S. Hrg. 106-680 EFFEa OF THE PROPOSED ERGONOMICS STAND- ARD ON MEDICAID AND MEDICARE PATIENTS AND PROVIDERS HEARING BEFORE THE SUBCOMMITTEE ON EMPLOYMENT, SAFETY, AND TRAINING OF THE COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS UNITED STATES SENATE ONE HUNDRED SIXTH CONGRESS SECOND SESSION ON EXAMINING THE OCCUPATIONAL SAFETY AND HEALTH ADMINISTRA- TION'S PROPOSED ERGONOMICS PROGRAM AND ITS POSSIBLE IMPACT ON MEDICAID, MEDICARE, AND OTHER HEALTH CARE COSTS JULY 13, 2000 Printed for the use of the Committee on Health, Education, Labor, and Pensions U.S. GOVERNMENT PRINTING OFFICE 65-610CC WASHINGTON 2000 : ForsalebytheSuperintendentofDocuments,CongressionalSalesOfTice U.S.GovernmentPrintingOffice,Washington,DC20402 COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS JAMES M. JEFFORDS, Vermont, Chairman JUDD GREGG, New Hampshire EDWARD M. KENNEDY, Massachusetts BILL FRIST, Tennessee CHRISTOPHER J. DODD, Connecticut MIKE DeWINE, Ohio TOM HARKIN, Iowa MICHAEL B. ENZI, Wyoming BARBARAA. MIKULSKI, Maryland TIM HUTCHINSON, Arkansas JEFF BINGAMAN, New Mexico SUSAN M. COLLINS, Maine PAUL D. WELLSTONE, Minnesota SAM BROWNBACK, Kansas PATTY MURRAY, Washington CHUCK HAGEL, Nebraska JACK REED, Rhode Island JEFF SESSIONS, Alabama Mark E. Powden, StaffDirector Susan K. Hattan, Deputy StaffDirector J. Michael Myers, Minority StaffDirectorand ChiefCounsel Subcommittee on Employment, Safety, and Training MICHAEL B. ENZI, Wyoming, Chairman JAMES M. JEFFORDS, Vermont PAUL D. WELLSTONE, Minnesota TIM HUTCHINSON, Arkansas EDWARD M. KENNEDY, Massachusetts CHUCK HAGEL, Nebraska CHRISTOPHER J. DODD, Connecticut JEFF SESSIONS, Alabama TOM HARKIN, Iowa Raissa H. Geary, StaffDirector Kelly Ross, Minority StaffDirector (II) CMS Library C2-07-13 750C Security Blvd. 35}Himors, Mgr\/te 21244^.^^ CONTENTS STATEMENTS Thursday, July 13, 2000 Page Enzi, Hon. Michael B., chairman ofthe subcommittee, opening statement 1 Wellstone, Hon. Paiil D., a U.S. Senatorfrom the State ofMinnesota, opening statement 5 Prepared statement 5 Sessions, Hon. Jeff, a U.S. Senator fit)m the State of Alabama, opening statement 8 Kennedy, Hon. Edward M., a U.S. Senator from the State ofMassachusetts, opening statement 9 Prepared statement 10 Hutchinson, Hon. Tim, a U.S. Senator from the State ofArkansas, prepared statement 13 Jeffress, Charles N., Assistant Secretary for Occupational Safety and Health, U.S. Department ofLabor, Washington, DC; and Rachel Weinstein, clinical standards group director, Health Care FinancingAdministration, Washing- ton, DC 14 Prepared statements of: Mr. Jeffress 17 Ms. Weinstein 29 Roadman, Dr. Charles, II, president and chief executive officer, American Health Care Association, Washington, DC; Karen A. Worthington, senior occupational health and safety specialist, American Nurses Association, Washington, DC; and Steven Monroe, administrator, Popular Living Cen- WY ter, Casper, 57 Prepared statements of: Dr. Roadman 59 Ms. Worthington 99 Mr. Monroe 103 ADDITIONAL MATERIAL Articles, publications, letters, etc.: SectionThree, PatientHandlingTasks 35 Responses ofMr. Jeffress to questions asked bySenatorEnzi Ill Responses ofMs. Weinsteinto questions asked bySenatorEnzi 115 (III) EFFECT OF THE PROPOSED ERGONOMICS STANDARD ON MEDICAID AND MEDICARE PATIENTS AND PROVIDERS THURSDAY, JULY 13, 2000 U.S. Senate, Subcommittee on Employment, Safety, and Training, of THE Committee on Health, Education, Labor, and Pensions, Washington, DC. The subcommittee met, pursuant to notice, at 9:34 a.m., in room SD-430, Dirksen Senate Office Building, Senator Michael Enzi (chairman ofthe subcommittee) presiding. Present: Senators Enzi, Sessions, Wellstone, and Kennedy. Opening Statement of Senator Enzi Senator Enzi. We will do a very short calling of the hearing to order just to announce that a vote has begun, and there are three stacked votes. One thing they do not do around here is schedule hearings around votes; it is votes around hearings. So we will have to go vote, and I apologize to everybody who is here on time that there will be a little delay, and actually members on both sides of the committee asked that we hold up until after the vote to begin. We could do a systematic jockeying through it, but then everybody does not get to hear the testimony. So as a result, I will express apologies on behalf of the Senate for the delay that we will—have, and we will go vote. So there will be a recess in the hearing already. [The prepared subcommittee recessed from 9:35 a.m. until 10:30 a.m.] Senator Enzi. I will reconvene the hearing, and I want to thank everybody for their patience. As I said before, we do not control when votes happen, but it appears that the voting is really the im- portant part ofthis whole process, so we need to get that done. I want to thank the members of the subcommittee who will be appearing and the members ofthe full committee who will be here, and particularly our distinguished panels and the public forjoining us today. This is the second hearing that we are holding to examine the implications of OSHA's proposed ergonomics rule. Today, I hope to gain a better understanding of how the rule would impact the health care system and particularly how it would impact those pro- viders and patients who arfe largely if not entirely Medicare and Medicaid programs. (1) 2 The thrust