Statement of the American Association of Homes and Services For the Aging

The American Association of Homes and Services for the Aging (AAHSA) appreciates the opportunity to submit this statement for the record of the Subcommittee’s hearing on June 12, 2001 on special issues confronting health care providers and consumers in rural areas.

AAHSA is a national organization whose more than 5,600 not-for-profit providers serve over 1,000,000 individuals on a daily basis. Approximately seventy-five percent of AAHSA members are affiliated with religious organizations; others are sponsored by private foundations, fraternal organizations, government agencies, and community groups. Our members include not only nursing facilities, but also independent senior housing, assisted living, continuing care retirement communities, and providers of home health care, adult day care, respite care, meals on wheels, and other services. AAHSA members are characterized by long-standing ties to their communities and a firm commitment to quality.

Providing health care and social services in rural areas present special challenges. According to the Medicare Payment Advisory Commission (MedPAC)’s recent study, "Medicare in Rural America", rural communities share several factors that may affect the supply of medical services to their residents: small and disproportionately older populations, relatively low incomes and less health insurance coverage, physical isolation, and weak or restrictive state health policies.¹ The report also noted that these problems are more severe for providers and consumers in rural areas that are farthest from an urban area.

The rural populations AAHSA members serve are dispersed over large geographic areas, making travel time a significant factor in home- and community-based services. For example, one home care agency in a rural area of New York State is the only health care provider within 5,000 square miles. Its employees routinely travel a total of 7,000 miles every day to serve its widely scattered clientele. The recent escalation in gasoline prices has added enormously to the agency’s cost of providing service, but these costs are not reflected in the reimbursement the agency receives, since the payment is based on the projected cost of a one-hour visit.

Rural providers have difficulty attracting health professionals to serve in non-urban settings. In addition, local populations from which rural providers can recruit staff are much smaller than in urban areas, making it that much more difficult for them to recruit and retain the staff they need to provide high-quality care. Health care facilities in rural areas tend to be smaller than average and have less access to sophisticated computer equipment, which makes it more difficult for them to comply with rapidly multiplying federal regulations. Medicare policies do not always give adequate consideration to these factors, making it more difficult for rural providers to meet the needs of their elderly residents and clients.

An overriding problem for health care providers in rural areas is that they simply do not have the volume of patients that can make prospective payment systems work. Prospective payment systems are based on the assumption that higher-than-average cost cases will be balanced by those costing less than the average, allowing the provider to at least break even. When a provider serves a low volume of patients, however, a few costly cases can completely overwhelm the provider’s financial situation. In more urban areas, some small health care providers have been able to consolidate with other facilities in order to achieve economies of scale to cope with prospective payment systems. Rural health care providers most often do not have this option, since they frequently are the only health care facility in their region. If they close their doors, consumers have no alternative source of health care.

Another factor to consider is that a rural health care provider frequently is not only the sole source of health care for consumers in the area, but often is the largest employer as well. Residents of rural areas typically have few employment alternatives. The closure of a local health care facility, besides throwing many people out of work, can have a major impact on other local businesses and on the local tax base.

AAHSA supports legislation that has been introduced in the House and Senate to resolve Medicare payment inequities toward hospitals in rural areas. However, these measures do not take into account the problems that also face rural nursing homes and home care providers. AAHSA recommends the following additional initiatives to enhance long-term care providers’ ability to serve consumers in rural areas:

Eliminate the impending 15% cut in Medicare spending on home health: Home health care fills an especially important place in rural areas, where it often is extremely difficult for consumers with disabilities to access other forms of health care. In addition, the MedPAC report on "Medicare in Rural America" points out two special challenges facing rural home care providers: travel time and low volume. MedPAC noted that "Traveling to serve sparse or remote populations may increase the costs of providing services to rural beneficiaries." In addition, "Because rural HHAs generally deliver fewer visits than their urban counterparts, their low volume could lead to higher per episode costs." The report went on to recommend that CMS study further the impact of the prospective payment system on rural home care providers.²

Home health agencies are trying to recover from the financial devastation of the Balanced Budget Act’s interim payment system. The new prospective payment system has solved some reimbursement problems. However, an additional 15 percent reduction would cause many more home health agencies to close, which will cause serious access and availability problems for Medicare beneficiaries. Furthermore, the BBA’s restrictions on eligibility for Medicare-covered home health services have caused total Medicare spending on home health to fall far below the levels that were projected in 1997, making the additional 15% cut unnecessary. The FY2002 budget resolution passed by Congress sets aside funding availability for the elimination of this spending cut, and AAHSA urges passage of the necessary legislation

