HCFA Reform Shifts From Legislation to Regulation.

WASHINGTON -- The time is ripe for regulatory relief and reform, according to policy analysts and lobbyists.

Currently, there are three mental health issues that can be addressed by the Bush administration--without the need for legislation, explained Michael Bromberg, chairman of Capitol Health Group, a Washington-based lobbying firm. They include the prospective payment system (PPS) for psychiatric hospitals, seclusion and restraint rules, and the National Commission on Mental Health.

Though the details of the National Commission on Mental Health have yet to be worked out, the National Association of Psychiatric Health Systems (NAPHS) is pushing to gain representation on the commission. The organization also is placing special emphasis on achieving regulatory relief for psychiatric hospitals. NAPHS executive director Mark Covall outlined the organization's advocacy agenda at the annual meeting of the NAPHS:

* Payment reform. The Medicare PPS for psychiatric hospitals must be implemented by Oct. 1, 2002, according to the Balanced Budget Refinement Act of 1999. Research projects funded by the Health Care Financing Administration are underway to tease out the details. Health Economics Research, a research organization based in Waltham, Mass., is looking at the cost structure of different types of facilities and at patient characteristics that predict variations in resource use.

The inpatient psychiatric PPS should be based on an acute care model, not a post-acute care model, which has been implemented in nursing homes and rehabilitation facilities, Mr. Covall said. The PPS plans enacted previously were built around the minimum data set and the resident assessment instrument, which focus on chronic, long-term issues.

Such diagnostic and assessment tools are not necessary in psychiatric hospitals to determine payment rate, he said. There is not a tremendous variation in resources used per day. An administratively simple system--without complex assessment tools--makes the most sense.

NAPHS urges HCFA to develop a simple PPS model for psychiatric hospitals and then determine whether more variables must built into the equation, rather than build upon the post-acute care model without the assessment tools, Mr. Covall said. Hopefully, the research findings will be considered in HCFA's report to Congress, which is due this October, and provide a clearer picture of the specific parameters needed for a sound payment system.

* Access and coverage. NAPHS wants to build momentum for the federal parity legislation (S.543), sponsored by Sen. Pete Domenici (R-N.M.) and Sen. Paul Wellstone (D-Minn.). Given Sen. Domenici's strong commitment to this issue and that the current parity law expires Sept. 30, 2001, Congress is expected to do something.

It's important to point out that the legislation does not mandate coverage; rather, it requires equal coverage for physical and mental health in health plans that currently offer mental health coverage. Also, studies have shown that parity is affordable, with a less than 1% increase in insurance premiums.

NAPHS also strongly supports the Family Opportunity Act (S.321 and H.R.600), which allows Medicaid coverage for disabled children whose family income is as high as 300% above the poverty level. Bipartisan support exists in both the House and Senate and money is available in budget resolutions bills, providing positive momentum for this legislation, Mr. Covall said.

Mr. Bromberg said someone in Congress needs to take a similar initiative in seeking coverage for the 44 million uninsured Americans. "It's second, third, or fourth on everyone's priority list, but never first."

Two ways to increase coverage include beefing up public programs, such as getting parents covered through the State Children's Health Insurance Program, and tax credits. The biggest single block of people who work and don't have insurance are those employed by small businesses. They are offered a health plan but can't afford to help pay the premium. The number of uninsured Americans could be reduced by 25%-30%, which is the best that can be expected, he said.

* Regulatory relief. Many organizations, including NAPHS, the American Psychiatric Association, and the American Medical Association, are urging HCFA to withdraw the seclusion and restraint rule that was issued at the beginning of this year for residential treatment centers that participate in Medicaid. The organizations also are calling on HCFA to develop national, consistent standards for the use of seclusion and restraint in all settings--preferably based on the standards from the Joint Commission on Accreditation of Healthcare Organizations. Most organizations are accredited and can meet those requirements.

"There are too many regulatory requirements that differ, making it difficult for providers to operate and to provide necessary services," Mr. Covall said. Members of Congress need to call or write HCFA and Health and Human Services Secretary Tommy Thompson.

HCFA also needs to develop clear rules regarding local medical review policies that differ, he said. These rules are medically necessary criteria, not coverage rules. However, they are being used for coverage decisions, which has made it difficult for providers to provide and get paid for partial hospitalization services.

Mr. Bromberg said he expects HCFA to be active in the regulatory arena. Mr. Thompson wants his legacy to be HCFA reform.

Automatic waivers and a streamlined process for giving governors access to Medicaid waivers easily top the HHS secretary's agenda. He also wants to streamline HCFA for providers, plans, and beneficiaries and make it a more responsive bureaucracy.

"The Democrats know they can win in the House and Senate in next year's midterm election, so they're going to stand tough on issues--particularly health care issues," he said. "This presents a huge opportunity for the health care community to seek massive regulatory changes," Mr. Bromberg said.