[Congressional Record Volume 145, Number 112 (Tuesday, August 3, 1999)]
[Extensions of Remarks]
[Pages E1728-E1731]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        EXPLANATION OF OMNIBUS LONG-TERM HEALTH CARE ACT OF 1999

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Tuesday, August 3, 1999

  Mr. STARK. Mr. Speaker, Representative Markey and I have introduced 
the Omnibus Long-Term Health Care Act of 1999. We are joined by 
Representatives McGovern, McDermott, Moakley, Olver, Capuano, and 
Gordon.
  The following is a detailed outline of the provisions of this 
legislation. We invite members of the House to join us in cosponsoring 
this legislation. We invite the public to suggest refinements and 
additions to the legislation to make it more comprehensive, workable, 
and effective legislation to help the millions of Americans facing the 
problems of obtaining quality long-term health care.***HD***Title I: 
Long-Term Care Giver Tax Credit
  Title I of the bill provides a $1000 tax credit similar to the one 
described by the President in his State of the Union address. Our 
proposal has several notable differences. First, our tax credit is 
completely refundable, and there is no distinction between care for an 
adult or a child. If the credit is not refundable,

[[Page E1729]]

it will fail to help those families in greatest need of help.
  To be honest, $1000 is not that much money for long-term care, but it 
does provide a family with modest relief that they can use as they see 
fit. That is why we have structured the bill to ensure that those who 
most need the support will receive the refund.
  Another important distinction between our proposal and the 
President's is the treatment of children with long term care needs. The 
President's proposal would limit the tax credit to $500 for children 
with long term care needs. We do not agree with this policy. The long-
term care needs of a disabled child are just as expensive and 
emotionally and troubling as they are for an adult.
  Our legislation also has a broader definition of individuals with 
long-term care needs. The President's proposal includes individuals who 
require assistance in to perform activities of daily living (bathing, 
dressing, eating, continence, toileting, and transferring in and out of 
a bed or chair). This is a good start but does not include people with 
severe mental health disabilities or developmental disabilities who 
cannot live independently.
  Finally, our legislation limits the amount of the refund for the 
wealthy, not the poor. In our bill, reductions in the refund begin at 
the upper income levels, not the lower income levels. The full refund 
is available up to income of $110,000 for a joint return, $75,000 for 
an individual return, and $55,000 for a married individual filing a 
separate return. Above these levels, the refund is decreased by $50 by 
every $1,000 over the threshold level.***HD***Title II: Long-Term Care 
Medicare Improvements
  Title II of the legislation addresses a range of reforms and 
improvements to Medicare benefits. The goal of this title is to provide 
adequate long-term coverage to patients with chronic health care needs. 
We believe that we can adjust Medicare benefits so that people can 
continue to live in their homes and communities, and enjoy the contact 
with their families and friends. These proposals are cost effective as 
they rely on services in facilities other than hospitals and skilled 
nursing facilities, and allow people to continue to live in familiar 
surroundings with their family.


                 1. Long-Term Home Health Aide Benefits

  The first section extends Medicare Home Health Aid-Type services to 
chronically dependent individuals. This section establishes a new 
``long-term'' home health benefit to maintain people with chronic 
conditions at home rather than in more expensive settings. Many people 
can no longer take care of themselves because physical or mental 
disabilities impair their ability to perform basic activities of daily 
living (ADLs), including eating, bathing, dressing, toileting, 
transferring in and out of a bed or chair, and continence. These are 
activities that we all take for granted. The inability to do any of 
these independently is distressing for the patient and a clear 
indication of the extent of the impairment.
  This provision allows individuals who suffer from a chronic physical 
or mental condition that impairs two or more ADLs to receive in-home 
care. To help contain costs, the provision would require competitive 
bidding of these services.


