Federal Perspectives

DME Providers Develop Model Supplier Standards

In a self-policing effort designed to head off increased federal oversight, a coalition of groups representing durable medical equipment providers and suppliers has put forth a long list of quality assurance standards it says should be adopted as conditions of Medicare participation.

The proposed standards, recently forwarded to the Health Care Financing Administration, emerged from a consensus conference convened last fall by the Health Industry Distributors of America, a DME industry trade group. The HIDA document presents broad standards applicable to all DME suppliers-proof of fiscal stability, 24-hour service, written quality assurance policies, and many others-as well as subsets of standards specific to nursing facilities and other patient care settings.

Suggested standards for long-term care include the following provider characteristics and performance requirements:

• No convictions for violations of Medicare and/or Medicaid rules and regulations
• Demonstrated capability to document compliance with Medicare and/or Medicaid regulations through use of appropriate billing software, generation of an auditable "paper trail," and regular internal audit procedures, including adherence to written policies and compliance standards
• Written procedures for resolution of questions and complaints
• Regular reviews to verify patient needs and monitor product utilization

The HIDA document also presents recommended home infusion therapy standards addressing staff competency, patient assessment, coordination of care, scheduling of services, patient and caregiver training, delivery and pick-up, routine monitoring and follow-up, emergency services, information management, and other issues.

For more information on the supplier standards document, call HIDA at 703-838-6107.

Report Explores Slowdown In Medicaid Growth

A dramatic decline in Medicaid spending growth over the past two years is mainly the result of tighter reimbursement and enrollment declines, not increased use of managed care plans, according to a new Kaiser Commission report.

Annual growth in federal and state Medicaid expenditures, after peaking at 22% in 1991, averaged about 9% from 1992-95. Last year, however, Medicaid costs increased just three percent.

The Kaiser report cites three major factors underlying last year's unexpected low growth: leveling off of Medicaid enrollment increases in many states; tightening of reimbursement for hospital services since 1991; and reduced per-capita spending, partly attributable to managed care but mainly due to a sharp drop in medical price inflation.

The low rate of growth seen in 1996 will not continue, according to the report, which forecasts annual growth of about 7% through the year 2002.

HHS Takes Hands-Off Approach To 'MedGuide'

The federal government will assume the role of interested observer as private-sector groups carry out the consumer prescription information initiative approved last month by Secretary of Health and Human Services Donna Shalala.

Shalala said provisions of the plan-widely dubbed "MedGuide" after the much-criticized Food and Drug Administration proposal it supplants-are sufficient to fulfill statutory mandates passed by Congress last year: to provide "useful" safety and usage information with 75 percent of all prescriptions by the year 2000, and 95 percent of prescriptions by the year 2006.

The primary vehicle for achieving those objectives will be standardized, drug-specific pamphlets with easy-to-understand information on approved uses, potential side effects and interactions, missed doses, and appropriate target patient groups.

Information on off-label uses-a major point of contention during development of the plan-can be presented in the pamphlets, as long as such information is customized for individual consumers, Shalala said.

Neither the congressional mandate nor the action plan calls for distribution of consumer information pamphlets to long-term care facility residents.

The 34-member steering committee that drafted the plan, apparently anticipating substantial federal oversight of program implementation, suggested two oversight options: FDA-coordinated progress reviews, or field testing of information dissemination guidelines by a government-sanctioned third party. Shalala rejected both options, noting that "since such feedback and prototype development are not required...we do not consider them necessary elements of the plan." She did, however, indicate that HHS is prepared to assist with program implementation by reviewing any information materials developed and providing periodic reports on progress toward the year 2000 goals.

Secretary Shalala also rejected a steering committee proposal to permit dissemination of drug information from federally accepted drug compendia, even if that information is inconsistent with FDA-approved labeling.

The Pharmaceutical Research and Manufacturers of America, an industry group that helped craft the plan, estimates that assembling and formatting required product data will cost its member companies a total of $14 million each year, at minimum. For individual retail pharmacies, the annual costs of producing the pamphlets will be about $1,500, according to FDA estimates.

GAO Criticizes Medicare Cost Limit Exception Process

Some nursing facilities receiving above-average Medicare payments to cover the costs of unusually complex caseloads shouldn't be getting the extra money, a report from the U.S. General Accounting Office suggests.

The GAO report, prepared at the request of the Senate Special Committee on Aging, casts a critical eye on the Health Care Financing Administration's system for determining which nursing facilities are granted exceptions from Medicare routine cost limits (RCLs).

RCL exceptions are supposed to be granted only to facilities serving high numbers of residents and providing unusual amounts of complex and costly services, but a recent GAO investigation indicates that often may not be the case.

After reviewing cost patterns and RCL exceptions at a random sample of nursing homes in Maine, Missouri, Ohio, and Washington, the GAO found "no substantive differences between the characteristics of, and services received by, Medicare patients residing in SNFs [skilled nursing facilities] granted exceptions and those in SNFs that did not receive exceptions." Resident acuity and functional levels were comparable, and RCL-exempted facilities were not providing significantly greater amounts of "atypical" services such as oxygen therapy, respiratory therapy, and I.V. medication services.

The GAO report concludes that the current RCL exception process "does not adequately distinguish between SNFs that provide atypical services (and thus qualify for additional payments under the regulations) and SNFs that have higher than normal costs for other reasons, such as inefficiency."

The report urges Health and Human Services Secretary Donna Shalala to instruct HCFA to tighten the RCL exception process by giving fiscal intermediaries more and better guidance on using provider data to verify the necessity of exceptions.

Congressional scrutiny of the RCL exception process was prompted by rapid growth in Medicare skilled nursing facility costs and in the number of facilities receiving higher-than-normal payments. Total Medicare payments to skilled nursing facilities rose from $456 million in the early 1980s to an estimated $10.8 billion last year. The number of facilities receiving payments higher than RCLs allow jumped from 62 in 1992 to 552 in 1995. In 1995 alone, the GAO report notes, these facilities received Medicare payments totaling roughly $100 million more than would have been paid under the cost limits.

OSHA Nursing Home Initiative Shifts Into High Gear

After several months of educational efforts, the U.S. Occupational Health and Safety Administration is moving into the enforcement phase of its seven-state initiative to curb workplace hazards in long-term care facilities.

Under a "Special Emphasis Program" launched last summer, OSHA has been scrutinizing reports of worker illness and injury at facilities in Florida, Illinois, Massachusetts, Missouri, New York, Ohio, and Pennsylvania. Based on those reports, OSHA now plans to conduct focused inspections of facilities identified as the worst offenders.

Detailed guidance on minimizing hazards and liability exposure in this area is presented in the ASCP publication OSHA Compliance: A Guide for the Long-Term Care Facility. Call Customer Service at 800-355-2727, or visit the ASCP home page at http://www.ascp.com.