U.S. GOVERNMENT PRINTING OFFICE

72–931 WASHINGTON : 2001

HEALTH CARE FINANCING ADMINISTRATION

PAPERWORK BURDENS

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS

HOUSE OF REPRESENTATIVES

ONE HUNDRED SEVENTH CONGRESS

FIRST SESSION

WASHINGTON, DC, MAY 9, 2001

Serial No. 107–6

Printed for the use of the Committee on Small Business

(

(II)

COMMITTEE ON SMALL BUSINESS

DONALD MANZULLO, Illinois, Chairman

LARRY COMBEST, Texas

JOEL HEFLEY, Colorado

ROSCOE G. BARTLETT, Maryland

FRANK A. LOBIONDO, New Jersey

SUE W. KELLY, New York

STEVEN J. CHABOT, Ohio

PHIL ENGLISH, Pennsylvania

PATRICK J. TOOMEY, Pennsylvania

JIM DEMINT, South Carolina

JOHN THUNE, South Dakota

MIKE PENCE, Indiana

MIKE FERGUSON, New Jersey

DARRELL E. ISSA, California

SAM GRAVES, Missouri

EDWARD L. SCHROCK, Virginia

GELIX J. GRUCCI, JR., New York

TODD W. AKIN, Missouri

SHELLEY MOORE CAPITO, West Virginia

NYDIA M. VELAZQUEZ, New York

JUANITA MILLENDER-MCDONALD,

California

DANNY K. DAVIS, Illinois

WILLIAM PASCRELL, New Jersey

DONNA M. CHRISTIAN-CHRISTENSEN,

Virgin Islands

ROBERT A. BRADY, Pennsylvania

TOM UDALL, New Mexico

STEPHANIE TUBBS JONES, Ohio

CHARLES A. GONZALEZ, Texas

DAVID D. PHELPS, Illinois

GRACE F. NAPOLITANO, California

BRIAN BAIRD, Washington

MARK UDALL, Colorado

JAMES P. LANGEVIN, Rhode Island

MIKE ROSS, Arkansas

BRAD CARSON, Oklahoma

ANIBAL ACEVEDO-VILA, Puerto Rico

COMMITTEE STAFF

DOUG THOMAS, Staff Director

PHIL ESKELAND, Deputy Staff Director

MICHAEL DAY, Minority Staff Director

(III)

C O N T E N T S

Page

Hearing held on May 9, 2001 ................................................................................. 1

WITNESSES

Mahood, William, M.D., Gastrointestinal Assocs., Inc ......................................... 5

Morris, Alan, M.D., Metropolitan Orthopaedics .................................................... 7

Cummings, Bruce, CEO, Blue Hill Memorial Hospital ........................................ 9

Anderton, Robert, D.D.S., J.D., L.L.M., American Dental Ass’n ......................... 11

Jeffries, Craig, CEO, Healthspan, Inc ................................................................... 13

APPENDIX

Opening statements:

Manzullo, Hon. Donald .................................................................................... 29

Velazquez, Hon. Nydia ..................................................................................... 32

Christensen, Hon. Donna ................................................................................. 34

Kelly, Hon. Sue ................................................................................................. 38

Jones, Hon. Stephanie Tubbs .......................................................................... 39

Ross, Hon. Mike ................................................................................................ 42

Udall, Hon. Tom ............................................................................................... 44

Prepared statements:

Mahood, William ............................................................................................... 47

Morris, Alan ...................................................................................................... 58

Cummings, Bruce ............................................................................................. 72

Anderton, Robert .............................................................................................. 120

Jeffreis, Craig ................................................................................................... 134

Additional Information:

Dr. Robert Anderton’s responses to Post Hearing Questions ....................... 140

Mr. Bruce Cummings’ responses to Post Hearing Questions ....................... 146

Mr. Craig Jeffreis’ responses to Post Hearing Questions .............................. 151

Dr. Alan Morris’ responses to Post Hearing Questions ................................. 155

Dr. William Mahood’s responses to Post Hearing Questions ........................ 158

Statement of the American Academy of Family Physicians ......................... 164

Statement of the American Academy of Ophthalmology .............................. 168

Statement of the American Physical Therapy Association ........................... 176

Statement of the American Society of Clinical Pathologists ......................... 184

Statement of the Power Mobility Coalition .................................................... 187

(1)

HEALTH CARE FINANCING ADMINISTRATION

PAPERWORK BURDENS

WEDNESDAY, MAY 9, 2001

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC.

The Committee met, pursuant to call, at 10:03 a.m., in Room

2360, Rayburn House Office Building, Hon. Donald A. Manzullo

(chair of the Committee) presiding.

Chairman MANZULLO. Please come to order.

Our hearing today is about Health Care Financing Administration regulatory requirements burdening health care providers. This

hearing will be the first in a series of hearings that the Committee

will hold on reducing regulators burdens on health care providers.

The next full Committee hearing is scheduled for July 11, when the

Committee will examine a broad array of regulatory relief options

for health care providers.

I would like to thank my colleague, the gentleman from Pennsylvania, Mr. Toomey, for the efforts he has made on that front, and

would hope that he can find the time to testify at the July 11 hearing.

I am going to waive the reading of the rest of my opening statement, and defer to Ms. Vela ́zquez and then Dr. ChristianChristensen. Both will have an opening statement.

Then I would like to ask Mr. Toomey to introduce his witness.

[Mr. Manzullo’s statement may be found in appendix.]

Chairman MANZULLO. Ms. Vela ́zquez.

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman.

Today the Committee begins working towards the reauthorization of the Paperwork Reduction Act. This landmark legislation

was signed into law in 1980 by President Carter with the goal of

reducing the overall burden and time small businesses spend complying with paperwork reporting requirements.

This Committee has long known that the overall Federal paperwork burdens fall disproportionately heavily on small businesses.

Paperwork requirements and the associated costs are nearly twice

as high for small businesses than corporate America.

The focus of this hearing is on the Health Care Financing Administration and the associated paperwork requirements that its

regulations create. HCFA is the Federal agency charged with administering Medicare, and has been referred to as the country’s

largest health insurance provider. Oftentimes, it is the only health

care option. The services they provide affect the lives of 38 million

Americans nationwide.

2

Because of the nature of its work, oftentimes HCFA creates some

of the largest and most complicated paperwork requirements. Out

of the 30-plus Federal agencies, HCFA ranks sixth behind Treasury, Labor, and DOD in paperwork burdens.

While it is easy to simply lay the blame for onerous regulations

on Federal agencies, the reality is that most of the paperwork burden that falls on small businesses are the result not of agency mandates, but due to legislative initiatives passed by Congress. I believe that if Congress truly wants to reduce paperwork burdens on

small businesses, we need to look first at how we legislate.

In recent years, a great deal of attention has been given to HCFA

regulations and the paperwork burden that it places on small businesses. It should come as no surprise that the industry affected

most by these paperwork requirements are the medical professions.

We often forget that many in the health care field are small businesses. As a matter of fact, small business loans to medical providers ranks in the top five under the SBA 7(a) loan program.

According to the American Medical Association, HCFA produces

over 110,000 pages of medical regulations, requiring doctors to

spend an estimated 20 percent to 50 percent of their time filling

out forms, meaning many doctors are spending as much time with

their accountants as they are with their patients.

Hopefully, today’s hearing will shed some light on how we can

streamline these processes, and what changes can be made to the

Paperwork Reduction Act to ensure agencies report clear and concise regulations.

I look forward to hearing from the witnesses on how this Committee can find a balance between the need for accurate reporting

requirements that do not overburden small businesses.

[Ms. Vela ́zquez’s statement may be found in appendix.]

Chairman MANZULLO. Thank you. We are going to defer Mrs.

Christensen’s statement until after the vote.

At this time, I would like to have Congressman Toomey to introduce his witness, and Congressman Baldacci can introduce his witness.

Mr. TOOMEY. Thank you, Mr. Chairman.

Chairman MANZULLO. After the introductions, the Committee

will stand in recess until after the vote.

Mr. TOOMEY. Thank you, Mr. Chairman. I want to also thank

you for your invitation to testify before the Committee on the July

11 hearing. I will certainly happily accept that invitation. I look

forward to speaking with this Committee about my bill, H.R. 868,

which has over 165 cosponsors already, the intent of which is to

provide some due process reform for health care providers when

they are dealing with HCFA in matters of dispute.

Today, of course, our topic is slightly different. I want to welcome

our first guest on the panel, Dr. William Mahood. Dr. Mahood’s

wife and daughter live in Flourtown, Pennsylvania. I am delighted

you could be with us today, and I appreciate your coming here to

be with us.

I want to tell you a little bit about Dr. Mahood. He has a group

practice in gastroenterology, has had a long history in being involved in public policy issues as they relate to health care in parVerDate 11-MAY-2000 11:13 Jul 19, 2001 Jkt 010199 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 E:\HEARINGS\72931 pfrm11 PsN: 72931
3

ticular, and has been involved in numerous medical societies and

organizations over the last 20 years.

