[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]
CMS REGULATION OF HEALTHCARE SERVICES
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTH CONGRESS
SECOND SESSION
__________
WASHINGTON, DC
__________
OCTOBER 3, 2002
__________
Serial No. 107-72
__________
Printed for the use of the Committee on Small Business
U.S. GOVERNMENT PRINTING OFFICE
82-598 WASHINGTON : 2002
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COMMITTEE ON SMALL BUSINESS
DONALD MANZULLO, Illinois, Chairman
LARRY COMBEST, Texas NYDIA M. VELAZQUEZ, New York
JOEL HEFLEY, Colorado JUANITA MILLENDER-McDONALD,
ROSCOE G. BARTLETT, Maryland California
FRANK A. LoBIONDO, New Jersey DANNY K. DAVIS, Illinois
SUE W. KELLY, New York BILL PASCRELL, Jr., New Jersey
STEVE CHABOT, Ohio DONNA M. CHRISTENSEN, Virgin
PATRICK J. TOOMEY, Pennsylvania Islands
JIM DeMINT, South Carolina ROBERT A. BRADY, Pennsylvania
JOHN R. THUNE, South Dakota TOM UDALL, New Mexico
MICHAEL PENCE, Indiana STEPHANIE TUBBS JONES, Ohio
MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas
DARRELL E. ISSA, California DAVID D. PHELPS, Illinois
SAM GRAVES, Missouri GRACE F. NAPOLITANO, California
EDWARD L. SCHROCK, Virginia BRIAN BAIRD, Washington
FELIX J. GRUCCI, Jr., New York MARK UDALL, Colorado
TODD W. AKIN, Missouri JAMES R. LANGEVIN, Rhode Island
SHELLEY MOORE CAPITO, West Virginia MIKE ROSS, Arkansas
BILL SHUSTER, Pennsylvania BRAD CARSON, Oklahoma
ANIBAL ACEVEDO-VILA, Puerto Rico
Doug Thomas, Staff Director
Phil Eskeland, Deputy Staff Director
Michael Day, Minority Staff Director
C O N T E N T S
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Page
Hearing held on October 3, 2002.................................. 01
Witnesses
Scully, Hon. Thomas, Administrator, Centers for Medicare &
Medicaid Services.............................................. 04
Harroun, Mary, President, Merry Walker Corp...................... 10
Probst, Dr. Edward, Columbus, IN................................. 15
Davey, Dr. Patrick, Lexington, KY, for the American Academy of
Dermatology.................................................... 17
Appendix
Opening statements:
Manzullo, Hon. Donald........................................ 37
Prepared statements:
Scully, Hon. Thomas.......................................... 39
Harroun, Mary................................................ 58
Probst, Dr. Edward........................................... 111
Davey, Dr. Patrick........................................... 116
Additional Information:
Letter to Chairman Manzullo from Nancy Taylor, Greenberg
Traurig, LLP............................................... 122
CMS REGULATION OF HEALTHCARE SERVICES
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THURSDAY, OCTOBER 3, 2002
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 2:10 p.m., in Room
2360, Rayburn House Office Building, Hon. Donald A. Manzullo
[chair of the Committee] presiding.
Chairman Manzullo. Good afternoon. We have an interesting
scenario going on over on the floor, but what else is new in
life? Let me get through the opening statement here and then we
will have to adjourn and come back for the remainder of the
hearing.
And I thought it would be a good idea, just before the
Congress ends to try to tie up as many loose ends as possible.
And perhaps Mr. Scully could help us on that.
This hearing really is in three parts. The first part is an
update on the administrative process of exactly how to deal
with Mary Harroun's combination of a walker and seat known as a
Merry Walker.
I am going to be asking Leslie Norwalk to sit at the table
and give us an update on the administrative process. Leslie, I
know when you were in my office, we asked it be concluded
within 60 days. We were subsequently advised that you wanted to
do a lot more research and investigation into that.
The second issue deals with the portable x-ray provider
reimbursement that apparently has reached a stalemate. We want
to get that taken care of have asked a couple of people from
CMS staff to join us.
The third issue deals with CLIA, and people from CMS, along
with Mr. Scully will help us through it.
The purpose here is to have this as informal as possible,
to have an exchange going on among the parties. We are looking
towards guidelines and a resolution.
I know with regard to the Merry Walker, I think we had
three issues in there, and one or two of them have been
resolved, and the third one may or may not be resolved to the
likings of my constituent, but at least will be on the road to
getting that resolved and to go on to working with Mary on
further applications and guidelines for the applications that
have already been approved by CMS.
We are also going to be joined later on by Dr. David
Weldon, M.D. He has asked to address the Committee and talk
briefly about the status of the portable x-ray issue. The fact
that the rates are so low, that the portable x-ray people are
going out of business, and CMS is actually paying more to do
the same services at a great disadvantage to the seniors who
are involved.
And my mother was one of those who had the benefits of
using the portable x-ray. And then when that was ended in
Rockford, Illinois, because of low reimbursement rates, she had
to be carted to the hospital, sat in the emergency room, and 4
hours later carted back to the nursing home, all at a cost of
several times more than the portable x-ray. We are quite
disappointed that that issue has not been resolved. So that is
going to be the purpose of the hearing.
[Mr. Manzullo's statement may be found in the appendix.]
Chairman Manzullo. And Dr. Christensen, did you have an
opening statement?
Mrs. Christian-Christensen. I do, Mr. Chairman. Did you
want me to go ahead and do it now?
Chairman Manzullo. Did you want to do it now or wait until
we get back?
Mrs. Christian-Christensen. I will wait. I will make an
informal statement.
Chairman Manzullo. As a Member of Congress and also as a
medical doctor, I want to give you some time.
Mrs. Christian-Christensen. Thank you.
Chairman Manzullo. We are adjourned here for a few minutes.
[Recess.]
Chairman Manzullo. Dr. Christensen.
Mrs. Christian-Christensen. Thank you, Mr. Chairman. I want
to thank you for having this hearing. I appreciate any time
that we have the opportunity to have Mr. Scully with us to
address the issues that are affecting our health care providers
and the patients that they serve.
I am glad that we are going to revisit the Merry Walker
issue again. I think it is a very appropriate example of how
the implementation of CMS regulations sometimes just don't
serve the patients or the provider well. I hope that we will be
able to resolve that issue today.
And beyond that, even make a start at seeing how we can
best fix the problem more systematically. I had the great
experience of being with my local doctors last weekend as they
were meeting with the representatives of our carrier in Puerto
Rico, Triple S. I applaud the effort that they are making to
try to address the concerns of the physicians, but I really
think we still need to fix the contracting system.
Even you, Mr. Scully, said that it was flawed. I don't
think we are going to be able to address a lot of the concerns
unless that is fixed. So I just wanted to say that on the
record again.
As we meet, the issue of restoring cuts to provider
payments, has not been resolved. There was an attempt today
here. The Senate was to have marked up a bill this week, they
have not marked it up yet. And I still hold that CMS can do it
administratively. I want to get it on the record. We are
forcing providers out of business. In doing so, we are denying
many people in this country access to health care.
I also want to underscore that just doing a Medicare give-
back bill wouldn't necessarily either get to the heart of the
problem. We really need to look at how the fees are set and
what are the parameters used. We said it before that the GDP
was not a good way to determine what our Medicare fees should
be. The issue, one of the issues I wanted to mention also is
HIPPA. As that is looming very imminently ahead, small
hospitals and other providers need funding and technical
assistance, I think to make the changes that are necessary to
become compliant, and I hope that we can begin to identify
where such help can be found.
And with the history of audits and the investigations,
which I have, at least on two occasions, asked for a moratorium
on, it causes us to be concerned over what will happen as these
new regulations are put into effect, because we know that the
costs of time and money for review or reconsideration process
is usually something that most of our small health care
providers can't afford. And it turns out that many of those
investigations don't find anything except innocent mistakes. So
I would like some reassurance from CMS that there will be some
flexibility and more help and technical assistance rather than
punitive measures imposed as we begin this very complex
process.
One more issue I would like to add, and otherwise I will
submit my entire opening statement for the record. And this is
not in order of importance. I still have a problem with the
prescription drug card that the administration is proposing.
The card--I think given the fact--it is a poor substitute for a
comprehensive Medicare prescription drug benefit. It not only
will not provide substantive help to seniors, but it has the
potential of hurting our pharmacies and our chain drug stores.
This is, I believe, the third reincarnation of the program. I
would like to know what is different about this program? How
will this program help more than the others? How is it
different than it will pass muster with the courts?
With that, I would like to thank all of you who are here to
testify this afternoon. Thank you for giving me the opportunity
to make an opening statement and welcome again.
Chairman Manzullo. Thank you, Doctor. What I would like to
do is do the testimony in thirds. Mr. Pence do you have an
opening statement?
Mr. Pence. I do very briefly, Mr. Chairman. I want to thank
you, Chairman Manzullo, for calling what I think is a very
important hearing at a very busy time on the legislative
calendar.
As the chairman of the Subcommittee on Regulatory Reform
and Oversight of this Committee, I regularly hear from small
business people who are struggling under the heavy hand of
government regulation. Often it is a small entrepreneur with a
new idea for making a product or a family business, like yours,
Mr. Chairman, passed down over generations that finds itself
unable to stay in business because of the cost and the burden
of onerous government regulations.
But I must say, in keeping with today's hearing, I think it
is particularly troubling when I hear from physicians in my
district, and even in my home town, which is represented here
on our panel today. People who oftentimes hold life and death
in their hands, the very well being of the citizens that we
serve, who tell me that they are unable to give their patients
the best care possible, in part because of government
regulations.
The Clinical Laboratory Improvement Amendments Act of 1988
or CLIA, is the issue that I have been a part of bringing to
the committee's attention today. CLIA, as we all know, is
administered primarily by the Centers for Medicare and Medicaid
Services. So I am particularly grateful for Administrator
Scully's participation today, and wish to thank you publicly
for being here.
CLIA's inception was in reaction, we all know, to poorly
performed laboratory tests that resulted in missed diagnosis,
particularly of cancer. It was absolutely a tragedy. CLIA's aim
was to prevent errors in laboratory testing and reporting.
In certain respects, these efforts have been commendable,
and in some ways quite successful. The difficulties however,
began in treating a single physician the same way we would
treat a 1,000-person laboratory. In other areas of government
we have been convinced that the one-size-fits-all regulation
isn't the answer. In the field of health care, I simply believe
the same rule should apply.
The Secretary of HHS, Tommy Thompson's Advisory Committee
on Regulatory Reform, has put together some important ideas on
changes to CLIA. We hope there are opportunities to work with
CMS on other changes and hopefully here some today. I think we
will hear in this hearing today, Mr. Chairman, reasons for
reform on the burden that physicians face.
And hopefully in this hearing, we will begin to hear the
beginnings of some very needful reforms under this new
administration. I look forward to hearing from all of our
witnesses. I would echo the chairman's appreciation for your
willingness to travel here many miles and endure the scrutiny
of a Congressional panel.
And again, we thank you, Mr. Chairman, for your leadership
in this area.
Chairman Manzullo. Well, thank you.
I want to do these in triplets, or in three parts, to keep
the testimony as tight as possible, and first talk about the
issue with the Merry Walker. Mr. Scully, if you wanted to
comment on that, or if you wanted to defer to Leslie on that,
on the status, however, you know, since you are the lead
witness, one of the lead witnesses on it, however you would
feel comfortable.
