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MARKER
This is not a textual record. This is used as an
administrative marker by the William J. Clinton
Presidential Library Staff.
Collection/Record Group:
Clinton Presidential Records
Subgroup/Office of Origin:
Health Care Task Force
Series/Staff Member:
Subseries:
OA/ID Number:
1227
FoIderlD:
Folder Title:
New System Organization Briefing Book [4]
Stack:
Row:
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51
6
4
2
�TO:
Walter Zelman, Cluster I New System Organization
FROM:
Harold Seidman
SUBJECT:
HIPC Governance
DATE:
March 24, 1993
Key Questions
Choice of the health care system governance structure and administrative procedures is
of critical importance because it may well determine who will control and benefit from the
program and directly influence program policy and results. Organization and procedure are not
necessarily neutral and may favor some interests over others.
In evaluating organization options, the following key questions should be asked:
•
What are the functions to be performed - adjudication, rule-making including
setting standards, chartering or licensing, promotion, examination and
supervision, enforcement,financing,technical assistance? Which are expected
to be dominant?
Is it structured to be reactive or proactive?
What is the nature of the constituency or constituencies that are being created and
will it be susceptible to capture by any one constituency?
Does it have the status and visibility to attract the desired leadership?
Does it have unique operating requirements which justify exemptions from civil
service laws and regulations, personnel ceilings, procurement laws?
How will it be funded - general taxes and appropriations, dedicated taxes, trust
fund, fees? Off or on budget?
Will it facilitate coordination withrelatedfederal programs?
Whatever option is selected care should be taken to safeguard the President's
constitutional powers as chief executive. The proliferation of quasi-govemment and quasi-non
government institutions, often created for short term political tactical advantage, has contributed
to the public perception that the government is out of control and no one is in charge. These
�include government-sponsored enterprises (Fannie Mae, Freddie Mac), wholly governmentowned corporations classified as "mixed-ownership" (FDIC and Resolution Trust Corp.) and socalled independent boards and commissions (Post Office).
Board vs. Single Executive
The debate over when and under what circumstances plural executives are preferable to
single administrators has been going on since the founding of the Republic. The constitution's
wording with its reference to the "principal officer" in each executive department clearly
indicates a preference for single executives. In a 1792 letter to the Secretary of War, George
Washington wrote: "My observation on every employment in life is, that wherever and
whenever one person is found adequate to the discharge of a duty by close application thereto
it is worse executed by two persons, and scarcely done at all if three or more are employed
therein." (The Writings of George Washington, U.S. Govt. Print. Off. 1931-34, XXXH,
p. 160.) Alexander Hamilton argued that with a plural executive it "becomes impossible, admist
mutual accusations, to determine on where blame or the punishment of a pernicious measure,
or series of pernicious measures, ought really to fall. It is shifted from one to another with so
much dexterity and under such plausible appearances, that the public opinion is left in suspense
about the real author." (Federalist No. 70.)
Experience has confirmed the framer's criticisms of plural executives. The use of a
board or commission would appear to be indicated only when fiinctions are predominantly quasijudicial with decisions made in an adversary process and mainly on a case-by-case basis. The
case-by-case judicialized approach relies heavily on precedent and is not calculated to produce
innovative thinking. Regulatory commissions have proved to be highly susceptible to capture
by those industries they are supposed to regulate. Any proposal for a board or commission
inevitably would generate pressure by diverse interest groups for board representation!.
Given the weight of expert opinion and experience, the burden of proof would appear to
be on those advocating a plural authority. The basic question is which type of organization will
be best positioned to respond promptly and effectively to public needs and progress in science
and technology.
Every impartial study by such diverse groups as the first and second Hoover commission^
the President's Advisory Council on Executive Organization (1971), and the Congressional Panel
on Social Security Organization (1984), have concurred in the President's Committee on
Administrative Management (1937) conclusion:
For purposes of management boards and commissions have turned out to be
failures. Their mechanism is inevitably slow, cumbersome, wasteful and
ineffective, and does not lend itselfreadilyto cooperation with other agencies.
Even strong men on boards find their individual opinions are watered down in
reaching board decisions.
�Perhaps the best informed critics of board structure are board members themselves.
Many are completely frustrated by the hours that must be devoted to debate and negotiation with
their colleagues and the difficulty of obtaining timely action when such action is necessary. All
members of the Nuclear Energy Regulatory Commission and all confirmed chairpersons and
former executive directors of the Consumer Product Safety Commission recommended in 1987
that their respective commissions bereplacedby single administrators.
The conflict within the Social Security Board and inability to agree on appointment of
an executive director is typical. The board was abolished in 1946. More recently Congress
abolished the Federal Home Loan Bank Board because of its inability to act decisively in dealing
with the savings and loan crisis and transferredresponsibilityfor supervision of savings
associations to a single-headed Office of Thrift Supervision in the Treasury Department.
In summary multi-headed agencies may suffer from the following deficiencies:
Authority is dispersed, with impaired accountability to the President and
Congress.
Buck passing is common among members, particularly for controversial
decisions.
Inability to act promptly and decisively.
Susceptible to least common denominator decisions or stalemate, or decisions
which are unclear, sending mixed signals to the public.
Inability or unwillingness to delegate administration to a chief executive officer
or to a chairperson. Even when they have legal powers, general managers feel
constrained to obtain a consensus of board members before taking significant
actions.
If a board is found essential for politicalreasons,a part-time board comparable to the
Board of Governors of the Postal Service is preferable to a fiill-time board, but is suffers from
many of the same deficiencies and it is difficult to hold accountable.
Maintenance of Public Confidence
Some contend that citizens would have greater confidence in the integrity and impartiality
of a federal health care system administered by a bi-partisan board rather than by a single
individual. There is no evidence that the public has greater confidence in boards than in single
administrators. Such confidence is the product of leadership and demonstrated competence, not
structure. The Comptroller of the Currency has earned such confidence, but the Federal Home
Loan Bank Board did not.
�In rule-making, both multi-headed and single-headed agencies are subject to the
provisions ofthe Administrative Procedures Act of 1946 which are designed to protect the public
interest. Informal rule-making requires notice and opportunity for comment and major rulemaking requires a record developed before a*/administrative law judge with an opportunity for
cross-examination.
Provision may be made for ad hoc boards within an agency, appointed by the President
or agency head, with specialized jurisdictions. Examples are boards of contract appeals. An
alternative is an advisory board and a requirement that the administrator obtain the Board's
advice before taking specific actions. An example is the Advisory Committee^of the National
Institutes of Health which recommend grants. What is to be avoided is a regulatory body on the
model of the Postal Rate Commission with authority over a single federal agency. Such a
commission finds it difficult to resist the temptation to micro-manage
Organization Location
Options are: (1) an executive department headed by a cabinet secretary; (2) an
independent agency; (3) an independent agency subject to policy direction by a cabinet officer;
(4) an autonomous unit within a department i.e. Federal Energy Regulatory Commission; and
(5) integration as a separate administration within an executive department.
In enacting The Reorganization Act of 1949 Congress declared as a matter of policy that
the executive branch should be organized in a limited number of executive departments under
single heads according to major purposes or mission. Cabinet status generally has been reserved
for those agencies administering a broad range of programs of national importance which raise
policy issues meriting presidential attention. A reorganized Department of Health would meet
the criteria but a more limited health carefinancingprogram would not.
Without more precise identification of the interrelationships of the proposed program with
other federal programs, it is difficult make a choice among the aAw options. Generally we
should avoid further balkanization of the executive branch and, wherever feasible and
appropriate, vest responsibility for policy direction and oversight in an official below the
President.
i:\home\gdp\wpdata\hipc.hs
�^NAPA
National Academy of Public Administration
Chanered by Congresi
STATEMENT OF
HAROLD SEIDMAN
SENIOR FELLOW
NATIONAL ACADEMY OF PUBLIC ADMINISTRATION
BEFORE
THE UNITED STATES SENATE SPECIAL COMMITTEE ON AGING
ON
REORGANIZATION OF THE SOCIAL SECURITY ADMINISTRATION
OCTOBER 3, 1989
1120 G Street. N.W. Suite 540 Washington. D C. 20005-3801 (202) 347-3190
�Mr. Chairman and Members of the Committee:
The Congress is currently considering various proposals to remove the Social
Security Administration from the Department of Health and Human Services and
to establish it as an independent agency within the executive branch headed by a
full-time, three-member Social Security Board. Establishing a board would mark a
return to the form of organization which existed until the board was abolished by
Reorganization Plan No. 2 of 1946 and replaced by a single administrator.
The Chairman of this Committee requested that the National Academy of
Public Administration, a non-profit organization chartered by the Congress,
examine the historical and organizational considerations regarding a board form of
executive governance and evaluate the strengths and weaknesses of plural
executives.
A report prepared by me and Ronald C. Moe has been submitted to
the Committee.
The report was reviewed by a distinguished advisory panel of
Academy Fellows composed of Robert M. Ball, Alan Dean, Arthur Flemming,
Dwight Ink, Elmer Staats, and Don Wortman. Except for Robert Ball and Arthur
Flemming, whose separate statement is included in the report, the panel endorsed
our findings and conclusions.
Reestablishing a Social Security Board would be counter to findings and
recommendations of almost every expert and impartial group that has studied the
organization and administration of executive agencies.
These include the
President's Committee on Administrative Management (1937), the first and second
Commissions on the Executive Branch of the Government (1949 and 1955), the
President's Advisory Council on Executive Organization (1971), and the
Congressional Panel on Social Security Organization (1984).
Each of these
independent groups came to the same conclusion as the President's Committee on
Administrative Management which found: "For purposes of management, boards
1
�and commissions have turned out to be failures. Their mechanism is inevitably
slow, cumbersome, wasteful and ineffective, and does not lend itself readily to
cooperation with other agencies. Even strong men on boards find their individual
opinions are watered down in reaching board decisions."
Recent experience with the Consumer Product Safety Commission, the
Federal Home Loan Bank Board, and Nuclear Regulatory Commission provides
tangible evidence of the management deficiences of plural executives and
confirms the findings of these expert observers. It should be noted that no major
private U.S. corporation is administered by a full-time board.
In view of the overwhelming weight of expert opinion and the well
documented evidence of weaknesses inherent in board management, it would seem
that the burden of proof rests with those advocating reestablishment of a fulltime Social Security Board.
Arguments for a board are based on certain
assumptions about how a board would behave. No recent examples are cited of
boards that have operated in the manner contemplated by proponents of board
structure. I know of no board administering complex operating programs that at
present conforms to the model described in testimony by board advocates.
It has been said that boards works only when composed of an Edgar Bergen,
as chairperson, and a Charlie McCarthy and a Mortimer Snerd. Boards never work
when composed of two or three Edgar Bergens. A strong chairperson who is
permitted to function, in effect, as a de facto single administrator may
compensate
for some, but not all, deficiences of board management.
Accountability to the Congress inevitably is blurred when the actions of a single
individual are justified as collective decisions.
Given the difficulty of maintaining a clear dividing line between policy and
administration, few boards are willing to delegate responsibility for day-to-day
management and operations to a chief executive officer or to refrain from
2
�micromanaging. Vesting statutory authorities independent of the board in a chief
executive officer or general manager does not solve the problem. Even when they
have the legal power, general managers feel constrained to obtain a consensus of
board members before taking significant actions. The relationship of a CEO in
private industry to a board chairman is not comparable to that of a CEO to a full
time Social Security Board. In the private sector the relationship between a
strong full-time board chairman and a strong CEO is uneasy at best and often
produces serious conflicts.
It would be regrettable if the debate over organization form were allowed to
divert attention from the actions which need to be taken to assure the integrity of
the social security system and its efficient operation.
We persist in seeking
organizational solutions to what are management problems. Organization under
either a board or single administrator or creation of an independent or Cabinet
agency cannot guarantee a satisfactory outcome. A 1988 panel report, prepared
by the National Academy of Public Administration at the request of the Senate
Committee on Governmental Affairs, identifies criteria which should be
considered in evaluating proposals to elevate agencies to Cabinet status. In the
past Cabinet status has been reserved for those agencies administering a broad
range of programs of national importance which raise policy issues meriting
presidential attention. Except for the Veterans Administration, cabinet status has
not been accorded programs serving a limited clientele or single geographic
region. The Academy panel found that "effectiveness of VA's programs is not
likely to be improved materially" simply by conversion to a Cabinet department.
Elevation of the Social Security Administration to Cabinet status would have to be
justified by reasons other than improved effectiveness of social security
programs.
�W need to be concerned also about how far we go in balkanizing the
e
executive branch. While it is difficult to know where to draw the line among the
many contenders for Cabinet status, it is clear that the President could not
manage a government in which agencies representing every major constitutency
reported directly to him.
In enacting the Reorganization Act of 1949 the
Congress declared as a matter of policy that the executive branch should be
organized in a limited number of agencies according to major purposes.
If our main objectives are restoring confidence in the integrity of the social
security system and bringing about urgently needed improvements in its
operations, then what is required is not reorganization, but restoration of
continuity and professional competence in the leadership and administration of the
system.
Provision of a fixed term for the administrator would constitute an
expression of congressional intent that the position should not rotate with changes
in administration.
The Congressional Panel on Social Security Organization identified the
problems and proposed appropriate solutions. Its report should provide the agenda
for priority attention by the Congress.
If Congress concludes that public
confidence requires some form of board supervision or oversight, a bi-partisan
advisory board, as recommended by that panel, would have the independence to
command public confidence in its evaluation of SSA policies and performance. A
full-time board would be placed in the position of evaluating itself and its
appraisals would inevitably be regarded as self-serving.
Mr. Chairman, this concludes my prepared testimony. I would be pleased to
respond to any questions the Committee may have.
�Clinton Presidential Records
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This marker identifies the place of a tabbed divider. Given our
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Divider Title:
3_
�Tab 3:
Federal-State Relations
1.
Lessons Learned from Health Planning
Paper developed by Shoshanna Sofaer, February 14, 1993, that discusses
lessons learned from the federal/state health planning program of the
1970s/early 1980s.
Issues covered include: structure of the program, governance constructs, and
lessons learned for health insurance purchasing cooperatives.
2.
Legal issues: Tax deductibility and state opt-out
Department of Justice memorandum, April 2, 1993, which discusses the
constitutionality of several tax policy options.
Issues covered include: limiting the tax deductibility of health insurance to
states that meet federal requirements in the reformed health system.
3.
Legal issues: Federal State Relationship
Department of Justice memorandum, March 5, 1993, which discusses the
constitutionality of several different options.
Issues covered include: background on the law regarding federal/state
relations, the ability of the federal government to place conditions on federal
funds and aid, and the authority of the federal government to regulate economic
activity.
�GOVERNANCE ISSUES IN HEALTH CARE REFORM:
LESSONS LEARNED FROM HEALTH PLANNING
Shoshanna sofaer, February 14, 1993
BACKGROUND
I n 1974, Congress passed PL 93-641, the National Health Planning
& Resource Development Act. That a c t mandated the development o f
agencies a t t h e s t a t e and l o c a l l e v e l whose tasks included,
g e n e r a l l y , t h e development and implementation o f comprehensive
h e a l t h plans and t h e r e g u l a t i o n o f new f a c i l i t y development and
major equipment purchase through a process c a l l e d c e r t i f i c a t e o f
need (CON). Note t h a t CON s t i l l e x i s t s i n varying forms i n many
states.
The i n s t i t u t i o n a l s t r u c t u r e created by PL 93-641 had three
levels.
At t h e f e d e r a l l e v e l , t h e r e was a N a t i o n a l Health
Planning Council, whose r e s p o n s i b i l i t y was t o advise DHHS (then
at f i r s t DHEW) t o develop and promulgate planning standards t o
guide both plan development and r e g u l a t i o n .
I believe that the
members o f t h i s Council were appointed by a combination o f DHHS
and Congress, but I am not sure.
I t was not a very powerful
group i n any case.
Note t h a t t h e r e was no requirement f o r
planning o r p o l i c y development t o be c a r r i e d out a t t h e n a t i o n a l
level.
At t h e s t a t e l e v e l , t h e law mandated State Health Planning and
Development Agencies (SHPDAs), which were i n a l l cases bodies o f
s t a t e government. They also produced a State Health Plan, based
upon l o c a l plans b u t also upon independent planning assessments,
and a State Medical F a c i l i t i e s Plan, t o address t h e new f o r
modernization, c o n s t r u c t i o n and conversion o f medical f a c i l i t i e s .
They had f i n a l a u t h o r i t y t o issue " c e r t i f i c a t e s o f need" f o r
f a c i l i t i e s and equipment, based on t h e i r f a c i l i t i e s p l a n and on
the recommendations o f the r e g i o n a l l e v e l o f the planning system.
Health Systems Agencies (HSAs). The law also mandated c r e a t i o n
of an advisory c o u n c i l , know as the Statewide Health Coordinating
Council (SHCC) .
-v '
•
I n i t i a l l y , t h e Governors o f each s t a t e were responsible f o r
d e f i n i n g t h e boundaries o f Health Systems Areas i n t h e s t a t e ;
these were the boundaries, then, o f the HSAs i n the s t a t e . This
was one o f t h e very few p r e r o g a t i v e s o f s t a t e o f f i c i a l s w i t h
respect t o the HSAs. However, the Secretary o f D E could r e v i s e
HW
these i f they d i d not meet c r i t e r i a i n the l e g i s l a t i o n or d i d not
provide adequate j u s t i f i c a t i o n f o r n o t meeting these c r i t e r i a .
Thus i n C a l i f o r n i a some r u r a l area s u c c e s s f u l l y fought f o r HSAs
t h a t d i d not include a major m e t r o p o l i t a n area, against the views
of then Governor J e r r y Brown and h i s s t a f f who wanted t o support
" r e g i o n a l i z a t i o n " o f care by i n c l u d i n g such an area, w i t h major
t e r t i a r y care f a c i l i t i e s , i n each r e g i o n .
�A few s t a t e s were e l i g i b l e t o create a "1536" agency which
combined t h e f u n c t i o n s of l o c a l and s t a t e h e a l t h planning i n one
u n i t o f government.
However, some areas t h a t would have been
p e r m i t t e d t o take t h i s r o u t e chose t o create a state-wide HSA
separate and d i s t i n c t from the government-based SHPDA.
Health Systems Agencies
One Health Systems Areas were defined, e l i g i b l e organizations
could apply t o be designated as HSAs t o serve those areas.
Communities had three options s p e l l e d out i n t h e l e g i s l a t i o n f o r
l e g a l sponsorship o f HSAs:
n o n - p r o f i t corporations; p u b l i c
r e g i o n a l planning bodies (also c a l l e d j o i n t powers arrangements)
and s i n g l e u n i t s o f general l o c a l government. Note t h a t t h e two
p u b l i c models were possible only when t h e boundaries of t h e HSA
defined by t h e Governor e x a c t l y matched t h e boundaries of t h e
l o c a l j u r i s d i c t i o n ( s ) involved. Governors also had some i n f o r m a l
i n f l u e n c e over t h e designation decisions.
By
f a r t h e most common form o f HSA was t h e n o n - p r o f i t
corporation.
I n p a r t t h i s was because o f t h e existence of
previous h e a l t h planning bodies, c a l l e d Comprehensive Health
Planning Agencies, which were n o n - p r o f i t s .
The sponsoring
organization's a c t i v i t i e s were t o be l i m i t e d t o h e a l t h planning
and resource development.
They could not be educational
i n s t i t u t i o n s and they were precluded from d i r e c t d e l i v e r y o f
h e a l t h care services.
Note t h a t funding f o r both t h e SHPDAs and t h e HSAs came d i r e c t l y
from t h e f e d e r a l government, s p e c i f i c a l l y from t h e Bureau o f
Health Planning (BHP) i n what became t h e Health Resources and
Services A d m i n i s t r a t i o n (HRSA) o f what i s now DHHS. Funding f o r
l o c a l agencies d i d n o t go through t h e s t a t e agency.
The Act
s p e c i f i e d a formula funding o f 50 cents per c a p i t a w i t h a maximum
l e v e l o f $3.75 m i l l i o n and a minimum l e v e l o f $175,000. HSAs
could n o t accept funding from organizations w i t h a f i d u c i a r y
i n t e r e s t i n t h e d e l i v e r y o f h e a l t h care services. They could do
other f u n d - r a i s i n g , and f e d e r a l matching funds were provided
where t h i s was t h e case. Some s t a t e s provided a d d i t i o n a l funding
t o HSAs, t o c a r r y out a d d i t i o n a l h e a l t h planning f u n c t i o n s , such
as p r o v i d i n g recommendations f o r t h e designation o f medically
underserved areas.
I n many but n o t a l l communities, there were m u l t i p l e a p p l i c a t i o n s
f o r designation as an HSA.
I n many cases, one o r more pree x i s t i n g comprehensive h e a l t h planning agencies applied f o r
designation.
Other a p p l i c a n t s included p r o v i d e r groups such as
l o c a l medical s o c i e t i e s or h o s p i t a l c o u n c i l s ; l o c a l government;
and o f t e n d i s g r u n t l e d community agencies representing s p e c i f i c
e t h n i c or geographic sub-groups.
I n many cases, t h e competing
a p p l i c a t i o n was a p l o y t o increase r e p r e s e n t a t i o n on t h e
governing body r a t h e r than a serious a p p l i c a t i o n . However, i n
many communities a p p l i c a t i o n s from l o c a l government were more
serious, r e f l e c t i n g a b e l i e f t h a t only an agency accountable t o
�elected
officials
could
legitimately carry out the HSAs
functions.
Successful applicants received a conditional
designation for a period of time and then a f i n a l designation
a f t e r successful completion of certain tasks specified by BHP.
HSA Governing Body Requirements
The Act specified, i n great d e t a i l , the size, composition and
functions of the HSA governing body, mandating that whatever
other governance an agency had (e.g. a County Board of
Supervisors), i t must hava a separate and d i s t i n c t governing body
assigned s p e c i f i c a l l y to the functions articulated i n the Act and
meeting i t s other requirements. I n some cases public bodies had
two l e v e l s of governance: a Governing Board, made up entirely of
l o c a l elected o f f i c i a l s ; and the actual Governing Body, designed
to meet the c r i t e r i a i n the law.