                           2. Adult Day Care

  The second section of this title's reforms is a provision for 
Medicare Substitute Adult Day Care Services. This provision would 
incorporate the adult day care setting into the current Medicare home 
health benefit. The provision allows beneficiaries to substitute any 
portion of their Medicare home health services for care in an adult day 
care center (ADC). Adult day care centers provide effective 
alternatives to complete confinement at home. Many States have used 
Medicaid funding to take advantage of ADCs for their patients.
  For many, the ADC setting is superior to traditional home health 
care. The ADC can provide skilled therapy like the home health 
provider. In addition, the ADC also provides rehabilitation activities 
and means for the patients. Similarly, the ADCs provide a social 
setting within a therapeutic environment to serve patients with a 
variety of needs.
  To achieve cost-savings, the ADC would be paid a flat rate of 95% of 
the rate that would have been paid for the service had it been 
delivered in the patient's home. The care would include the home health 
benefit and transportation, meals and supervised activities. As an 
added budget neutrality measure, the title allows the Secretary of 
Health and Human Services to lower the payment rate for ADC services if 
growth in those services is greater than current projections under the 
traditional home health program.
  This program is not an expansion of the home health benefit. It would 
not make any new people eligible for the Medicare home health benefit. 
Nor would it expand the definition of what qualifies for reimbursement 
by Medicare for home health services. This legislation recognizes that 
ADCs can provide the same services, at lower costs, than traditional 
home care. Futhermore, the legislation recognizes the benefits of 
social interaction, activities, meals, and a therapeutic environment in 
which trained professionals can treat, monitor, and support patients.
  The legislation also includes important quality and anti-fraud 
protections. In order to participate in the Medicare home care program, 
ADCs must meet the same standards set for home health agencies. The 
only exception is that the ADCs would not be required to be 
``primarily'' involved in the provision of skilled nursing services and 
therapy services. The exception recognizes that ADCs provide services 
to an array of patients and that skilled nursing services and therapy 
services are not their primary activity.
  Here is an example of how the system would work. A physician 
prescribes home care for the patient. Next, the patient and his or her 
family decide how to arrange for the services. They could choose to 
receive all services through home care, or choose a mix of adult day 
care and home care services. Therefore, if the patient required three 
physical therapy visits and two home health aide visits, the patient 
could receive the physical therapy at the ADC while retaining the home 
health aide visits. When the patient goes to the ADC, he or she will 
receive the physical therapy and other benefits the ADC provides. All 
of these services would be incorporated into the payment rate of 95% of 
the home setting rate for the physical therapy service. This plan 
offers a savings for Medicare and an improved benefit to the patient.


                      3 Home Health Case Managers

  The third section of this title makes a number of improvements in the 
quality of services provided through home care. First it establishes a 
case manager who will oversee the provision of home health care. This 
section of the legislation will ensure that those in need of long-term 
health care will receive necessary and cost effective care.
  The Balanced Budget Act of 1997 (BBA) implemented a number of 
policies designed to slow the growth of a health benefit that was 
doubling in cost every three or four years. Prior to the BBA, the 
incentive to home health agencies was to over-use services to boost 
profits. In the BBA's prospective payment system (PPS), the incentive 
will be the opposite and there are real concerns about potential under-
utilization of services.
  The Medicare Home Health Case Manager legislation would ensure that 
an independent case manager evaluates the patient's needs and service 
level. The case manager will be financially independent of the home 
health agency and would be paid through a Medicare fee-schedule, 
independent of the amount or type of care the patients receive. The 
legislation would also provide the Health Care Financing Administration 
(HCFA) with the flexibility to investigate the effectiveness of 
reimbursing home health case managers on a competitively bid basis.
  This type of case manager program is endorsed by the Medicare Payment 
Advisory Commission (MedPAC), a Commission appointed by Congress to 
provide expert advice on Medicare and Medicaid policy. In their March 
1998 report to Congress they recommended that such a case manager be 
adopted for the home health benefit. Their report states:

       Such an assessment would help to minimize the provision of 
     services of marginal clinical value, while ensuring that 
     patients receive appropriate care. Requiring case management 
     of long-term home health users could improve outcomes for 
     individuals with long-term home health needs and at the same 
     time slow the growth of Medicare home health expenditures. 
     (Emphasis added).

  In addition, there are real-life examples of case management systems 
saving money and improving care. For example, Maryland's Medicaid 
program has a high cost user initiative which in FY 96 saved the state 
$3.30 for each $1 spent--a savings of 230%. The Health Insurance 
Association of America also commissioned a study of its member plans 
and found that rehabilitation/case management programs return an 
investment of $30 for every $1 spent.
  Therefore, this section would achieve two important goals. First, it 
saves money. Second, the program ensures that patient's needs are met. 
Patient's care should be determined based on an objective and 
independent evaluation of the patient's condition, not the bottom line 
of a health care corporation.


                          4. Coordinated Care

  Another section recognizes that there are many medical conditions, 
such as congestive heart failure, that create severe long-term care 
needs that need coordinated, comprehensive care. Many people suffer an 
acute condition that leaves them weakened and in need of health care 
long after the acute phase of the condition passes. Currently, Medicare 
does not adequately cover an expensive recuperation that can last for 
months. This section directs the Secretary to identify 10 medical 
conditions, clustered by diagnostic related groups (DRGs) that 
consistently require intense follow-up care. Along with the 10 DRGs, 
the

[[Page E1730]]

Secretary would determine reasonable costs to cover comprehensive case 
management, caregiver education and training, and other general 
assistance. Our proposal requires the Secretary of Health and Human 
Services to identify those medical conditions, clustered into logical 
DRGs that represent the most expensive home health services, most 
consistently require home health services, and require the longest 
period of convalescence. Using these DRGs, the Secretary will be able 
to develop a better system of coordinating care and helping families.


