SECRETARY'S ADVISORY COMMITTEE ON REGULATORY REFORM
 FINAL HEARING

November 21, 2002
Hubert Humphrey Building, Room 800
200 Independence Avenue, SW
Washington, D.C. 20201

The Committee adopted revisions to previously approved recommendations on smart cards and setting a defined schedule for the release of HIPAA regulations.

The Final Report is adopted. (The Committee gave staff discretion to conduct final proofreading and incorporate other minor edits.)

Dr. Wildenthal was impressed by the effectiveness of the committee. He commended the committee members and leadership for doing a remarkable job and believes the final product is something they can be proud of. He has confidence that this report will not just sit on the shelf, but that it will continue in motion.

Ms. Walden expressed enthusiasm that the committee members brought their individual areas of expertise to the table without bringing their own personal agendas. This allowed them to come together and effectively discuss change. However, she believes their work is only the tip of the iceberg and more needs to happen at the higher policy level. She believes that if we put the consumer in the center of the picture, we will be closer to where we need to be.

Mr. Olsen commended the committee for its thoughtful and constructive work. He pointed out that some recommendations have already been acted upon, such as the EMTALA regulations, the OASIS form, and the 1-800 Medicare number. However, he also stated serious reservations about the committee’s work. He believes the committee’s proceedings have lacked sufficient input from consumers, and consequently, some recommendations have lacked adequate evidence to make an informed decision. He also noted that substantive disagreements are not reflected in the text of the final report and requested that an addendum be delivered to the Secretary to include the committee’s remarks.

Ms. Margulis commended the leadership of the committee and remarked that Mr. Olsen’s comments represent part of the diversity of expertise around the table. She hopes the consumer will continually be at the center of the system as they go forward. She believes that technology-related recommendations will help build the system of healthcare and result in cost savings.

Ms. Utterback thanked the Secretary for giving her the opportunity to serve and hear different perspectives within the healthcare industry. She expressed personal concerns that the committee only tinkered around the edges when looking at consumers and the changing demographics. She underscored the need for greater consumer input and said she had serious concerns that we are not prepared and have not done enough despite much being accomplished.

Ms. Sutherland expressed thanks to the committee leaders and HHS staff. She echoed the words of Ms. Utterback. Though this process, she learned how hard it is to change things. This needs to be an ongoing process and she believes the committee has only reached the tip of the iceberg. She emphasized the need for the consumer to be kept at the center of the healthcare system.

The field hearings left the greatest impression on Mr. Bloom. These hearings allowed committee members to see health facilities at work outside of Washington. He was encouraged at how some of these small facilities effectively tackle major healthcare processes. Yet, he also emphasized that these best practices do not represent most healthcare systems and need to be better publicized as good models to follow. He further commented that the committee did not get information out early enough, which is no fault of the staff. This was an enormous task, and the staff did an incredible job with limited resources. The committee’s work is only the first step toward change, and Mr. Bloom anticipates bigger challenges in the future. He commits himself to continue to work on any follow-up working groups. He said working on the committee has been "a great experience."

Ms Gigliotti thanked the Secretary for the opportunity to serve. She attributed the success of the committee to the mutual respect and consideration given to one another. She also expressed gratitude to the public who took time to share their experiences. Many of the solutions the committee encountered could not be done administratively, but only statutorily. There is an attached Appendix C which addresses some of this unfinished business, and she asked the Secretary to look at this section and urge Congress to consider the statutory changes necessary to give flexibility and provide safe healthcare.

Dr. Dennis thanked the Secretary, committee leadership, and DHHS staff for their outstanding work. The Committee’s work, he emphasized, should be an ongoing process and healthcare regulations should continuously be reviewed. The committee accomplished many tasks, but he also recognized much remaining unfinished business, such as medical education and the National Practitioner Databank.

