[Federal Register Volume 61, Number 114 (Wednesday, June 12, 1996)]
[Notices]
[Pages 29800-29873]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-13754]
[[Page 29799]]
_______________________________________________________________________
Part II
Department of Justice
_______________________________________________________________________
Antitrust Division
_______________________________________________________________________
United States v. Health Choice of Northwest Missouri, Inc., et al.;
Public Comments and Response on Proposed Final Judgment; Notice
Federal Register / Vol. 61, No. 114 / Wednesday, June 12, 1996 /
Notices
[[Page 29800]]
DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Health Choice of Northwest Missouri, Inc., et
al.; Public Comments and Response on Proposed Final Judgment
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
Sec. 16 (b)-(h), the United States publishes below the comments
received on the proposed Final Judgment in United States v. Health
Choice of Northwest Missouri, Inc., et al., Civil Action No. 95-6171-
CV-SJ-6, United States District Court for the Western District of
Missouri, together with the response of the United States to the
comments.
Copies of the response and the public comments are available on
request for inspection and copying in Room 215, Liberty Place Building,
Antitrust Division, U.S. Department of Justice, 325 Seventh Street,
NW., Washington, DC 20530, and for inspection at the Office of the
Clerk of the United States District Court for the Western District of
Missouri, 200 United States Courthouse, 811 Grand Avenue, Kansas City,
Missouri 64106.
Rebecca P. Dick,
Deputy Director, Office of Operations, Antitrust Division.
In the United States District Court for the Western District of
Missouri
United States of America, Plaintiff, vs. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Case No. 95-6171-CV-SJ-6.
United States' Response to Public Comments
Pursuant to the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16 (b)-(h) (``Tunney Act''), the United
States hereby responds to the public comments received regarding the
proposed Final Judgment in this case.
I
Background
On September 13, 1995, the United States filed the Complaint in
this matter. The Complaint alleges that Defendants, in violation of
Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, conspired to prevent
the development of competitive managed care health plans in Buchanan
County, Missouri by, among other things, negotiating fees on behalf of
most of the physicians in Buchanan County and forming an unlawfully
structured physician-hospital organization. Complaint Paras. 24 and 25.
Simultaneously with the filing of the Complaint, the United States
filed the proposed Final Judgment, a Competitive Impact Statement
(``CIS''), and a Stipulation signed by all the parties that allows for
entry of the Final Judgment following compliance with the Tunney Act.
The CIS explains in detail the provisions of the proposed Final
Judgment, the nature and purpose of these proceedings, and the
practices giving rise to the alleged violation.
As the Complaint and CIS explain, 85% of all the physicians living
or practicing in Buchanan County agreed to negotiate collectively fees
and other contract terms with managed care plans seeking to enter
Buchanan County, with the purpose and effect of increasing physician
fees and controlling the development of competitive managed care health
plans in Buchanan County. Together with the only hospital in Buchanan
County, they also formed Defendant Health Choice of Northwest Missouri,
Inc. (``Health Choice'') to provide managed care. At no time did the
competing physicians share financial risk or otherwise integrate their
practices.
Since the formation of Health Choice and until the filing of the
Complaint, no managed care plan had been able to enter Buchanan County
without contracting with Health Choice, despite the efforts of several
plans to do so. By refusing to deal with managed care plans seeking to
enter Buchanan County except through Health Choice, Defendant Heartland
System, Inc. (``Heartland'') and the physicians belonging to Defendant
St. Joseph Physicians, Inc. (``SJPI'') were able to obtain higher
compensation and a more favorable hospital utilization review program
from managed care plans than they would have been able to obtain
independently.
The overarching goal of the proposed Judgment is to prevent
Defendants from discouraging the development of competitive managed
care in Buchanan County, while still permitting defendants to market a
provider-controlled plan. The proposed Final Judgment consequently
deals with a wide range of activities.
Except for publishing the comments and this response in the Federal
Register, the plaintiff and defendants have completed the procedures
the Tunney Act requires before the proposed Final Judgment may be
entered.\1\ The 60-day period for public comments expired on December
4, 1995. As of March 27, 1996, the United States had received 155
comments.
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\1\ The United States plans to publish the comments and this
response promptly in the Federal Register. It will provide the Court
with a Certificate Of Compliance With The Requirements Of The
Antitrust Procedures And Penalties Act and file a Motion For Entry
Of Final Judgment once publication is made.
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The comments come from a variety of sources. The most comprehensive
comments were submitted by the Coalition for Quality Healthcare
(``Coalition''), which describes itself as a group of health care
providers and consumers in Northwest Missouri (Comments 19, 34 and
82).\2\ Another substantial comment is Comment 51, the comment of an
unnamed ancillary services provider (i.e., provider of home health
care, hospice care, outpatient rehabilitation services, or durable
medical equipment) located outside of Missouri. Nine comments were
submitted by Buchanan County citizens,\3\ in addition to 16 comments
from Buchanan County ancillary services providers.\4\ A total of 105
comments were submitted by either ancillary services providers' trade
associations or individual ancillary services providers located outside
of Buchanan County.\5\ Finally, 19 comments were submitted by hospitals
located outside of Buchanan County.\6\
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\2\ The United States on January 19, 1996, numbered, indexed,
and lodged with the Court all 143 comments it had received as of
that date. For ease and convenience, the government in this Response
refers to individual comments by those assigned numbers. The
attached supplemental log lists the numbers assigned to the
additional 12 comments the United States received from January 19 to
March 27, 1996.
\3\ Comments 1, 7-8, 11, 15-16, 25, and 142-143.
\4\ Comments 3-6, 9-10, 12-14, 17-18, 20-21, 53, 151, and 155.
\5\ Comments 22-24, 26-27, 29-33, 36-40, 42-50, 52, 54-56, 60-
71, 74-81, 83, 85-128, 130-133, 136-141, 144, and 154.
\6\ Comments 28, 35, 57-59, 72-73, 84, 129, 134-135, 145-150,
and 152-153.
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II
Response to Comments
A. Overview
None of the comments oppose the main provisions of the proposed
Final Judgment (Sections IV (C) and (D), V (C) and (D), and VI(B)).
Only one, Comment 41, suggests that the Judgment fails to redress the
violation of federal antitrust laws alleged in the Complaint. That
Comment, and one other dealing with the composition of the Health
Choice provider panel (Comment 2), are addressed in Subsection B below.
The remaining 153 comments relate almost exclusively to how the
proposed Final Judgment deals with Heartland's referral policy
regarding ancillary services, a copy of which is attached to the
proposed Final Judgment. Most of these comments urge that the ancillary
services referral policy should either be changed or deleted from the
Judgment.
[[Page 29801]]
They raise five different antitrust issues that are addressed in
Subsections C through G below.
Finally, Subsection H addresses the Coalition's contentions about
the provisions of the proposed Final Judgment limiting Heartland's
acquisition of physician practices (Comments 34 and 82). Subsection I
addresses the Coalition's objections to the Judgment's compliance
provisions (Id.).\7\
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\7\ This Response addresses all of the antitrust issues and
issues relating to the substance of the Complaint and proposed Final
Judgment that are raised in the comments. Unrelated arguments and
objections are not discussed. For example, the nine comments from
private citizens in Buchanan County complain primarily about the
quality of services and billing practices of Heartland. These
complaints do not involve antitrust concerns, they are irrelevant to
this case, and the Antitrust Division of the United States
Department of Justice lacks authority to consider or address them.
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B. The Provider Panel Provisions Adequately Protect Competition
Commenter David L. Hutchinson of East Lansing, Michigan, Comment
41, suggests that the proposed Final Judgment will not be effective in
allowing for the development of competitive managed care in Buchanan
County because the Judgment permits too many Buchanan County physicians
to participate on the Health Choice provider panel. In particular, Mr.
Hutchinson is concerned because ``Health Choice still retains 85% of
the physicians working or residing in the area, this is still a
monopoly because the remaining 15% will not be able to adequately
compete in the quantity of service which they provide.''
The United States agrees that there would be reason for concern if
85% of the physicians working or living in Buchanan County were owners
of a Buchanan County managed care plan that negotiated with payers. As
the CIS explains, the concern in such a situation is that there would
be an insufficient number of physicians remaining in the market with
the incentive to contract with competing managed care plans that might
seek to enter Buchanan County, or to form their own plans. CIS at 17.
This would likely increase the cost to consumers of obtaining health
care services in Buchanan County.
The proposed Final Judgment, however, does not permit such a
situation. The Defendants are not permitted to negotiate on behalf of
competing physicians unless they meet the requirements of a qualified
managed care plan. Proposed Final Judgment Sections IV (C) and (D), V
(C) and (D), and VI(B). As explained in the CIS (pages 16-17), in order
to satisfy those requirements, no more than 30% of the physicians in
any relevant market may be owners of the plan. Id., Section II(I)(2).
While the plan may, if it wishes, contract with more, or even all, of
the remaining doctors (as non-provider-owned managed care plans are
able to do), the plan may do that only if it is at risk for
overcharging or overutilization by those subcontracting physicians. Id.
This ensures that there will be a substantial pool of physicians in
Buchanan County who have the incentives to contract with, or form their
own, rival managed care plans in Buchanan County.\8\ See CIS at 17-19.
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\8\ Comment 2, from Robert S. Keller, O.D. of St. Joseph,
Missouri, argues that the Health Choice provider panel violates
Medicare regulations by excluding optometrists. The proposed Final
Judgment, however, does not preclude Health Choice from having
optometrists or any other type of provider on its panel.
Furthermore, this issue has nothing to do with the antitrust
violation alleged in the Complaint, which the proposed Final
Judgment seeks to remedy.
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C. The Referral Policy Provision Is Appropriate and Adequate Relief for
the Violation Alleges in the Complaint and Will Encourage, Not Impinge
Upon, Patient Choice
Heartland's ancillary services referral policy, with which
Heartland must comply under the proposed Final Judgment, essentially
requires Heartland representatives to inquire if the patient has a
choice of ancillary services providers and then to honor that choice.
The policy is designed to ensure that the patient has the opportunity
to use an ancillary services provider other than Heartland if the
patient so wishes. Many commenters contend that this referral policy is
not in the public interest because they believe other policies would
better ensure that patients will be able to make informed choices in
selecting ancillary services providers.
In opposing the referral policy of the proposed Final Judgment, the
Coalition contends that the policy, ``violates a consumer/patient's
right to make an informed choice among all ancillary services
providers'' and that it ``enhances Heartland's capacity to monopolize
the ancillary services market within Northwest Missouri and Northeast
Kansas.'' Comment 82 at 2. The Coalition urges that the referral policy
provision be deleted or, as an alternative, that the Court order
Heartland to adopt the model referral policy that the Coalition
developed after submitting its formal Comment (Comment 34) on November
21, 1995.\9\ The Coalition's model policy would require Heartland to
allow on its premises an ``ombudsman,'' whose ``salary and expenses
could be shared equally among the competitors (including Heartland), in
order to preserve the ombudsman's independence'' (Comment 82 at 17),
and who would ``operate[ ] as an independent social worker'' in order
to ``fully inform the patient of his options and see that the patient
is given the freedom to choose any ancillary services provider.''
(Comment 82 at Exhibit 9).
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\9\ The Coalition's model referral policy appears as Exhibit 9
to the Memorandum In Opposition To Proposed Final Judgment appended
to the Coalition's December 1, 1995 Motion To Appear As Amicus
(Comment 82), which the government is addressing as a comment.
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Clearly, deleting the proposed Judgment's referral policy would
weaken rather than strengthen the Judgment. Further, appointment of an
ombudsman paid for collectively by all ancillary services providers, a
novel remedy, is unnecessary here. Requiring Heartland to observe its
already promulgated policy regarding referrals for ancillary services,
which provides for ready access by patients to information about the
full range of ancillary services providers, is a wholly effective
remedy for the specific antitrust violation alleged in the Complaint
and well within the reaches of the public interest within the meaning
of the Tunney Act. Cf., United States v. Microsoft Corp., 56 F.3d,
1448, 1459-60 (D.C. Cir. 1995)(decree adequate if within reaches of
public interest).\10\
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\10\ Many of the comments urged that the decree require
Heartland to use a rotation system by which referrals would be
distributed among Heartland and the other ancillary services
providers. Such a system would eliminate or reduce competition by
allocating patients and would raise serious antitrust concerns.
Palmer v. BRG, Inc., 498 U.S. 46; United States v. Heffernan, 43
F.3d 1144, 1146-47 (7th Cir. 1994) (Posner, J.) (bid rotation
agreement eliminates all competition among the participants and
hence is even more serious than price fixing, which preserves
competition in quality of service).
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The Coalition is incorrect in asserting that the proposed Final
Judgment ``prevents patients from making an informed choice regarding
ancillary services.'' (Comment 82, Memorandum In Opposition To Proposed
Final Judgment, at 5, emphasis supplied). The proposed Final Judgment
requires that Heartland (1) must honor a physician's order of a
specific ancillary services provider unless the patient overrides that
decision, (2) must ask the patient if the patient has a preference for
an ancillary services provider and must honor any such preference, (3)
must not tell the patient about Heartland's ancillary services
providers unless the patient states he or she has no preference among
ancillary services providers, (4) must honor the patient's
[[Page 29802]]
choice if the patient decides not to use the Heartland ancillary
services providers, and, if asked, (5) must tell the patient that there
are non-Heartland ancillary services providers who are listed in the
telephone book, give the patient a reasonable amount of time to
investigate other options, and then honor whatever choice the patient
makes. If the patient again requests the names of other ancillary
services providers, Heartland must name those providers.\11\
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\11\ Heartland's attorney has told us that Heartland is
considering adopting the attached revised referral policy.
Basically, that policy would have Heartland personnel provide a list
of Buchanan County ancillary services providers, rather than the
telephone book, to patients requesting information about non-
Heartland ancillary services providers. It also requires Heartland
to explain to a patient who is an enrollee in a managed care plan
the financial consequences to the patient of not using the plan's
preferred ancillary services provider. This revision contains
protections for Heartland patients in addition to those required by
the Final Judgment. Adoption of the revision would not violate the
Final Judgment and does not require amendment of the Final Judgment.
Implementation of the revision, given the presence of other
provisions in the proposed Final Judgment, would largely dispose of
the objections raised in Comments 23, 27, 52, 67, 79, 94, 98, 126,
and 138.
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As numerous comments illustrate, there are myriad alternative
provisions that could be proposed to resolve the hospital ancillary
services referral issue. The government does not dispute that some of
these may be reasonable alternatives. That, however, is not a
sufficient reason to reject the negotiated settlement of this case,
which provides adequate and appropriate relief to remedy the violation
in this case and prevent its recurrence. Microsoft, 56 F.3d at 1460-61.
Significantly, the Complaint in this case did not charge Heartland
with specific violations in the ancillary services market. Rather, the
Complaint focuses on Heartland's efforts, along with the other
defendants, to impede the development of competitive managed care
health plans in Buchanan County. The ancillary services provision
(Section VII(B)(1)) in the proposed Final Judgment is intended as a
preventive measure to ensure that Heartland will follow its own
preexisting ancillary services referral policy so that it will not
abuse its market position in inpatient hospital services to restrict
competition in the market for ancillary services by deterring managed
care plans or other health care consumers from contracting with
alternative ancillary services providers.
Finally, at least one comment suggests that the referral policy
provision should be stricken from the Judgment because the Complaint
does not allege a specific violation involving ancillary services but
rather focuses more broadly on efforts to hamper the development of
managed care in Buchanan County. Comment 82 at 2, 16. There is no
requirement that the government's Complaint specifically mention
Heartland's ancillary services activities in order to include ancillary
services relief in the Final Judgment. Relief in a consent decree is
appropriate as long as it is within the general scope of the case.
Int'l Assn. of Firefighters v. City of Cleveland, 478 U.S. 501, 525
(1986).
The ancillary services provision of the proposed Final Judgment
will help to prevent the recurrence of collaborative efforts to
discourage the development of competitive managed care plans in
Buchanan County, which is specifically alleged in the Complaint, and in
the process also stop attempts to restrain competition in the provision
of ancillary services to patients who are either uninsured or covered
by other types of medical insurances. In particular, the ancillary
services provision ensures that Heartland will honor the decisions of
patients or their insurers regarding choice of ancillary services
providers.12
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\12\ Several other provisions are also incorporated into the
proposed Final Judgment to ensure that patients and insurers are not
coerced into using Heartland's ancillary services. Section VI(E)
prohibits Heartland from forcing managed care plans in which
Heartland does not have a financial interest from using Heartland's
ancillary services in order to get Heartland's hospital services.
Also, Section VII(B)(3) allows the United States access to
Heartland's credentialing files to ascertain if Heartland has
curtailed the hospital privileges of a physician employed by or
affiliated with a competing managed care plan. The United States
could also ascertain if Heartland had limited hospital privileges of
a physician for ordering ancillary services from a vendor other than
Heartland for any patient.
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D. The Referral Policy Provision Has No Preemptive Effect
Several commenters suggest that the ancillary services provision of
the proposed Final Judgment will have de jure or de facto preemptive
effect on other cases. This is not correct.
It is well established that ``a consent judgment, even one entered
at the behest of the Antitrust Division, does not immunize the
defendant from liability for actions, including those contemplated by
the decree, that violate the rights of nonparties.'' Broadcast Music,
Inc. v. Columbia Broadcasting System, Inc., 441 U.S. 1, 13 (1979).
Ancillary services providers and others consequently remain free to
pursue their own federal or state antitrust or other actions against
Heartland for any activity they believe is illegal, and they may seek
whatever remedy they deem appropriate. The ancillary services provision
in this matter, therefore, does not have any ``preemptive effect'' upon
the relief claimable by any plaintiff against Heartland or any other
hospital, and would not prevent a court, in an appropriate case, from
requiring different, or more expansive, relief.13
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\13\ For example, the United States has been informed by the
Missouri Attorney General's Office that the Missouri Attorney
General is investigating Heartland's ancillary services referral
practices, and other practices, to determine their legality under
the Missouri Merchandising Practices Act, Sec. 407.020 RSMo, and the
Missouri Antitrust Law, Secs. 416.031 RSMo. The proposed Final
Judgment does not preclude or preempt any legal action by the
Missouri Attorney General, or by private parties, seeking broader
injunctive relief or different types of relief under either those
laws or the federal antitrust laws. Moreover, in agreeing to this
proposed Final Judgment, the United States does not express any view
as to whether any of the practices permitted by the Attachment to
the Final Judgment would be ``unfair'' within the meaning of the
Missouri Merchandising Practices Act, Sec. 407.020 RSMo.
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The proposed Final Judgment also does not establish a national
ceiling, or even a ceiling in Buchanan County, on what can or may be in
a hospital ancillary services referral policy. The ancillary services
provision in the proposed Judgment is simply, on the facts and in the
procedural setting of this case, adequate relief to protect against the
possibility that Heartland could use its market position in inpatient
services to restrict competition in the market for ancillary services.
E. Heartland May Comply With Federal or State Laws or Further Protect
the Patient's Right To Choose
Several commenters have suggested that the ancillary services
provision of the proposed Final Judgment conflicts with hospital
accreditation standards and various federal and state laws and
regulations.14 There have also been claims that the proposed Final
Judgment precludes Heartland from adopting additional measures intended
to assist Heartland patients in choosing ancillary services providers.
None of these claims and suggestions is correct.
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\14\ The Coalition, for example, asserts that the ancillary
services provision of the proposed Final Judgment is inconsistent
with hospital accreditation standards and Medicare regulations,
primarily because ``Heartland's referral policy does not allow
ancillary services providers, who have an established relationship
with the patient before admission to Heartland's acute care
hospital, to participate in discharge planning for their patients.-
.-.-.'' (Comment 82 at 13).
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Section VII(B)(1) of the proposed Final Judgment requires only
those steps needed to correct or prevent competitive problems alleged
or similar to those alleged in the Complaint. Heartland in addition is
independently obligated to comply with hospital accreditation
standards, Medicare regulations, state or federal laws, or the
[[Page 29803]]
decrees in other state or federal law suits, including, if necessary,
permitting outside ancillary services providers to participate in
patient discharge planning. Moreover, as far as the government has been
able to determine, nothing in the Heartland ancillary services referral
policy, with which Section VII(B) of the proposed Final Judgment
requires Heartland to comply, requires Heartland to do anything that
any hospital accreditation standard or any federal or state statute,
rule, or regulation of which the United States is aware prohibits. (See
attached Joint Commission For Accreditation Of Healthcare Organizations
accreditation standards and Medicare patient discharge planning
regulations).
F. The Referral Policy Does Not Harm Heartland's Rivals or Buchanan
County Consumers
The Coalition also contends that the referral provision will lead
to a deterioration of competition in the provision of ancillary
services in Buchanan County. E.g., Comment 82 at 3-4, 10-13. But these
contentions assume that before the proposed Final Judgment was
negotiated, Heartland was following an ancillary services referral
policy that was more favorable to competing providers than the policy
put in place by the Final Judgment. In fact, the government's
investigation revealed that Heartland, before accepting the proposed
Final Judgment, may not have always been in compliance with its stated
policy.\15\ Coalition members and Buchanan County citizens will be
better, not worse, off as a result of the proposed Final Judgment since
the Judgment will now ensure compliance.
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\15\ This may be why Heartland's ancillary services rivals lost
referrals. See Comment 82 at 12-13. If so, the proposed Final
Judgment will correct the problem. Of course, another explanation
for this loss of referrals may be that Heartland began offering
better care and service, i.e., that it was successfully competing on
the merits. This would be lawful competition properly left in place
by the proposed Final Judgment. Cargill, Inc. v. Monfort, Inc., 479
U.S. 104, 116 (1986).
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Microsoft, supra, recently noted in a strikingly similar context
that ``[w]hile the district court may inquire into whether a decree
will result in any positive injury to third parties * * *, in the
absence of such injury, it should not reject an otherwise adequate
remedy simply because a third party claims it could be better
treated.'' 56 F.3d at 1461 n.9 (emphasis supplied). There was no
positive injury to third parties in Microsoft, and there is none in the
present case. In fact, competitors and consumers are benefited by the
proposed Final Judgment.
G. The Ancillary Services Relief is Consistent With the Federal
Antitrust Laws
Comment 51 suggests more explicitly than any of the other comments
that the Heartland Referral Policy, which Section VII(B)(1) of the
proposed Final Judgment requires Heartland to follow, is inconsistent
with the federal antitrust laws, and more particularly, with Key
Enterprises, Inc. v. Venice Hospital, 919 F.2d 1550 (11th Cir. 1990),
vacated, reh'g en banc granted, 979 F.2d 806 (11th Cir. 1992), order
granting en banc review vacated, 9 F.3d 893 (11th Cir. 1993 (per
curiam), cert. denied sub nom. Sammett Corp. v. Key Enterprises,
Inc.,__U.S.__, 114 S.Ct. 2132 (1994). Relying on the later-vacated Key
Enterprises decision, this comment contends that Heartland should be
required to disseminate information about its ancillary services
competitors, and to allow such competitors access to Heartland's
hospital patients. Anything less would be, in the words of the Comment,
``inconsistent with federal antitrust policy. * * *'' Comment 51 at 2.
The ancillary services provision of the proposed Final Judgment is
consistent with both the federal antitrust laws and Key Enterprises.
Key Enterprises was never finally resolved by the courts. A panel of
the Court of Appeals reversed a trial court order that had overturned a
$2.3 million jury verdict in favor of a durable medical equipment
supplier who claimed that a hospital with 76% of the available beds in
a local market had violated Sections 1 and 2 of the Sherman Act by
coercing or unduly influencing home health agencies in that community
to refer their patients to a durable medical equipment supplier in
which the hospital had a financial interest. 919 F.2d at 1553, 1555.
Significantly, no injunctive or other equitable relief was at issue in
Key Enterprises. The case was vacated after the Eleventh Circuit
granted rehearing en banc and then settled prior to en banc review.\16\
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\16\ At least four courts have refused to consider Key
Enterprises because it has been vacated: Pacifica Kidney Center,
Inc. v. National Medical Care, Inc., 1993 WL 190858 (9th Cir. 1993)
(unpublished disposition) at **4 n. 3; Home Health Specialists, Inc.
v. Liberty Health System, 1994-2 Trade Cas. para. 70,699 (E.D. Pa.
1994) at p. 72,794; Atlanta Pulmonary Diagnostic Clinic v. Haynes,
1994 WL 258260 (N.D. Ga. 1994); and Northwest Title And Escrow Corp.
v. Edina Realty, Inc., 1994-1 Trade Cas. para. 70,485 (D. Minn.
1993).
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Moreover, as noted earlier, this case is not about ancillary
services markets. Heartland was not charged with restraining trade in
or monopolizing any ancillary services market. Rather, Heartland was
charged with conspiring with physicians to discourage the development
of competitive managed care in Buchanan County. The ancillary services
provision of the proposed Final Judgment is prophylactic, intended
simply to prevent Heartland from exploiting its position in additional
ways. The provision is effective and well within the bounds of the
public interest. Nothing in Key Enterprises or any other decision
requires this Judgment to contain any more relief than it does.
H. The Physician Practices Acquisitions Provisions are Adequate To
Remedy the Violation Alleged in the Complaint
The Coalition criticizes the provisions of the proposed Final
Judgment that place limits and controls on Heartland's acquisition of
physician practices. Comment 34 at 6; Comment 82 at 18-19. The
Coalition argues that ``the practical effect'' of three of those
provisions, Sections VIII(B)-(D), will be to allow Heartland to
``monopolize the market for primary care physicians in Northwest
Missouri and Northeast Kansas. * * *'' Comment 82 at 19.
The Judgment's physician practices acquisitions provisions,
Sections VI(D) and VIII(B)-(D) of the decree, are, in conjunction with
the physician credentialing provision of the proposed Final Judgment
(Section VII(B)(3)), sufficient to ensure the development of conditions
that permit the growth of competitive managed care in Buchanan County.
They certainly will not promote the monopolization of primary care
physician services in Northwest Missouri or Northeast Kansas.
Section VI(D) is the primary provision in the proposed Final
Judgment regarding physician practices acquisitions. CIS at 20. It
enjoins Heartland from acquiring during the next five years additional
existing family practice and general internal medicine physician
practices in Buchanan County without the prior written approval of the
United States, and from acquiring any other existing active physician
practice in Buchanan county without 90 days' prior notification.
Section VI(D) was designed to, and will, prevent Heartland from
obtaining control of so many physicians that it could raise prices for
physician services above competitive levels or otherwise thwart
competing managed care plans from entering and competing effectively in
Buchanan County.
Sections VIII(B)-(D) set forth the exceptions to Section VI(D).
Section VIII(B) allows Heartland to acquire the practice of a physician
who derives only limited revenues (less than 20% of total
[[Page 29804]]
practice revenues) from patients in Buchanan County (i.e., the
established physician working primarily outside of Buchanan County and
hence whose practice has little competitive impact in Buchanan County).
Section VIII(C) allows Heartland to acquire within the first two years
of a physician's arrival in Buchanan County the practice of any
physician who Heartland actively recruited to Buchanan County (i.e.,
the new physician who would not have come to Buchanan County but for
Heartland and whose practice is not yet sufficiently established to
have an independent competitive impact on the market). Section VIII(D)
allows Heartland to acquire the practice of any family practice or
general internal medicine physician already in Buchanan County who
otherwise would no longer practice primary care medicine in Buchanan
County (i.e., the established physician working primarily in Buchanan
County whose practice may have a significant independent competitive
impact on the market but who is otherwise going to exit the market).
None of these three limited exceptions will result in the
monopolization or a substantial lessening of competition in the
physician services market in Buchanan County. Rather, Sections VI(D)
and VIII (B)-(D), in conjunction with the physician credentialing
provision (Section VII(B)(3)), will ensure that Heartland does not
achieve by acquisition or credentialing the anticompetitive result
(preventing the development of competitive managed care) that it
initially sought to accomplish through agreement with the physicians of
Buchanan County, and which is at the heart of the antitrust violation
alleged in the Complaint. These provisions will result, at least for
the near future, in the continued presence, if not the increase, of a
substantial pool of primary care and other physicians not employed by
Heartland in Buchanan County.\17\
---------------------------------------------------------------------------
\17\ By its terms, this provision would not apply if any firm
other than Heartland made a bona fide offer to purchase the practice
for a price above the liquidation value of the practice. 4 CCH Trade
Reg. Rpt. para.13,104 at 20,574.
---------------------------------------------------------------------------
That continuing pool of primary care and other physicians not
employed by Heartland will also protect competition in ancillary
services markets in Buchanan County. Comment 34 at 2, 5, 6; Comment 82
at 19. The Coalition correctly notes that many hospitalized patients
look to their physician to recommend an ancillary services provider.
Comment 34 at 2. There is consequently likely to remain during the term
of this Judgment a substantial stream of ancillary services referrals
from doctors who are not employed by Heartland and who therefore will
not automatically refer their patients to Heartland's ancillary
services providers.
Furthermore, the referral policy with which Heartland must comply
(Section VII(B)(1) of the decree) will significantly curtail any
adverse impact on competition in ancillary services in Buchanan County
from possible future Heartland purchases of Buchanan County physician
practices. The policy specifically requires Heartland to ask, and
honor, a hospitalized patient's choice of ancillary services provider.
Heartland must do that even if the patient's choice is different from
the doctor's and the doctor is an employee of Heartland.
The Coalition also suggests that the proposed Final Judgment is
deficient because it does not prohibit Heartland from bringing into
Buchanan County a physician who has not previously practiced there.
Comment 34 at 6; Comment 82 at 18. By increasing the supply of
physicians in Buchanan County, such conduct could be procompetitive.
The proposed Final Judgment therefore does not proscribe this activity.
The United States, moreover, remains free to challenge such actions in
the future in a separate, independent antitrust action if this activity
should prove to be anticompetitive.
I. The Compliance Provisions Are Sufficient
The Coalition also believes that two of the compliance provisions
of the proposed Final Judgment, Sections X and XI, should be modified
to (1) require the defendants to submit written reports and the United
States to conduct at least annual inspections, and (2) give the Court
broader powers to monitor and enforce the Judgment as Judge Oliver
required in United States v. Associated Milk Producers, Inc., 394 F.
Supp. 29, 46 (W.D. Mo. 1975). Comment 34 at 7; Comment 82 at 19-20. The
United States believes that the compliance provisions of the proposed
Final Judgment as they now stand are fully adequate to deter, detect,
and correct any decree violations.
Sections X and XI of the proposed Final Judgment are standard
judgment compliance provisions that the government has used repeatedly
in its consent decrees and litigated judgments over the 20 years since
Associated Milk Producers was entered. They include the requirement
that Defendants obtain from their appropriate personnel, and maintain
for the government's inspection, annual written certifications that
each such person (1) has read and agrees to abide by the Judgment, (2)
understands that noncompliance with the Judgment may result in criminal
contempt of court, and (3) has reported any violation of the Judgment
to counsel for that Defendant.\18\ Furthermore, Section XII of the
proposed Final Judgment, another standard decree compliance provision,
allows the government to (1) inspect and copy records or documents of
any of the Defendants relating to matters contained in the Judgment,
(2) interview personnel of any of the Defendants about such matters,
and (3) require any of the Defendants to submit written reports, under
oath if necessary, about any such matter.
---------------------------------------------------------------------------
\18\ The Associated Milk Producers decree, even as supplemented
by Judge Oliver, did not contain this provision. 394 F. Supp. at 49-
58.
---------------------------------------------------------------------------
The commenters do not suggest that these customary judgment
compliance provisions have been inadequate to uncover and remedy decree
violations in the government's earlier judgments. Nor do they offer any
reason to expect a different result here.\19\ The government will not
hesitate, as the proposed Final Judgment permits (Section IX), to seek
a modification of Sections X and XI if these provisions in practice
prove to be inadequate to properly enforce this decree.
---------------------------------------------------------------------------
\19\ Indeed, Judge Oliver in a subsequent government antitrust
consent decree did not order these supplemental provisions. United
States v. Mid-American Dairymen, Inc., 1977-1 Trade Case. para.
61,508 (W.D.Mo. 1977).
---------------------------------------------------------------------------
III
The Legal Standard Government the Court's Public Interest Determination
Once the United States moves for entry of the proposed Final
Judgment, the Tunney Act directs the Court to determine whether entry
of the proposed Final Judgment ``is in the public interest.'' 15 U.S.C.
Sec. 16(e). In making that determination, ``the court's function is not
to determine whether the resulting array of rights and liabilities is
one that will best serve society, but only to confirm that the
resulting settlement is within the reaches of the public interest.''
United States v. Western Elec. Co., 933 F.2d 1572, 1576 (D.C. Cir.),
cert. denied, 114 S. Ct.487 (1993) (emphasis added, internal quotation
and citation omitted).\20\ The Court should evaluate the relief set
forth in the proposed Final Judgment and should enter the Judgment if
it falls within the
[[Page 29805]]
government's ``rather broad discretion to settle with the defendant
within the reaches of the public interest.'' Microsoft, 56 F.3d at
1461. Accord, Associated Milk Producers, 534 F.2d at 117-18.
---------------------------------------------------------------------------
\20\ The Western Electric decision concerned a consensual
modification of an existing antitrust decree. The Court of Appeals
assumed that the Tunney Act was applicable.
---------------------------------------------------------------------------
The Court is not ``to make de novo determination of facts and
issues.'' Western Elec., 993 F.2d at 1577. Rather, ``[t]he balancing of
competing social and political interests affected by a proposed
antitrust decree must be left, in the first instance, to the discretion
of the Attorney General.'' Id. (internal quotation and citation omitted
throughout). In particular, the Court must defer to the Department's
assessment of likely competitive consequences, which it may reject
``only if it has exceptional confidence that adverse antitrust
consequences will result--perhaps akin to the confidence that would
justify a court in overturning the predictive judgments of an
administrative agency.'' Id.\21\
---------------------------------------------------------------------------
\21\ The Tunney Act does not give a court authority to impose
different terms on the parties. See, e.g., United States v. American
Tel. & Tel. Co., 552 F. Supp. 131, 153 n. 95 (D.D.C. 1982), aff'd
sub nom. Maryland v. United States, 460 U.S. 1001 (1983) (Mem.);
accord H.R. Rep. No. 1463, 93d Cong., 2d Sess. 8 (1974). A court, of
course, can condition entry of a decree on the parties' agreement to
a different bargain, see, e.g., AT&T, 552 F. Supp. at 225, but if
the parties do not agree to such terms, the court's only choices are
to enter and decree the parties proposed or to leave the parties to
litigate.
---------------------------------------------------------------------------
The Court may not reject a decree simply ``because a third party
claims it could be better treated.'' Microsoft, 56 F. 3d at 1461 n.9.
The Tunney Act does not empower the Court to reject the remedies in the
proposed Final Judgment based on the belief that ``other remedies were
preferable.'' Id. at 1460.\22\ As Judge Greene has observed:
\22\ Citing United States v. Central Contracting Co., 537 F.
Supp. 571 (E.D.Va. 1982), the Coalition wrote the government in
November 1995 and requested all ``determinative'' materials and
documents called for by 15 U.S.C. Sec. 16(b) (Comment 19). The
United States replied that there are no such materials or documents.
The Coalition suggests in Comment 82 that this response shows that
``the DOJ has not been forthcoming with disclosure of the underlying
factual materials supporting the proposed policy.'' Memorandum In
Opposition To Proposed Final Judgment at 5. The Coalition suggests,
apparently because of Associated Milk Producers, that the
government's response requires the Court to make a more careful
review in this instance than might otherwise be the case. This
approach is unwarranted in the present matter even if the
Coalition's reading of Associated Milk Producers is correct. Here
there simply are no documents which, either along or as a group,
have such singular or particularized significance as to be
``determinative'' under 15 U.S.C. Sec. 16(b). The Coalition is
incorrect in suggesting that the Department never produces
determinative documents. The Department has done so in 19 cases
since the Central Contracting decision.
---------------------------------------------------------------------------
If courts acting under the Tunney Act disapproved proposed
consent decrees merely because they did not contain the exact relief
which the court would have imposed after a finding of liability,
defendants would have no incentive to consent to judgment and this
element of compromise would be destroyed. The consent decree would
thus as a practical matter be eliminated as an antitrust enforcement
tool, despite Congress' directive that it be preserved.
United States v. American Tel. & Tel. Co., 552 F. Supp. 131, 151
(D.D.C. 1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001
(1983) (Mem.).
Moreover, as noted above, the entry of a governmental antitrust
decree forecloses no private party from seeking and obtaining
appropriate antitrust remedies. Thus, Defendants will remain liable for
any illegal acts, and any private party may challenge such conduct if
and when appropriate. If any of the commenting parties has a basis for
suing Defendants, they may do so. The legal precedent discussed above
holds that the scope of a Tunney Act proceeding is limited to whether
entry of this particular proposed Final Judgment, agreed to by the
parties as settlement of this case, is in the public interest.
Finally, the Tunney Act does not contemplate judicial reevaluation
of the wisdom of the government's determination of which violations to
allege in the Complaint. The government's decision not to bring a
particular case on the facts and law before it at a particular time,
like any other decision not to prosecute, ``involves a complicated
balancing of a number of factors which are peculiarly within [the
government's] expertise.'' Heckler v. Chaney, 470 U.S. 821, 831 (1985).
Thus, the Court may not look beyond the Complaint ``to evaluate claims
that the government did not make and to inquire as to why they were not
made.'' Microsoft, 56 F.3d at 1459 (emphasis in original); See also,
United States v. Associated Milk Producers, Inc., 534 F.2d 113, 117-18
(8th Cir. 1976), cert. denied, 429 U.S. 940 (1976).
Similarly, the government has wide discretion within the reaches of
the public interest to resolve potential litigation. E.g., United
States v. Western Elec. Co., 993 F.2d 1572 (D.C. Cir.), cert. denied,
114 S. Ct. 487 (1993); United States v. American Tel. & Tel. Co., 552
F. Supp. 131, 151 (D.D.C. 1982), aff'd sub nom. Maryland v. United
States, 460 U.S. 1001 (1983) (Mem.). The Supreme Court has recognized
that a government antitrust consent decree is a contract between the
parties to settle their disputes and differences, United States v. ITT
Continental Baking Co., 420 U.S. 223, 235-38 (1975), United States v.
Armour & Co., 402 U.S. 673, 681-82 (1971), and ``normally embodies a
compromise; in exchange for the saving of cost and elimination of risk,
the parties each give up something they might have won had they
proceeded with the litigation.'' Armour, 402 U.S. at 681.
The ancillary services provision (Section VII(B)(1)) in the
proposed Final Judgment is a preventive measure to protect against the
possibility that Heartland could abuse its market position in inpatient
hospital services to restrict competition in the market for ancillary
services by deterring managed care plans or other heath care consumers
form contracting with alternative ancillary services providers.\23\
This Judgment has the virtue of bringing the public certain benefits
and protection without the uncertainty and expense of protracted
litigation. Armour, 402 U.S. at 681; Microsoft, 56 F. 3d at 1459.
---------------------------------------------------------------------------
\23\ Managed care plans in general are making greater use of
competition among ancillary services providers to reduce premium
costs and to reduce the number and duration of hospitalizations.
See, e.g., K. O'Donnell & E. Sampson, ``Home Health Care: The
Pivotal Link In The Creation Of A New Health Care Delivery System,
Journal of Health Care Finance, Volume 21, No. 2, pages 74-86
(1994); and G. Leavenworth, ``The Fastest Growing Segment Of The
Health Care Industry Combines Cost-Effective, High--Quality Care
With The Comforts Of Home,'' Business & Health, vol. 13, special
issue, p. 51 (Jan. 1995).
---------------------------------------------------------------------------
IV
Conclusion
After careful consideration of these comments, the United States
concludes that entry of the proposed Final Judgment will provide an
effective and appropriate remedy for the antitrust violation alleged in
the Complaint and is in the public interest. The United States will
therefore move the Court to enter the proposed Final Judgment once, as
15 U.S.C. Sec. 16(d) requires, the public comments and this Response
have been published in the Federal Register.
Dated: May 17, 1996.
Respectfully submitted,
[[Page 29806]]
----------------------------------------------------------------------
Allen S. Vanbebber,
Deputy United States Attorney, Western District of Missouri, Suite
2300, 1201 Walnut Street, Kansas City, Missouri 64106-2149, Tel: (816)
426-3122.
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.,
Gregory S. Asciolla,
Attorneys, Antitrust Division, U.S. Dept. of Justice, Room 414, 325 7th
Street, N.W., Washington, DC 20530, Tel: (202) 307-0808.
Certificate of Service
I, Edward D. Eliasberg, Jr., hereby certify that copies of the
Response to Public Comments in U.S. v. Health Choice of Northwest
Missouri, Inc., et al., was served on the 17th day of May 1996 by first
class mail to counsel as follows:
Thomas D. Watkins, Esquire, Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, Missouri 64506-0217
George E. Leonard, Esquire, Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, Missouri 64105-0509
Richard D. Raksin, Esquire, Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603
Jack Briggs, Health Choice of Northwest Missouri, Inc., 510 Francis
Street, St. Joseph, Missouri 64501
Brian B. Myers, Esquire, Lathrop & Norquist, 2345 Grand Avenue, Suite
2600, Kansas City, Missouri 64108
Thomas M. Bradshaw, Esquire, Dianne M. Hansen, Esquire, Armstrong,
Teasdale, Schlafly & Davis, Suite 2000, 2345 Grand Boulevard, Kansas
City, Missouri 64108
Glenn E. Davis, Esquire, Diane E. Felix, Esquire, Armstrong, Teasdale,
Schlafly & Davis, One Metropolitan Square, Suite 2600, St. Louis,
Missouri 63102-2704
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.
Hospital Inpatient--Ancillary Services Referral Policy
I. General Statement
After a patient or other appropriate person (collectively,
``patient'') has been identified (via screening, assessment, discharge
planning, staff, family, physician, or other means) as being in need of
appropriate home health, hospice, DME, or outpatient rehabilitation
services (referred to collectively as ``Ancillary Service''), and, if
necessary, a physician's order has been obtained, the following
procedures will be used by a non-physician referring person when
connecting patients to the appropriate Ancillary Service. Our focus is
on patient choice.
II. Service Referrals
A. If a physician orders an Ancillary Service and specifies the
provider to be used (whether specifically written in the chart or other
written notification), then a referring person shall contact the
patient indicating that the physician has ordered an Ancillary Service
and has ordered that a particular provider be used. If necessary, the
patient should be informed of any financial considerations (i.e.,
managed care). The patient should then be asked whether the particular
provider is acceptable, and if so, referred to that provider. (If the
patient does not wish that provider, see subsection B below).
B. If a physician orders an Ancillary Service, but does not specify
the provider to use, then the patient shall be contacted and informed
that his physician has ordered an Ancillary Service; if necessary, the
patient should be informed of any financial considerations (i.e.,
managed care); and the patient shall be asked if he has a preference as
to which provider to use:
1. If the patient has a preference, that preference shall be
honored.
2. If the patient has no preference, a referring person shall
indicate that Heartland has an excellent, full accredited Ancillary
Service that is available to the patient, and the appropriate Heartland
brochure may be given. If the patient accepts, then the referral shall
be made to Heartland's Ancillary Service.
3. If the patient has not accepted Heartland's Ancillary Service
(see subsection B(2) above), or asks what other providers are
available, a referring person shall state that there are other
providers in the community that may offer the Ancillary Service, and
provide the patient with the list of providers attached. If
appropriate, this list may be provided verbally. [PATIENT SHALL BE
GIVEN A REASONABLE AMOUNT OF TIME TO INVESTIGATE OTHER OPTIONS.] If the
patient at this point chooses a provider, that choice shall be noted on
the patient's chart and the referral made to the provider chosen.
Copies of the Comments and the United States' Response to Public
Comments, with all omitted attachments, are available for inspection in
Room 200, Liberty Place, (202/514-2481), United States Department of
Justice, Washington, DC and at the Office of the Clerk of the United
States District Court for the District of Western Missouri, Kansas
City, Missouri.
Lodging of Public Comments Regarding Proposed Final Judgment
United States of America, Plaintiff, vs. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Case No. 95-6171-CV-SJ-6.
Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C.
Secs. 16 (b)-(h) (``Tunney Act''), Plaintiff United States of America
hereby lodges with the Court the comments the government has received
to date from the public regarding the Proposed Final Judgment in this
case.
Attached to this pleading is a log listing for each comment the
date the government received the comment, the date of the comment, the
name and address, if available, of the commenter, the number of pages,
and a brief description of the comment.
As the log indicates, the government received six comments in which
the commenter requested anonymity. While those comments have been
described in the log, five of those comments have been returned to
their authors. The government has explained to those authors by means
of accompanying transmittal letters that comments in Tunney Act
proceedings become part of the public record. The government has
invited each of these authors either promptly to submit a revised
comment not disclosing the author's identity or to resubmit the
original comment if the author no longer objects to public disclosure
of the author's identity.
The sixth comment is an anonymous handwritten letter without return
address in which the author's supervisor at Defendant Heartland Health
System, Inc. is specifically named and claimed to be the primary cause
of the problems in this matter. That comment will not be made available
to the public unless the Court desires the government to do so.
The government anticipates that it soon will be filing its response
to all the comments, as required by the Tunney Act, 15 U.S.C.
Sec. 16(d).
Dated: January 19, 1996.
Respectfully submitted,
[[Page 29807]]
----------------------------------------------------------------------
Alleen S. Vanbebber,
Deputy United States Attorney, Western District of Missouri, Suite
2300, 1201 Walnut Street, Kansas City, Missouri 64106-2149, Tel: (816)
426-3122.
----------------------------------------------------------------------
Edward D. Eliasberg, Jr.,
Gregory S. Asciolla,
Attorneys, Antitrust Division, U.S. Dept. of Justice, Room 9422, 600 E
Street, NW., Washington, DC 20530, Tel: (202) 307-0808.
Certificate of Service
I, Edward D. Eliasberg Jr., hereby certify that a copy of the
foregoing document was served on the 19th day of January 1996 by first
class mail to counsel as follows:
Thomas D. Watkins, Esquire, Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, Missouri 64506-0217
George E. Leonard, Esquire, Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, Missouri 64105-0509
Richard D. Raskin, Esquire, Sidley & Austin, One First National Plaza,
Chicago, Illinois 60603
Jack Briggs, Health Choice of Northwest Missouri Inc., 510 Francis
Street, St. Joseph, Missouri 64501
Brian B. Myers, Lathrop & Norquist, 2345 Grand Avenue, Suite 2600,
Kansas City, Missouri 64108
Thomas M. Bradshaw, Esquire, Dianne M. Hansen, Esquire, Armstrong,
Teasdale, Schlafly & Davis, 1700 City Center Square, 1100 Main Street,
Kansas City, Missouri 64105
Glenn E. Davis, Esquire, Dianne E. Felix, Esquire, Armstrong, Teasdale,
Schlafly & Davis, One Metropolitan Square, Suite 2600, St. Louis,
Missouri 63102-2704
----------------------------------------------------------------------
Edward D. Eliasberg Jr.
Note: The following list indicates where tables, newspaper
articles and attachments have been taken out, you can obtain copies
of these complete documents in our Department of Justice, Premerger
Office, Liberty Place Building, ATR Division, Room 215, 325 Seventh
Street, NW., Washington, DC 20530.
1. Sept. 26, 1995 letter from Robert S. Keller, O.D.
2. Letter from the Administrator of St. Joseph Nursing Home
3. Anonymous note (had newspaper articles)
4. Mark L. Wyble, Coordinator, Patient & Community Relations from Total
Home Health Care
5. Oct. 3, 1995 from Citadel Health Care, written by Lowell Fox,
Administrator
6. Nov. 4, 1995 letter from Richard C. Bosworth, R.Ph., Coalition of
Quality Health Care
7. Nov. 20, 1995 letter, Hill Country Health Services, Inc., from Ron
Julian, Administrator.
8. Nov. 19, 1995 letter, from Dennis O. Davidson, M.D.
9. Nov. 23, 1995, Home Health Insights, Inc., from Ross Feezer
10. Nov. 27, 1995, Shepard's Crook Nursing Agency, Inc., from Suzanne
Wilkinson, Administrator/Owner
11. Nov. 27, 1995, Metro Home Health Care Services, Inc., from Richard
A. Porter, President/Administrator
12. Nov. 29, 1995, Kevin Miller, RRT, RCP
13. Dec. 4, 1995, Gibson Health Services, from Patricia A. Gibson, RN,
MPH
14. Dec. 4, 1995, Heritage Home Health Inc., from Matthew F. Komac
15. Nov. 21, 1995, Metro Home Health Care Services, Inc. from Richard
A. Porter
16. Anonymous letter (had clippings)
17. Feb 28, 1996, Missouri Alliance for Home Care, from Dale E. Smith
September 26, 1995.
Gail Kursh,
Chief, Prof. & Intellectual Prop. Section/Health Care Task Force
Dear Ms. Kursh: I am grateful for the opportunity of writing to
you regarding my concerns with reference to Heartland Health Systems
here in St. Joseph.
I am a retired Senior Citizen and a patient of a Dr. in the
group aligned with the hospital. I like my Dr. but don't approve of
the monopoly the hospital has over the Dr.'s services as well as
options given to the patients in several areas. Also, I understand
the referral to specialists is down-sized. The Pres. of the hospital
was quoted as saying ``he was not being paid to be stupid,'' but he
is being paid to have integrity and high standard of morals.
Yours truly,
Helen Kadera
P.S. I with so many, many others are grateful that this
situation is being investigated.
Optometry
Dr. Joyce Keller Stroud
Dr. Robert S. Keller
3605 Faraon Street, St. Joseph, Missouri 64506, Telephone (816) 364-
2000
26 September 1995.
Gail Kursh,
Chief, Intellectual Prop. Section, Health Care Antitrust, U.S. Dept.
of Justice, 600 E. St. N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: It is my hope that you have received a copy of
the St. Joseph News Press of 24 September 1995.
I want to point out that the Heartland Hospital new HMO, called
Community Health Plan, is excluding Optometry in providing eye
health care to its members.
I refer to total eye health, with the exception of surgery.
Optometrists can treat most eye health conditions and recently in
Missouri, that included glaucoma.
Since 28 August 1995, I have sought an opportunity to appear
before the Board of Community Health Plan to point out that Medicare
and Medicaid utilize the services of Optometry to the fullest extent
of their licensure.
Enclosed is a copy of the regulations defining the scope of the
various professions. Heartland is in the process of being the
gatekeeper for Medicaid in our area of Missouri, and they cannot be
allowed to usurp Federal Regulations or any patients right to
choose.
Very truly yours,
Robert S. Keller, O.D.
Gail Kursh,
U.S. Dept Justice, 600 E St. N.W. Rm. 9300, Washington, D.C. 20530
Dear Ms. Kursh: First, we don't want to talk against our
Hospital as it is good to have a hospital in our city. But we expect
the Hospital to be a Hospital, and not in competition with nearly
every business in our town. Other businesses such as pharmacies,
medical supplies Insurances, Nursing homes, all other nursing needs,
such as Home health care programs, laboratories, rehab programs, and
so on, it goes on and on.
We in the nursing home and convalescent business have to go
through the state of Missouri to apply for Licenses and permits to
start a convalescent center, we are inspected at least twice a year,
more if they see fit. We have many rules to go by. We have to be
approved by the State to operate. We don't think the same rules
apply. Now Heartland Health systems has taken over so many of the
services we had for years here in St. Joseph--without any permission
from the State of Missouri without going through the processes
required for nursing facilities. They have opened a skilled and
intermediate care nursing home without contacting the State or going
through the process. I have talked with a Regional Manager for the
Division of Social Services and told him out plight, He said we
can't do anything as Hospitals can do things and we can't say
anything to them. There surely is some regulations for them as well
as anyone else.
As of now in St. Joseph, MO. if the doctors don't belong to
Heartland Health Systems, they can't take their patients there,
which is double expense. A Doctor used to be in his office and the
patient went there first, then if they needed hospitalization, fine,
otherwise the Doctors office was cheaper. Also now if you need
medications, the Doctors goes through Heartlands Pharmacy which cuts
our own Hometown pharmacies. Our St. Joseph Surgical Supply is
having a rough time, our suppliers of Health Care are all suffering
and all nursing Homes are really hurting. Our facility alone is over
40 patients down and if we call a Doctor about anyone who is sick,
they immediately say send them to the Hospital, we'll check them out
here, which is very expensive. The ambulance service here is
terribly expensive and is
[[Page 29808]]
owned by Heartland Health systems. This is another reason the
Medicare program is suffering and Doctors could come to the Nursing
facilities to see their patients as in the past but they seldom do
that now.
Mr. Kruse not only has bought up the Drs. offices and buildings
and clinics around St. Joseph and areas outside of St. Joseph, the
Doctors had to join Heartland in order to use the hospital. An
official of our State, said it would be good for the government to
look into other hospitals he has worked for.
If all our nursing homes are forced to close, it would be a big
loss to our city businesses, where we buy our supplies, also the
employees would be out of work and we as business owners would be
hurt. The banks that loaned us money to build and operate.
I understand the money Heartland's loans come from outside the
St. Joseph area.
The min trouble we have with Heartland is the when we send our
patients to them as have for years, instead of returning them to us
for their rehab, and care, they are transferring them to their
skilled and intermediate care units, until there Medicare days are
used.
Two of our employees have met and talked with Heartlands Social
Service Dept. they made the remark, ``we have to send them to our
nursing home, we don't have a choice.
Their Social Service Dept. call daily to check on vacancies, of
which we have 40. However refferals are few and far between. In the
past the majority of our patients came from the hospital.
We in the health care business in St. Joseph are all hurting, we
appreciate any effort to stop Heartlands monopoly.
Sincerely;
Administrator St. Joseph Nursing Home.
