complex patients is increased.

We believe stringent governance

of the exception process has the potentiality for saving 50-60 million dollars based on HCFA's cost reports.

However, we believe that a short transition period should be adopted before the imposition of the restrictive exception procedures, and that during this period bona fide applications from those providers meeting the restrictive criteria should be processed and approved to mitigate fiscal damage to the programs of those providers.

1(b). HCFA should also retain those exceptions for extraordinary events set forth in the proposed rule.

2. Additional reimbursement for routine laboratory tests such as hematocrits, clotting times, etc. can be eliminated. Thus, the reimbursement rate for chronic dialysis treatments would be deemed to encompass the provision of such routine laboratory tests. We believe the fiscal burden on providers will not be great, and that the potential cost savings would be substantial.

3. To the extent that the Congressionally required budgetary savings cannot be achieved by the savings generated by the reduction in exceptions, then the providers' screen should be reduced by a reasonable across-the-board percentage.

4. Physicians should be given a specific Medicare code number for the performance of their supervisory physician service to chronic dialysis patients regardless of the setting. The monetary evaluation for this procedure code should reflect the

cognitive skills that encompass the rendering of services to these patients, in addition to the specific "hands on" procedures. Further, this procedure code must be indexed under the Medicare economic index as are all other physicians services.

We believe for the reasons articulated above in our comments on the proposed rule that the proposed reduction in physician reimbursement is irrational, and particularly unjust because of the failure of HCFA (with one slight exception) to allow any cost of living increases during a ten year period. also believe that the great bulk of the Congressionally mandated savings in the program can be achieved by the methods we have suggested above.

We

5. We would urge HCFA to work with the Association, the providers and patient groups to develop a workable and sen

sible rate making system once it has collected and analyzed accurate data.

As of 12/31/81, the number of ESRD patients entitled to Medicare is 67, 385.

Reimbursement

Includes home health agency and skilled nursing facility payments.

STATEMENT OF DONALD SIMMONS, ADMINISTRATOR,

EL

CAMINO DIALYSIS SERVICES, ON BEHALF OF THE NATIONAL RENAL ADMINISTRATORS ASSOCIATION

Mr. SIMMONS. Thank you, Mr. Pickle. My name is Don Simmons. I am immediate past president of the National Renal Administrators Association and on behalf of myself and the members of the association, I want to thank you for the opportunity today.

First, it is our opinion regarding the proposed regulation that the data and the methodology used by HCFA in developing these proposed rates are without merit, as to the validity of the data, by reason of obsolescence, and the methodology by reason of lack of consistency and reasonableness.

While this committee is the final arbitor of congressional intent, it seems to us that the concept of dual composite rates, as mandated by the act, has not been met by these proposed rates.

Second, we are very concerned that the stated objective of this committee to encourage the utilization of less costly treatment modalities will not be met by these proposed regulations.

We feel the 100-percent reimbursement agreement has been a positive factor in reducing a serious financial disincentive, both for patients and providers. We hope the committee mandates-I repeat, mandates-that the administration return this provision for all future home dialysis patients.

We have concerns that present rules concerning assignment of benefits by patients to providers other than those supervising their care may be counterproductive toward implementation of a fair and equitable reimbursement which would reward the efficient providers to both outpatient and home dialysis.

It is also our considered opinion that reimbursement of $20 more than the composite rate for a training dialysis will be a definitive disincentive to increased home dialysis. We know HCFA wants to turn the clock back to 1973 when 40 percent of the patients were at home, but it will not be accomplished by paying the same rates for training as were paid in 1973.

Third, we feel in order to minimize any disruptions to accessibility of care to ESRD patients that the proposed rates not be implemented for at least 6 months following the effective date of the final rules.

Fourth, as these rates are prospective and are based upon national data in the aggregate, we request this committee to seriously consider legislation that would prevent individual States from effecting statutes and rules which result in higher expenses for facilities without those individual States reimbursing the facilities for those increased expenses.

Finally, we would ask that return on equity be considered a reportable expense under the program. To proprietary facilities, return on equity is as much an expense as labor, supplies, or rent. And I want to thank you again for this opportunity, Mr. Chair

man.

Mr. PICKLE. I thank you, Mr. Simmons, for that brief statement. Now we will hear from Mr. Abbey, vice president of Travenol Laboratories.

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