Mr. Scully. It depends on what Leslie says.
Chairman Manzullo. We are looking at the administrative
status on that. It is up to you.
Mr. Scully. I would be happy to talk about it.
STATEMENT OF THE HON. THOMAS SCULLY, ADMINISTRATOR, CENTERS FOR
MEDICARE AND MEDICAID SERVICES
Mr. Scully. If you wouldn't mind first, so I don't forget
to just quickly run through the Congresswoman's issues, could I
jump to those and then go straight back? Because a lot of
them--they are all important issues.
Let me start with the drug card, as you know this is
something that came out of our career staff. And I talked to
you before about it. We clearly don't look at that as a
substitute for a Medicare drug benefit. We really wanted to get
a drug benefit this year. We spent a lot of time supporting the
House bill.
We showed great willingness to work on any kind of variable
with the Senate. And I am personally very disappointed, it
doesn't look like we are going to get one this year.
We believe that the drug card, as I said before, I
represent 40 million seniors and disabled, we believe they walk
into a pharmacy and pay the highest prices. We all have, or I
have Blue Cross of Virginia. I probably pay 15 to 20 percent
less because of their use of a PBM than a senior does, and we
are basically trying to organize the seniors to have the same
kind of purchasing power people under 65 have in the interim.
In the long run, seniors want an insurance plan where they
are going to pay $10 a prescription like I do. In the short
term, we want to give them some hope by coordinating their
market power. We have spent a lot of time with the drug makers,
the retail pharmacists and the chain drug stores. We understand
their concerns. I think the new reg is much tighter, and
answered a lot of their concerns. They have not actually sued
us yet.
Ms. Norwalk. They filed Friday.
Mr. Scully. We spent a lot of time talking to them. I
understand their concerns. They have a lot of legitimate
concerns. They are concerned that we organize 40 million
seniors, and seniors pay the highest cost in a retail pharmacy,
they are concerned more that we are going to go to mail order,
which I don't think will happen, we are concerned about that.
They are also concerned that if seniors pay lower prices,
they are going to get stuck in the squeeze and their margins,
where there are high costs on seniors will be lower.
We have every expectation that people under 65 may pay
more, but we don't believe people over 65 should be paying the
highest prices, which is what happens right now. So that--we
are trying to work with the pharmacists as much as we can. The
drug card is clearly a short term--I think it is a little more
than a band aid, but we believe it is a help. We also think it
is a first step.
We have had a lot of bipartisan support. You may have
noticed that in the Senate, one of the few things that got
through the Senate in the drug bill was that both sides on a
bipartisan basis, said the drug discount card is a good idea.
But we have never held it out as a substitute or even a short
term fix. Almost all of the bills, Democratic and Republican on
both sides, envision usorganizing 40 million seniors into
purchasing co-ops. That is all we are trying to do. We are very
sensitive to the pharmacists' concerns. I never expected them to like
it, but I do think we have bent over backwards to find ways to address
their concerns, purely because of the lawsuit, because there is a
question about our existing legal authority or ability and our rules to
answer all of their concerns, we are kind of in a catch-22.
The more we tighten up our rule, the more people--there is
a legal question about our authority to do it. So, but we are
committed to working with them. I spent a lot of time talking
to them. I went and spoke at their annual meetings. I have
talked to the chain drug stores, and you know we think they
have a lot of legislate concerns we would like to address. We
also think that we have 40 million seniors that aren't
organized, and we have a responsibility to organize them.
I am glad to hear you have a good relationship with your
contractor. As you know, we want to do contracting reform. I
think there is a pretty good chance, if we do get a bill in the
next couple of weeks that we are going to get contracting
reform. SSS is part of Empire. My guess is they will probably
be involved no matter what. But they tend to be one of our
better contractors. We think that we can do a lot to improve
that system.
On physician payment reform. Chairman Thomas and many other
people hope that I can fix that on my own. I can tell you I
have spent many hours with every lawyer in the government. We
can't fix it. Unfortunately, there is a negative 4.4 percent
update coming on top of last year's negative 5.4 percent, and
we are very strongly trying to fix that this year.
And as I think you would ask, I have been the number 1
advocate of fixing it. And the administration does not look at
that as a give-back. We look at it as a technical fix. The
formula is screwed up, and we are determined to fix that. We
are not great fans of a big give-back bill, as you know. But we
do believe that Congress absolutely has to fix the physician
payment formula before we leave or we are going to have a
significant access problem.
So we are completely in support of that. And the two other
quick things, I will mention HIPAA. I agree with a lot of your
concerns about HIPAA. We have a lot of work to do on HIPAA, but
I do think in the long run, all of the doctors' offices, all of
the hospitals, and I used to represent 2,000 of them, you know
they now get billed by 25 different insurance companies with 25
different sets of forms. It is going to be difficult and
intimidating to go to one common set of forms.
It may be difficult a year from now when we flip the switch
and use a common data set. But people have been talking about
this for 15 years as the right thing to do. I think 2 or 3
years from now when you go into a lot or a physician's office,
they are going to have a lot lower need for clerical staff,
hopefully, because they will have one set of forms for every
insurance company, and for Medicare and for Medicaid. It is an
intimidating task, and we are responsible for the education. It
is going to be tough.
But I do think that we need, at some point, to close our
eyes and take the leap of faith and have every provider use one
set of common codes. In the long run, it will do a lot to
debureaucratize the billing system. And we are hoping to do the
best we can to work with your providers to educate them on
that.
The last thing I have tried, maybe I will just use this as
my introduction to the other issues we are going to get into.
We tried the best we can to debureaucratize CMS in the last
year and to deal with people, even this morning at our staff
meeting, I was in North Carolina, rural North Carolina touring
five hospitals on Friday. I came back and gave the example of
one that had a minor investigation 5 years ago. It turned out
after 5 years of investigation, that they had no violation, but
they spent $1 million dollars on legal fees on a 60-bed
hospital. And that is the kind of thing that drives people
crazy.
We are doing the best we can to avoid that kind of thing.
On the other hand, we are spending $560 billion of taxpayer
money every year in Medicare and Medicare and S-CHIP and you
have to have some reasonable guidelines to make sure the
programs don't get defrauded.
But I think we have made a lot of gains. We are here to
talk about the issues that came up 4 or 5 months ago. And I
think we have spent a lot of staff time and made a lot of
effort. We haven't resolved all your issues, but we spent a lot
of time on them. And I will just jump in by talking about Merry
Walker.
If you would like, stop there and go on one by one?
Chairman Manzullo. Yes.
Mr. Scully. On the Merry Walker issue, we almost resolved
it during the break on the vote. But we are very sensitive to
Mary's concerns. We spent a lot of time on it. Leslie spent a
lot of time on it. The bottom line is, it is pretty clear that
she obviously come up with a creative product that makes a lot
of sense.
I am sure in many cases, her ambulatory device makes a lot
of sense and would help in a lot of nursing homes. I spent a
lot of yesterday in a nursing home in Arkansas. And there is no
question that you can pretty much look at it from the
perspective of many seniors, that the device makes a lot of
sense.
In my written testimony, we laid out a lot of examples of
why we have concerns about the Merry Walker. It is a great
product. I think we are making a lot of changes in our
regulatory basis to make sure it is not automatically coded as
a restraint. In most cases it is not going to be a restraint.
Out of about 3,100 I think cases of restraint--6,100, filed
complaints about restraints this year, about 30 of them came
from Merry Walker. There is no doubt the company, that Mary had
no intention of having it be designed as a restraint, but we
have a statutory requirement that if anything, whether it is a
wheelchair with a belt, whether it is bed with a brace on it,
whether it is a walker that is intended to be helpful for
rehab, which this one is; if a patient who is physically or
mentally limited has trouble getting out of it by themselves,
we have to code it as a restraint.
I think Mary's major concern, and I think we have had some
gains with your staff's help in the last few months, is that
nursing homes haven't been buying them because they thought
they always had to code it as a restraint.
And so if they are going to have to report it as a
restraint and fill out pages and pages of forms they weren't
going to buy it and use it. We have made a big effort in the
last 4 or 5 months. We have sent out a guide to almost every
nursing home in the country saying this should not
automatically be coded as a restraint. We are about to send out
to all of the State surveyors guidance that says that it should
not be coded as a restraint.
In talking to Mary during the break, I think she--
apparently didn't know it--we are coming up with a new code
that takes it out of a category that apparently more
automatically throws in that problem area.
But it is clear we spent a lot of time looking, probably
more time looking at this device than any device in the world,
I would guess the last 6 months. There are some cases where
clearly, and yet I think you can see it by looking at it, an
elderly patient who maybe much better off in this than a
wheelchair, and in some cases, can't get outside of the
railing, and can't get out of the thing, and it is not intended
to be used as a restraint, but it might be.
And in these cases where we have tried to set up a
situation where if nursing homes essentiallycertify, they would
not be consider it automatically as a restraint, which is Mary's number
one concern. But a nursing home would have to say, we don't believe for
this patient it is a restraint. But for other patients, there are a
subset of patients where it could be a restraint, we have at least 30
examples where patients have had significant problems getting out of
it, or have fallen. That is not the intent. Clearly having been in a
lot of rehab hospitals over the years, it is a great device, and
probably could be very helpful to a lot of patients.
But clearly you can see in some cases could be difficult
for some patients to get out of. So that is the problem. Your
original request, or Mary's was that we never classify it as a
device. I think we have gone to every length--sorry, as a
restraint, every length we can to educate the provider that it
should not be used as a restraint.
But that they--if they basically find that for that patient
it is not a problem, then it is not a restraint. Because the
issue for her, if it is ever classified as a restraint in the
MDS system, the nursing home then has to fill out lots of forms
and must have greater oversight, which is clearly not the case.
And, I think for many patients this is probably a far
better device than a wheelchair. That is pretty obvious. I
think it is also obvious that for the agency to say this could
never be a restraint for any senior in a nursing home also is
inaccurate.
So that is--I skipped over my testimony. But that is a
quick summary on that subject. We spent a lot of time talking.
[Mr. Scully's statement may be found in the appendix.]
Chairman Manzullo. I would like to go to Leslie Norwalk,
who is the policy director and counselor to the Administrator
at CMS. And I just want to take you back to our office. When
was that, in June?
Ms. Norwalk. In June.
Chairman Manzullo. Our goal was to try to get the
resolution in 60 days, and that time has come and passed. But,
there have been reasons for that, because I know you have been
doing a lot of research on it. If you could bring us up to
date, give us the legals, where we are exactly on it, and then,
Mary may have a question or a comment and we can take it from
there.
Ms. Norwalk. As Tom alluded we--Barry and I, actually
spent, your fabulous regulatory counsel spent----
Chairman Manzullo. I will note that for the record.
Mr. Pence. Move to Strike.
Ms. Norwalk. But of course. We spent a significant amount
of time after that meeting, and I think it was July 10th when
Barry and I actually came to some understanding that the
resident assessment instrument, which is the guidance that goes
along with our Minimum Data Set that nursing homes are required
to fill out, those instructions to the nursing homes, we
altered those and amended those, so it was clear, as Tom
mentioned, that it was not always classified or categorized as
a restraint and tried to make clear to the nursing homes that
they needed to do an individualized assessment to see whether
or not the effect of the particular device had the effect of
being a restraint.
And if it did, then they would need to code on the MDS as a
restraint. And then, follow the statutory requirements of when
it is a restraint. When something is a restraint, the statute
requires--that it has to be used to treat medical symptoms, and
it cannot be done purely for staff convenience.