Dear Sir: We are all so very upset--We owe thousands of dollars
on our nursing home--It's rather new & the bank didn't want to loan
money to a nursing home they didn't feel secure because of something
that happened years ago--Finally they did--Now this we are down over
40 beds & no hope. If we call & doctor he tells us to send them out
to the hospital & he'll see them. Ambulance is $400.00 just for
that. Then they keep the patient & put the patient in their nursing
home. This is in all nursing homes in St. Joseph--All pharmacies are
suffering, all supply companies are suffering. Will you please help
us in St. Joseph. Please, please.
Beltone Knapp Hearing Aid Center
1150 South Belt Highway, St. Joseph, MO 64507, (816) 232-3386, FAX:
(816) 232-4362
Sept. 29, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Anti-trust Division, U.S. Dept. of Justice, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Heartland Hospital Comments
Dear Gentlemen: On Sept. 24th, 1995 the St. Joseph News-press
ran an article on the Heartland Hospital's problem and potential
problems with both the federal and state governments.
In this geographical area we have only one hospital, and one
physicians office that specializes in problems of the ear. At least
one other ear specialist was purported to have been forced out.
It is our understanding that any patient who has any questions
of possible hearing problems is tested and if over 65 is billed to
medicare. If there is a loss, they are sold hearing aids by the
hospital. To our knowledge they are not given a choice or advised of
the many immediate and long term benefits of being fitted by a
dispenser other than the hospital.
If there is to be true competition than this system needs some
changes.
Sincerely,
Roger E. Knapp,
President.
October 4, 1995.
Gail Kursh,
Health Care Task Force, Department of Justice, Antitrust Division,
600 E Street, N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: As an 18 year employee of a Nursing Facility in
St. Joseph Mo., I am writing in regard to the Anti Trust Suit
against Heartland Health Systems in St. Joseph.
In the 18 years that I have been at this facility we have more
vacancies as this time than we have ever had. We feel it is still
the monopolization of Heartland. If we send a patient to the
hospital they are treated in the acute hospital, transferred to
extended care for rehab, until their Medicare days are used.
Sometimes they are then transferred to the Medicaid unit. The
nursing homes in St. Joseph all have rehab available and there
really isn't any reason for patients to remain in the Hospital for
the length of time they are kept. I believe it is abusing Medicare
and Medicaid as well as private insurance. This did not happen in
the past, only under the present management.
They have bought the Drs. groups, this has caused a trickle down
effect in our city. It has affected everyone in the Health Care
Industry. Heartland now has a 210 bed nursing facility, when there
are many vacancies in the nursing homes in this area. If you use the
Doctors they have bought, you use Heartlands Pharmacy, Laboratory,
exray, and supplies. This has even gone so far as to hurt office
supply businesses, as the Doctors in the past have bought their
office supplies from the local businesses, now they buy through
Heartland.
As far as Nursing Homes go, we all have vacancies and can't see
there was a need for 210 beds at Heartland. I understand they will
be adding an Alzhiemers Unit. There is a total of 500 beds
available, when these are utilized, how many vacancies will we have
and how many homes will be forced to close.
We were of the opinion it was against the law to have a
monopoly. Heartland definitely has a monopoly in St. Joseph.
We have written the Justice Department in the past, as of this
date we can see no difference in Heartlands attempts to monopolize
the Health Care providers in Buchanan County and Northwest Mo.
Finally the summary I read does not rectify the monopoly Heartland
already has. Doctors, laboratories, pharmacies, long term care,
suppliers, and home health.
We remain optimistic that the anti-trust department can help the
providers in and around our area.
Sincerely,
Dee Frye,
P.O. Box 1308, St. Joseph, MO 64502.
I am writing in reference to a newspaper article concerning
Heartland Health System of St. Joseph, MO.
I have had quite a few bad dealings with the doctors in St.
Joseph and Heartland Health System and Physician's acute care
services--which are affiliated with Heartland.
Our insurance provider is Health Net, which my husband carries
through his employer.
I have seen numerous instances of poor patient care, medical
negligence, mis-diagnosis and probable medical malpractice. Over-
billing of patient accounts and trying to get more money out of the
patient, than the insurance says we have to pay.
Another area you may want to check into is the med-clinic which
is a doctor-owned clinic in St. Joseph.
Patients who have went to the clinic for a problem are given
inaccurate lab results and inaccurate diagnosis and told to come
back to be rechecked again, and when these patients go to their
regular doctor there is nothing wrong with them.
I live 25 miles north of St. Joseph, and my family drives 70+
miles to use a hospital in Kansas City. The care is so bad at
Heartland, I wouldn't take a dog there. I hope we never have a life
threatening emergency--they probably wouldn't make it to Kansas
City, but they would be better off, than going to Heartland.
Sincerely,
Alona S. Miller,
20421 County Road 223, Union Star, MO 64494.
October 3, 1995.
Professions and Intellectual Property Section, Health Care, Task
Force,
Anti Trust Division, U.S. Department of Justice, 600 E Street N.W.,
Room 9300, Washington, D.C. 20530
Attention: Gail Kursh, Chief
Dear Ms. Kursh: Recently in the St. Joseph Newspress the article
on HEARTLAND HOSPITAL, St. Joseph, Missouri pertaining to the anti-
trust suit that is pending against them.
You might find it very interesting to the treatment that a local
doctor * * * Dr. Charles Willman received from them. He filed law
suits again the hospital and some doctors but was unable to get by
the Judge Bartlett in Kansas City and also unable to be heard in
Jefferson City, Missouri. Dr. Willman was a very fine surgeon and
was my person doctor. They refused him practice at the hospital and
you might find it very helpful if you investigated this case.
Dr. Willman gave up his practice and now lives in Springfield,
Missouri due to financial reasons.
[[Page 29809]]
Sincerely yours,
Joy Schiesl,
Five Lindenwood Lane, St. Joseph, Missouri 64505.
Bender's Total Home Health Care
3829 Frederick Avenue, St. Joseph, Missouri 64506, 816/279-1668, 800/
633-9781, Fax 816/279-6425
Gail Kursch,
Dept. of Justice, Antitrust Division, 600 E Street NW, Room 9300,
Washington, DC 20530
This is to make you aware of a grave concern we and others
(providers and patients) have regarding the new Referral Policy of
Heartland Health Systems. That policy, as stated in the proposed
Final Judgment against Heartland Health Systems, HealthChoice of
Northwest Missouri and St. Joseph Physicians Inc. by the U.S.
Justice Dept., has clearly been developed to serve the best
interests of Heartland and its subsidiaries, and certainly not the
best interests of patients. Not only are patients unlikely to be
given an equal, unbiased choice of providers, the new policy
guarantees that patients will not be given unbiased information or
assistance with which to make necessary decisions.
There are several reputable providers of home health care,
hospice, home medical equipment, oxygen and outpatient
rehabilitation services serving St. Joseph and the surrounding area.
In an effort to achieve total vertical integration, Heartland has
created subsidiaries to fill each of these ancillary services. In
doing so, Heartland has become a direct competitor with each of the
independent providers for whom Heartland is the primary referral
source. To further control referrals, Heartland also now ``owns'' an
HMO, an managed care agency and several physicians' practices.
While being ripe for abuse, this situation is not of itself
necessarily harmful to independent providers nor to patients.
Actually, we contend that fair competition encourages providers to
improve the service they render and to hold down costs, which
ultimately benefits consumers. However, the procedures which
Heartland's discharge planners have been ordered to follow are
harmful to the ultimate consumer good by preventing fair
competition.
The previous referral policy was that every patient for whom
ancillary services were ordered would be made aware of all area
providers of the required service(s) in an unbiased way. Should a
patient have questions about any of these, the discharge planner,
working on the patient's behalf, would seek accurate information.
This policy, if followed, would foster fair competition; would
encourage providers to compete based on merit, not artificial
barriers or deal-making; and most importantly, would benefit
patients.
The new policy states that if a patient does not express a
preference of provider, the discharge planner shall make a sales
pitch for Heartland's own service. If the patient does not accept
Heartland's Ancillary Service or asks what other providers are
available, they shall be told to look in the telephone book. Only if
the patient asks again for information on other providers are the
referring personnel to verbally (not in writing) identify the
independent providers that can serve the patient's needs. At no time
is the discharge planner to act on the patient's behalf by providing
impartial information that would facilitate the patient choosing one
of Heartland's competitors.
Obviously, this new policy blatantly prevents free, informed
patient choice by denying equal access to information. Discharge
planners who should be impartial patient advocates are turned into
agents for heartland's ancillary services. No other provider is
allowed to put literature into the hands of patients. No other
provider is allowed access to patient charts. No other provider's
capabilities can even be outlined to patients and families who could
benefit from their service.
We do not expect each independent provider to be allowed to walk
the halls ``fishing'' for patients or to give an aggressive sales
pitch to every patient that is admitted. What is expected is
fairness. Equal access to accurate information by patients and
impartial efforts by those who are supposed to be assigned (and
allowed) to serve the best interests of the patient--not those of
Heartland. Heartland's Ancillary Services should be treated no
better or worse than any other provider, but should compete for the
opportunity to serve the needs of the patient based upon merit. Give
the patients equal, unbiased information and impartial assistance
and let them choose.
We have no complaint against hospital personnel, in fact most
with whom we have had dealings over recent years (as patients and as
a provider of products/services) have been extremely efficient and
helpful. Our concern is with the new policy which, not only
threatens the viability of independent businesses, but betrays the
trust of unsuspecting patients who assume that their interests are
being handled by impartial sources.
Mark L. Wyble,
Coordinator, Patient & Community Relations.
October 9, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Anti-trust Division, U.S. Department of Justice, 600 E
Street, N.W., Room 9300, Washington, D.C 20530
Dear Gail Kursh: I recently saw an article in the St. Joseph
newspaper indicating that the Justice Department was accepting
written comments on the proposed consent decree concerning
Heartland, Health Choice and St. Joseph Physicians, Inc.
What I cannot understand is how Heartland Health Systems, the
parent of all these organizations, and supposedly a non-profit
organization, can contribute over three million dollars to the
purchase and development of land for an industrial park in St.
Joseph.
If Heartland Health Systems has that much extra money to throw
around then whatever they are doing must be a real serious violation
of the anti-trust laws and should require more serious penalties
than the slap on the wrist they are receiving in the consent decree.
A concerned citizen of St. Joseph, Missouri
Coalition for Quality Healthcare
October 10, 1995.
To all who have been affected by Heartland's business practices,
both providers and patients:
We are a group of business professionals and citizens concerned
about the fairness in the healthcare market in St. Joseph.
We Want Our Voice To Be Heard
The Justice Department recently filed in district court a
``Final Judgment'', which, according to the competitive impact
statement filed with it ``* * * will restore the benefits of free
and open competition in St. Joseph and will provide consumers with a
broader selection of competitive health care plans.''
The Coalition for Quality Healthcare, and other concerned
citizens, want you to become familiar with the ``proposed Final
Judgment.'' The United States District Court for the Western
District of Missouri has filed this civil action suit against
Heartland Health Systems, Health Choice of Northwest Missouri, Inc.,
and Physicians, Inc., on September 13, 1995. After 60 days,
(November 13, 1995) this Final Judgment will be entered into court.
Once finalized, no changes will be allowed into the decree for a 5-
year period. We believe that the proposed final judgment should be
modified and clarified before it has been filed and entered by the
court.
Appropriate steps are needed to ensure equal access and to
foster patient care. In order to ensure equal access to available
services provided by many sources other than Heartland, as well as
adequate patient choice in obtaining those services, we believe that
certain restrictions need to apply to Heartland Health Systems.
These restrictions would serve to foster and support cost reduction
through total market competition, and should include the following:
Strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components.
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area. A
legislated rotation system would guarantee that hospital staff could
not unfairly influence hospitalized patients in the selection of
necessary providers and would provide a means of accountability.
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well.
In order to ensure compliance with the above, make the
hospital post, for public examination, their daily referrals to both
their hospital-based component and to other providers in the
community.
Situation
It is time we made the hospital accountable for their actions!
They say they have a
[[Page 29810]]
referral policy, and they follow it * * * let's make them abide by
it. Hospitals who exceed 30% of referrals to their own components,
should be subject to a fine.
Recommendation
We recommend that violators be fined $50,000 per day.
What We Would Like To See
First and foremost, we would like to see the patients offered
informed consent and the right to choose. We feel that all people
need to be educated on this fact.
As a provider, your business may be adversely affected by
Heartland's use of its monopoly power. As a patient at Heartland,
you may have been ``coerced'' into using a Heartland based
component, disregarding ``Your Right to Choose''.
Please join us for an informative meeting:
Who: The Coalition for Quality Healthcare
When: Tuesday, October 17 &/or Thursday, October 19
Where: Stan's Golden Grill
Time: 6:30
It is only necessary to attend one of these meetings. We wanted
to create an option in an effort to accommodate everyone's busy
schedule. We will make every attempt to contain these meetings to
approximately 1\1/2\ hours.
RSVP your attendance today to: 279-5393.
Our goal is to submit to the United States District Court for
the Western District of Missouri our recommendations to amend the
``Final Judgment''. We as a group of professional healthcare
providers and concerned citizens, must take this stand now, or abide
by the decree that will be enforced as of November 13, 1995.
Together, we CAN make a difference.
Questions? Call 279-5393.
Sincerely,
The Coalition for Quality Healthcare
Citadel Health Care
5026 Faraon Street, St. Joseph, MO 64506, (816) 279-1591, Fax (816)
232-3775
October 3, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, Room
9300, Washington, D.C. 20530
Dear Ms. Kursh: We are a small 100-bed skilled nursing home
sitting in the shadows of Heartland Hospital of St. Joseph,
Missouri. By doing a good job in all respects, we have been able to
survive. But being a neighbor to an octopus, when the octopus is
trying to eat you every day, is no fun.
The ``Final Judgement'' filed with the district court falls far
short of creating a level playing field. Heartland conducted an
elaborate building campaign and vastly expanded it's new ``campus'',
then had it's older facility left mostly vacant. Being good business
persons, they chose to convert that hospital structure into a
skilled nursing home, directly affecting 400 other long term care
beds operated by private entities. Heartland's intrusion into the
market added a 50% increase in nursing home beds in a state where a
certificate of need is/was required, except that they used political
influence to circumvent the certificate of need laws to be our
monster competitor.
Does Heartland refer persons to our nursing home? Fat chance!
They raid our census every time we have someone that becomes ill
enough to need hospital or rehabilitation treatments. If those
residents leave us, and they either have Medicare available
coverage, or have private insurance, or are lucky enough to be
financially secure, they never come back to us. They or their
families are ``sold the Heartland philosophy'' (that Heartland can
do more than any other nursing home, and do it so much better that
nobody should ever leave Heartland's sphere of care). We have four
such cases just in the month of September 1995, and know that those
people will not be back until they are indigent, at which time
Heartland will dump them like the next load of garbage, back to a
nursing home.
Or if the person makes significant recovery, Heartland refers
everyone possible to it's wholly owned ``Heartland Home Health
Care'', which looks like it is just about to force all three other
home-care businesses out of business. This seems grossly unfair,
considering that again Heartland is the ``new kid on the block''.
The other home care agencies were in business long before Heartland
entered that market.
Is it coincidence that Heartland is thriving and all other
health care businesses in the area are struggling for survival? Not
hardly. Heartland has already bought approximately 80% of all the
available physician services in the area. And if the doctor wants to
keep his job (not his practice--just his job), he will do as
Heartland directs.
In the long term care industry, survival depends upon a
facility's relationship between local physicians and the hospital.
Where does that leave every long term care provider in St. Joseph?
Answer: 1) Competing for patients with the hospital; 2) Depending
upon referrals by doctors that are employees of Heartland, operating
medical practices that are owned by Heartland. If a potential
nursing home admission is first seen at the hospital, if there is
room in Heartland's facility and there is a way to induce the family
to stay there, that is what happens. If the potential admission is
seen in one of Heartland's medical practices (and they own approx.
80% of all the providers in the area), the Heartland provider is
certainly referring potential clients to Heartland's nursing center.
If when the managed care capitation occurs, Heartland will now
be in a position to absolutely bankrupt all the other nursing
facilities in the area because they have a large, former hospital to
expand into. They can bid services below their competitor's cost of
staying in business because of their competitive advantage * * * an
advantage based upon monopolistic principles of eliminating
competition.
It is relevant to note that Heartland's per diem rate is
approximately 25% higher than other competitive nursing homes here,
they are 95% filled with private paying residents, and the composite
private pay census of all other homes in this area is approximately
25%. Heartland has staff persons whose responsibility is to recruit
from the hospital to fill their nursing home with private paying
persons. Nobody else in this area has access to walk the halls of
the hospitals to recruit persons in need, and have the ``closed
market'' already captured.
We know that Heartland has spent huge sums of money defending
its right to acquire and operate all of the health care industry in
a large area of northwest Missouri. Unless something is done in the
near term future, they will squeeze their smaller counterparts like
a huge python kills its prey. And when there is no life left,
Heartland will swallow the remains.
When the competition is gone, so will be all ability to make
independent health care choices, and so will go the availability of
services to the masses. Heartland is flourishing because it already
has captured the private pay market that can and does pay market
rates. The rest of us must accept public assistance patients, or not
accept any at all. Heartland gets all the private pay clientele, not
because they necessarily provide better product, but because it's
hospital has first access to those folks. If they were not sold a
``bill of goods'', why else would someone opt to pay 25% premium for
services in a hospital-converted nursing home when they could have a
much homier accommodation in some of this city's nursing facilities?
Unfair competitive advantage!
Please do not turn your backs on the providers that took care of
this community before Heartland became a megopoly. Those providers
all survived and provided good service until the hospital pushed
them aside. Given any kind of equal opportunity access patients,
those facilities can still compete. It is the lack of access, due to
Heartland's vertical integration, that threatens the livelihood of
the other health care businesses in this area.
Thanking you in advance for any assistance you may provide, I
remain.
Sincerely,
Lowel Fox,
Administrator.
October 11, 1995.
Ms. Gail Kirch
Health Care Task Force, U.S. Dept. of Justice, 600 E St., NW., Room
9300, Washington, DC 20530
Dear Ms. Kirch: Regarding Heartland Health System and St. Joseph
Physicians Inc. in St. Joseph, MO. I prefer to go the a doctor of my
choice and a hospital of my choice. I have gone out of St. Joseph
for years and hope to continue to do so.
Heartland Health, under Lowell Kruse, has been attempting to
``keep everyone in the area'' for years. There needs to be a full
scale investigation.
Sincerely,
Evelyn W. Nask,
2720 Francis, St. Joseph, MO 64501.
October 8, 1995.
Dear Ms. Kursch, Chief, Professions & Intellectual Health Care
Task Force: I wish to comment on your proposed consent decree
concerning Heartland, Health Choice and St. Joseph Physicians Inc.
in St. Joseph.
[[Page 29811]]
It is not my desire to have my choice of doctor(s) and hospital
eliminated. If I choose to go outside Heartland Health System for
medical treatment I want that to be a viable option for me.
It appears Mr. Lowell Kruse and Heartland Health System are
attempting to create a monopoly in N.W. Missouri, thereby running
competitors out of business.
There needs to be a large scale investigation (without warning)
of this entire system. I also think the doctor should be in charge
of the patient, not the administrator on the insurance company.
Sincerely,
Ruth Serrells,
2730 Felix St., St. Joseph, MO 64501.
cc:
State of Missouri, Attorney General's Office, Attn: Mr. Gary
Kraus, Superior Court, Box 899, Jefferson City, MO 65102
November 4, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street
NW., Rm. 9300, Washington, DC 20530
Dear Ms. Kursh: This is an explanation of how I feel Heartland's
policy and competition has affected my business over the last few
years and how it will affect me in the future if strict guidelines
are not put into place.
Heartland is competing with me directly for my nursing home
patients and for my regular customers as though they were a standard
business competing for profits. Competition is good and will always
be the best system to keep all of the business community on the
leading edge of giving the patients the best quality care they can
possibly receive. As a ``for profit'' business, I must pay taxes and
incur expenses in the day-to-day activities that control how I do
business. Heartland, on the other hand, is competing directly for my
patients and other laboratory, home health, and hospice care, etc.
that they want to control, on a non-profit basis * * * How is that
possible? Their desires and efforts are towards controlling all
aspects of healthcare in the entire Northwest Missouri area.
My business has decreased two-fold in the nursing home area. One
is in direct competition for my customers in the homes and secondly
through Heartland's in-house referral policy. When a patient is
admitted into Heartland Hospital from a nursing home, they are
``captured'' into Heartland's system. When these patients are
discharged, they are, on many occasions, discharged into Heartland's
skilled or intermediate care facility and are then serviced by
Heartland's own pharmacy. As you research past history you will see
Heartland has already been in trouble for not giving their patients
a real choice in their Heartland Centre facility. As a matter of
fact, Heartland used to make their long-term care center patients
sign a statement that they would only get their pharmaceuticals
through the Heartland pharmacy. It has only been recently, (within
the last two or three years) that Heartland was forced by Medicare
to allow other pharmacies into their nursing home setting. At that
time, Heartland officials sent a letter to their patients which lead
the patient and families to believe that if they didn't use
Heartland's own pharmacy, Heartland could not guarantee the quality
of service they would receive. This is a very scary thought to these
elderly patients and their families. It is also a statement that
could not be further from the truth. Given this ``threat'', does the
patient really have a choice in pharmacy?
My total prescription volume, down by 20% in the last two years,
is partially due to Heartland's policy to discount their
prescription ``copay'' to all their employees for the purpose of
increasing the volume of their new pharmacy. Even if we could afford
to do this (reimbursement for our services by the Heartland HMO does
not leave room for any more discounts) our contract with the claims
processor makes discounts an unfair business practice. It should
also be noted that Heartland, because of their position as a
hospital and now an HMO, receive deep discounts on prescription
drugs. Sometimes Heartland may pay as much as 80% less for the same
pharmaceuticals that I buy at wholesale prices. This constitutes
another aspect of unfair competition. There is no way I can cut my
prices to adequately compete when I have to pay so much more for the
same items. Several years ago Heartland had another pharmacy which
tried to compete with existing pharmacies and could not make it on
standard competition. Needless to say, Heartland has found this
``unfair'' competition much more lucrative.
Jake's also does not receive any referrals of patients as they
leave the hospital and have needs for walkers, canes, crutches,
wheelchairs, commodes and numerous other healthcare necessities for
recuperation at home. This is an area I know all to well. I used to
own a business that worked exclusively in home care supplies and
fell to Heartland's unfair and unprofessional business practices.
After building a quality business, having a past, non-exclusive,
service contract with Heartland, and a letter of intent for
continuation of this contract along with increased equipment needs
forcing a large expenditure on my part, Heartland began doing
business with another company without notice. This forced me into a
sale situation which was less than desirable.
My major concern is for the patient's overall healthcare.
Competition is what keeps hospitals, pharmacies, hospices, and other
healthcare services accountable to the general public and each
individual consumer. Competition encourages business to be the best
that it can be. St. Joseph has only one hospital. The public is not
able to compare Heartland's services to another hospital and choose
the one which best provides for their specific needs. The new
Heartland HMO seals the fate of true competition, not allowing for
any choice what-so-ever in hospital services. If competition is
further impeded, if Heartland is allowed to go forward with their
plans without strict checks and balances, who benefits except the
pocketbook of Heartland? If these other services, represented by
many companies, are allowed to fall by the wayside, who will be able
to hold Heartland accountable? What guarantees will be in place that
will make sure the patient's welfare and comfort are the driving
force of healthcare decisions? I am deeply concerned that without
the variety of businesses now involved in the many areas of
healthcare in the St. Joseph community, Heartland will have a
``captive audience''. It will not make decisions based on what is
best for the patient, but will judge a patient's healthcare
treatment by money saved * * * by profit generated.
You have the power to ensure that fair competition exists in the
St. Joseph community. It is within your power to ensure that
Heartland's domain is not allowed to continue to snowball and over-
run its competitors. Unfortunately, if nothing is done to strictly
control Heartland, by the time it is realized that lack of
competition breeds apathy and poor service, the competitors will be
gone.
In closing, I want to thank you for the opportunity to speak to
these issues. I hope you are able to see the crisis faced by myself
and my colleagues. If I can be of further assistance, please feel
free to contact me at the address and phone number listed below.
Sincerely,
Richard C. Bosworth,
Coalition of Quality Health Care, 2318 N Belt Hwy., St. Joseph, MO
64506.
Armstrong, Teasdale, Schlafly & Davis
Attorneys and Counselors
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, Fax (816) 221-0786
November 13, 1995.
Edward D. Eliasberg, Jr.,
Antitrust Division, U.S. Dept. of Justice, 600 E. Street, N.W., Room
9420, BICN Bldg., Washington, D.C. 20530
Re: U.S. v. Health Choice of Northwest Missouri, et al., Civil
Action No. 95-6171-CV-SJ-6, Pending in U.S. District Court, Western
District of Missouri
Dear Mr. Eliasberg: This office represents The Coalition for
Quality Healthcare, a Missouri non-profit corporation made up of
businesses in the St. Joseph and northwest Missouri area who provide
ancillary healthcare services to the public. In connection with our
representation, we are preparing to respond to the proposed Final
Judgment in the above matter.
We obtained a copy of the proposed Final Judgment (consent
decree), Stipulation, Complaint and Competitive Impact Statement
from the district court. We were informed by the district court that
no ``determinative'' materials or documents called for by Sec. 16(d)
of the Tunney Act were filed with the court. We also called your
Department to request those documents or materials and were told
that none exist in this case.
Section VII of the filed Competitive Impact Statement recites
that ``No materials and documents of the type described in Section
2(b) of the APPA, 15 U.S.C. Sec. 16(b), were considered in
formulating the proposed Final Judgment.'' In light of the fact that
this suit
[[Page 29812]]
resulted from a multi-year investigation by your Department, during
which administrative depositions were taken and documents produced
by defendants, it seems improbable under the circumstances that no
documents exist which your office considered determinative in
drafting the proposed consent decree.
This very issue was taken up by the district court in United
States v. Central Contracting Co., Inc., 537 F.Supp. 571 (1982). In
Central Contracting, in response to a request for materials called
for by the Tunney Act, the Department of Justice asserted that
``there were simply no documents or materials * * * that contributed
materially to the formulation of the proposed relief.'' Id. at 573.
The Court found the government's assertion disingenuous in light of
the government's similar claims in 172 out of 188 prior cases that
it considered neither documents nor any materials determinative. Id.
at 577. The Court refused to blandly (and blindly) accept the
government's certification that no documents or materials led to the
government's determination that it should enter into a consent
decree. Id. at 575. Rather, the Tunney Act required a ``good faith
review of all pertinent documents and materials and a disclosure''
of those materials called for by the Act. Id. at 577.
We hereby request on behalf of The Coalition for Quality
Healthcare that the United States produce to this office and file
with the U.S. District Court for the Western District of Missouri a
list of any materials and documents which the United States
considered ``determinative'' in formulating the proposed Final
Judgment, so that we or any members of the public may request copies
of specific documents from your Department.
I look forward to your prompt response to this request.
Very truly yours,
Thomas M. Bradshaw, P.C.
TMB:kag
cc: Ms. Kristin Helsel, President, Coalition for Quality
Healthcare
Glenn Davis, Esq.
Heritage Home Health
Central Office: 169 Daniel Webster Hwy., Suite 7, Meredith, NH 03253,
603-279-4700, Fax 279-1370
Branch Office: 500 Commercial St., Unit 302B, Manchester, NH 03101,
603-669-5700, Fax 669-5755
November 14, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW,
Room 9300, Washington, DC 20530
Re: DOJ's recommended home health, DME and hospice referral policy
for Heartland Hospital
Dear Chief Kursh: I read with interest an article that appeared
in . . . home health line, November 13, 1995, Vol. XX, No. 43, that
referenced the above mentioned policy. Please take a moment to
consider the following:
(1) The main source of referrals for home health services come
from hospitals. The vast majority of consumers of home health
services are patients discharged from hospitals in need of follow-up
care.
(2) Free standing home health agencies can not reasonably
duplicate such a facility (hospital).
(3) Free standing Medicare certified home health agencies are
inspected according to the same federal regulations as hospital
based home health agencies. There are no requirements or need for
further ``independent review or evaluation'' by the hospital.
(4) Vertical integration and monopolizing of referrals can and
will not serve long term cost containment.
(5) Medicare beneficiaries should be offered a list of all
participating Medicare providers when they are in need of services.
(6) Hospitals should have discharge planners that are not
affiliated with any home health agency, including the hospital based
home health agency. Referrals could then be made to the best
provider for the given circumstances. Often times, even though the
hospital based agency can not properly service a patient, the
referral is given to them, only to have the patient left without
service entirely or on their own to locate another provider.
Hospitals are reimbursed for offering discharge planing to their
patients to locate the best possible scenario of services for that
patient and to ensure that persons' discharge is a safe and
successful one. In the current environment, however, discharge
planners are fast becoming ``casefinders'' for Hospital based home
health agencies.
(7) Hospital discharge planners often refer patients to other
types of Ancillary services, that they are not affiliated with, when
the hospital does not own facilities or agencies offering that type
of service without doing an independent review or evaluation. For
example, a referral to a skilled nursing, sub acute of
rehabilitation facility.
(8) Hospitals are no longer the community providers they once
were. They take the homes of people who owe them money. They employ
attorneys, accountants, MBA's, image consultants and more. They
advertise. Health care is a business. Hospitals are profiting from
that business. They should not be allowed to continue unchecked.
Thank you for your consideration.
Sincerely,
Carolyn A. Virtue,
Administrator.
MS&R--Medical Sales & Rentals
1411 Memorial, Bryan, Texas 77802, (409) 776-5555
November 14, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W. Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
The Coalition for Quality Healthcare is correct. Heartland
Hospital is taking away a person's freedom of choice. Allowing the
hospital to eliminate competition will eventually lead to poor
service and poor quality of care. The independent businessman is the
backbone of this country and that will be eliminated if the hospital
is allowed to keep referring their patients to themselves.
Your recommended referral policy for Heartland Hospital is not
correct. It is ``big business'' orientated and does not consider the
patient or the independent businessman.
A local hospital opened their own DME company last year. Since
that time two independent companies have had to change their day to
day business strategies because they no longer get referrals from
the area's major hospital. We are fighting to stay in business.
Please call me at 409-776-5555 if you would like more opinions
or viewpoints.
Sincerely,
Nathan L. Cook,
Owner/President.
HealthCare Personnel
Moorings Professional Building, Suite 407, 2335 Tamiami Trail No.,
Naples, FL 33940, (941) 261-8700 FAX (941) 261-7206
November 15, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, AntiTrust Division, 600 E St., N.W.
Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et.
al. Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: The proposed final judgment for U.S. v. Health
Choice is a death knell for quality care in the home health care
setting. Competition supports and promotes a high quality of care,
evidenced by clinical outcomes, cost-effective clinical guidelines,
patient satisfaction and appropriate utilization of community
resources. Your proposed judgment creates a monopoly for hospital-
based home health care agencies and the end of competition in home
health care.
Hospitals have a ``captured audience'' of vulnerable patients
who feel dependent upon the hospital staff. Patients are not likely
to defy a discharge planner's referral to the hospital home health
agency for fear that their defiance would create an environment
where the patient's continuing needs (in-patient needs and paperwork
for reimbursement needs) may not be met or may be delayed.
Additionally, hospitals exert their influence over physicians
(with hospital privileges) to refer only to the hospital-based
agency in order to support the hospital. Some hospitals have even
moved their home health agency from being a separate entity to a
hospital department, so that self-referrals are not subject to GAO
investigations instituted by Rep. Pete Stark (D-Calif.). A second
reason may be to shift administrative costs.
I have been in home health agency administration for twenty
years. In the past two years I have seen hospitals discontinue
[[Page 29813]]
a referral rotation system, discontinue hospital access to patients
by agencies who serve them, refer only to their own agency, call
physicians to ask why a hospital patient was referred to an outside
agency, and hide all referral data and percentage of referrals to
hospital based or outside agencies. All these practices reinforce a
hospital-based home health care monopoly.
Hospital arguments for promoting their own agency at the
exclusion of outside agencies include continuum of care, referrals
to other agencies would require hospital credentialing of outside
agencies, and hospitals always give the patient a choice. It is easy
to refute these claims.
The traditional continuum of care has always been from
organization to organization, be it a hospital or other community
resource agency, with patient information transferred between
professionals who are trained to focus on continuity and
coordination of care. Just because a home health agency has the same
name or is affiliated with a hospital does not, in itself, assure
quality, continuity or coordination of care. Continuum of care
actually is a reimbursement train for the hospital, in the absence
of their desired hospital-based reimbursement bundling.
The responsibility of a discharge planner includes knowledge and
judgment regarding all home health care community resources that
would benefit the patient. Traditionally, in cities as large as
Cleveland, Ohio and as small as Naples, Florida, discharge planners
have always known resources available, and have received feedback
regarding the quality of care from those agencies. Besides, state
home health agency licensure laws establish standards that agencies
must meet, so hospitals should know that standards are met and don't
need to ``credential'' them.
Finally, hospitals ALWAYS state they give the patient a choice,
yet many outside agency patients have told outside agencies that
during their hospitalization, hospital representatives have almost
insisted they use the hospital-based agency and demand to know why
the patient would NOT want to use an affiliated agency. Also,
physicians who refer to outside agencies tell outside agencies that
as soon as the patient is admitted, before the physician even
discusses discharge with the patient (to advise them of the
physician's choice of agency), the hospital-based agency has already
been in to talk with the patient and already has them signed up as a
referral for their agency. The physician does not even have a
choice.
Thank you for the opportunity to send you my comments on your
proposed final judgment for the above mentioned case. Please don't
be persuaded by big hospital corporations and hospital lobbyists to
pass a judgment that abolishes competition in home health care and
effectively gives patients no choice and no recourse when a complete
monopoly occurs.
Sincerely,
Greg Eggland,
Director.
Health Personnel Incorporated
1110 Chartiers Avenue, McKees Rocks, PA 15136-3642, (412) 331-1042,
FAX: (412) 331-2774
November 16, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Dear Chief Kursh: After reading the article that appeared in the
11/13/95 edition of Home Health Line I feel it is necessary as a
free standing home health care agency to comment on the Department
of Justice's proposed referral policy for Heartland Hospital. This
policy will be precedent setting for all hospitals across the nation
and fails to take into consideration a number of things such as:
The main source of home health referrals is hospitals and
hospitals have a captive referral source which cannot be duplicated
in any other way. Yet, they are a very expensive source of home
health care and often provide a poorer quality of care. Hospitals
pass through some of their administrative and general costs to their
home health agencies and get away with this ``double dipping''. The
cost of a visit is increased by passing through costs of the
hospital and this does not help cost containment efforts.
Also, at least in this area of the country, hospitals do not
individualize their care. They discharge patients from homecare
before they stabilize which sends them back to the hospital and
increases health care cost.
One way to stop this is to enforce regulations: Freestanding
agencies must meet the same certification and/or licensure standards
as hospital agencies. Therefore, hospitals should have a rotating
list which assures equitable referrals to all qualified providers
(one that meet Medicare certification (licensure) standards and have
the necessary services). The hospital should have to make their
percentage of referrals public knowledge to each agency.
The discharge planner should offer a list of all participating
Medicare providers in the service area and the discharge planner
should have no affiliation with any agency. By the way, hospitals
often cannot service the patient adequately and so the patient is
left without care, i.e. a physical therapist is not available to see
the patient in a timely manner (four weeks later a physical
therapist is starting to see the patient). No home health aide is
available so the hospital agency tells the patient that they do not
qualify for a home health aide. (For example, the patient has a
fractured arm and myocardial infarction but, does not qualify for an
aide?)
Although, your policy puts the physician back in control, it
fails to take into consideration the fact that here in Pittsburgh,
if doctors refer to another entity outside the hospital, the
hospital can revoke their privileges. (This is happening in
Pittsburgh.) You need to write the settlement so that hospitals
cannot retaliate or put pressure on the doctor to refer to their
agency.
Referring the patient to the phone book is inappropriate as the
patient cannot tell which providers can give the kind of care they
need or who is Medicare certified. Also, the list of other providers
needs to be written as sick or well people, cannot remember many, if
any, names and they need the phone numbers.
This issue covers more than the antitrust issue you seem to be
addressing. The settlement fails to address the Anti-kickback Law
which prohibits hospital doctors (doctors paid by the hospital) from
referring to a hospital owned agency and the Stark II Law. According
to these laws, no agency can receive referrals from any physician
who has been paid more than $24,999.00 by that agency. If a hospital
or doctor owns more than a 5% financial interest in an agency, they
cannot self refer.
Health Personnel, Inc. has tried to address these issues with
HCFA since 1986 and no one has been able to resolve these problems.
In addition, the American Federation of Home Health Agencies has had
discussions with Mr. Thomas Hoyer at HCFA in Baltimore regarding the
patient choice issue. I hope you will resolve these problems and
legal questions.
Sincerely,
Phyllis W. Fredland,
Director of Nursing.
Home Health Specialists
November 16, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Dept. of Justice, Antitrust Div., Washington, D.C. 20530
Dear Ms. Kursh: I have recently read the D.O.J., proposed
referral policy for home health, DME and hospice for Heartland
Hospital. I personally find this totally absurb. If this proposal
passes it not only will affect the freestanding home health
industry, but will also affect a patient's right to choose, even
though the bill offers some small reference to freedom of choice.
The government reports that Medicare will be broke by the year 2007,
and then a bill such as this is recommended for hospital based
agencies. Evidently there has been no investigation of the cost of
hospital based agencies versus freestanding agencies for patient
care and supply reimbursement. To allow a hospital to elaborate on
their agency and state that they know nothing of the other agencies
in town is absurb, when we all know that being a discharge planner,
they have had some dealings with the other agencies in their area.
Freestanding agencies have received a bad deal, since the beginning
of hospital agencies when it comes to referrals and this will only
make it worse. We provide the same quality and conservative care
that they state they provide and at a lower cost. As it stands right
now in our area, we are not allowed to place brochures in our
hospital, visit our former patients, because that is considered
solicitation by the hospital, and we are not allowed to view the
admittance and discharge rooster. This only
[[Page 29814]]
started when they opened there own agency. A rotation of referrals
would give everyone a fair chance to provide the care for the
patients that we should all strive for. This would stop the
hospitals attempting to monopolize the health care industry and
could possibly reduce the legal and judicial fees that are being
used due to law suits over the monopolizing of care. The posting of
referrals would then allow the freestanding agencies to view how
referrals are given and provide some insight into the qualifications
and professionalism of the discharge planners, who in some instances
are placed in the hospitals by competing home health agencies. If
the bill is passed as the D.O.J. recommends, you will see slowly the
fading away of freestanding home health companies the provide a
large number of jobs to people in our area. I hope that the people
reviewing this proposed policy really know the impact that this will
have on the health care industry and take into consideration that it
is hard enough now for freestanding agencies to receive referrals
from hospitals, knowing fully well the discharge planners are not
playing by the regulations that are in existence now, and this would
make it easier to violate regulations, while at the same time
allowing an industry of freestanding ag to die away. Please, for all
the freestanding agencies that are in existence please review this
referral policy closely and make discharge planners to rotate
referrals as well as make available to home health agencies the list
of the referral list.
Sincerely,
Donna Isabell,
Administrator/President, Home Health Specialists, Inc.
November 6, 1995.
Dear Gail: My name is Kathy Smith. I read an article in the St.
Joe newspaper on Sept. 24, '95 concerning Heartland Health System.
This article really hit home with me. This hospital, or so called
hospital, has ruined my life. Let me tell you my story.
I broke my ankle on April 12th of this year. I was taken to the
hospital by some friends. (My husband works the late shift so he met
us at the hospital later.) I waited in the emergency room for one
hour and 45 minutes. In that time, no one came out to check on me. I
finally had my husband go ask a nurse for a blanket. My body was
beginning to shake. I imagine shock was starting to set in.
Finally I get back to E.R. and am taken on to X-ray and I wait
some more for a doctor to come and set my foot. I find out I need
surgery. They will do it tomorrow (April 13). I leave E.R., its
after 2:00 in the morning.
Surgery is done the next afternoon. All went well, or so I am
told. I get released on the 14th & I go home.
Now, you have to understand, I'm 33 years old, and am married
and have two small boys, ages 3 and 5. I'm walking or hoppling
around with a walker, can't fix supper, can't do all the chores
around the house, that I used too. This hurts, I've never had to
depend on other people. But I figured, I'll be up and around in 6 to
8 weeks, just like the doctor had stated. End of story? I wish, it's
only the beginning!
One week after the 1st surgery in April, I came down with a high
fever of 103 degrees, then the chills, and nausea. I called my
doctor, he wasn't in. I told the nurse, or the secretary or whoever,
and they said they would get a hold of him and have him call me. He
did, about 45 minutes later. I told him all the symptoms, and do you
know what he said, I must be coming down with a cold or maybe the
flu. Take some Tylenol.
I went back to the doctor, every week for the next month, then
every 2 weeks for awhile. I had a place on my ankle that wasn't
healing. He (the doctor) would squeeze on my leg and say that was
fat draining out. He even brought in a colleague, and they both
agreed that was what it was. (No not once in his office did he wear
rubber gloves when he touched my ankle (leg).)
Finally after about a month, he decided to put me on antibiotics
(actually he gave me a choice, go in the hospital or take
antibiotics.) Now, when you have a family that depends on you, what
choice if any would you have taken? So I took antibiotics. Even when
I went back to see this doctor (on antibiotics) he'd continue to
squeeze on my leg, and it (puss) would just ooze out and one time he
mentioned, maybe it is a blood clot.
We are in June now, the 5th. He decides he'd better go in and
take the plate and screws out. It's June 7th, he took the hardware
out. The infection had eaten my flesh away, and some bone along with
it. Actually it had spread into my bone. Now I have osteomyelitis (a
bone disease). I thought I was going to lose my whole foot & part of
my leg! Where did they get this doctor from? I had a lot of
unanswered questions? I was worried, I was in pain and I was scared.
Two days later, I got another visit from another doctor he wants
to put a groshong catheter in my chest. Why? I ask. I needed to be
on vancomycin (one of the strongest antibiotics used to control
osteomyelitis.) I have that surgery on June 9th. The doctor assured
me I wouldn't feel a thing. I was to be given a local to deaden my
chest area. Well, the local didn't work. I was awake through \3/4\
of the operation talking with the doctor & the nurses. Have you ever
heard of a doctor going through with an operation when the patient
was awake? I could feel those tubes running down to my heart. It did
hurt but I tried to be strong & not let the pain get to me too bad.
The first doctor, he called in a plastic surgeon. He was to try
to fill in this hole in my leg (that hole was left by the first
doctor after he took plate & screws out, where the flesh had rotted
away.) So the plastic surgeon, cut a flap in the back of my leg to
fill in the original hole. It was done on June 13th. Then I laid in
the hospital bed for a week and couldn't move. The 3rd doctor said
let's keep our fingers crossed to make sure this takes (skin graft).
Also the 3rd doctor said to me ``if I were in your shoes, or one
of my family members, I wouldn't be real upset with doctor #1.'' Can
you believe what he told me? I came so close to losing my foot and
he had the nerve to say something so foolish!
On June 20th, the gal from the Heartland Home Health Care came
in and said, ``We've got you all signed up for H.H.C.'' I wanted to
know why and she said ``because you'll have a nurse come over & make
sure you get the vancomycin twice daily.'' The nurse from H.H.C.
told me it was kinda expensive. They had contacted my insurance co.
and they agreed to pay 80%. We had to pick up the 20%. I thought it
(the price) couldn't be real bad. But I was wrong. Each bag of
medicine was $65.00. Thats $130.00 a day. I was on this medicine
from June 21st to August 24th. The nurse came out almost weekly to
draw blood for tests. The 1st doctor told me I wouldn't be on it
(vanco) for long. He was wrong. I was dismissed from hospital June
21st.
There was no mention I could have gotten another Home Health
Care Provider, in fact I was shocked to learn, other ones were out
there, & that they may have been cheaper. I guess you could call me
stupid, but after this nightmare, I have really opened my eyes. Each
visit with a nurse was over $100.00.
These people must think we are made of money. My husband is a
welder, at a plant here in town, and he doesn't make alot of money
for 4 people to live on. We rent the house we live & our fortunate
to have 2nd hand vehicles to drive. Our kids get hand me down
clothes.
So you see we don't have a lot of money, and Heartland doesn't
help when they have such high prices for their services, and they
need to stop monopolizing the St. Joe area.
By the way, my 1st doctor told me after I asked him a few times.
(``I had picked up the stupid infection from the hospital from the
surgery.'') Isn't that a kick in the ass? Now, we have all these
hospital bills & doctor bills to pay. And I have a scarred up leg to
show for it. And the doctors & hospital are getting richer for their
mistakes. If you know anyone that could help me I would appreciate
it!
Sincerely,
Kathy S. Smith.
October 17, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Anti-Trust Division, U.S. Department of Justice, 600 E
St., NW., Room 9300, Washington, DC 20530
Re: Heartland Referral Policy--consent decree page 13B-1
As a prior patient of Heartland Hospital, choices in health care
providers were not given at the time of discharge.
I believe upon being admitted to the hospital, information on
all agencies should be provided to all patients.
Being advised to check the phone directory is not a logical
solution.
Kathy S. Smith.
VIP Home Nursing & Rehabilitation Service, Inc.
51 Century Boulevard, Suite 308, Nashville, Tennessee 37214, (615) 883-
9816, (800) 826-8998
November 17, 1995.
Gail Kursh,
[[Page 29815]]
Chief, Professions & Intellectual Property Section/Health Care Task,
Dept. of Justice, Antitrust Division, 600 E. Street, N.W., Room
9300, Washington, DC 20503
Re: United States vs Health Care of Northwest Missouri, Inc. Case
No.: 95-6171-CV-SJ-6
Chief Kursh: In response to the above case/proposal, I would
like to put some light on this proposal as far as freestanding
providers are concerned.
Here in Middle Tennessee we feel like the unwanted step-child as
far as hospitals are concerned.
Approximately ninety percent of the hospitals, large and small,
now have their own in-house home care service.
We are told by the discharge planners:
1. We rotate our patients to assure equitable referrals to all
providers in the area.
This is hogwash! We have called on some hospitals in the Middle
Tennessee area for over a year and still do not get patients from a
good portion of them. Or, if we do get a patient, it is because the
patient has requested VIP (which has been overridden before), or the
patient may live in an outlying area where the hospital home health
cannot service due to distance. (VIP has six offices covering 22
counties.)
2. We have been told point blank that unless the patient
requests a certain home-health agency, they will automatically be
placed with the hospital home health service.
3. We have seen instances where the hospitals are referring
patients to their home health, without any input from the patient's
physician. Sometimes the physicians get upset over this issue,
because in some cases the hospital home health apparently doesn't
provide the level of care that the physician would like to see.
4. Some of the smaller hospitals in the area have been in very
poor financial condition. These have been bought out by another
hospital that has an in-house home nursing service. The physicians
in the area were so appreciative to be able to keep a hospital open
in their area, that we have been told by the physicians that they
will only use the hospital's in-house service because they feel so
indebted to the new hospital.
5. Another hospital in this area was in the ``red'' and due to
close in three to six months. A freestanding home nursing service
contracted with them to run a home health service for them. The home
nursing service, to my understanding, paid the hospital $3,000 a
month to rent space (this is a very small town). The home nursing
service has one of their own employees making rounds to the patients
up for discharge, to check with them about their home health needs.
The home nursing service is signing up patients left and right for
their service. This is considered fraud under Medicare rules.
Freestanding services are restricted by Medicare of direct
solicitation of patients!
Do you see where our frustrations are coming from?
These in-house hospital home health services do not need to be
given any additional power on referrals. They already have a captive
patient population.
Passing this proposal would be a true slap-in-the-face for all
freestanding providers of home nursing. Instead of a few crumbs, the
step-children need a whole piece of the cake for a change!
Please help us!
Best regards,
Kay Smith,
Director of Patient Services.
November 17, 1995.
Ms. Gail Kursh,
Professions & Intellectual Property Section/Health Task Force, Dept.
of Justice, Antitrust Division, 600 E. St., N.W., Room 9300,
Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Gail: My comments on the above case for hospital discharge
planners are that the hospital should provide the patient with a
list of area providers who handle that patient's needed service. The
hospital should have the right to have their own service listed
first, and give to the patient any material the hospital has
prepared for that service organization.
The balance of the list should include, in alphabetical order,
all other service providers who request to the hospital to be
included on the list. The list should not encompass an area of more
than 50 miles from the hospital. The hospital should be allowed to
print a disclaimer that they cannot speak to the quality of care the
other listed providers provide.
Thank you,
Michael W. Thomas,
4518 Forestwood Drive, Parma, Ohio 44134.
Our Lady of Mercy Medical Center
600 East 233rd Street, Bronx, New York 10466-2697, Phone: (718) 920-
9000
November 16, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street; N.W., Room 9300, Washington, DC 20530
Re: Case # 95-61-71-CV-SJ-6, United States v. Health Choice of North
West Missouri, Inc. et. al.
Dear Chief Kursh: I want to applaud your recommended Home
Health, DME, and hospital referral policy for Heartland Hospital. It
is appropriate that a hospital with their own home health agency
refer patients to their own excellent, fully accredited agency.
Our agency does not keep statistics but we get frequent calls
from patients when other agencies do not visit them within 24 hours
of discharge from the Medical Center. It is hard to recommend other
agencies!
Thank you for your support of the hospitals and their home
health agencies.
Sincerely,
Rose M. Rosenberg,
DPS/Administrator, Home Health Agency, (718) 920-9030.
Hill Country Health Services, Inc., dba Hill Country Home Health
P.O. Box 909, Lampasas, Texas 76550, 512-556-8293, Fax 512-556-3591
November 20, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St. N.W.,
Room 9300, Washington, D.C. 20530
Re: United States vs Health Choice, Northwest Missouri, Inc., et al,
Case No. 95-6171-CV-SJ-6, U.S. District Court, Western Division of
Missouri
Dear Ms. Kursh: I would like to comment on the above case
involving home health referrals from hospitals. As the owner/
administrator of a free-standing home health agency in Central
Texas, we deal with numerous hospitals and home health patients.
In our service areas, we have encountered hospital discharge
planners participating in self dealing by referring predominately to
hospital based home health agencies. The patients are told ``your
doctor has ordered home health and we will have a nurse out to see
you tomorrow.'' These patients are not given a choice of available
agencies.
Many times, our former patients have requested our agency
because of particular caregivers. They have been told by the
discharge planner that these care givers do not work for us anymore,
when in fact they do still work for us.
I believe in competition but it is really hard to compete
against a monopoly.
In accordance to published Fraud Alerts (see attached), it is
against the law to offer anything of value to induce a referral. If
a hospital supervisor tells a discharge planner ``if you want to
keep your job, you WILL refer patients to our (hospital based) home
health agency'', then I feel this violates the intent and the letter
of the law.
Your proposals in the aforementioned case falls far short of
``leveling the playing field''. I would like you to consider forcing
hospitals to do the following:
a. Allow patients to exercise their right of freedom to choose
their beneficiaries.
b. Allow non-hospital based providers to visit their former
patients in the hospital.
c. Where no provider is specified by the physician or the
patient, provide a list of eligible providers in the area so that a
patient can exercise their right to choose their provider.
d. Make sure that discharge planners are not coerced by
supervisors to violate Medicare Antitrust, and the Federal Trade
Commission's laws by doing self referrals in order to keep their
jobs.
Thank you for your attention to this matter and I trust that the
Justice Department will rule in favor of all; the patients and those
of us that compete on the currently unlevel playing field.
[[Page 29816]]
Sincerely,
Ron Julian,
Administrator.
Dennis O. Davidson, M.D.
A Member of Arkansas Family Care Network, Arkansas Physician
Management, Inc.
2000 Harrison St., Suite D, Batesville, AR 72501
Mailing Address: P.O. Drawer G, Batesville, AR 72503
November 19, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Re: U.S. vs Health Choice of Northwest Missouri, Inc., et al, Case
No. 95-6171-CV-SJ-6 in the U.S. District Court for the Western
District of Missouri.
Dear Ms. Kursh: I am enclosing a copy of an article from Home
Health Line dated 11-13-95 pursuant to the above captioned case.
Please know at first that I own no interest in a Home Health Care
Agency. The DOJ has made an error. In short, you have given the
hospital the monopolistic power to slant probably near 100% of their
referrals to their home health agencies. Discharge planners in the
hospital are people hired by the hospital. Who but the hospital will
they recommend referral to. You are not giving any equal
accessibility to the patient's to other home health agencies.
Hospitals also work out various deals with physicians and these
physicians are eager to send all of their patient's to the hospital
home health agencies anyway.
This decision is so unreasonable and stinks so badly that I am
sending copies of this letter and article to all my senators and
congressmen. I hope that they have the good insight to bring up some
sort of law that puts a stop to a decision of this caliber. I cannot
for the life of me understand that you can feel that there is any
equity or justice in this decision.
Thank you for the opportunity for presenting my written comment.
Sincerely yours,
Dennis O. Davidson,
DOD/bjr.
cc:
Senator Dale Bumpers
Senator David Pryor
Senator Steve Bell
Congresswoman Blanche Lambert
Alternacare Home Health Services, Inc.
414 E. Main St., P.O. Box 2591, Lancaster, OH 43130-5591, (614) 653-
2224, (614) 653-1333 FAX
November 21, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Dare Task
Force, Department of Justice, Antitrust Division, 600 E. St. NW,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I would like take the opportunity to share my
viewpoint regarding the case United States vs. Health Choice of
Northwest Missouri, Inc., et al. It has been my experience that
hospitals do not present the home health choice available to
patients who are being discharged from a hospital. The discharge
planners at our local hospital inconsistently provide the written
list of choices--but rather verbally inform the patient of a select
few. (The local hospital has a home health agency.)
It is not the responsibility of the hospital to ``credential''
or endorse any agency. Rather, it is the patient's right to be made
aware of choices and have those choices honored. The hospital can
simply provide the facts, via a brochure from each agency, and allow
the patient to make their selection.
