Areas of Examination

The SPARCS Database and Governor Carey

DRGs-(Diagnostic Related Groups)

HCFA-Federal Deeming Waiver for Parental Income

Aid to Families with Dependent Children and the

Surgeons Generals Workshop of 1982

The Demise of the Nursing

The Use of Glassers Meta-Analysis as a Decision-Making Tool

PROBLEM:

Ineffective Peer Review within the States

Coverup of a Functional Government Reporting System

Accountability of the Controlling Authorities

Systems Design by Untrained Individuals

BACKGROUND

Samuel Johnson the 18th Century English Author once stated that:

"The present state of things, is the consequence of the past."

Todays Health Care costs are the result of physicans(AMA), scientists(NIH), legislators and business in conjunction with the political and economic framework, created vis-a-vis Medicaid/Medicare an "Illness-Oriented Health Care System" .

Legistalors fought hard to pass:

THE OMNIBUS RECONCILATION ACT OF 1981(P.L.97-35) -"Using the authority of the OMNIBUS RECONCILATION ACT OF 1981(P.L.97-35), a State can offer, under Secretarial waiver , home and community based services to individuals who otherwise would require institutionalization. This law was quickly followed by the THE TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982.

THE TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982 - Under Section 1902(e) of the Act, as added by section 134 of the Tax Equity and Fiscal Responsibility Act of 1982, "a State has the option of covering under Medicaid disabled children age 18 or under who are living at home who would be eligible for SSI or State Supplementary payment, and therefore Medicaid, if they were in a medical institution.

SOCIAL SECURITY AMENDMENTS OF 1983 -In October of l983, the Social Security Amendment-HR 1900.S.I. went into effect. The purpose of this amendment was to create a payment system which would allow the transition of payor responsibility from federal agencies to state agencies over a period of three years based upon DRGs as its sole rating and classification critieria.

As a result of these laws, individuals most in need of these programs were excluded. Keep in mind all of these funds are delivered to the States thru State Block Grants.

These laws all went into effect without appropriate systems controls. The result - a deficit budget out of control.

The major problem in governmental systems is the lack of a consistent systems approach to problem-solving. Because no common General Systems Methodology exists the results/outcomes of most governmental processes remain in question. Therefore, other criteria come into being. In Medicine, as well as in Education,the failure to establish cross disclipnary terminology to evaluate the relative effectiveness of one disclipines treatment protocol to another has produced flawed results. This ego-focused approach leads to dollar desposial comparisons. The more money one has been able to spend the more personal power one attains; as opossed to a result oriented comparisions,ie. the quicker and cheaper one can solve problems, the faster one can proceed to the next.

The following will provide examples that resulted from the aforementioned legislation and the products that were produced.

The SPARCS Database and Governor Carey

BACKGROUND:

In November of 1977, Governor Carey; State of New York called for a major reorganization of the State Health Department creating the New York State OHSM - Office of Health Systems Management in order to strengthen accountability and management of New York's state health responsibilities.

TOTALLY Financed by HCFA (Grant #99-P-97433/2-02) in grants for 5.3 million dollars, the SPARCS (STATEWIDE PLANNING AND RESEARCH COOPERATIVE SYSTEM) Reporting Network was created. This system provided the following:

1. Statewide implementation of uniform reporting forms.

2. Structured systems streamlining.

3. Minimal disruption of existing systems.

4. First state to have common statewide PSRO (Federal Professional Standards Review Organization Program) Data Set.

5. Accepts computer tapes of PSRO Information.

6. Single Repository of all available health data.

7. Testing of Yale University DRG Classification System in New York State.

8. Model for Nationwide Auditing of Medicaid/MedicarePrograms.

The following is an example of the SPARCS Data Systems Development Project (Exhibit A). All health data items have a defined field and format, thereby making it simple to request and order Reports Formatted to a Users Specific Information Needs.

Political elections results produce Governor Mario Cuomo who appoints Dr. David Axelrod, Commisioner of Health-State of New York. Brandon Consulting(McAuto) gets the MMIS contract.

Within the New York State Management Information System is buried SPARCS. A tool for effective comparative cost analysis by DRGs.

DRGs, the State of New York, HCFA, AFDC, and

The Surgeons Generals Workshop of 1982 (Kroop)

DRGs and the State of New York

The approval of FRG (Functional Related Groups) and DRGs (Diagnostic Related Groups) created during the era of Federalism and Reaganomics has produced high profits for the health care industry. As evidenced in the last ten years, an ineffective tool to reduce costs. Thus paving the road for the 900 billion dollars health care industry that exists today.

