BRINGING COMMON SENSE TO HEALTH CARE REGULATION: REPORT OF THE
SECRETARY’S ADVISORY COMMITTEE ON
REGULATORY REFORM

 

 

 

 

 

"…When we flood doctors and hospitals with excessive paperwork, patients suffer the consequences…"

- Secretary Tommy G. Thompson 
at the January 2002 Committee Meeting -

 

 

 

 

TABLE OF CONTENTS

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PROLOGUE

Dear Secretary Thompson,

In the eight months since we first met in Washington and you asked this Committee to find immediate and effective solutions to the most vexing regulatory problems, we have worked diligently to achieve that goal.

We have worked steadily, in subcommittees and the larger Committee, using conference calls and public meetings to accomplish a considerable body of work. We took your challenge to heart and set forth on a mission:

To improve the quality of and access to health care and human services for patients and consumers by (1) removing regulatory obstacles to smoothly functioning relationships in the health care system, and (2) promoting appropriate regulatory approaches so that time and resources can be redirected towards patient care.

In the course of our work we have conducted a series of regional hearings around the country. We brought together panels of doctors, nurses, administrators, beneficiaries, caregivers, and other private citizens. They told us how Federal health programs and drugs and devices regulated by the Food and Drug Administration (FDA) were working for them, and gave the Committee suggestions for improvements in processes or regulations based on their experiences. At every one of the Committee’s hearings, we were privileged to listen to comments from the public. The Committee incorporated into its recommendations many ideas from this testimony, in addition to public comments submitted electronically and in writing.

We have seen how the current complexity of law and regulations creates problems for beneficiaries and other consumers, health plans, medical directors, providers, and regulated industries. In some situations, that complexity actually led some medical directors to decisions that kept beneficiaries from receiving needed services. We also discovered that beneficiaries, their families, and other private citizens alike find it exceedingly difficult to obtain information about Medicare, Medicaid, and FDA-regulated products.

In the process of our work, we often discovered that issues identified throughout the hearings are complicated and would require more than a regulatory solution. In some cases, a solution to a problem that is vexing to beneficiaries and providers alike would require legislative solutions, or either significant structural changes or fiscal resources that would require careful decisions by the Administration and the Congress. A dedicated staff has helped us to identify those issues, in spite of challenging time frames. We did not consider the budgetary impact of our recommendations. It may be that when a careful budgetary analysis is complete it could have an effect on a recommendation’s feasibility. We are grateful that you began the work of implementing some of these recommendations in the course of our deliberations or after they were adopted, but well before the publication of this final report.

Today, we are sending to you this report that contains our 255 recommendations. While they are crafted to provide specific solutions, we defer to you how best to delegate responsibility for implementing these changes. We hope that you and your colleagues will find the results of this work helpful in improving the functioning of Medicare, Medicaid and the FDA to better meet the health care needs of all Americans.

On behalf of the members of the Committee, it has been a privilege to work in your service.

Douglas L. Wood, M.D.
Chairman, Secretary’s Advisory Committee on Regulatory Reform

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SECRETARY’S ADVISORY COMMITTEE ON REGULATORY REFORM

MEMBERS

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ACKNOWLEDGMENTS

Many people helped prepare this report. Their support was critical as the Committee conducted its hearings, analyzed issues, and worked toward consensus on its recommendations.

The Secretary’s Advisory Committee on Regulatory Reform (Committee) is very grateful for the direction and significant support provided to the Committee by Department of Health and Human Services (HHS) Secretary Tommy G. Thompson, the HHS Regulatory Reform Steering Committee members, and the core Department staff assigned to this initiative from the Office of the Secretary, the Centers for Medicare & Medicaid Services, and the Food and Drug Administration. Their expert policy direction and strategic advice—as well as their policy analysis, planning, and management and communication skills—were exemplary, thoroughly professional, and essential to helping the Committee accomplish its mission.

Very special thanks also go to those staff at the Department’s Headquarters, regional and field offices, contractors, and others who: participated in brainstorming sessions that contributed significantly to the direction and course of the regulatory reform initiative; provided expert testimony as panelists during each public meeting, including the five regional hearings; provided extensive, topic-specific, oral briefings to orient the subcommittees as they moved forward in their deliberations; provided technical assistance on a wide variety of the Department’s most vexing and challenging regulatory reform issues; provided extensive outreach to local, regional, and national stakeholders; coordinated the arrangements for Committee meetings and hearings, including scheduling national, regional, State, and local speakers and site visits; and provided substantive analytic support throughout the year on a variety of general and specific issues that ultimately led to the Committee being able to complete its mission. Their unflagging willingness to respond thoroughly and within extremely short time frames was most appreciated by—and proved to be invaluable to—Committee members.

