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

Prologue

Secretary's Advisory Committee on Regulatory Reform Members

Acknowledgments

Executive Summary

Chapter 1. The Impact of Regulation on Access to Care

Chapter 2. Reducing Paperwork Burden

Chapter 3. Improving Communication

Chapter 4. Increasing Flexibility

Chapter 5. 21st Century Federal Health Care Programs,
Electronic Reporting, and Privacy

Long Term Vision

Appendices:

A. Committee Organization

B. Master List of Adopted Recommendations

C. Unfinished Business

D. Committee Charter

E. Acronyms Used in This Report

Endnotes

 

 

THE SECRETARY OF HEALTH AND HUMAN SERVICES
Washington, DC 20201

 

November 21, 2002

 

 

TO: MEMBERS OF THE ADVISORY COMMITTEE ON REGULATORY REFORM

President Bush and I share the view that Federal regulations must be crafted to ensure that, in an effort to protect public health and safety, we do not act in ways to create burdens that interfere with the fundamental objective of our programs – access to high quality health care.

With this in mind, I established the Secretary’s advisory Committee on Regulatory Reform and asked you, its members, to review major areas of my Department’s current regulations. I selected you for this task because you each bring a special expertise to the table, and I hope that you would complement each other by providing a wide spectrum of perspectives.

Your report to me, containing over 250 specific recommendations, certainly meets my expectations for thoroughness and validates my expectations of how you would work with collegiality, purpose and energy. Many of your recommendations focus on changes designed to bring new approaches to health care delivery, address vexing health-related problems, and reduce impediments to delivery high quality health care to the public.

Because of the significance of your endeavor, I asked senior officials in my Department not to wait for your final report to take action on recommendations that deserved immediate attention. I am pleased to say that many of your recommendations have not only been considered, but have in fact already been implemented. Of course, all of your recommendations will be assessed carefully and expeditiously.

Thank you for your time and dedication to this effort. You will definitely see the fruits of your labors, and I am certain you will take pride in what you have done for this Administration and for all American health consumers.

Tommy G. Thompson

 

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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

 

Douglas L. Wood, M.D., Chair
Vice-Chair, Department of Medicine
Consultant in Cardiovascular Diseases
Mayo Clinic
Rochester, MN

 

Jeff Bloom
AIDS Patient Advocate
Board of Directors
The Title II Community AIDS National Network
Washington, DC

G. Kristin Crosby, M.D.
Vice President and Chief Medical Officer
Olympic Health Management Systems, Inc.
Chief Medical Officer
Sterling Life Insurance Company
Bellingham, WA

Bruce D. Cummings
President and Chief Executive Officer
Olean General Hospital
Olean, NY

Gary C. Dennis, M.D.
Chief of Neurosurgery
Howard University Hospital
Washington, DC

Susan Desmond-Hellmann, M.D.
Executive Vice President and Chief Medical Officer
Genentech
South San Francisco, CA

Ronald W. Dollens
President and Chief Executive Officer
Guidant Corporation
Indianapolis, IN

Stephen H. Martin
Senator
11th District of Virginia
Chesterfield, VA

Gary S. Mendoza
Principal
Riordan & McKinzie
Los Angeles, CA

Nancy H. Nielsen, M.D., Ph.D.
Vice Speaker of the House of Delegates
American Medical Association,
Assistant Dean
University of Buffalo School of Medicine
Buffalo, NY

Erik D. Olsen
Member, Board of Directors
AARP
Glenbrook, NV

Suzanne R. Pattee, J.D.
Vice President of Public Policy and Patient Affairs
Cystic Fibrosis Foundation
Bethesda, MD

Gary B. Redding, C.P.A.
Commissioner
Georgia Department of Community Health
Atlanta, GA

Jack A. Rovner
Attorney
Michael Best & Friedrich, LLC
Chicago, IL

Kern Wildenthal, M.D., Ph.D.
President
The University of Texas Southwestern
Medical Center at Dallas
Dallas, TX

Ex Officio
Margaret P. Sparr, M.S.Ed., M.P.A.
Executive Coordinator
Secretary's Advisory Committee on
Regulatory Reform
Washington, DC

Michele M. Evink M.S., R.Ph.
Director of Pharmacy Services
Clarke County Hospital
Osceola, IA

Eugene Anthony Fay
Vice President of Government Affairs
Province Healthcare Company
Brentwood, TN

John J. Finan, Jr.
President and Chief Executive Officer
Franciscan Missionaries of Our Lady Health System, Inc
Baton Rouge, LA

Lisa K. Gigliotti, J.D.
Human Services Policy Coordinator
Office of Governor John Engler
Lansing, MI

Thomas R. Hefty
Chairman and Chief Executive Officer
Cobalt Corporation
West Allis, WI

Heidi S. Margulis
Senior Vice President of Government Relations
Humana Inc.
Louisville, KY

Mary M. Martin
The Seniors Coalition
Crofton, MD

Judith A. Ryan, Ph.D.
President and Chief Executive Officer
The Evangelical Lutheran Good
Samaritan Society
Sioux Falls, SD

Leonard D. Schaeffer
Chairman and Chief Executive Officer
WellPoint Health Networks, Inc.
Thousand Oaks, CA

Patricia Osborne Shafer, R.N., M.N.
Chair, Professional Advisory Board
Member, Board of Directors
Epilepsy Foundation,
Epilepsy Nurse Specialist
Beth Israel Deaconess Medical Center
Boston, MA

Judith G. Sutherland
President and Chief Executive Officer
Visiting Nurse Corporation of Colorado
Denver, CO

William Toby, Jr., M.S.W., M.P.A.
President,
Toby and Associates Health Care
Consulting, Inc.
Rockville Center, NY

Karen B. Utterback, R.N., M.S.
Vice President of Operations
South Mississippi Home Health, Inc.
Hattiesburg, MS

Patricia McDade Walden, N.H.A.
Executive Vice President
Bradley Health Care, Inc.
Southington, CT

 

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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.

 

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EMERGENCY CARE AND EMTALA

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.)

 

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RURAL HEALTH CARE

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.

 

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A BENEFICIARY-CENTERED SYSTEM

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 SAFE MEDICAL PRODUCTS AND RELATED INFORMATION

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.

 

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DUAL ELIGIBILITY FOR MEDICARE AND MEDICAID

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.

 

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Master List of SACRR Committee Recommendations

Chapter 1

An asterisk [* ] next to the number of a recommendation indicates that legislative action may be required in order for the Department to implement the Committee’s recommendation. See Appendix B. 

Number

Adopted Recommendations

Full Committee Action

17

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.

Adopted 
May 2002, 
with dissent from 
Mr. Martin

18

Issue immediate interpretive guidance that use of community-based Emergency Medical Service (EMS) protocols, including established 911 protocols, is not a violation of the Emergency Medical Treatment and Active Labor Act (EMTALA).

Adopted 
May 2002

19*

Exclude from the purview of EMTALA, patients who are referred to the emergency department for diagnostic or scheduled therapeutic services, unless the diagnosis is part of the EMTALA-required screening or the treatment is part of the EMTALA-required stabilization.

Adopted 
May 2002

20*

Resolve the Medicare coverage issues underlying the need for advanced beneficiary notices (ABNs) to have to be provided in the emergency room. Consider waiving the requirement for ABNs and the associated denial of coverage in emergency room and other urgent care settings.

Adopted 
May 2002

21*

Issue interpretive guidance that EMTALA does not apply:

  • In the event of an attack involving multiple casualties and where hospitals use an established disaster plan.
  • In the event of bioterrorism, or the threat of bioterrorism, to those hospitals directly affected and where hospitals follow a community-based, regional or Centers for Disease Control and Prevention (CDC)-directed protocol (especially for highly contagious outbreaks, like smallpox).

Adopted 
May 2002

22

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, Centers for Medicare & Medicaid Services (CMS) guidance should provide an explanation as to whether there is a recommended threshold for the application of EMTALA as it relates to the number of specialists and type of specialists on staff who are 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).

Adopted 
May 2002

23

Require that hospitals be notified when EMTALA investigations are completed, regardless of the outcome.

Adopted 
May 2002

24

Make Quality Improvement Organization (QIO) review mandatory early in the process and improve training of regional offices and State Agencies to improve performance and consistency of review of complaints. (CMS’ Atlanta Regional Office procedures should be used as a model.)

Adopted 
May 2002

110*

Consolidate existing definitions of "rural" into one communicable definition. (Currently "rural" can mean one thing for a hospital and another for a rural health clinic.)

Adopted 
June 2002

111

Disaggregate data describing rural health care delivery from data describing urban health care delivery to ensure accurate representation of resources and expenses for the purposes of rule-making and rate-setting.

Adopted 
June 2002

112

Eliminate the ceiling regarding the maximum number of surgeries a rural hospital can perform in order to bill Part A for Certified Registered Nurse Anesthetist (CRNA) services instead of Part B, to eliminate the burden of having to get Part B provider numbers for rural CRNAs.

Adopted 
June 2002

113*

Establish a Part A fee schedule for CRNA services. (This schedule could be used to reimburse rural hospitals in lieu of the pass-through cost of CRNA services.)

Adopted 
June 2002

114

Allow hospitals, skilled nursing facilities, and other affected entities to file an annual, renewable, three-year, geographic, reclassification application. Consult with the Office of General Counsel and industry legal experts to determine if the Medicare, Medicaid and SCHIP Benefits Improvement and Protection Act of 2000 does indeed permit the filing of renewable, three-year, geographic, reclassification applications. Accept the first renewable application by September 1, 2003, if it is determined that three-year, renewable, geographic, reclassification applications are permitted by statute.2

Adopted 
June 2002

115*

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.

Adopted 
June 2002

116

Develop a pilot certification survey process for Critical Access Hospitals (CAHs) that would entail a single survey to examine all aspects of a hospital’s operations and allied health services.

Adopted 
June 2002

117*

Develop a legislative proposal with Congress for a single certification survey process for all providers of rural health services, including hospitals, skilled nursing facilities, home health agencies, rural health clinics, community health centers, etc., based on the results of the single survey process for CAHs.

Adopted 
June 2002

118

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.

Adopted 
June 2002

119*

Develop a legislative proposal with Congress to address the current fragmented approach to rural Medicare payment policy (e.g., Sole Community Hospitals, CAHs, 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.

Adopted 
June 2002

126

Clarify the policy that in the event that a Medicare+Choice Organization (M+CO) becomes insolvent, and can no longer pay the provider network, the beneficiary is still responsible for any pre-determined obligations (e.g., co-pays, etc.) but should not be balance-billed for any unpaid services beyond that obligation.

Adopted 
June 2002

131

Define limits of EMTALA by clarifying that EMTALA requirements end when a qualified medical person has made a decision:

  • that no emergency exists;
  • that an emergency exists and the patient is stabilized;
  • 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
  • that an emergency exists and an unstable patient (who) is admitted to the hospital has been stabilized.

Adopted 
June 2002

132

Create an Emergency Services Cooperative Project that would follow the format of the Diabetes and Cardiovascular Quality Improvement Project. This should be developed and implemented with a scientific and technical advisory board of emergency physicians, hospitals, first responders, emergency transportation specialists, consumers and other advisers. This group should also guide development of future regulations that would assure availability of effective emergency services in all parts of the country. This group would include on-call physicians (medical and surgical specialists who provide care for emergencies) as part of the scientific and technical advisory board for the Emergency Services Cooperative Project. In the future, this group should take on thorny issues such as reimbursement mechanisms for EMTALA-related services when patients don’t have insurance; foster appropriate consultation with and involvement by QIOs; appropriate due process for hospitals and health care professionals before CMS can issue a public notice of termination and proceed with a termination letter.

Adopted 
June 2002

133

Clarify the "prudent layperson" concept as per the EMTALA Notice of Proposed Rulemaking (NPRM) as follows:

  • The term "prudent" has a commonly understood meaning, and we would refer the reader to the general dictionary definition to this term.
  • A "layperson" refers to an individual with an average knowledge of health and medicine, as the definition of "emergency medical condition" states.

Adopted 
June 2002

159

Intensify outreach efforts to educate rural health clinics and providers about the specific programs that focus on rural communities and invest in rural "best practices." Develop a rural health care section on relevant HHS websites for providers that will include all appropriate resources, technical and financial assistance programs, and best practice models for rural communities.

Adopted 
June 2002

164

Exclude from Medicare local medical review policies (LMRPs) those diagnostic services ordered by a qualified medical professional when medically necessary pursuant to satisfying the hospital’s EMTALA obligations; and require fiscal intermediaries (FIs) and carriers to pay for diagnostic services when ordered and provided in connection with satisfying the hospital’s EMTALA obligation.

Adopted 
June 2002

192

Convene by September 1, 2002, with recommendations by July 1, 2003, and have a pilot ready to implement by September 1, 2003, an interagency working group consisting of CMS, State Medicaid Directors, and the Social Security Administration (SSA) to work on an improved system for timely and accurate identification, enrollment, and notification of dual eligibles.3

Adopted 
June 2002

193*

Identify the best practices of States that have been most successful in identifying and enrolling dual eligible beneficiaries (QMBs, SLMBs, QI-1s, QI-2s), including through electronic data matches, and encourage through incentives, use of those best practices in other States that are not as successful. Develop pilot studies and other demonstrations of innovative methods to integrate Medicare and Medicaid data on a near real-time basis, so that States could be provided continuous ability to access and analyze their dual eligibility data on a command basis.

Adopted 
June 2002

194

Institute in those 15 States where there is no electronic information exchange to identify dual eligibles, data match agreements between the State, and CMS and/or SSA. Until those data match agreements have been operationalized, develop or refine interim working agreements between States and CMS and/or SSA to ensure timely notification about dual eligibility and enrollment. Work to continuously improve the quality and accuracy of the Medicaid eligibility data States bring to CMS and/or SSA for new and existing electronic information exchanges to identify and enroll dual eligibles.

Adopted 
June 2002

195

Determine what barriers exist to State Medicaid Agencies complying with Federal timelines for enrolling qualified Medicare beneficiaries into premium assistance programs, and seek remedies (e.g., best practices for technical problems, information technology improvements, etc.) to remove those barriers. (The timelines apply only after an individual has filed an application through the State Medicaid Agency.)

Adopted 
June 2002

196

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.

Adopted 
June 2002

197*

Look at States that have enacted a single enrollment form for all eligible programs such as the District of Columbia. Develop a simplified, model, "one-stop-shop" application form that constitutes a formal beneficiary enrollment into all eligible Federal/State entitlement or assistance programs (for example, Medicaid, food stamps, Women, Infants and Children (WIC), housing, etc.). To the maximum extent possible, work with relevant agencies to standardize the form in order to develop an electronic enrollment process. Immediately have HHS look at those State programs that are most successful in enrolling dual eligible beneficiaries into all eligible Federal/State entitlement or assistance programs (especially those programs under the auspices of the Secretary of HHS).

Adopted 
June 2002

198

Determine if States provide assistance to individuals who require assistance to complete beneficiary enrollment applications for Federal/State entitlement or assistance programs, consistent with applicable Federal, State and local laws, requirements, and established policies, including but not limited to those regarding individuals with Limited English Proficiency (LEP) and the Americans with Disabilities Act. Work with States to eliminate any technical barriers they may encounter to meeting those requirements and share best practices that demonstrate effective methods of doing so.

Adopted 
June 2002

219

Develop a database for practitioners, patients, and caregivers to help prevent known potential adverse interactions between and among drugs, foods and dietary supplements. Once a patient, caregiver, or any medical professional enters a patient’s complete drug regimen into this database, the program would alert the patient to the level of risk and/or benefit of any known potential interactions. (For this recommendation, the term "drug" includes prescription and over-the-counter medications, and the term "dietary supplements" include but are not exclusive to herbal and nutritional supplements. An existing example can be found on the web at www.aidsmeds.com.)

Adopted 
June 2002; 
Re-adopted 
September 2002

220

Publicize the user-friendly, drug-food-dietary supplement interactions database to mitigate any increases in health care costs due to adverse events. (For this recommendation, the term "drug" includes prescription and over-the-counter medications, and the term "dietary supplements" include but are not exclusive to herbal and nutritional supplements.)

Adopted 
June 2002; 
Re-adopted 
September 2002

221

Immediately launch an educational and information campaign to educate patients and all health care professionals about the MedWatch system (an adverse event reporting system operated by the FDA) to increase the reporting of adverse events until an improved, automatic information technology system is established.

Adopted 
June 2002

223

Use the Centers for Education and Research on Therapeutics (CERTs) for collection of adverse event information from all health care providers, both public and private. Use CERTs to develop a central repository of drug adverse event reports from all health care providers. CERTs should conduct Phase IV Trials when, in consultation with the FDA, it has been decided that a Phase IV Trial may be necessary to answer new questions that arise from newly reported adverse events.

Adopted 
June 2002

234

Promote the broadest dissemination of the "Best Pharmaceuticals for Children Act" mandate for a 1-800-Toll-Free number for reporting of adverse drug events when promulgating a final rule under P.L. 107-109. The toll-free number should appear in an easily identifiable location. The Committee also recommends that manufacturers voluntarily begin placing this number on unit of use or ready-to-dispense prescription packages to minimize the impact on pharmacy.

Adopted 
September 2002

235

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, information presentation and standardized definitions (and measurements).

Adopted 
September 2002

238*

Shift from doing name safety testing, in most cases, to reviewing data from sponsors who follow protocols designed to evaluate the potential for look-alike and sound-alike errors with generic and proprietary names prior to approval of FDA-regulated drugs. Use information gathered from the name safety research to improve patient safety by minimizing post-marketing medication errors linked to name similarity and practitioner confusion.

Adopted 
September 2002

239

Encourage all relevant parties (FDA, other HHS agencies, consumer groups, industry, and pharmacy groups) to issue educational materials on the reporting of adverse events targeted to the patient and health care provider audiences. Such materials should be designed to encourage reporting of appropriate adverse events by patients and health care providers.

Adopted 
September 2002

240*

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

Adopted 
September 2002

246*

Add information on clinical trials for devices (IDEs) 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.

Adopted 
September 2002

247

Develop separate MedWatch forms for pharmaceutical products and medical devices.

Adopted 
September 2002

 

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CHAPTER 2

Reducing Paperwork Burden

"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.

 

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OUTCOME AND ASSESSMENT INFORMATION SET (OASIS)

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."

 

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MINIMUM DATA SET (MDS)

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.

 

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STATE/FEDERAL COORDINATION

"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.

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Master List of SACRR Committee Recommendations

Chapter 2

An asterisk [* ] next to the number of a recommendation indicates that legislative action may be required in order for the Department to implement the Committee’s recommendation. See Appendix B. 