Incentives for recruitment and retention of staff: While staffing is a serious problem throughout the long-term care field, it is particularly urgent in rural areas, which have smaller and generally less-educated labor pools. AAHSA strongly supports legislation that has been introduced by Rep. Lois Capps, Senator John Kerry, and Senator Tim Hutchinson to provide a variety of incentives for the recruitment, training, and retention of nursing staff at all levels. These measures include a new program of scholarships for individuals to obtain nursing education in exchange for serving for at least two years in areas with nursing shortages, an enhanced federal Medicaid match for nursing homes’ cost of training certified nursing assistants, and grants to meet the costs of child care and transportation for nursing students. It is particularly important that these bills cover staff recruitment, training, and retention for long-term care providers as well as for hospitals and that they provide these incentives for certified nursing assistants and other nursing staff as well as for registered nurses. This legislation would go a long way toward solving the health care staffing crisis, and we urge its passage by Congress.

Single task workers: Because of the difficulty of hiring sufficient numbers of certified nursing assistants, nursing homes in many areas maximized the efficiency of their staffs by training non-nursing staff to help residents with specific tasks such as eating and drinking. Last year, the Health Care Financing Administration, now CMS, notified nursing homes that they would be cited for care deficiencies if they continued this practice. Current law defines a nursing assistant as "any individual providing nursing or nursing-related services to residents in a skilled nursing facility or a nursing facility." The statute requires that nurse aides successfully complete a training and competency evaluation program. The law does not define which specific tasks are considered to be "nursing or nursing-related"; CMS has determined, under its State Operations Manual, which tasks should be so designated. According to the State Operations Manual, assisting residents with eating or drinking is considered to be a nursing-related task.

In the nursing home environment, many employees who are neither nurse aides nor licensed health professionals also have frequent and regular contact with residents. Permitting these individuals to be trained to help residents at mealtime can offer partial relief to the nurse aide shortage and provide more individual attention to residents. Allowing specially trained non-nursing staff to assist residents who may need only a little help frees certified nursing assistants to help other residents who have more complex needs. This kind of relief is especially important in rural areas, where it is particularly difficult for nursing homes to hire sufficient staff.

AAHSA strongly supports legislation that has been introduced by Rep. Paul Ryan and Senator Herb Kohl to permit nursing facilities to train non-nursing personnel to assist residents with eating and drinking. These employees would augment, but not replace existing staff and would be trained specifically to help with eating and drinking without having to complete the full nurse aide training and competency evaluation program. The interdisciplinary team responsible for the care of the resident would determine resident appropriateness and employee competence and ability to perform these tasks, and the training programs would be reviewed and approved by the state regulatory authority.

Need for regulatory relief: Regulatory requirements that are costly for most long-term care providers become almost insurmountable burdens for providers in rural areas. For example, nursing homes now are supposed to have one full-time compliance officer to ensure that the facility is not violating Medicare payment policies and another full-time employee to monitor the facility’s compliance with the privacy requirements under the Health Insurance Portability and Accountability Act of 1996. For small facilities with few administrative staff, devoting two full-time positions to this kind of regulatory compliance is an inefficient use of scarce resources. AAHSA strongly supports the work your subcommittee is doing this year to review the regulatory requirements for health care providers and modify or eliminate those that are non-essential.

Another example of unnecessary regulation that is particularly burdensome for rural nursing homes is the requirement in Section 941 of the Benefits Improvement and Protection Act, that nursing facilities post daily for each shift the current number of licensed and unlicensed nursing staff, in a uniform manner to be designated by HCFA and in a clearly visible place. Again, for nursing homes that have few administrative staff, little computerization, and a shortage of nursing staff, this requirement will take resources away from essential patient care. Furthermore, posting of staffing levels is of little value and is potentially misleading to consumers, since without any reference to the acuity of the residents being served, or an established criterion for appropriate staffing levels based on resident acuity, simple staff numbers are meaningless. AAHSA urges the repeal of this provision.

Regulatory relief for "swing beds": Current law allows small, rural hospitals to enter into agreements under which the hospital can use its beds to provide either acute or skilled nursing care, according to patients’ needs. A hospital bed becomes a swing bed when a patient no longer needs acute care but still needs subacute care. Rather than transferring the patient to a different facility, the hospital keeps the patient and is reimbursed at the subacute level. Swing beds may provide access to subacute care for Medicare beneficiaries in many rural areas where there are few other providers of this kind of care. Swing bed patients typically have relatively short stays, averaging approximately nine days.

