B-201120.OM, NOV 5, 1980

B-201120.OM: Nov 5, 1980

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ARE STATUTORILY REQUIRED BY 42 U.S.C. WE UNDERSTAND THAT YOUR QUESTION WAS PROMPTED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' (HHS) PROPOSED ELIMINATION OF THIS REGULATORY REQUIREMENT. WE HAVE NO LEGAL OBJECTIONS TO HH'S PROPOSED ELIMINATION OF THE REGULATION REQUIRING THESE STUDIES. ATTACHED IS A DETAILED ANALYSIS SUPPORTING OUR CONCLUSION. THERE IS NO LEGAL OBJECTION TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' PROPOSED ELIMINATION OF 42 C.F.R. 405.1137(C). BACKGROUND: HUMAN RESOURCES DIVISION STAFF CURRENTLY IS REVIEWING THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' (HHS) PROPOSED STANDARDS FOR SKILLED NURSING FACILITIES. ARE STATUTORILY REQUIRED. THERE ARE TWO ELEMENTS TO A UTILIZATION REVIEW: REVIEWS OF EXTENDED DURATION CASES AND MCES.

B-201120.OM, NOV 5, 1980

SUBJECT: ELIMINATION OF THE MEDICAL CARE EVALUATION STUDY REQUIREMENT OF 42 C.F.R. 405.1137(C) - (B-201120)

GAO EVALUATOR, KANSAS CITY REGIONAL OFFICE - JAMES HOFFMAN:

THIS RESPONDS TO YOUR QUESTION WHETHER THE MEDICAL CARE EVALUATION STUDIES, DESCRIBED IN 42 C.F.R. 405.1137(C), ARE STATUTORILY REQUIRED BY 42 U.S.C. SEC. 1395XK). WE UNDERSTAND THAT YOUR QUESTION WAS PROMPTED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' (HHS) PROPOSED ELIMINATION OF THIS REGULATORY REQUIREMENT.

BASED UPON OUR ANALYSIS, WE CONCLUDE THAT 42 U.S.C. 1395XK) AUTHORIZES, BUT DOES NOT REQUIRE, THE CONDUCT OF MEDICAL CARE EVALUATION STUDIES. THEREFORE, WE HAVE NO LEGAL OBJECTIONS TO HH'S PROPOSED ELIMINATION OF THE REGULATION REQUIRING THESE STUDIES.

ATTACHED IS A DETAILED ANALYSIS SUPPORTING OUR CONCLUSION.

ATTACHMENT

ELIMINATION OF THE MEDICAL CARE EVALUATION STUDY REQUIREMENT OF 42 C.F.R. 405.1137(C)

DIGEST:

THE PROVISIONS OF 42 U.S.C. SEC. 1395XK) DO NOT REQUIRE MEDICAL CARE EVALUATION STUDIES. CONSEQUENTLY, THERE IS NO LEGAL OBJECTION TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' PROPOSED ELIMINATION OF 42 C.F.R. 405.1137(C), A REGULATION WHICH CURRENTLY REQUIRES SUCH STUDIES.

BACKGROUND:

HUMAN RESOURCES DIVISION STAFF CURRENTLY IS REVIEWING THE DEPARTMENT OF HEALTH AND HUMAN SERVICES' (HHS) PROPOSED STANDARDS FOR SKILLED NURSING FACILITIES. IN THIS CONNECTION, THE STAFF ASKED WHETHER MEDICAL CARE EVALUATION STUDIES (MCES), WHICH HHS HAS PROPOSED TO DROP FROM ITS CONDITIONS OF PARTICIPATION IN MEDICARE (TITLE XVIII OF THE SOCIAL SECURITY ACT) AND MEDICAID (TITLE XIX OF THAT ACT), ARE STATUTORILY REQUIRED.

