SECRETARY'S ADVISORY COMMITTEE ON REGULATORY REFORM REGIONAL HEARING #3
MEETING MINUTES/SUMMARY 

DAY TWO

April 18, 2002
Ramada Plaza Suites & Conference Center
Philadelphia Room
Pittsburgh, Pennsylvania

Dr. Wood introduced the Health Information Portability and Accountability Act (HIPAA) and said a lot of information and misinformation is circulating about the regulations. The privacy regulations are still being re-written, and HHS has a comment period currently open, with 62,000 comments received so far.

8:10 a.m. HIPAA Privacy Rule Presentation

Ms. Stannard and Ms. Goldstein reviewed HIPAA’s history. Congress wanted to standardize health information and foster electronic claims submission. It also wanted privacy rules to protect the information from misuse. Reaching no consensus on the specifics of the privacy rule, Congress sent the matter to HHS, which has reviewed existing laws, ethical standards and actual practice to come up with the privacy regulations. Drafting the regulations has been a balancing act, with tradeoffs between patient privacy and public goals such as research. The balancing act has to take into account how the rules will affect various types of providers, only some of whom are covered under the statute.

The cases that HIPAA covers involve electronic transmissions of information for three broad purposes: 1) treatment, payment and operations – information is most easily shared here; 2) uses of public importance such as research – information is more restricted; and 3) everything else – information is most restricted. HIPAA introduces various key words that spell out who the "covered entities" are, what rules they must impose on their non-covered "business associates" regarding how information is used, what qualifies as "protected information," how "marketing" uses are defined and governed, and what the "minimum necessary" exchange of information is. In all these cases, a standard of "reasonableness" gives providers discretion to use their professional judgment.

Covered entities are required to designate a privacy official, develop a privacy policy, give staff training, develop sanctions for violations and meet documentation requirements. Federal sanctions are $100 per violation, up to $25,000 in a calendar year. Knowing, improper disclosures can generate greater fines or even jail time.

HHS’s goal is to have a final rule out by the end of this summer. More information on the privacy rule can be found at (http://www.hhs.gov/ocr/hipaa) .  More information on administrative simplification can be found at (http://aspe.hhs.gov/admnsimp/Index.htm)

Q&A

The committee and the panel discussed HIPAA penalties, guidance to providers for how to comply, pharmacists’ use of health information, rules governing marketing uses, psychotherapy notes, minimum necessary disclosure rules, myths about HIPAA, what information health plans can share with employers, and whether faxed documents are covered as "electronic transmissions."

9:25 a.m. demonstration

The committee participated in a HIPAA quiz, based on actual questions that HHS has received about the privacy rule. Issues raised in the questions included doctors discussing patients’ cases in semi-public places, when consent forms are required, whether family members can pick up prescriptions, the role of business associates, office sign-in sheets, semi-private rooms, what computer equipment HIPAA requires providers to purchase, and disclosing information to state and local agencies.

9:42 a.m. Break

10 a.m. resume, hIPAA, presentation two

Ms. Stannard and Ms. Goldstein discussed various difficulties and real-world complexities that HHS staff faced in drafting the rules. They also discussed some of the changes envisioned in the agency’s recent proposed modification. The "touchstone" in their decision process, they said, was the question, "What would a reasonable patient expect?" HHS is actively seeking alternatives to its proposed regulation in the current comment period. Issues discussed included consent and notice rules, what constitutes minimum necessary information, what information health researchers need, what constitutes marketing, how to accommodate adverse event reporting to the Food and Drug Administration (FDA), how to deal with hybrid entities not envisioned in the statute, and what to do with ownership changes.

Q&A

The committee and the panel discussed marketing rules, use of health records for research and epidemiology studies, the use of "granny cams" in nursing homes, and how providers and patients are likely to react to having yet another form to sign.

10:15 a.m. public comment

Pam Parr, executive director of a home health agency in Ohio, said OASIS is duplicative and wastes nurses’ time on paperwork. This particularly hits rural providers, who must drive greater distances to patients’ homes for the assessment. She recommended that OASIS be limited to Medicare patients only, that a single OASIS form be used for all situations, eliminating the requirement for a new assessment when a patient undergoes "significant change in condition," creating an exemption for single-visit cases, allowing more types of staff to complete the form, changing the time limit for the forms to be processed, and increasing reimbursements.

Dr. Thomas Puckett, a pathologist from Mississippi, said HIPAA is creating a problem for private laboratory accreditation agencies, which must now sign "business associate" agreements with every lab they accredit. Lab accreditation groups should be defined as health oversight agencies when approved by the government and thus exempted from the HIPAA requirement.