The Committee is grateful to the large number of citizens who graciously took the time to share their thoughts and concerns, either in person or via e-mail or letter. Their comments put a human face on the complexity and burdens the health care system is facing today and guided the Committee in its deliberations.

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EXECUTIVE SUMMARY

There is general agreement that the United States health care system has the potential to provide quality care for all patients. Most also agree that the current system disrupts the basic relationship between patients and caregivers, frustrates and intimidates many patients with its complexity, and expends health care resources inefficiently. In many cases, these disruptions may adversely affect the health of individuals and their communities. The Secretary’s Advisory Committee on Regulatory Reform (Committee) was assembled with the premise that patients would receive better, higher quality care if the health care system were streamlined and unnecessary barriers were removed.

The Committee recognizes that regulations are necessary to ensure basic protections for beneficiaries and other consumers, prevent fraud, maintain and promote access to care, and provide governing direction for large public programs, such as Medicare and Medicaid. It realizes that many concerns about regulations might be alleviated if the regulations achieved their desired goals efficiently. Much of the Committee’s work focused on improvements that would attain the efficiency so needed.¹

The Committee sought to identify solutions to problems that could be immediately implemented. In evaluating problems identified by the public, the Committee learned that some problems were not merely regulatory in origin. Rather, solutions to some problems require significant infrastructure changes, significant spending, or even legislative changes. During its tenure, the Committee drafted and adopted 255 recommendations, most of which can be implemented administratively.

Currently, accessing care often is difficult because of the hurdles that must be cleared by patients and providers before care is delivered or pharmaceutical products and medical devices can be made available. The Committee heard testimony and received public comments that many of these hurdles are created by—or result from—regulation. If these barriers interfere with a person’s access to needed care or innovative treatments, the system must respond. The Committee recommends that certain requirements be revamped to achieve this end.

Through public testimony and written comments, the Committee learned that beneficiaries often spend more time making sense out of paperwork than seeing their health care providers. The Committee sought opportunities to reduce paperwork and improve the quality of care provided to beneficiaries and other consumers.

The development of complex regulations often has the unintended consequence of creating confusion about the intent behind the regulations and how the regulations should be implemented. Problems are inevitable when people are asked to comply with rules they do not understand. Many problems brought before the Committee are linked to the issuance of complex regulations that then require additional clarifying documents and guidance. Too often, those affected by the regulation (beneficiaries, physicians and other providers, and health plans) do not know where to get needed information. Some information available from contractors (who are the face of Medicare for beneficiaries and providers) is not easy to understand. Committee recommendations in this area urge the Department to speak more clearly, listen more closely, and respond more fully in its communications with beneficiaries and providers.

Regulatory requirements, mechanically enforced, can stifle innovation in service delivery and quality improvement. Health care regulation must adapt to market changes and evolving relationships within the health care system. The Committee heard testimony recommending that the Department discard a one-size-fits-all approach when implementing regulations. The recommendations that the Committee developed reflect the view that flexible implementation of regulations can strengthen the programs under the Department’s purview. Moreover, once a rule or regulation is in place, its effectiveness in achieving its intended purpose should be periodically evaluated.

The health care delivery system has changed dramatically since enactment of the Food, Drug and Cosmetic Act in 1938 and the creation of Medicare and Medicaid in 1965. While advances in medicine and technology allow seniors and persons with chronic diseases and disabilities to live longer, healthier lives, the rules and regulations that govern Federal health care programs have not progressed as rapidly. As a result, patients, providers, and regulated industries feel encumbered by outdated rules or frustrated by their inability to take advantage of current technology. The result often is a serious delay in accessing needed health care services.

The Committee’s recommendations address many areas of concern and devote considerable attention to those areas identified in public comment as problematic. Each chapter of the report highlights Committee recommendations to illustrate key themes. The full list of Committee recommendations can be found in Appendix B. While conducting its work, the Committee asked HHS staff to provide technical review by assessing the ease of implementing a proposed solution. However, the budgetary impact was not factored in the recommendations; when careful analysis is complete, it could have an effect on a recommendation’s feasibility. In addition, the Committee recognizes there are statutory or structural limitations that must be considered before HHS makes final decisions about which recommendations can be quickly implemented.

The Committee’s unfinished business is summarized in Appendix C. Note that the presence of an item in this Appendix does not imply endorsement nor does it imply rejection. The full text transcript for all Committee meetings, including the final meeting on November 21, 2002, is available at http://www.regreform.hhs.gov.

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CHAPTER 1

THE IMPACT of Regulation on Access to Care

" We recognize the need to enhance the trust of Americans that they will be well cared for, served, and protected…" – Mission Statement, Secretary’s Advisory Committee on Regulatory Reform.