And the concern is, that while most of the nursing homes
are terrific, but every once in a while you get a bad egg and
they might put someone in Merry Walker's fabulous device who
wants to get out of it, can't get out of it for whatever
reason, and either falls over or they are stuck in here. And
Mary totally understands that this should be used, in most
instances, with supervision.
Sometimes nursing homes don't have that supervision. So I
think--what we did was, we went as far as we could go in terms
of making--everything except for saying that it is not
classified as--it is never classified as a restraint, but yet
trying to be clear that it didn't always have to be one,
either, so that middle ground. And we did a lot in terms of
educating the nursing homes, getting on calls and talking to
the associations, getting this out so that the actual guidance,
when someone is looking at, gee, how do I code the restraint in
the MDS, they actually read that it is not always a restraint,
and they have to do an individual assessment.
So that is where we are. That happened after our meeting.
So that is the first step. Now, actually there was a step prior
to that. I know that there was a trademark concern that came up
probably at the last hearing. I think we did resolve that
issue. So those are the two issues in terms of resolution, we
have come to resolution in terms of that.
If you think, Mary, after looking at this that you might
define something differently, we have put it out in draft form
to make sure that nursing homes understand the clarifications.
If they don't understand, we will go ahead and revise it.
The third step that we did, or that is in the works, is we
are putting out a new version of the MDS. The Secretary 's
Advisory Committee on Regulatory Reform that Mr. Pence referred
to earlier, we spent a lot of time on that committee as well.
So one of things that came up was that the MDS itself was
simply too burdensome. So with Tom 's help, we reduced the
actual burden on that by 20 to 30 percent, we reduced the
questions so the nursing homes would be able to answer it more
quickly.
Now, the new version of the MDS should roll out about 2004.
And in that new version, the way that we currently code the
Merry Walker is in one of five categories. The five categories
are bed rails--two different types of bed rails, a trunk
restraint, a limb restraint and chair prevents rising.
Now the Merry Walker does not intelligently fall in any of
those five categories, admittedly so. So we have put in our new
instructions that even though we understand it shouldn't be a
chair prevents rising, we would like to code it there until
2004 when we will have a new category. We will probably have an
``other'' category, because there may be other things that
don't fall into those five. And we would like to make it as
easy as possible for nursing homes to pick one that is the most
appropriate.
That won't happen until 2004. But that is in the works to
also be resolved. Of course, if it is not a restraint, you
would never code it there. Elsewhere within the MDS, there is a
section--it is an ambulatory device, a walker or a cane or a
crutch. You may code it in both places.
I think what I--and Mary, you can help me with this. I
think where we are now, is that Mary would like us to do
something more to get people out of wheelchairs and into the
Merry Walker. I think that that might be--there may be some of
that that is part of a restraint discussion, but I think the
rest of it is really beyond the what is a restraint discussion
and something that steps farther, that we haven't really done
brain storming on. That is certainly something that we could do
with her, without your brilliant regulatory counsel in the
room.
But, at this point in time, I think that we have done,
about as far as we think we can, given our concerns with the
complaints that State surveyors have had as to restraints.
Mr. Scully. Talking to Mary during the break, the vote, one
of Mary's concerns is, I was at a 95-bed nursing home yesterday
in Little Rock. There are a lot of people in wheelchairs that
could and should be in a more appropriate device, that they are
not going to sit in a wheelchairall day. That may well be
correct. And we have a lot of problems with nursing homes, both with
payment and level of care and level of staffing.
But I think that goes beyond how we someday incentivize
facilities to use better devices, as different than a
restraint. You can probably fall out of a wheelchair as well,
but the issue is, as a statutory matter, anything that a person
cannot get out of easily, has to be classified as a restraint.
I think we have gone as far as--very far in clarifying that in
most cases, it will be--I think Mary's number 1 problem is it
is hard to market it. It is a restraint. We have to fill out
lots of paperwork. We have gone to great extents to make it
clear to nursing homes and to our contractors and to the State
surveyors that unless they say for this patient, it may be a
restraint, and won't be classified as such.
Chairman Manzullo. Okay.
STATEMENT OF MARY HARROUN, M.S., LNHA PRESIDENT, MERRY WALKER
CORPORATION
Ms. Harroun. I am Mary Harroun, the inventor of the Merry
Walker. I am a geriatric psychologist, licensed nursing home
administrator. I invented the Merry Walker 12 years ago.
I discovered this about a year and a half ago when I was at
an Alzheimer's conference and had not kept up with on the MDS
because I am not in clinical practice any more. Leslie did give
to Barry a copy of all of the deficiencies. I believe we came
up with 30 deficiencies on the Merry Walker. I read through
them extremely carefully and found out, gleaning through them,
that there were 32 documentations required in order to use a
Merry Walker in a nursing home if it is considered a restraint.
I talked to a number of nursing homes that had actually
used the Merry Walker and were cited as--that it was cited as a
restraint when, in fact, they were not using it as a
restraining device. I do have some problems with that.
[Ms. Harroun's statement may be found in the appendix.]
Chairman Manzullo. Let me take you forward. Based upon what
Ms. Norwalk said on since the meeting we had in our office in
July, okay, would you comment on what she said?
Ms. Harroun. I have not seen a copy of that, so I cannot--I
have no knowledge of that.
Chairman Manzullo. Is this in draft form?
Mr. Scully. She only has one copy.
Ms. Harroun. No, I did not receive this from you.
Chairman Manzullo. Our efficient Regulatory Counsel sent it
to you.
Ms. Harroun. I did not receive it. So this is the first
time that I have actually seen this.
Chairman Manzullo. Ms. Norwalk, the purpose of that is to
advise nursing home administrators that this is not
automatically a restraint?
Ms. Norwalk. That is correct.
Chairman Manzullo. All right. Mary.
Ms. Harroun. That would be fine.
Chairman Manzullo. That was one of your goals in there. Go
ahead.
Ms. Harroun. What we need to do is make sure the resident,
of course, is appropriate to use the Merry Walker, which I have
always advocated they need the assistance of one.
Chairman Manzullo. Okay.
Ms. Harroun. Or stand-by assist, whatever you want to call
it.
Chairman Manzullo. Let me stop you right there at that
point. Ms. Norwalk, what Mary said, that this device cannot be
used by a senior alone, there has to be some person to assist
them. Is that part of your guidance in the letter that went
out?
Ms. Norwalk. The guidance that went out purely addresses
how it is that a nursing home fill out paperwork. So how it is
that they code it, so that we can do a full care plan and
assessment. It is part of the care assessment that the nursing
home has to do for every single patient.
Chairman Manzullo. How many pages is this form?
Mr. Scully. Well, in fairness because the nursing homes
actually look at this, but we went through major nursing home
reform a couple of years ago. We now have prospective payment
for nursing homes. The way we both track quality, I note that
we are going to have a public outcomes rating in every
newspaper in the country November 12th of every nursing home,
all this comes from the MDS data, but they also get paid on it.
So when you are in a nursing home, there is a fairly thorough
evaluation that is done on a regular basis to decide how you
get paid.
So depending on how sick, how old they are, what
complications they have. We pay about $12 billion a year,
$13\1/2\ billion a year this year in payments for Medicare
payments to nursing homes.
It is always done based on the patient evaluation. So the
forms that they fill out are not for regulations, they also
determine the payment that they get.
Chairman Manzullo. Okay.
Ms. Harroun. I have a question. Since I have not been
educated in the MDS because I have been out of the clinical
area for 12 years. The RUG, is that--those are based on
payment. And from what I understand, and please correct me if
I'm wrong, if a resident needs higher intervention in care,
more nursing, they have decubitus ulcers, they can no longer
walk, they are incontinent, they need assistance with ADLs,
does the nursing home in fact get paid more money for that
resident care or do they get paid----
Mr. Scully. Yes. Much like we went to DRG's, which are
diagnosis related groups in 1985 for hospitals, and a few years
ago went to ambulatory payment codes for outpatients, RUGS are
resource utilization groups. There are 88 of them. I may be
wrong. And there are 88 categories. As a nursing home patient,
they fill out a form about how mobile are you, do you have
Alzheimer's? What your various illness problems are. How many
activities of daily living do you need help? It is done
periodically during the nursing home stay.
And basically that determines what we use to track quality,
but it is also used for payment. So if a nursing home
identifies the patient as having higher acuity and more
illnesses and more trouble with various activities of daily
living, they get paid more--there are 45 RUGS payments.
Ms. Harroun. If I were owner of a nursing home, God forbid,
I would not be in there, wouldn't it behoove me to run my
residents right on the edge to receive higher payment for
Medicare, or poorer care? If I have a resident sitting
immobile, either in bed or a wheelchair, and they are probably
going to develop a level 1, let's start with a decubitus ulcer,
it then goes up to level 4, I would receive more payment for
that patient's ulcer than if I kept them ambulatory in the
first place and not ever allowed them to have a decubitus
ulcer?
Mr. Scully. Well, you can say the same thing about any
prospective payment system, whether it is hospital inpatient or
outpatient. We track them pretty closely. I think we measure
quality very closely. I think you are going to see it--I forget
where you live, Mary, Chicago. You are going to see a full-page
ad in the Chicago Tribune on November 12th, comparing on a
number of quality measures, including bed sores, how every
nursing home in the Chicago area compares.
So those that aren't doing a good job, may theoretically
get paid more for having sicker patients, but you are not going
to look very good and you are going to have a hard time the
next time a family tries to find a nursing home if you have the
worst outcomes in Chicago. You are going to lose business.
So you do, in fact, get paid for higher acuity, but it also
shows up in your quality measurements.
Ms. Harroun. Now, the quality measures I also have a
problem with, in that you are measuring in one section of that,
under the long-term care section you have acute care and then
long-term care. One section is measuring the amount of
restraints used in that nursing home.
If, in fact, Merry Walker is being considered a restraint,
that will then take away the thrust of wanting to use the Merry
Walker, even though--when they have to regard it as a
restraint, because that is going to knock them down in the
quality measures and show them that they are, in fact, a worse
nursing home.
Mr. Scully. If they are defined as a restraint, as we said
earlier, we have gone to great lengths to make sure nursing
homes know if there was a mistaken problem in the past where
they thought that they would use a restraint, in the future
that is not going to be the case.
One of the measures of quality is number of patients in
restraints, because that is one of major patient concerns over
the years, is nursing homes that restrain patients for
convenience and nothing else. And I think we have made it
pretty clear that except for patients where this could be a
problem, it is not a restraint.
Chairman Manzullo. At this point, the Merry Walker is no
longer automatically considered a restraint?
Mr. Scully. That is right.
Chairman Manzullo. And then, Mary, would your situation,
you are going to have to--I think you are looking at a
marketing aspect, as to which HCFA cannot get involved in,
because everybody knows it is common knowledge in your
statement that the fact that people are better off in the Merry
Walker than they are in a wheelchair. Okay.
Ms. Norwalk, at this point then, is there any more that CMS
is planning on doing with the Merry Walker besides that
advisory that you are putting out to the nursing homes?
Ms. Norwalk. Just when we revise the MDS system when it
comes out in 2004, we will have an additional category so that
it is put in a more appropriate category than ``chair prevents
rising'', so that it is coded more appropriately, so that
people aren't confused as to where it should go.
Because clearly this is not a chair that prevents rising.
