996, published by CCH Inc.]

                    Partial Hospitalization Coverage

       Medicare also covers partial hospitalization services 
     connected with the treatment of mental illness. Partial 
     hospitalization services are covered only if the individual 
     otherwise would require inpatient psychiatric care. [Soc. 
     Sec. Act Sec. Sec. 1833(c), 1835(a)(2)(F), 1861(s)(2)(B).]
       Under this benefit, Medicare covers: (1) individual and 
     group therapy with physicians or psychologists (or other 
     authorized mental health professionals); (2) occupational 
     therapy; (3) services of social workers, trained psychiatric 
     nurses, and other staff trained to work with psychiatric 
     patients; (4) drugs and biologicals furnished for therapeutic 
     purposes that cannot be self-administered; (5) individualized 
     activity therapies that are not primarily recreational or 
     diversionary; (6) family counseling (for treatment of the 
     patient's condition); (7) patient training and education; and 
     (8) diagnostic services. Meals and transportation are 
     excluded specifically from coverage. [Soc. Sec. Act. 
     Sec. 1861(ff)(2).]
       The services must be reasonable and necessary for the 
     diagnosis or active treatment of the individual's condition. 
     They also must be reasonably expected to improve or maintain 
     the individual's condition and functional level and to 
     prevent relapse or hospitalization. The course of treatment 
     must be prescribed, supervised, and reviewed by a physician. 
     The program must be hospital-based or hospital-affiliated and 
     must be a distinct and organized intensive ambulatory 
     treatment service offering less than 24-hour-daily care. 
     [Soc. Sec. Act Sec. 1861(ff).] Effective October 1, 1991, 
     partial hospitalization services also are covered in 
     community health centers (see para. 382). [Soc. Sec. Act 
     Sec. 1861(ff)(3).]

     

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