This same unfair practice of referring to hospital-owned
agencies/companies is also occurring in the Durable Medical
Equipment area of services and providers.
The referral policy of Heartland Health Systems, Inc. (St.
Joseph, MO) is unfair and should not be acceptable. In the
recommended referral policy, the choice is made for the patient,
unless they choose another option. Certainly it is clear that this
is not in accordance with the regulations requiring patient choice.
Instead, the patient should be provided with available services
(again with printed brochure), then permitted to make a choice. If
the patient than has no preference, then a system of rotating the
referrals to the local agencies may be considered as equitable.
Please consider carefully before approving any policy for
referrals as proposed by Heartland Hospital.
Sincerely,
Diane Flowers-Stuckey,
Director.
The Lee Visiting Nurse Association, Inc.
P.O. Box 415, Lee, Massachusetts 01238, Telephone (413) 243-1212, FAX
(413) 243-4215
November 20, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., Room
9300, Washington, D.C. 20530
Re: U.S. v. Health Choice of Northwest Missouri, Inc., et al., Case
No. 95-6171-CV-SJ-6 in the U.S. District Court for the Western
District of Missouri
Dear Ms. Kursh: The referral policy recommended by the DOJ for
Heartland Hospital is highly prejudicial. ``Choice'' is most
certainly diluted and may be seen as a very subjective term when
used by a hospital discharge planner with affiliation to a specific
home care agency.
Having experience in this area, I can imagine a patient being
given a ``choice'' of a particular agency which is in fact more of a
recommendation, a directive, or a preference depending upon the
approach of the discharge planner. Most patients lack knowledge in
this area and tend to rely upon the advice of the discharge planner:
It is unusual for a patient to state a specific choice. However, if
a patient expresses uncertainty and then is directed to a phonebook
to ``choose'', this seems less than supportive or helpful in any
way. Hence, choice is not a ``choice,'' and is, instead, a sort of
punitive arrangement whereby the discharge planner essentially
denies the patient assistance in ``choosing.''
How perverse! Choice is a word loosely interpreted these days,
but since when is self-referral considered a ``choice?'' Only the
most savvy, assertive patient could navigate such a system.
Antitrust is dead if this is how the courts elect to interpret the
patient's right to choose.
Sincerely,
Paula Schutzmann,
Executive Director, Certified Case Manager.
Sun Management Services
61 Duke Street, PO Box 232, Northumberland, PA 17857, 99 South Cameron
Street, Harrisburg, PA 17101, 1-800-577-5514
November 20, 1995.
Ms. Gail Kursh,
Chief, Professions and Intellectual Property Services, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E.
Street, NW., Room 9300, Washington DC 20530
Re: United States Health Choice of Northwest Missouri, Inc., et al.,
Case Number: 95-6171-CV-SJ-6
Dear Ms. Kursh: It is with great concern that I read the
proposed settlement as it related to the recommended home health,
DME, and Hospice referral policy for Heartland Hospital.
The policy repeatedly stated that ``if the patient has a
preference, that preference shall be honored.'' We believe, however,
that the policy does nothing to ensure even a minimal level of
knowledge by the patient.
This policy is the equivalent of asking a patient's permission
for major surgery without providing any information regarding risks
or outcomes.
Patients at a minimum should be informed of other providers and
be provided equivalent marketing materials that are used by the
hospital. Patients should be offered access to other provider's
staff for the purpose of evaluating options.
The argument by Heartland's Attorney, Thomas Watkins, that
``there is no hospital in the world that is going to want to bless
somebody else's home health agency when they cannot be responsible
for care. We cannot be in the position of educating the patient--we
don't have the information'' is ridiculous.
Other providers are more than happy to provide the hospital and
the patient the information required to make an informed decision.
Hospital Social Service Departments routinely provide information
about community resources. To allow them to act differently in areas
where the hospital has a vested financial interest is questionable
ethics at best.
The recommended referral policy not only provides inadequate
access to information ensuring a patient's ability to make an
informed choice but also provides the
[[Page 29817]]
hospital opportunity to be discriminate in terms of what patient it
chooses to serve.
It is common today for patients simply to say yes to home health
referrals; allowing the hospital to self refer desirable patients
and to farm out to other provides those they wish not to serve.
We believe that the recommend policy protects the hospital's
vested investments at the expense of an informed patient choice and
suggest appropriate revisions be required.
Sincerely,
Steven Richard,
Senior Advisor.
Armstrong, Teasdale, Schlafly & Davis
A Partnership Including Professional Corporations
Attorneys and Counselors
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, Fax (816) 221-0786
November 21, 1995.
Via Federal Express
Ms. Gail Kursh, Esq.,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, 600 E Street, NW., Room 9300,
Washington, DC 20530
Re: Objections and Comments of the Coalition for Quality Healthcare
to the Proposed Final Judgment pending in United States v. Health
Choice of Northwest Missouri, Inc., et al., Civil Action No. 95-
6171-CV-SJ-6, Western District of Missouri, as published in the
Federal Register, Tuesday, October 3, 1995
Dear Ms. Kursh: This law firm represents the Coalition for
Quality Healthcare (the ``Coalition''), a nonprofit Missouri
corporation organized to assure consumer access to timely and
relevant information and to promote competitiveness in the
healthcare field. This letter constitutes the formal Comment and
objections of the Coalition to the proposed Final Judgment pending
in the above-referenced matter.
By way of background, the Coalition is comprised of concerned
citizens and providers of ancillary healthcare services in Northwest
Missouri, including St. Joseph, Missouri and its surrounding areas.
Members of the Coalition include owners of long-term care
facilities, home health care agencies, pharmacies, medical equipment
companies, and other service oriented businesses operating in the
healthcare field.
The Coalition members firmly believe that the proposed Final
Judgment is not in the best interest of the public primarily because
the proposed Final Judgment contains a provision requiring Heartland
Health System, Inc. (``Heartland'') physicians to follow the
Heartland ``Referral Policy'' if a Patient needs ancillary services
upon discharge from acute care. Comparison of the provisions of the
proposed Final Judgment to the Complaint reveals the anomaly that
the Complaint focuses exclusively on defendants' efforts to
foreclose competition from other managed care plans in Buchanan
County. Heartland's Referral Policy is not mentioned in the
Complaint and seems to have been improvidently added to the proposed
Final Judgment.
The proposed Heartland Referral Policy denies patients the right
to make an informed choice among ancillary service providers in the
Northwest Missouri area. Specifically, the Coalition urges the
Department of Justice to remove the Heartland Referral Policy from
the proposed Final Judgment for the following reasons:
A. The Referral Policy is not in the Public's interest because
it prevents patients from making an informed choice regarding
Ancillary Services:
* The proposed policy would allow the doctor to initially order
that a particular ancillary service provider be used, rather than
allow the patient to choose freely among any of the ancillary
service providers in the Northwest Missouri area. Because Heartland
employs or is otherwise associated with the majority of physicians
with staff privileges at Heartland's hospital, doctors will
routinely order Heartland ancillary service providers for the
patient. Hospital patients requiring ancillary services are
frequently elderly, in ill health and are unlikely to question, let
alone contest, a doctor's order, or understand the basis for the
recommendation.
* Even if the doctor does not designate a certain ancillary
service provider, the patient is nonetheless steered to Heartland.
Under the proposed policy, the patient is only informed that
Heartland has excellent, fully accredited ancillary services
available and then the patient is given a Heartland brochure. The
patient is not informed about the availability of any competing
ancillary service providers in the Northwest Missouri area.
* If the patient rejects Heartland's ancillary service
providers, or specifically asks what other providers are available,
the patient is not given the names of or any information about non-
Heartland providers. Rather, the patient is told that Heartland
cannot provide any information about or recommend any of the other
ancillary service providers and the patient is then merely referred
to the telephone book to look for other providers.
* As a result of the foregoing, the Consumer is denied timely
and equal access to sufficient information on ancillary service
options and quality to make an informed choice.
B. Heartland, through its Referral Policy, effectively
monopolizes the ancillary services market within Heartland's
geographic service region, resulting in antitrust injury to other
ancillary service providers:
* Heartland, located in St. Joseph, Missouri, is the only acute
care facility in Buchanan County. The closest comparable facility is
North Kansas City Hospital, located in Clay County, Missouri, 60
miles south of St. Joseph.
* Patients from private (non-Heartland) long-term care
facilities who are transferred to Heartland's hospital for acute
care are not returned to the private facility upon discharge, even
if the patient had been a long term resident of the private
facility. Rather, the patients are transferred to either Heartland's
skilled nursing facility, which charges a higher daily rate than
comparable facilities in the community, or to Heartland's
rehabilitation center. The patients are then kept in these Heartland
care facilities until medicare days are exhausted. The patients are
only returned to their former private facility if Heartland does not
want them or if the patient's funds are depleted.
* Patients of private Home Health Care agencies experience
similar exclusion from their prior provider. Patients who have been
cared for by a non-Heartland home health care agency prior to being
admitted to Heartland's hospital are not returned to that agency
upon discharge. Instead, patients are being directed to Heartland's
home health care unless the patient objects to the doctor's order or
recommendation to use Heartland. Because patients are often elderly,
infirm and forgetful, they do not know that they can object to a
change in home health care providers and insist that their former
agency resume care upon the patient's discharge.
* Heartland hospital staff do not give notice to a patient's
prior ancillary service provider when that patient is to be
discharged from the hospital. In some instances, prior providers
report that their patients have been home for two to four days with
no follow-up care by their home health care agency because the
hospital failed to notify the former provider of the patient's
discharge. This is grossly harmful to the patient and greatly
affects the quality of the patient's care.
* Failure to give notice of a patient's discharge also prevents
the prior ancillary service providers from taking part in discharge
planning for their patients, thus preventing the providers from
competing in the marketplace for the patient's business. Providers
report having been specifically denied the opportunity to
participate in discharge planning meetings for their patients.
* Owners of private long-term care facilities and home health
care agencies uniformly report a significant loss in revenue and
patient census since Heartland began its Referral Policy which
effectively eliminates a patient's choice.
* An institutional pharmacy which serves 60 nursing homes in St.
Joseph and the surrounding area has lost significant amounts of
business due to the overall loss of private nursing home patients to
the Heartland system. Heartland's own pharmacy services the needs of
patients using Heartland's ancillary services.
C. The Heartland Referral Policy and the proposed Final Decree
have no accountability provisions to ensure that Heartland Hospital
patients, and patients of Heartland's physicians, are being given
sufficient, unbiased information to allow the patient to make an
informed choice among all available ancillary service providers.
D. Taken together, the foregoing considerations concerning the
Heartland Referral Policy, Heartland's physician practice and
recruitment efforts, and Heartland's other conduct create conditions
that facilitate unlawful maintenance of monopoly power by Heartland
through anticompetitive and coercive means,
[[Page 29818]]
conditions conducive to a successful attempt by Heartland to
monopolize the ancillary services markets in Northwest Missouri and
Northeastern Kansas, and conditions that permit Heartland to channel
or steer patients in need of ancillary services only to providers it
owns, controls, or in which it maintains a significant economic
interest.
The antitrust concerns in this situation are clear, the most
significant of which is foreclosure from referrals. The proposed
Referral Policy will only exacerbate this situation and ultimately
will result in an insufficient number of referrals for Heartland's
competitors in ancillary services to remain viable. This, in turn,
will increase Heartland's market power substantially and create the
risk of enabling Heartland to raise and sustain prices above those
which would otherwise prevail in a competitive marketplace, or lower
the quality of care. Whether analyzed in terms of Heartland's
efforts to engage in exclusive dealing agreements, tying
arrangements, reciprocal dealing agreements or monopolization and
attempted monopolization, via predatory refusals to deal, abuse of
essential facilities, or monopoly leveraging, the anticompetitive
effects, which are contrary to the public interest, are apparent.
The Coalition is currently drafting a model Referral Policy
which allows patients to make an informed choice among all ancillary
service providers in the St. Joseph and surrounding regions. We will
provide the Department of Justice and the District Court with a copy
of the model Referral Policy, along with arguments and authorities
in support of its adoption, within the next 10 days.
While the ancillary services Referral Policy is of paramount
importance to the Coalition, other terms and conditions of the Final
Judgment give unfair competitive advantage to Heartland in the
primary care physician market. The Coalition specifically objects to
the following provisions in the Final Judgment:
A. Part VIII: Heartland Permitted Activities
* Subpart (B)--Allows Heartland, without preapproval from the
DOJ, to employ or acquire an unlimited number of physicians who are
not currently located in Buchanan County, so long as less than 20%
of the physician's income was derived from patients living in
Buchanan County;
* Subpart (C)--Puts no limit on the number of new doctors that
Heartland can bring into Buchanan County to work for Heartland (as
employees or through acquiring their practice), so long as Heartland
incurs substantial costs in recruiting the doctors, or gives them
substantial financial support or income guarantees. Even though the
acquisitions require prior notice to the DOJ, approval is given if
the financial criteria are met.
* Subpart (D)--Allows Heartland, with prior DOJ, approval, to
acquire the practice or employ any physician who finds he or she
cannot practice in Buchanan County unless hired by Heartland. This
provision underscores the real effect of Heartland's monopoly power,
i.e. if independent physicians cannot compete successfully with
doctors owned by Heartland, they have to join Heartland to survive.
* The practical effect of the foregoing provisions is that
Heartland's physician base will continue to grow and monopolize the
market for GAPC physicians in Northwest Missouri and Northeast
Kansas, leaving sole practitioners with little choice but to join
Heartland or move their practices elsewhere.
B. Part X-XI: Compliance Program / Certifications
* Requires only self-reporting of Heartland's proposed
acquisitions or other actions covered by the Final Judgment and an
annual certification by the defendants that the Final Judgment terms
are being adhered to.
* Although the DOJ is to be given ``access'' to defendant's
records and personnel and the right to obtain written reports from
any defendants, there is no requirement that written reports be made
to the DOJ by any of the defendants, and no requirement that the DOJ
will conduct annual, or better yet, semi-annual inspection of books
and records and interview of personnel.
* Without an affirmative requirement of regular, periodic
written reports or DOJ inspections to determine compliance, it will
be virtually impossible to determine whether violations of the Final
Judgment have occurred.
* The proposed Final Judgment should give the Court broader
powers to monitor and enforce the final judgment. For comparison,
see Judge Oliver's opinion in United States v. Associated Milk
Producers, Inc., 394 F.Supp. 29, 46 (W.D. Mo. 1975), entering a
Supplemental Order establishing the manner in which alleged
violations of a final judgment entered upon a proposed consent
decree should be brought before the Court for appropriate judicial
enforcement proceedings.
The Coalition welcomes the opportunity to engage in meaningful
discussions with the Department of Justice to clarify and supplement
the foregoing arguments and to assist in any manner possible to
assure that the Final Judgment in this case is truly in the public's
interest.
The Coalition looks forward to a response from the Department of
Justice to this Comment.
Very truly yours,
Glenn E. Davis, Esq.
Thomas M. Bradshaw, Esq.
Dianne M. Hansen, Esq.
DMH/kag
cc: Coalition for Quality Healthcare
The Hon. Howard F. Sachs, Sr. District Judge
Clerk of the District Court, Western District of Missouri
Bennett C. Rushkoff, Esq., Assistant Attorney General for the
State of Missouri
Ozarks Medical Center
1100 Kentucky Avenue, P.O. Box 1100, West Plains, Missouri 65775, (417)
256-9111, FAX (417) 257-6770
November 17, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 699 E Street,
N.W., Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6, U.S. District Court for the Western
District of Missouri
Dear Ms. Kursh: I am writing in support of the proposed final
judgement for the above mentioned case, specifically related to the
discharge process and referrals to hospital-based HHA, DME and
hospital affiliates.
As a hospital vice president, I repeatedly see the discharged
process interrupted and made complex by demands that every
ambulatory care provider within an hour's drive to our hospital be
given access to and, in some cases a guaranteed referral to,
patients being sent home for recuperation. OMC demands that
discharge workers recite a carefully crafted script that does not
mention our many years of quality service and coordination with
inpatient services just so that external firms will not claim that
we are hoarding referrals to ourselves.
I am especially in opposition to the guidelines suggested by the
Coalition for Quality Healthcare. These guidelines, as I understand
them, would further drive a wedge between hospital inpatient and
outpatient businesses. They would also require hospitals to use a
rotational system for referrals among all area providers. This is,
in effect, stating that just by starting a new business someone is
automatically guaranteed a proportional share of business,
irrespective of quality, service or their commitment to the
community. The guidelines would also require hospitals to permit
freestanding providers a large degree of visitation access to
inpatients on hospital property. This would be especially onerous to
patients and families during times of illness and crisis. External
sales personnel could not be kept from repeated unwanted intrusions
into the patient's care setting.
I urge the Department of Justice to stand behind it's initial
HHA/DME guidelines. This would permit better coordination of patient
care without fostering undue intrusion into the care environment.
Yours truly,
Jeffrey B. Johnston,
Vice President for Operations.
Idaho Home Health, Inc.
800 Yellowstone Ave., Pocatello, ID 83201, (208) 232-1122, (800) 491-
2224, fax (208) 232-7941
November 16, 1995.
Gail Kursh,
Department of Justice, Antitrust Division, 600 E St. N.W. Room 9300,
Washington, D.C. 20530
Re: Home Health Referral Protocol
Dear Ms. Kursh: We understand the Department of Justice will
receive input regarding the recommendations for home health
referrals proposed in the United States v. Health Choice of
Northwest Missouri case. Enclosed are several instances of hospital
channeling we uncovered in Idaho. If the DOJ
[[Page 29819]]
intends the recommendations only apply for Antitrust issues this
distinction should be clearly and expressly stated so entities will
not apply it to non anti trust matters. If that is the intent,
however, we suggest the recommendations be broadened to include 42
USC 1395a issues. Hospital patient channeling and violation of
patient choice are the top issues facing proprietary agencies today.
For your information, in Idaho during 1993 if proprietary home
health agencies rather than hospital based agencies had provided the
Medicare home health visits the Medicare program would have saved
millions of dollars. It goes without saying historically Hospital
based home health visits are significantly more expensive than
proprietary agencies. If the Government was really serious about
saving Medicare money it would discontinue facilitating a situation
that lends itself to inefficient use of taxpayer dollars. You must
be aware the primary motivation behind hospitals entering the home
health market is to ``cost shift'' hospital overhead to the home
health agency to increase the visit cost up to Medicare program
limits. By doing this hospitals can ``cost shift'' millions of
hospital dollars into the home health agency thereby improving the
bottom line of the hospital.
We suggest a protocol of first asking the patient if they have a
preference of home health agencies. If the answer is affirmative
then refer the patient to that agency. If the answer is negative the
patient is then provided a list of agencies and the patient is
advised to call each agency and inquire regarding charges and
quality of service. Since none of the other agencies can solicit the
patient while in the hospital it is unfair to allow the patient to
be solicited by the hospital discharge planner on behalf of the
hospital agency. Alternatively, allow the other agencies access to
the patient at the time of discharge to also recommend their
services similar to what the DOJ is allowing the hospital employees
to do. To allow the hospital discharge planner, who is not an
employee of the hospital agency, to say the hospital's agency
provides quality care and it cannot comment on the quality of care
at other agencies is the same as channeling the patient. To assume
otherwise reflects a lack of understanding of the market place.
Medicare law prohibits rebates or kickbacks for patient
referrals. If the hospital is cost shifting part of its
administrative overhead to the home health agency and the discharge
planners salary is part of that overhead allocation then the DOJ is
condoning violation of Medicare law. The DOJ recommendation also
fails to indicate what sanction will take place if the
recommendations are violated.
This issue is most difficult and complex and affects thousands
of home health agencies. It may also cost our Government billions of
unnecessary taxpayer dollars. Please consider the above.
Sincerely,
William F. Bacon,
Vice President & General Counsel.
Health Data Services, Incorporated
November 22, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530
Re: U.S. vs. Health Choice of Northwest Missouri, Inc. et al., Case
Number 95-6171-CV-SJ-6, U.S. District Court, Western District of
Missouri
Dear Ms. Kursh: Our business is in Home Health Care; Infusion,
Durable Medical Equipment and Home Health. The referrals come from
sources within the hospital walls. As we continue to see more
hospitals get involved in the Home Health side of the business,
outside the confinement of the hospital, our referrals continue to
dry up. The staff is instructed to provide minimal amount of
information about alternative sources, furthermore, many of the
physicians are pressured ever so slightly to use the Hospital
Services. The patient's benefits are not looked after, only the
financial concerns of the hospital. As we continue to see the
dramatic changes in the hospital, they will attack the most
vulnerable, the independent providers of Home Health Services,
gobble them up and provide less choices for the patients. If our
justice system continues to allow the monopolizing of services by
the hospitals, the smaller communities will end up with the hospital
as the only choice.
Sincerely,
Glen H. Beussink,
Executive Director of HDS.
Gentle Homecare, Inc.
505 Laurel Avenue, Suite 203, Highland Park, IL 60035, Tel: 708/432-
9100 or 312/764-5920, Fax: 708/432-9221.
November 22, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E Street, NW., Room
9300, Washington DC 20530
Re: U.S. v. Health Choice of Northwest Missouri, Inc., et al., Case
No. 95-6171-CV-SJ-6, In the U.S. District Court for the Western
District of Missouri
Dear Ms. Kursh: We vehemently oppose the referral policy
currently blessed by the Dept. of Justice in an agreed-upon proposed
settlement between the Dept. of Justice and Heartland Health System
Inc., St. Joseph, MO.
If this court decision becomes final, it will effectively create
regional monopolies. Free-standing home health agencies will be put
out of business, because you have now cut us off from out patients,
and given us no means to compete.
Please reconsider--there have to be stronger limitations on the
hospital's ability to refer its patients to its own hospital-based
components.
We would appreciate a reply.
Very truly yours,
Susan Siegal,
Administrator.
Home Health Insights, Inc.
111 East Florence Blvd., Suite 1-B, Casa Grande, Arizona 85222-4047,
(602) 421-2239, FAX (602) 421-2503
November 23, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street.,
N.W., Room 9300, Washington, DC 20530
Dear Ms Kursh: I am writing to join my voice with the Coalition
for Quality Healthcare in recommending their modifications to your
proposed settlement with Heartland Health System of St. Joseph, MO
(Case #95-6171-CV-SJ-6). Our community hospital, which does not
operate its own home health agency, currently uses a rotation system
for spreading referrals among the area HHAs.
Sincerely,
Ross Feezer,
Adminstrator.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
To Whom It May Concern: This is in response to the Dept. of
Justice proposed judgement for United States v. Health Choice of
Antitrust Missouri, Inc. Case #95-6171-CV-SJ-6.
As a health care provider (RN) and consumer, it appalls me to
know that hospitals may not be required to inform patients about
alternatives in the health care market. Because a hospital informs a
client of any available home health agencies does not mean the
hospital endorses such agencies. Healthy competition is good for the
consumer and serves as a check and balance system. Hospital based
agencies would usually monopolize the market if this referral policy
is permitted and quality care will be compromised.
Also, economically, competition allows the consumer to get the
most service for their money. Please do not permit this to change.
Sincerely,
Julie L. Miller,
RD 2 Box 58, Friendens, PA 15541.
November 15, 1995.
Gail Kursh,
Chief, Professionals and Intellectual Property, Health Care Task
Force, Department of Justice, Anti-Trust Division, 600 E Street,
NW., Ste 9300, Washington, DC 20530
Dear Mrs. Kursh: In response to the article ``Courts Use
Antitrust Law to Thwart Efforts to Limit Spread of Managed Care'',
in the Employee Benefit Plan Review, I must agree with the actions
of the court to limit the actions of the managed care organization
[[Page 29820]]
``Health Choice''. The primary concern that I found when reading
this article is the fact that St. Joseph Hospital is a for-profit
hospital. All activities which this hospital indulges itself are
done to increase the financial status of the hospital, thus causing
extensive investigation to occur with every public action in which
it participates. I feel that had this been a non-profit hospital no
complaint would have been filed due to the fact the company is
operating to provide a better care service for the community. It is
possible that Health Choice is operating to provide a service to
assist in the health care of the community but due to the fact that
they are for-profit diminishes this idea, primarily because all
surplus revenue will not only be used for the hospital's needs but
it will be distributed among the staff of the hospital. So who is
really benefiting from this conglomerate.
In a second observation, the restrictions set upon Health Choice
do not punish or fine the institution for its practices, it just
prohibits any future activity. In light of these penalties Health
Choice still retains 85% of the physicians working or residing in
the area, this is still a monopoly because the remaining 15% will
not be able to adequately compete in the quantity of service which
they provide. I believe more drastic measures should be taken or
else the Health Choice Network will eventually gain 100% of the
market, due to the fact that the remaining 15% join the organization
or relocate their practice.
I look forward to hearing your response to these observations
and thank you for the opportunity to voice my opinion.
Sincerely,
David L. Hutchinson,
Public Administration Student, Michigan State University.
VNA HealthCare Services
1789 South Braddock Avenue, P.O. Box 82550, Pittsburgh, PA 15218, 412/
256-6910, fax 412/256-6920
November 24, 1995.
Ms. Gail Kursh,
Chief, Profession & Intellectual Property Section/Health Care Task
Force, Antitrust Division, U.S. Department of Justice, 600 E.
Street, N.W., Room 9300, Washington, D.C. 20530
Re: United States v. Heartland Health Systems Inc., Civil Action No.
95-6171-CV-SJ-6
Dear Ms. Kursh: This comment is submitted to urge the Justice
Department either to modify or, alternatively, to delete entirely
the ``Referral Policy'' regarding the provision of ancillary
services that is attached to the Final Consent Judgment against
Heartland Health System, Inc. For reasons explained below, that
``Referral Policy'' would put the Justice Department's official
approval on a policy that is seriously deficient from both a
practical and a legal standpoint.
I am the Executive Director of VNA HealthCare Services, which
has been serving the residents of Allegheny County, Pennsylvania
since 1919--more than 75 years. We have enjoyed an outstanding
record of high quality services to the community and, as a non-
profit organization, provide services to many individuals without
resources. Independent home health agencies, such as VNA HealthCare
Services, are dependent in substantial part on patient referrals
from hospitals and the physicians on their medical staffs. Our
experience in the Pittsburgh area is similar to that across the
country, in that approximately 76% of our patients come to us
directly from hospitals. Reasonable access to those patients, who
include persons with private and governmental insurance, is
essential to our survival.
Recent changes in reimbursement methodologies have given
hospitals an incentive to``steer'' patients to hospital-affiliated
home health care or other ancillary services. Steering of that sort
typically involves: (1) Denying representives of competing home
health agencies access to hospital premises and patients, even
patients who were under the care of the competing home health agency
prior to their hospital admissions; (2) refusal to provide patients
with brochures or other information regarding competing home health
agencies; (3) subtle and not-so-subtle pressure on patients to
select the hospital-affiliated agency; and (4) pressure on hospital
staff physicians to make referrals to the hospital-affiliated home
care provider.
It is no exaggeration to say that the spread of these practices
has reached epidemic proportions.
The Heartland referral policy does nothing to address the access
and informational concerns that arise in a market in which consumers
(the patients) are typically uninformed about their options.
Contrary to the stated goal of the Competitive Impact Statement, the
referral policy does not prevent a dominant hospital such as
Heartland from foreclosing competition and abusing its control over
inpatient hospital services to further its position in the provision
of ancillary services, such as home health care. Under the Heartland
policy, the hospital's ``referring person'' need not even identify
competing agencies of which it is aware unless a patient
specifically asks twice about alternatives to the hospital's
ancillary service. This is clearly not in keeping with federal
regulations requiring the hospital to conduct a discharge planning
process devoted to patient concerns and long-term best outcomes.
Without sufficient patient input in the decision-making process, an
inequitable and manipulative atmosphere will result, given that many
patients are already frail, confused or distracted from their normal
decisionmaking capabilities at time of discharge.
Furthermore, in the proposed policy the hospital referring
person is actually encouraged to make what may well be a false
statement regarding lack of knowledge about the alternative
providers. A discharge planning department's reason for being is to
know what the community resources are and to facilitate making them
available. For the Heartland patient population, however, at no time
is the hospital obligated to provide brochures or other printed
information about alternatives to the hospital's affiliate. The
referring person may, however, extol the virtues of Heartland's
``excellent, fully accredited,'' ancillary service and provide a
Heartland brochure.
If the Justice Department is concerned about stopping the
erosion of competition in home health care and other ancillary
services, we respectfully submit that it should seek substantial
modifications in the Heartland Referral Policy. The modification
suggested below would help to restore competition from smaller,
independent providers, but these are certainly not the only
approaches.
First, Heartland should be obligated to provide patients with
information about all accredited home health care agencies in its
service area. Such a requirement could be modeled after that which
the Commonwealth of Pennsylvania imposed earlier this year, as a
condition of its approval of a merger between two hospitals in
Harrisburg, Pennsylvania. (A copy of that negotiated settlement
provision which has not yet been entered by the court, and the
Pennsylvania Attorney General's press release announcing the
settlement, are attached to this comment.) Paragraph 19 of that
settlement would require the hospitals' discharge planners to
provide each patient requiring home health care services or home
infusion services with a list of all accredited agencies, and a
``patient choice form,'' which is attached to the settlement
agreement as Exhibit 2. That Documentation of Choice form
affirmatively states that, ``Basic information on each agency will
be provided to assist you in your decision.'' It adds that ``any
agency which you desire will be contacted on your behalf,'' and
emphasizes that a selection of any agency other than the hospitals'
affiliate ``will in no way affect your care at [the hospital] or
prevent you from receiving future care at [the hospital].''
Second, the hospital's referring person should be prohibited
from espousing the benefits of the hospital's affiliate unless
competing agencies are given an equal opportunity to participate in
a legally appropriate manner in the discharge planning process, and
equal access to the patient or the patient's family.
Third, the hospital should be required to allow at least one
home health coordinator from a competitor other than the hospital
affiliate, to be available on site.
Fourth, the hospital's referring person should be required,
before asking if the patient has a preference, to state
affirmatively that alternatives to the hospital's affiliate are
available, that the patient will be given a list of these
alternatives (by name, address and phone number) and that the
referring person will assist the patient in contacting them if the
patient so desires.
Fifth, if the patient and the patient's family have no
preference, and no desire for written information, then the
patient's physician should make the choice of a home care provider.
Sixth, Heartland should be prohibited from directly or
indirectly putting pressure on the doctors on its medical staff to
refer patients to the hospital's affiliated services.
My suggestions are intended to guide dominant hospitals in
complying with the
[[Page 29821]]
very general mandates of the Medicare ``freedom of choice''
provision and the Sherman Act. The former statute provides simply
that ``(a)ny individual entitled to insurance benefits under this
title may obtain health services from any institution, agency, or
person qualified to participate under this title if such
institution, agency or person undertakes to provide him such
services.'' 42 U.S.C. Sec. 1395a. Unfortunately, courts have held
that foreclosed providers have no private right of action for
violation of this section. Therefore, absent more forceful action by
the Government's law enforcement agencies, the patient's right to
choose his provider of home care or other ancillary services will
remain a largely illusory one.
As you are undoubtedly aware, a plethora of antitrust cases have
recognized the Sherman Act issues that should, but evidently do not,
constrain the actions of vertically integrated hospitals. These
include the Key Enterprises v. Venice Hospital case in Florida, and
the M&M Medical Supplies case in Virginia. Since resort to antitrust
litigation remains a prohibitively expensive proposition for most
home care and ancillary service providers, this threat has not
deterred hospitals from engaging in exclusionary conduct.
Although the Heartland consent decree, will, of course, not have
any formal precendential value, health care providers have become
accustomed to careful scrutiny of consent decrees, business review
letters, and informal advisory opinions for signs regarding the
direction of antitrust policy. I respectfully submit that the
proposed Heartland Referral Policy sends the wrong signal--a signal
that hospital discharge planners and social workers must merely go
through the motions of advising their patients about alternatives to
the hospital's affiliated services. A much more aggressive policy is
required to comply with the hospital's existing obligations to
provide its patients with freedom of choice. Nothing less will
overcome the access and informational gaps that permit hospitals to
exploit patients at a time when they are particularly vulnerable to
steering tactics.
If I can provide any further information regarding the problems
that our home health agency and other VNAs have encountered in our
efforts to compete with hospital-owned and hospital-based home
health agencies, please do not hesitate to contact me.
Thank you in advance for your consideration of this comment.
Respectfully submitted,
Andrew R. Peacock
ARP:eu
In the United States District Court for the Middle District of
Pennsylvania
Commonwealth of Pennsylvania, Plaintiff, v. Capital Health
System Services and Polyclinic Health System, Defendants. Civil
Action No. .
Final Judgment
Whereas the Commonwealth of Pennsylvania (``Commonwealth'') filed a
Complaint in this matter on __________, as a direct purchaser of
inpatient acute-care hospital services in Cumberland, Dauphin, and
Perry Counties and as parens patriae to protect its general economy,
pursuant to section 7 of the Clayton Act, 15 U.S.C. Sec. 18;
Whereas Capital Health System Services (``CHS'') and Polyclinic
Health System (``PHS'') agreed on September 28, 1994, to merge these
two independent health-care entities (hereinafter referred to as ``New
Co'') into an integrated community health-care delivery system for
central Pennsylvania;
Whereas New Co is expected to generate a net cost savings of at
least $70 million over the first five-year period following
implementation and annual savings thereafter of about $21 million, to
improve quality of health care for central Pennsylvania residents, and
to increase access to health care services for central Pennsylvania
residents, including the indigent and the otherwise underserved;
Whereas the Office of Attorney General of the Commonwealth
(``Attorney General'') is responsible for enforcement of the federal
antitrust laws and is authorized to bring suit on behalf of the
Commonwealth as a direct purchaser of inpatient acute-care hospital
services and as parens patriae to protect its general economy;
Whereas CHS and PHS have cooperated fully with the Attorney
General's investigation of the proposed consolidation;
Whereas the Attorney General has concluded its investigation of the
proposed consolidation of the two health-care systems and believes
that, without this Final Judgment, it may raise anticompetitive
concerns under the federal antitrust laws;
Whereas CHS and PHS desire to assure the Attorney General and the
community that they intend to operate New Co in accordance with their
mission and continue their commitment of providing quality, affordable
health care to the community;
Whereas CHS and PHS, desiring to resolve the Attorney General's
concerns without trail or adjudication of any issue of fact or law,
have consented to entry of this Final Judgment; and
Whereas this Final Judgment is not an admission of liability by
CHS, PHS, or New Co as to any issue of fact or law and may not be
offered or received into evidence in any action as an admission of
liability; it is hereby ORDERED:
I. Jurisdiction
1. This Court has jurisdiction over the subject matter of this
action and each of the parties consenting to this Final Judgment. The
Complaint states a claim upon which relief may be granted.
II. Definitions
As used in this Final Judgment:
2. ``Capital Health System Services'' (``CHS'') means the nonprofit
tax-exempt corporation organized under the laws of the Commonwealth of
Pennsylvania that is the corporate parent of Harrisburg Hospital
(``HH''), a nonprofit tax-exempt hospital located at 111 South Front
Street, Harrisburg, Pennsylvania, and Seidle Memorial Hospital
(``SMH''), a nonprofit tax-exempt hospital located at 120 South Filbert
Street, Mechanicsburg, Pennsylvania.
3. ``Polyclinic Health System'' (``PHS'') means the nonprofit tax-
exempt corporation organized under the laws of the Commonwealth of
Pennsylvania that is the corporate parent of the Polyclinic Medical
Center (``PMC''), a nonprofit tax-exempt hospital located at 2601 North
Third Street, Harrisburg, Pennsylvania.
4. ``New Co'' means the nonprofit corporation that CHS and PHS will
create pursuant to their September 28, 1994, agreement to merge.
5. ``Member Hospital'' means HH, PMC or SMH.
6. ``Managed-Care Plan'' means a health maintenance organization,
preferred provider organization, or other health-service purchasing
program which uses financial or other incentives to prevent unnecessary
services and includes some form of utilization review.
7. ``Health Plans'' means all types of organized health-service
purchasing programs, including but not limited to managed-care plans,
offered by third-party payors, health-care providers or any other
person.
8. ``Health-Care Provider'' means physicians, hospitals,
laboratories and physician networks.
9. ``Acquire'' means to purchase the whole or the majority of the
assets, stock, equity, capital or other interest of a corporation or
other business entity, or to receive the right or ability to designate
the majority of directors or trustees or otherwise control the
management of a corporation or other business entity.
10. ``Net Cost Savings'' means the difference between the total
expenditures that CHS and PHS would have incurred absent the
consolidation of the two health systems and their total expenditures
actually made, minus the total expenditures incurred to implement the
consolidation into New Co. As a guide to help calculate net cost
savings, the parties will use the
[[Page 29822]]
Efficiency Study for the Consolidation of CHS and PHS, dated November
1994, as amended.
11. ``Hospital'' means a health care facility, licensed as a
hospital, having a duly organized governing body with overall
administrative and professional responsibility, and an organized
professional staff that provides 24-hour inpatient care, that may also
provide outpatient services, and having as a primary function the
provision of inpatient services for medical diagnosis, treatment, and
care of physically injured or sick persons with short term or episodic
health problems or infirmities.
III. Terms
12. Anticipated Savings and Price Reductions. CSH and PHS intend to
merge and consolidate services into New Co, increase efficiency, and
reduce the cost of delivering health-care services so that the cost to
the community of those services will be lower than they would have been
absent the merger.
12.1 New Co shall achieve in 199__ constant dollars at least $70
million in net cost savings by [five years after closing]. At least 80%
of the net cost savings New Co achieves in each of the first five years
shall be passed on to consumers or other purchasers of health-care
services in the form of low-cost or no-cost health-care programs for
the community or by reducing prices or limiting actual price increases
for existing services. Prior to passing on any such cost savings to
consumers or other purchasers of health-care services in the form of
low-cost or no-cost health-care programs, New Co shall submit in
writing to the Office of Attorney General their proposal(s) for passing
on such cost savings, which will be automatically approved unless the
Office of Attorney General objects to any specific proposal within ten
(10) business days following receipt of such proposal. At a minimum,
the following cumulative net cost savings shall be passed on; $0 by
[one year after closing]; $5.6 million by [two years after closing];
$24 million by [three years after closing]; $40 million by [four years
after closing]; and $56 million by [five years after closing]. These
savings shall be documented in the annual report described in Paragraph
23. The parties will develop a mutually-agreed upon model to measure
the net cost savings on a case mix, inflation index adjusted net cost
per admission basis in comparison to pre-merger costs, and the
cumulative net cost savings passed on to consumers on a case mix,
inflation index adjusted net revenue per admission basis. If New Co
fails to meet the targeted net cost savings in any given fiscal year,
the shortfall amount shall be carried forward into subsequent fiscal
year until the full net cost savings amount has been realized by New
Co, including the portion to be passed on as described above. If New Co
exceeds the targeted net cost savings in any given year, the excess
amount shall be credited towards New Co's target for the next fiscal
year.
12.2 If by [five years after closing], New Co has not achieved $70
million in net cost savings, New Co shall pay in cash an amount equal
to $70 million less the amount of savings actually achieved into a fund
established by the Attorney General. The Attorney General shall use
this money to fund low-cost or no-cost health-care services to
Cumberland, Dauphin and Perry County residents, such as child
immunizations, mammograms, drug and alcohol abuse treatment programs,
or other health-care services needed by the community for which
adequate resources are not available. The Attorney General shall
select, after receiving any input from New Co, a charitable
organization to administer these funds. If New Co has not achieved $70
million in net cost savings, New Co shall have an opportunity to
demonstrate, to the satisfaction of the Attorney General, that
circumstances beyond its control have prevented achievement of the
savings.
12.3 If by [five years after closing], New Co has not achieved at
least $66.5 million of the anticipated net cost savings, the
restrictions on changes in the case-mix adjusted net inpatient revenue
per admission contained in Subparagraph 12.4 shall continue until [ten
years after closing], regardless of whether the Final Judgment is
terminated any time earlier pursuant to Paragraph 33.
12.4 New Co's case-mix adjusted net inpatient revenue per
admission for all inpatients treated during the fiscal year under
consideration at member hospitals (hereinafter ``Revenue''), in fiscal
years subsequent to 1994-95, shall not exceed the combined Revenue of
the member hospitals for 1994-95, as adjusted pursuant to Subparagraph
12.5, and excluding the effects of New Services, as defined in
Subparagraph 12.6, outliner cases, and externally imposed requirements,
including but not limited to changes in payment methods or
reimbursement methods imposed or implemented by state or federal
regulations.
12.5 In determining compliance with Subparagraph 12.4, Revenue
shall be adjusted (up or down) for changes in the Consumer Price Index-
Urban, plus two percent.
12.6 ``New Services'' means either (a) services not listed on
Exhibits 1-A, 1-B or 1-C (copies of which are appended hereto), which
list services provided at each of the member hospitals as of entry of
this Final Judgment; or (b) material changes in community need,
technology, or sophistication of treatment which either (i) require a
certificate of need or (ii) require a combination of new capital,
personnel and supply expenditures in excess of $100,000 in any fiscal
year. Upon request by the Attorney General, New Co shall provide all
information and documentation reasonably necessary to support the
application of this subparagraph. If New Services are provided, they
shall be described in the annual report to the Attorney General,
required by Paragraph 23.
12.7 If New Co fails to comply with Subparagraph 12.4, it shall
reimburse the excess by lowering its rates in the next fiscal year in
an amount equal to the excess. If New Co exceeds the targeted Revenue
savings in any given year, the savings amount shall be credited towards
New Co's target for the next fiscal year. In the annual report
described in Paragraph 23, New Co shall describe its compliance with
this subparagraph.
12.8 Subparagraphs 12.3, 12.4, 12.5, 12.6, and 12.7 shall apply
only during those fiscal years when the Commonwealth of Pennsylvania or
the federal government does not substantially regulate hospital rates.
13. Nonexclusivity.
13.1 New Co shall not enter into any provider contract with any
health plan on terms that prohibit New Co from entering into a provider
contract for any services New Co offers with any other health plan.
13.2 New Co shall not require managed-care plans to contract with
its employed doctors as a precondition to contracting with its member
hospitals.
13.3 New Co shall not restrict an independent physician's ability
to provide services or procedures outside the member hospitals, unless
performance of duties outside the member hospitals would impair or
interfere with the safe and effective treatment of a patient.
13.4 New Co shall not prohibit independent physicians who are
members in any New Co physician-hospital network from participating in
any other physician-hospital networks, health plans, or integrated
delivery systems.
14. Nondiscrimination.
14.1 New Co shall not enter into any exclusive contracts with any
health-care provider by which it requires that
[[Page 29823]]
provider to render services only at a member hospital or by which it
requires only one physician or group of physicians to provide
particular services at a member hospital. New Co may enter into
exclusive contracts with anesthesiologists; radiologists; nuclear
medicine physicians; pathologists; physiatrists; emergency-room
physicians; neonatologists; perinatologists; cardiologists,
cardiovascular surgeons, and neurologists for interpretive services
only; radiation oncologists; and physicians providing services in New
Co's low-income clinics, so long as these contracts are competitively
bid at least once every three years and the bidding specifications
affirmatively require the winning physician(s) not to refuse
unreasonably to participate in any health plans that have provider
contracts with the member hospitals. This provision, however, shall not
require New Co to terminate any existing contracts, and New Co may
require its employed physicians to render services only at member
hospitals. New Co may also petition the Attorney General for approval
to enter into exclusive contracts with physicians in specialties other
than those listed above. The Attorney General shall provide New Co with
a response to the petition within ninety (90) days.
14.2 Other than as provided in Paragraph 14.1, New Co shall
provide an open staff, ensuring equal access to all qualified
physicians in Cumberland, Dauphin, and Perry Counties according to the
criteria of the Joint Commission on Accreditation of Health Care
Organizations and the medical staff by-laws.
14.3 New Co shall negotiate in good faith with all health plans
with a licensed service area within Cumberland, Dauphin, or Perry
Counties which approach it seeking a provider contract. This provision,
however, shall not be construed to require a New Co to enter into a
provider contract with any particular health plan.
14.4 New Co shall not enter into provider contracts with any
licensed health plan operated by New Co itself, in existence now or
which may be created, on terms available to that plan solely because it
is sponsored by New Co, where doing so would place other comparable
licensed health plans at a competitive disadvantage, because of any
market power New Co may have rather than from efficiencies resulting
from its integration with its health plan.
14.5 With respect to Health Central, Inc., the new managed-care
plan proposed by six south central Pennsylvania hospitals, including
CHS, New Co will participate in this plan only on nonexclusive terms.
Further, New Co will not engage in any ``most-favored-nation'' pricing
with respect to this plan vis-a-vis other competing managed-care plans
in its market, and will not cross-subsidize Health Central, Inc.
through the operating revenues of New Co in a manner that would
facilitate predatory pricing or other anticompetitive conduct. New Co
shall disclose, as part of its annual report pursuant to Paragraph 23,
all funds that were provided by New Co to Health Central, Inc. during
the preceding fiscal year.
14.6 New Co will not use employment, the location of a physician
or group practice, or the location where patients will receive any
necessary follow-up care to determine referrals from the emergency
room. New Co may consider quality of care and reasonable proximity for
patient convenience in determining referrals. The referral policy used
to inform unassigned patients of the availability of follow-up care
shall be provided to the Attorney General within thirty (30) days from
entry of this Final Judgment. Should the Attorney General object to
this policy, the parties shall attempt to reach a mutually satisfactory
resolution. This subparagraph shall not preclude any managed-care plan
operated by New Co from limiting referrals to providers with provider
contracts with that plan.
14.7 Except as provided in Paragraph 14.1, if New Co establishes
or sponsors its own health plan, it shall not base credentialing
decisions or other decisions affecting a physician's access to, or
working conditions at, a member hospital on whether that physician
enters into a provider contract with either New Co's plan or with a
competing plan.
15. Health Plans.
15.1 New Co will not unreasonably terminate any provider contracts
to which its member hospitals are parties as of the date of entry of
this Final Judgment.
15.2 New Co shall attempt, in good faith, to contract with all
health plans operating in its service area which offer commercially-
reasonable terms on a fully-capitated basis, a percentage of premium
revenue basis, or on other terms that require New Co to assume risk.
New Co shall not refuse to contract with a health plan solely because
such plan proposes a capitated contractual reimbursement methodology.
This provision, however, does not require New Co to enter into a
provider contract with any particular health plan or with all health
plans.
16. Employment of Physicians.
16.1 New Co shall be prohibited from employing more than 20% of
the physicians in Cumberland, Dauphin and Perry Counties practicing in
any of the following areas: family practice/internal medicine,
pediatrics, or obstetrics/gynecology, except as provided in
Subparagraph 16.2. In calculating this percentage, full-time residency
faculty members employed by New Co shall be counted as one half each
and physicians employed at the HH or PMC low-income clinics shall be
excluded.
16.2 New Co may recruit and employ physicians from outside
Cumberland, Dauphin, and Perry Counties into those counties, in any of
the enumerated areas listed in Subparagraph 16.1 without regard to or
in violation of the 20% limitation in that subparagraph.
16.3 In determining New Co's compliance with Subparagraph 16.1, up
to 79 residents employed by New Co shall be excluded. Additional
residents beyond 79 shall be counted at one half each.
16.4 New Co shall not solicit the employment of any physician or
group practice within Cumberland, Dauphin, and Perry Counties if such
employment would cause New Co to exceed the limitations imposed by
Subparagraph 16.1.
16.5 New Co may petition the Attorney General in writing for an
exception to Subparagraph 16.1 when market conditions exist for
employing physicians in any of the enumerated categories above the 20%
limitation level. The Attorney General will respond to the petition
within thirty (30) days from the receipt of all information reasonably
necessary from New Co to analyze the petition.
17. Operating Room Scheduling. Operating room scheduling shall be
determined by an Operating Room Committee that includes physicians,
operating room nurses, and representatives of hospital administration,
according to the following criteria:
17.1 Operating room time will be assigned in blocks based on
physicians' demonstrated need for access to operating rooms.
17.2 These assignments will be updated quarterly, based on actual
usage of block time. If a particular slot is not reserved by the
physician to which it is allocated prior to 24 hours before the time of
that slot, the time will be released and will be assigned to other
physicians on a first-come first-served basis. If a physician is not
utilizing a sufficient amount of reserved time, that physician's block
time will be
[[Page 29824]]
reassigned at the time of the quarterly update.
18. ``Most-Favored-Nation'' Provisions in Contracts With Health
Plans. New Co shall not enter into any provider contract with any
health plan on terms which include a most-favored-nation clause to the
benefit of New Co or any health-care plan. A most-favored-nation clause
is any term in a provider contract that allows the buyer to receive the
benefit of any better payment rate, term or condition that the seller
gives another provider for the same service. In the case of any
existing most-favored-nation clause to the benefit of New Co or any
health-care plan in current provider contracts, New Co agrees not to
renew or extend such contracts without deleting that term. New Co shall
inform the Attorney General of the presence of a most-favored-nation
clause in any existing provider contracts by providing a list of such
contracts to the Attorney General not more than thirty (30) days from
entry of this Final Judgment.
19. Ancillary Services. CHS shall, as soon as is practicable but in
no event later than twelve (12) months of entry of this Final Judgment,
divest all of its assets and interests in Capital Health Products, its
durable medical equipment company, to a third-party buyer. Further, New
Co shall not require any healthcare purchaser or patient to purchase
home health services or home infusion therapy services from any entity
affiliated with New Co. If companies not affiliated with New Co cannot
provide services in a manner that would permit New Co to contain costs
in the context of risk-bearing contracts, New Co may require these
services to be purchased from a company affiliated with New Co. In all
other circumstances, New Co shall affirmatively inform patients and
providers needing home health-care services or home infusion therapy
services of the availability of such services from companies not
related to New Co. In this regard, New Co's discharge planners must
provide each patient requiring home health-care services or home
infusion therapy services with a patient choice form, which is appended
as Exhibit 2, and with a list of all home health-care and home infusion
therapy agencies accredited by the Joint Commission on Accreditation of
Health Care Organizations serving Cumberland, Dauphin, and Perry
Counties. This provider list must be updated at least quarterly if New
Co is requested to do so by a qualified agency; and, if a home health-
care or home infusion therapy agency that is not affiliated with New Co
is selected by the patient, that agency must be given reasonable access
to the patient's records and to the member hospital's premises so that
it may begin providing needed services to that patient. The provisions
of this paragraph will also be applicable to CHS's durable medical
equipment company until the sale of that company is completed.
20. Certificates of Need. New Co shall not oppose certificates-of-
need applications filed by other hospitals or other health-care
providers with the Pennsylvania Department of Health unless it notifies
the Attorney General in writing, as soon as practicable but at least
seven (7) days prior to filing any opposition, and provides a copy of
any opposition to the Attorney General when it is filed with the
Department.
21. Future Sales and Acquisitions of Hospital Assets. New Co shall
not, without the prior approval of the Attorney General, acquire any
indemnity plan, health maintenance organization, or hospital in
Cumberland, Dauphin, or Perry Counties or permit any indemnity plan,
health maintenance organization, or hospital in these counties to
acquire New Co. New Co may not enter into any joint ventures with any
hospital in Cumberland, Dauphin, or Perry Counties; acquire any
hospital outside Cumberland, Dauphin, or Perry Counties; or permit any
hospital outside Cumberland, Dauphin, or Perry Counties to acquire New
Co, without first giving at least 60 days notice to the Attorney
General. The preceding sentence, however, shall not apply to joint
ventures to provide residency programs or to joint ventures with annual
operating costs of below $100,000.
22. Binding on Successors and Assigns. The terms of this Final
Judgment are binding on New Co and its directors, officers, managers
and employees, successors and assigns, including but not limited to any
person or entity to whom New Co may be sold, leased or otherwise
transferred, during the term of its duration, and all persons who are
in active concert or participation with them and who have actual or
constructive notice thereof. New Co shall not permit any substantial
part of New Co to be acquired by any other person unless that person
agrees in writing to be bound by the provisions of this Final Judgment.
23. Reporting Mechanism.
23.1 Within 150 days from the close of each fiscal year during
which this Final Judgment is in effect, New Co shall submit to the
Attorney General an annual report accompanied by an officer's
compliance certificate describing its compliance with this Final
Judgment. This report shall include a discussion of the steps taken by
New Co to comply with the efficiencies and services reconfiguration
plans and the estimated savings from these steps. The Attorney General
will provide notice to New Co of any concerns raised by the annual
compliance report within a reasonable time after its issuance. New Co
will meet with the Attorney General to attempt to resolve any concerns
that the Attorney General may raise from its review of the report.
23.2 New Co will reimburse the Attorney General for expenses,
including the payment of any expert fees, incurred in analyzing and
verifying this report, in an amount not to exceed $10,000 per year.
Within sixty (60) days from entry of this Final Judgment, New Co will
pay the Attorney General $5,000 to establish a mutually-agreed upon
model to be used to analyze compliance. This amount shall be deducted
from the first year's reimbursement requirement. New Co will cooperate
with any expert hired by the Attorney General, including but not
limited to providing any additional requested information reasonably
necessary to complete the analysis and verification of the compliance
report.
24. Publication of Efficiency Report. New Co shall prepare, subject
to the Attorney General's approval, a condensed version of its
efficiency report to be released to the general public within fourteen
(14) days from entry of the Final Judgment.
25. Compliance. To determine or secure compliance with this Final
Judgment, any duly authorized representative of the Attorney General
shall be permitted:
25.1 Upon reasonable notice, access during normal business hours
to all non-privileged books, ledgers, accounts, correspondence,
memoranda, and other records and documents, in the possession or under
the control of New Co, relating to any matters contained in this Final
Judgment; and
25.2 Upon reasonable notice, access during normal business hours
to interview officers, managers or employees regarding any matters
contained in this Final Judgment.