Mr. Scully. That only kicks in if the nursing home itself
determines for that patient it may be a restraint. Our goal
here is to make it abundantly clear to every nursing home and
every State surveyor for a patient who can, in fact, use this
and get out of it themselves, which the vast bulk of patients
can, it is not a restraint and they will never even get to the
second category.
Chairman Manzullo. My question would be, when the term
Merry Walker it will have the TM on there.
Ms. Harroun. R.
Chairman Manzullo. Are your questions answered?
Ms. Harroun. Yes.
Chairman Manzullo. Mr. Pence, did you have any question
involving the Merry Walker?
Mr. Pence. No, Mr. Chairman. Thank you.
Chairman Manzullo. All right. I am going to excuse, Mary
Harroun and Leslie Norwalk on this one-third of the hearing.
Thank you so much.
Mr. Scully, thank you for the hours you spent. Ms. Norwalk
thank you also for the great job you have done on this. I am
going to excuse Ms. Norwalk and Mary Harroun. And then let's go
on with the testimony. And, Congressman Pence, maybe you would
like to introduce your constituents. This is on the CLIA. As
soon as you introduce them, then I want to jump back to Mr.
Scully if that is okay with you, Mr. Scully, to bring out the
CLIA portion of your testimony.
Mr. Scully. Sure.
Mr. Pence. Thank you, Mr. Chairman. Our next witness is a
constituent of mine and a friend, and a professional with whom
my family has enjoyed a warm relationship for over 25 years.
Dr. Edward Probst hails from Columbus, Indiana. He is the
immediate past president of the Indiana State Medical
Association. He is a practicing dermatologist in my home town
of Columbus, Indiana, and if I may say for the record, is more
than any other physician in my home State most responsible for
calling the particular changes which CLIA imposed on small
practitioners to this Congressman's, attention and therefore to
this Committee's attention. It is my privilege to recognize Dr.
Edward Probst for an opening statement. And thank you for being
here.
Dr. Probst. Was Mr. Scully going to speak at this point?
Mr. Pence. I think it was the chairman's intention, from
counsel, to recognize Mr. Scully immediately after my
introduction, which I didn't previously understand. So Dr.
Probst, if you would hold your powder, Mr. Scully, you are
recognized.
Mr. Scully. I will be quick. I have a long history with
CLIA. Just guessing from looking at this thick briefing book
that the doctor does as well.
I was involved in the first Bush Administration in the CLIA
regulations. They were passed in 1988. There were some changes
and the regulations were written when I was overseeing that HHS
portion at OMB in 1992.
So I got very involved with those, and a lot of the changes
and I followed CLIA pretty closely since. I was also in the
interim, when I was expelled from government for 8 years, I was
on the board of SmithKline, which is now out of existence, a
clinical lab company, their domestic U.S. Advisory board. So I
learned a lot about CLIA and clinical lab oversight, some of
which has changed in recent years.
So there is no question that CLIA is complex. There is no
question that CLIA can sometimes be difficult. But there is
also no question that when CLIA was put in, it was because
there was a significant problem with quality in clinical labs.
Much of which has improved in the last 10 years, even from
our own evaluations in the last couple of years, I can tell you
our belief is that the quality of services in clinical labs has
improved dramatically.
Congress created a number of different thresholds. Most
physician office labs are waived, they are on the waived
services, physician lab services are waived from CLIA. That is
generally a regular cycle of kind of self-certification. The
dermatology issues and others, when you get into higher acuity,
higher difficulty types of clinical labs, most of the--that is
really when the clinical lab guidance, that is more difficult,
kicks in.
In some cases for dermatologist and others for things like
melanomas, there is a much more thorough requirement. I am just
guessing that the Doctor's concern is, when you get to things
like the melanomas or higher-acuity types of lab tests, it is
more difficult lab tests.
There are much more thorough requirements from CLIA in the
statute. And my guess wouldbe, most physicians would say why do
I have to hire a highly-trained clinician or a highly-trained nurse to
do these, I am a doctor I can do these myself. That was a lot of the
concern in the late 1980s when this happened is if physicians did it
themselves that would be the case. But in most cases it turned up
going, for pure volume, it evolved over the years in to nonphysicians
doing those labs and doing evaluations, there was a huge level of
errors, which is why CLIA was passed for a variety of reasons.
So your concern is, as you state in your opening statement,
about a giant lab like SmithKline no longer exists, but there
are three or four large clinical lab companies that do the vast
bulk of clinical lab services for hospitals and physicians'
office should be treated differently from the average
physician's office. Generally they are. It is only for the
really much more difficult and much more sensitive tests that
are done, a lot of them are in dermatologist offices, that the
higher threshold for regulatory oversight for CLIA kicks in.
So I would say, I haven't spent as much time as I did 10
years ago, so when you get to the details of this I might even,
with the chairman's approval, call upon my staffers who do this
every day, to get into the more detailed questions about the
regulations.
Chairman Manzullo. Dr. Probst, you are up.
STATEMENT OF EDWARD L. PROBST, M.D., COLUMBUS, INDIANA
Dr. Probst. Good afternoon Mr. Chairman, Committee members,
thank you for hearing testimony on CLIA, and a special thanks
to Representative Pence for responding to my concerns.
I am Edward L. Probst, a dermatologic physician from
Columbus, Indiana and immediate past President of the Indiana
State Medical Association.
There are many results from the CLIA Act that Congress did
not intend. That also have adverse effects on patients,
physicians and care. These include physicians no longer
offering crucial office testing, physicians limiting tests
offered and physicians being overwhelmed by the paperwork of
the Act.
I will comment mainly on the latter, but the others are in
the written testimony and the attachments.
All physicians want accurate testing. This is not the
issue.
The attachment on page 1 is our office calendar of 46
requirement activities in addition to the daily requirements,
which are in the attachments, and the additional paperwork for
each test done. These binders that I brought show the results
of these requirements in our office. Each requirement takes
time.
The few tests that I perform relate to the immediate direct
care of the patient. Diagnosis of fungus tests, scabies, lice,
etc, and are in the area of my training.
Consider the paperwork for a microscopic test done by me in
my office while the patient remains in the exam room waiting
for the results.
Before CLIA, I would examine the patient, take a scraping,
label the slide, carry the slide myself to the microscope, read
the slide, return to the patient, record the results in the
patient's chart, in red, so we would know it is a laboratory
test, explain the results to the patient and outline the
treatment recommendations.
What more could be required that would improve this service
or the efficiency of its delivery? This was pre-CLIA.
After CLIA--Note the CLIA laboratory requisition form which
is on page 31 of the attachments requiring 14 entries, all of
which are already in the chart. This is a requisition from me
to me. It is a requisition to the laboratory, and that is still
me. So it is a requisition from me to me required by the CLIA
inspector.
On page 32 of the attachment is the CLIA laboratory test
requisition and report log, which is required to be at the
microscope, with 10 entries that are already in the chart, and
also on the requisition form.
Then, I have to record my findings on each of those forms.
Then I go to the exam room and record it in the patients
record, which is where I think it belongs in the first place.
What added value is this redundant and time consuming
paperwork? In my opinion, none.
Time for extra paperwork removes time from patient care.
But, in addition to that, each of those pieces of paper has to
be reviewed by a quality assurance person to be sure that the
data is correct, which can only be correct if it were taken
from the chart in the first place, because that is where the
data originated. This must also be approved by the laboratory
director, who must be a M.D., who would rather be seeing
patients.
And then, the M.D. laboratory director must create a
summary that gets placed in the CLIA book. All of this is for
the CLIA inspector. All of this is time away from the patients.
Let me share two examples about time. Mrs. X, an older lady
usually with multiple complaint was in my office. She did not
require microscopic testing, and most people don't. After
evaluating and giving recommendations, I had time to ask her
``Is there anything else you would like to talk about?''
She said, ``yes, I plan to kill myself today.'' She was not
kidding. I was the only person she was willing to tell that to.
If I had been burdened with a lab test requisition, I might not
have had time for concern, and Mrs. X would have died that day.
Mr. Nathan S, and he said I can use his name, a farmer, was
in my office for a skin cancer follow. No laboratory test was
needed. I had time to inquire about him and his family as we
finished. He said ``no problems.'' His wife, Joanne, said,
``Nate can't see well today.''
He had an acute vessel occlusion. I made arrangements for
immediate intervention, and his vision was spared. And it would
have been lost otherwise. Time for needy patience, versus time
for needless reduplicating paper. That is the question.
The CLIA regulations prevent us from being the caring,
compassionate physicians that we are. Please, remove the
unnecessary red tape of CLIA, OSHA, HIPA, Medicare, et cetera,
so we can do what we have been called to do, be caring,
compassionate physicians.
Thank you all for caring. I welcome any questions on my
written or verbal testimony.
Chairman Manzullo. Thank you, Doctor.
[Dr. Probst's statement may be found in the appendix.]
Chairman Manzullo. Congressman Pence, did you want to
introduce Dr. Davey?
Mr. Pence. Yes, Mr. Chairman.
The Committee will now hear from the Dr. Patrick Davey. He
is also a dermatologist with a practice in Lexington, Kentucky.
Currently serves as chairman of the American Academy of
Dermatology's Association Quality of Care Task Force.
He is a distinguished physician, well qualified to speak to
the practical implications of the issues we are addressing
today. Dr. Davey is an assistant clinical professor as well as
of dermatology at the University of Kentucky. Where, in
addition to top flight health care, I understand that they have
a basketball program, although I have no proof of that.
Dr. Davey. Well, Indiana used to have a basketball program.
Mr. Pence. I left that one open, Mr. Chairman. And I yield
back to the chairman.
Chairman Manzullo. We look forward to your testimony. The
goofy-looking clock is notpart of CLIA. It is part of our time
system here. When it gets to yellow, that means you have 1 minute. When
it gets to red, that means you have no time left.
Dr. Davey. I assumed that it was part of HIPAA.
Chairman Manzullo. Isn't Indiana red also?
STATEMENT OF PATRICK DAVEY, M.D., LEXINGTON, KENTUCKY FOR THE
AMERICAN ACADEMY OF DERMATOLOGY
Dr. Davey. Good afternoon, Mr. Chairman and Committee
members. I want to thank you for inviting me to discuss CLIA
for dermatologists and give you a national perspective on the
issue, because I travel around the country a lot, and look at
individual practices as part of what I do.
I am a practicing dermatologist in Lexington, Kentucky. And
in my practice, we have a nine-physician practice. We have a
high complexity lab under the CLIA regulations which performs
about 15,000 biopsies a year, about 2,000 frozen section
margins a year. So it is a little bit different than the
perspective that we just got.
So what I am going to tell you is what I see when I go
around the country and look at dermatologists' offices. I am
also the chairman of the American Academy of Dermatology's
Quality of Care Task Force, and deal with this issue on a
weekly basis, where we see mostly people who are confused about
what goes under the CLIA regulations and what doesn't go under
the CLIA regulations.
And finally, the other thing I do is I survey organizations
for the Accreditation Association for Ambulatory Health Care,
and I also teach new surveyors, so I am well aware of going in
and doing surveys and accrediting facilities.
I have a long-standing personal interest in quality
improvement and management, and most of the papers that I have
written, and also the talks that I give, deal with, how do you
set up a quality improvement program in your office. In order
to try to bring dermatologists up to speed on this issue.
Most dermatologists are actually in a solo or small
practice, about 46 percent. I am the exception in being in a
large practice. The CLIA Act, of course, was passed in 1988,
and was really a reaction to larger laboratories where there
was a problem with pap smear testing, as Mr. Scully alluded to
earlier.
