August 31, 2007

Herb Kuhn, Acting Deputy Administrator
Centers for Medicare & Medicaid Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W., Room 445-G
Washington, DC 20201

Re: (CMS-1385-P) Medicare Program; Proposed Revisions to Payment Policies under the Physician Fee Schedule and Other Part B Payment Policies for Calendar Year 2008; Proposed Revisions to the Payment Policies of Ambulance Services under the Ambulance Fee Schedule for CY 2008; and the Proposed Elimination of the E-Prescribing Exemption for Computer-Generated Facsimile Transmissions (Vol. 72, No. 133) July 12, 2007

Dear Mr. Kuhn:

On behalf of Pennsylvania’s 225 hospitals and health care systems, The Hospital & Healthsystem Association of Pennsylvania (HAP) welcomes this opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS) proposed rule for the calendar year (CY) 2008 physician and ambulance fee schedules. Our comments focus primarily on the proposed changes to regulations related to the prohibition of physician self-referrals under Medicare and Medicaid.

Pennsylvania hospitals and health systems seek to provide coordinated, high-quality, cost-effective and compassionate health care through community-based integrated delivery systems. To that end, HAP believes quality efficient health care is accomplished by teamwork. Hospital care is especially dependent on the ability of hospital leaders and physicians to work together to improve the delivery of health care to provide patients the right care, at the right time, in the right setting. The need for collaboration among health care providers never has been more compelling, as collaboration, quality, and efficiency are inextricably related.

At the heart of the issue surrounding physician self-referral prohibitions is the need to ensure that no patient question whether their physician is acting in the best clinical interest of the patient, or responding to financial investment decisions. 

There is a definite need to establish clear accountability and transparency safeguards regarding financial investment by physicians in facilities that they own in whole or in part. These safeguards should include consideration of limitations on financial investments; clear definition of capabilities needed in such facilities to deal with any complications, or patient safety issues; ownership disclosure to patients; compliance with state and federal laws; adherence to quality standards; commitments to provide access to uninsured, Medicaid, and other publicly supported patients; and fulfillment of an obligation to support the community’s emergency service capacity.

It is important to ensure that there is clarity on the types of self-referral arrangements that clearly need to be prohibited, as well as standards for other types of arrangements that should be permitted to achieve needed improvements in the health care delivery system, sustain access to services, promote integration of clinical care across providers and settings, and enhance institutional or practitioner productivity and efficiencies.

Given the complexity of this issue, HAP encourages CMS to reconsider the proposed changes to ensure that self-referral prohibitions not result in the unintended consequence of nullifying legitimate investment, employment and financial arrangements that are designed to achieve clinical integration and coordination of evidence-based, patient-centered and systems-oriented care delivery.

Attached are detailed concerns for your review and consideration.

If you have any questions regarding our comments, please contact Melissa Speck, HAP’s director of policy development at (717) 561-5356, or via email at mspeck@haponline.org.

Sincerely,

PAULA A. BUSSARD
Senior Vice President, Policy & Regulatory Services