A couple of noteworthy examples nationally, Dr. Mahood has

been a member of AMA’s board of trustees since 1996, and AMA’s

Council of Medical Service since 1991. He has also been very active

on the local level. In Montgomery County, Dr. Mahood helped to

create the county’s board of health, and co-chaired a health task

force for the county.

Dr. Mahood works in the trenches of providing medical care, but

also understands our health care system in a broader context, so

his input today is going to be very helpful. I am personally delighted you could be with us to join us and give us your views. I

would like to welcome Dr. Mahood.

Chairman MANZULLO. Thank you, Congressman Toomey. Congressman Baldacci used to be a member of the Small Business

Committee. We miss his presence. He and I used to exchange spaghetti recipes from our family restaurants.

Congressman Baldacci, will you introduce your guests here?

Mr. BALDACCI. I won’t give you the recipe, but I will introduce

my guest.

First, I want to thank you, Mr. Chairman and Ranking Member

Vela ́zquez. It is a pleasure to be here with all of you. This is a very

important matter, and I commend you for taking this issue up and

for coming forward with this hearing.

When we look at health care costs and look at the amount of

money that is being spent on paperwork itself taking away from

needed care to people, this is truly an important area that needs

to be addressed.

Mr. Cummings is a good friend of mine. He is somebody who has

been a health care leader in Maine. He has been the CEO of the

Blue Hill Memorial Hospital. He serves on numerous boards. He

has been the executive officer of the Blue Hill Memorial Hospital

for over 10 years, and has contributed to the hospital’s successes

for over 20 years. He has been chair of the board of the Maine Hospital Association, and currently the director and vice-chair of the

Maine Center for Public Health.

He had been representing the American Hospital Association on

the Interagency Task Force on Rural Health Clinics, and is currently a member of the American Hospital Association Task Force

on Regulatory Relief.

Bruce’s commitment, his intelligence, tenacity, and energy have

helped to mold Blue Hill Memorial Hospital into a first class hospital and health care provider in the community. He has helped

other health facilities to meet the needs of the people of Maine. I

have found his advocacy, especially for rural Maine, to be second

to none. He truly represents the best of his profession. I appreciate

his participation at this hearing.

Bruce and I met last week, along with other hospital administrators. Bruce had an example, and I am not sure if he is going to

unfurl that stack of paperwork today, but he unfurled it for my

benefit. It was good, because it leaves a lasting impression in terms

of the amount of paperwork that people have to go through.

I want to thank the chairman for the opportunity, and look forward to hearing from the witnesses.

4

Chairman MANZULLO. Thank you very much. We are going to a

recess so we can approve the Journal of the great things we did

yesterday. Then we will be back in about 15 minutes.

[Recess.]

Chairman MANZULLO. The hearing will come to order..

We are going to have an opening statement from the gentlelady

from the Virgin Islands and doctor, Mrs. Christian-Christensen.

Mrs. CHRISTENSEN. Thank you, Mr. Chairman.

I want to thank you and the ranking member, Ms. Vela ́zquez, for

holding this hearing on the paperwork burdens of the Health Care

Financing Administration.

As chairman of the Health Brain Trust, but especially as a physician who suffered from the complex and burdensome bureaucracy

myself, I can say that a close scrutiny of this important issue is

long overdue. I commend the Chair and the ranking member for

recognizing the special plight of small businesses which are health

care providers in bringing the issue of HCFA to this Committee.

It is an honor to welcome my colleagues and all of the representatives of health care provider associations who are with us this

morning. I want to thank them for stepping in and providing information to this Committee on behalf of all of the health care providers of this country.

Based on the introduction of bills like H.R. 868, and many letters

and statements, it seems that help is on the way. However, I would

caution that to fix and not compound the problems, it is important

that this Congress not follow the lead of HCFA, but instead, hear

from and be advised by those who know the problems and its impact best, the providers.

We must be especially cognizant, as we do that, of the fact that

indeed Congress is responsible for some of the confusion itself.

Several key leaders in both bodies are on record. In the House,

three chairmen, Chairman Tauzin, Chairman Bilirakis, and Chairman Greenwood, in a letter to Secretary Thompson, stated their

commitment to changing the system so health care professionals

can better focus on improving quality of care. Both the President

and the Secretary are on record in favor of reform, as well.

During several testimonies here on the Hill, I have committed

myself to working on this issue. I have also signed on as a cosponsor of H.R. 868.

It is no wonder this agency is a mess. There are over 130,000

pages of regulations which, based on my experience, are interpreted differently in different parts of this country. Just a few examples:

A Medicare patient, at perhaps the very worst time, in the emergency room, can be faced with filling out over eight pages of Medicare forms; because of complexity and continuous changes, records

have to be reviewed by at least four people to ensure compliance;

OASIS, which is used to assess care at home health agencies, asks

more than 60 questions; another tool used for skilled nursing facilities asks almost 200, which are not used for calculating, what the

payment should be;

According to GAO, 40 extra minutes of a nurse’s time is required

just to do the initial OASIS assessment. For every hour of health

5

care provided, it takes anywhere from 30 minutes to an hour to do

the paperwork.

HCFA is quick to point out that it is not ranked the worst in

terms of record keeping, it is ranked sixth. But I have a feeling,

having been a physician and having had to fill out the paperwork

to take care of patients and do all the rest of the best of medicine,

that we just do not complain. I don’t think that the full record from

physicians and health care providers is there for them to really be

ranked as they should be ranked. I am sure if all the information

was there, HCFA would be ranked higher than sixth as one of the

worst regulatory agencies as far as regulatory burdens are concerned.

It is, therefore, no wonder that many physicians and other medical service providers choose not to participate in the Medicare program. Many in my district of the Virgin Islands do not, and not

only because of the reporting requirements, but because of lack of

fairness and timely responses, timely payments, and then the denials and medical necessity decisions.

I would like, Mr. Chairman, to ask unanimous consent to include

in my statement a statement from one of our local physicians at

home for the record.

As you have said, this is not going to be our only hearing on this

issue, and I am really pleased to hear that. I look forward to hearing from our guests this morning. Hopefully this is the beginning

of resolving many if not all of the issues that we have with HCFA.

Thank you, Mr. Chairman.

Chairman MANZULLO. Could you identify the name of the physician, for the record?

Mrs. CHRISTENSEN. Yes, Dr. Robert L. Booker. He is an

endocrinologist in the Virgin Islands. He has served in the medical

society.

Chairman MANZULLO. That statement and the full statements of

all the witnesses will be admitted in the record, without objection.

Our first witness is Dr. William Mahood.

One of my constituents is the former head of the gastroenterologists. At one time I learned about the ENTs, but I am not

even going to get into that now.

HCFA has been referred to as ‘‘Hell Can Find Anyone.’’ We are

coming off a big fight with HCFA back home where they fined

three chiropractors $250,000. We got it down to $1,500. Then

HCFA appealed it. Within a short period of time, they withdrew

that appeal. My staff gave me a set of boxing gloves. On the right

boxing glove it says HCFA. I should have brought them here. We

know who the enemy is. We represent people, we don’t represent

the government, so you are among friends here.

Dr. Mahood, I look forward to your testimony. We are going to

try to keep the testimony at 5 minutes apiece so we will have plenty of time for questions and interactions. Doctor.

STATEMENT OF WILLIAM H. MAHOOD, M.D.

Dr. MAHOOD. Thank you, Mr. Chairman.

My name is Bill Mahood. I am a member of the American Medical Association Board of Trustees and a practicing gastroenterologist from Abington, Pennsylvania.

6

We appreciate the Committee’s efforts to address the burdensome Medicare regulatory requirements, and believe that the bipartisan Medicare Education and Regulatory Fairness Act, MERFA,

will significantly decrease the burdens placed on physicians.

Two-thirds of physician practices qualify as small businesses,

with less than 25 employees. Thus, these practices cannot absorb

the costs imposed by the unfunded government mandates resulting

from burdensome Medicare regulations.

In fact, in a recent AMA survey, more than one-third of the responding physicians spend one hour completing Medicare forms

and administrative requirements for every one to four hours of patient care. These requirements shift physicians’ time away from patient care.

Three examples. First, documentation guidelines require physicians to record information in a patient’s chart that is not clinically

relevant. These stringent documentation requirements force physicians to overload the patient’s medical record with extraneous information that can actually harm patient care.

When a patient needs emergency treatment, for example, physicians must go through volumes of patient records to try to quickly

determine what treatment is needed. It is like trying to find a needle in a haystack.

HCFA is developing clinical examples to illustrate the typical

documentation that should be in a medical record. We understand

that the initial draft of this clinical example is already 640 pages

long.

Finally, even though these guidelines are a serious Medicare paperwork problem, and we know Medicare relies on them to ensure

proper payment, the guidelines have never gone through the OMB

clearance process.

We urge the Committee to review the paperwork burden imposed

by the guidelines and to explore whether pilot projects using peer

review designed to test the clinical relevance of the guidelines are

not a more appropriate response to ensuring clinically relevant documentation standards.

