Preliminary Options and Recommendations

                                         By Leighton Ku

                            Center on Budget and Policy Priorities
                                      820 First St., NE
                                         Suite 510
                                   Washington, DC 20002


                                           October 2006

This report was produced under a subcontract from the National Health Law Program, under the
direction of Mara Youdelman and Steve Hitov, and was supported by a grant from the California
Endowment. A number of experts, including representatives of health care provider associations,
the interpreter community, advocacy organizations, Medicare payment experts and others, offered
helpful information and advice as this project developed. Any opinions expressed are the author’s,
however, and do not necessarily reflect the opinions or positions of those interviewed, the Center on
Budget and Policy Priorities, the National Health Law Program or the California Endowment.
               Preliminary Options and Recommendations
                                        Executive Summary

   To improve access to health care, advance               The report offers a number of preliminary
the quality of care and reduce the risk of              recommendations, but these recommendations
medical errors, many organizations have                 should be viewed as a starting point, not an
proposed that insurers, including the federal           ending point, for discussion of these complex
Medicare program, provide funding for                   issues. The five recommendations are:
language services, such as professional
interpretation, for patients who are limited              •   Develop a flexible system of Medicare payment for
English proficient (LEP). Such a step would                   language services in hospitals. Evidence shows
serve as a counterpart to current federal civil               that       hospitals        frequently     offer
rights policies that interpreter services be made             interpretation and other language services,
available for LEP patients, as well as to                     but are rarely reimbursed for these
nationwide efforts to improve the quality of                  expenses.         This discourages broader
care, which suffers when patients and their                   availability of language assistance. A two-
doctors (or other caregivers) are unable to                   phase system for development of
communicate because of language barriers.                     payments could provide immediate
Although more than two million elderly people                 financing for language services in inpatient
in the United States are LEP, Medicare does                   and outpatient settings and provide time to
not provide funding for language assistance.                  develop a more refined payment system.
Reducing language barriers could increase the
quality of care for a growing group of Medicare               In the first phase, hospitals could receive
patients and reduce racial and ethnic disparities             additional Medicare payments based
in health care.                                               broadly on the volume of LEP patients, as
                                                              measured by Census data on the LEP
   This report discusses how the federal                      population in their service areas. This
government could design payment systems for                   would provide funding for language
language services in Medicare. Medicare has a                 services and give time for hospitals to
number of complex payment systems for                         implement more consistent methods of
inpatient hospital care, outpatient hospital                  recording data about patients’ primary
services, physician visits, managed care and                  languages and how their language needs
other services. A method of paying for                        are met.
language services that works in one Medicare
payment system may not be feasible or                         This information could be used to develop,
appropriate for another. This paper reviews                   in the second phase, a more refined system
information about current approaches to pay                   that adjusts individual inpatient and
for language services, current Medicare                       outpatient    hospital    payments     (i.e.,
payment systems and principles that could be                  Diagnosis-Related      Group-based      and
considered in designing payment systems for                   Ambulatory Payment Classification-based
language services. It then reviews a number of                payments) on a claim-specific basis for
options for inpatient and outpatient hospital                 LEP patients. It is important to develop a
systems, physician services and managed care                  system that gives hospitals flexibility in
plans.                                                        determining how to provide language

    services,    e.g.,     through   in-person                        LEP patients, but there is no organized
    professional       interpreters,   through                        system of monitoring how or whether
    telephone language services or through                            health plans meet these requirements.
    increased availability of bilingual and
    multilingual clinicians.                                      •   Exempt language services from Medicare cost-
                                                                      sharing requirements.   If there was no
•   Offer grants to hospitals, schools that train health              exemption, Medicare beneficiaries would
    professionals and community groups to increase the                be required to pay for a portion of the
    recruitment and training of bilingual and                         costs of interpretation in physician and
    multilingual medical interpreters and clinicians.                 outpatient settings. This might actually
    To improve services, it will be necessary to                      create a disincentive to the use of
    increase the stock of appropriately trained                       interpreters, reduce the quality of care
    medical interpreters and bilingual or                             provided and create additional liability risks
    multilingual clinicians. This could benefit                       for health care providers. This exemption
    not only Medicare patients, but the                               would be akin to existing Medicare policies
    Medicaid and privately insured patients                           that exempt clinical laboratory tests from
    who will receive care from the same health                        cost-sharing. It would assure consistency
    professionals.                                                    with existing federal civil rights laws and
                                                                      avoid creating a disincentive to not use
•   To improve language services in physician settings,               language services.
    provide Medicare reimbursements to in-person
    interpreters and develop a system of federal                   This report also examines a number of other
    contracts for telephone interpretation firms. This          options for Medicare funding of language
    will      increase      the      availability   of          services. It discusses, for example, the potential
    interpretation services in primary and                      for including language service criteria as a
    specialty care settings, but avoids making                  component of “pay for performance” systems
    physicians the financial intermediaries for                 in Medicare, but concludes that it is too early to
    these services. A reimbursement system                      understand how such an approach could be
    for payment of interpreters could be                        implemented or what its effects might be.
    developed, like the reimbursement systems
    that exist for many other health                              Medicare is a constantly evolving program.
    professionals. The federal government                       As the proportion of Medicare beneficiaries
    could also arrange to contract with a                       who lack English proficiency grows, the federal
    number of telephone interpretation firms                    government has the opportunity to consider
    that physicians could call to get telephonic                how it can better address the health care needs
    interpretation for Medicare patients.                       of these patients. In a nation that pays for
    These firms would directly bill the federal                 high-technology medical advances to help
    government. There are many circum-                          patients, it is regrettable that we stint on simple
    stances in which it is not feasible to                      things like helping a patient and physician
    arrange for in-person interpretation and                    communicate.
    telephone interpretation is the appropriate

