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Arguments
by Consumers for Affordable Health Care Against a
New Surgery Unit in Portland
March 26, 2004
Michael LeBlanc, Administrative Hearing Officer
Office of Administrative Hearings
Department of Human Services
11 State House Station
221 State Street
Augusta, Me 04333-0011
VIA HAND DELIVERY
Re: Argument to Supplement February 4th Testimony
in Opposition to Certificate of Need Application Proposed
by the Portland Surgery Center, LLC and ASCOA, Inc.
Dear Mr. LeBlanc:
Consumers for Affordable Health Care (CAHC) is a
statewide coalition that represents the interests
of the public and consumers in health care and health
insurance matters. Its 40 organizational members include
labor, faith-based, consumer, women's, children's,
disabled, elderly and health care provider organizations
in addition to numerous small businesses. (See the
attached list of 2004 organizational and business
members) Collectively, our member organizations and
businesses represent the interests of an estimated
200,000 Maine citizens. As consumers and, ultimately,
the end payers for health care services in Maine,
the health and financial interests of our members,
in addition to the public in general, will be substantially
and directly affected by the proposed project.
On behalf of our membership, I testified in opposition
to the proposed application at the public hearing
held on February 4, 2004. The basis for our February
4th opposition was, and remains, that the applicant
failed to meet its burden of proof. That burden required
a showing that each element of the criteria set forth
in 22 M.R.S.A., Chapter 103-A, et seq.
I also spoke at the informational forum conducted
by the Maine Department of Human Services Certificate
of Need Unit. Five consumer-residents of the greater
Portland area also spoke at that information forum
held on December 22, 2003 regarding the "need
for ambulatory surgery services in the greater Portland
area." At that forum, most, if not all, of the
five consumers stated that they did not have any problems
in terms of "waiting times" in obtaining
surgical services. One of the consumers indicated
that she had had multiple surgeries and had no difficulty
in obtaining those services in a timely manner. At
that same informational forum, a representative of
Maine Medical Center stated that for certain elective
surgeries the waiting time was between three and 12
days.
On March 8, 2004, the Commissioner of the Department
of Human Services granted the applicant's request
for reconsideration because the informational record
was closed prior to the statutorily prescribed and
publicly noticed time period. Despite the opportunity
to submit additional information and arguments, the
applicant has still not produced documentary evidence
sufficient to meet its burden of proof. For that reason,
the application must be denied.
Applicant Has Not Met Its Burden of Proof That
the Proposed Project Will Substantially Address Specific
Health Problems As Measured by Health Needs in the
Area to Be Served by the Project
At the public hearing on February 4th, I stated that
there has been no evidence documenting that the project
meets the health needs in the area to be served. I
stated that the listing at VerizonSuperPages.Com contained
over 600 physicians in Portland. I also made the point
that, under the category of "Physicians and Surgeons,
MDs and DOs, Portland, Maine," the names of 150
practitioners in six specialty areas - hand surgery,
general surgery, cardiology, orthopedics, ophthalmology,
and otolaryngology - were listed. In response to that
testimony, physician representatives of the applicant
asserted that the service area was not restricted
to Portland or the greater Portland area but that
the project would draw patients from across the entire
state. Given those representations, the applicant
has not produced any support that the health services
to be offered by the proposed project would address
the "specific health problems as measured by
health needs in the area to be served by the project."
Performing community-based surveys is a typical function
for development corporations that assist physician
practices interested in undertaking large projects
of this nature. A recent article by Stan Luxenberg,
"Invest in a surgicenter? You can make a solid
profit, but be careful about the anti-kickback and
self-referral rules," (Medical Economics, December
5, 2003) states, in relevant part, on the very first
page:
- For expert advice, consider using a development
company. These start by conducting community surveys,
checking the amount of surgery that's already done,
and determining whether demand is sufficient to
support a new facility. (italics added)
- So if you're invited to join a partnership that's
planning to build a surgery center, how do you make
sure it will be profitable, not simply a convenience?
You and your partners should start by evaluating
whether your area really needs the facility. (italics
added)
Applicant readily admits that it conducted no surveys
of the area, however defined, to determine whether
the services to be offered by the project would substantially
address the specific health problems as measured by
health needs in the area to be served by the project.
Moreover, with regard to addressing "health
needs" of the area served, there is no support
in the record for the proposition that there is a
need for the proposed multi-specialty surgical center
due to lack of access to timely surgical services.