And the American Academy of Dermatology initially opposed
the CLIA Act, and we advocated passage of legislation to exempt
the physician office laboratories from CLIA. And really, since
these exemptions, this has really failed. What we would like to
do is to have some regulatory relief from the CLIA regulations.
Now, what this really does, what CLIA is really doing is,
it is impeding the ability of dermatologists to provide these
services in their office to the patients as we heard from my
colleague here. That is a problem.
Most dermatologist's office really have limited resource
for the CLIA compliance. They don't have the staff to be able
to jump through all of those hoops that we are required to do
with the CLIA, and we really are very patient oriented, we
really want to spend our time with patients rather than spend
our time trying to meet the regulatory requirements. The
American Academy of Dermatology in 1993 developed a CLIA manual
which I have here to show you. It is there for our members.
Every time I lift this thing I get a hernia. You can see it is
a fill-in-the-blank type of manual so that people can meet the
CLIA regulations by filling in a blank.
Since it has been passed, about 75 percent of
dermatologists have stopped doing these tests in their office
when you will look at our surveys. We are trained to do the
tests in our training programs. It is something we are very
good at, but it is something that we just can't do because of
the CLIA regulations. We can't afford the cost and we can't
afford the paperwork that has happened because of CLIA.
What we would like to see happen is that some of these
basic dermatologic tests moved from a medium complexity level
down to a waived or a physician performed type of testing. And
we feel that this could be done without really endangering the
quality of care. If you look, for example, the fungal culture
that we saw here, that is a very simply test to perform.
You go ahead and do a scraping on a patient, or you do
clipping from toenails, you put it in there and you look at it.
It is a color change that is going to happen. So you can do it
is very easily to see if it is positive or negative based on
that color change. It is also something that we had to learn
for our board certification. We did that every day in our
residency programs and for our board certifications, so we are
very well aware of these types of tests.
In my statement, I gave a number of other tests that we
would like to see moved from these medium complexity down to a
lower complexity.
And hopefully, that is one of things that this Committee
will be able to do for us. We would also like to have the
Committee weigh in in support of Secretary Thompson's
Regulatory Reform Committee. We talked about that a little bit
earlier. What this will do, it will give us this information
from CLIA in plain English, and we do speak English in
Kentucky.
It also would increase the involvement of physicians in
these regulations. That is one of the reasons I am here,
because I am interested in the process, I wanted to be involved
in it. And it would improve really the providers and also the
people that are going to be going out and doing the
inspections. It would improve their education with respect to
CLIA.
So that is why I am here. I would like to have the
Committee look at giving us regulatory relief. Thank you very
much for your time, and I would be pleased to answer any
questions.
[Dr. Davey's statement may be found in the appendix.]
Chairman Manzullo. Thank you. Mr. Scully, you have a member
from CMS at the table.
Mr. Scully. Yes, Mr. Chairman. Judy Yost is the director of
the CLIA division and certification.
Chairman Manzullo. What I would like to do is to give your
response, or Mrs. Yost's response, I guess, to the problems
and/or suggestions of each of the physicians.
Mr. Scully. If you don't mind I will give mine quickly, and
then let Judy answer appropriate questions. Certainly they
raised some reasonable concerns. The Secretary's Regulatory
Relief Task Force, I think most of the staff from the
organization has come from CMS. We are trying to simplify CLIA.
We are trying to come up with clear education. We would be
happy to get the doctor more involved, both of them much more
involved. I think, for the most part, a lot of--I think in
talking to Judy here, probably the biggest problem we have had
is with dermatologists. Maybe we should spend more time with
dermatologist trying to find out the deal with their specific
problems, because the other major group that I think encounters
CLIA the most, the pathologists, are generally pretty
supportive and have been happy with the changes we have made.
So maybe we haven't spent enough time focusing on the
specific issues with dermatologists, because most
dermatologists, from what Judy has told me, and from other
places today, dermatologists tend to do the more complex
treatments, complex tests to get them under the scrutiny of
more CLIA oversight, and they tend to fall into that category
more than other doctorsseeing patients on a regular physician
practice.
Pathologists generally don't have that type of practice. So
part of this may be specific to dermatologists, and there maybe
other practice groups who have had problems with CLIA, but they
seem to have specific and somewhat unique problems with CLIA. I
am totally committed to spending more time to deal with some of
unique challenges that we present for dermatologists.
Ms. Yost. Just briefly. Thank you. I don't think----
Chairman Manzullo. What is your position at CMS?
Ms. Yost. I am director of the division of laboratory
services at CMS. But just to echo Tom Scully's comments, I also
want to say that we very much want to work with the
dermatologists, because their issues are important. They are
serious. They are unique.
Chairman Manzullo. Let me stop you at that point right
there. Drs. Davey and Probst, have you had a relationship with,
or the Academy had a relationship with CMS, it is not as tight
as you would like it? Give us some concrete suggestions here so
we can be able to follow the thread here on the suggestions.
What would you like to see done?
Dr. Davey. When you look at our practice, it really runs
the gamut. We certainly have things that should fall under the
high complexity, like biopsies, skin biopsies. My office, we--
if you came into my office, we would biopsy you, and then we
would process that, and we have our own dermatopathologists
that would look at it under a microscope.
My lab would meet the CAP, College of American Pathology
standards in terms of what we are shooting for in that office.
If you have a solo physician that is doing a scraping like this
that is going to be scraping----
Chairman Manzullo. Is that where the problem is?
Dr. Davey. We have some tests that we feel should not be at
the level of complexity that they are at.
Chairman Manzullo. Ms. Yost, your comment on that?
Ms. Yost. Just I agree partly with the comment about the
pathology. In regard to the--like the KOH and the fungus test
from the DTM and so forth that are routinely done by
dermatologists we--these tests were actually taken to the
Clinical Laboratory Improvement Advisory Committee, which is a
technical secretary's advisory committee to the CLIA program,
it is an ongoing program.
Chairman Manzullo. Do physicians sit on it? Dermatologists
sit on that?
Ms. Yost. There is not a dermatologist, but there are
physicians represented on the committee as well as obviously
laboratory experts and consumers.
Chairman Manzullo. So there is no dermatologist on CLIA?
How many physicians sit on that committee?
Ms. Yost. Well----
Chairman Manzullo. How many people?
Ms. Yost. There are about 20 people on the committee. And
probably 4 or 5 of them are physicians or Ph.Ds.--and the rest
are probably Ph.Ds in laboratory science.
Chairman Manzullo. Do you think it would help you if a
dermatologist sat on that committee?
Ms. Yost. They are certainly welcome to be invited to the
committee. Obviously it is one of those cases where you have to
have a balance between all areas of expertise.
Chairman Manzullo. I think it is obvious here that they are
not represented at all. There is agreement that they should be.
Mr. Scully, what would be the process to appoint somebody?
Mr. Scully. I don't know. But I assume I can probably take
care of it.
Chairman Manzullo. Could you do that? Do you understand
what he is offering here?
Dr. Davey. I am very happy that he has offered that.
Chairman Manzullo. You bet. All right. So--I didn't mean to
interrupt you on it.
Mr. Scully. My guess is that technically the Secretary, a
lot of these, we have many advisory committees. The Secretary
appoints them.
I am sure I could talk to the Secretary, unless there is a
statutory limit, if there is, when the next person comes off,
we would be happy to appoint a dermatologist.
Chairman Manzullo. There you are.
Dr. Davey. Thank you.
Ms. Yost. Just to let you know, that the issues have been
brought up before to the CLIA committee over the years, because
of the concerns that have been expressed today, some of the
same. And it was the committee's opinion on several occasions,
not just one time, that these tests still were of a complexity
because of the complexity, the training and the quality control
needed to do these particular tests, that they could not--the
type of complexity that they were categorized in under CLIA
could really not be reduced. Those things that could be have
already been done like the KOH prep. That is being done for
fungal elements. So it has been done. That doesn't mean that we
can't evaluate that again, and obviously if there is a
representative member on the CLIA, then obviously various
arguments can be made.
But there was a lot of testimony presented to that group,
just so that you know that we have not ignored the whole issue
over time. I think this is important to know.
In regard to the very simple tests that you are doing, the
more simple tests that you are doing outside of the tissues, I
believe that we could probably work with you to reduce your
paperwork. We really don't prescribe that you have special
forms to order tests, or to report results or to keep a log.
You do need to document if you do quality control. But you can
actually use the patient's chart to order the test, and to
report the result. You don't need to have a separate piece of
paper to do that. We have no requirements for that.
So we will work with you to try and simplify that process.
I will contact our State folks and get back with you. We would
very much like to help you, because you don't need to have
those stacks of paper to do those routine types of tests,
because you do them every day.
You do need to do, periodically you need to check, a couple
of times a year, to make sure that the test is working and
document that. But you certainly don't have to have ongoing
paperwork on a daily basis for each patient.
Mr. Scully. We would be happy to work to simplify this, in
many areas of CMS and OSHA, which applies to them in many cases
too, regulation. Sometimes the regulations we put out are
significantly enhanced by consultants who make people generate
50 times as much paperwork as they need.
So we will do our best to clarify it and make sure that we
put the minimum demands on them.
Dr. Davey. Mr. Chairman, one of the other problems that we
have is that there is not only CMS, there is two other Federal
agencies involved in this, in the CLIA Act also. It is one of
those cases where we get some piece of information from one
part of that Federal agency, and another piece of information
somewhere else.
Chairman Manzullo. Does that Committee try to coordinate,
Ms. Yost, does that Committee try to coordinate CLIA with the
other two agencies?
Ms. Yost. Yes. All three agencies are represented. I, too,
am on that committee as well.
Chairman Manzullo. Okay.
Dr. Davey. There is also a problem with interpretation of
the regulations, which I understand completely, because
tomorrow I am going to Greenville, South Carolina, to interpret
regulations in an office.
Mrs. Christian-Christensen. I was looking at the faces of
the doctors. And, Dr. Probst, you seemed to be surprised to
find out that you didn't have to do all of that paperwork. So
who is it that regulates that where you are?
Dr. Probst. The CLIA inspector said we must do it, these
are the forms that we must use. We had no choice in that. It
was not flexible. And when I persisted and ask why is this any
better than what I am doing, I was told we need this so the
inspector will have the information.
We were given no choice. And this has been year after year
after year. I am glad to hear that it doesn't have to be that
way. But how does that funnel down to us?
Mrs. Christian-Christensen. This is the problem that I
found with the carriers. I don't know if the carrier has a role
in setting those regulations in this particular instance. But
they are interpreted differently. That has to be fixed. Because
we have doctors that have moved from one area to the other. And
they are just, you know, confounded by the--the difference in
how the interpretations are done, and therefore, what they are
required to do. It needs to be clear.
Mr. Scully. These are slightly different. One is the
surveyors generally, you can correct me if I am wrong, but for
hospitals, nursing homes, home health agencies, and I am sure
for CLIA, tend to be done, we pay for them and the surveys are
done by State surveyors under contract to us.
I can tell you that there are standards, paperwork
requirements on how they interpret our guidelines do vary
significantly State to State, and we can sometimes clarify. But
the State is essentially our contractor, so it is an Indiana
State employee, working essentially under contract to both the
State of Indiana and Medicare, Medicaid for both. And they do
the surveys under contract for us.
