Subject:
             Proposed PA Legislation governing Tobacco-$$$ Expenditures
        Date:
             Mon, 17 Jan 2000 08:04:47 -0800
       From:
             "Robert B. Sklaroff, MD" <rsklaroff@home.com>
 Organization:
             @Home Network
 
 
 

Many of you have not received prior e-mail from me, and you should feel
free to explore issues other than those that are tobacco-related (e.g.,
Physician Unionization and the Blues Monopoly) by double-clicking my
name at the end of this memo, to enter my Web-site.

This document is being distributed to anyone/everyone who has expressed
a modicum of interest in this effort (even if said-conversation may have
become a remote memory).  Those who have positions in key organizations
are also being provided the opportunity to critique this work, inasmuch
as I view it as having the potential to be applied nationally.  I
recognize that some of you may have met me only once, but please
consider this an effort to be inclusive rather than intrusive.
Obviously, if there is anyone else with whom you feel you would like to
share this proposal, please do so and encourage that individual to
respond directly to me, so that he/she may be added to my distribution
list.

I have limited distribution to those with e-mail addresses (among
attendees of various coalition meetings I've attended) to facilitate
receipt of responses.  Although there is a desire to violate my policy
of sending it "blind" because it may be desirable for others listed
herein to exchange ideas among each other longitudinally regarding this
issue, I have chosen to maintain everyone's anonymity.

Recipients include individuals with primary interests both in the
tobacco control and health care delivery "worlds," and I recognize that
some facets thereof may be more attractive to members of one or the
group.  Nevertheless, ultimately, a synthesized piece of legislation
must be promulgated.

I recognize that some may view this as having been generated "late in
the game," but it is to be floated before the Governor's Budget Address
(and before final MSA approval, noting my plan to file a U.S. Supreme
Court Appeal within a month).  It also represents both a strategic
retreat from some ideas that have been presented (e.g., creating a new
"uncompensated care" bureaucracy) and it includes a "sexy" concept (the
Health Care Quality Council) that could resonate well among the public.

Furthermore, it is intended to ensure the MSA-$$$ isn't diverted by
hospitals from funding the underserved, and it provides a mechanism for
researchers to covet receipt of funding (through the Tobacco Control
Council).  Politically, it appears to eschew many potentially-potent
stakeholders (a departure from the Governor's approach of overwhelming
efforts to invite even the most tangential organizations to think-tank
meetings), but it may be viewed as a purist starting-point (derivative
directly from the MSA) upon which others may then justify superimposing
their ideas.

All philosophical viewpoints have been mainstreamed and all language can
be justified ethically (beyond the 20 findings-of-fact that constitute
Section 2); providing a detailed commentary would be unwieldy, but the
rationale for deleting many definitions, for example, was based on the
desire to streamline the overall document without creating ambiguity.
Yet, no effort was made to insert stealth-phraseology that could
reflexly alienate definable viewpoints (such as creating a definition of
medical necessity that the Health Care Quality Council might invoke, a
key ongoing bone-in-the-craw with regard to Act 68).  Information was
conveyed in as much matter-of-fact lingo as could be lifted from other
models.

I have identified certain legislators who could submit such legislation
as is reflected by this document in a bipartisan fashion to both Houses,
but a certain level of organizational "consensus development" should
first occur.  I argue that adding it to the legislative "hopper" could
help "move-the-marble" towards a desirable endpoint (such as complying
with CDC Guidelines), particularly because no other proposal has been
yet introduced that encompasses many of the concepts emphasized herein.

Thus, this represents a synthesis of concepts that will soon be
published as part of an op-ed piece in the Inky and that are fleshed-out
on my Web-Site.

THIS IS A FIRST-DRAFT AND REPRESENTS NO ONE ELSE'S INPUT BUT MY OWN.

Nevertheless, I hope to receive PROMPT CRITIQUE so that I can present it
(starting in 48 hours) to various interested parties (seeking approval).