Mr. Finan joined by telephone and commended the leadership and DHHS staff. He remarked that this was an awesome task, but he believes they have made a significant contribution. What "screams at him" most from this whole process are the effects that complex regulations have on the actual delivery of healthcare. He recognized that the intent of Congress and what actually occurs in the trenches must be aligned and strengthened in the future. He hopes for an ongoing effort and remarked that the committee made an improvement but did not slow the tide.

Ms. Shafer began by thanking the leadership of the committee. Joining the committee
"wearing many different hats" as a nurse, disabled person, and industry provider, she was initially skeptical of what the intended outcome of the committee’s work was to be. Although she was pleased to hear many diverse patient-focused comments, the disabled community lacked representation both during the public hearings and around the table. The disabled community, she emphasized, needs to be addressed in Medicare reform. She was pleased to see the focus on technology and emphasis on consistency in communications reflected in the recommendations. Nonetheless, she still stressed that more needs to occur.

Ms. Evink thanked the Secretary for the opportunity to serve and the diversity of the committee members. She was particularly enthusiastic about the public hearings on rural health and HIPAA issues, which she emphasized as being critical to the way care is provided. She was impressed that the committee did not put up walls to protect their personal and professional agendas, but worked hard to bring information to the table and reach a consensus. As a result, the committee was able to accomplish many incremental changes, most notably in the area of drug product labeling and naming. Yet, even with the important accomplishments made thus far, she believes the committee’s work must still be an ongoing process.

Mr. Toby commended the committee leadership for their dignity, grace, and direction. Approaching the committee as a former CMS regulator with thirty-two years in the DHHS, and first-hand experience in writing many of these cumbersome regulations, he felt strongly that the committee identified most of the major problems. The Committee learned how regulations tend to have unintended consequences; EMTALA and the Minimum Data Set (MDS) served as two examples of this. People that write recommendations are decent and good people, but they must justify their jobs. These people are only as good as their leadership, so it is important that the Secretary continue to pursue reform and carry out the committee’s recommendations. He believes that consumers and providers alike will find the report useful. The report proposes recommendations that are simple and predictable. He profoundly hopes that the Secretary and his successors will give attention to the recommendations.

Mr. Rovner thanked the leadership, staff, members of the committee, and members of the Coordination Subcommittee. He believes that the committee has not just nibbled at the edges, but has addressed important discrete items - 255 recommendations in 9 months. He quoted a line from page 81 in the report stating "the time has come for all stakeholders in the healthcare system to begin a process of redesigning the regulatory system to improve its effectiveness and address systemwide problems." He looks to this quote as guidance for all of us looking forward as we think about how we can make this an ongoing process of improvement. From this experience, he now believes that all stakeholders can come together in goodwill to make this process work better for beneficiaries and consumers. He concluded by saying if we can continue to bring this type of collaboration to the entire delivery system, we can accomplish a great deal.

Mr. Cummings thanked the leadership of the committee. He encouraged the audience to imagine the healthcare industry as a triangle or three-legged stool. One leg represents the "social construct" of health care (private benefit or public good?), the second leg represents financing, and the third leg represents regulation, which mediates the other two legs. All three parts are in sync and reinforce one another. He argued that we have done as much as we can do within our current regulatory framework, yet we have failed to effectively address the social construct or financing legs of the stool. As a country, we need to decide whether healthcare should be made a public or private benefit; and if we can make that decision, then the healthcare financing system might become more consistent and less fragmented in the future.

Mr. Dollens thanked the Secretary for his vision in establishing this committee and believing that work like this could happen. Although the committee expressed concern about follow-through and whether anyone would listen to their recommendations, he was pleasantly surprised by the timely actions that were already carried out while the committee was in process. Lastly, he suggested that focus should be geared toward over-arching policy recommendations and that a new group should perhaps be established to focus on the "first principles" of a health system.