Next, I would like to discuss the Medicare enrollment process. A

physician cannot be reimbursed for providing treatment to a patient until he or she has a provider number, which is issued by

Medicare upon completion of the Form 855 enrollment process.

Carriers often take months to approve these enrollment applications, even though physicians have already undergone tremendous

scrutiny to become licensed in the State and to have hospital privileges.

During this approval process, many physicians, especially in

rural and smaller practices, are effectively precluded from treating

Medicare patients.

Carriers should reserve temporary provider numbers, allowing licensed physicians to see Medicare patients while waiting for their

permanent Medicare number.

Another problem with the enrollment process is HCFA’s cost and

time estimates required by the Paperwork Reduction Act. For example, HCFA’s estimate for clerical employee wages, and attorneys’

and consultants’ fees for completing this form are severely underVerDate 11-MAY-2000 11:13 Jul 19, 2001 Jkt 010199 PO 00000 Frm 00010 Fmt 6633 Sfmt 6602 E:\HEARINGS\72931 pfrm11 PsN: 72931
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estimated. HCFA should be required to take into account the true

costs of the Medicare enrollment process.

Another problem is a pending HCFA initiative under which all

physicians would have to enroll in Medicare. Physicians also would

have to revalidate this every 3 years. This is completely unnecessary and burdensome, and we urge the Committee to prevent

HCFA from expanding the enrollment process.

The final issue I would like to address today is the serious conflict in Medicare policy between advanced beneficiary notices, or

ABNs, and a requirement under the Emergency Medical Treatment

and Active Labor Act, EMTALA.

When physicians see Medicare patients, to bill the patient for an

uncovered or possibly uncovered service, the physician must request that the patient sign an ABN. It just states that the service

may not be covered and that the patient will indeed pay if it is not

covered.

Medicare obviously requires these be signed by the patient prior

to ordering or performing a noncovered service, but under

EMTALA, the patient must first be stabilized before you can even

ask about their insurance. EMTALA prohibits a physician from

complying with the Medicare ABN policy, and therefore, although

the emergency service must be provided, the physician cannot bill

or be paid for them.

We urge the Committee to recommend that HCFA immediately

resolve this conflict. We thank the Committee for pursuing these

regulatory relief efforts. We look forward to working with you in

the future. Thank you.

Chairman MANZULLO. Thank you, Doctor.

[Dr. Mahood’s statement may be found in appendix.]

Chairman MANZULLO. Our next witness will be Dr. Alan Morris.

He is from St. Louis, Missouri, born in the great State of Illinois.

We just wanted you to acknowledge that.

He is a graduate of the University of Illinois, the University of

Illinois Medical School, and former Captain, U.S. Army Reserves.

He has a practice in orthopaedic surgery. He is here to testify

about how he loves to fill out forms.

Dr. Morris, you were trained to fill out forms and not practice

medicine, is that correct?

STATEMENT OF ALAN MORRIS, M.D.

Dr. MORRIS. As I frequently tell my mother, this is not what you

sent me to medical school for.

Good morning, Chairman Manzullo and members of the Committee. My name is Alan Morris. I am a practicing orthopaedic surgeon in St. Louis, Missouri. I have a small practice, six partners.

I am also chairman of the Council on Health Policy and Practice

for the American Association of Orthopaedic Surgeons. On behalf

of this association, which represents 18,000 board-certified

orthopaedic surgeons, I would like to thank you for the opportunity

to testify.

In our health care system, our number one concern, of course,

should be to ensure quality patient care. Instead, we have managed

to create a bureaucratic nightmare of paperwork, rather than focusing on spending time with the patients.

8

Let me share with you some examples of this onerous paperwork

burden. Mr. Chairman, it is very important to stress to you that

Medicare sets the standards, and other payers may follow these

standards. Our practice is set up to comply with Medicare.

My practice is a rather typical orthopaedic practice. It can be

characterized as a small business. We have 26.5 FTE employees for

seven physicians. Seventeen are administrative staff. This does not

include an outside company to whom we have outsourced our billing process. This, in reality, adds additional administrative staff to

process paperwork. That is a lot of people to push paper.

My associates and I are required to comply with requirements,

both directed centrally from HCFA and independently by Medicare

carriers, who enter into contracts with HCFA to oversee the coding

and billing practices of physicians and other Medicare providers.

These carriers operate with a great deal of discretion, and utilize

their own specific policies and forms, in addition to those of HCFA,

and are not required to comply with Federal government review.

We are required to comply with new and revised policies distributed monthly through the bulletins by each Medicare carrier. This

is in two areas.

These policies often vary from carrier to carrier, but my patients

are pleased that my medical journals take priority over my reading

of these bulletins, which come out every month. I am a little behind

in reading those bulletins.

Adding to our paperwork this year, the HHS Office of Inspector

General distributed to physicians guidelines to develop voluntary

compliance plans. My practice invested significant time to comply

with paperwork requirements, and took time away from patient

care to train our staff to comply with these plans.

To participate as Medicare providers, as my colleague has already said, our practice is required to complete several lengthy

Medicare enrollment applications. Each physician is required to

apply for a separate individual Medicare provider number, and the

practice is required to apply for a separate group practice number.

Medicare requires physicians to reapply for Medicare numbers

each time they move from one practice to another. Recently, three

members of my practice applied for Medicare numbers. Two of

these partners just practiced down the street. They have been in

practice for 20 years. They received their Medicare enrollment

numbers approximately 6 weeks after they reapplied. For one of

our orthopaedic surgeons who was applying for the first time, it

took significantly greater time. In addition, the practice had to reapply for a new group number. It is important to say that we could

treat Medicare patients during that time, but we could not submit

a Medicare payment or could not submit a claim for Medicare payment.

In contrast, I just recently completed a Veterans Administration

credentialing online form. It was done online. It took me 15 minutes. I received prompt approval. There was no hassles. There was

no paperwork. It was very streamlined. I think HCFA could learn

something from the VA.

I believe HCFA has seriously underestimated, under the requirements of the Paperwork Reduction Act, the time and cost involved

to complete these enrollment forms.

9

Finally, I would just like to mention E&M guidelines. This is the

most onerous paperwork burden in the Medicare program. These

guidelines have never gone through, as was stated, the OMB clearance process. It takes nearly as much time for me to dictate the

report as I spend face to face with my patient. Don’t forget the time

and cost for my practice’s three typists to transcribe these reports

into the medical record.

In closing, I don’t know all the nuances of legislative and statutory approaches to solve these problems. I did try to address some

of these in my written testimony. But one thing is clear, paperwork

needs to be reduced, and the requirements need to be simplified

and standardized. All government agencies, HCFA and its affiliates, Medicare carriers, need to come under the same requirements.

We look forward to working with you, Mr. Chairman, and the

Committee to find solutions to the paperwork burdens that are imposed upon us.

Thank you very much.

Chairman MANZULLO. Thank you very much, Doctor.

[Dr. Morris’ statement may be found in appendix.]

Chairman MANZULLO. Our next witness has already been introduced by his Congressman. He is hiding behind that stack of paperwork. I am sure you are going to make a notation that those

papers are not there to balance the table.

Mr. Cummings.

STATEMENT OF BRUCE D. CUMMINGS, CEO, BLUE HILL MEMORIAL HOSPITAL, ON BEHALF OF AMERICAN HOSPITAL ASSOCIATION

Mr. CUMMINGS. Thank you, Mr. Chairman.

I am Bruce Cummings, the CEO of Blue Hill Memorial Hospital

in Blue Hill, Maine. I am here today on behalf of the American

Hospital Association’s nearly 5,000 hospitals, health system network, and other health care provider members. We welcome the opportunity to testify before you on the complexity and burden of

HCFA’s paperwork requirements.

Blue Hill Memorial Hospital is a 25-bed hospital. It was established in 1924 to serve the residents of a small coastal village of

Blue Hill. Since I am from a State with a long maritime tradition,

I am going to borrow a cue from last summer’s hit movie, the Perfect Storm, to frame my remarks.

The Perfect Storm is the true story of a small fishing vessel, the

Andrea Gail, that was caught up and ultimately destroyed by the

confluence of three major storms. Like the Andrea Gail, hospitals

are facing an assault. It is an assault born of the confluence of several bureaucratic engines. First and foremost are the Federal Medicare regulations, and then a myriad of State and local laws; and

last but not least, requirements from private payers and accreditation bodies.

Unlike the movie, this perfect storm is not a cataclysmic event,

but an insidious assault gradually eroding the effectiveness of

health care staff, driving caregivers from the field, and wounding

the ability of hospitals, home health agencies, and other providers

to care for patients.

10

To illustrate this problem, I have brought some examples with

me. I would like to tell you about one of them right now. This is

the largest one before me. It is known as the Medicare cost report.

It costs us about $100,000 to prepare this report in a 25-bed hospital.

Chairman MANZULLO. Could you describe how thick that is for

the record, Mr. Cummings?

Mr. CUMMINGS. I am not good at guessing. I would say at least

a foot. Over a foot.

Chairman MANZULLO. Thank you.

