Huge Backlog Of Health Workers Needs Certification For Medicare

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 now 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,” 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, which ended Sept. 30, the budget for federal survey and certification of health care providers, including initial inspections and regular 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. Clinton also asked Congress for authority to help finance the inspections by charging fees to home care agencies and other health care providers, but Congress has not approved the request.

Dyer said many hospitals would be willing to pay such fees. “User fees are a reasonable short-term solution,” she said.

In the past five years, for example, the number of skilled nursing homes participating in Medicare has risen by over 4,000 to 13,166, while the number of home health agencies has increased to 8,898, from 5,730 in 1990.

Rural health clinics in the Medicare program have quadrupled over the same period, to 2,555 up from 551 in 1990. Outpatient surgery centers have increased to 2,049 from 1,197 while the number of hospices has more than doubled, to 1,855 from 825. Nearly 1,000 kidney dialysis centers have been added to the Medicare program, bringing the total to 2,836.

One reason for such increases is that health care providers are branching out into new areas, so one company can serve all of a patient’s medical needs from birth to death. Health care executives say such full-service arrangements, known as integrated delivery systems, are good for patients and good for the company’s bottom line.

Thomas A. Scully, president of the Federation of American Health Systems, which represents 1,700 investor-owned hospitals, said the premise of the Republican plan was that consumers would benefit from a more competitive medical market. But he said: “If you want a competitive, dynamic market, you have to let more people in. And you can’t get into the market unless you are licensed and certified.”

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. 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.

In view of the tight budgets, she said, federal and state health regulators must set priorities, and “initial certifications” rank near the bottom, behind the reinspection of nursing homes and home health agencies already participating in Medicare.

Under federal law, such nursing homes and home health agencies must be reinspected once a year on the average, and the maximum interval between surveys for any institution is 15 months. The government has more discretion in deciding how often to evaluate other health care providers and tries to inspect 15 percent of them each year.

Kenneth C. Robbins, president of the Illinois Hospital and Health Systems Association, said many hospitals wanted to convert “excess capacity” to other uses, like long-term care, but had been stymied because they could not get permission from Medicare.

Robbins said the delays showed “a certain confusion among public policy makers.”

“On the one hand,” he said, “hospitals are being urged to be efficient providers of a broad spectrum of services. But when they try to convert existing facilities to more efficient uses or offer new services, they are rebuffed by regulatory barriers. It is symptomatic of government decision-making.”