*

The Rationale for this Proposal has been detailed elsewhere.
Essentially, it is drawn from a number of bills that call for the
establishment of a Health Care Ombudsman and that call for use of
Tobacco Settlement Money to assist low-income individuals [e.g., HB 511,
HB 2125 and SB 75 (Session of 1999)].  The Text of Act 68 is not readily
available, nor are the Rules and Regulations generated therefrom; this
is why a generic suggestion has been made regarding how this document is
to be implemented within that context.    Because naming the governing
entity after one of these bills (a "Health Care Coordinating Council")
could cause confusion with the Health Care Cost-Containment Council, the
word "Quality" has been invoked.  And because this Council must be
empowered to function within a solitary administrative department, the
Health Department has been invoked to assume responsibility for overall
coordination of its activities. Also, inasmuch as this Proposal will
require revision (invoking, for example, the recent legislation passed
in Philadelphia-but vetoed by Mayor Rendell-calling for creation of a
Health Care Advocate), its level of detail belies the fact that it
should best be viewed as a First Draft implementing the following
concepts:

1. The creation of a user-friendly system for the assessment of health
care quality concerns.
2. The creation of a fund devoted exclusively to Medicaid-related health
care expenses.
3. The creation of a fund devoted exclusively to Tobacco Control
programs.
4. The creation of an administrative infrastructure that encompasses
these concerns and ensures they are mainstreamed throughout governmental
and non-governmental health care delivery structures.

*

PRINTER'S NO. ---

THE GENERAL ASSEMBLY/SENATE OF PENNSYLVANIA

HOUSE/SENATE BILL

No. --- Session of 2000

INTRODUCED BY ---, [date]

REFERRED TO [HOUSE] COMMITTEE ON HEALTH AND HUMAN SERVICES,
REFERRED TO [SENATE] HEALTH AND WELFARE COMMITTEE,
[date]

AN ACT

Providing for appropriating Tobacco Settlement Monies towards the
establishment of a Health Care Quality Council, the financing of
Medicaid-associated expenditures, the financing of a Tobacco Control
Program; and imposing additional powers and duties on the Department of
Health, the Insurance Department and the Department of Public Welfare.

Section 1.      Short title
Section 2.      Legislative findings
Section 3.      Definitions
Section 4.      Health Care Quality Council
Section 5.      Tobacco Control Council
Section 6.      Medicaid-Supplement Council
Section 7.      Expenditure of Commonwealth Funds
Section 8.      Administration
Section 9.      Duties of Providers
Section 10.     Audits
Section 11.     Waiver Request
Section 12.     Reports
Section 13.     Effective Date

The General Assembly of the Commonwealth of Pennsylvania hereby enacts
as follows:

Section 1.  Short title.
This act shall be known and may be cited as the "Health Care Quality
Council Act."