•   Improve monitoring and oversight of existing
    requirements to provide language services in
    Medicare managed care. Medicare managed
    care contracts already require that the
    health plans provide language assistance to

                Preliminary Options and Recommendations

   In a variety of ways, the federal government           that, “As a result of the increasing linguistic
requires, encourages and pays for language                diversity in the United States, professional
services to help patients with limited English            interpretation services are increasingly needed
proficiency      (LEP)     communicate       more         to assist low English proficient racial and ethnic
effectively with their doctors or other health            minority patients in healthcare settings.”
care providers. These policies are part of                Therefore, the Institute recommended,
broader efforts to improve the quality of health          “Greater resources should be made available by
care as well as to reduce health care disparities         payors to provide coverage for interpretation
that affect racial or ethnic minorities. Under            services for limited English proficient patients
federal civil rights policy, health care providers        and their families.”5
that receive federal funds are obligated to offer
free language interpretation to assist LEP                   Other organizations have made similar
patients in order to avoid discrimination on the          recommendations. The American College of
basis of national origin.1 The U.S. Department            Physicians, for example, has stated that
of Health and Human Services (HHS) has                    “Reimbursement for interpreter services should
established national standards for culturally and         be provided by Medicare and Medicaid.” It
linguistically appropriate services in health care.       went on to note that, “This should be provided
The U.S. Public Health Service supports a                 either directly to interpreter providers or as a
variety of projects to improve language access            reimbursable expense that could be billed
and to reduce health care disparities.2 The               separately with payment for physician office
federal government also makes federal                     visits.”6 The American Medical Association has
matching funds available to state Medicaid and            said that it is “strongly opposed to allowing the
SCHIP programs in order to finance language               burden of funding written and oral
services for LEP patients.3                               interpretation services for limited-English-
                                                          proficiency patients to fall on physicians.”7 The
   A notable gap in these federal policies is the         National Association of Public Hospitals and
lack of Medicare reimbursement for language               Health Systems has noted the difficulties of
services, including interpretation.       (In this        providing adequate language services without
report, “interpretation” refers to oral translation       additional funding.8 The National Alliance for
between an LEP patient and an English-                    Hispanic Health has called for reimbursement
speaking health care provider. Other language             for interpreters as well as for increased
services include translation of written                   compensation for bilingual health care
materials.) The lack of funding for language              providers.9 The HHS Office of Minority
assistance discourages health care providers              Health’s report on culturally and linguistically
from actually providing these services for their          appropriate services stated that “Federal and
patients. The lack of financial incentives is an          state policymakers should support and
important — though not the only — stumbling               implement         direct    reimbursement      of
block to improved language access and                     interpretation and translation costs in the
coverage of language services by health insurers          Medicare and Medicaid programs, and private
could improve the availability of these                   insurers should do the same for their
necessary and effective services.4 A widely-              commercial products.”10
cited Institute of Medicine report on reducing
racial and ethnic disparities in health care found

