SECRETARY'S ADVISORY COMMITTEE ON REGULATORY REFORM REGIONAL HEARING #5
MEETING MINUTES/SUMMARY 

DAY TWO

June 11, 2002
Hyatt Regency Hotel
Minneapolis, Minnesota

Ms. Norwalk, policy director and counselor to the administrator, outlined the structure of Medicaid and discussed state/federal issues regarding dual eligibles, data sharing, and survey and certification. As a state/federal partnership, Medicaid is administered by states with oversight at the federal level. The federal government sets an eligibility floor, and states have discretion to add to it. About 6.2 million people are dually eligible – that is, they are eligible for both Medicare and Medicaid. They have different rights and processes to follow under each program, which can create confusion. The Program of All-Inclusive Care for the Elderly (PACE) demonstration aims to target frail dual eligibles. States have said they want more access to federal data to identify dual eligibles. Surveys and certification procedures for various types of providers are often dictated by statute, which results in firms with multiple types of business being reviewed multiple times. Some training for state surveyors is underway.

Q&A

The committee and Ms. Norwalk discussed deeming as a way to simplify certification, the types of surveys done on providers, the Medicare benefit package, end-of-life care, and drug formularies.

Panel Discussion

Mr. Bringewatt, the president and CEO, said that short-term ideas to remove burden should set the foundation for long-term structural reform that improves care. Health care in the U.S. is organized around acute episodes, with various types of providers in their "silos" making independent decisions. The system should better serve people with chronic conditions, recognizing the interdependence of public health, primary care, acute care, and long-term care. Currently, acute care is favored: providers have disincentives to serve chronically ill, high-risk beneficiaries, and acute care is easier for many providers to finance. New structures are needed that allow segments of the health care system to collaborate.

Dr. Mark Meiners, University of Maryland Center on Aging

Dr. Meiners, a professor of economics and policy, said the silo mentality of American health care extends to the organization of CMS, which has its own silos. There are currently efforts to integrate Medicare and Medicaid policy for dual eligibles, who incur a disproportionate share of the two programs’ costs. Some models for integration include Social HMOs, the PACE program, Evercare, Minnesota Senior Health Options and the Wisconsin Partnership program. Several obstacles make integration difficult, including the Medicaid waiver process, the effects of the Balanced Budget Act, consumer backlash against HMOs, state turf battles, and the effects of economic business cycles. CMS should support state diversity and local demonstration projects that work toward the "holy grail" of integrated care.

Pam Parker, Minnesota Department of Human Services

Ms. Parker, director of integrated purchasing demonstrations, discussed the Minnesota Senior Health Options program, the state’s demonstration project for dual eligibles. It incorporates features of existing models – PACE, Evercare and Medicare+Choice – and extends integrated care beyond the frail elderly populations that some of these models have targeted. With primary care, acute care and long-term care under one banner, the program provides one-stop shopping, with joint informational materials, a joint enrollment process and a unified coverage and appeal process. Getting this setup through the CMS waiver process was a long and difficult procedure because the idea was new, but CMS staff were creative and helpful. She recommends that CMS: 1) set up a clear process template to facilitate future demonstration waivers, 2) provide appropriate risk adjustment for payment, since OMB has rejected the PACE risk adjuster for some purposes, 3) clarify that administrative solutions other than demonstration projects are possible, 4) expand PACE to serve dual eligibles in all settings, 5) bring PACE-style resources to mainstream clinics, and 6) grant permanent status to the Minnesota Senior Health Options and the Minnesota Disability Health Options programs.

Dr. Gavinski, a primary care physician and chief medical officer, discussed the Wisconsin PACE program and the Wisconsin Partnership Program. Their goal is help the frail elderly retain maximum function and keep them in the community. PACE is a model for coordination of care and high standards, and it provides quick responses to patient needs. The Benefits Improvement and Protection Act of 2000 called for more flexibility in implementing PACE. The programs need more operational flexibility, as they have to comply with multiple federal, state and local requirements, and some PACE providers are small, making regulatory compliance difficult. They fear that regulatory oversight could overrun PACE as it has done for nursing homes. In addition, providers are frustrated that they have spent money and devoted effort to changing their data systems, only to have the rules change on them. She recommends that: 1) integrated care programs be encouraged to grow and expand, 2) the program rules allow for continued innovation to keep up with market changes, 3) CMS review duplicative regulations, 4) CMS develop a compendium of rules and regulations, and 5) staff hiring requirements be made more flexible for new PACE programs.

