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May 19, 2008

Washington Health Policy Week in Review Archive d98498ad-27ed-4b98-b33b-b89e94f4ffe3

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Brainstorming to Give Impoverished Seniors Prescription Drug Help

By John Reichard, CQ HealthBeat Editor

May 16, 2008 -- Federal officials met with representatives of community and senior organizations at a "summit" Friday to improve efforts to sign up seniors for Medicare's relatively generous prescription drug benefit for low-income seniors.

As part of the effort, Acting Centers for Medicare and Medicaid Services Administrator Kerry Weems said he'll hold regional CMS administrators' feet to the fire by establishing and publicizing enrollment goals for each of their regions. "We are not kidding about reaching everybody," he said.

Weems estimated that more than 80 percent of those eligible for the benefit, better known in bureaucratic lingo as the "low-income subsidy," or "LIS" have been enrolled. "This is a major achievement. You should be proud of it," he told summit participants. "This work isn't easy. It's like looking for a needle in a haystack.

Last year working together we successfully increased the number of low-income subsidy individuals by a quarter of a million people," Weems continued. "However, I think you'll agree that these people were the low-hanging fruit...we want to climb higher in the tree and reach the upper branches.

"Listening to you, CMS has refined our national campaign," Weems added. The campaign dropped a late-enrollment penalty and allows those eligible for LIS to enroll at any time during the year. The agency also has commissioned new research "that will measure the effectiveness of multiple direct marketing approaches."

A particular focus of Friday's gathering was targeting data pointing to areas of the country that could clearly benefit from—increased, intensified, targeted outreach. Some of these are places you'd assume outreach would be necessary—Cook County [Illinois], Kings County New York [Brooklyn], Los Angeles, Philadelphia, but there are others. Rural Louisiana, Arkansas, Kentucky, Tennessee "these aren't necessarily places that people think of first."

Much of the summit was to be devoted to the sharing of lessons learned among the organizations partnering with CMS. Agency officials also went over data that could be used to identify the best outreach targets. That information includes rankings of counties according to estimated numbers of beneficiaries eligible for the low-income drug benefit. The data allows groups to identify counties that have large numbers of those beneficiaries—or if not large numbers, relatively large percentages of Medicare beneficiaries falling into the low-income category. The data also allows analysis of individual zip codes to find where those eligible are clustered.

Reaching households is one thing, persuading people to sign up is another.

Research released by CMS at the meeting sought to shed more light on why those eligible for LIS have not enrolled. Interviews with selected numbers of that population found that in many cases they are in good health, do not expect to need prescription drugs for several years, and that they have heard prescription drug costs are high under the Medicare drug benefit.

Seniors also were reluctant to provide personal information on the application filed with the Social Security Administration to determine if they had too many assets to qualify. "A strong sense of pride and desire for independence is a barrier" in rural areas, researchers found. "Some equate it to asking for a handout," or getting welfare and fear being stigmatized in their communities.

In other cases, people have little experience calling CMS or the Social Security Administration and are intimidated by the prospect. In urban areas, seniors appear to be more connected socially, but to have fewer ties to senior groups and senior centers than in rural areas.

"Partners believe the key to successful outreach initiatives have been one-on-one contact," particularly in settings such as drug stores, libraries, health fairs, and senior centers. Partners also "strongly encourage partnerships with churches." Church leaders "are some of the most respected individuals in the communities and carry significant weight with those who might be too proud to accept help."

In rural areas, seniors express "greater reliance on in-person resources such as local insurance agents, trusting them with all types of financial and insurance decisions," researchers added.

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Bush Administration's SCHIP Decision Takes Heat From Two Hill Agencies

By Alex Wayne, CQ Staff

May 15, 2008 -- Two separate nonpartisan congressional advisory agencies said Thursday the Bush administration improperly issued a directive last year limiting state expansions of children's health insurance programs.

The opinions, by the Government Accountability Office and the Congressional Research Service, lend weight to Democrats' efforts to nullify the directive, something they have promised to do since it was issued in August. But Democrats seek to kill the directive through stand-alone legislation, a route that will be troublesome, especially because Republicans are not on their side.

GAO and CRS provided their opinions on the directive—issued as a letter to state health officials Aug. 17—during a hearing by the Energy and Commerce Subcommittee on Health. The subcommittee's chairman, Frank Pallone Jr., D-N.J., is the sponsor of legislation to nullify the directive (HR 5998).