On the carrier side, we discussed briefly before, we have
51 carriers, FIs, for part A and part B. We are trying to get
that down to about 20 to 25.
Mrs. Christian-Christensen. What can you do to make it
uniform?
Mr. Scully. To be fair, we are trying to make it more
uniform. We just went through this with outpatient drugs where
different parts cover and pay for things. We want to make it
more uniform, but when it is too uniform then you get
complaints that you are not sensitive to the practice patterns
in Indiana versus Seattle. The carriers do have some
flexibility and I think should, to either cover and pay for,
reimburse or allow differences between Indianapolis and
Seattle.
On the other hand, we need to have a lot more consistency.
I am trying. We have medical directors in each one of these
plans. We now have monthly meetings with them. We try to get
them to have more consistency.
But we try to find the right level of Federal mandate to
say you are consistent and also leave different practice
patterns to physicians and hospitals that have different
practice patterns in different regions. But nobody is ever
happy. But we are trying to do the best that we can.
Ms. Yost. As part of the regulatory reform issue, since
that was brought up earlier, I wanted to mention also we are in
the throes of publishing final CLIA regulations, which actually
are more balanced and more fair than the ones that we have now.
But, as part of that, we are going to be doing extensive
training and education of not only the laboratories but our
surveyors as well. So I understand your concern. And we will
certainly continue to work to kind of mediate that a little
bit.
You also have to be aware that some States have their own
laboratory licensure programs which may be more stringent than
CLIA, in which case we can't interfere with that.
Chairman Manzullo. Mr. Pence.
Mr. Pence. Thank you, Mr. Chairman. I have only been in
Congress for 21 months. And I have probably found this hearing
more fascinating than any hearing I have been involved in since
being in Congress, which is not saying much.
But, this has really been fascinating. I can't help but
feel that we have opened some lines of communication here that
are very valuable and very helpful.
That being said, in your written testimony, Mr. Scully, you
pointed out that you have worked hard to streamline procedures,
improve flexibility, all of things we have been talking about
in an ad hoc way today, reducing the burdens.
You also wrote that we are working to take into
consideration the tremendous amounts of feedback we have
received on the 1992 rule, so that we can publish a streamlined
final rule in the near future, the focus being especially
helpful for small business labs that many Medicare
beneficiaries rely on.
I think it is very helpful that the Chairman, in his style,
kind of getting to a core issue here. Obviously there is, it
seems as though the panel lacks an important perspective, from
the dermatology profession, and would add my urgent
encouragement that a seat be found very quickly for this
particular part of the medical profession, that as you point
out, Mr. Scully, seems most beleaguered by CLIA in your
experience.
But, I wanted to give you an opportunity also to speak, to
elaborate on your written remarks. What is the status of that
streamlined final rule? What might be the time line for that?
And is there still time for, whether it is one of our two
witnesses today or someone else representing dermatology, to
participate in helping to develop that new streamlined final
rule?
Mr. Scully. I believe I shouldn't put this heat on my
former agency, OMB, but I signed the final rule I think last
week. It is in the process of going through the administration.
I don't think it is particularly controversial. Well, maybe it
is, I don't know. But I haven't had a fight with anybody about
it so far. I think it is probably going to be pretty well
received and was strongly supported by most of clinical lab
groups. The pathologists, I didn't personally talk to the
dermatologists. But if there are subsequent problems, we are
happy to go back. This is a fairly major rule. But we can go
back, we have--it is a huge agency, my budget is about $560
billion.
We have many rules going through. We can make technical
changes in lots of areas when we need to do it. So if there are
other things to do it, that make sense we will do it. But the
rule, I believe, should be out in next couple of weeks in
final.
Mr. Pence. We will look forward to going over that and
getting feedback from not only our witnesses but other folks
affected by it.
I guess my last comment is more of an encouragement. I will
yield back to the chairman that I think the--and I am not
speaking on behalf of the witnesses, but I think that the
attitude that you reflected, Mr. Scully, and Ms. Yost, is very
admirable and very much appreciated.
Although I will comment that from my vantage point, our
witnesses were reacting with, if I can say a degree of
incredulity, as Mrs. Yost described what actually was required
and what is not required. It suggests to me that not only are
we dealing with the fact that there are other arms of the
government involved at the table here, but that I--it seems to
me, and we are still early in an administration, but I guess I
would encourage Ms. Cost and others charged in administering
the CLIA law to--I am picking up a philosophy here that is one
that as you make other comments of trying to accommodate small
operators and create rules that make sense, and allow people to
useexisting systems, it is entirely possible that there may be
a philosophy in the Washington CLIA shop that has not yet invaded the
culture of the State offices.
I guess, that is what I would like to most encourage you to
do, not just in Kentucky and Indiana, but to communicate to the
State offices, what may, in fact, and probably is, in fact, a
different governing philosophy that should animate at the State
operations that administer CLIA. And I would encourage that.
Mr. Scully. One of the problems which having such a program
of Medicare and Medicaid is that things fall through the
cracks. When I first took the job last year, I met with the
heads of all of major clinical lab companies in New York for an
emergency meeting for a rule they really wanted out. And they
met with me and they told me this rule had been sitting around
for 3 years. And their argument sounded reasonable. I went back
to Washington and said, what is the deal with this reg?
And everybody said, well, nothing. I said, well, nobody--it
had been sitting around for 2 years and hadn't gone out. So
sometimes there is a lack of communication. We put that rule
out last year, and it was very helpful to clinical labs. For
some reason, in the Medicare program, clinical labs is a very
small piece.
And to Judy's credit, this probably doesn't get as much
attention from me or other people who are administrators. And
so it is good to have these focused on occasionally where we
are missing things to get these issues raised up and we can cut
through them.
But we are clearly committed to doing that. And when you
see the final CLIA rule that comes out, it will be helpful. If
it is not, we will go back to work and try to make it better.
Chairman Manzullo. Thank you. We appreciate that, Dr.
Probst and Dr. Davey. And did you want to say something?
Dr. Probst. If I may, sir. I am here as the past president
of Indiana State Medical Association representing all
physicians. I happen to be a dermatologist, and I think because
of that, the response was that only dermatologists have
problems with CLAI. This is not true in Indiana.
My testimony related only to requisition because I only had
a short time. My written comments and attachments reflect that
all physicians have problems. Wet mounts, microscopic
urinalysis, various stains for bacteria, the whiff test for
bacterial vaginosis, are several tests mentioned by physicians
who have added their letters to my testimony.
I am not coming from a dermatologic position. Indiana
physicians in all practices are not doing tests that should be
done in the office to better serve patients and save them time
and inconvenience.
I am not reflecting the position of dermatologists. I am
reflecting the position of all physicians in Indiana and the
patients there who are not allowed to have the tests in the
office, for tests that are best done there.
Thank you for allowing the additional comments.
Chairman Manzullo. The record will note that. Okay.
Dr. Davey, Dr. Probst, and Mrs. Yost, you are excused.
Thank you for your testimony.
Then I would like to have Mr. Tim Tryslit, and Mr. Terry
Kay have a seat. Well, we are two for two.
This third issue here has been with us for some time.
Several months ago when we had a hearing involving the portable
x-ray providers, Mr. Scully at that time said that he would
like to have this matter resolved within 90 days.
There have been a lot of discussions going on with the
industry. But I would--before I turn this over to Dr. Weldon
who has got some base questions to ask with regard to the
portable x-rays, Mr. Tryslit, could you please, spell your last
name, for the record and give your position.
STATEMENT OF TIM TRYSLA, POLICY ADVISOR, OFFICE OF THE
ADMINISTRATOR
Mr. Trysla. T-R-Y-S-L-A. I am a policy advisor, like
Leslie, in the office of the administrator.
Chairman Manzullo. And Mr. Kay.
STATEMENT OF TERRY KAY, DIRECTOR, DIVISION OF PRACTITIONER
SERVICES
Mr. Kay. K-A-Y. I am a director of the Division of
Practitioner Services.
Chairman Manzullo. Okay. Dr. Weldon.
Dr. Weldon. Mr. Chairman, I want to again thank you for
indulging me and giving me the opportunity to be here. I
certainly want to also extend my thanks to the ranking member
in supporting me, having the opportunity to be here, joining
with the panel in asking questions.
And I certainly appreciate the hard work of the President
of the United States and Secretary Thompson and Mr. Scully in
terms of doing everything that they can to make sure that
America's seniors get quality health care.
Before I get onto the portable x-ray issue, which I had
some questions about, I just want to say as a clinician, I
still see patients once a month at the Veterans Clinic in my
district, to bring the tried and true bedside diagnostic
techniques of doing scrapings of fungal lesions of scabies and
lice lesions.
Every doctor has a microscope in their office. To try to
bring all of that stuff under the regulatory burden of a
bureaucracy to me is absolutely insane. Any physician who is
licensed and accredited to practice in their given specialty,
in my opinion they shouldn't have to justify it to a
bureaucracy that they are doing it correctly.
But, moving on to the issue of the portable x-ray. As you
know I have mentioned this previously at the previous hearing,
that, I practiced internal medicine for 15 years before I was
elected to the House. I was one of a small group of physicians
in the community of Melbourne, Florida, that continued to track
their patients once they were admitted to a nursing home.
And I found the use of portable x-ray to be a tremendous
time saver, a cost saver and a suffering saver in that patients
would fall, patients would have a cough, I would be concerned
about a fracture, I would be concerned about pneumonia. Rather
than transporting them to my office and having them to go
through that ordeal in an ambulance; or worse, having to
transport them to the emergency room with a tremendously
increased burden of cost associated with that, I found the
portable x-ray to be, I thought, just a win-win all around,
good for the patients, good for me.
The quality of the response I would get from the portable
x-ray providers was superior to what I got at the hospital, and
compared very nicely to what I had--we had a large medical
group, so we had radiologist rights in the building we were in.
So if I brought the patient to my office, I could get an x-ray
report over the phone from the radiologist in my building.
But if I brought the patient to the emergency room, it was
hours and hours. And frequently I would have to go down to the
hospital radiology department and thumb through x-rays to
findthe x-ray on my patient, whereas with the portable x-ray at the
nursing home, I got a phone call from the radiologist.
But, I have some concern about the set-up code. It is my
understanding that the set up code which is the Q code for the
portable x-ray industry, was established in 1992. And the law
required that the set up code be reviewed every 5 years. And
according to what I have been told, under the previous
administration, and so far under this administration there has
not been a review. There has not been a review in 10 years. And
the requirements of the law have not been fulfilled.
Is that correct? Has there been a review of the set-up
code, cost and reimbursement?
Mr. Scully. Maybe I will ask Terry to answer that.
Mr. Kay. All right. At this point it has not. We have been
working over the last--since the last hearing with
representatives from the portable x-ray industry to, you know,
get this review. Kind of in a nutshell, the way our review
works is that we work with an outside sort of privately
established Committee, which has been formed by the American
Medical Association, of about 30 specialty groups and some
others, some nonphysician groups, and they review requests.
You know, they look at what staff is needed to do a
service, what equipment, what supplies and sort of what
resources are required to do these services.
Mr. Weldon. So it has not been done?
Mr. Scully. Because I am sure you know, Congressman, Dr.
Weldon, we have about $66 billion of physician payments we make
every year for physician and related services. And every year
we go through the resource utilization committee, to figure out
how these codes move around.
