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New York State challenges PSRO program
Legislation
New York State cha1lenges PSRO program New York, often the maverick of the 50 states, is the first to defy the national Professional Standards Review Organizations (PSRO) program by establishing a review system of its own. Believing that since it finances half the cost of Medicaid, it should have the responsibility of policing it, the New York legislature mandated the state system, which now has 130 nurses and 20 full-time physicians as reviewers. All the physicians are active practitioners with hospital privileges, and each reviews four to five hospitals. The defiance may result in a court battle, for the US Department of Health, Education, and Welfare (HEW) is adamant in its opinion that PSROs should have final review authority. HEW is threatening to cut off Medicaid funds to New York. New York, thus far, has refused to comply with HEW'Sdirectives and indications are that it will not back down. In the state system, nurses review all hospital cases within three days of admission, using length-of-stay norms based on Medicaid's experience and criteria established by the state medical society and the American Medical Association. Any questionable service or cost is discussed with a physician reviewer. After study and consultation with the attending physician, the reviewer determines whether payment should be denied. In many cases, state decisions conflict with the PSRO decisions. If this happens, state decision takes precedence. The state system differs from PSROs in that
9H4
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prescreening is required for all elective surgery cases. Also, should more than one preoperative day be required for an elective procedure, approval must be given by a physician reviewer. In addition to on-site review, New York is analyzing Medicaid hospital records, making retroactive payment denials. It is also initiating a strict new screening program for nursing home patients and intends to start an ambulatory care review program. Opponents to state review contend that the PSROs have not been active long enough to show results and that New York State has mismanaged the Medicaid program. New York officials state that PSROs rarely make denials and have permitted a status quo condition to prevail. They insist they will continue with their program until the PSROs can produce equal results. The Privacy Act of 1974 provided for a Privacy Protection Study Commission that after two years of study and numerous hearings throughout the country has issued the report., "Personal privacy in an information society." One section of the report concerns record keeping in the medical care relationship, and the commission makes strong recommendations in this area. It believes safeguards are needed to protect privacy due to increasing automation and changing concepts of records. Several laws on medical records privacy have been introduced, but it is expected that the first legislation incorporating the commission's recommendations will be introduced by Sen Edward Kennedy (D-Mass), chairman of the health and scientific research subcommittee of the Senate Human Resources Committee. Individuals are often asked to authorize disclosure of medical record information they
AORN Journal, November 1977, V o l 2 6 , No 5
have never seen and may disagree with. The commission believes this problem can be alleviated by allowing a patient to copy and correct his medical record if the physician agrees that disclosure of the record will not be harmful to the patient. The provider of a medical record should have a definite procedure for correction. If it refuses to change the record, it must allow the patient to file a statement with the reasons for the disagreement and any subsequent disclosure must include a note to that effect. If the medical record is changed, the provider must send the changes to any person previously given the disputed information. The commission’s report is explicit in its recommendations about information for retrospective epidemiological research studies. To guarantee the confidentiality of individuals, it places considerable responsibility on the medical care provider when releasing information for research studies. Several hospital cost containment bills have been introduced in Congress since the Administration first introduced its bills in April. With no action during the first session of the 95th Congress, which adjourned in October, these bills will be considered during the second session that begins in January. Although varying in several provisions, they are alike in setting the federal government as the proper vehicle to set limits on the revenue a hospital may receive. The following is a recap of the hospital cost containment bills to be considered: “Hospital Cost Containment Act of 1977” (Administration’s bills), HR 6575 introduced by Rep Paul Rogers (D-Fla) and Rep Dan Rostenkowski (D-Ill) and S 1391 introduced by Sen Kennedy. This act has three major parts: report on permanent reform, transitional cost constraint, and limitation on hospital capital expenditures. It restricts inpatient hospital revenue increases; sets national limits on hospital capital expenditures, hospital beds, and occupancy rates; and allows state regulation in lieu of federal control under certain circumstances. “Hospital Cost Containment Act of 1977,” HR 8121 introduced by Rep Rogers. Similarto HR 6575 but with new provisions added to hospital cost containment. Has four major sections: report on permanent reform, hospital cost constraint, limits on capital expenditures, and program to discourage unneeded hospital