The Committee began with this premise: while regulations are necessary to implement government programs, complex and burdensome regulations create unnecessary barriers and restrict access to services by disrupting the relationship between patients and their caregivers. By devoting resources to navigating complex rules and regulations, health care providers have less time to focus on delivering high-quality care.

Medicare is the largest Federal health program, providing coverage for 40.7 million American seniors, individuals with end-stage renal disease (ESRD), and individuals with other disabilities. It is projected to expend $254.8 billion in fiscal year 2003. Medicaid provides coverage to 40.4 million Americans and is projected to expend $158.7 billion in fiscal year 2003. There are 6.2 million Americans eligible for both Medicare and Medicaid. Today there are approximately 885,500 doctors, 6,000 hospitals, 155 Medicare+Choice plans, 14,800 skilled nursing facilities (SNFs), 17,000 nursing facilities (NFs), 7,100 home health agencies (HHAs), and other providers participating in one or both of these programs. A wide range of Federal, State and local regulations govern these providers, suppliers, health plans, and practitioners who deliver care and other services. Even beneficiaries must comply with certain rules. These regulations change at varied times, often have a direct impact on access to care, and often result in unintended consequences.

While most of the Department of Health and Human Services’ (HHS) regulations are intended to provide operational and policy details for participation in public programs such as Medicare and Medicaid, they reach far beyond the individual programs, affecting other patients and providers as well. For example, regulations that list requirements for hospitals to participate in Medicare, referred to as the "Conditions of Participation" or "COPs" serve to establish minimum standards for quality that provide protections for all patients.

There is general agreement that the United States health care system has the potential to provide high-quality care for all patients. Accessing that care often is difficult because both patients and providers must clear hurdles before care is delivered. Many of these hurdles are created by or are a result of regulation. Government regulations directly and indirectly affect where patients receive their care, how providers deliver care, and the amount paid for care. Many beneficiaries navigate the system with little direct disruption; for others, the cost of regulation is greater uncertainty and disruptions in care. When these regulatory barriers interfere with a person’s access to needed care, the system must respond. This chapter addresses impediments to the patient’s goal of obtaining high-quality care and the provider’s goal of delivering that care.

The Committee carefully examined the regulations for implementing the Emergency Medical Treatment and Active Labor Act (EMTALA) of 1986. Congress passed EMTALA in response to reports that hospitals were refusing to treat some patients based on their ability to pay and that several deaths occurred subsequent to such refusal. EMTALA was designed to prevent a hospital from refusing to screen and provide appropriate emergency treatment to patients seeking care in an emergency department. The law requires hospitals to conduct a medical screening examination for any patient who comes to an emergency department. EMTALA was intended to ensure that all patients have access to emergency care, regardless of ability to pay. But what was designed as a straightforward guarantee of emergency care has yielded a myriad of confusing regulations that in some cases have reduced access to care.

The Committee heard testimony from physicians, hospital administrators, and ambulance drivers expressing their difficulty interpreting the complex and confusing EMTALA regulations. Coupled with severe monetary penalties, private lawsuits, and the threat of termination from all Federal programs for violating EMTALA, physicians and hospitals noted that current regulations create an impediment to care. In particular, the law takes force when a patient "comes to the hospital," but the definition of hospital boundary lines is overly broad and may prevent some ancillary facilities from taking the most appropriate action (e.g., calling 911) in an emergency situation. In addition, EMTALA regulations prevent hospitals from talking to patients about their insurance status before screening. This may conflict with other Medicare rules that require advance beneficiary notices (ABNs) to be provided before billing a patient for services not covered under Medicare. Unable to follow both EMTALA and Medicare rules, hospitals may, at one time or another, forego Medicare payments rather than risk enormous penalties.

The Committee heard that hospital medical staff and legal counsel are uncertain when their EMTALA obligations end. Consequently, some doctors (particularly surgical specialists) are unwilling to take on-call duty, concerned about the risk of being uncompensated and responsible for open-ended follow-up care. Specialists are particularly concerned about the on-call time that they are required to spend at the hospitals where they have admitting privileges.

Finally, hospital administrators described the Centers for Medicare & Medicaid Services’ (CMS) review procedures for alleged EMTALA violations that are inconsistent from one regional office to another and often focus on minor technical errors or incomplete paperwork, rather than the entire episode of care. Current procedures require the forwarding of alleged EMTALA violations involving medical judgment or physician action for peer review by Quality Improvement Organizations (QIOs), only after initial State Survey Agency review, which may take up to 15 days. Delay in getting clinical case review by QIOs is believed to contribute to provider frustration.

In response to a thorough discussion of the effect of EMTALA regulations on access to care, the Committee makes the following recommendations:

Recommendation: Modify the definition of "hospital property" to be only the emergency department and any other health facility that holds itself out to the public as being available to provide emergency or urgent care, as well as the "immediate vicinity" to the hospital property (such as the hospital lawn, parking lot, waiting room, or similar location) in situations where someone seeking emergency care is physically unable to proceed to the actual emergency department or urgent care facility.