Number

Adopted Recommendations

Full Committee
 Action

32

Develop shorter versions of the Minimum Data Set (MDS) (e.g., one of the quarterly assessments forms) for Medicare and Medicaid resident assessment, to the maximum extent possible. Define the specific uses of any data elements prior to retaining any element on the form as part of an overall streamlining process. Delete or revise all MDS data elements whose reliability is below generally accepted statistical standards.

Adopted 
May 2002

33

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

Adopted 
May 2002

34

Automate the Resident Assessment Protocols (RAPs) process at the facility level to free up more time to meet patient care needs.

Adopted 
May 2002

35

Update the Coverage Manual relevant to Medicare Part A (e.g., who can be covered, authorized benefit periods, breaking the spell of illness, and other administrative issues).

Adopted 
May 2002

36

Integrate updates of the MDS Manual and Resident Assessment (RAI) User Guide and documentation into one manual, distribute the updated guide as soon as possible, and keep the one manual up-to-date. Revise the current manual to incorporate all interpretive guidance and answers to frequently asked questions. Keep a downloadable, up-to-date manual available on the CMS website and publish an annual print edition each year on a set date which incorporates all life-to-date regulation and guidance. Post quarterly updates on interpretive guidance to the CMS website.

Adopted 
May 2002

37

Continue to develop the MDS 3.0, which will include an analysis of the clinical relevancy of its contents and the capability to capture short stay assessment data, with an expected release date of 2004.

Adopted 
May 2002

38

Adopt a continuous quality improvement process to keep the MDS tool and the 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).

Adopted 
May 2002

39

Give providers joint property rights to any data submitted as part of the MDS process. (This will allow the provider to access backup copies and may reduce the need for providers to warehouse redundant manual versions of the data.)

Adopted 
May 2002

40

Develop facility-specific analytic reports that allow facilities to compare their own performance in relation to local, regional and national trends. Develop reports and other tools to share aggregate data with all persons.

Adopted 
May 2002

41

Shorten the interval from when MDS data were originally collected to when the reports of those data are made public. The older the data are, the less relevant the application and inferences to be drawn from those data.

Adopted 
May 2002

43

Eliminate data elements that are not used for payment, quality measurement, or survey purposes for those resident assessments performed solely for the purpose of complying with Medicare payment requirements.

Adopted 
May 2002

44

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

Adopted 
May 2002

52

Seek greater partnerships and outreach to the full continuum of academic medical, nursing, and other allied health care training programs in order to expose all health care professionals (not just specialists) to the value of training in gerontology and participation in interdisciplinary teams, and to the utility of clinical patient care data sets in the process of care planning.

Adopted 
May 2002

54

Change the Outcome and Assessment Information Set (OASIS) policies to better reflect actual home health agency (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. (For example, HHA nurses, especially in rural areas, come to the HHA central office only once a week.)

Adopted 
May 2002

55

Eliminate separate form for significant change in condition when it occurs in the 5-day window of the follow-up assessment.

Adopted 
May 2002

56

Create the option to use one OASIS form for all situations of care or change in status.

Adopted 
May 2002

59

Ensure that data collection efforts facilitate development of care plan.

  • 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.

Adopted 
May 2002

61

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).

Adopted 
May 2002

63

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

Adopted 
May 2002

64

Conduct an independent evaluation of the cost-benefit of using the OASIS form.

Adopted 
May 2002

66*

Seek legislation that would require all insurance companies and other government payers to recognize the validity of the Medicare enrollment process and prohibit them from developing their own processes. (For provider enrollment.)

Adopted 
May 2002

71

Eliminate forms HCFA 1513 and HCFA 1514.

Adopted 
May 2002

72

Incorporate form HCFA 2572 into CMS 855.

Adopted 
May 2002

76

Issue clear directions to carriers and State Agencies (SAs) that observations made on the MDS, OASIS, and other HHS-approved survey instruments do not require redundant manual documentation to support the observations.

Adopted 
May 2002

79

Adopt protocols for joint ownership of data, thus eliminating the need for manual backup copies of data.

Adopted 
May 2002

80

Establish a task force funded 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 Secretary of HHS), none of which are required to be coordinated. The task force should also address regulatory oversight. The task force will be established no later than December 31, 2002 and it will have a six-month time frame for recommendations to be submitted.6

Adopted 
May 2002

99

CMS should eliminate the Evaluation & Management (E&M) documentation guidelines.

Adopted 
May 2002, 
with dissent 
from Dr. Olsen

100

Encourage skilled nursing facilities (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 SNFs 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.)

Adopted 
June 2002

101

Consider the efficacy of making the collection of OASIS mandatory for Medicare patients only.

Adopted 
June 2002 
with dissent 
from 
Mr. Bloom
Mr. Fay, and
Dr.Olsen,  

102*

Establish incentives to encourage State Medicaid programs to discontinue requiring forms HCFA 1513, HCFA 1514, HCFA 1561, HCFA 2572 and other forms no longer used by CMS.

Adopted 
June 2002

108

Follow the GAO’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.

Adopted 
June 2002

214*

Issue a Notice of Proposed Rulemaking (NPRM) modifying the enforcement regulation in order to defer the ability of the SA to suspend a facility’s nurse aide training programs pending the final results of an appeal; implement the final rule issue required instructional guidance; and provide training to ROs, States, and providers.

Adopted 
June 2002

217

Issue an NPRM modifying 42 CFR § 488.318(b)(2) so that when inadequate survey performance (e.g., "failure to cite only valid deficiencies, failure to use Federal standards, protocols, and the forms, methods, procedures, policies, and systems as specified by [CMS]…") is demonstrated/established to have contributed to the citation of a deficiency, that the CMS Regional Office or SA must conduct follow-up (including on-site investigation, if necessary) to validate the presence of the deficiency, if a corresponding remedy is to be applied. Implement the final rule; and require CMS to monitor its application.

Adopted 
June 2002

230

Issue immediately a written statement that "Medicare hospice providers must recognize the individual’s right to self-determination at the end of life and hospice staff should be prepared to provide CPR for hospice patients that request to be resuscitated or do not have a DNR or advance directive."

Adopted
September 2002

245

Encourage electronic submission of applications to market new FDA-regulated products, including all relevant information that can be furnished electronically.

Adopted
September 2002

 

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CHAPTER 3

IMPROVING COMMUNICATION

"Our hope and prayer to the people at CMS (the Centers of Medicare & Medicaid Services) is that you do nothing to weaken the good regulations, that you improve them wherever you can; but certainly we don't want you to weaken them or take them away." – Frances Klafter, age 93, National Senior Citizens Law Center. Public Comment during Minnesota Hearing.

In this chapter, the Committee highlights another major finding relevant to regulatory reform; because of fundamental barriers in the Department’s delivery of information, the misinterpretation of the requirements by its agents, or other basic communication failures, the meaning and purpose of rules get lost in the translation. Better communication is key to easing regulatory burden.

Many problems brought before the Committee are linked in one way or another to the complexity of regulations facing patients and providers that require additional documents and guidance for implementing the provisions. Compounding this problem, consumers and providers alike often do not know where to get needed information. For example, the Government Accounting Office (GAO) reported in September 2001 that information available from Medicare contractors is not always complete or clear. Answers to specific questions are perceived as inadequate, response to feedback is uneven, and complaints about an unfriendly, even hostile, tone in communications are too common.

Problems are inevitable when people are expected to comply with rules they do not understand. The Emergency Medical Treatment and Active Labor Act (EMTALA) regulations, intended to ensure that patients seeking treatment in hospital emergency rooms receive appropriate screening and care, are a primary example. Complex regulations and uneven enforcement have led to widespread confusion over what the regulations actually require. This confusion in turn has caused resentment and controversy over a regulation that provides an important consumer protection—to provide access to emergency care.

"I’ve wondered since 1993, when I first started as a SHIP (State Health Insurance Assistance Program) advisor, why CMS doesn’t approach the military for technical writing? If they, which they do, write documents for 18-year-olds to use in repairing jet engines…then they could certainly help CMS." – E.M. Kevan, volunteer counselor at the Area Agency on Aging – Region One, Inc., written comments submitted at the Phoenix regional hearing

In the past few years, the Department of Health and Human Services (HHS) has begun to address the often unintelligible quality of its communications with consumers, physicians, providers, and health plans. In some areas, such as educational materials for Medicare beneficiaries, these improvement efforts are substantial and are beginning to achieve significant results. In many other areas, progress is much less evident.

Eighty-three of the Committee’s 255 recommendations urge HHS to improve communications. Some recommendations are broad and others highly specific, but the overall message is clear: HHS and its contractors must speak more clearly, listen more closely, and respond more fully in its communications with consumers and providers.

The Committee urges HHS to develop comprehensive strategies to improve communications overall, to improve access to information, and to improve the quality of that information for consumers and providers. Because consumers and providers are very different audiences, the Committee has developed different priorities and specific recommendations for improving communications with each.

 

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CONSUMER COMMUNICATIONS

Consumers’ information needs vary widely. The Committee heard testimony regarding the necessity of targeting information to meet the specific needs of a variety of populations. Making materials as simple as possible and testing them to make sure they are understandable to the people who need them is key. Special efforts are needed for those who use a different language or have a different cultural background or cognitive skills. Information and assistance must be made available in the right places at the right times. For consumers, the Committee’s highest priority recommendations focus on the Medicare program and fall into three key areas—comprehensive planning, better access to clear information, and counseling and community partnerships.

Comprehensive planning. The following recommendation identifies consumer communications as a priority for the Medicare program:

Recommendation: Develop, fund, and implement a comprehensive, ongoing communications plan that will be coordinated among HHS, CMS and its contractors, as recommended by HHS’ Advisory Panel on Medicare Education. Aggressively try to reach specific segments of the audience using appropriate channels, including radio, TV, 1-800-MEDICARE, web and print media, as well as other strategies supported by research results.

Better access to clear information. Medicare beneficiaries, and those who assist them, often are confused by various agencies, offices, and phone numbers provided to individuals seeking assistance. Obtaining or understanding the information can be particularly difficult for first-time enrollees. The Committee heard that information provided by the Medicare Compare website and the 1-800-MEDICARE service should be improved. The Committee encourages the Secretary to take specific steps to improve access to information. The Committee urges that the Medicare & You Handbook, produced by CMS, encourage Medicare beneficiaries to use the 1-800-MEDICARE number; that information provided through the 1-800-MEDICARE number for new enrollees should be reviewed; and that an easy-to-locate reminder be provided for Medicare beneficiaries.

Recommendation: Add the 1-800-MEDICARE phone number and www.medicare.gov website address to beneficiaries’ Medicare cards.

The complexity of Medicare program rules and benefits often confuses seniors and people with disabilities and makes it difficult for them to navigate the program. Recent flux in the Medicare+Choice (M+C) program, for example, has concerned beneficiaries who have been forced to adhere to a series of confusing rules in order to switch health plans. There are many opportunities for the Department to make materials easier to use and understand. The Committee urges HHS to simplify forms, use plain language, and test materials at grade levels lower than its current practice. HHS should evaluate and promote improvements, such as forms that allow people to enroll in more than one assistance program at the same time with one application for all programs, perhaps starting with those under the Secretary’s purview, recognizing that this effort will require the cooperation of State and territorial governments. Further, assistance completing applications should be provided for those who need it, and websites that help consumers choose health plans and nursing homes should be improved.

Recommendation: Simplify beneficiary forms, use plain language in forms, and use peer focus groups to rigorously retest the clarity of communication on an ongoing basis. Test the effectiveness of targeting communications literacy to the fourth grade level. (Currently, Medicare policy targets a sixth grade literacy level.)

Recommendation: Simplify the Medicare application using plain language and encourage States to develop their own simplified, universal application for Medicaid and other services.

There also are problems with advance beneficiary notices (ABNs). When a provider is unsure whether a specific service is covered by Medicare, and the provider wishes to bill the patient for that service, the provider must provide and ask beneficiaries to sign an ABN. The process underlying the need for ABNs should be simplified. More efforts generally should be made to minimize uncertainty as to whether services are covered. Ideally, Medicare should provide its beneficiaries with prior determinations of coverage.

Finally, revisions intended to improve materials must themselves be continually reviewed to ensure they are as effective as possible.

Counseling and community partnership. With thousands of agencies and programs having an impact on Americans in each State, county, and territory, individuals seeking HHS services often find it difficult to navigate the system to find the appropriate program or service. There are significant communications challenges. In particular, individuals eligible for both Medicare and Medicaid may not be aware of services provided by both programs. Some Medicare beneficiaries with low incomes may be entitled to Medicaid coverage that pays for their prescription drugs and all of their Medicare cost-sharing requirements. Others may qualify for more limited Medicaid coverage.

Although some individuals may be concerned about the perceived stigma associated with enrolling in any low-income assistance program and are therefore reluctant to enroll, many face significant barriers to accessing necessary information to make informed choices. In fact, large numbers of Medicare beneficiaries are eligible for Medicaid but are not enrolled. The Committee urges HHS to work with States to improve education materials for dually eligible individuals, to better identify dually eligible individuals for purposes of enrollment, and to maximize computerized information systems and best practices for identifying dually eligible beneficiaries. The Committee also believes that community-based organizations could provide assistance to beneficiaries who have language barriers, as well as hard-to-reach eligible populations.

SHIPs are State programs that receive grants from the Federal government to give free health insurance counseling and assistance to people with Medicare. SHIPs train counselors to work with seniors and individuals with disabilities by answering questions and helping beneficiaries and their families navigate through the Medicare bureaucracy. The Committee examined SHIPs’ efforts and believes HHS could improve effectiveness by better integrating them into other beneficiary outreach activities.

Recommendation: Improve the accuracy and effectiveness of beneficiary counseling and assistance programs (e.g., SHIPs) by fully integrating them into regional and local outreach activities and by providing consistent training to these programs. Training programs should be based on national standards with implementation tailored to community needs.

 

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PROVIDER COMMUNICATIONS

Commenters noted that HHS should improve its communications with practitioners, providers, and health plans. Their needs are different from those of consumers. Providers often need highly specific and technical information. Each provider group has unique needs, and there are wide variations in the degree of sophistication and the amount of resources they can devote to understanding and implementing government rules and regulations. For example, a major urban teaching hospital or chain of facilities may have special, dedicated compliance officers and other resources to help them understand and comply with regulations that a rural community hospital or small supplier cannot afford. Also, many of the actions needed to improve provider communications involve the fiscal intermediaries and carriers with which Medicare contracts to process claims and educate providers, as well as Medicare beneficiaries. These two audiences may compete for available educational resources.

Accountability and collegiality. To emphasize basic fairness and accountability, the Committee recommends that HHS require its Medicare contractors to report the specific reason when they refuse to pay a claim. For example, contractors should not merely say a service is "not medically necessary"; rather, they should state the basis for such a conclusion.

Recommendation: Require Carriers and fiscal intermediaries to report the specific reasons for their denial of claims in plain language, explain what additional information is needed, and reference the specific regulation, policy memorandum, or local medical review policy (LMRP) upon which the denial was based. Appeals to decisions should be reviewed and responded to within 45 days.

This is one of several Committee recommendations urging HHS and Medicare contractors to be more accountable. For example, the Committee discussed instances when a contractor gave a provider incorrect advice on how to file a claim and then denied the claim. This led to further discussions about long delays that occur in appealing claims determinations. Consequently, the Committee urges HHS to reduce these delays. Similarly, under current practice, if a skilled nursing facility (SNF) does not complete the Minimum Data Set (MDS) in the required timeframe, the provider is penalized by receipt of a lower (default) payment while the claim is decided. The Committee heard that these delays are significant for SNFs (paid under the Resource Utilization Group, or RUG, system) and believes that HHS should issue clear and reasonable rules for submission of the MDS and other instruments so providers are not penalized for legitimate delays in completing the assessment.

Recommendation: Establish an appeal process for default RUG payments with a specified time frame for the appeal. Establish clear and reasonable rules concerning submission of the MDS instrument so providers are not penalized with default RUG payments for legitimate, minor delays in completing an MDS assessment.

Public commenters said the tone of HHS program information issued by Medicare contractors does not consistently convey that providers are colleagues and partners in Medicare’s health care delivery system. The Committee believes all communications must be clear, concise, and collegial in tone. Contractors should collaborate with providers to address systemic and emerging problems and should assume problems are honest errors best dealt with through targeted education, unless there is clear evidence to suggest intentional wrongdoing. HHS should offer more assistance in helping providers learn how to comply with regulations by surveying providers on best practices for complying with regulations and by publishing results for all to see and use.

The Committee also urges HHS to share more information with providers on how systems and policy development processes work. Specific examples include M+C risk adjustment methodology, and validity data on the Outcome and Assessment Information Set (OASIS) home health patient assessment form questions. HHS should publicize more widely information about workshops and other opportunities for providers to get training on how to comply with regulations.

Need for consistency and accuracy. Another recommendation for provider communications is to eliminate the practice of individual contractors and CMS regional offices (ROs) rewriting instructions and guidance for providers from CMS headquarters. This is considered a key source of the inconsistency and confusion in Medicare policy that so frustrates providers. Contractors and ROs should rewrite information only when unique local conditions require it.

Recommendation: Eliminate the practice of having contractors and ROs rewrite materials from CMS’ central office (CO), allowing exceptions only when required by unique local conditions.

Achieving consistent and centralized information is a common goal of many Committee recommendations. There are several additional opportunities for improvements, including the following:

The Committee also finds that there are opportunities to increase consistency between HHS and State agencies’ protocols and policy interpretations (such as those regarding the Medicaid program) and surveys of facilities to ensure compliance with regulations. For example, HHS should use less subjective language for phrases in policy interpretations that historically lead to confusion by the provider community, such as "repeat deficiencies."

Recommendation: Improve communication between CMS and States, including the clarity and consistency of Medicaid policy interpretations across CMS, by conducting centralized training for all RO and CO staff to ensure uniformity.

Recommendation: Standardize the investigative protocols of HHS and State survey teams. Increase training for State survey teams. Focus training on the proper interpretation of the regulatory compliance requirements placed on nursing facilities.

Feedback and comprehensive planning. There is merit to surveying providers and using feedback from those surveys to enhance communication. The Committee recommends that CMS survey providers and other contractor customers to determine how satisfied the audience(s) are with the services CMS’ agents provide (e.g., in the contractor’s processing of claims and providing needed information). This would allow providers, suppliers, and beneficiaries to rate the service they receive from contractors. Posting the results of these surveys on the Medicare website and factoring the results into performance ratings when considering contract renewals would add value. The Committee’s recommendation further calls for establishing a continuous feedback process for learning about providers’ experiences with CMS’ agents and incorporating that information into policy and practices. Additional recommendations call for use of focus groups and other means to test communications for effectiveness.

Recommendation: Improve CMS oversight of contractors’ customer service performance by establishing a customer satisfaction survey process to be conducted by an organization independent of CMS and its contractors.