"The Aug. 17 directive would impose strict new requirements on states and beneficiaries that are not only impossible to achieve but make little, if any, sense," Pallone said.

The letter was issued in the heat of a debate between Congress and President Bush over expanding the State Children's Health Insurance Program, or SCHIP. States were told they would have to meet new standards before the government would allow them to expand coverage under the program to children from families making more than 2.5 times the federal poverty level—or $53,000 for a family of four.

States complained that it would be impossible for them to meet one of the standards: a requirement for them to show they already were covering 95 percent of all children from families making less than twice the poverty level. Soon after issuing the letter, the administration cited it when rejecting a proposal by New York to expand SCHIP to cover children from families making up to four times the poverty level. New York and other states are suing over the decision.

Administration officials said the directive was intended to prevent families from dropping private insurance to enroll their children in SCHIP—a phenomenon known as "crowd-out."

Morton Rosenberg, a legal specialist for CRS, and Dayna K. Shah, managing associate general counsel for GAO, both said the Aug. 17 letter amounted to a regulation and should have been issued like any other administrative rule, using a process that would have allowed Congress to easily disapprove the measure. Rosenberg said Congress could probably still pass a disapproval resolution to nullify the letter, if it wanted. Disapproval resolutions cannot be filibustered in the Senate and so are easier to pass than standard bills.

But Pallone said he would rather pass his bill because it would also require the Centers for Medicare and Medicaid Services to reconsider New York's proposal to expand its children's health insurance program.

A House Democratic aide said CMS officials were invited to testify at Thursday's hearing but told the committee's staff they would only participate if the hearing were held behind closed doors. A CMS spokesman, Jeff Nelligan, said he did not know that the agency had been invited to testify.

Many Republicans support the principle behind the Aug. 17 letter, so Pallone's bill stands little chance of passing the Senate, where it could be filibustered. "The concern about government [insurance] coverage crowding out private insurance is a legitimate one," said Rep. Nathan Deal of Georgia, the senior Republican on the subcommittee.

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Disparities Legislation: Once a Decade?

By John Reichard, CQ HealthBeat Editor

May 12, 2008 -- Why, a questioner demanded of Senate staffer Caya Lewis and other panelists at a Capitol Hill forum Monday, is Congress turning a deaf ear to pleas for legislation narrowing racial and ethnic disparities regarding health status and access to care? What will it take to end the "stalemate" over the issue, the questioner earnestly pleaded.

The answer from Lewis: many are unaware of those disparities or don't believe they exist.

Panelists at the event for congressional aides sponsored by the nonpartisan Alliance for Health Reform and The Commonwealth Fund sought to clarify that the problem is very real, and that both federal and state lawmakers can do much to address it. But solving the puzzle goes beyond the big challenge of enacting universal coverage, they noted. And the legislative response needed to deal with its other dimensions is slow to develop, they acknowledged.

The last major piece of disparities legislation was signed into law (PL 106-525) in the year 2000, noted Lewis, a Democratic staffer for the Senate Health, Education, Labor and Pensions Committee chaired by Sen. Edward M. Kennedy, D-Mass. Lewis made no predictions about when the current disparities legislation (S 1576) her boss is co-sponsoring with Sen. Thad Cochran, R-Miss., might make it through Congress, but proponents clearly hope they can at least get it through the Senate this year.

"While people of color make up just one-third of the U.S. population, they comprise over half of the nation's 47 million uninsured individuals," according to a paper co-authored by another panelist, Brian Smedley, research director of The Opportunity Agenda, an advocacy organization that describes its mission as ending racial and gender bias, among other goals. "But even when insured, minority and low-income individuals are less likely to access health care as out-of-pocket costs rise and more likely than are native-born white Americans to face cultural and linguistic barriers to care."

Bruce Siegel, a health policy professor at George Washington University, offered several other statistics illustrating differences in health status and access to health care. Seven of 10 African-Americans are either overweight or obese, compared with about 5 of 10 white Americans and 3 of 10 Asian-Americans, he said. Only 44 percent of Hispanic-Americans go to a private doctor or clinic for their usual care compared with 62 percent of African-Americans and 77 percent of white Americans.

Americans of Asian or Pacific Island descent are more likely to be physically restrained in nursing homes than other racial or ethnic groups, he said. And minorities are less likely than white Americans to receive a pneumococcal vaccination, he said.