Mr. CUMMINGS. Recently, Congress sought to improve the financial viability of small rural primary care facilities by creating the

Critical Access Hospital Program. These hospitals, however, have

continued to experience serious cash flow problems because of long

delays by some fiscal intermediaries in settling the annual Medicare cost report.

Some fiscal intermediaries may not settle cost reports for 2 or

more years. Our cost report, the one you see before you here, was

filed last summer, and we still have not had it settled by our fiscal

intermediary, even though it was declared complete months ago.

Worse yet, Blue Hill Memorial Hospital, which is operating at a deficit, is owed more than $21⁄2 million over a period of 3 years. To

compensate, we have had to take out a bank loan to meet our current obligations. These interest charges on the loan are approximately $120,000 a year. Those expenses, by the way, are disallowed by Medicare in the cost report. They are all avoidable. That

is money we could have used to replace outdated equipment, start

new programs for our community, or to help recruit and retain

scarce health care personnel.

You have asked us to estimate the total paperwork burden imposed by HCFA on small hospitals. The AHA recently commissioned Price Waterhouse Coopers to ask some of America’s hospitals about their paperwork experience. Their findings may shock

you.

They found that physicians, nurses, and other hospital staff

spend on average at least 30 minutes on paperwork for every hour

of patient care provided to a typical Medicare patient. In the emergency department, as you have heard already, about every hour of

patient care generates at least an hour of paperwork.

We have provided a copy of that study for the record. While some

paperwork is necessary for clinical purposes, there has been a significant increase in paperwork to document regulatory compliance.

The problem is growing. Since 1997, more than 100 regulations affecting health care have come online.

We know Congress intended to address some of these issues

when it enacted the Paperwork Reduction Act. What Congress did

not anticipate is how some agencies would get around the law. For

example, it is our understanding that HCFA violated the Paperwork Reduction Act by not receiving final clearance from OMB for

the Medicare Secondary Payer form, which I have here.

The MSP form is intended to determine when a patient has insurance other than Medicare. As a result of this violation, HCFA

does not formally require hospitals to complete the form. It merely

requires that the hospital ask the patient the same 25 questions

11

contained in the form at every patient encounter. If a patient

comes every day to the hospital to receive outpatient treatment and

related testing for, say, cancer, or a serious infection, he or she will

be asked the same questions each and every day.

We recommend that Congress create an intergovernmental task

force to review the Paperwork Reduction Act, other similar laws,

and make recommendations for corrective measures.

In conclusion, some regulations contribute to our efforts to provide quality patient care, but others simply drain resources away

from that goal. Where Congress can make a difference is in reducing paperwork and bureaucracy. To assist you, the AHA has developed a list of reforms, both general and specific, for your consideration. We look forward to working with you to achieve meaningful

regulatory relief.

Thank you for this opportunity, and I look forward to showing

you additional forms, if you would like, during the question and answer period.

Chairman MANZULLO. I appreciate that.

[Mr. Cummings’ statement may be found in appendix.]

Chairman MANZULLO. Before we get to our next speaker, let me

make this announcement. If there are individuals in positions within HCFA that are not answering your correspondence, that are sitting on it, would you let us know? This Committee has the power

of subpoena. I am not at all embarrassed to use that power in order

to make these Federal agencies accountable, and to answer before

this Committee and the Nation why it takes so long to do that.

I would also encourage the associations here to write to the

Members, and not be hesitant to contact your Members of Congress; to have a continuing dialogue going on with your Members

of Congress and people at HCFA.

What we have found out is in our last experience with HCFA, for

3 months they never answered a letter, for 3 months. Then we had

to have an office meeting back in my district. That is when we

found out that the Wisconsin Physician Service, WPS, that administers health care for the State of Illinois, really did not know the

difference between an x-ray and the X files. It was totally embarrassing to see representatives from the government that had no

idea what was going on. The only way you are going to able to get

HCFA to move on some of these things is to contact a Member of

Congress and to continually call and do everything possible you can

to dislodge those forms that are there.

Dr. Robert Anderton from Carrollton, Texas, is a dentist, a Doctor of laws, a Master of laws, and probably a master of paperwork,

which is one of the reasons why he is here to testify today. He has

been a member of the Dallas County Dental Society, has obviously

very impressive credentials, and Doctor, welcome to our Committee. I look forward to your testimony.

STATEMENT OF ROBERT M. ANDERTON, D.D.S., J.D., LL.M.

Dr. ANDERTON. Thank you, Mr. Chairman.

I am Dr. Robert Anderton, President of the American Dental Association. While these issues that affect dentistry are not quite as

heavy in volume as those affecting the hospitals, they are quite

critical to our practitioners. As you may know, dentists generally

12

have very small practices. Most offices have only four or fewer employees, so excessive paperwork is always a problem for us.

I would like today to discuss three areas where significant problems exist. One issue is in Medicare, the other in Medicaid, and yet

another of our concerns is with the recently finalized HHS privacy

rules.

The vast majority of dental services are not covered by Medicare.

In fact, they are expressly excluded by statute. However, some dentists have been forced to file Medicare claims for noncovered services when requested to do so by one of their patients. These patients often mistakenly believe the services are covered. Other dentists have filed claims as a favor to their patients because supplemental dental coverage plans require a Medicare denial.

For whatever the reason, requiring dentists to submit a claim

that they know will be denied is a waste of resources for all concerned. HCFA expends scarce agency resources on needlessly processing claims, patients are inconvenienced, and dentists are forced

to spend staff time processing Medicare claim forms, which are

very different, in most instances, from medical insurance claim

forms.

More important, these dentists will also have to take the time to

file applications to become Medicare providers just in order to process the claim. This is an important distinction because, unlike physicians, the vast majority of dentists do not participate in Medicare.

This predicament has occurred because of HCFA’s rules that give

each beneficiary an absolute right to cause the practitioner who

has provided a service to file a Medicare claim. This can easily be

fixed if HCFA would amend its rules so categorically excluded services are exempted from these requirements.

Dentists should be able to opt out of the Medicare program, also.

At the present time, Medicare’s private contracting law does not

apply to dentists. Once providers have opted out of Medicare, they

are no longer subjected to Medicare’s rules. A simple expansion of

the definition of ‘‘provider’’ to include dentists would not alter the

mechanics of private contracting, but it would give dentists a simple means of avoiding the unnecessary paperwork requirements

currently imposed by HCFA, especially in view of the fact that

most dental services are not covered by the program, anyway.

With regard to HCFA’s role in the Medicaid program, excessive

paperwork requirements are a disincentive to participation in the

program. Therefore, they present a needless barrier to appropriate

health care for underserved populations.

Misinformation and confusion concerning HCFA rules and regulations remain, but the solution is simple: HCFA should clarify for

the States exactly what their requirements are, and then encourage the States to simplify those requirements that are left to the

States’ discretion.

HCFA could assist States by facilitating the establishment of systems to ensure rapid confirmation of children’s eligibility under

Medicaid, or the State Children’s Health Insurance Program.

Lastly, I would like to briefly explain our concerns about the

final rule regarding medical records privacy. While the ADA generally supported many of the provisions of the proposed privacy

13

rule, the final privacy rule contains many new features that were

added without input from the health care industry.

Frankly, we are concerned that the final rule generates more

questions about compliance than it answers, and creates unnecessary paperwork. The final rule expanded coverage of the privacy

provision to include oral communications. This provision could have

the unintended consequence of limiting doctor-patient discussions

at chairside, where proper patient care demands detailed communication.

Dental offices are designed to be patient-friendly, with most having open operatories. It would cost thousands of dollars to soundproof schools, clinics, and the average dental office just to comply

with the privacy rule if these operatories had to be enclosed.

In addition, receptionists are usually located in waiting room

areas where follow-up phone calls are made to patients after extensive procedures, and calls are also made to remind patients of their

appointments and discussions concerning payment for treatment,

which also take place at the receptionists’ desk.

All of these are oral communications that would now be subject

to the privacy rule. To comply with the rule, it appears that dentists would have to reconfigure treatment rooms and the manner

in which the receptionist area opens up to the waiting rooms.

Finally, changes to the rule are so vague dentists may be uncertain as to how to comply. Many would have to go to great lengths

to avoid potential criminal penalties. The ADA believes the final

rule must be modified so dentists and other providers better understand their obligations and are not subject to unreasonable burdens.

Mr. Chairman, I want to thank you for the opportunity to be

with you today. I would be happy to answer any questions, if I can.

Chairman MANZULLO. I can see why you had to go to law school

to practice dentistry, Doctor.

[Dr. Anderton’s statement may be found in appendix.]

Chairman MANZULLO. Our next witness is Craig Jeffries from

Johnson City, Tennessee. He is the President and CEO of

HEALTHSPAN Services, Incorporated, in Johnson City. They provide regional coordinated health and pharmacy service operations.

STATEMENT OF CRAIG JEFFRIES, PRESIDENT AND CEO,

HEALTHSPAN SERVICES, INCORPORATED, ON BEHALF OF

THE AMERICAN ASSOCIATION FOR HOMECARE

Mr. JEFFRIES. Thank you, Mr. Chairman. Thank you for inviting

us to testify this morning.

