News From Capitol Hill
Reelection Year Faces Budget-Cutters
With reelection facing many members of the Senate Finance Committee this year, the committee may not be responsive to making cuts in programs like Medicare - especially since older voters who are affected by these cuts go to the polls in large numbers. Six Republicans, four Democrats, and Harry Byrd of Virginia, who is an Indpendent, must face voters next year. There has been some behind-the-scenes grumbling about chairman Robert Dole's (R-Kans.) willingness to put his members in the political hotseat. Dole is not up for reelection. It will be particularly interesting to observe how these 1 1 Senators, one-third of the 33-member committee, respond to making more cuts in Medicare and possibly in Medicaid.
Competition Legislation Foretells Role for PSROs
After months of comments about the fate of Professional Standards Review Organizations, HHS is giving broad hints that it wishes to include PSRO-type entities in its forthcoming competition legislation. HHS Secretary Richard Schweiker made the committment in hearings before PSRO advocate Rep. George O'Brien (R-IlL). An unofficial HHS reporton the subject suggests ways to make reivew organizations compete for federal funding and to revise the incentive structure so that good performance is rewarded financially.
Governors Report Budget Woes
Governors had a strong voice in Washington this fall, meeting with several Congressional committees following this year's budget cuts. Expecting proposals for greater program cuts in FY82 appropriations, several southern Republican governors said they would not be able to take up the slack created in social programs by federal budget cuts. Gov. Lamar Alexander (RTenn.) urged President Reagan to accept a plan offered by several governors to have the federal government take over Medicaid and other income transfer programs while states run education programs. Mississippi's Gov. William Winter already has cut his state's Medicaid program three times since 1979 and further cuts would force reductions in the drug reimbursement program and coverage for intermediate care facilities. Gov. Frank White's (Ark.) decision to make up for the $18 million loss in federal Medicaid payments by cutting back on AFDC has prompted a lawsuit by AFDC recipients.
Hatch Bill Gets Closer Scrutiny, (S. 234)
The Senate Finance Committee has decided to take a detailed look at the Community Home Health Services Act (S. 234) to the dismay of Sen. Orrin Hatch (R-Utah). Sen. Hatch had hoped to achieve Senate passage of his home health care proposal before Congress adjourned for Christmas. Hatch faces the formidable task of winning over committee chairman Robert Dole (R-Kans.) who is said to be concerned about the possible impact of the bill on Medicare and Medicaid expenditures. The panel is not only concerned about the cost of added Medicare/Medicaid benefits, but also about a tax credit provision. The bill now would allow families to receive a credit for physical changes made in their homes to accommodate elderly family members. Hatch has picked up significant support for his bill as House Aging Committee Chairman Claude Pepper (D-FIa.) said he would introduce a companion bill in the House. Senators Jennings Randolph (D-W. Va.), Carl Levin (D-Mich.), and Roger Jepsen (RIowa) also added their names to a growing list of cosponsors.
HHS Submits Competition Reports/ Schweiker Makes Proposal
HHS Secretary Richard Schweiker and top aide Robert Rubin, MD, presented a health care competition proposal to the Cabinet Council on Human Resources, thus moving one step closer to making a legislative proposal. Schweiker and Rubin presented the council with a list of five options that were culled from a shopping list of options gathered by Rubin's Department Task Force on Competition.
The options included proposals to encourage employers to offer workers a choice of cost-effective health plans while giving employees an incentive to take advantage of the offer; devices to discourage employers from deducting excessive health insurance premiums from their tax returns; a proposal for excise tax increases on alcohol and cigarettes; a surprise plan to add catastrophic illness coverage to Medicare; and a Medicare voucher plan to offer beneficiaries theoption of buying private health insurance.
Secretary Schweiker chairs the Cabinet Council on Human Resources. Other members include Vice President George Bush, Presidential Counselor Edwin Meese, Presidential Chief of Staff James Baker, the Attorney General, and the Secretaries of Agriculture, Labor, Education, and Housing and Urban Development. The Council will review the proposal and decide whether or not to recommend it to President Reagan.
Another competitijin taslr force has completed its report for use by HHS. That group, headed by David Winston, was influential on Schweiker's report. The Winston group favored a nationally uniform limit on the income tax exclusion of the employee's share of employerpaid health insurance. The group also suggested keeping federal health planning laws in force to counteract state certificate-of-need laws.
Implementing the Reconciliation Budget Act of 1981
The Budget Reconciliation Act authorizes Secretan Schweiker to grant waivers to the states for the provision of a range of noninstitutional long-term care services under Medicaid. The Health Care Financing Administration (HCFA) is considering a number of options to incorporate into the regulations it issues. The common theme, of course, is to minimize federal regulation of the states.
One option HCFA intends to implement is to request states to describe how they intend to determine patients' needs and develop treatment plans, rather than having HCFA specify how the states should do this. To get a waiver, the law requires a state to assure HHS that it will safeguard the patients' health and welfare. Previously, HCFA officials would have defined minimum standards of provider participation that states would use. Officials working on the regulation, however, recommend the option of requiring states to develop standards and describe them in the waiver request.
The law also requires states to inform individuals found to require SNF or ICF care of feasible alternatives to institutionalization and to give them a choice. HCFA officials are leaning toward a rule that would require states to inform individuals of the alternatives and give them a choice, but would not require documentation of such action.
