I pit * AN]) MEMORANDUM IKXKK BUREAU HEALTH SERVICES RESEARCH AND EVALUATION (coordinators, (,rantees, Members December 20, 11)73 of the National Advisory Council Acting Director, @S SUBJL(,'I': Highlights of NovembeV 26-Z7 National Advisory CoIuncil Meeting Once again it is a pleasure to present the highlights of the November 26-27 National Advisory Council meeting. You will recall that the Council last met in July. During the July meeting, Council members were briefed on events since the initiation of the proposed phaseout and the subsequent one year extension of RMP. At that time, the Council recommended funding of RMPs in Fiscal 1974 based on staff reviews and annualized funding levels until a more regular review process could be reestablis'hed. Using this authority $17'1 million was awarded to RMPs on October 1. An additional $24.136 million has recently been released for RMP grants and contracts. Application for these funds were reviewed at the present Council meeting for awards beginning January 1, 1973. Because of the importance of'some of the discussion and actions at this session I will outline the most important topics rather than give the usual play-by-play description of discussion and presentations. I. Termination of RMP Activities Both Dr. Kenneth M. Endicott, Administrator HRA, and Dr. Harold Margulies, Acting Deputy Administrator, addressed the Council on the period of support for RMP activities. Dr. Endicott advised Council Members to ignore uncertainties about budget periods when reviewing applications and Dr. Margulies reported on new understandings that apparently had been reac ed wit in HEW concerning t e period for RMP expenditures. In doing so he noted that the new understandings, while based on high-level oral discussions, were still subject to change. In view of this information. the Council recommended an extension of the period during which RMPS funds may be spent. Contrary to expectations, however, there is no official. change with respect to termination of RMP activities. 2 II. Options Another understanding within HEW discussed by Dr. Margulies concerns the use of grant funds. While the purposed for which funds can be expended may be altered by new legislation, HRA and HEW still consider the five RMP options as high priority areas. They should be treated as areas of continuing emphasis, but not as exclusive areas of grant awards. Accordingly, all activities authorized by the Act and in the Mission Statement previously approved by the Council are eligible for support pro- vided that they are within the purview 6f current council policies. III. Policy Actions The Council recommended three important policies. Allocation of additional funds - All the FY 1974 funds apportioned by OMB for RMPS have been released and will be awarded by January 1, 1974. Because of the lawsuit by the National Association of Regional Medical Programs, Inc., there is a possibility that substantial additional funds will become available for award in Fiscal 1974. In order to prepare for such an eventuality, the Council approved a resolution @Enclosure, 1) which provides that: 1. any funds up to $81.9 million may be awarded by the Director RMPS, using the established formula atiling method. ($81.9 million is the maximum anticipated amount of FY 74 funds.) 2. up to $10 million over the above amount can be awarded by the Director with notification to the Counci 3. award of all other additional funds would be subject to further recommendations by the Council. Discretionary Funding Authority - The Council voted to modify the "Governing Principles and Requirements: Discretionary RMP Funding and Rebudgeting Authority" (Enclosures 2) originally issued September 20, 1972. The revised policy will be transmitted formally in a NID in the near future. The revision removes the distinction formerly made between "triennial" and "anniversary" Regions with respect to rebudgeting authority. In approving the change, the Council asked that Regions be informed that the distinction may be reinstituted if the program continues. The phaseout and subsequent resumption of activities by RMPS, however, has made the difference between the old triennial and anniversary classifications irrelevant at the present time. 3 Resumption of review process certification and management assessment visits - The RMPS' plans in connection with management assessment and review process certification were discussed with the Council and their resolution supporting these activities is attached (Enclosure, 3). Since over $41 million in FY 74 funds will be awarded for RMP grants and contracts, and since many struc'ttiral and personnel changes have occurred in RMPs during the last year, the Regions' present ability to allocate, award and manage funds assumes great importance. At the time the phaseout was announced in Jan;xary i973, Management assessment visits had been carried out in all but 18 Regions,and these Regions will be among the first to be visited under the reconstituted activity. In addition to management assessments, a few review process verifi- cation visits still remain to be completed. These and clearing up review process problems in compliance with RMPS standards will also receive priority attention. IV. Special Reports Overview of RMPs - Mr. Roland Peterson, Director, Office of Program planning and Evaluation, RMPS, presented statistical data on Coordinator changes, program staff, committee activity and categories of proposed RMP activities. These showed, among other things, that RMPs have retained about half the staff they had prior to phaseout and that about 75% of proposed activities are within the option areas. Mr. Peterson's data indicate that, in general, the Regions have attained a surprising degree of stability and renewed