Still more regulations?

Last March, the White House announced that the long-delayed Advisory Commission on Consumer Protection and Quality in the Health Care Industry finally had enough members to begin its work. President Clinton charged the Commission with developing a "Healthcare Consumer Bill of Rights" based on outcome measures and consumer satisfaction, with a final report due on March 30, 1998. The American Association of Health Plans (AAHP) and the Association of Managed Health Care Plans both expressed satisfaction with the Commission and its mission, assured by the President's declaration that the Commission's product would not take the form of more regulatory legislation.

The long-term care industry has had no representation on the Commission, as noted previously in this column ("Left Out Again," Nursing Homes, June 1997, p. 10). This absence might have been justified several years ago by the relatively small number of nursing home residents involved with managed care. Today, however, nearly all states are shifting Medicaid and Medicare clients into managed care systems, and a growing number of HMOs are developing network relationships with nursing homes. The long-term care industry will indeed be directly affected by what the Commission develops.

What's more, there is potential for the Commission's work to add to the regulatory environment already enveloping nursing homes. This was underscored in September, when the American Association of Retired Persons (AARP), Families USA (a self-styled healthcare consumer group) and three nonprofit HMOs joined in a preemptive strike to set the agenda for the Commission's final report. The five organizations asked the Commission to consider their "Agreement on a Statement of Principles for Consumer Protection" as national standards "to protect consumers and to achieve fair, consistent and efficient regulation, and greater accountability by health plans."

The HMO coauthors - HIP Health Insurance Plans, Kaiser Permanente and Group Health Cooperative of Puget Sound - are nonprofit organizations founded at least 50 years ago, all of which enjoy unusually close relationships with the policy and medical research offices of the U.S. Department of Health and Human Services (HHS).

The first principle in the agreement, described as "Accessibility of Services," requires plans to, among other things, "provide healthcare materials and services in a culturally and linguistically sensitive manner," and to "provide out-of-network referrals at no cost to the member when the health plan does not have a network physician with the appropriate training or experience." The vagueness of such language as "culturally and linguistically sensitive manner" - especially if used as the basis for regulation - opens the possibility that nursing homes might have to employ caregivers speaking the native language of every immigrant resident. Similarly, a "network physician with the appropriate training and experience" might suggest that care for mental health problems must be provided by a psychiatrist rather than a nonphysician mental health professional.

The language on "continuity of care" in the Statement of Principles begins with the requirement that "members should be allowed to choose their own primary care physician and change their primary care physician at any time" - not necessarily a plus for organized medical staffs in nursing homes. Meanwhile, the section on provider reimbursement incentives offers the not unreasonable requirement that care systems should not use payment methods that "directly encourage providers to overtreat patients or to limit medically necessary care" - but then goes on to exclude full-risk capitation as an acceptable option.

Most importantly, these and other standards are proposed to be "legally enforceable" on both health plans and providers. In other words, regardless of their adherence to OBRA regulations, long-term care providers could be placed at risk of litigation for failure to follow a court's interpretation of the Statement of Principles.

AARP Legislative Director John Rother described the Statement of Principles as part of his organization's effort to "empower managed care consumers with a comprehensive and understandable set of national standards to protect their interests and restore their trust." Anthony Watson, CEO of HIP Health Insurance Plans, told members of the press, "We intend to insist on even higher standards of behavior within our industry, and we are more than willing to see laws enacted to ensure that result."

However, representatives of other managed healthcare plans and of private sector payers reacted angrily. A release from AAHP sounded a plaintive note, suggesting that the tame process of developing voluntary guidelines for health plans now threatens to become a serious attempt to reassert the Federal role in regulating health care.

A recent speech by President Clinton hinted at this agenda. Although he pledged that he would not impose new Federal regulations on health care, he complained that the switch to managed care - even though encouraged by Administration policies on Medicaid waivers - failed to achieve adequate "standards and consumer protections." It is possible, though, that the Administration will allow itself to be "pushed" into a more active regulatory posture. If so, the long-term care industry might find itself in a poor position to push back.