ofmy concern is that there are fixed reimbursements for virtually all health care services and providers that would be subject to the proposed rule. That means basically that these pro- viders will not be able to absorb the cost of the rule, and there could either be a ratcheting down of services, a reduction in access to certain services by the most vulnerable beneficiaries, or yet a larger financial crisis for Medicare and Medicaid. What distresses me most, though, is that there does not appear to have been any consultation between OSHA and the Health Care Financing Administration, and I hope we will get a different flavor for that in the hearing today. HCFA, of course, oversees Medicare and the Federal role in Medicaid. Nor does there appear to have been consultation between HCFA and the State Medicaid programs regarding the impact ofthe rule. I do not think a single colleague of mine would disagree that we already have a very serious and complicated situation on our hands in the Medicare program services for hospitalization and posthospitalization care, especially home health and nursing home care, with a lot ofthem going out ofbusiness these days. It only gets more complicated and serious with the imposition of the proposed ergonomics rule. While I believe Congress and the ad- ministration have worked in a bipartisan fashion to monitor and adjust the effects of the 1997 Balanced Budget Act on Medicare beneficiaries' access to quality health care, there is still significant concern that the most needy patients may be experiencing dif- ficulty in accessing care. The entity responsible for making both payment and quality of care recommendations to HCFA, the Medicare Payment Advisory Commission or MEDPAC, reported in June of 1999 that "Partici- pants in our panel said that some home health care beneficiaries have been unable to receive the services to which they are entitled under Medicare. Panelists also indicate that once patients are iden- tified as having expensive care needs, agencies may discontinue their care abruptly, and these patients may have difficulty obtain- ing care from other agencies. In effect, some home health agencies are making coverage decisions based on payment considerations." Last month, the administration itself said: "Recent evidence sug- gests that some of this reduction in spending has the potential to undermine access to quality health care services. Many hospital discharge planners reported increased difficulty obtaining home health services for Medicare beneficiaries, and similarly, 58 percent of the hospital discharge planners reported that Medicare patients requiring extensive services such as intravenous medications have become more difficult to place in nursing homes." Industry reports paint a bleak financial picture as well. For ex- ample, since September 1999, 1,841 nursing facilities have filed for bankruptcy, and more than 2,500 home health agencies have closed since 1997. Cuts imposed in the Balanced Budget Act are blamed by almost all providers. Even basic knowledge of the health care system reveals these days that there is little room to cost-shift to private-pay fee-for-service patients because they do not exist any- more. Providers are now mostly paid on a pre-negotiated basis, not on a cost basis, service-by-service basis, as they were in the past. The 3 old system allowed providers to charge some consumers more to compensate for the cost of caring for patients who were not paying enough. But the new system has managed care customers who are not willing or in a position to pass on to their customers the costs ofunderfunded services for other patients. So that is the landscape that we are faced with before we throw OSHA's proposed ergonomics rule into the mix. Now let us see what kind of havoc the proposed rule will wreak on this already bleak picture. According to OSHA's own estimates, the nursing and personal care residential home health and hospital industry would have a combined first-year cost of nearly $1.4 billion. OSHA engaged in some fancy accounting to make the annual cost of the rule look lower than this, but even OSHA acknowledges that the first-year cost will be at least this high, and some say OSHA's figure for year one is a gross underestimation ofthe cost. For example, according to the American Health Care Association, from whom we will hear today, the first-year cost of the proposed rule ofnursing, personal care and residential segment ofthe health care industry alone would be almost $1.2 billion. The discrepancy in the total 10-year cost estimate is even more OSHA staggering. estimates that the total 10-year cost of the rule for this narrow segment of the health care system is $3.14 billion. American Health Care Association estimates it is over $6.5 billion. Given the statistics about already decreasing access to care, I am very concerned about the additional detrimental impact the cost of the rule will have on quality of care. Rest assured I am not sug- gesting that worker safety is not vitally important, but this is not just an industry concern, this is a system concern which impacts patients and payers as well as providers. We are talking a lot about cost here, but let me emphasize that the point of this hearing is not about how we cost out the price of worker safety. That is not the question before