In New York State, Dr. Powers, Kennedy Center for Mental Retardation and Developmental Disabilities was busy working on DRGs. His friend Dr. Judson Force, Chief, Division of Crippled Children Services, Department of Health and Mental Habilitation, Baltimore, MD., (Exhibit E-State Maternal Child Health and Crippled Children's List) was working with Surgeon General Kroop on the Report of the Surgeon General's Workshop on Children with Handicaps and their Families ( Exhibit D-Report of the Surgeon General's Workshop on Children with Handicaps and their Families).

Their model involved the creation of four modules designed to interface total health care delivery. The result of the application of this model was to give control to a select group of doctors (ie.: Dr. Judson Force, Chief, Division of Crippled Children Services, Department of Health and Mental Habilitation, Baltimore, MD.). The state models created utilized social services as the assessor in place of trained medical professionals (Registered Nurse). All decision-making of alternatives for patient care were assessed through the use of the Functional Related Groups controlled by States Department of Social Services; a non-medical entity supported by Dr. Axelrod, Commissioner of Health of the State of New York (in the NYS Model). The "NYS Care at Home Program" (National Model) reduced the availability of Medicaid Supported Home Care Services.

The requirements of the NYS model waiver is:

Exhibit X - "pg2. III.A.3. Hospitalized or reciving care in a skilled nursing facility for at least 30 consecutive days or in an intermediate facility for the developmentally disabled for at least 180 consective days. This means children requiring Home Care had to seek institutionalization in order to qualify for Home Care benefits. A good way for doctors to insure their hospital investments were profitable. Enabling doctors/institutions to qualify for research funding (Computer Retrieval Information for Sceintific Projects-CRISP) by securing a sufficiently large patient population. This methodology offered doctors and hospitals a way to take control of patient care for their financial interests.

Parents who decided to apply for this waiver were offered no Professional Support in the Home. In effect, making it impossible for working families to maintain their sick family members at Home. (See "pg7.B7. Be able to be cared for at no more cost in the community than in the aproprpriate institutional setting.) Thereby guaranteeing the need for institutionalization.

The real cost to society was hidden by the Administrative Directive pg12. C4."Medical Costs which are reimbursed by other third party payors or by private sources (parents, grandparents, etc.) should be EXCLUDED FROM THE BUDGET. Thereby distorting REAL PATIENT MAINTANINCE COSTS . The Plan of Individual Care is assesssed by CONTRACTORS; the majority of whom are not trained to make this level of medical assessment. Follow-up is made by the Department of Social Services who require RE-EVALUATION EVERY 60 DAYS, by a Case Worker not a medical professional. All individual case assessments are dominated by Budgetary Criteria not Patient Well-Being.

In the end final decisions about case management are made by individuals who have no direct "hands-on nursing care" experience (pg17. II) with the patient or their needs and whose jobs depend on meeting budgetary requirements. The failure to provide Home Care Support Systems taxes family resources and insures frequent rehospitalizations. THEREBY ESTABLISHING THE REVOLVING DOOR TO INSTITUTIONALIZATION.

There is no profit for doctors and institutions in Nursing yet this is the most cost-effective way of providing Home Care.

As a result the State of New York eliminated "NURSING" as an easily reimburseable Service for Home Care. This was done by DOCTORS REFUSING to WRITE PRESCRIPTIONS to recommend Home Care Nursing Services for patients, instead directing them to the institution. Further, the Health and Hospital Corporation required nurses to create or belong to agencies or registries whose minimum requirements were financilly prohibitive to small groups of nurses seeking to move children from the hospital to the home. The constraints imposed on Professional NursingCorporations required large investments for the creation of such entities.

Registries and Agencies charge 2 to 3 times a nurses hourly rate to the provider; making nursing services cost prohibitive. Health and Hospital Corporation in NY effectively took control of ALL Nursing Services eliminating incentives for individual Nursing Porfessionals to be able to provide cost-effective Home Care. (Exhibit X - Nursing Agencies Practices in the New York Metro Area - 1983)

In New York State this organization is their key to cost-containment. Cases requiring 24 hr. Professional Nursing Services were sent "CASE BUSTER NURSES" who reduced costs by declaring services uneccessary. Individuals were unable for the most part to defend their family members needs and cost-containmnent was achieved at the expense of patient health status.

This cost-shifting benefited all medical institutions by an increase in the necessity for hospitalization and or institutionalization. A vehicle (mechanism) for ABSOLUTE CONTROL BY DOCTORS AND a unsurpation of INDIVIDUAL CHOICE (let alone doctor-patient relationship).

