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HCFA vs. HMO, or "Welcome to the Twilight Zone." (Health Care Financing Administration and health maintenance organization)

Nursing homes are caught in the middle

Picture this if you will. The time is the present. The battleground is a skilled nursing facility. The combatants, the Health Care Financing Administration's (HCFA's) minions of Federal and state survey authorities versus the health maintenance organization's (HMO's) hordes of case managers and cost accountants. They are engaged in an endless war over control of nursing home care.

Each has a clear mission, and neither will give ground to its perceived adversary. The HMO, to be victorious, must achieve maximum cost savings under its Medicare Risk Contract. It can do so only if it is able to reduce individual inpatient subacute stays through the establishment of predetermined lengths of stay and managed care plans. HCFA's mission, on the other hand, is to protect the nursing home resident's rights to self-direction, the impact on costs not-withstanding.

It is a war being waged in almost inaccessible offices by adversaries who rarely, if ever, meet and who view their goals as mutually exclusive. It is a war between payers and regulators which started with the passage of the 1987 Omnibus Reconciliation Act (OBRA) and escalated with the introduction of Medicare Risk products to nursing home patients by HMOs. It is a war that will probably continue as long as nursing homes are certified under federal OBRA regulations and HMOs are allowed to operate Medicare Risk plans without regard to regulations that affect a nursing home resident's rights or nursing care.

It is an unusual war, however, in that the only casualties will be the hapless individuals in the middle, those who require nursing home care. HCFA defines them as long-term care "residents," and the HMO, as subacute "patients." One group or another will be forced into submission by combatants using Federal certification regulations or payer requirements as weapons.

Do not adjust your television sets. There is definitely something wrong with this picture. You have entered that surreal space between resident rights and patient care. You have entered the Twilight Zone.

You're in good company there, too. In addition to owning two nursing homes, I am a social service consultant to 34 nursing homes in Connecticut. I am always being asked by nursing home staff, especially social workers and nurses, whether a nursing home can order a resident to participate in treatment programs, and whether the nursing home has a right to discharge a resident who refuses to be discharged. These are not hypothetical questions.

I have encountered large numbers of subacute care patients who decided that they liked a nursing home enough that they no longer wanted to leave. Many of these individuals give up their interest in active rehabilitation; many did not have the interest in the first place. For them, the nursing home - though it may not be ideal - provides a nurturing environment that they cannot find anywhere else.

In my own facility two elderly women who were admitted for rehabilitation following hip replacements simply decided that rehab was too tiring, even though they were progressing well. They stopped going to rehab, and their HMOs stopped paying for their care. Neither wished to leave the Medicare Unit, though, because they liked their rooms, roommates and unit staff. Their families agreed, and one even retained counsel to ensure that no transfer or discharge took place. As for the other woman, the state ombudsman weighed in on her side. Even though the situation was eventually resolved amicably, it appeared for a while that neither woman could be moved - at least, not without issuance of a 30-day transfer notice and a complicated, lengthy and often unpleasant discharge process.

How did this strange situation come about? It dates back to the passage of OBRA,[1] landmark Federal legislation that changed nursing homes from settings in which patients' treatments were primarily staff-directed to settings in which residents are allowed to direct their healthcare planning and preferences. Born out of a "growing number of reports of substandard nursing home care and the threat of a decreasing federal role in oversight,"[2] the Institute of Medicine (IOM) issued a study in which it recommended sweeping reforms, thus paving the way for the passage of OBRA.[3]

A cornerstone of OBRA regulations is the Resident Bill of Rights, which defines nursing home occupants as "residents"[4] who have the right to participate in their plan of care and refuse treatments, medications and schedules that are unacceptable to them.[5] By defining nursing home occupants as residents, OBRA mandates, through its Resident Bill of Rights, that such residents must be accorded the right to almost total self-direction in healthcare choices, regardless of their outcomes.

During these same years emerged the first Medicare-Risk HMOs, some of which ventured into managing nursing-home-based subacute care. These organizations neither refer to nor appear to recognize nursing home occupants as residents.[6] The HMO treats nursing home residents as "patients" who must conform to healthcare plan goals and directives that have been established by the HMO's healthcare professionals.

Both OBRA and HMOs use "care plans" - but the cornerstone of the HMO care plan is often the "critical pathway," a predetermined course of treatment in which interim goals and time frames for achievement are established for patients by case managers who are coordinating the care.[7] The critical pathway is usually established in conjunction with an HMO's healthcare coverage parameters and is defined within the HMO's risk contract with a provider.