Section 2.  Legislative findings.
The General Assembly finds that:
(1) There is an urgent need to ensure Pennsylvanians continue to receive
the highest-quality health care.
(2) This goal necessitates constant reassessment of the performance of
all participants in the health care delivery system through a
user-friendly process that acquires and processes relevant information.
(3) All patients and providers must be empowered to become involved
productively in this process.
(4) The availability of Tobacco Settlement monies provides an
opportunity to fund such a program, inasmuch as tobacco use remains the
major preventable cause of disease, disability and death.
(5) Tobacco Settlement monies were generated based upon Medicaid
expenditures for tobacco-related illnesses, and this fact must control
decisions regarding how they are to be budgeted.
(6) If utilized wisely, tobacco use will decline commensurate with the
need for future disbursement of Tobacco settlement monies; thus, there
is no need to retain an annual tithe to preclude shortfalls.
(7) It is difficult to distinguish all health care expenditures devoted
solely to a tobacco-related illness from those devoted to the
maintenance of overall health; thus, deferring any effort to
differentiate these categories of costs will preclude creation of an
unnecessary and unwieldy bureaucracy.
(8) The Centers for Disease Control and Prevention has promulgated a
"Best Practices" program that would consume 25% of the Tobacco Monies,
and implementing this program would satisfy the goals of that component
of the Tobacco Settlement devoted exclusively to Tobacco Control
activities.
(9) Providers provide more than a billion dollars of uncompensated care
annually, and this figure can be anticipated to rise as the incidence of
tobacco-related illness (caused by increase tobacco use among teenagers)
continues to increase; for example, hospitals provided over $704,000,000
in uncompensated care in 1998, a figure that has risen over 5% annually
during the past decade.
(10) Uncompensated care is clearly related to the ability of patients to
pay for care, ascribable both to low income and lack of insurance
coverage; currently, nearly one of every ten Pennsylvanians does not
have health insurance coverage, a figure that has also risen over the
past five years.
(11) Reliable data in Pennsylvania on the geographic and demographic
distribution of the uninsured are lacking; thus, surrogates have been
used (e.g., income, unemployment, and Medicaid enrollment data).
(12) Pennsylvania's Medicaid program currently provides payments to
assist some hospitals with the costs of providing uncompensated care for
low-income and uninsured patients; the three basic funding streams under
Medicaid invoked for this purpose include inpatient disproportionate
share payments, outpatient disproportionate share payments and community
access fund provider payments.
(13) Of this Commonwealth's 254 acute care hospitals, 128 received about
$304,000,000 through these three programs in 1998, with the Federal
government providing slightly more than did the state; this covered
about 56% of the reported cost of uncompensated care at those hospitals
receiving assistance.
(14) Pennsylvania does not have a public hospital system to provide
charity care; in those states that do run public hospitals,
uncompensated care represents about one-third of the total costs for
those facilities.
(15) Tobacco Settlement monies (initially, approximately $400,000,000
annually) can be used to supplement State Medicaid spending; monies
channeled through the Medicaid program would be matched with Federal
funds, thus doubling their potential impact when expended in this
fashion.
(16) To qualify as an "institution of purely public charity" under the
act of November 26, 1997 (P.L.508, No.55), known as the Institutions of
Purely Public Charity Act, an institution must (among other things)
provide uncompensated goods and services equal to 3% or more of its
total operating expenses.
(17) Providing compensation to providers bearing a significant financial
burden from uncompensated care permits their continued viability and
continued access to care for the medically indigent and uninsured.
(18) Providing such compensation also motivates them to seek the
opportunity to treat these needy patients.
(19) Organizations already exist (e.g. the National Institutes of
Health) that are charged with ensuring ensure adequate funding is
provided to other facets of health care delivery (e.g., research);
therefore, Tobacco Settlement monies must be directed towards such
pursuits to the extent to which these entities are funded for activities
encompassed by the Medicaid-Supplement and Tobacco Control Councils.
(20) It is unnecessary to create a new bureaucracy to govern the
expenditure of Tobacco Settlement monies, noting the competence of
existing entities within the administrative structures of the
Commonwealth.