My name is Craig Jeffries. I am president and CEO of

HEALTHSPAN Services. I am testifying today also on behalf of the

American Association for Home Care.

Healthspan is an independent, for-profit regional provider of

home health care in the northeastern section of Tennessee, southwestern Virginia, and western North Carolina. A lot of our business is Medicare and Medicaid. Approximately 35 percent is Medicare, and 25 percent is with the Tennessee Medicaid program, so

we feel the burdens from the requirements from HCFA very strongly with that percentage of our business.

14

The home health care that we provide is providing nurses and

physical therapists in individuals’ homes so that they are receiving

the therapy in their own homes. We also provide medical equipment such as wheelchairs and respiratory equipment to those patients in their homes. In any one month, we are serving approximately 3,000 patients in that northeastern Tennessee area.

We appreciate the Committee for initiating this in-depth review

and analysis of the regulatory requirements imposed by the Health

Care Financing Administration. Mr. Chairman, I have heard from

my folks in my office when they get a memorandum from HCFA

that ‘‘Here come the Feds again,’’ a different analogy than yours.

What I would like to do is focus on two areas. The first is the

unfair burdens documenting medical necessity to support payment

for medical equipment.

The CMN, Certificate of Medical Necessity, is a form to document the medical necessity of certain items. It is required by statute. The CMN forms were approved by the Office of Management

and Budget in accordance with the Paperwork Reduction Act.

A supplier, however, that submits a properly executed CMN,

while they have satisfied its legal obligation to document medical

necessity, HCFA and its contractors, the DMERCs, or the Medicare

carriers, often require additional documentation. This additional

documentation has not gone through the process of approval by

OMB pursuant to the Paperwork Reduction Act. This additional

documentation of medical necessity is a tremendous burden.

Mr. Chairman, you asked us to make comparisons with the private sector. I asked our folks at Healthspan. They estimate that an

additional FTE is required for every 80 new Medicare patients per

month that we are providing medical equipment to just to handle

this burdensome CMN documentation requirement.

For example, after we receive an initial order from the physician,

we need to call back that prescribing physician to get additional information for the CMN approximately 70 percent of the time for

our Medicare patient. That compares to only 50 percent of the time

for private orders. So it gets a margin of difference between private

insurers and Medicare.

Additionally, once the prescription or the CMN is provided back

to us from the physician’s office, we need to call back or spend additional time; 95 percent of the time for private insurance it comes

back complete, whereas only 70 percent of the time does it come

back complete from Medicare patients.

This burden obviously is one that is imposed on us, but it also

is a tremendous burden on the physician’s office. I am sure the

physicians here, while they did not specifically address this CMN

requirement, would agree that there is a heavy burden imposed by

that paperwork requirement.

The second area that I would like to address is for our home

health agencies, which are providing nursing and therapy to patients in the home. They are required to fill in a new form, which

was mentioned earlier by the Congresswoman and Dr. ChristianChristensen, called OASIS.

HCFA requires home health agencies to collect extensive sensitive personal information on an 80-question survey form, and

they need to get this from every patient, regardless of whether they

15

seek Medicare or Medicaid coverage. We need to get this on admission of the patient, every 60 days when they are still on service,

after any hospital discharge, and whenever there is a significant

change in the condition of the patient.

There are two areas we are concerned with this OASIS form.

One is that it is asking 80 questions when it appears that 18 to

23 are sufficient to support the claim for payment, so the additional

questions do not seem to serve any purpose. The other requirement

on OASIS that is extremely burdensome is that HCFA is extending

the burden of collecting OASIS information to our non-Medicare

and non-Medicaid patients.

In Healthspan’s business, we specialize with a lot of patients who

are young pediatric patients or developmentally disabled patients.

None of those populations were considered when addressing the development of the OASIS form, so it really becomes a form that is

irrelevant.

Mr. Chairman, I appreciate the opportunity to testify this morning. I look forward to answering questions.

Chairman MANZULLO. Thank you.

[Mr. Jeffries’ statement may be found in appendix.]

Chairman MANZULLO. Ms. Vela ́zquez.

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman.

I want to thank all of the witnesses for the important information and experiences they have shared with us.

Dr. Mahood, my first question is for you. You stated that you are

encouraged by President Bush’s and Secretary Thompson’s commitment to decrease regulatory burdens on physicians, and that the

President has acknowledged that Medicare is driving physicians

from the program.

What are some of the President’s initiatives to alleviate the burden that you support?

Dr. MAHOOD. To look at the privacy rule, for example, we are

very concerned about that. While the rule was allowed to go into

effect, Tommy Thompson has said that he will indeed take cognizance of the many problems that we still have with that privacy

rule and make the needed changes before the effective date comes

up in 2 years. That is one example.

Ms. VELA ́ ZQUEZ. It seems like there are a lot of complaints

against private insurance companies who contract with HCFA. In

light of this, would you support privatizing Medicare?

Dr. MAHOOD. The American Medical Association has a policy

which would indeed favor individually-owned and individually-selected health insurance, which essentially would eliminate the interference of the third party between the patient and physician. In

essence, there would be long-term support for that.

Ms. VELA ́ ZQUEZ. The American people benefit because of important regulations in the area of health and safety, the environment,

and consumer protection, but we have to be very sensitive to the

aggregate impact of those regulations. We need to make certain

that they are done properly and the burden is minimized.

Congress creates the laws from which these regulations originate. Should Congress be reassessing these regulations on a periodic basis to determine if they are creating more benefits than burdens?

16

Dr. MAHOOD. Absolutely. We feel very strongly that—for instance, the proposed recommendation which HCFA is looking at to

expand the enrollment of physicians and to have them recertified

every 3 years is a perfect example of where the rule would far exceed the problem. It is absolutely a monstrous recommendation for

an incredibly small problem in that area.

Let me show you, if I can, an example of a form which we use

in our office to record a patient visit. The form is a 2-page form,

and I seem to have misplaced it, but it is a 2-page form for each

visit. In my practice, for many years I was able to accurately document the interval history between a visit, say, 3 months earlier,

record my physical findings and my plan of treatment in 2 inches

or 3 inches of written information on my chart. Thus, I could look

at a page of my chart and see pretty much a year of the history

of that patient. Now I have a form front and back filled out for

every visit. I have another form for each telephone call that we receive. Thus, my chart quickly becomes inches thick of papers. Trying to find something in there is very difficult.

So the regulations definitely need to be looked at. We think Congress does have an oversight responsibility, and we encourage you

to take a very close look at that.

Ms. VELA ́ ZQUEZ. Thank you, Dr. Mahood.

Dr. Morris, you stated in your opening statement that your association would like to encourage our Committee to evaluate the possible regulatory reforms under the Regulatory Flexibility Act, in

addition to the Paperwork Reduction Act.

Would you support bringing HCFA within the scope of SBREFA?

Dr. MORRIS. I am not that familiar with the abbreviation that

you used.

Ms. VELA ́ ZQUEZ. The Small Business Regulatory Enforcement

Fairness Act.

Dr. MORRIS. Thank you, very much. Yes, in a very short answer.

Yes.

Ms. VELA ́ ZQUEZ. Let me ask a follow-up question.

In SBREFA, it is the kind of review process that applies to

OSHA and EPA. Now we passed legislation last year in this Committee to include the IRS—the legislation was stalled in the Committee on Ways and Means, not by the Democrats, but by the Republicans. But that is another story. Whenever the EPA or OSHA

is going to issue any regulations, they have to hear from the business community that it is going to impact.

My question is, how could we assure that HCFA’s role on under

SBREFA would not delay important activities to improve patient

care under Medicare, Medicaid, and CHIP?

Dr. MORRIS. I think that regardless of the regulations, we as

physicians, and my associate next to me, the hospital, are going to

continue to take care of our patients. We are going to continue to

submit the claims. Those claims may be very long in being responded to, but we are going to continue to take care of the beneficiaries and take care of our patients.

But I agree with you that HCFA should be aware of the regulations and the impact not only on we as providers and physicians,

but also the patients, as we have also tried to point out.

17

Ms. VELA ́ ZQUEZ. And I guess that Members of Congress, whenever we pass legislation that will mandate agencies such as HCFA

to produce such regulations.

Dr. MORRIS. Absolutely.

Ms. VELA ́ ZQUEZ. Thank you.

Mr. Cummings, when agencies circumvent the normal rulemaking process, small businesses have less opportunity to comment

and participate in the process. How can we make certain that agencies follow the normal rulemaking process and not avoid executive

and congressionally-mandated regulatory requirements?

Mr. CUMMINGS. I am aware of only the MSP form that I can

point to as a specific circumvention of the Paperwork Reduction Act

by HCFA, although I think it would be very instructive to have

Congress, perhaps through the GAO or through an intergovernmental task force, really examine this question more fully. We

think there are undoubtedly other examples.

