Despite what HCFA told you, home care still is entitled to fair treatment
Ever hear of Regulatory Enforcement Fairness Act? Get acquainted
It sounds unlikely that something with a title as long-winded as "The Small Business Regulatory Enforcement Fairness Act of 1996" could simplify federal regulations, but the new law may be the best way for home health providers to battle one of the biggest federal regulators of them all - the Health Care Financing Administration (HCFA).
Granted, Congress is the same august bunch that passed the Balanced Budget Act (BBA), but the Regulatory Enforcement Fairness Act (that's its short title) has the potential to ease the burden of some of the BBA's provisions, says health care attorney John C. Gilliland II.
Designed to foster a regulatory environment that is more responsive to small business, the law will let federal agencies know the full impact of their enforcement and compliance policies on small businesses. And, says Gilliland, home health agencies are small businesses.
"I was sitting here in my office in Cincinnati one day, drinking coffee and staring out the window, commiserating with home health agencies about what they were going through, and it came to me - these are small businesses!" Gilliland says.
That little epiphany led Gilliland to search the Internet for the Small Business Association's (SBA) Web page, and what he found was even more exciting. Not only had Congress created the act in 1996, but it had also given the SBA administrator the authority to appoint a National Ombudsman and 10 regional regulatory fairness boards. The result was the Regulatory Fairness Program (RegFair). SBA administrator Aida Alvarez has made the implementation of RegFair a key part of the SBA's strategic plan.
Last November, the SBA administrator appointed former Congressman Peter Barca as National Ombudsman. The ombudsman's office is located in Chicago. Alvarez also appointed 50 small business owners to serve as regional Regulatory Fairness Board members. By February 1998, the Regulatory Fairness Boards had been chartered, thus creating the basic tools of the program.
"What concerns me with home care," Gilliland explains, "is there's no counterbalance to HCFA. All this stuff, like the surety bond debacle and everything else, has been going on without anyone in power saying, 'Hey, wait a minute!' There's the perception of fraud, and HCFA has been running wild on that. As a lawyer, I am distraught over the lack of due process and how agencies are jerked around by fiscal intermediaries. There's an incredible denial of due process.
"People don't think of home health agencies as small businesses, but they are, and they have problems with unfair enforcement of regulations by HCFA."
The size standards as defined by the SBA are expressed either in number of employees or annual receipts in millions of dollars, unless otherwise specified, according to the Federal Register (vol. 61, Jan. 31, 1996, p. 3,289). To qualify as a small business, home health agencies' annual receipts cannot exceed $5 million, which must be an average of three years' worth of revenues. The number of employee standards, however, does not apply to home health, the SBA says.
Although many hospital-based agencies will exceed the $5 million revenue limit, many freestanding agencies, particularly those making 40,000 or fewer annual visits, would qualify. The SBA says that some home care agencies affiliated with hospitals may qualify depending on the agency's ownership and independence. "Most would be considered affiliated with the hospital, but there could be some relationships that would be considered as small businesses," says Gary Jackson, assistant administrator for the SBA's office of size standards in Washington, DC.
Gilliland has concluded that "not-for-profit hospital based agencies can submit these reports. And VNAs are small businesses. In their comments to the first set of surety bond regulations, HCFA said there were 9,444 Medicare-certified home health agencies, and approximately 1,080 are nonprofit. All but 150 were reimbursed less than $5 million."
Gilliland notes that these are HCFA's own statistics published in Federal Register in the surety bond final rule.1 HCFA is required by law to assess a regulation's impact on small businesses.
"The regs said there was not going to be any impact here. HCFA was thinking the bond premiums would be 10 bucks a thousand. What a joke!"
For nonprofit entities to be considered small businesses, the key is whether the agency is independently owned and operated and not dominant in its field. Government entities are considered small entities if they are governments of a city, county, town, township, village, school district, or special district with a population of less than 50,000, Gilliland says.
The SBA's Jackson explains that relationships between hospitals and agencies will be considered on a case-by-case basis.Just what's in it for you, anyway?
Although complaining about regulatory unfairness will not force overnight change, it will begin a data-collecting process that will prove valuable in the future, Gilliland says. So far, the SBA ombudsman has heard mostly complaints about the Internal Revenue Service and the Environmental Protection Agency. But given enough time, home health agencies would be able to fill an impressive file with complaints about HCFA.
"Agencies should submit reports when they encounter what they think are unfair practices, for example, dealing with intermediaries. This extends to state surveyors when they are serving on behalf of HCFA. Anything like that. There are a lot of claims denials," Gilliland says, "but no meaningful appeals process. By submitting reports, agencies can build up a database for the SBA, which the SBA can then bring to Congress's attention. If the SBA concludes there is a problem - and I think they will - this can be a counterweight to HCFA. That's the value of the SBA."
The SBA ombudsman does not intervene in cases, but the ombudsman does make an annual report to Congress, Gilliland points out.
His plan is gaining support. Gilliland approached attendees at the National Asso- ciation for Home Care's March policy conference in Washington, DC, with the idea, and most reacted enthusiastically. "I think it's fantastic," says Ann Howard, executive director of the American Federation of Home Health Agencies in Silver Spring, MD. "It's a way to change the system to compile a case against HCFA for arbitrary treatment of home health agencies."
Cathy Frasca, RN, BSN, FACHCA, vice president of home health services for South Hills Health System in Homestead, PA, also liked the idea. "I think that's a great approach. We can use any approach. In Pennsylvania, there's a group of women who own home health agencies, and they're preparing a minority-type lawsuit. They're looking for anything to get the government's attention."A chance to speak at hearings
Public hearings also are held to discuss particularly nettlesome regulatory problems. All comments received from small businesses will be reflected in the ombudsman's annual report to Congress. Providers are encouraged by the SBA ombudsman's office to attend these hearings and speak out. " Anybody can give testimony on federal regulation," says Susan Kramer, program coordinator for the ombudsman's office in Chicago. "We do encourage home health providers to come."
If you wish to testify at a hearing, contact the national ombudsman's office at (312) 353-0880. (See schedule of hearings, inserted in this issue.)
Gilliland explains that the SBA ombudsman's office is enthusiastic because officials are eager to get the word out about their new program. "While talking with Susan Kramer in the Ombudsman's office," he says, "I kept thinking, 'Gee, if this had been done two years ago, I wonder if we'd be encountering some of the problems we are now?'"
Not surprisingly, a senior HCFA official contacted recently about the SBA approach, called it "a long shot." The official may be right. But given the reluctance of Congress to tinker with the Balanced Budget Act and the tight regulatory grip HCFA now has on home care, has anyone come up with a better idea?
[Editor's Note: If you would like to know if your hospital-affiliated or system-affiliated agency qualifies as a small business, call either Jackson at (202) 205-6618 or Linda Flagg, size standard program manager, at (202) 205-6475 for clarification.]Reference
1. 63 Fed Reg 307-308 (Jan. 5, 1998).