General Accounting Office (GAO),

According to a recent report by the General Accounting Office (GAO), physical and sexual abuse of nursing home residents often goes unreported to the authorities and is rarely prosecuted. The three-state investigation also uncovered gaps in state and federal rules intended to protect nursing home residents from medicaid abuse.

According to the report, registries designed to keep abusers out of nursing homes are not consistently updated. And since there is no national registry, nursing homes that conduct checks in one state might unsuspectingly hire an individual who has been fired from nursing homes for abuse in other states.

The report recommended that CMS assess the usefulness of the state registries. Also, the GAO suggested CMS finish implementing an education effort that began over three years ago to encourage nursing home employees to report abuse.

The American Healthcare Association endorsed the recommendations, and stressed that only 2.21% of about 17,000 nursing homes nationwide were cited for patient abuse in 2001. Reported cases have declined over the last three years.medicare

Source:Reuters 3-4-2002

National Notes

Medicare Improper Payment Rates Declined in 2001

Date:3/1/2002

The Department of Health and Human Services (HHS) has reported that the rate of improper Medicare payments continued to decline last year. The improper payment rate, which estimates the portion of Medicare fee-for-service payments that do not comply with Medicare laws and regulations, was 6.3% in 2001, compared with 6.8% in 2000. This is less than half the 13.8% estimated in 1996, the first year HHS calculated the rate.

Improper payments include:

“Medically unnecessary” services—usually cases in which medical reviewers determined that the beneficiary’s condition did not warrant inpatient hospital care;

Documentation deficiencies—instances where medical records were insufficient to support claims;

Miscoding—services found to be coded for a higher level of care than was supported by medical records

The FY 2003 budget proposal President Bush recently sent to Congress includes $591 in new tax cuts over 10 years. He proposes making various tax cuts enacted under the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) permanent, including the estate tax repeal. This would increase the cost of EGTRRA from $1.35 trillion over ten years to $1.48 trillion.

The President’s budget also includes other tax proposals that the Administration introduced last year as measures of economic stimulation. These include

acceleration of EGTRRA’s reduction in individual marginal tax rates;

tax refunds to lower- and moderate-income families and individuals;

a refundable healthcare tax credit;

refundable education tax credits;

and others.

The total cost of the economic recovery plans are estimated at $591 billion over ten years, and the budget would result in a federal deficit of $80 billion. Democrats said there were parts of the budget they would support, but some called it a “setback” and a “sore disappointment.”

Source:tax.cchgroup.com 2-5-2002

National Notes

States Joining Front Lines in Enron Class Action

Date:2/1/2002

As most of you know, the collapse of Enron has wiped out at least $1 billion in retirement funds. Those affected include not only employees of Enron, but also teachers, firefighters, and other public employees. Some states are now joining a class-action lawsuit to get some of that money back.

The attorneys general in Georgia, Ohio, and Washington have asked a Texas federal court to name them as lead plaintiffs in investors’ securities fraud litigation already underway. Others are also seeking to lead the class-action lawsuit, including pension agencies in New York, Florida, and California.

Source:Washington Post 1-18-2002

National Notes

The Death of a Loophole

Date:1/25/2002

HHS has announced that it will further restrict the use of the Medicaid loophole that allows states to receive inflated federal matching funds by making excessive payments to hospitals and then requiring the hospitals to return the excess money to the state.

The announcement completes changes proposed in November 2001 that limited use of the loophole by allowing states to make overall payments to local government-owned or -operated hospitals of up to 150% of the estimated amount that would be paid under Medicare for the same services. The new changes will limit such payments to 100% of estimated Medicare payments, which is the limit for all other hospitals.

States will be able to phase in the changes under previously approved transitions that continue until 2008 in some states.

Source:HHS Press Release 1-17-2002

National Notes

Healthcare Spending Still on the Rise

Date:1/11/2002

Healthcare spending in the U.S. rose to $1.3 trillion in 2000, a 6.9% increase over the previous year, according to a report by the Centers for Medicare & Medicaid Services (CMS).

The increase for 2000 was the highest annual increase recorded since 1993, when spending rose by 7.4%. Healthcare spending averaged $4,637 per person in 2000, compared to $4,377 in 1999.

Spending for prescription drugs once again led in the pace of growth in 2000, although at a slower rate than in recent years. Drug spending increased by 17.3% to a total of $121.8 billion in 2000, compared to 19.2% to a total of $103.9 billion in 1999.

Nursing home expenditures, which had been trending downward since 1995, rose by 3.3% in 2000. Spending for freestanding home health services increased by 0.3% in 2000, after five years of declining growth and actual declines in 1998 and 1999.

Spending for Medicare was $224 billion, an increase of 5.6%. Medicare accounted for 38% of public spending on healthcare and 17% of overall health spending. Increases in Medicare spending were attributed largely to changes in provider payments.