Section 3.  Definitions.
The following words and phrases when used in this act shall have the
meanings given to them in this section unless the context clearly
indicates otherwise:
--"CDC."  The Centers for Disease Control and Prevention.
--"Disproportionate share payment."  {"DiSh"} A payment made to a
qualifying hospital that serves high volumes or large numbers of
Medicaid and Medically Indigent patients under the Pennsylvania Medicaid
program, including matching funds made available by the Federal
Government pursuant to Title XIX of the Social Security Act (49 Stat.
620, U.S.C. § 301 et seq.); the term shall include any payments made to
hospitals for inpatient disproportionate share, outpatient
disproportionate share and community access on or before the effective
date of this act.
--"Hospital."  An institution having an organized medical staff licensed
by the Commonwealth to provide diagnostic and/or therapeutic inpatient
medical care services, by or under the supervision of physicians.
--"Provider's service territory."  The geographic region used by the
Pennsylvania Health Care Cost Containment Council to determine the area
in which the preponderance of a provider's patient load resides;
determinations made with regard to hospitals may be invoked by other
providers in that region.
--"Medicaid."  The State-administered program operated under sections
443.1, 443.2 and 443.3 of the act of June 13, 1967 (P.L.31, No.21),
known as the Public Welfare Code.
--"Medically Indigent."  Low-income and moderate-income individuals who
either lack health insurance coverage or whose health insurance coverage
is insufficient to provide them with adequate coverage for the services
that they require or who are enrolled in or are eligible for enrollment
in the Medicaid program.
--"Tobacco Settlement Monies."  Payments derived from any damage award
or settlement resulting from litigation between the Commonwealth and
various defendant tobacco manufacturers
--"Uncompensated care."  Patient care for which a provider receives no
compensation, including the cost of providing free inpatient and
outpatient care to the medically indigent, the cost of delivering such
care to patients who do not pay some or all of their charity care and
other bad debt as defined by regulation of the Department of Public
Welfare; the term does not include the difference between negotiated or
contractual payments which are below usual and customary charges, other
discounts from charges, unpaid balance- billing of Medicaid patients or
the cost of community service programs, educational programs, outreach
programs and other special programs, nor does it include any overdue
Medicare or Medicaid payment owed by the Federal or State government of
any Medicare or Medicaid contractor.

Section 4.  Health Care Quality Council.
(a) The Health Care Quality Council shall be established to ensure
Pennsylvanians receive the highest quality of health care; it shall
develop, implement and administer this program within the Department of
Health, in cooperation with the Insurance Department and the Department
of Public Welfare.
(b) The Health Care Quality Council shall be comprised of fifteen (15)
voting members, three each appointed for two-year terms (to coincide
with the legislative sessions) by the Governor, Senate Majority Leader,
Senate Minority Leader, House Majority Leader and House Minority Leader;
the Physician General shall serve as Chair and the Secretaries of Health
and Public Welfare shall serve as ex officio members.
(c) The Health Care Quality Council shall invite input from both
patients and providers, and such input shall be accepted 24-hours-a-day,
seven-days-per-week either by-name or anonymously.
(d) Input shall be accepted through use of a toll-free telephone number
(maintained by a live operator),     a toll-free FAX number, a mailing
address, and an e-mail address.
(e) Following completion of its analysis of a given concern, the Health
Care Quality Council shall provide feedback both to the individual who
initiated the study and to all others who have been affected by it; the
Health Care Quality Council shall also refer the matter to appropriate
administrative entity(-ies) consistent with precedent and such statutes
as have previously been enacted (e.g., Act 68).
(f) The Health Care Quality Council shall not supplant the activities of
any other governmental entity.
(g) The Health Care Quality Council shall oversight the activities of
the Tobacco Control Council and the Medicaid-Supplement Council,
ensuring disbursement of Tobacco Settlement monies is consistent with
applicable statutes, precedents, rules & regulations, state & federal
laws, and judicial mandates.

Section 5.  Tobacco Control Council
(a) The Tobacco Control Council shall be established to ensure programs
intended to minimize tobacco use are maximally effective, coordinated,
non-duplicative and consistent with all national standards;    it shall
report regularly through the Health Care Quality Council and secondarily
to other governmental entities whenever it deems such direct
communication would expedite resolution of a given problem.
(b) The Tobacco Control Council shall be comprised of fifteen (15)
voting members, three each appointed for two-year terms (to coincide
with the legislative sessions) by the Governor, Senate Majority Leader,
Senate Minority Leader, House Majority Leader and House Minority Leader;
the Physician General shall serve as Chair and the Secretary of Health
shall serve as ex officio member.
(c) The Tobacco Control Council shall invite input from both patients
and providers, and such input shall be accepted 24-hours-a-day,
seven-days-per-week either by-name or anonymously.
(d) Input shall be accepted through use of a toll-free telephone number
(maintained by a live operator), a toll-free FAX number, a mailing
address, and an e-mail address.
(e) The Tobacco Control Council shall attempt to ensure monies are
expended in a fashion that is consistent with the CDC "Best Practices"
Guidelines, emphasizing prevention and treatment activities.