Indeed, feedback should be an integral part of all facets of the comprehensive communications plan for beneficiaries and providers. Communication plans should find the most effective ways to incorporate local and national educational campaigns and advisory committees and focus on listening and responding to beneficiaries and providers. Providers should be involved early in the policy development process. HHS should publish evaluations of its improvements efforts and track progress over time. Another recommendation also focuses on the need to incorporate more feedback from providers.

Recommendation: Enhance provider education efforts by ensuring that comprehensive communication plans are coordinated among HHS, CMS, and its contractors. Aggressively try to reach the various provider communities (including physician, nurses, and other provider groups.) These communication plans should include how to use local and national educational campaigns and advisory committees in the most effective way possible and be responsive to the needs of all provider groups.

Recommendation: Strengthen efforts to increase and improve provider education on an ongoing basis, with a new emphasis on incorporating feedback from providers into continuous quality improvement efforts. Develop mechanisms to routinely obtain and evaluate such feedback, such as focus groups, surveys, and other methods.

Better quality information. As with consumer communications, the Committee explored several additional areas to improve the quality of information for providers. Educational materials could be simplified and targeted; formal instructions could be rewritten in plain language and include executive summaries with bullets on key points. In particular, the Committee believes that HHS should evaluate the New Physician Training Manual, along with the websites that provide information on clinical laboratory (CLIA) regulations and LMRPs. HHS should strive to become a world-class supplier of information to providers about the programs it administers, employing the best practices in the industry, against which other insurers can benchmark.

Special efforts are needed in some areas. For example:

Policies on other issues should be conveyed in plain language as well. For example, HHS should:

STANDARDIZING COMMUNICATION: HIPAA

A separate, new concern brought to the Committee involves communication among providers and payers/health plans. New regulations implementing the Health Insurance Portability and Accountability Act of 1996 (HIPAA) establish standards for electronic communication of health care transactions, such as sending claims to insurers for payment, a highly technical area. The regulations also set standards for how providers must protect patient privacy. These seemingly separate issues are in fact closely related, now that health care delivery, record keeping, and business are increasingly conducted electronically.

As this trend continues, two principles should be considered: 1) the process for achieving simplification should not be unnecessarily burdensome or costly, and 2) with the advent of streamlined technology for transmitting health information comes the responsibility of ensuring that this information is maintained and transmitted confidentially and that it is not misused. These issues are discussed in more detail in Chapter 5.

 

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Master List of SACRR Committee Recommendations

Chapter 3

 

An asterisk [* ] next to the number of a recommendation indicates that legislative action may be required in order for the Department to implement the Committee’s recommendation. See Appendix B. 

Number

Adopted Recommendations

Full Committee
 Action

14

Review and revise the language of its template on Medicare Health Plan Compare in situations where there is a $0 premium or $0 co-pay. The fill-in-the-blank default template language does not make sense for situations where the dollar amount is greater than $0. The result is confusing, misleading, and possibly contradictory language as to financial liability.

Adopted 
May 2002

25

Develop, fund and implement a comprehensive, ongoing communications plan that will be coordinated among HHS, CMS and its contractors, as recommended by the Advisory Panel on Medicare Education, to aggressively reach specific segments of the audience, using the appropriate channels including radio, TV, 1-800-MEDICARE, web and print media, as well as other strategies supported by research results.

Adopted 
May 2002

26

Continuously improve efforts to educate elderly individuals and/or individuals with disabilities approaching Medicare eligibility.

Adopted 
May 2002

27

Add the 1-800 MEDICARE phone number and website address to the beneficiary’s Medicare card.

Adopted 
May 2002

28

Eliminate overly burdensome Medicare Secondary Payer requirements.

Adopted 
May 2002

29

Research, consumer-test, and evaluate the current Medicare Summary Notice (MSN) and incorporate those enhancements that result in improved beneficiary understanding of the content. Incorporate reasons for noncoverage or denial of service on MSNs in plain language and refer beneficiaries to relevant regulations regarding the noncoverage or denial.

Adopted 
May 2002

30

Improve and consistently update the Medicare Plan Finder (which includes original Medicare and Medicare+Choice).

Adopted 
May 2002

31

Develop/implement performance standards for CMS’program of beneficiary education and communication efforts so that the program can be implemented consistently by CMS and all its agents and partners.

Adopted 
May 2002

42

Enhance CMS’investment in education related to the use of the Minimum Data Set (MDS), including web-based training tools, such as the Medicare Learning Network. Update the skilled nursing facility (SNF) section of the Medicare Learning Network to include a detailed tutorial on MDS.

Adopted 
May 2002

45

Add case mix/risk adjustment to quality indicators, as appropriate.

Adopted 
May 2002

46

Improve the legend of key terms on the Nursing Home Compare website.

Adopted 
May 2002

48

Improve the balance of nursing home comparative data available for the public to include both quality of life and quality of care measures.

Adopted 
May 2002

49

Standardize the investigative protocols of HHS and State survey teams. Increase training for State survey teams. Focus training on the proper interpretation of the regulatory compliance requirements placed on nursing facilities.

Adopted 
May 2002

53*

Establish an appeal process for default Resource Utilization Group (RUG) payments with a specified time frame for the appeal. Establish clear and reasonable rules concerning submission of the MDS instrument so that providers are not penalized with default RUG payments for legitimate, minor delays in completing an MDS assessment.

Adopted 
May 2002

57

Share the Outcome and Assessment Information Set (OASIS) risk-adjustment methodology with all users; make the information available on the CMS website.

Adopted 
May 2002

58

Provide access to the studies on the validity of OASIS data, adverse event measurements, and the University of Colorado study on OASIS quality and outcomes.

Adopted 
May 2002

109

Improve CMS’ oversight of contractor customer performance by establishing a customer satisfaction survey process to be conducted by an organization independent of CMS and its contractors.

  • Include periodic (e.g., quarterly or semi-annual) survey events along with a continuous customer feedback process.
  • Include different approaches for beneficiaries, physicians, providers, and suppliers.
  • Publish customer satisfaction survey results of each contractor in the media and on the CMS and Medicare.gov websites.
  • Include the results in the contractor performance scores. Use these results in establishing the bidding schedule and as a major consideration in contract awards.

Adopted 
June 2002

124

Examine Social Security Administration (SSA) disenrollment forms and Medicare & You Handbook information to ensure that the text does not stimulate an unintended disenrollment that triggers the "lock-in."7

Adopted 
June 2002

128

Reduce the number of pages of referring telephone numbers in the next publication of the Medicare & You Handbook by focusing on 1-800 MEDICARE so as to avoid overwhelming readers. Ensure that all transferred callers from 1-800-MEDICARE are connected expeditiously with a "live" person at the connected number. Furthermore, work with consumer testing groups to determine the best content and organization of the Medicare & You Handbook, if not currently doing so.

Adopted 
June 2002

129

Improve communication between CMS and States, including the clarity and consistency of Medicaid policy interpretations across CMS by conducting centralized training for all Regional Office (RO) and Central Office (CO) staff to ensure uniformity.

Adopted 
June 2002

134

Expand contractual relationships to community-based organizations (in addition to State Health Insurance and Assistance [SHIP] programs, organizations with whom Regional Education about Choices in Health [REACH] currently works) for translation services, information/education services, and outreach to individuals with limited English proficiency, persons with disabilities, and beneficiaries in rural areas. Consider the Request for Proposal (RFP) process as a means of establishing these relationships.

Adopted 
June 2002

135

Improve the accuracy and effectiveness of beneficiary counseling and assistance programs (e.g., SHIPs) by fully integrating them into regional and local outreach activities and by providing consistent training to these programs. Training programs should be based on national standards with implementation tailored to community needs.

Adopted 
June 2002

136*

Encourage and/or incentivize State Medicaid plans to provide reimbursement to community agencies providing education and outreach activities.

Adopted 
June 2002

137

Simplify beneficiary forms, use plain language in forms, and use peer focus groups to rigorously re-test the clarity of communication on an ongoing basis. Test the effectiveness of targeting communications literacy to the fourth grade level. (Currently, Medicare policy targets a sixth grade literacy level.)

Adopted 
June 2002

138*

Simplify the Medicare application using plain language and encourage States to develop their own simplified, universal application for Medicaid and other services.

Adopted 
June 2002

139

Continually evaluate and improve education and communication strategies to ensure that beneficiaries find materials easy to access and understand so they can make informed decisions about their rights, options, and obligations.

Adopted 
June 2002

140

Implement education and training of fiscal intermediaries (FIs) and carrier call centers regarding the rules for disclosing beneficiary-specific information to others (as covered in Transmittal AB-01-87). Publish these guidelines in plain language for the general public on the Medicare.gov website.

Adopted 
June 2002

141

Enhance provider education efforts by ensuring that comprehensive communication plans are coordinated among HHS, CMS, and its contractors to aggressively reach the various provider communities (including physician, nurses, and other provider groups). These communication plans should include how to use local and national educational campaigns and advisory committees in the most effective way possible and be responsive to the needs of all provider groups.

Adopted 
June 2002

142

Simplify communications to providers using plain language and using formats that are accurate and easy to use by the provider groups on an ongoing basis. Target communications appropriately and include an executive summary of key points in all bulletins, updates, and instructions. (For example, develop a simplified "executive summary" set of instructions for physicians and staff to use the new advanced beneficiary notices.)

Adopted 
June 2002

143

Maximize the use of technology-based educational initiatives (for example, MedLearn), targeting content to the different types of providers, including non-physician providers and suppliers of care.

Adopted 
June 2002

144

Consult with advisory panels or groups of providers to provide real-time review of new communication strategies or materials in a proactive manner. Use focus groups of the intended audiences to rigorously test clarity of communications and educational programs.

Adopted 
June 2002

145

Ensure that interpretations of regulations are consistent within all manuals and that every program memorandum clearly describes the modifications or introductions of regulations. Require carriers to give answers based on regulations and CMS guidelines and not on their own interpretations. Eliminate penalties or denial of payment to providers for errors due to incorrect advice from carriers or FIs.

Adopted 
June 2002

146

Continuously improve the development of a central repository of information (i.e., MedLearn) so that general information for providers and rules/regulations are disseminated from CMS and not individual carriers, while being cognizant of regional sensitivities.

Adopted 
June 2002

147

Survey FIs and carriers and publicize the results of what are discovered to be the contractors’ "best practices" relating to provider education and communication.

Adopted 
June 2002

148

Compile, publish, and distribute widely a yearly report of provider best practices to serve as guidance for compliance. Give specific emphasis to best practices of rural health programs, clinics or providers among the rural health care community using most effective national and regional outreach methods. Periodically focus CMS teleconferences and listening sessions with various communities of interest on sharing best practices addressing problematic rules and regulations.

Adopted 
June 2002

149

Ensure that carriers are meeting with the medical community and stakeholders when systemic problems are identified and that such meetings are used as a basis for provider education programs.

Adopted 
June 2002

150

Require carriers/FIs to report the specific reasons for their denial of claims in plain language, explain what additional information is needed, and reference the specific regulation, policy memorandum or local medical review policy (LMRP), upon which the denial was based. Appeals to decisions should be reviewed and responded to within 45 days.

Adopted 
June 2002

151

Conduct outreach with the hospice and nursing home industries so that both better understand how Medicare beneficiaries living in nursing facilities can access hospice services.

Adopted 
June 2002

152

Develop and continuously improve provider educational initiatives programs to address systemic misperceptions and confusion that exist in the home care and long-term care industry about CMS’ policies and requirements (e.g., on OASIS, MDS, and "homebound status").

Adopted 
June 2002

153

Involve all stakeholders early in the course of policy development to ensure that subsequent regulations and interpretations will be understandable and workable in diverse settings.

Adopted 
June 2002

154

Assess the effectiveness and publish results of the evaluations of provider educational materials, including but not limited to the new Resident and New Physician Training Manual.

Adopted 
June 2002

155

Establish a workgroup to evaluate the impact and feasibility of standardized medical review policies.

Adopted 
June 2002

156

Streamline the frequency of communication output, particularly rules and regulations, by ultimately moving to an annual publication of CMS regulations (Medicare Provider Manual) with quarterly updates for new technologies, treatments, and coverage decisions. Make this available online and in easy-to-update paper format.

Adopted 
June 2002

157

Provide assistance for small rural communities to learn and apply for competitive requests for proposals. Provide account service representatives to rural health clinics/providers.

Adopted 
June 2002

158

Market/publicize regional technical assistance workshops and train-the-trainer programs to assist rural health care providers and programs in each State.

Adopted 
June 2002

160

Develop models to educate people from rural communities to become health care practitioners and provide incentives for these practitioners to remain in their own rural communities.

Adopted 
June 2002

161

Convene focus groups to continue to improve the clarity of the advance beneficiary notice (ABN) for both beneficiaries and providers. Emphasis should include the minimizing of any question of medical judgment.

Adopted 
June 2002

162

Continue to improve the LMRP web site so it is more user-friendly.

Adopted 
June 2002

163*

Evaluate the potential for CMS to develop an automated prior authorization system that could, using computer edits similar to those used by insurance companies in their current claims processing systems, efficiently determine whether most claims will or will not be covered; develop a pilot program to test use of such a system in Medicare; determine the extent to which additional resources beyond computer edits may be needed for accurate prior coverage determinations; implement and evaluate the pilot program, focusing on the benefits perceived by beneficiaries and providers and the potential to minimize costs to the program; and based upon lessons learned in the pilot program, develop and implement a full national Medicare system to furnish prior coverage determinations to both beneficiaries and providers.

Adopted 
June 2002

165

Simplify and clarify the Clinical Laboratory Improvement Act (CLIA) requirements using plain language whenever possible to assist laboratory and physician office laboratory (POL) staff in understanding and complying with CLIA guidelines.

Adopted 
June 2002

166

Provide information to POLs about training opportunities by the State Survey Agencies (SAs) and other accrediting bodies, such as the College of American Pathologists (CAP) and the Commission on Office and Laboratory Accreditation (COLA) to assist with interpretation and implementation of new CLIA requirements.

Adopted 
June 2002

167

Update and make more user friendly CMS’ CLIA website; include links to the Centers for Disease Control and Prevention’s National Laboratory Training Network.

Adopted 
June 2002

168

Include a plain-language version of the CLIA requirements as well as a basic laboratory practices document tailored to the POL’s test system menu for moderate complexity tests, as part of the CLIA application package.

Adopted 
June 2002

169

Help laboratories to interpret the new CLIA requirements by offering training and simplified guidelines at meetings of laboratory professionals, accreditation bodies, and medical organizations.

Adopted 
June 2002

170

Develop protocols of compliance surveys for waived POLs that use criteria established in consultation with accrediting agencies and physician organizations. Perform compliance surveys when indicated on waived laboratories according to CLIA guidelines and using criteria established in consultation with accrediting agencies and physician organizations.

Adopted 
June 2002

171

Modify the Alternate Quality Assessment Survey (AQAS) self survey form as an educational tool to facilitate the survey and certification process.

Adopted 
June 2002

172

Increase the number of POL representatives serving on the Clinical Laboratory Advisory Committee (CLIAC) to more accurately reflect the number of POLs being regulated.

Adopted 
June 2002

173

Develop an educational brochure for POLs containing a plain-language interpretation of the regulatory requirements by having CMS and CDC collaborate.

Adopted 
June 2002

174

Provide open forums with professional, medical, and accreditation laboratory organizations to solicit feedback on ways to improve outreach to POLs and to increase understanding of the CLIA program among physicians.

Adopted 
June 2002

175

Solicit interest in developing an educational "Clearinghouse" on the CLIA website that includes a multimedia educational program package from interested parties, including: CMS; other Federal agencies; professional, medical, and accreditation laboratory organizations; and the CLIAC. Design methods for evaluating the effectiveness of educational programs.

Adopted 
June 2002

176

Collaborate with States and private laboratory organizations to develop and promote self-assessment tools for laboratories, as well as other types of educational programs. Include in these efforts an evaluation of the effectiveness of such educational programs.

Adopted 
June 2002

177

Stress to CMS staff the importance of collegiality and clarity in communication with providers and incorporate these factors into employee performance evaluations.

Adopted 
June 2002

178

Address program integrity problems with a general understanding that most providers want to comply with program rules and that targeted education is the best way to address problems. Reserve other approaches for instances when targeted education efforts have failed or there is clear evidence of intentional misconduct.

Adopted 
June 2002

179

Strengthen efforts to increase and improve provider education on an ongoing basis, with a new emphasis on incorporating feedback from providers into continuous quality improvement efforts. Develop mechanisms to routinely obtain and evaluate such feedback, such as focus groups, surveys, and other methods.

Adopted 
June 2002

180

Ensure that CMS has staff with well-developed talent for explaining complex matters in plain language, and work with policy experts to ensure that written communications to providers are clear, concise, and collegial. Hire and/or train staff extensively to achieve the relatively high skill levels needed to explain complex Medicare policies clearly.

Adopted 
June 2002

181

Eliminate the practice of having contractors and ROs rewrite materials from CMS’ central office, allowing exceptions only when required by unique local conditions.

Adopted 
June 2002

182

Publish annual reports that establish a baseline and track progress over time of efforts to improve the clarity and collegiality of communications.

Adopted 
June 2002

183

Evaluate the impact of newly revised materials to determine if they reduce the number of beneficiaries who make inappropriate decisions based on a misunderstanding of their rights and options.

Adopted  
June 2002

184

Evaluate whether instructing newly eligible beneficiaries to call 1-800-MEDICARE for questions about Medicare Part B eligibility is more effective in helping them to become accustomed to this resource than instructing them to call a toll-free SSA online number, which is current practice.

Adopted  
June 2002

191

Work with States when drafting State Medicaid Letters and solicit States’ input prior to the letter being formally issued.

Adopted 
June 2002

199

Work in coordination with States on development of appropriate educational materials for dual eligibles that are equal in quality to those published for all Medicare beneficiaries, to assist dual eligibles in understanding the programs (including the core set of Federally mandated Medicaid services) to which they are entitled and their financial responsibility in those programs. Use these materials as part of outreach efforts with this population.

Adopted 
June 2002

200

Evaluate for best practices the State of Connecticut’s 211 system for beneficiary information, called "Info Line" (www.infoline.org). Determine the extent to which other States are using this model and encourage the use of systems like "Info Line" by States as a model for all Medicare & Medicaid beneficiaries.

Adopted 
June 2002

201

Clarify in the State Operations Manual (SOM) section(s) dealing with "Medicare-Medicaid Certification – Distinct Part Designation" that any reference to particular examples (mentioned either in relevant Instructions, Survey Procedures, Interpretive Guidelines, or Forms) is intended only to be EXEMPLARY of how compliance may be achieved, but does not constitute the only configurations that are allowed for compliance with the statute or regulations. Clarify for State surveyors that in the absence of a facility complying with one or more examples that are mentioned, the facility must still be able to demonstrate how it complies with the regulation or statute. Provide guidance and training to surveyors and providers. Follow up and monitor consistency in application. (Recommendation refers to just SNF/NFs.)