Governing bodies were to have no l e s s than ten and no more than
3 0 members, unless an Executive Committee was created with l e s s
that 3 0 members. I n fact, most HSAs had about 30 members, i n
part because there was v i r t u a l l y no way for them to meet the
representational c r i t e r i a described below with fewer people. I
have studied one board with 63 members i n an HSA that covered a
very large number of counties i n northern-most California; i t
actually functioned extremely well.
Governing
body
responsibilities
included
the internal
administrative and f i s c a l a f f a i r s of the HSA; establishment of
plans; awarding of Area Health Services Development grants (a
function they never exercised since the money for these was never
appropriated); and conduct of various reviews.
Governing bodies had to have a majority, but no more than 60
percent of t h e i r members be consumer and/or major purchasers of
health care.
As a group, these consumer members were to be
"broadly representative of the s o c i a l , economic, l i n g u i s t i c and
r a c i a l populations, geographic areas of the health service area,
and major purchasers of health care."
Consumers could not be
c l o s e l y related to providers (e.g. be MDs wives). The remaining
members were to be health care providers. At least 1/3 had to be
d i r e c t providers, representing physicians, dentists, nurses and
other health professionals.
Other provider members would
represent health care i n s t i t u t i o n s such as hospitals, long-term
care
facilities
and HMOs; health
care
insurers, health
professional schools; and a l l i e d health professionals. I f there
was an HMO i n the area, they had to have a t l e a s t one member
representing t h e i r interests on the governing body. I f there was
a
VA f a c i l i t i e s
i n the area,
they
could
designate
a
representative who would serve ex o f f i c i o .
HSAs were also
required
to include
public elected o f f i c i a l s
and other
representatives of l o c a l government.
�We're n o t done y e t !
O v e r a l l , t h e governing body had t o ensure
o v e r a l l p r o p o r t i o n a l representation o f t h e metropolitan and nonm e t r o p o l i t a n areas of t h e i r region.
These
compositional
s p e c i f i c a t i o n s applied not only t o t h e HSA governing body, but t o
major committees ( t o t h e extent f e a s i b l e ) and t o any sub-area
c o u n c i l s created by t h e HSA t o operate a t a s t i l l more l o c a l
level.
The law d i d not s p e c i f i c how t h e members were t o be chosen; t h e
methods were t o be included i n by-laws developed during t h e
c o n d i t i o n a l designation period and reviewed and approved by DHEW.
I n many cases, t h e o r i g i n a l board or how i t would be chosen had
been s p e c i f i e d i n t h e a p p l i c a t i o n . By-laws generally s p e c i f i e d
staggered terms of o f f i c e f o r members and l i m i t s i n t h e number o f
consecutive terms.
Boards of n o n - p r o f i t s were generally s e l f selected from nominations made by a v a r i e t y o f agencies. I n some
cases, a p a r t i c u l a r agency (such as a p r o f e s s i o n a l association)
was designated i n t h e by-laws as t h e one which would nominate f o r
a p a r t i c u l a r s l o t . Sometimes t h e r i g h t t o nominate r o t a t e d among
a group o f agencies.
Boards o f p u b l i c agencies were generally
appointed by l o c a l elected o f f i c i a l s , based on nominations coming
from a combination o f current board members and s t a f f . De f a c t o ,
s t a f f had a l o t o f i n f l u e n c e over who got onto t h e board, except
i n those cases where they were very weak o v e r a l l .
There were c o n f l i c t o f i n t e r e s t r u l e s t h a t required members t o
r e f r a i n from p a r t i c i p a t i o n i n decisions t h a t a f f e c t e d them i n
some way.
These were t r i c k y t o enforce.
For example, i f a
p a r t i c u l a r h o s p i t a l i n t h e community had asked f o r a CON, then an
a d m i n i s t r a t o r from t h a t h o s p i t a l would have t o r e f r a i n from
p a r t i c i p a t i n g but i t wasn't c l e a r t h a t t h e a d m i n i s t r a t o r from a
competing h o s p i t a l would have t o do so, o r a member of t h e
medical s t a f f o f t h a t h o s p i t a l or a competing h o s p i t a l .
DYNAMICS OF GOVERNANCE IH THE HSAS
1.
The linkage between t h e HSA and l o c a l elected o f f i c i a l s was
not strong. I n t e r e s t i n g l y , there i s l i t t l e evidence t h a t " p u b l i c
agency" HSAs had more i n t e r a c t i o n w i t h and support from, l o c a l
e l e c t e d o f f i c i a l s (LEOs) than d i d t h e n o n - p r o f i t s .
Some nonp r o f i t s appear t o have gone out o f t h e i r way t o reach out t o LEOs
w h i l e t h e p u b l i c agencies sometimes behaved as i f t h e i r
p a r t i c i p a t i o n could simply be taken f o r granted.
2.
The r e l a t i o n s h i p between t h e HSA and t h e s t a t e h e a l t h
planning agencies also v a r i e d and could a t times be q u i t e tense.
HSAs had r e p r e s e n t a t i v e .on t h e SHCC. The focus of t h e c o n f l i c t
was o f t e n a p a r t i c u l a r CON d e c i s i o n .
I n some cases, providers
were able t o e x e r t more pressure a t t h e s t a t e l e v e l than they had
a t t h e l o c a l l e v e l , r e s u l t i n g i n s i t u a t i o n s where t h e s t a t e
overturned a d e n i a l o f a CON a t t h e l o c a l l e v e l . Sometimes t h e
l o c a l HSA e s s e n t i a l l y wimped out and pushed t h e tough decision up
t o t h e s t a t e l e v e l i n order t o avoid a l i e n a t i n g t h e i r providers.
�3.
Putting
together
boards
that
could
meet
the
"representational" c r i t e r i a i n the law was often a nightmare. I t
frequently led to more emphasis on demographic and professional
c h a r a c t e r i s t i c s than to either commitment, expertise, legitimacy
or s k i l l i n identifying board members.
4.
I n many cases, the HSA board or a substantial sub-group of
the board was at odds with the mission of the agency and
participated only to protect t h e i r turf, make sure the agency did
l i t t l e or nothing of significance, or undermine i t more actively.
5.
The law reflected what Ted Marmor and Jim Morone term a
"mirror" approach to representation. Thus, i f you were a nurse,
you by d e f i n i t i o n represented nurses. I f you were Latino, you by
definition represented Latinos. This i s a fundamentally flawed
approach. The law had no mechanisms to ensure accountability of
any
kind
of these
"representatives" to those they were
purportedly representing.
6.
De facto, given the much greater degree of pre-existing
organization among providers, they were f a r more l i k e l y to have
true "representatives" on the HSA boards.
7.
There were substantial gaps i n the levels of expertise of
provider and consumer members of boards, which i n turn limited
the a b i l i t y of the consumer to exercise power i n proportion to
t h e i r actual numbers.
Consumers' responses included the
following:
being intimidated by providers; being resentful of
providers; deferring to providers; withdrawing from the process
of decision-making; choosing one issue and pushing that rather
than getting involved i n the broad range of concerns; learning
f a s t and getting on a par with providers.
The l a s t response
didn't occur often enough.
8.
Gaps i n expertise were exacerbated i n some agencies by an
unwillingness of staff to provide s p e c i f i c extra support to the
consumer members of the board.
Often, s t a f f were not good a t
providing background materials to a s s i s t i n decision-making.
9.
Gaps were also exacerbated because providers almost always
had more and better data than the s t a f f of the agency. Note that
the l e v e l and quality of data available a t that point i n time was
substantially lower than that available today, e s p e c i a l l y to
purchasers.
Providers no longer have the degree of monopoly of
data they had i n the past.
10. Note that providers-served on boards as part of t h e i r jobs,
while consumers served as a c i v i c responsibility. Board members
were not paid. This created another serious d i s p a r i t y i n a b i l i t y
to p a r t i c i p a t e and function e f f e c t i v e l y .
�11. HSA s t a f f v a r i e d widely i n the q u a l i t y of t h e i r i n t e r a c t i o n
w i t h boards.
Board-staff r e l a t i o n s h i p s proved t o be extremely
s i g n i f i c a n t i n determining the r e l a t i v e success of HSAs. S t a f f
had
t o f a c i l i t a t e s t r u c t u r e and encourage e f f e c t i v e board
decision-making r a t h e r than viewing boards as a nuisance t o be
manipulated or ignored.
The best s t a f f s pushed decision-making
onto boards and used board members e f f e c t i v e l y as spokespeople
f o r the agency i n the community and beyond. On the other hand,
when boards d i d not respect or t r u s t s t a f f , ( t y p i c a l l y because
s t a f f got too f a r i n f r o n t of them or were caught being
manipulative) t h i n g s got stymied.
LESSONS LEARNED AND
QUESTIONS RAISED
1.
I t i s possible t o have a system t h a t emanates t o both s t a t e
and sub-state r e g i o n a l l e v e l s from the f e d e r a l government, i f the
vast m a j o r i t y of the funding comes d i r e c t l y from the f e d e r a l
government.
Do we
want t o d i s t i n g u i s h between funding f o r HIPC
a d m i n i s t r a t i v e operations and the a c t u a l d o l l a r s spent t o
purchase coverage?
What would t h a t imply f o r appropriate
governance?
2.
I t i s also possible t o o u t l i n e a few options f o r HIPC
sponsorship i n the l e g i s l a t i o n , as was done w i t h the HSAs; even
though h i s t o r i c a l circumstances l e d t o a predominance of one
model, t h i s would not have t o be t h e case w i t h HIPCs, which don't
have c l e a r "predecessor" agencies i n most regions. Options might
include
*
p u b l i c bodies ( e i t h e r representing
j u r i s d i c t i o n or m u l t i p l e j u r i s d i c t i o n s )
a
single
*
q u a s i - p u b l i c (or q u a s i - p r i v a t e ) organizations
*
large
n o n - p r o f i t corporations
The idea of having m u l t i p l e p o t e n t i a l HIPCs competing f o r
d e s i g n a t i o n may be a very good one.
The question i s a t what
l e v e l would i n i t i a l s e l e c t i o n decisions be made.
3.
I t i s also possible t o o u t l i n e a few options f o r how HIPC
board members would be chosen, or t o s p e c i f y s e l e c t i o n mechanisms
f o r a l l HIPCs.
The
s e l e c t i o n options may
parallel
the
sponsorship options, or they might be d i s t i n c t from them (more
l i k e a Chinese menu: one from Column A and one from Column B).
4.
I t i s c l e a r l y possible t o e l i m i n a t e c e r t a i n kinds of
o r g a n i z a t i o n s from sponsorship, and c e r t a i n kinds of i n d i v i d u a l s
from membership on the board.
I t i s also p o s s i b l e t o develop
b e t t e r c o n f l i c t of i n t e r e s t r u l e s both f o r sponsors and members
(e.g. no f i d u c i a r y i n t e r e s t i n an o r g a n i z a t i o n t h a t d e l i v e r s
�h e a l t h care or i n a h e a l t h p l a n ; no close f a m i l i a l r e l a t i o n s h i p
w i t h anyone who does).
This might get t r i c k y , however, f o r governments and
employers who a c t u a l l y d e l i v e r h e a l t h services as w e l l as pay f o r
coverage.
For example, i n some s t a t e s there are no strong l o c a l
p u b l i c h e a l t h s e r v i c e agencies but r a t h e r o u t s t a t i o n e d s t a f f of
s t a t e h e a l t h agencies.
Some employers and labor t r u s t s o f f e r
d i r e c t care e i t h e r a t the w o r k s i t e (e.g. occupational nurses;
w o r k s i t e h e a l t h promotion) or a t employer or labor t r u s t owned
and operated c l i n i c s .
5.
Excessive s p e c i f i c i t y i n the l e g i s l a t i o n and the guidance
provided t o HSAs o f t e n made them i n t o r e a c t i v e r a t h e r than
p r o a c t i v e organizations t h a t focussed on procedure r a t h e r than
substance.
This was t r u e of the s p e c i f i c a t i o n s regarding size
and composition of governing bodies. These had the worst of both
worlds: they were too d e t a i l e d and they d i d n ' t achieve what they
set
out t o do:
i . e . they d i d n ' t r e s u l t i n a predominant
i n f l u e n c e of consumers r a t h e r than providers.
In the case of HIPCs, we can eliminate the providers and the
insurers from participation e n t i r e l y . However, there remains the
potential for unbalanced participation by those representing
(consumers) those who use services and who may d i r e c t l y pay
little
or
nothing for either coverage or
services and
(government; employers) those who pay d i r e c t l y for coverage or
services. Once again, the major purchasers are l i k e l y to have a
pre-existing l e v e l of organization, as well as h i s t o r i c a l
expertise, that w i l l give them an edge.
This r a i s e s a number of questions about whether and how t o
develop comparable l e v e l s of o r g a n i z a t i o n and expertise among
consumers, and the r o l e of the HIPC and i t s s t a f f i n doing so.
6.
The q u a l i t y of data a v a i l a b l e t o governing boards, the
q u a l i t y of a n a l y s i s of data provided t o them by s t a f f , the
relevance of data t o the i n t e r e s t s and concerns of consumers, and
the c o m p r e h e n s i b i l i t y of data by l a y people as w e l l as "experts"
w i l l s i g n i f i c a n t l y i n f l u e n c e the a c t u a l dynamic of p a r t i c i p a t i o n
and decision-making.
There i s a b i t of a c i r c l e here: w i t h o u t e f f e c t i v e consumer
reps, the data t o t r a c k the i n d i c a t o r s they care about might not
be a v a i l a b l e .
Unless the data are a v a i l a b l e , you won't get
e f f e c t i v e consumer representation.
S u b s t a n t i a l t r a i n i n g and t e c h n i c a l assistance w i l l be needed
both by HIPC s t a f f and boards t o address some of these issues and
get consumers "jump-started." However, c r e a t i v e and extensive
outreach needs t o be done t o i d e n t i f y e x i s t i n g o r g a n i z a t i o n s t h a t
do have the capacity t o e f f e c t i v e l y represent and advocate f o r
h e a l t h care consumers. Just who i s l i k e l y t o be best a t t h i s
w i l l vary from r e g i o n t o region.
�7.
Again, i t would appear that very clear c r i t e r i a need to be
specified that a l l HIPCs and t h e i r governing boards should be
required to meet; the way they meet them should be articulated,
well j u s t i f i e d , but not previously prescribed. This requires a
l e v e l of accountable, non-bureaucratic decision-making a t the
state and/or federal levels to make determinations about whether
c r i t e r i a are met i n i t i a l l y , and are continuing to be met.
8.
I n a very few cases, HSAs did not get f i n a l designation, or
they l o s t t h e i r designation because they f a i l e d so miserably to
perform t h e i r functions.
We may want to i n s t i t u t e a periodic re-opening (maybe every
5, 7 or ten years) of the bidding to be the regional HIPC. We
may also want to make sure that a HIPC can be "de-designated" i f
they t r u l y screw up.
8
�US. Dqsrtmeot rf Justice
ac 3B30
AP 2 19
P
93
MEMORANDUM
To:
Paul Starr
Lois Quam
Whits House Haalth Care Task Force
Prom: Douglas Letter
Robert Zener
Appellate Litigacioa Counsel
Civil Division
Depam&enc of Justice
You asked for tha advice
the Department of Justice on the
following question: are there constitucional problems i f
Congress passes a statute under 'which ic provides some type of
credi c or deduction from federal Income taxes to employers for
amouncs they pay for employee health benefits, but the aaployers
are entitled tc the credit or deduction only i f the individual
employer' s state has a regulatory system in place concerning
delivery of health care and that state system meets federal
requirements for such plans.
As we explained when we man with you yesterday, such
legislation would very likely survive a constitutional challenge
as* long as the tax credit or deduction for employer health care
payments can be tied rationally to the federal scheme designed to
encourage the states to adopt haalth care regulatory programs
that meet federal requirements. This memorandum explains the
reasons for our oral 'advice. Because of your need for this
information quickly, this memorandum has not been cleared through
the Attorney "General's Office.
l . As you are already avarp, the legislation you propose i s
similar to the federal tax credit given to en^loyers who make
contributions to state unemployment insurance schemes that meet
criteria established by federal ^Legislation. See Title 26 of the
United States Code, Sections 3302 and 3304.
The precursor of that unen^^oytrent tax scheme was challenged,
shortly after i t was enacced in 1935, and vas upheld by the
Supreme Court in an opinion written by the highly esteemed
Justice Cardczo. In Qy? q Steward Tftrtrn*? F ?! v. Davis. 301
U.S. 548 (1°37), the Court held that the scheme was a valid
1
T
�^4. 02/83
18:20
O202 633 1151
CIVIL/AhfEUAlE
exercise of Congress' power under the Taxing and Spending Clause
of the Constitution.
Ia steward Machiaa Co.. an employer attacked on a variety of
grounds -- including the Tenth Amendment and the Fifth Amendment
Due Process Clause -- the scheme under which i t was required to
pay unemployment taxes. A key aspect of the Court's ruling was
its determination that Congress vas not imposing a condition that
was unrelated to the federal goal to be achieved. See 301 U.S.
at 590-91. The Court also based i t s decision on the fact that
the state of the en^loyer plaintiff had voluntarily cooperated
with the federal scheme and had adopted a state unemployment
benefits program that conformed to federal standards. However,
we have no reason to believe tliat- the result would be different
i f a state itself had brought t^he challenge rather than an
individual en?3loyer/taxpayer.
In the years since the Supreme Court's ruling in steward
Machine Co.. the federal courtsj have continued to uphold similar
federal schemes. Thus, in United States v. itev York. 315 U.S.
510, 515-17 (1942), the Supreme Court relied upon Steward Machine
Co. in rejecting an argument that the credit to a taxpayer who
makes payments to a qualified state unemployment benefits scheme
is a "penalty against an employer who does not.
11
More recently, in EflUtti CarTliag. v. EaJSBX* 485 U.S. 505
(1588) , the Supreme Court upheld against an attack by a state a
federal scheme providing that holders of state bonds would not be
entitled to an exemption frcm federal tax on interest from state
bonds unless those bonds meet specified federal requirements.
The federal scheme effectively compeiled the states to issue a
particular type of bond rather ^han another, thereby requiring
state gsvemments to change theax own laws in order to take
advantage of the associated federal benefits. ' (In doing so, the
Court did note, however, i t s continuing reservation that an some
ccint the financial inducement ciffered to states by Congress
under a particular program "mignt be so coejrcive as to be
unconstitutional." l i - at 512 n.6. Citing South Dakota v. Csie.
482 U.S. 203 (1987).)
Just last 'term, in New York v. United States. 112 S. Ct.
2408 (1992), the Supreme Court again upheld a federal scheme that
provided a benefit to individuals only i f their states had joined
a federal program. There, one df the provisions of federal law
under attack provided that states could either regulate
radioactive waste according to federal standards or their
residents who produce radioactive waste would be subject to
federal regulation authorizing epsxes with radioactive disposal
sites to deny access co those sites. See £&. at 2427.
Similarly, the federal courts rejected constitutional
challenges by states and landowners to a federal flood insurance
�,
/02/93
16:21
CIVIL/APPELLATE
©202 633 1151
program under which residents i n certain areas were eligible tor
federally subsidized flood insurance only i f the communities i n
which they lived complied with federal flood abatement standards.
T f « f tandP"*^ Rights Assn. v i £S£Zl&i 453 F. Supp. 1025,
fia
a f f d . 558 P.2d 311 (D.C. Cir.) g«n l ^ ^ - *44 U.S- 927
(1979). I n addition, residents!in those areas had co be covered
by flood insurance i n order to Ise eligible to receive mortgage
money from federally supervised!private lenders.
,
0
In a l l of these cases the courts have upheld schemes that
empl eyed the same basic principle you have proposed: inducing
states to adopt a federally approved program so that their
citizens are able to take advantage of a federal benefit that i s
rationally related to the underlying federal program. The fact
that the Federal Government can |be said under these schemes to
penalize individual citizens i f itheir states f a l l to accept the
federal inducement has apparently not mattered, as these schemes
have survived constitutional attjack.
Consequently, based on legal precedent, the health care
scheme mechanism about which youi bave questioned us should be
upheld i f challenged on constitutional grounds. 2. You also asked us to provide models of enforcement
methods for programs in which federal benefits to individuals are
dependent upon federally approved programs.
One i s the unemployment tax credit scheme described above,
Under that scheme, the Secretary of Labor examines state programs
to decide i f they meet federal standards. After holding an
agency hearing, i f he decides that the state programs are
deficient, he declines to certifJ- them to the Secretary of the
Treasury, and the residents of these states are then not eligible
for a federal tax credit. The decision of the Secretary of Labor
that a state program does not meet federal standards i s then
subject to judicial review. SeejTitle 26 of the United States
Code, Sections 3304 and 3310.
Another example i s provided by the federal scheme governing
disbursements of federal funds to states to operate unemployment:
benefits programs. Under this scheme too, the Secretary"of Labor
must afford a state an administrative hearing before finding i t s
program out of compliince, and hiis determination of non-compliance i s then subject to j u d i c i a l review, See T i t l e 42 of the
United States Code, Sections 503 and 504.
-
A third example of this type of enforcement mechanism i s i n
the Medicaid statute. See T i t l e 42 of the Uhited States Code,
Section 1396c.
I f an enforcement mechanism such as these i s utilized, you
w i l l want to consider i f the appropriate federal o f f i c i a l should
�04/02/83
16:22
BTZU*
630
have emergency power to find a itate out of compliance in proper
circumstances, and whether any decision to find a state's
citizens ineligible for federal tax credits or deductions should
be autcraatically stayed until the ccroletion of judicial review.