But Siegel also noted that certain policy initiatives make a difference. For example, programs to improve the quality of care in dialysis facilities are associated with improved quality overall and with smaller disparities in care between black and white patients. And having a "medical home," a current hot topic in policy circles, is important, he indicated. Having a medical home means having a doctor or practice that monitors one's overall care and emphasizes preventive practices, among other goals. Minorities with medical homes are just as likely as whites to receive reminders for preventive care visits, he said.

Smedley presented an analysis of states that have made or pursued health care system changes to draw lessons on how to reduce disparities. “Coverage expansions are necessary but not sufficient to promote health care equity,” he said. Other methods include promoting diversity among health care professionals; minority professionals are more likely to practice in underserved areas. Streamlining enrollment procedures also helps boost enrollment in publicly funded health care programs, he said. And "outreach" programs to find potential enrollees need to be evaluated, he said.

Panelists made the point that having an insurance card doesn't mean a local doctor or other provider will be available nearby. Assuring that "infrastructure" means supporting safety net institutions such as community health centers and providing incentives such as loan repayment for practicing in underserved areas, Smedley said.

To get federal legislation untracked, Lewis stressed the importance of reaching across the aisle to find common ground. She noted that Kennedy has worked well with Cochran, who is "great" on the issue because of his knowledge of health care disparities in the Mississippi Delta.

"One of the clear things we can do at the federal level is improve the training of minority health professionals," she noted. The seemingly dry topic of data collection also is key because it helps clarify specific aspects of disparity, panelists noted. Among other objectives, the Kennedy-Cochran bill would boost training efforts and standardize the way federal health programs collect data pertaining to race and ethnicity. It also would help fund community programs targeting disparities and require a national plan to improve minority health and eliminate disparities.

Becky Shipp, a GOP staffer with the Senate Finance Committee, said she agreed that the disparity problem is real and that expanding coverage options should not be the only policy option. Shipp, who said she was speaking for herself and not for her boss, added that expanding programs such as the State Children's Health Insurance Program to include higher income levels had undesirable effects such as crowding out private coverage.

But she agreed that this "is the season for health reform" and said the current system is "unsustainable." She also offered some encouragement. Health policy "is really hard. It's really hard to get stuff done." But "every once in a while you capture lightning in a bottle."

Lewis similarly suggested that steady effort would pay off in gaining passage of disparities legislation. "It takes a while, but it shouldn't be once every 10 years," she said.

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Medicare Hopes to 'Bundle' Its Way to Better Hospital Care

By John Reichard, CQ HealthBeat Editor

May 16, 2008 -- Federal officials plan to test a new way of paying hospitals they hope will address growing concerns over spending and quality of care in the Medicare program. But the approach will require physician practices and hospitals to learn to cooperate in ways they've never had to before.

The Centers for Medicare and Medicaid Services said Friday it will test "bundled payment" in which hospitals and doctors team up to provide all the services associated with surgical procedures in return for a single payment amount. The announcement came amid growing pressure on the agency to move on the payment concept.

The Medicare Payment Advisory Commission has urged CMS and Congress to take various steps relating to bundling as a way of reducing wasteful Medicare spending.

Hospitals have expressed concern about not moving too quickly on bundled payment, which involves forging new links with physicians to determine not only how to best deliver care together, but also to resolve thorny issues such as how to divide up payments. James Bentley, senior vice president for policy planning at the American Hospital Association, praised the demo concept, depending on how it is actually structured. "We've got to learn to walk before we can run," he said in an interview.

In the project, providers would receive a single payment for both Part A services, the hospital side of Medicare, and Part B services, the doctor portion of the program. CMS now pays hospitals a pre-set amount for a particular diagnosis for all their services they provide, but that doesn't include the physician services involved.

"The physicians who care for the patient during the stay are paid separately under the Medicare Physician Fee Schedule for each service they perform," CMS noted in news release. "The separate payment systems can lead to conflicting incentives that may affect decisions about what care will be provided."

The "Acute Care Episode" (ACE) demonstration is open to applicants from Texas, Oklahoma, New Mexico, and Colorado. It will test 28 cardiac and 9 orthopedic inpatient surgical services. CMS said it will award only one ACE demonstration site per market in the first year of the program. "Each demonstration site, or 'Value-Based Care Center', will be selected and actively marketed by CMS to both beneficiaries and referring physicians," the agency said.