The critical pathway, individualized to the patient prior to or at the time of admission, is predicated on the patient's willingness to participate in the treatment process described. If a patient chooses for any reason not to participate in the treatment, the length of subacute stay is usually not increased by the HMO. Conversely, if a resident is forced to participate in a treatment process, the nursing home may be subject to penalties for violating OBRA's Resident Bill of Rights.

In short, this conflict deals basically with the question of who should optimally control care. It raises the issue of whether nursing home occupants should be allowed total self-direction in their healthcare choices, regardless of outcome, or whether care should be directed by professionals who, by virtue of their training, know more about the occupant's healthcare needs than the occupant.

The ideal answer - and probable resolution - to this conflict is to define the nursing home occupant as both patient and resident. As patients, they must be viewed as in need of professional direction, but they must also be viewed as residents having opinions and choices that must be valued and considered.

Resolution of the conflict by the combatants is unlikely to occur, however, because they have vested adversarial interests. Resolution can only be achieved by those who control day-to-day "battlefield" operations, i.e., the nursing home providers.

Providers must educate their staffs to, in turn, educate nursing home occupants about the benefits and necessity of professional management of their individual care plans. The goal is to motivate occupants to allow the implementation of their care plan directives, even if they don't totally agree with all processes involved. Such cooperation can only be achieved if the patients/residents trust their caregivers and if the caregivers respect them. Trust must be earned; respect must be taught.

Nurses, nurse aides and other direct and indirect caregivers must learn how to help the resident to become a "productive" patient, because it is in the resident's best interest to do so. Residents must be tactfully, openly and repeatedly encouraged (not forced) to participate in their care plans and treatments, unless their reasons against doing so are truly mitigating. Residents should be encouraged to try a therapy and be praised for their efforts in doing so, even if their efforts do not meet their care plan goals. The care plan may require modification, but whether or not it is modified, it should be seen as an important factor in their lives. The care plan is the tool the HMO will use to gauge a patient's progress toward ending care - or, more to the point, whether and to what extent covered benefits should be continued.

The "warfare" between HCFA and HMO is growing in importance to nursing homes, as they encounter the Medicare Prospective Payment System and other pressures to manage costs and acuity levels. Many have already seen Medicare benefits increasingly limited by those HMOs that have been allowed to manage them.[8] While Medicare coverage has never been granted to individuals who do not meet Medicare eligibility requirements, it is now becoming unavailable to those who may be eligible, but choose not to follow the HMO's predetermined care plan or treatment options. This can only lead to the premature termination of benefits, and a perceptual shift of the nursing home occupant from the role of patient to resident.

This can also signal the beginning of a nightmare both for nursing home occupants and managers who, regardless of the definitions used, must worry about what happens next. It would appear that any hope of escape from the Twilight Zone rests with enlightened providers.


1. 1987 Nursing Home Reform Act Provisions of OBRA Regulations Governing Patient Care Requirements and Resident Rights. (1989, February 2). Medicare and Medicaid Requirements for Long-Term Care Facilities, 54 F.R. 5316, (1990, March 20). F.R. 10256.

2. Shield RR. Managing the Care of Nursing Home Residents: The Challenge of Integration. In: Newcomer RJ., Wilkinson AM (eds). Annual Review of Gerontology and Geriatrics 1996;16:62.

3. Shield: 62.

4. Federal Register/Vol. 54, No. 21/Thursday, February 2, 1989/Rules and Regulations: 5319.

5. Ronai, SE, Esq., et al. OBRA Regulations Governing Patient Care Requirements and Residents' Rights, Interpretive Guidelines and Instructions to Surveyors, Together with the Nursing Home Regulations of the Connecticut Public Health Code and Other Relevant Connecticut Law, An Integrated Outline for Long-Term Care Providers, June 1990.

6. Dickstein HW. Subacute Care in Nursing Homes: Issues and Solutions. Hartford, 1997.

7. Hicks PL, Frattali C. Subacute Outcome Measurement and Critical Paths Development and Use. In: Griffen K (ed). Handbook of Subacute Care. Gaithersburg: Aspen, 1995.

8. Kongstvedt PR. The Managed Health Care Handbook, 2nd ed. Gaithersburg: Aspen, 1993.

Howard W. Dickstein, PhD, is owner of two subacute care facilities, Crestfield Rehabilitation Center and Fenwood Manor, both in Connecticut. Active in health care since 1965, he has a doctorate in healthcare administration and master's in social work and education.
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Author:Dickstein, Howard W.
Publication:Nursing Homes
Date:Apr 1, 1998
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