viability, considering the events of the last year. Section 907 reports - Dr. Margaret Sloan, who is now an Assistant to Dr. van Hoek, reported on the outcome of RMPS' long-standing effort to carry out the provisions of Section 907 of the RNP statute. This has resulted in the publication of a seven volume inventory of services entitled Hospital Services for Selected Chronic Disease Patients. Copies have been mailed to all RMPs and will be sent to Council members. The inventory was developed through a questionnaire under a contract with the Joint Commission of the Accreditation of Hospitals. It covers 92% of the Nation's hospitals. Special runs can be made from the data contained in the inventory. The JCAH Steering Committee felt that a list of outstanding facilities should be published only after actual site visitations to facilities. It was decided, therefore, that the public interest would be served best by publishing the basic data and criteria which could be applied by users to develop lists suitable to'their particular needs. I 4 Four criteria documents have now been completed. The kidney and stroke criteria appeared in the October 1973 JAMA. The heart disease and cancer criteria will be published in November and December respectively. These are tentative documents and comments and suggestions are invited. Address any comments regarding the criteria to Dr. Sloan at the Parklawn Building. The American Cancer Society, American Hospital Association and JCAH are interested in keeping the data up to date and have dis- cussed this with HRA. It is therefore possible.that the inventory will be repeated in another year. End Stage Kidney Disease Regulations - Mr. Matthew Spear, who has been on detail with othersdevelopiilg standards for the new Social Security kidney reimbursement program, reviewed the Interim Kidne_v Regulations. Mr. Spear stated that medical care has now been extended to persons with end stage kidney disease who are fully covered by Social Security. Reimbursement for care under the Act was authorized to begin on July 1, 1973, and interim Reguiations were promulgated on June 29th. (See Enclosure, 4) The Regulations blanket in coverage of existing end-stage renal services and provide coverage for new services only on an exception basis. The Regulat ons provide for (1) minimum utilization, 4-2) medical review, (3) facility affiliation and (4) cost containment. All RMPS kidney activities must comply with the above regulations and conditions to that effect were placed on all kidney activities reviewed and approved at the present Council meeting. V. Presentation by Dr. van Hoek Dr. Robert van Hoek, Director Bureau of Health Services Research and Evaluation, discussed a number of matters of mutual interest to the Bureau and RMPS. The Emergency Medical Services program which was initially lodged in the Bureau has now been transferred to the Health Services Administration. There is a bill the the House (H.R. 11385) which would combine the National Center for Health Services R&D with the National Center for Health Statistics, but passage is not expected. The Bureau has developed a lengthy program statement on health. service research needs which have been mailed to all RMP Coordinators. In summary these Program needs are: 1. studies of planning licensure, and legislation especially certificate of need and planning mechanisms. 2. quality of health care including (a) assuring quality, (b) dis- seminating findings and (c) implementing the PSRO legislation, the quAlity aspects of kidney and HMOs (if legislation passes). 5 3. financing of medical care in regard 4. productivity of the health care system especially to manpower 5. data systems emphasizing improved medical record systems in ambulatory and institutional settings 6. long term care Dr. van Hoek suggested that RMPs could assist the health service research and development effort in disseminating BHSR&E research findings and also in developing indices of standards of medical care and the effectiveness of medical care processes. VI. Director's report Contrary to the usual custom,II did not make a long report to the Council. To conserve time, which was needed for grant reviews, I sent a background memorandum to Council members prior to the meeting (See Enclosure, 5). At the meeting I did, however, briefly summarize the current budget picture (Enclosure, 6) and noted, as you already know, that additional funds may be forthcoming. VII. Other matters The Council reviewed applications from the 53 Regions during the closed portion of the meeting. The Council members considered the applications carefully and extensively discussed identified problem areas. Three Council site visits will be conducted during January as a result of the deliberations. Dr. Sparkman and Dr. Reinschmidt attended the meeting and addressed the Council on behalf of the Steering Committee and the National Association of RMPS. Future dates were tentatively scheduled for January, February and March 1973 in the event that additional funds will be released. We have decided to cancel the January meeting though, so the next Council session will be on February 12-13 followed by a meeting on March 12-13. I hope this summary of the meeting will be informative and useful. Sincerely yours. Herbert B. Pahl, Ph.D. ENCLOSURE(I RESOLUTION BY THE NATIONAL ADVISORY COUNCIL ON REGIONAL MEDICAL PROGRAMS RECOMMENDING ALLOCATION OF ADDITIONAL RMPS FUNDS IN FISCAL YEAR 1974 WHEREAS: RMPS has established a method acceptable to this Council for allocating the funds already made available for Fiscal Year 1974, and WHEREAS: Substantial additional funds may become available for obligation by RMPS in Fiscal Year 1974, BE IT RESOLVED THAT: The National Advisory Council recommends that; 1. the Regional Medical Programs Service allocate by established mode the full amount of Fiscal Year 1974 funds made available, up to the maximum amount Anticipated under the HEW Continuing Resolution or Appropriation, $81.9 million. 