A CMS spokesman said the demo will start Jan. 1, 2009 and run through Dec. 31, 2011. Officials will pick up to 15 markets in the four states, he said. The four states were selected because of the readiness of Medicare administrative contractors in those areas to oversee the project in time for the Jan. 1 start, he said. The agency hopes savings will be "significant."

CMS hopes that the "global payment" approach will spur doctors and hospitals to work together efficiently so they can have more money left over to divide after delivering their various services. "CMS expects to demonstrate how to not only better coordinate inpatient care, but to also achieve savings in the delivery of that care than can ultimately be shared between providers, beneficiaries, and Medicare," said CMS Acting Administrator Kerry Weems.

The agency also aims to publicly post price and quality information associated with the procedures to test whether that draws more beneficiaries and physician referrals to the facilities involved.

Medicare ran a similar program from 1991 through 1996 to test bundled payment for cardiac bypass surgery at seven hospitals. Medicare estimated savings of about 10 percent on bypass patients treated in participating hospitals. Savings for the program totaled $42.3 million while Medicare patients and their insurers saved another $7.9 million.

All hospitals hoped to increase their bypass volumes and market shares but that "rarely happened," according to an evaluation of the bypass demo. "Several hospitals felt that the government had abandoned them by not actively promoting the demonstration or allowing them to waive patient co-pays for the uninsured." But most of the sites were able to reduce their costs, and nearly all of the hospitals signed major new private managed care contracts based on bundled payment.

"In three of the four original hospitals, staff were surprised at how quickly physicians were able to reduce lengths of stay, substitute generic for brand drugs, and reduce unnecessary testing and other services."

Nurses and quality assurance directors in most of the hospitals believed quality improved during the test, mainly because of increased emphasis by surgeons and other doctors on avoiding complications through closer patient monitoring, the evaluation said. It noted that those quality assessments were "subjective."

One area of dissatisfaction among all the hospitals was in billing and collection of payments; "nearly all sites felt they should have received extra payments to cover the novel billing arrangements."

Bentley said the demo should be a good experiment to determine how well hospitals and doctors work together. But he expressed concern that the project won't mandate one approach to bundling. "We need to find out if there are multiple models that work," he said. Alternatives could include a hospital taking the lead in contracting with physicians, physician practices initiating the contracting, or the hiring of an outside entity by both hospitals and doctors to manage the bundled payment and to set the rules for payment, he said.

Bentley also noted that hospitals outside the four states selected have expressed interest in bundling. "On the other hand, if you're going to start small, you've got to start small," he said.

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Proposal: New Universal Coverage Plan Would Cover Significant Portion of Uninsured

By Leah Nylen, CQ Staff

May 13, 2008 --Forty-four million of the nation's uninsured could receive health care under a new plan that would allow individuals to buy coverage through a new, national health insurance connector program, according to an article released Tuesday by The Commonwealth Fund, a private health care foundation.

The Commonwealth Fund proposal appears in the May/June 2008 issue of the health policy journal Health Affairs.

A national entity known as a "connector" would offer both individuals and small businesses the opportunity to buy into private insurance or "Medicare Extra," health insurance that would build off the existing Medicare system and would be available across the country.

The proposal would require that all individuals enroll in a health care plan, and people without insurance who file taxes would be automatically enrolled.

If adopted, the plan would reduce the number of uninsured people in the United States from 48.3 million in 2008 to less than 4 million in the first year the plan is implemented, according to a news release.

"The case for reform is overwhelming," said Karen Davis, president of the Commonwealth Fund. "We have a historic opportunity with a new administration in 2009."

Under the Commonwealth proposal, individuals would be required to enroll in health insurance, and tax credits would be available to ensure that premiums account for five percent of income for low-income families or 10 percent for higher-income families. Employers would have to either provide coverage or contribute up to seven percent of their payroll into a pool.

The article estimated that as many as 60 million people would choose coverage under the connector program. The new plan would require about $15 billion in new spending, with the rest offset by reduced administrative costs.

"This approach will eliminate wasteful administrative costs, enable people to keep their coverage if jobs or circumstances change, and provide affordable health insurance with good access to health care and financial protection to all," said Cathy Schoen, lead author and Commonwealth Fund senior vice president.

If the plan were implemented in conjunction with other changes to the health system, such as the adoption of health information technology and negotiated prescription drug prices, the proposal could save as much as $1.6 trillion over the next 10 years, Schoen said.