I think for many of us in the field, whether we are practicing

physicians or trying to run small hospitals, the burden of just getting through the day, in terms or meeting our clinical and administrative responsibilities, is such that we rarely have the time to look

up in the Federal Register or participate in rulemaking.

Ms. VELA ́ ZQUEZ. Mr. Cummings, the SBA National Ombudsman

Program was developed by SBREFA to provide small businesses an

opportunity to comment on agency enforcement activity. Through

this provision, we have provided small businesses a forum in which

to express their views and share their experiences about Federal

regulatory activities. The national ombudsman receives these comments and reports these findings each year to us, to Congress. I am

interested to know if you have utilized the regional advocates, and

how do you think they could be more effective in reporting HCFA’s

enforcement activities?

Mr. CUMMINGS. I appreciate the Congresswoman bringing this

up. I was unfamiliar with the SBA National Ombudsman Program,

so no, we have not used this resource. Thank you for mentioning

it to me.

Ms. VELA ́ ZQUEZ. Have any of you had any experience with this?

Mr. JEFFRIES. I would note, I don’t know what the current experience at HCFA is, but back at the 1980s there was an SBA liaison

that was housed at the Health Care Financing Administration

whose responsibility was to coordinate and act as a liaison for that.

He served as a lightning rod, in some respects, because he received

the input that you are suggesting should be provided from small

businesses that are burdened by the activities of HCFA. So I would

suggest looking at that.

Ms. VELA ́ ZQUEZ. Thank you.

Thank you, Mr. Chairman.

Chairman MANZULLO. Thank you, Ms. Vela ́zquez.

Let me submit this to you. I don’t think there will ever be one

package of legislation that can address every problem or just a portion of the problems that we are facing here. What I would suggest

is this: If you get a form that is 25 or 28 pages of questions and

you think you can do it in five or less, I would encourage you to

contact my Committee. We will take that form plus your form and

we will send it to the agency saying, ‘‘The Committee on Small

18

Business has jurisdiction over the Paperwork Reduction Act. As far

as we are concerned, you are violating that. This is the suggested

form. Would you comment on that in 7 days or less?’’. We are going to have to pick away at this animal. This thing is

totally out of control. The experience that I had with HCFA, it was

not good at all.

To think that—she is not here, but the Democrats wanted to

have HCFA in charge of pharmaceuticals for seniors. That is

enough to raise the hair on the back of your head. Of course, Republicans want to create another agency. There is not much—I

don’t know where you are going to go on that.

But I would recommend you—you can do it on a one-by-one

basis. Take one issue that you can identify, and please don’t hesitate to use our Committee.

And in addition, the Small Business Administration has what is

called the Office of Advocacy. Ms. Vela ́zquez and I, along with another Committee, were able to use that office to complain to the

Department of Defense that the 104,000 hats that the Air Force

had requested should not have been contracted out to the Government Printing Office because the Air Force thought that hats are

printed and not manufactured. We were able to cancel a contract

with the manufacturer, who was going to have a Chinese factory

manufacture those American hats.

So the SBA has an in-house law firm. We also have I think about

six lawyers on staff with the Committee on Small Business, and we

really want to help you out question by question, and inch away,

regulation by regulation, to get you back into the business of providing for health care.

I just have a couple of questions. I want to give a tremendous

amount of time to Dr. Christensen because of her background. Mr.

Toomey will be after her.

Mr. Jeffries, my mother was a home health care patient, a great

beneficiary of a tremendous way to utilize experts as they came to

her assisted living center at a fraction of the cost had she been hospitalized: I am distressed about the fact that every time you pick

up 80 patients, you have to hire a full-time employee. First of all,

those full-time employees are difficult to train, they are hard to

find.

I don’t know if home health care has been picked out or singled

out for all of these onerous forms, but fill me in, is there some kind

of a program to eliminate home health care by drowning you in all

these forms?

Mr. JEFFRIES. One would think so from the forms that are required by the Health Care Financing Administration. I think home

health care, as you well know, is well-liked by patients. I think

physicians see it as a very viable way of keeping the independence

of that individual.

Chairman MANZULLO. It worked with my mom, because she went

from home health care to hospice, and she passed away at the assisted living center, which was her home for years.

What forms are not necessary?

Mr. JEFFRIES. Part of what you have heard here—and I can reemphasize, when a form goes through the process of approval and

then HCFA, through its Medicare carriers, the DMERCs, allows

19

them to add additional requirements, it is very difficult to meet

those requirements. You think you have done it when you have the

OMB-approved form, but then they require all those things.

I think just focusing, from an oversight function, the spotlight on

what are those additional documentations—and I will work with

the American Association of Home Care to provide you some specific examples of that—I think that would be an important investigatory area, who are those additional requirements and why don’t

they go through the Paperwork Reduction Act process?

Chairman MANZULLO. My point person on staff is, to my right,

Barry Pineles. He is an expert on regulations. He stays up on Saturday nights in front of the fire and he reads all these books on

regulations. He has a real heart for people that are hit heavy by

it. He is an expert on regulations and regulatory reform.

Dr. Christensen, let us use the 5-minute rule, and then when everybody here has completed their time, I would like to go back to

you for additional questions after that.

Dr. Christensen.

Mrs. CHRISTENSEN. Thank you.

I think we have had some great questions already, as well. That

cuts down some of the questions I have to ask. I am really impressed with some of the very concrete recommendations, though,

that we have from this panel on how we can proceed to address

some of the burdensome HCFA regulations.

Let me start with Dr. Mahood. I know we are going to discuss

H.R. 868 later on, but I see an article that indicated that the IG

at the Department of Health and Human Services had criticized

very strongly this bill, saying that it would dramatically reduce accountability for Medicare claims.

Are you familiar with statements made by the Inspector General

at the Department of Health and Human Services? If so, how

would you respond to those criticisms?

Dr. MAHOOD. It does not change the accountability at all. What

it does is it limits the preclaim audits so that they are not random.

They can still do audits and they can do prepayment audits, but

they should do them for cause or for a rational reason, not just randomly.

There is no intention of any part of the act to interfere with the

search and identification of true fraud or abuse. So I would say

that they are off the mark.

Mrs. CHRISTENSEN. All right.

There has been a lot of discussion about medical errors. I would

ask the first three panelists, Dr. Mahood, Dr. Morris, and Mr.

Cummings, to what extent do you think the burden of paperwork

and the regulatory burden in general impacts on quality of care?

Can there be a relationship between the amount of paperwork burden and the medical errors that have been reported?

Dr. MAHOOD. I don’t think there is any doubt about it. As a gastroenterologist, I am called on in the middle of the night to see a

patient who has suddenly started to have a massive gastrointestinal hemorrhage. I have not seen the patient before. I am a

consultant.

I go to the chart. While the patient is bleeding and receiving

blood transfusions, I have to find out the best I can what might be

20

the cause and what the appropriate next step is, whether it is an

emergency endoscopy or what. It often takes 20 or 30 minutes or

longer to go through just the last few days of the patient’s care, because every physician who sees that patient has to fill out such an

extensive documentation.

So there is no doubt in my mind that it does interfere with proper care.

Dr. MORRIS. I would respond to that by saying I don’t think it

adds the additional paperwork. That is not going to prevent a medical error. Many of the errors are due to process, but it is not due

to the medical records.

The Orthopaedic Association has instituted a sign-your-site program several years ago wherein, when we are seeing the patient

before surgery, we write with an indelible pen on the area where

we are going to do our surgery. We don’t depend on looking

through the pages of the chart to be sure which side we are going

to operate on.

It may seem very simplistic, but it is extraordinarily easy to do

and effective.

Mr. CUMMINGS. Congresswoman, in your opening statement you

alluded to the OASIS form. Mr. Jeffries also spoke to this during

his remarks.

I brought a copy of it with me, and with the chairman’s permission, I would like to be able to just show it to members of the Committee. Then I will answer your question about how it affects patient care.

This is the form that our home health agency must complete. It

takes our nurses, if they were to do this by hand, about 90 minutes. We have provided them with laptop computers so they are

able to do this in only an hour. There are 43 additional pages of

forms not attached here that they also must fill out for that initial

patient visit.

As Mr. Jeffries mentioned, home health agencies must do this,

whether the patient is a Medicare beneficiary or not. Where we see

this affecting patients is that our nurses are unable to provide any

care to the patient until they have completed this form.

Being in a rural area, the average distance between our home

health patients is 20 miles. The average age of our patients is 78.

They typically have two or three chronic conditions. Congestive

heart failure is the leading diagnosis. The patients often have skin

lesions, and 33 percent have severe anxiety.

Before the nurse can lay a hand on that patient, she must complete this OASIS assessment. The patient can beg for help and she

cannot help him. So I think that is where we see this: with frail,

elderly, uncomfortable patients for whom that nurse cannot provide

any assistance until she has completed this paperwork.

Chairman MANZULLO. Is this one form? It appears that page 7

of 11—it gets down to what is your favorite color, those types of

questions.

Mr. CUMMINGS. Mr. Chairman, it combines several forms required by Medicare. One is the OASIS form, which is the lion’s

share of this.