2. up to $10.0 million of any amount over $81.9 million which the Regional Medical Programs Service may e directed to obligate in Fiscal Year 1974, may be distributed in a manner that the Director, Regional Medical Programs Service, finds will make the best possible use of funds in accordance.with existing legislation, Council, Department and RMPS policies. All such distributions will be reported to the Council. 3. any other funds in excess of $81.9 million, not awarded pursuant to item 2, above, shall be awarded subject to the Council's recommendation thereon at its next regular or special meeting after such funds shall have become available for obligation. APPROVED: National Advisory Council on Regional Medical Programs - 11/26/73 DRAFT: 11/26/73. ENCLOSURE(2 GOVERNING PRINCIPLES AND REQUIREMENTS: DISCRETIONARY RMP FUNDING AND REBUDGETING AUTHORITY I. APPROVAL AND FUNDING AUTHORITY An RMP, at its discretion, may fund any eligible operational or program staff activity (including new activities) or rebudget funds within the total direct costs awarded subject to the prin- ciples and requirements set forth below. II. PRINCIPLES The following principles shall be generally applicable in all situations: A. Consonance With Federal Requirements No activity shall be undertaken that is contrary to Title IX of the PHS Act and other applicable legislation, regulations, written Departmental, HRA, and,RMPS policies, and/or specific conditions of the grant. B. Applicability of Local RMP Procedures Any activity undertaken pursuant to the authority conferred by this policy shall be subject to the regular review, approval and funding requirements of the particular RMP, the grantee (where different), and the Regional Advisory Group, As described in NID of August 3o, 1972. C. Current Regional Advisory Group Approval Any operational. Activity initiated by an RMP within its discretion- ary authority must have current RAG approval. That is, it must be approved by the RAG in the budget. period during which it is initiated or the immediately preceding one. If not, the activity must be re- approved by the RAG before it can be undertaken. Likewise, any pro- gram staff activity must have current RAG approval in accordance with the policies or normal administrative procedures of the RMP. D. Activities Jointly Funded by Two or More RNPs Any activity which involves, anticipates, or requires funding by more than one RNP during the total anticipated RMPS support period requires prior RNPS approval for such funding (but not for the tech- nical design or details of the activity). E. Obligations of Funds Derived From Grant Related Income No grant related income may be expended without prior RMPS approval DRAFT: 11/26/73 Pg. 2 F. Resolution of Questions Regarding Discretionar Fundin Authorit When there are any substantive questions or doubts as to the scope and applicability of the discretionary funding and re- budgeting authority, the grantee or the Coordinator on its behalf shall communicate with RNPS for advice and guidance. III. REQUIREMENTS Because of the changing conditions that have prevailed, the following authorities to act are identical for all RMPs regardless of previous status. RMPs must obtain prior approval from the Director, RMPS for any pro- posed program staff or operational activity involving, 1. Alterations and renovations in excess of $25,000 total Federal direct costs per activity, or any new construction regardless of amount. 2. Research or other activities involving the use of human subjects. I (Programmatic approval by RMPS is required in addition to approval by NIH of an institutional plan for safeguarding the rights and welfare of human subjects.) 3. HMO related feasibility stu es. 4. End-stage treatment of kidney disease (e.g. dialysis, transplant- ation and supportive facilities and services). 5. Other specialized activities as identified by RMPS. IV. NOTIFICATIONS RMPS should be notified immediately whenever an activity is initiated which has not been funded previously. The following documents should be submitted: 1. The budget for the new activity on RMPS 34-1, Page 16. 2. Revised budgets for any activity from which funds have been withdrawn, again on RMPS 34-1, Page 16. 3. A brief description of the activity on the applicable form, RMPS 34-1, Pages 6, 9, 11, 12, or 15, as appropriate. In all other cases, normal procedures for notifying lITS of rebudgets should be followed. Rebudgeting procedures are described in the in- structions for RMPS 34-1, Page 16. LNULUSUHL(3 RESOLUTION BY THE NAI'IONAL ADVISORY COUNCIL ON REGIONAL MEDICAL PROGRARS-@EC@MMENDING REPORT ON STATUS OF RMPs' COMPLIANCE WITH REVIEW REQUIREMENTS WHEREAS: Some RMPs still have not complied fully with the the "RMPS Review Process Requirements and Standards" and administrative management requirements, then BE IT THEREFORE RESOLVED:. The National Advisory Council reiterates the necessity for all RMPs to be in compliance with the "RMPS Review Process Requirements and Standards" and administrative management requirements as soon as possible, and therefore, requests'the Director, RMPS, to report the status of RMPs' compliance at the next Council meeting. APPROVED: National Advisory Council on Regional Medical Programs, November 26, 1973 ENCLOSURE( 4 /Excerpt from FEDERAL REGISTER, June 29, 1973 Issue, Pages 17210-17212, Medicatd--HEW Interim Regulations on Payment for Treatment of Chronic Renal Disease, Effective July 1, 1973./ Title 20--Employees' tenefits Chapter III--Social Security Administration, D/HEW Part 405--Federal Health Insurance for the Aged