Ms. Warring, Massachusetts Medicaid director, said coordinating claims between Medicaid and Medicare presents a "maze" of third-party liability that adds cost to the system without adding value. Processing on questionable claims can take more than four years, and with a 58 percent recovery rate, the amount of effort required may not be cost effective. Meanwhile, the programs lose credibility with providers and clog up fiscal intermediaries’ administrative review systems. The proposed system for retroactive claims review – which involves sampling disputed claims for in-depth review and then extrapolating the results – is creative, but it is not the big fix. Other issues facing state Medicaid departments include dealing with "dueling" assessment instruments (MDS, OASIS, and OBCQI – outcome-based continuous quality improvement) in various settings, rules that Medicaid pharmacy waivers be budget neutral, and the impact of the Olmstead decision that requires community care for most people with disabilities. She recommended that CMS: 1) create a high-level strategic planning group for dual eligibles, 2) increase staffing on dual-eligibles issues, 3) issue policy guidance to states, 4) consider dual eligibles in its deliberations of Medicare reform, and 5) amend the budget neutrality policy for Medicaid waivers to allow states to include savings to the Medicare program as part of the demonstrated cost savings.

Q&A

The committee and the panel discussed integrated care demonstrations, payment systems, risk adjustment, end-of-life care, and the Medicaid waiver process.

10:10 a.m. Public Comment

Dr. Fred Gremmels, a family physician from Wisconsin, commended the committee for recommending repeal of the E&M documentation guidelines, saying it could help diffuse the current crisis in health care access. Physicians also feel hassled by the Medicare Secondary Payer form, and even the reformed requirement that it be filled out every 90 days is too often. Medicare should act like other insurance companies and obtain information directly from patients, rather than putting the burden on providers. Ads that encourage patients to report fraud are adversarial; they should reflect the fact that most physicians do not commit fraud and encourage patients to talk with their doctors about any problems first. Reimbursement for primary care is inadequate for some conditions.

Francis Klafter, age 93, with the National Senior Citizens Law Center, said regulations have done a lot of good to improve care, and the committee should go about its work carefully. It is important that CMS send Medicare beneficiaries timely and complete information about the services they were provided so that they can arm themselves for the appeals process. Some beneficiaries have had to take legal action just to get the same information their providers routinely get about their claims. Medicare notices should be set in large type that is easy for seniors to read. They should state what regulation or policy is being referenced, and they should state what information providers are required to give to beneficiaries.

State Rep. Fran Bradley, chairman of the Health and Human Services Policy Committee of the Minnesota House of Representatives, said paperwork requirements for nursing homes are swelling, and the survey process creates a "police state" mentality, which unduly stresses the staff. Overreaction to use of restraints has resulted in more falls and premature deaths, which is an example of how bad regulation affects health care quality, productivity, and staff frustration levels. The challenge in clearing out bad regulations is that virtually every regulation has a constituency fighting for it. Nursing home regulation needs a new paradigm, one focused on quality and consumer needs. If the customers are being well treated, then lots of paperwork requirements can disappear.

Bill O’Dowd, director of rehabilitation at the Sister Kenny Rehabilitation Institute, said inconsistent, out-of-date and unclear regulations hinder care. CMS’s 75 percent rule – which categorizes facilities based on whether 75 percent of their recent patients required intensive rehabilitation services – is not consistent with the goals of the inpatient prospective payment system (PPS). In addition, enforcement of the rule is inconsistent, and the list of 10 medical conditions that apply under the rule is out of date. The rule forces facilities to make a choice whether to treat some less intensive patients and risk losing their status as an inpatient rehabilitation facility. The list of conditions should be expanded to the 21 conditions found in the PPS final rule.