Adopted 
June 2002

202*

Require FIs to render decisions on demand bills within 45 days after receiving all medical records documentation required by the FI to support the original decision made by the SNF. If the FI decision is not rendered by 90 days, require FIs to pay the SNF automatically. Require administrative law judges (ALJs) to render a decision within a 90-day period of time after an appeal is filed at the ALJ level. Allow payment without "prejudice" during the appeals period.

Adopted 
June 2002

204

Provide comprehensive training, as opposed to broad-based generalized training, for carrier and FI telephone customer service representatives (CSRs) so that CSRs are more knowledgeable in specific areas and can improve their level of consistency in providing answers. Consider the merits of credentialing some or all of the contractors' CSRs in order to ensure that issue experts can directly respond to specific provider inquiries.

Adopted 
June 2002

205*

Convene relevant stakeholders to work with CMS to:

  • Reconcile conflicts in regulations and/or guidance that prevent clear delineation as to which entity (the SNF or the hospice) is required to be the lead in providing required end-of-life care to SNF residents once they elect their hospice benefit.
  • Revise guidance and procedures to recognize end-of-life care in the context of the survey protocol and the SNF/NF’s operations under each individual agreement with hospice.
  • Define the precise, unambiguously stated conditions under which, terminally ill beneficiaries who are residents of SNFs/NFs may access their statutorily entitled hospice benefit.

Incorporate these revisions and criteria-based conditions into the SOM as part of interpretive guidance for surveyors of hospice and SNFs/NFs, at Task 6, K., at other relevant sections of the Guidance to Surveyors, as well as into relevant Program Integrity Instructions that ultimately affect the ability of hospice and SNFs/NFs to provide these services. Reconvene all relevant stakeholders to determine if more structural changes are needed, based on the degree of success achieved by the newly issued guidance. If necessary, revise and incorporate changes (including criteria developed from above) to the CMS conditions for participation for both hospice and SNFs/NFs in order to assure that beneficiaries may access their statutorily entitled benefits and the appropriate entity can be held accountable. Implement final rule and provide training to both hospice and SNF/NF surveyors and providers.

Adopted 
June 2002

206

Issue a revised policy declaring that due to the national nursing shortage, we are in a period of "extraordinary circumstances." Due to this problem, contracting for nursing services for continuous care is allowed. The statement should restate the responsibility of hospice when contracting for services, located in 42 CFR § 418.80.

Adopted 
June 2002

207

Convene relevant stakeholders to work with CMS to revise the threshold definition of "harm" as applied in the SNF/NF enforcement process and operationalize item-specific criteria for decision making at each relevant survey requirement. Publish the results of this collaboration in a Notice of Proposed Rulemaking (NPRM) and revise relevant regulations as needed. Implement the final rule; develop guidance for survey and enforcement; provide training to surveyors and providers; and require CMS to monitor its application by surveyors.

Adopted 
June 2002

208

Convene relevant stakeholders to work with CMS to amend the threshold definition of "repeat deficiency" as applied in the SNF/NF enforcement process; insure that the more serious remedy associated with a repeat deficiency can only be applied in the presence of a repeat occurrence of the same problem, and/or a repeat deficiency of the same subordinate requirement within the larger regulatory group. (For example, under the larger regulatory grouping, "Quality of Care," there might be a citation related to wound care on one survey, and a citation related to personal grooming found on a subsequent survey. For purposes of the Advisory Committee’s recommendation, the latter citation would not constitute a "repeat deficiency" of wound care, and hence the more serious penalty would not be imposed.) Issue a NPRM adding the revised definition from above at 42 CFR § 488.401 and related requirements as needed; publish a final rule; develop and issue corresponding instructional guidance in SOM Chapter, 7, Section 7516, and (C) (3). Provide training to surveyors and providers; require CMS to monitor its application by surveyors.

Adopted 
June 2002

209

Convene relevant stakeholders to define and clarify the criteria for when a determination of a "quality of care" deficiency rises to the threshold level of "abuse and neglect." Publish an NPRM incorporating these criteria and related requirements; amend the SOM Guidance to include and implement these new definitions; and provide training to ROs, States, and providers.

Adopted 
June 2002

212

Strengthen the quality of SOM communications (e.g., survey procedures, interpretive guidance, written instructions, etc.) written for the primary audience of SAs and surveyors, by infusing it with a more positive, less provider-adversarial tone and stance. Include specific instructions and guidance that suggest or favor increased communication between surveyors and providers, including allowing surveyors to exchange information with providers on best or innovative practices. Design training programs for surveyors and providers that implement these types of less adversarial, more collegial types of changes.

Adopted 
June 2002

216

Convene relevant stakeholders to modify and operationalize the definition of "substandard quality of care" and defining the exclusive set of the subordinate requirements/survey tags whose citation can constitute the threshold determination of substandard quality of care (i.e., only those requirements that deal with the provision and quality of care and/or to the training of nurse aides, but NOT to the citation of other SNF/NF requirements, e.g., having sufficient closet space, etc.) Issue an NPRM to this effect; publish and implement a final rule; issue revised instructional guidance; provide training to the surveyors and providers.

Adopted 
June 2002

218

Issue an NPRM modifying the regulation at 42 CFR § 488.331 to include criteria for "timeliness" (so that it applies to timely transmission of both the CMS Form 2567 [Statement of Deficiencies] and the notice to the facility of its opportunity to request an Informal Dispute Resolution [IDR]). Until such time as a regulation can be promulgated, issue instructional guidance to State and Federal survey agencies establishing preliminary criteria for timely response to IDR requests. Implement final regulation; and provide guidance and training to ROs, States and providers.

Adopted 
June 2002

 

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CHAPTER 4

Increasing Flexibility

"…We have been a local marketplace success.... We've had health plan interest and provider interest in expansion. Consumer satisfaction has been high....we need to develop some clear templates to make it easier for States and providers to pursue these integrated demonstrations..." – Pam Parker, panelist discussing PACE, Minneapolis Hearing – June 2002.

Health care regulation must adapt to changes in health care technology and changing relationships within the system. Marketplace innovation offers patients, physicians, hospitals, other providers, suppliers, and health plans opportunities to improve health and allow individuals to live longer and happier lives. Programs that require Federal and State government coordination, such as Medicaid, add a layer of complexity making it particularly challenging to deliver care. Layers of statutory requirements, Federal program directives, and implementing judicial decisions compel providers to redirect significant resources from the provision of care to unnecessary paperwork and other time-consuming activities.

The Committee heard concerns that the implementation of program requirements often results in limited flexibility for patients, providers, and other business partners. While regulation plays an important role in protecting consumers, mechanically enforced regulations can stifle innovation in service delivery and quality improvement. Regulators should think not only about achieving policy objectives but also about the process required for the rule to be implemented. For example, regulators should consider what changes in information systems are needed or how a new required activity fits with current provider work processes or patient flow patterns. Once a rule is in place, regulators should evaluate its effectiveness. Does the rule produce the desired outcome? At what cost? What are the operational problems or unintended consequences, and how could they be addressed? Over time, do changes in the marketplace, the organization and delivery of medical services, or in beneficiary needs make some rules obsolete or suggest the need for revision?

 

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IMPROVING IMPLEMENTATION

The Committee received testimony outlining problems with the Department of Health and Human Services (HHS’s) implementation of statutory requirements throughout its deliberations. The Committee heard concerns about the cost-benefit analyses used to support previously issued rules. For example, many commenters stated that the initial Health Insurance Portability and Accountability Act (HIPAA) Transaction and Privacy Rules were promulgated based on impact statements underestimating the full cost of compliance. While they agreed that long-term savings would likely be realized, the initial costs of compliance will adversely affect many providers and plans. This impact is particularly difficult for providers and health plans operating under constrained reimbursement, which limits the funds available to comply with regulations. In many cases, interpretive guidance does not reflect cost estimates for compliance. The development and release of Home Health Agency (HHA) survey and certification guidelines and Medicare+Choice (M+C) operational policy letters are two examples.

Regulations often create administrative inefficiencies that can have an adverse impact on both consumers and providers. For example, all HHAs must use the standardized Outcome and Assessment Information Set (OASIS) on all clients regardless of whether the patient has private insurance coverage, Medicaid, or Medicare, because OASIS is a requirement contained within the Conditions of Participation (COPs) for Medicare HHAs. OASIS is an example of the process-oriented requirements found in COPs, Medicare’s basic health and safety standards.

In contrast, an oversight system focused on outcome-based quality standards can retain structure and process requirements, but compliance is monitored less frequently for certain providers or health plans. The rationale for this approach would be acquiring evidence of sustained good performance by those providers or plans. For private health plans that could otherwise demonstrate compliance with regulations and quality standards, this could mean such alternatives as the use of data-driven, focused, review-based monitoring visits to determine compliance with Medicare’s regulations. The end result would be a reduction in the multiplicity of reviews and the ability to redirect scarce resources for the benefit of a plan’s enrollees.

 

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MULTIPLE REVIEWS

Multiple reviews and audits of the same provider or health plan by different oversight agencies demonstrate the burdensome nature of multiple regulatory requirements. State and Federal governments, as well as private sector employers, are increasingly interested in collecting quality data. As a result, many managed care organizations are audited repeatedly for administrative data and asked for significant amounts of information on adherence to preventive care guidelines and other care algorithms. Several private sector organizations conduct quality reviews, including the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) and the National Committee for Quality Assurance (NCQA). Other groups also collect quality data, including Medicare’s Quality Improvement Organizations (QIOs) and some professional societies. Despite efforts at coordinating data collection elements and their definitions, little congruence exists in groups’ expectations. The Committee heard through comment and testimony that each reviewer’s requests are complex, and each review typically requires that information be presented in a specific way.

This lack of coordination is problematic, particularly because entities may be faced with largely redundant requests for information several times a year. Realistically, no health care organization can launch measurement and improvement initiatives in all of these areas at the same time. For example, the disparate requests by various regulators may overwhelm quality programs in hospitals. The large number of quality measures, combined with the lack of consensus as to their validity, undermines effectiveness of all the efforts. Those responsible for quality measurement and improvement in individual hospitals or physician groups are forced to choose which regulatory mandates to comply with and which to ignore. This number of requests could potentially inhibit providers’ ability to implement quality improvement initiatives tailored to their unique local situations.

Moreover, once the burden of regulation becomes overwhelming, the legitimacy of the regulatory enterprise may be questioned, and cynicism and resignation may be fomented among health care providers. A second concern may be even more important. The creation of multiple uncoordinated mandates regarding quality measurement and improvement means hospitals incur substantial additional costs. Responding fully to reporting requirements suggested by JCAHO and consensus organizations, such as the National Quality Forum, is very time-consuming. For hospitals, this often means larger investments in quality measurement and reporting must be made with insufficient evidence that the particular activity improves quality.

HHAs and nursing facilities expressed similar concerns. At a time when providers are constraining costs in response to reimbursement pressures, they are required to expand their investment in reporting data related to a variety of quality measures. As the regulatory bodies make these data available, providers undoubtedly will need to spend additional human and financial resources to assess the results and respond publicly before initiating any improvement programs.

The Committee heard from health care organizations, including health plans and hospitals, that government agencies should make greater use of "deeming," by which approval from such by private organizations as JCAHO and NCQA is accepted to satisfy government requirements. For example, the Regional Office (RO) staff of the Centers for Medicare & Medicaid Services (CMS) conduct oversight of both M+C health plans and deeming organizations certified to accredit plan participation in Medicare. The Committee heard suggestions for alleviating the burden caused by multiple reviews, including: coordinating review schedules between agencies so health care organizations can provide information in a common format and less frequently; requiring reviewing agencies to make better use of electronic data submissions; and concentrating reviews on "bad actors."

The Department can take specific action to improve the implementation process for regulations. For example, CMS could minimize the unique challenges faced by rural providers (described in Chapter 1) by taking a more rational approach to survey and certification activities. Today, a critical access hospital (CAH) may provide a variety of services (e.g., home health, skilled nursing, inpatient acute care) and be surveyed separately for each of the different types of services it provides. To reduce the impact on CAHs, CMS could conduct a single survey of a CAH to certify compliance with all relevant program standards that apply to the home health, skilled nursing, and inpatient acute care it provides, thus saving the resources the CAH would have to devote to this activity and recognizing the integrated nature of the care provided.

Likewise, CMS separately: performs an on-site visit to review a Medicare+Choice organization’s (M+CO) activities for compliance with Federal requirements as laid out in CMS monitoring guidelines; conducts an audit to verify the M+CO’s annual rate and benefit filing; and reviews records to verify encounter data submitted for risk adjustment. Audits and monitoring are necessary to ensure an M+CO’s compliance with statutory requirements. However, CMS’ fragmented approach to site visits is overly burdensome, requires duplicative preparation, and increases costs. Alternative options for determining plan compliance should be pursued.

Recommendation: Establish a coordinated annual schedule for CMS-related on-site audits/reviews of M+COs to ensure that oversight activities are coordinated to the greatest extent possible for M+COs that wish to have their routine periodic and scheduled reviews take place at the same time. (Unannounced reviews or visits would not be affected by this provision.)

 

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HOME HEALTH AGENCIES

HHAs provide Medicare-covered services to approximately 2.5 million patients per year and provide an average of 36 visits to each patient. Reimbursement for Medicare home health totals approximately $12.2 billion for fiscal year 2002. The Committee heard testimony that HHAs participating in Medicare need more flexibility in the management of their operations to better serve their patients. The Committee believes that the home health COPs do not reflect the use of current technology nor modern management. Revised COPs for HHAs have not been finalized since they were proposed in 1997 (except for those specifically related to collection, encoding and transmission of OASIS).

Recommendation: Publish a final rule on the previously proposed rule on Conditions of Participation (COPs) for Home Health Agencies (HHAs) currently in the queue.

CMS provides guidance to State government surveyors who act on behalf of the Department. Surveyors review HHA operations to ensure the agency meets Medicare’s COPs. Guidance to State surveyors specifies the process requirements HHAs must meet to deliver home health services. COPs set parameters on the operational structure for any separate home health entity delivering services not covered by Medicare (e.g., separate admissions policies, clinical records, personnel records, etc.). For many HHAs, Medicare’s interpretive guidance for survey and certification staff serves as an additional layer of regulation and constrains their ability to offer consumers the non-Medicare products they desire, such as private duty nursing and custodial care. Medicare should consider regulatory standards that could be adjusted for small providers or for those with a limited Medicare caseload. The Committee recommends that HHAs be given greater flexibility.

Recommendation: Limit application of Medicare’s HHA COPs based on certain payers (e.g., Medicare patients only) and service criteria (e.g., excluding services that do not meet the definition of "home health services" in the Social Security Act, Section 1861, such as those custodial in nature or considered personal care and may not result from a signed physician order).

Recommendation: Revise CMS’ Interpretive Guidance on Medicare’s HHA COPs (the State Operations Manual [SOM]-Provider Certification, Section 2183, "Separate Entities") to give all agencies more flexibility in managing their operations, such as the requirements for separate policies and procedures for admission, separate clinical records, separate licensure (unless required by State), separate time sheets and personnel records, and separate budgets. (The Interpretive Guidance contains directions to State surveyors for recognizing and qualifying an organization as a "separate entity" so they can properly certify that an HHA meets Medicare COPs. Surveyors would not apply COP requirements to patients served by the "separate entity.")

MEDICARE+CHOICE

Congress established the M+C program in 1997 to provide seniors and persons with disabilities a choice of private health plan options similar to those offered to the under-65 population. Today, 4.9 million beneficiaries are enrolled in an M+C plan. The regulations that govern M+C exemplify the Committee’s concerns about rigid interpretations of the law. Beneficiary enrollment and health plan participation in the program peaked in 1999. As a result of health care costs climbing faster than M+C payments, along with other factors, enrollment in M+C plans fell as plan participation declined.

To help beneficiaries remain in their plans, CMS undertook a series of initiatives to enhance provider network stability by reducing administrative requirements that divert resources away from health plan benefits and services. The Committee has identified several important areas in which CMS can make further improvements to M+C requirements, such as the review of marketing materials intended for beneficiaries, data filing requirements for health plan benefits and rates, and payment reconciliation, as well as standards for determining compliance with Medicare’s regulations. Medicare should implement solutions to mirror those in the private sector that can streamline and speed administrative activities for beneficiaries, health plans, and providers. (Some technological solutions are discussed in Chapter 5.)

M+C organizations (M+COs) are required by statute to submit all M+C marketing materials and enrollment materials to CMS at least 45 days before they are to be disseminated. This allows CMS to determine whether marketing materials contain adequate information about certain topics and whether they contain materially false or misleading information that could induce a beneficiary to enroll in (or remain enrolled in) an M+C plan or cause a plan enrollee to fail to exercise his or her rights to receive covered benefits. CMS does provide M+COs with a 10-day review period if they follow certain CMS models without modification.

The Committee heard assertions that reviews requiring the full 45-day period frequently result in substantial delays in the availability of accurate information. Some M+COs noted that CMS ROs may require revisions for editorial or stylistic reasons, even though these M+COs believe the materials are not misleading or inaccurate and do not contain misrepresentations. CMS should continue to protect beneficiaries from receiving misleading marketing materials but ensure they receive timely information.

Recommendation: Continue to standardize and streamline the process of receiving M+CO marketing materials, including nationwide use of "use & file" standards; establish uniform performance standards that do not exceed statutory requirements and provide training before their use by all CMS ROs.

To participate in the M+C program, M+COs annually submit a rate and benefit package (an Adjusted Community Rate Proposal or ACRP). The ACRP was established to ensure that monthly rates charged by M+COs are justified by the benefit package offered to beneficiaries and that the rate and benefit package is commensurate with CMS payment. Many M+COs offer different benefit packages within segments of their service areas and must submit separate ACRPs for each M+C plan they offer. The ACRP was revised several years ago, but it still requires information that may not add to the actuarial soundness of the filing nor meet the sound actuarial standards required in similar commercial, private-sector filings. The ACRP’s filing process requires unnecessarily detailed submissions in some cases and redundant submissions in others when plans serve multiple markets.

Recommendation: Simplify the Medicare program’s data filing process requirements in ACRPs for M+C health plans; prepare a report due September 30, 2002 to inform that goal which examines the following options.8

  • Statutory recommendations that would allow plans to use M+C only data in doing their ACRPs.

  • Allow M+COs to make greater use of actuarially-generated information rather than information from the accounting systems in ACRPs.

  • Reduce the number of filings for 2004.

  • Reduce backup documentation required for the 2004 filing.

  • Use simpler filing forms similar to those used in State Department of Insurance filings.

  • Reduce the number of benefit categories submitted in ACRPs for the 2004 filings.