As we have tried to explain, the portable x-ray providers
get paid from that pot. So we have, in fact, if the new
physician fee schedule, which is something we didn't mention,
their rate, is in direct response to your interest, they, in
their new fee schedule, the draft anyway which is going to go
final for January 1st, they are the single biggest increase in
the pot. Their rates go up about 8 percent before you do the
pro rata cut that we have been talking about.
Dr. Weldon. The physician reimbursement?
Mr. Scully. For the overall portion of the portable x-ray
supplier, I believe is the largest percent increase in the
physician pot, it is about 8 percent. But the underlying
expense code of that, which is the part that is just the set-up
fee, which is about $11 or something, the idea when they bring
the machine up to the nursing home, they bring it inside to set
it up, they get paid roughly $30 for the x-ray, varies by area,
but roughly $100 for transporting the x-ray machine, and then
the set-up fee, which is about $11.
That particular subcomponent, what they get paid for, is
reviewed under a practice expense advisory committee. So we
have reviewed the rate and changed the rate for next year, as a
direct result of your input.
But the set up fee, the $11 out of the $150, is still under
review.
Dr. Weldon. I was told that the it was under review and
that it was had been determined to be appropriate. Is that
true?
Mr. Kay. No.
Chairman Manzullo. Doctor, would you yield a second?
Dr. Weldon. You are the chairman. I yield.
Chairman Manzullo. Is anybody here from the industry that
would like to put some input into the statements that were just
made by CMS? Any correction or anything?
Mr. Halsey. This just came up yesterday. I am Steven Halsey
representing the National Association of Portable X-ray
Providers.
Chairman Manzullo. Do you want to have a seat here? It is
up to you. If you want to refute something that was said or add
to it, or perhaps Mr. Kay was in the process of saying
something and I cut him off.
Mr. Halsey. It is not a prepared statement. I think that
there is some clarity issues that are important, if I can make
a brief statement.
We have been working with the people at the table, and I
want to say for the record that since your last hearing in May,
Mr. Chairman, which I think brought about the meetings that we
have undertaken, meetings face to face, conference calls, and
individual telephone conversations, I do want to state that on
behalf of Mr. Scully and Mr. Tryslit and Mr. Kay, they have
worked in good faith to try and get a clearer understanding of
the problems in the industry, and how we might go about
positively affecting what is simply a disastrous spiral in in
the bottom line of the companies.
So while I don't think it is appropriate, or not at this
time with the preparation that I have, to talk about some of
the very specific items such as the Q code, the review to our
understanding, it has not been reviewed, it is required by law.
But, I do want to state that these people have been working
for a number of months in good faith on this issue. But, the
reality is, we have absolutely zero effect after 5 months.
And I know for a fact that during these 5 months, there are
a number of companies who have gone out of business. There are
more that are going out of business. There was a witness who
testified before this Committee in May. I spoke to him
yesterday, he is laying two people off tomorrow.
Chairman Manzullo. We are also joined by?
STATEMENT OF NANCY TAYLOR, OUTSIDE COUNSEL TO THE NATIONAL
ASSOCIATION FOR THE SUPPORT OF LONG TERM CARE
Ms. Taylor. Nancy Taylor. T-A-Y-L-O-R.
Chairman Manzullo. What is your position?
Ms. Taylor. I am outside counsel to the National
Association for the Support of Long Term Care, which also
represents many portable x-ray providers.
Chairman Manzullo. Did you have a comment on the statement
that some of the CMS people made?
Ms. Taylor. Yes. We have a letter for the Committee as
well, which recognizes that this is a complex issue, and the
National Association for Portable X-ray has done a great job.
We have worked with them at CMS.
There two parts of the code that provides transportation
money to portable x-ray providers. One is the transportation
code, we have been working very closely with CMS to update the
fee. The second part, which is the set-up code, requires
providers to get adjustments from the Physician Advisory Coding
Committee. We could not get on the schedule to seek air
increase for September. We have now asked that we be on the
schedule in January.
I wish that the CMS administrator could do something about
that but he can't.
Dr. Weldon. Well, if I can reclaim my time, Mr. Chairman.
That was actually the question I was leading up to, to Mr.
Scully. Can you have the Physician Advisory Committee put the
set-up fee on their agenda when they meet again?
Mr. Trysla. Congressman, we have actually have that feed up
for January. They haveasked us to look at our top priority of
codes, and this is going to be one of those priorities.
Mr. Scully. As you can tell, I actually don't do any work
myself. I am just the front man.
Mr. Kay. Could I just elaborate on that? The Practice
Expense Advisory Committee that we have been working with has
been very busy over the last few years revising all of the
services and the fee schedules. There are over 7,000 services
that we pay. This year alone, we just reviewed 1,100. They, in
the last meeting that occurred in September, said that they
would, you know, look at the next 50 that we asked them to do.
So, Mr. Scully, you know, certainly has the authority at
this point, you know to put this on the top list of priorities
for review. So it is a private, independent group. But, they--
--
Mr. Scully. The way it works, Doctor, as you probably know,
is they--a lot of these committees, we basically take all of
the affected parties, put them in a room. And if we are going
to increase payments for portable x-ray, then theoretically it
comes out of the pot of somebody else.
So all of the providers get in the room and we discuss and
debate what the relative priority of various payments for
physicians, labs, other things are. And usually in 95 percent
of the cases we take those recommendations. But they are in
fact recommendations to me and the secretary, and we can change
them if we like, and we do occasionally.
But we would be happy to put this on the top of the list,
and I will certainly do so.
Dr. Weldon. I appreciate the dilemma that you face. My
primary concern, just so you understand, is if this industry
goes away, you are going to pay more money. And your quality of
service is going to be worse.
You may not be able to tell that is happening, because the
figures are so gigantic. If emergency room services are $20
billions next year, to pick a figure out of thin air, if they
are $20.02 billion, you are not going to notice that that
increase is due to the fact that you put a much smaller
industry that was costing you less out of business.
And the concern I have, just so you understand, is just
what this gentleman was talking about. I have got portable x-
ray providers telling me that based on the reimbursement
schedule, they are not going to be able to stay in the
business. And my perspective as a clinician utilizing the
service, was that it was very, very good for seniors, and it
was good for clinicians, and it was also good for you, in terms
of providing better quality at reduced costs.
Let me just get back to the issue. I just want to make sure
that I understand this correctly. You have not determined that
the set-up fee at this point is adequate? You do not have a
position on that?
Mr. Scully. Correct me if I'm wrong. We have not reviewed a
change in the set-up fee alone.
Dr. Weldon. So in front of this Committee, you are not
saying it is inadequate or adequate?
Mr. Scully. I don't think we have come to that conclusion
yet. I think, in looking at the other two components which are
transportation, and the overall fee for doing the x-ray, where
we have made--I don't think, the final rule should be out on
November 1st, but the draft rule is pretty clear, that we have
made some substantial increases in those areas. I think it was
the biggest single increase in the physician fee schedule, but
it probably isn't going to take care of all of their concerns.
Obviously, I am particularly concerned about making any
additional changes up or down on the fee schedule that are
really dramatic in the context of a negative 4.4 percent
update. If we manage to fix that in the next 2 or 3 weeks, it
will be a lot easier--I can tell you the anesthesiologists, the
oncologists, many of the people think their practice expenses
are off and they need higher payment. In the context, everybody
is going down negative 4.4 percent, and everything is a zero
sum game, it is difficult to make changes.
They are going to go up next year. It is not due to the
set-up component. But the set-up component is $11, the
transportation component varies, but it is about $100, and $30
is the x-ray. Roughly.
Mr. Kay. Roughly.
Mr. Scully. We will keep looking at the set-up component.
Dr. Weldon. Just so you understand. I am one of the people
in this body who is trying to get you a better top line to deal
with.
Mr. Scully. I would hope so.
Dr. Weldon. To help you in all of those areas. I do want to
just cover the transportation issue. There is some regional
issues associated with that. They vary by carrier. And I
believe you delegate that issue to the carriers to make a
decision; is that correct?
Mr. Scully. Yes.
Dr. Weldon. In the southeast, as I understand it, there is
quite a bit of variability. And I have some serious concern the
Florida carrier is under reimbursing this. And I would like you
to look into this for me in the near future and get back to me
about this. It is not unique, I believe, to Florida. There are
some other States. It is one of the concerns I have. When you
do delegate some of those reimbursement decisions to carriers,
that sometimes they make good decisions and sometimes they make
bad decisions.
So if you could please get back to me on that I would very
much appreciate that.
Mr. Scully. I will tell you what I have done. I was
traveling in Arkansas yesterday, but my crack staff, Dr.
Trystla told me that you were concerned about Florida.
Dr. Weldon. How did he guess?
Mr. Scully. I think he heard from your staff. And,
apparently one of the concerns--when this came up 2 years ago
before I got to HCFA, now CMS, I believe that we actually
discussed with the industry coming up with national rates for
transportation. The ideas may vary among the industry, they
decided that they didn't want to do that, they wanted to keep
regional rates, which are set by the carriers.
I heard from Tim yesterday, that our carrier, which is
First Coast in Florida, had not been, for whatever reason,
particularly helpful in arranging a meeting with the portable
x-ray suppliers. I called the CEO of First Coast last night. He
didn't know anything about this. And I asked him to
specifically meet with him and have his staff meet with them,
and tell me what--they would decide what the appropriate rate
is with First Coast, which is the Florida carrier.
But I will get back to him, and as soon as he meets with
them and the industry will--it is for the industry to go in and
make the argument about having a higher rate.
Dr. Weldon. Great. Mr. Chairman, I want to thank you so
much for giving me the opportunity to be here. And I want to
thank all of the witnesses, including, the impromptu witnesses
for the input that they have helped us with.
I just want to, before I yield back, I would be very happy
to linger. I just want to underscore, that I think this is a
valuable service for seniors. I am determined to do everything
I can to make sure that it remains a viable service for senior
citizens.
Chairman Manzullo. Thank you. The problem is that as what
happened in Rockford, Illinois, the carriers went out of
business. And it is costing the taxpayers a tremendous amount
of money to do the same service that the portable x-ray people
did, that--the portable x-ray people charge a fraction, by the
time you figure when Ma had to go to the hospital, and one
ofthose Caravans picked her up, it wasn't an ambulance, a special
vehicle, and she was gone 4 hours. And that--that was the guy's only
run. She was the only one in the van. She sat in the emergency room. I
mean, the cost to the taxpayers is horrendous. And it continues. And my
question, and Mr. Halsey, I am sorry to really put you on the spot.
Forgive me for putting you at the table.
Mrs. Taylor, I don't apologize for that, you raised your
hand, you came up here on your own. We run this Committee a
little bit differently than some committees, but the purpose is
to resolve issues. And that is why we are here.
Is there anything that we can do between now and January to
prevent the further closing of these extremely important home
x-ray businesses? I mean, is there--my understanding of the
statute, Mr. Scully, is that you can have an interim payment
system, that would at least keep these home x-ray providers
alive, fulfilling that purpose, because they can get the finest
ruling in January, but if they are all out of business, it
wouldn't do much good at that point.
Mr. Scully. Well, Mr. Chairman, the suggestion----
Chairman Manzullo. I am sorry. Interim rate adjustment.
Mr. Scully. Tim and Terry can jump in. The biggest
variable, which is carrier priced, and varies by region, as you
mentioned, is transportation. What we are planning to do is
send out, I think it is just about to go out, a memorandum to
all of the carriers, asking them to review this.
I think the message they will get from that is not to
review it down.