Recommendation: Issue immediate interpretive guidance that use of community-based Emergency Medical Service (EMS) protocols, including established 911 protocols, is not a violation of EMTALA.

Recommendation: Review, update, and clarify in regulation and interpretive guidance what is mandated by EMTALA for the physician; clearly distinguish physician medical staff responsibilities from hospital responsibilities. In particular, CMS guidance should provide an explanation of whether there is a recommended threshold for the application of EMTALA as it relates to the number and type of specialists on staff available to be on-call at a particular hospital (e.g., identify safe harbors when physician specialists who are in short supply are on-call at more than one hospital at the same time).

Recommendation: Define limits of EMTALA by clarifying that EMTALA requirements end when qualified medical staff have made a decision: (a) that no emergency exists; (b) that an emergency exists and the patient is stabilized; (c) that an emergency exists which requires transfer to another facility where the EMTALA obligation rests with the transferring hospital until arrival at the receiving hospital; or (d) that an emergency exists and an unstable patient (who) is admitted to the hospital has been stabilized.

Recommendation: Mandate review by QIOs early in the process and improve training of regional offices and State agencies to improve performance and consistency of review of EMTALA complaints. (CMS’ Atlanta Regional Office procedures should be used as a model.)

 

Regulatory impediments to providing quality health care exist in a variety of settings. Rural providers are geographically isolated and serve a smaller population base that is disproportionately older with lower household incomes. Given these factors, rural providers face unique challenges that make them particularly vulnerable to operating pressures created by regulations. In addition, rural providers often experience difficulty attracting other health care professionals to practice in their locations. Rural hospitals and clinics often rely on temporary (locum tenens) doctors, and it can take months to register them with Medicare contractors, which delays billing and creates severe cash flow problems. Commenters asserted that the process to register doctors should be faster and more uniform, preferably electronic.

Rural providers encounter severe financial pressures related to dependence on government funding sources. Members of the rural health care community said new Federal initiatives are particularly difficult to implement because they require investment in new computer equipment and training, and providers lack access to necessary capital.

Recognizing that rural providers need special assistance to ensure access to services for seniors, individuals with disabilities, and other patients, Congress created a number of special programs and payment categories. In a report to the Committee, HHS’ Office of Rural Health Policy stated there are more than 200 discrete HHS programs that affect rural communities, each with slightly different requirements and designed to address different problems. Each program or payment system, for example, defines the term "rural" slightly differently: by population, by geographic location, by health care provider shortage, or by transportation difficulties. In addition, each program or payment system has its own unique set of regulations.

Health care providers in rural America, short on time and without administrative staff to research funding opportunities, find it difficult to identify and prepare the necessary paperwork to participate in these special programs. In addition, patients in rural areas may not have access to support services to assist them in completing eligibility forms. Thus, beneficiaries may not receive assistance from the very programs designed to help them.

Rural practitioners recommended that HHS conduct more research on rural health needs and give rural providers one clear and consistent office to work with for all of their waiver requests, grant applications, and technical assistance. Testimony clearly articulated the belief that regulations implementing the many programs and payment systems designed specifically for rural health care providers are prepared without adequate input from the providers who will be governed by the regulations. This is of great concern to the Committee. The rural health care system must not fail; in many areas, the hospital or other entity is the provider of first and last resort.

In response to testimony and Committee discussions, recognition of the important services rural providers deliver, and the need for those services to continue, the Committee recommends:

Recommendation: Consolidate existing definitions of "rural" into one communicable definition. (Currently "rural" has a different meaning for hospitals versus health clinics.)

Recommendation: Intensify outreach efforts to educate rural health providers about the specific programs that focus on rural communities and invest in rural best practices. Maximize the ability of HHS websites to connect rural health providers to information about all appropriate resources, technical and financial assistance programs, and best-practice models for rural communities.

Recommendation: Develop a legislative proposal with Congress to address the current fragmented approach to rural Medicare payment policy (e.g., Sole Community Hospitals, Critical Access Hospitals, bonus payments for rural primary care physicians, etc.) with an eye toward replacing this fragmented approach with a system that recognizes the unique operating characteristics of rural providers in all settings.

One of the most serious problems facing rural communities and their health care system is a shortage of qualified health care professionals. Although there are shortages of various health professionals in many parts of the country, the impact in the rural area can be especially severe. Health care decision makers should take steps to address this shortage. The Committee recognizes that some proposed actions are statutory and beyond the scope of its charter; this includes changing the payment system for small rural hospitals and recognizing Certified Registered Nurse Anesthetists (CRNAs) as providers of service. The Committee believes that implementing the following recommendations would help ameliorate the shortage of rural health professionals.