ANALYSIS:

CONDITIONS OF PARTICIPATION MUST BE FULFILLED BY A SKILLED NURSING FACILITY, DEFINED AT 42 U.S.C. SEC. 1395XJ) (1976 AND SUPP. I 1977), FN1 BEFORE IT CAN PARTICIPATE IN EITHER THE MEDICARE OR MEDICAID PROGRAMS. FN2

CURRENTLY, ONE CONDITION OF PARTICIPATION MANDATES THAT THE SKILLED NURSING FACILITY CARRY OUT A UTILIZATION REVIEW WHICH "HAS AS ITS OVERALL OBJECTIVES BOTH THE MAINTENANCE OF HIGH QUALITY PATIENT CARE AND ASSURANCE OF APPROPRIATE AND EFFICIENT UTILIZATION OF FACILITY SERVICES." 42 C.F.R. SEC. 405.1137 (1979). AS THIS REGULATION POINTS OUT, THERE ARE TWO ELEMENTS TO A UTILIZATION REVIEW: REVIEWS OF EXTENDED DURATION CASES AND MCES. IN PARTICULAR, THE MCES:

"EMPHASIZE IDENTIFICATION AND ANALYSIS OF PATTERNS OF PATIENT CARE, AND SUGGEST, WHERE APPROPRIATE, POSSIBLE CHANGES FOR MAINTAINING CONSISTENTLY HIGH QUALITY PATIENT CARE AND EFFECTIVE AND EFFICIENT USE OF SERVICES." 42 C.F.R. 405.1137(C).

HHS HAS PROPOSED TO ELIMINATE THE MCE ASPECT OF ITS REGULATIONS DESCRIBED IN 42 C.F.R. 405.1137(C), ABOVE, FN3 THE DEPARTMENT'S RATIONALE FOR DOING SO IS STATED IN THE PREAMBLE OF THE PROPOSED RULES:

"MCES ORIGINATED IN ACUTE CARE SETTINGS AS A MECHANISM FOR PROFESSIONAL STANDARDS REVIEW ORGANIZATIONS TO PROVIDE QUALITY ASSURANCE. HOWEVER, THIS CRITERIA IS NOT WHOLLY TRANSFERABLE TO THE LONG-TERM CARE SETTING. *** MANY OF THE PROBLEMS OF NURSING HOME PATIENTS (ESPECIALLY IN THE AREA OF QUALITY OF LIFE AND PSYCHOLOGICAL ASPECTS OF CARE) ARE UNIQUE TO THE LONG-TERM CARE SETTING AND IT IS THEREFORE EXTREMELY DIFFICULT TO DEVELOP MEANINGFUL PROCESS CRITERIA."

THE STATUTORY DEFINITION OF UTILIZATION REVIEW MUST BE CONSIDERED IN DETERMINING WHETHER THE MCES ARE STATUTORILY REQUIRED.

THE CURRENT LAW STATES:

"A UTILIZATION REVIEW PLAN OF A *** SKILLED NURSING FACILITY SHALL BE CONSIDERED SUFFICIENT *** IF IT PROVIDES -

"(1) FOR THE REVIEW, ON A SAMPLE OR OTHER BASIS, OF ADMISSIONS TO THE INSTITUTION, THE DURATION OF STAYS THEREIN, AND THE PROFESSIONAL SERVICES (INCLUDING DRUGS AND BIOLOGICALS) FURNISHED, (A) WITH RESPECT TO THE MEDICAL NECESSITY OF THE SERVICES, AND (B) FOR THE PURPOSE OF PROMOTING THE MOST EFFICIENT USE OF AVAILABLE HEALTH FACILITIES AND SERVICES;" 42 U.S.C. 1395XK) (1976). THUS THE STATUTE DOES NOT EXPRESSLY REFER TO MCES.