Chairman Manzullo. If they are like Wisconsin's Physician
Service they * * *
Mr. Scully. Well, not all of them are like that. We have
been--I have been trying, as you know, and I hope again in the
next couple of weeks that we will. And there is bipartisan and
bicameral support for carrier and contractor reform. We are
trying to come up with the 20 best contractors.
Chairman Manzullo. So are you going to ask them----
Mr. Scully. To go back in and review the transportation
payment.
Chairman Manzullo. Are you going to ask them to mark it up
higher?
Mr. Scully. Well, we ask them to go back and review its
appropriateness. That is probably 75 percent of the actual fee
is the transportation cost. So if we send out a program
memorandum saying we think there is a problem here, please go
back and review it, cull this criteria, tell us why you set it
at the rates you did, review that rate, get back to us, the
general--they generally follow our guidance and go back and
look at it.
Chairman Manzullo. Mr. Halsey, would that satisfy your
inquiry?
Mr. Halsey. Mr. Chairman, I want to applaud the effort and
point out that the program memorandum that is being discussed
came about through these organizations working with CMS. I know
we all bash an agency such as CMS with vigor and frequency.
We applaud that. That will, over a period of time, impact
individual providers that are dealing with individual carriers.
And we think that is outstanding. But we still would love to
see the--when we talk about the highest rate, which this is
statistically true of the overall update, we are talking
pennies for patient. We might be talking 7 or 12 cents per
patient. While that is appreciated, it isn't going to make any
difference. These companies are going out of business. Our one
request statutorily, and this is in response to the questions
that the Committee put before Mr. Scully----
Mr. Scully. If we can get into the weeds a little bit on
this. There are three--I am rounding off. Three basic
components. The $11 set-up fee, which is a practice expense and
has to go through a formal--there is a Federal rate for that.
That has to go through a formal panel, which varies the rates
relatively to other practice expenses and other doctors.
There is a $30 x-ray fee, which is the update, again a
relatively small piece we are talking about. Then there is the
roughly $100 transportation fee.
There is only one set locally, the transportation fee. It
is by far the biggest component. If the carriers change that
that will have--the other two pieces which are smaller are a
part of a much more structured developmental national rates.
Chairman Manzullo. Would you agree with that?
Ms. Halsey. I am still stuck with the fact, and it was
answered formally to Dr. Weldon's question. The statute clearly
states that these are to be reviewed every 5 years. The answer
is it has not. We are asking for an interim adjustment in
recognition of the fact that this $11 rate was set 10 to 12
years ago.
I think it is reasonable to say.
Chairman Manzullo. Which figure are you looking for?
Mr. Halsey. The data we provided to the Agency places it
between normal hours and after hours in the high twenties to
low $30 rates, and that is in cost. And I understand it is not
strictly cost-based now and that is appropriate. But certainly
if we--what we are looking at is something over 100 percent
increase is appropriate on the only data that exists, and that
is the date that was compiled by our industry.
So what we are saying is in the absence of the legally
mandated 5-year review and any data that has been put forward
by CMS, it doesn't seem reasonable to set an interim adjustment
until--and if in January they can get this going and everything
else--let us be clear; in January it doesn't mean it is over,
but an interim adjustment which is legally possible from the
Secretary's office would give these small businesses the hope
to say--because that is what we are talking about. They need a
sign from this Agency that says I need to stay around.
Chairman Manzullo. Did you want to respond to that, Mr. Kay
or Mr. Scully?
Mr. Scully. I guess the way I have looked at it, as he
said, the only evidence out there so far is industry data. And
it is a relatively small amount of money, in all candor. But on
the other hand, it comes from a $66 billion pot of money that
every time one goes up, others come down. In the context of
making adjustments in that budget-neutral pot the physicians
are very angry about right now, I have been hesitant to make
any radical changes, even though this is a small amount of
money.
The much bigger variable is transportation and it doesn't
really count against that pot. So if a local carrier decided to
go out and say we were going to pay $120 for transportation
instead of $100, they just do that and it doesn't come out of
the rest of the pot. So it looked to me as a more workable
solution. We are happy to keep looking at the $11 but we have
to come up with independent data other than what the industry
gave us.
Chairman Manzullo. The only reason, going to Dr. Weldon,
that I would suggest that you increase it is the fact that it
is obvious by any test whatsoever that you would be saving
millions of dollars instantly by not sending these seniors in
these caravans, tying up drivers for 4 hours. This is so
simple; that if they get a modest adjustment on the cost of the
x-ray, you won't--you will save immediately millions of
dollars.
I use my mother as an example, because that is exactly what
happened there. I would suggest--I mean, I can't force you. It
does two things. We need to save this profession so they are
around here in January; otherwise they are going to be gone.
And the second thing it does is it automatically saves money.
Mr. Scully. We will aggressively keep looking at it. I
think we have made a lot of changesin the policy. I think there
is a strong likelihood the biggest component will go up. And to be
honest with you, Mr. Chairman, there are very few things out of that
$265 billion pot that I wouldn't structure differently if I could.
There are a lot of crazy things in the budget.
Mr. Weldon. Mr. Chairman, I would ask you to yield to me
for a minute. Are you saying, Mr. Scully, for you to provide an
interim rate adjustment upward now for the setup fee for the
portable x-ray providers, that you have to adjust somebody else
down to find the revenue for that?
Mr. Scully. It depends. My belief is that that is correct
because basically within the physician payment pot for anything
we set rates for, which includes the general physician payments
and the national--anything on the RBRVS scale--the physician
gets 36 bucks for an office visit. If we decide to raise
anesthesiologists' practice expenses or raise oncology
payments, it comes out of the pot someplace else. And that is
what this $11 setup fee is in the $66 billion pot that is in
the national rate schedule.
On the other hand, when you leave something to carrier
discretion and they make the changes during the course of the
year, they can raise the rates temporarily it doesn't have an
impact on anybody else. So the transportation fee can be raised
locally without any impact on any rates; is that correct?
Mr. Weldon. Just so I understand, you know the reason I am
bringing up this setup fee is it has been frozen at a 1992
level. And, you know, we have had some inflation since then.
And are there other fees in that same pot that have been frozen
at the same level for the last 10 years?
Mr. Kay. There are some that have actually gone down in the
last 10 years. I was going to say basically this service--
because you know, to date anyway, we haven't had data that sort
of met the criteria that we use to establish these rates.
Essentially the payment rate is--carried over from the previous
charge based system. It used to be the reasonable charge
system. And the new fee schedule was implemented in 1992, so we
sort of used the average rate that was being paid at that time.
And since then we have applied the updates over the years. So
the various adjustments that have been made to the fee schedule
have been applied to that rate.
Mr. Scully. So it has gone up a little bit but not that
much.
Mr. Weldon. Before yielding back, I just want to say I am
very concerned about the fact that the input I am getting from
industry is the setup fee on this, the cost to the carriers,
and I understand they can make it up on transportation perhaps,
but I think there should be a basis in fact and a basis in
logic and a basis in reality for the reimbursement schedule.
And if the setup costs associated with these small businesses
are 100 or 200 percent higher than the current Medicare
reimbursement schedule, then I think it is very, very timely
that we review this. And if at all possible, I would like you
to provide an interim update for this service in the weeks and
months ahead, and I would highly encourage you to do that.
I am happy to yield back.
Chairman Manzullo. Mr. Kay, are you saying there is
something flawed with the data that has been given to you by
the industry?
Mr. Scully. I have gone through this now with the $17
billion outpatient rule which has moved payments for drugs in
the country up and down. As a matter of course, we generally
try to come up with independent third-party independent data.
Chairman Manzullo. You don't have any other data; is that
correct?
Mr. Kay. Right.
Chairman Manzullo. So I mean, there has been no review in 5
years. You have no independent data on your own, and you could
take the data of using my mother as an example. I mean, this is
so simple. I mean, this is so simple. We are going into the flu
season. And if my mother were still alive, I think I would lock
that door there and post a guard and instruct you, Mr. Scully,
to increase that schedule right away so she doesn't--so she
wouldn't have to get into one of those ambulances, go out where
it is cold, and sit in a waiting room with a bunch of sick
people at a hospital. I mean, you could prevent that. It is so
simple.
And these people are knocking on your doors. You have
physicians all over the place saying, this is not an issue of
money, this is an issue of safety and health of these patients.
And people in nursing homes have no business being carted to a
hospital and set in a waiting room with all types of germs and
things when the reason they are there is perhaps probably
because their doctor thinks they have pneumonia in the first
place. I mean, we really need an answer on this thing.
I mean, can't you just--what does it take? I mean, you
could make it an administrative rule, Mr. Scully, to say that
at least until January, which is only, you know, 2\1/2\ months
from now, 2\3/4\ months from now, we are going to increase that
x-ray component just so these guys can stay alive. I would
implore you to do that.
Mr. Scully. Mr. Chairman, I think this thing has gotten a
lot of attention in the Agency. I think there is a high
likelihood that certainly with some carriers and some regions,
the payment is set by region, which is the biggest piece. My
biggest concern, to be honest with you, and a lot of physicians
don't put two and two together, that if you ask Congressman
Weldon, Dr. Weldon--I think he is an internist--can we increase
any other fee in the pot? And by the way, we are going to cut
your office visit for your next doctor's office visit by 50
cents--.
Chairman Manzullo. So you would have to cut another? So the
result of this hearing today is you are going to encourage the
State providers to up the transportation fee to help these guys
out in the interim.
Mr. Scully. We are going to tell them to do the right
thing, but hopefully they will understand that they are
supposed to review this thoroughly and, like I did with the CEO
of the Florida health plan, when we find problems where we are
not getting any satisfactory communication with our carriers
from the industry, we will call them up and make sure they get
a thorough hearing.
Chairman Manzullo. Anybody else have anything they want to
add?
Ms. Taylor. We are just very anxious for this program
memorandum to get out. So hopefully it will get out very soon.
Chairman Manzullo. Is there anything they can do?
Mr. Scully. I think the program memorandum is just about
out the door. And if it isn't, it will be after this hearing.
Chairman Manzullo. We are 3 for 3 today. Thank you so much,
Mr. Scully. This is the sixth hearing we have had on CMS.
Mr. Scully. First on CMS.
Chairman Manzullo. First one on CMS. But I don't think--let me
put it this way. To the physicians out there and the providers,
I can't tell you how much they appreciate your sitting down at
a table like this with the people that make the decisions and
the policy people. The dermatologists were actually shocked
that they sat at the table with the person that said, come, be
a part of this group.
I am shocked, pleasantly, pleasantly surprised, amazed it
could be--I don't want to say this easy--but this is a process
that we use to try to resolve things. You know one of our goals
on the Small Business Committee is to bring down the cost of
health care insurance and one of the ways we do that is to try
to help you make CMS more efficient.
Mr. Scully. I will tell you, because I share your goal. As
I told you before, we created 11 open-door policy groups with
the same intent. I think we have had over 3,000 people on these
calls. And once a month with every one of these groups--the
hospitals, rural hospitals, nursing homes, home health
agencies--last week I had one with pharmacists, last week I had
one with three health providers, and we had about 40 people in
Washington and something like 1,200 on the phone, and we go
through all these issues and people bring up gripes and
complaints and we try to fix them.
So maybe we should invite you to come co-chair one with me
at some point.
Chairman Manzullo. I would look forward to that after the
election. Thank you again so much and this meeting is
adjourned.
[Whereupon, at 4:25 p.m., the Committee was adjourned.]
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