26. Complaint Procedure. Any person, including health-care
providers, health plans, or consumers of medical services, who wishes
to report a possible violation of this Final Judgment shall send a
written description of the possible violation to the Chief Deputy
Attorney General, Antitrust Section, Office of Attorney General, 14th
Floor, Strawberry Square, Harrisburg, Pennsylvania 17120 and to New
Co's
[[Page 29825]]
President, 17 South Market Square, P.O. Box 8700, Harrisburg,
Pennsylvania 17105. New Co shall respond in writing to the complainant
and to the Attorney General within thirty (30) days from receipt of any
complaint. If the complaint is still unresolved, the Attorney General
will attempt to negotiate a satisfactory resolution. If New Co believes
any complaint to be frivolous, it may so advise the Attorney General,
and its obligations under this paragraph will be satisfied unless it is
otherwise advised by the Attorney General to respond more fully to the
complaint.
27. Reimbursement of Expenses. Upon entry of this Final Judgment,
CHS and PHS shall jointly pay $50,000 to reimburse the Attorney
General's costs incurred to conduct its investigation, which payment
shall be used for future Public Protection Division enforcement
purposes.
28. Enforcement.
28.1 If the Attorney General believes that there has been a
violation of this Final Judgment, it shall promptly notify New Co
thereof. The Attorney General shall thereafter permit New Co a
reasonable opportunity to cure any alleged violation without
instituting legal action. If the alleged violation is not substantially
cured by New Co within sixty (60) days of notification, the Attorney
General may thereafter undertake any remedial action it deems
appropriate. This time period shall be extended in circumstances where
the sixty (60) day period is not sufficient time to cure the alleged
violation.
28.2 In any action or proceeding brought by the Attorney General
to enforce this Final Judgment or otherwise arising out of or relating
hereto, the Attorney General, if it is the prevailing party, shall
recover its costs and expenses, including a reasonable sum for
attorneys' fees.
29. Legal Exposure. No provision of this Final Judgment shall be
interpreted or construed to require New Co to take any action, or to
prohibit New Co from taking any action, if that requirement or
prohibition would expose New Co to significant risk of liability for
any type of negligence (including negligent credentialing or negligence
in making referrals) or malpractice.
30. Notices. All notices required by this Final Judgment shall be
sent by certified or registered mail, return receipt requested, postage
prepaid, or by hand delivery, to:
If to the Attorney General:
Chief Deputy Attorney General, Antitrust Section, Office of
Attorney General, 14th Floor, Strawberry Square, Harrisburg, PA 17120
If to New Co:
President, New Co, 17 South Market Square, P.O. Box 8700,
Harrisburg, PA 17105
31. Averment of Truth. New Co avers that the information it has
provided to the Attorney General in connection with this Final
Judgment, to the best of its knowledge, is true and represents the most
recent and comprehensive data available, and that no material
information has been withheld.
32. Termination. This Final Judgment shall expire on the tenth
anniversary of its date of entry if it has not terminated prior to that
time as provided in Paragraph 33. Notwithstanding the first sentence of
this paragraph, enforcement of Paragraph 16 shall expire on the fifth
anniversary of entry of this Final Judgment.
33. Early Expiration. After [five years from closing], if New Co
has complied with the applicable provisions of this Final Judgment, the
Attorney General shall join New Co in an application to this Court for
an order terminating, in whole or in part, this Final Judgment. The
Attorney General shall not unreasonably refuse to join any such
application.
34. Modification. If either the Attorney General or New Co should
believe that modification of the Final Judgment would be in the public
interest because of changed or unforeseen circumstances or for other
reasons, that party shall give notice to the other, and the parties
shall attempt to agree on a modification. If the parties agree on a
modification, they shall jointly petition the Court to modify the Final
Judgment. If the parties cannot agree on a modification, the party
seeking modification may petition the Court for modification and shall
bear the burden of persuasion that the requested modification is in the
public interest.
35. Retention of Jurisdiction. Unless this Final Judgment is
terminated early pursuant to Paragraph 33, jurisdiction is retained by
this Court for ten (10) years after entry to enable any party to apply
to this Court for such further orders and directions as may be
necessary and appropriate for the interpretation, modification and
enforcement of this Final Judgment.
Dated this 20th day of July, 1995.
Walter W. Cohen,
Acting Attorney General, Commonwealth of Pennsylvania.
Carl S. Hisiro,
Chief Deputy Attorney General, Antitrust Section.
James A. Donahue, III,
Senior Deputy Attorney General, Antitrust Section, Office of Attorney
General, 14th Floor, Strawberry Square, Harrisburg, PA 17120, (717)
787-4530, Attorneys for the Commonwealth of Pennsylvania.
Capital Health System.
John S. Cramer,
President and Chief Executive Officer.
Attest: Cheryl P. Makle
Polyclinic Health, System.
Stephen H. Franklin,
President and Chief Executive Officer.
Attest: M.M. Van Bly
Toby G. Singer, Esquire.
Stephen D. Kiess, Esquire,
Jones, Day, Reavis & Pogue, Metropolitan Square, 1450 G Street, N.W.,
Washington, DC 20005-2088, (202) 879-3939, Attorneys for Capital Health
System and Polyclinic Health System.
So Ordered:
----------------------------------------------------------------------
United States District Judge
Exhibit 1-A--Harrisburg Hospital Inpatient Services
General inpatient care for HIV/AIDS
Birthing room/LDRP room
Open-heart Surgery
Cardiac intensive care unit
Angioplasty
Chronic obstructive pulmonary disease service
Hemodialysis
Medical surgical or other intensive care unit
Histopathology laboratory
Neonatal intensive care unit
Obstetrics unit
Pediatric acute inpatient unit
Reproductive health services
Organized social work services
Organ/tissue transplant
Orthopedic surgery
Occupational therapy services
Physical therapy services
Respiratory therapy services
Speech therapy services
Oncology services
CT Scanner
Diagnostic radioisotope facility
Ultrasound
Blood bank
Patient education
Exhibit 1-B--Seidle Memorial Hospital Inpatient Services
Skilled nursing or other long-term care
Organized social work services
Physical therapy services
Recreational therapy services
[[Page 29826]]
Speech therapy services
Exhibit 1-C--Polyclinc Medical Center Inpatient Services
General inpatient care for HIV/AIDS
Birthing Room/LDRP room
Cardiac catherization laboratory
Open-Heart Surgery
Cardiac Intensive Care Unit
Angioplasty
Chronic obstructive pulmonary disease service
Emergency Department
Medical surgical or other intensive care units
Neonatal Intensive Care Unit
Obstetrics Unit
Pediatric Acute Inpatient Unit
Psychiatric Inpatient Service
Extracorporeal Shock-Wave Lithotripter
Alzheimer's diagnostic/Assessment Services
Comprehensive Geriatric Assessment
Emergency Response (Geriatric)
Geriatric Clinics
Respite Care
Senior Membership program
Patient Education
Community Health Promotion
Worsite Health Promotion
Hemodialysis
Histopathology Laboratory
Blood Bank
Occupational Health Services
Psychiatric Consultation/Liasion Services
Psychiatric Geriatric Services
Megavoltage Radiation Therapy
Rehabilitation Inpatient Unit
Skilled Nursing or Other Long-Term Care Unit
Orthopedic Surgery
Magnetic Resonance Imaging (MRI)
Therapeutic Radioisotope therapy
CT scanner
Reproductive health services
Single photon emission computerized tomography
Organized social work services
Patient representative services
Occupational therapy services
Physical therapy services
Recreational therapy services
Respiratory therapy services
Speech therapy services
Health sciences library
Cardiac rehabilitation program
Non-invasive cardiac assessment services
Mammography Screening Services
Mammography diagnostic services
Oncology services
Exhibit 2--[New CO] Referrals for Home Health and/or Home Health
Equipment--Documentation of Choice
PATIENT:--------------------------------------------------------------
D.O.B.-----------------------------------------------------------------
Your physician(s) ____________, has recommended that you receive
visiting nurse or other home health services after you are discharged
from the hospital. A listing of agencies offering visiting nursing and/
or home health care services in the region is available for your
review. A representative from [New Co] will contact any of these
agencies, or any other agency not listed, upon your request. Selection
of this agency is your responsibility or that of your family, unless
your insurance company, health plan, HMO, or physician (because of
special needs) require you to use a particular agency. Basic
information on each agency will be provided to assist you in your
decision.
Choice of Provider: Include Agency Name, Address and Phone Number
1. Home Health Agency:------------------------------------------------
2. Equipment Provider:------------------------------------------------
3. Other:-------------------------------------------------------------
Reason for Choice: Check all that apply
____Previous Relationship with Home Health Company
____Patient/Family Preference
____Insurance Provider Directive
____Doctor Recommendation/Directive Explain: ________
____Hospital Recommendation/Directive Explain: ________
____Other Explain: ________
____Patient/Family No Preference (see below)
In the event that you or your family do not have a preference from
the attached list of available agencies, [New Co] can provide this
service if you so desire. However, you should be assured that no such
referral is required and that any agency which you desire will be
contacted on your behalf. Your selection of an agency other than [New
Co] will in no way affect your care at [New Co] or prevent you from
receiving future care at [New Co].
I have had the opportunity to review information related to home
health care services and have had my questions answered to my
satisfaction. My selection is as indicated above.
----------------------------------------------------------------------
Signature
----------------------------------------------------------------------
Date
----------------------------------------------------------------------
Relationship (if not patient)
Comments:-------------------------------------------------------------
(If unable to obtain signature)
Person Completing This Form:------------------------------------------
Commonwealth of Pennsylvania, Office of Attorney General, Harrisburg,
PA 17120
For Immediate Release--Thursday, July 20, 1995.
Contact: Jack J. Lewis, Assistant Press Secretary, 717-787-5211
(home: 657-9840).
(Also released via RP Newswire in Central PA.)
HARRISBURG--The Office of Attorney General has approved the
Harrisburg Hospital-Polyclinic Medical Center merger ``because we
have it guaranteed--in writing--that at least $56 million in savings
will be passed on to consumers,'' Acting Attorney General Walter W.
Cohen announced today.
Cohen said a proposed settlement negotiated by the Attorney
General's office addresses antitrust concerns sparked by the planned
merger of Capital Health System (CHS), corporate parent of both
Harrisburg Hospital and Seidle Memorial Hospital, with Polyclinic
Health System (PHS), corporate parent of Polyclinic Medical Center.
Both Harrisburg Hospital and Polyclinic Medical Center are in
Harrisburg; Seidle Memorial Hospital is in Mechanicsburg.
We have negotiated a carefully structured plan that mandates
cost savings and--most importantly--guarantees that those savings
will be passed on to consumers,'' Cohen said.
``We've also ensured that the new system to be created by this
merger will not use its market power to create an unfair advantage
over others in the marketplace, health care providers and health
plans.
``Without the safeguards included in this agreement, the
proposed consolidation of these two health-care systems would have
raised significant concerns about the effects on health-care
competition in the Capitol area. With these safeguards, we are
convinced that this merger will benefit not only the hospitals but
also--and this is our bottom line--the people who live in the
Harrisburg area.''
Cohen announced the settlement at a news conference also
attended by John S. Cramer, CHS president and chief executive
officer, and Stephen H. Franklin, PHS president and chief executive
officer.
The proposal will be submitted to the Federal Trade Commission
for its review, Cohen said. If the FTC agrees to defer jurisdiction
to the state, the agreement will be filed in U.S. District Court for
the Middle District of Pennsylvania for court approval.
Cohen said the proposed settlement requires the new health-care
system to achieve at least $70 million in net cost savings within
the first five years after implementation of the merger.
Of that amount, he said, $56 million in savings must be passed
on to consumers in the form of free or reduced-cost health-care
programs or through adjustments of prices charged for existing
services. He noted that cost variables will be monitored by the
Attorney General's office.
If the targeted $70 million cost-savings figure is not reached
five years after implementation of the merger, the settlement
requires the new health system to pay $70 million minus the actual
achieved savings to a fund established by the Attorney General's
office, Cohen said.
``The fund would be used to supply free or low-cost services
such as child immunizations, mammograms, and drug and alcohol abuse
treatment programs to residents of Cumberland, Dauphin and Perry
counties,'' he said.
Chief Deputy Attorney General Carl S. Hisiro, who heads the
Attorney General's
[[Page 29827]]
Antitrust Section, said the section interviewed dozens of doctors,
health-care insurers, ancillary care providers, personnel from other
hospitals, and others in the community during the investigation.
``This agreement responds to many of the anticompetitive
concerns raised by those individuals,'' Hisiro said.
The proposed settlement requires the new system to hold overall
price increases to changes in the Consumer Price Index-Urban, plus 2
percent, for at least five years. ``This guarantees that there will
be no drastic price increases for consumers in the wake of the
merger,'' Hisiro said.
The proposal also requires CHS to sell Capital Health Products,
its durable medical equipment company, to a third-party buyer within
one year.
The new system can't require patients to buy home health-care
services from any company affiliated with the new system, and it
must provide patients with information about all accredited home
health-care agencies in the area, according to the agreement.
Cohen said other provisions included in the settlement which are
designed to protect consumers against possible anticompetitive
effects of the merger include:
--During its first five years, the new system is prohibited--with
certain defined exceptions--from employing more than 20 percent of
the physicians in Cumberland, Dauphin and Perry counties practicing
in family medicine/internal medicine, pediatrics, and obstetrics/
gynecology.
--The new system cannot bar independent physicians who are members
of any physician-hospital network established by the new system from
participating in other physician-hospital networks or health plans.
--The new system is prohibited from entering into an exclusive
contract or providing special benefits to any single health plan.
The system must negotiate in good faith with all health plans
serving the Capitol area.
--The new system is barred in most cases from entering into
exclusive contracts with health-care providers.
Cohen said that if the new system participates in Health Central
Inc., a managed-care plan proposed by six south central Pennsylvania
hospitals including CHS, the settlement requires that the system
participate only on nonexclusive terms.
``The new system is barred from giving this plan any price
breaks not offered to other plans, and the system cannot subsidize
Health Central through its own revenues in any anticompetitive
manner,'' Cohen said.
Under terms of the settlement, the new system cannot--without
prior approval of the Attorney General's office--acquire or be
acquired by ``any indemnity plan, health maintenance organization,
or hospital in Cumberland, Dauphin or Perry counties.''
Cohen said that for five years after the merger takes place, the
new system must submit annual reports to the Attorney General's
office describing the system's compliance with the eventual final
judgment of the court.
Cohen said the term of the settlement is 10 years, although the
parties can petition the court to end it after five years if the
system has complied with the terms at that time.
In concluding the investigation, Cohen stressed that officials
of both CHS and PHS cooperated fully with the investigation. He
commended Hisiro and Senior Deputy Attorney General James A. Donahue
III for their roles in negotiating the proposed settlement.
Shepard's Crook Nursing Agency, Inc.
P.O. Box 2234, Pampa, Texas 79066, Phone 806/665-0356
November 27, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E. St.,
N.W., Room 9300, Washington, D.C. 20530
Regarding: United States v. Healthchoice of Northwest Missouri, Inc.
The main objective in managed health care and the referral
system is providing good care for the patient. Variations in
agencies are most evident in quality of care and skills of the
staff.
Any regulation that restricts patients choices lowers the
quality of care the patient receives for the dollar spent.
The Columbia hospital administrator in Pampa, Texas told
Shepard's Agency he did not intend to refer to anyone and wanted all
the other agencies in town gone. He wanted all the business. Many of
our patients were forced by the hospital to use the hospital home
health while requesting another agency. Many hospitals are now
practicing the regulation proposed. The result is evident in patient
dissatisfaction and reduced quality of care.
The patient should be treated as a customer of services and not
a captive of the discharge planner.
A great majority of patients requiring home health are the
elderly. This is a group which has difficulty making demands for a
choice. Their rights are usually the ones most abused.
A system which is based on self-referral to the hospital based
agency is set up for fraud and abuse. This will result in
accelerated utilization, and high cost to Medicare. Hospitals have a
great need to shift Medicare money to hospital expenses and increase
hospital profit. Due to this practice, free-standing agencies can
provide home health cheaper than hospital based agencies.
Hospitals should be required by law to offer patient choices.
Agencies should be allowed to visit their patients at the hospital
to arrange plans on discharge. If the patient has no preference,
referrals should be rotated.
This is a critical time in Health Care. Caution must prevail to
lower cost. Giving the hospitals more control over care after
leaving the hospital is step in the wrong direction. Protecting
patients rights' will help lower medical cost.
The patient should be asked if they have been served by a home
health agency. If the patient says at this point yes, they should be
asked if they wish to remain. Only if the patient states they do not
choose to stay with the same agencies should other agencies be
offered. Switching a patient to another agency increases cost in
repetitive health care teachings. This should be done only at the
patient's choice. The patient should have the right to control his
own health care. Please find enclosed documented complaints from
patients and Shepard's Nursing Home Health on the Columbia Hospital
referral system to their home health agency.
Further information is available.
Sincerely,
Suzanne Wilkinson,
Administrator/Owner, Shepard's Crook Nursing Agency, Inc.
Fayette County Health Department
P.O. Box 340, South Fifth and Edwards St., Vandalia, IL 62471, (618)
283-1044
December 1, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St. NW.,
Room 9300, Washington, DC 20530
Re: Proposed final judgment for United States v. Health Choice of
Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6 in the
U.S. District Court for the Western District of Missouri
Dear Ms. Kursh: As a freestanding Home Health Agency we are very
concerned about the referral policy which is open for comment at
this time.
While technically the patient is being given a choice of which
agency receives the referral, we do not feel it is an informed
choice. When a patient/family is under the stress of
hospitalization, they are very susceptible to nuances and
recommendations of the discharge planner. The following situation
illustrates my point.
Where Will They Eat?
Characters: Innkeeper, Mr. Miles, traveler, Companion.
Scene: Hotel lobby check-out desk.
Time: 12:00 noon.
Situation: Traveler and companion are checking out of the hotel
and anxious to get on their way, but are hungry.
Innkeeper: Thank you so much for staying with us, Mr. Miles. I
hope every thing was satisfactory. It is noon and you will be
needing lunch soon. Do you have a preference for where you eat?
Traveler: No, but we are hungry and unfamiliar with the area.
Pizza sounds good.
Innkeeper: We have an excellent eatery across the lobby. Our
chef is Italian and the pizza is superb. We were recently evaluated
by Tasters Delight and received a 10 (Smile). You can't get better
than that! (Hands traveler a menu.)
Traveler: Oh, that pizza looks wonderful, but I don't know. We
thought we might go down the road a bit. Are there any other places?
Innkeeper: Oh yes, but I can't make a recommendation. You can
check the telephone book.
Traveler: Well . . . gee . . . I don't have my reading glasses .
. .
(Innkeeper stands there saying nothing)
[[Page 29828]]
Traveler: Can you just tell me the names of other pizza places?
Innkeeper: Yes, I can, but be sure you understand that I have
never eaten at these places and really don't know anything about
them, but they are The Pizza Place, Papa's Pizza, and All You Can
Eat Family Pizza Place. Now remember, I can't speak about the
quality of their food like I can about our restaurant, but you
certainly don't have to eat here. The choice is yours.
Traveler: (Turning to companion) What do you think?
Companion: Oh, I don't know. It's been a long trip and I'm
anxious to get to our destination. I wonder if it really matters.
Innkeeper: Let me reassure you that our restaurant is top
quality. I hear lots of great comments from the patrons as they
leave. Look on the wall. There is a newspaper article written up
just last month.
Traveler: Well, we were certainly pleased with our room so if
you say your food is good I guess we better have lunch here.
Scene closes with traveler and companion walking across lobby
into the hotel restaurant.
Curtain.
Were the travelers given enough information to make an informed
decision? Where would you eat?
I urge you to find these referral policies unacceptable.
Thank you.
Very truly yours,
Cara Kelly,
Administrator.
Metro Home Health Care Services, Inc.
``THE HELPING HANDS OF CARING PROFESSIONALS''
November 27, 1995,
Ms. Gail Kursh,
Chief, Professionals & Intellectual Property, Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street
NW, Room 9300, Washington, DC 20530
RE: ``United States v. Health Choice of Northwest Missouri, Inc., et
al., Case Number 95-6171-CV-SJ-6
Dear Ms. Kursh: Per the attached:
1. Referring to II B(2): How does the DOJ know that Heartland is
an excellent home care agency? A hospital near us opened an agency.
We were the best, VNA the second best and theirs was third best. The
hospital CEO said all referrals go to the third best agency, their
own.
2. Heartland's agency may be the most expensive. PROPAC stated
hospitals cost an average of $15.00 more per visit. Should patients
be referred to cost effective agencies and not just the one owned by
the hospital?
3. Hospitals have been referring to agencies for thirty years.
When they start their own agency, do they all of a sudden become
deaf and dumb as to what agencies are good and which aren't in their
community? Discharge planners' jobs should be to refer patients to
quality services regardless of ownership and NOT in regard to how
much money the referring entity can make off the referral.
4. Doesn't it seem a bit harsh for the DOJ to suggest that
hospitals tell 85 year old sick patients who are quickly being
discharged home without support to go to the phone book to find a
provider if they don't take the hospital program? Is that giving the
patient a choice?
Sick, elderly patients depend on others to give non-biased
advice for their care. Please allow that to continue.
Thank you.
Sincerely,
Richard A. Porter,
President/Administrator, Metro Home Health Care Services.
James F. Wayne
Account Executive, Quantum Health Resources, 350 Cordelia Way, Walnut
Creek, CA. 94596, (510) 942-0747
November 25, 1995
Ms. Gail Kursh,
Chief, Professionals & Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E St., N.W.,
Room 9300, Washington, D.C. 20530
Subject: United States v. Health Choice of Northwest Missouri Inc.,
et al. Case No. 95-6171-CV-SJ-6 (U.S. District Court, Western
District of Missouri)
Invited Comments regarding the above case from the D.O.J. on the
proposed final judgment (Ref: Home Health line 11300 Rockville Pike
#1100 Rockville MD 20852-3030):
Ancillary Service Referrals
If a patient does not accept the provider recommended by their
personal physician then the patient shall be referred back to his or
her physician to discuss alternatives to make a joint/collaborative
decision.
A patient needs to direct his or her concerns about a
physician's choice of ancillary service provider and resolve the
matter with the physician prior to next step in process. Additional
service providers can be discussed and the appropriateness of the
additional alternatives can be weighed.
Should the physician and patient disagree with the initial
selection, and mutually determine that the chosen provider does not
meet the needs of the patient, an alternative provider shall be
chosen. The patient shall be redirected to the hospital social
worker/discharge planner with the new recommendation.
Timely Ancillary Provider Selection
The physician must enable a patient the opportunity to make a
timely and appropriate selection to meet his or her specific needs
prior to discharge. Should ancillary provider selection be a part of
the post-hospitalization treatment strategy then early decisions
(e.g. prior to hospitalization) should be considered. This diligence
will be mutually beneficial to both physician and patient.
Physician/Patient Collaboration in Provider Selection
A patient with a high-risk chronic disease, for example, one
whose needs are unique and potentially multi-system in nature, may
require an ancillary service provider with specialized expertise,
experience and understanding to meet the highest expectations of
quality and safety in caring for that specific disorder. Therefore,
physician/patient collaboration must take place as a first step in
selecting an appropriate provider. Collaboration encourages
proactive planning jointly by both hospital based utilization review
personnel and families affected by the illness.
Provider Selection Process: Suggested Criteria
1. Clinical specialization in patient's medical condition: The
agency rendering the ancillary service shall be recognized by the
local medical community as a specialty service with experience and
business resources appropriate to the needs of the patient(s) being
referred.
2. Accreditation by a joint commission authority: The agency
rendering the ancillary service be approved and licensed by a State
or Federal agency, i.e., Joint Commission on Accreditation of Home
Health Agencies.
3. Physician's ancillary provider selection must be based on
``plan of care'' established to treat and monitor patient's therapy:
The referring physician should have a knowledge of the company
servicing the patient, including quality of service and abilities of
the company to meet all plan of care requirements. A necessary
requirement is that the ancillary provider must have experience and
understanding of the disease state. The selection goal is focussed
to match the patient's condition to the service provider's specialty
and clinical ability to execute the ``plan of care''.
4. Current ancillary provider shall be notified on admission of
their patient by hospital utilization department. Current service
providers having relationship with patient shall be given
notification that patient has been admitted. Immediate steps can be
taken to proactively revise plan of care at expected date of
discharge. Home provider will have opportunity to discuss any
changed orders with physician and follow the progress of the patient
(i.e. concurrent review) until discharge orders are rendered.
Thank you for this opportunity to make comments,
James Wayne
Family Nurse Care
9880 E. Grand River, Suite 110, Brighton, MI 48116, (810) 229-0300
November 21, 1995.
Ms. Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., NW.,
Room 9300, Washington DC 20530
Dear Ms. Kursh: I am writing to you as the owner of a Medicare
certified home care agency and delegate to the White House
Conference on Small Business. My agency has serviced Livingston
County since 1987, receiving referrals from hospitals in four
surrounding counties as well as Livingston County.
In April of this year, the only hospital in the county became
affiliated with a multi-hospital organization and our referrals
decreased 30%. The Medical Director of this
[[Page 29829]]
hospital states that they are mandated to refer to their own
hospital-based home health agency. The discharge planners state that
they must refer to their own agency. One of our patients asked for
our services, presenting a magnet with our telephone number on it
and she was refused access to return to our agency. The patient
states that she was too sick to argue.
The law is very clear: ``Any individual entitled to insurance
benefits under this title (42 USCS 1395 et seq.) may obtain health
services from any institution, agency, or person qualified to
participate under this title (42 USCS 1395 et seq.) if such
institution, agency, or person undertakes to provide him such
services''; yet hospitals across the United States are engaged in
this practice.
Because hospitals have traditionally lost money over the years,
they have targeted home care as an area where they can shift
hospital costs and keep the client in a closed system. There are
plenty of sick, elderly people in this country and the small, nurse-
owned agencies that offer community-based care are being threatened
out of existence because of this practice.
I urge you to consider the fact that small businesses are the
engine that drives the U.S. economy, and consider the following in
your final judgement:
* Bigger is not always better where health care is concerned.
* Set limitations on hospital's ability to refer to clients to
their own hospital-based components.
* Require the hospital to use a rotation system, which assures
equitable referrals to all providers in the area.
* Require the hospital to permit (on their premises, during
normal working hours) representatives of freestanding providers--
other than their own hospital-based components--to visit their
patients who have been admitted for hospitalization; and to expose
the patient population to the availability of outside services as
well.
* Make the hospital publicly post its daily referrals to both
its hospital-based entities and to other providers in the community.
Sincerely,
Marilyn LeVasseur, M.S., R.N.,
Administrator.
Infusion Management Systems, Inc. dba Concepts of Care
December 1, 1995
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, 600 E St. N.W., Room 9300, Washington,
D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al. Case No. 95-6171-DV-SJ-6
Dear Ms. Gail Kursh: My name is Sandra Smith Jackson and I am
employed as Vice President of the Continuous Quality Improvement
Department for a Home and Community Support Agency which has 30
medicare certified agencies across Texas. Our locations are
freestanding and we have been providing care for 27 years.
Our Agency will be adversely affected by the proposed final
judgment for United States v. Health Choice of Northwest Missouri,
Inc., et al. This decision does not encourage fair competition or
patient choice. The hospital would be able to monopolize all the
ancillary services. Heartland would present information regarding
its service without making any mention of other providers in the
community unless the patient specifically asked. If the patient
asked they would be told to look in the telephone book. I'm not
aware of a lot of hospitalized clients that would look for a listing
of providers in the telephone book. It would be difficult for a
patient who had no preference to make an informed choice if the
discharge planner only gives them a brochure for the hospital.
I believe as well as our state association (Texas Association of
Home Care) that agencies shall not engage in coercive or
unreasonably restrictive exclusionary behavior which would restrict
or impede consumer choice of provider agencies. An agency or related
entity that provides a screen to clients for home care referrals
shall not use that position to influence a client's choice and to
direct referrals to itself, and shall inform clients of the
availability of home care providers and advise clients that they
have the right to choose the provider they prefer. I also believe
that agencies should cooperate to see that patient gets the best
comprehensive service.
Thank you for allowing me the opportunity to give comments in
this matter. I have enclosed a business card if you have any
questions.
Sincerely,
Sandra Smith Jackson,
Vice President, CQI/Licensure and Certification.
Visiting Nurse Associations of Pennsylvania
1789 S. Braddock Avenue, P.O. Box 82550, Pittsburgh, PA 15218, (412)
256-6927
November 29, 1995
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Antitrust Division, U.S. Department of Justice, 600 E.
Street, N.W., Room 9300, Washington, D.C. 20530
Re: United States v. Heartland Health Systems Inc., Civil Action
No. 95-6171-CV-SJ-6
Dear Ms. Kursh: We are writing in support of the letter which
you received from VNA HealthCare Services dated November 24, 1995.
Visiting Nurse Associations of Pennsylvania is a membership
organization which includes 33 community-based, non-profit home
health agencies serving the entire state of Pennsylvania.
Our members believe that the ``Referral Policy'' contained in
the Final Consent Judgement against Heartland Health Systems Inc.
will be used by hospitals to deny patients ``freedom of choice'' of
a home health care provider. It is our experience that hospitals
steer patients to their affiliated home care agency. This tied
relationship restrains our members from competing on a ``level
playing field.''
The ``Referral Policy'' in question should be modified to send a
strong message to hospitals that they must abide by both Medicare
and Medicaid laws and federal antitrust statutes.
Thank you for your consideration of our concerns.
Respectfully yours,
Mahlon Fiscel,
President.
Visiting Nurse Association of Greater Philadelphia
December 1, 1995
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force Antitrust Division, U.S. Department of Justice, 600 E. Street,
NW., Room 9300, Washington, DC 20530
Re: United States v. Heartland Health Systems Inc. Civil Action No.
95-6171-CV-SJ-6
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.
[[Page 29830]]
Sincerely,
Stephen W. Holt.
Gardner, Carton & Douglas
1301 K Street, N.W., Suite 900, East Tower, Washington, D.C. 20005,
(202) 408-7100, Facsimile: (202) 289-1504
December 1, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, U.S. Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Comments--United States v. Health Choice of Northwest Missouri,
Inc., et al., Case No.: 95-6171-CV-SJ-6
Dear Ms. Kursh: The law firm of Gardner, Carton & Douglas is
pleased to submit comments in response to the proposed final
judgment in the above-captioned case published in the October 3,
1995, Federal Register (60 F.R. 51808). These comments are filed on
behalf of an independent home health care company (the ``Company'')
located in the Southeast. The Company furnishes over 100,000 home
health visits per year and has been in operation since 1985. The
Company has four locations and employs over 120 individuals.
During the last three years, the Company has seen many of the
hospitals within the Company's service areas promulgate various
exclusionary policies favoring referrals of hospital inpatient to
hospital-based or hospital-owned home health agencies and other
hospital affiliated ancillary providers. Such policies typically
prohibit outside agency personnel from hospital floors and encourage
discharge planners' referral of hospital patients to hospital
providers. The proposed final judgment appears to endorse and
encourage such exclusionary practices and, therefore, fails to
protect the public interest and should be revised to adequately
protect patient freedom of choice and fair competition. The Company
comments more specifically as follows:
1. The Proposed Policy Is Contrary to the Public Interest Because It Is
Anti-Competitive
While the Company appreciates that the main focus of the
underlying litigation in Health Choice was not the hospital's
referral policies, implementation of the ancillary service referral
policy set forth in the proposed final judgment would limit outside
providers' and suppliers' access to hospital patients in favor of a
hospital's own ancillary providers. That is, the policy, as drafted,
would permit and encourage use of the hospital's market power in an
exclusionary manner to the detriment of smaller ancillary providers
and patients.
Hence, the Company's first concern is that the proposed policy
is inconsistent with federal antitrust policy in that it excludes
competing ancillary providers from hospital patients. (See, e.g.,
Key Enterprises Of Delaware, Inc. v. Venice Hospital, 919 F.2d 1550
(11th Cir. 1990)).
Under Section II(B)(2) of the proposed policy, the hospital may
in effect steer patients to its own ancillary providers because it
must only inform a patient of alternative providers when hospital
services are first denied by the patient. Then, the hospital must
only direct the patient to a phone book (Section II(B)(3)) to
identify alternate ancillary providers. This system ignores the
realities of the hospital-patient relationship, and will
unreasonably restrict competition by limiting patient choice. The
Venice Court noted that ``patients know very little about ancillary
providers,'' described a patient's freedom of choice under similar
circumstances as ``illusory,'' and concluded that ``[i]t therefore
becomes very easy to channel patient choice by limiting the
patient's exposure to competition.'' 919 F.2d at 1557. Because the
proposed policy grants a privileged status to the hospital's
providers, it interferes with fair competition among the range of
ancillary providers available to the patients. For this reason, the
policy, as drafted, is contrary to the public interest.
2. The Proposed Policy Is Contrary to the Public Interest Because It
Violates Patient Freedom of Choice
The proposed policy also is contrary to the public interest in
that it violates the freedom of choice provisions of the Medicare
statute. Pursuant to section 1802 of the Social Security Act,
``[a]ny individual entitled to insurance benefits under this title
may obtain health services from any institution, agencies, or person
qualified to participate under this title if such institution,
agencies, or person undertakes to provide him such services.'' 42
U.S.C. Sec. 1395a. A parallel provision applies to Medicaid
recipients. 42 U.S.C. Sec. 1396a(23).
While this federal ``right to choose'' inures to the benefit of
patients (i.e., Medicare beneficiaries and Medicaid recipients)
rather than providers, patients denied the option of securing home
health and other ancillary care services from any entities other
than the hospital's agencies are materially harmed.
The draft ancillary provider referral policy deprives patients
of information necessary for a patient to choose among providers and
to actively participate in his or her own health care. It also
substantially hinders providers' ability to compete for patients
based on cost, quality of care, and other objective criteria
relevant to a patient's choice. Moreover, as this ``right to
choose'' is a fundamental principle underlying the administration of
the Medicare and Medicaid programs, denial of such rights by a
hospital in accordance with the proposed policy could jeopardize the
hospital's status as a Medicare or Medicaid provider.
The Company also notes that the Inspector General (``IG'') of
the U.S. Department of Health and Human Services recently deemed
hospital self-referral policies as ``suspect.'' As a result, as part
of the IG's 1996 Operation Restore Trust Workplan, she will review
hospital discharge planning to determine the extent to which
financial conflicts of interest, such as hospital ownership of
ancillary providers, negatively affects effective hospital discharge
planning and patient choice. The Company urges the Department of
Justice to coordinate with the IG to develop one consistent policy.
3. Recommendations
Our client agrees that where the patient's physician specifies a
particular ancillary provider in the treatment order, that order
should be honored, where consistent with the patient's wishes. Also,
where a patient expresses a clear preference for a particular
ancillary provider, based on reputation, previous experience, health
insurance coverage, or other competitive factors, that preference
should be honored. However, where neither the physician nor the
patient expresses such a choice, the hospital ancillary provider
should not enjoy a preferred status over all other ancillary
providers. The Company therefore suggests the following revisions to
bring the proposed policy within the public interest:
A. Prior to patient discharge, the hospital should be required
to furnish to its patients a current list of all certified or
otherwise licensed ancillary providers within its service area. Such
a list should include the hospital's providers. The hospital need
not be charged with responsibility of verifying or guaranteeing the
services of listed providers, and appropriate disclosure language
may appear on the list.
B. Hospital personnel should not influence, steer or otherwise
interfere with patient freedom of choice by directing a patient's
referral to (or away from) any particular provider on the list.
Independent ancillary providers should be treated the same as the
hospital's providers under the policy to prevent the hospital from
channeling patients.
C. The policy should clarify that the hospital should continue
to permit representatives of nonhospital ancillary providers on its
floors, to the extent consistent with patient health and safety, to
coordinate the continuing care of referred patients, and to educate
physicians and patients of available nonhospital services. The
hospital should not block outside ancillary providers' access to
physicians, discharge planners, and patients.
D. Last, because the draft policy is largely self-enforcing, the
hospital should maintain and make available for public review and
verification its records of referrals to ancillary providers.
We are grateful for your consideration of these issues and are
pleased to participate in the development of the final judgment.
Please do not hesitate to contact me if you have any questions or
require additional information.
Very truly yours,
Christopher L. White.
Illinois Homecare Council
Nation's First Homecare Association
November 28, 1995
Gail Kursh,
Chief, Professionals and Intellectual Property Section/Health Care
Task Force, United States Department of Justice, Antitrust Division,
600 E Street, N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: The Illinois Home Care Council is a state-wide
trade organization serving the needs of home care providers and
suppliers in Illinois. IHCC represents 350 members, including over
250 providers serving more than 125,000 Illinois citizens in their
homes. We believe that one of our most
[[Page 29831]]
important roles is to speak for the consumers of our services,
individuals who, for reasons of age or infirmity, are often unable
to speak for themselves.
We are writing to you to express concerns about the proposed
consent decree in United States v. Health Choice of Northwest
Missouri, Inc., et al., with our attention fixed firmly on the
consumers of our services. As a trade organization, our membership
includes home health providers of every type: from not-for-profit
visiting nurses associations to proprietary chains. We also count
among our members many hospital-based home health agencies.
Competition is stiff in our state, and sometimes disputes arise
among local providers trying to get access to patient referral
sources. From that standpoint, we welcome the efforts of the Justice
Department to clarify the role of the hospital discharge planner in
a facility which offers ancillary services. We also strongly support
the need for Medicare recipients, and indeed every home care
consumer, to exercise free choice in selecting a home care or other
ancilliary service provider.
It is our focus on patients that raises concerns about some of
the provisions included in your proposed consent decree,
specifically about the Referral Policy presented on page 51812 of
the October 3, 1995 Federal Register. We fear that the Justice
Department may not fully recognize the speed with which today's
patient is admitted to, treated in and discharged from the hospital.
Many of these patients are elderly, and are sent home before they
and their families have fully grasped what has happened to them and
what they will need on returning home. We believe that the process
outlined in Part II (3) of the proposed Referral Policy will only
serve to increase the anxiety experienced by patients undergoing a
hospitalization, and potentially force them into a bad decision. We
also doubt whether today's average hospitalization provides
sufficient time for the patient to independently examine all of his
options and arrive at a conclusion in time for the discharge planner
to plan a discharge. In short, we believe that the proposed policy
places an unfair burden on vulnerable, sick people. We are unable to
see how it protects patient choice or promotes quality care.
IHCC would like to recommend that Part II (3) of the proposed
Referral Policy be eliminated and that Part II (2) be amended with a
requirement that hospital discharge planning departments maintain a
reasonably up-to-date list of licensed ancillary service providers,
noting those that are Medicare certified, and that these lists be
provided to every patient requiring post-discharge ancillary
services. We agree that hospital discharge planners should not be
forced into evaluating each provider for the patient; however, they
should be aware of the specialities of the various providers, and be
willing and able to inform the patients of these specialties.
Imparting information about choices is central to the concept of
hospital discharge planning. We believe that a focus on the patient
and his or her needs will make clear the best policy in this matter.
Thank you for this opportunity to comment on the proposed
consent decree. We understand that the proposed settlement
technically applies only to the parties involved. However, we also
recognize the precedent-setting nature of the acceptance of such an
interpretation of the Medicare freedom of choice requirements by the
United States Department of Justice. We believe that acceptance of
the Referral Policy language currently included in the proposed
consent decree will do a grave injustice to hospitalized patients
nationwide, and urge you to revise the policy as described above.
Sincerely,
Monica Brahler,
President.
cc: Michael Kulczycki,
Pamela Steinbach,
Rebecca Friedman Zuber
November 3, 1995
Mrs. Marian Wilson,
Tiffany Square Convalescent Center, 3002 N. 18th Street, St. Joseph,
Missouri 64505
Dear Mrs. Wilson: Although we have not formally met, I have
heard so many good things about you that it seems as though I know
you. I know that David Cathcart has talked to you about our interest
in acquiring other nursing facilities in St. Joseph, and that you
are going to take your time before making any major decision. I have
been talking to David about this for nearly a year, and the ``state
of the industry'' in St. Joseph has been in a downward spiral during
all that time.
Seeing you at the ``Coalition'' meeting tells me that you too
are concerned about the future of our businesses. I believe we are
at the crossroads of survival today, and suspect that either a
facility will close, or an owner will pump large amounts of cash
into the business to make it survive * * * for a little longer.
Attached is a copy of a letter to David Cathcart that briefly
outlines our thoughts and objectives. I believe it affords you an
opportunity to convert your interest into cash, and it affords the
new entity an opportunity to make management decisions for the good
not only of the nursing homes, but also for the good of the entire
community. I cannot imagine the amount of good you have done in this
community * * * it has been tremendous. But things in this industry
are changing so fast that unless we are changing at the same time,
we are falling further behind. The requirement for electronic
transfer of MDS data to Jefferson City by next July 1 is one major
example. Maybe you are already at that point too, but it took us
over a year to become able to do that computer transfer of data. And
the new survey process is no cake-walk.
I sincerely hope you will not be offended, and that you will
give serious consideration to the content of this mailing. I will be
happy to meet with you at any time.
Sincerely,
Lowell Fox,
5051 Faraon 64506, 233-1212 (home), 279-1591 (office).
Central Health Services, Inc.
6600 Powers Ferry Road, Atlanta, Georgia 30339, 404/644-6500
November 28, 1995
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, U.S. Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Comments on Proposed Final Judgement: United States v.
Health Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-
CV-SJ-6 in the U.S. District Court for the Western District of
Missouri
Dear Ms. Kursh: As a home health care provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selection of post-hospital
ancillary services, including the selection of a home health care
provider. For these reasons I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgement
(recommended policy) be modified as such:
Strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to provide patients with an
updated list of Medicare/Medicaid providers in the community;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
Jerry Sevy,
General Counsel.
Upper Peninsula Home Nursing
1414 W. Fair, Suite 44, Marquette, MI 49855, 906/225-4545
November 22, 1995.
Gail Kursh,
[[Page 29832]]
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington DC 20530
Dear Ms. Kursh: The only word to describe the DOJ's recent
decision in United States v. Health Choice of Northwest Missouri,
Inc. et al., is: Devastating.
Private, non-hospital-based home health care agencies already
struggle with the monopolistic practices of self-referring hospital
programs. This decision would in effect nail the lid on the coffin
of informed choice for small community based programs such as ours.
Add in a hospital's ability to divert funds to media advertising
and the fact that such advertising is disallowed under Medicare cost
settling and you eliminate any chance for a private, non-hospital-
based agency to establish a level competitive field.
Asking hospital-based discharge planners to ``play fair'' is at
best naive, and more likely is simply stupid. When a patient hears a
discharge planner state they ``can not speak to the quality of
outside providers,'' they will actually hear: ``therefore, the
outside program is no good.'' That's reality. Instead, the
Department of Justice should be encouraging hospitals to mention ALL
agencies who are certified or accredited at the same level, or
higher, in their own community.
Let me offer a very good example in our community. For almost
twenty years, Marquette County, in Michigan's Upper Peninsula, was
served by two private home health care agencies--U.P. Home Nursing &
Hospice and Northern Home Nursing. (The area was also served by the
small, county-operated health department program.) In 1992, after we
refused to sell to the local hospital, Marquette General, the
Hospital bought our competing agency.
Instantly, the twenty-year policy of rotating referrals was
dropped. Instantly, our hospital-generated referrals went from 45%
to less than 4%. Instantly, the U.P. Home Nursing & Hospice
discharge planning staff were not allowed to speak to patients in
the hospital. In fact, even if a hospitalized patient were already
being seen by our Agency, our staff were not allowed to speak to
them in the hospital without a signed release, even if the patient
and physician requested us. Presently, the hospital is telling our
patients they are no longer in our care but will have to make their
home health decision all over again upon discharge from the
hospital. Obviously, the hospital influences their decision toward
the hospital's own program.
As a final, and ridiculous, action, the hospital imposed a form
on patients that included confusing language. The form compelled
them, upon admission, to disavow any non-hospital based home health
providers, and this was presented as a normal part of the multi-
paged admissions process.
This story is strong evidence that the Department of Justice
must include language which addresses the hospital's responsibility
to refer to Medicare-certified and accredited programs. U.P. Home
Nursing & Hospice has been certified for twenty years through
Medicare without a single deficiency. For the past three years, we
have maintained accreditation through CHAP--the Community Health
Accrediting Program. This sterling accreditation offers us deemed
status for participation in Medicare, and we achieved this high
accreditation with an unheard of 57 commendations on our first
application. For our local hospital to state they can ``not vouch
for the quality of this program'' would be utterly unfounded and
even fraudulent. They are, indeed, well aware of our high standards
of quality. They are also aware of our unique billing policy: for
needed home health services, we accept third-party reimbursement as
payment in full. Patients are not directly billed. The hospital can
not claim this policy and by limiting choice denies care to many in
our community who can not afford the hospital's 18% interest rate on
unpaid balances.
Your pending decision in the matter of Heartland Health System,
Inc. does not include provisions which would protect the private
sector. Nor does it support informed choice and anti-trust
provisions in the current law. We can understand the DOJ's desire to
mandate some type of informed choice for hospital-based programs. At
present, it seems there are none. But we strongly urge you to
consider the modifications proposed by the St. Joseph group, ``Your
Right to Choose:''
Strengthen limitations on a hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers.
Make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
The Department of Justice must consider fair competitive
practices in this matter. By eliminating freedom of choice, you
dilute competition and, thereby, reduce quality and cost-
effectiveness in this growing method of health care delivery.
Sincerely,
Cynthia A. Nyquist, R.N., B.S.N.,
Administrator/CEO.
North Woods Home Nursing & Hospice
P.O. Box 307, Manistique, MI 49854-0307, (906) 341-6963, 800-852-3736
November 24, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I am writing to you as the owner/administrator
of a Medicare certified home health care agency. We have been in
operation since 1985. We have had tremendous success with acceptance
by our local physicians. I have letters where they laud our service
as excellent.
Our regional medical center entered the home health market about
3 years ago and now 2 local hospitals opened agencies in 1994. We
have maintained our market share, although our growth has stopped.
We looked upon this increased competition with concern, but also as
a reason to do a better and better job. We feel competition is good
for quality and efficiency.
The referrals from these hospitals and our local doctors has
practically dried up. The doctor's office (private physicians)
office gives patients a questionable choice situation. The hospital
owned physicians and the referral process at the hospital prevents
us from receiving referrals, even when the patient requests us. The
patients call and tell us they are ``too sick to fight''. This more
recent ``bullying'' of our infirm and elderly will surely hamper our
continued success.
My optimism of the goodness of people and the upholding of
fairness in our judicial system is at question if this present
referral practice is allowed to continue. The majority of our
patients are served under the Medicare system. Please review the
patient rights regulations under this program and also any antitrust
implications. I believe the problems here border on basic ``human
rights'' exploitation. Referrals should be based on choice and a
rotating system. Quality issues are assured by MDPH hotline and CHAP
certifications, and in our very small town--word of mouth!
Sincerely
Susan L. Bjorne,
Administrator.
Baylor Homecare
3200 W. Hwy. 22, Corsicana, Texas 75110, (903) 872-5535
Lynn Gill, RN
Director of Operations, Baylor HomeCare, 3510 Crutcher Street,
Dallas, Texas 75246
Gail Kursh,
Health Care Task Force, Department of Justice, Antitrust Division,
600 E St, N.W., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: This is a response to the proposed final
judgement for United States vs. Health Choice of Northwest Missouri,
Inc., et al., Case Number 95-6171-CV-SJ-6 in the U.S. District Court
for the Western District of Missouri.
We agree that the referring agency/discharge planner should not
make a recommendation for another provider. The discharge planner is
familiar with their own facility's home health agency, DME, etc.,
but not the many other agencies available. Many agencies have
problems documented by State/Medicare surveyors. These would not be
known by the discharge planner. If the patient wants to choose
another agency, it is certainly their right. This transfers the
liability/responsibility to the patient to research their options
and make the choice. If a patient is given a list of providers by
the discharge planner and an agency from the list administers poor
care, the hospital ultimately could be held liable.
Patient preference should be honored. However, the physician
also has the right to
[[Page 29833]]
refuse to write orders to a certain agency because of a history of
poor care, over utilization, etc. Then the patient must then make a
choice of either changing physicians or changing agencies.
The proposed referral procedure certainly honors patient choice
and guards against liability of the referring facility.
Sincerely,
Lynn Gill, RN,
Director of Operations, Baylor HomeCare.
Danville Regional Medical Center
142 South Main Street, Danville VA 24541
November 28, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, Room 9300, 600 E
Street NW., Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: I applaud the Department of Justice on the
recommended home health, DME, and hospice referral policy in the
proposed settlement between the department and Heartland Health
System, Inc., of St. Joseph, MO.
It is my opinion that the referral policy in the proposed final
judgment is fair and equitable. A hospital should have no
responsibility to, in effect, promote outside proprietary services
with or without a company specific physicians order. Additionally, a
hospital cannot be responsible for seeming to tacitly approve of the
quality of care provided by outside ancillary companies. If
proprietary ancillary service companies wish to enhance their market
share, they should do this by making themselves the company of
choice by providing outstanding service, not by demanding their name
be mentioned immediately upon mention of a home health, DME, or
hospice referral.
The policy in the proposed settlement allows for true freedom of
choice for patients as it will tend to reduce reliance on company
name recognition. It has been my experience that some patients and
families tend to select companies with high name recognition even
though services provided are unexceptional or even sub-standard.
Once again, I wholeheartedly congratulate the department on it's
reasonable, fair, and common sense referral policy.
Very Sincerely,
William S. Sigmon, RN,
Director of Home Health.
Helix Health System
November 28, 1995
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: United States vs. Health Choice of Northwest Missouri, Inc., et
al, Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: I recently saw a copy of the recommended home
health, DME and hospice referral policy for Heartland Hospital.
I believe that your recommendation for the approval of this
referral policy strikes an appropriate balance between right and
obligations of a hospital in connection with its related home health
and DME companies. If I had to make any change in the form, it would
be to strike out the word ``excellent'' in subparagraph IIB2. I
think that the ``puffing'' of its related services is questionable.
The remainder of the form is both logical and sensible.
I totally agree with the concept that a hospital should not be
placed in a position of having to refer to one or more outside
providers. It has no ability to judge the quality or accessibility
of the unrelated home health or DME agencies. It does not have the
ability, and should not have the obligation, to go through a
``credentialling process'' for the outside agencies. I believe the
formula suggested in this document is the only approach that a
hospital can reasonably use.
Very truly yours,
Robert J. Ryan,
Vice President & General Counsel.
Center for Health Care Law
519 C Street, N.E., Stanton Park, Washington, D.C. 20002-5809, (202)
547-5262 FAX: (202) 547-7126
December 4, 1995
Gail Kursh,
Chief Professionals and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Civil No. 95-6171-CV-SJ-6
Dear Ms. Kursh: These comments relate to the proposed Final
Judgment, Stipulation, and Competitive Impact Statement that has
been filed with the United States District Court for the Western
District of Missouri in the above entitled matter, as published in
60 Fed. Reg. 51808 (October 3, 1995). The National Association for
Home Care (NAHC), representing the interests of over 6000 home care
providers and their patients, recommends several modifications in
the proposed referral policy which is designed to ensure patient
choice.
Under 42 U.S.C. Sec. 1395a, Medicare patients are guaranteed
free choice of a provider of services. That statutory provision
provides:
``Any individual entitled to insurance benefits under this title
may obtained health services from any institution, agency, or person
qualified to participate under this title if such institution,
agency, or person undertakes to provide him such services.''
A comparable provision exist under federal Medicaid law, 42
U.S.C. Sec. 1396a(a)(23) which states:
``Any individual eligible for medical assistance (including
drugs) may obtain such assistance from any institution, agency,
community, pharmacy, or person, qualified to perform the service or
services required, * * * who undertakes to provide him such
services.''
It has long been the position of the National Association for
Home Care that hospitals that participate in the Medicare and
Medicaid programs must provide for an unencumbered freedom of choice
for post hospital care services as part of meeting their discharge
planning obligations. 42 C.F.R. Sec. 482.21(b). In addition, NAHC
believes that compliance with the federal antitrust laws requires
hospitals and other parties within the health care system to honor a
patient's freedom of choice for the selection of care. The proposed
referral policy set forth for the above entitled matter is a clear
effort to achieve those ends. However, we believe that this referral
policy should be strengthened in a number of areas and clarified in
others.
The most important alteration that should occur in the referral
policy is an expansion of the standard for ancillary services
referrals to specifically include an application of the policy to
any party within the health system that is in the position to affect
a referral for services. For example, many patients are referred to
home health services from physicians, clinics, nursing facilities,
rehabilitation centers, as well as hospitals. The referral policy
should clearly state that it applies to all parties within the
health system that are in a position to affect a referral.
In addition, the proposed referral policy is designed in a
manner which offers true freedom of choice only after the health
system is allowed to market its ancillary services to the patient.
We would recommend that the referral policy be modified to provide
that when an ancillary service has been ordered and a provider
specified, the referring person be obligated to inform the patient
that he or she does not have to use that provider but may choose any
provider he or she wants. Moreover, the referring person should be
obligated simultaneously to provide information to the patient
regarding the availability of other providers in the community.
Similarly, when the doctor has not specified a particular provider
and the patient has no preference as to provider, the referring
person should be obligated to provide information regarding the
availability of other providers in the community. A patient cannot
made an informed choice unless such information is provided. The
referring person is in a position to provide such information. A
patient should not be required to reject the doctor's specified
provider or Heartland's ancillary services or ask what other
providers are available before the referring person provides
information regarding the availability of ancillary services in the
community.
In terms of providing information, NAHC recommends that the
referral policy be modified to require that the referring person
offer a list of available providers which includes, but is not
limited to, those providers listed in a telephone book.
Specifically, with respect to home health and hospice services, NAHC
would recommend that the health system secure an up-to-date listing
of certified providers on a quarterly basis and make this list
available to patients.