Section 6.  Medicaid-Supplement Council
(a) The Medicaid-Supplement Council shall be established to ensure
Medicaid providers are provided supplemental payments that are maximized
(e.g., through acquisition of Federal matching funds) and that are
disbursed so as to encourage optimal access-to-care for Medicaid
recipients; it shall report regularly through the Health Care Quality
Council and secondarily to other governmental entities whenever it deems
such direct communication would expedite resolution of a given problem.
(b) The Medicaid-Supplement Council shall be comprised of fifteen (15)
voting members, three each appointed for two-year terms (to coincide
with the legislative sessions) by the Governor, Senate Majority Leader,
Senate Minority Leader, House Majority Leader and House Minority Leader;
the Physician General shall serve as Chair and the Secretary of Public
Welfare shall serve as ex officio member.
(c) The Medicaid-Supplement Council shall invite input from both
patients and providers, and such input shall be accepted 24-hours-a-day,
seven-days-per-week either by-name or anonymously.
(d) Input shall be accepted through use of a toll-free telephone number
(maintained by a live operator), a toll-free FAX number, a mailing
address, and an e-mail address.
(e) The Medicaid-Supplement Council shall ensure monies are expended in
a fashion that is consistent with Disproportionate Share Guidelines used
to qualify for Federal Medicaid matching funds; any statute intended to
expand the qualifications of recipients of such monies (e.g., to
Medically Indigent patients and/or providers) shall be drawn from a
sequestered fund, if necessary, to ensure the capacity to obtain such
matching funds is not compromised.

Section 7.  Expenditure of Commonwealth Funds
(a) Allocation.--Annually the State Treasurer shall set aside Tobacco
Settlement Monies.
(b) Appropriation.--All funds set aside under subsection (a) shall be
deposited on a continuing basis in Funds administered by the Departments
of Health and Public Welfare as restricted-receipt accounts to implement
the provisions of this act.
(c) These monies shall be disbursed to Funds administered through the
aforementioned Councils by application of the following formula:  74% to
the Medicaid-Supplement Council, 25% to the Tobacco Control Council, and
1% to the Health Care Quality Council.
(d) Beginning in the State fiscal year starting July 1, 2000,
Disproportionate Share payments shall be deposited into the
Medicaid-Supplement Fund; the initial amount deposited shall be equal to
the sum of all Disproportionate Share payments made in the State fiscal
year beginning July 1, 1999, or the year beginning July 1, 1998
(whichever is greater) times 1.025, plus the appropriate Federal match
for that amount.
(e) These Monies shall not be employed to offset previously-established
levels of funding through the General Fund until/unless a specific
finding has been legislatively that the need for such funding has been
determined to have decreased; thus, the General Assembly shall annually
deposit an amount equal to or greater than the amount deposited during
the prior year, plus the appropriate Federal match.
(f) Monies from other sources shall be deposited into these Funds as
received and at the determination of the appropriate Council(s); these
may be derived from voluntary contributions by other payers, from
Federal matching funds, from grants, and from fines levied against those
who have violated state law.