3. You also raised with us i f there might be constitutional
problems i f a state declines to accept the inducements to establish a federally acceptable health care program, and the
Federal Government then does so! directly. We noted that there
are a number of options that the Federal Government could use i f
i t wished to provide itself for an acceptable health care system
in that state. We did point out that there would be constitutional problems i f the Federal Government attempted to utilize a
state entity in carrying out such a program. As we have advised
you in prior memoranda, there are Tenth Amendment prohibitions i f
the Federal Government attempts to force a state to use i t s
entities to implement a federal scheme. See New York v. qnited
states. 112 S.'ct. 2408 (1992). I f instead the Federal
Gcvemment were merely regulating a state entity, that might be
acceptable since the Sunreoe Court has held that Congress can
impose some federal social welfare programs -- such as the Fair
Labor Standards Act
on state (entities as employers. See
Gs.rcia v. San Anconio MatropoHtiwr Transit Authority. 469 U.S.
528 (1985).
!
Because the orecise role oft the states with regard to the
entities that will be regulating] provision of health care has not
yet been determined, we think at this point that i t i s best
simply to provide in proposed legislation that the President or
the appropriate federal agency can establish a system to
implement a federal health care program in a state that declines
to'accept the inducements to establish i t s own plan. Such a
delegation of authority would, we hope, never need to be used,
and should leave the necessary ffexibility for the Executive
Branch to create at the tima a scheme that would be constiS^ht
tutionally acceptable.
We hope that this answers your questions. Please telephone
us (Douglas Letter -- 514-3602; Robert Zener -- 514-1597) i f you
have further questions. (Jeffrey Clair of the Civil Division
Appellate Staff assisted with this memorandum.)
�US. D p rm n of Justice
e at e t
HtLtAlnim, AC 30530
51993
MMRNU
EOADM
Tot
Walter Zelman
White House Health Care Task Force
From: Douglas Letter
Appellate Litigation Counsel
Civil Division
Department of Justice
As part of your work on the Health Care Task Force you have
posed to me several general questions regarding the possible
constitutionality of different options concerning regulation and
delivery of health care services. In this memorandum, I provide
you with some background on the law regarding Federal Government/State jrelations, the ability of the Federal Government to
place conditions on federal funds and aid, and the authority of
the Federal Government to regulate economic activity. In doing
so, I have tried to give you answers to your questions, although,
as you will see, there are no clear answers on soma of them.
At this point, we cannot provide definitive responses to
some of your questions because the questions are rather amorphous, and the state of the law is not clearly developed in •
certain of the relevant areas. In ruling on constitutional
challenges to various federal legislative schemes, the federal
courts often analyze the entire scheme and take into account in
differing ways its various aspects rather than focusing exclusively on the narrow part of the scheme actually under legal
attack. Consequently, i t is difficult to try to advise you
whether a particular mechanism would survive constitutional ' ;
challenge unless we know the precise place of that mechanism
within the overall legislative scheme. This factor makes i t
harder for you in trying to craft a legislative scheme while
avoiding possible constitutional problems, but we ara limited in
' our ability to give you solid advice until we have a rather
precisely defined scheme to examine.
Therefore, i t is probably best for me to provide you with
this background infonnation and general advice at this point, and
then to remain available to provide clearer opinions as you f i l l
in the details of the legislative proposal. You should thus take
the advice given here as preliminary; as we work with you during
�the development of the legislative proposal, our advice should
become more precise.
In addition, although I have consulted a number of sources
within the Department of Justice regarding your questions, the
Attorney General's Office has not had the opportunity to study
these points thoroughly because of the short timing.
At this stage, my impression is that you are interested
almost exclusively in the Justice Department's view of possible
legal issues. Therefore/as you see, this memorandum sticks
primarily to those types of points and largely avoids questions
of policy. I expect that the Department may later want to
provide policy advice to the Task Force.
A. You raised questions with me concerning the ability of
the Federal Government to direct the states to take various
actions that would utilize the states' power. Federal health
care legislation would definitely encounter constitutional
difficulty under the Tenth Amendment i f i t directly orders the
states to take certain action (.such as to form health-care
cooperatives) or refrain from taking certain action (such as to
levy additional health-care taxes). The Supreme Court has
recently held, in connection with federal radioactive waste
legislation, that the Tenth Amendment does not permit the Federal
Government to "command . . . state governments to implement
legislation enacted by Congress." We believe this ruling would
bar legislation that, for example, requires the.states to form
health-care cooperatives, or forbids the states from imposing
health-care charges or taxes. •
1
Note that the Federal Government can Itself regulate the
activities of the states with regard to their relations vith
their employees. Thus, general federal health regulation could
be applied to the states as employers. The Tenth Amendment
difficulty arises, however, when the Federal Government requires
states to exercise regulatory authority over private employers
and employees.
2
There are two ways to avoid the Tenth Amendment limitation
on compelling states to implement federal legislation. First, ,
requirements that would otherwise violate the Tenth Amendment may
be imposed as conditions on federal funding. The Supreme Court
has squarely held that the Federal Government may utilize the
device of attaching conditions to federal funding as a means of
1
New
3 See
York v .
fiflXfiia
Pntfcert S ^ . m n .
V.
flan
112
S.
Ct.
2 4 0 8 , 2428
Anf.aT^o M e t r o n o l t t e s n T r a r ^ h
(1992).
Anthnrltv.
469 U.S. 528 (1985) (Congress can impose Fair Labor Standards Act
protections on state workers).
�imposing requirementa that are otherwise beyond the Federal
Government's constitutional authority. The only real limitation
is that the conditions must "bear some relationship to the
purpose of the federal spending." Thus, any requirements or
conditions to be imposed should be attached to health care
related federal funding.
3
4
The other technique to avoid Tenth Amendment limitations is
to "offer States the choice of regulating [private] activity
according to federal standards or having state law preempted by
federal regulation." This is the technique widely used in the
environmental area, such as in the Clean Water Act and the Clean
Air Act.
5
Thus, the Federal Government can utilize the states in
various cooperative federalism schemes, but likely cannot simply
order the states to use their sovereign power in specified ways.
B. with regard to direct federal regulation of economic
activity, the courts have held that the Federal•Government has
the constitutional authority to impose wage and price controls.
In addition, the courts have sustained price controls on medical
transactions related to Medicare coverage. We anticipate that
under these precedents, the price and cost controls involved in a
new health care coverage system would be constitutionally
sustainable. However, there are aspects that could cause
problems.
6
7
3
United a m * * v. fiuUfiZ, 297 U.S. 1 (1946); QftlahQM v.
Civil Service CmrnTn, 330 u.s. 127 (1947)} south Dakota v. o^la,
483 U.S. 203 (1987); Maw
York v. U.S..
112 S.Ct. 2408 (1992).
4
tfew Yary v. p.ff.. 112 S.Ct. 2408, 2423 (1992).
5
New York v. U.S..
112 S. Ct. 2408, 2.424 (1992).
' BQWlflg V. tflUinqhflm, 321 U.S. 503
(1944); Local Union Wo.
11. SBEfl v. Boidt. 461 F.2d 1392, 1396 (Em. App. 1973)(citing
cases); Amalgamated Maafc gutters v. Cnnnallv. 337 F.Supp. 737
(D.D.C. 1971) (three-judge court).
7
In Whitney v. HfifiJslflX, 780 F.2d 963 (Uth Cir.); fifiit.
denied, 479 U.S. 813 (1966), the court sustained a temporary
freeze on fees charged Medicare patients by non-participating
physicians; the freeze was designed to preclude physicians from
shifting the burden of reductions in Medicare reimbursements to
Medicare beneficiaries.
See alSO MetroHna Family Practice Group
v. SylUvan, 767 F. Supp. 1314 (D.N.C. 1989), aff'd, 929 F.2d 693
(4th Cir. 1990)(table).
�Past ystax of wage and price controls hav t sn designed
to assure that transactions take place at a reasonable price,
rather than to prevent certain transactions from taking place at
a l l . A health care system that imposes a cap on total costs
could operate, overtly or as a practical matter, to prevent certain types of medical treatment from taking place at a l l . The
courts may find that distinction significant.
Where the restriction i s on medical treatments that the Government will pay for out of public funds, there is ample
precedent to uphold the limitation. Indeed, the courts have
sustained even limitations on the amounts a physician can charge
a Medicare patient over and above the government reimbursement.
However, where a restriction on the availability of treatment at
any price goes beyond protecting the integrity of a government
reimbursement system
and the restriction imposed is for
economic reasons (rather than health and safety, as in the case
of FDA regulations)
there could be a constitutional problem.
B
9
This is an uncharted area of the law. The right to medical
treatment has been given constitutional protection in the area of
abortion; but that is for reasons that are not generally applicable to other types of treatment. Where the treatment sought
is medically necessary •- and particularly where a life-threatening condition is involved -- i t is entirely possible that the
courts would impose some constitutional limits on the Government's ability to impose, for economic reasons, restrictions on a
patient's ability to obtain treatment for which he or she is
willing to pay.
10
11
8
See cases cited in note 7 flucra.
9
See Ma *ehuflftfct:fl Medical Society v. Puftaftifl, 615
790, 797 (1st C i r . ) , eert. denied. 464 U.S. 696 (1987).
BB
F.2d
1 0
PlarmM Parenthood v. CaBfiY, 112 8. C t . ^ l , 2807-8
(1992) . Compare Pennhtirefc State achoal ft Hospital v. Halflerrnafl,
451 U.S. 1, 16
rehabilitative
QonalAaon, 422
concurring)(no
illness).
n.12 (1981)(no constitutional right to
treatment for mentally retarded); O'Connor v.
U.S. 563, 587-89 (1975)(Burger, C.J.,
constitutional right to treatment for mental
1 1
See New York Sr.ate Qphthalmoloalcal Society v. Bowen, 854
F.2d 1379, 1388 (D.C. Cir.1988),
denied 490 U.S. 1098
(1989), in which Judge Mikva suggested that a liberty interest
may exist where "the challenged regulation restricts access to
treatment indispensable to a patient's life, health or sight in a
way that 'shocks the conscience," or "has dire personal
consequences."
1
�Thara are two ways of protecting a system against constitutional vulnerability on this score.
First, doctors could be offered strong incentives to come
"voluntarily" within the system, but not be faced with an
absolute requirement -- thus preserving some opportunity for
doctors to practice, and patients to obtain care, outside the
system, while guaranteeing that the vast bulk'of medical
transactions occur within the system. Although court rulings
have sustained the Government's right to control prices charged
by private physicians, part of the justification for that has
been the doctors' ability to opt out of the system. - Where, a l l
or virtually a l l medical servides were required to be provided
within the government regulated system, a very limited "escape
hatch" would not necessarily carry the day. But i f there is
some reality to the escape opportunity, we believe i t would
contribute substantially to- a legal defense of the system.
3
2
13
An alternative would be to build in some kind of variance
procedure, where medical treatment outside the restrictions of a
cost cap would be allowed i f i t met some criteria of significant
medical necessity. Zt must be recognized that any such escape
hatch might become very difficult to control, since the governing
criteria would probably have to be general and thus subject to
expansive administrative and judicial interpretation.
C. Requiring all doctors to operate within a federal health
care system may or may not raise constitutional.problems, depending on what the "system" i s . If the only limitation irnposed
is that doctors within the system limit their charges to a
schedule of reasonable fees established by the Federal Government
or by a designated health care cooperative, there should be no
problem. The courts have uniformly sustained federal price
controls against constitutional challenge, even though they force
providers of goods and service either to conform to the federal
limitations or go out of business.
These precedents should
sustain a federal health eare scheme that forces doctors to
14
1 3
See Whitney v. Heeklar. gupga.
1 3
In N w York Ochthalmoloalcal Soelefcy. flUBtt, the court v
e
concluded that a patient's option to forego Medicare coverage did
not relieve a Medicare limitation on cataract treatment from
constitutional scrutiny (the court sustained the limitation on
other grounds). 854 F.2d at 1384.
1 4
fiflKlfifi V. Wtllingham. 321 U.S. 503 (1944); Loeal Tftiion
No. i i . IBEW v. fioldL, 481 F.2d 1392, 1396 {Bra. App. 1973)(citing
cases);ftmaloamat-gdMeat gutters v. Connallv. 337 F.Supp. 737
(D.D.C. 1971)(three-judge court).
�operate within a federal syatem that regulates their charges. W
e
note, however, that most or a l l of the rulings upholding federal
price controls have involved situations in which the controls
were temporary, which might not be true in the planned legislation here.
However, more serious issues are presented i f the system
operates to deny or limit the opportunity of some doctors to
practice medicine at a l l . Under present practice, as we understand i t , H O typically limit their members to a restricted list
Ms
of providers. This policy does not restrict the opportunity of
doctors not on the l i s t tp practice medicine, since there are
plenty of patients who do not belong to H O . Moreover, the H O
Ms
Ms
are private entities, and are thus free to choose with w o they
hm
will deal. But i f federal legislation establishes H O to which
Ms
all patients in an area must belong, then serious questions would
be raised by the H O ' restriction of their members to a limited
Ms
l i s t of providers.
Under this kind of system, an H O determination that a
M
doctor could not get on the l i s t could represent state action
denying the doctor a chance to practice his profession. At the.
very least, doctors would have to be given an opportunity to get
on the l i s t upon meeting.a reasonable set of requirements (which
could include charging reasonable fees); and would also have to
be provided some kind of due process to challenge determinations
that they do not qualify for inclusion on the l i s t .
These difficulties ara reduced in a system that utilizes
private entities as the health care cooperatives or H O . The
Ms
Supreme Court has allowed private entities to become very heavily
involved in federal regulatory schemes without becoming governmental actors subject to due process restrictions. For example,
the Court.has held that a private nursing home's decision to
transfer a Medicaid patient to a lower-level facility was not a
governmental decision requiring due process procedures -- despite
the federal funding involved and the attendant federal regulation.
However, i f the private entity were deemed to be acting
as the Oovemment's agent for purposes of implementing the
statute, a different rule would likely apply.
.
15
1
There is, however, one warningi when the private entity is
exercising the coercive power of the Federal Government, then i t
must comply with constitutional restrictions. For example, the
1 5
Blum v. Xuetflte* 457 U.S. 991 (1982). .See also RundiillSateC v. Kohn. 457 U.S. 830 (1982)(private school i s not a state
actor subject to due process restrictions in making personnel
decisions, even though nearly a l l the students were state-funded,
and school was subject to extensive state regulation in
connection with such funding).
�Supreme Court has held that where federal regulations require
private employer! to administer drug tests to their employees!
constitutional restrictions apply. Thus, if a private health
care cooperative were required to accept all qualified applicants
as members, constitutional restrictions would likely apply to i t s
membership decisions. However, i f i t were free to pick the
doctors and hospitals that i t would utilise, within overall
budget constraints, i t s decisions in that specific area would
likely be free of constitutional restrictions. Furthermore, any
problems in this area could be lessened if the system were one in
which participation by health care providers can be described as
voluntary.
15
D. Federal legislation that restricts individuals' ability '
to select their own physicians will invite attack on the ground
that i t interferes with a constitutional right of privacy. The
case law on the right of privacy has not addressed this issue;
thus, we cannot predict what the outcome of such a challenge
would be.
Clearly, the Federal Goveniment (or a health care cooperative operating under federal legislation) can limit the services
for which i t will reimburse the patient. But a more difficult
issue is raised i f an individual willing to forego reimbursement
of the fee is unable to choose his or her own physician. Zn this
context, we assume that the physician meets all applicable legal
requirements - including whatever fee limits might be set by the
legislation -- so that the only issue is the individual's personal preference for a particular doctor. Zn order to insure
that the legislation survives constitutional challenge in an area
where the law is highly uncertain, i t would be preferable to
afford some option on the part of individuals to choose physicians at their own expense outside the cooperative's l i s t .
B. Questions have also been raised reaarding delegations of
federal authority to different types of entities. Under the
modern non-delegation doctrine, Congress may delegate authority
to a variety of bodies, including the Executive Branch, independent agencies, the states, and even private groups. There appear
to be few substantive limits on the nature of the authority that
Congress may vest.
v
For example, Congress has successfully assigned government
corporations to collect Insurance premiums from private retirement plans and pay benefits, and provided industry groups with
17
36 flftiaaar V. Railway Labor Bxeeutives' Ass'n. 289 U.S. 602
(1989).
1 7
211,
see CannpUy v. gengion BftacfltfiuflgantYCorp., 4 5 u.s.
7
222-23 n.7 (1966) .
�authority to fix minimum pricae, redistribute revenues, and
control production levels, as well as promulgate safety standards.
The Supreme Court has also held that even delegations
of fundamental governmental functions such as taxation do not
receive heightened scrutiny. Consequently, there is no necessary lecal impediment to delegating comprehensive authority over
health insurance and related matters.
18
19
20
There are, however, at least two important procedural
limitations. First, Congress must lay down an intelligible
principle to which the delegate must conform, so that courts may
determine whether the will of Congress has been obeyed.^ This
limitation would ordinarily be satisfied by a general directive
concerning the public policies (such as fair rates, or cost
containment, or universal coverage} that the scheme is intended
to promote. Greater elaboration and specificity may be
1
22
1 8
Such schemes are particularly prevalent under the
Agricultural Marketing Agreement Act of 1937. The Act
effectively permits dairy farmers (and, to a lesser extent, dairy
handlers) to aet the minimum prices that handlers must pay to
fanners, see united States v. ROCft-Rgyfll CO-QPerativfl, Jnc, 307
U.S. 533, 574-78 (1939) (upholding statute against delegation
challenge and allowing order approved by fanners that required
milk handlers to pay into settlement fund difference between
minimum price and uniform price). The Act also gives authority
to reject quotas set by the Secretary of Agriculture, see ffisftarfl
v. jfl-ibum. 317 U S - I l l , 115-16 (1942). Similarly, the Tobacco
..
Inspection Act of 1935 delegated to tobacco growers the power to
veto the Secretary's designation of an auction market, see gurrin
v. Wallace. 306 U.S. 1, 6 (1939), and the Bituminous Coal Act of
1937 allowed coal producers to fix minimum prices for members of
Bituminous Coal Code, effective upon approval or modification of
the National Bituminous Coal Comnission. See p^nahine fothraeiee
Coal CQ. V. MkiM, 310 U.S. 381 (1940).
19 see Saint T.ouie. Tron Mountain. & Southern Rv. Co. v.
Taylor- 210 U.S. 281, 285-87 (1908) (sustaining congressional
delegation under Federal Railway Safety Appliances Act of 1893 to
American Railway Association to set minimum height requirement'
for drawbars on railroad cars). Congress has subsequently
incorporated privately-developed safety standards for
occupational safety and health regulation, see 29 U.S.C. §5
655(a), 652(9).
2 0
See Skinnar v. Mifl-AfflBgiMn PiPflllM Cfl.i 490 U.S. 212,
220-23 (1989).
2 1
fi^, Mtatretta v. tfa-ttad States. 488 V.B. 361, 371-79
(1989) (Sentencing Commission)..
2 2
see skinner. 488 U.S. 1^219 (citing cases).
�necessary i f the delegate's authority could be viewed as extending to matters of individual liberty, such as the type or
degree of medical care for which a person may contract.*
3
Because delegations of authority to private actors have
generally concerned industry self-regulation or secondary
insurance, rather than primary responsibility for the management
of matters so directly affecting the citizenry,.it is unclear
whether a more demanding standard of review for this type of
delegation could emerge.
Second, for reasons primarily relating to the constitutio
separation of powers, oversight of most delegations must in
likelihood be vested in the President or an Executive Branch
agency, and may not be vested in the Congress and possibly other
bodies. To a certain extent, Article II of the Constitution
centralizes implementation of federal laws in the Executive
Branch of the Federal Government. Thus, the Supreme Court has
stated in one context that those who carry out substantial
authority pursuant to the laws of the United States must bs
appointed under the Appointments Clause of Article II. *
24
d
Despite this principle, Congress has successfully assigned
to the states what amounts to final authority over cooperative
federal/state ventures, thus effectively avoiding the restrictions of Article I I .
But Executive Branch oversight may be
2 5
2 3
i n l f l l t o v . TTnlf.Ad States. U l 8. Ct. 1752, 1756 (1991),
the Supreme Court noted the ambiguity in its precedent as to
whether regulations that pose a risk to individual liberty, such
as those contemplating criminal sanctions, require more specific
guidance from Congress, but held that the delegation in that case
would survive such a heightened review.
2 4
fiL.Morrison v. Olson. • 8 U.S. 654 (1968)(appointment
47
power and separation of powers concerns)j Bowsher v. Syn&i, 478
U.S. 714 (1986) (removal authority); IHS v. Chadha# 462 U.S. 919
(1983) (legislative veto); Buckley v. ValfiQ, 424 U.S. 1, 118-40
(1976) (appointment power).
2 5
2 6
see BliflklflX v. X&lflfl, 424 U.S. 1, 124-26 (1976 ) .
See, e.g.. Train v. HBBC. 421 U.S. 60, 79 (1975) (noting
that EPA is required to approve state plans providing for timely
attainment and subsequent maintenance of ambient air standards
otherwise complying with amended Clean Air Act). The Supreme
Court has upheld Congress' "adoption" of state authority as less
of a constitutional delegation than a consent to state
legislation. See prudential tns. Co. v. BanjMlln« 328 U.S. 408,
438-40 6 n. 51 (1946) (McCarran-Ferguson Act). .But see, fl.q^>
(continued...)
�particularly critical i f delegated authority were to he exercised
by private associations or cooperatives. Courts have been wary
of allowing the exercise of coercive power by private parties,
and could be expected to demand comprehensive administrative
review of actions directly affecting the public and implicating
powers normally reserved to governmental actors. Moreover,
because the purpose of the limits on delegation is to afford a
statutory standard for courts to enforce, the doctrine suggests
that some form of judicial review must be provided, although i t
may be permissible to preclude review by whole classes of
affected parties, such as consumers of medical care.