Because of the lack of effective interfaces among State and Federal agency information systems, the process for determining M+C enrollee status is time-consuming and resource intensive and regularly results in extensive delays in remitting substantial retroactive payments to M+COs. M+C payments are adjusted to reflect a variety of patient characteristics. For example, private health plans receive a payment adjustment for each enrollee who continues to work and is covered by an employer plan or is diagnosed with end-stage renal disease (ESRD). Adjustments are made on the basis of the county in which the enrollee resides and the enrollee’s age and institutional status. CMS uses multiple information systems to determine enrollee status. Payments to M+COs must be adjusted monthly based on enrollee characteristics that reflect differences in the cost of providing covered benefits. M+COs are responsible for verifying and reconciling CMS’ information and the plan’s information to ensure payment accuracy.

The Committee heard that a more timely and efficient system for payment reconciliation would encourage M+COs to remain in the program and would contribute to program stability. The Committee discussed alternative methods for determining a plan’s compliance with Medicare regulations. For example, established plans with good performance might not require the same intensity of review as new plans or those with declining enrollments.

Recommendation: Determine new procedures for processing working aged enrollments for M+CO payment reconciliation purposes and establish a pilot (to test the new procedures). Analyze systems issues with enrollments of individuals with ESRD and propose workarounds.

Recommendation: Convene a work group whose goal is to pursue alternative methods of determining an M+CO’s compliance with Medicare’s regulations, such as by data-driven, focused review-based, biennial monitoring visits. (Plans with good performance should not be subject to total review.) Implement work group’s recommendations no later than January 1, 2004.9

Similarly, risk-adjusted payments are designed to more accurately pay M+COs based on demographic information, certain special enrollment status codes, and the beneficiary’s health status. During the development of the health status-based risk adjustment method for the M+C program, CMS made a decision not to implement risk adjustment in a budget-neutral manner within the M+C program. The Committee was concerned that the implementation plan for risk-adjusted reimbursement will adversely affect provider network stability and thus the willingness of plans to continue operating in their current service areas.

Recommendation: Make the changes necessary to implement the M+C enrollee health risk adjustment methodology with the M+C program on a budget-neutral basis, without increasing or decreasing total funding for the M+C program, as intended by Congress.

 

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STATE FLEXIBILITY

The success of Federal-State health program partnerships is dependent on the flexibility of each partner in the relationship. Medicaid, a jointly funded Federal-State health program operated by State governments, is a prime example. CMS conducts oversight of State Medicaid programs through its regional offices. Innovative program changes at the State level must be approved through a waiver process that until recently was lengthy and burdensome, even if other waiver States were successfully implementing identical programs. "Dear State Medicaid Director" letters, generally used to inform States about significant changes in Federal policy, have the potential to disrupt a State’s programs and relationships with Medicaid providers. Shifting from heavy-handed regulation to demonstrated outcomes-based processes would change the Federal role to one of partnership with the States and foster innovative solutions. The Committee recommends allowing public programs to keep pace with fast-changing health care services and changing populations.

Recommendation: Give States greater flexibility in developing their programs by stating the purpose of the programs (for example, providing health care to individuals with low incomes) and giving States the ability to design their own programs in compliance with Federal law, while holding States accountable for achieving the outcomes in accordance with pre-established criteria. (Do not specify how States should meet those criteria.)

States, seeking creative solutions to serve dually eligible individuals who are elderly or who have disabilities, often focus on coordinating service delivery and satisfying the desire for community-based care. These creative approaches face the obstacle of the budget-neutrality requirement imposed by the Social Security Act. When the Federal government analyzes the cost-effectiveness of a Medicaid waiver, it measures the cost to the Medicaid program itself and does not measure the costs across all benefit programs under HHS’ purview.

As the Committee considered the waiver issue, it was suggested that the Federal government define "cost-effective" as providing services under a waiver in a manner that will cost no more to the combined Medicare and Medicaid programs than the cost of providing the same (or better) Medicare and Medicaid services separately on a fee-for-service basis to the same population. Integration and coordination of many Federal and State programs could increase the quality of care and provide savings. For example, at a field hearing in Minneapolis, a panelist noted that the integration of Medicare and Medicaid dollars, along with the flexibility to develop care plans based on a frail, older adult’s needs instead of rigid Medicare or Medicaid guidelines, allows her PACE (Program for All-Inclusive Care for the Elderly) organization to improve the quality of care and to deliver more cost-effective care and care plans. In particular, the panelist noted that the waiver enhances the staff’s ability to intervene quickly and begin treatment in a few hours; it would take a few days to a few weeks in the traditional system.

Recommendation: Work with the Office of Management and Budget to recognize that budget neutrality is measured across Medicare and all benefit programs under the purview of the HHS Secretary, not solely Medicaid. When determining whether waiver services are cost-effective, CMS should uniformly clarify or adopt the policy that "cost-effective" means waiver services will cost no more to the Medicare and Medicaid programs combined than the combined costs of providing Medicare and Medicaid services on a fee-for-service basis to the same population.

The Committee makes these recommendations with the objective of improving the implementation of policy objectives without stifling innovation or quality improvement.

 

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Master List of SACRR Committee Recommendations

Chapter 4

 

An asterisk [* ] next to the number of a recommendation indicates that legislative action may be required in order for the Department to implement the Committee’s recommendation. See Appendix B. 

Number

Adopted Recommendations

Full Committee
 Action

1

Publish a final rule on the previously proposed rule on Conditions of Participation (COPs) for home health agencies (HHAs) currently in the queue.

Adopted 
May 2002

2

Announce removal of the Proposed Rules on HHA COPs from the docket if the proposed rule remains dormant for more than six months from the date of adopting this recommendation.

Adopted 
May 2002

3

Eliminate or modify the definitions of branch office and sub-unit contained within Medicare’s COPs for HHAs to reflect current technology and accepted practices.

Adopted 
May 2002

4

Allow Medicare+Choice Organizations (M+COs) to access State and county codes and input changes to that data element during the summer of 2002 for payment reconciliation of special status Medicare enrollees. (Direct access to proprietary information held in Federal databases would be limited in accordance with the Privacy Act.)10

Adopted 
May 2002

5

Determine new procedures for processing working aged enrollments for M+CO payment reconciliation purposes and establish pilot. Analyze systems issues with ESRD enrollments and propose workarounds.

Adopted 
May 2002

6*

Simplify the Medicare program’s data filing process requirements in Adjusted Community Rate Proposals (ACRPs) for Medicare+Choice (M+C) health plans; prepare a report due September 30, 2002, to inform that goal which examines the following options.

  • Statutory recommendations that would allow plans to use M+C only data in doing their ACRs.
  • Allow M+COs to make greater use of actuarially-generated information rather than information from the accounting systems in the ACR.
  • Reduce the number of filings for the 2004 filing.
  • Reduce the back-up documentation required for the 2004 filing.
  • Use simpler filing forms similar to those used in State Department of Insurance filings.
  • Reduce the number of benefit categories submitted in the ACR for the 2004 filings.11

Adopted 
May 2002

7

Provide additional comprehensive training for auditors concerning the development of ACR proposals in order to decrease the occurrence of erroneous and incorrect findings; include industry experts in the faculty for the training sessions. Consult with industry experts in the design of the training.

Adopted 
May 2002

8

Convene a work group whose goal is to pursue alternative methods of determining a M+COs compliance with Medicare’s regulations, such as by data-driven and "focused review"-based, biennial monitoring visits. (Plans with good performance should not be subject to total review.) Implement work group’s recommendations no later than January 1, 2004.12

Adopted 
May 2002

9*

Continue to standardize and streamline the process of reviewing M+CO marketing materials, including nationwide use of "use & file" standards; establish uniform performance standards that do not exceed statutory requirements and provide training prior to their use by all CMS Regional Offices (ROs).

Adopted 
May 2002

10

Establish a policy wherein joint training is conducted for M+CO CMS Regional Office (RO) and Central Office (CO) staff in one setting regarding major initiatives and issuance of significant changes in existing M+C policy.

Adopted 
May 2002

11

Establish a policy to provide sufficient notice to M+COs to implement major CMS information systems’ changes allowing M+COs to adequately budget for said changes, many of which occur when M+COs are in the midst of implementing other statutory system upgrades, such as for Year 2000 (Y2K) and HIPAA.

Adopted 
May 2002

12

Establish a Special Election Period (SEP) for current M+CO members who wish to enroll in a zero-premium plan offered by the same M+CO in 2002 consistent with the "lock-in" requirement.13

Adopted 
May 2002

13

Establish a policy that allows M+C plans to default members to replacement plans based on the member’s primary care physician choice.

Adopted 
May 2002

15

Clarify the 36-month payment reconciliation rule to ensure that the 36-month window runs from the time an M+CO submits its information or claim rather than the time CMS acts on and enters the information or claim into the system.

Adopted 
May 2002

16

Publish regulations in a timely fashion. States are left in limbo or held financially responsible for unclear policies. (For example, finalize and publish the newest revision of Medicaid and School Health: A Technical Guide for States; clarify the policy related to payment for these services. [The "old" version of the Technical Guide still references Medicaid as a payer of last resort for health-related services. The transmittal of May 2000 indicates the opposite.])

Adopted 
May 2002

62

Field test new the Outcome and Assessment Information Set (OASIS) measures before they are put into use.

Adopted 
May 2002

120*

Limit the application of the Medicare’s Home Health COPs based on certain payers (e.g., apply to Medicare patients only) and service criteria (e.g., the criteria would exclude services that do not meet the definition of "home health services" in the Social Security Act, Section 1861, such as those that are custodial in nature or considered personal care and may not result from a signed physician order).

Adopted 
June 2002, 
with dissent 
from Dr. Olsen

121

Revise the CMS Interpretive Guidance on Medicare’s HHA COPs (the State Operations Manual – Provider Certification, Section 2183, "Separate Entities") to give all agencies more flexibility in managing their operations, such as the requirements for separate policies and procedures for admission, separate clinical records, separate licensure (unless required by the State), separate timesheets and personnel records, and separate budgets. (The Interpretive Guidance contains directions to State surveyors for recognizing and qualifying an organization as a "separate entity" so that they can properly certify that an HHA meets Medicare’s COPs. The surveyors would not apply the COP requirements to the patients served by the "separate entity.")

Adopted 
June 2002, 
with dissent 
from Dr. Olsen

122

Establish a coordinated annual schedule for CMS-related on-site audits/reviews of M+COs to ensure that oversight activities are coordinated to the greatest extent possible for those M+COs that wish to have their routine periodic and scheduled reviews take place at the same time. (Unannounced reviews or visits would not be affected by this provision.)

Adopted 
June 2002

123

Establish a process for making timely changes to the standardized Summary of Benefits (SB) language so that beneficiaries can rely on it to make informed choices. Permit limited variations from the standardized language when they are needed for accuracy and are made in a way that does not undermine the utility of the SB for plan-to-plan comparison.

Adopted 
June 2002

127

Make the changes necessary to implement the M+C enrollee health risk adjustment methodology with the M+C program on a budget-neutral basis, without increasing or decreasing total funding for the M+C program, as intended by Congress.

Adopted 
June 2002, 
with dissent 
Mr. Fay, 
Ms. Martin 
Dr. Olsen 
Ms. Pattee, and
from Ms. Ryan, 

130*

Seek administrative solutions within statutory parameters to reduce Transitional Medical Assistance (TMA) reporting requirements from quarterly to annually until such time as the statutory parameters are addressed. (Currently, families receiving transitional Medicaid coverage must report requested information quarterly, and they lose eligibility if the information is not submitted.)

Adopted 
June 2002

189

Work with the Office of Management and Budget to recognize that budget neutrality is measured across Medicare and all benefit programs under the purview of the Secretary of the Department of Health and Human Services, not solely Medicaid. A specific situation to apply the recognition is when determining whether waiver services are cost-effective, CMS should uniformly clarify or adopt the policy that "cost-effective" means waiver services will cost no more to the Medicare and Medicaid programs combined than the combined costs of providing Medicare and Medicaid services on a fee-for-service basis to the same population.

Adopted 
June 2002

190

Give States greater flexibility in developing their programs by stating the purpose of the programs (for example, providing health care for low-income individuals) and giving the States the ability to design their own programs, in compliance with Federal law, while holding States accountable for achieving the outcomes in accordance with pre-established criteria. (Do not specify how States should meet those criteria.)

Adopted 
June 2002

210

Issue a Notice of Proposed Rulemaking (NPRM) modifying the regulation at 42 CFR § 488.331, and elsewhere as necessary, to require (as opposed to making optional):

  • State Survey Agencies (SAs) and CMS ROs to implement Informal Dispute Resolution (IDR) programs that afford facilities an opportunity to request and receive a face-to-face review for those deficiencies they feel cannot be adequately addressed through telephone or written communication. (Note: Until such time as a regulation can be promulgated, issue instructions encouraging SAs and the CMS ROs to offer face-face opportunities to the maximum extent possible.)
  • IDRs, as stipulated above, be incorporated as a required step in all provider appeal procedures related to survey and certification (see also recommendation #211), including use of IDR in instances of a surveyor’s failure to follow required Federal procedures.
  • IDRs be conducted in a timely fashion (see also recommendation #218), and notice be given to the facility of its opportunity to request IDR.
  • IDR programs be conducted through an independent third party who is not connected to the SA, RO, or the facility.

Implement the final rule; issue revised instructions and guidance; and provide training to surveyors, States and providers.

Adopted 
June 2002

211

Issue an NPRM modifying the regulation at 42 CFR § 498 to permit providers the opportunity to (1) appeal noncompliance whether or not a remedy is actually imposed; (2) to challenge severity and scope determinations; and (3) to challenge choice of remedies recommended or imposed, including modification to related citations. Implement the final rule; issue instructional guidance; and provide training to ROs, States and providers.

Adopted 
June 2002

213*

Issue an NPRM that would allow CMS to grant waivers to SAs to test and implement alternatives to the survey and enforcement process currently required to assess Federal quality of care and resident outcome requirements. Implement a final rule, develop criteria and guidance to States in making application to CMS for such waivers; issue guidance for survey and enforcement purposes; provide training to States, surveyors, and providers; evaluate the efficacy of waivers that have been granted, in relation to the efficacy of CMS’ current survey process, in terms of overall improvement to quality and care and resident outcomes.

Adopted 
June 2002

227

Issue written guidance to surveyors stating that 42 CFR § 418.88b, which requires as a COP for hospice providers that dietary counseling by qualified individuals is available, does not preclude nurses or other qualified health professionals from providing dietary counseling (could be implemented with a memorandum).

Adopted 
September 2002

228

Revise the hospice COPs to provide an exception to the twenty-four (24) hour nursing services standard in the hospice COPs when respite care is provided (without undermining basic health and safety standards for hospice patients).

Adopted 
September 2002

229

Collaborate with States to ensure that State Plan Amendments and State waiver requests (for example, 1115 waivers) are approved in a manner that is timely, significantly decreases unnecessary documentation, and fosters State program innovation. CMS should adopt a reasonable, workable, preset schedule for completing State requests for plan amendment approvals and waivers. (This would enable States to promptly provide a continuum of services to all beneficiaries in the least restrictive setting, regardless of whether those beneficiaries have disabilities.)

Adopted 
September 2002, 
with dissent from 
Mr. Bloom, 
Ms. Pattee and
Ms. Shafer, and 

231

Recognize the significant impact of coordination of benefits (COB) on the quality of care provided to individuals who are dually eligible to participate in the Medicare and Medicaid programs. Establish an advisory group of key stakeholders, including representatives from CMS, fiscal intermediaries, carriers, providers, State Medicaid directors, and beneficiaries to determine a process to significantly improve COB for this group and to reinforce the CMS ROs’ authority to deal with regional and other specific concerns that arise.

  • The advisory group will be established no later than March 31, 2003, and it will have a six-month time frame to submit recommendations.14
  • The advisory group will be charged with finding national solutions to dual-eligible coordination issues, including but not limited to timeliness of decision making, accountability of FIs, quality assurance, and program issues that impede desired outcomes. The advisory group will focus on formulating best practice guidelines to aid in the decision making process at FI level, creating clear time frames for decisions on coverage, and assisting with decision-making guidelines.
  • Recommendations from this advisory group will be relayed to FIs and providers in the form of education about determination of coverage, with the goal of removing obstacles to determination of coverage and quality care.

Adopted 
September 2002

232

Require that Medicare FIs and carriers pay claims in review for longer than 45 days for unresolved situations in which Medicaid or Medicare may be obligated to pay. Develop systems for Medicare to ensure the timely recoupment of payments that are determined to be the responsibility of Medicaid upon final review.

Adopted 
September 2002

248

Support government-wide efforts to simplify and harmonize requirements related to human subject research; maintain strong human subject protections and balance individual medical privacy rights with the societal health benefit that results from effective medical research.

Adopted 
September 2002

249

Support the activities of the HHS Working Group to respond to the National Bioethics Advisory Commission report, Ethical and Policy Issues in Research Involving Human Participants.

Adopted 
September 2002

 

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Chapter 5

21st Century Federal Health CARE Programs, 
Electronic reporting, and privacy

"…the UPS (United Parcel Service) person…. has available to him or her a hand held device where all manner of information can be readily accessed in a moment about where packages are, where trucks are, etc. We have nothing analogous to that in the health care system. Instead, we have all these separate data silos that are almost impervious to patients." – Committee Member Bruce Cummings at the January 2002 Meeting, reporting on a discussion of the Data & Information Subcommittee.

Health care delivery in the United States has changed drastically since the enactment of the Food, Drug and Cosmetic Act in 1938 and the two largest Federal health programs, Medicare and Medicaid, in 1965. Advances in medicine allow many Americans, including senior citizens and individuals with disabilities, to live longer, healthier lives. Advances in technology have resulted in better diagnosis and treatment of a host of diseases and conditions. Patients today receive treatments that were only ideas a decade ago. Advances in information technology have streamlined data transmission, reduced storage costs, and added complexities and opportunities to enhance care.

While health care innovation has progressed rapidly, rules that govern Federal health care programs have not kept pace. As a result, patients and providers feel encumbered by outdated rules or frustrated by their inability to take advantage of current technology. Removing these barriers could improve the effectiveness and efficiency of the programs.

The Committee identified several key ways in which the Department of Health and Human Services (HHS) could better align regulations with the current health care environment, and make HHS programs more receptive to future changes. The use of technology—to improve access to care, to improve quality, and to improve program administration—is discussed below, plus suggestions for streamlining the implementation of the Health Insurance Portability and Accountability Act (HIPAA) rules on standardization and privacy.

