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“THE PATIENT FREEDOM OF CHOICE ACT” mentioning the U.S. Dept. of Justice was published in the Extensions of Remarks section on pages E237-E238 on Feb. 12, 1997.
The publication is reproduced in full below:
THE PATIENT FREEDOM OF CHOICE ACT
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HON. FORTNEY PETE STARK
of california
in the house of representatives
Wednesday, February 12, 1997
Mr. STARK. Mr. Speaker, I am pleased to introduce the Patient Freedom of Choice Act of 1997.
Previously, I have sponsored legislation that restricts physicians from self-referral because this practice leads to overutilization and increased health care expenses. This legislation is designed to rectify a similar problem.
Today, nonprofit hospitals, forprofit hospitals, and large health care conglomerates have acquired their own posthospital entities such as home health care agencies, durable medical equipment businesses and skilled nursing facilities so as to refer discharged patients exclusively to their own services. As a result, many nonhospital based entities have seen inflows of new patients completely halted once a hospital acquires an agency in their service area.
The effects of this self-referral trend are harmful. Hospitals that refer patients exclusively to their own entities eliminate competition in the market and thereby remove incentives to improve quality and decrease costs. Further, hospitals are able to selectively refer patients that require more profitable services to their own entity while sending the less profitable cases to the nonhospital based entities. The nonhospital entity is forced to either raise prices or leave the market. Worst of all, patients have no voice in deciding which entity provides the services.
This legislation remedies the problem by leveling the playing field. First, hospitals will be required to provide those patients being discharged for post-hospital services with a list of all participating providers in the service area so that the patient may choose their provider.
Second, hospitals must disclose all financial interest in post hospital service entities to the Secretary of Health and Human Services. In addition, they must report to the Secretary the percentage of post hospital referrals that are made to their self-owned entities as well as to other eligible entities. A hospital that fails to comply with the bill's requirements would be subject to a civil money penalty of $10,000 for each violation.
This legislation does not hinder a hospital's ability to offer its own services. It merely guarantees that all providers will have an opportunity to compete in the market. Most importantly, it guarantees that patients will have choice when selecting their provider.
I am drafting a similar bill for introduction later this year which would require that all providers--not just hospitals--give freedom of choice to Medicare and Medicaid beneficiaries. I see no reason why a patient should be held captive to a provider's preference for referral--it should be the patient's choice. For example, home health agencies who refer clients to nursing homes should provide the beneficiary with a complete list of all Medicare-Medicaid certified nursing homes in the area in which the patient resides. This requirement would ensure that all Medicare and Medicaid beneficiaries are given a choice of provider regardless of referral source.
Additionally, I will add to the next bill a third party cause of action which would allow these providers to bring suit against hospitals for failing to adhere to the proper discharge planning process.
Attached is a letter that typifies the current problem in the home health services market.
Visiting Nurse Association
of Greater Philadelphia,
December 1, 1995.
Re United States v. Heartland Health Systems Inc. Civil Action No. 95-6171-CV-SJ-6.
Ms. Gail Kursh,Chief, Professions & Intellectual Property Section/Health
Care Task Force Antitrust Division, U.S. Department of
Justice, Washington, DC.
Dear Ms. Kursh: I am writing to urge that the Justice Department not consent to the proposed final judgment in the above-referenced case, because the ``Referral Policy'' regarding provision of home health care does not adequately protect patient choice and fair competition.
The VNA of Greater Philadelphia is the largest home health agency in Pennsylvania. We are a non-profit, community-based agency which has served communities in southeastern Pennsylvania, including the City of Philadelphia, for 110 years. We provide home health services to approximately 2,000 patients a day, many of whom are Medicare and/or Medicaid patients referred for care directly following an episode of hospitalization.
Patient choice and fair competition are protected by both Medicare and Medicaid law and by antitrust provisions. The proposed Heartland referral policy undermines these protections. Heartland would have no obligation to provide reasonable information about other home health providers in the community for patients who have expressed no provider preference. Telling a hospitalized patient that there are other providers listed in the telephone book and then giving the patient ``time to investigate'', all in the context of the Heartland representative extolling the virtues of its home health service, clearly encourages steering patients to the hospital-owned agency. Further, a policy of stonewalling patient's requests for information about other providers, places the discharge planning staff in the position of denying knowledge that they actually have about alternate providers. This clearly undermines continuity of care for patients.
Although the Heartland consent decree may have no formal precedential impact, in practice this decree could have far-reaching, negative impact on patients and on independent providers, including visiting nurse associations, because it would send a clear signal that anti-trust and patient choice protections are no longer to be taken seriously.
We urge that you require a more aggressive policy to assure that vulnerable, hospitalized patients truly have access to the information they need to make an informed choice of their home health provider.
Sincerely,Stephen W. Holt.
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