37
28
29
Finally, i t bears mention that attempts to provide an
external check on congressional delegation by providing for
referenda or other direct democratic controls (as opposed to
checks in the form of Executive or Judicial Branch review) are
not constitutionally required. Indeed, these referenda may
26
(...continued)
Kniekerbockar Tee Co. v. Sr.awart. 253 U.S. 149, 164 (1920)
(Congress cannot transfer legislative authority concerning
maritime law to states). To the extent the ceding of state
authority to a cooperative.is involved, state non-delegation law
would be implicated.
2 7
fififi, A.?., Sunahina Anf-hraeifca Coal Co.. 310 U.S. at 399
( [s]ince law-making is not entrusted to the industry, this
statutory scheme is unquestionably valid"); Saquioa Oranoa Co. v.
Yauttar. 973 F.2d 752, 759 (9th Cir. 1992) (Agricultural
Marketing Agreement Act's requirement of producer approval of
marketing orders were a legitimate condition precedent to
exercise of Secretary's "'ultimate authority" }; onitad states v.
Frame- 885 F.2d 1119, 1128-29 (3d Cir. 1989) (upholding authority
of beef producers to collect assessments and plan disbursements
when "the amount of governmental oversight of the program is
considerable"); Evanatan Tna. Co. v. Hfiiin, 598 F. Supp. 1290,
1311-12 (D.N.J. 19Q4) (delegation of authority to pay claims of
insureds upon insolvency of a surplus lines insurer upheld based
on supervisory control of stats insurance commissioners);
n
1
Prydsntitti Property ft caev^itY Co. v. inaurancfl C t ms i n of v
Qn igQ
South Carol ina. Dept. of Inauranea. 534 F. Supp. 571, 580 (D.S.C.
1982) (upholding constitutionality of state reinsurance facility
responsible for apportioning losses based on oversight of state
insurance commission); aff'd. 699 F.2d 690 (4th.Cir. 1983); L.
Tribe, American gonetitutional Law 368-69 (2d ed. 1988)
(delegation to private actors disfavored).
28 See Taubv. i l l S. Ct. at 1757-58.
2
9 See Block v. Cammnnity Nutrition Tnat.. 467 U.S. 340,
346-47 (1984).
10
�themselves bs the source of constitutional infirmities. Prior
delegations to industry groups have been redeemed on the ground
that any resulting referenda were less an exercise of quasilegislative authority by interested parties than a condition for
enactment required by Congress.
30
Moreover, i f the legislative scheme explicitly provides a.
democratic check on the health care cooperative's officials or
administrators - such as referenda or the election of representatives - those provisions would almost certainly be subject
to the constraints of the Equal Protection Clause, which would .
limit any attempt to define narrowly the electorate.^ Additionally, First Amendment concerns might be implicated, and the
various constitutional rules governing political elections might
have to be followed in such referenda.
Were regional cooperatives subject to such checks, novel questions concerning the
composition of the relevant electorates could be raised.
32
F. The principles stated above should answer or help
analyze the questions you posed to me.
Thus, for example, you asked whether, i f money is required
to be paid through a health care cooperative, must that entity be
a government agency. The answer from precedent appears to be
"no," but that there may be a requirement of some form of control
by a federal official i f the cooperative is a private entity. In
addition, i f the cooperative i s a private entity, we have not
found any requirement under the non-delegation doctrine that i t
must be governed by a representative body chosen by election, but
we can certainly envision a court so holding in the future.3 0
See, fi^, lAlfcfli: v. Brown. 317 U.S. 341, 352 (1943);
£U££ia, 306 U.S. at 16.
31 see N w York Citv Bd. of HsfcimataB v. MQErlfl; 489 U.S.
e
688 (1989); Ball v. James. 451-U.S. 355, 362-72 (1981) (exercise
of general governmental powers over entire geographic area served
by body, as opposed to a special-purpose unit of government
primarily affecting a limited class of constituents, subject to a
one-person, one-vote system of election);fiL.Buckley v. Y&i&Q,
424 U.S. at 93 (equal protection analysis identical under Fifth
and Fourteenth Amendments).
32 see rm1-Almond. Inc. v. DfiPflrtmBPt Qt AqrifiUlCUrfl* 960
F.2d 105 (9th Cir. 1992) (First Amendment considerations might be
relevant to referenda among agricultural producers). But see
S a l v e r Land Go. v. Tulare Lake Baain Water Storage D i a t r i c t . 410
U.S. 719 (1973) (referendum concerning irrigation district not
governed by same constitutional principles covering political
elections).
ll
�The question arose as to whether a private or semi-private
health care cooperative could be delegated the power to tax its
members by raising premiums. As noted above, the Supreme Court
has ruled that the taxing power is not subject to special nondelegation principles. Therefore, the delegation of such power
would seem to be no more or less beyond Congress' power than
delegations of other types of federal power. However, no
precedent that we have found confronts the issues raised by a
private entity directly receiving payments from private citizens
for what might be construed as a government service or '
entitlement.
You" also asked about the authority of the Federal Government
to impose spending limits on health care cooperatives established
i n the states or regions. I f the question is whether the Federal
Government can stop a state from spending its own revenues, the
answer appears to be "no." However, the Government can achieve
the same objective by creative use of restrictions on receiving
federal grants or benefits;
federal funds could be reduced
or eliminated i f states spend beyond a specified amount.' i f the
question is the power of the Federal Government to limit spending
by a private health care cooperative, the. answer is likely that
i t can so regulate, although, as noted above, there may be limits
on the Government's ability to stop individuals from obtaining
and paying for health care that i s medically necessary.
Finally, you asked whether there is a difference for legal
purposes .whether the Federal Government uses a cooperative
federalism scheme such as the Clean Air Act (under which the
Federal Government implements the statute if' a state fails to do
so, pursuant to an approved federal plan) or simply encourages/forces the states through incentives to adopt a health care
regulatory system. "While numerous different types of issues
might arise depending upon which type of scheme is used, we see
no difference at the outset because both would appear to be valid
ways for the Federal Government to act.
G. You have also raised the issue concerning the type of
command there should be over a federal entity established to
govern a federal health care system. Although this would appear
to be largely a policy call, I wish to note that the Department .
of justice has over the years been an active advocate of preserving the maximum amount of control for the President. We have
found that numerous problems for the Presidency'arise when administrative agencies are headed by officers given independence from
the Chief Executive. Zn recent years, many questions have
cropped up concerning the precise nature of the independence of
such officers, and whether Article I I of the Constitution restricts the amount of freedom from the President that can be
given to an officer who ie executing the law. Consequently, we
urge that very serious thought be given before any agency is
created whose officers are not freely appointed by the President
^
12
�(with Senate approval, of course) and freely removable by him as
well.
I trust that this m m r n u provides you and your staff
eoadm
with helpful guidance as you consider which of m n options to
ay
recommend. I look forward to working with you further on this
important and exciting project. As explained earlier, w at the
e
Department of Justice should be able to provide the Task Force,
with more focused views on constitutional and other issues as the
options are narrowed and a more specific scheme is crafted.
Zf you have questions about any of the material in this
m m r n u , please call m at 514-3602. Unfortunately, Z will be
eoadm
e
away from m office most of the week of March 8 because I have a
y
court appearance in California involving a major constitutional
issue. Zn m absence, as Z mentioned to you earlier, please feel
y
free to contact Barbara Blddle .(514-2541). Most of the work on
this m m r n u was done by Robert Zener and Edward Swains in the
eoadm
Civil Division, and Barbara can consult with them or others here,
and should be able to help you until Z return on March 15.
13
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
L-
�Tab 4:
Health Alliance Materials
1.
Health Insurance Purchasing Cooperatives as Legal Authorities
Memorandum from Margaret Farrell, legal consultant, March 18, 1993, which
discusses the creation, governance, authority and responsibility of health
insurance purchasing cooperatives.
Issues covered include: constitutional delegation of authority, due process
requirements, statutory requirements including open government laws, state
constitutions and administrative procedures, and purchasing cooperative market
share.
�MEMORANDUM
DRAFT
FOR OFFICIAL USE ONLY
TO:
Walter Zellman
White House Health Care Task Force
Working Group on Governance
FROM:
Margaret G. Farrell, Esq.
RE:
HIPCs as Legal Authorities
DATE:
March 18, 1993
In a memorandum dated March 9, 1993, you have described
various functions that the task force may recommend be carried out
by health insurance purchasing cooperatives (HIPCs) in a proposed
system of managed competition for the health care industry. These
functions indude:
• enrolling members/subscribers who meet national
eligibility standards (e.g. poor, self employed, small business etc.)
and collecting and paying their premiums to participating health
plans they select.
• establishing standards for health plans (in addition to
federal standards) which will be offered by the HIPC to members
• selecting participating plans: precluding the participation ;•
of plans that fail to meet HIPC quahty and price standards (either by
prohibiting the plan from selling to HIPC members at all or
permitting the plan to sell only at HIPC stipulated prices - set to
reflect federally mandated or targeted budget limits).
• bargaining with health plans over the price of standard
benefit packages to be charged to members
• establishing regional "bench mark" prices for standard
benefit packages based on federal formulas to be used to determine
1
1
Benchmarks might be the mean price for like packages offered by
plans participating in the HIPC or the lowest price at which the package
is offered by any HIPC plan.
�(1) employer purchasing obligations and tax deductions; (2)
employee income tax liability and (3) the amount of federal subsidies
for low income families and small employers.
• enforcing balance billing prohibitions against a plan or
a provider charging HIPC members more than the price that the HIPC
will pay the plan, by authorizing or requiring plans to use approved
fee schedules in paying providers.
• performing other planning and regulatory functions,
perhaps similar to those performed by SHPDAs and HSAs under the
repealed Federal Health Planning Act (and performed in some states
under CON)3.
2
You have asked several questions regarding the creation,
governance, authority and responsibility of entities carrying out
these functions. At bottom, these queries raise questions of
constitutional law, because Congress can repeal or amend any
existing federal legislation that would conflict with its health care
reform legislation and any conflicting state law would fall under the
Supremacy Clause of the Constitution.
4
You have not asked what other bodies should monitor and
supervise the performance of these functions by HIPCs (such as a
National Board or Commission, state governors, other federal and
state departments or agencies) - only whether the Constitution (or
any federal laws that would need to be amended) requires or
prohibits their being performed that by any particular entities.
Reframed, your questions are:
2 Employers would be required to pay a minimum percentage of the
benchmark price for employees, employers would be permitted to deduct
no more than the benchmark price as the expense of providing employee
health benefits (whether the employer is eligible to be a member of the
HIPC or not), and employee income (in the form of health insurance)
would be exempt from taxation only up to their contribution to the
benchmark price.
See discussion infra at notes 37 - 39.
E.g. McDermott v. Wisconsin, 228 U.S. 115 (1913)(Wisconsin law
prohibiting labeling required by Federal Food and Drug Act invalidated
under the Supremacy Clause): Florida Ume & Avocado Growers, Inc. v.
Paul, 373 U.S. 132, 142-43 (dictum). See generally, Lawrence Tribe,
American Constitutional Law §§ 6-25 to 6-29 (1988).
3
4
�1. Does the United States Constitution jjenniLthe delegation of
these functions by Congress to some other body? If so, what does the
Constitution require Congress to do when it delegates such functions
to a government agency or private entity?
2. Does the Constitution require that any of the functions
described above be performed by a federal government agency or by
a state government agency (or the designated agent of such) or could
these functions be performed by non-profit corporations?
3. What, if any, limitations does the Constitution's due process
clause or other provisions of the Constitution place direcdy on the
performance of these functions by a public body or a private nonprofit corporation?
4. What stamtory requirements for investigation, rulemaking
and adjudication contained in the Federal Administrative Procedure
Act, the federal Sunshine Act, the Federal Advisory Committee Act,
the Freedom of Information Act and other open government
legislation would apply to the performance of these functions by a
public body or non-profit corporation?
5. What limitations are imposed by state constitutions and
state administrative procedure acts on the performance of these
functions by a state agency or a private entity?
6. Finally, would the answers to the above questions depend
on whether enrollment in the HIPC is (1) mandatory for only small ,
firms and individuals with 35 to 60% of the market population; (2)
mandatory for all persons and employers except employers of large
size and government beneficiaries - 70 to 90% of the market
population; (3) mandatory for all residents and businesses within the
HIPC's region -100%.?5
This memorandum addresses these questions. It also raises
questions with regard to more substantive federal statutes - the
antitrust laws and ERISA - that should be explored before drafting
legislation locating HIPC functions. It concludes that, although the
law is not well developed on some questions you have raised, in
5
It is assumed that there is only one HIPC performing the described
functions in any given geographic area.
�general, there is no function described above, that could not be
constitutionally delegated by Congress to a pubhc body, state or
federal, or to a private non-profit organization so long as either a
federal administrative agency or commission or a state agency
retained ultimate rulemaking and adjudicatory authority subject to
judicial review and so long as such bodies were required by statute
or regulation to provide basic due process protections for those
affected by its actions. Thus, new federal legislation might provide
that any body (state agency, existing non-profit, regional
cooperative or newly formed non-profit corporation) meeting federal
requirements could apply to be designated a HIPC in a given
geographic area, thereby providing states considerable flexibility
with regard to the administration of the federal scheme.
Although provisions of federal and state administrative
procedure acts could be construed to apply to such public or private
regulatory bodies, their provisions may not be much more
burdensome than the due process otherwise Constitutionally
required. Furthermore, those acts, like more substantive laws, such
the antitrust laws, can be superseded by specific provisions of the
new health reform legislation. It should be understood that these
conclusions are based on the general outlines of managed
competition developed to date, and could change depending on
specific provisions included in the Task Force's recommendations and
further more definitive research, as described more fully below.
I. BACKGROUND
This section sets out my understanding of regulatory agencies
and managed competition so that the premises that underhe the
following analysis will be dear.
Regulation and administrative bodies.
• Regulated industries. Historically, administrative agendes
can be viewed as responsible for two kinds of tasks. First, agendes
have been created to regulate the economic activity in a single
industry, such as the ICC's regulation of the transportation industry
or the SEC's regulation of the securities industry. Usually these
agencies are created in the exercise of Congress's constitutional
6
6
See generally, Bernard Schwartz. Administrative Law, 10-27 (1984)
(hereinafter Schwartz.)
�authority to regulate interstate commerce and out of its desire to
gain informed expert judgments based on objective empirical
information to achieve broad policy objectives. The agencies often
grant licenses or monopolistic franchises, control the entry of new
firms into the industry through licensure, regulate prices by setting
rates or approving tariffs, and regulate business practices.
Sometimes this authority is granted to an "independent regulatory
commission," a board of supervisors insulated from executive control
in various ways.
7
8
• Sodal assistance administration. Second, agendes have been
charged with responsibihty for assisting dtizens or protecting them
in specific ways that sometimes cut across industry lines. OSHA and
Social Security Administration are examples. These agendes, such as
those administering Medicare and Medicaid, are more likely to be
created in the exercise of Congress' authority to spend funds for the
general welfare, to be housed in executive branch departments and
to utilize state government in the administration of their programs,
reflecting the state's historic role in the areas of health, education
and welfare.
9
Managed competition.
• Regulating the industry. As I currently understand it,
managed competition in the health care industry will require the
creation of administrative bodies that carryout both of these tasks industry regulation and the provision of social assistance. First, like
the regulatory schemes applied in other industries, managed
competition seeks to change conditions in the market for health care
in order to correct perceived defidendes. Thus, new laws would
standardize the marketed product by mandating minimum health
insurance benefits; require HIPCs to collect and provide product and
quahty information to consumers; grant franchises by permitting
only one designated group (a HIPC) to broker the sale of health
insurance/plans in a given geographic region and perhaps permitting
only health plans selected by the HIPC to sell to individuals and
7
E.g. ICC v. Chicago, R.I.& P. R 218 U.S. 88, 102 (1910);
The Federal Trade Comission, the Federal Communications
Commission and Federal Energy Regulatory Commssion are examples.
Charles C. Steward Machine v. Davis, 301 U.S. 548 (1937) (Social
Security program found to be an exercise of Congressional authority to
spend public funds for the general welfare).
8
9
�businesses eligible to become HIPC subscribers. At the same time, it
would maintain a market in which there are many buyers
(individuals, employees and businesses) and many sellers (of both
insurance and health care services). It is not dear whether eligible
individuals and businesses would be free to purchase health
insurance and services outside the HIPC (though there may be
conomic dissincentives to do so) or whether partidpating plans and
providers would be free to sell their services to eligible individuals
and buinesses outside the HIPC.
• Controling prices. However, rather than rdy entirely on
bargained for exchanges in a corrected market to keep prices down,
it is anticipated that new legislation would also authorize direct
regulatory control over prices. This could be done by prohibiting
balanced billing by plans and providers; by authorizing or requiring
HIPCs to impose price controls (such as prospective DRG and relative
value scale reimbursement) on hospitals, doctors and other
providers; or by imposing price controls directly on providers. As
agencies regulating an industry, therefore, newly created
administrative agencies will have to mediate the tension between
reliance on competitive market forces to bring about efficiency and
lower prices and rehance on non-competitive direct regulation to do
so. This tension is not uncommon and exists in the case of other
instances of single industry regulation, such as the ICC and FCC. It
has been encountered before in the health planning area.
10
• Administering social assistance. In addition, agencies
monitoring managed competition may also be asked to administer a
new social welfare program that provides a subsidy for the purchase
of health insurance to low income individuals and small businesses.
This new subsidy program may replace Medicaid and the states'
adult indigent medical care programs as a means of providing health
1 0
Under the federal health planning laws, private local health service
agencies were given authority to review competing applications for
certificates of need and permission to make capital expenditures. The
Supreme Court held that such legislation did not create a "pervasive
repeal of the antitrust laws as appealed to every action aken in response
to the health-care planning process." National Gerimedlcal Hosp. &
Gerontology Center v. Blue Cross of Kansas City. 452 U.S. 378, 393
(1981). This holding seemed to affirm a Justice Department ruling that
an HSA could not confer antitrust immunity on competing hospitals. See
Clark Havighurst, Health Care Law and Policy, 924-25 (1988) and H.R
Rep. No. 190. 96th Cong. 1st Sess. 54-55 (1979).
�care to poor individuals and marginal businesses. As such, it can be
regarded as an entitlement program — one which defines a benefit
and creates eligibility criteria defining those who may claim the
benefit Medicare, social security and Medicaid are such all
individual entitlement programs. To the extent that the size of the
subsidy, the minimum benefit package and benchmark prices are
estabhshed by HIPCs and subsidies are paid by these new agencies
under managed competition, they will be engaged in defining and
distributing entitlement benefits.
11
• Governance. While it is clear that managed'competition
legislation will have to address the question of the supervision of the
HIPCs, this memo does not, except in so far as certain supervision is
required by due process. As mentioned above, there are many
examples of agencies and commissions that regulate single industries.
And there are many examples of agencies that administer social •
welfare programs.* However, I am not aware of a single agency that •
does both.
Thus, federal authority will have to be located in some federal
body (an agency within an existing executive department, a new
executive department, a new independent agency or commission,
etc.) that is institutionally designed to both impose economic
restraints on the private markets for health insurance and health
services, and bestow affirmative benefits on consumers. (Something
like combining the institutional capacities of the Interstate Commerce
Commission and the Social Security Administration). This
memorandum focuses only on HIPCs and how they can discharge
these dual functions. I would be pleased to explore various options
for such governing bodies in a separate memorandum for the
working group.
While the states can be given pohcy making and administrative
responsibihty for the work carried out by the HIPCs, Congressional
legislation compelling states to assume particular responsibihties for ,
4
1 1
In a more indirect way, provisions that permit all employers to deduct
the cost of providing minimum benefit package policies to their
employees, and that permit employees a tax deduction for their
contribution to the purchase of such policies can be regarded as
entitlements as well. Nevertheless, these tax advantages, which amount
to subsidies to the non-poor dispensed through the tax system, have not
usually been viewed as entitlement programs, though persons who claim
such tax benefits are entitled to certain procedures.
�the implementation of managed competition is problematic. In the
past, the Supreme Court has struck down Congressional commerce
power legislation that compelled state action in areas traditionally
integral to state sovereignty. Last year, the Court struck down
Congressional radioactive waste legislation which required states to
take tide to waste sites or regulate them in accordance with
Congressional requirements was found to be an intrusion on state
sovereignty and violative of the Tenth Amendment Alternatively,
states may be given such authority pursuant to voluntary
contractual arrangements with the federal government. Finally,
state agencies might be given broad pohcy making authority by state
statutes enacted as a condition to the receipt of federal funds (as
with current grant in aid programs). If so, state constitutional
restrictions on the delegation of legislative and executive authority to
state agencies needs to be investigated and taken into account.
12
13
14
At this point, HIPCs can be defined only by their functions,
which are described above, and this memorandum will consider only
the legal imphcations of locating those functions in federal
administrative agencies, state administrative agencies and private
non-profit corporations.
DELEGATIONS OF STANDARD SETTING, RULEMAKING AUTHORITY TO
HIPCs AS PUBLIC OR PRIVATE BODIES.
Administrative process - the way in which administrative
agencies carry out their various functions - traditionally have been
1 2
National League of Cities v. Usery, 426 U.S. 833 (1976) (striking
down statute that applied Fair Labor Standards Act to state and local
governments' relation to their employees); But see Garcia v. San Antonio
Metropolitan TYansit Authroity, 469 U.S. 528 (1985)(5 to 4 decision
overruling National League of Cities).
New York v. United States, 112 S. Ct. 2408 (1992). See also
Memorandum of the Department of Justice to Walter Zelman, March 5,
1993
For instance, most states contracted with the Secretary of HHS to
apply planning criteria to providers seeking Medicaid reimbursement for
the cost of capital improvements under legislation since repealed. 42
U.S.C. §1320a-l (1976)(repealed 1988); 42 U.S.C. § 246 (1976); 42
C.F.R § 100.103(a)(1977) (hereafter called 1122 authority). States can
also contract with the Secretary to apply Medicare conditions of
participation to institutional providers under Medicare.
