Written Testimony

The American Association for Respiratory Care (AARC) is a national association representing 36,000 Respiratory Therapists (RTs) across the country. The AARC appreciates this opportunity to comment on the implications of the Balanced Budget Act (BBA) of 1997 for beneficiaries and providers in Medicare’s traditional fee-for-service program.

Respiratory therapists practice in all health care settings. They care for patients ranging from the premature infant whose lungs are underdeveloped to the elderly patient whose lungs are diseased. Respiratory therapists care for Medicare beneficiaries who suffer from diseases such as emphysema, bronchitis, asthma and lung cancer, as well as patients who require the use of a ventilator to breathe.

Respiratory therapists assess the status of patients’ health, and recommend medications and delivery devices to the attending physician. In collaboration with physicians, they design, implement and modify respiratory therapy treatment plans. Using protocol-based care, respiratory therapists initiate, conduct, and modify prescribed therapeutic procedures, assist physicians performing special procedures, and conduct pulmonary rehabilitation. They select appropriate equipment, verify its operation, correct malfunctions, and assure that it will not contribute to infections. Respiratory therapists also maintain patient records and communicate relevant information to other members of the health care team.

The AARC believes that the structural reforms of Medicare’s payment systems mandated by the BBA were intended to control spending growth, preserve the Medicare Hospital Insurance Trust Fund, and continue the movement from cost-based reimbursement to prospective payment. While we can appreciate the need to control costs, the following concerns arise over the implementation of the prospective payment systems (PPS) for skilled nursing facilities (SNFs) and for outpatient department (OPD) services:

1. Facilities will stint on health care services in the absence of fair reimbursement.
2. In an attempt to save money by curbing costs, Medicare will end up spending more money through increased re-admissions, emergency room visits, and medical services needed to treat beneficiaries over the long term.
3. Cost reductions will restrict beneficiaries’ access to respiratory therapy provided by competent health care professionals.

In this regard, the AARC applauds the efforts of the Senate Finance Committee to hold hearings on the implications of the BBA. In addition, we support the commitment made by the Health Care Financing Administration’s (HCFA) to proactively monitor the impact of the BBA to ensure that beneficiary access to covered services is not compromised.

To aid the committee in its evaluation of the implications of the BBA, the AARC documented its concerns regarding possible decreases in beneficiary access to safe and effective respiratory therapy. The AARC believes that the costs of respiratory therapy are under-recognized. We also believe that unintended negative consequences from implementation of the BBA’s mandates have the greatest and most direct impact on beneficiaries’ access to safe and effective respiratory therapy.

In its assessment of the new SNF PPS rules, the AARC identified several issues that it requests the Congress to address:

1. Recognition of respiratory therapy as a rehabilitative service;
2. Development of a respiratory therapy outlier policy in the federal rates, and
3. Safety and quality issues, such as the absence of minimum competency, that affect patient care.

Recognition of respiratory therapy as a rehabilitative service: The new SNF PPS rates do not include specific cost calculations for respiratory therapy services. The Resource Utilization Groups (RUGs-III) case-mix classification system designates only physical therapy, occupational therapy, and speech therapy as rehabilitation services. Respiratory therapy was omitted without reason or justification. The AARC opposes the omission of respiratory therapy services as a designated rehabilitation service as part of the RUGs-III system. This omission is not an accurate reflection of the baseline year experience. Ultimately, it will disadvantage Medicare beneficiaries with respiratory rehabilitation potential by denying them needed services.

The AARC believes that this omission was the result of using 1995 as a baseline year to collect PPS demonstration data on respiratory therapy in SNFs. These data included little instances of respiratory therapy in the rehabilitation groups. For example, in new admissions to the rehabilitation groups in 1995, 65 percent received physical therapy, 49 percent received occupational therapy, and seven percent received speech-language pathology services, while only three percent received respiratory therapy. Because of its minimal use, HCFA apparently concluded that respiratory therapy rehabilitation was too insignificant to include in the RUGs-III as a rehabilitation service. This leads to under-recognition of respiratory therapy services within a rehabilitation context.