John Horty, a health attorney, said HIPAA creates problems for physician-operated surgi-centers. EMTALA hits rural hospitals hard, because they cannot find physicians to take call duty.

Tony Tirone, JCAHO, said that accreditation agencies need to be exempted from the HIPAA requirement that they get "business associate" agreements with all of the agencies they accredit. Signing 18,000 separate agreements is wasteful, and it is currently unclear what language needs to be in them. The suggested model language in the recent proposed changes made things worse by raising the specter of writing contracts that have to be enforceable under multiple state laws.

Robert Michalski, a compliance officer with the West Penn Allegheny Health System, said recent proposed changes to the HIPAA privacy rules have set providers back, and they are skeptical that the rules will ever be final. The implementation period was supposed to be two years. Providers should have two years after the final rule is published to comply. The rules regarding privacy notices, marking rules, accounting of disclosures, and minimum necessary disclosures are burdensome and/or confusing.

Kimberly Gray, a privacy officer with Highmark Blue Cross Blue Shield, said she was speaking on behalf of the American Association of Health Plans. The proposed rule changes have made sharing information easier, but the association wants HHS to clarify the rules regarding how they resolve member complaints. Also, disease management programs could be considered "marketing" under some interpretations, and the rules need to be clarified.

Barbara Dickman, AARP, said that seniors want to know that the information they tell their doctors is used appropriately. The recent proposed changes to HIPAA are a step backward. A patient’s written permission should be required before information is released. HHS should use common sense to resolve problems and create exemptions. It’s important that seniors give written authorization before they are bothered with marketing messages, much like the hassle of telemarketers.

Discussion, Q&A

The committee discussed HIPAA consent requirements, efforts to educate patients and providers about privacy, good faith efforts to get HIPAA consent in emergency situations, explaining HIPAA in the Medicare handbook, marketing rules, business associate rules, and congressional intent.

Dr. Wood noted that a review of the public comments the advisory committee has received found that HIPAA was the second most commented-on topic, second only to payment concerns, which are not in the committee’s purview.

Dr. Wood described his work with the Cooperative Cardiovascular Project and how it brought various providers together to focus on improving the management of patients with heart disease at critical points where they could affect patient outcomes. The Advisory Committee will have short-term impact on specific regulations and practice, but long-term it should focus on institutionalizing a reform approach similar to the cardiovascular project, he said.

The Committee reviewed summaries of issues identified in the testimony on multiple reviews, rural health and HIPAA:

1. Multiple reviews

Data & Information Requirements

• Coordinate data collection between government and private accreditors.
• Improve the public/private partnership through better data sharing.
• Continue and enhance cooperation in the development of performance measures and other data requirements.
• Coordinate regulators outside of the provider community, possibly through development of consortia for data sharing (e.g., reimbursement, patient safety), so that the burden of coordination does not fall solely on the provider community.
• Coordinate efforts among agencies to create single, uniform surveys.
• Eliminate, or significantly simplify, the Medicare cost report so that only those data elements critical to payment and cost analyses are collected.
• Implement a standard insurance form and uniform claims submission guidelines.

Improving Public / Private Partnership

• Revise the CMS review process for accreditation systems.
• Strive to standardize and unify CMS regulatory requirements with other public and private programs.

Changes to Current Regulations

• Publish the Life Safety Code regulation in final.
• Update and publish the Conditions of Participation for other providers.
• Eliminate CMS regulatory requirements that become obsolete.
• Give providers an easy way to obtain guidance in the application of unclear regulations or processes. Make those decisions applicable to all regions of the federal government and to all contractors.
• Review HHS’s process for revising regulations.
• Make Medicare more uniform by eliminating regional variations in the area of provider payment and medical necessity criteria.

Process for Developing New Regulations

• Speed up the regulation development process, or, barring that, write the regulations more broadly and flexibly to allow for changing circumstances.
• Establish a system to facilitate participation of interested parties in regulation development. The system would seek input on assumptions, cost estimates, and implementation issues before regulations are promulgated.
• Give regulated entities sufficient lead time to comply with new requirements.
• Develop demonstration projects under a regulatory "safe harbor" that allows testing of alternative ways to achieve regulatory objectives in the most efficient and effective fashion. Use four or five sites around the country to pilot and perfect these techniques.
• Simplify reports and/or extend reporting time frames (bi-annually instead of annually).
• Create reasonable timeframes for implementation of new regulations that affect providers’ financial reporting.
• Develop a cost/benefit analysis covering implementation and compliance before enacting new regulations. Give providers federal funds to cover the additional costs. Develop a CMS system to ensure the timely elimination of obsolete regulations with scheduled re-evaluation of all regulations.