Dallas Salisbury, president of Employee Benefit Research Institute, a research group dedicated to promoting employee benefits, said that business groups would likely support several aspects of the proposal. In particular, the plan would maintain the current tax treatment for health insurance and allow those 60 and over to buy in to Medicare, both policies the business community has long endorsed, he said.

"There's a consensus that an employer-based system should continue to be part of overall approach," Salisbury said. Employers "want to continue to be part of system."

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Reading the Health Care Tea Leaves for 2009

By John Reichard, CQ HealthBeat Editor

May 13, 2008 --With Election Day almost six months away, no one knows the answers, but top health care analysts, pollsters, and advisers offered insights at a Washington, D.C., forum Tuesday—and some surprising answers. They suggested, for example, that the Iraq War might increase rather than decrease the chances of an overhaul, and that while the public looks to Democrats more than Republicans for answers on health care, Sen. John McCain of Arizona, the presumed GOP presidential nominee, may have embraced an unexpectedly strong strategy in focusing on health costs rather than universal coverage.

Democratic pollster Celinda C. Lake conceded at the forum sponsored by the policy journal Health Affairs that McCain is "very audacious and very smart in leading on cost." People come to the health overhaul debate as consumers, not altruists, she said. Their gut concern is "what's it going to do with my coverage."

Worries about unaffordable care cause insured Americans to cling more tightly to their current health care benefits, she suggested, adding that they are likely to resist proposals that water down their current benefits to pay for universal coverage. Lake also noted that insured Americans can bring the greatest political pressure to bear on the health care debate.

"Ironically, one of the strongest predictors of not voting is not having health insurance," she said.

Although Americans see health care as a right, they worry about the cost implications of universal coverage, including longer waits for care and less access to doctors, according to Lake. Women—who Lake sees as key to how the next election will turn out and to the fate of health care proposals in the next few years—worry that instead of having 25 minutes with the doctor they will only have 10 minutes.

Americans also want a uniquely American answer to the problems in the health care system. “"They recognize that the U.S. system is in crisis, but they seek to improve the system instead of adopting a foreign model,”" Lake and her co-authors wrote in an article released Tuesday by Health Affairs. "“The majority of America is not fine with going to government health clinics,"” she told the forum.

But Lake added that because Americans are wary of plunging into the unfamiliar, McCain's plan has significant weaknesses. She appeared to be referring in part to provisions that would provide people with tax credits, allowing those covered by employers to switch to the individual market. Among the cost worries of the public is "losing all that money that employers put into the system," she said.

Democrats, she said, might have a better chance of overhauling health care than they did in the early 1990s if they tried motivating voters out of anger rather than fear. The Democratic message then was that people should support universal coverage because they could suddenly lose their jobs and be "one paycheck away from disaster." That fear caused people to want to stick to what they had, Lake said. Targeting wealthy insurance companies, on the other hand, may be a stronger way to build support for universal coverage.

Despite potential pitfalls, Lake said she sees a "unique" opportunity to move on health care early in the next administration. "Health care for all Americans is a real possibility," she said in the Health Affairs piece. "The coalitions being built in favor of major health reform at the state and national levels are unprecedented in their breadth and influence."

GOP pollster William D. McInturff agreed with Lake that there is a real chance for overhaul, saying public perceptions of the economy are worse now than they were of the recession economy of the early 1990s. The $150 billion to $200 billion yearly cost of the Iraq War has made the public angry about all the money being spent abroad and more open to the idea of spending $110 billion a year on covering the uninsured. "I think Iraq has shifted the dialogue about that kind of price tag," he said.

But Americans aren't willing to accept a little less health care so the uninsured can get more, and they are skeptical that ending lower tax rates for the rich will generate enough money to cover the uninsured, he added.

McCain has certain advantages over Democrats, McInturff asserted. One is that as a Republican, he can go after trial lawyers. The pollster said voters respond strongly to the argument that extra tests and procedures ordered by doctors worried about getting sued drive up the cost of care. But Democrats can't talk about that issue for fear of alienating trial lawyers that account for much of their campaign financing, McInturff said.

As president, McCain would be serving with Democratic majorities in the House and Senate, McInturff predicted, and voters "don't think that is a bad outcome" because it forces compromises around the middle.

Congressional Budget Office Director Peter R. Orszag hammered away at the importance of controlling costs, saying that the rate at which health costs grow is the key to the nation's financial future. Dropping tests, products, and procedures that don't work is the single most important step the United States could take to improve the efficiency of its economy and could produce savings equal to 5 percent of the Gross Domestic Product without harming the outcomes of health care, he said.