Ms. Ryan thanked the Secretary for the diversity and organization of the committee. The structure of the subcommittees and executive committees, she observed, was very effective and should be replicated in the future. However, she also noted that the intent of many recommendations lacked synchronization with how they were actually implemented in the field. A professional commitment to continuous improvement and quality care needs to be made. This commitment must include the consumer’s ability to make informed choices and the government’s ongoing involvement in the real world to avoid the unintended consequences of many regulations. This must also involve an additional commitment to technology, and the use of data to learn from the past and improve in the future. Currently, she emphasized, we are not using data to improve because we are "hung up" on the issues of privacy and confidentiality. Insurance companies and other organizations often know more about disease and patient profiles than providers. The Medicare smart card and health information system recommendations are excellent, but the government must take the next step in implementing these suggestions. America is aging, she stated, yet our health care systems are designed more for acute care than for the chronic care and human services needed by an aging population. She concluded by emphasizing the importance of integrating the Medicare and Medicaid programs and supporting pilot projects and waiver systems to demonstrate programs that work locally.

Mr. Hefty thanked the staff and Secretary. He emphasized that regulatory reform is like a "victory of singles and doubles" in baseball. Although the recommendations must still be acted upon and additional work must still be done, we have finished a good report representing solid steps forward. He also commended the diversity of the group and acknowledged the importance of continually building on the successes and avoiding the failures of our current healthcare practices.

Dr. Nielsen thanked the leadership and DHHS staff. She found it helpful that the committee was able to get beyond the labels of what stakeholder each member was representing. She credited this not only to the structure of the subcommittees, but also the enormous amount of good will among the committee members. From the start, the committee was given strict guidelines about the issues they were able to address (no statutory changes and no increased spending). This initially seemed like a real problem, but with excellent leadership emphatic about positive change, real progress was made despite these restrictions. However, she stated concern about what will happen when the committee’s work ends and people continue to run up against burdensome regulations. She proposed that a mechanism be implemented, such as a 1-800 number, where people can voice their real-life experiences with the unintended consequences of many regulations.

Dr. Wood began by addressing several issues that the Secretary asked the committee to accomplish in January of this year. First, to clarify and simplify regulations, making it easier for patients and consumers to get better care. Second, to make it easier for providers, health plans, device manufacturers, beneficiaries, and consumers to meet the requirements of DHHS. And third, to customize DHHS rules to better suit the needs of local health care providers and patients.

In response to the Secretary’s requests, the committee developed a mission statement to guide their work and effectiveness. Their simple goal was to improve the level of services for patients and consumers by focusing on ways to cut red tape, to remove obstacles to smoothly functioning relationships in the health care system, and to reduce regulatory burden.

The whole committee undertook a very aggressive work schedule in order to accomplish these tasks. They visited many regions of the country, listened to the concerns of the public, and learned more about how paperwork and regulations affect the system of health care delivery. With a clear mission and a strong work ethic, the committee was able to identify key regulations that served little purpose and undermined the quality of care and healthcare delivery.

Dr. Wood was pleased to present the final report containing over 250 recommendations to Secretary Thompson. He further specified the major issues the recommendations addressed and thanked the committee for the privilege of leading such an extraordinary group of people. Lastly, he thanked Secretary Thompson for his support and commitment in acting upon their recommendations.

Dr. Wood described Secretary Thompson as a leading advocate for the health and welfare of all Americans. He is the 19^th individual to serve in the role of Secretary of DHHS, and has shown his commitment to improve the health and welfare of American citizens in his previous role as Governor of Wisconsin. Furthermore, his many accomplishments during his term as Governor afforded him a deep understanding of the integration of social change and healthcare reform, which will be invaluable for the vision of the future. Dr. Wood was pleased to be able to work on the Secretary’s behalf.

Secretary Thompson thanked Dr. Wood for his tremendous effort and the privilege of being able to call him a friend. The Secretary also extended his thanks to the committee for their willingness to take on another job in order to benefit the citizenry at large. He remarked that the country is in debt for their service. He specifically acknowledged the work of Bobby Jindal, the Assistant Secretary of Planning and Evaluation, who flew back from Europe to attend this meeting, and Peggy Sparr, for her instrumental role in making this report happen.