Section 8.  Administration
(a) The Departments of Health, Public Welfare and Insurance shall
promulgate all rules and regulations necessary to implement the
provisions of this act; pursuant thereof, they shall develop and use
such forms, records and procedures as deemed necessary.
(b) The Department of Public Welfare shall have the following additional
powers and duties:
(1)  In conjunction with the Medicaid-Supplement Council, adopt in
regulation and use an allocation formula to distribute monies from the
Fund to qualifying providers; this formula shall include the following
factors:
(i)  The volume and percentage of inpatient Medicaid patient visits
compared to total visits.
(ii)  The volume and percentage of outpatient encounters covered by
Medicaid compared to total outpatient encounters.
(iii)  The percentage of households in the provider's service territory
at or below the Federal poverty level.
(iv)  The annual unemployment rate in the provider's service territory.
(v)  The provider's audited uncompensated care costs compared to the
provider's net patient revenue.
(2) Develop a definition and accounting methodology for use by the
providers in determining Medicaid-related and uncompensated care levels.
(3) Recoup funds from providers that may have been overpaid for
Medicaid-related medical care.
(4) Deny payment to any provider that fraudulently accepts payment under
this act.
(5) Levy financial penalties and withhold in full or in part payments to
providers that fail to meet their obligations under this act.

Section 9.  Duties of Providers.
(a)  Financial statement.--Providers shall annually provide the
department, within 120 days of the completion of its fiscal year, a
statement as to the level of Medicaid-financed and uncompensated care to
the Medically Indigent Population they have provided.
(b)  Other requirements.--Qualifying providers that receive payments
from the fund shall:
(1)  Accept patients regardless of their ability to pay.
(2)  Be enrolled as Medicaid providers.
(3)  Agree not to balance-bill Medicaid patients or other patients whose
household income is at or below 185% of the Federal poverty level.
(4)  Submit a plan to the department for its approval that would assess
the ability of low-income individuals, Medicaid beneficiaries and the
uninsured residing in that provider's service territory to access
outpatient services; the plan must include a description of how that
provider intends to ensure the broadest possible access to outpatient
care and preventative services.
(5)  Make a good faith effort to determine if patients have health
insurance coverage, and to file timely and complete claims to secure
payment for services rendered.
(6)  Fulfill any other obligations imposed on providers receiving
Disproportionate Share payments pursuant to Federal or State law and
regulation.

Section 10.  Audits.
(a) Departmental.--The Public Welfare Department may audit the records
of any provider receiving payments under this act to disapprove the
allowance of any Medicaid-related or uncompensated care amount, to
determine the reasonableness of any data used in calculating the
allocation and distribution system, and otherwise to ensure compliance
with this act; the Public Welfare Department shall have the authority to
order an independent performance audit of the claims management, billing
and collection processes of any provider receiving payments from the
fund.
(b)  Auditor General.--The Auditor General may audit the records of any
provider to determine compliance with this act, ensuring the
satisfaction of both performance and fiscal responsibilities; the
Auditor General shall periodically conduct a random audit of the
uncompensated care of a select sample of providers and provide the
General Assembly and the Public Welfare Department a report on the
results of such audits.

Section 11.  Waiver request.
Were such an action to be determined to enhance the amount of money in
the Medicaid-Supplement Fund and yield a more efficient administrative
structure, the Commonwealth (through the Health and Public Welfare
Departments and in cooperation with representatives of the hospital
industry) shall apply to the Federal Health Care Financing Agency to
request a waiver that would allow Medicare Disproportionate Share
payments made to Commonwealth hospitals to be deposited into the
Medicaid-Supplement Fund; any monies generated in this fashion would be
earmarked exclusively for disbursement back to hospitals

Section 12.  Reports.
(a) The Health Care Quality Council shall issue an annual report to the
General Assembly, encompassing both its activities and those of the two
Councils reporting through it; these reports shall include a summary of
the input logs maintained by all three entities, plus how the problems
raised were resolved.
(b) The Tobacco Control Council shall include in its report detailed
information regarding the use of and fiscal impact of tobacco products,
including specific information regarding youth access thereto.
(c) The Medicaid-Supplement Council shall include in its report the
following information:
(1)  The name, address and amount of Medicaid-related and uncompensated
care provided by each provider in this Commonwealth.
(2)  The amount paid to each qualifying provider from the Fund.
(3)  Deposits into and disbursements from the Fund.

Section 13.  Effective date.
This act shall take effect on July 1, 2000.