CMS is beginning to implement provisions of the Balanced Budget Act that will bring swing beds under the skilled nursing facility prospective payment system (SNF PPS). In turn, the SNF PPS is based on a full assessment of a skilled nursing facility resident’s condition that is done upon entry and at specific intervals thereafter, recorded on the minimum data set (MDS). CMS has determined that the assessment for payment purposes must be done according to the full MDS, rather than just according to the specific treatments for which reimbursement is claimed.

The full MDS is a detailed and time-consuming process, as it should be. The current requirements are such that skilled nursing facilities with average Medicare volume are forced, as a practical matter, to dedicate the equivalent of a full-time RN to completing assessments rather than providing care if the facilities are to get all of the paperwork completed and submitted on the time schedule required. This requirement is particularly onerous for rural hospitals, which have little experience with OBRA requirements for skilled nursing facilities and which have limited administrative and nursing staffs. It also makes little sense to require rural hospitals to complete the full MDS process for patients who generally will occupy a swing bed for only a few days.

Last year’s Medicare and Medicaid Benefits Improvement and Protection Act (BIPA) exempted critical care facilities in rural areas from the requirements of the prospective payment system. AAHSA recommends that a similar approach be taken toward swing beds in rural hospitals, exempting them from completing the full MDS and from the skilled nursing facility prospective payment system. Hospitals could then be reimbursed for care given to swing bed patients according to the current cost-related basis, which combines a calculated rate and a retrospective component.

Nursing assistant training lockout: Medicare and Medicaid prohibit nurse aide training by or in a nursing facility if the facility within the last two years has: (1) operated under a (staffing) waiver; (2) has been subject to an extended or partial extended survey; (3) has been assessed a civil money penalty of $5000 or more; or (4) has been subject to certain remedies (i.e., denial of payment for new admissions, or temporary management, termination of provider agreement due to a finding of immediate jeopardy, and/or closure of a facility, transfer of residents, or both). These provisions are severely restricting the ability of nursing facilities to train nurse aides and have proved counterproductive to improving quality of care.

There is little argument for approval of a nurse aide training program by a facility that is providing substandard quality of care. However, the prohibition on training once compliance has been achieved and demonstrated is completely arbitrary and poses problems for providers and residents alike. The two-year duration of the nurse aide training "lock-out" severely impedes the facility’s ability to recruit and retain adequate and qualified staff, and to assure provision of quality care.

Opportunities to access alternative training programs are frequently limited and many facilities, even after achieving and demonstrating compliance, find it difficult, if not impossible, to secure training for their aides. This problem is particularly severe in rural areas, where the nearest alternative training site may be at a great distance from the facility. The end result can be either new compromises to quality of care or a recurrence of the problems that caused the disqualification from training. The effect of this particular sanction is counterproductive to the improvement of quality, and to the intent of the law that facilities achieve and maintain sustained compliance.

AAHSA urges the elimination of the present two-year prohibition on nurse aide training by or in nursing facilities that are found to be out of compliance with certain federal long term care requirements [Section(s) 1819 and 1919(f)(2)(B)(iii)(I)(b) of the Social Security Act]. Once facilities have corrected their deficiencies and demonstrated compliance, they should be permitted to resume their nurse-aide training programs.

Medicare wage index: Hospitals in rural areas have the option of using the urban wage index in filing reimbursement claims if they can show that they must compete with urban areas in recruiting staff. This option should be extended to rural nursing homes, which also must often compete with urban facilities in recruiting staff.

Telemedicine in long-term care: Telemedicine is a promising new use of technology that holds the potential for greatly improving access to quality health care in rural areas. Section 223 of last year’s Benefit Improvement and Protection Act, which expanded Medicare payments for telehealth services provided to rural beneficiaries, did not authorize nursing homes as potential sites, although it did give CMS two years to study additional settings for telehealth services. Nursing homes located in rural areas are often central elements of their communities, familiar to and easily accessed by beneficiaries, and providing ready access to skilled professional services. Including nursing homes as originating sites for telehealth services will benefit not only the community at large, but also the frail elderly population residing in these facilities by improving the breadth and quality of medical services potentially available to them. AAHSA recommends that nursing homes be authorized as telemedicine sites without the additional delay of waiting for the CMS study.

Conclusion: Medicare regulations and payment policies that are problematic for long-term care providers generally can become almost insurmountable for rural providers, who must cope with the special challenges of small patient populations and labor pools and lengthy travel times to serve home care clients. AAHSA looks forward to working with the subcommittee on reforms that will provide essential relief to rural nursing homes and home care agencies and enhance their ability to give the highest-quality health care.

¹ Medicare Payment Advisory Commission. Report to Congress: Medicare in Rural America. June 2001, p.8
² Ibid, p. 107-110