Last January, Secretary Thompson charged the committee with the task of finding easier ways to provide health care while still maintaining the high standards of accountability. "We want regulations to serve people, not make people serve regulations," he said. The final report represents just the beginning of the regulatory reform process. Containing 255 recommendations formulated in less than a year, it is an enormous accomplishment. In fact, getting 29 people to agree upon 255 recommendations is in itself a miracle.

The Secretary noted that DHHS did not waste time implementing these recommendations. To date, 30 recommendations have already been acted upon, thanks to Tom Scully, the CMS administrator, and CMS staff. These have included streamlining paperwork requirements in the MDS form, cutting the time needed to complete the Medicare assessment form in half, allowing hospitals to gather Medicare secondary payer information every 90 days as opposed to every time the patient comes in, and many others. All these changes have meant less burden on health care providers and more time spent on patients.

However, all of this is still simply the tip of the iceberg, the Secretary said. To continue with the great work already completed, the Secretary asked Bobby Jindal to create an internal strikeforce to carry out the implementation of these recommendations. He requested that Dr. Wood keep in contact with this strikeforce and remain involved, either personally or with an executive committee, to make sure we get the job completed.

Furthermore, as healthcare becomes the number one issue after the war on terrorism, the Secretary emphasized the need to take a long hard look at the overall delivery of healthcare in this country. This regulatory initiative has been the first giant step in this direction, but much more still needs to be accomplished. Starting this Sunday, Secretary Thompson asked another group to take the second step in this huge endeavor. They are being asked to look at the healthcare delivery system, the healthcare liability system, and healthcare technology. The third step will then be to approach Congress and ask for changes to the overall system.

The Secretary concluded with additional thanks to the committee for their dedication and outstanding work. He echoed President Bush’s words, calling them "part of the armies of compassion in America". He is confident that working together, they can make the health system in America stronger and better tomorrow than it is today.

Mr. Redding participated by telephone. From the first meeting, Mr. Redding wanted to see greater flexibility within the regulations to allow providers to do their jobs most effectively and to allow for technological innovation. Looking at the final report, he is confident that the committee addressed these issues. However, he wanted to emphasize the importance of the Medicaid program in addition to the Medicare program. Oftentimes the Medicaid program, which serves as the safety net for nearly 44 million people, is shortchanged and overlooked. The impact these regulations can have on the Medicaid program may equal or even surpass the impact they have on Medicare. He concluded with giving his thanks for having this "wonderful opportunity" to serve on the committee.

Dr. Crosby underscored what a tremendous learning experience these past nine months have been, even for a physician like herself with over 30 years of experience in healthcare. She quoted John Donne, an English poet, who wrote , "as the island of knowledge expands, so do the shorelines of ignorance." As she learned more about the regulatory process, the number of questions she had also grew. She stressed that the dividing line between consumers and providers is an artificial one; we will all be consumers at one point in our lives. She had a sobering encounter with the healthcare system this past year as a consumer facing a serious personal illness. She realized that although we have a lot of amazing care available, it takes quite a bit of effort to negotiate the health care maze. She also thanked the communities who invited the committee into their workplaces. She was inspired by places like Little Havana that have been able to use their community resources to develop amazing institutions. She concluded by thanking the leadership and staff for their inspiring work, and saying what a privilege it has been to be able to serve on the committee.

Mr. Fay thanked the members of his subcommittee and the HHS staff. He then made four comments on the report. First, smart cards are a great opportunity for HHS to be a leader in an explosive innovation in technology. However, in order to get this technology effectively and quickly launched, the government should have an open source community-based model where people are invited to submit programs or hardware for approval. Second, the Medicare program will greatly benefit from e-commerce and the shift from paperwork to electronic filing and forms. Third, the MDS and OASIS instruments are too similar and they should be integrated to reduce paperwork and data collection burden. Lastly, the process of revisiting regulations, as the committee has done this past year, must be continuous and ongoing.