   Language barriers can have a detrimental             States who were LEP, meaning that they spoke
effect on the health care of a substantial share        English less than very well or not at all. About
of patients, especially those in racial/ethnic          half are Spanish-speaking. The number of LEP
minority groups and immigrants. For example,            seniors has been rising over time and is likely to
about a third of Latino patients report having          continue to climb. While the great majority of
communications problems with their physicians           LEP seniors are immigrants (including both
as do more than one-quarter of Asian                    naturalized citizens and non-citizens), a large
Americans.11 An ample body of research                  number are native-born American citizens who
evidence and common sense indicate that when            are primarily LEP. Of these elderly LEP
LEP patients and their caregivers cannot                people, a smaller, but sizable, number of
communicate, unnecessary and potentially                Medicare beneficiaries need language assistance.
dangerous problems may follow, reducing                 Some LEP Medicare beneficiaries already have
access to health care, compromising the quality         accommodations (e.g., they already have located
of care, elevating the risk of medical errors,          some bilingual health care providers) and some
inducing unnecessary diagnostic testing and             immigrants over the age of 65 are not on
invasive procedures, and raising the risk that          Medicare (because they are not eligible or did
the patient will not understand how to follow           not have sufficient work experience in the
medical advice or self-manage his or her                United States to quality for free Part A
disease.12    A recent study of Medicare                coverage). Finally, a large share of the LEP are
beneficiaries found that LEP beneficiaries had          American citizens: American Community
poorer access to a usual source of health care          Survey data show that about half (46 percent)
and to preventive cancer screenings than                of those who are LEP are U.S. citizens
beneficiaries who were not LEP.13 That is,              (naturalized or native-born).
even though all of those studied had insurance
through Medicare, there were discrepancies in              Some may question whether it is appropriate
access to care that were related to language            to use federal funds to pay for interpretation or
proficiency.                                            language services in Medicare. Since English is
                                                        the dominant language in the United States,
  Concern about language barriers is not just           some may feel it is inappropriate to offer
an issue of civil rights or racial and ethnic           services in any other languages. Such a belief,
disparities, but part of a broader concern about        however, runs contrary to existing civil rights
the quality and efficiency of health care.              policies which require language interpretation
Effective patient communication is an essential         for LEP patients to reduce the risk of
part of any strategy to improve the quality of          discrimination on the basis of race, ethnicity or
medical care and to prevent unnecessary or              national origin. Offering Medicare reimburse-
inappropriate care.         Improving language          ments for language services does not
services would not only improve LEP patients’
access to care, but increase the likelihood that
                                                           Table 1. Number of People Over 65 With
that their diseases are properly diagnosed, that
they learn how to better care for themselves,                     Limited English Proficiency
and that they better manage their diabetes,
                                                        Primary Language Spoken           1,000s of Seniors
heart disease or other chronic diseases. In turn,       Spanish                                 1,178
this     can     help      reduce    unnecessary        Other Indo-European Language             700
hospitalizations and emergency room visits.             Asian/Pacific Island Language            531
                                                        Other Language                            71
  According to the Census Bureau’s American             Total                                   2,480
Community Survey, in 2003 there were 2.5
million people over the age of 65 in the United         Source: 2003 American Community Survey

substantially modify the existing civil rights of        for hospital (inpatient and outpatient) care,
beneficiaries, instead it offers payments to             physician care and managed care. Because
healthcare providers in order to help them               Medicare payment methods often influence
afford the services that they are already                state Medicaid programs and private health
supposed to be providing.                                insurance companies, developing Medicare
                                                         payment methods could have broader
   Some may believe that the use of other                repercussions for other payors and insurance
languages may discourage people from learning            beneficiaries.
English. Acquisition of English proficiency can
help immigrants integrate more fully into
American society and improve their                       The Varying Modes and Contexts of
employment prospects.          But there is no           Language Services
evidence that offering interpretation in health
care settings discourages people from learning             There are many ways to provide language
English. Because health problems and medical             assistance to LEP patients in health care
treatment are intensely personal and technically         settings:
complex, it is medically appropriate to offer
communications in the language in which                    •   In-person professional interpreters.
patients are most proficient. Finally, Medicare            •   Bilingual or multilingual clinicians.
beneficiaries are mostly elderly; if they have not         •   Other bilingual or multilingual health care
gained English proficiency by this phase in their              staff who serve as interpreters.
lives their English skills are unlikely to improve         •   Telephone interpretation services, in which
greatly no matter how strong their intent. The                 the clinician and patient are at one site, but
ability to learn a language decreases sharply                  the interpreter is in a remote location and
with age.                                                      provides interpretation by telephone (e.g.,
                                                               using a speaker phone or dual headsets) or
   Finally, some may be concerned that offering                similar arrangements (e.g., videocon-
interpretation in Medicare might aid undocu-                   ference).
mented immigrants. But undocumented immi-                  •   Informal interpreters (e.g., a friend or
grants are not eligible for Medicare. In order to              family members).
qualify for Medicare, a person must be a U.S.              •   Standard written translations of forms,
citizen or a legal non-citizen immigrant who has               educational materials, etc.
met other additional criteria. Most foreign-               •   Custom written translations (e.g., written
born Medicare beneficiaries had to work in the                 instructions from physician to patient or
United States for more than 10 years in order to               caretakers, translated descriptions of how
qualify (or their spouses had to work that long),              to take medications, etc.).
just as citizens must.
                                                            Each approach serves different needs and
   While some have proposed that Medicare pay            has different costs. For example, while in-
for interpretation or language services, there           person professional interpreters are probably
has been relatively little discussion of how to          the most appropriate in certain settings (e.g.,
structure payments for these services. This is           hospitals or large clinics) or for certain
not a trivial issue. Medicare payment policy is          languages (e.g., Spanish or languages common
complex and is one of the most important                 in an area), telephone interpretation may be
aspects of federal policy for Medicare. This             more logistically feasible in health care sites that
paper offers a preliminary set of options and            see fewer LEP patients, for patients who speak
recommendations about how Medicare could                 a less common language or in after-hours
pay for language services, focusing on payments          settings when fewer staff are working. Research

