HEALTH MAINTENANCE ORGANIZATION SERVICE 1. Review Committee; 2. Grant Review Procedures; 3. General Counsel's Opinion of May 3, 1972. FINANCE AND PROJECT REVIEW WORK GROUP . HMO COORDINATING COMMITTEE May 31, 1972 DR. FRANK SEUBOLD, HMOS ~ CHAIRMAN RM. 134-31, PARKLAWN BUILDING 443-2256 MR. GLEN J. MARTIN, SSA/BHI 1-0-4 LOW EAST BUILDING 6401 SECURITY BLVD. BALTIMORE, MD. 21235 (301) 594-8387 MR. ARTHUR SPINDLER, SRS-OPPE RM. 5518, HEWS 13-28301 DR. H.R. JOLLEY, SRS-MSA RM. 4524 HEWS 13-33381 DR. RICHARD GREEN, OEO RM. 615 . 1200 19th ST., N.W. WASHINGTON, D.C. 20506 254-5920 DR. THOMAS DUBLIN, BHME, NIH RM. 5C-23, BUILDING 31 14-62573 MRS. MARIE HENDERSON, CSC RM. 4351 1900 E ST., N.W. WASHINGTON, D. C. 20415 632-6127 MR. ROBERT THORNER, HMOS RM. 13A-22, PARKLAWN BUILDING 443-4617 MRS. BESSIE DRAPER, HMOS RM. 13-06, PARKLAWN BULLDING 443-4106 MR. LOUIS FIREISON, HMOS RM. 134-23, PARKLAWN BUILDING 443-2253 MR. ODIE WILLIAMS, HMOS RM. 13A-03, PARKLAWN BUILDING 443-4778 MR. KEN MASON, HMOS RM. 13A-31, PARKLAWN BULLDING 443-2256 Three Members of the National Advisory Council on Regional Medical Programs Bland W. Cannon, M.D. Anthony L. Komaroff, M.D. Benjamin W. Watkins, D.P.M. HEALTH MAINTENANCE ORGANIZATION SERVICE Grant Review Procedures The Health Maintenance Organization Service (HMOS) was established by the Secretary as an element of HSMHA in October after nearly a year of functioning both as a Task Force in the Office of the Secretary and as an Office in the Office of the Administrator, HSMHA. The HMOS serves as lead agency within DHEW to promote the development of HMOs through technical and financial assistance, as required, in order to support achievement of the 1980 National Health Strategy goal of making the HMO option available to enroll 90 percent of the population, if they so desire. Specific objectives of the program are: . to convert Federal, State, local and private purchasers of health care to provide the HMO option . to provide a comprehensive range of professional and technical assistance services and financial support to HMOs in the planning, development and eventually in the initial operating stages . to increase provider and consumer understanding of the HMO concept and operations and of their potential roles in HMO development. , To realize the goals of delivery of high quality comprehensive health care services with cost containment, the HMO must emphasize . coordination of resources and services . improved manpower utilization and productivity . effective medical records and information systems - approaches to increased accessibility of medical care. The HMOS is a decentralized program providing for the needs of the grantees through our Regional Office staff. Central Office staff provides a resource to the field offices in the areas of technical assistance, consumer education and information, medical care and professional practices and project management and planning. Page 2 - Grant Review Procedures As an experimental program, the HMOS has funded 110 planning and development projects in 42 states and the District of Columbia. Until legislation is passed, grant funding will be limited to con- tinuation of planning and development functions, with no new projects tc be initiated and no funding to be allowed for payment for services ir. an operational ENO. In the grant cycle presently under consideration, eligibility is limited by administrative decision to transition from planning to development or for continuation of development by: 1. Any organization funded for planning and development in June 1971, as long as that organization is not operational as an HMO and is not asking for specific support to pay for health and medical services. 2. Any organization funded for planning in January 1972, with the same proviso. Te HMOS utilizes a multi-level procedure for review, evaluation and wward of planning end development grants ~ Regional, central office, aud interagency reviews are required before a selection is made. The voview process is summarized in the attached chart. -¢ should be emphasized that the HMOS review process involves repre- sentatives from different agencies and from different programs within agencies. In alt of the regional offices the following organizations representatives are involved in our review: A. RMPS B. SSA C. SRS D. HOS some of the regional offices also involve representatives from other +} SMHA programs and from NIH and OEO. review and comment is obtained on all projects from the Comprehensive HMealth Planning "B" agency, or where there is no "B" agency, from the A agency. The EMOS has not made any award to date which is contrary to the area-wide or state-wide planning agency. On May 24 and 25, the HMOS review committee will consider the applications submitted for review. Review and comments by the ad hoc HMO Committee of the RMPNAC and by the Finance and Project Reveiw Work Group of the HMOS Coordinating Committee will take place May 31, 1972. One copy of Page 3 - Grant Review Process each application and 20 copies of the summary sheets will be made available to the RMPS. Members of the ad hoc HMO Committee will present the recommendations of the May 31 action to the RMPS National Advisory Council on June 5, 1972. Final action on recommendations will be made by the Administrator, HSMHA and award notices issued. HEALTH MAINTENANCE ORGANIZATION SERYTCE REVIEW PROCESS Regional Office 1. Notifies grantee of eligibility and invites to submit. 2. Application submitt- ed to RO and reviewed by Regional Office Cmte. consisting of represen- tatives from: RMPS, SRS, SSA and most of the other HSMHA Programs. In some of the Regions representatives from OEO and NIH are in attendance. 3. Review & comment by CHP "B" or "A" agency. 4, Recommendations by the Regional Program Director are made on each application & sent to HMOS Central Office. Note: HMOS Central Office staff will com- prise a part of the Regional office review committee to gain further insights into the specific annlicatitons. Substantive Review Committee 1. Review of the con- tinuation applications in depty by HMOS and representatives from RMPS, CHS, NCHSR&D, Hill-Burton, OPPE and CHP. 2. Teams, by Regions, review & recommend action to be taken on specific applications. 