After expressing her thanks for the opportunity to serve, Ms. Pattee made several comments on the report. In particular, she stressed the importance of including people with disabilities, not just seniors, when we look at Medicare beneficiaries. She remarked that there are many holes in our safety net programs, and as a nation, we need to look at the entire system and address real reform to improve access for all. While the changes the committee has submitted thus far seem like common sense solutions, she warned that these obvious changes may have unintended consequences. She is concerned, for example, that enforcing consistency in Local Medical Review Policies might impede access to new technologies. Furthermore, she argued that state flexibility could lead to inequities within the healthcare system because of differing poverty levels or prescription drug coverage. Although a lot of unfinished business still remains, she believes that by focusing attention on the implementation of information technology, the smart card, and the impact of the HIPAA privacy rule on medical research, important changes will be made to the healthcare system.

Ms. Norwalk said that her experience with the committee far exceeded any of her expectations, and she commended the committee and the CMS staff for their tremendous effort. She emphasized that we are all in this together; all stakeholders need to be involved. We must proceed forward with a consumer-driven care model, which the recommendations have reflected. We must be careful not to compromise quality in our attempt to reduce burden. By focusing on outcomes, we can carefully monitor our gains. Giving people access to information is another important way to affect change without spending huge amounts of resources. She appreciated the committee’s recommendations because they detailed not only what regulations are ineffective, but the reason they do not work, and ways to make them work better. Currently, nearly half of the committee’s recommendations are already in various stages of implementation and others are under consideration. She assured the committee that their work will not be put on a back shelf. This is only the first step, so she urged the committee to continue to contact her if they discover something else that needs to be changed. She concluded by thanking the committee for their invaluable perspective in understanding the impact of the regulations CMS implements outside of Washington.

Mr. Jindal began by thanking the committee for their time and hard work. From the beginning, the Secretary asked the committee not to go beyond their scope of work. And despite the many tempting opportunities to divert their attention, he applauded the committee for staying focused. The Secretary also wanted specific and discrete recommendations that identified both problem areas and solutions. Mr. Jindal commended the committee for submitting 255 very specific recommendations. He said "this has been a successful project, way beyond our expectations." Jindal further stated that this is one of the most diverse groups of people coming together to study the healthcare system that he has participated in and watched. He applauded the committee for being able to go beyond their individual experiences to look at the healthcare system as a whole. As much as we hate our healthcare system, he said, it is better than any other alternative. "We see the glimpses of the opportunity when our healthcare system works at its best, it’s better than any health care system in the world." He said that the Secretary is very serious about taking IOM-specific recommendations into consideration, and also setting forth a process to look at the healthcare system from a broader perspective. The committee’s work has encouraged the Secretary to continue his efforts to revamp the healthcare system and put "the patients and their doctors, their providers, back in control of health care."

As the Executive Coordinator of the Regulatory Reform Initiative since June, Ms. Sparr thanked the committee for their dedication and hard work. She was impressed by the creativity and dialogue that occurred among the members and the commitment to their vision. She gave a special thanks to the CMS staff who put in many sleepless nights for this initiative. She further thanked the CMS internal advisory committee and the Department Steering Committee.

With an MD, PhD, JD, and three years in healthcare administration, Dr. Siguel felt that the committee overlooked some important ways to help simplify the healthcare system. He stressed the enormous amount of complexity that was unleashed with the introduction of HIPAA. Over 100,000 committees and nearly 300,000 websites have been created to deal with HIPAA-related issues. We must create uniform criteria for what it means to comply with these privacy recommendations. He also stated that claims processing has become an undue burden with over 100,000 decision-making rules to determine payment of a claim. For a doctor, the paperwork required for this process is extraordinary. The number of consent forms required for patients to fill out is also unnecessary. Dr. Siguel suggested that a manual or uniform consent form be implemented to avoid this regulatory burden. Finally, he concluded by stressing the importance of using outcome measures to evaluate effectiveness.