 

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TECHNOLOGY TO IMPROVE ACCESS TO CARE

Eligibility and enrollment for health programs. Effective application of technology can improve access to care. It can directly improve access to services by providing a vehicle for ensuring that individuals who qualify for government health care programs are identified, notified of their eligibility, and given clear instructions for enrolling in a program. To ensure that individuals receive the full range of services for which they are eligible, it is important that the enrollment process is simple and easy for beneficiaries to use. For example, improved cross-communication among agencies—such as the Centers for Medicare & Medicaid Services (CMS), Social Security Administration (SSA), and State Medicaid programs—could assist those eligible for multiple programs by reducing the number of enrollment or application forms they are required to complete. HHS should take steps to improve electronic information exchange among States, CMS, and SSA, and it should improve the quality of the data exchanged. As part of this effort, HHS should highlight best practices from States that have been most successful in identifying and enrolling individuals eligible for more than one Federal program.

Medicare+Choice (M+C) enrollment. Likewise, the Medicare program provides seniors and individuals with disabilities in many parts of the country the option of receiving their health care through original Medicare or by enrolling in a private Medicare+Choice (M+C) plan. Beneficiaries who opt to enroll in M+C would benefit from application of technology that simplifies the enrollment process. For example, many employers use online processes for enrollment and disenrollment in their health plans and have the capability to permit Medicare beneficiaries to enroll in M+C through those same processes. While the Medicare program works with employers to provide M+C options, enrollees are unable to take advantage of online capabilities that also are available through many employer groups. Likewise, other beneficiaries who choose to enroll in M+C plans are unable to enroll using their personal computers because of the requirement for a written signature of a beneficiary’s enrollment decision. These M+C policies limit opportunities that would otherwise make the enrollment and disenrollment process more efficient, less time consuming, and administratively less burdensome for beneficiaries, M+C plans, and employers.

Access to new technologies. Access to effective health care in some cases requires access to the latest advances in technology. One of the obstacles to the acceptance and incorporation of new technology is the fact that scientific advances often occur in bursts—not timed with regulatory or budget cycles—and don’t always fit under the purview of one program or one administrative component. For example, an increasing number of new health care products involve a hybrid of pharmaceuticals, biotechnology, and medical device technology. Recently, a stent, a device used to hold open a blood vessel closed because of cholesterol plaque, was embedded with a drug that would gradually diffuse out to reduce the chance of renarrowing the blood vessel. This new design has the potential to improve health by eliminating the likelihood of recurrent chest pain and need for additional procedures, thereby improving the quality of a beneficiary’s life. Yet, such products coming to the Food and Drug Administration (FDA) for approval face a major process barrier: FDA has one process to review drugs and a separate process to review medical devices.

Patients who may benefit from these combination products face delays, as the product must be evaluated by two separate parts of the agency. As researchers continue to break down scientific barriers, developing new technologies that no longer fit within the old categories, changes are needed to enable FDA to respond quickly and maintain its focus on safety.

Recommendation: Determine processes for timely review of FDA-regulated combination products by dedicating staff to the development of appropriate policies or establishing of an Office of Combination Products.

FDA/CMS coverage process. The FDA and CMS have different roles in releasing new technologies to the public. New technology, once approved by FDA, must then be considered separately for Medicare coverage. Streamlining the process by which CMS decides whether to pay for new technologies approved by FDA would enable Medicare beneficiaries to receive important new treatments sooner. Specifically, beneficiaries and medical device manufacturers voiced concerns that even though data collection and other requirements for FDA approval and CMS coverage are similar, the two approval processes occur along mutually exclusive, sequential timelines. For the most part, CMS’ coverage decision process does not begin until after FDA has approved a new technology.

The Committee urges the Secretary to pursue actions to improve the availability of new medical technologies for Medicare beneficiaries, without sacrificing careful review for safety, efficacy, and improved quality care. Increased cooperation between CMS and FDA could expedite the availability of new technology.

Recommendation: Issue a Memorandum of Understanding (MOU) between FDA and CMS that considers stakeholders’ interests and defines the process the two agencies will employ to permit information exchange and support collaboration relative to their respective review of innovative medical device technologies while maintaining confidentiality of trade secrets and other proprietary data. Propose regulations to achieve specific elements of this recommendation, as needed.

 

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TECHNOLOGY TO IMPROVE QUALITY

The consistent delivery of high-quality care—an outcome valued by patients, providers, and third parties, such as employers and health plans—cannot be achieved without innovation in the use of technology. Such technology would facilitate timely data analysis to inform health care decision-makers at local and national levels. At several regional hearings, the Committee heard from individuals with experience on the front lines of health care delivery and saw such innovation in action. For example, the Committee learned about the Pittsburgh Regional Healthcare Initiative, a consortium of clinicians, hospitals, health plans, and businesses created with the goal of improving patient safety through the use of existing local information systems and collaboration with HHS’ Centers for Disease Control and Prevention. By using a shared regional database and examining local variations in outcomes on a risk-adjusted basis, this public/private partnership has achieved two of its initial objectives—to reduce hospital-acquired infections and in-hospital medication errors significantly.

The Committee discussed the value of using an electronic health record to improve health care quality by increasing the accuracy of information and to reduce the need for redundant documentation by multiple clinicians. As an example, the Committee learned about the electronic health record developed by the University of Pittsburgh Medical Center (UPMC), when some of its members had an opportunity to witness a demonstration of UPMC’s "smart card." These smart cards, which include numerous security features for protecting private health information, are being used by hospital staff to access comprehensive medical history and insurance information and provide patients access to their own medical information. The Committee believes that this technology would increase the accuracy, accessibility, and transferability of important health information. It may be difficult to achieve consensus in the process of building an electronic health record, but regulators should encourage these efforts.

OASIS/MDS. Post-acute care assessment instruments provide an example of how advances in technology can be harnessed to improve the quality of care. As discussed in Chapter 2, both the Minimum Data Set (MDS) for nursing facilities and the Outcome and Assessment Information Set (OASIS) for home health agencies (HHAs) are used as tools for patient care planning, internal quality improvement, external oversight, and payment. Nursing homes submit MDS data electronically using software called Resident Assessment Validation Entry Software System (RAVEN); HHAs submit OASIS data electronically using software called Home Assessment Validation Entry Software System (HAVEN). Although they are intended for patient populations with similar characteristics and care planning needs, and ultimately are designed to meet similar objectives, these two tools are not "connected." Thus, a patient discharged from a skilled nursing setting and admitted to a home care setting must be subjected to a full OASIS assessment, requiring potentially unnecessary hassles to and efforts by both beneficiary and provider. By making the data elements compatible, HHS would create opportunities to streamline information systems. More important, this would increase the accuracy and reliability of data used for improving quality and patient care planning and would avoid the unnecessary burden of asking beneficiaries the same questions again and again.

 

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TECHNOLOGY TO STREAMLINE PROGRAM ADMINISTRATION

Technology can be used a number of ways to improve care. Modernizing Medicare’s administration and operations not only can streamline operations but also can improve the flow of data transmission among patients, providers, Federal, State, and local public agencies, private health plans, and others. By using the latest information technology, patients, their families, and their providers will have more time and resources to receive or deliver care. Two examples are discussed below.

Electronic signatures. The transition by HHS to allow electronic signatures is under way, but in many instances the requirement for manual signatures remains. For example, CMS requires entry of a manual signature and date on Medicare cost reports, physicians’ orders for durable medical equipment (DME), and provider enrollment applications. Relying on manual signatures is time-consuming, demands the retention of hard copy documents, and does not provide any greater degree of security than the use of electronic signatures. Efforts to offer electronic signatures, while protecting the financial integrity of the program, are strongly encouraged.

Filing of the Medicare cost report (MCR). The MCR provides another example of an outdated manual document that could be streamlined. While the cost report has evolved from a paper-based form to an electronic format, even in electronic format the MCR must be mailed on a floppy diskette to the Medicare contractor. HHS could enhance program administration and policy-making by developing the means for electronic filing of the MCR and implementing a way to distribute MCR data immediately, even if unaudited, to public and private stakeholders for better informed decision-making, similar to the Securities and Exchange Commission’s EDGAR system.

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STANDARDIZATION AND PROTECTING PRIVACY

HIPAA contains provisions that have significant impact on the administration and operations of the vast majority of health care providers and health plans, two of which the Committee examined: the standardization of electronically transmitted health care information and the privacy of health care information used by certain "covered entities." The Committee learned about HIPAA regulations through the testimony of two expert panels, a review of public comments, and the expertise of Committee members. The key issues are discussed below.

Overview of HIPAA electronic transactions. HIPAA’s purpose is to improve the "efficiency and effectiveness of the health care system through the establishment of standards and requirements for the electronic transmission" of health information (HIPAA § 261). These standards must "be consistent with the objective of reducing the administrative costs of providing and paying for health care" (Social Security Act, as amended by HIPAA). HIPAA requires HHS to issue uniform national standards, including data elements and code sets, for the electronic conduct of the following 10 administrative and financial transactions by health care providers, health care plans, and health care clearinghouses ("covered entities"):

The law also requires HHS to adopt unique identifiers and security standards for transmitting health information and allows HHS to adopt standards for additional financial and administrative transactions determined to be appropriate by the Secretary.

The Transactions Rule, published on August 17, 2000, establishes standards for eight of the ten transactions listed above. Standards for health claims attachments and first report of injury have yet to be proposed. Once the applicable compliance date occurs, if a covered entity wishes to electronically conduct a transaction for which standards have been set with another entity, the Transactions Rule requires that the entity use only the "standard" transaction. The standard transaction also must be used if a covered entity conducts electronically, within itself, a transaction for which standards have been set.

The Committee heard from many individuals who were concerned that—while the endpoint of administrative simplification is desirable—the process of transition is burdensome. At the May 2002 regional hearing in Denver, a participant stressed that the regulations need to be released promptly as the health care industry already has committed significant resources to implementing the initial set of administrative simplification rules. The administrative simplification process needs to be more efficient to meet intended goals. Issuing clearer rules would facilitate implementation of this regulation.

Recommendation: Issue clearer rules, including more meaningful compliance guidance, for covered entities regarding conduct of Direct Data Entry (DDE) Transactions (45 CFR § 162.923(b)).

Drug coding. HIPAA requires that HHS issue uniform national standards, including data elements and code sets, for the electronic transmission of certain administrative and financial health care transactions.

Recommendation: Implement a drug coding system that is standard, updates electronically, and specifically states the product administered.

Defined schedule for modification to the transactions standards. Stakeholders need predictability regarding changes to the transaction standards to efficiently and cost-effectively maintain compliant computer transaction capabilities. Changes to transaction standards require computer programming and adequate testing so changes can be implemented without disrupting health care delivery. Currently, HHS builds no such predictability into the issuance of regulation for transaction standards. For example, the final security, provider identifier, and health plan identifier rules have not been issued, and stakeholders do not know when to expect these rules. HHS already employs an annual regulatory modification schedule for other regulations, such as Medicare’s prospective payment system regulations for hospitals and physicians. A similar approach is recommended for HIPAA regulations, particularly because compliance is so heavily dependent on the interrelationships between various complex rules.

Recommendation: Set a defined schedule (45 CFR § 160.104) for issuance of final modifications, additions, and deletions to the transactions standards, and for compliance with those modifications and additions as follows:

  • Publish final modifications, additions, and deletions to transactions standards as final rules in the Federal Register on the same, pre-set calendar date each year (for example, December 1 or nearest business day before that date).

  • Establish a six-month compliance date for routine modifications and additions to transactions standards.

  • Specify a longer compliance period for major transactions standards changes (e.g., replacement of a clinical code set) that require the industry to have very long planning periods.

  • Investigate development of a process to identify "minor" modifications and expedite their publication (perhaps via abbreviated rule making) in recognition of the opportunity for public input that already is afforded by the industry standards development process, again based on specified publication and effective dates.

(This recommendation assumes the nature of modifications will vary from year to year. In some years, changes may be minor in nature, while in others may be far-reaching because of proposals for new transactions, replacing clinical code sets, etc.)

Absence of complete transaction definitions. The descriptions of a standard transaction may have up to four required elements—a "sender," a "receiver," a "content," and a "purpose." An electronic transmission between covered entities, or within a covered entity, must satisfy each element that applies for that particular transaction to qualify as a standard transaction. For example, the "health care claims" standard transaction must come from a provider (the sender) to a health plan (the receiver) and must contain "a request to obtain payment and the necessary accompanying information" to support the claim (the content) and seek payment for health care (the purpose). In some cases, the regulations are unclear whether a particular transaction must be in standard format. This undermines efficiency, planning, and implementation. Regulated entities should be able to understand their compliance obligations under the Transactions Rule.

Recommendation: Require the definition of every standard transaction (45 CFR §§ 162.1101—162.1801) to include a "sender" specification and a "receiver" specification. (For example, revise the "health care claims status" and "referral certification and authorization" standard transactions to add "sender" and "receiver" requirements to their definitions.)

Definition of "within the same covered entity for electronic transactions." Several providers and plans noted they did not understand the definition of the phrase "within the same covered entity" as used in the Transactions Rule. And many did not understand the regulation’s requirement that they use a standard transaction when the transmission is within the same covered entity. Implementation costs could be reduced by simply deleting the phrase "within the same covered entity" or defining it in a more useful manner.

Recommendation: Eliminate or define in a useful manner the meaning of "within the same covered entity" (45 C.F.R § 162.923(a)). (For example, if the intent of this provision is to require that transactions between health care components doing different covered functions that are part of the same corporate entity ought to be in standard formats, then apply the concepts of "hybrid entity," "covered functions," "multiple-function covered entity," and "health care components" (now applicable only to the HIPAA Privacy Rule) to all HIPAA rules, including the Transactions Rule. The "within the same covered entity" provision then could be redefined to apply only to transactions that are between a covered entity’s health care components that do different covered functions.)

Overview of HIPAA Privacy. HHS modified the Privacy Rule by publishing final regulations on August 14, 2002, to address concerns that the Rule could have otherwise inadvertently and adversely affected timely access to quality care.15 The regulations specify the uses and disclosures that "covered entities" (providers conducting electronic transactions, health plans, and health care clearinghouses) are allowed to make for individually identifiable medical information (referred to as "protected health information"). The regulations give patients new privacy protections, including the right to access their medical records, more control over their health care information—such as prior authorization before covered entities may use or disclose protected information for non-routine uses—and notification of providers’ privacy practices.

Many providers stated that implementation costs are significant without benefiting patients. Providers said the regulations require them to negotiate privacy agreements with all of their business associates, which imposes significant legal costs. Similarly, requiring direct treatment providers (e.g., doctors and pharmacists) to give patients a notice of privacy practices by or at first service delivery presents logistical hurdles in some situations and adds another complex medical form for patients to read and review before a service is delivered. Finally, doctors reported being uncertain about the type of information they are allowed to share, and with whom, and noted the risk that enforcement authorities will overinterpret the statute and prevent communication necessary for health care delivery.

The Committee is pleased that HHS already has adopted several provisions consistent with Committee recommendations, including:

As with many other issues, the Committee members brought a wide range of personal and professional experiences to the table when they evaluated privacy issues. There were varied views regarding the requirement to get a patient’s written consent before sharing health information. Most supported eliminating the requirement that patients give written consent before providers could use their health information to provide health care, while others argued the requirement is necessary for consumers to maintain control of how private information is used.

The Committee considers the following specific issues to be priorities:

Defined schedule for modifications and notice to the privacy standards. Consistent with the need to adopt a defined schedule for issuing modifications to HIPAA’s transactions rules, the Committee notes that HHS should adopt a predictable schedule for amendments to the HIPAA Privacy Rule because a defined cycle would enhance predictability and enable better industry planning, budgeting, implementation, and compliance.

Recommendation: Set a defined schedule (45 CFR § 160.104) for issuance of final modifications, additions, and deletions to the privacy standards, and for compliance with those modifications and additions as follows:

  • Publish final modifications, additions, and deletions to privacy standards as final rules in the Federal Register on the same, pre-set calendar date each year (for example, December 1 or nearest business day before that date).

  • Establish a six-month compliance date for routine modifications and additions to privacy standards.

  • Specify a longer compliance period for major privacy standards changes that require the industry to have very long planning periods.

(This recommendation assumes that the nature of modifications will vary from year to year. In some years, changes may be minor in nature, while in others may be far-reaching.)

Continuous improvement in the Privacy Rule. The complexity of the Privacy Rule, the broad importance it has on health care delivery, and the need to make continuous improvements in its operation and effectiveness suggest that the public interest and regulatory process would benefit from HHS’ continuing receptiveness to public input.

Recommendation: Establish a Privacy Rule advisory panel either within the National Committee on Vital and Health Statistics or as a separate advisory committee or task force to concentrate on improving the operation and consumer privacy protections of the Privacy Rule and to advise HHS on the modification, additions, and deletions to the Privacy Rule’s standards and implementation specifications for the defined annual Privacy Rule Modification cycle. The advisory panel or task force should be comprised of health industry representatives, patients, and health plan enrollees with significant operational experience in the delivery and financing of health care and of representatives from various government agencies, including the FDA, Department of Labor, Office of the Inspector General, Department of Justice, State Medicaid programs, and others that regulate activities affecting health care delivery or financing.

The Committee also heard that certain Privacy Rule provisions and the regulations governing transactions and code sets are inconsistent with current privacy practices and are unclear or potentially ineffective in achieving their stated goals.

Some additional recommendations on privacy for future consideration by the Department follow:

Recommendation: Require a covered entity that obtains direct or indirect remuneration from a third party for requesting any authorization relating to use or disclosure of an individual’s medical information to reveal that fact, as well as the third party source of the remuneration. (This may be achieved by including the following provisions within 45 CFR § 164.508(c)(2):

"(_) If use or disclosure of protected health information by any entity pursuant to an authorization requested by a covered entity will result in direct or indirect remuneration to the requesting covered entity from a third party, a statement that such remuneration will result and identification of the third party or class of third parties who will furnish the remuneration.")

Regarding business associates:

Recommendation: Modify the Privacy Rule to specify that a covered entity serving as a business associate must comply with each provision of 45 CFR § 164.504(e)(2) applicable to that business associate relationship. Continue to require that the covered entity specify in writing the uses and disclosures that the business associate covered entity is allowed to make, as required by 45 CFR § 164.504(e)(2)(i).

Regarding de-identification requirements:

Recommendation: Clarify the de-identification safe harbor knowledge requirement (45 CFR § 164.514(b)(2)) by making clear that "other information" must be available outside the covered entity and by clarifying the meaning of "actual knowledge" in the corporate context. (This may be accomplished by revising 45 CFR § 164.514(b)(2)(ii) as follows:

"(ii) The covered entity determines, after documented inquiry of those of its components that may be reasonably expected to know, that it has no actual knowledge that the information could be used alone or in combination with other information available outside of the covered entity to identify an individual who is a subject of the information.")