THE LEGISLATIVE HISTORY OF THE STATUTE ADDRESSING UTILIZATION REVIEWS REVEALS NO CLEAR INTENTION OF WHETHER CONGRESS WISHED THAT MCES, PER SE, BE PERFORMED. FOR EXAMPLE, ONE SENATE REPORT ON THE LEGISLATION ULTIMATELY ENACTED AS 42 U.S.C. 1395XK) STATES -

"HOSPITALS AND EXTENDED CARE FACILITIES PARTICIPATING IN THE PROGRAM WOULD BE REQUIRED TO HAVE IN EFFECT A UTILIZATION REVIEW PLAN PROVIDING FOR A REVIEW OF ADMISSIONS TO THE INSTITUTION, LENGTH OF STAYS, AND THE MEDICAL NECESSITY OF SERVICES PROVIDED WITH THE OBJECTIVE OF PROMOTING THE EFFICIENT USE OF SERVICES AND FACILITIES. ***

"UNDER A UTILIZATION REVIEW PLAN, TIMELY REVIEW WOULD HAVE TO BE MADE OF EACH CASE IN WHICH A BENEFICIARY STAYS IN THE INSTITUTION FOR AN EXTENDED PERIOD." S. REP. NO. 404, 89 CONG., 1ST SESS. 47 (1965).

WE NOTE THAT MCES ARE NOT MENTIONED IN THE LEGISLATIVE HISTORY.

UNDER PROPOSED 42 C.F.R. 483.14 (WHICH WILL BE THE REVISED HHS REGULATION IMPLEMENTING UTILIZATION REVIEW), SKILLED NURSING FACILITIES MUST HAVE, IN EFFECT, A UTILIZATION REVIEW PLAN THAT PROVIDES FOR REVIEW OF EACH RECIPIENT'S NEED FOR THE MEDICAL SERVICES THAT ARE PROVIDED. IN ADDITION, UNDER PROPOSED 42 C.F.R. 483.14, AN EXTENSIVE REVIEW WILL BE MADE OF THE CASE OF EACH RECIPIENT RECEIVING EITHER MEDICARE OR MEDICAID ASSISTANCE FROM THE DATE OF ADMISSION TO ENSURE THAT THE RECIPIENT IS IN THE FACILITY NO LONGER THAN IS CONSISTENT WITH GOOD MEDICAL PRACTICE. THUS, ONE CAN REASONABLY CONCLUDE THAT THE OBJECTIVES OF 42 U.S.C. 1395XK) WILL BE REALIZED.

IT IS TRUE THAT MCES ARE CONDUCTED TO PROMOTE EFFICIENCY, A GOAL CONGRESS WISHED TO ACCOMPLISH THROUGH UTILIZATION REVIEWS IN GENERAL. HOWEVER, IN VIEW OF THE FACT THAT A UTILIZATION REVIEW, UNDER THE PROPOSED REGULATION, ENCOMPASSES PROCEDURES OTHER THAN MCES WHICH CAN ALSO BE SEEN AS PROMOTING EFFICIENCY, WE CONCLUDE MCES, PER SE, ARE NOT REQUIRED UNDER 42 U.S.C. SEC. 1395XK).

FN1 GENERALLY, SKILLED NURSING FACILITIES ARE "ENGAGED IN PROVIDING TO INPATIENTS (A) SKILLED NURSING CARE AND RELATED SERVICES FOR PATIENTS WHO REQUIRE MEDICAL OR NURSING CARE, OR (B) REHABILITATION SERVICES FOR THE REHABILITATION OF INJURED, DISABLED OR SICK PERSONS." 42 U.S.C. SEC. 1395XJ)(1) (1976).

FN2 SEE 42 C.F.R. SECS. 405.1101-1137 (SUBPART K) (1979), "CONDITIONS OF PARTICIPATION: SKILLED NURSING FACILITIES"; AND 42 C.F.R. 442.202 (1979).

FN3 THE PROPOSED REVISIONS TO THE REGULATIONS WERE PUBLISHED IN THE FEDERAL REGISTER ON JULY 14, 1980, 45 FED. REG. 47,368-85 (1980).