Recommendation: Address rural workforce issues.

• Consider continuance of "hold harmless" provisions under the prospective payment system for ambulatory services.

• Recognize Advanced Registered Nurse Practitioners as providers of services.

• Retain the State’s statutory flexibility regarding use of CRNAs.

• Recognize the need for educational support for preparation of rural health care providers.

• Recognize the impact of tighter immigration regulations on access to foreign physicians and immigrant, entry-level caregivers and the need to work with rural health care providers to resolve these issues.

Recommendation: Urge the National Advisory Committee on Rural Health to advise HHS on a process whereby HHS works with knowledgeable representatives of rural America to analyze the impact of a new statute or regulation on the rural delivery system before it is enacted.

 

Nearly 20 years ago, the President’s Commission for the Study of Ethical Problems in Medicine and Biomedical and Behavioral Research wrote that a person should be able to access health care services without excessive burdens. Patients trying to obtain needed health services should not be encumbered by the need to read the fine print on an insurance card, when clear language and legible font are possible.

The Committee is deeply concerned about access to care and the regulatory hurdles that providers must overcome for their patients to receive care. While most Medicare rules and regulations are administered consistently across the country, coverage of some services varies at the local level. Because of this variation, providers often are unable to determine with certainty if some services are covered. In such cases, the statute requires providers to issue an ABN to the patient to later bill him or her for the care that Medicare does not cover. While intended to give beneficiaries a warning, the ABN, and the inability to determine if a service is covered before it is delivered, imposes a constraint on the delivery of care. Some problems could be relieved by a system to furnish prior coverage determinations to both beneficiaries and providers. Recognizing the significant resources and advance planning required to implement such a system for millions of beneficiaries, the Committee urges the Secretary to begin considering such changes.

Access to health care services includes access to safe medical products. The Food and Drug Administration (FDA) regulates such products to determine if they are safe and effective. While all products carry some risk, FDA determines that—if products meet certain standards—they can be made available to the public. Before a medical product can be marketed, it must undergo extensive testing of its safety and efficacy. The FDA Modernization Act of 1997 (FDAMA) provided for the development of a clinical trials database for drugs and biologics. The database is maintained by HHS and is the place where firms can advise consumers of clinical trials that they are conducting. Participation by firms in the clinical trial database is mandatory for drugs used to treat serious and life-threatening conditions and for efficacy trials, and it is voluntary for other types of products or trials. Some clinical trials have trouble attracting human research subjects, so making the database available to the public could help make people better aware of available trials. Because the primary users are consumers, their input about the types of information that would be helpful to include in the database is critical to success. The Committee believes this resource should be expanded to increase access to new treatment opportunities.

Recommendation: Add information on clinical trials for (medical) devices (with investigational device exemption designations) to the clinical trial database for drugs and biologics. Seek stakeholder input in this process, while ensuring confidentiality of proprietary information. Establish, as a priority, the implementation of this database for all FDA-regulated products.

Once on the market, FDA-approved products must be used appropriately and safely. Providers and consumers can minimize risks with accurate, timely, and consistent information about the appropriate and safe use of medical products. FDA could eliminate errors caused by confusing brand names by ensuring that products are carefully named. The Committee believes that the labeling of medical products should be clear, with standardized presentation and definitions. The Committee also believes that using bar coding technology could reduce medical errors in hospitals, and therefore, the Committee recommends that FDA implement packaging requirements to facilitate development of such a system by hospitals. Consumers and providers could learn how to use medical products safely and avoid potentially dangerous interactions between and among drugs, foods, and dietary supplements through an interactive database. HHS should take steps to improve current adverse event reporting mechanisms (like MedWatch) or study the development of new information technology reporting systems for adverse events. In response to testimony and public comments, the Committee makes the following recommendations:

Recommendation: Adopt safe labeling practices for all FDA-regulated products to improve patient safety and decrease avoidable adverse drug events. For example, adopt labeling standards with respect to label format, information placement and presentation, and standardized definitions (and measurements).

Recommendation: Issue regulations that would require all appropriate FDA-regulated products to be packaged to take full advantage of appropriate administration and patient identification technologies to prevent medical errors.