                5. Other Home Health Service Improvement

  Adopting a provision from Rep. Jim McGovern's bill, we propose an 
outlier policy. In brief, this provision requires that HCFA develop a 
home health agency outlier program, so that agencies do not avoid the 
money-losing, harder to care for cases. We also propose to strengthen 
the provisions in the BBA that require hospitals to give more objective 
information to patients about the full range of post-hospital services, 
and not just direct patients to their hospital-owned services. Finally, 
we give more flexibility to the ``homebound'' rule.


                        6. Hospice Improvements

  Another section provides broad revisions and improvements to the 
hospice care benefit. Hospice care includes interdisciplinary 
professional services for patients whose health condition will not 
benefit from cure-based treatments. Hospice care, which may be offered 
in the person's residence or a skilled facility, provides palliative 
care to reduce pain and enhance the patient's quality of life. For 
those patients in the terminal phase of their life, hospice care offers 
final comfort for the patient and the patient's family. The current 
rules governing hospice care offer physicians few incentives to 
recommend this alternative for their patients.
  In a 1999 report to Congress, MedPAC commented that,

       Another vulnerable population is the nearly 2 million 
     Medicare beneficiaries who die each year. Too many of their 
     physical, emotional, and other needs go unmet, although good 
     care could minimize or eliminate this unnecessary suffering. 
     Even hospices--which pioneered care for the dying--help only 
     a fraction of patients and are often used far later than they 
     should be. Ensuring that beneficiaries receive human, 
     appropriate care at the end of their lives should be a 
     priority for the Medicare program.

  The consequence of our current medical practice is that patients 
remain in more expensive treatment facilities and do not receive the 
palliative care they require. This section of the bill offers three 
specific improvements.
  First, the legislation would direct the Secretary to designate DRGs 
that indicate a chronic and terminal condition that are most likely to 
lead to death, and for which hospice care may provide assistance. These 
DRGs would then be used as a part of the patient's discharge planning. 
The intent of this section is to ensure that patients receive a 
complete review of their treatment and care options, including hospice 
options in the patient's community.
  A second solution is to ensure that information regarding hospice 
care becomes a part of physician training. This section does not 
require that physicians become proficient in the medical practice of 
hospice care, only that they become more aware of its services as an 
option for terminally ill patients.
  The legislation would also include hospice care within the federal 
employees health benefits program (FEHBP). We hope that by including 
this benefit for our nation's federal employees, we will set a standard 
for other insurance providers. The net result would be that more 
patients will obtain necessary hospice care during the final days of 
their lives.