Speaking at the American Health Care Association's (AHCA) annual convention in San Antonio, HCFA Administrator Carolyne Davis told the group that a state can now divest its Medicaid funds to services such as homemakers, adult day care, case management, and respite care. These services will be more costeffective and will allow more older people to remain at home, Dr. Davis said.
Policymakers Report on National Health Expenditures Details Costs of Nursing Home Care
A Department of Health and Human Services report entitled "National Health Expenditures, 1980" reports that nursing home care cost $20.7 billion in 1980 and increased 16.6% over 1979 cost figures. Increases in prices and days of care, along with the rapid expansion of intermediate care facilities for the mentally retarded (ICFs/MR) funded by Medicaid, were major contributors to cost increases overall.
The nursing home category included SNFs, ICFs, and personal care homes that provide nursing care. Hospitals providing nursing home- type care were included with expenditures for hospital care. When the ICF/MR component was excluded, spending for other nursing home care nearly doubled between 1975 and 1980, growing from $9.8 billion to $19 billion. However, the report concluded that expenditures for nursing home care are beginning to show signs of slowing down.
Benefits paid under Medicare and Medicaid totalled $60.6 billion in 1980. The two programs accounted for almost 28% of personal health care expenditures and financed over two-thirds of all public spending for personal health care. Fortyseven million people, or about onefifth of the nation's population, are covered by Medicare and/or Medicaid.
Total national health care expenditures for 1980 were $247 billion. Hospital care accounted for $99.6 billion of that amount and spending for physicians was $46.6 billion. Nursing home care ranked third among the highest costs. Reprints of this report can be obtained from HCFA, ORDS Publications, Rm. IE9, Oak Meadows Bldg., 6325 Security Blvd., Baltimore, MD 21207.
Federal Council on Aging Beset With Budget and Personnel Changes
In early November President Reagan announced the nomination of 10 new members to the 15member Federal Council on Aging. Rev. Msgr. Charles Fahey has been replaced as chairman, but will remain on the council until his term expires in June of this year. The new nominees consist of nine women and one man. Adelaide Attard of New York, a Nassau County Commissioner, was designated chairperson. Other nominees include: Margaret Arnold of Washington, D.C., coordinator of women's activities for the National Retired Teachers Association/American Association of Retired Persons (WRTA/ A ARP); Nelda Barton of Kentucky, president and chairman of the board of Health Systems, Inc.; Edna Bogosian of Massachusetts, principal insurance examiner for the state Department of Banking and Insurance; Syd Captain of Florida, a local talk show host; Charlotte Conable of Washington, D.C., coordinator of public policy projects, women's studies, The George Washington University; Katie Dusenberry of Arizona, member of the board of supervisors of Pima county; Frances Lamont of South Dakota, a state senator; Josephine Oblinger of Illinois, a state representative; and Edna Russell of California, director of education and training at San Jose State University.
Congressional appropriations for this presidential advisory group have been cut from the $281,000 FY81 funding level to $200,000 for FY82. The drastic cuts of an already limited budget and the large number of new appointments of members threatens the existence of the Council as anything more than window dressing.
C. Everett Koop Becomes Surgeon General
Dr. C. Everett Koop, former Surgeon-In-Chief at Children's Hospital in Philadelphia, was sworn as the U.S. Surgeon General on January 21, 1982. Dr. Koop has identified the elderly and disabled as major interests he hopes to serve while in office.
State Department Prepares For World Assembly on Aging
The State Department is reprogramming $400,000 for the World Assembly on Aging. William Kerrigan, Secretary General for the World Assembly, will use the funds for preparing activities for the twoweek conference that will be held in Vienna, Austria starting the last week of July, 1982.
Regulatory Notes Earnings for Social Security Beneficiaries Increases
The October 30 issue of the Federal Register detailed new Social Security (SS) changes including information on what a beneficiary can earn without losing benefits. An individual under age 65 may earn a maximum amount of $4,440 without losing any SS benefits in 1982, an increase from $4,080 in 1981. The exempt amount for beneficiaries from 65 to 72 years of age will increase from $5,500 in 1981 to $6,000 in 1982. Beneficiaries 72 years of age or more may earn any amount without losing benefits beginning with the month they are 72. In 1983, the latter rule will apply to individuals 70 years of age or more.
Revised Conditions of Participation for SNFs Expected
At the time of this writing, recommendations of the Deregulatory Task Force on the conditions of participation for skilled nursing facilities were being circulated for final clearance by the Health Care Financing Administration with publication of proposed changes expected by February 1. Proposal drafts have received widespread media attention and concern from advocates for the aging. It seems the proposed "regs" reduce federal regulation of the industry at a time when many states have been forced to cut back on nursing home inspections because of reduced federal money.
Among the recommendations is one in which nursing homes accredited by the private organization, the Joint Commission on Accreditation of Hospitals (JCAH), would be "deemed" to have met the requirements for Medicare and Medicaid. State licensing agencies believe this proposal gives the nursing home industry license to police itself. The study group also recommended repeal of rules stipulating that each elderly resident should be encouraged to exercise his or her rights as a patient and a citizen, and should be allowed to express grievances to outsiders. This so-called "patients' rights" issue had been carefully considered by the Carter Administration, which proposed to raise patients' rights to the level of a federal standard, therefore insuring enforcement.