us. We are talking about how we absorb new costs in a health car—e system without compro—mising Medicare and Medicaid patients' in fact, all pa- tients' essential access to health care. What presents such a baffling contradiction is the juxtaposition between the high cost imposed by the proposed ergonomics rule and the recent level of concern expressed by the administration over current access to care for Medicare and Medicaid beneficiaries. Using OSHA numbers for the broader health system, the first-year cost alone is 15 percent of what the administration has asked Con- gress to reinvest in the Medicare program over the next 5 years just to prevent the pending cuts. In addition, the administration has asked for another $21 billion to increase payments to providers and facilities. From a White House web site June 20th press release: "President Clinton pro- poses to restore payment to critically important Medicare provid- ers. To mitigate access problems currently confronting Medicare beneficiaries, the President will propose to take new action to en- sure that hospitals, teaching facilities, rural providers, home health agencies, nursing homes, and other providers receive adequate re- imbursement." 4 Here are the highlights. For the hospitals, the President would invest $10 billion over 10 years by increasing inpatient hospital payment rates, eliminating reductions in the Medicare dispropor- tionate share hospital payment rates for fiscal yearOl, and freezing the Medicaid dish allotments for fiscal yearOO, which are the hos- pitals that provide the bulk of the care for the indigent and poor, and reserving $1 billion to improve the sustainability of rural health care providers. Rightly so, the administration's own emphasis is on those hos- pitals that almost exclusively serve the poor and those that serve rural areas. Yet under the proposed ergonomics rule, a huge por- tion of that would be absorbed, at least $740 million in the first year, with slightly decreasing amounts over the following 10 years going toward implementing and complying with the rule. For home health agencies, the President's proposal would invest $3 billion over 10 years, and for nursing homes, $2 billion over 10 years. Again, under the proposed ergonomics rule, at least $119 million of the home health care resources would be diverted in the first year to comply with the rule. As for nursing homes, it would be at least $526 million in the first year. That is 25 percent of the administration's proposed 10-year funding increase. Using basic math, it appears that at least over the first 10 years, the ergonomics rule would actually cut the resources of nursing homes even with the President's extra $2 billion. As a Congress, we have an obligation to engage on behalf of the beneficiaries, and as a subcommittee, we have an oversight obliga- tion to question whether this consequence of the proposed rule, which OSHA did measure in dollars, was ever appropriately meas- ured in the price ofaccess to health care services. Having said all of that, I will again emphasize that our panel is not an exercise in disregarding health care worker safety over pa- tients. I am among the strongest proponents of improving work- place safety and preventing worker injuries. I have read the comments of the health care worker representa- tives, including the American Nurses Association, including their latest news release, a representative of which I am very glad to have on the second panel. In fact, I came across a reference to a 1995 study by the Minnesota Nurses Association which looked at OSHA injury and illness logs in the State. The finding was very powerful that during the 4 years preceding the study, a staffing re- duction of nearly 10 percent was accompanied by a 65 percent in- crease in injuries and illnesses during the same time. In fact, health care services as a whole have an injury rate of 14.4 per 1,000 workers. It is the third-highest among recorded oc- cupations. As the American Nurses Association testimony during OSHA's public comment hearing attests, in most industries, the weight and size of the product requiring a manual lift can be ad- justed or controlled; thus, the potential for MSDs can be substan- tially reduced. In health care settings, this variable cannot be con- trolled. Those are the kinds of statistics I would like to see disappear. When providers are forced to reduce staffing levels either because of cost or lack of available staff, they often ask more of employees, particularly in industries where they cannot say no to the customer 5 — and where they cannot pass the costs along to the customer ^in this case, the patient. In my own State of Wyoming, an article from Tuesday's Casper Star quoted Tom Jones, executive director of the Wyoming He^th Care Association in Cheyenne, who said: 'The shortage of all types ofnursing personnel, notjust certified nurse assistants, is reaching a critical stage. The problem with certified nurse assistants, who provide the most direct care in nursing homes, is turnover. The work is emotionally and physically demanding." The story went on to emphasize exactly the point I am making in calling this hearing, saying "a total of 2,900 patients in Wyo- ming's nursing homes and 60 percent ofthem on the Medicaid pro- gram." Medicaid pays 64 percent of the cost of