 

Medicare beneficiaries who have low incomes often will qualify for additional assistance under their State’s Medicaid program. When individuals are dually eligible, Medicaid can help pay for Medicare out-of-pocket expenses. For example, for some dually eligible individuals, Medicaid pays their co-payments, deductibles, monthly Medicare Part B premiums, and services not covered by Medicare. Preceding a beneficiary’s Medicaid eligibility determination, Medicare Part B monthly premiums are deducted from the Supplemental Security Income (SSI) or Social Security Disability Insurance (SSDI) payment. Once beneficiaries are determined eligible for Medicaid, those Part B premium payments are refunded within 90 days. If the refund is delayed, the refund amount grows. If the delay in determining eligibility is lengthy, the refund amount may be significant and may endanger the beneficiary’s eligibility for Medicaid by raising assets above Medicaid asset limits. To address this problem, the Committee recommends:

Recommendation: Institute immediately a policy requiring States to exempt lump sum Medicare Part B premium refunds—currently allowed to be deducted from the Social Security benefit payments of a dually eligible beneficiary during the period in which the beneficiary’s initial Medicaid eligibility is being determined—from being counted as an asset in determining the beneficiary’s continuing eligibility for Medicaid.

In conclusion, the Committee focused on providing consumers and patients with access to safe and efficient products and services. This chapter addresses recommendations that can be implemented administratively as well as those requiring Congressional action. This blending simply highlights the complexity of problems facing the health care system. As each of the subsequent chapters makes clear, reducing that complexity is a difficult but not impossible task.

"My doctor constantly reminds me that he’s sick and tired of the paperwork. … It’s not much fun to go to a doctor who’s not happy." – Lena Archuleta, Medicare beneficiary and panelist at Denver hearing, reporting the comments of a neighbor.

The Department of Health and Human Services (HHS) needs to reduce beneficiary and provider paperwork when it is practical and feasible, particularly for the Medicare program. Throughout the Committee’s deliberations, it became clear that reducing paperwork would allow more time for direct patient care, permitting improved health care quality and improved patient safety. Data collection efforts have tended to evolve from the circumstances at the time they were implemented, resulting in a patchwork of disparate data instruments and processes. This purpose and context had to be considered before recommending a requirement’s elimination. Consequently, the Committee deliberated the merits of every proposal and only recommends changes that do not detract from HHS efforts to improve quality or refine payment accuracy. Public testimony at regional hearings and written comments were very informative and demonstrate that beneficiaries spend considerable time filling out duplicative paperwork or answering the same questions repeatedly. Nurses, whose time is in great demand due in part to the current shortage, testified they spend more time completing paperwork than providing care. The Committee makes nearly 32 recommendations on ways HHS can reduce paperwork. Its priorities are discussed in detail in this chapter.

Documentation and related activities connect a wide variety of patients, providers, and payers in the health care delivery system. Forms and other required documents often identify the patient’s diagnosis, services provided, procedures performed, and by whom care was delivered, and they are used to estimate providers’ costs for furnishing services and claim payment. The number and complexity of government forms have proliferated as the Medicare program has evolved from its original 1965 design.

The Centers for Medicare & Medicaid Services (CMS) uses data collected from these forms to refine and update payment systems. CMS also requires providers to submit some information beyond what is needed for making accurate payments. Information that the Department collects often is an important resource, offering data regarding medical care practice and outcomes. Some additional data are used for program integrity and other functions, such as assessing and improving quality and research. The Medicare program may require additional documentation to determine if services meet certain medically necessary standards and to determine if another payer should pay for the services. Some information is duplicative or extraneous and is not needed for patient care, payment, or quality management. The collection, transmission, and storage of this unneeded information creates work that does not directly help anyone in the health care system.

A key theme emerged from deliberations and public comments: if data are collected, they should be used for the stated and authorized purpose, be it paying providers appropriately, improving quality of care, or improving plans of care. HHS should eliminate data collection requirements that have no direct use. Routine collection of data for purely academic reasons or undefined future use unreasonably burdens the health care system.

Medicare requires that OASIS, a standardized questionnaire, be used by home health agencies (HHAs) to assess patients’ physical, mental, and social conditions. OASIS was developed 15 years ago for providers to integrate continuous quality improvement into home care. The Omnibus Budget Reconciliation Act of 1987 (OBRA ’87) requires HHAs to evaluate patients and establish plans of care and mandates that Medicare monitor the quality of home care and services with a standardized, reproducible assessment instrument to attain and maintain the highest practicable functional capacity of each individual patient. OASIS started with approximately 300 elements and evolved into 79 core elements.

The Balanced Budget Act of 1997 required CMS to develop and implement a prospective payment system for home health. CMS (previously the Health Care Financing Administration) selected OASIS as the base reporting tool, which now has multiple uses, including payment, quality, and care planning. It is administered at designated intervals and at other major points in a patient’s care cycle (e.g., when a patient begins home care, transfers to a hospital, returns from the hospital, or is discharged from home care). While the Committee received testimony that OASIS and other instruments generate valuable information and provide a thorough patient assessment, it also heard significant concerns about, and some constructive criticism of, OASIS.