1 3
1 4
�15
characterized as either rulemaking or adjudication. Like
legislation, rulemaking is considered the estabhshment of rules of
general apphcation to take effect prospectively. . In contrast,
adjudication, like the judicial process, is considered the apphcation of
rules to particular situations often having retrospective effect If
they carry out the functions described above, HIPCs will engage in
both rule making and adjudication.
16
17
For example, when the HIPCs perform the fohowing functions,
they will be engaging in rulemaking:
•
•
•
•
Setting benchmark prices
Estabhshing additional standards for participating plans
Modifying federally promulgated payment schedules
Estabhshing plans or standards for health planning.
Because rulemaking is legislative in nature, the question arises
whether Congress, the branch of government given legislative
authority under the Constitution, can delegate that authority to other
bodies.
Delegations to public administradve agencies
The Supreme Court has made clear that Congress may
delegate its legislative powers to executive branch agencies, so long
as it provides an "intelligible principle" sufficient to indicate the
valid legislative goal Congress intended to promote, to provide
guidance to the agency in carrying out the delegation, and to provide
courts a standard against which to review agency action. In the
18
19
1 5
1 Report of the Attorney General's Committee on Administrative
Procedure 7 (1941).
Wayman v. Southard. 10 Wheat. 1, 43 (U.S. 1825 (Congress may
transfer rulemaking power to administrative agency)
Crowell v. Benson, 285 U.S. 22 (1932) (Congress may create an
agency to decide private disputes, rather than confer such Jurisdiction on
a court, so long as judicial review is provided).
J. W. Hampton, Jr.. & Co. v. United States, 394 U.S. 394,409 (1928).
E.g. Amalgamated Meat Cutters v. Connally, 337 F. Supp. 737
(D.D.C. 1971)(delegation of authority to the President to"stabilize prices"
sustained): Secretary of Agriculture v. Central Roig Ref. Co. 338 U.S.
604, 610 (1950) (broad standards giving leeway to Secretary's expert
Judgment suflBcient.) And see generally, Schwartz, supra note at §2.6.
At the beginning of the new deal, the Supreme Court used the delegation
1 6
1 7
1 8
1 9
�regulatory area, such broad (seemingly vacuous) standards as "in the
pubhc interest" contained or imphed in delegating legislation to guide
independent agency have been held constitutionally sufficient.
However, in recent years the discarded nondelegation doctrine
regained some credibihty after Chief Justice Rehnquist rehed upon it
in some separate opinions. In addition, there are several
apparent exceptions. It seems dear that Congress may not overtly
delegate its taxing powers and must provide a dearer standard
where the ddegated authority affects constitutionally protected •
personalrights,such as the right to travel.
20
21
22
23
From these broad perameters, one can condude that a
Congressional ddegation of authority to HIPCs to set benchmark
prices, supplemental standards for health plans or health planning
standards or plans would be sustained if Congress provides "an
intelligible principle" to guide the agency and reviewing courts. Such
a standard gains meaning and specificity in hght of both the
legislative history of Congressional intent and regulatory
interpretation. Where both legislative and administrative
standards are lacking, courts have invahdated ddegations to state
agencies violative of due process. HIPC rulemaking can still be
24
25
doctrine to strike down several schemes of economic regulation but has
not invalidated a federal act on delegation grounds since 1937* See
A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 (1935);
Panama Refining Co. v. Ryan, 293 U.S. 399 (1935)
E.g. New York Central Securities Corp. v. United States, 287 U.S. 12
(1932) (authority to approve railroad acquisitions "in the public interest"
sustained); NAACP v. FPC. 425 U.S. 662 (1976) (grant of authority to
Federal Power Commission to regulate the supply and price of energy in
the pubhc interest did not include a delegation of authority to prohibit
racial discrimination.)
- v
1 Industrial Union Department AFL-CIO v. American Petroleum
Institute, 448 U.S. 607 (1980) (concurring).
National Cable Television Assoc. v. United States, 415 U.S.336. 341
(1974); cf. Federal Energy Administration v. Algonquin SNG, Inc. 426
U.S. 548 (1976)(fees/taxes on imported oil sustained as exercise of
foreign affairs)
Kent v. Dulles. 357 U.S.* 116 (1958)
Uchter v. United States. 334 U.S. 742. 783 (1948) ("excessive profits"
was sufficient standard where the agency's applications were within
scope of Congressional intended policy) and see Kenneth C. Davis, 1
Administrative Law Treatise, 213 (2d ed. 1978).
Solgin v. Kaufman, 418 F.2d 163 (7th Cir. 1969); Homsby v. Allen,
326 F.2d 605 (5th Cir. 1964).
2 0
2
2 2
2 3
2 4
2 5
�challenged if the delegation is characterized as a delegation of taxing
authority or one affecting individual protected hberty interests. For
instance, the authority of the HIPCs to set benchmark prices which
estabhsh the amount of employee contribution toward the purchase
of a basic benefit pohcy can regarded as a tax in the sense that it
must be paid whether or not an employee chooses to be insured by a
HIPC approved plan. The authority to determine the magnitude of
this involuntary contribution is arguably the authority to tax and *
thus non-delegable. However, such a delegation would probably be
saved by clear imposition of the "tax" obligation by Congressional
legislation, with only its apphcation delegated to the HIPC.26
The argument that HIPC determined plan standards (such as
excluding plans that cover disapproved technology or benefits such
as cosmetic surgery) affect constitutionally protected hberty interest
in obtaining medical care and thus subject to stricture delegation
requirements is more attenuated. It would seem to depend on
prohibitions against purchasing excluded treatments outside the
HIPC and it rests on the assumption that there is such a
constitutionahy protected interest. I know of only one case in which
therightto privately purchase a particular medical treatment
(acupuncture) has been held to be a constitutionahy protected
right, although there is much discussion of a constitutional privacy
right that includes the right to refuse treatment
27
28
Such broad delegations have been made both to independent
federal agencies, such as the FTC and the FCC, discussed above, and
to federal departmental agencies. Thus, as originally enacted, the
Medicare statute authorized the Secretary to pay hospitals
"reasonable costs" for their services to Medicare beneficiaries. In a
more restricted delegation, the Secretary of HHS is given similar
authority to approved state Medicaid plans based on assurances that
state reimbursement rates are "reasonable and adequate" to meet
29
2 6
See discussion infra.
Andrew v. Ballard, Texas case cite
Eg. Cruzan v. Harmon, 760 S.W.2d 408 (Mo. 1988)
The Secretary exercised this authority through regulations that relied
heavily on reimbursement practices of private Blue Cross/Blue Shield
Associations. See generally, Judith Feder. Mediare: The Politics of
Federal Hospital Insurance 53-142 (1977). Reasonable cost
reimbursement for hospitals has been replaced by prospective payment
based on diagnostically related groups rates (DRGs).
2 7
2 8
2 9
�the costs of efficiently and economically operated facihties meeting
federal and state quahty and safety standards.
30
And, similar delegations have been made to state governmental
bodies. Thus, in the health care area, in 1983 Congress required HHS
. to allow Medicare payment to hospitals to be made in accordance
with state rate setting programs in specific states that had
demonstrated that they had cost effective programs. In some
states, these rate setting programs follow a pubhc utihty model,
placing rate setting authority in an independent commission and
others place the function in an existing state agency^ In a more
restricted delegation, Congress delegated to state planning agencies
authority to approve Medicaid reimbursable capital expenditures
made by health care facihties if the states met certain federal
requirements.
31
32
33
Efforts have been made to control the broad delegations of
rulemaking authority to independent agencies, (permitted by the
decline of the non-delegation doctrine), by providing for a post
agency decision "legislative veto" either by the action of one house or
Congressional silence. These efforts have been limited by the
Supreme Court's striking down several post decision schemes that
violated constitutional requirements for bicameral action and
Presidential approval or veto. Legislation embodying Congressional
ratification of agency rulemaking should be avoided. However,
Congress can still control the exercise of agency rulemaking
authority, such as that to be ceded to HIPCs, by providing a waiting
period before their rules become effective during which Congress can
act legislatively, through Congressional oversight of HIPC budgets,
the enactment of appropriationriders,sunset provisions, or
amendment of authorizing legislation to estabhsh specific limitations
on agency authority.
"
34
3 0
42 U.S.C. 1902(a)(13) (1990).
42 U.S.C. §1395ww(c)(l)(C)(Supp. 1983-87) and see Kean v. Heckler,
799 F.2d 895 (3d Cir. 1986).
Barry Furrow, Sandra Johnson, Timothy Jost and Robert Schwartz,
The Law ofHealth Care Organization and Finance. 360
(1991).(hereinafter Furrow.)
42 U.S.C. §1320a-l (1976)(repealed 1988). 42 U.S.C. §300e-4, 300m
to 300t (repealed 1986).
Immigration and Naturalization Service v. Chadha, 103 S. Ct. 2764
(1983) (one house veto struck down as violative of constitutional
requirement for bicameral legislation);
3 1
3 2
3 3
3 4
�Delgarions to private bodies
Although the promulgation of governmentally enforced
rules by private bodies is not favored by the courts, the
Constitution permits delegations of the kinds of rulemaking functions
HIPCs may be given to private non-profit corporations, so long as
provision is made for the approval of their rulemaking by state or
federal government agencies, procedural due process and judicial
review. Thus, rulemaking and adjudicatory authority of the
private self-regulatory body used to supervise the NASDAQ, over the
counter stock exchange was held to be constitutional where the SEC
retained authority to approve its rules under statutory standards,
promulgate its rules through note and comment procedures and their
adjudicatory procedures were deemed fair. It should be noted that
these voluntary associations do not regulate the only market for over
the counter securities, but set the conditions upon which a dealer can
engage in trading on a particular exchange. Thus, it may be
important whether HIPCs regulate the only market in which certain
buyers and sellers can participate or whether eligible subscribers
and HIPC selected plans can deal with each other outside the HIPC
controhed market The Supreme Court has evidenced some
inclination to distinguish between such truly national self-regulatory
bodies and the delegation of federal authority to private associations
that amounted to local cartels. .
35
36
37
38
3 5
Lawrence Tribe, American Constitutional Law, 369 (1988) citing
United States v. Mazurie. 419 U.S. 544 (1975)(delegation of authority to
regulate liquor sales to Indian tribe upheld as one to a body with
attributes of sovereignty, "more than private, voluntary organizations,")
See generally, Jaffe, Law Making and Private Groups, 51 Ha;rv. L.
Rev. 201 (1937); Uebmann, Delegation to Private Parties in American
Constitutional Law. 50 Ind. L. J . 650 (1975).
First Jersey Securities, Inc. v. National Association of Security
Dealers, 605 F.2d 690 (19 Hupholding Maloney Act's, 15 U.S.C. §78o-3,
creation of private voluntary association of security dealers to promulgate
rules to prevent fraud, promote equitable practices, perfect the
mechanism of afreeand open market and protect the public interest on
the NASDAQ exchange and the power to discipline its members.) See
also United States v. National Association of Security Dealers, 422 U.S.
694. 700-01 (1975). See discussion infra.
Florida Line and Avocado Growers v. Paul, 373 U.S. 132
(1963) (upholding a California law which regulated the sale of avocados as
not preempted by the federal scheme implementing similar rules
established by a private body made up largely of Florida growers.)
3 6
3 7
3 8
�In the health care area, the Medicare statute rehes heavily on
standards promulgated by the Joint Commission on the Accrediation
of Healthcare Organizations (JCAHO), a private non-profit corporation
made up of hospital, physician and health care professional
associations, to determine a hospital's qualification to participate in
Medicare. Prior to 1984, psychiataric hospitals were required to
meet JCAHO standards in order to participate in Medicare. The
scheme withstood a patient challenge that it was an unconstitutional
delegation of standard setting authority to a self interested private
organization and that its accreditation procedure denied them of due
process. The Third Circuit Court of Appeals found that there was
no "real delegation" to JCAHO since the "Secretary retainfed] ultimate
authority over decertification decisions" by virtue of Ms authority tp^
estabhsh "equivelant standards," conduct his^own surveys and make,
de novo evaluations of hospital compliance?*
39
40
1
•
The National Health Planning and Resources Development Act,
now repealed, also rehed upon the standards and plans promulgate
by private health planning organizations. In order to receive certain
federal funds, states were required to enact Certificate of Need Laws,
authorizing the creation of Health Service Agencies (HSAs) and
delegate to them adjudicatory and rulemaking authority reviewable
under procedures complying with requirements of the federal act.
It thus provided for the designation of private, non-profit
corporations to formulate regional health plans and evaluate and
make recommendations to the state government's planning agency
(SHPDA) regarding individual apphcations for certificates of need to
invest in new health service facihties.
HSA health services and
42
4 3
39 42 U.S.C. § 1395x(f); 42 C.F.R. part 482 (1986).
Cospito v. Heckler. 742 F.2d 72 (3d Cir. 1984).
41 Id.
42 C.F.R §123.407(a)(1977)(federalregulationsrequiredthat state
review procedures be promulgated in accordance with state laws
governing the adoption of administrative rules i.e. state administrative
procedure acts.)
42 U.S.C. §3001 -1 (1976). HEW (now HHS) was given authority to
divide the country into 213 health service areas andrecognizea single
health services agency in each authorized under state law to engage in
the planning and evaluation of new capital investment in health care
facilities. HSAs were required to be governed by boards of local residents
broadly representative of the social, economic, linguistic and racial
populations of the area. 42 U.S.C.§3001-l(b)(3)(C)(West 1977). Hie
4 0
4 2
4 3
�iinplementation plans, when proposed by the SHPDA and approved
by an advisory committee (the SHCC, composed largely of
representatives from the HSAs), became standards against which the
state agency was obhged to measure certificate of need
apphcations. I am unaware of any constitutional challenges to this
utilization of private planning bodies to establish enforceable CON
standards.
44
More recently, in its 1990 Medigap legislation, Congress
provided a rulemaking role for a private, non-profit association of
state insurance commissioners. In OBRA 1990, Congress prohibited
the sale of medigap insurance pohcies unless the pohcies either (1)
comply with state regulatory programs that provide for the
apphcation of standards promulgated by the National Association of
Insurance Commissioners (NAIC), enacted by the state and approved
by the Supplemental Health Insurance Panel (the Secretary and four
state insurance commissioners) or (2) comply with a state regulatory
program which meets standards promulgated by the Secretary of
HHS. In states with no such program, the pohcies may be certified
by the Secretary. The statute specifies the process through which
the NAIC must promulgate its standards, Le. in consultation with
working groups composed of representatives of insurers, consmners,
medicare beneficiaries and other qualified individuals. In addition,
states seeking to institute Medigap programs were required to
submitt for HHS approval administrative procedures governing
insurance rate increases, including pubhc hearings. If such state
programs meet or exceed the NAIC standards, then pohcies approved
in those states are deemed to meet federal requirements. In this
scheme, if the NAIC did not develop a model state statute meeting
federal requirements, or if a state did not enact the model act, HHS
was given default authority to develop medigap standards and apply,
them directly through the certification of policies. Although the
45
46
legislation permitted the Secretary to designate either a such a private
body or a state agency that had a representative advisory board. See
generally, Margaret Farrell Ewing, Health Planning and
Deinstitutionalization, 31 Stanford L. Rev. 679. 687-701 (1979).
44 42 U.S.C. §300e-4. 300m-l; 42 U.S.C. §3001-2(b)(2) (1976). Hie
statute required hearings at the local and state level on the proposed
health plan. 42 U.S.C. § 300m-3(c)(2)(B) (1976).
45 42 U.S.C.§1395ss (a)(2) (1991) Conf. Rep. Omnibus Budget
Reconciliation Act of 1990, 101 Cong. 2d Sess. 785 (1990).
46 42 U.S.C.§ 1395ss(m) (1991).
�Secretary is not given authority to disapprove NAIC standards, she is
given authority to disapprove state programs for their enforcement
The JCAHO, HSA and Medigap examples suggest that questions
of delegations of rulemaking authority to private bodies are obviated
. where the Secretary of a department (e.g. HHS), and independent
agency (e.g. SEC) or a state agency exercising federal authority (e.g.a
state 1122 agency) has at least formal authority to disapprove their
rules. While all of the delegations to private bodies dted above
differed in important respects, and particular ddegations made to
HIPCs would have to be analyzed specifically, it should be noted that
in all of these examples of regulatory authority ceded to private
groups, pubhc bodies retained oversight authority and provision was
made for the observance by the private body of fair adjudicatory •
^procedures.*
Final agency action approving private rulemaking is subject to
judicial review through writs of injunction or mandamus, under
section 42 US.C. 1983 or under the state or federal Administrative
Procedure Act. Such a check on private authority to widd pubhc
power is in keeping with our basic concepts of constitutional
governance.
47
48
Ddegations and preemption: Antitrust laws and ERISA
Where Congress has passed legislation or indicated an intention
to occupy a particular fidd within its authority to regulate (even
with an indication that there should be no regulation in the fidd),
state laws must give way. This seemingly simple prindple is often
difficult to apply. Two federal laws rdevant C health care
o
4 7
Wilder v. Virginia Hospital Association, 496 U.S. 498 (1990) (health
care provider hdd to have a cause of action under § 1983 to enforce
provisions of the Boren Amendment requiring state medicaid rates that
are "reasonable and adequate" to meet the costs of efficiently and
economically operated facilities.)
Persons who believed they are agrieved by agency action may Haim
an implied cause of action under the organic statute (Cort v. Ash, 422
U.S. 66 (1975). under 42 U.S.C. 1983 (rights arising under the laws of
the United States) or under section 704 of the Federal Administrative
Procedure Act ("Agency action made reviewable by statute and final
agency action for which there is no other adequate remedy in a court are
subject to judicial review.")
4 8
�regulation that create difficult problems of construction are the
federal antitrust laws and the Employees Retirement Income
Security Act (ERISA). They are relevant here in several ways.
• Federal antitrust laws. Federal antitrust laws are enacted to
prohibit certain anticompetitive behavior by private parties. States
themselves do not violate the federal laws when they doose to
regulate an area rather than rely on free market forces; nor do
private bodies whose actions are authorized and suprevised by state
law. However, states, too, have antitrust laws governing private
anticompetitive conduct
49
Managed competition would permit certain behavior by private
entities that would seem to otherwise violate the antitrust laws. For
example, the monopsonistic behavior of HIPCs in aggregating
purchasing power and boycotting uncooperative plans would be
suspect under the antitrust laws were it not for new federal law
authorizing such activity or state action regulating i t The extent of
antitrust exemption may be difficult to determine, depending on the
specific authority granted to HIPCs. Thus, such new laws should
make as dear as possible the extent to which they replace federal
antitrust laws and the extent to which they preempt state antitrust
laws.
5 0
Similarly, if a state or private body were expected to exerdse
non-ddegated authority, such as state pohce power to regulate
insurance (HMO laws etc.), in conjunction with newly obtained
authority under managed competition, questions might arise whether
state law permitting or requiring such action was preempted by
ERISA. In general, ERISA preempts state laws relating to pension
and welfare benefits plans, except laws regulating insurance and not
4 9
Parker v. Brown, 317 U.S. 341 (1943); Patrick v. Burget 108 S. Ct
1658 (1988) (hospital peer review not immunizedfromantitrust attack by
state action because state did not actively supervise the state approved
activity either through its administrative agencies or its courts).
The McCarren-Ferguson Act immunizes against Sherman Act attacks
the business of insurance when it is regulated by state law. 15 U.S.C.
§1011-1015 (1990). Whether application by the HIPC of standards for
the selection of health plans and benchmark prices would be regarded as
the regulation of insurance by state law is not dear, but might depend on
the extent towhich the HIPC is supervised by state authorities.
5 0
�51
pertaining to self-insured employer plans. Thus, state insurance
laws have been held preempted as they relate to the health benefit
plans of self-insuring employer.
52
A HIPC making a benchmark determination could be regarded
as setting premium rates, an inherent pohce power authority of the
state, not preempted by ERISA except as apphed to self insuring
employers, who then could not be required to pay such rates for
their employees benefits. In another important ERISA decision, a
federal court has invahdated a state rate setting program that
surcharged all health plans, including the plaintiff union plan, an
amount necessary to fund an indigent care pool This payment was
construed to be a payment of ERISA protected benefits to non-plan
beneficiaries (the poor) and hence to violate ERISA. If HIPCs were to
include in the benchmark a factor intended to defray the cost of
providing either the state or federal component of the subsidy for
low income subscribers, such an action would seem to conflict with
ERISA. The managed competition scheme is not sufficiently well
defined to explore the ERISA preemption issues thoroughly, however,
it should be addressed in anyfinalTask Force proposal and
amendments to ERISA proposed.
m. DELEGATIONS OF ADJUDICATORY AUTHORITY TO PUBUC AND
PRIVATE BODIES: DUE PROCESS LIMITATIONS ON THE PROCEDURES
USED TO CARRYOUT DELEGATED FUNCTIONS
It is well estabhshed that Congress may confer adjudicatory
powers on an administrative agency as opposed to an Article HI
court, including jurisdiction to decide cases involving the liabihty of
one private party to another, so long as provision is made for judicial
review. This adjudicatory power may also include jurisdiction over
cases in which the agency itself is a party, as is the case with the
enforcement of much regulatory authority.
53
The fohowing functions performed by HIPCs can be regarded as
adjudicatory functions:
51 Metropolitan Life Insurance v. Massachusetts, 471 U.S. 724 (1985)
(state laws requiring insurance coverage of mental health benefits were
laws regulating insurance savedfromERISA preemption).
52 McGann v. H & H Music Co. 946 F.2d 401 (5th Cir. 1991)
Crowell v. Benson, 285 U.S. 22 (1922).
5 3
�•
•
•
•
•
•
Selecting plans as qualified to participate
Applying payment schedules to plans
Enforcing balanced billing against plans and providers
Determining individual eligibility for subsidies
Determining payment due individual plans under contracts
Applying health planning standards to individual projects
Constitutionally required due process.