the nursing home resident's care, and two-thirds ofthe total Medicare budget goes for nursing home care. I simply do not see how the cost of the rule, even by OSHA's estimate, would not have a terrible effect on access to health care services in Wyoming. We do need to address the worker safety needs for those who provide health care services; however, we cannot do so with a rule that is not completely thought out, coordinated with the other agencies involved, and that may seem to threaten our most vulner- able health customers. I hope our panelists can shed some additional light on how that is going to be avoided. With that, I want to again thank everybody for attending and participating in today's hearing, and I will now recognize the dis- tinguished ranking member from Minnesota. Senator Wellstone. Opening Statement of Senator Wellstone Senator Wellstone. Thank you, Mr. Chairman. I would like to ask unanimous consent that my full statement be included in the record. I was going to read it, but I think I'll just read a bit ofit and then we can move forward. Senator Enzl Without objection, we will do that, and we will in- clude all the testimony of those testifying today, regardless of whether they have time to present it. [The prepared statement ofSenator Wellstone follows:] Prepared Statement of Senator Wellstone Mr. Chairman, the purpose of this hearing is to discuss whether OSHA's proposed ergonomic rule will impose a financial hardship on health care facilities by imposing costs they cannot absorb. How- ever, I believe the evidence demonstrates that ergonomic preven- tion programs reduce injuries and the costs associated with them. Ergonomics programs simply pay for themselves. It is undeniable that many health care providers are indeed ex- periencing financial hardship. The Balanced Budget Act of 1997 drastically reduced Medicaid and Medicare reimbursements to pro- viders, and these reductions have threatened the viability of hos- pitals and nursing home facilities in Minnesota and across the country. Health care providers in rural areas have been especially hard hit. I understand and sympathize with providers facing cuts 6 in their reimbursement levels who are struggling to continue pro- viding high-quality care for their patients. I strongly believe we must revisit the Balanced Budget Act and make a renewed commitment to promoting high quality health care. But we cannot make up for the funding losses resulting from the 1997 Budget Act by jeopardizing worker safety or compromis- ing patient care. Health care facilities must receive fair reimburse- ment in order to provide high quality care. Fortunately, health care facilities can create a safer workplace with no net cost. Study after study have demonstrated that ergonomics programs cut costs while ensuring greater worker and patient protection. One study found an 84 percent decrease in workers' compensation costs, an 86 percent reduction in lost work days, and a 64 percent reduction in restricted work days. In Cam- den, ME, when a 203-bed facility invested in two lifts, worker training and gait belts, their workers' compensation premium dropped from $750,000 to $184,000 each year. Studies also consistently show that relatively small investments in ergonomics dramatically reduce injury rates and costs to provid- ers. The potential for savings is enormous. Currently, nursing homes spend $1 billion for workers' compensation premiums. Addi- tional costs are incurred due to lost work days and overtime pay for workers who fill in for their injured colleagues. In fact, the eco- nomic impact analysis of OSHA's proposed rule projects annual benefits of $5.8 billion, as opposed to an estimated annual cost of $644 million. But this is more than a simple calculation of costs to business. We cannot lose sight of the importance, in human terms, or pre- venting disabling injuries to health care workers. Ergonomics pre- vention programs is especially urgent for health care workers. While nearly two million workers suffer muscuoloskeletal disorders in the workplace every year, one out ofevery six injuries in the pri- vate sector occur in a health care setting. Nursing home workers are among the most vulnerable of health care providers. One report finds more than 18 percent of all nurs- ing home workers are injured or become ill on the job each year, twice the rate of other private sector workers. In 1994, the injury rate among care providers in nursing homes was higher than among workers in coal mining, steel mills, warehouses, trucking, or paper mills. Moreover, of the 20 fastest growing industries in the United States, the nursing home industry remains the most dangerous of all, with the highest injury and illness rate. The injury rate for nursing home workers increased 57 percent from 1984 to 1995. In 1998,, more than 49,000 nursing aides, orderlies and attendants lost a median of five days of work due to a musculoskeletal inju- ries. OSHA has found that most injuries to nurses aides in nursing homes are back and shoulder injuries, and 47 percent ofthose inju- ries are caused by overexertion in lifting and transferring resi- dents. A shortage of nursing assistants may exacerbate this prob- OSHA lem. In 1992, inspectors found that the short staffing of nurses assistants in one nursing home chain required that a single