Testimony noted that the forms are too long, have too many questions, are required too frequently, and consume too much HHA staff time. In particular, HHA staff members noted that they find it difficult to complete the assessment and enter the data electronically in the allotted time frames. One HHA representative testified that her agency’s nurses require one and a half to two hours to complete the OASIS assessment, time that is not available to provide direct patient care. On average, the provider noted it takes a nurse six months to learn how to administer this assessment proficiently. Once the information is collected, it requires an average of 17 minutes for an experienced person to input the assessment data into the system. The Committee heard that it is difficult for HHAs to submit accurate assessments within the time frame required and that once the data are entered, there often are additional delays before the information is accepted as final. Several witnesses suggested that excessive paperwork was a negative factor in retaining nurses. Finally, the Committee heard suggestions that CMS should streamline the assessment tool itself.

In light of the testimony and public comments to reduce excessive paperwork, the Committee developed recommendations that would preserve the useful and necessary aspects of the OASIS tool, while allowing nursing personnel in HHAs to spend more time providing care.

Recommendation: Change OASIS policies to better reflect actual HHA operations.

• Expand the time for completion of the OASIS instrument, for example, from 5 days to 7 days;

• Change the lock-in time for the OASIS instrument, for example, from 7 days to 14 days. (HHA nurses, especially in rural areas, come to the HHA central office only once a week.)

Recommendation: Ensure that data collection efforts facilitate development of care plans.

• Delete elements that are duplicative or not used for payment (including risk adjustment), quality management, or survey purposes. CMS should particularly scrutinize elements listed in Miami testimony, including MO190, MO340, MO640-680, and MO780.

• Eliminate OASIS encounters that are not used for payment, quality management, or survey purposes.

Recommendation: Adopt a continuous quality improvement process to keep the OASIS tool current with medical practice and changing delivery systems. Establish a scientific and technical advisory panel to guide OASIS use (measure work-ups, interpretation of data quality, interpretation of results, quality reporting, assessment of need for new measures).

Recommendation: Clarify the definition of "significant change." Consider using re-hospitalization as a proxy for "significant change."

The Committee examined the regulatory issues related to the Minimum Data Set (MDS), which specifies patient assessment data that Medicare skilled nursing facilities (SNFs) and Medicaid nursing facilities (NFs) are required to collect. OBRA ’87 requires the use of a comprehensive, accurate, standardized, reproducible assessment of each resident’s functional capacity based on a uniform minimum data set for resident assessment and care planning. Federal regulations specify the content of the MDS, resulting in an eight-page form.

MDS data serve as a basis for the following: (1) Medicare and Medicaid certified nursing homes are required to complete a comprehensive assessment upon admission, a quarterly assessment (a form fewer than eight pages is permitted), and an annual re-assessment; (2) Medicare SNFs are required to complete the MDS at specified intervals for payment purposes, providing the data necessary to adjust payment rates (a three-page form or the eight-page form for assessments on days 5, 14, 30, 60, and 90 of a Medicare SNF stay is required); (3) all States use MDS to meet Federal NF requirements related to patient assessment and care planning; (4) similar to Medicare, some States use MDS to establish Medicaid payments for NF services; (5) CMS extracts MDS data to develop Federal Quality of Care and Quality of Life Measures for use as a source of public information; and (6) CMS uses MDS data to develop other Federal quality indicators for use in its survey process, which also serves as a source of public information.

In conjunction with MDS, facilities complete Resident Assessment Protocols (RAPs) for each patient. Originally designed to improve care planning, the RAPs are intended to provide a road map from the MDS assessment process to the completion of a thorough, interdisciplinary plan of care. Additionally, MDS is required to be automated. Typically, after data are collected on the paper form, facilities enter the information electronically. Any changes in the MDS form require new manuals, forms, and training, as well as consultation with States.

Clinical data often are warehoused. For example, MDS data are transmitted to State Agencies for warehousing, analysis, and, ultimately, redistribution in aggregate form. A number of States have established, or are planning to establish, separate MDS review programs intended to monitor and assess the accuracy of MDS data for program purposes. States that have implemented these programs and systems have testified to their efficiency and resulting improvement in MDS accuracy and compliance.

The Committee received many comments that MDS is an unnecessarily complex process that diverts nursing resources to paperwork compliance and that HHS should streamline the requirements without compromising quality. For example, a nursing home administrator recommended that the shorter, quarterly version of the MDS be used for assessments on patients who are "Medicare-only." The quarterly assessment is shorter than the full MDS, contains all of the requisite data for calculating appropriate payment rates, supports the construction of all quality indicators and quality measures required by CMS, and is used on a quarterly basis by Medicare and Medicaid facilities.

The Committee was pleased to learn that CMS already has taken steps to allow the use of a shorter form to gather information needed for Medicare claims. The full MDS will continue to be administered on day 14, consistent with current law and regulation, but a shorter form may be used on days 5, 30, and 90 of a Medicare SNF stay.