• The interests affected. The Constitution requires that where
government action affects the constitutionally protected interest, the
due process clause requires that certain procedures be observed.
The Constitution does not require such protection whenever personal
interests are affected by governmental action, but only when such
interests are defined by positive law sources - constitutions, statutes
or the common law.
54
55
Thus, as a threshold matter, the interests affected by HIPCs
must be found to be protected hberty or property interests within
the meaning of the fourteenth amendment in order for due process
requirements to apply to HIPC adjudications. Originally limited to
interests protected by federal and state constitutions and common
law, modern cases have included statutory entitlements such as
entitlements to Medicare and Medicaid. Arguably, the interests of
persons claiming a statutory entitlement to health insurance
subsidies, health plans claiming entitlement to selection by the HIPC
56
54 Goldberg v. Kelly, 397 U.S. 254 (1970) (welfarerecipientsinterest In
continued benefits held a constitutionally protected interest entitled to
due process procedures.)
55 See e.g. Cospito v. Heckler. 742 F.2d 72 (3d Cir. 1984) (involuntarily
committed psychiatric patients had no constitutional due process right to
a hearing before a private accrediting body whose accreditation was
required for payment of Medicare and Medicaid federal benefits);
O'Bannon v. Town Court Nursing Center, 447 U.S. 773 (1980) (patients
in Medicaid certified nursing home had only an indirect noncognlzable
interest in certification proceedings entitling them to protections of due
process.)
See also Board of Regents v. Roth. 408 U.S. 564 (1972) and Wisconsin v.
Constantineau, 400 U.S. 433 (1971) and see generally. Tribe, American
Constitutional Law, 677 (2d ed. 1988).
56 Goldberg v. Kelly, supra. Cf Wilder v. Virginia Hospital Association,
supra, holding that hospitals had a cause of actiohn to enforce against
the state rate provisions in the federal Medicaid statute.
�in accordance with national and local statutory and regulatory
standards, and providers, claiming common law rights to contract for
fees would seem to meet threshold requirements for the imposition
of due process procedures.
• Adjudication by pubhc agencies: the process required.
However, the procedures that due process requires of administrative
agencies vary depending upon three factors: the individual interest
affected, the risk of erroneous deprivation of such interest through
the procedures used and the interest of the government interest in
the program involved and in minimizing the administrative burden
of procedural requirements. Thus, due process requirements are
determined on a case by case basis and depend on the weight
ascribed by the court to the private and pubhc interests involved
and the utihty of particular procedures in producing accurate fact
finding.
57
58
Where the due process clause is found apphcable, the
procedures required usually include notice and some kind of a
hearing. However, there is considerable variation as to what kind of
notice is required, when it must be given, what kind of hearing must
be provided and whether it must be before or after the agency has
acted. De novo review of agency action, i.e. an evidentiary hearing
before a federal or state court before agency action is taken meets
due process requirements that the state treat individuals with
fundamental fairness. In various administrative contexts, due
process before an administrative agency has been held to include;
notice of the issues involved, an opportunity to present and rebut
oral and documentary evidence, therightto retain counsel, and the
right to a decision by a neutral decisionmaker based only upon the
evidencerecordedin an official transcript
59
Yet, fewer procedural protections are required where the
interests involved are not given great weight Thus welfare
recipients were accorded greater protections than the recipients of
57 Mathews v. Eldridge, 424 U.S. 319 (1976) (beneficiaries of disability
insurance not entitled to predetermination hearing before the Social
Security Administration before termination of their benefits).
58 See generally, Jerry Mashaw, Due Process in the Administrative
State, (1985).
59 Schwartz supra.note 5 at § 5.1.
�60
disability insurance benefits. Furthermore, Congress may proscribe
administrative procedures apphcable to particular agency actions,
and the Constitution does not require judicial review until those
administrative procedures have been exhausted.
61
• Adjudication by private bodies - no state action. The
restrictions of the fourteenth amendment are apphed only to state
action, not private action. The actions of a HIPC carrying out the
described functions could be regarded as the actions of the state,
despite their non-profit corporate status if sufficient indices of state
connection are present Thus, state subsidization of private activity
andthe provision of coersive effect to private actions has been held
to constitute state action.
62
The fact that state subsidies may turn on private decisions does
not necessarily cloak them with state action. The Supreme Court
held that Medicaid patients in a private nursing home that conducted
utilization reviews to determine whether their care was appropriate,
were not entitled to due process hearings on that issue before the
utilization review committee because the Court found the nursing
home's review was not state action. State law did not demand the
transfer of such patients, only termination of their Medicaid benefits
unless they were transferred to an appropriate level of care. No
state action was found despite the fact that the state encouraged
private utilization review programs and state Medicaid regulations
required the nursing home to conduct such utilization review.
Presumably Medicaid beneficiaries could sue state Medicaid
authorities for arbitrarily accepting unreviewable appropriateness .
determinations made by private nursing homes in violation of due
process requirements - a difficult burden. Thus, whether the
adjudications conducted by HIPCs would be considered "state action?
63
6 0
Compare Goldberg v. Kelly supra and Mathews v. Eldridge, supra.
61 Weinberger v. Salfl, 422 U.S. 749 (1975) (social security beneficiary
not entitled to de novo Judicial review under the social security act and
could not obtain any Judicial review until after afinalagency decision by
the Secretary.)
62Burton v. Wilmington Parking Authority, 365 U.S. 715 (1961) (public
fundings, contractual relations and tax exemption sufficient to render
privately owned restuarant not "purely private" and subject to fourteenth
amendment prohbitions against racial discrimination).
63 Blum v. Yaretsky, 457 U.S. 991 (1982) ("That the state responds to
such (private) actions by adjusting benefits does not render it responsible
for those actions.")
�for fourteenth amendment due process purposes would depend on
their contection to coersive state power.
• Adjudications by private bodies - state action found. Where
private adjudication is sufficiently connected with the exercise of
pubhc authority as to be regarded as state action, constituional due
process requirements are met if governmental authority to review
the adjudication, even if such review occurs after the agency has
take adverse action is retained. Thus, adjudications of the private
JCAHO were sustained against a due process challenge because the
Secretary retained authority under the statue to make a de novo
determination of a psychiatric hospitals compliance with apphcable
standards.
64
Similarly, the adjudicatory authority to impose Medicare
sanctions upon hospitals and physicians given to private, non-profit
Professional Review Organizations (PROs) has been held to comply
with due process requirements where only a post sanction hearing
before the agency was provided (not a hearing before the PRO).
Most PROs are non-profit organizations sponsored by physicians.
They are authorized to deny Medicare payment for hospital care
falling below certain quahty standards promulgated by HCFA and the
PRO and physicians' care falling below "professionally recognized
standards of health care." Medicare beneficiaries for whom payment
has been denied are entitled to a hearing before a social security
administration administrative law judge (ALJ), review by the social
security administration's Appeals Council and judicial review in
which a substantial evidence standard is apphed. Providers are
entitled only to reconsideration by the PRO, written submissions to
the Office of the Inspector General, which receives the PRO
recommendations and imposes sanctions, (including exclusionfrom
the Medicare program,) before such sanctions are levied. Only after "
imposition of sanctions is a provider entitled to an ALJ hearing and
65
66
(
6 4
Cospito v. Heckler, supra, and Clark Havighurst Health Care Law
and Policy, 511-24 (1988).
65 Under the 1982 amendments to the Medicare act the Secretary of
HHS was authorized to contract with any group (public or private) to
review the necessity of individual hospitalizations and DRG
reimbursements (validating DRG diagnosis and the necessity for
discharge and readmissions) as well as physicians reimbursement in
accordance with statutory, regulatory and contract requlrements42
U.S.C. § 13220c-3(a)
42. U.S.C. 1320c-4; 42 C.F.R § 1004 et seq. (1987).
6 6
�agency review. This adjudicatory procedure, in which the provider is
entided only to a hearing before the agency after sanctions have
been levied has been held to comply with.due process
requirements.
67
The Secretary is also empowered under the Medicare statute to
contract with private "fiscal intermediaries" (usually insurance
companies) to determine whether services rendered to Medicare
beneficiaries are "covered" services and the amount of the
reimbursable expense. Beneficiaries dissatisfied with the
intermediary's determination are entitled to reconsideration by HCFA
and a hearing before an AIJ, with judicial review only after final
agency action is taken. Due process does not require a hearing
before the privatefiscalintermediary makes its coverage decision,
and some intermediary determinations have been held to be
unappealable, even to the agency. In testimony arguing that
delegation by a federal executive agency offinaladjudicatory
authority to private arbitrators would be unconstitutional, the Office
of Legal Counsel concluded that such authority would meet
constitutional requirements if private decisionmakers were selected
and removable by the agency, and the adjudication did not become
final until reviewed and approved by the head of the agency . The
6 8
69
70
6 7
Doyle v. Secretary ofHealth and Human Services, 848 F.2d 296 (1st
Cir. 1988) (physician not entitled to pre-determination or pre-sanction
hearing before the agency). The statute provides that some PRO
decisions (such as those pertaining to DRG coding and outliers) cannot
be appealed to the agency. With regard to determinations made by
state 1122 agencies prohibiting Medicaid reimbursement of capital
investments not approved by state planning agencies. Secretary Calif ano
claimed that he was not authorized by the federal statutes to review
individual CON determinations or Medicaid reimbursement
determinations. See Ewing. supra, at 705.
68 42 U.S.C. 1395u: Schweiker v. McClure, 456 U.S. 188 (1982).
69 id. Such authority is arguably constitutional because the Secretary
can resume the power of decision at any time by discharging the
intermediary.
Statement of William P. Barr Assistant Attorney General. Office of
Legal Counsel, Hearing Before the Subcomittee on Oversight of
Government Management Committee on Government Affairs, United
States Senate, September 19, 1989. The statement drew attention to
concerns for delegation and dissipation of executive authority as opposed
to delegations of legislative authority.
7 0
�same would seem to be true with regard to private decisionmakers
such as HIPCs.
Thus, whether HIPCs are public or private bodies, they may be
delegated adjudicatory responsibilities for iinplementing managed
competition so long as the responsible federal agency retains
authority to terminate their authority in accordance with statutory
or regulatory standards and review their adjudications subject to
judicial review.- The standard of judicial review of agency action
requires that the agency action be sustained if it is not arbitrary and
capricious and itsfindingsare supported by substantial evidence. i
7
STATE CONSTITUTIONAL REQUIREMENTS
As mentioned above, states may become part of the managed
competition reform in three ways - through direct federal
compulsion, through contractual agreements between state agencies
and the federal government and through the enactment of state laws
meeting federal standards. The memorandum to you from the
Department of Justice dated March 5,1993 discussed the tenth
amendment problems encountered with thefirstoption. Requiring
states to take action prohibited by their constitutions would highlight
tenth amendment issues.
Greater constitutional latitude is provided by voluntary
involvement of the states either through contracts or state
enactments induced by federal funding requirements. The extent of
that latitude is nicely illustrated by the North Carolina certificate of
need program which was found by its Supreme Court to violate the
North Carolina constitution. When the federal government
required enactment of such CON laws as a condition to the receipt of
federal planning funds, the federal law was attacked as
•.
'
unconstitutional. A federal court sustained the law, reasoning that
the state's were not compeUed to violate their own constitutions but
would forego federal funding unless they did. In states where
particular state actions (contracts or statutes) required by federal
law for state participation in managed competition is forbidden by
state constitutional provisions, alternative federal mechanisms
should be made available as they are, for instance, in the 1990
72
73
7 1
7 2
7 3
Schwartz, supra § 10.
AshtonPark
Marrow v. Calif ano
�Medigap program. When the managed competition program becomes
more clearly defined, further research should be done to determine
how extensive conflicts between state constitutions and federal
managed competition requirements may be.
. ADMINISTRATIVE PROCEDURE ACT REQUIREMENTS
74
75
The Sunshine Act, Advisory Committee Act and the
Freedom of Information Act, (FIOA) are ah part of the Federal
Administrative Procedure Act (APA), Their apphcabihty turns on
the definition of "agency" as it has been defined for-purposes of the
APA. The statute defines agency as "each authority of the
Government of the united States, whether or not it is within or
subject to review by another agency," with certain exceptions such
as Congress, the courts and governments of the territories.
76
77
78
The definition has been apphed in various factual contexts but
is generally held to be "the authority to act with sanction of the
government" and under the supervision and control of federal
executive branch. The definition has been held not to include state
agencies or bodies engaged in the collection of medical information
for the state. Courts have noted that the extensive regulation of
the state acceptance of federal funds does not render state agencies
or local governments federal agencies for the purposes of the APA.
79
80
81
Neither are private bodies rendered federal agencies by virtue
of accepting federal funds or contracting to carryout regulated
functions, unless they become the "functional equivelants" of federal
7 4
5 U.S.C. § 552b, nt (for purposes of § 552b, agency includes any executive
department, Government corporation, Goveemment controlled corporation, '
independent regulatory agency or other establishement in the executive
branch of the Government.)
5 U.S.C. Ap. 2, § 1 et seq.
5 U.S.C. § 552a.
5 U.S.C. § 551 et seq.
5 U.S.C. § 551(1) and 552a(e)
79 Lassiter v. Guy F. Arkinson, 176 F.2d 984.
SL Micheal's Convalescent Hospital v. California, 643 F.2d 1369 ( 9th Cir.
1981) (California Health Facilities Commission not a federal agency for
purposes of the Privacy Act, 5 U.S.C. 552a(a)(2) and 552a (g)).
United States v. Orleans, 425 U.S. 807 (1976); Forsham v. Harris, 445 U.S. 169
(1980)(extensive detailed, and "virtually day to day supervision" by federal
officials required to render an entity a federal agency for APA purposes.)
7 5
7 6
7 7
7 8
8 0
8 1
�82
agencies, making decisions for them. Thus, the National Academiy
of Science was held not be to an agency merely because it
contractaed with the government, and neither was the American Red
Cross where it could not be shown that it was extensively supervised
by the federal government. Closer to home, a private, non-profit
Professional Services Review Organization, very similar to a PRO, was
held not to be a federal agency simply because it carried out its
Medicare and Medicaid functions pursuant to federal regulatory and
contractual provisions.
83
84
Whether HIPCs could be considered federal agencies for the
purposes of the APA would depend on the specific pubhc authorities
granted to them and the extent to which their actions are sanctioned
by governmental power.
CONCLUSION
As stated above, this memorandum concludes that the
Constitution allows considerable latitude regarding the location of
functions to be carried out by HIPCs. It neither flatly prohibits the
location of such functions with state or private bodies nor requires
that they be so located. It does require that when those functions
are enforced through governmental power, persons affected be provided fundamentally fair procedures, including judicial review,
and that pohcy determinations of general apphcation be made
accountable through some action of an agency responsible to the
executive, judicial or legislative branches of the federal government..
8 2
Washington Research Project Inc., v. Department of Health Education and
WHfare, 504 F2d 238 (D.C. Cir.-1974) cert, denied 421 U.S. 963 (1974) (private
consultants were not agencies).
83 Lombardo v. Handler, 397 F. Supp. 792 aff d 546 F.2d 1043 (D.C Or. 1975);
Irwin Memorial Blood Bank v. American National Red Cross, 640 F.2d 1051 (9th
cir. 1981).
Public Citizen Health Research Group v. Department of Health Education
and Welfare, 668 F.2d 537 (D.C. Cir. 1981).
8 4
�Clinton Presidential Records
Digital Records Marker
This is not a presidential record. This is used as an administrative
marker by the William J. Clinton Presidential Library Staff.
This marker identifies the place of a tabbed divider. Given our
digitization capabilities, we are sometimes unable to adequately
scan such dividers. The title from the original document is
indicated below.
Divider Title:
�Tab 5:
State Accountability
1.
Sample Performance Measures for States
Attachment from working group which lists sample criteria
on which states may be required to report and meet standards.
2.
Assuring Access and Quality for Low-Income, Underserved, and
and Vulnerable Populations
This document was created by several groups with interrelated disciplines
which discusses performance based accountability, federal standards and
infrastructure development.
Issues covered include: Establishing a performance-based system of
accountability; Establishing standards and regulations emphasizing protections
for special populations; Eliminating or minimizing deficiencies and disparities.
�FOR OFFICIAL USE ONLY
- 14 -
ATTACHMENT 1.1: SAMPLE PERFORMANCE MEASURES FOR STATES
Assessments for each measure would focus on subpopulations of vulnerable populations as well as
for the population of the state as a whole. Measures that would be used as benchmarks (rather than
standards) are indicated by asterisks (*).
A.
•
•
B.
Enrollment/Plan Capacity
Percent of eligible population actually enrolled in plans
Percent of enrollees able to enroll in their "first choice" plan
Service/Satisfaction
Percent of enrolled population satisfied with their HA. •
Percent of enrolled population receiving out-of-plan care
Percent of enrolled population satisfied with their plans •
Percent of population disenrolling from plans
Percent of enrolled population satisfied with their primary care provider *
Percent of enrolled population satisfied with access to specialist care *
Travel times to primary care services
Response times for emergency services
Time delays in obtaining primary care appointments
C.
•
•
•
D.
•
•
Provision and Appropriate Utilization of Covered Services
Percent of eligible population receiving covered preventive services (e.g., complete
immunization for children age 2; annual mammography for women over 50; prenatal care for
pregnant women)
Percent of eligible population with common chronic conditions receiving services necessary
for their care (e.g., percent of patients with diabetes receiving annual ophthalmologic
examinations)
Percent of enrolled population receiving unnecessary services (e.g., C-section rates in the
pregnant population) *
Outcomes of care
Rates of adverse events indicating inadequate access to covered ambulatory services (e.g.,
admission rates for pediatric asthma, diabetic ketoacidosis, etc.) '
Rates of adverse events indicating poor quality of covered services (e.g., inpatient readmission
rates; unplanned return to surgery rates; morbidity and mortality rates for specific
condition/procedures) *
PRELIMINARY STAFF WORKING PAPER FOR DISCUSSION PURPOSES ONLY
�FOR OFFICIAL USE ONLY
ASSURING ACCESS and QUALITY for LOW-INCOME,
UNDERSERVED, and VULNERABLE POPULATIONS THROUGH
• PERFORMANCE BASED ACCOUNTABILITY
• FEDERAL STANDARDS and
• INFRASTRUCTURE DEVELOPMENT
PRELTMTNAKY STAFF WORKING PAPFR FOP, DISCUSSION PURPOSES ONLY
�FOR OFFICIAL USE ONLY
- 1 -
TABLE OF CONTENTS
I.
Statement of the Problem
1
II.
Purpose of the Proposal
2
HI.
Establishing a Performance-Based System of Accountability
3
A.
B.
C.
IV.
Structuring the Market to Assure Access and Quality
Assuring Accessibility of Quality Care from the Outset
Assuring that Consumer Education, and Grievance and
Redress Procedures Protect Special Populations
7
7
9
10
Eliminating or Minimizing Deficiencies and Disparities
A.
B.
C.
VI.
3
4
5
Establishing Standards and Regulations Emphasizing
Protections for Special Populations
A.
B.
C.
V.
Achieving and Enforcing State Accountability
Promoting Accountability at Other Levels
Establishing a Nationally Standardized Database
Providing Technical Assistance and Funding to Enhance
Availability and Quality of Facilities and Providers
Establishing and Pursuing Personal Health Improvement Goals
Recognizing and Supporting Quality
Essential Community Providers
11
12
12
12
Attachments
A.
B.
C.
D.
Attachment 1.1: Sample Performance Measures for States
Attachment 1.2: Federal Reporting Requirements
Attachment 2: Rationale for Consumer Protection Specifications
Attachment 3: Standards for Minimizing Systemic and Personal
Health Deficits
PRPT TMIMARV STAFF WORKTS'C PAPFR FOR mSCUSSTON PURPOSES ONLY
14
15
17
19
�FOR OFFICIAL USE ONLY
- 1 -
ASSURING ACCESS AND QUALITY FOR LOW-INCOME, UNDERSERVED AND
VULNERABLE POPULATIONS THROUGH:
• PERFORMANCE BASED ACCOUNTABILITY
• FEDERAL STANDARDS and
• INFRASTRUCTURE DEVELOPMENT
L
STATEMENT OF THE PROBLEM
Health care refonn should remove majorfinancialbarriers that have limited access and quality of care
for (1) low-income persons; (2) residents of rural, inner dty and other communities that are
medically underserved; and (3) vulnerable populations such as those with chronic illnesses, the
homeless, and substance abusers. Hie new system guarantees access to a comprehensive package of
health benefits without respect to income, employment, or health status for all people encompassed by
reform. Eligible persons will receive full or partial subsidies for the cost of coverage, based on their
income, and plans and providers will no longerreceivereducedreimbursementsfor serving lowincome populations, as they do now under Medicaid.
These fundamental changes increase the likelihood that market forces will support delivery of care to
special populations. However, they are not sufficient to ensure that the new system will provide
access to quality health services that areresponsiveto the needs of these traditionally "marketdisadvantaged" groups. Reasons for this assertion include the following:
•
Subsidies will support coverage only in health plans at or below the benchmark premium.
Thus, low-income persons are likely to have fewer effective choices among plans and a
harder time responding to inter-plan differences in accessibility and quality by "voting with
their feet."
•
In many rural areas (and some inner-city communities) health professionals must contend with
geographic or social isolation, low levels of compensation, inadequate access to secondary or
tertiary care centers, and lack of back-up, which has a net effect of seriously limiting
competition.
•
Serving low income and vulnerable populations is often more costly: patients may need more
time, more outreach and more follow-up; facilities may require more security; and insurance
costs of all kinds may be higher. Methods now available for "risk-adjusting" premiums to
account for these costs are not well tested. Plans and providers may continue to avoid serving
what they view as "unprofitable" patients.
•
Historical limitations in health care coverage for underserved populations will not be
overcome overnight. The supply of providers and plans in these communities is limited. Few
"mainstream" providers have real expertise in responding to the special needs of many
historically underserved groups; few providers have been drawn from their ranks. Facilities in
these communities have had differentially lower access to capital for plant, equipment and
information systems infrastructure.