Julie Falhaber, director of the Medicare Senior Health Options program for the Medica health plan, said the program, by combining Medicare and Medicaid claims processing into one entity, eases the burden of claims filing on providers for their dual eligible patients. This also spares beneficiaries from receiving confusing paperwork from Medicare while the claims get sorted out. With the money saved in administrative costs, Medica can provide extra benefits to beneficiaries, such as massage therapy not covered by Medicare. The program also sorts through often contradictory language in marketing materials and generates integrated materials for beneficiaries.

Candy Hanson, an adult health nursing supervisor for Chisago County, commended the committee on its recommendations to ease the burden of the OASIS home health patient assessment form. The issue of collecting data on non-Medicare/Medicaid patients still remains, however. If the data on private-pay patients are not being used, then data collection is a huge waste of time and resources. The data collection burden has limited the number of visits that nurses can do each day, and thus has limited client access to care. She recommended further simplification of the OASIS form and collecting data on Medicare patients only.

Eleanor Hands, executive director of the Minnesota Hospice Association, said that only physicians can bill Medicare Part B for hospice claims under current rules. This forces patients to interrupt pre-existing relationships with advance practice nurses and physician assistants when they move to hospice care. These two types of providers should be allowed to participate on the interdisciplinary hospice team as physician extenders and bill Medicare accordingly.

Rodney Forsman, an administrator at the Mayo Clinic, said a recent memorandum to Medicare’s fiscal intermediaries (A-01-116) has unleashed a "blizzard" of paperwork on community-based laboratories by requiring them to gather information for Medicare Secondary Payer forms. This information is very difficult for laboratories to get. Medicare carriers were not similarly instructed, and this gives independent laboratories a distinct advantage, since they can market themselves as the hassle-free alternative to community-based labs. In this case, a well-intended regulation has pushed lab services farther away from the community.

10:45 a.m. Break

11 a.m. Resume, Public Comment

Denise Anderson, a registered dietician with Quorum Healthcare, said that more dietetic services are needed in various settings to help prevent disease. One example of this is nutritional support during home-based IV drug therapy. The OASIS form needs additional nutrition screening to flag unexplained weight loss and changes in appetite for attention. A dietitian should be seen as an adjunct therapist in the OASIS process to help train other home health service providers. Dietary screening would save money in other areas.

Mark Ward, executive director of Evercare in Minnesota, described a case of a 68-year-old woman with multiple medical conditions that he said illustrates the strength of the integrated care model. The woman, a dual-eligible beneficiary, wanted to leave her nursing home, so Evercare arranged for discharge to a subsidized apartment and recruited her son to assist his mother more. Their care coordinator also set up support services that allowed her to survive and thrive in the community, including equipment, home care, and meals. Faced with an infection, her care team helped her avoid surgery by arranging for a second opinion and successfully treating the infection with IV antibiotics, instead. The woman is now living more independently and is much happier. This case and others demonstrate that the Minnesota Senior Health Options program model is working, and it should be given permanent status.

11:12 a.m. Committee business

The Coordination subcommittee, Jack Rovner, chairman, presented several recommendations for a series of votes.

11:30 a.m. lunch break

The Coordination subcommittee continued its voting on recommendations. The Data and Information subcommittee, Tony Fay, chairman, presented its agenda of recommendation for a series of votes.

3:35 p.m. break

Dr. Wood introduced the afternoon’s discussion. He said he wanted to get the committee thinking about wider reform for the regulatory process and was encouraged by Secretary Thompson’s charge to be bold and radical. In a wide-ranging conversation, the committee touched on the role of incremental versus sweeping changes; ways to alter the health care system’s focus on acute care episodes; guidelines for making regulations clear, effective and uniform, with a solid research base and a positive cost-benefit ratio; ways to know if regulatory reform has been successful; the multiple roles of CMS; outcomes- and quality-focused regulatory models; the impact of "smart card" technology; tax credits for private coverage; other private-sector models for health insurance; empowering beneficiaries with good information; medical savings accounts; block grants from the federal government to the states; the structure of the U.S. health care system; the history of the Medicare program; and ways to integrate care for beneficiaries across "siloed" provider types.

Dr. Wood encouraged committee members to work on long-term recommendations for the committee’s final meeting in September.

Meeting summary prepared by John McCoy, Health Policy Analyst Mathematica Policy Research, Inc.