[[Page 29834]]
Finally, we are concerned that the referral policy allows for a
marketing effort within Heartland that could result in undue
influence over an individual's choice of ancillary service
providers. Many patients are not aware of alternative providers that
may be available in their community. Particularly in an inpatient
setting, they are in a captive environment where marketing could
result in inappropriate steering or coercing of patients into
Heartland's own ancillary service providers. The referral policy
should impose some restraints on the marketing activity. That
restraint would not require that the health system open its doors to
marketing efforts by competing ancillary service providers. Instead,
it should focus on the degree of access to the patient by the
ancillary service providers or a party within the health system
acting on their behalf. Limiting the marketing efforts to an
expression of the availability of an accredited ancillary service
available to the patient with a brochure should provide a sufficient
protection.
NAHC appreciates the opportunity to provide comment on this
matter. It is anticipated that the final referral policy will be
utilized by health systems and other provider facilities across the
country as a basis for determining whether their activities comply
with federal antitrust laws. Accordingly, it is advisable that the
Department of Justice ensure that it is established in a manner
which appropriately and comprehensively achieves patient freedom of
choice.
Very truly yours,
William A Dombi
Approve Home Medical Services, Inc.,
2000 E. Harrison St., Suite E, Batesville, AR 72501, (501) 698-1123,
(800) 822-8232, Fax (501) 698-1044
December 2, 1995
Gail Kursh,
Chief, Professional & Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E St.,
NW., Room 9300, Washington, DC 20530
Re: U.S. v. Health Choice of Northwest Missouri, Inc., et al. Case
No. 95-6171-CV-SJ-6 in the U.S. District Court for the Western
District of Missouri.
Dear Ms. Kursh: As I was catching up on my reading of
professional journals and newsletters this past week, I happened on
to an article in Home Health Line newsletter dated 11-13-95 that
disturbed me greatly. I am an owner of an independent free standing
home health agency that is currently fighting the unfair discharge
practices of our local hospital much as must be the case in St.
Joseph, Missouri with Heartland Hospital.
I was totally appalled that the Department of Justice was
considering endorsing such a biased and unfair referral policy as
the one described in the newsletter article. If approved, this would
be a true victory for unscrupulous hospitals bent on totally
monopolizing the home health care market in their areas. To think
that an elderly person, so ill as to be hospitalized and then met
all the criteria for home health care upon discharge, would be in
any condition to be put through this proposed maze without just
giving up and saying, ``Oh, go ahead and do what you want'' to the
discharge planner, is totally naive. No patient would be aware that
they have to jump through all these hoops and I doubt seriously that
any discharge planner would even bother. At best, it would be the
word of a sick, feeble, elderly person against the word of the
hospital's paid employees that the hospital had complied.
The only way to ensure fairness when a patient does not have a
preference would be for the hospital to be required to rotate
referrals among area home health agencies. If a patient wants to
explore home health options, then a representative from any of the
various area home health agencies should be able to visit and talk
to the patient just as the hospital's representative does.
Regardless of what policy is adopted, the one proposed by Health
Choice of Northwest Missouri, Inc., is incredibly self-serving and
is surely the most unfair and unjust proposal I have seen to date. I
beg of you to reject this proposal and take time to develop a plan
that would truly insure patient freedom of choice and level the
playing field for all providers of home health services.
Thank you for taking time to consider my concerns.
Sincerely,
Steve Bryant
CC: Senator Dale Bumpers,
Senator David Pryor,
Congresswoman Blanche Lambert Lincoln
Powers, Pyles, Sutter & Verville PC, Attorneys at Law
December 4, 1995
Gail Kursh,
Chief, Professional and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Proposed Final Judgment: United States v. Health Choice of
Northwest Missouri, Inc., et al. Civil No. 95-6171-CV-SJ-6 (W.D.
Mo.)
Dear Ms. Kursh: The Home Health Services and Staffing
Association (``HHSSA'') hereby files comments on the proposed Final
Judgment, Stipulation, and Competitive Impact Statement in the
above-captioned case in response to the invitation for comments
published at 60 Fed. Reg. 51808 (October 3, 1995).
HHSSA represents more than 30 home care and staffing companies
which have nearly 1,600 offices in virtually every state and the
District of Columbia which employ more than 300,000 people and
provide health care services to more than 750,000 people on any
given day.
We believe the proposed Final Judgment is inadequate in that it
incorporates a referral policy which is inconsistent with its stated
objective of promoting ``patient choice.'' See Referral Policy, I.
and II., 60 Fed. Reg. at 51812/2-3. Further, we believe that the
policy is contrary to 15 U.S.C. Secs. 1 and 2 and the Medicare Act.
The portion of the policy that creates the greatest concern is
the provision which states that a hospital may promote its own home
health agency or hospital-affiliated home health agency without
informing the patient that he or she has a choice of other agencies
and without informing the patient of the name and contact person for
other agencies. The policy thereby permits the hospital to engage in
``steering'' patients to the hospital's affiliated home health
agency regardless of the price or quality of the service.
It is this practice of steering home health patients that was
condemned in a recent treatise as inconsistent with the pubic policy
underlying the antitrust laws, as well as managed care. See The
Importance of Maintaining Competition and Antitrust Enforcement in
Health Care Reform (October 26, 1993) (copy attached). This practice
results in the destruction of competition, which results in higher
prices, reduced quality, and loss of innovation. Id. at 2.
As the treatise points out, ``[s]teering can take many forms,
but usually is accomplished by the hospitals not informing the
patients of competitive alternatives, by not giving patients the
opportunity to select another agency, by refusing to distribute the
literature of other agencies, by subtly inducing or coercing staff
physicians to order only from the hospital's home care company,
[and] by falsely disparaging the quality or services of other
agencies * * *'' Id. at 17. This steering activity has already
resulted in substantial litigation under the antitrust laws. Id. at
20.
As the American Bar Association has stated, ``[a]ntitrust
enforcement, which promotes consumer choices and welfare while
restricting anticompetitive conduct, will be vital to the
implementation of health care reform.'' Id. at 14. The proposed
Final Judgment simply does not promote consumer choice while
restricting anticompetitive conduct.
Further, we believe that promotion of consumer choice among
providers was one of the foundation principles of the Medicare Act.
See 42 U.S.C. Sec. 1395a, which protects the right of any
beneficiary to ``obtain health services from any institution, agency
or person qualified to participate under this title * * *'' This
principle has further been incorporated into an amendment to the
Medicare antifraud and abuse laws at Sec. 1128D(a)(2)(C) by
Sec. 8105 of the Medicare Preservation Act of 1995, which was passed
by Congress on November 17, 1995. That amendment will require the
Secretary of Health and Human Services, in establishing safe harbors
under the antifraud and abuse laws, to consider the extent to which
such action will result in ``an increase or decrease in patient
freedom of choice among health care providers.''
Accordingly, we urge that the Final Judgment be revised to
require a referral policy which informs all patients of their
freedom of choice of providers and provides patients with a list of
providers which they may use to exercise this choice.
[[Page 29835]]
Sincerely,
James C. Pyles
The Importance of Maintaining Competition and Antitrust Enforcement in
Health Care Reform
A Joint Position Paper of the American Federation of Home Health
Agencies and the Home Health Services and Staffing Association
October 26, 1993.
I. Executive Summary
The Clinton Administration has released its long awaited health
care reform legislative package. The Administration's plan relies upon
the concept of ``managed competition.'' States will establish health
insurance purchasing cooperatives, known as ``regional alliances,'' to
purchase health care goods and services from privately operated
networks of health providers and insurers that join together to provide
goods and services as a group.
In anticipation of health care reform, hospitals are consolidating
and diversifying as never before into larger ``health care systems''
that provide products far beyond traditional inpatient hospital
services, including post-discharge goods and services such as home
health and durable medical equipment.\1\ In some circumstances,
particularly where the hospital controls a significant percentage of
referrals for a particular service and channels or ``steers'' its
patients needing that service to its own provider, serious
anticompetitive effects result. Other providers of the service are
unable to compete on the merits and thus competition is decreased or
destroyed.
---------------------------------------------------------------------------
\1\ See Facey Medical Foundation, IRS Exemption Ruling, (March
31, 1993) (Doc. 93-4212); Friendly Hills Healthcare Network, IRS
Exemption Ruling (January 29, 1993) (Doc. 93-1926); ``Health-Care
Firms Face Checkup for Merger Potential,'' The Wall Street Journal,
C1 (Oct. 12, 1993).
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Hospital steering of patients to their own home care companies in
this situation can have profound anticompetitive effects. It can force
other home care companies from the market based not on their prices or
quality but rather on the hospital's market power over referrals. The
arrangement between the hospital and its own home health agency is a
stringent entry barrier, preventing new providers of the service from
entering the market. Ultimately, the hospital provider is able to
exercise substantial market power without a concomitant superiority in
quality and consumers suffer. Prices for home care services increase,
quality falls, patient choice is narrowed if not eliminated, and
innovation is quashed. Indeed, free-standing providers of home health
services and durable medical equipment have brought several antitrust
challenges to this precise situation, and studies of physician self-
referrals to ventures they own confirm these likely effects.\2\
---------------------------------------------------------------------------
\2\ See. e.g., State of Florida Health Care Cost Containment
Board, Joint Ventures Among Health Care Providers in Florida (1991).
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Providers of health care services, particularly hospitals, now
argue that, to make health reform meaningful, they need an exemption,
or at least ``more lenient treatment,'' under the antitrust laws.
Several bills including an antitrust exemption for hospitals have been
introduced in Congress, and the Clinton health reform proposal
suggests, incorrectly, that some fine-tuning of the antitrust laws
might be appropriate. On the other hand, most knowledgeable and
objective observers, including the Section on Antitrust Law of the
American Bar Association, have concluded that health care reform will
not require any type of antitrust exemption or antitrust ``relief'' for
providers.
The recently issued Department of Justice and Federal Trade
Commission Statements of Antitrust Enforcement Policy in the Health
Care Area suggest the same. The Statements, while providing clearer
guidance to hospitals and physicians about the analysis of particular
antitrust-sensitive activities, do not relax the antitrust laws or
antitrust enforcement and do not appear to support any type of
relaxation. Some may misperceive, however, the timing of the
Statements' publication and their focus on antitrust enforcement in
health care as a signal that health reform legislation justifies some
type of antitrust relaxation.
The American Federation of Home Health Agencies (``AFHHA'') and the
Home Health Services & Staffing Association (``HHSSA''), two of the
leading national associations of home health providers, believe that
providing an antitrust exemption or lenient antitrust treatment for
hospitals or others under health reform would adversely affect
consumers. Especially as hospitals increasingly diversify by providing
home health and other non-hospital services, it is important to retain
current antitrust constraints and strong antitrust enforcement to help
ensure that markets for home health services remain competitive. With
an antitrust exemption or ``antitrust relief,'' health care systems
will squeeze free-standing home health agencies out of those markets
and exercise market power to the detriment of consumers of home health
services.
Accordingly, we oppose antitrust relief for health care providers
in the context of health care reform or otherwise. We believe that
federal health reform legislation should include affirmative provisions
ensuring that home care companies and other providers of health care
service are able to compete to participate in health plans providing
goods and services to health alliances. We believe that for ``managed
competition'' to exist there obviously must be competition, which will
require a formal mechanism to prohibit some providers from exercising
market power to prevent others from competing. This position statement
outlines our reasons, and we welcome the opportunity to explain our
position in more detail.
II. The American Federation of Home Health Agencies and the Home Health
Services & Staffing Association
The American Federation of Home Health Agencies (AFHHA), formed in
1981, is a national association of approximately 170 Medicare certified
home health agencies. It includes many different types of home care
providers, such as free-standing agencies, visiting nurse associations,
hospital-based agencies, chain agencies, and county agencies. State
home health associations, vendors to home health agencies, consultants,
and individuals also are members. AFHHA seeks to influence public
policy on behalf of home health consumers and its members, and provides
its members with technical advice on numerous problems and issues
affecting the home health industry.
HHSSA is the only national association representing the proprietary
home health and supplemental staffing industry. Founded in 1978, HHSSA
now includes approximately 23 member companies with over 1,600 offices
and more than 250,000 health care workers. Its purposes include
encouraging and promoting greater quality, efficiency, reliability, and
safety in the delivery of home health care, improving the services of
home health providers to the general public and discouraging enactment
of restrictive legislation, regulations, or policies that impede
competition or adversely affect the public. In pursuing these
objectives and based on its in depth knowledge of the industry, HHSSA
frequently comments on important governmental policy issues affecting
its members and consumers of home care services.
[[Page 29836]]
III. AFHHA's and HHSSA's Concerns
A. Introduction
The concerns of AFHHA and HHSSA stem from four interrelated
factors: (1) The increasing tendency of hospitals to diversify into
home care services using anticompetitive practices, such as
``steering,'' that exclude other home care providers based on the
hospitals' power over referrals rather than quality of care
considerations, and the resulting adverse effects on consumers; (2) the
increasing tendency of hospitals to consolidate and thus increase both
the percentage of referrals they control and their power over
referrals; (3) the effect that health care reform might have in
inducing providers to consolidate and integrate further and to
diversify into new services using anticompetitive means; and (4) the
efforts of some providers, particularly hospitals, to obtain statutory
exemptions from the antitrust laws or more lenient interpretation of
the antitrust laws.
Succinctly stated, health care providers need no antitrust relief
or exemption. For managed competition to achieve its anticipated
benefits of lowering costs and prices, increasing quality and services,
and improving access, and promoting innovation, there must be
competition. And for competition to exist, logic, economics, and
history show that strong antitrust laws and enforcement are crucial.
Accordingly, health care reform must include safeguards, at both the
federal and state levels, to ensure that home health agencies, as well
as other providers, retain the opportunity to compete based on their
prices, quality, and patient satisfaction or choice.
B. The Importance of the Antitrust Laws
The purpose of the antitrust laws is to protect and promote
competition as the method by which our economy allocates resources. The
Supreme Court has noted that the antitrust laws ``are as important to
the preservation of economic freedom and our free enterprise system as
the Bill of Rights is to the protection of our fundamental personal
freedoms.'' \3\ The Court long ago explained that the antitrust laws
---------------------------------------------------------------------------
\3\ United States v. Topco Associates, 405 U.S. 596, 610 (1972).
rest on the premise that the unrestrained interaction of competitive
forces will yield the best allocation of our economic resources, the
lowest prices, the highest quality and the greatest material
progress, while at the same time providing an environment conducive
to the preservation of our democratic institutions.\4\
---------------------------------------------------------------------------
\4\ Northern Pac. Ry. v. United States, 356 U.S. 1, 4 (1958).
For these reasons, strong antitrust laws and enforcement have enjoyed
wide bipartisan support throughout their history.
Section 1 of the Sherman Antitrust Act proscribes agreements that
unreasonably restrain competition. Section 2 of that statute prohibits
sellers from monopolizing, attempting to monopolize, or conspiring to
monopolize the provisions of goods and services. And section 7 of the
Clayton Act prevents mergers and other types of integration between
sellers if the likely effect will be to lessen competition
substantially.
The basic concern of the antitrust laws is to prevent businesses
from obtaining substantial ``market power'' achieved by means other
than competition on the merits. Market power--the ability of sellers to
raise prices and reduce quality--both transfers income from consumers
to producers (a form of ``economic theft'') and distorts efficient
resource allocation by decreasing the amount of goods and services
produced.
The antitrust laws condemn the acquisition of market power when it
results from conduct that excludes competitors from the market without
achieving the values that competition promotes. Thus, for example, a
firm cannot use its power in one market to decrease or destroy
competition in another market. Yet, that is exactly what happens when
hospitals providing home care services use their power over referrals
to exclude competing home care services from the market. The consumer,
of course, is the loser. He or she may pay inflated prices, receive
substandard quality, or, in general, not be able to exercise the choice
that the antitrust laws envision. Consumer access to health care
services is reduced, and innovation may be stifled.
Because of the indispensable role of the antitrust laws in
promoting the welfare of consumers, exemptions from antitrust coverage
have always been strongly disfavored.\5\ Given the importance of the
antitrust laws to a properly functioning economy, those arguing for
``special antitrust treatment'' bear an especially heavy burden of
persuasion.
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\5\ E.g., FTC v. Ticor Title Ins. Co., 112 S. Ct. 2169 (1992);
see generally 1 John J. Miles, Health Care & Antitrust Law Sec. 7.01
at 7-2 (1992) (``A cardinal principle of antitrust analysis * * * is
that immunity from the antitrust laws is disfavored, primarily
because of this nation's commitment to competition as the method by
which resources are to be allocated.'').
---------------------------------------------------------------------------
C. Managed Competition
Although the precise form that health care reform ultimately will
take remains uncertain, some form of ``managed competition'' seems
likely. Under the Administration's managed competition proposal,
standard benefits would include home care as an alternative to
inpatient care,\6\ and thus home care will be an important part of
health care reform.
---------------------------------------------------------------------------
\6\ See generally Dana Priest, Clinton Health Plan Includes
Broad ``Standard'' Benefits, The Washington Post, Sept. 4, 1993, at
A1, A16.
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Under managed competition, states will establish one or more
``regional alliances'' that will purchase health care goods and
services on behalf of individual businesses and consumers.\7\ The
theory is that regional alliances will be able to coordinate the
purchase of health care services efficiently and to exert some degree
of countervailing market power over sellers, resulting in lower prices
than could be obtained through purchases by individual businesses.
Regional alliances would accept payment from businesses and consumers
and offer them an array of health plans from which to choose.
---------------------------------------------------------------------------
\7\ See generally Rick Wartzman & Hilary Stout, Clinton Health
Plan: Push Competition, Be Ready to Regulate, The Wall Street
Journal, Sept. 13, 1993, at A1.
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Regional alliances would purchase goods and services from ``health
plans.'' These will be integrated delivery systems of providers
delivering services and insurers financing these services. All forms of
health care goods and services, including hospital care, medical
services, home health services, durable medical equipment, and drugs
could be integrated into large networks or plans. Ideally, each
geographical area would include two or more plans that would compete
against one another, based on price, type of reimbursement mechanism
(e.g., capitation, fee for service, and the like), quality, array of
services, and convenience. Many geographical areas, however,
particularly those with relatively sparse populations and perhaps
inner-city areas, may be unable to support more than one plan.
Health plans could take several forms. For example, the delivery
and financing functions could be completely integrated into a single
entity as in a Kaiser-type system. Alternatively, the health plan might
finance and coordinate the marketing and delivery of health care
services, but contract for their provision with different types of
providers. Single health care systems formed by hospitals probably will
attempt to become the sole provider of
[[Page 29837]]
many types of health care services by diversifying into all areas of
health care goods and services and then preventing other firms
providing these goods and services from competing on the merits.
Enacting an antitrust exemption or relaxing antitrust enforcement would
help guarantee this result. Consumers would be the losers.
D. Economic Integration and Managed Competition
In forming health plans, providers, particularly hospitals, will
attempt to band together to deal ``more effectively'' with regional
alliances. Encouraging this consolidation by relaxing the antitrust
laws seems especially ironic since a primary purpose for creating
regional alliances is to increase the power of buyers and one goal of
managed competition reform is to increase competition among providers.
Permitting providers to aggregate their market power through
integration would seem to defeat these goals by reducing or eliminating
competition among providers and allowing provider conglomerates to
neutralize the increased bargaining power of health care purchasers.
Regardless of whether a health plan is a fully integrated single
entity or contracts with others for goods, services, or financing,
health plan formation might result in several types of economic
integration. Two are:
1. Horizontal integration among hospitals, by merger or joint
venture, which might achieve efficiencies but which also raises the
specter of market power--not only in markets for hospital services but
in other markets, including home care, as well;
2. Non-horizontal integration (sometimes called vertical
integration or diversification), by unilateral entry, merger, joint
venture, or contractual arrangement, by which sellers of one good or
service diversify into providing other goods or services.
Both forms of economic integration can generate procompetitive
effects benefitting consumers. To that extent, we applaud them, and so
do the antitrust laws. Under applicable rule-of-reason antitrust
analysis, they are lawful \8\ and need no exemption or relief from the
antitrust laws. On the other hand, unrestrained integration can have
significant anticompetitive effects, in which case it is and should be
condemned by the antitrust laws--whether it occurs in the context of
health reform or otherwise.
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\8\ See, e.g., National Bancard Corp. v. VISA U.S.A., Inc., 779
F.2d 210 (11th Cir.), cert. denied, 479 U.S. 923 (1986) (upholding
procompetitive joint venture among competitors).
---------------------------------------------------------------------------
The arguments of some provider groups, namely that the antitrust
laws and antitrust enforcement in general should be relaxed to permit
what they perceive as beneficial ``collaboration'' and integration
through mergers between, and joint ventures among, competing hospitals,
are misdirected. We and others see no need for antitrust relief
regardless of the form that health care reform takes.\9\ Indeed, we
believe serious damage to the health care system and consumers would
result from relaxation of the antitrust laws.
---------------------------------------------------------------------------
\9\ One commentator has accused the hospitals of ``crying wolf''
and talking out of both sides of their mouths when complaining about
antitrust enforcement. David Burda, Mergers Thrive Despite Wailing
about Adversity, Mod. Healthcare, Oct. 12, 1992 at 26.
---------------------------------------------------------------------------
In general, current antitrust principles and enforcement should
permit beneficial integration among health care providers, while
prohibiting that which might result in the integrating parties
obtaining market power. This is particularly true since almost all
types of integration will be tested under antitrust's ``rule of
reason,'' which requires a fact-specific analysis of the particular
circumstances in which the integration occurs. The antitrust laws are
thus ``self-adjusting'' to particular sets of facts and economic
circumstances and are sufficiently flexible to accommodate any special
characteristics or concerns that health care industries or health
reform raise.\10\ The enforcement agencies have challenged few hospital
mergers,\11\ and those they did challenge resulted in hospitals with
unusually high post-merger market shares, usually over 50%.\12\ The
agencies have challenged no hospital joint ventures.
---------------------------------------------------------------------------
\10\ Appalachian Coals, Inc. v. United States, 288 U.S. 344
(1933) (noting that antitrust laws have the adaptability of
constitutional provisions).
\11\ Recent Federal Trade Commission figures indicate, for
example, that from 1981 through 1992, the Commission received some
332 premerger notifications of hospital mergers. Of these, it
investigated about 14 and challenged three. FTC Watch, Sept. 6,
1993, at 3.
\12\ E.g., United States v. Rockford Mem. Corp., 717 F. Supp.
1251, 1280 (N.D. Ill. 1989), (market share of approximately 72%),
aff'd, 898 F.2d 1278 (7th Cir.), cert. denied, 111 S.Ct. 295 (1990)
---------------------------------------------------------------------------
Both the Federal Trade Commission and Antitrust Division have
emphasized the importance of strong antitrust enforcement if health
reform is to succeed. We agree. It seems clear, for example, that
alternative delivery systems, such as health maintenance organizations,
could not have developed or generated the procompetitive effects they
have without antitrust enforcement against organized resistance to them
by provider groups.
In addition, a working group of the American Bar Association, which
approached the issue without bias, recently concluded that ``antitrust
enforcement should not be a barrier to health care reform. Antitrust
enforcement, which promotes consumer choice and welfare while
restricting anticompetitive conduct, will be vital to the
implementation of health care reform.'' \13\ Thus, the group explained
that ``[a] blanket exemption from the antitrust laws is, therefore,
neither necessary or appropriate. The antitrust laws are not a barrier
to health care reform but rather a means of promoting and protecting
the more innovative and cost effective mechanisms contemplated by
health care reform.'' \14\ We agree with this objective assessment.
---------------------------------------------------------------------------
\13\ ABA Working Group on Health Care Reform, Antitrust
Implications of Health Care Reform (May 14, 1993) at 2.
\14\ Id. at 17.
---------------------------------------------------------------------------
The concern of some providers that they lack antitrust guidance in
planning collaborative activities is more credible but provides no
basis for more lenient antitrust treatment or an exemption from
antitrust coverage. Rather, the solution to this problem is antitrust
guidance for the hospital industry. The Federal Trade Commission and
Antitrust Division have done exactly that by issuing their Statements
of Antitrust Enforcement Policy in the Health Care Area on September
15. The Statements explain in detail and in non-legalese how the
federal antitrust enforcement agencies analyze transactions such as
hospital mergers and hospital joint ventures which pose a risk of
violating the antitrust laws. In addition, one state attorney general
has issued antitrust guidelines relating specifically to hospital
mergers.\15\
---------------------------------------------------------------------------
\15\ Attorney General of Massachusetts, Antitrust Guidelines for
Mergers and Similar Transactions Among Hospitals (Aug. 19, 1993).
It is both interesting and telling that neither the Department
of Justice and Federal Trade Commission Statements, nor the Attorney
General of Massachusetts Guidelines contain or propose any type of
relaxed antitrust rules for hospitals. Rather, both merely provide
readable and understandable explanations of how those agencies
analyze the potential antitrust ramifications of particular types of
conduct.
---------------------------------------------------------------------------
Early indications are that the Clinton Antitrust Division will
enforce the antitrust laws more aggressively than past
administrations.\16\ We hope the Clinton Administration has the courage
to adhere to the convictions it expressed
[[Page 29838]]
initially. It would be a shame for the Administration to back away from
its commitment by establishing ``special leniency rules'' for one
segment of the economy.\17\
---------------------------------------------------------------------------
\16\ The recent rescission by the Antitrust Division of the much
maligned 1985 Vertical Restraints Guidelines is but one example of
this. Anne K. Bingaman, Assistant Attorney General, Antitrust
Division, ``Antitrust Enforcement: Some Initial Thoughts and
Actions'' (Aug. 10, 1993).
\17\ Some states--most without careful examination--have enacted
statutes intended to permit hospitals to ``collaborate'' by merging
or entering into market allocation agreements if the arrangement is
approved by the state. Hospitals will argue that these activities
are protected from the federal antitrust laws by the so called
``state-action exemption.'' Whether the state statutes are
sufficient effectively to preempt the federal antitrust laws is an
unanswered question at present.
---------------------------------------------------------------------------
E. Integration Affecting Home Health Patients
The form of integration with the most potential to affect adversely
consumers of home health services is that where the hospital or health
care system (or several hospitals or health systems together)
diversifies into home care and then, while hiding competitive options
from patients, ``steers'' those needing home care to its own provider.
This can result in substantial anticompetitive effects. The problem is
occurring already, and health reform likely will exacerbate it,
especially if Congress or the antitrust enforcement agencies embrace
antitrust immunity or lenient antitrust enforcement.
The competitive difficulty already faced by many consumers of home
health services derives from a simple set of facts. A hospital whose
inpatients constitute a significant percentage of home health referrals
in an area enters the home health market, either unilaterally, by
acquiring an already existing agency, forming a joint venture with an
agency, or through a contractual relationship. The hospital then
``steers'' or ``channels'' its patients needing home care at discharge
to ``its'' company. It might do this in part to escape the effect of
hospital rate regulation by federal or state governments. For example,
the hospital may have substantial market power in the market for
hospital services that it cannot exercise by raising prices because of
fixed DRG payment amounts or state rate regulation. Thus, to evade the
effects of rate regulations on its bottom line, it diversifies into
other markets with less or no regulation. In these, if it can obtain
market power, it can exercise that power by raising prices.
Steering can take many forms, but usually is accomplished by the
hospitals not informing patients of competitive alternatives, by not
giving patients the opportunity to select another agency, by refusing
to distribute the literature of other agencies, by subtly inducing or
coercing staff physicians to order only from the hospital's home care
company, by falsely disparaging the quality or services of other
agencies, or by simply disregarding or refusing to honor the patient's
or patient's physician's choice when he or she chooses a home care
company other than the hospital's. One requirement for competition to
work is that buyers and sellers be informed of their options. In this
scenario, however, the hospital creates and exploits an ``informational
market imperfection.''
Competitors of the hospital's home health service are
``foreclosed'' from dealing with the hospital's inpatients. If this
foreclosure is significant, which is primarily a function of the
hospital's importance as a referral source, competing agencies will be
unable to obtain sufficient patients to remain in business regardless
of the cost or quality of those services. Moreover, realizing that a
major source of referrals is ``tied up,'' new agencies will not enter
the market; the hospital's conduct raises an entry barrier. Ultimately,
as competing agencies are forced from the market, the hospital's agency
obtains substantial market power, allowing it to raise prices and lower
quality to the detriment of consumers. The freedom of patients to
choose is adversely affected, and innovation is stifled. Costs also are
likely to increase because the hospital home care company feels no
pressure to produce its services in the most efficient manner.
Depending on the circumstances, the hospital's actions can violate
sections 1 or 2 of the Sherman Act or section 7 of the Clayton Act.\18\
---------------------------------------------------------------------------
\18\ The Federal Trade Commission is investigating a similar
factual pattern involving physicians. Physicians who typically refer
patients to another facility for particular services related to
their practice (such as urologists referring to a lithotripsy
center) might establish a joint venture to render the service and
then refer all their patients needing the service to their venture.
If the joint venture includes most physicians who refer patients for
that particular type of service, it will be difficult or impossible
for other facilities to compete or new facilities to enter the
market. See generally Kevin J. Arquit, Director, Bureau of
Competition, Federal Trade Commission, ``A New Concern in Health
Care Antitrust Enforcement: Acquisition and Exercise of Market Power
by Physician Ancillary Joint Ventures'' (Jan. 20, 1992).
---------------------------------------------------------------------------
We recognize that the antitrust laws are meant to protect
competition, not competitors.\19\ In other words, the concern of the
antitrust laws is not with the survival of individual home health
agencies but with the effect of their destruction on competition
generally. The antitrust laws assume that efficient firms will force
inefficient firms from the market. Thus, home health agencies offering
high prices or inferior quality or services should expect to fail--both
now and under health reform. Competition on the merits weeds out some
competitors.
---------------------------------------------------------------------------
\19\ See eg., Atlantic Richfield Co. v. USA Petroleum Co., 110
S.Ct. 1884 (1990).
---------------------------------------------------------------------------
Our home health agencies welcome competition on the merits, which
the antitrust laws promote. In the situation presented above, however,
there is no competition on the merits and therein, lies the problem.
Competitors of the hospital's home care agency are not forced from the
market because of their inferiority in relation to the hospital's
agency, but rather because of the hospital's ability to control
referrals and exploit its patients' lack of information about competing
agencies. If integrated health care systems are allowed to gain market
power under the guise of a ``health plan,'' they will be able to
control patient choice even if the patients are given information about
the plan's services because the patients will be ``locked up'' in that
particular plan.
The Supreme Court, in a landmark antitrust case last year,
recognized that lack of information by consumers could result in a
seller exercising market power over them and that this lack of
information was an important consideration in determining whether an
antitrust violation had occurred.\20\ Lack of information (or the cost
of obtaining information) reduces the ability of consumers to switch to
potentially less costly and better services and thus permits the seller
to charge higher prices or provide lower quality than otherwise would
be possible. Indeed, the seller need not even have a large market share
for this power to result as long as information about competitors can
be suppressed.
---------------------------------------------------------------------------
\20\ Eastman Kodak Co. v. Image Technical Servs., Inc., 112
S.Ct. 2072 (1992).
---------------------------------------------------------------------------
This scenario is more than idle speculation. At least one antitrust
case has challenged a hospital's steering patients needing home health
services to its affiliated home health agency.\21\ Similarly, a number
of antitrust suits have challenged steering by hospitals to their
affiliated provider of patients needing durable medical equipment,
resulting in three major decisions by federal circuit courts of
appeals, all in favor of the plaintiff.\22\ Thus, even absent reform,
the problem is real, and the loser is the consumer.
---------------------------------------------------------------------------
\21\ Beacon Med Care, Inc. v. Sound Home Health Servs., Inc.,
No. C84-478T (W.D. Wash. filed Aug. 9, 1984).
\22\ M&M Medical Supplies & Serv., Inc. v. Pleasant Valley
Hosp., 981 F.2d 160 (4th Cir. 1992) (en banc); Advanced Health Care
Servs. v. Radford Community Hosp., 910 F.2d 139 (4th Cir. 1990); Key
Enters., Inc. v. Venice Hosp., Inc., 919 F.2d 1550 (11th Cir. 1990)
(vacated and rehearing en banc granted).
---------------------------------------------------------------------------
The adverse effects on competition in home care markets can be
magnified
[[Page 29839]]
when hospitals integrate horizontally. Many home care patients are
hospital inpatients needing home care services at discharge. When
hospitals integrate, by merging, for example, their power over
referrals for home health services merges and increases as well.
Typically, if both hospitals have home care companies, those companies
also merge, increasing their market power in the market for home care
services.
The same anticompetitive problem can arise short of merger. For
example, competing hospitals might establish, as many have done, a
single home care company by forming a home care joint venture. The
result may be anticompetitive if, had they not formed the joint
venture, the hospitals would have entered the home care market
independently or if the hospitals tacitly or explicitly agree to refer
their patients needing home care to their joint venture. That type of
agreement is analogous to physicians referring patients to joint
ventures in which they have an economic interest, which empirical
studies have shown increase both utilization and price.\23\ Hospital
joint ventures formed to provide durable medical equipment have been
subjected to antitrust challenge.\24\
---------------------------------------------------------------------------
\23\ The concern over steering of patients by physicians led
Congress in the Omnibus Reconciliation Act of 1993, Sec. 13562,
amending section 1877 of the Social Security Act (42 U.S.C.
Sec. 1395nn), to prohibit physician ``self-referrals'' for certain
designated services, including home health services.
\24\ E.g., Alexandria Medical Artrs Pharmacy, Inc. v. Alexandria
Health Servs. Corp., No. 88-0110A (E.D. Va. filed Feb. 3, 1988
(three hospital durable medical equipment joint venture).
---------------------------------------------------------------------------
The integration that health reform might generate if the antitrust
laws are relaxed will exacerbate the competitive problems already
experienced in home care markets. The managed competition model will
induce hospitals to integrate horizontally as they attempt to negate
the effects of health alliance purchasing power. Managed competition
also will induce hospitals to diversify--integrate non-horizontally--
even further to become the exclusive provider of both hospital services
and the full array of health care services to AHPs, including home
care.\25\ Health care systems, for example, are acquiring physician
practices to be able to offer medical services in a package with
hospital services.\26\ They desire to offer a ``seamless system'' of
health care in which the system provides all needed goods and services.
---------------------------------------------------------------------------
\25\ See generally Sandy Lutz, Hospitals Continue to Move Into
Home Care, Mod. Healthcare, Jan. 25, 1993, at 28.
\26\See generally, Dynamic Diversification: Hospitals Pursue
Physician Alliances, ``Seamless'' Care, Hosps., Feb. 5, 1992, at
20; Urge to Merge Strong in Health Care Field, Flint J., July 4,
1993.
---------------------------------------------------------------------------
This presents no anticompetitive problem if all providers remain
able to compete based on the merits of their products and services, and
purchasers have access to the provider offering the lowest quality-
adjusted price. Seamless systems, in fact, do have the potential to
produce significant efficiencies, particularly by reducing the health
plan's transactions costs in contracting with providers. Seamless
systems, however, will not result in lower costs or higher quality if
they obtain market power, and thus vigorous antitrust enforcement in
the world of managed care will be crucial. Consumer welfare will depend
on the ability of integrated and non-integrated providers to compete
against one another.
Hospitals are likely to use the managed competition environment
affirmatively to squeeze other home health competitors out of the
market, by, for example, ``bundling'' their package of services (which
includes home care) such that the price for each service is not
discernible and thus comparable. The transaction may resemble or
constitute a tying or ``leveraging'' arrangement whereby the health
system refuses to sell some services unless the purchaser buys all. Or,
if the health system does offer the services separately, it may price
its home care at below cost and then cross-subsidize these losses
temporarily with profits from other services. It then easily might be
able to recoup its losses after competing home health agencies are
forced from the market. The result will be higher prices to consumers,
lower quality, and little, if any, freedom or choice.
IV. What's the Answer?
The answer to this potential conundrum is both simple and clear: It
is imperative both that Congress not loosen the antitrust constraints
on activities such as these and that health care reform include
provisions designed to ensure that services, such as home care, are
selected on a competitive basis. The proponents of antitrust relief
have failed to make their case, and the dangers from granting relief
are manifest.
We will be able to suggest specific strategies to ensure
competition after we have seen and analyzed the specifics of the
Clinton proposal. We believe, however, that any reform legislation
should require that all providers be permitted to compete to offer
their various services. Statutes or regulations should require, for
example, that health plans select providers based on competitive bids
or a similar type of competitive process. Regulations could delineate
objective criteria for selection based on price, quality, services, and
cost effectiveness, perhaps with provisions for appeal when health
plans fail to follow competitive procedures.
V. Conclusion
Home health services are a key part of the health care matrix. The
industry's importance is growing rapidly as the country seeks better
access to less expensive forms of patient care and more types of
services can be provided safely in the home. Accordingly, it is
important that markets for home health services remain open and
competitive, offering patients cost effective, high quality services
and continuing innovation. Providing hospitals (or any providers) with
an antitrust exemption will inevitably lead to a loss of patient
choice, quality care, innovation and effective cost control.
Thus, competition in home care markets is critically important to
consumers, providers, and the government alike. That competition should
not be needlessly eroded by unwarranted special interest exemption
legislation or lenient antitrust enforcement rules that may benefit
particular providers but will irreparably damage the health care
delivery system and those it serves.
American Federation of Home Health Agencies, 1320 Fenwick Lane, Silver
Spring, Maryland 20910, (301) 588-1454.
Home Health Services and Staffing Association, 119 S. Saint Asaph St.,
#115D, Alexandria, Virginia 22314, (703) 836-9863.
Patient First
Home Health Nursing Services, Inc., 811 West Avenue, P.O. Box 1026,
Wellington, Texas 79095-1026
To: Gail Kursh,
From: Monni J. Reed, R.N., D.O.N., Patient First Home Health,
Wellington, Texas
Re: Proposed final judgment for United States v. Health Choice of
Northwest Missouri, Inc.
As a practicing nurse for the last seventeen years I have
observed the emergence of home health from the hospital, Dr's
office, and now, home health office point of view.
While working in the Doctors office I saw home health nurses
come in with problems, concern and suggestions for their patients
care. At that time the local hospital had no home health so the Dr.
felt free to admit to an Agency without concern about hospital
conflict. I had left the Doctors office and was working in the
hospital when it opened it's own home health agency to try to
increase revenue to keep its doors open. (This hospital has approx.
30 beds). Every Doctor on staff
[[Page 29840]]
was expected to refer to the hospital home health. Families and
patients were bombarded with literatures stressing the need to use
the hospital home health if they supported the ``local community''
and want to help keep the hospital in existence. I witnessed a staff
R.N. be terminated because she worked for another home health on her
days off. (She'd been with that hospital for 6 to 10 years). After I
had left that small town hospital and started working for a home
health agency in another small town, I frequently carried lab
specimens and Doctor orders to the small hospital in the town I now
work. I was very comfortable going into the hospital to visit
patients who were already on our home health services. That halted
abruptly when this hospital opened their own home health agency.
Now, my patients and their families report that while hospitalized,
the hospital home health director tries (and sometimes does) to get
them to switch to the hospital home health to support the community
and keep the hospital open.
This is directly against guidelines but happens every day.
Hospital administrators feel they are above the rules and
regulations that the rest of us must live by. By passing this bill
as it stands we will only be giving them the final go ahead.
Monni J. Reed
Kevin Miller, RRT, RCP
306 Live Oak St., College Station, Texas 77840, Home 409-693-6419,
Office 409-774-1198
November 29, 1995.
To: Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., N.W., Room
9300, Washington, D.C. 20530
IE; Final Judgment for United States v. Health Choice of Northwest
Missouri, Inc., et al., Case #95-6171-CV-SJ-6
Dear Ms. Kursh: I have been a health care professional for many
years with most of my employment within hospitals as management or
in supervisory positions. This has given me great knowledge of
billing practices, accreditation surveys as well as expansion of
service projects that include home health and home medical equipment
ventures.
The majority of hospitals in the United States commonly
overcharge, over utilize service and often provide poor quality of
care. The poor quality of care and malpractice are seldom noticed by
JCAHO or the general public as these problems are most often covered
up or altered to appear to be appropriate care. Most surveys are
announced and scheduled. This allows hospitals time to alter paper
work and generate reports that indicate they are performing well in
the patients best interest. Further most hospital bills are not
closely scrutinized and contain a tremendous amount of over billing
and or charges for unnecessary procedures and supplies. I am
confident that 80-90% of all patient bills are in some way inflated.
When over billing is discovered most hospitals simply correct the
bill and indicate that there was a billing error. I have noted many
of these practices at virtually every hospital I have worked with
and is common knowledge among many health care professionals.
In the last few years there have been more and more hospitals
ever expanding into home health, home medical equipment, extended
care facilities and other areas they feel would profit them. Their
position allows them total access to these patients and the ability
to self refer them to their affiliates. The patient loses their
freedom of choice for health care. Home care services have been
available for many years provided by established free standing home
health agencies throughout America. These agencies are experts with
many years of experience providing home care. They possess great
knowledge of the home care field and employ a variety of medical
professionals. These free standing agencies for the most part
provide good care and have saved tax payers money. It is well
understood that home care is by far, less expensive than
hospitalization. This cost savings have helped the home care market
to grow and have decreased the patients average stay in the
hospital. There is currently a large network of free standing home
care providers within most areas of our country and there is not a
need for hospitals to extend their care in these areas. This would
only drive free standing providers out of business and allow
hospitals the opportunity to monopolize on every aspect of health
care. This move would further burden our entire American health care
system and add to the current health care crisis.
There is always a conflict of interest whenever a hospital based
provider of home health care is allowed to control all referrals. If
the DOJ allows this to happen, they are not protecting the taxpayers
interests. It would only benefit hospitals. The ever increasing cost
of health care can be attributed to hospitals that exploit their
positions and have caused health care spending to increase
unchecked. It alarms me to think of the consequences this action
would cause and its impact on all Americans. A standard referral
procedure should be developed by the DOJ, not Heartland as this will
only result in exploitation of patient referrals. I have enclosed
information on a recent ruling that should provide guidance for the
DOJ. Further hospitals should be limited to prevent monopolistic
practices. There is little risk of liability to hospitals if they
inform the patient that they are not responsible for non affiliates
upon referral.
The final judgement in this case may be viewed as a precedence
in future cases that are similar. For this reason great care should
be taken to insure that stringent guidelines are in place that
govern hospitals referral policies. Further restrictions are needed
to prevent hospitals from pursuing ventures that are not in the best
interest of the public. It should be clear that hospitals and large
health care systems are in a prime position to commit Medicare fraud
and abuse. The hospitals that are venturing into home care should be
suspect and closely scrutinized to help discourage this abuse.
In closing I would like to thank the DOJ for allowing comments
on this case prior to the final judgment. I hope that these comments
are helpful in determining this case.
Best Regards,
Kevin E. Miller
American Federation of Home Health Agencies, Inc.
1320 Fenwick Lane, Suite 100, Silver Spring, MD 20910, Phone (301) 588-
1454, Fax (301) 588-4732
December 4, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Antitrust Division, Department of Justice, Room 9300--600 E
Street, N.W., Washington, D.C. 20530.
Dear Ms. Kursh: The American Federation of Home Health Agencies
(AFHHA) wishes to comment on the Department of Justice's proposed
final judgment in the United States v. Health Choice of Northwest
Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6, in the U.S.
District Court for the Western District of Missouri. AFHHA is a
national association representing Medicare participating home health
agencies, the majority of which are free-standing small business
providers.
AFHHA contends that the proposed judgement, if finalized, will
convey to hospital based entities a strong competitive advantage,
blessed by the Department of Justice, which is not equitable to
patients, other providers, or the Medicare program. We are pleased
that the proposed judgement constitutes an acknowledgement that the
patient has the right to receive home health and other services from
a provider of his or her choice. Unfortunately, the Department of
Justice would allow this right to be easily circumvented by the
discharging entity.
The proposed judgement does little to address current
monopolistic practices of some hospital networks. Home health
providers are experiencing ongoing problems with the refusal of
hospitals to refer patients to home care agencies other than their
own. This extends to the point of refusing to honor the patient's or
family's specific choice of provider and even though the non-
affiliated agency may offer a broader range of service and greater
access to care, including emergency services.
Our members are Medicare participating, which means that they
meet very strict Federal conditions of participation, and are
certified as meeting such standards by state surveyors and/or by an
accrediting body, i.e., the Joint Commission for the Accreditation
of Healthcare Organizations or the National League for Nursing.
The procedures which you outline enable a hospital to cast doubt
on the reputation of all non-affiliated home health agencies and
ensure that hospital based home care providers will receive
virtually all referrals. Giving the hospital the right to hype or
puff their ``excellent'' services while disparaging other providers
with comments such as ``we cannot make a recommendation,'' ``have
done no evaluation,'' and ``cannot speak to the quality of care''
they provide stacks the deck in favor of the hospital and against
competing providers.
The judgment also grants an unfair advantage to the hospital's
ancillary services by providing that the only source of
[[Page 29841]]
information that must be mentioned regarding services offered by
independent providers is the Yellow Pages. Referring patients to the
Yellow Pages leaves them to perform the legwork to identify other
qualified providers. Placed in this position, most patients will
simply agree to accept the hospital's ancillary service. Confused,
sick, frail elderly patients cannot ``look it up'' in the phone
book, even if able to read the print. Nor do families ordinarily
have the energy, time, knowledge, or resources to fight for their
right to choose a provider at a time when they are tending to a
hospitalized family member.
The Department of Justice may in fact end up exacerbating the
problem of captive referrals. Hospitals are purchasing physician
practices and providers of ancillary services, thereby guaranteeing
a steady stream of referrals. We have received many reports that
physicians have refused to sign home care orders unless the patient
agrees to use the hospital based home health agency and that
physicians have told patients to find new doctors if they wish to
receive services from non-affiliated providers. For their part,
physicians with privileges at, or on staff of, hospitals are often
subjected to enormous pressure to channel all referrals to hospital
based entities. The Heartland solution does not address such abuses.
AFHHA urges that the judgment be revised as follows, in the
interest of curbing monopolistic practices, promoting competition,
and preserving the small business infrastructure:
1. Hospital discharge planners must demonstrate knowledge of
available resources and providers in the community, and assist the
patient in making contact, if requested.
2. Patients requiring post hospital home health services must be
provided with a written alphabetical list of all duly certified
providers in the area, along with phone numbers.
3. Along with the written list of providers, the hospital must
distribute brochures supplied by home health agencies in the area.
4. The hospital must indicate the types of services offered by
each listed agency, what hours services are available, and whether
the home care provider is certified to participate in the Medicare
program by the state or by an accrediting body. (Brochures supplied
by providers could also serve this purpose.)
5. Hospitals may not arbitrarily omit providers from the list.
6. The patient's choice of provider must be honored. Referrals
of patients who indicate no preference must be made on a rotating
basis to those home health agencies which offer the range of
services ordered by the physician.
7. The referring hospital must disclose any financial
relationship with providers on the list supplied to patients.
8. The discharging hospital must obtain written acknowledgement
from patients and/or family members that they have received the
required information.
9. Referring hospitals must establish a grievance procedure for
use by any patient or provider who believes that their rights under
this judgment or under Medicare law have been violated. Any such
grievance must be heard by a neutral mediator within five business
days of the alleged violation.
These changes we recommend will help preserve competition. It
was robust competition that enabled the home health infrastructure
to respond to the challenge of the 1982 implementation of the
Medicare Diagnostic Related Group reimbursement system for
hospitals. This reimbursement change led to the earlier discharge of
patients from hospitals. Home health agencies have implemented
continuous quality improvement programs, developed technological and
service innovations, and bent over backwards to satisfy the consumer
of home care services. Where home health providers are guaranteed a
steady stream of referrals by virtue of steering of patients by a
parent hospital, the quality, innovation, and consumer satisfaction
associated with a competitive system will be greatly compromised.
With Congress looking at competitive markets as a big part of
the solution to what ails publicly funded health care programs, this
is not the time for the Antitrust Division to enfranchise one
model--the hospital based model--as the prime deliverer of home care
in communities across the nation.
Sincerely yours,
Ann B. Howard,
Executive Director.
NAMES
National Association for Medical Equipment Services
December 4, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW,
Room 9300, Washington, DC 20530.
Dear Ms. Kursh: The National Association for Medical Equipment
Service (NAMES) hereby submits comments on the proposed consent
order in United States v. Health Choice of Northwest Missouri, Inc.,
et al., Case No 95-6171-CV-S1-6 (W.D. Mo.).
NAMES is a nonprofit association of over 1800 suppliers of home
medical equipment (HME) and services, in approximately 4000 sites
across the country. Based upon individual patient needs and
according to physicians' prescriptions, NAMES members furnish a wide
variety of equipment, supplies, and services for home use, from
traditional medical equipment such as oxygen and hospital beds,
highly sophisticated items and services such as parenteral and
enteral nutrition and supplies and specialized wheelchairs. NAMES
member companies include both ``freestanding'' independent HME
entities and those with hospital affiliations, either through
ownership or contractual arrangements.
NAMES is concerned with those provisions of the proposed
settlement involving Heartland Health Systems Inc., which set forth
the hospital's obligations when referring patients to hospital-
affiliated ancillary service providers, including its HME supplier.
DOJ's focus in the case was on a separate issue--collusion with
physicians--and the ``patient referral to affiliated companies''
aspect of the hospital operation necessarily constituted a smaller
part of the agency's scrutiny. NAMES is concerned, however, that
these provisions of the final agreement (Section II, entitled
``Ancillary Service Referrals'') may be viewed as setting a standard
for the industry for hospital-owned or affiliated HME providers.
Referrals by a hospital to an affiliated ancillary service
provider give rise to numerous regulatory issues relating to patient
freedom of choice, including whether full disclosure of the
affiliation has been made to patients and whether the patients, in
turn, have provided informed consent to receive services from the
affiliated provider. NAMES' Code of Ethics addresses this issue
specifically, providing at paragraph 9 that HME suppliers must:
avoid participating, directly or indirectly, with a source of
patient referrals in a ``captive referral arrangement'' whereby
patients are directed to utilize a supplier of home medical
equipment in derogation of the patients' rights to select the
supplier of their choice.
Some NAMES members have expressed the view that the proposed
policy--which does not require the hospital having an affiliated
ancillary service provider to inform the patient of other area
suppliers--does not ensure informed patient consent and freedom of
choice.
Given the complexity of the issues involved, and the fact that
this aspect of the settlement did not constitute DOJ's primary focus
in this case, NAMES recommends that the DOJ clarify the proposed
order to make clear that if it is not intended to establish an
industry standard. Alternatively, DOJ should furnish a more detailed
explanation of the competitive factors which it considered in
accepting the hospital's proposal in this case.
Overall, NAMES believes that an effort to articulate standards
for hospital referrals to affiliated HME suppliers would be
beneficial. The adoption of clear, objective standards would do much
to reduce or eliminate the multiple disputes which have arisen in
this area.
Please do not hesitate to contact us with any questions.
Sincerely,
William D. Coughlan,
President and CEO.
NAMES
National Association of Medical Equipment Suppliers
CODE OF ETHICS
Having been accepted into membership in the National Association
of Medical Equipment Suppliers, we do hereby subscribe without
reservation to the Association's Code of Ethics.
The purpose of the Code of Ethics shall be to set and improve
standards within the practice of providing home medical equipment
and services. To maintain the ethical conduct and integrity of this
Association, a member pledges to abide by the following:
[[Page 29842]]
1. To render the highest level of care promptly and competently
taking into account the health and safety of the patient.
2. To serve all patients regardless of race, creed, national
origin or reason of illness.
3. To provide quality home medical equipment and services which
are appropriate for the patients' needs.
4. To instruct the patients and/or caregivers in the proper use
of the equipment.
5. To explain fully and accurately to patients and/or caregivers
patients' rights and obligations regarding the rental, sale and
service of home medical equipment.
6. To respect the confidential nature of the patients' records
and not to disclose such information without proper authorization,
except as required by law.
7. To continue to expand and improve professional knowledge and
skills so as to provide patients with equipment and services which
are continually updated.
8. To abide by both Federal and local laws and regulations which
govern the home medical equipment industry.
9. To avoid participating, directly or indirectly, with a source
of patient referrals in a ``captive referral arrangement''; whereby
patients are directed to utilize a supplier of home medical
equipment in derogation of the patients' rights to select the
suppliers of their choice.
10. To act in good faith; to be honest, truthful and fair to all
concerned.
Gibson Health Services
1468 State Street, P.O. Box 368, East St. Louis, IL 62202, (618) 274-
6026
December 4, 1995.
Ms. Gail Kursch,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Anti-trust Division, 600 E. Street,
N.W., Room 9300, Washington, DC 20530.
Re: United States v. Health Choice of Northwest Missouri, et al,
Case No. 95-6171-CV-SJ-6, United States District Court for the
Western District of Missouri.
Dear Ms. Kursch: I understand that you are accepting comments on
the proposed settlement for the above referenced case.
I feel that it is not only unjust but also inhumane to condone,
endorse or approve a policy or settlement that allows a discharge
planner to give a patient a telephone book unless the patient asks a
second time instead of a list of area Home Health Agencies.
My staff and I would like for you to consider the following
regarding the Department of Justice's recommended Home Health
Referral Policy:
1. It represents a discriminatory act against a person who is
illiterate or who has a limited reading and/or mental capacity.
2. If the patient cannot read or has a limited mental capacity,
this denies the patient their right to make an informed decision.
3. Depending upon the community the hospital is located, the
phone book may not list all of the agencies that provide services
where the patient lives. For example, if this patient lives in East
St. Louis, Illinois and was in a St. Louis, Missouri hospital (which
is common) and is given a St. Louis, Missouri phone book, my agency
in East St. Louis would never be recognized.
4. It reflects a blatant kickback violation because the
``intent'' is merely to increase the hospital's revenues. Does the
hospital have its own ambulance service? transportation service?
private duty service? home oxygen service? etc.? If not, how is the
patient made aware of their option for these services? If options
are offered for services that they do not provide, sounds like
something is really wrong not to do the same for services they do
provide.