services. "Hospital Cost Containment Act of 1977," HR 8337 introduced by Rep Rostenkowski. Similar to HR 6575 but effective for only four years. Exempts hospitals that admit under 4,000 patients a year. Consists of two major parts: report on permanent reform and transitional cost constraint. Differs from HR 6575 in some definitions, allowable percentages, and allowable revenue.. No provisions for hospital capital expenditure limitations. "State Cost Control Plan for Hospitals Act of 1977," S 1878 introduced by Sen Richard Schweiker (R-Pa). Contains five major sections: state hospital cost control, federal hospital cost control, PSRO amendments, hospital capital expenditures limitations, and planning law amendments. Contains provisions of Administration's proposal, moratorium on capital expenditures, and PSRO review of all physician services. "Hospital Cost Containment Act of 1977," S 1391 as reported. Similar to first S 1391 but covers major medical equipment in physician's office and adds new provisions on state hospital cost containment programs. This is the only bill that has been reported up by a subcommittee for action by a committee. "Hospital Cost Containment Act of 1977," HR 8687 introduced by Rep Tim Lee Carter (R-Ky). Similar to S 1878. Contains six major sections: report on permanent federal rate review, state hospital cost control, federal hospital cost control, PSRO amendments, hospital capital expenditures limitations, and planning law amendments. Also contains PSRO review of all physician services and uniform cost reporting. "Medicare-Medicaid Administrative and Reimbursement Reform Act of 1977," S 1470 introduced by Sen Herman Talmadge (D-Ga). Provides for classification of hospitals and payment of routine costs at average rates; state cost control option, incentives for closure or conversion, and applies only to MedicareMedicaid. Although it is difficult to determine which bill you prefer, it is important to be knowledgeable about each since passage of a cost containment bill is considered the first step to national health insurance.
Dora B D'Amico Associate editor
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New York State cha1lenges PSRO program New York, often the maverick of the 50 states, is the first to defy the national Professional Standards Review Organizations (PSRO) program by establishing a review system of its own. Believing that since it finances half the cost of Medicaid, it should have the responsibility of policing it, the New York legislature mandated the state system, which now has 130 nurses and 20 full-time physicians as reviewers. All the physicians are active practitioners with hospital privileges, and each reviews four to five hospitals. The defiance may result in a court battle, for the US Department of Health, Education, and Welfare (HEW) is adamant in its opinion that PSROs should have final review authority. HEW is threatening to cut off Medicaid funds to New York. New York, thus far, has refused to comply with HEW'Sdirectives and indications are that it will not back down. In the state system, nurses review all hospital cases within three days of admission, using length-of-stay norms based on Medicaid's experience and criteria established by the state medical society and the American Medical Association. Any questionable service or cost is discussed with a physician reviewer. After study and consultation with the attending physician, the reviewer determines whether payment should be denied. In many cases, state decisions conflict with the PSRO decisions. If this happens, state decision takes precedence. The state system differs from PSROs in that
9H4
3
prescreening is required for all elective surgery cases. Also, should more than one preoperative day be required for an elective procedure, approval must be given by a physician reviewer. In addition to on-site review, New York is analyzing Medicaid hospital records, making retroactive payment denials. It is also initiating a strict new screening program for nursing home patients and intends to start an ambulatory care review program. Opponents to state review contend that the PSROs have not been active long enough to show results and that New York State has mismanaged the Medicaid program. New York officials state that PSROs rarely make denials and have permitted a status quo condition to prevail. They insist they will continue with their program until the PSROs can produce equal results. The Privacy Act of 1974 provided for a Privacy Protection Study Commission that after two years of study and numerous hearings throughout the country has issued the report., "Personal privacy in an information society." One section of the report concerns record keeping in the medical care relationship, and the commission makes strong recommendations in this area. It believes safeguards are needed to protect privacy due to increasing automation and changing concepts of records. Several laws on medical records privacy have been introduced, but it is expected that the first legislation incorporating the commission's recommendations will be introduced by Sen Edward Kennedy (D-Mass), chairman of the health and scientific research subcommittee of the Senate Human Resources Committee. Individuals are often asked to authorize disclosure of medical record information they