Ms. Morris has a degree in nursing and is a physician liaison for a small 65-bed hospital in Florida. Her position was created for the express purpose of helping physicians, patients, and staff workers understand medical necessity and the coding guidelines to get reimbursement from Medicare. In her position, she has had the most difficulty dealing with the Local Medical Review Policies (LMRPs). The latitude CMS gives intermediaries and carriers in the development of LMRPs gives rise to considerable variation and complexity. Physicians do not have the time needed to labor over time-consuming paperwork, she stated. She proposed that CMS review LMRPs for consistency across the country.

As Director of Federal Regulatory Affairs for the American Society of Health System Pharmacists, Mr. Stein commended Secretary Thompson for appointing a pharmacist to the committee. He stated that pharmacists are one of the few health professionals not recognized under the Social Security Act as health care providers. However, as pharmacists move from simple dispensers of products to providers of clinical care, CMS should continue to recognize the importance of the pharmacist in their deliberations. He is pleased that product safety remains a high priority on the committee’s list and urged the FDA to take quick action on the recommendations.

Ms. Welles represents a consumer organization composed of one and a half million nursing home residents. She agreed with Erik Olsen that many recommendations might have looked different if there were more consumer representation around the table. She was concerned that many of the recommendations look like proposals that the administration has previously rejected. She was also concerned that families are not given fair input into the surveying process. Many families may see nursing home neglect for months without a response from administrators. Furthermore, surveyors often do not find deficiencies that families know are harming residents. Deficiencies are often undercited. Many nursing homes are also understaffed and consequently jeopardizing the health of many residents. These pressing issues must be addressed above de-regulation and the survey process.

Ms. Spitznagel represented the Healthcare Leadership Council (HLC). The Council is an association of organizations across the spectrum of providers and manufacturers in the health care system. She commended the committee for looking at issues prospectively instead of retrospectively, while also maintaining their focus on quality care. She hopes to watch this process move forward on behalf of HLC.

As Vice President of Regulatory Affairs, Ms. Schaller spoke on behalf of the America Association of Health Plans (AAHP). She gave her support for the goals of the committee in an effort to strengthen public programs and free up resources. She also agreed with the Secretary and the committee that their work is an important starting point. She was particularly appreciative for the attention that was given to the Medicare+Choice program. Lastly, she looks forward to being involved in the follow-through on the recommendations and thanked the committee for their hard work.

As Executive Director of the Alliance to Improve Medicare (AIM), Ms. Moorhead thanked the committee for implementing some of the recommendations included in AIM’s May 2001 report so quickly. She was particularly pleased with the attention given to improving beneficiary communications. She thanked the Secretary for the diversity of the group, and she looks forward to their continued work in the future.

Dr. Wood closed the meeting by thanking the committee members for their kind remarks, but said that it was their hard work that made everything possible. At first, Dr. Wood admitted being daunted by the tremendous accomplishments of the committee members around the table, wondering how he would most effectively harness all this expertise. He initially thought about structuring subcommittees by industry where people would feel most comfortable, but soon realized that it was necessary to mix people from different industries up in order to take advantage of their diversity and differing vantage points. Although the committee was often criticized for having light consumer representation, Dr. Wood felt confident that the committee, as a whole, kept the consumer in the center. He hopes that the work they have done will provide a solid foundation for the future and an example for DHHS of effective advisory committee structuring.

He expressed his appreciation for the hard work of the committee members, especially the Executive Committee. There is now a different standard for which success is to be measured. However, he also acknowledged that the most difficult things lie ahead. He was pleased by the Secretary’s comment that this is only one piece of a much greater vision. Dr. Wood said it has been a privilege to be associated with and lead a group of individuals with such personal commitment to the committee’s success. He further thanked the DHHS staff who have made this initiative so effective. He noted that the political process is cumbersome and extremely slow, but he believes we can still make progress within the domains in which we work. He looks forward to seeing the names of the committee members alongside other significant achievements not only for their personal careers but also in efforts to improve the health care of Americans across the country.

Meeting summary prepared by Jaclyn Wong, Research Assistant/Programmer, Mathematica Policy Research, Inc.