Diagnostic Related Groups created levels of care for the purpose of controlling who comes out and goes into institutions. (Exhibit C-Report to the Governor and the Legislature:MEDICAID Home and Community Services Model Waiver). This comprised approximately 25% of the Home Care Population in 1983.

Dr. Powers felt assured of his success; his friend has just been appointed an Economic Adviser and starts in October, 1983; and

B.C. works for Lumina Assoc.-University of Minnesota (he gets paid for consulting) and Provident Life Insurance is very supportive. In preparation for the Social Security Act of 1983, HCFA issued a memorandum to the States (Exhibit B-Title XIX, Social Security Act: Decisions on Reducing Bias Towards Institutional Care-HCFA-May 1982; HCFA-Pub.45-3, Transmittal 1- February 1983; HCFA-Pub.45-4, Transmittal 2- December 1982; NYS Administrative Directive ,Transmittal No. 86-ADM-4 re: Federal Waivers).

THE DEMISE OF NURSING

Registered Professional Nursing and the State of New York

Nursing 1978 to 1984 - From 1978 to 1984, individuals with private insurance which included Private Duty Nursing were allowed to retain individual nurses to provide care in their homes without using registries or agencies. Many insurancecompanies advised parents with chronically-ill children who required 24 hour a day nursing to form Professional Corporations as an easy reimbursement vehicle for the insuror.

Groups of Nurses caring for patients in the institutional setting would offer to work a few days a month on a case. Parents would elect one nurse to form a Professional Corporation. This cut paperwork for the insurance company. One check verus 20 individual checks. The Nursing Corporation retained and verified Nursing Licenses through the Department of Education. The Nurses paid for their administrative overhead from their contractor fees, double the amount they could make working through a registry or agency.

In 1985, the State of New York eliminated the Nurses Professional Corporation by requiring huge administrative overhead for the purposes of case management (under the supervision of the Health and Hospitals Corporation, contractor for the Office of Health Systems Management). This prevented groups of nurses from forming small work groups to take care of individual cases with specialized health care needs. It removed the obligation of insurers to recognize and fund this cost-effective form of health delivery. In essence HHC in the guise of case management removed the Nurse as a professional corporation. The Social Security Act of 1983 replaced Professional Nursing with Home Health Aids which resulted in eventual institutionalization for individuals who could have remained home with nursing services.

Chapter 959 of the laws of 1984 required licensure of home health care services agencies. Agencies which failed to file an application by October 1, 1985 were barred from providing services subject to licensure under the law after April 1, 1986 until all approvals and licenses are obtained. This agency had the authority to control what services were approved for each DRG. If a doctor wrote a prescription for an Outlier DRG; ie., Jane Smith will require 24 hour a day Professional Registered Nursing Care for Tay-Sachs; the agency could declare that service as a deleted Home Care Service based upon the assessment of their TEAM.

Exhibit G State of New York, Department of Health Memorandum Series 86-51, Date-5/14/86 pg.4 "Where a LHCSA (Licensure of HOme Care Services Agencies) proposes the addition or deletion of other health related services as defined in Section 765-2.2(c) of the regulations, the agency give 30 days prior written notification to the appropriate OHSM area office." NOW A SYSTEM WAS IN PLACE TO FUNNEL PATIENTS THRU THE REVOLVING DOOR OFINSTITUTIONALIZATION.

This practice stems from the oversupply of doctors in the New York Metro area and the undersupply of nurses. Instead of investing in the delivery of services DRS/AMA invested in medical technology ie. MRI-imaging devices. This created the inbalance in the delivery of medical services we experience today.

Doctors/AMA told insurance companies they could provide better care ie.; medical crisis intervention. This service was only available in a hospital/institution. Thus eliminating funds for the most cost-effective form of Preventive Medicine - Nursings' Early Crisis Intervention in the Home Setting.

Private Insurors hired Expert Doctor Consultants who agreed that patients with Chronic/Orphan Diseases would recieve better care by trying "Experimental Treatments" thereby releasing the Insurance Company from further claims. All Insurance Master Contracts have an exclusion clause that excepts the Insurance Company for paying for Experimental Treatment and/or conditions resulting from the use of experimental protocols. This forced the family/a family member to beggar themselves to qualify for Health Services(AFDC/Mediciad/SSI) whose services were approved by the AMA/NIH.

A case whose total cost including 24 hour Registered Nursing cost an insurance company apprx. $350,000 a year, cost 1.6 million a year (in a hospital/institution) paid for by Medicaid under this plan of action.

These restrictive and explotive medical practices with the help of the profit-oriented members of AMA/NIH had effectively eliminated the least cost method of delivery of health care services-NURSING.