Payment for Services in Connection iqith Kidtey TtatisOlant and Renal Dialysis Provided ties Section 299I of P.L. 92-603 extends medicate protection against the cost of chronic renal disease (CRD) to virtually the entire population. The legislation authorizes the Secretary to limit reimbursement to facilities meeting such requit6ments As he may prescribe by regulation. In view of the new issues that stem from the virtually universal coverage of.a very complex service, the absence of prior experience, and possible precedents that the regulations may establish, final decisions on Medicare payment and facility qualification policies will require careful study And reevaluation based upon operating experience. Operations on July l@, 1973i are to be based upon interim regulations. Section 2901 also requires that the regulations to be promulgated include minimum utilization rates, which are associated both with cost of operation and quality of performance, which is generally superior when staff is well-practiced, and 4 provision for a medical review board to screen the appropriateness of patients for the proposed treatment procedures. The final regulations, when promulgated, will provide for such rates and review boards. In addition, the final requirements for participation in the program will provide that facilities have affiliations which tie them in with the various modali- ties of treatment so as to s.upport the development of an organized effective system of delivery of treatment of CRD. Authority for parti- cipation by a facility on an interim basis should not be construed to imply that it will be approved on a permanent basis for participation in the program. When the selection of qualifying facilities under the final conditions is made, it is expected that those not qualifying will be phased out with aminimum of interruption in the continuity of service. In addition, interim reimbursement levels and mechanisms to be employed should not be contrued to reflect the final policies which will be adopted and which are expected to contain additional features providing incentives for effective and efficient performance. During the interim period, limits will be applied to reimbursement amounts and services covered beyond which payment will be made, i.e., will be considered reasonable and necessary, only if adequate justifi- cation is provided. Subject to requirements described below, facilities Page 2 which were in operation in the performance of CRD treatment on June 1, 1973, will be reimbursed under the program during the interim period for services which are not increased substantially; additional facili- ties will be qualified to participate and substantial additions to services will be allowed for reimbursement on an exception basis. Those facilities which have not provided transplatation or chronic maintenance dialysis prior to June 1, 1973, or which have expanded or contemplate substantial .'expansion of services after June 1, 1973, will in addition be reviewed during the interim period to determine whether their entry into the field is consistent with the criteria described below, which include principles expected to be encompassed in final conditions of participation. With respect to transplantation, these criteria and principles include the following: (1) The facility is participating in the Medicare program; (2) it can reasonably be expected to perform a sufficient number of transplants per year and otherwise demonstrates a capacity to perform with high qu@lity; (3) it makes a needed contribution to access of care in an area; (4) it contributes to a coordinated system of cake by its arrangements for cooperation with other facilities in the area offering the same or other modalities of care for end-stage renal disease patients so that patients should be placed in the appropriate site and receive the appropriate service; (5) its costs of performance are expected to conform with the norms for the services it provides; and (6) its capital expenditures for this service have not been isapproved by a State agency designated in accordance with Section 1122 of Title XI of the Social Security Act. During the period immediately after June 1, 1973, special consideration for participation will be given to a facility that has prior to June 1, 1973, made a substantial investment of time, study, and resources in preparation for provision of the services in question. Subject to the above caveat transplant hospitals which are currently participating in the Medicare program will continue to be reimbursed in the interim period for renal transplantation until conditions of participation are promulgated and applied. With respect to chronic maintenance dialysis facilities, the criteria and principles include the following: (1) The facility is expected to meet an acceptable utilization rate and otherwise demonstrates a capacity to perform at high quality; (2) the facility makes a needed contribution to access of care; (3) the facility makes a positive contributionito the total system of care of CRD by working in coopera- tion with other sites and modalities of care; (4) the facility has arrangements for a patient review mechanism to assure that all patients are screened for the appropriateness of their treatment modality-- including suitability for transplant and home dialysis; (5) the cost (or charge) of the service offered by the facility is in conformity Page 3 and (6) its with norms of costs (or charges) for similar services; capital expenditures for this service have not been disapproved by a State agency designated in accordance with Section 1122 of Title XI of the Social Security Act. During the period immediately after June 1, 1973, special consideration for participation will be given to a facility that, prior to June 