[Congressional Record Volume 144, Number 151 (Wednesday, October 21, 1998)]
[Senate]
[Pages S12876-S12877]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SENATE RESOLUTION 314--EXPRESSING THE SENSE OF THE SENATE REGARDING
SKILLED NURSING FACILITIES
Mr. HATCH submitted the following resolution; which was refered to
the Committe on Finance:
S. Res. 314
Resolved,
SECTION 1. SENSE OF THE SENATE REGARDING AUTHORITY OF
SECRETARY, COLLECTION OF DATA, AND REPORT TO
CONGRESS.
(a) Authority.--It is the sense of the Senate that the
Secretary of Health and Human Services, in making payments
under the prospective payment system for skilled nursing
facilities pursuant to section 1888(e) of the Social Security
Act (42 U.S.C. 1395yy(e)), has the authority under section
1888(e)(4)(G)(i) of such Act to provide for an appropriate
adjustment to account for case mix which reflects a patient's
medical needs requiring the provision of non-therapy
ancillary services (such as respiratory therapy, pharmacy,
laboratory, X-ray, and parenteral and enteral services, and
covered durable medical supplies).
(b) Data.--It is the sense of the Senate that the Secretary
of Health and Human Services should gather sufficient data on
the provision of non-therapy ancillary services by skilled
nursing facilities that are paid under the prospective
payment system pursuant to section 1888(e) of the Social
Security Act in order to develop the appropriate adjustment
for case mix under section 1888(e)(4)(G)(i) of such Act.
(c) Report to Congress.--It is the sense of the Senate that
the Secretary of Health and Human Services should
periodically report to Congress on the development of the
appropriate adjustment for case mix under section
1888(e)(4)(G)(i) of the Social Security Act which reflects a
patient's medical needs requiring the provision of non-
therapy ancillary services.
Mr. HATCH. Mr. President, today I introduce S. Res. 314 which
expresses the sense of the Senate regarding the authority of the
Secretary of Health and Human Services to make adjustments in payments
made to skilled nursing facilities under the Medicare program.
As my colleagues are aware, pursuant to the Balanced Budget Act of
1997, Congress directed the Health Care Financing Administration to
create a new prospective payment system, or PPS, for Medicare-certified
skilled nursing facilities, or SNFs, as they are called.
Skilled nursing facilities are now in the process of moving from the
historical cost-based reimbursement system to the new prospective
payment system.
This new system combines costs associated with nursing services,
capital investment, and other medical services bundled together and
then adjusted to reflect the needs of the patients.
Congress rightly sought this new system as a way of getting skilled
nursing facility operators to manage both the quality and costs of
health care for seniors qualified under Medicare.
As this system has been developed quickly since the enactment of the
BBA, there has been a problem identified with adjustments for services
considered ``non-therapy'' services.
These include respiratory therapy, pharmaceutical products,
parenteral and enteral products, laboratory and x-ray services, and
other covered medical supplies.
While I believe that HCFA has done a remarkable job in getting this
system in place over the past year, I am concerned that the adjustment
in payment for these specific services has not yet been developed.
This is especially true for a patient who is very ill--those with
multiple disease conditions treated in a SNF. There is simply not
adequate provisions for ensuring that the prospective payment made each
day appropriately reflects the higher medical costs that these patients
may need.
As a result of this new system, many nursing homes cannot afford to
treat certain types of patients. That was never our intent.
HCFA officials have acknowledged that they needed more data to fix
the problem. They commissioned a study last year to assist them to make
corrections.
However, the data was not yet available in time for the first year to
implement some corrections. While I am certain that HCFA will correct
this system, I want to ensure that services to our most vulnerable
seniors in nursing homes getting complex medical services will continue
to get their care.
I do not want bureaucratic delays in any way to impede their care.
The PPS theory of paying according to average does not work when the
rates are not based on solid data and the case-mix adjustment for non-
therapy ancillaries is based on very little data. This is obviously not
what Congress intended with the BBA.
In March, the Medicare Payment Assessment Commission advised the
Congress that ``the RUG-III system may not adequately differentiate
among Medicare SNF patients . . . this may lead to significant
overpayment and under payment for patients within a RUG group.''
In September, the Appropriations Committee report for the Department
of Health and Human Services included the following:
The Committee has heard concerns regarding the equity of
the new Medicare SNF prospective payment system as it relates
to nontherapy ancillaries. The demonstration upon which the
new system was based did not include this class of items and
services. Due to the lack of sufficient data to make these
changes, the new system may provide a windfall for some
providers while seriously impairing the ability of others to
treat patients requiring more intensive care. Therefore, the
Committee urges HCFA to reexamine this policy and make
budget-neutral changes this year to assure continued access
to services for high cost patients pending the gathering of
sufficient data on which to base permanent reforms.
Mr. President, unless relief is provided and this anomaly in the
payment system is corrected, a major impediment will remain for certain
patients with high non-therapy ancillary costs to receive Medicare
services in nursing facilities.
An immediate transitional modification is needed before irreparable
harm is done to quality care and access for high costs patients. Some
facilities have already begun PPS coverage although HCFA apparently
will not begin making actual PPS payments until December, or later.
However, on January 1 about 60 percent of the SNFs will begin coverage
under the PPS.
We must, therefore, develop longer term solutions for these crucial
services, but first we must do no harm in the interim.
Providers can quickly change operations to maximize light care and
minimize heavy care. Specialty staff, such as respiratory therapists,
will be let go; special physical plant and equipment, such as air flow
equipment for ``clean room'' level infection control will be
dismantled; and hospital referral arrangements will be changed.
Accordingly, I am submitting today S. Res. 314 expressing the sense
of the Senate that the Secretary, pursuant to section 1888(e)(4)(G)(i),
has the authority to provide for an appropriate adjustment to account
for case mix which reflects a patient's medical needs requiring non-
therapy ancillary services.
HCFA has acknowledged the shortcomings of the current RUG-III system.
The RUG-III demonstration project had treated these costs as a pass-
through because the system did not have the data available to include
such costs.
My resolution will clarify and reaffirm Congressional intent that the
Secretary has the administrative flexibility to make appropriate
adjustments to the case-mix of SNFs to reflect the costs of these
services.
One approach, which accommodates HCFA's operational impediment of
Year 2000 computer software problems, would be to make payment
adjustments to reflect the relative resource utilization of non-therapy
ancillaries by different patient types based on a SNF's cost report for
the first year under the PPS.
The resolution calls upon the Secretary to gather sufficient data on
the provisions of non-therapy ancillaries in order to develop the
appropriate adjustments. And, it also urges the Secretary to
periodically report to Congress on the development of the appropriate
adjustment.
Mr. President, this issue is one of quality and access for America's
seniors to community based skilled care.
And, while it was my hope that the Senate could pass this resolution
today, I trust my remarks and the language of the resolution will serve
to further define the complex issues associated with this important
matter.
I am encouraged that the distinguished Chairman of the Finance
Committee, Senator Roth, and the distinguished Minority Member, Senator
[[Page S12877]]
Moynihan, have indicated their interest, and look forward to working
with them early next year to address this issue in the Finance
Committee.
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