              7. Help for Low-Income Seniors and Disabled

  Another section of this title will help all lower-income Medicare 
beneficiaries--and the chronically ill, the disabled, and the frail 
`old-old' who tend to be those with the least income. This amendment is 
a repeat of a bill introduced by Rep. McDermott and Stark (HR 1455) 
which coordinates SSA and IRS data to presume that individuals who show 
income below the poverty level are eligible for the QMBy and SLMBy 
programs and presumptively enrolls them in those programs. Today about 
40% to 50% of those who are eligible for these programs which pay 
Medicare's premiums, deductibles, and copays, fail to enroll. 
Presumptive enrollment will provide hundreds, even thousands of dollars 
of help per year to our nation's poorest, most vulnerable 
citizens.***HD***Title III: Nursing Home Improvements
  Title three of the legislation provides a number of reforms to laws 
and regulations governing skilled nursing facilities. Earlier this 
year, the General Accounting Office released a report that several 
members of Congress and Rep. Stark requested. That report, ``Nursing 
Homes: Additional Steps Needed to Strengthen Enforcement of Federal 
Quality Standards (GAO/HEHS-99-46)'' indicated that more than 40 
percent of the skilled nursing facilities did not comply with 
fundamental quality standards. In many cases, these deviations from 
quality standards represent an egregious threat to the health of 
patients living in nursing homes. At least 25 percent of the homes 
reviewed violated standards that eventually created actual harm to the 
residents.
  Currently, 1.6 million elderly live in skilled nursing facilities. 
These people are among the sickest and most vulnerable segment of the 
population. A major portion of the Omnibus Budget Reconciliation Act of 
1987 (OBRA 87) brought sweeping reforms to the nursing home industry. 
That legislation did much to improve and ensure the quality of health 
care provided in skilled nursing facilities. Fortunately, the majority 
of skilled nursing facilities responded well to these changes and 
continue of offer quality care for their patients. Unfortunately, a 
sizable minority of skilled nursing facilities continues to place 
profits ahead of quality care. Because of the continued failure of 
these providers, we must give the states and health care regulators the 
legal tools to bring these providers into line or remove them from the 
system.
  This title provides several important modifications and additions to 
the OBRA-87 legislation. First, all skilled nursing facilities will be 
required to conspicuously post in each ward of the facility a list of 
the names and credentials of the on-staff employees directly 
responsible for resident care and the current ratios of residents to 
staff. This simple requirement will allow families and the nursing home 
ombudsman program to determine whether the facility provides adequate 
staff to attend to the residents'' needs. In addition, the legislation 
would direct the Secretary of Health and Human Services to issue 
guidelines for adequate staffing for skilled nursing facilities.
  The second provision of this title gives states alternative punitive 
measures to use with repeatedly noncompliant nursing facilities. One of 
the distressing trends identified in the GAO report is a phenomenon 
they describe as a ``yo-yo'' effect. A nursing facility will correct 
the problem and avoid the fines or penalties. Once found to be in 
compliance, the facility will slip back and provide substandard 
services until cited again by regulators.
  Our proposed legislation offers two fixes. First, the legislation 
would allow states to recover the expense of resurveying and 
reinspecting the skilled nursing facility where there has been a 
substantial violation of the regulations. Second, the legislation would 
prohibit the facility from including the costs of the resurveying and 
reinspection in its reasonable costs figures. In other words, they 
cannot pass the bill of rectification onto Medicare or Medicaid. This 
proposal is a clear financial disincentive for homes to practice a yo-
yo management and adds an important regulatory tool for the states.
  The third major initiative in our legislation is the requirement of 
criminal background checks. Skilled nursing facilities would be 
required to conduct a criminal background check of all employees and 
would be prohibited from hiring any person who has been convicted of 
patient or residence abuse. This portion of the legislation makes clear 
that we do not want felons who have a history of abusing others working 
with one of the most vulnerable groups of people in the nation.
  Finally, the legislation requires skilled nursing facilities to 
report cases when an employee has harmed a patient or resident. The 
legislation calls for revising the current Nursing Aide Registry. Under 
our legislation, the new name of the data base will be the Nursing 
Facility Employee Registry and will list any nursing facility employee 
who has been convicted or had a finding of abuse or neglect of a 
patient.***HD***Title IV: Long-Term Care Insurance
  Title four of the legislation addresses long-term care insurance. The 
first chapter encourages long-term health care policies for federal and 
nongovernmental employees. The second chapter extends the consumer 
protection standards contained within the Health Insurance Portability 
and Accountability Act to all long-term care policies.
  First, it directs the Office of Personnel Management to provide for 
the sale to the general public of group long-term care insurance 
policies that are offered to federal employees.
  The legislation keeps separate the premiums and costs of 
nongovernmental employees from governmental employees, thus protecting 
the federal employees from potential adverse cost impacts. In other 
words, nongovernment employees could pay a higher premium if the cost 
of underwriting that population is higher than the cost of underwriting 
federal employees. It is our hope, however, that by helping create a 
group market and offering economies of scale, this provision will help 
nonfederal employees obtain lower cost policies.
  The next section extends the consumer protection standards contained 
within the Health Insurance Portability and Accountability Act to all 
long-term care policies. Currently, these standards apply to only tax-
qualified policies. Without these protections, some insurance providers 
may be tempted to provide long-

[[Page E1731]]

term care policies that do not provide the level of financial 
protection that consumers need. Because of the expense of these 
policies, the consequences of purchasing inadequate insurance, and the 
difficulty of understanding these policies, we need to ensure that 
reasonable quality standards protect consumers from buying inadequate 
and inappropriate long-term care policies.***HD***Title V: 
Reauthorization of the Older Americans Act of 1965
  Title five of the legislation is an extension of the Older Americans 
Act of 1965, as proposed by the President to include grants for care 
giver assistance.***HD***Title VI: Early Buy-in For Medicare
  Title six of the legislation would provide caregivers an early option 
to join Medicare. This important portion of the bill would provide 
increased access to health coverage for Americans who are the primary 
caregivers for family member with long-term care needs.
  Many Americans must quit job or retire early to care for a family 
member who has long care needs. In addition, they tend to range in age 
from 55 to 64. Consequently, health insurance companies refuse to 
insure them or charge huge premiums. Our proposal would cover nearly 
five million early caregivers who face the prospect of being uninsured 
and who are helping all of us by keeping other individuals out of 
taxpayer-subsidized institutions. This provision allows qualifying 
individuals to receive Medicare coverage when they leave their 
employment to provide long-term care for a spouse or 
relative.***HD***Title VII: Long-Term Care Giver Social Security Credit 
Protection
  Title seven also protects the future retirement income of caregivers 
who leave their employment to offer long-term care. This title does two 
things. First, it ensures that caregivers will continue to receive 
their Social Security credits while they are caregivers. Second, while 
the caregiver is unemployed he or she will be credited with the 
arithmetic average of his or her previous three years of employment as 
a contribution to income.

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