1, 1973, had made a substantial investment of time, study, and resources in preparation for provision of the services in question. Subject to the above caveat, dialysis facilities which have been in operation before June 1, 1973, will be reimbursed by the program during the interim period until conditions of participation are promulgated, if they meet the following minimal conditions: (1) If hospital-operated, the hospital is participating in the Medicare program; (2) of free- standing, the facility (a) meets State or local licensure requirements, f.f any, (b) is a facility in which treatment is under the general supervision of a physician (who need not be a full-time supervisor), (c) has an affiliation, e.g., has arrangements for back-up care, etc., with a participating hospital, and (d) agrees that no charge will be made for a covered dialysis service provided by the facility that is in excess of the charge determined to be the reasonable charge of that facility. In addition to these considerations, regulations are amended hereby to clarify certain aspects of requirements for entitlement to Health Insurance Benefits because of chronic renal disease. (Catalogue of Federal Domestic Assistance Program Nos. 13,800, Health Insurance for the Aged--Hospital Insurance, and 13,801, Health Insurance for the Aged--Supplementary Medical Insurance). Dated: June 22, 1973 Arthur E. Hess, Acting Commissioner of Social Security. Approved: June 26, 1973 Caspar W. Weinberger, Secretary of Healthi Education, and Welfare. Subparts A, B, D, and E of Regulations No. 5 of the Social Security Administration (20 CFR Part 405) are amended as set forth below. 1. Section 405.104 is added to read as follows: Page 4 9405.'04 Entitlement to hospitj' insurance benefits base on .L L chronic kidney failure. (a) Eligibility--An individual is eligible for hospital iri@,urai-ice benefits based on chronic renal disease if he: (1) Has not attained age 65; and (2) Is either-- (i) Fully or currently insured (.as such terms are defined @Lii Subpart B of Part 404 of this chapter), or (-Al.i) Entitled to monthly insurance benefits under Title II of the Act, or (iii) The spouse or dependent child of a person who meets the requirements of subdivision (i) or (ii) of this subparagraph; and (3) Is medically determined to have chronic renal disease and continuing renal dialysis or a kidney transplant is essential for treatment of such disease. (b) Entitlement--(l) When entitlement begins. Effective with respect to services provided after June 1973, an eligible individual, as defined in paragraph (a) of this section, is entitled to hospital insurance benefits beginning with whichever is earlier: (i) The month in which he is hospitalized in preparation for and anticipation of kidney transplant surgery, provided that such transplant surgery occurs in that month or the following month, or (ii) the third calendar month after the month in which he begins a course of dialysis. (2) When entitlement ends.--An individual's entitlement, established under paragraph (b) (1) of this section ends with the twelfth month after the month in which he received a kidney transplant or such course of dialysis is otherwise terminated, unless before the end of such twelfth month, the individual again requires a course of dialysis or a kidney transplant. (c) Definitions.--(l) "Child" and"spouse" defined. An is the child or spouse of a person, for purposes of paragraph (a) (2) (iii) of this section, if the individual is so related to that p(@,rsoii that he meets the relationship requirements set forth -Ln Subpart, L, cf Part 404 of this chapter for entitlement, respectively, (i) Lo ciiild's insurance benefits, or (ii) to wi",-'e's, husband's, widow's, widower's, or mother's insurance benefits under Title 11 of the k,@t, on that person's earnings record, whether or not the relationship has coi:it.,-@.riue(.1 long e-,ioiigh for such individual to qualify for such benefits. (2) Dependency of a child.--For purposes of paragraph (a) (@1) (iii) of this section, the child of a person is that person's "dependent child" if he meets the dependency requirements set forth in 99404.323-404.327 of this chapter for entitlement to child's insurance benefits on that person's earnings record. 2. Section 405.116 is amended by adding paragraph (g) to read as follows: §405.116 Inpatient hospital services; defined. Page 5 (g) Services in connection with kidney transplantation. With respect to services rendered in connection with kidney transplantation, for an interim period beginning July 1, 1973, for services rendered on and'after that date, and until regulations setting forth conditions of participation are promulgated and applied, coverage is limited to services rendered in participating hospitals which on June 1, 1973, have been providing the services and have not substantially increased such services, or which have, in the opinion of t@e Secretary, demonstrated the need for and appropriateness of their assumption of or increase in the provision of such services, in an effective and economical system of chronic renal disease treatment. 