The creative mix of Committee members led to rich discussions about the value of accessing and using new technology to move the Department’s programs into the 21st Century. Despite varied views, there was consensus that a number of issues require further HHS action. Opinions varied about some of the recommendations adopted—privacy being just one example—reflecting differences that have challenged policymakers and society at large.

 

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Master List of SACRR Committee Recommendations

Chapter 5

An asterisk [* ] next to the number of a recommendation indicates that legislative action may be required in order for the Department to implement the Committee’s recommendation. See Appendix B. 

Number

Adopted Recommendations

Full Committee
 Status

47

Further automate the Minimum Data Set (MDS) process, including the design of publicly available software with "interview wizards" and other intuitive data accumulation methods.

Adopted 
May 2002

50*

Use the Health Insurance Portability and Accountability Act (HIPAA) mandate as the basis to standardize terminology and identify common data elements used by payers, programs, providers, and suppliers of care and to determine whether the Resident Assessment Protocols (RAPs) are confidential and if any access protections are needed.

Adopted 
May 2002

51

Develop a standard instrument for the assessment of the health and functional status of patients receiving post acute services as mandated by the Benefit Improvement and Protection Act (BIPA); integrate, to the extent feasible, communication standards adopted under the Consolidated Health Information (CHI) eGov initiative as part of the development of this tool.

Adopted 
May 2002

60

Consider the impact of HIPAA on home health agencies (HHA) with respect to the timing of any changes to the Outcome Assessment and Information Set (OASIS).

Adopted 
May 2002

65

Create modern-day electronic and on-line enrollment processes for physicians and Part B suppliers.

  • Immediately implement a system that allows providers to submit electronic applications via e-mail.
  • Develop a secure website for provider enrollment.

Adopted 
May 2002

67

Create and maintain one central repository of forms required or allowed by HHS or its principal components from all of the various HHS websites.

Adopted 
May 2002

68

Create a continuous review process for all forms with an eye to constantly improving and streamlining existing forms and eliminating obsolete forms.

Adopted 
May 2002

69

Redesign all forms and data requirements to seamlessly interface with the Information Technology (IT) architecture of HHS so as to minimize human intervention and optimize IT output. Do not publish new forms until IT issues have been addressed.

Adopted 
May 2002

70

Eliminate Medicare credit balance reporting.

Adopted 
May 2002

73

Reduce costs and speed up administrative activities for providers, suppliers, health plans, and consumers by modernizing HHS IT, processes, and applications:

  • Implement use of electronic signatures.
  • Implement use of e-filing.
  • Integrate data acquisition into IT architecture of HHS and data providers.
  • Maximize use of web-based transactions.

Adopted 
May 2002

74

Modernize the current Medicare Cost Report (MCR), make it more useful, more creative, and less burdensome:

  • Eliminate CMS 339; fold data into the MCR.
  • Eliminate need to file redundant manual data to support the MCR.
  • Modernize and speed up current audit process, settle MCRs within one year and first round appeals within six months.
  • Establish a method to electronically file MCRs into a central repository similar to the U.S. Securities and Exchange Commission’s Electronic Data Gathering and Retrieval (EDGAR) system.

Adopted 
May 2002

75

Use Generally Accepted Accounting Principles-based cost reporting for providers who no longer receive cost reimbursement; continue to use a simplified and streamlined version of the MCR for cost-based providers.

Adopted 
May 2002, 
with dissent from 
Ms. Pattee

77

Connect data instruments and acquisition efforts so data can be transferred and applied to another use or another site of service.

Adopted 
May 2002

78

Provide resources to meet the January 1, 2005, deadline set by Congress for the development of standard patient assessment instruments as mandated by BIPA. Involve providers and patients in this process.

Adopted 
May 2002

81

Simplify the authorization process by adopting the Notice of Proposed Rulemaking (NPRM) proposal at 45 CFR § 164.508 that would permit a single, relatively straightforward form to cover all authorization settings.16

Adopted 
May 2002

82

Require a covered entity that obtains direct or indirect remuneration from a third party for requesting any authorization relating to use or disclosure of an individual’s medical information to reveal that fact, as well as the third party source of the remuneration. (This may be achieved by including the following provisions within 45 CFR § 164.508(c)(2):

"(_) If use or disclosure of protected health information by any entity pursuant to an authorization requested by a covered entity will result in direct or indirect remuneration to the requesting covered entity from a third party, a statement that such remuneration will result and identification of the third party or class of third parties who will furnish the remuneration.")

Adopted 
May 2002

83

Allow a covered entity to use and disclose the minimum necessary protected health information without individuals’ authorizations to distribute a newsletter or similar general circulation communication to a broad cross-section of patients, enrollees or other broad group of individuals. Clarify that this activity is allowed by adding the following new rule as 45 CFR § 164.508(a)(3)(i)(C):

"(C) A newsletter or similar type of general communication device that the covered entity distributes to a broad cross-section of patients, enrollees, or other broad group of individuals."

Adopted 
June 2002; 
Re-adopted 
September 2002, 
with dissent from 
Dr. Olsen, 
Ms. Ryan, 
Mr. Toby

84

Redefine activities that are not marketing as follows. As the NPRM proposes, add "care coordination" and "case management" to activities that are not marketing, and allow medical information use and disclosure without authorization for communications regarding (a) members of a provider’s or health plan’s network, (b) products or services, or payments for such products or services, provided by a covered entity or included in health plan benefits, (c) treatment of the individual, or (d) directing or recommending alternative treatments, therapies, health care providers, or care settings. Close loopholes in the NPRM proposal by requiring covered entities to reveal the fact and source of any third-party remuneration for making "non-marketing" communications and allowing individuals to opt out of future such communications. (This may be accomplished by adding the following provisions as new 45 CFR § 164.514(e):

"(e)(1) Standards: certain communications involving remuneration. Except when the communication is contained in a newsletter or similar type of general communication device that the covered entity distributes to a broad cross-section of patients, enrollees, or other broad group of individuals, a covered entity that uses or discloses an individual’s protected health information to communicate with that individual by any means, other than face-to-face with that individual, about any of the matters described in paragraphs (e)(1)(i)-(iii) of this section, and that receives or will receive direct or indirect remuneration from a third party for making the communication, must meet the requirements of paragraph (e)(2) of this section.

"(i) The covered entity communicates with an individual to describe the entities participating in a health care provider network or a health plan network, or to describe if, and the extent to which, a product or service (or payment for such product or service) is provided by a covered entity or included in a plan of benefits.

"(ii) The covered entity communicates with an individual for treatment of that individual.

"(iii) The covered entity communicates with an individual for case management or care coordination for that individual, or to direct or recommend alternative treatments, therapies, health care providers, or settings of care to that individual.

"(2) Implementation specifications: requirements relating to certain communications involving remuneration. Except when the communication is contained in a newsletter or similar type of general communication device that the covered entity distributes to a broad cross-section of patients, enrollees, or other broad group of individuals or is face-to-face with the individual, a covered entity that makes a communication as described in paragraphs (e)(1)(i)-(iii) of this section and that receives or will receive direct or indirect remuneration from a third party for making the communication must in the communication:

"(i) Identify the covered entity as the party making the communication;

"(ii) Prominently state that the covered entity has received or will receive remuneration from a third party for making the communication and disclose the name of the third party providing the remuneration; and

"(iii) Provide instructions describing how the individual may opt out of receiving future such communications, and for each individual who so opts-out, avoid any future such communications with that individual.")

Clarify in the rule, or at least in the preamble to the rule, that an activity that the Privacy Rule characterizes as "not marketing" may still be marketing regulated by other applicable Federal and State laws, such as FDA regulations, CMS rules addressing Medicare+Choice (M+C) materials, and the anti-kickback and anti-influencing laws (Social Security Act §§ 1128A(a)(5), 1128B(b)). HHS Office of Civil Rights (OCR) should coordinate the final "marketing" provisions of the Privacy Rule with the HHS Office of Inspector General, FDA, and other appropriate Federal agencies to ensure consistency in regulatory provisions among these agencies.

Adopted 
June 2002; 
Re-adopted 
September 2002, 
with dissent from 
Dr. Olsen, 
Mr. Toby

85

Clarify that incidental use and disclosure is permitted (45 CFR §§ 164.502(a), 164.530(c)) by adopting the NPRM provisions that specify that uses and disclosures reasonably incidental to permitted uses and disclosures of medical information are not violations of the Privacy Rule.

Adopted 
May 2002

86

Clarify the provisions on informal permission for persons involved in payment related to an individual’s health care, so that communications with family or others acting for an individual "not present" to resolve payment matters relating to the individual’s health care, are permitted. (This can be accomplished by rewording of the first sentence of 45 CFR § 164.510(b)(3) as follows:

"(3) Limited uses and disclosures when the individual is not present. If the individual is not present, or the opportunity to agree or object to the use or disclosure cannot practicably be provided because of the individual’s incapacity or an emergency circumstance, the covered entity may, in the exercise of professional judgment, determine whether the disclosure is in the best interests of the individual and, if so, disclose only the protected health information that is directly relevant to the person’s involvement with the individual’s health care or payment related to the individual’s health care.")

Adopted 
May 2002

87

Reconcile potential conflict between confidential communications and explanations of benefits (EOB) issuance (45 CFR §§ 164.501 ("Payment"), 164.522(b)(1)) by clarifying that a health plan may require the person demanding confidential communication to explain how the health plan can perform its payment obligations of issuing EOBs to the subscriber.

Require the HHS OCR to coordinate the Privacy Rule with the rules of the Department of Labor’s (DOL) Pension and Welfare Benefits Administration, which regulates Employee Retirement Income Security Act (ERISA) group health plans, in order to avoid conflicting compliance obligations for ERISA group health plans and the health insurers that administer or underwrite them.

(This may be accomplished by rewording 45 CFR § 164.522(b)(2)(ii)(A) to state, "When appropriate, information as to how payment activities, including issuance of explanations of benefits to the insured under a health plan, will be handled."

Another potential solution is to allow a health plan to warn in its notice of privacy practices that requests for confidential communications may not prevent the insured under a health plan from receiving other information, such as explanations of benefits for others covered by the insured’s policy or benefits plan, that may alert the insured that the individual requesting confidential communications obtained health care. Yet another is to permit a health plan to inform an individual requesting confidential communication that the individual may have to pay for the care to avoid the health plan providing information to the insured through other explanations of benefits or similar communications that may alert the insured that the individual obtained health care in confidence.)

Adopted 
June 2002; 
Re-adopted 
September 2002, 
with dissent from
Dr. Olsen, 
Ms. Ryan

88

Delete the endangerment requirement at 45 CFR §§ 164.524(a)(3), (4), (d)(2) and leave it to the health care professional’s judgment, exercised in the best interest of the individual or others, whether requested protected health information should be made available to an individual or the individual’s personal representative. Continue to grant the individual or the individual’s personal representative denied access, based on that exercise of professional judgment, the right to have another professional review the access denial. Allow the explanation for the denial to be, simply, "Information has been withheld based on the judgment of a qualified health care professional."

(The revised rule and procedures would thus state:

"§ 164.524(a) . . .

"(3) Reviewable grounds for denial. A covered entity may deny an individual or an individual’s personal representative access to specific protected health information concerning the individual if a licensed health care professional has determined, in the exercise of professional judgment, that providing access to that protected health information is not in the best interest of the individual or others. The individual or the individual’s personal representative has the right to have such denial reviewed in accordance with the procedures of paragraph (d)(4) of this section.

"[Delete paragraphs (a)(3)(i)-(iii) and (a)(4) of this section.]

"(b) Implementation specifications: requests for access and timely action. . . .

"(2) Timely action by the covered entity. (i) . . . the covered entity must act on a request for access no later than 30 days after receipt of the request as follows. . . .

"(B) if the covered entity denies the request, in whole or in part, it must provide the individual with a written denial, in accordance with paragraph (d) of this section. . . .

"(d) Implementation specifications: Denial of access. If the covered entity denies access, in whole or in part, to protected health information, the covered entity must comply with the following requirements. . . .

"(2) Denial. The covered entity must provide a timely, written denial to the individual, in accordance with paragraph (b)(2) of this section. The denial must be in plain language and contain:

"(i) The basis for the denial. If the denial of access is in accordance with paragraph (a)(3) of this section, it is sufficient to state, "Information has been withheld based on the judgment of a qualified health care professional."

"(ii) If the denial is in accordance with paragraph (a)(3) of this section, a statement of the individual’s review rights under paragraph (d)(4) of this section, including a description of how the individual may exercise such review rights.

"(iii) A description of how the individual may complain to the covered entity pursuant to the complaint procedures in § 164.530(d) or to the Secretary pursuant to the procedures in § 160.306. The description must include the name, or title, and telephone number of the contact person or office designated in § 164.530(a)(1)(ii)

"(4) Review of denial requested. If the individual or the individual’s personal representative requests review of a denial of access under paragraph (a)(3) of this section, the covered entity must designate a licensed health care professional to review the decision to deny access. This designated reviewing official must not have been directly involved in the denial and must be qualified by training or experience to make an informed evaluation whether withholding the protected health information to which access has been denied is in the best interest of the individual or others. The covered entity must promptly refer the request for review to such designated reviewing official. The designated reviewing official must determine, within a reasonable time, whether to deny or grant the access requested based on the designated reviewing official’s professional judgment, exercised in the best interest of the individual or others. The covered entity must promptly provide written notice to the individual or the individual’s personal representative of the determination of the designated reviewing official, and take all action required by this section to carry out the designated reviewing official’s determination.")

Adopted 
June 2002; 
Re-adopted 
September 2002, 
with dissent from 
Dr. Olsen, 
Ms. Ryan and 
Mr. Toby

89

Allow an additional year for covered entities to conform pre-existing contracts with business associates to the Privacy Rule’s requirements and issue the model business associate terms suggested by the NPRM.

Adopted 
May 2002

90

Modify the Privacy Rule to specify that a covered entity serving as a business associate must comply with each provision of 45 CFR § 164.504(e)(2) applicable to that business associate relationship. Continue to require that the covered entity specify in writing the uses and disclosures that the business associate covered entity is allowed to make, as required by 45 CFR § 164.504(e)(2)(i).

(This provision is needed because a business associate is permitted to use and disclose the protected health information of the covered entity it serves only as that covered entity allows.

This approach can be implemented as follows. Revise 45 CFR § 164.502(e)(1)(iii) to state:

"(iii) A covered entity acting as the business associate of another covered entity will be in noncompliance with the standards, implementation specifications, and requirements of this paragraph and § 164.504(e) of this subpart if the business associate covered entity violates any of the provisions of § 164.504(e)(2) of this subpart, including any use or disclosure of the protected health information of the covered entity on whose behalf the covered entity business associate is acting that is inconsistent with the uses and disclosures of such information specified in writing as required by paragraph (e)(2)(i) of this section by the covered entity on whose behalf the business associate covered entity is acting."

Revise 45 CFR § 164.502(e)(2) to state:

"(2) Implementation specification: satisfactory assurance. A covered entity must document the satisfactory assurances required by paragraph (e)(1) of this section by:

"(i) For a business associate who is also a covered entity, specifying in writing the permitted and required uses and disclosures of the covered entity’s protected health information by the business associate in compliance with § 164.504(e)(2)(i) of this subpart.

"(ii) For a business associate who is not a covered entity, obtaining a written contract or other written agreement or arrangement with the business associate that meets the applicable requirements of § 164.504(e) of this subpart.")

Adopted 
May 2002

91

Adopt the NPRM proposal at 45 CFR §§ 160.202, 164.502(g) to clarify that parents’ access to the medical information of their unemancipated children is controlled by State law, and when State law is silent, by the covered entity’s professional judgment.

Adopted 
May 2002

92

Adopt the NPRM proposal at (45 CFR § 164.504(a)) to remove "primary" from the hybrid entity definition and give any covered entity with non-covered functions the option to designate itself a hybrid entity. (By adopting this proposal, the covered entity will be required to identify each of its operations that perform covered functions and subject these health care components, as well as each component that serves the health care components in a business associate capacity, to Privacy Rule compliance.

The effect will be that the health care components, and the components serving them in a business associate capacity, may not disclose their protected health information to, or allow their protected health information to be used by, non-health care components unless the Privacy Rule allows such disclosure or use. For example, a health care component will not be allowed to disclose its protected health information to the covered entity’s human resources personnel performing non-covered employment functions. It also means that individually identifiable health information held by the covered entity’s non-health care components [e.g., health information in the human resources department is not protected health information subject to the Privacy Rule.])

Adopted 
May 2002; 
Re-adopted 
September 2002 
with dissents from 
Dr. Olsen and 
Mr. Toby

93

Adopt the NPRM proposal at 45 CFR §164.501 ("Protected Health Information") that would exclude employment records from the protected health information definition.

Adopted 
May 2002, 
with dissent from 
Dr. Olsen

94

Adopt the NPRM proposal at 45 CFR § 164.504(f) to explicitly state that a health plan may disclose enrollment data to the employer or other sponsor of the group health plan, even if the sponsor does not qualify under the Privacy Rule to perform plan administration functions.

Adopted 
May 2002

95

Adopt the NPRM proposal at 45 CFR § 164.514(b)(2)(i)(R) that would make clear that a re-identification code or key under 45 CFR § 164.514(c) does not have to be deleted to de-identify data.

Adopted 
May 2002

96

Clarify the de-identification safe harbor knowledge requirement 45 CFR § 164.514(b)(2) by making clear that "other information" must be available outside the covered entity and by clarifying the meaning of "actual knowledge" in the corporate context.

(This may be accomplished by revising 45 CFR § 164.514(b)(2)(ii) as follows:

"(ii) The covered entity determines, after documented inquiry of those of its components that may be reasonably expected to know, that it has no actual knowledge that the information could be used alone or in combination with other information available outside of the covered entity to identify an individual who is a subject of the information.")

Adopted 
May 2002

97

Set a defined schedule (45 CFR § 160.104) for issuance of final modifications, additions, and deletions to the privacy standards, and for compliance with those modifications and additions as follows:

  • Publish final modifications, additions, and deletions to privacy standards as final rules in the Federal Register on the same, pre-set calendar date each year (for example, December 1 or nearest business day before that date).
  • Establish a six-month compliance date for routine modifications and additions to privacy standards.
  • Specify a longer compliance period for major privacy standards changes that require the industry to have very long planning periods.

(This recommendation assumes that the nature of modifications will vary from year to year. In some years, changes may be minor in nature, while in others may be far-reaching.)

Adopted 
May 2002; 
Re-adopted 
November 2002

98

Establish a Privacy Rule advisory panel either within the National Committee on Vital and Health Statistics or as a separate advisory committee or task force, to concentrate on improving the operation and consumer privacy protections of the Privacy Rule and to advise HHS on the modification, additions, and deletions to the Privacy Rule’s standards and implementation specifications for the defined annual Privacy Rule Modification cycle. The advisory panel or task force should be comprised of health industry representatives, patients, and health plan enrollees with significant operational experience in the delivery and financing of health care and representative of various government agencies, including FDA, DOL, OIG, Department of Justice, State Medicaid programs, etc. that regulate activities affecting health care delivery or financing.