But "our political system does not deal well with gradual long-term problems," he added. As a result, it may be wiser for policy makers to focus on areas with both a near-term and long-term payoff. As an example, Orszag cited the finding that end-of-life care costs $50,000 at UCLA Medical Center compared with $25,000 at the Mayo Clinic—with no difference in health outcomes. "That's not about your kids or grandkids, that's about your tax dollars today," he said.

If employers informed workers exactly how much they forego in salaries now because of the cost of care, those employees might become a more potent political force for lower health costs, he added.

Orszag noted that CBO is gearing up for next year's debate by beefing up its staff of health care analysts and by preparing two volumes on policy alternatives for would-be health reformers. The idea is to have a tool kit ready for those assembling health care plans and to avoid unexpected cost estimates that torpedo plans politically. There should be no surprises from CBO in the health care debate this time, he said.

But Orszag hinted that health care won't necessarily be a front-burner issue next year. If the economy is weak, Congress may be preoccupied with that issue. It also faces the expiration of the Bush tax cuts (PL 107-16, PL 108-27) and the issue of global climate change.

However, health care advisers to the top presidential candidates downplayed the idea that health care won't be front and center, and jousted over which campaign would deal best with public anxieties over the cost of care.

Jeanne Lambrew, an adviser to the Clinton campaign, and David Blumenthal, an adviser to the Obama campaign, said the McCain plan can't get costs under control because it doesn't provide for universal coverage. Only when the uninsured are brought into the health system can the nation's entire health costs be addressed, they said. Otherwise, costs are shifted from payer to payer with no comprehensive plan to assure efficiency.

Blumenthal said a reinsurance provision in the Obama health plan would shave $2,500 per person right away off the yearly premium costs of employees in small businesses, in which most uninsured Americans work. But moderator Susan Dentzer, the new editor of Health Affairs, expressed skepticism about the Obama campaign's estimate that its health plan would cost $65 billion a year overall, saying that estimates of the cost of the reinsurance provision alone have run as high as $60 billion per year.

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Worries Over Nursing Home Care Agitate Lawmakers

By John Reichard, CQ HealthBeat Editor

May 15, 2008 -- A House panel began reviewing Thursday how the increasingly veiled nature of nursing home ownership is affecting the quality of care for frail elderly and disabled Americans and whether current federal quality standards have become outmoded.

"Our regulatory system—mired in the past when nursing homes were owned by small companies—is inadequate to address the problems and challenged posed by mammoth multi-state corporations, LLCs and private equity firms that dominate the industry," said Connecticut Attorney General Richard Blumenthal during a hearing by the House Energy and Commerce Oversight Subcommittee.

Blumenthal and other patient advocates testified that multi-layered ownership has made it much harder to find accountable executives to correct deficiencies in care and that quality-of-care problems abound in the industry despite minimal federal standards set by the Omnibus Budget Reconciliation Act of 1987 (PL 100-203).

One of every five nursing homes in the United States has deficiencies that cause actual harm to residents or that put them at risk of harm, said Lewis Morris, chief counsel to the Inspector General for the Department of Health and Human Services, citing 2006 data.

Problems with the inspection system allow poor conditions to fester, witnesses said.

In many cases nursing home inspectors miss serious quality-of-care problems such as poor nutrition, dehydration and bedsores, according to a Government Accountability Office report also released Thursday. In about 15 percent of federal inspections following up on previous state nursing home inspections, at least one of the most serious type of deficiency was found. In nine states, 25 percent of the federal follow-up inspections detected serious deficiencies missed by state inspectors.

Inconsistent inspection methods are too subjective to yield evidence that leads to effective enforcement action, said Andrew Kramer, a health policy professor at the University of Denver in Colorado.

An industry trend toward nursing home acquisitions by private equity firms also threatens to undermine care by piling on debt that creates dangerous cost-cutting pressures, advocates said.

Tom DeBruin, president of a regional branch of the Service Employees International Union in Pennsylvania, said that private equity firms seek to make "extreme profit," putting patients at risk. "The industry has moved towards increasingly complex corporate structures and highly leveraged buyouts," he said.