3. Section 405.231 is amended by revising paragraphs (g) and (h) to read as follows: §405.231 Medical and other health services; included items and services. Subject to the conditions, limitations, and exclusions set forth n 9405.232, the term "medical and other health services" means the following items or services: (g) Rental or, effective January li, 1968, the purchase of durab e medical equipment, including iron lungs, oxygen tents, hospital beds, renal dialysis systems, and wheelchairs used in the patient's home. For purposes of this paragraph, the term "home" does not include an insitution which meets the requirements of Section 1861 (e) (1) or 1861 (j) (1) of the Act--see §9405.1001 and 405.1101; with respect to dialysis facilities which render home training and provide equipment, supplies, and back-up services to patients who dialyze in the home, coverage s]iAll be limited to services of those dialysis facilities described in paragraph (h) of this section. (ii) Prosthetic devices (other than dental) which replace all or part of an 4-nternal body organ, including replacement of such devices. respect to renal dialysis facilities, during an interim period @@cginfting July 1, 1973, for facility dialysis services rendered on and after "hat date and util regulations setting forth conditions of Pa@--ticipat-i'.on for Iliese facilities are promulgated and applied, coverage ,@,.s 1-imited to the services of those facilities which on June 1, 1973, leave been providing the services and which have not substantia lly increased such services or which have, in the opinion of the Secretary, ul(-nionstrated the need for and appropriateness of their assumption of (,i- iiicreaFe in the provision of such services, in an effective and k.,t,(lsioinical system of (-Iironic renal diFease treatment, and which also one of. the following re(ju.trenients: (1,N 'I'lie facility is part of a participating hospital; or (2) It is a free-standing facility which meets the following conditions-- (i) Greets State or local licensure requirements, if any, (ii) Is a facility in which treatment is under the general supervision of a physician, who need not be a full-time supervisor. ll,tige 0 (iii) Has an affiliation, e.g., has arrangements for back-up care, etc., with a'participating hospital, and (iv) Agrees that no charge will be made for a covered dialysis service provided by the facility that is in excess of the charge determined under the health insurance program to be the reasonable charge of that facility and agrees to bill the program and not the patient for amounts reimbursable under the program. 4. Section 405.402 is amended by adding paragraph (g) to read as follows: 405.402 Cost reimbursement; general. (g) The Social Security Administration is authorized to issue temporary instructions modifying the provisions of this subpart to the extent it finds appropriate for cost reporting periods ending after June 30, 1973, in order to implement Section 201 (Coverage for Disability Beneficiaries Under Medicare) and 299I (Chronic Renal Disease Considered to Constitute Disability) of P.L. 92-603. In so doing, rules may be developed for establishing limits on costs and services above which reimbursement shall be made only upon Appropriate justification. 5. Section 405.502 is amended by adding paragraph (e) to read as follows: 9405.502 Criteria for determining reasonable charges. (e) Criteria for determination of reasonable charges under the chronic renal disease program--With respect to reimbursement for services in connection with renal dialysis and kidney transplantation, the normal medical market in which customary and prevailing charges can be deter- mined will not be available; most such services will be reimbursed by the health insurance program. With respect to such services, therefore, reasonable charges may be defined in terms related to charges or costs prior to July 1, 1973, the costs and profits that are reasonable when the treatments are provided in an effective and economical manner, and/or charges made for other services, taking into account comparable physicians' time and skill requirements. Definitions may be developed which describe the elements of service included within the scope of a dialysis treatment and limits may be established on charges and services above which reimbursement shall be made only upon appropriate justifi- cation. (i'R Doc. 73-13253 Filed 6-28-73; 8:45 a.m.) 111',ALTII Rl;,.(;OUI-,CES AD".ITI-i'[E'TP.ATIC),',] BUIT-AU OF@ IIEALTII @(;EJ)VICES & EVAI,UATION Members of the National Advisory Council on Regional iledical Procrapi@o ENCLOSURE(5 I,')to\f Acting Director, RMP SUBJECT: Background Information for November 26-27, 1973 Council Meeting Since we will be having a rather full agenda at the Council meeting next week, I believe it will be helpful to send you the following information in order to bring you up to date on some particulars since the last meeting in July. At the I-,resent meeting the Coliii(,-il @,ii.11 be reviewing applications for the first time in a year, and @.:(, will need as much time as possi-ble to conduct grant revie%,.,s. I will. try to ke.(--.,I) this report as brief as possibl.e and Refer as necessary to the attac,',I- mc,nts, some of which you have already seen. I. Status of the National Advisory Council Dr. Meyer and Dr. Mcrhedran resigned froia the Cciii,,cil. Dr. Moyer's resi.gniti.c)i-i was dLic to the of I-!i@; Private practice. Dr. tlcPli(@(ii.-on llIS TOOV(@D to Maiii.:. and a Position with the Veterans Administration. Since I)r. i.s now a Federal employee, lic, is precli.id(-,(! by law f)-c)-@ii continuing to serve on the Council. The terms of four present Council members, T)rs,. Cirinon, Po-1h, Watkins and Mr. Millil@on, expire on l@ovembcr 30, 1973. Si.nce Dr. Calincn and Dr. Rc)tli havp both served than one term., neither is el.igible for rcappoii)tlikent. After the extension of the program in June, l@APs were requested to propose potential Council i-ic)n-,irices, and Tiliny names were suggested. I'@'-IPS now I!as stil)riitted a slate. of iionii.iic-er, for con- sideration by the Secretary and, if approved, these ,!ill fill the -t( r- >, i: 13 vacancies that %.:ill. ist a -,r November 30t:h. Among others, the PMPE.. nominations incl.ude fc)3--rtcr members of the @-,PS I@eviev,, Committee (which was abolished last June 30), and individuals recommended by the Regions. We have been assured t)-iit the processing of the nominations will be expedited. Page 2 - Pleiiil)crs of the Nati.oncil Advisory Council on Pc-gi.oy,iil Medical Programs II, for The i.,-lTtouiit made available for @IP c!raiits in Year 1974 i,:, @41.236 millions Of this amount $]-'/.I. mill-io)a @vz3.s Septc@mber and awarded on October ]-. The October 1 a%.iarciFi intended to maintain the vi.