Adopted 
May 2002

103

Expand the J Code system to more accurately define the package size used. If available package sizes are 100 mg, 200 mg, and 1 gram, have separate codes for each of those sizes, with corresponding reimbursements.

Adopted 
June 2002

104

Further clarify the HIPAA final transaction rules to allow providers to make changes in the event the National Drug Codes (NDC) system is going to remain a part of the initial HIPAA transactions codes implementation.

Adopted 
June 2002

105

Clearly define covered drug products instead of broadly defining what may qualify as self-administered.

Adopted 
June 2002

106

Use patient-specific modifiers that may move drugs into a covered category for patients with limited mobility and/or capability to understand therapeutic schedules.

Adopted 
June 2002

107

Implement a drug coding system that is standard, updates electronically, and specifically states the product administered. (Currently, the only such coding system that exists is the NDC coding system.)

Adopted 
June 2002

125

Explore the feasibility of permitting members of employer group health plans or individuals who have access to a personal computer to enroll and disenroll electronically from M+C plans, and begin a pilot to test said procedures, respecting security, privacy, and other related matters.

Adopted 
June 2002

185

Set a defined schedule (45 CFR § 160.104) for issuance of final modifications, additions, and deletions to the transactions standards, and for compliance with those modifications and additions as follows:

  • Publish final modifications, additions, and deletions to transactions standards as final rules in the Federal Register on the same pre-set calendar date each year (for example, December 1 or nearest business day before that date).
  • Establish a six-month compliance date for routine modifications and additions to transactions standards.
  • Specify a longer compliance period for major transactions standards changes (e.g., replacement of a clinical code set) that require the industry to have very long planning periods.
  • Investigate development of a process to identify "minor" modifications and expedite their publication (perhaps via abbreviated rule making) in recognition of the opportunity for public input that is already afforded by the industry standards development process, again based on specified publication and effective dates.

(This recommendation assumes that the nature of modifications will vary from year to year. In some years, changes may be minor in nature, while in others may be far-reaching because of proposals for new transactions, replacing clinical code sets, etc.)

Adopted 
June 2002; 
Re-adopted 
November 2002

186

Require the definition of every standard transaction (45 CFR §§ 162.1101 162.1801) to include a "sender" specification and a "receiver" specification. (For example, revise the "health care claims status" and "referral certification and authorization" standard transactions to add "sender" and "receiver" requirements to their definitions.)

Adopted 
June 2002

187

Eliminate or define in a useful manner the meaning of "Within the Same Covered Entity" (45 C.F.R § 162.923(a)). (For example, if the intent of this provision is to require that transactions between health care components doing different covered functions that are part of the same corporate entity ought to be in standard formats, then apply the concepts of "hybrid entity," "covered functions," "multiple-function covered entity," and "health care components" [now applicable only to the HIPAA Privacy Rule] to all of the HIPAA rules, including the Transactions Rule. The "within the same covered entity" provision could then be redefined to apply only to transactions that are between a covered entity’s health care components that do different covered functions.)

Adopted 
June 2002

188

Issue clearer rules, including more meaningful compliance guidance, for covered entities regarding conduct of Direct Data Entry (DDE) Transactions (45 CFR § 162.923(b)).

Adopted 
June 2002

203

Revise the Medicare and Medicaid cost reports to reflect the current purpose and use of these two separate documents. The data should be sufficient to create, as required by Congress, a Skilled Nursing Facility (SNF) wage index, appropriate market basket update, and other purposes that CMS can justify.

Adopted 
June 2002

215

Modify existing regulations in order to allow providers the option to utilize electronic images, transmittals, and automated vendor file exchange data receipts as evidence to support costs claimed for reimbursement in place of the currently required "hard copy" originals of such evidence.

Adopted 
June 2002

222

Create an FDA/HHS working group of all affected stakeholders to look at the current IT systems that have automatic reporting for adverse events, adverse drug reactions, and medical errors; study the feasibility of developing a National Automatic System. (An existing example can be found on the web at www.PRHI.org.)

Adopted 
June 2002

224

Design and implement, as soon as possible, a demonstration project to deploy Medicare smart cards to selected beneficiaries. Include a chip on the card that would contain basic beneficiary data in a write-protected form so it could not be altered by an unauthorized user. Ensure that the smart card can be used by providers, beneficiaries, and the industry to store information. (Note: the long-term goal of this initiative is to create an electronic medical record.)

Adopted 
September 2002; 
Re-adopted 
November 2002

225

Establish a multidisciplinary panel to evaluate open architecture applications for use with a Medicare smart card. Direct the panel to make recommendations to approve or reject proposed open architecture applications for the Medicare smart card. Give special attention to privacy concerns. Seek technical assistance from the OIG to prevent fraud and abuse. ("Open architecture" provides a platform on which users can layer software and data. Outside groups would be encouraged to develop ways to expand the card’s use beyond simple identification with data stores and interfacing applications. Additional issues for consideration upon deployment of a smart card include:

  • Determining whether all applications developed by the health care community should be funneled to the panel for consideration before being implemented or whether this panel would support a community model in which various entities would develop software applications themselves on an ongoing basis, producing creative mechanisms and seeking industry-wide standards.
  • Acknowledging that the technological capacity of smart cards may require some organization to set parameters on the use of the card and the types of software that would be permitted for inclusion on the card.
  • Developing a formal public/private partnership to support private sector innovation for a government-sponsored product and reconcile any issues that arise from this partnership.)

Adopted 
September 2002; 
Re-adopted 
November 2002

226*

Use the Medicare smart card as a tool for integrating medical information across the continuum of care over the long term. For example, allow for the integration of data from future electronic standard assessment instruments, enrollment forms, and medication administration records into smart card technology.

Adopted 
September 2002

233

Develop an online, real-time claims adjudication system for Medicare that gives payors information relating to coverage, reimbursement, and coordination of benefits at the point of service whenever possible.

Adopted 
September 2002

236*

Issue a Memorandum of Understanding (MOU) between the FDA and CMS that considers the interest of stakeholders and defines the process the two agencies will employ to permit the exchange of information and support collaboration relative to their respective reviews of innovative medical device technologies while maintaining the confidentiality of trade secrets and other proprietary data. Propose regulations to achieve specific elements of this recommendation, as needed.

Adopted 
September 2002

237

Formally promote and encourage the implementation of processes to expedite FDA notification of CMS when an Investigational Device Exemption (IDE) designation, i.e., Category A or B, has been granted, and ensure complete and timely CMS transmittal of such notification to local carriers and fiscal intermediaries.

Adopted 
September 2002

241*

Establish a process, with input from affected stakeholders, to enable early coordination between FDA and CMS and, when appropriate, permit parallel reviews during the design of clinical trials for medical device technologies, thereby promoting more timely patient access to innovative therapies without slowing down the FDA approval process.

Adopted 
September 2002

242*

Announce publicly and promote through outreach to stakeholders the process (e.g., relevant structures and time frames) for the implementation of recommendations relating to FDA/CMS coordination related to new medical device technologies.

Adopted 
September 2002

243

To facilitate timely release of new medical device technologies and to enable CMS to support the processes for enhanced FDA/CMS coordination on new medical device technology issues:

  • Encourage CMS to issue guidance in consultation with stakeholders on Medicare coverage standards (guidance is not legally binding).
  • Recognize the importance of and support the maintenance of local medical review policies (LMRPs).
  • Support the timely issuance of Health Common Procedure Coding System (HCPCS) consistent with the Advisory Committee’s recommendation to adopt a defined schedule for issuance of proposed and final modifications, additions and deletions to the transaction standards (see recommendation 185).
  • Eliminate the requirement to submit six months of marketing data (post-FDA approval) prior to the acceptance of the HCPCS application.
  • Improve the effectiveness and efficiency of the national coverage decision process by promoting CMS consideration of reliable data from outside sources in the coverage and payment review processes.
  • For decisions involving national coverage for new technologies without a referral for technology assessment or to the Medicare Coverage Advisory Committee (MCAC), direct CMS to establish and maintain a six-month time frame for issuing decisions. If a referral is required, establish and maintain a 12-month timeframe for decisions.
  • Allocate adequate CMS staff and resources to meet expedited time frames for national coverage decisions.

Adopted 
September 2002, 
with dissent from 
Mr. Bloom and 
Ms. Ryan

244

Determine processes for timely review of FDA-regulated combination products by dedicating staff to the development of appropriate policies or establishing a new Office of Combination Products.

Adopted 
September 2002

 

 

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LONG TERM VISION

The Department of Health and Human Services (HHS) includes the Centers for Medicare & Medicaid Services (CMS), and the Food and Drug Administration (FDA), among other important agencies. Over time, these agencies’ programs and regulatory responsibilities have become quite complex, with the following results: regulations governing Medicare and Medicaid often can interfere with the process of delivering care to the programs’ beneficiaries, adversely affect physicians and providers who render that care, and in some situations, prevent beneficiaries from receiving services to which they are entitled. Similarly, while FDA has made progress during recent years in streamlining operations and improving customer service, improvements still are needed to ensure that drugs, biologics, and devices are safe and that consumers and patients have access to medical innovation that can improve or extend their quality of life. Much can be done to improve health care services and products for all Americans and to make HHS regulations and programs work better for the individuals and organizations responsible for the delivery of health services or the development of regulated products.

Although most of the Committee’s short-term recommendations relate to Medicare, the long-term recommendations mostly are applicable to the regulatory processes used by both agencies. The Committee offers these recommendations for improving the regulatory process to avoid convening a committee of this kind again in the future. Some of these suggestions could be accomplished within the management structure and regulatory process of HHS; others would require legislative changes, management structure changes, or resource allocation decisions. But vision is needed to guide improvements in the regulatory process to solve the fundamental problems existing today. This chapter outlines the Committee’s vision of the future and offers thoughts about how to achieve the vision.

 

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PROBLEMS WITH THE CURRENT SYSTEM

The current regulatory process expends considerable energy and effort on annual updates of payment systems for inpatient hospital care, outpatient hospital care, physician services, ambulance services, nursing home care, and more. These routine updates alone require considerable effort. The work of crafting new regulations in response to Congressional action provides a major challenge to HHS. Adequate human resources and technology investments will be needed to achieve a higher level of service to beneficiaries and providers. The problem must be remedied before truly effective long-term improvements in service can be achieved. For example, it is not possible to provide a pre-authorization system for Medicare beneficiaries that would enhance service and remove uncertainties of the current system without additional resources.

The current regulatory process diverts precious resources from direct patient care or service. Some of the financial and human resources needed to achieve service improvements and overall performance can come from elimination of regulatory processes that do not add value for beneficiaries. The savings generated from regulatory simplification and restructuring could be used for other important programs and services.

Today’s system of health care regulation needs to be redesigned in order to build a high-quality health care system for the 21st Century. The time has come for all stakeholders in the health care system to improve effectiveness and address systemwide problems. Achievement of the Committee’s vision requires a quality design effort that spans several years, and potentially, new funding sources. The approach should be based on the following general guidelines and principles, some of which are not new, but perhaps have been forgotten or need to be re-emphasized:

 

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GUIDING PRINCIPLES

A specific framework for the future structure of regulatory process would incorporate the following elements:

The regulatory process should operate in an integrated fashion; too often the regulatory process is fragmented. Regulations in one area may conflict with the regulatory requirements in another. Unnecessary duplication of effort also occurs in regulation and program administration. For example, a Medicare beneficiary may have separate data collected from hospitals for Part A care, physicians for Part B, home health (OASIS), a nursing home (MDS), and durable medical equipment—much of it having no clinical relevance. Thus, there are multiple regulatory requirements for data collection, creating multiple data sets for the same beneficiary and no ability to integrate across programs, databases, or processes to improve care. A different approach should be taken. There should be a patient-centered record, supported by improved information technology using smart card and other technologies. Information technology advances should permit data to be collected for clinical purposes and used for payment and quality purposes without overlaying expensive, confusing, and burdensome, separate reporting systems.

HHS should improve communication between programs and achieve true integration to serve beneficiaries and providers, building on the success of the Medicaid waiver process. Important program improvements that are successfully studied and implemented in the context of Medicaid demonstration programs should be evaluated for rapid incorporation into Medicare programs. These changes would require Congressional action.

An orientation to service requires that new measures of performance be incorporated in program management and assessment of effectiveness. For example, service should be measured by the frequency with which beneficiaries are enrolled without problems, or how many providers are registered within 21 days, or how often the right answer is provided to help line inquiries. Rather than concentrating on completion of forms to collect data that are not directly related to patient care, emphasis should be on the quality of clinical performance. Regulations run the risk of creating barriers to innovation by forcing all providers to work backward to a basic level of functioning. CMS already is working to improve the ability to care for patients with certain diseases and conditions, and these efforts could be helped by redirecting resources from regulatory processes that do not add value to these important, quality-oriented practices.

Assessing the value of simplification should include operational savings from streamlined processes that avoid duplication of effort and are more likely to result in the desired improvements in service and quality of care. The Committee (and others) has tried to estimate the potential savings, but an accurate assessment would require additional work by the Department.17

Regulation in the health care field has grown by a steady process of accretion. It has resulted in a system that is duplicative, intrusive, and too often in conflict with itself. Indicative of the problem, no one knows the cost of these regulations. This should be determined, or at least estimated. While each new regulatory scheme appears on its face, and at first, to be beneficial, it is critical to know whether the benefit is real, particularly as it evolves over time, as circumstances change, and as patients and providers deal with the cumulative effect of these regulations.

The experience of Medicare demonstrates the need to consider new approaches. As outlined elsewhere in this report, regulations frequently are invasive and prescriptive. Too often, regulations stand in the way of patients being able to get the care they need and that their providers are ready to provide. Regulations have grown over time, each one addressing a perceived problem, followed by ambiguous interpretations, bulletins, and even more regulations to make the initial ones "work." The Committee has outlined a number of recommendations to change the regulations, and this statement of long-term recommendations is intended to prevent problems identified through this effort from occurring again. However, it may well be that no matter how skilled and well-meaning the government officials, and no matter how the process is improved, the effort to regulate on a service-by-service basis every element of the provision of care to Medicare beneficiaries inevitably results in the kinds of regulatory problems the Committee has identified. The effort to control, by statute and regulations, the vast variety of circumstances presented, and the complexity of health care itself, inevitably leads to regulatory problems.

Sometimes it is necessary to consider bold changes rather than small, incremental, problem-oriented fixes. The system should be patient-centric. A system centered on the patient (and on the consumer before she or he becomes a patient) will reduce the need for intrusive, detailed regulation. Given more power to make their own decisions and more control over the use of their resources for care, patients—with good information—can use their purchasing power (and intermediaries working on their behalf) to mitigate the need for complex and detailed regulation.

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The Committee was unable to address all of the issues raised during its deliberations; the Committee’s scope of work was broad, and the timeframe in which the Committee was charged to complete its work was narrow. Following is a catalogue of the proposed recommendations that were either formally discussed or put forth for Committee consideration but were not brought to closure. Inclusion of proposed recommendations in this list implies neither Committee endorsement nor rejection. (Proposed recommendations marked by an asterisk [*] may require legislative action.)

PURPOSE

The Secretary’s Advisory Committee on Regulatory Reform will provide findings and recommendations to the Secretary regarding potential regulatory changes that would enable HHS programs to reduce burdens and costs associated with Departmental regulations, while at the same time maintaining or enhancing effectiveness, efficiency, impact and accessibility.

AUTHORITY

This Committee is governed by the provisions of the Federal Advisory Committee Act, Public Law 92-463, as amended (5 U.S.C. Appendix 2), which sets forth standards for the formation of advisory Committees and implementing regulations (41 CFR 102-3.)

FUNCTIONS

The Secretary’s Advisory Committee on Regulatory Reform shall advise and make recommendations related to health care delivery, operations, biomedical and health research as well as the development of pharmaceuticals and other medical products. The process of formulating recommendations would include regional public hearings and soliciting public comments regarding particular HHS regulations.

The Committee shall (a) review candidate regulatory changes identified through the regional hearings, through solicitations of written comments from the public, or through consultation with HHS staff and (b) advise whether, if effected, these candidate changes would have beneficial results associated with the purpose described above.

As appropriate, the Committee shall consider the potentially most beneficial regulatory reforms and advise regarding their priority for implementation.

STRUCTURE

The Committee shall consist of not more than 30 members including the Chairperson or Co-Chairperson. Appointments shall be made by the Secretary from authorities knowledgeable in the fields of health care delivery, health system operations, advocacy for patients’ interest, health insurance, development of pharmaceuticals and other medical products, and biomedical and health services research. Attention shall be given to equitable geographic distribution and to ethnic and gender representation.

Members, including the Chairperson or Co-Chairperson, shall serve from the date of their individual appointments until the termination of the Committee – approximately one year. Should any member be unable to complete his or her term, the Secretary, at his discretion, may appoint a replacement to fill the remainder of the unexpired term.

As necessary, standing and ad hoc sub-committees composed of members of the parent Committee may be established to perform specific functions within the Committee’s jurisdiction. The Department Committee Management Officer shall be notified upon establishment of each sub-committee and shall be provided information on its name, membership, function and estimated frequency of meetings.

Management and support services shall be provided by the Office of the Assistant Secretary for Planning and Evaluation.

MEETINGS

The Committee shall meet three times unless, after consultation with the Chairperson or Co-Chairpersons, the Secretary determines that additional meetings are necessary to fulfill the purpose of the Committee. All meetings shall be at the call of Chairperson or Co-Chairpersons. An official of the Federal government shall be present at all meetings.

Meetings shall be open to the public. Advance notice of all meetings shall be given to the public.

Meetings shall be conducted and records of proceedings shall be kept in accordance with applicable laws and Departmental regulations.

COMPENSATION

Members who are not full-time Federal employees shall be paid per diem payments and travel expenses in accordance with Standard Government Travel Regulations.

COST ESTIMATE

The estimated cost for operating the Committee, including travel expenses for members but excluding staff support, is $365,000. The estimated person years of Federal staff support is 1.5 at an estimated cost of $135,000.

REPORTS

The Committee shall present its findings and recommendations regarding reform of HHS regulations to the Secretary in written reports approximately 30 days following each Committee meeting and in a final report upon completion of its tenure. A copy of each report shall be provided to the Department Committee Management Officer.

TERMINATION DATE

Unless renewed by appropriate action prior to its expiration, the Secretary’s Advisory Committee on Regulatory Reform shall terminate by no later than November 30, 2002.

 

 

 

APPROVED:

August 28, 2001 (original);
October 29, 2001 (as amended)
August 6, 2002 (as amended)                                                                                             

Secretary:
Tommy G. Thompson