Bureau of Insurance Rule Chapter 850, section 7(D)(3)(b)
Timely Access to Health Care Services states with
regard to non-urgent specialty services: "Unless
not reasonably possible, properly referred enrollees
should be able to obtain an appointment for routine
specialty physician services within 30 days."
While the Rule does not apply to health care providers,
it is instructive in that it establishes a reasonable
"waiting time" for elective, or non-urgent,
specialty services. There has been no evidence offered
by the applicant to support the need for the project
based on "waiting times" to obtain elective
surgeries outside of the 30-day time period in the
area served. In fact, at the December 13, 2003 informational
forum, hospital representatives indicated that the
waiting times for elective surgery were three to 12
days.
Applicant Has Not Met Its Burden of Proof That
the Services Affected by the Proposed Project Will
Be Accessible to All Residents of the Area Proposed
to Be Served
Accessibility of health care services is most often
measured in three different ways: affordability of
the service, "timely access" to the service,
and "geographic access" to the service.
Section 7 of the Maine Bureau of Insurance Rule Chapter
850 establishes time and geographic access standards
that health plans in Maine must meet for their enrollees.
While the rule does not apply to providers of health
care services, it is instructive in that it establishes
reasonable "waiting periods" for specialty
and other services and reasonable "travel distances"
for specialty and other services. Bureau of Insurance
Rule Chapter 850, section 7(C)(2) Geographic Accessibility
states: "Except as provided in subsection 7(C)(3)
specialty care and hospital services shall be available
within 60 minutes travel time by automobile of each
enrollee's residence." Section 7(C)(3) provides
limited exceptions permitted by the Superintendent
of Insurance to HMOs in specific, individual circumstances.
Given the position of the applicant that the project
will draw from a statewide pool of patients, there
has been no showing that a project located in Portland,
Maine is geographically "accessible to all residents
of the area proposed to be served." Moreover,
the proposed project proposes to deliver six different
surgical services in one location without providing
evidence to support the location of all six services
in one location. One must ask whether the applicant
has met its burden to prove that any one of the six
types of surgery are accessible to the area proposed
to be served rather than in a location where the need
may be greater. Without this evidence, a multi-specialty
surgical center in Portland, Maine certainly cannot
meet the standard of accessibility nor of "orderly
and economic development of health facilities and
health resources for the State…" 22 M.R.S.A
§ 335(7)(D) (italics added)
Applicant Has Not Met Its Burden of Proof That
the Services by the Proposed Project Are Consistent
with the Orderly and Economic Development of Health
Facilities and Health Resources for the State
Dr. David Wennberg made a presentation to the Commission
to Study Maine's Hospitals that supports the argument
that a decrease in unit cost of services provided
by Ambulatory Surgical Centers may be offset by an
increase in units of services provided. The Office
of Inspector General (OIG) of the Department of Health
and Human Services issued an audit review of surgery
centers and determined that certain surgery centers
may be billing for multiple procedures during one
operative session when they should only be billing
for one service. The OIG Audit Report (A-07-03-02660,
January 2003, see attached) reported the results from
a nationwide review of claims for multiple procedures
performed in the same operative session in these ASCs.
The review identified 21,056 instances of overpayments
totaling $5,103,361, out of a total of 54,549 instances
in which multiple procedures performed during the
same operative session were split between claims.
Even though the applicant argues that the cost per
unit of service may be lower for certain surgical
services, it has not met its burden of proof that
the impact on overall health expenditures in the community
or in the state will go down. In fact, based on a
potential increase in the volume of services, often
driven by financial incentives, the increase in the
units of services may more than likely offset any
potential savings or decrease in costs. However, the
applicant has not produced enough evidence to enable
a determination in its favor.
ASCOA's "Think Profits" Advertising Underscores
That Savings Resulting from Greater Efficiencies May
Not Be Returned to the People of Maine
The Services section of ASCOA's website, www.ascoa.com,
offers this advice:
Think Profit. ASCOA routinely achieves returns
far in excess of that which is typical for new ventures
or that of other investment opportunities generally
available. These remarkable results derive from
focus and discipline in our approach to development
and management.
Clearly, as a matter of "orderly and economic
development of health facilities and health resources,"
the people of Maine would rather see savings resulting
from economies of scale or cost efficiencies returned
to them in overall lower costs, not just per unit
decreases in cost.
For these reasons, CAHC urges the Commissioner to
deny the applicant's CON application. Thank you.
Sincerely,
Joseph P. Ditré, Esq.
Executive Director
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