•
Finally, the new system will not eliminate ongoing societal problems such as racial and ethnic
discrimination, lack of adequate housing, poor education, low-wage jobs and high crime. It
cannot alter geography or trends in the depopulation of rural areas. These factors, however,
have been and are likely to continue to be disincentives to serving special populations.
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PURPOSE OF THE PROPOSAL
How, then, do we ensure that the new system does not perpetuate the multi-tiered system of health
care that exists today? To address this question, we organized a cross-cutting group of participants,
including representatives of working groups 1, la, 2, 8, 9, and of clusters VIII and XV. This breadth
of involvement reflected our conviction that all parts of the new system need to be designed to not
only protect low income and vulnerable populations, but to significantly improve their access to
affordable, effective, and responsive care. All too often, policy has been developed on the assumption
that we can meet the needs of low-income and underserved populations only by limiting the benefits
of other groups. Quite to the contrary, wefindthat effective protections for low-income and
underserved consumers ensure effective protections for all consumers.
This proposal summarizes the conclusions of our consensus building process and provides a rationale
for the approach we have taken. Additional detail is included in Attachments, as well as in the
submissions of the participating working groups. Our proposal is tailored specifically to the
opportunities and challenges inherent in the President's framework for health care reform. This
framework calls for a national health program whose fundamental elements are Federally defined, but
which is implemented and managed by States. States will be accountable for meeting a health care
budget. Hiey will thus require (and be given) considerable latitude in designing how they will meet
system objectives across widely varying community contexts.
Our proposal, therefore, includes three interacting and complementary elements:
•
Federally defined standards
•
A performance-based system of accountability
•
Federal support for infrastructure development.
It is important to identify the approach we did not take: highly specific process-oriented regulation
at all levels of the new system. Those concerned about protection of low-income and underserved
populations have often viewed such regulation as the only guarantee of theirrights.Hie continuing
disparities in access and health status of the poor argue that, at least so far, this approach hasn't
worked — although it may have prevented even worse disparities from emerging.
The new system, however, provides opportunities to move beyond this approach. In return for
providing States withflexibility,the new system demands that States take responsibility for ensuring
access and quality, and be accountable for meeting Federal performance standards. New technologies
now make it feasible to monitor their performance systematically, simply, and in "real time".
The new system also introduces significant new actors into health carereform:health alliances
(H.A.s) and health care plans. In the context of Stateflexibility,these local entities can be held
responsible for assuring affordability, access, and quality of care for their respective populations.
More important, both HA.s and plans have the opportunity to innovate to improve health care
delivery for all Americans, including low-income, underserved and vulnerable groups. Such
innovation could well be stifled by the micromanagement often inherent in process-oriented Federal
regulation.
In the pages that follow, we describe in detail the elements of our proposal. Our discussion assumes
the effective enforcement of existing protections under Federal law that prohibit discrimination on the
basis of race, creed, color, gender, ethnicity, physical handicaps and disabilities. Our paper is
organized into three sections:
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1.
a performance-based system of accountability, in which States, HA.s, and plans are both
supported in and held accountable for meeting specific standards for access and quality of
care;
2.
A system of Federal standards and enforcement mechanisms designed to protect lowincome, underserved and vulnerable populations by (1) structuring market competition to
ensure them access and quality; (2) certifying plans and providers; and (3) creating a multifaceted system of consumer protection, education and empowerment.
3.
mechanisms for redudng or eliminating disparities in local health care resources (personnel
and facilities) and health status through the infusion of technical assistance, capital and
workforce development.
m. ESTABLISHING A PERFORMANCE-BASED SYSTEM OF ACCOUNTABILITY
A performance-based system of accountability is the cornerstone of this proposal's strategy to ensure
access and quality without excessive Federal micromanagement. This system emphasizes achieving
specific standards for access and quality of care — for the population as a whole as well as for
specia] populations — rather than prescribing the processes by which these standards must be
achieved. It mandates what must be done without telling States, HA.S, or health care plans how they
must do it.
Consistent with the construct of national reform with Stateflexibility,direct Federal oversight focuses
primarily on the States. The strategy fosters accountability at other levels as well, however, through
Federa] standards set for HA.s and plans, a nationally-standardized database, and Federal reporting
requirements. The nationally-standardized database supports performance-based monitoring,
decision-making, and improvement of health care delivery at national, State, HA., and plan levels.
Federal reporting requirements ensure that policymakers, HAs, plans, consumers, and practitioners
have the information they need to assess, improve, and make choices about many aspects of care.
The new database could and should be linked and dosely coordinated with other public health data
collection efforts such as surveillance, sentinel events reporting, etc.
Because infonnation systems and quality assurance activities are attractive targets when "overhead"
must be reduced in budgets at any level (Federal, State, or local), the integrity of the accountability
system can only be assured if it is funded through a mandatory set aside of a percent of premium
income rather than as an administrative line item.
A
Achieving and Enforcing State Accountability
The proposal incorporates an explicit process by which States are held accountable to the Federal
government for assuring that the services included in the comprehensive benefit package are readily
available, accessible, and meet a high level of quality for all segments of their population
encompassed by the reform. A Federal board (with input from States) would identify specific
measures and standards relating to enrollment, service, and access to covered services. States would
be required to meet these standards, both for their population as a whole as well as for special
populations. Additional measures and national benchmarks related to other aspects of quality
(satisfaction with care, appropriate utilization of services, and outcomes of care) would also be
identified. (See Attachment 1.1 for specific examples of State performance measures and
benchmarks).
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Under reform, States will have two new effector arms for achieving these goals: (1) RA-s, whose
functions are to structure the market to ensure that all of their eligible residents are enrolled in
affordable, high quality plans; and (2) health care plans responsible for providing the services in the
comprehensive benefit package to their enrollees in health-enhancing, responsive, and cost-effective
ways (i.e., through their ability to coordinate care, reallocate resources, locate services, and influence
the behavior of providers and consumers).
The system of accountability would give States strong incentives to use the powers at their disposal
to meet Federal standards. State powers include (1) specification of requirements and functions of
HA.s; (2) certification, recertification, and decertification of plans; (3) provision of technical
assistance to HA.s and plans; (4) modification of State laws affecting medical practice; (5) control
over budget allocations; and (6) control over activities of HA.S. Incentives for meeting Federal
objectives could be enhanced by raising performance standards over time and by making State
performance results (and the data on which they are based) available to advocacy groups and the
genera] public.
Both "bottom-up" and "top-down" efforts will be needed to enforce State accountability for access
and quality of care. If States do not meet certain performance standards, the nationally-standardized
database (see below) will provide information to determine whether problems are local, regional, or
systemic to the State. Advocacy groups (Federal, State, and local), consumer representatives on HA.
boards, and others — all of whom would have access to these data — could bring pressure to bear
on the appropriate actor (plan, HA., or State) to improve performance.
From the Federal level, a variety of mechanisms could be used to enforce State accountability. States
not meeting some or all performance standards could (1) receive help from the Federal government
(e.g., identification of problem areas; focused technical assistance); (2) be subjected to financial
penalties (e.g., decreases in Federal subsidies for failing to meeting enrollment goals); (3) be allowed
targeted increases in the State health care budget (e.g., increases in subsidies and/or State spending to
achieve specific public health delivery goals); (4) be subjected to stricter Federal controls (e.g.,
specific structural/process requirements imposed by the Federal government on that particular State);
or (5) be subject to direct Federal intervention in specified areas of activity (e.g., certification and
decertification of plans).
1
B.
Promoting Accountability at Other Levels
Health Alliances would be mandated to follow Federal guidelines — a duty to disclose — in
reporting certain types of infonnation to States, consumers, and practitioners; and plans would be
mandated to follow Federal guidelines in reporting certain types of information to HA.s and States
(see Attachment 1.2). These requirements, along with the standardized database described below,
would foster accountability at many levels by assuring that:
•
States have accurate, relevant, and comparable informalion to assess HA. performance;
•
HA.s have accurate, relevant, and comparable information to assess plan performance
(enabling them to make the best use of available plans to meet the needs of all segments of
their populations);
1
This approach runs the risk of perpetuating the problem it is trying to address.
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consumers and practitioners have accurate, relevant, and comparable information to make
infonned choices among plans;
plans have adequate (i.e. all-payer), accurate, and comparable information to assess provider
performance; and
plans have a database for improving plan performance (e.g., by supporting quality and
utilization management efforts through practice pattern profiling).
C
Establishing a Nationally-Standardized Database
To support the system of accountability, a Federal board would specify data elements, definitions,
instruments, sampling parameters, and reporting protocols for a nationally-standardized database. A
database that would be effective in supporting assessments of enrollment, access, service, satisfaction,
provision of covered services, and quality of care for different subgroups of the population could be
obtained by linking transaction-level data with enrollee and provider characteristics and consumer
reports of care. Such information could be obtained from the following standardized instruments:
2
•
the annual enrollment data collected by HA.s (including information about each enrollee's
unique identifier, age, gender, race/ethnicity, educational attainment, native language, zip code,
perceived health status, and plan);
•
periodic consumer surveys conducted by States to obtain information about enrollee/
disenrollee assessments of care and use of out-of-plan care;
•
plan, institution, and practitioner characteristics collected by HA.s (including unique
identifiers, practitioner type and specialty, relevant plan characteristics from State certification);
•
uniform ambulatory encounter/daims data (containing information about service provided,
site of service, diagnosis, reason for service, and provider);
•
uniform hospital discharge data (containing information about diagnoses, complications,
services provided, and providers);
•
uniform reporting on grievances and outcomes of grievances, and on disenrollment and
cause of disenrollment; and
3
1
Although standardized instruments could be developed readily from existing tools (e.g., GHAA consumer
satisfaction survey; HCFA-1500 daim form; UB-92 institutional billing form; universal drug claim form),
certain types of refinements would be desirable (for example, to remove bias toward certain types of plans in the
GHAA survey, and to improve diagnosis and service reporting in ambulatory encounter forms). Decisions
related to the standardized database should be made through a process that obtains advice from all parties who
will use and provide these data (e.g.,representativesof consumers, practitioners, institutional providers, bealth
plans, health alliances, employers, public agencies, health services researchers, regulators, and coding experts),
3
Option: consumer surveys could be conducted by the Federal government (PHS).
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•
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standardized measures of quality in dimensions of access, appropriateness, and outcomes of
service collected from plans.
Consistent with the need to buttress Stateflexibilitywith accountability. States would be responsible
for collecting and linking these data, for ensuring that HA.s and plans have complete databases for
their respective populations, for incorporating safeguards to ensure patient confidentiality, and for
making information available to other appropriate parties (such as the Federal government,
researchers, and advocacy groups). Submission of 100 percent transaction data would minimize the
need for expensive, intrusive validation and would support the development of a timely and flexible
database. If plans were required to obtain from their providers transaction data for all of their
enrollees, the burden of data collection for States would be reduced and the capability of plans to
pursue quality improvement activities would be strengthened.
4
5
The nationally-standardized database would support a number of important functions. In addition to
the activities described above (performance-based monitoring, choice of plans and providers,
utilization management, and quality improvement), it would undergird many operational functions of
the new system, such as paying claims, enrollment, risk-adjustment of plan premiums, subsidy
determinations, and global budgeting. The database would also provide the Federal government with
a valuable tool for:
•
assessing the impact of reform on different States and on different segments of the
population (e.g., highlighting accomplishments or providing "early warning" signs indicative of
the need for corrective action);
•
meeting public health objectives (e.g., by providing a mechanism for tracking immunization
rates for various subgroups of the population, and for holding States, HA.s, and plans
accountable for meeting specific rates of immunization); and
•
making rational decisions about national and local workforce requirements (e.g., by
providing comparative data about the use of different types of practitioners with costs, access,
service, and quality of care).
The database would promote administrative efficiencies in other ways as well. The ambulatory
encounter form would function as a uniform claim form for all fee-for-service payments. The
system would ensure that all health care plans had a database to support both performance monitoring
and practice pattern profiling, thereby reducing the need for time-consuming, costly chart review and
for intrusive, case-by-case utilization review. The need for separate public health efforts in certain
areas (e.g., tracking immunizations) would be reduced.
4
The Federal govenunent could help States set up their data systems by providing start-up funds, design
assistance, and funding for personnel training. Some States might want to join together to set up regional data
centers. Alternatively, the Federal government could establish regional data centers and make them available to
States.
5
Some of these functions would be strengthened by supplementing or integrating the nationally-standardized
database with information from other sources. For example, some performance monitoring will require
additional data from condition-based encounter forms or medical record review. Practitioner and consumer
choice of plans might be enhanced by information obtained from practitioner surveys. Public bealth objectives
could be addressed more effectively by linking the core database with information obtained through Federal and
local public health data coUection efforts (surveillance, sentinel events reporting, etc.).
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The burden of obtaining such a data set need not be excessive. Most of these data are either currently
being collected — although not in a consistent or standardized way — or will have to be collected
for other reasons under the refonn. Many elements of the system of accountability are fully
compatible with a paperless system. Moreover, the costs and responsibility for collection would be
spread over different groups. Any unwarranted increase in the burden of data collection over time
could be minimized by mandating that changes in the information system or additional data
requirements (e.g., performance measures necessitating condition-based encounter forms or chart
review) be made through a process that includes the perspectives not only of regulators and
researchers, but also of plans, practitioners, and consumers.
V.
ESTABLISHING STANDARDS AND REGULATIONS EMPHASIZING
PROTECTIONS FOR SPECIAL POPULATIONS
Accountability and performance monitoring provide incentives for States, HA.s and plans to maintain
and improve access and quality of care for all consumers, and especially for special populations.
They also provide needed tools to remedy situations where access and quality are inadequate. By
themselves, however, accountability systems do not prevent the inclusion of plans and providers that
are either unwilling or unable to care for special populations. Therefore, the new system must also be
guided by standards and regulations that maximize the likelihood that plans will perform well and
that specia] populations will be well served. These protections will be especially important — and
may need to be temporarily more detailed — during the transition period when the infrastmcture for
ensuring accountability is under development.
Data on aggregated performance will not be sufficient to identify and address specific cases where
members of low-income populations are being denied access to high quality, needed health services,
or are experiencing discrimination. The new system must therefore include mechanisms for individual
consumers, and classes of consumers, to present grievances and obtain redress through administrative
mechanisms and, in selected cases, private rights of action to the courts.
The pages that follow summarize standards and regulations that are needed to (1) structure the market
to ensure access and quality for special populations; (2) ensure from the outset that quality plans and
providers are accessible to special populations; and (3) assure that consumer education standards, as
well as mechanisms for grievances, appeals, and redress protect special populations. Attachment 2.
provides a more detailed discussion of the rationale behind each of these required standards or
regulations.
A
Structuring the Market to Ensure Access and Quality for Special Populations
Insurers, health plans, and providers have not historically "competed" to serve special populations.
Concerns have been expressed that plans and providers will still market themselves selectively to
avoid serving areas with high concentrations of special populations, or that they will seek to enroll
special populations to capture their premium dollars, but then fail to provide true access to quality,
needed services. The recommendations that follow are meant to provide the mix of incentives and
requirements for structuring the market appropriately.
1.
Health Alliance Governance: Federal requirements must specify that HA. governing boards
include representatives of diverse segments of the consumer and purchaser population,
including individuals who have knowledge of and are sensitive to the needs and circumstances
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of special populations. An additional needed protection may be an advisory committee
representing low income, underserved, and vulnerable populations. HA. boards electing not
to follow recommendations from such advisory boards would be required to explain their
decisions in writing. All activity of health alliances must be executed with maximum
openness and public scrutiny.
2.
Health Alliance Powers: Federal requirements must assure that HA.S are given sufficient
purchasing powers to influence their local delivery systems. At minimum, these powers must
include the ability to (1) selectively contract with plans; (2) negotiate with plans over price
and service area; (3) limit enrollment in plans for cause, or because of high cost or low
quality; and (4) provide technical and other assistance to foster the development of new plans.
3.
Defining the Boundaries of Health Alliances: Federal requirements must assure that HA.
regions include the broadest possible mix of citizens and communities, rather than isolating
low-income, underserved, and vulnerable individuals or communities. Recommended
requirements would specify that each HA. region be large, geographically contiguous and not
divide consolidated metropolitan statistical areas (MSAs) within a State, since such areas often
include a mix of inner city and suburban communities.
4.
Definition of Sub-HA. Service Areas: Health Alliances will be empowered to define subHA. service areas, but the sub-area boundaries must be drawn so that special populations are
not isolated into distinct service areas where they could reasonably be included in more
heterogenous socio-demographic or geographic service areas.
5.
Setting the Benchmark Premium Paid by Employers: Federal requirements must specify
that if the system is financed through premium contributions from employers (among others),
the benchmark premium used for determining employer contributions will be based on a
community rate set for the entire HA. region.
6.
H.A Assurances of Capacity, Comparable Choice, and Access Within Service Areas:
Throughout each service area it defines, the HA. must ensure sufficient capacity for the
eligible population and comparable levels of choice, quality, and access to all residents, .
including members of special populations. While all plans will not be required to offer
services to all parts of the HA. service area, the HA. will be required to assure that all parts
of the service area are covered.
7.
Setting the Premium Level at Which Low-Income People will be Subsidized: Federal
requirements must specify that the premium level set for subsidies will ensure that in each
HA.-defined service area plans are offered at or below that level which—
•
cover the entire region,
•
have the capacity to serve 133 percent of the subsidized population, and
•
are accepting new enroUees.
These requirements are designed to ensure that lower-cost plans are available for both
subsidized and non-subsidized persons, so that they do not become "poor people only" plans
(see separate discussion below).
8.
Risk Adjusting Payments to Plans: Actuarial models forrisk-adjustmentdeveloped by the
Federa] government must incorporate factors related to health status, geography, poverty,
underserv ice, and language and cultural barriers (to replace historical risk adjustment on
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experience, pre-existing conditions, etc.). In addition, reinsurance or separate payments
should be available for exceptionally high-cost or long-stay cases.
B.
Assuring Accessibility and Quality of Carefiromthe Outset
The new system must assure all Americans that they will have health care coverage at all times, and
that the services included in the comprehensive. Federally-specified benefit package will be readily
accessible, available, and of high quality. One of the most critical mechanisms for achieving these
assurances — and to ensure that a two-tiered system does not develop — is the certification and
recertification of health plans. Under the new system, States will be responsible for plan certification.
Below are Federal standards that States must follow (see also Group 9 Toll Gate V. paper for a
complete discussion of this issue).
1.
Minimum Federal Standards for All Plans: In addition to the data reporting and
performance-monitoring requirements discussed above, Federal standards shall require that, to
be certified, plans must agree and demonstrate the ability to provide the full scope of benefits
included in the comprehensive benefit package. This includes demonstrating that they can
offer:
•
an adequate number, type, and location of providers to assure ready accessibility of
covered services to all enrollees, including members of special populations;
•
hours of service and response times that assure ready availability of routine and
emergency services to all enrollees;
•
clear,firmlinkages and ready access to both in- and outpatient medically-indicated
specialty care;
•
necessary support services required by special populations to obtain adequate access to
care (e.g. enabling services; cultural/linguistic competence); and
•
access to physicians and other health care professionals who are licensed or certified
as required by State law and qualified to perform the services they are under contract
to provide.
6
Further, plans must fully comply with Federal regulations constraining provider risk-sharing
anangements, when these arrangements could create incentives to deny needed services to
enrollees.
2.
Encouraging Community-Based Health Plans While Avoiding Exploitation of Special
Populations in "Poor-People-Only" Plans: Among traditional approaches to preventing
low quality plans that prey on vulnerable consumers are mandates that all plans serve all
populations in an area. This requirement may not protect poor people or other at-risk groups
from discrimination within a plan. It does, however, discourage development of new plans in
underserv ed areas, or of plans which elect to focus on providing high quality care to special
populations. For this reason, we are proposing a different approach to resolving this dilemma.
In general, it is expected that health plans will serve heterogenous communities. However, in
some parts of the country, it may prove both feasible and desirable for a health plan to target
its services to a particular community with a high concentration of members of special
populations. Depending on the nature of the health plan involved, this can either undermine
6
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or enhance access to quality health care for such groups. This makes it vitally important to
distinguish at the outset between "poor-people-only" plans and high quality community-based
health plans.
By "poor-people-only" plans, we mean those that target members of special populations but
fail to meet either their basic, or special, health care needs. Such plans and their providers are
typically interested in banking capitated payments rather than enhancing access, choice, and
quality. They may price their products at unrealistically low levels to encourage enrollment,
but offer minimal levels and quality of service to limit short-term costs. They may offer
"sham" care by limiting number or quality of providers, limiting hours of service, or otherwise
restricting access to high cost services.
A subset of plans and providers exist (and it is hoped that more will develop) with a distinct
mission to provide high quality health care to one or more special population groups or
communities. Given their expertise, experience and commitment, networks of such
community-based providers may well develop into health plans. To permit the development
of such community-based plans—while avoiding exploitation of special populations—the
Federal government needs to specify special standards that health plans must meet when their
service areas include communities with high concentrations of special population groups.
These standards require that plans demonstrate their ability and willingness to enhance access
and quality of care for the special populations they want to serve. Such plans must provide or
arrange for enabling and facilitating services such as non-medical case management including
linkage to needed social and behavioral services, translation and interpretation, medical
transportation, etc. to the extent required by the population.
C
Assuring That Consumer Education and Grievance Procedures Protect Special
Populations
Consumer choice of plan is a key element in "managed competition." Historically, consumers have
had little objective or relevant information on their options, and plans and providers have often used
marketing strategies as part of their overall effort to encourage emollment by some and discourage
enrollment by others, including special populations. In the new system, HA.s will play the
predominant role in providing standardized information on available plans, including data on
performance generated through accountability and monitoring systems, and in the actual enrollment of
individuals in plans.
1.