5. While we can clearly understand that a hospital may not want
to ``endorse'' other Home Health Agencies, providing a list of
available agencies could be beneficial to everyone. The patient is
conveniently given information for decision making, the free
standing Home Health Agency is fairly recognized and the hospital
has a better working relationship with the Home Health Agency which
helps everyone.
6. The hospitals could simply provide a list of agencies by
name, address, phone and area served. It would be ideal to also
include the disciplines and specialties offered by the agency. The
hospital Discharge Planner could then read off the list of agencies
serving the patient's community. A senior citizen or person with
limited reading ability might recognize the name of an agency he or
she is familiar with. In addition, many persons prefer to support
agencies within their community. This is particularly important in
minority communities where there may be a strong ethnic
consciousness to support their own minority businesses to help with
jobs, taxes, etc.
7. It's simply more convenient for the patient. Patients are now
leaving the hospital in more acute states. If you were sick, would
you want to try to find something in the Yellow Pages that you knew
nothing about?
8. If this hospital is only going to give the patients a phone
book and the sick person says ``That's OK, I don't feel like looking
through a phone book,'' will the hospital's Home Health Agency
follow all patients that are discharged from the hospital?
The patient with no coverage?
The patient that lives in the high crime areas?
The patient that travelled a long distance to this
hospital who lives perhaps 50 miles or more away??
The patient on Medicaid (The significance of this will
vary from state to state. Some states reimburse cost while other
states reimburse well below cost. For example, in Illinois, Medicaid
only pays $41.55 per visit without consideration that the cost is
$55 to $75 per visit.)
In summary, we would recommend that Sections II.B.2 and II.B.3
of the attached recommended policy be removed to reflect that a list
of area Home Health Agencies are read and given to the patient which
includes the hospital's home health agency. The hospital could note
that they are not endorsing the other agencies, but stress that the
information is given for them to make the choice. The patient/family
should be offered the time, if desired, to call some of the agencies
if they want more information.
If I can be of further assistance in this matter, do not
hesitate to call. Thank you for your attention.
Sincerely,
Patricia A. Gibson,
Chief Executive Officer.
C: National Association of Home Care, Illinois Home Care, Council
Law Offices, Small, Craig & Werkenthin, A Professional Corporation
Suite 1100, 100 Congress Avenue, Austin, Texas 78701-4099, (512) 472-
8355, San Antonio Office, 300 Convent Street, Suite 1950, San Antonio,
Texas 78205-3738, (210) 226-2080, Facsimiles, Austin: (512) 320-9734,
San Antonio: (210) 226-2646.
December 1, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St. N.W.,
Room 9300, Washington, DC 20530, VIA FAX NO. (202) 514 9978.
Re: Comments on Proposed Final Judgment; United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-
6; In the U.S. District Court for the Western District of Missouri.
Dear Ms. Kursh: This law firm represents Texas Home Health, Inc.
which is a home health care provider in Texas. With respect to the
Proposed Final Judgment in the above matter, Texas Home Health
submits the following comments.
The referral procedure developed by Heartland Health System
would allow Heartland to maintain a competitive advantage over other
providers in the situations in which the patient does not have a
provider preference. Under Heartland's proposal, if the patient does
not have a preference, the discharge planner is allowed to inform
the patient that Heartland has the capability to provide the
services and apparently would be allowed to make representations as
to the quality of service to be provided. If the patient does not
accept Heartland's services, it appears that the patient would be
given a telephone book and informed that there are other providers
for which quality representations cannot be made.
If this procedure is followed, it is unlikely that any provider
other than Heartland would receive referrals. Apart from the fact
that Heartland would be in a position to embellish quality and
provide tacit indications that it is preferable to other providers,
if a patient has no preference as to providers, the patient will
more likely than not choose Heartland because it has no other
information about the other providers. The patient would be forced
to locate other providers in a telephone book and make its own
investigation. It is unlikely patients will expend this effort.
Additionally there may be a perception that the other providers do
not provide services having the same degree of quality as Heartland.
To correct these deficiencies in the proposal, the discharge
planner should
[[Page 29843]]
provide the patient with the names of every provider that has
requested to be included on the information listing. No preference
should be given to Heartland, and the same type of information
should be given for each provider. Heartland should be precluded
from making oral representations about its services or implying that
its services are superior to those of other providers unless other
providers are given the opportunity to make similar presentations.
Other providers should be given the opportunity to have
brochures distributed to the patients. The essence of the procedure
should be to ensure that the patient has freedom of choice and that
Heartland cannot exploit its position to give it a competitive
advantage. Heartland's proposal will not accomplish this.
Only if all providers participate on a level playing field can
freedom of choice truly occur. All providers should be given the
opportunity to be included on a listing of eligible providers and to
provide information that can be evaluated by the patient without
influence from the discharge planner. Otherwise, the discharge
planner could effectively control the patient's decision or provide
information in a favorable light to Heartland. The effect of this is
that other providers are precluded from having the opportunity to
market their services to potential consumers.
Texas Home Health respectfully requests that you consider the
potential abuse with the proposed referral procedure.
Very truly yours,
William R. McIlhany
Central Home Health Care
Decatur Office, 495 Winn Way Suite 100, Decatur, Georgia 30030, 404/
296-0805.
November 29, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530.
Re: Comments on Proposed Final Judgement: United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6
in the U.S. District Court for the Western District of Missouri.
Dear Ms. Kursh: As a home health care provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selection of post-hospital
ancillary services, including the selection of a home health care
provider. For these reasons I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgement
(recommended policy) be modified as such:
strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components;
require the hospital to provide patients with an
updated list of Medicare/Medicaid providers in the community;
require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well;
make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
Sandy Caroland,
Administrator.
Healthfield Services of Middle Georgia, Inc.
2490 Riverside Drive, Macon, Georgia 31204, 912/743-5769.
November 29, 1995
Gail Kursh,
Chief Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530.
Re: Comments on Proposed Final Judgement: United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6
in the U.S. District Court for the Western District of Missouri.
Dear Ms. Kursh: As a home health care provider, I have first-
hand knowledge of the subject matter the Department of Justice is
dealing with in the above referenced matter. I also understand the
influence a hospital can exert in a patient's selection of post-
hospital ancillary services, including the selection of a home
health care provider. For these reasons, I have reviewed and studied
the DOJ's recommended home health, DME and hospice referral policy
for Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgement
(recommended policy) be modified as such:
strengthen limitations on the hospitals ability to
refer its patients to its own hospital-based components;
require the hospital to provide patients with an
updated list of Medicare/Medicaid providers in the community;
require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well;
make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
William H. Hursey,
Administrator.
Date: November 29, 1995
To: Gail Kursh, Department of Justice, Washington, D.C.
Re: The final judgement for United States v. Health Choice of
Northwest Missouri, Inc. Case #95-6171.
I support the referral procedure Heartland Health System
developed for home health, DME and hospice services.
If a physician specifies the provider to be used, ancillary
services continue to be medically directed. This prevents the
physician or facility from incurring any liability by selecting
providers through rotation or otherwise without credentialling or
quality assurance procedures. The patient should be asked if this is
acceptable, and if so, referred to that provider.
The patient's preference should always be honored if the
physician does not order a specific provider.
Agencies should honestly and conscientiously cooperate in
providing information to assure comprehensive services to clients
and their families.
It has been my experience, hospice services are not as
competitive as home health because of the profits involved. The
number of home health agencies has escalated dramatically this last
year. I am saddened, because I see home health becoming ``big
business'' and not a community service any longer. Agencies within
our service area have always respected each other and provided
service for our individual communities. Many of the newer for-profit
agencies do not follow the Medicare guidelines. Some agencies tell
their patients that they may drive and never address safety or
interim care needs for fear of losing a patient.
Heartland Health Systems has developed a referral system that
keeps home health and hospice medically directed and holistic in
nature, the way it was intended.
[[Page 29844]]
Sincerely,
Reneah Wilson,
Home Health/Hospice Director, Ochiltree Hospital District, 2402 South
Main, Perryton, Texas 79070.
Shannon Medical Center
Home Health Services, 120 E. Harris, San Angelo, Texas 76902, (915)
6533-6741
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: As a hospital-based provider of home care
services, I am in favor of the proposed final judgment in the United
States vs. Health Choice of Northwest Missouri, Inc. et al., Case
No. 95-6171-CV-SJ-6. I find the requirements set out for referrals
determination quite satisfactory in assuring patient choice and
maintaining competition. Contrary to popular beliefs, hospital-based
home care agencies do not have a monopoly on referrals and many of
us do our utmost to provide patient choice and are very
conscientious in maintaining the Medicare Conditions of
Participation. I strongly encourage the judgment to stand and for
the Department of Justice to resist placing any additional burdens
on providers which would be unnecessary.
Thank you for your consideration.
Yours truly,
Janis Fuchs,
Director, Shannon Home Health Services, 127 E. Beauregard, San Angelo,
Texas 76903.
Keweenaw Home Nursing & Hospice
414 Hecla Street, Laurium, Michigan 49913, Fax: (906) 337-9929, 1-800-
594-7053, (906) 337-5700
December 1, 1995.
Gail Kursh,
Chief Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E. St., NW, Room
9300, Washington, DC 20530.
Dear Ms. Kursh: As an owner of a small rural free standing home
health care agency, I have real concern about the recent DOJ ruling
in the matter of U.S. v. Health Choice of Northwest Missouri, Inc.
Our agency has an excellent reputation for quality in our
community. In over 6 years of existence we have been Medicare
certified without a single deficiency. For nearly 3 years, we have
maintained CHAP accreditation through the community Health
Accreditation Program of the National League for Nursing.
The two local hospitals have teamed together and created their
own home care agency. To some degree these hospitals give patients
choice but certainly will not continue to give choice under the DOJ
ruling. These hospitals are very aware of our quality and reputation
and certainly could ``speak to the quality'' of our program.
Please reconsider the DOJ's decision in the case and protect the
individuals freedom of choice. The future of the free standing
agency depends on it.
Sincerely,
Diane Tiberg
Visiting Nurse Services of Southern Michigan, Inc.
311 East Michigan Avenue, Suite 200, Battle Creek, Michigan 49017-4939,
Battle Creek (616) 962-0303, Coldwater (517) 279-7550, Albion (517)
629-8100, Toll-Free 1-800-622-9822, FAX (616) 962-8810
November 28, 1995.
Gail Kursh,
Chief Professional and Intellectual Property Section, Health Care
Task Force, Department of Justice, Anti Trust Division, 600 E. St.
NW, Room 9300, Washington, D.C. 20530.
Dear Mrs. Kursh: We are writing to give input in the case,
United States v. Health Choice of Northwest Missouri, Inc, et al;
case number 95-6171 CV-SJ-6 in the U.S. District Court for the
Western District of Missouri.
We are a non-profit home care agency serving Southwest Michigan.
We wish to urge that hospitals be required to continue to offer
patients choices for care so that the value of the free market can
continue to influence quality. Patients need to be able to judge and
select based upon quality. Monopoly influence often tends to rule
out this free choice.
We propose that the final judgment be modified to:
Strengthen limitations on the hospital's ability to
refer it's patients to it's own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well; and,
Make the hospitality publicly post it's daily referrals
to both it's hospital-based entities and to other providers in the
community.
Please consider this as the final judgment is made. Thank you.
Sincerely,
Judy Hoelscher,
Vice President of Clinical Services.
Visiting Nurse Association of Martin/St. Lucie County, Inc.
2400 S.E. Monterey Road, Suite 100, Stuart, Florida 34996, (407) 286-
1844, All Areas 930-6877, Joint Commission on Accreditation of Health
Care Organizations
November 28, 1995.
Gail Kursh
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St. N.W.
Room 9300, Washington, D.C. 20530.
Re: United States v. Health Choice of Northwest Missouri, Inc., et.
al. Case No. 95-0171-CV-SJ-6.
Dear Ms. Kursh: The proposed final judgement for U.S. v. Health
Choice is a step back for quality care in the home health care
setting. Competition supports and promotes a high quality of care,
evidenced by clinical outcomes, cost-effective clinical guidelines,
patient satisfaction and appropriate use of community resources.
Your proposed judgement has the potential to create a monopoly for
hospital-based home health care agencies and may end competition in
home health care.
Hospitals have a ``captured audience'' of vulnerable patients
who feel dependent upon the hospital staff. Patients are not likely
to go against a discharge planner's referral to the hospital home
health agency for fear that their failure to ``cooperate'' may
create an environment where the patient's continuing needs (in-
patient needs and paperwork for reimbursement needs) may not be met
or may be delayed.
Additionally, hospitals exert their influence over physicians
(with hospital privileges) to refer only to the hospital-based
agency in order to support the hospital. Some hospitals have even
moved their home health agency from being a separate entity to a
hospital department, so that self-referrals are not subject to GAO
investigations instituted by Rep. Pete Stark (D-Calif.). A second
reason is to shift administrative costs under the present MEDICARE
Cost Reimbursed Home Health System.
Over the past two years hospitals discontinued the referral
rotation system; discontinued hospital access to patients by
agencies who serve them, refer only to their own agencies, called
physicians to ask why a hospital patient was referred to an outside
agency, etc. These actions clearly demonstrate a move to a monopoly
system.
Hospital arguments for promoting their own agency at the
exclusion of outside agencies include continuum of care, referrals
to other agencies would require hospital credentialing of outside
agencies, and hospitals always give the patient a choice. It is easy
to refute these claims.
The traditional continuum of care has always been from
organization to organization, be it a hospital or other community
resource agency, with patient information transferred between
professionals who are trained to focus on continuity and
coordination of care. Just because a home health agency has the same
name or is affiliated with a hospital does not, in itself, assure a
continuum of quality care.
The responsibility of a discharge planner includes knowledge and
judgement regarding all home health care community resources that
would benefit the patient. Discharge planners know resources
available and receive feedback regarding the quality of care from
these resources. Many state home health agency licensure laws
establish standards that agencies must meet, so hospitals know that
standards are met and don't need to ``credential'' them.
Additionally, many home health agencies today are accredited
themselves through either the Joint Commission on the Accreditation
of Health
[[Page 29845]]
Care Organization (JCAHO), or the Community Health Accreditation
Program (CHAP).
Finally, hospitals ALWAYS state they give the patient a choice,
yet many patients have told outside agencies that during their
hospitalization, hospital representatives have almost insisted they
use a hospital-based agency. Also, physicians who refer to outside
agencies tell outside agencies that as soon as the patient is
admitted, before the physician even discusses discharge with the
patient (to advise them of options), the hospital-based agency has
already been in to talk with the patient and already has them signed
up as a referral for their agency.
Thank you for the opportunity to send my comments on your
proposed final judgement for the above mentioned case. Please don't
be persuaded by big hospital corporations and hospital lobbyists to
pass a judgement that quite probably abolishes competition in home
health care and effectively gives patients no choice.
Sincerely,
Robert J. Quinn,
Director of Operations.
Cornerstone Home Health Care
6300 Samuell Blvd., Suite 120 B, Dallas, Texas 75228-7100, Phone: (214)
681-1600, Fax: (214) 381-2900
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E St., NW.,
Room 9300, Washington, DC 20530.
To: Gail Kursh,
As an owner of an independent home health agency, I recommend
that the Department of Justice should allow the hospital discharge
planner give a list of all home health agencies serving the
neighborhood of the patients residence area. I would also recommend
that the patients be given a brochure of the agencies requested by
the patient so they will be able to choose the service of their
choice. The hospital based agencies should self refer no more than
50% of the patients discharged from the hospital to its own or
related home health agency. The discharge planner should give a list
of all agencies serving the area to the doctors at the hospital for
their information.
I hope my suggestions will help you and the survival of all the
independent home health agencies.
Sincerely,
Tom Varughese,
Administrator.
National Home Infusion Association
205 Daingerfield Road, Alexandria, VA 22314, Phone 703-549-3740, Fax
703-683-3619
December 4, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street NW.,
Room 9300, Washington, DC 20530.
Dear Ms. Kursh: On behalf of the members of the National Home
Infusion Association, I am writing to express our concerns regarding
the proposed final judgment for United States v. Health Choice of
Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6 in U.S.
District Court for the Western District of Missouri.
Specifically, while we believe the proposed final judgment in
regard to the referral policy is a well intended attempt to address
this issue, we are concerned that instead it will further strengthen
the growing anticompetitive environment in which institutions
capture referrals for their own outpatient service companies.
Nationwide, two out of every three hospitals now offer some form
of home care services and the numbers are continuing to grow at a
rapid pace. That means that today, institutional inpatients have a
higher potential to be captively referred to an institution's own
outpatient service company than ever before.
The department's proposed guidelines appear to base the balance
to an institution's self-referral with a physician discharging a
patient, out of the same institution who grants that physician
privileges to work within that institution, into the care of a
competitor of that institution and with the hospital's own
filtration of information to the patient as it concerns competitors
to its outpatient service company(ies).
Our organization routinely receives calls from both outpatient
providers and physicians indicating that hospitals are increasingly
pressuring physicians and patients, both directly and indirectly, to
utilize the hospital's own outpatient services.
It is our belief that outpatient service providers should be
allowed unfiltered access to potential referral patients, and that
restrictions should be placed on a hospital's ability to pressure
physicians. We believe this will create and foster a competitive
environment.
Therefore, NHIA urges you to support the incorporation of the
Coalition for Quality Health Care's recommendations into the final
judgment, namely:
to strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components; to require
the hospital to use a rotation system which assures equitable
referrals to all providers in the area; and
to require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and
to expose the patient population to the availability of
outside services as well; and
to make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
It is NHIA's position that the proposed final judgment needs to
recognize that both patients and physicians are in a vulnerable
position within an institution and that measures such as those
recommended by the Coalition for Quality Health Care need to be
incorporated to foster and ensure a competitive environment.
Sincerely,
Robin J. Richardson,
Executive Director.
Visiting Nurse Associations of America
3801 E. Florida Ave., Suite 900, Denver, CO 80210, (303) 753-0218, Fax
753-0258
December 4, 1995.
Ms. Gail Kursh,
Chief Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530.
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6 in the U.S. District Court for the
Western District of Missouri.
Dear Ms. Kursh: The Visiting Nurse Associations of America
(VNAA) presents the following comments to urge the United States
Department of Justice (DOJ) to withdraw its consent to the proposed
final judgment regarding United States v. Health Choice of Northwest
Missouri, Inc., et al. in order to modify the judgment to better
serve the public interest.
VNAA is a national membership organization, representing 210
Visiting Nurse Associations (VNAs) throughout the United States.
VNAs are home- and community-based, nonprofit, Medicare-certified
home health and hospice agencies. The VNA mission is to provide the
most compassionate and cost-effective care possible to our patients
without regard to their ability to pay. VNA's services range from
homemaker services to skilled nursing care, including high-tech
services such as blood transfusions and chemotherapy. HCFA's 1993
data demonstrate that 26% of all Medicare home health admissions
that year were to VNAs. VNAs also carry the majority of Medicaid
home care and a significant volume of privately-insured home care.
Because VNAs have provided care regardless of patients' ability to
pay for over 100 years, they have been, and continue to be, the
safety net for uninsured and underinsured patients. Charity support
allows VNAs to be that safety net, bridging the gap between cost of
care and reimbursement.
As the delivery of health care moves increasingly away from the
hospital to the home, patients must be assured they have access to a
broad range of providers, including free-standing agencies such as
VNAs. VNAs have both the historic mission and the cutting edge
clinical advances for treating patients in the home. VNAA believes
that the policy regarding patient referral by a hospital system to
home care and other ancillary services, which is outlined in the
proposed final judgment for United States v. Health Choice of
Northwest Missouri, Inc., et al., would be detrimental to this goal.
This judgment, as currently written, would restrict a patient's
freedom to choose his or her own home care provider because a
patient most likely would not be made aware of all qualified
providers in the community at the time of hospital discharge. As a
result, the judgment would conflict with current Medicare and
Medicaid policy that protects
[[Page 29846]]
patient choice and fair competition (42 USC Sec. 1395a) and (42 USC
Sec. 1396a(23)).
VNAA requests the DOJ to revise its judgment to better protect
patient choice and competition by requiring hospitals to present a
written list of local Medicare- and Medicaid-certified home care and
other ancillary providers to a patient at the same time that a
hospital informs the patient of its own accredited ancillary
services. VNAA also requests that participating hospitals be
required to provide such patients with a written explanation of the
Medicare and Medicaid statutes that protect a patient's freedom-to-
choose his or her provider of services and the quality standards the
listed certified agencies must meet as specified by the programs'
conditions of participation.
Thank you for your consideration of our comments.
Sincerely,
William G. Vanell,
President and CEO.
Home Care Association of America
9570 Regency Square Blvd., Jacksonville, FL 32225, 1-800-386-HCAA
December 1, 1995
Gail Hursh,
Chief Professions & Intellectual Property Section Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530.
Re: United States v. Health Choice of Northwest Missouri, et al Case
No. 95-6171-CV-SJ-6.
Dear Gail Hursh: I am general counsel for Home Care Association
of America (HCAA) which represents two hundred forty (240) home care
agencies throughout the United States with nine (9) in Missouri.
We are very cognizant of hospitals similar to Heartland Hospital
committing similar offenses and believe that the free standing home
health agencies will not be adequately protected by the ``DOJ's
Recommended Home Health, DME, and Hospice Referral Policy for
Heartland Hospital''.
Under the proposed recommendation, the Hospital will still have
an unfair advantage over any home care agency not affiliated with
the hospital. The hospital essentially has a captive audience and
has no requirement to even suggest that there are other home care
agencies in the community that provide similar services. Under II
(B)(2) of the recommendation, if a patient has not made a
preference, the hospital is in the position to move the patient
directly into their own service and the patient would never know the
availability of any other service. Patients coming out of a hospital
are generally willing to do what ever the hospital staff suggest.
To put a requirement on the patient to make a request for other
providers is putting an undue burden on the patient and the other
providers in the community. Medicare does not allow advertisement as
a reimburseable cost to providers and therefore because the hospital
has a captive patient, they are able to inform the patient about
their service without any additional cost. Other providers are
generally precluded from discussing their services with a patient in
the hospital. This gives the hospital a marked advantage because the
patient has no choice.
We at HCAA would request that you reconsider your
recommendations and modify them as follows:
The hospital shall not be allowed to self refer any more than
thirty (30) percent of all the patients which do not have a
preference. Patients not having a preference of a specific provider
would be referred to providers registered with the hospital on a
rotation basis. Thus no agency could be given preferential treatment
and the hospital would not monopolize the care for patients who have
not been informed as to the services available in the community. Any
willing provider qualified under Medicare shall be allowed placement
on the referral list and shall receive patients on the rotation
basis.
We believe that the above referral plan would be beneficial to
all and would not preclude the hospital from self referral
completely. This also does not disrupt the hospital by requiring
that the other providers be allowed to discuss their services with
patients prior to the patient leaving the hospital.
We believe that if you make the above change to your
recommendation it will preclude a substantial amount of future
litigation in the anti-trust area with hospitals.
We request that you reconsider your recommendations and include
our suggested change.
If you should have any questions, or would like to discuss this
further, please feel free to contact me directly.
Sincerely,
H. Kenneth Johnston II,
General Counsel.
cc: Dwight Cenac, Chairman of the Board
NARD Legislative Defense Fund, National Association of Retail Druggists
205 Daingerfield Road, Alexandria, Virginia 22314
December 1, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW,
Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: The purpose of this correspondence is to express
our concerns regarding the proposed final judgment for United States
v. Health Choice of Northwest Missouri, Inc., et al., Case No. 95-
6171-CV-SJ-6 in U.S. District Court for the Western District of
Missouri.
On behalf of our members in Missouri and throughout the country,
we urge you to support the incorporation in the final judgment and
recommendations of the Coalition for Quality Health Care, namely:
to strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components; to require
the hospital to use a rotation system which assures equitable
referrals to all providers in the area; and
to require the hospital to permit (on their premises,
during normal working hours,) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and
to expose the patient population to the availability of
outside services as well; and
to make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
On behalf of more than 75,000 independent retail pharmacists
nationwide, we reiterate our concern that the final judgment be
formulated to assure that consumers truly have a choice of
competitors.
The ability of the consumer to select the health care provider
or health care entity of their choice is an essential ingredient in
maintaining a competitive environment in our marketplace.
Sincerely,
John M. Rector,
Senior Vice President of Government Affairs and General Counsel.
In The United States District Court, For The Western District of
Missouri
United States of America, Plaintiff, v. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Civil Action No. 95-6171-CV-SJ-
6.
Motion For Leave To Appear As Amicus Curiae, File Briefs and
Participate In Hearings On Proposed Final Judgment
The Coalition for Quality Healthcare, a nonprofit Missouri
corporation organized to assure consumer access to timely and relevant
information and to promote competitiveness in the health care field,
hereby moves the Court, pursuant to 15 U.S.C. Sec. 16(b), for leave to
appear as Amicus Curiae in this case and to file the accompanying
Memorandum of Amicus Curiae in Opposition to Proposed Final Judgment in
this matter. Amicus also respectfully requests that it be allowed to
present evidence and participate in oral arguments in support of its
Memorandum of Amicus Curiae in any proceedings held by the Court to
determine whether approval of the proposed Final Judgment is in the
public's interest.
In support of its Motion, Amicus attaches and incorporates its
Memorandum of Law.
[[Page 29847]]
Respectfully submitted,
Armstrong, Teasdale, Schlafly & Davis.
Thomas M. Bradshaw, Mo. 20411,
Dianne M. Hansen, Mo. 40356,
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, (816) 221-0786 FAX.
and
Glenn E. Davis, Mo. 30308,
Diane E. Felix, Mo. 28439,
One Metropolitan Square, Suite 2600, St. Louis, Missouri 63102-2704,
(314) 621-5070.
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare
Certificate of Mailing
I hereby certify that a true and correct copy of the foregoing
document was mailed, postage prepaid, this 1st day of December, 1995,
to the following counsel of record:
Lawrence R. Fullerton, Esq., Edward D. Eliasberg, Jr., Esq.,
Antitrust Division, U.S. Dept. of Justice, 600 E Street, N.W., Room
9420, BICN Bldg., Washington, D.C. 20530
Thomas D. Watkins, Esq., Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, MO 64506-0217
George E. Leonard, Esq., Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, MO 64105-0509
Richard D. Raskin, Esq., Sidley & Austin, One First National Plaza,
Chicago, IL 60603
Brian B. Myers, Lathrop & Norquist, 2345 Grand Avenue, Suite 2600,
Kansas City, MO 64108
Dianne M. Hansen,
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare.
In The United States District Court, For The Western District of
Missouri
United States of America, Plaintiff, v. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Civil Action No. 95-6171-CV-SJ-
6.
Memorandum of Law In Support of Motion To Appear As Amicus Curiae and
To File Amicus Brief and To Participate In Proceedings On Proposed
Final Judgment
For the reasons set forth below, the Coalition for Quality
Healthcare, requests permission to appear as Amicus Curiae and to file,
and to have the Court consider, the accompanying Memorandum of Law of
Amicus Curiae in Opposition to the Proposed Final Judgment in United
States v. Health Choice of Northwest Missouri, Inc., et al., No. 95-
6171-CV-SJ-6.
Amicus also requests the opportunity to be heard and present
evidence at any hearing scheduled by the Court to determine whether
approval of the proposed Final Judgment is in the public's interest.
Status of Amicus Curiae
The Coalition for Quality Healthcare (the ``Coalition'') is a
nonprofit Missouri corporation organized to assure consumer access to
timely and relevant information and to promote competitiveness in the
healthcare field. The Coalition is comprised of concerned citizens and
providers of ancillary healthcare services in Northwest Missouri,
including St. Joseph, Missouri and its surrounding areas. Members of
the Coalition include owners of long-term care facilities, home health
care agencies, pharmacies, medical equipment companies, and other
service oriented businesses operating in the healthcare field.
The Coalition believes that the proposed Final Judgment is not in
the public's interest. The terms and provisions of the ``referral
policy'' which is incorporated into the Final Judgment, if approved by
this Court, will directly injure members of the public, including
patients who will be denied the right to make an informed choice among
all available ancillary services providers, and non-Heartland ancillary
services providers who will be foreclosed from obtaining business from
patients being discharged from Heartland's acute care hospital. The
practical effect of the referral policy is that Heartland will continue
to increase its monopoly power in the ancillary services market through
predatory practices and leveraging, causing antitrust injuries.
On November 22, 1995, pursuant to the Tunney Act, the Coalition
filed its formal Comment with this Court, directed to the Department of
Justice, Antitrust Division. Amicus now seeks the Court's permission to
supplement its Comment with the attached Memorandum of Amicus Curiae
setting forth arguments and authorities in opposition to the proposed
Final Judgment and recommending to the Court alternative provisions,
including a model referral policy, which the Coalition believes will
better serve the public's interest.
Amicus further seeks permission to participate in any proceedings
or hearings before this Court to determine whether the proposed Final
Judgment is in the public's interest.
Statutory Right to Appear as Amicus Curiae
Under Section 16(f) of the Tunney Act, 15 U.S.C. Sec. 16, the Court
may authorize full or limited participation in proceedings before the
court by interested persons or agencies, including appearance amicus
curiae, intervention as a party pursuant to Fed.R.Civ.P. 24,
examination of witnesses or documentary materials, or participation in
any other manner and extent which serves the public interest as the
Court may deem appropriate. Id Secs. 16(f)(3), 16(f)(5).
Courts frequently permit amicus submissions in Tunney Act
proceedings. See e.g. United States v. Microsoft Corp., 56 F.3d 1448
(D.C. Cir. 1995); United States v. Airline Tariff Publishing Co., 1993-
1 Trade Cases para. 70,191 (D.C. Dist. 1993); United States v.
International Telephone & Telegraph Co., 349 F.Supp. 22, 26 n.2 (D.
Conn. 1972).
The Coalition believes that the proposed consent decree is of the
greatest possible importance to the citizens and patients utilizing
acute healthcare services and ancillary healthcare services in
Northwest Missouri and Northeast Kansas. As discussed more fully in the
accompanying Memorandum of Amicus Curiae, the Final Judgment and
Competitive Impact Statement filed by the Department of Justice fails
to provide the Court with either the factual or economic analysis
necessary for the Court to determine whether the proposed decree is
sufficient to restore competition to the managed care services and
ancillary healthcare services markets within Heartland's geographic
region. Nor has Heartland supplied the affidavits of even a single
economist describing the likely consequences of the proposed referral
policy on the existing ancillary services market. Compare e.g., United
States v. Western Electric Co., Inc., 993 F.2d 1572, 1578-1582 (D.C.
Cir. 1993) (describing numerous affidavits from economic experts that
provided factual record for determining whether proposed decree and
modification was in the public interest).
The Court must look at the competitive impact of a proposed
judgment upon the public generally and upon individuals or entities
alleging specific injury from the violations set forth in the
compliant. See 15 U.S.C. Sec. 16(3). In the Memorandum of Amicus
Curiae, the Coalition describes in detail, supported with letters from
its members, the anticompetitive effect that the proposed consent
decree will have on both ancillary service providers and non-Heartland
physicians, and economic data indicating that members of the public
have suffered and will continue to suffer antitrust injuries if the
proposed Final Judgment and the incorporated referral policy are
approved.
[[Page 29848]]
In view of the paucity of the existing record, consideration of
additional submissions under Section 16(f) is particularly appropriate.
Conclusion
For the foregoing reasons, amicus respectfully requests that the
Court grant it leave to file the accompanying Memorandum under section
16(f) of the Tunney Act, 15 U.S.C. Sec. 16, and that the Court further
consider the Memorandum on the merits in making its public interest
determination under Section 16(e). Finally, amicus respectfully
requests that the Court allow it to present evidence and participate in
any proceedings before this Court to determine whether the proposed
Final Judgment is in the public's interest.
Respectfully submitted,
Armstrong, Teasdale, Schlafly & Davis
Thomas M. Bradshaw, Mo. 20411
Dianne M. Hansen, Mo. 40356
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, (816) 221-0786 FAX.
and
Glenn E. Davis, Mo. 30308
Diane E. Felix, Mo. 28439
One Metropolitan Square, Suite 2600, St. Louis, Missouri 63102-2704,
(314) 621-5070.
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare
Certificate of Mailing
I hereby certify that a true and correct copy of the foregoing
document was mailed, postage prepaid, this 1st day of December, 1995,
to the following counsel of record:
Lawrence R. Fullerton, Esq., Edward D. Eliasberg, Jr., Esq.,
Antitrust Division, U.S. Dept. of Justice, 600 E Street, N.W., Room
9420, BICN Bldg., Washington, D.C. 20530
Thomas D. Watkins, Esq., Watkins, Boulware, Lucas, Miner, Murphy
&Taylor, 3101 Frederick Avenue, St. Joseph, MO 64506-0217
George E. Leonard, Esq., Shugart, Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, MO 64105-0509
Richard D. Raskin, Esq., Sidley & Austin, One First National Plaza,
Chicago, IL 60603
Brian B. Myers, Lathrop & Norquist, 2345 Grand Avenue, Suite 2600,
Kansas City, MO 64108
Dianne M. Hansen,
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare.
In the United States District Court, for the Western District of
Missouri
United States of America, Plaintiff, v. Health Choice of
Northwest Missouri, Inc., Heartland Health System, Inc., and St.
Joseph Physicians, Inc., Defendants. Civil Action No. 95-6171-CV-SJ-
6.
Order
On Motion for Leave to Appear as Amicus Curiae in the above matter
brought by the Coalition for Quality Healthcare, and for good cause
shown,
IT IS HEREBY ORDERED that the Coalition for Quality Healthcare is
hereby granted leave to appear as Amicus Curiae in this case, including
the right to file briefs, participate in oral arguments and present
evidence at any hearings scheduled by the Court to determine whether
approval of the proposed Final Judgment is in the public's interest.
IT IS SO ORDERED.
HON. HOWARD F. SACHS,
Sr. U.S. District Judge.
In the United States District Court, for the Western District of
Missouri
United States of America, Plaintiff, v. Health Choice of
Northwest Missouri, Inc., Heartland Health System Inc., and St.
Joseph Physicians, Inc., Defendants. Civil Action No. 95-6171-CV-SJ-
6.
Memorandum of Amicus Curiae in Opposition To Proposed Final Judgment
Armstrong, Teasdale, Schlafly & Davis
Thomas M. Bradshaw, Mo. 20411,
Dianne M. Hansen, Mo. 40356,
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, (816) 221-0786 FAX.
and
Glenn E. Davis, Mo. 30308,
Diane E. Felix, Mo. 28439,
One Metropolitan Square, Suite 2600, St. Louis, Missouri 63102-2704,
(314) 621-5070.
The Coalition for Quality Healthcare (the ``Coalition''), as amicus
curiae, submit for the Court's consideration and information the
following arguments and authorities in opposition to the proposed Final
Judgment in this matter.
I. Background
The Antitrust Division of the Department of Justice (``DOJ'') has
determined that between April 14, 1986 and June 9, 1995, Health Choice
of Northwest Missouri, Inc. (``Health Choice''), Heartland Health
System, Inc. (``Heartland''), St. Joseph Physicians, Inc. (``SJPI'')
and others acted in concert to restrain or prevent the development of
competitive managed health care programs in Buchanan County, Missouri,
Complaint, para. 25. The DOJ found that this anticompetitive conduct
constitutes an unreasonable restraint of price and other competition
among managed care plans and among physicians in Buchanan County, which
deprives consumers and third-party payers of the benefits of free and
open competition in the purchase of health care services in Buchanan
County. Complaint, para. 27.
The Coalition is a nonprofit Missouri corporation organized to
assure consumer access to information and to promote competition in the
healthcare field. It is comprised of concerned citizens and providers
of ancillary healthcare services in Northwest Missouri, including St.
Joseph, Missouri and its surrounding areas. Members of the Coalition
include owners of long-term care facilities, home health care agencies,
pharmacies, medical equipment companies, and other service oriented
businesses operating in the healthcare field. The Coalition believes
that the deleterious effects of defendants' anticompetitive conduct
reaches beyond those enumerated in the Complaint and impacts not only
the consuming public and physicians, but also all ancillary services
providers operating within Heartland's geographic region who are not
affiliated with Heartland.
The Coalition understands that the principal focus of the DOJ's
investigation resulting in the proposed consent judgment related to
defendants' efforts to interfere with managed care programs, and that
the subject of ancillary services arose very late in the investigation
process. It is noteworthy that the Complaint before the Court makes no
reference to ancillary services at all. The DOJ has informed the
Coalition that it has no ``determinative materials'' from the
investigation concerning the ``referral policy'' referred to in the
Final Judgment. In sum, as the proposed judgment relates to ancillary
services, the Coalition believes that the referral policy itself is
beyond the scope of the Complaint, is an ill-advised addition to the
proposed consent judgment, and is included in the proposed judgment
without adequate investigation and attention to its consequences.
Accordingly, the Coalition's objections to the proposed Final Judgment,
and in particular the referral policy it includes, are both procedural
and substantive in nature.
As discussed in this Memorandum, the proposed Final Judgment, which
incorporates Heartland's ancillary services ``referral policy'' \1\
into its terms, is not in the public's interest because it violates a
consumer/patient's right to make an informed choice among all ancillary
services providers and because the referral policy enhances Heartland's
capacity to monopolize the
[[Page 29849]]
ancillary services market within Northwest Missouri and Northeast
Kansas. Further, the proposed Final Judgment lacks an effective,
affirmative Compliance Program since it relies solely on ``self-
reporting'' by the defendants. Finally, the Final Judgment contains no
provisions detailing the manner in which alleged violations of the
consent decree should be brought before the Court for appropriate
judicial enforcement proceedings.
---------------------------------------------------------------------------
\1\ Attached as Exhibit 1 is a copy of the Heartland Ancillary
Services Referral Policy which is incorporated into the terms of the
proposed Final Judgment.
---------------------------------------------------------------------------
For these reasons, as set forth in the Comment previously filed by
Amicus on November 22, 1995,\2\ and as set forth more fully below,
amicus curiae opposes the proposed Final Judgment.
---------------------------------------------------------------------------
\2\ A copy of the Comment filed by the Coalition for Quality
Healthcare with the Department of Justice is attached as Exhibit 2.
---------------------------------------------------------------------------
II. The Permissible Scope of This Court's Review
In 1974, Congress enacted the Antitrust Procedures and Penalties
Act (``APPA''), also known as the Tunney Act, 15 U.S.C. Secs. 16 (b)-
(h) (1995), out of concern with ``prior practice, which gave the
[Justice] Department almost total control of the consent decree
process, with only minimal judicial oversight.'' United States v.
American Tel. & Tel., 552 F.Supp. 131, 148 (D.D.Cir. 1982), aff'd sub
nom., Maryland v. United States, 460 U.S. 1001 (1983). Congress sought
to eliminate ``judicial rubber stamping'' of such consent decrees \3\
by providing that ``before entering any consent judgment * * * the
court shall determine that the entry of such judgment is in the public
interest.'' 15 U.S.C. Sec. 16(e).
---------------------------------------------------------------------------
\3\ As a sponsor of the Act, Senator Tunney declared:
``Specifically, our legislation will * * * make our courts an
independent force rather than a rubber stamp in reviewing consent
decrees, and it will assure that the courtroom rather than the
backroom becomes the final arbiter in antitrust enforcement.'' The
Antitrust Procedures and Penalties Act: Hearings on S. 782 and S.
1088 before the Subcommittee on Antitrust and Monopoly of the
Committee on the Judiciary, 93d Cong., 1st Sess. (1973).
---------------------------------------------------------------------------
The legislative history of the Tunney Act shows that Congress did
not intend the court's action to be merely pro forma. United States v.
Gillette Co., 406 F.Supp. 713, 715 (D. Mass. 1975). When the government
and putative defendant(s) present a proposed consent decree to the
district court for review under the Tunney Act, the court can and
should inquire into the purpose, meaning and efficacy of the proposed
decree. U.S. v. Microsoft Corp., 56 F.3d 1448, 1462 (D.C.C. 1995).
Moreover, if third parties contend that they have been positively
injured by the decree, a district judge should hesitate before assuming
that the decree is appropriate. Id. Similarly, a district court is
expected to closely scrutinize the compliance mechanisms of a proposed
consent decree. Id.
In making its inquiry, many courts have held hearings,\4\ with
testimony of experts, witnesses, and interested persons,\5\ and ordered
the DOJ to produce its ``determinative'' documents and materials to
interested parties, as required by Section 16(b) of the Tunney Act.\6\
For example, in United States v. Central Contracting Co., Inc., 537
F.Supp. 571 (1982), the DOJ asserted that ``there were simply no
documents or materials * * * that contributed materially to the
formulation of the proposed relief.'' Id. at 573. The district court
found the government's assertion disingenuous in light of the
government's similar claims in 172 out of 188 prior cases that it
considered neither documents nor any materials determinative. Id. at
577. The Court refused to blandly (and blindly) accept the government's
certification that no documents or materials led to the government's
determination that it should enter into a consent decree. Id. at 575.
Rather, the Tunney Act required a ``good faith review of all pertinent
documents and materials and a disclosure'' of those materials called
for by the Act. Id. at 577.
---------------------------------------------------------------------------
\4\ See, e.g., United States v. Westinghouse Elec. Corp., 1988
WL 47345 (D.D.C.); United States v. Bechtel Corp., 1979 WL 158 (N.D.
Cal.), aff'd 648 F.2d 660 (9th Cir. 1981), cert. denied, 454 U.S.
1083; United States v. Mid-America Dairymen, Inc., 1977 WL 4352(
W.D. Mo.).
\5\ To facilitate its review, the district court may ``authorize
full or limited participation in proceedings before the court by
interested persons or agencies.'' 15 U.S.C. Sec. 16(f)(3). United
States v. BNS, Inc., 858 F.2d 456, 459 (9th Cir. 1988).
\6\ The court can also condition approval of a consent decree on
the Antitrust Division's making available information and evidence
obtained by the government to potential, private plaintiffs which
will assist in the effective prosecution of their claims. United
States v. Associated Milk Producers, Inc., 394 F.Supp. 29, 45 (W.D.
Mo. 1975), citing U.S. Code Cong. and Admin. News 1974, 93rd Cong.
2nd Sess., pp. 6538-39.
---------------------------------------------------------------------------
A pro forma approval is certainly not warranted here. The well-
publicized and lengthy investigation into the defendants' activities
has resulted in a proposed final judgment that reaches beyond the DOJ's
managed care investigation and includes a wholly deficient referral
policy relative to ancillary services. Amicus curiae formally requested
copies of any ``determinative'' materials or documents from the DOJ so
that its counsel could properly evaluate the terms and conditions of
the proposed Final Judgment and Competitive Impact Statement.\7\ The
Department of Justice denied that any such documents exist.\8\
Accordingly, the Court should carefully evaluate whether this is in the
public interest, particularly when the DOJ has not been forthcoming
with disclosure of the underlying factual materials supporting the
proposed policy.
---------------------------------------------------------------------------
\7\ By letter of November 13, 1995, the Coalition requested the
Department of Justice to produce a list of determinative materials
to its counsel. (See Exhibit 3, attached.)
\8\ On November 21, 1995, the Department of Justice, Antitrust
Division, responded to the Coalition that the Department had
determined that no such materials or documents existed. (See Exhibit
4, attached.)
---------------------------------------------------------------------------
Amicus respectfully requests the Court to hold a hearing to
determine whether the proposed consent decree is in the public's
interest and to allow amicus to present evidence, including testimony,
to support its arguments, as outlined below, that the consent decree is
not in the public's interest.
III. Arguments and Authorities
A. The Final Judgment is not in the public's interest because the
incorporated Heartland Referral Policy prevents patients from making an
informed choice regarding ancillary services.
Heartland has diversified into the ancillary services market and
now owns, operates or otherwise controls or is affiliated with various
ancillary services providers including a skilled nursing facility, a
rehabilitation facility, a pharmacy, and a home health care agency.
Heartland now competes with other ``downstream providers'' in the
ancillary services market and, through its referral policy and
discharge practices, unfairly monopolizes that market by ``steering''
or ``channeling'' its patients to its affiliated ancillary services
providers. The channeling of patient choice is sufficient to show
injury to consumers and a violation of the antitrust laws. Key
Enterprises of Delaware, Inc., 919 F.2d 1550, 1559 (11th Cir. 1990),
vacated with instructions to dismiss (due to post-appeal settlement of
case), 9 F.3d 893 (11th Cir. 1993).
Anticompetitive steering tactics include, but are not necessarily
limited to, referring all business to the hospital-affiliated service
providers when the patient is offered no meaningful choice among
competing suppliers; \9\ refusing
[[Page 29850]]
to make available materials concerning the services of competing
suppliers; and permitting hospital-affiliated service providers access
to patients needing ancillary services but denying access to
competitors. See J. Miles, Health Care & Antitrust Law, ``Provider
Diversification,'' ch. 14 Sec. 14.01 (Clark, Boardman & Callaghan
1995).
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\9\ Frequently, patients will have no immediate preference among
downstream suppliers because they remain too ill to make a rational
choice, because they lack information about the competitive
attributes of different suppliers, because the information they do
have provides little objective guidance about the services provided
by different companies, or because the cost of the products and
services will be paid by third party payors and thus little
incentive exists to engage in price comparisons. Or the patient
simply may place substantial trust in the hospital or its doctor and
thus select its affiliated company because of its affiliation with
the hospital. J. Miles, Health Care & Antitrust Law, ``Provider
Diversification,'' ch. 14, Sec. 14.01 (Clark, Boardman & Callaghan
1995).
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The antitrust laws do not require the consumer to suffer some form
of direct or immediate monetary damage before a defendant's
anticompetitive conduct is actionable. Being denied equal access to
services is sufficient to violate the antitrust laws. See Aspen Skiing
Company v. Aspen Highlands Skiing Corp., 472 U.S. 585, 105 S.Ct. 2847,
2859-60 (1985) (consumers injured by not having easy access to all four
skiing mountains); see also Association of General Contractors of Cal.
v. California St. Council of Carpenters, 459 U.S. 519, 103 S.Ct 897,
903 (1983) (``coercive activity that prevents its victims from making
free choices between market alternatives is inherently destructive of
competitive conditions and may be condemned even without proof of its
actual market effect.'').
In Key Enterprises, a hospital, after forming a durable medical
equipment company (``DME'') joint venture, steered its patients needing
DME to the venture. The hospital changed two longstanding policies
after the venture was formed. First, although no DME vendors had been
permitted access to hospital patients prior to the venture, only
representatives of the venture were permitted access to patients
needing DME afterward. Second, although independent home health nurses
had been primarily responsible for selecting the appropriate DME vendor
prior to the venture, a representative of the venture subsequently took
that responsibility.
In addition, the hospital instituted a default policy by which
patients without a preference of a DME supplier would be referred to
the venture automatically whereas a rotation system among DME vendors
had been used previously. Id. at 1558. As a result of these practices,
the DME venture's market share promptly increased from about 9 percent
prior to the venture with the hospital to around 61 percent, while the
competing DME's market share decreased from about 73 percent to 30
percent. Moreover, 64 percent of the venture's business consisted of
the hospital's patients and about 85 percent of all hospital referrals
for DME went to the venture. Id. at 1566. In upholding a jury verdict
on the attempted monopolization claim, the appeals court held that the
hospital's conduct was predatory and sufficient to show a dangerous
probability of monopolization. Id.\10\
---------------------------------------------------------------------------
\10\ Attached as Exhibit 5 for the Court's convenience is a copy
of the Key Enterprises opinion which contains a thorough discussion
of anticompetitive practices such as ``channeling'' and
``leveraging'' in a hospital diversification case.
---------------------------------------------------------------------------
The proposed Final Judgment in this case entrenches the defendants'
ability to engage in anticompetitive practices and to violate the
antitrust laws because it requires Heartland physicians to ``observe
the attached and incorporated Heartland referral policy relating to the
provision of ancillary services.'' Final Judgment, VII (B)(1). That
referral policy impermissibly steers or channels Heartland patients to
Heartland-affiliated ancillary services providers:
(1) The policy allows the doctor to initially order that a
particular ancillary services provider be used, rather than allow the
patient to choose freely among any of the ancillary services providers
in the Northwest Missouri area. Because Heartland employs or is
otherwise associated with the majority of physicians with staff
privileges at Heartland's hospital, doctors will routinely order
Heartland ancillary services providers for the patient. Hospital
patients requiring ancillary services are frequently elderly, in ill
health and are unlikely to question, let alone contest, a doctor's
order, or to understand the basis for the recommendation or any
underlying conflict of interest.
(2) Even if the doctor does not designate a certain ancillary
services provider, the patient is nonetheless ``steered'' to Heartland
because the patient is only informed that Heartland has excellent,
fully accredited ancillary services available and then the patient is
given a Heartland brochure. The patient is not informed about the
availability of any competing ancillary services providers in the
Northwest Missouri area.
(3) If the patient rejects Heartland's ancillary services
providers, or specifically asks what other providers are available, the
patient is not given the names of or any information about non-
Heartland providers. Rather, the patient is told that Heartland cannot
provide any information about or recommend any of the other ancillary
services providers and the patient is then merely referred to the
telephone book to look for other providers.
If a firm attempts to exclude rivals on some basis other than
efficiency, it is fair to characterize its behavior as ``predatory.''
Aspen Skiing Company v. Aspen Highlands Skiing Corp., 472 U.S. 585, 605
(1985). The predatory effect of Heartland's mandated referral policy is
that consumers are channeled to Heartland-affiliated ancillary services
providers, rather than being given timely and equal access to
sufficient information on all ancillary services options and quality to
be allowed to make an informed choice among those options. The presence
of the referral policy in the proposed Final Judgment is a thinly-
disguised but calculated effort to obtain the imprimatur of the Court's
approval on a referral policy designed to maintain entry barriers to
other ancillary service providers and enhance the defendants' market
power.
B. Heartland, through its Referral Policy, effectively monopolizes the
ancillary services market within Heartland's geographic service region,
resulting in antitrust injury to consumers and other ancillary services
providers.
The proposed Final Judgment and its incorporated referral policy
impair competition in an unnecessarily restrictive way by foreclosing
competing ancillary services providers from obtaining access to
patients being discharged from acute care. The effect on competing
ancillary service providers is devastating, because patients being
discharged from acute care are a critical source of business for
competing ancillary services providers. The effect of the referral
policy is especially onerous because Heartland is the only acute care
facility located in Buchanan County, Missouri. The closest comparable
facility is North Kansas City Hospital, located in Clay County,
Missouri, 60 miles south of St. Joseph.
To the extent that Heartland patients are systematically and
successfully ``steered'' to Heartland affiliated service providers,
competitors will be foreclosed from that source of patients. This
raises serious antitrust concerns because there may be an insufficient
number of remaining referrals for competitors to remain viable. The
hospital-affiliated ancillary services providers are already obtaining
a substantial market share and an unwarranted degree of market power in
the ancillary services market, enabling them to raise and sustain
prices above (or lower quality below) levels that would be achieved in
a truly competitive marketplace.
Although firms have no duty under the antitrust law to promote
their competitors, there are recognized exceptions to this rule in
hospital diversification cases. One exception,
[[Page 29851]]
applicable to the Heartland case, is where a hospital ``leverages'' its
market power in one market (the ``upstream'' acute care market) to
obtain a competitive advantage in a second separate market (the
``downstream'' ancillary services market). See e.g., Advanced Health-
Care Services, Inc. v. Radford Community Hospital, 910 F.2d 139 (4th
Cir. 1990) (hospital with monopoly power in the market for acute care
hospital services can use that power to foreclose competition and gain
unfair competitive advantage in the downstream market for ancillary
services and DME); Key Enterprises, 919 F.2d at 1566-68.
The terms and the practical effect of Heartland's referral policy
allow Heartland to gain an unfair competitive advantage in the
ancillary services market. Comments and data supplied by competitors of
Heartland-affiliated ancillary services underscore the concerns about
the anticompetitive aspects of the proposed consent decree.\11\
Specific examples of these concerns follow.
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\11\ Attached as Exhibit 6 are letters from various ancillary
services providers who compete with Heartland in the Joseph,
Missouri service provider area, objecting to the proposed Final
Judgment and explaining the direct impact of the Referral Policy on
those providers.
---------------------------------------------------------------------------
Patients from private (non-Heartland) long-term care facilities who
are transferred to Heartland's hospital for acute care are not returned
to the private long-term care facility upon discharge, even if the
patient had been a long term resident of the private facility. Rather,
the patients are transferred to either Heartland's skilled nursing
facility, which charges a higher daily rate than comparable facilities
in the community, or to Heartland's rehabilitation center. The patients
are then kept in these Heartland care facilities until their Medicare
coverage is exhausted. The patients are only returned to their former
private facility if Heartland does not want them or if there is no
Medicare coverage or private source of payment for the patient's care.
Patients of private home health care agencies experience similar
exclusion from their prior provider. Patients who have been cared for
by a non-Heartland home health care agency prior to being admitted to
Heartland's hospital are not returned to that agency upon discharge.
Instead, patients are being directed to Heartland's home health care
unless the patient objects to the doctor's order or recommendation to
use Heartland. The patients in question are often elderly, infirm and
vulnerable, and may be unaware that they can object to a change in home
health care providers and insist that their former agency resume care
upon the patient's discharge, or unable to assert their right to do so.
Heartland hospital staff do not give notice to a patient's prior
ancillary services provider when that patient is to be discharged from
the hospital. In some instances, prior providers report that their
patients have been home for two to four days with no follow-up care by
their home health care agency because the hospital failed to notify the
former provider of the patient's discharge. This is grossly harmful to
the patient and greatly affects the quality of the patient's care.
C. The Final Judgment contributes to cause direct antitrust injury to
the public.