@il.)ili.ty of' l@(-,gi-onF, through 31, 1973. The remaining *24.136 milli.oii has just ):)cen to us by the Depart-i@ic,@nt and will he awarded by us to 1,1@ll's in Applications for the remaining funds ,iill be considered at. the November Council meeting. III. Special Projects Pediatric Pulmonary Centers - In addition to the amounts discussed above, $2 mill.ion has been earmarked for continued support of Pediatric Pulmonary Centers through June 30, 1974. Eleven Centers have been funded by PIIPS in the past. (see Enclosure i.) To date awards have been made to ei-ght centers in the amount of $1,340,420. Two centers, California and New.Mexica, remain to be funded and the Georgia application has been withdrawn. Admini::4trition of the Pediatric Pulmonary Center grants has been transferred to the Bureau of Community Health Services in the Health Services Aclini-nis- trati.on. Any further funds for these projects after June 30, 1974 will come from that agency. Construction - Tile Second Supplemental Appropciation Act for Fiscal Tear 1973 included $5.0 milli-on under Title IX (-the @IP authority) for two specifically designated hospitals, one in Seattle the other in '.evmort, Vermont. At the Jul-y meeting of the Council- it was recommended that funding of these facilities proceed expedi- tiously in accordance with the Congressional mandate. (see Eiiclo- sure 2 .) The Seattle project is still in the early planning stage and no application has been received. The Vermont project has been awarded the $0.5 million intended for i.t. The $4.5 million balance for the Seattle construction nroject remains available until expended. PI/iP construction funds have been transferred to thci'llill- Burton program for award and administration. Emer ency Medical Services - The Hawaii EMS project was traiiE@fc@rred on November 1, 1973 from the Research Corporation of the University of Hawaii to the Hawaii Medical Association. This grant will be administered by the EMS Branch, Bureau of Health Services research and Evaluation, under an agreement with RMPS. All other I,,I.IS projects are stil.1 under PMPS. (See Enclosurei[3 for listing of active El-IS projects.) Health Service Education Activities - The Mahoning-Shenango Area Health Education Network, Inc. has been funded under a separate Page 3 Members of the National Advisory Council on Regional Medical Programs award through October 31, 1974. This project was originally funded through the Northeast Ohio Regional Medical Program, which itself was terminated on July 31, 1973. (3ee Enslosure 3 for listing of active hs/ea activities.) Contracts - A summary of P14PS contract activities is presented in Enclosure 4 IV. Coordinator Changes Since July, new Coordinators have been appointed in two Regions, Wisconsin and Greater Delaware Valley. Coordinators in the following Regions have been changed from "acting" to permanent: Alabama, Nassau Suffolk, Northlands, Tenncssee/Mid-Sotith, and Texas. (See Enclosure 5 for a complete and current list Of P14Ps and Coordinators.) V. Lawsuit A Class-action Suit against the Government has been filed by the Ilational Association of regional Medical Programs, et. al. The action seeks release of additional PI.IPS funds from both the FY 73 and FY 74 appropriations. The suit was filed on September 21, 1973 in the US District Court for the District of Columbia and assigned ' It has s i-,ned to Judge Flannery. to Judge Pratt. ubsequcnt:ly be r--ass , Various affidavits have been submitted. to the Court and i hearing before Judge Flannery is scheduled for December 7, 1971). The suit seeks: a. release of $90-100 million of FY 73 funds. b. release of all. l'Y 74 appropriated funds as they become releasable. ($60.453 milli-on for grants and contracts under the Continuing Resolution.) c. removal of all mission restrictions. d. removal of all restraints on the time within which funds may be allocated. . @ In an initial move in the suit, a request by the plaintiffs or a Temporary l@@;training order concerning availability of FY 73 funds was denied by Judge Pr@itt who ruled that IPY 73 funds had lapsed. This was subsequently reversed by the Court of Appeals and the issue of release of FY 73 funds has been restored as part of the VI. Coordinators' Meeting The national Steering Ccnjoitte-e of P,.i,P Cocr(3i.nitlors and later the Page 4 of. the Nati.ol@ii-tl Advisory Council- on Medicil r,r(-)cjrcims full group of ")3 IZMP Coorciin@itors met in Chicago on October The following i@;-ijor issues facing were out3.-Liicd to both groups. .I 1. Current r(.!E-,trictions on expenditures of funds by TZMPS 2. Coi,arni.tmerti to FY 1972 (-,,irinirke(3 f@'@-IS and activities whi-cl-i go Y.)Pyond Juno 30, 1974 termination d@).t-e. (See Enclosure 3 .) 3. The effective functioning of the Council in view of the fact thzit there is nor Reviev7 Committc@e to assi.st it and tli@it ,-he Council wi.1.1 be reduced seriously in membership if appoiiitiiL(---nts are not made quickly. 4. Approval of the proposed RMPS Spending Plan which is stil.1 subj6ct to change until final approval is secured. 