Chairman MANZULLO. This has to be asked of one person?

21

Mr. CUMMINGS. Yes. There are also certain State laws that must

be fulfilled during this initial assessment visit, and certain accreditation requirements. So this represents, then, the confluence of

these various requirements.

So although not all of them are OASIS-related, all must, in fact,

be completed on every patient when they are first brought in for

care to an agency.

Chairman MANZULLO. There is duplicative material, questions?

Mr. CUMMINGS. Yes.

Chairman MANZULLO. Can I throw out a challenge to you? Could

you create your own form that would consolidate all this information into one and get that to us, and we will send it over to HCFA

and challenge them to accept that form, as opposed to this one?

Mr. CUMMINGS. I would be happy to go back to my nurses and

confer with the Visiting Nurse Association of America and the National Association of Home Care.

Chairman MANZULLO. Then we can bring that before the Committee and bring you back again, and explain why it takes all of

this to perhaps put down in 10 or 12 pages what you would like.

Mr. CUMMINGS. Thank you. We will try.

Mrs. CHRISTENSEN. Let me just ask a follow-up question.

Chairman MANZULLO. Sure.

Mrs. CHRISTENSEN. I am sure it is going to take a brief answer.

Mr. Jeffries, is there any justification at all—has any justification at all been given for questions that are not related to calculating payment?

Mr. JEFFRIES. Job security has been talked about a lot. There are

a lot of people at HCFA that probably benefit by the additional

questions, because there is additional analysis.

I think it is hard to justify the additional information. As others

have testified, there is probably some value at some point, but it

is a question of cost and resources, and diverting focus to what we

are all trying to do, and that is, maximize patient outcomes by providing good care.

Mr. Chairman, just to follow up on this form, remember that this

is being imposed by HCFA for us to use with non-Medicare and

non-Medicaid patients.

Chairman MANZULLO. That is interesting, because there is no jurisdiction for that. Would you send us a letter on your letterhead,

and we will get that to the SBA Office of Advocacy, and have

HCFA give us a legal opinion as to whether or not that is possible?

One of the things we want to do at the Office of Advocacy in this

Congress, hopefully, is to give it the power to start a class action

lawsuit, class action lawsuits against Federal agencies. Of course,

it costs $1 million every time you challenge a regulation.

Mr. Toomey.

Mr. TOOMEY. Thank you, Mr. Chairman.

If I could just comment briefly on this outrageous absurdity of

paperwork that is required, from what I have heard from the physicians in my district about E&M forms and other documentation,

I cannot help but reflect on the fact that this obviously detracts

from the time that physicians could be spending with patients.

It is obviously an effort by HCFA to verify that these services

were, in fact, provided. We have to step back and recognize, I

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think, that we have such a profoundly flawed system that this kind

of battle will always go on. We have to keep fighting it, but we are

never going to win this until patients are the people that are in

control of this process in verifying that services were provided. The

patient knows. A third party bureaucrat in Washington will always

demand unreasonable and excessive information to try to verify

something they cannot know but something that the patient knows.

If we move in the direction of giving the patient the control of

the money that is spent on their behalf, putting the patient in the

role of the consumer, so many of these problems go away. I hope

we will move in that direction. I realize that is beyond the scope

of this hearing today.

Let me ask a more direct question. I would direct this first to Dr.

Mahood, but anyone else may make a comment and would be welcome.

When you consider the magnitude of this regulatory burden, I

was wondering, Doctor, if you could share with us your thoughts

on the extent to which solo practitioners and small group practices

are basically forced to join large groups or become employees of

hospitals.

To what extent do you see the gradual reduction, if not the elimination, of the solo practitioner and the small group practice that

so many patients prefer to have?

Dr. MAHOOD. Let me give you a quick example. We did refer to,

in our testimony, the enrollment form for Medicare participation.

This is a copy of the application. It is over 30 pages in length.

As I implied—— Chairman MANZULLO. Excuse me. Is that per person, per patient?

Dr. MAHOOD. No, this is an enrollment form for physicians to be

a participating provider in the Medicare program.

Chairman MANZULLO. Thank you.

Dr. MAHOOD. For a physician going into private practice by

themselves, or particularly in a rural area where there are more

Medicare or Medicaid patients percentagewise—they would be in

practice for anywhere from 2 to 6 months before they could submit

a bill for reimbursement for the patients they have seen. That is

prohibitive. So physicians coming out today do indeed tend to join

larger practices.

Our practice is 14 gastroenterologists just outside of Philadelphia. We recently had a world class gastroenterologist from Temple, head of a program there, join our practice. We were flattered.

She had to get a new enrollment number. It took our practice 4

months before we could finally submit any bills for her care to the

Medicare population.

Now, that was possible in our practice, with some difficulty, because of the work of other physicians supporting her income. But

clearly, it could not have been carried out by her alone. So that is

an example of how it interferes in the individual or small group development.

Dr. MORRIS. If I might follow up on that, I have with me an

HMO application form which is standardized in the State of Missouri. This is double-sided, but this is eight pages. It is the same

information, to allow a physician to be credentialed.

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I would also like to follow up, if I might, about the home care

issue. That I think is a real detriment to patient care. The home

care nurse, the person out at the home, if they have a question

about this form and they have to call the physician, they have to

speak with the physician personally. They cannot get the information, according to Medicare regulations, from an office nurse or a

PA, a physician’s assistant, or any sort of physician’s extender.

Also, if you are a private practitioner, be it primary care or a

surgeon, you are obviously not in the office all the time. So I ask

you, what happens with that home care nurse who is out in the

home at that time trying to fill out this form, and has a question

about a diagnosis or about something that has been happening?

She cannot take that information or that order from a physician extender and has to wait for the doctor. The doctor is not there. The

doctor is in surgery.

That happens all the time. That has been explained to me very

clearly as a real problem to the home care nurses. Thank you.

Mr. TOOMEY. Thank you, Doctor. I yield the balance of my time.

Chairman MANZULLO. Dr. Anderton.

Dr. ANDERTON. I would comment also on the small, solo practitioners. As you know, about 80 percent of the practicing dentists

in this country are solo practitioners. They are overburdened with

this same type of paperwork.

If I can shift gears for just a minute and go to Medicaid, where

most dentists are involved, we have some States that require an

application that is 50 pages long just to participate in Medicaid.

This is causing severe problems for us in getting providers to even

sign up for the programs. Not only is the paperwork burdensome

and voluminous, it is the contracts these providers have to sign.

It was mentioned earlier about fraud and about probable cause.

Most of you are aware, in order for a provider to sign up to participate in these programs, they have to essentially sign away their

fourth amendment protection against unreasonable search and seizure.

This allows the Justice Department to come in, as was mentioned earlier, on random audits to seize records and to do those

kinds of things. In fact, there are instances where physicians have

been handcuffed in their offices and their records seized for no

probable cause. Those things are unduly burdensome, and it is

really hindering our efforts to go in and provide access to care for

people who really need it.

Also, as I testified earlier, a dentist very often has to sign up for

Medicare just to file a claim for a patient who requests it. By

HCFA rules, they are required to do so, even when they know the

claim is going to be denied. They have to go through all of this paperwork with only four or fewer employees in their office. So it is

a critical situation.

Mr. CUMMINGS. I wonder if I could respond to Mr. Toomey’s

question, also, an additional perspective.

In my rural area, we, the hospital, employ all of the rural physicians. There are 14 of them. They used to be in private practice.

They were unable to continue to be in private practice primarily for

two reasons. One is the dearth of health insurance in our area. We

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have no large employers—almost 45 percent of the patients who

came to this small practice had no insurance of any kind.

But the other reason was to deal with the paperwork. We were

able to obtain something called a rural health clinic designation for

each of our practice sites, for which we are very appreciative, and

this helps improve the payment from Medicare and Medicaid to

these rural primary care doctors.

But the paperwork burden has not gone away. This is the manual that each rural health clinic must have. I have taken this from

one of our sites, the Island Medical Center. By the way, for reasons

I don’t understand, we are never to take the manual from the

premises, so I am sure I have committed some egregious HCFA violation by bringing it here.

We have to have one of these, regardless of the size of the practice, so each—— Chairman MANZULLO. Could you describe the dimensions and the

pages, the number of pages, for the record, approximately? It is

about eight inches thick?

Mr. CUMMINGS. Six inches thick, maybe, and several hundred

pages.

Dr. MORRIS. It weighs about 10 pounds.

Mr. CUMMINGS. The smallest practice we have is one doctor and

a family nurse practitioner. The largest we have are four doctors

and a nurse practitioner, so you can see, we are talking about very

small practices, but each of them have to have one of these.

Chairman MANZULLO. Thank you.

Mr. Phelps.

Mr. PHELPS. Thank you, Mr. Chairman. Thank you for calling

this hearing and these distinguished people to be here to give us

input.

I don’t think there is a Federal official who is not aware of overregulation, especially in the health care industry. I have chaired

the Health Care Committee in the Illinois House for 4 years, and

was astonished at what we found in many of our investigations

there.