Marketing and Consumer Education: HAs must be required, through their contracts with
plans, to limit plans' marketing and advertising to exclude activities that might lead to
discrimination or biased selection against members of special populations. Additional steps
such as those below are required for special populations:
•
When special populations represent a significant proportion (e.g., more than 5 percent)
of the population in a HA. region, information about plans offered should include
their performance in caring for these subpopulations, as well as for the population
overall.
•
HA.s will be required to conduct targeted outreach and consumer education to
promote enrollment in health plans by specia] populations (including non Englishspeaking, non-literate, or low literacy persons and members of racial or ethnic
minorities). They will be expected to work with advocacy groups and to contract with
community-based and other organizations (who are not health care providers or
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insurers) to extend their capacity to reach and educate members of special populations.
2.
Grievance, Appeal, and Redress: Minimum Federal standards of procedure are required for
addressing the cases of individuals who believe they have been denied needed and covered
services. These standards must:
•
require all plans to establish an intemal claims review and dispute procedure, and
provide notice to each covered individual of its availability and how to activate it;
•
specify the response time for resolution of different kinds of daims;
•
specify response time when pre-authorization of services is required; and
•
include development of an appeals process at the HA. level for daims still in dispute
after a plan's intemal review process is exhausted.
While in certain situations private rights of action in the courts will be retained, Federal
standards should also promote alternate dispute resolution mechanisms such as fact finding
and mediation. Federal standards must assure that when liability is established, individuals
may be awarded actual damages (compensatory and consequential), as well as reasonable
attorney's fees and court costs. Each plan's grievance "trackrecord"should be part of the
standardized information provided by HAs to inform consumer choice.
HA.s should be required to develop an independent ombudsperson to address complaints from
consumers about the availability, accessibility, acceptability or quality of care provided by a
particular plan or provider (rather than denial of needed care). Consumers must retain the
right to bring advocates and/or independent medical expertise to all grievance proceedings.
Similar programs and protections may also be needed for providers with concerns about plans.
3.
Federal Funding for Advocacy Programs: Consumers in general, and low-income,
underserved and vulnerable consumers in particular, would benefit from the development of
independent advocacy programs funded direcdy by the Federal government. Such programs
could provide services to individual consumers, but would also be very valuable in reviewing
and translating complex information to identify their implications from a consumer-specific
perspective. Advocacy programs might focus on all consumers in a particular State or region,
on low-income consumers, or on particular sub-groups defined by their special health care
needs (e.g. the disabled); by their race or ethnicity (e.g. Asian Americans); by their age (e.g.
children); or by their place of residence ("frontier" rural communities). Such advocates should
have access to data generated through the nationally-standardized data base, but may conduct
independent data collection efforts where they believe issues and problems were not being
effectively "flagged" through existing data elements.
VL
ELIMINATING OR MINIMIZING DEFICIENCIES AND DISPARITIES
Currently, neither the service delivery systems nor the providers who work in them are adequate to
meet the basic health care needs of many special populations. In both rural and urban underserved
areas, a shortage of physicians, small group practices and primary care centers limit access for special
populations. Health care facilities serving specia] populations (hospitals, primary care centers,
skilled- and intermediate care centers, substance abuse treatment centers, etc.) tend to be either
deteriorated, inadequate to demand, or non-existent. Those facilities that are in place and are closely
tied to the communities they serve are often under-funded or lack critical management systems or
skills to make them fully competitive.
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A.
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Providing Technical Assistance and Funding to Enhance Availability and Quality of
Facilities and Providers
Resources must be made available to enable these providers to equitably participate in serving special
populations and others. Legal or regulatory barriers to capital formation, interagency networking, and
plan development for facilities and organizations that serve special populations must be removed.
Targeted Federal programs must be expanded and/or established to fund infrastructure development
such as:
•
providing technical assistance and funding to traditional providers to prepare them to
participate in networks and plans;
•
developing additional capacity for primary care delivery in underserved areas; and
expanding efforts to increase the availability of primary care providers through the National
Health Service Corps, loan forgiveness programs, etc.
Health professionals (physicians, mid-levels, and others) serving special populations must often
contend with geographic or social isolation, low levels of compensation, inadequate access to
secondary or tertiary care centers, and lack of back-up. The net effect of these and other issues is
difficulty in recruiting or retaining qualified providers. Federal efforts to resolve these problems must
include (1) early recruiting of health professional candidates in underserved communities; (2) assuring
adequate compensation for providers serving special populations; and (3) encouraging increased
numbers of providers to choose primary care. Finally, a separate State-based program of technical
assistance to promote quality of care for all populations should be implemented consistent with the
recommendations in the Tollgate V paper of Group 9.
B.
Establishing and Pursuing Persona] Health Improvement Goals
Special populations disproportionately suffer a variety of health problems. These include low levels
of childhood immunization against preventable disease; and high levels of diabetes, preventable
cancers, HIV infection/AIDS, substance abuse, cirrhosis, and hypertension. It is suggested that
nationa] goals for personal health improvement related to these and other conditions be formulated on
the mode] of Healthy People 2000 (where they do not already exist), and that States be assigned
responsibility for their vigorous pursuit. The performance-based system of accountability outlined in
Section FV above could monitor progress toward these goals.
Because there are limits in the ability of personal health services to correct the enormous disparity in
health status indicators (e.g. infant mortality, life expectancy, moibidity from preventable cancers,
stroke and heart disease), increased emphasis on population-based prevention and public health
efforts is critical to assuring the benefits of health care reform for special populations. A further
discussion of these issues is found in the Toll Gate V paper submitted by Ouster VHI.
C.
Recognizing and Supporting Quality Essential Community Providers
Essential Community Providers (ECPs) can be defined as institutions or practitioners that provide —
or have the potential to provide — quality primary and preventive health care services and/or critical
enabling and facilitating seivices (such as transportation and case management) that reduce or
eliminate barriers to care for underserved special populations. In addition to private practitioners,
ECPs may mciude school-based clinics, Federally-qualified health centers, family planning programs,
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community and migrant health centers, certain public hospitals, and certain other providers currently
receiving Federal grants.
Separate streams for infrastructure development funding and technical assistance to providers, such as
those described in VI.A. above, in underserved areas will help them compete in the marketplace.
However, in the early stages of reform, some may not be able to survive in a competitive
environment without additional protections and assistance.
Only a few health plans are likely to locate new providers and facilities in underserved areas in the
short term. Nevertheless, many plans may be resistant to integrating ECPs into their networks. At
the same time, populations that have traditionally used these providers are likely to continue to turn to
them for care. Although such providers have a history of providing care without receiving thirdparty reimbursements, their survival will increasingly be jeopardized by such practices. Furthermore,
it is important that the unique skills and expertise of these providers be available, not only to their
traditional clients, but to other, more "mainstream" providers who will need to leam how to be truly
responsive to the needs of low-income, underserved and vulnerable populations.
During the firstfiveyears after full implementation of the new system, therefore, a system is needed
for designating Essential Community Providers, for protecting their short-term economic survival, and
for facilitating their true integration into health plans. The Federal government will be required to
designate certain classes of providers as ECPs. States will be required to designate additional ECPs,
using Federal definitions and criteria. A broad range of providers should be considered for
designation, including publicly supported outpatient clinics, both freestanding and hospital-based;
other key units of public hospitals (e.g. emergency rooms) that provide important primary care and
preventive health services; outpatient departments in other hospitals; and individual practitioners in
outlying rural areas. Organizations which are denied designation by the State will be able to appeal
those decisions to the Federal government. All ECPs must meet explicit andrigorousquality
standards to ensure that low income people are protected against traditional providers who offer a low
standard of care.
All health plans will be required to reimburse ECPs for needed health services they provide to their
enrollees. Methods for determining reimbursement rates for such "out-of-plan" use will be
developed by the Federal government for Federally designated ECPs and by the State for ECPs they
designate. Each ECP will be required to report to the Health Alliance the extent of reimbursements
they receive from each health plan. This will support HA efforts to facilitate integration of ECPs into
plans by identifying situations where a plan's enrollees are making extensive use of a particular
provider.
To encourage integration of services, each HA will be authorized to require that one or more health
plans in its area contracts with each designated essential provider. In contracting with such providers,
plans must offer reimbursement rates comparable to those offered to other providers in their network,
for the same services. In addition, the HA will be authorized to contract directly with essential
community providers to make their services available to enrollees in all health plans (e.g. family
planning programs).
Special designations and reimbursement protections will be revisited at a date certain to determine if
they should be revised, repealed or re-authorized.
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ATTACHMENT 1.1: SAMPLE PERFORMANCE MEASURES FOR STATES
Assessments for each measure would focus on subpopulations of vulnerable populations as well as
for the population of the state as a whole. Measures that would be used as benchmarks (rather than
standards) are indicated by asterisks (*).
Enrollment/Plan Capacity
Percent of eligible population actually enrolled in plans
Percent of enrollees able to enroll in their "first choice" plan
B.
Service/Satisfaction
Percent of enrolled population satisfied with their HA. *
Percent of enrolled population receiving out-of-plan care
Percent of enrolled population satisfied with their plans •
Percent of population disenrolling from plans
Percent of enrolled population satisfied with their primary care provider •
Percent of enrolled population satisfied with access to specialist care *
Travel times to primary care services
Response times for emergency services
Time delays in obtaining primary care appointments
C.
•
•
•
D.
•
•
Provision and Appropriate Utilization of Covered Services
Percent of eligible population receiving covered preventive services (e.g., complete
immunization for children age 2; annual mammography for women over 50; prenatal care for
pregnant women)
Percent of eligible population with common chronic conditions receiving services necessary
for their care (e.g., percent of patients with diabetes receiving annual ophthalmologic
examinations)
Percent of enrolled population receiving unnecessary services (e.g., C-section rates in the
pregnant population) *
Outcomes of care
Rates of adverse events indicating inadequate access to covered ambulatory services (e.g.,
admission rates for pediatric asthma, diabetic ketoacidosis, etc.) *
Rates of adverse events indicating poor quality of covered services (e.g., inpatient readmission
rates; unplanned return to surgery rates; morbidity and mortality rates for specific
condition/procedures) •
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ATTACHMENT 12: FEDERAL REPORTING REQUIREMENTS
A.
Federal Reporting Requirements for States
•
Develop and report to the Federal government a time-specific and quantified plan for
achieving delivery goals of reform within their prescribed budget and the constraints of
Federal law.
•
Meet Federally-specified performance standards relating to enrollment, access, service,
satisfaction, provision of covered services, and quality of care for the State population as a
whole as well as for low income, underserved, and vulnerable subpopulations. State
performance to be documented to the Federal government through required reports.
•
Collect, validate, and ensure confidentiality of Federally-specified data submitted by HA.s,
plans, providers, and consumers. Disseminate data to appropriate parties.
B.
Federal Reporting Requirements for Health Alliances
•
Collect, validate, and ensure the accuracy of Federally-specified primary data (e.g., enrollee
characteristics, enrollee/disenrollee questionnaires).
•
Develop required reports for the State on HA. and plan performance in meeting standards for
access, service, satisfaction, and quality of care for the population as a whole and for defined
sub-groups, across and within plans.
•
Have an effective system for providing consumers with information about available health care
plans. This information must be available in a format, in languages, and through media that
make it easily accessible and useful to all segments of the PC population in comparing and
selecting plans.
At minimum, this information will include:
•
•
•
•
•
•
•
•
affordabUity (e.g., plan premiums and cost-sharing [both current and trends])
convenience (e.g., locations and hours of operation of providers and facilities)
provider characteristics and credentials (for both practitioners and institutions)
choice of and access to providers and services (including availability, assignment to,
and ability to change providers, use of gatekeepers, economic incentives placed on
practitioners, access to specialist care, and limitation of service use through
preauthorization review)
consumer assessments of service and quality of care (including in-plan and out-ofplan service use; voluntary disenrollment rates)
performance measures assessing important aspects of the process and outcome of care
systems for dealing with complaints and grievances, including mediation but reserving
the (ultimate) right of consumers to action against plans
Have an effective system for providing praaitioners with comparable information about
available health care plans. At minimum, this information should encompass:
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•
•
•
•
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process of managing care (e.g., approach to utilization review, case management,
quality assessment, quality improvement)
provider characteristics and credentials
provider contracting requirements (e.g., exclusivity, payment schemes, and risk-sharing
arrangements)
performance measures assessing service and quality of care
C. Federal Reporting Requirements for Health Care Plans
•
Agree and demonstrate the ability to follow Federal guidelines in providing information to the
State and EA. about costs, access, provision of services, and quality of care; assure that all
practitioners and institutions under contract to the plan meet Federal data reporting standards.
Agree to inspection and validation of all plan records by the State, HA., or other regulatory
bodies.
•
Agree and demonstrate the ability to follow Federal standards for uniform daim
forms/defmitions/processing including timely filing and paying of daims, provider
responsibility for filing claims, and balance billing protections.
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ATTACHMENT 2: RATIONALE FOR CONSUMER PROTECTION SPECIFICATIONS
1.
Governance: The governing body of the Health Alliance will have ultimate responsibility for
deciding which plans are offered, at what price, to what areas within its region. Governing
bodies will also play a significant role in using information about plans and providers, and
developing strategies for effective outreach, education, enrollment and protection of
consumers. The membership of governing bodies is therefore a critical factor for protection of
consumers in the general, and for members of special populations. Federal requirements must
specify that Health Alliances represent the interests of consumers, patients and purchasers, and
include individuals who have expertise in and are sensitive to the needs and circumstances of
special populations.
2.
Defining the Boundaries of Health Alliances: The boundaries of HA.S will be set by a
designated State agency. However, Federal requirements should be designed to increase the
likelihood that HA. regions include a broad mix of citizens and communities, rather than
isolating low-income, underserved and vulnerable individuals and communities.
Recommended requirements would specify that each HA. region be large, geographically
contiguous and not divide consolidated metropolitan statistical areas (MSAs) within a State,
since such areas often include a mix of inner city and suburban communities.
3.
Definition of sub-HA. Service Areas: Health Alliances will be empowered to define subHA. service area boundaries. Boundaries for HA. service areas must be drawn so that lowincome, underserved and vulnerable populations are not isolated into distinct service areas
where they could reasonably be included in a service area with more heterogenous sociodemographic or geographic characteristics.
4.
Setting the Benchmark Premium Paid by Employers: Federal requirements specify that if
the system is financed through premium contributions from employers among others, the
benchmark premium used for determining employer contributions will be based on a
community rate set for the entire HA. region. A large and varied "rating area" increases the
likelihood that the benchmark premium will reflect the costs of serving a broad mix of citizens
and communities. It decreases the likelihood that employers will face economic disincentives
to hire people from special populations whose health care costs might be higher than average,
or from locating their businesses in such areas.
5.
H.A Assurances of Comparable Choice and Access Within Service Areas: As noted
earlier, many are concerned that plans and providers will avoid serving areas with high
concentrations of low-income and vulnerable populations. Throughout each service area it
defines, the HA. must ensure comparable levels of choice and access to all residents,
including members of special populations. While all plans will not be required to offer
serv ices to all parts of the HA. service area, the HA. will be required to make sure that all
parts of the service area are covered and empowered to negotiate with plans to expand their
service areas, if necessary, to achieve this outcome. If multiple plans and providers are
available in some parts of the HA.-defined service area, then they must be available within
all parts of the area.
6.
Setting the Premium Level at Which Low-Income People will be Subsidized: Even if
multiple plans are offered in all parts of a service area, low-income individuals may be
limited in their choice by the extent to which they are subsidized. While it might be desirable
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- 18 -
for subsidies to cover the full range of plan premiums in a given area, budget constraints
make this unlikely. Low income persons will have a difficult time paying any incremental
premiums for higher cost plans. The definition of the premium level for subsidies is therefore
critical.
Federal requirements will specify that the premium level for subsidies be set to ensure that in
each HA.-defmed service area, plans are offered, at or below that level, that cover the entire
region, have the capacity to serve 133 percent of the subsidized population, and are accepting
new enrollees. These requirements are designed to ensure that lower-cost plans are available
for both subsidized and non-subsidized persons, so that they do not become "poor people
only" plans.
7.
Risk Adjusting Payments to Plans: A major distortion in the current health care market is
that plans and providers achieve a "competitive advantage" with respect to price not by
maximizing their effectiveness or efficiency but by avoiding high cost enrollees and patients.
Overt methods for risk avoidance (pre-existing condition limitations; denial of coverage
because of health history) will be proscribed in the new system. The most commonly used
method for "risk-adjustment" of premiums, experience rating, will also be proscribed.
It is essential, therefore, that other risk-adjustment methods be used to protect plans from
excessive adverse selection and reduce their incentives to avoid serving higher cost patients,
including those from special populations. To accomplish this, it has beenrecommendedthat a
Federal agency develop modelrisk-adjustmentsystems that incorporate factorsrelatedto
geographic location, poverty, underservice and language and cultural barriers. In addition,
reinsurance or separate payments may be made available for exceptionally high-cost or longstay cases. Plans that do not enroll higher cost patients will receive lower payments from the
H.A.; plans that do will receive higher payments.
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ATTACHMENT 3: ELIMINATING SYSTEMIC AND PERSONAL HEALTH DEFICITS
A.
The FederaJ Government must . . .
•
establish and periodically review nationa] personal health goals to be achieved by States, such
as—
•
universal childhood immunization against preventable diseases
•
reduced transmission of HIV and STDs
•
reduced incidence and/or improved treatment of hypertension, diabetes, drrhosis and
other diseases endemic to special populations
•
mammography where indicated for all women over 50
•
smoking cessation; reduced substance use, etc.
•
designate a class of essential community service providers, including certain Federally-funded
programs meeting Federal quality standards, such as: family planning programs, school-based
clinics, community and migrant health centers, certain public hospitals, and certain other
providers currently receiving Federal grants.
•
require plans to reimburse essential community providers for out-of-network visits for
covered services at a rate which is reasonable and related to the costs of furnishing such
services as determined by the Secretary of HHS.
•
require that accountable health plans contracting with an ECP must offer reimbursement rates
comparable to rates they offer to other providers in their network for the same services
•
monitor — either direcdy or indirectly through States — H A , plan, and provider adherence
to the above requirements relating to such providers.
B.
States must . . .
•
demonstrate capacity to comply with Federal guidelines regarding the allocation and
management of infrastructure development funds.
•
allocate to HA.s, providers, and other organizations funds designated for infrastructure
development, services to enhance and assure access to quality care for low income/underserved populations, and population based preventive services.
•
develop plans to achieve measured progress toward current national personal health goals in
concert with HA.s
•
using Federal guidelines, designate additional classes of ECPs such as local departments of
health, other community-based clinics, individual practice providers, certain public hospitals,
and others.
•
specify reasonable reimbursement rates that plans must pay to State-designated ECPs for outof-network services.
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•
assure that accountable health plans contracting with an essentia] community service provider
offer reimbursement rates comparable to rates they offer to other providers in their network
for the same services.
•
monitor, either directly or indirecdy, the HA.s, plans, and essential community service
providers adherence to the aboverequirementsrelating to such providers.
•
assure that plans reimburse Federally-designated ECPs for out-of-network visits for covered
services at rates which are reasonable and related to the cost of furnishing such services as
determined by the Secretary of HHS.
C.
•
D.
Health Alliances must . . .
require one or more plans to contract with essential community service providers in order to
offer an integrated system of primary, secondary, and tertiary care to persons in underserved
areas at comparable levels of access, choice, and quality as other areas in the PC.
Plans must . . .
•
reimbuise Federally-designated essential community providers for out-of-plan covered
services at a rate which is reasonable andrelatedto the costs of furnishing such services as
determined by the Secretary of HHS.
•
reimburse State-designated essential community providers for out-of-plan covered services at
a rate which is reasonable and related to the costs of furnishing such services as determined
by the State.
•
when negotiating contracts with essential community providers, must offer reimbursement
rates comparable to rates they offer to other providers in their network.
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�
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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Health Care Reform
Identifier
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2006-0810-F
Description
An account of the resource
<p>This collection consists of records related to Hillary Rodham Clinton's Health Care Reform Files, 1993-1996. First Lady Hillary Rodham Clinton served as the Chair of the President's Task Force on National Health Care Reform. The files contain reports, memoranda, correspondence, schedules, and news clippings. These materials discuss topics such as the proposed health care plan, the need for health care reform, benefits packages, Medicare, Medicaid, events in support of the Administration's plan, and other health care reform proposals. Furthermore, this material includes draft reports from the White House Health Care Interdepartmental Working Group, formed to advise the Health Care Task Force on the reform plan.</p>
<p>This collection is divided into two seperate segments. Click here for records from:<br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+1"><strong>Segment One</strong></a> <br /><a href="http://clinton.presidentiallibraries.us/items/browse?advanced%5B0%5D%5Belement_id%5D=43&advanced%5B0%5D%5Btype%5D=is+exactly&advanced%5B0%5D%5Bterms%5D=2006-0810-F+Segment+2"><strong>Segment Two</strong></a></p>
Provenance
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Clinton Presidential Records
Publisher
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William J. Clinton Presidential Library & Museum
Text
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Original Format
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Paper
Dublin Core
The Dublin Core metadata element set is common to all Omeka records, including items, files, and collections. For more information see, http://dublincore.org/documents/dces/.
Title
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New System Organization Briefing Book [4]
Creator
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Health Care Task Force
General Files
Identifier
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2006-0810-F Segment 1
Is Part Of
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Box 51
<a href="http://clinton.presidentiallibraries.us/items/show/36144" target="_blank">Collection Finding Aid</a>
<a href="https://catalog.archives.gov/id/12090749" target="_blank">National Archives Catalog Description</a>
Provenance
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Clinton Presidential Records: White House Staff and Office Files
Publisher
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William J. Clinton Presidential Library & Museum
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Adobe Acrobat Document
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Preservation-Reproduction-Reference
Date Created
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5/5/2015
Source
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42-t-2194630-20060810F-Seg1-051-002-2015
12090749