Owners of private long-term care facilities and home health care
agencies uniformly report a significant loss in revenue, patient census
and hospital referrals since Heartland began its referral policy.\12\
Figures obtained from the 1994 Home Health Agency Annual Report show
that among four competing home health care agencies operating in the
St. Joseph, Missouri region, Heartland Home Care admitted almost 300
more new patients to its home health care service than its next closest
competitor in St. Joseph, Missouri.\13\
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\12\ See Exhibit 6. Carriage Square Health Care Center reports
that medicare patient days decreased from 5,689 in 1989 to 91 in
1995; St. Joseph Convalescent Center reports a loss of 1,302 patient
days in 1993-94, 1,369 patient days in 1994-95, and 1,091 patient
days between July, 1995 and September, 1995; Tiffany Square
Convalescent Center reports that its occupancy rate dropped from
93.5% in 1993 to 79.7% in 1995; and Caregivers Home Health, Inc.
reports that hospital patient referrals for home health care dropped
from a high of 22 patients per month to a low of 8 patients per
month during the period January, 1994 to July, 1995.
\13\ See Exhibit 7, 1994 Home Health Agency Annual Reports for
Heartland Home Care, Caregivers Home Health, Inc., Benders Home
Care, Inc. and Kendallwood Home Health. [Note that the patient
census figures for Kendallwood have been reduced by 50% on the Recap
Sheet #1 to reflect only Kendallwood's St. Joseph agency, since
Kendallwood operates another agency outside of the St. Joseph,
Missouri region].
---------------------------------------------------------------------------
An institutional pharmacy which serves 60 private (non-Heartland)
nursing homes in St. Joseph and the surrounding area has lost
significant amounts of business due to the overall loss of private
nursing home patients to the Heartland system.\14\ Heartland's own
pharmacy services the needs of patients using Heartland's ancillary
services.
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\14\ See Exhibit 6, letters from Lipira Pharmacy indicating a
yearly loss in revenue of between $80,000 to $100,000 due to loss of
patients to Heartland's skilled nursing facility or Heartland's
rehabilitation facility.
---------------------------------------------------------------------------
The Coalition believes these developments are not the result of
Heartland's provision of superior or more efficient care or services.
Rather, these trends reflect the effects of the referral policy,
discharge practices, and other conduct by Heartland to steer patients
to its own services and those of its affiliates.
D. Heartland's Referral Policy is inconsistent with federal regulations
related to Discharge Planning that govern Medicare and Medicaid
hospitals and with standards of the Joint Commission for Accreditation
of Healthcare Organizations (``accreditation standards'') to which
Heartland subscribes.
Heartland's referral policy does not allow ancillary services
providers, who have an established relationship with the patient before
admission to Heartland's acute care hospital, to participate in
discharge planning for their patients, thus preventing the providers
from competing in the marketplace for the patient's business. Providers
are given no notice of their patient's discharge by Heartland and have
been specifically denied the opportunity to participate in discharge
planning meetings for their patients. Heartland's referral policy is
inconsistent with new federal regulations pertaining to discharge
planning for the patient and with accreditation standards pertaining to
informed consent by patients.
Effective January 12, 1995, the Health Care Financing
Administration (HCFA) issued new regulations adopting more specific
patient discharge planning standards for hospitals participating in
Medicare and Medicaid programs. 42 CFR Sec. 482.43.\15\ The new
regulations require, among other things, that a Medicare/Medicaid
participating hospital:
---------------------------------------------------------------------------
\15\ Attached as Exhibit 8 is a copy of the Final Rule,
published in 59 Fed. Reg. 64141 (December 13, 1994).
---------------------------------------------------------------------------
(1) Identify at an early stage of hospitalization those patients
likely to suffer adverse health consequences without discharge
planning. Sec. 482.43(a).
(2) Provide a ``discharge planning evaluation'' to such patients
and to others upon request, which must include an evaluation of:
(a) The likelihood of a patient needing post-hospital services and
of the availability of the services. Sec. 482.43(b)(3).
(b) The likelihood of a patient's capacity for self-care or of the
patient being cared for in the environment from
[[Page 29852]]
which he or she entered the hospital. Sec. 482.43(b)(4).
(3) Discuss the results of the evaluation with the patient or
individual acting on his or her behalf. Sec. 482.43(b)(6).
(4) If the evaluation indicates the need for a discharge plan, an
RN, social worker, or other appropriately qualified personnel must
develop such a plan. Sec. 482.43(c)(1);
(5) As needed, the patient and family members or interested persons
must be counseled to prepare them for post-hospital care.
Sec. 482.43(c)(5).
The hospital has an obligation under these new regulations to
evaluate the patient's capacity to return to the pre-hospitalization
environment, which necessarily includes the ancillary services
providers involved with the patient's care before the hospitalization.
If the patient elects to return to the care of the same ancillary
service provider as before hospitalization, it is reasonable to
consider that pre-hospitalization ancillary services provider to be an
``interested person'' who must be ``counseled'', i.e. advised of the
planned discharge date for the patient, in order to assure that
appropriate arrangements are made on a timely basis.
One of the comments discussed by the HCFA in the Order of
Rulemaking suggests that the hospital be required to give each patient
the full range of options to consider for post-hospital care. In
responding, HCFA stated that: ``In most instances the focus on a return
to the prehospitalization environment is a valid one, serving the
interests of the patient within available community resources.'' HCFA
concluded that the new regulation did not preclude a patient from being
offered a full range of options to consider for post-hospital care and
determined that no further change to the regulation was necessary. 64
Fed. Reg. 64147. The HCFA also agreed to incorporate, into the HCFA's
``Interpretive Guidelines'' covering discharge planning, the
requirement that the hospital should ``maintain complete and accurate
information on community long-term care services and facilities for
advising patients and their representatives of their options.'' 59 Fed.
Reg. 64148.\16\
---------------------------------------------------------------------------
\16\ As of the date of filing this Memorandum, the HCFA had not
yet issued new Interpretive Guidelines incorporating the referenced
requirement.
---------------------------------------------------------------------------
The Joint Commission for Accreditation of Healthcare Organizations
(``JCAHO'') has established standards for accredited hospitals
governing Patient Rights and Organization Ethics, with the stated goal
of helping to ``improve patient outcomes by respecting each patient's
rights and conducting business relationships with patients and the
public in an ethical manner''.\17\ An accredited hospital is required
to obtain informed consent for all patient care, including discharge
planning services. JCAHO Standard RI.1.2.1. The stated JCAHO intent for
this requirement is to ensure that the hospital's staff clearly explain
to the patient and, when appropriate, the patient's family, ``any
professional relationship to another health care provider or
institution that might suggest a conflict of interest.'' JCAHO Standard
RI.1.2.1. This standard requires Heartland's physicians or other staff
members treating the patient, to explain to the patient any business
relationships between the treating physician or hospital and any other
organization of health care service involved in the patient's care,
including Heartland's affiliation with certain ancillary service
providers.
---------------------------------------------------------------------------
\17\ Joint Commission for Accreditation of Healthcare
Organizations, ``Patient Rights and Organizational Ethics,'' Sec. 1
(1995).
---------------------------------------------------------------------------
Moreover, an accredited hospital must operate according to a code
of ethical behavior. JCAHO Standard RI.4. The JCAHO's stated intent for
this standard is that a hospital must conduct its business patient care
activities in an honest, decent, and proper manner, which includes
marketing, admission, transfer, and discharge functions. JCAHO
Standards RI.4
Heartland's referral policy, the manner in which it manages
discharge planning functions, and related conduct are inconsistent with
both the HCFA regulations and the JCAHO standards.
E. The Court should strike the Referral Policy from the Final Judgment,
or in the alternative, order Heartland to adopt a revised policy such
as the ``Model Referral Policy'' submitted by Amicus Curiae.
For those reasons set forth in Part III (A) to (D) above, amicus
urges the Court to strike Heartland's referral policy from the terms
and conditions of the proposed Final Judgment. The referral policy is
not a necessary component for the protection of managed care, the
principal thrust of the proposed judgment and the entire focus of the
Complaint. Even if it does relate to managed care issues, however, it
should be rejected as inappropriate. In the alternative, amicus
respectfully suggests that the parties adopt or the Court impose a
substitute referral policy whose terms and conditions are similar to
those set forth in the ``Model Referral Policy'' attached to this
Memorandum as Exhibit 9.
Anticompetitive concerns, whether directly related to managed care
or not, can best be met through a referral policy that affords each
patient equal access to and information about all ancillary services
available within Heartland's geographic region. By the same token, the
policy should provide ancillary services providers equal access to
Heartland patients. Amicus curiae strongly believes that its Model
Referral Policy achieves these objectives. The highlights of the policy
include the following provisions:
1. The hospital must commit to promote and support a patient's
right to make an informed choice by ensuring that its staff and
employees implement and follow the terms of the referral policy.
2. The policy is to be administered and monitored by an independent
social worker or ``ombudsman,'' whose salary and expenses could be
shared equally among the competitors (including Heartland), in order to
preserve the ombudsman's independence.
3. When ancillary services are ordered by a physician, the
ombudsman must fully inform the patient of all options for ancillary
services within Heartland's geographic region and insure that a
patient's choice of provider is honored.
4. When a patient is admitted to Heartland's hospital from a
private long-term or skilled nursing facility, or if a patient is a
current client of a home health care agency, that provider's name
should be noted on the patient's chart. Prior ancillary services
providers must be notified of and encouraged to participate in any
discharge planning for their patients.
5. All ancillary services providers will be allowed access to
Heartland patients who request contact with that provider, or if the
patient is a current client of that provider. Further, all ancillary
services providers should be allowed to supply the ombudsman with
brochures about their services which will be available to the patient,
but not to competing ancillary services providers.
A referral policy embracing the foregoing provisions would promote
healthy competition in the ancillary services market and ``level the
playing field.''
F. The terms of the Final Judgment give unfair competitive advantage to
Heartland in the primary care physician market.
Other terms and conditions of the Final Judgment give unfair
competitive advantage to Heartland in the primary care physician
market. Specifically,
[[Page 29853]]
under the terms of the proposed consent decree, Heartland is allowed to
employ or acquire, without preapproval from the DOJ, an unlimited
number of physicians who are not currently located in Buchanan County,
so long as less than 20% of the physician's income was derived from
patients living in Buchanan County. Final Judgment, Part VIII (B).
Further, the consent decree does not limit the number of new
doctors that Heartland can bring into Buchanan County to work for
Heartland (as employees or through acquiring their practice), so long
as Heartland incurs substantial costs in recruiting the doctors, or
gives them substantial financial support or income guarantees. Even
though the acquisitions require prior notice to the government,
approval will be given if the financial criteria are met. Final
Judgment, Part VIII (C).
Finally, the consent decree allows Heartland, with prior DOJ
approval, to acquire the practice or employ any physician who finds he
or she cannot practice in Buchanan County unless hired by Heartland.
Final Judgment, Part VIII (D).
The foregoing provisions enable Heartland to further enhance its
monopoly power and regional control of physician services, i.e. if
independent physicians cannot compete successfully with doctors owned
by Heartland, they have to join Heartland to survive. The practical
effect of the foregoing provisions is that Heartland's physician base
will continue to grow and monopolize the market for primary care
physicians in Northwest Missouri and Northeast Kansas, leaving sole
practitioners with little choice but to join Heartland or move their
practices elsewhere. One can scarcely posit a clearer example of single
firm power to control price and exclude competition.
Amicus curiae urges the Court to scrutinize the terms of the
proposed Final Judgment and Competitive Impact Statement in light of
the fact that neither the DOJ nor the defendants have produced any
studies, surveys, or other economic data, or even any affidavits from
economists, to show that the proposed decree will result in an increase
in competition in the managed care program market, the primary care
physician market, or the ancillary services market, or that the decree
will prevent Heartland from monopolizing the remainder of those
markets. Amicus accordingly urges the Court to require further
submissions from the DOJ both by way of expert affidavits and the
production of documents and economic data, to explain how permitting
Heartland to continue to acquire unlimited numbers of primary care
physicians and to continue to allow its physicians to channel Heartland
patients to Heartland-affiliated ancillary services providers, can be
argued to be in the ``public interest.''
G. The proposed Final Judgment lacks an effective and affirmative
Compliance Program and enforcement provisions.
The proposed consent decree lacks accountability provisions to
ensure that Heartland hospital patients, and patients of Heartland's
physicians, are being given sufficient, unbiased information to allow
the patient to make an informed choice among all available ancillary
services providers. Moreover, the Compliance Program set forth in the
proposed Final Judgment requires only self-reporting of Heartland's
proposed acquisitions or other actions covered by the Final Judgment
and an annual certification by the defendants that the Final Judgment
terms are being adhered to. Final Judgment, Sec. X. Although the DOJ is
given what it already has--``access'' to the defendants' records and
personnel and the right to obtain written reports from the defendants--
there is no requirement that written reports be made to the DOJ by any
of the defendants, and no requirement that the Department will conduct
periodic or even annual inspections of books and records and interview
of personnel.
Without an affirmative requirement of regular, periodic written
reports or government inspections to determine compliance, it will be
virtually impossible to determine whether violations of the terms and
provisions of the Final Judgment have occurred.
In addition to lacking effective compliance provisions, the
proposed Final Judgment provides no judicial mechanism to monitor and
enforce the final judgment if its terms are violated. In United States
v. Associated Milk Producers, Inc., 394 F.Supp. 29 (W.D. Mo. 1975),
Judge Oliver addressed these very concerns, finding that ``many persons
who may be affected by a consent decree simply do not possess and are
not furnished with any information in regard to the manner in which
alleged violations of a final judgment entered upon a proposed consent
decree are to be brought before the Court for appropriate judicial
enforcement proceedings.'' Id. at 46. To remedy this situation, Judge
Oliver entered a Supplemental Order establishing enforcement and
modification procedures to be followed in the event of violations by
the defendants of the final judgment.
Similar, appropriate judicial enforcement provisions should be
crafted by the Court and included in the Final Judgment, or as a
Supplementary Order, in this proceeding.
IV. Conclusion
The proposed Final Judgment is not in the public's interest because
it fails to address adequately, much less remedy, the foregoing
concerns about the Heartland referral policy, Heartland's physician
practice and recruitment efforts, and Heartland's other conduct, which
create conditions that facilitate unlawful maintenance of monopoly
power by Heartland through anticompetitive and coercive means,
conditions conducive to a successful attempt by Heartland to monopolize
both the primary care physician market and the ancillary services
market in Northwest Missouri and Northeastern Kansas, and conditions
that permit Heartland to channel or steer patients in need of ancillary
services only to providers it owns, controls, or in which it maintains
a significant economic interest.
Amicus strongly urges the Court to strike the incorporated
referral policy from the terms of the proposed Final Judgment, or in
the alternative to revise the referral policy to conform to the
terms and conditions set forth in the ``Model Referral Policy''
proposed by amicus. In addition, amicus urges the court to
strengthen the oversight and reporting provisions of the Compliance
Program contained in the constant decree, and to incorporate into
the consent decree enforcement and modification procedures to be
followed in the event of violations by the defendants of the decree.
Finally, amicus respectfully requests the Court to allow amicus
to participate in any proceedings or hearings conducted by the Court
to determine whether the proposed consent decree is in the public's
interest, including oral arguments and presentation of evidence in
support of amicus curiae's opposition to the proposed decree.
Respectfully submitted,
ARMSTRONG, TEASDALE, SCHLAFLY & DAVIS
Thomas M. Bradshaw, Mo. 20411
Dianne M. Hansen, Mo. 40356,
1700 City Center Square, 1100 Main Street, Kansas City, Missouri 64105,
(816) 221-3420, (816) 221-0786 FAX
and
Glenn E. Davis, Mo. 30308
Diane E. Felix, Mo. 28439,
One Metropolitan Square, Suite 2600, St. Louis, Missouri 63102-2704,
(314) 621-5070.
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare.
Certificate of Mailing
I hereby certify that a true and correct copy of the foregoing
document was mailed, postage prepaid, this 1st day of December 1995
to the following counsel of record:
[[Page 29854]]
Lawrence R. Fullerton, Esq., Edward D. Eliasberg, Jr., Esq.,
Antitrust Division, U.S. Dept. of Justice, 600 E Street, NW., Room
9420, BICN Bldg., Washington, DC 20530
Thomas D. Watkins, Esq., Watkins, Boulware, Lucas, Miner, Murphy &
Taylor, 3101 Frederick Avenue, St. Joseph, MO 64506-0217
George E. Leonard, Esq., Shugart Thomson & Kilroy, 12 Wyandotte
Plaza, 120 West 12th Street, Kansas City, MO 64105-0509
Brian B. Myers, Esq., Lathrop & Norquist, 2345 Grand Avenue, Suite
2600, Kansas City, MO 64108
Richard D. Raskin, Esq., Sidley & Austin, One First National Plaza,
Chicago, IL 60603
Dianne M. Hansen
Attorneys for Amicus Curiae, The Coalition for Quality Healthcare.
Western Illinois Home Health Care, Inc.
Gail Hursh,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Dear Gail Hursh: I am writing in reference to the proposed
settlement of United States v. Health Choice of Northwest Missouri,
et. al. Case No. 95-6171-CV-SJ-6. I am writing in reference to deep
concern over the settlement of this case that could open wider an
exclusive market to the hospital based home care agency. They now,
even with the present statute, control the referrals out of the
hospital with intentional direction to their hospital based home
care agency. Opening this door even wider will put them in the
drivers seat and force many independent home care agencies out of
business. It defeats any strives to force excellent care with the
forces of competition, and puts them in control of our health care
dollar usage.
In our area, hospitals have even excluded us from visiting
previous patients that are hospitalized. We have lost patients that
had asked for us stating in misleading terms that I am sending your
home care nurse out; to their dismay when they arrive home they have
never met that nurse or the hospital agency.
I had read once that there was a movement to require hospitals
to publicize a list of discharges and where the referral was made
and to incorporate fines for misuse of their system. I would hope we
would go in that direction in some fashion to prevent what was not
ever intended; exclusive control of the health care system by
certain providers.
I appreciate your sincere review of this point of view and
concern.
Sincerely,
Barbara Byers,
Chief Executive Officer, Western Illinois Home Health Care Inc.
Delta County Memorial Hospital
100 Stafford Lane, P.O. Box 10100, Delta, Colorado 81416-5003, (970)
874-7681
November 30, 1995.
Gail Kursh,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St. N.W.,
Room 9300, Washington, D.C. 20530
Ms. Kursh, I recently read the article in ``Home Health Line''
regarding the judgement for the United States vs Health Choice of
Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6,
regarding the choice of Home Health Agencies for hospitalized
patients.
The article was very informative and very timely for our
institution. We have a hospital-based Home Health agency and in the
past year there has been several new agencies that have moved into
the area. Generally, when our physicians order Home Health it will
be the hospital's agency, since they are familiar with the nursing
staff, their practices and the quality of care they provide.
Currently, our Discharge Planners will inform the patient the
physician has ordered Home Health and that the hospital has it's own
agency. If the patient requests other options for Home Health, we
provide them with a written list of the other agencies in the area,
then inform them that this will have to be discussed and approved by
the physician, since he is the one who have to deal with a different
agency. So far, this has worked well.
We have been approached by outside Home Health agencies
requesting to sit in our Discharge Planning Conferences, which I
find totally inappropriate. That is like having a stranger come in
off the streets and hear about our patients, their medical condition
or home situation, a total breech of patient confidentiality. Our
hospital's Home Health agency does participate in our Discharge
Planning Conferences, since many of the patients are currently their
clients and any new referrals will probably go to them.
I certainly do not agree with a rotation system either.
Discharge Planning in our community is difficult enough without
having the added complication of keeping track which agency is next
on the list. Along with the fact we have no first-hand knowledge
about the quality of care they provide. Nor do I agree with allowing
them access to our patients in the hospital. These patients are here
because they are sick, they certainly do not want or need a
``Salesman'' pounding on their door. For one thing the patient may
not even need Home Health. Secondly, I am sure our patients do not
want four or five agency personnel knowing about their medical
condition or that they are even in the hospital. AGAIN, WHAT
HAPPENED TO PATIENT CONFIDENTIALITY????
I think if these Home Health agencies want to expose the public
to the availability of other Home Health Care agencies in the area,
they need to advertise like every other business. That way patients
may ask for their particular agency if or when the need arose.
Thank you for this opportunity to express our concerns on this
matter.
Sincerely,
Ramona Frazier,
QA/Risk Manager.
Joyce Gillespie,
Marti Svensen
North Georgia Home Health Agency, Inc.
Main Office, 1875 Fant Drive, Ft. Oglethorpe, Georgia 30742, 706/861-
5940
December 1, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
N.W., Room 9300, Washington, D.C. 20530.
Re: Comments on Proposed Final Judgement: United States vs. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6
in the U.S. District Court for the Western District of Missouri
Dear Ms. Kursh: As a home health care provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selection of post-hospital
ancillary services, including the selection of a home health care
provider. For these reasons, I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws,) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgement
(recommended policy) be modified as such:
Strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to provide patients with an
updated list of Medicare/Medicaid providers in the community:
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
Sherylon Smith,
Administrator.
SS:so
[[Page 29855]]
Lutheran Home Care Service, Inc.
2700 Luther Drive, Chambersburg, PA 17201-8132, VOICE/TDD/TT/FAX, 717/
264-8178 and 762-3996
December 1, 1995.
Gail Kursh,
Dept. of Justice, Antitrust Division, 600 E. St., N.W., Room 9300,
Washington, D.C. 20530
Dear Ms. Kursh, I am writing to register a complaint regarding
the proposed referral policy for home health, DME and hospice
recommended by the Department of Justice. We have been the primary
provider of home health and hospice within our community for 18
years. Due to philosophical differences between our agency and the
local hospitals we did not become the hospitals home health
provider. The two small local hospitals brought in another home care
agency from outside of our area. This provider already has an
advantage over us since they have formed an alliance with the
hospitals. Our hospitals, have tried to be very fair in offering
choices to the patients, however, if this new referral policy is
approved then we are at a significant disadvantage.
Lutheran Home Care Services, Inc. supports the modifications as
proposed by the Coalition for Quality Healthcare. Those of us who
have provided faithful quality services, as well as hundreds of
thousands of dollars in benevolent care over many years should not
be put at significant risk which would occur if this policy were
passed. We are doing our part to try and keep our share of the
market. We should not be penalized by a policy that clearly favors
the hospital based agencies.
Sincerely,
Diane M. Howell,
Executive Director.
November, 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Gaina Keljawski.
Tugaloo Home Health Agency, Inc.
P.O. Box 77, Lavonia, Georgia 30553, (706) 356-8480
December 1, 1995.
Gail Kursh,
Chief, Professional and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 E. St.,
NW., Room 9300, Washington DC 20530
Re: Comments on Proposed Final Judgment United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6
in the U.S. District Court for the Western District of Missouri
Dear Ms. Kursh: As a home health care provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selecting of post-hospital
ancillary services, including the selection of a home health care
provider. For these reasons I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgment
(recommended policy) be modified as such:
Strengthen limitations on the hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to provide patients with an
updated list of Medicare/Medicaid providers in the community;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers in the area;
Require the hospital to permit (on their premises,
during normal working hours) representatives of freestanding
providers--other than their own hospital-based components--to visit
their patients who have been admitted for hospitalization; and to
expose the patient population to the availability of outside
services as well;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
Captain C.C. Dudley,
Executive Director.
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW., Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
Sincerely yours,
L. Patterson
November 13, 1995.
Chief Gail Kursh,
Profession & Intellectual Property Section, Health Care Task Force,
Department of Justice, Antitrust Division, 600 E St., NW., Room
9300, Washington, DC 20530
Dear Chief Kursh: This letter is to provide my comments on the
proposed final judgement for United States v. Health Choice of
Northwest Missouri, Inc. et al., Case No. 95-6171-CV-SJ-6 in the
U.S. District Court for the Western District of Missouri.
I have read the Department of Justice's recommended home health,
DME and hospice referral policy for Heartland Hospital and as a home
health provider I find it continues to impede fair competition and
preserves the hospital monopoly on referrals to home care.
My background encompasses home care from public health to
proprietary agencies. I have witnessed hospital-based agencies take
on case overloads that prevents adequate care being provided. A
prime example is Medicare patients requiring skilled nursing and
home health aide services. In the Omaha area there is a severe
shortage of home health aides so the patient is advised they are
entitled to two ``bath visits'' per week. The patient often infers
this is all Medicare allows when instead it is all that can be
staffed. The assumption cannot be made that the agency is just being
conservative with Medicare because often the skilled nursing and
therapies are maximized when the patient really needs more
assistance with personal care. The purchase power of Medicare is
severely decreased when one agency provides a ``bath visit'' for one
hour
[[Page 29856]]
versus an agency that can provide staff to provide a two hour visit
giving more personal care. With the lack of competition and patients
not knowledgeable of their benefits we will continue to see our
health care dollars erode.
I do not feel this present policy goes far enough to encourage
fair competition. I would like to see the final judgement modified
to strengthen limitations on the hospitals ability to refer its
patients to its own health care agencies. I think the hospital
should be required to use a rotation system which assures equal
referrals to all providers and allow the freestanding providers to
visit the hospitalized population to expose them to the availability
of outside services.
Thank you for your consideration on this issue.
Glenelle Kruse,
208 N. Chestnut, Glenwood, Iowa 51534, 712-527-4372.
Cabarrus County Home Health
28 Branchview Dr., NE, P.O. Box 707, Concord, N.C. 28026-0707, Phone
(704) 788-8180, Fax (704) 788-9876
November 30, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW,
Room 9300, Washington, DC 20530
Re: Comments on Proposed Final Judgment: United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No 95-6171-CV-SJ-6
in the U.S. District Court for the Western District of Missouri
Dear Ms. Kursh: As a home health care provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selection of post-hospital
ancillary services, including the selection of a home health care
provider. For these reasons I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgment
(recommended policy) be modified as such:
* Strengthen limitations on the hospital's ability to refer its
patients to its own hospital-based components;
* Require the hospital to provide patients with an updated list
of Medicare/Medicaid providers in the community;
* Require the hospital to use a rotation system, which assures
equitable referrals to all providers in the area;
* Require the hospital to permit (on their premises, during
normal working hours) representatives of freestanding providers--
other than their own hospital-based components--to visit their
patients who have been admitted for hospitalization; and to expose
the patient population to the availability of outside services as
well;
* Make the hospital publicly post its daily referrals to both
its hospital-based entities and to other providers in the community.
On behalf of our home health agency and the patients we serve,
we respectfully ask that you give these comments due consideration.
These issues are of even more concern in today's era of health care
and provider consolidation.
Sincerely,
JoAnn Reed,
Director.
Emerald Care
2923 Rousseau Court, Gastonia, NC 28054, Fax: 704-864-3673, Toll-Free
Tel: 1-800-427-1143, Telephone: 704-867-1141
December 1, 1995.
Gail Hursh,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
NW., Room 9300, Washington, D.C. 20530
Re: United States versus Health Choice of Northwest Missouri, et
al., Case Number 95-6171-CV-SJ-6
Dear Ms. Hursh: I have received a copy of your recommended Home
Health, Durable Medical Equipment and Hospice Referral Policy for
Heartland Hospital and I have reservations about your recommended
action. Please consider the following:
Hospitals now own physician practices and in our area,
our community-based hospital owns several physician practices and is
planning to build a five-story building for physician offices. The
physicians, therefore, are strongly encouraged to refer to the
hospitals' home health agency. Because of the financial-ownership
relationship, this ``encouragement'' is more like a demand or
directive. This type of relationship/requirement approaches a
conflict of interest issue.
Concerning Heartland Hospital not being able to recommend
another home health agency:
A community-based hospital has a responsibility to
maintain information on pertinent resources for the education of
their staff. While no hospital can fully guarantee or totally
recommend the services of any large home health agency, including
their own, they can and should give patients an informed choice
based upon written or verified information from the established,
licensed and accredited home health agency, home medical equipment
company, pharmacies, etc. Your statement implies that since a home
health agency is not part of a hospital, i.e., Heartland, the
discharge planner cannot recommend them.
I applaud your effort in emphasizing patient choice in the
referral/selection of a home health agency. Patients need to be
informed of the resources such as licensed/accredited home health
agencies before a decision is made. Physicians also need the ability
to make a choice that is based on the good of their patients and
what their patients want without possible recrimination by the
hospital, with whom the physician may have an employee relationship.
Many patients who need home health services are elderly and
vulnerable. The idea that these fragile persons have to ask for
choices of available ancillary services, after being identified as
needing these services, is not fair to the client.
I thank you for the opportunity to comment. If you have any
questions please do not hesitate to call.
Sincerely,
Eileen A. Klimkowski,
Executive Director.
Cooper Home Health, Inc.
51 North Side Square, Cooper, Texas 75432, 903-395-2811, 800-395-5357,
FAX 903-395-2766
November 30, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., NW.,
Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Chief Kursh: As an owner/administrator of a private home
health agency in Texas, I would like to comment on the above
referenced case and ask for consideration for small business owners.
It appears that this case reflects the same problems experienced by
privately owned home health agencies in competition with hospital-
based agencies. In short, hospitals have a built-in referral base
and are reluctant to refer patients to outside home care agencies
for obvious reasons. I personally am familiar with numerous examples
in which patients were not given a choice, and some were even misled
into thinking their physician had made the choice for them. In
reading the proposed procedure developed by Heartland Health System,
I am convinced that approval of this procedure will solidify the
power of hospital discharge planners to exclude outside agencies and
refer exclusively to their own.
The proposed procedure is also in direct conflict with the Texas
Association for Home Care Code of Ethics which states:
Agencies shall honestly and conscientiously cooperate
in providing information about referrals and shall work together to
assure comprehensive services to clients and their families.
Member agencies shall not engage in coercive or
unreasonably restrictive exclusionary behavior which would restrict
or impede consumer choice of provider agencies. A member agency or
related entity that provides a screen to clients for home care
referrals shall not use that position to influence a client's choice
and to direct referrals to itself, and shall inform clients of the
availability of home care providers and advise clients that they
have the right to choose the provider they prefer.
The proposed procedure would allow Heartland Health System to
present information regarding its service without any mention of
other providers. It is obvious this procedure does not allow the
patient to make
[[Page 29857]]
an informed choice, especially if he does not express a preference.
At a minimum, the discharge planner should be required to make
available a listing of all providers in the patient's community
without showing preference to any provider.
I would sincerely appreciate your careful consideration of this
case, and hope that you can be sympathetic to the position of
privately owned businesses. Many current practices are already in
violation of the antitrust laws, and approval of Heartland's
proposed procedure would give hospitals and other health systems the
ability to restrict trade even further. Thank you for your concern.
Respectfully,
Nicki J. Beeler,
Administrator.
At Home Health Care
900 Veterans Blvd., Suite 230, Redwood City, California 94063, (415)
368-1182, FAX (415) 368-1184
December 2, 1995.
Ms. Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, Room 9300, 600 E.
Street, N.W., Washington, D.C. 20530.
Dear Ms. Kursh: Below are comments on the proposed final
judgement for United States v. Health Choice of Northwest Missouri,
Inc., et al., Case No. 95-6171-CV-SJ-6.
Section II.B.2. and 3. of the referral policy:
De facto, the result will be no true patient choice. Before
long, no other qualified provider will ever hear about potential
clients they could be caring for. If the hospital is allowed to be
the first and only provider to ``sell to'' the sick and dying, the
frail elderly, and their beleaguered families, few other providers
will get referrals. This is a fox in the hen house situation.
We say this because hospitals, being almost universally in a
strapped financial condition, put enormous pressure on their self-
owned home care agencies. In our area, they are nothing less than
predatory. They discard the literature we deliver to the hospital,
they cajole the doctors at hospital staff meetings, and they
disguise home care agency nurses as hospital-employees, i.e.,
Discharge Planners.
Earlier this year, we received a referral from the ALS
foundation (Lou Gehrig's Disease) and the patient's family. When our
nurse went to the hospital for the discharge planning session, the
hospital's ``discharge planner'' was actually a nurse from the
hospital-based home care agency. In fact, she made the comment that
she didn't quite know how to handle the situation; she said she'd
never given a patient to another agency before.
Usually, the ``discharge planners'' are more discreet than this,
but they invariably believe that all hospital patients belong to
them. If they ``release'' a patient to another agency, they believe
it is a result of their largesse.
A common ploy is ``I'm so sorry Mrs. So-and-so, but the
paperwork is already made out. Just try us for the first day. If it
doesn't work out, you can change agencies tomorrow.'' The normal
reply from a sick, elderly person is, ``I don't want to be a bother
to anyone.'' A frail, fatigued, 85-year old should not be expected
become an informed consumer at the time of discharge.
Handing the patient a phone book is completely unacceptable. The
very least they could do is provide them a ``Help at Home'' booklet
or ``Senior Handbook'' published, if not by the hospital itself,
then by the county of residence. As written, this art of the
recommended referral policy would be insulting to the patient.
We urge the Department of Justice to make sure that Heartland is
not made the fox in the hen house. Even more cogent, however, is the
Department's moral obligation to insure that American citizens, at
their most vulnerable moment, are not taken advantage of.
Sincerly yours,
Robert J. Brock,
Vice President.
cc: California Association for Health Care at Home, Attn: Connie
Little, RN
November 30, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., NW,
Room 9300, Washington, DC 20530.
Re: U.S. v. Health Choice of N.W. Missouri, Inc., Case No. 95-6171-
CV-SJ-6
Dear Chief Kursh: As a social worker for a private home health
agency in Texas, I would like to comment on the above mentioned case
and ask for consideration for patient rights to informed choices.
Hospitals have a built-in referral base and are reluctant to refer
patients to home health agencies other than their own. In reading
the proposed procedure developed by Heartland Health System, I am
convinced that approval of this procedure will give discharge
planners the power to refer exclusively to their own agencies. The
proposed procedure is also in direct conflict with the Texas
Association for Home Care code of Ethics. Patients must have the
right to make a informed choice of health care. Thank you for your
concern.
Respectfully,
Gregory Grinstead.
November 27, 1995.
Gail Kursh,
Chief Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St. NW Room 9300,
Washington, D.C. 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to
refer its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals
to both its hospital-based entities and to other providers in the
community.
Sincerely yours.
Margaret Klan,
4 Oakridge Drive, Marquette, MI 49855.
Richmond Healthcare Consultants, Inc.
303 South A Street, Richmond, IN 47374, (317) 935-4677
November 30, 1995.
Gail Hursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, N.W.
Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, et al.,
Case No. 95-6171-CV-SJ-6, United States District Court for the
Western District of Missouri
The proposed settlement would unduly burden non-hospital based
home care agencies.
As a President of two non-hospital owned agencies in a 78,000
population community with one hospital, my agencies, as well as the
other non-hospital agencies, have to scratch and dig to PRESERVE our
clients who become hospitalized. The hospital has been documented
pressuring our patients to change to the hospital owned agency.
We have clients who specifically request us by name and they get
the hospital based agency in spite of their requests. They voice
dissatisfaction to their doctors who are also under pressure by the
hospital (via their privileges) to refer only to hospital based
agency services.
We (the non-hospital based agencies) must constantly monitor
their activities to prevent duress to our patients.
A settlement as described would in my opinion let free the
modicum of restraint the hospital maintains now due to the existing
anti-trust regulations.
There would be no holds barred, no competition for the hospital
and I see even now the effects of lesser quality provided by some
hospital based services becoming even less quality oriented without
strict enforcement of anti-trust activities. The hospital presently
takes the bulk of all discharged clients as it is.
I plead for enforcement of the anti-trust regulations, not a
lessening of them. On behalf of my staff and clients, I thank you
for your time.
[[Page 29858]]
Sincerely,
Robin King,
Administrator.
RK/sf
Cooper Home Health, Inc.,
51 North Side Square, Cooper, Texas 75432, 903-395-2811, 800-395-5357,
FAX 903-395-2766.
November 30, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., N.W.,
Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Chief Kursh: As an owner/DON of a small, private home
health agency in Texas, I would like to take this opportunity to
comment on the above case. This case reflects a growing problem for
those of us in the private industry. There is fierce competition in
the home health industry for patient referrals on the whole. Most
hospitals now have their own home health departments. These
hospitals have a built in referral system and are reluctant to refer
patients to competing agencies for obvious reasons. Currently
discharge planners are required to give patients a choice when a
referral for home health is ordered by the physician. Some discharge
planners are not giving patients a choice now due to pressures from
their administration to refer to the hospital home health. Should
the proposed procedure be approved, there will be very little, if
any, incentive for outside referrals to be made. This will
effectively exclude private home health agencies from receiving any
referrals from hospitals.
The main focus of those of us in the health care industry should
always be the welfare of the patient. The patient must always be
given a choice and assisted with whatever information he or she
needs to make that choice. This proposed process, as it is currently
written, would remove patient welfare as a top priority and be
replaced by the desire for increased revenue/volume.
I feel that at the very least, the discharge planners must give
patients a list of home health agencies in the area. I also feel
that patients should be assisted to make decisions about different
agencies; i.e.: agencies that may specialize in certain areas of
service.
Please consider all of the above when making a decision about
this proposed procedure. The relationship between hospitals and home
health agencies is strained now due to competition for patients. The
passing of this procedure would only prove to give hospitals a
greater monopoly than they currently have further straining
relationships and shoving patient welfare to a far, distant
priority.
Thank you for your time and concern in this matter.
Sincerely,
Tina Janes,
DON.
Tami L. Becker, R.N., B.S.N.,
14 Zanella Dr., Emmitsburg, Md. 21727
November 15, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E Street,
Northwest--Room 9300, Washington, D.C. 20530
Dear Gail: I am writing in response to the article published in
* * * home health line, November 13, 1995, regarding the final
judgement for United States v. Health Choice of Northwest Missouri,
Inc., et al., Case No. 95-6171-CV-SJ-6.
First of all, I wish to express my thanks to the Department of
Justice for accepting written comments on its proposed final
judgement in this precedent setting case.
As a supervisor for a non-profit home health agency serving a
small, but rapidly growing rural community, I have seen considerable
changes in the delivery of home health care over the thirteen years
I have worked for this company. Our agency has been in business for
over twenty years providing care to the residents of our county, and
has taken pride in it's ability to change and grow to meet the needs
of the area. We have been proactive in stream-lining our services to
become more efficient and cost effective, while assuring a continued
high quality of care. Despite our small size, we have been able to
negotiate with several managed care organizations winning contracts
to provide care to the local residents. This enables persons within
our county boundaries to continue to have a choice between our
agency and the large, unfamiliar home health agencies located in
other counties or states.
We are well aware of the practices of many of these for-profit
home health agencies, which contend the ability to provide services
to a large geographic area in order to win managed care contracts;
but, in reality have no providers in many of the rural areas which
they service. Frequently, we are called by area residents who may
have had our services in the past, complaining that their physician
prescribed nurse, therapy, or aide services prior to their discharge
from a hospital. Once they were home, they found that only one or
two of the services were provided in a timely manner, as the other
service(s) were unavailable due to ``staffing shortages''. In one
case, a patient who had been hospitalized for a hip replacement
waited more than a week for therapy. In another case, an immobilized
patient never received aide services to which he was entitled,
leaving his elderly spouse solely responsible for his personal care
needs. Both of these patients had advised their referring hospitals
that they wished to be referred to our agency, but were told that
they had to use the agency with which the hospital was contracted.
Quite obviously, these patients both received less than adequate
care, when there were local agencies willing and able to provide the
service.
In most cases, it is the vulnerable elderly population which
become the victims in the competition between home health agencies.
Even if they are mentally and physically able to understand their
rights when it comes to choosing medical care, they are afraid to
speak up, for fear of what will happen if they need to seek care in
a particular facility in the future. Furthermore, we are seeing an
increase in the number of patients seeking assistance after they
have been discharged from their home health agency. The home health
agency, having exhausted the patient's home health insurance
benefit, release the patient, to their own capabilities. It is then
expected that we, the non-profit home health agency, will pick up
where the for-profit agency left off and provide uncompensated care.
While we are committed to caring for the indigent, un-insured and
under-insured of our county, it is only through the small margin of
profit reimbursement we receive from the insured clients, that we
can continue to provide the charity care for which we are known. As
many of the patients referred to us are non-pay or partial pay on
admission to our program, it does not take long to exhaust our
resources.
We have neither asked for, or received a governmental subsidy to
assist in the provision of our services for over two years.
Therefore, it does not seem reasonable to allow the for-profit
agencies to discharge patients with continuing home health needs,
after having depleted their insurance benefits.
The referrals we receive have been won by our continued
reputation for excellence within our community. We have no money for
marketing. Most of our referrals come by word of mouth, either from
a patient, physician or a referral source with whom we have worked
in the past. Despite the evolution of managed care, we continue to
subsist based upon our willingness to streamline and cost cut.
However, a form of competition which we will not survive is the
ability of hospitals to form home health agencies, and retain all of
their paying referrals. Our local community hospital is now in the
process of forming a home health agency, which we have supported
from the onset. We feel that while another home health agency in our
county will most definitely impact our referral base, it is
important that all community hospitals augment their outpatient
services to remain viable. Never-the-less, if that hospital or any
hospital is allowed prevent patients from learning of and utilizing
other agencies, we will have no chance for survival. This, in my
opinion, is not fair market competition but rather the creation of a
monopoly.
Thank you again for the opportunity to express my concerns with
regards to this issue.
Sincerely,
Tami L. Becker.
Texas Association for Home Care
3737 Executive Center Drive, Suite 151, Austin, Texas 78731, (512) 338-
9293
December 1, 1995.
Gail Kursh,
[[Page 29859]]
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St. NW.,
Room 9300, Washington, DC 20530
Re: United v. Health Choice of Northwest Missouri, Inc. et al, Case
No. 95-6171-CV-SJ-6, District Court for the Western District of
Missouri
Dear Ms. Kursh: The Texas Association for Home Care represents
over 650 home and community support services agencies throughout
Texas providing home health, hospice and personal assistance
services. Our membership includes freestanding and hospital based,
as well as proprietary and non-profit agencies. We have provided all
of our members a copy of the proposed final judgment which outlines
a policy for patient referral by the hospital system to home care
and other ancillary services.
The paramount questions in determining acceptability of the
referral policy should be (1) is the patient advised that he has a
choice of providers for ancillary services? (2) is adequate
information made available for the patient to make an informed
selection? The sequence in which the information is provided with
relationship to the provisions of information about the hospital's
ancillary services is also a key factor in determining acceptability
of the policy.
The Texas Association for Home Care unanimously passed a Code of
Ethics in September 1995 in order to promote the provision of high
quality home and community support services to patients by member
agencies. Two provisions in our Code of Ethics are relevant to this
case:
Agencies shall honestly and conscientiously cooperate
in providing information about referrals and shall work together to
assure comprehensive services to clients and their families.
Member agencies shall not engage in coercive or
unreasonably restrictive exclusionary behavior which would restrict
or impede consumer choice of provider agencies. A member agency or
related entity that provides a screen to clients for home care
referrals shall not use that position to influence a client's choice
to direct referral to itself, and shall inform clients of the
availability of home care providers and advise clients that they
have the right to choose the provider they prefer.
We will appreciate your serious consideration of all comments
that you receive from the industries affected to protect the
patient's freedom of choice and to prevent unreasonable restraint of
trade.
Sincerely,
Anita Bradberry,
Executive Director.
Diana L. Gustin, Attorney at Law
Plaza Tower, Suite 2001, 800 South Gay Street, Knoxville, Tennessee
37929, Telephone (615) 523-5545, Telecopier (615) 523-4738
November 30, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., N.W.,
Room 9300, Washington, D.C. 20530
Re: Written Comments on the proposed final judgment for: United
States v. Health Choice of Northwest Missouri, Inc., et al. Case No.
95-6171-CV-SJ-6 in the U.S. District for the Western District of
Missouri.
Dear Ms. Kursh, I am writing in response to the article in the
newsletter of Home Health Line on November 13, 1995, which noted
that providers are being given a chance to comment on the proposed
final judgment for the above captioned matter. I represent several
home health care agencies, one of which contacted me concerning this
matter. I have reviewed the proposed order with my client and
discussed the ramifications of the changes which might result in
hospital discharge policies as a result of this litigation. My
client and I do not believe the policy endorsed by the DOJ goes far
enough to protect independent freestanding home health care agencies
from unfair competition by hospitals. I believe the final judgment
should be modified in accordance with the Coalition for Quality
Healthcare, the group of St. Joseph health care providers which
proposed that the final judgment be modified to:
--Strengthen limitations on hospital's ability to refer its patients
to its own hospital-based components;
--Require the hospital to use a rotation system which assures
equitable referrals to all providers in the area;
--Require the hospital to permit representatives of freestanding
providers to visit the hospital patients who have been admitted for
hospitalization and thereby expose the patient population to the
availability of outside services;
--Make the hospital publicly post its daily referrals to both its
hospital-based entities and to other providers in the community.
In addition to endorsing the changes suggested by the Coalition,
I would like to take this opportunity to comment on some other
concerns in regard to the DOJ's recommended referral policy.
First of all, I believe it is extremely important to protect the
patient's right to be informed and to participate in the planning of
their own care. In fact, 42 Code of Federal Regulation Section
484.10 codifies the patients's right to be informed, in advance
about the care to be furnished and of any changes in the care to be
furnished. I believe this requires more than allowing a physician to
order an Ancillary Service, specify the provider to be used and then
ask the patient if this is acceptable. The patient should be
educated about the available choices in order to make an informed
decision. Requiring hospitals to permit representatives of
freestanding providers to visit the hospital patients who have been
admitted for hospitalization and thereby expose the patient
population to the availability of outside services would accomplish
this objective. Requiring hospitals to publicly post daily referrals
to both its hospital-based entities and to other providers in the
community would be a simple and easy way to monitor the hospitals'
referral practices.
Secondly, the disclaimer contained in the DOJ's recommended home
health, DME and hospice referral policy could be quite misleading.
The social worker, who is asked a second time, about other providers
``should indicate that Heartland has done no independent review or
evaluation of these providers and cannot speak to the quality of
care they provide***''
This infers that other agencies' quality of care is not equal to
(or better than) the hospital's quality of care. This suggestion may
be used to frighten the patient into choosing the hospital
affiliated agency. Since quality assurance and condition of
participation surveys are performed on a regular basis upon all home
health care agencies which participate in the Medicare program, it
should be presumed that those agencies which have maintain their
license in good standing have the level of quality care necessary.
In short, quality controls exist for freestanding agencies which are
not being mentioned to the patient yet the suggestion is being made
that providers, other than the hospital affiliated provider, could
be lacking in quality in comparison thereto. This type of misleading
disclaimer could be construed as unfair competition.
Finally, the application of the prohibition on self-referral
should be considered in this context. 42 U.S.C. Section 1320a-7b
states that whoever knowingly and willfully solicits or receives any
remuneration directly or indirectly, overtly or covertly, in cash or
in kind, in return for referring an individual to a person for the
furnishing or arranging for the furnishing of any items or service
for which payment may be made in whole or in part under Title XVIII
or a State health care program, shall be guilty of a felony and upon
conviction thereof, shall be fined not more than $25,000 or
imprisoned for not more than five years, or both. This section of
the Medicare Act could be read to find that payment of wages to the
hospital social worker or discharge planner or referring physician
would qualify as acceptance of remuneration for referral to the
hospital affiliated provider. In fact, the very abuse this statute
seeks to prohibit could occur if hospitals are continually allowed
to automatically refer all ancillary services to their own
affiliated providers. There is an incentive for overutilization
being perpetuated by allowing a hospital to automatically refer to
itself.
Based upon all of these points, I strongly suggest consideration
of language which would provide additional safeguards in the
referral policy at issue in this litigation. Thank you for the
opportunity to provide comments on this subject. If you have any
questions concerning this letter, please feel free to contact my
office.
[[Page 29860]]
Sincerely,
Diana L. Gustin.
Villa-Care Home Health, Professional Home Health Services
1100 Bridgewood Dr., Suite 110, Fort Worth, Texas 76112, (817) 451-
3654, Metro (817) 429-9229, Fax (817) 451-3806
November 30, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530.
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 195-6171-CV-SJ-6, U.S. District Court for the West
District of Missouri.
Dear Ms. Kursh: As a home health provider, the proposed final
judgment for above referenced case creates serious questions for us.
From the provisions I have read, it seems that this proposal from
Heartland Health System would continue to allow Heartland to refer
to their own ancillary services with few exceptions. This could, and
probably would, have a negative impact on private, free-standing
ancillary services of all kinds.
Texas Association for Home Care embraces a code of ethics that
includes cooperation between agencies in providing information about
referrals and the provision of comprehensive services to clients and
their families. Also included in this code is that member agencies
will not engage in coercive or unreasonably restrictive exclusionary
behavior which would restrict or impede consumer choice of provider
agencies. The proposed final judgment would be unreasonably
restrictive, exclusionary, coercive, and as a result, detrimental to
any agency not attached to a hospital or other large health care
system.
``If the patient has no preference, a referring person shall
indicate that Heartland has an excellent, fully accredited Ancillary
Service that is available to the patient, and the appropriate
Heartland brochure may be given'' is not allowing the patient the
right to choose. The patient remains uninformed about options in the
community, unless by some chance s/he has more knowledge than the
average patient about resources available.
It is the obligation, duty and responsibility of free-standing
ancillary services to provide information to the healthcare system
regarding their qualifications which may include Medicare
certification, JCAHO accreditation, etc. It should also be the
obligation, duty and responsibility of the healthcare system to make
that information available to all patients. In light of the changes
being proposed in the Medicare payment method to home health
agencies, it is the fear of many of the free-standing agencies that
the healthcare systems will take only those patients felt to be
``cost effective,'' and all others will be referred out.
Too many times the elderly population is neglected or abused by
healthcare providers. To pass this final judgment would be another
opportunity for huge healthcare systems to benefit financially from
the unsuspecting public.
I appreciate this opportunity to express my feelings regarding
this issue and hope that the final judgment will be more favorable
to the patient and the independent ancillary service providers.
Sincerely,
Meredith H. Tracy,
Director of Nursing.
Total Professional Health Care, A Subsidiary of NuMED Home Health Care,
Inc.
5770 Roosevelt Blvd., Suite 700, Clearwater, FL 34620, (813) 531-0299,
(813) 530-4912 Fax
November 30, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street N.W., Room 3900, Washington, D.C. 20530.
Dear Ms. Kursh. This is in response to an article written in the
Home Health Line regarding the proposed Department of Justice's
final judgement for the United States versus Health Choice of
Northwest Missouri Inc., et al, case number 956171-cv-sj-6.
As a home health provider, Total Professional Health Care has
three major areas of concern. Although the prepared judgement
appears to give the beneficiary the right to choose his or her
provider, we fear that the method in which the alternatives are
presented still favor the hospital based affiliated provider. Please
refer to B#2, ``if the patient has no preference, a referring person
shall indicate that Heartland has an excellent, fully accredited
Ancillary Service that is available to the patient, and the
appropriate Heartland brochure may be given.'' Based upon this
reference, we would like to pose a question; If you were the
beneficiary, who would you choose? The unknowing guest of the
hospital could be swayed into believing that the hospital based
affiliates are the ``only'' choice.
The second area of concern is the issue of quality care. Since
it appears that there will a minimum amount of competitiveness among
the ancillary services, who will ensure that the best care is
provided? Can you ensure the beneficiary that his or her ``choice''
of providers is the correct one? Who is willing to take
responsibility for inferior care should the situation arise?
Lastly, a member of the free standing provider community, our
business will be dramatically affected by this proposed final
judgement. We have already experienced difficulty accessing
patient's charts. Several of the physicians who who have ordered our
home health services for their patients in the past have yielded to
internal pressures from within the hospitals to order hospital based
home health agencies.
We have been providing quality care to our community since 1976
and have earned an excellent reputation. We consider the
opportunities afforded to the hospital based ancillary services to
be grossly unfair. We hope that you will consider these facts when
making your final decision.
Thank you for allowing us to comment on this very important
matter. Should you have any questions, please do not hesitate to
contact me at (813) 531-0299.
Sincerely,
Margaret VanDeMar,
Regional Director.
cc: Susan Carmichael, President, NuMED Home Health Care
Idaho Home Health, Inc.
1910 Channing Way, Idaho Falls ID 83404, (208) 528-2877, (800) 464-
2877, fax (208) 529-529-5867
December 3, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., N.W.,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: The proposed settlement between the DOJ and
Heartland Health System Inc., undermines the free enterprise system
and sentences the small, community-based entrepreneur to the
assembly line. A more equitable approach to the problem would be:
1. Strengthen limitations on the hospital's ability to refer its
patients to its own hospital-based components;
2. Require the hospital to use a rotation system, which assures
equitable referrals to all Providers in the area;
3. Require the hospital to permit (on their premises, during
normal working hours) representatives of freestanding providers--
other than their own hospital-based components--to visit their
patients who have been admitted for hospitalization; and to expose
the patient population to the availability of outside services as
well;
4. Make the hospital publicly post its daily referrals to both
its hospital-based entities and to other providers in the community.
Incorporating the above recommendations into the DOJ settlement
would go a long way toward resolving the inequities that have
existed between hospitals and community-based entities.
Thank you,
Frank Dalley,
President.
November 27, 1995
Gail Hursh,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
NW., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who
[[Page 29861]]
will ask you to modify the decision to include the following
language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours.
Sharon Fries.
November 27, 1995
Gail Hursh,
Chief Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. Street,
NW., Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours.
Lou Ann Balding.
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Diane Gadomski
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Darrel Benneto
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual, Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Jayne E. Majors
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual, Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Irma Powers
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling the matter of United States v. Health Choice of Northwest
Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
[[Page 29862]]
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
MaryAnn Perry
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling the matter of United States v. Health Choice of Northwest
Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Sherri Rule
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E. Street, N.W.,
Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decisions to
include the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
FAIR competition requests in better, fair priced care
for our patients.
Sincerely yours,
Joan Risk,
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E. Street, N.W.,
Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decisions to
include the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Emma Jean Fowler
November 27, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., NW.,
Room 9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Brenda Phillips
November 27, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., NW.,
Room 9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Stephanie Paderson,
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E. St., NW., Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices
[[Page 29863]]
which have practically eliminated competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours.