The Committee heard testimony that MDS is outdated. In particular, the RAPs need to be revised to reflect advances in medical technology. Consulting with patient groups, nurses, physicians, reimbursement specialists, and software vendors would enable HHS to update the MDS so it becomes a more clinically relevant, effective, efficient, and user-friendly tool. At a time when a nursing shortage exists in the United States, especially in long-term care settings, the Committee believes that it is inappropriate to divert precious patient care resources to unnecessary paperwork. The Committee recommends that the Secretary consider the following MDS changes:

Recommendation: Clarify with interpretive guidance that the MDS is a source document and does not require supporting documentation to justify coded responses.

Recommendation: Adopt a continuous quality improvement process to keep the MDS tool and the Resident Assessment Instrument (RAI) process current with medical practice and changing delivery systems. Establish a scientific and technical advisory panel to guide MDS use (measure work-ups, interpretation of data quality, and interpretation of results, quality reporting, assessment of need for new measures).

Recommendation: Consolidate the number and timing of all MDS assessments to those required for care planning purposes, to the maximum extent possible. Refine the time frames for MDS assessments so payment and quality cycles coincide and such cycles require the least number of assessments during short periods of time.

Recommendation: Follow the General Accounting Office’s February 2002 recommendation that CMS not establish its own separate review program, distinct from State efforts, to ensure the accuracy of MDS data for payment purposes. Reorient CMS’ proposed MDS accuracy program and confine its monitoring activities to determining the adequacy of each State’s efforts to ensure MDS accuracy and providing guidance and technical assistance to individual States, as needed.

Recommendation: Encourage SNFs certified to participate in Medicare to use the new shorter assessment form (called the Medicare Payment Assessment Form) to update a Medicare beneficiary’s condition on days 5, 14, 30, 60, and 90 of the person’s stay in the nursing home. Maintain the policy that skilled nursing facilities complete the full MDS to assess resident status on admission, annually and upon significant change in resident status thereafter. (Note: the requirement that the admission MDS is to be completed no later than l4 days after the resident’s admission would continue in force.)

Overall, the goal of these recommendations is to preserve the intended use of MDS for formulating assessments, plans of care, and quality measurement. With these changes, clinicians would be afforded the opportunity to focus more on resident care rather than on paperwork. These recommendations keep essential data elements intact for monitoring quality.

"Just in this calendar year, … we underwent a full [State] Department of Health licensing survey. …Next month, a full Joint Commission survey … the Department of Health then comes in [for a revisit]. …That’s a room full of documents that we prepare, and then… they give us 18 pages of information that they want when they come on site, and all of this we’ve done now twice in two months because both the Department of Health and the Joint Commission have deemed status, and many of the regulations overlap. …And then to top it all off, last week we were ‘fortunate’ enough to be chosen for a focused Medicare audit that the Department of Health performed on Medicare’s behalf to validate the Joint Commission survey that we had that was a month after the Department of Health survey that surveyed exactly the same information." – Elizabeth Concordia, President and CEO of UPMC Presbyterian and Shadyside, testifying at the Pittsburgh regional hearing

The Federal government is responsible for ensuring that its expenditures are prudent, and it plays an important role in protecting the health and well being of the nation’s most vulnerable populations. Federal law requires that all facilities seeking participation in Medicare and Medicaid undergo an inspection when they initially enter the program and on a regular basis thereafter. CMS contracts with survey agencies in 54 States and territories to inspect participating providers and to determine their compliance with specific Federal health, safety, and quality standards.

The Committee heard testimony on the need for greater coordination between State and Federal agencies on programs that serve individuals who are dually eligible for Medicare and Medicaid. The Program for All-Inclusive Care for the Elderly (PACE) is an example of a program that seeks to better coordinate care for these beneficiaries. PACE aims to provide a better continuum of care, but in doing so, often straddles established provider types. This subjects PACE facilities to multiple reviews and sometimes conflicting requirements. Established PACE programs recommended reviewing duplicative regulations on combination providers and allowing more flexible hiring rules.⁴

It became clear that there are opportunities to modify and better coordinate duplicative Federal and State requirements that deflect resources from patient care.

Recommendation: Establish a task force to address specific issues related to current practices, whereby a single provider or health plan may be reviewed/surveyed/audited by numerous State and Federal entities (especially those under the auspices of the HHS Secretary), none of which is required to be coordinated. The task force should address regulatory oversight. It should be established no later than December 31, 2002, and it should have a six-month time frame for recommendations to be submitted.⁵

In making these recommendations, the Committee seeks to eliminate duplicative reviews, reduce paperwork burden, and free the resources that would otherwise be devoted to these activities for patient care and quality improvement.