5. Si.ze, composition and morale-of the RMPS stal@f. 6. Possible need to distribute substantial additional funds as the result of the litigation. Dr. Pahl, Mr. Chambliss, Mrs. Silsbee and Mr. Gardell answered questions from the Coordi.nators. (See Enclosure 6 VI!. Statu@; of @APS The Di.vi-sion of Professional and Technical. Dcvelo]-,nient has di-E)rr,z.intl.ed. The Kidney program staff li@i5, been to the Ilealth Services Administratic!n and the remaining E)IITD staff lieis been transferred to the Divi.sion of operations irid Development and other office units in RMPS. Public information about RVPS is the responsibility of the Bureau. The Planning and Evaluation function has been substantially reduced. P&E now essentially answers inquiries but performs no evaluation functions. There has been little change in the Office of the Director and, with some personnel changes, the Division of Or-)erati-ons and Development largely remains intact. Several. R14P staff members will be working part-time over the next few months on task forces concerned with the HRA legislative program. F@age 5 - Members c,f the national Advisory council on Regional Medical Programs VIII. Structure of Review A new, simplified review and award system has been instituted for FY 1974. Instructions containing the new requireraents were sent to the Regions on September 7, 1973. (See Enclosure 7 , especially item I@ re areas of concentration for review and item II on "Priorities and Options.") The review criteria and rating system used prior to phaseout are no longer germane. Fiscal Year 74 funds (i.e., the October 1 and forthcoming January 1 awards) are being allocated on the basis of a formula ceiling. Each Fegion's ceiling is calculated on the basis of its percentage share of the FY 73 annualized funding level. for all RMPS. Funds awarded in FY 73 for special projects such as EMS and HS/ea's have not been included in the annualized funding levels used in this calculation. Graphicall.y.tl,,e. formula looks like this: Flegion's Annualized Region's ceiling = FY 74 funds available X 73 Funci@nr, Annuil-j-zc-el Fu,-,(Jing for all Regions for 73 Each Region meeting the requirements of the Septeiriber 7tli instruc- tions is entitled to the amount it requestsup to the calculated ceiling. At the Council meeting RIPS staff will explain budgets and provide additional, up-to-date information (from site visits, phone contacts, etc.) on individual Regions, and present on occasion specific issues for Council consideration. @iritten staff summaries for all 53 active Regions are being mailed to Council members under separate cover. IX. @lif:cellineot,.s Dr. Margulies is now full.-tiy(ic as Acting Deputy Administrator, 1r-I.A. (All key positions in BRA, except Dr. Endicott, the Administrator, are "acting.) 1.1 Daniel Zwick, who was with Pi.' r. PS a number of years ago, has been al)liointcd Acting Director of the fall offic@e of Planiiiiiq, Eval.uati.oii and legislation. ,No former IU.IPS stiff, Mr. Iranian V,iri No,3trziiid inO;Mr. Bob l@.-alkington, have moved into key spots in Mr. Zwick's office. In August, the 1,@assiu-Suffoll- RNIP SO.I?Zlratc!d from and dissolved the joint prograit relationship with the lqassau-Stiffolk Cl@'ll. Ne-ither the ll,!'IP's coi-poi:@itc, strucLi.ii.-(-, nor staff structui.-f- have been adversely affected. Page 6 - Vcmijer!-; Of the National Advi.@;c,:r-y Council on Regional Medical Programs The Metro. New York J@IP has changed grante,@ to the New York Acadiamy of Medicine. The New @'J(.,rsey P-I.IP changed graiitc@o@ to the I(-@rsey regional Medical Y,rogram, Inc. The Tenne@;sc!c.!/Mid-South IZI-LI? has reorganized and is no\@i in full compliance with the RT4PS policy governing kA(;-Grantee-Coor'di.nator relationships. X. Sub-'Iec@ t(,o ))(@ Covered at the Coui-ic@!i.-I. Meeting This report does not cover the following Items,; of interest that will be diseased at the Council ii-t@c!ting: (a) new kidney regul.a- t-.Lons; (b) current status of PT4Ps; and (c) publications r(--E7,ul.tinq from Section 907 activities. We also expect tl-i@-,t Aqel-,Cy arid Dureau representatives will cover future plans and legislative dc@v(--lopmc@nt-s. I hope that the above information will help to bring you up to date on major program developments since the last meet-.ng in July. We recognize that bac';r rsnbcr has an unusually large number of applications a,@si.aiieci due to the depleted status of the Council. -I trust that your reading of the applications ,,jill give to you, as it has to our staff, a strong impression of the overall vitality and continued viability of the l@cgi.ons. 1 expect that we will have a very busy and productive meeting, azid I would like to thank the entire Council for their ti.iiir@ and effort. F'urthel- and more detailed staff-analyses of the November ipplicati.ons wall. be available at the meeting. Herbert B. Pahl, Ph.D. Enclosures SOURCES AND STATUS OF RMPS FUNDS ANTICIPATED TO BE AVAILABLE FOR EXPENDITURE BY RMPs IN FISCAL YEAR 1974, AS OF NOVEMBER 1, 1973 SOURCE AND CATEGORY OF FUNDS STATUS AS OurF Ill"/l-'/73 Fiscal 73 Funds FY 73 Balance ...................... $ 6.900 m Awarded 6/30/73 but may not be spent by RMPS. Direct Operations(73 Supplemental).. 1.700 m Available to RMPS Congressional Construction Earmark (73 Supplemental Appropriation)... .000 M $.5mawarded to North Country 'Hosp., Newport, Vt. Remaining $4.5 m earmarked by Congress for Seattle Childrents Medical Center. Total 73 Funds ..................... $13.600 m $13.600 m Fiscal 74 Funds RMP Support ......................... $41.236 m $17.1 awarded 10/l/73. Remaining $24.136 m apportioned and released for RMP Grants. HEW Earmark for Pediatric d in the Pulmonary Centers ................. 2.000 m Eight centers funde amount of $1,340,420. Two centers Calif. and N.M. still to be awarded. Georgia Pediatric Pulmonary application withdrawn. Direct Operations ................. 2.314 m Available to RMPS Other ............................. 1.464 m $.338 m set aside for HMO contract extensions through 12/31/73. Total 74 Funds .................... $47.014 m $47.014 m TOTAL ANTICIPATED AMOUNT FOR FY 74 .............. $60. 6@14 m