In contrast to 1995 data, use of HCFA’s 1996 Standard Analytical Beneficiary Encrypted Public Use Files (data bases that contain all Medicare services delivered to a sample of beneficiaries) show that 24 percent of the 1.6 million Medicare beneficiaries who were in SNFs during 1996 received respiratory therapy. This is an eight-fold increase over the three percent figure HCFA obtained from the 1995 SNF PPS demonstration. Therefore, the AARC recommends that Congress include respiratory therapy as a distinct medical service in the rehabilitation classification group, and not as a subset of other therapy services. In addition, the AARC recommends that Congress develop a factor to establishing the SNF payment rates to appropriately recognize costs for respiratory therapy services in all groups.

Development of a respiratory therapy outlier policy in federal rates: A significant number of Medicare beneficiaries in SNFs require extensive respiratory therapy services. Although the PPS deals with some of these beneficiaries through the RUGs-III categorization, adequate resources for approximately 80,000 to 90,000 Medicare beneficiaries requiring extensive respiratory therapy services are not provided.

HCFA data show that approximately 24 percent of the 1.6 million beneficiaries who were in a SNF in 1996 received respiratory therapy services. Out of the top 100 diagnoses, the top 10 diagnoses account for approximately half of all respiratory therapy services -- the top five account for one-third of all payments. The top four pulmonary diagnoses average between $75 and $100 per day in respiratory therapy services. This amount is far more than the payments available to SNFs in the RUGs-III categories that do not have respiratory adjustments. The respiratory care needs of approximately 100,000 Medicare beneficiaries that fall into this category warrant an outlier policy to insure access to safe and competent care for these beneficiaries.

Safety and quality of care issues affecting patient outcomes: The SNF PPS provides nursing homes with a financial incentive to utilize the least costly personnel. These substitutes may not be qualified to provide respiratory therapy. The AARC is concerned that respiratory therapy services are being provided to Medicare beneficiaries by personnel who are not trained and who do not have the necessary competency testing in respiratory therapy to provide such care. This is occurring and patient safety is being compromised.

Respiratory therapy training is defined as a supervised, deliberate and systematic continuing educational activity in affective, psychomotor, and cognitive domains. Bona Fide respiratory therapy education programs must be approved by a local, regional, or national accrediting entity. This education includes supervised preclinical and clinical activities. All respiratory therapists must undergo formal education and documentation of competence through tests determined to be valid and reliable. Congress should recognize that respiratory therapy must be provided by trained, skilled and experienced professionals who have documented competency. In addition, respiratory therapy, like services provided by physicians, nurses, physical therapists, etc., must be fully funded in order to achieve positive patient outcomes and to maintain savings to the Medicare program.

The AARC has several concerns with the proposed PPS for OPD services, including:

1. The categories in the Ambulatory Payment Classification (APC) system do not reflect comparable respiratory therapy services;
2. There is no APC category that covers pulmonary rehabilitation as a distinct service, and
3. APC categories do not include all the services from the respiratory therapy job analysis.

APC categories do not reflect comparable respiratory therapy services: The AARC is concerned that APC categories for respiratory therapy services contain significant differences in complexity, equipment, expertise, and payment required when performing the services. The AARC recommends a readjustment of these categories to clearly reflect comparable levels of time, medical resources, and reimbursement needed to competently provide respiratory therapy services.

There is no APC category that covers pulmonary rehabilitation as a distinct service: Pulmonary rehabilitation is an effective, medically accepted therapy that enhances standard medical care, and decreases the cost of treating chronic lung disease. Rehabilitation should be recognized as an integral component of comprehensive care for people with pulmonary disorders. No national Medicare policy currently exists to cover outpatient pulmonary rehabilitation. The proposed PPS for OPD services provides Congress with an opportunity to specifically include outpatient pulmonary rehabilitation under Medicare.

The APC categories do not include all the services from the respiratory therapy job analysis: The National Board for Respiratory Care, the credentialing agency for the profession, conducts job analyses approximately every five years to ensure its credentialing examinations reflect current practice. This job analysis may assist Congress in determining the respiratory therapy services to cover under the PPS for OPD services.

While the AARC is committed to implementing a PPS for SNFs and OPDs, we have several concerns that may only be addressed by Congress through legislative action. The AARC urges Congress to take action on the aforementioned recommendations on the following:

1. Assure Medicare beneficiaries access to safe and effective respiratory therapy.
2. Assure that all persons providing respiratory therapy meet minimum competency standards.
3. Assure fair reimbursement

The AARC offers its assistance to the Congress in achieving these recommendations.