I represent an extremely rural area, the largest congressional geographic district east of the Mississippi. It covers 27 counties, and

small counties, as much as 4,000 and 5,000 population only, so I

am aware of the value, and could say nothing better about how I

feel about home health care.

I know it is a challenge to try to balance how we have access,

create access, for especially senior frail elderly people who need to

have care at the most vulnerable time of their lives, and make it

affordable and make it protected to the consumers and the taxpayers.

I guess what I am interested in asking, for fear of duplicating

what has already been explored and maybe will be gotten into, how

did we arrive at where we are? We make the laws. We ask agencies

that we create by appropriations, by law, to carry them out.

Now, in the Illinois legislature, there was one time when I actually voted to repeal my own bill, because by the time the agencies

that made the rules to implement the bill that I passed, with the

intent that I made clear on the House floor, a matter of Journal

record, I did not even recognize my own bill.

25

I guess my point is, has there ever been what you feel, and

maybe not you individually, but the associations you represent, any

clear inclusion of people talking to make it clear to HCFA, now,

this law has passed by Congressman whoever, and we need to

know from the standpoint of those of you who deal with it every

day in the field, how can a health care provider that wanted to rip

off the taxpayer through fraud and abuse—that is what I assume

these laws were made to try to protect from happening. We need

professionals, people that know—the FBI, the way they know about

counterfeit is they call in those convicted counterfeiters and learn

from them how they were able to do this.

I guess what we need to know is from people who can help us

identify what we can prevent from happening without stacks of

regulations. Can you, in this form, tell someone in HCFA, that

there are about 10 pages or less that actually get to the heart of

what you are after. The rest of it is enough, or makes no sense and

creates too many jobs for taxpayers to subsidize, and could possibly

hurt funding for the home care program itself.

I happen to believe that home care can be proven to prevent

costs in both the government and the private sector. I have seen

it happen.

Is there not that kind of inclusion, and could we not prevent

some of this nonsense?

Dr. MAHOOD. If I could respond to that, you know, your point is

well made. Speaking for the physician community, a large number

of physicians are scared. They get reports like this from their carrier four times a year. They get bulletins monthly. They get special

letters. Each one has rules and regulations buried in them, and

they don’t know what they are responsible for, and they can’t find

out easily.

They can make a phone call to the carrier, and the person on the

other end of the line says, this is the way to do it. If they do it

that way, they may subsequently find that it was the wrong way,

and they have no evidence, no proof. We rarely get anything in

writing with a signed statement. It is a cottage industry.

Mr. PHELPS. I don’t want to cut you off, but I know you are answering the question as vaguely as I put it.

But what I want to know is before it becomes regulation and

law—and we know there is some sort of congressional effort because of 60 Minutes or 20/20 or some news that brought it to our

attention—people are getting ripped off; these old people are paying, in their matching funds as well as the government—they are

getting ripped off. We all rush up here and have a press conference

and say, as a good guy, here is what I am going to do. No one ever

asks, after we pass that, what are the consequences for carrying

out and enforcing what we have passed into laws.

Before that becomes implemented, one of the reasons how it

should be implemented would be to include people like you to sit

around the table with HCFA and say, ‘‘Instead of getting those notices, you had better be doing this right. Before we put this in implementation, what do you think?’’ that has not ever been done, as

far as you know?

Mr. JEFFRIES. Congressman Phelps, I would suggest that as part

of your review of the Paperwork Reduction Act, one of the requireVerDate 11-MAY-2000 11:13 Jul 19, 2001 Jkt 010199 PO 00000 Frm 00029 Fmt 6633 Sfmt 6602 E:\HEARINGS\72931 pfrm11 PsN: 72931
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ments in that process might be to have HCFA look at what the private sector does.

There is an encouraging trend, it is not overwhelming, but an encouraging trend to go back to the simple reliance on what the physician wants in the prescription, and stop second-guessing from

home health prescribing or DME prescribing. I think that is a good

private sector initiative that HCFA ought to address when they are

coming up with new rules pursuant to a new law.

Dr. MAHOOD. Just a quick response. Participating in the process

with HCFA, people within the HCFA program who have medical

backgrounds understand the need to make things simple, but they

are outvoted by other departments within HCFA; for instance, the

program integrity group. We have different departments within

that very agency which add layers and layers of complexity on the

forms. So it is a very difficult problem to resolve when you are

dealing with an agency of that size.

Mr. PHELPS. Yes, sir.

Dr. MORRIS. My members would have two words to answer that:

oversight and accountability.

Mr. PHELPS. Thank you very much, folks.

Mr. CUMMINGS. Mr. Phelps, if I could add to my colleagues’ comments, in the report prepared by the American Hospital Association, a copy of which is being made available to all of you, are eight

specific recommendations to improve the process by which regulations are created. We have six recommendations on specific regulatory in need of reform.

One of those eight is the very issue that you have just raised,

which is to have greater input from the field, from hospitals, have

health nurses and practicing physicians before a form is generated.

That does not happen right now.

The other is that there is really no one in charge of the regulatory apparatus. These are created by different divisions,

bureaus——

Mr. PHELPS. What I was getting to——

Mr. CUMMINGS. Divisions within HCFA, and no one is looking at

them in terms of the totality.

Mr. PHELPS. We need to know somewhere in the oversight process, once there are those who are capable of giving input and pointing out things, instead of being outvoted, there needs to be a process where they come back to a Committee such as this to say, ‘‘Why

is this not being accepted? What are your reasons?’’ we need more

oversight.

Ms. VELA ́ ZQUEZ. Congresswoman Tubbs Jones.

Mrs. JONES. Good morning. I want to give you a quick background and ask you some quick questions.

I come from Cleveland, home of the Cleveland Clinic, the University Hospital. We are in the midst of a competitive issue on hospitals. I spend a lot of time working with the physicians in my community, in the health care area.

For the record, I just have to say that a number of the physicians

have said to me the reason they have gone out of private practice

is because hospitals often make it inconvenient for you to be in private practice, other than to be associated with the hospital in your

27

community, because of the competitive issues. I need to lay that on

the record.

I empathize with each of you about this paper process. I came

to the Committee on Small Business for the purpose of trying to

assist you. I wonder if you would contemplate how terrible it is for

the senior citizens in our communities across this country to deal

with the medical process, as well? Is universal health care a solution for much of the paperwork that you put on the table or raise?

I need short answers, because I have all of 5 minutes.

Dr. MAHOOD. If universal health care is a single-payer, absolutely not, because what that would be expanding the regulatory

hassles throughout the whole medical system.

Mrs. JONES. Let me back up. What percentage of your practice

comes through the process we are talking about right now?

Dr. MAHOOD. Approximately 60 percent of my practice is Medicare. Now, a percentage of that is managed Medicare, so it is not

all the regular Medicare.

Mrs. JONES. Health maintenance organizations?

Dr. MAHOOD. Yes.

Mrs. JONES. In my community, a health maintenance organization has no requirement to enter into a contract, so what has been

happening to the people in my community is all of a sudden, the

health care maintenance organization goes out of business and the

people have no health care.

What happened when a hospital closed down in my community,

it had a health maintenance organization. The hospital left. There

are people running around with no place to go, and two hospitals

within 2 miles of that one hospital that closed down because there

was no HMO service there, and these people had no health care

service.

Is that the result, to have an HMO that can come and go whenever they want to and not give people any health care?

Dr. MAHOOD. No. I think the insurance commissioner should

have more oversight and responsibility for plans that develop programs within areas so that they do have the resources to serve

those clients.

Mrs. JONES. I don’t mean to make light. I hope you understand.

The issue is so much more complicated than the paper reduction

process that we are discussing here. The health care issue is so

much more complicated.

I would hope that in addition to the paper reduction process that

we are talking about here, that we can come to the table to talk

about the delivery of health care and access to health care for all

folk, with or without money, being 44 million out there without any

health care at all.

I am supportive, and I am going to do what I can to help you

reduce paper, but also I am asking you to step up and say what

are we going to do to deliver health care to the folks?

I guess I am out of time. I am sure you had an opportunity. I

have your preparation.

I am from Cleveland, Ohio, with the University Hospital, the

Cleveland Clinic. If you are ever in the area and I can be helpful,

please call me.

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One more question, are any of you from urban centers? Two of

you. Do you do diversion when an emergency room closes down for

lack of beds in your hospitals?

Dr. MAHOOD. Infrequently, but yes.

Mrs. JONES. Is that a practice? And this is not only for me, but

is that a practice that is put together by a panel of physicians or

health care providers as to how you do that diverting process, and

when you open up and close back down?

Dr. MAHOOD. I am unfamiliar with how it works in the hospital.

I believe it is an administrative decision based on a lack of beds,

as you said. But it is very infrequent in our hospital that that happens.

Mrs. JONES. Thank you so much. I look forward to working with

you on future issues.

Ms. VELA ́ ZQUEZ. Do you have any other questions?

On behalf of the chairman and myself, I want to thank you all

for being here today.

This meeting is adjourned.

[Whereupon, at 11:54 a.m., the Committee was adjourned.]

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