"For example last winter, the Carlyle Group, one of the world's largest private equity buyout firms, completed a $6.6 billion leveraged buyout of HCR Manor Care, the nation's largest nursing home care provider." DeBruin said that "plain common sense suggests that there is reason to be worried about cost-cutting pressure at a company that has just taken on up to $5.5 billion in new debt." DeBruin suggested that the company will cut staff and imperil care as a result.

Blumenthal called the case of New England nursing home chain Haven Health "a poster child for the perils of concentrated ownership and power." Blumenthal said the owner of the company drained its assets away from patient care. Funds went toward a $9 million record company in Nashville and a half-million dollar lake front property, while patient care suffered and the chain owed its vendors close to $13 million, Blumenthal said.

The subcommittee heard from a woman who said her husband, an Alzheimer's patient, was allowed to leave a Haven facility in Greenwich, Connecticut, 10 times in his first four days there. The woman, Susana Aceituno, said she decided to move her husband but was then asked by a Haven administrator to give the facility another opportunity. He subsequently escaped again and fell down an embankment, causing an injury that led to quadriplegia, Aceituno testified.

The Connecticut Department of Health fined the facility $615 for not looking after her husband but "because Haven Health Care said that would be a financial hardship for them, they sent the state a check for $1," Aceituno said.

"I really hope you can be a little more tough," she told the lawmakers.

Luis Navas-Migueloa, a nursing home ombudsman for the city of Baltimore, said he sees differences between facilities owned by smaller concerns and those whose ownership is unclear because of the complexity of their management structures.

"When dealing with the less transparent nursing home, there usually is an obvious lack of personal contact which turns into a lack of personal care and concern," he said. "When there is a problem in a nursing home with an absent owner it is difficult, and sometimes impossible to bring a resolution to problems. The administration becomes the buffer between the owners and the problems which occur in the facility. Residents, families, and advocates in general, are limited to speaking with an individual who is either hiding problems from the ownership of the nursing home, or hiding the ownership from the people who end up suffering due to these problems."

Morris of the HHS Inspector General's office said that the Centers for Medicare and Medicaid Services operates a system called "Pecos" that includes ownership information but that it is not a comprehensive solution. The database has enrollment information on 70 percent of the nursing homes operating in the Medicare program, said Acting CMS Administrator Kerry Weems.

Subcommittee Chairman Bart Stupak, D-Mich., and other lawmakers emphasized the importance of access by the public and by regulators to information on which entity in a nursing home management structure has the resources to fix quality of care problems when they occur.

Stupak pressed Weems on why Pecos doesn't have ownership information on all nursing home operators and why that information isn't a part of the Nursing Home Compare Web site that compares the quality of nursing homes. “We need to link the ownership database to the quality database,” Stupak said.

"It is our goal to populate Pecos 100 percent," Weems said, and to link ownership data to quality data, but he added that the ownership data needs to be "usable." Stupak also asked why, with one in five homes providing seriously substandard care, CMS doesn't expand its "Special Focus Facility Program" focusing on facilities with chronic quality of care programs. "It is a program that is resource intensive ... within the resources we have it is a program we would look to expand," Weems said.

Stupak also pushed Weems on why the agency isn't doing more to implement a nursing home inspection system developed by university professor Kramer called the Quality Indicator Survey. Kramer said that method creates more consistent inspections that involves larger samples of facilities and much more interviewing of facility residents. "You ask them all sorts of questions" that cast a wider net to discover quality problems, Kramer said.

"We've moved QIS at a pace consistent with the budgetary resources that we have," Weems said. Stupak noted that the cost of wider expansion would be some $20 million.

Democrats and Republicans alike at the hearing called for increased "transparency" to determine ownership of nursing homes and quality of care problems. Reps. Pete Stark, D-Calif., and Jan Schakowsky, D-Ill., are expected to introduce legislation within the next few weeks increasing transparency. Stupak said he plans to develop a separate "discussion draft" requiring the linking of information on ownership and quality.

In the Senate, Republican Charles E. Grassley of Iowa and Democrat Herb Kohl of Wisconsin have introduced legislation (S 2641) to give consumers standardized information on care in nursing homes, including inspection results, the size of a facility's staff, and ownership information. The measure also would stiffen penalties for poor quality care. The pair hope to attach the measure to Medicare legislation blocking a scheduled July 1 Medicare payment cut to doctors. The SEIU's DeBruin noted the measure is opposed by for-profit nursing homes, but advocates hope they can get it passed anyway, saying it wouldn't add to federal spending.

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