Evidence- and Outcomes-Based Approach to Regulations

• As a general philosophy, regulations should evolve from an initial stage of demonstrating compliance with minimum administrative, structural or capacity requirements to the advanced stage of demonstrating real improvement through performance measures and outcomes.
• Assure that new regulatory requirements, particularly performance measures, are evidence-based.

Deeming

• Rely on deeming authority to the greatest extent possible, although the current deemed status model may not work for all providers.
• Revise the data validation process, which is burdensome on providers.
• Include utilization management, grievances, and appeals as deemable categories.

Reviews

• Employ web-based technology to the greatest extent possible to reduce burdensome and labor-intensive on-site reviews.
• Move the CMS regional office on-site survey schedule from a two-year to a three-year cycle.

Incentives

• Reward regulated entities that demonstrate sustained compliance with regulatory requirements with reduced oversight and public recognition.

Physician / Patient Relationship

• Streamline physician documentation.
• Maintain doctor-to-doctor communication while meeting necessary medico-legal requirements and without encouraging fraud by: a) standardizing physician notes, b) adopting the "chart it once" rule, and c) documenting by exception.

Impact Analysis / Costs / Payment

• Perform a rural impact analysis before adopting or implementing new regulations.
• Factor the costs of implementing significant regulations into Medicare updates.
• Encourage a market basket update that reflects increases in hospital costs.
• Retain the current cost-based payment system for rural ambulance providers until something better can be created.
• Eliminate the Medicaid disproportionate share (DSH) cap on payments to hospitals.
• Make rural "hold harmless" payments permanent.
• Remodel the Rural Community Hospital payment system.
• Revise the Prospective Payment System (PPS) for rural areas.
• Lower the percent of DRG payments that are adjusted by wage indexes.
• Reform hospital wage index use and reclassification.
• Provide a Medicare managed care wraparound for cost-based providers.
• Recognize the high fixed cost of lower-volume rural services: ambulance, CRNAs, home health.
• Refine Home Health PPS requirements.
• Assure rural community health centers equitable access to funding.
• Do not water-down the occupational mix adjustment.

Work Force

• Fully reinstate rural access to J1 visa waivers.
• Remove the cap on residency positions for programs in rural communities.
• Standardize rural graduate medical education (GME) guidelines.
• Recognize nurse practitioners as providers in Medicaid regulations and Medicare Part A.
• Create a universal credentialing and application process.

Community Competence / Rural Outreach

• Provide assistance for small rural communities to learn and apply for competitive grants.
• Educate practitioners in their own towns, which will keep them in the rural areas they are from.
• Invest in rural best practices research.

Data

• Limit OASIS and MDS requirements to the data necessary for payment systems.
• Disaggregate data for rural issues.

Miscellaneous

• Eliminate network/outreach grant application restrictions.
• Support proportional representation on MedPAC.
• Support the Rural Community Hospital Assistance Act.
• Delay provider-based rules scheduled for October 1.
• Simplify signature authority and sequence number processes.
• Limit hospital building code regulations for small satellite clinics.
• Return oversight of anesthesia care to the states.
• Create an easier system for waiving lab work requirements.
• Make clinics aware that they can take advantage of service waivers.
• Give the Federal Rural Health Task Force the power to advise the Secretary on waivers.
• Educate beneficiaries better about ABNs.
• Include better eye and dental care in Medicare.

• Replace the redundant written consent requirement with a written acknowledgement in the medical privacy rule.
• Permit hospitals to share non-facially identifiable information for quality and other purposes.
• Exempt "incidental disclosures" of patient information.
• Eliminate additional business associate requirements.
• Encourage HHS to stand firm on changes to the HIPAA final rule.

• Encourage federal rule collaboration.
• Institutionalize the rulemaking process to ensure continuity.
• Encourage better consistency between lab work and diagnosis.
• Encourage better consistency on Fiscal Intermediary requirements.
• Simplify Medicare cost reports
• Encourage tort reform for medical malpractice insurance.

The committee discussed the status of rural health professionals as contract workers vs. employees, getting UPIN numbers for physicians, clinic operating hours, clinic evaluations, educating rural providers about grant possibilities and assisting them with grant writing, expanding the J-1 visa program, and providing greater incentives for providers to serve rural areas.

The committee briefly discussed the posting of public comments to the committee’s website and analysis of those comments. The May meeting in Denver will have a full committee meeting on the first day, with a regional hearing on the second. A tentative agenda calls for reviewing previously suggested recommendations on OASIS, MDS, and cost reports.

1:55 P.m. Adjourn