The effects of Glassers' Meta-Analysis on American Medicine

Any research methodology whose results impact lives of humans beings should not be decided based on "Respect for parisimony and good sense which demands an acceptance of the notion that imperfect studies can converge on a true conclusion ." (Meta-Analysis in Social Research, Glasser pg. 222)

Meta-Analysis is a tool to defend any position selected. The use of Meta-Analysis has now reached across all disclipines greatly reducing the Integrity of the Information. Its funding by the National Institute of Mental Health has resulted in the less cost-effective Health Management. This model now is used as a physicans decison-making tool in the selection of patient treatments. In education Meta-analysis is the primiary criteria for Federal Funding. (Exhibit G - The Association Between Beta-Agonist Use and Death From Asthma-A Meta-analytic Integration of Case Control Studies, JAMA, October 20, 1993-Vol.270, No. 15. Note: Comment pg. 1844./Application for New Grants: Fiscal Year 1994. Synthesize andCommunicate a Professional Knowledge Base: Contributions to Research and Practice - CFDA No. 84.023E)

General Systems Theory utilitizes raw data entered by the actual observer; via computer input or physical records. This requires the facts to quantify and qualify the cost basis of the subject being researched. Researcherscan then retain the ability to analyze the raw data while creating Historical Documentation.

Inference incorrectly taken as fact give answers of inappropriate certainty.

PROBLEM RESOLUTION

All systems of assessment require the same examination as any good physician would give a patient. By examining the practices within the State of New York, one gets a chance to look at the problems of the NYS MMIS system whose creation was to serve as a National Model for the delivery of cost-effective Health Care.

The most interesting commonality is the fact that the controlling authority for all funding of these projects is linked to the National Institute of Mental Health. It was

One must seriously question the common logic of asking untrained

SPARCS (STATEWIDE PLANNING AND RESEARCH COOPERATIVE SYSTEM) Reporting Network

This system should be used to evaluate DRGs by:

1. Comparing DRGs to CPI (Unbundling of Procedures)

2. Compare cost-variance of treatment by DRG

3. Compare and list Providers, by DRG and cost

4. Compare DRG for early intervention (do they exist)

5. A Tool to Identify Medical Fraud By DRG

HCFA, AFDC, MEDICAID

HCFA-Federal Deeming Waiver for Parental Income and Aid to Families with Dependent Children as established by the Surgeons Generals Workshop of 1982 must be replaced with Welfore Work Programs which have time limits. Families beggared by a chronically -ill family member should have access to the neccessary support services so they can return to work. Day-Care for the Elderly, Schools providing Nursing Support and Intervention thru School Health Clinics( for the middle class as well as the impoverished), Day Care Services for Single Mothers. Everyone needing to work should have access to Home Care Support, retraining and associated services.

Generic Standards must be established to meet the basic needs of running any functional organization.

The needs for a General Standards Commission is needed. Project Life Cycle Methodology should replace archaic systems. (Exhibit X). This would result with the accountability of all agency heads. This System Development and Maintenance Management function would provide needed historical documentation.

Standards exist to prohibit any physician the use in the institutional setting of any "pharmaticual protcol " that is being federally funded under Research Sciences/medicaid to used.

THE ABILITY TO DO MORE WITH LESS is possible in our society with Good Old-Fashioned American Ingenuity Transformed to verifiable business products. These products produce jobs.

HOME HEALTH SERVICES

Nursing Health Maintenance Organizations, Professional Nursing Corporations and the Public Health Service Corp should join together to create a united front to contain health care costs.

Public pressure to control Health Care costs identify the need to establish a NURSING SERVICE MAINTENANCE ORGANIZATIONS. These organizations would employ the basic components of Nursing to Managed Care in the Health Maintenance Home Care Environment.

Modern telecommunications enable information concerning a clients status to be sent to doctor for further evaluation. To be collected by Diagnostic Related Group and sent via computer to a database for cost analysis.

Regional representatives of NURSING SERVICE MAINTENANCE ORGANIZATION can service those far removed from major metropolitan cities. The ability of all familes with chronically ill family members to remain intact depends on their ability to perform as functional individuals during their family crisis. Family stabilization can be made available when the SKILLED NURSING PROFESSIONAL can assume responsibilities in the HOME which previously had been ONLY provided within the hospital/institutional setting.

Individuals with Chronic/Orphan Diseases (asthma, diabetes, aids), requiring Primary, Secondary, Tertiary continuous care are the client population. These encompass 60 million/ada and AARP more than 33% of the national population.