AORN Journal, November 1977, V o l 2 6 , No 5
have never seen and may disagree with. The commission believes this problem can be alleviated by allowing a patient to copy and correct his medical record if the physician agrees that disclosure of the record will not be harmful to the patient. The provider of a medical record should have a definite procedure for correction. If it refuses to change the record, it must allow the patient to file a statement with the reasons for the disagreement and any subsequent disclosure must include a note to that effect. If the medical record is changed, the provider must send the changes to any person previously given the disputed information. The commission’s report is explicit in its recommendations about information for retrospective epidemiological research studies. To guarantee the confidentiality of individuals, it places considerable responsibility on the medical care provider when releasing information for research studies. Several hospital cost containment bills have been introduced in Congress since the Administration first introduced its bills in April. With no action during the first session of the 95th Congress, which adjourned in October, these bills will be considered during the second session that begins in January. Although varying in several provisions, they are alike in setting the federal government as the proper vehicle to set limits on the revenue a hospital may receive. The following is a recap of the hospital cost containment bills to be considered: “Hospital Cost Containment Act of 1977” (Administration’s bills), HR 6575 introduced by Rep Paul Rogers (D-Fla) and Rep Dan Rostenkowski (D-Ill) and S 1391 introduced by Sen Kennedy. This act has three major parts: report on permanent reform, transitional cost constraint, and limitation on hospital capital expenditures. It restricts inpatient hospital revenue increases; sets national limits on hospital capital expenditures, hospital beds, and occupancy rates; and allows state regulation in lieu of federal control under certain circumstances. “Hospital Cost Containment Act of 1977,” HR 8121 introduced by Rep Rogers. Similarto HR 6575 but with new provisions added to hospital cost containment. Has four major sections: report on permanent reform, hospital cost constraint, limits on capital expenditures, and program to discourage unneeded hospital
services. "Hospital Cost Containment Act of 1977," HR 8337 introduced by Rep Rostenkowski. Similar to HR 6575 but effective for only four years. Exempts hospitals that admit under 4,000 patients a year. Consists of two major parts: report on permanent reform and transitional cost constraint. Differs from HR 6575 in some definitions, allowable percentages, and allowable revenue.. No provisions for hospital capital expenditure limitations. "State Cost Control Plan for Hospitals Act of 1977," S 1878 introduced by Sen Richard Schweiker (R-Pa). Contains five major sections: state hospital cost control, federal hospital cost control, PSRO amendments, hospital capital expenditures limitations, and planning law amendments. Contains provisions of Administration's proposal, moratorium on capital expenditures, and PSRO review of all physician services. "Hospital Cost Containment Act of 1977," S 1391 as reported. Similar to first S 1391 but covers major medical equipment in physician's office and adds new provisions on state hospital cost containment programs. This is the only bill that has been reported up by a subcommittee for action by a committee. "Hospital Cost Containment Act of 1977," HR 8687 introduced by Rep Tim Lee Carter (R-Ky). Similar to S 1878. Contains six major sections: report on permanent federal rate review, state hospital cost control, federal hospital cost control, PSRO amendments, hospital capital expenditures limitations, and planning law amendments. Also contains PSRO review of all physician services and uniform cost reporting. "Medicare-Medicaid Administrative and Reimbursement Reform Act of 1977," S 1470 introduced by Sen Herman Talmadge (D-Ga). Provides for classification of hospitals and payment of routine costs at average rates; state cost control option, incentives for closure or conversion, and applies only to MedicareMedicaid. Although it is difficult to determine which bill you prefer, it is important to be knowledgeable about each since passage of a cost containment bill is considered the first step to national health insurance.
Dora B D'Amico Associate editor
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