Stephanie Wickstrom
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E. St., NW., Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Deanna LaBelle
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW, Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Susan Hakola
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW, Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v Health Choice of
Northwest Missouri Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Donna Carlson Albire
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Rene Dawe
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., NW,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United States v. Health Choice of
Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely yours,
Marybeth Coyne,
Occupational Therapist.
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual, Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am an employee in a small, rural freestanding
home health care agency. I have read with great dismay the recent
DOJ ruling in the matter of United
[[Page 29864]]
States v. Health Choice of Northwest Missouri, Inc.
In our own community, a local hospital-based program has
instituted unfair practices which have practically eliminated
competition in our service area.
I know that in our government, numbers count. Let me add my
voice to the many who will ask you to modify the decision to include
the following language:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system, which
assures equitable referrals to all providers who offer the same
level of certification and/or accreditation, or higher in the area--
Hospitals are well aware of the accreditation of local providers;
Require the hospital to permit (on their premises,
during normal working hours), representatives of freestanding
providers;
Make the hospital publicly post its daily referrals to
both its hospital-based entities and to other providers in the
community.
Sincerely,
Chris Renland
District Health Department No. 4
Alpena County, 1521 W. Chisholm St., Alpena, MI 49707, (517) 356-4507,
Fax (517) 356-9080
November 29, 1995.
Gail Kursh,
Chief, Professional and Intellectual Property Section, Health Care
Task Force, Department of Justice, Anti-Trust Division, 600 E
Street, NW, Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc. et
al., Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: It is with great concern that I read of the
Department of Justice's proposed final judgement concerning the
above case. As the proposed judgement currently reads, home health
care programs which are not affiliated with hospitals are put at a
severe disadvantage, because they will not have access to patients
in a hospital's system.
The precedence this rule sets will not only be a blow to
independent home health agencies, such as ours, but also to
patients. At the time when patients are most in need of knowing
their available options, they are least able to explore them.
Safeguards must be in place to assure that patients are made aware
of options available to them at the time of discharge. Only when
knowing the options will a patient be able to make an informed
choice.
Please let this letter serve as a request that the final
judgement be modified to:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital based components;
Require the hospital to use a rotation system which
assures equitable referrals to all providers in the area; and
Require the hospital to unbiasly inform a patient of
his or her options when establishing their discharge plan.
Choice can only be choice when one knows what their alternatives
are. Only by making such modifications will we ensure a patient's
choice is protected.
Sincerely,
Christopher J. Benedict,
Health Educator.
District Health Department No. 4
Alpena County, 1521 W. Chisholm St., Alpena, MI 49707, (517) 356-4507,
Fax (517) 356-9080
November 29, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6
Dear Ms. Kursh: It is with great concern that I read of the
Department of Justice's proposed final judgment concerning the above
case. As the proposed judgment currently reads, home health care
programs which are not affiliated with hospitals are put at a severe
disadvantage, because they will not have access to patients in a
hospital's system.
The precedence this ruling sets will not only be a blow to
independent home health agencies, such as ours, but also to
patients. At the time when patients are most in need of knowing
their available options, they are least able to explore them.
Safeguards must be in place to assure that patients are made aware
of options available to them at the time of discharge. Only when
knowing the options will a patient be able to make an informed
choice.
Please let this letter serve as a request that the final
judgment be modified to:
Strengthen limitations on a hospital's ability to refer
its patients to its own hospital-based components;
Require the hospital to use a rotation system which
assures equitable referrals to all providers in the area; and
Require the hospital to unbiasly inform a patient of
his or her options when establishing their discharge plan.
Choice can only be choice when one knows what their alternatives
are. Only by making such modifications will we ensure a patient's
choice is protected.
Sincerely,
Kathy Orban,
Home Care Nursing Director.
Harbors Home Health and Hospice
201 7th Street, Hoquiam, WA 98550, (360) 532-5454
December 1, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 ``E''
Street, N.W., Room 9300, Washington, D.C. 20530
Re: Comments of proposed final judgement for United States vs.
Health Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-
CV-SJ-6, U.S. District Court
I believe the policy as written does not adequately protect
patient choice and fair competition.
I feel the hospital should be required to provide a quarterly
updated list from the surveyors of Medicare and Medicaid certified
providers to patients who were not receiving service from a Home
Health Agency at time of hospital admission and do not have a
preference of home care providers. Additionally, the referring
entity should not be able to steer or influence patients toward
their own provider entity. Hospitals should be prohibited from
steering patients away from an established relationship with a free
standing agency.
I have experienced in practice, patients who were open to a free
standing agency on admission to the hospital and notice was given to
the social service department of the established relationship. The
patients were referred and opened to the facility based agency upon
discharge. When queried, neither the patient or family made the
choice to change and in some cases insisted they be referred back to
their original agency so they might continue with the same
caregivers. Other patients and families said they would stay with
the hospital based to avoid bother and to be sure they could again
be admitted to the facility. In other cases, the frail elderly
suffered from confusion or just did what ``they'' recommended.
Frail elderly suffering from chronic illnesses deserve to be
protected when their defenses are compromised.
Please see that the final judgement assures patient choice and
fair competition protected by Medicare (42 USC Sec. 1395a) and
Medicaid (42 USC Sec. 1396a(23).
Thank you for your consideration of these comments.
Sincerely,
DeLila Thorp,
Administrator.
Faith Community Hospital
171 Magnolia St., Jacksboro, Texas 76458, 817-567-6633, FAX 817-567-
5714
November 27, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. Of Justice, Antitrust Division, 600 E St., NW, Room
9300, Washington, DC 20530
I would like to take this opportunity to comment on the United
States v. Health Choice of Northwest Missouri, Inc., et al., Case
No. 95-6171-CV-SJ-6.
It is a fact that fraud is running ramped in home health and DME
services in the health field. With the implementation of the Stark I
and Stark II amendment, some of the fraud activity by hospitals and
physicians has been curtailed.
I have no knowledge of case no. 95-6171-CV-SJ-6, however, I
would like to respond to one of the provisions as set forth:
If a physician orders an Ancillary Service and
specifies the provider to be used (whether specifically written in
the chart or other written notifications), then a referring person
shall contact the patient indicating that the physician has ordered
an Ancillary Service and has ordered that a particular
[[Page 29865]]
provider be used. The patient should be asked if this is acceptable,
and if so, referred to that provider.
This section is where I have a problem due to the possibility
that a physician who may have a vendetta against a hospital based
home health service can willfully, without any repercussion, direct
all patients away from that service.
The physician should not be allowed to order a patient to use a
particular home health service. This should be solely the patients
choice.
This judgement, if approved, can and probably will set a
standard for other hospital systems. When you have only 2 or 3
physicians on medical staff and a physician becomes disgruntled with
any faction of the hospital, dependent upon his client base, he
could severely threaten the viability of the hospital.
So, with this in mind, I ask that you please reconsider the
terminology used, whereby the physician can specify the provider.
Sincerely,
Ronald G. Ammons,
Administrator.
R.D. #3 Box 284, Meadville Pa. 16335
December 1, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW., Room
9300, Washington, DC 20530
Dear Gail Kursh: Regarding the article in Home Health Line, 11-
13-1995, Vol. XX, No. 43, and the Dept. of Justice recommended home
care referral policy for Heartland Hospital System Inc.
I am very concerned that Americans are losing their freedom of
choice. I currently work for a home health company that is not
locally hospital based. I have found citizens in our community, to a
large extent, are unaware there is any choice and assume each
company is one and the same. In the past I worked for the local
hospital based program and when competition arrived positive changes
occurred. I am aware of some changes that occurred prior to and
since I left their employment. Competition has benefited our
community. Example. Referred patients requiring home health care are
now seen within 24 deg., unless the patient requests otherwise.
Previously patients often were scheduled per office convenience with
several day delays.
Ordered therapy/treatment (which can safely be
completed in the home) are more rapidly available (staff educated to
complete) when the treatment is available from competition.
Local low pay scale for home care nurses has been
brought in line with surrounding communities.
I realize that hospitals are concerned about their
fiscal responsibility and home care is economically positive for the
hospital but are there assurances that optimal care will be provided
safely and efficiently to our society. I feel a monopoly may lead to
a decline in services provided to the client/patient in home care. I
agree with the ``Coalition for Quality Healthcare'' proposal . . .
modifications are necessary to ensure optimal health care to our
society. Freedom of choice should prevail. Patients and physicians
will have freedom to change if dissatisfied with a current provider.
I feel competition helps to ensure the best home care skilled
services to our neighbors, friends, and loved ones.
Sincerely yours,
Sharon Ferguson
Memorial Medical Center of East Texas
P.O. Box 1447, Lufkin, Texas 75901 (409) 634-8111
November 29, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section/Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street, NW, Room 930, Washington, DC 20530
Dear Ms. Kursh, Memorial Medical Center of East Texas is a
private, non-profit hospital system which also includes a skilled
nursing facility, rehab facility, inpatient physiatric facility and
home health care. In our community, population 40,000, there are
eleven free-standing home health care agencies and two hospital
based. The marketing efforts by the hospital based agencies are
limited to access through the hospital medical staff system and
educational programs for hospital staff such as social workers and
utilization review nurses.
It poses an ethical dilemma for the hospital ``discharge
planning'' staff members to give information or a list of other
agencies for several reasons. We have no way to reliably ascertain
the quality of care given by these agencies. Often we have patients
who are admitted after being a patient of another home health agency
and we have questions about the care that was rendered. For our
hospital to give brochures or provide a list would constitute, in
the eyes of the consumers, the endorsements of these agencies. This
causes grave concern from the hospital risk management department.
It would be impossible to keep a current list since agencies
routinely open, close, change locations and change staff. To require
the hospital to keep up with all of this is an unnecessary
administrative burden.
In no other hospital practice are we required to advocate for
our competition. If a patient comes in for outpatient lab or
mammography we are not required to give them a listing of all other
free-standing labs or mammography centers in our region. It has
always been an enigma to me that the home health agencies were
singled out for this constraint. Therefore, I wish to voice my
support of the procedure developed by Heartland Health Systems and
currently under consideration in the United States v. Health Choice
of Northwest Missouri, Inc., et al., case no 95-6171-CV-SJ-6
currently in the United States District Courts for the Western
District of Missouri.
Should you have any questions or need further input, I am
available to you at 800-944-0825.
Thank you very much.
Patricia R. Jones,
Administrative Director, Memorial Medical Center HomeCare.
Supportive Care Services--Hospice Brazos Valley
2729 A East 29th Street, Bryan, TX 77802, Phone #: (409) 776-0793, 1-
800-824-2326, Fax #: (409) 774-0041
November 29, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E St., NW,
Room 9300, Washington, DC 20530
Dear Ms. Kursh: I am writing to you in response to a Texas
Association for Home Care Fax Alert. This Alert was dated November
24, 1995. It was regarding the Dept. of Justice proposed final
judgment for United States v. Health Choice of Northwest Missouri,
Inc., et al.
My concerns emanate about the scenario of:
If a physician orders an Ancillary Service, but does
not specify the provider to use, then the patient shall be contacted
and informed that his physician has ordered an Ancillary Service and
shall be asked if he has a preference as to which provider to use.
If the patient has no preference, a referring person
shall indicate that Heartland has an excellent, fully accredited
Ancillary Service that is available to the patient, and the
appropriate Heartland brochure may be given. If the patient accepts,
then the referral shall be made to Heartland's Ancillary Service.
It is this second paragraph that is of great concern to me as
both a consumer and a provider. As a consumer, unless I have the
advantage of full knowledge, how am I to have the ability to make an
informed choice. By Heartland being allowed to present themselves
without necessarily disclosing information regarding other possible
Home Health or Hospice choices, my beliefs are there is a
possibility of manipulation of consumer by Heartland or any other
hospital with this advantage.
In Texas, TAHC Code of Ethics provisions appear to be more
stringent than the proposed DOJ referral policy, thus protecting the
consumer's right of informed choice. The point of significance is
that the client must be provided information, regarding all options
of home care service providers, not just hospital's (in which the
client is receiving services) home care agency. For a client that
had no previous knowledge about home care provider services, it
would not be possible for him to make a fully informed decision of
choice.
I greatly encourage to reconsider the DOJ's stance and final
judgement for United States v. Health Choice of Northwest Missouri,
Inc., et al. For the publics protection and to guarantee their right
to full informed decision of choice, it would appear beneficial that
the judgement follow the guideline of the TAHC Code of Ethics
provisions regarding this situation.
If I may be of further assistance to you regarding this issue or
if I may provide
[[Page 29866]]
further information, please do not hesitate to contact me. Thank you
for your time and consideration.
Sincerely yours,
Timothy M. Brown
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Dept. of Justice Antitrust Division, 600 E St., NW.,
Room 9300, Washington, DC 20530
To Whom It May Concern: This is in response to the Dept. of
Justice proposed judgment for United States v. Health Choice of
Antitrust Missouri, Inc. Case #95-6171-CV-SJ-6.
As a health care provider (RN) and consumer, it appalls me to
know that hospitals may not be required to inform patients about
alternatives in the health care market. Because a hospital informs a
client of any available home health agencies does not mean the
hospital endorses such agencies. Healthy competition is good for the
consumer and serves as a check and balance system. Hospital based
agencies would usually monopolize the market if this referral policy
is permitted and quality care will be compromised.
Also, economically, competition allows the consumer to get the
most service for their money. Please do not permit this to change.
Sincerely,
Barbara L. Lenecea
Marblehead Visiting Nurse Association, Inc.
Widger Road Medical Building, Marblehead, MA 01945-2146, Phone (617)
631-1900, FAX (617) 631-7944
November 20, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Dept. of Justice Antitrust Division, 600 E Street, NW., Room
9300, Washington, DC 20530
Dear Ms. Kursh: As the CEO of a visiting nurse agency which
receives approximately 35% of its referrals from a hospital that has
its own home health agency, I can truly speak to the referral policy
issue.
At present, the patients being discharged from this hospital are
frequently not only not given any choice for a provider of home
health services he/she may require, but are refused the opportunity
to utilize the services of an agency for whom they voice a
preference.
Today, patients in need of care are allowed fewer and fewer
choices. It is my belief that patients should not only be asked if
they have a preference, but be given the opportunity to verbalize
their choice of provider in their service area. Further, it seems
logical for representatives of various home health agencies to be
physically present in the hospitals, so that the home health plan of
care may be established and followed up on in a timely fashion, thus
making for a smoother transition for the patient and patient's
family.
An equitable referral system is essential to ensure the patient
has the freedom of choice and is given every opportunity to exercise
his/her right of choice. This is one means by which the hospital may
be held accountable for providing the patient's rights.
It is may hope and the hope of my staff, that the Department of
Justice will consider these factors and support the Health Care
Fairness Act of 1995 (H.R. 2400).
Sincerely,
Joyce L. Elliott
December 4, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property, Section/Health Care Task
Force, Dept. of Justice, Antitrust Division, 600 E St., NW., Room
9300, Washington, DC 20530.
Dear Mrs. Kursh: It greatly distresses me that there would be
even slight consideration given to allowing hospital discharge
planners the ability, by law, not to give patients choices available
to them for home care.
Free standing agencies are not asking for recommendations from
discharge planners in terms of the quality work we do. We feel that
our work speaks for itself. We do however, expect for patients to be
made aware that we exist.
This situation is the closest thing I have ever witnessed of the
government actually participating in setting up a monopoly. What has
happened to fair competition and patient choice?
Respectfully,
Susan Livvix
Memorial Hospital of Taylor County and Memorial Nursing Home
Eugene W. Arnett, President, Medford, Wisconsin 54451, Telephone: 715-
748-8100, Fax: 715-748-8199
December 4, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice--Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530.
Dear Ms. Kursh: I am in support of the Department of Justice
recommended home health, DME, and hospice referral policy as
outlined for Heartland Hospital in St. Joseph, Missouri.
Hospitals have internal mechanisms that provide for independent
review or evaluation of the services offered. Offering names of
other providers during discharge planning could infer the hospital
is endorsing that agency.
I also support patient choice; but if the patient has no
preference and asks the hospital for guidance, the hospital has an
obligation to help that patient. Recommending their own services
should not be misconstrued as a monopoly tactic.
Please consider these remarks when making a final judgment for
United States.
Sincerely,
Carol A. Ahles,
Vice President--Administration.
Polyclinic Medical CenterTM
December 8, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 93, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc., et
al., Case No. 95-6171-CV-SJ-6.
Dear Ms. Kursh: I am responding to the proposed settlement
between the DOJ and Heartland Health System Inc., St. Joseph, Mo.
As the medical director for a large hospital-based home health
care and hospice agency, I am very much in favor of the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
As we all know, patients are being sent home from hospitals
``quicker and sicker.'' Home health care and hospice care under the
auspices of a hospital becomes the legal responsibility of the
hospital. Our agencies are Medicare and Joint Commission certified.
Quality of care and issues such a patient outcomes, patient
satisfaction, etc. are studied by our hospital Quality Assessment
Department, Administration, Professional Activities Committee on the
Board of Directors, and the Board of Directors of the hospital.
Hospital discharge planners are in an excellent position to know the
qualifications of its own departments, but are not in a position to
know the qualifications of other area providers.
The recommended policy is a good one and should become
permanent.
Respectfully yours,
James F. Crispen,
Medical Director, Professional Home Health Care Agency & Professional
Hospice Care (A Subsidiary of the Polyclinic Medical Center,
Harrisburg, Pa).
Reavis Health Systems
1980 South Austin Avenue, Georgetown, TX 78626, (512)930-5877, Fax
(512) 863-6506
December 1, 1995.
Ms. Gail Kursh,
Chief of Professions & Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street NW #9300, Washington, DC 20530.
Dear Ms. Kursh: I want to applaud your judgment in the case of
United States v. Health Choice of Northwest Missouri, Inc. I
thoroughly believe it is imperative that the patient retain the
utmost privilege and right of making the choice of a health care
provider themselves. It is such a relief to finally have a precedent
that sets that stage for higher ethical standards.
It has been my experience that when a health care facility is
faced with stiff competition, patients rights are sometimes abused.
I feel it is necessary for strict regulations in regard to Hospital-
based health facilities and their disbursement of referrals. It is
unfortunate the rights of individuals are most frequently abused in
the interest of the larger institutions, and the patient so often is
not even aware.
I want all patients to be provided with information notifying
them they have a
[[Page 29867]]
choice in home health agencies. Hospitals should be required to
provide the patient with a list of all prospective agencies. I would
also like to see a provision that allows all home health agencies to
leave educational materials. I do not feel this would make hospitals
liable for the care rendered by the respective agencies.
It is time to stop the abuse and provide us all with equal and
fair legislation.
Sincerely,
Nancy Reavis,
CEO, Reavis Health Systems, Inc.
MedCare Systems, Inc.
Grand Rapids 616.452.5700 FAX 616.452.8822, Lansing
517.394.4435 FAX 517.394.4439
December 6, 1995.
Ms. Gail Kursh,
Chief, Professional and Intellectual Property/Section, Health Care
Task Force, Dept. of Justice, Antitrust Division, 600 E. St., NW.,
Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: I am writing in response to the article in Home
Health Line of November 13, 1995. I am concerned as an administrator
of a Medicare/Medicaid certified home care agency that the health
care industry is not only being allowed but pushed to form mega-
systems that violate antitrust values.
In the Grand Rapids area of Michigan where our corporate office
is located, we have a hospital merger pending that will monopolize
health care in this area, and effectually eliminate the balance of
cost control and quality management that competition provides.
We are already seeing this in the home care industry. Because
the hospitals have their own home care components, they direct the
vast majority of discharges for home care to their own agencies. The
protection of patient choice is not effective because the Medicare
population is elderly and sometimes forgetful. They need objective
support to make educated free choice. Even physicians who could
educate their patients regarding special services through outside
agencies are intimidated into using a hospital service that may not
best meet the patient's needs.
The agency I work for has focused on developing services not
previously available in the community. We hire critical care nurses
for our cardiovascular program and provide in home telemetry. We
have been told by many in the community that our services are the
ones they would like to use but they cannot because their hospital
administration directs them to use the hospital's program.
We need change, and control over provider driven referrals and
care. Why are we putting the control in the financial hands of the
biggest provider system in our country, the hospital, that has
demonstrated for decades that it does not know how to control cost
but instead shifts cost. Hospital based home care agencies are being
used for cost shifting.
Small independent health care businesses need to be fostered in
the managed care environment so that the true benefits of
competition, cost control and quality, will be realized. We need to
educate consumers and allow choice in health care.
Mega-monopoly providers who direct business to their own bottom
line are not the answer.
We need to:
Stop provide driven referral. We are shifting from
physician provider driven to mega hospital provider driven.
Require to rotate referrals for general med/surg cases.
This will help educate the public and stimulate competition to the
good of patients.
Require hospitals to allow free standing home care
agencies the freedom to visit their patients in the hospital.
Require the hospital during the discharge planning
process to provide patients a list of agencies that provide home
care.
Require mandatory education of hospital discharge
planners regarding services available in the community that address
specific, special patient needs.
Allow the educated professional discharge planners to
use their own professional, clinical judgement when counseling
patients choosing an agency rather than direct to their hospital
agency simply because they have been directed to do so.
Prevent hospital administration from intimidating
discharge planners or physicians into making self referrals to their
own agency regardless of patient need. The doctor or discharge
planner may know another agency that is better qualified to meet the
specific patient's needs.
Provide incentives for creative health care
professionals to decrease cost while enhancing quality.
Sincerely,
Carol E. Veenstra
December 6, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St., Room
9300, Washington, DC 20530
Dear Ms. Kursh: I am writing in regards to the case United
States v. Health Choice of Northwest Missouri, Inc. I am a MSW, LCSW
Clinical Social Worker with 20 years experience in health care
settings. I would like to comment on this case from the standpoint
of patient self-determination, ie choice, and efficiency/cost
effectiveness.
First, the proposed changes from the Coalition for Quality
Healthcare are unreasonable and place undue burden on the discharge
planner to `'take care of the vendor,'' not the patient.
Documentation of referrals, daily posting of referrals, rotation
system, etc is extra work which does not enhance the care of
patients. Also, patient confidentiality precludes having vendor
representatives roam the halls looking for clients.
Secondly, the Heartland approach which suggests that a patient
should ask TWICE for the names of non-hospital affiliated vendors is
disrespectful, time consuming, manipulative and an undue hardship in
the patient.
Why can't reason dominate in this ruling? The hospital discharge
planners can first discuss the hospital based home care program,
then if the patient requests other vendor names/info, the discharge
planner can share that info with the patient at that moment.
Obviously this case is between vendors and hospitals. Where is
the patient in this and who is looking out for their needs/rights?
Thank you for the opportunity to express my comments.
Sincerely,
Brenda Wilson,
Lead Social Worker.
Central Hospice Care
1150 Hammond Drive, Suite B-2100, Atlanta, GA 30328, (770) 391-9531,
Fax (770) 391-9732, (800) 581-8000
November 29, 1995.
Gail Kursh,
Chief, Professional & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street,
N.W., Room 9300, Washington, D.C. 20530
Re: Comments on Proposed Final Judgement: United States v. Health
Choice of Northwest Missouri, Inc., et al., Case No. 95-6171-CV-SJ-6
in the U.S. District Court for the Western District Court for the
Western District of Missouri
Dear Ms. Kursh: As a Hospice provider I have first-hand
knowledge of the subject matter the Department of Justice is dealing
with in the above referenced matter. I also understand the influence
a hospital can exert in a patient's selection of post-hospital
ancillary services, including the selection of a hospice care
provider. For these reasons I have reviewed and studied the DOJ's
recommended home health, DME and hospice referral policy for
Heartland Hospital.
In the interest of protecting patient choice (which is
guaranteed by both Federal and State laws) as well as maintaining
fair competition consistent with the antitrust laws and FTC
regulations, I respectfully submit that the final proposed judgement
(recommended policy) be modified as such:
--Strengthen limitations on the hospital's ability to refer its
patients to its own hospital-based components;
--Require the hospital to provide patients with an updated list of
Medicare/Medicaid providers in the community;
--Require the hospital to use a rotation system, which assures
equitable referrals to all providers in the area;
--Require the hospital to permit (on their premises, during normal
working hours) representatives of freestanding providers--other than
their own hospital-based components--to visit their patients who
have been admitted for hospitalization; and to expose the patient
population to the availability of outside services as well;
--Make the hospital publicly post its daily referrals to both its
hospital-based entities and to other providers in the community.
On behalf of our Hospice agency and the patients we serve, we
respectfully ask that
[[Page 29868]]
you give these comments due consideration. These issues are of even
more concern in today's era of health care and provider
consolidation.
Sincerely,
Margot Marcus,
Manager, Central Hospice Care, 1150 Hammond Drive, Suite B-2100,
Atlanta, GA 30328.
Heritage Home Health Inc.
December 4, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St. N.W.,
Room 9300, Washington, D.C. 20530
Re: United States v. Health Choice of Northwest Missouri, Inc. et
al., Case No. 95-6171-CV-SJ-6
Dear Gail Kursh: After reading about the case of Heartland
Health System Inc. in the Home Health System Line, we would like to
respond to you with our concerns as we are in a very similar
situation and we would like to request any information, decisions or
assistance you can provide us.
We are Heritage Home Health Care, a proprietary freestanding
Home Health Agency, and we have 5 branches. The agency is a small
corporation owned and operated by myself and my mother.
We opened two branches eight months ago in counties that have a
hospital based HHA and to date we have received zero referrals. In
our other counties, we had received at least 80 to 100 from the
hospital by this time. Montana is a CON state and it has established
guidelines that allow two HHA in each county so there is the
capability for choice. In the two counties with hospital based HHA,
there are only two Home Health Agencies, ours and the Hospital
based.
Enclosed is some of our correspondence in our efforts to try and
promote patient choice or any kind of mechanism to minimize their
weighting the individuals decision of a HHA. Presently the hospitals
allow the hospital based HHA have an individual review the charts on
a daily basis for any patient that would be in need of home health
services. We are not allowed the same privilege because of patient
confidentiality as our staff are not employees of the hospital. When
the hospital Home Health personnel locates a possible referral, they
call the Doctor and inform him that they can provide Home Health
Services and get the physicians order.
Another concern is that the doctors depend on hospitals for many
things, including the privilege of doing surgery, perhaps office
space etc. Because a large amount of their revenue comes from their
functions at the hospital, some doctors are not going to recommend
any other home health agency if the hospital has one. If the doctors
did recommend another home health agency, they could loose some of
their privileges. The same goes for the patient. The patients will
not go against the doctor's and/or hospital's wishes for fear of
reprisal. This is especially true when there is only one doctor in
town. That doctor could refuse to treat the patient and the patient
would have to go out of town for treatment. This has actually
happened in several instances.
Under the Conditions of Participation, at least in the Medicare
program as I understand it, the patient must be given a choice in
regards to their care giver.
As you can see by our attachments, the hospital not only doesn't
give us referrals: it also tries to take the ones we have. We have
also been told by people who have been in the hospital that Heritage
was never mentioned to them. They were just informed that the
hospital would be providing Home Health services when they went home
or they stated the doctor has ordered Home Health and the hospital
would be sending someone out.
Before we arrived, neither of the hospital agencies offered
weekend care or 24 hour on call services. We offer this as part of
our normal patient care. Also, we utilize LPNs for home health aids.
Now due to competition, they have upgraded their service to include
both of these. Without the competition factor, they would never have
upgraded their services. If hospitals are permitted to monopolize
the Home Health service the way they do now, there will not be any
choice as no other home health agency will be able to survive.
In the counties where there are no Hospital based HHAs we have
had no problems with them and each have their own mechanism for
issuing referrals. The hospitals refer in any of the following
manners:
1. Allows the review of the admissions sheets daily.
2. Has a rotation basis if the person does not have a preference
after given a choice.
3. If an agency had previously provided services, they will call
that agency first or ask the individual if they would like to
continue with the agency they had previously used.
4. The discharge planner makes a notation in the medical chart
to the doctor such as would you like to order home health.
5. Schedule discharge planning meetings held with ancillary
service providers.
Brochures of ancillary services are given to the patient. One of
the hospital's provides these brochures in their packet that is
given to every one that is admitted.
Is there some sort of mechanism, that could provide statistical
data to show how many Home Health referrals are made and to what
agency? If there is not, there should be and it should also be
public information.
We are a Medicare Certified and State Licensed agency which all
home health agencies must be to provide Medicare services. In the
last two surveys, we did not have any deficiencies so not only do we
meet the required guidelines, but this verifies that we provide
quality care.
This is only a small sampling of some of the problems that are
occurring. If a judgement is in favor of the hospital based
agencies, it would only compound problems for existing Home Health
Agencies. Your decision will have a very large impact on the
hospital referral processes in the future. I would like very much to
converse with you on this subject. Please call me at (406) 443-2186.
Sincerely,
Matthew F. Komac,
Administrator.
Metro Home Health Care Services, Inc.
3200 Greenfield Road, Suite 260, Dearborn, Michigan 48120, Telephone:
(313) 336-6303, FAX: (313) 336-7157
November 21, 1995.
Ms. Gail Kursh,
Chief, Professions & Intellectual Property Section/Health Care Task
Force, Department of Justice, Antitrust Division, 600 E Street, NW.,
Room 9300, Washington, DC 20530.
Dear Ms. Kursh: Hospitals have cost the Medicare program
hundreds of millions of dollars by shifting hospital costs down into
their Medicare home health agencies (HHA). These agencies are paid
cost, allowing the hospital to profit from shifting expenses to its
home care agency.
This encourages the hospital to increase referrals to its HHA
because the bigger its hospital based HHA, the more of the
hospital's costs are paid for under the Medicare home health agency
benefit. The attached will show that and the American Hospital
Association advocates its hospitals to maximize Medicare
reimbursement this way.
Should the Department of Justice encourage hospitals to make
profits off Medicare referrals?
Sincerely,
Richard A. Porter,
President/Administrator.
Numerous Enclosures
St. Francis Hospital
2016 South Main Street, Maryville, MO 64468, Phone: (816) 562-2600,
Fax: (816) 562-2411
December 26, 1995.
Mr. Edward D. Eliasberg, Jr.
Professions in Intellectual Property, Bicentennial Building, Room
9422, 600 E. Street NW, Washington, DC 20530
Dear Mr. Eliasberg: I'm writing this letter relative to the
allegations filed against Heartland Health System in St. Joseph,
Missouri. There is a group of citizens in the St. Joseph area who
refer to their coalition as the Coalition for Quality Health Care.
As a part of their information campaign, they are telling people
that Heartland Hospital owns rural hospitals in Northwest Missouri,
including St. Francis Hospital in Maryville. I'm writing this letter
to set the record straight that St. Francis Hospital, Maryville,
Missouri, is an independent, not-for-profit corporation whose sole
member is SSM Health Care System of St. Louis, Missouri. The
sponsoring organization of SSM Health Care System is the Franciscan
Sisters of Mary of St. Louis, Missouri. Please understand that St.
Francis Hospital is not owned, operated, managed, or controlled by
Heartland Health System.
If you have any questions in this regard, then please contact
me.
[[Page 29869]]
Sincerely,
Ray Brazier,
President.
To Whom It May Concern: Enclosed are some clippings from the St.
Joseph, Missouri newspaper. Perhaps you have already received copies
of them, but if not, please read them.
It would be well if some were to come investigate the situation
in St. Joseph. I am sure you know a lot about what is going on, but
probably there is much you don't know.
What we really need is a hospital that will be in competition
with Heartland West. When an individual has surgery, they only keep
them for one, two, or three days, regardless of how serious it might
be. They are very short of rooms at Heartland East and people often
are sent home and called when a room is available. This is
ridiculous since Heartland West is setting down there with lots of
vacancies. They have spent Millions of dollars to add on at
Heartland East but none of the building has helped the room
situation. They are trying to get a monopoly on all the doctors in
town, but some are not joining them.
Heartland West is to be turned into a center for long term
care--mostly older people. On the 5th floor of this institution is a
Mental Health area which supposedly is locked at all times. But some
of those people could find a way to get off the floor and it would
be very dangerous for the older people who might be living there.
They closed the emergency room which was convenient to people who do
not have cars, etc. and everyone has to go to Heartland East,
waiting several hours before being taken care of.
I do not wish to sign this letter, but I do feel the government
should step in and straighten things out. They are short of nurses
and admittance help and when someone quits they do not replace them.
Those going in on emergency or accident have to be taken in the
front door of the hospital where every one can see them. 2 young
girls were taken there with serious injuries following a car
accident. They had to spend the night in the surgery room until
rooms were available for them in ICU.
This is just a little about the ways things are and I thought I
could add it to your investigation.
Shepherd's Services, Inc.
12970 Pandora Drive, Suite 200, Dallas, TX 75238, (214) 340-3193, (214)
340-3195 Fax
November 29, 1995.
Gail Kursh,
Chief, Professions & Intellectual Property Section, Health Care Task
Force, Department of Justice, Antitrust Division, 600 E. St. NW.,
Room 9300, Washington, DC 20530
Re: United States v. Health Choice of Northwest Missouri, Inc. et
al., Case No. 95-6171-CV-SJ-6, District Court for the Western
District of Missouri
Dear Ms. Kursh: We would like to comment on the proposed final
judgment in the above case:
Since we do not have the full pleading, we are not completely
aware of the full scope of this litigation. We are aware, however,
of the portion that would effect our home health care agency, and--
indeed--the entire home health care industry. We are most concerned
about those who are covered by Medicare and Medicaid, or by personal
pay. Since HMOs have already restricted the patient's choices by
their system of operation, this essential removes options from the
hospital as well.
1. We think the system proposed by Heartland Health System, is
extremely prejudicial to other home health providers in the
community. Since the legislation enabling Medicare and Medicaid is
founded on a basic principle that patients have true freedom on
choice--and mandates such--any action by a health care provider that
intimidates the patient in any way, either overtly or covertly, is
contravening the intention of the law.
a. In the initial contact, the hospital is, in essence,
questioning the physician's competence in his ability to name a
provider. Since the same Patient's Rights extend to the physician,
it would be hoped--but often unfulfilled--that the physician or his
staff would have educated the patient about freedom of choice.
b. The proposed resolution, written with an extreme bias in
favor of Heartland Health System, virtually guarantees no referrals
in all but the most exceptional cases. The patient is not advised of
his rights under Medicare or Medicaid, but only asked if there is a
preferred provider. Since many, if not most, of the patients we have
on service were unaware of their rights before they were explained
to them, simply asking if a provider is preferred is going to
elicit, in most cases, an uneducated answer, not an informed one.
Example:
1. An elderly patient was admitted from our service to a local
hospital. The discharge planner of the hospital was told of the
patient's relationship to our agency. Upon discharge the patient was
advised, while still very disoriented, that home care had been
ordered. The planner asked if the patient had a preference. Upon
being asked, the patient could remember our Director of Nurse's name
and the aide's name, but not our agency name. The planner discharged
the patient to the hospital's agency without any attempt to help the
patient find us. Our brochure was on the table but was out of sight
of the patient. Our name was in the patient's chart. Rather than
assisting the patient, the planner simply said they would take care
of it. When the agency showed up for a visit, the patient called us
to see if we could send the previous nurse and aide were available
since they had been so wonderful to her. Finding out what had
happened, we asked the agency to transfer the patient. They refused.
Following up, we advised the patient of the Medicare rights and the
choice of provider clause. The patient, ``didn't want to make the
hospital angry'' and did not change.
c. In the second phase of the proposed process, Heartland can
give the patient a full sales pitch, again with no reference to
patient rights, and not mention other possible options. Only a very
assertive patient would object and ask about other options. Again,
the reasons are many, but ignorance of the system is very high on
the list. Since Medicare will not reimburse advertising, the major
hospitals, with huge financial reserves from other income sources,
have done widespread public relations campaigns. Therefore, they
have name recognition with the patients. After all, they are often
in a hospital with the same, or similar name. Name recognition and
credentials do not necessarily equate with providing quality care,
as so many of those covered by HMOs have found to their dismay. In
Texas the law prohibits an agency from having to be Joint Commission
certified since Medicare certification is equivalent.
Again, in this phase, the patient who would be assertive enough
to want additional information to make an informed, intelligent
decision, is essentially left to his or her own devices by the
abstract referral to the telephone book. No attempt is made to
provide the patient reasonable service. If the patient asks for
assistance a second time, the planner gives verbal choices. It is
widely recognized that, in terms of mental retention verbal
presentation which is the least preferred method of communication.
Point of information:
The discharge planner was a disinterested party in terms of who
provided the proposed care, and was primarily a patient advocate.
For many years, hospitals used one of two methods for making
referrals:
1. A rotation between agencies that had signed up with the
hospital, or:
2. Agencies provided the hospital information about their
services that could be distributed to the patients.
A suitably austere planner could, again, intimidate the patient
with lack of assistance and this barrage of noninformation.
Example:
1. A patient who chose our service before admission to a local
hospital: Although the patient was committed to service with us, the
discharge planner, who was actually an employee of the hospital's
home health care agency, refused to discharge the patient to us.
Earlier in the afternoon the same social worker had informed us that
the patient was not going to be released until the next day. That
afternoon the patient was abruptly discharged to the hospital
agency. When the patient objected he was told, in essence, the
hospital did not know us. If our administrator had not happened to
have stopped by while the patient was being transferred to a wheel
chair for discharge, he would have been at home under the hospital's
service in spite of his objections. This was a very assertive
client. You can imagine how much courage it would have taken for
someone who was frail and elderly to offer this much resistance.
Note also the language in the proposed final judgment. ``* * *
the referring person cannot make a recommendation. * * *'' This is
an extremely restrictive phrase for a legal judgment. A planner will
be in violation of the judgment if any other phraseology is used.
2. In clinical professions engaged in such practices as
counseling--including social workers covered by their own code of
ethics--a client is to be offered three choices
[[Page 29870]]
during a referral, and is informed how to make an informed choice
about other options. In relationships between home health care, and
related services, and hospitals this ethical courtesy not followed.
The Texas Association for Home Care (TAHC), of which our agency is a
member, is extremely concerned about ethical practices in this area,
and recently unanimously passed a Code of Ethics. The Code covers
both free standing and hospital based agencies who are members of
TAHC. Two points are essential to our cooperative efforts to provide
the highest quality of care to our clients:
a. Agencies shall honestly and conscientiously cooperate in
providing information about referrals and shall work together to
assure comprehensive services to their clients and their families.
b. Member agencies shall not engage in coercive or unreasonably
restrictive exclusionary behavior which would restrict or impede
consumer choice of provider agencies. A member agency or related
entity that provides a screen to clients for home care referrals
shall not use that position to influence a client's choice to direct
referrals to itself, and shall inform clients of the availability of
home care providers and advise clients that they have the right to
choose the provider they prefer.
Other Observations
1. Following these guidelines would not be excessively
restrictive on hospitals. They would allow them access to the
patients on an equal footing with other providers. The very fact
that the planner is an employee of the hospital places that person
in a ``position of influence'' that is hardly negligible in terms of
eliciting preferential responses.
2. In a metropolitan area it is unreasonable to expect the
discharge planner to be acquainted with every available agency, nor
to serve as a spokesperson for other agencies. The disclaimer, (``no
independent review * * *'' etc.) is appropriate. As we receive
requests for information we attempt to educate the prospective
patient. It is reasonable to give basic guidelines on how to select
providers of any ancillary services. Again, the goal would be to
provide equal footing as outlined in the TAHC Code of Ethics. It is
not unreasonable to ask the hospital to provide basic patient rights
information to their patients. We utilize several different
suppliers of DME equipment. Where a major appliance, for example a
particular bed required for the patient's care, we advise them of
other options that are available to them.
Point of information:
In most cases the patient truly has no preference and follows
our recommendation because they trust us.
Recognizing this ``position of influence,'' the hospital will
have many patients who do not have a preference. There will be
plenty of opportunity for them to admit those patients without
prejudicing opportunities for other providers.
Recommendations
We believe the following guidelines are patient oriented and
equitable for all providers.
1. If a physician orders a specific provider that order should
be honored. An order for Ancillary Services is as binding as any
other medical order. A nurse does not ask the patient if medical
orders are acceptable.
2. If the patient does not express a preference, the patient
should be educated about how to make an informed decision rather
than summarily making decisions for them.
3. In recommending their own agency, discharge planners should
provide available information on other providers. As a minimum the
planner should provide the applicable section of the classified
section of the telephone book in which alternative providers are
listed.
4. If brochures are provided from the hospital agency, brochures
from other agencies should also be provided to help the patient in
making an informed decision.
Thank you for your time in reviewing and considering our
comments and recommendations.
Sincerely,
Richard G. Copeland,
Administrator.
January 18, 1996.
Gail Kursch.
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street NW., Room 9300, Washington, DC 20530.
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs. Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Anne Santora
Ramadan Hand Institute, Lake Butler Hospital
850 E. Main Street, Lake Butler, FL 32054, (904) 496-2323
January 19, 1996.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street NW., Room 9300, Washington, DC 20530
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs. Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Pamela B. Howard,
Hospital Administrator.
January 18, 1996.
Gail Kursch,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street NW., Room 9300, Washington, DC 20530
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs. Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional. I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Patti Hecht
January 18, 1996.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street N.W., Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United
[[Page 29871]]
States vs. Health Choice of Northwest Missouri, Inc., Case Number
95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Ann Reilly
Athens-Limestone Hospital
700 West Market Street, P.O. Box 999, Athens, Alabama 35611, Phone
(205) 233-9292.
January 19, 1996.
Ms. Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street N.W., Room 9300, Washington, D.C. 20530.
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs. Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Philip E. Dotson,
Chief Executive Officer.
Mississippi Baptist Medical Center
January 29, 1996.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, 600 East Street NW., Room 9300,
Washington, DC 20530.
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs. Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive. Also, as a member of NAHC, I am disappointed in
its opposition to this DOJ ruling.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate that
preference to the appropriate party. If the patient is interested in
other providers, referred them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Dan Gore,
Asst. Exec. Dir., Mississippi Baptist Medical Center, Central
Mississippi Health Care at Home.
St. Joseph Convalescent Center
811 North 9th Street, St. Joseph, MO 64501, Phone: (816) 233-5164.
February 5, 1996.
Edward D. Eliasberg, Jr.,
U.S. Department of Justice, Antitrust Division, Bicentennial
Building, 600 E Street NW., Washington, DC 20530.
Re: U.S. v. Health Choice of Northwest Missouri, Inc.
Dear Mr. Edward D. Eliasberg, Jr. I am returning my letter for
your record so that you may submit it. If you need any more
information I would be happy to cooperate in this matter.
Thank you.
Lisa Smith
U.S. Department of Justice
Antitrust Division, Bicentennial Building, 600 E Street, NW,
Washington, DC 20530
January 18, 1996.
Ms. Lisa Smith
St. Joseph Convalescent Center, P.O. Box 283, 881 North 9th Street,
St. Joseph, MO 64502
Re: U.S. v. Health Choice of Northwest Missouri, Inc.
Dear. Ms. Smith: This is in regard to the enclosed October 4,
1995 letter from you to Gail Kursh. You apparently sent us the
letter in order to comment upon the proposed Final Judgment in
United States v. Health Choice of Northwest Missouri, Inc. el al.
You request that the letter be kept confidential.
We are returning your letter because the federal statute that
governs the entrance of proposed final judgments in federal
government civil antitrust cases, 15 U.S.C. Sec. 16(b)-(h), requires
us to publish and file with the Court all comments received. We were
not sure you were aware of this provision.
You are, of course, free to resubmit the letter to us if you
have no objection to your identity being disclosed. You also can, if
you like, submit a redacted or anonymous letter or do nothing at
all.
We are trying to finish our statutorily-required response to the
comments as expeditiously as possible. We therefore request that you
promptly send us any comment you care to submit or resubmit.
Sincerely yours,
Edward D. Eliasberg, Jr.,
Attorney.
Enclosure
October 4, 1995.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 E Street,
N.W. Room 9300, Washington, D.C. 20530
Dear Ms. Kursh: We need help now. I have been in this industry
since 1984 and have never experienced such shortage of patients for
such a long period of time. The trend right now is if you send a
resident to the hospital for any reason they are treated and then
sent to the skilled unit or acute unit at Heartland West. They are
kept for as many days as medicare allows. When we call the social
service to check on our patients we are given the run around. Some
patients are tentatively placed in another facility that was owned
by Heartland, until we called the floor to check on our resident and
found out what was going on. They were going to place a dialysis
patient with history of noncompliance with diet and fluids and
fluctuating blood sugars to a residential care facility. They do not
allow us to be a part of the care plan process during their stay.
When you try to contact Social Service they no longer have anyone to
answer the phone so you must leave a message and they seldom return
your call. When they do return your call they either do not know
what is going on or they are uncooperative. When you call the
resident's physician to check on the patient they do not know what
is going on with the resident--they do not make discharge plans the
paid Heartland staff and Heartland doctors make these decisions.
Today for instance, one of our residents who had been hospitalized
recently was to return at 12:30 p.m. At 2:15 p.m. today she had
still not returned. We tried to find out what was going on through
social service and the floor--they had no idea what was going on--so
we went and picked up the resident. We have been told that the
resident is asked to sign a paper stating they want to go to
Heartland nursing home if they need nursing home care. These elderly
patients are not given a choice as to placement outside of
Heartland. We talked to the head of social service at Heartland and
he didn't even know
[[Page 29872]]
what we offered. We have been informed that if social service does
try to place outside of Heartland they are reprimanded for this
practice. In less they have a group of independent social workers or
a group of people to evaluate what they are doing with these elderly
people this practice will not change. I have tried to involve many
groups at different times and no one wants to help when it comes to
Heartland. Heartland owns this town and no one will stand up to
them. What they are doing is wrong--the monopoly is wrong. The money
that medicare and medicaid pays them is unbelievable. Heartland's
nursing home should get the same reimbursement and inspectors with
the same rules and regulations that we have to follow. All Heartland
West is a very large nursing home. A couple of years ago when we
were hearing the rumors about them starting there nursing facility,
they had meetings with the nursing home industry denying these
rumors. They promised to have meetings with us on quarterly basis to
keep us informed of what was going on but there was no plans for a
nursing home. That was the last meeting that they ever had. I can
not imagine the government allowing something so unfair going on.
They say nursing homes cost the government so much money but we can
not cost nearly as much as these type of setups. I hope someone can
help us. Everyone in health care has felt a large impact due to
Heartland Systems. When we talk to people they do not get
information about any outside nursing homes. We have taken brochures
to Heartland but I feel they are probably never circulated. We used
to average 4 or 5 residents admitted from Heartland each month since
January 1995. July 26, 1995 was the last new resident that we
received from Heartland. On August 23, 1995 we received a new
resident who expired within a few days. These are the type of
patients we get now hard to take care of, very ill or the patients
you can rehab to go home. We have gotten one call on a new resident
but she ended up going to skilled because she still had medicare
days to use. They make no bones about what they are doing. We call
them to check on them on skilled ward and they say they have only
been there for a few days and their time is not up they will contact
me when it is. They are bleeding medicare and medicaid for all they
can. When we tell the social workers what we offer they act like
this is the first time they have ever heard of us. They are building
a residential facility out by the new hospital also. How can this be
possible? They don't need a certificate of need. They are trying to
buy other nursing homes in town also. Please try to do something for
us.
There are a lot of good nursing homes in this town but how long
can we all survive without patients, not very long. This is so
unfair and we feel that no one can hear our cries. I have even made
trips to the hospital trying to get patients but these fall on deaf
ears also. Between the hospital and home health they pretty much
control the elderly population in this town and are fully aware of
this. Help us know before it is to late. I hope this is kept in the
highest confidence for we are struggling now to get patients and if
they knew what we are telling you they would really give us a hard
time. Thank you for your time.
Sincerely,
Lisa Smith
Raulerson Hospital
January 30, 1996.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street N.W., Room 9300, Washington DC 20530
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs, Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate their
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Frank Irby,
Chief Executive Officer.
Raulerson Home Care
217 S.W. Park Street, Okeechobee, Florida 34974, (941) 357-0080, (800)
440-2227, Fax (941) 357-1081
January 30, 1996.
Gail Kursh,
Chief, Professions and Intellectual Property Section, Health Care
Task Force, Department of Justice, Antitrust Division, 600 East
Street N.W., Room 9300, Washington DC 20530
Dear Ms. Kursh: I am writing in support of the DOJ's proposed
final judgment for United States vs, Health Choice of Northwest
Missouri, Inc., Case Number 95-6171-CV-SJ-6.
As a home health care professional, I am very concerned about
the protection of patient choice and the quality of health care all
patients receive.
The only home care agency of which a hospital can speak with
authority and assurance is its own. Recommending other agencies is a
liability issue. There is no way hospital administration and
discharge planners can be sure of the quality of services provided
by other agencies.
If a patient has a request for an agency, other than that
recommended by his physician, he simply needs to indicate their
preference to the appropriate party. If the patient is interested in
other providers, referring them to the yellow pages provides an
organized and unbiased information source.
Thank you for the opportunity to voice my opinion.
Respectfully,
Lisa G. Smith,
Home Health Administrator.
Missouri Alliance for Home Care
431 E. McCarty Street, Jefferson City, MO 65101-3103, 573-6342, Fax
573-6343
February 28, 1996.
Honorable Howard Sachs,
U.S. District Court, Western District, Western Division, U.S. Court
House, 811 Grand Ave., Kansas City, MO 64106
Re: Proposed Final Judgment: United States v. Health Choice of
Northwest Missouri, Inc., et al., Civil No. 95-6171-CV-SJ-6
(W.D.Mo.)
Dear Judge Sachs: The Missouri Alliance for Home Care (MAHC) is
responding to the above captioned case concerning the provision of
ancillary services that is attached to the Final Consent Judgment
against Heartland Health System, Inc.
MAHC is the home care industry trade association in Missouri.
Membership includes companies that provide home health, hospice,
home infusion therapy, in-home long term care services and home
medical equipment. The membership of MAHC is broad-based
representing hospital based, as well as, private freestanding
companies.
MAHC feels that the final judgment fails in several important
areas:
1. It does not meet the letter of the law establishing criteria
for fair competition as intended by Medicare and Medicaid.
2. It helps create a monopoly in an area well served by
competitive providers.
3. It does not consider patients without adequate health
coverage allowing for cherry picking of patients with financial
resources.
4. It treats patients as a commodity to be controlled, directed,
indeed steered to ancillary services.
5. This decision has national ramifications and should be widely
disseminated. A national understanding of this new referral policy
and its impact on consumers and providers is crucial. The critical
nature of these ramifications further impresses the need to ensure
this policy complies with the rules set forth under the Medicare
Act, something the Heartland policy does not do.
MAHC feels the patient should be empowered to make decisions.
They should be informed of the process of arranging for home care
services, what alternative providers are available and the financial
costs to them depending upon their decision.
At a time when the patient is at their most vulnerable they turn
to the physician and hospital to give them and their families help
in selecting services to ease the transition to home. Many of these
patients may not realize that they have a choice. If hospital
personnel or their physician steers their care to hospital based
services the patient will probably accept, without question, that
referral, thus preventing them the option to exercise their
[[Page 29873]]
right to choose. The very act of forcing a patient to ask twice for
alternative providers is demeaning to them. We should be servicing
the sick by assisting them to a comfortable transition home not
manipulating them.
MAHC favors several changes to the judgment:
1. Patients should be informed and given the power to make a
choice. Patients should be given a patients Bill of Rights to
educate themselves. They should understand what choices they will
need to make, how to go about making those choices and any
limitations of their insurance coverage or payor for those services.
If the patient previously had a provider that they wish to continue
using that choice should be allowed.
2. Patients should be given information about alternative
providers. The hospital discharge process should provide each
patient requiring any home care service with a list of companies
that can provide the services to meet the patient's needs. The
hospital should be required to maintain and make available an up-to-
date listing of qualified providers. The hospital ancillary services
should be on the list in alphabetical order. The patient should be
assured that selection of any company other than the hospitals'
affiliate will not affect their care at the hospital or prevent them
from receiving future care from the hospital. This list should
contain basic information about services available from each
provider including how the patient contacts the company and it
should be updated quarterly.
3. The patient's discharge information should be shared. As the
patient discusses options with the competing companies, appropriate
discharge information about their medical care and needed services
in the home should be shared with the agency the patient selects.
All companies should discuss how services will be provided and what
costs, if any, the patient will be expected to pay.
4. Patients have the right to be aware of any financial
relationships or incentives between the person making a referral and
the provider. If the patient and the patient's family have no
preference, and no desire for written information, then the
patient's physician should make the choice of a home care provider.
There should be no pressure or incentive on the physician or any of
the hospital medical staff to refer patients to the hospital's
affiliated services. If there is a financial relationship between
the provider and the physician, including but not limited to the
physician being an employee of or having a financial interest in the
hospital, or the physician's practice being owned by the hospital,
this must be disclosed to the patient. Patients have a right to know
if the physician or hospital has a financial interest in the
provider or company where they are referred.
This Final Judgment sends a confusing message from the
government. Decisions in the past have sought to lower health care
costs, indeed, the government has supported competition as a way to
decrease costs. Past policy and current Medicare law encourages
patient freedom of choice of providers. Legal action by the
Department of Justice has been taken in the past to prevent
referrals by health care decision makers that have a financial
interest in provider companies.
The Final Judgment seems to refute all of these past decisions.
Government policy needs to give consistent direction. MAHC
encourages you to reconsider your decision regarding the referral
policy and to instead insist on a national policy which protects the
patient's right to choose and promotes fair market competition among
providers.
Sincerely,
Dale E. Smith,
President, Missouri Alliance for Home Care.
cc: Gail Kursh, Esq., Chief Professional & Intellectual Property
Section, Health Care Task Force, Department of Justice
Jay Nixon, Attorney General of Missouri
[FR Doc. 96-13754 Filed 6-11-96; 8:45 am]
BILLING CODE 4410-01-M