This service would provide:

NURSING CERTIFICATION IN SPECIALIZATION -CEU educatiion

courses which identify common problems of Chronic/Orphan Disorders, advanced Respiratory practices, advanced pharmacology, Cancer Care at Home, TPN, and advanced techniques in CPR; among others.

*TRAINING AND EDUCATION - Counseling, financial incentives, and employment referals will be provided for nursing to enable the professional nurse interested in Primary Home Care with access to additional education and training to keep in step with the many advances of modern technology.

*SPECIALIZED NURSING - Individuals with needs for continuous Home Care will have access to a NATIONAL DATA BANK of Professional Nurses interested in providing Primary Home Care. Nurses will have access to training and certification available before in the hospital setting.

*SPECIALIZED NURSING - Individuals with needs for continuous Home Care will have access to a NATIONAL DATA BANK of Professional Nurses interested seeking to provide this care in the Primary Home Setting.

*STANDARDS AND PROCEDURES - All Home Care environments will be prepared with documented guidelines for NURSING PRACTICE that would serve the Professional Nurse and protect Patient Rights. Government and private insurance carriers to provide a NATIONAL CLAIMS PROCESSING DATA BANK TO QUALIFY AN@ QUANTIFY THE COST BENEFITS OF HOME CARE.

FAMILY SUPPORT GROUPS - Community-Based Family Support Referral Services will be provided to individuals seeking FAMILY SUPPORT GROUPS to help them thru their difficult times.

TELECOMMUNICATIONS APPLICATION - All Nurses would relay their daily visits via modem, getting messages from e-mail, and doing paperwork on their computer.

We must make it profitable to do the right thing. A Consortium of Government and Insurance to

We shall find the solution only when we have the facts, and having the facts, accept our mutual responsibilities.

EXHIBIT F - HISTORY OF Functional Related Groups (FRGs) and

Diagnostic Related Groups (DRGS)

At Yale University Professors John D. Thompson and Robert B. Fetter were testing Functional Related Groups (FRGs) andDiagnostic Related Groups (DRGS) in New York and New Jersey from 1977 to 1979. The goal was to develop a scheme of patient classification to be used in Utilization Review. Soon other applications were found in areas such as budgeting, planning and reimbursement. Due to inconsistencies and inadequacies, a second set of DRGs was developed and has been used in New Jersey since 1982, under the Medicare Prospective Payment System (PPS). DRGs were implemented nationwide for all hospitalizations after the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) was passed. The purpose of a DRG-based system of Medicare/Medicaid reimbursement was to hold down rising health care costs. The effect was exactly the opposite.(Unbundling)

The DRG system is a patient classification scheme that categorizes patients who are medically related with respect to diagnosis and treatment and who are statistically similar in length of hospital stay. This system changed hospital reimbursement from a fee-for-service system to a lump sum, fixed fee payment based on the diagnoses rather than time or services rendered. The fees were fixed by a research team , which determined a national average fee for each of the principal discharge diagnoses. The classifications were formed from over 10,000 ICD-9-CM codes that were divided into 23 basic major diagnostic categories.

The six variables responsible for DRG classification are:

1. The patient's principal diagnosis

2. The patient's secondary diagnosis

3. Surgical procedures

4. Comorbidity and complications

5. Age and sex

6. Discharge status

Cases that cannot be assigned to an appropriate DRG because of atypical situations are called cost outliers. These atypical situations are as follows:

1. Clinical outliers:

a. Unique combinations of diagnoses surgeries.

b. Very rare conditions.

2. Long length of stay (LOS) referred to day outlier.

3. Death.

4. Leaving against medical advice.

5. Admitted and discharged the same day.

6. Low-volume DRGs.

The current Federal plan for outliers is the full DRG rate plus an additional payment for the services provided.

The Moral of the Story - Don't hire foxes to guard the chickencoop.

BIBLIOGRAPY

1) General Systems Theory (Korzybski, Science and Sanity,1933), 2) Design Science (Fuller, Inventory of World Resources-Document 1-World Game, 1963)

3) General Theory of Transformation (O'Donnell, The 4th Jerusalem Conference on Information, May 21-25, 1984, Jersualem, Israel.

4) Introduction to Integration of Labor, Michael O'Donnell, International Planning Corporation, Presentation to AT & T, 1983.

5) Systems & Data Processing in Insurance Companies, Life Management Institute,Loma,1982.

6) The Mathematical Theory of Communication, Shannon and Weaver, University of Illinois Press, 1975. 7) Decisionmaking, Janis and Mann, Free Press, 1977.

8) Aided Instructional Methods, IPC Co., 1982

9) Project Life Cycle Methodology - The Standards Process

Home

© 1982-2006.

All Rights Reserved.