3. Recommendation consolidated to be brought before the ad hoc HMO Cmte, of the RMP National Advisory Council and the Finance & Project Review Work Group of the HMO Coordinating Cmte. Note: ad hoc HMO Committee of the RMP National Advisory Council; Finance & Project Review Group of the HMO Coord. Committee 1. The Work Group con- sists of representatives from: HMOS OEO NIH SRS SSA 2. Review and comment to insure that agency concerns are reinforced by the actions taken. 3. Recommendations of a policy nature to DHEW HMO Coordinating Cmte. HMOS Regional Staff will be involved in the Central Office review to insure that all local considera- tions are made clear. FLOW CHART RMPS, National Council Advisory Administrator, HSMHA The HMO Program status and recommen- dations for Council action will be pre- sented by the ad hoc HMO committee of the RMPNAC at the June 5 meeting of the Council. 1. Final decisio made and award notices issued. { : | DEPARTMENT OF HEALTH, EDUCATION, AND WELFARE PUBLIC HEALTH SERVICE HEALTH SERVICES AND MENTAL HEALTH ADMINISTRATION ROCKVILLE, MARYLAND 20852 OFFICE OF THE ADMINISTRATOR SAMPLE AWARD TRANSMITTAL LETTER This ‘award has been made under the authority of Section 910(c) of the Public Health Service Act as amended and constitutes a.continu- ation of your present grant, No. , made under the authority of Section 314(e) of the same Act. The change was necessitated by program priority considerations within the Health Services and Mental Health Administration in the absence of specific Health Maintenance Organization legislation. These funds, made available through the Regional Medical Programs Service, will support the project for this one funding period and will not be available in subsequent years. The funds are intended to support planning and development activities only; under no cir- cumstances can they be used to support payment for services delivered. i As in your prior award, the Health Maintenance Organization Service will be responsible for the programmatic activities of the grant. Financial reports required for Grants Management are to be submitted to the Regional Medical Programs Service in Rockville, Maryland. 7 FROU ' SUBJECT: Sidney Edelman sefowgy . : d&ssistant General Counsel for Public Health lir. Gereld R. Riso OFFICE OF THE GENERAL COUNSEL Deputy Administrator for Deve lopment . | DATES M AY 4 {072 | s Use of cection $10{c), Public Health Service Act, to fund HMO planning and development x You have requested our advice with respect to the legal authority under section 910(c), Fublic Health Service Act, of (1) awarding grante for continued development support of 1220's to whom granta and contracts heve previously been made (under statutory authority which is not identified), and (2) awarding contracts to organizations (beth profit and nonprofit) for the purposa of providing technical assistance in certain management areas to reals (soma of which have previeusly received Federal eesistance and some of which have not) which ére in the planning end development stage, This Office has previously advised, in the context of proposals for 1210 planning end development, that, to the extent that proposed WO activities fall within the purposes of section 910{c),7 _ funds appropriated for Title IX would be available for their support. Ye have alco advised that, in light of the language of the provision itsel£ as well as the limitationa imposed on the use of Title Ix Section 910{c) reads as follows: "Phe Secretary 1s authorized to support research, studies, investigations, training, and demonstrations designed to maximize the utilization of manpower in the delivery of health services." 2/ Memo, GH (Edelman) to HS (ilson), "iDD--Availability of Title ix funds", December 21, 1970 (DF #47); Mowo, GH (Edelman) to Division of Budget (Heyer), "iO--Legal Authority to Establish wio's under Title IX as compared with the Administrator's law Preposals", December 10, 1971 (DF #56). Page 2 » Mr, Gerald R. Riso - * . ° funds in general by sections soocay2/ and section 901¢c) wa considered section 910(c) of doubtiul utility as a vehicle for the support of onerational HMO activities.2 As you have described the proposed activities under present consiceration, they appear clearly to fall within the ambit of planning and development of 10's, and do not involve actual operation of such organizations. Accordingly, to the extent that the proposal may reasanably ba termed "demonstrations" und are "designed to maximize the utilization of manpower in the delivery of health services" (a matter which is primarily for administrative judement), they cppear authorized by section 91L0(c}). Since that. provision speaks of “support by the Secretary of the specified activities, and since section $00(2a) includes both grants and contracts in describing the purposes of Title Lx, it is our opinion that either grants or contracts may be utilized for financial support of auch activitiea. cc: Dr. Harold Margulies a ‘Mx. Hastings 3/ Section 900(d) in pertinent part directs that the purposes of ~ Title IX be accomplished “without interferring wlth the patterns, or tne methods of financing, of patient care ox professional practice..." 4/ Section 901{c) prohibita the provision of hospital, medical or other care to @ patient “at any facility incident to research, training, ox demonstration éctivitias carried out with funds appropriated pursuant to this title, unless he has been referred to such facility by a practicing physician or, where appropriate, a practicing dentist”, 5/ Memo, GC (Hastings) to HS (Riso), “Availability of RMP funds for ~ support of operétional Hud's," December 21, 1971 (DF #56); Momo, Gil (Edelman) to 1210S (HacLeod), "Funding sources for 12 projects" December 16, 1971 (DF #56).