Red tape delays expanding of Medicare services Budget cuts hold up certification of clinics, hospices, home care


WASHINGTON -- Hospitals and other health care providers who responded to demands for more rural health clinics, hospices and health care in the home for Medicare patients say they are stymied in offering these services because they cannot get approval from federal regulators.

Because of budget cuts, federal and state officials say, they have a huge, growing backlog of health care providers awaiting certification to participate in Medicare.

Matters will only worsen, they say, as Republicans in Congress cut the budget for such regulatory activity, while encouraging doctors and hospitals to form new health plans to serve Medicare patients.

The delay in approval of new health care providers is a case study of the way seemingly mundane practical problems may cripple ambitious Republican plans to control the cost of Medicare. The Republicans would let private health insurers compete for Medicare business, offering coverage to 37 million people who are elderly or disabled.

In theory, each health plan will provide a wide range of services in return for a fixed amount of federal money. But the federal agency that runs Medicare cannot keep up with explosive growth in the number of nursing homes, home health care agencies, rural health clinics, hospices and outpatient surgery centers that need to be inspected and approved by the government before treating Medicare patients.

"These delays impede the whole process of health care reform," said Jane Ford, director of regulatory activities at the Kansas Hospital Association.

New home health agencies and hospices are, in many states, unable to obtain the inspections they need to be certified for Medicare. Fifteen states, including New York, New Jersey, Illinois, Michigan, Ohio and Wisconsin, report they are not conducting initial surveys for home care agencies at this time, said Mary T. St. Pierre, director of regulatory affairs at the National Association for Home Care. She said many other states had established waiting lists, with no guarantee of inspections by any particular date.

Bruce C. Vladeck, administrator of the Federal Health Care Financing Administration, which runs Medicare and Medicaid, acknowledged that there was reason for concern. "There's no question this is a real problem," he said. "We can't do everything we should do in the survey process. We've had very significant growth in the number of facilities participating in Medicare, but we don't have an adequate budget to do the initial certifications in a timely way."

Carmela S. Dyer, a vice president of the American Hospital Association, said the difficulty getting permission from federal regulators to provide new services under Medicare was immensely frustrating to hospitals and would be "a persistent, chronic problem" for consumers and the industry.

"Health care providers are attempting to provide a broader spectrum of care, a wider range of services, so we can treat patients in the most appropriate cost-effective setting," Ms. Dyer said. "Hospitals want to open skilled nursing facility units, rural health clinics and home health care agencies. All require an initial survey and certification before they can be paid under Medicare. But the lack of federal funds has virtually stopped the process in some states."

In the fiscal year 1995, the budget for federal survey and certification of health care providers, including initial inspections and follow-up visits, was $145.8 million, some $3.6 million less than in 1992, when there were fewer new certifications.

President Clinton requested $162 million for 1996. The House voted to provide $152 million, and a Senate committee approved $134.5 million. The final number is likely to be closer to the Senate figure. Mr. Clinton also asked Congress for authority to help finance the inspections by charging fees to home care agencies and other providers, but Congress has not approved the request.

Ms. Dyer said many hospitals would be willing to pay such fees.

Typically, state officials, operating under contract with the federal government, inspect nursing homes and other health care providers to see if they are complying with federal standards for the quality of care. Barbara J. Gagel, director of the Health Standards and Quality Bureau of the Medicare program, said the government did not have enough money to carry out all of its responsibilities.

Federal and state regulators are supposed to inspect health care providers within three weeks after they apply to participate in Medicare. Ms. Gagel told states that they could disregard this requirement because of the "extraordinarily tight fiscal constraints" this year. But, she said, health care providers still cannot be certified, and cannot be paid under Medicare, until they have been inspected for compliance with federal standards.

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