indicates that there is less potential for                share hospital (DSH) payments and allocates a
misunderstanding and consequent medical                   special grant fund for language services.
error with a professional interpreter than an
informal interpreter.14                                      A number of private agencies across the
                                                          nation are vendors of language services and
   Language assistance may be needed in many              many offer specialized medical interpreters.
settings or contexts. It may be required in               Medical interpreters not only have language
direct contacts between the patient and the               skills, but have additional training in medical
physician or other clinician, including nurses or         terminology and professional behavior,
other health professionals. It can also be                including patient confidentiality. Typically,
required in other contacts with non-clinical              these organizations have internal training and
parts of the medical system, such as                      testing standards to ensure the linguistic
receptionists, social workers or the billing              competence of their staff and often also ensure
office. Finally, language assistance may be               qualifications in medical interpretation. They
required in many different part of the health             offer in-person and telephone interpretation
system, including hospitals, clinics, physicians’         services, as well as written translation services.
offices, nursing homes and so on.                         For example, the U.S. General Services
                                                          Administration has a federal supply schedule
   In some cases, language services can be                for language services which gives insights into
scheduled in advance. In some cases, they are             the types of services and prices available among
required for emergency or unscheduled walk-in             a variety of contractors.16             In-person
visits. These logistical factors also influence the       interviewers are typically paid on an hourly or
form and cost of assistance.                              daily basis with a two-hour minimum. Rates
                                                          may vary depending on the language involved
                                                          and type of interpretation.            Telephone
How Others Pay for Language Services                      interpretation services typically charge by the
                                                          minute as well as having a charge for the phone
   Under Medicaid and SCHIP, interpretation               connection. In addition to commercial sources,
services can be covered by states as either               a number of community-based nonprofit
administrative expenses or as medical benefits,           agencies offer interpretation services to nearby
so state expenses are eligible for federal                health care providers or help translate written
matching payments of 50 percent or more.                  materials for use by patients.
According to the National Health Law
Program, as of 2005 thirteen states paid for                 Health care facilities often have in-house
interpreter services under Medicaid or SCHIP.15           staff who serves as interpreters; some are
Varying approaches are used: some authorize               professionally-trained and some are not (e.g.,
reimbursement to interpreters for their services,         clinical or non-clinical staff who happen to be
while     others     contract   with     specific         bi- or multilingual). In addition, a number of
organizations to provide interpretation. This             staff and affiliated clinicians (e.g., doctors and
latter approach is particularly useful in                 nurses) may be bilingual or multi-lingual and an
outpatient or office settings. One state has              interpreter is not needed since the clinician and
separate payment rates for telephone and in-              patient can community directly. In order to
person interpretation. In some areas, hospitals           attract (and retain) appropriate staff, many
may include interpretation costs as allowable             organizations give special consideration to job
expenses used to establish overall Medicaid               applicants who are bilingual or offer higher
payment rates. One state uses interpretation              wages to those who are bilingual. A recent
costs in computing Medicaid disproportionate              survey conducted by the Health Research and
                                                          Educational Trust and the American Hospital

Association shows that hospitals use a wide                    other staff costs, supplies, meals, etc.).
array of staff and approaches, including
professional interpreters, hospital clinical and               Additional hospital payments — calculated
non-clinical staff and telephone services, to                  on a different basis— are available under
provide language assistance.           However,                Medicare to help finance indirect medical
hospitals rarely receive direct reimbursement                  education or to assist “disproportionate
for the work they do. Only 3 percent of                        share” hospitals that serve large numbers
hospitals reported receiving reimbursements for                of Medicaid or Supplemental Security
language services, and those were primarily                    Income patients.
through state Medicaid programs.17
                                                           •   Physician payments. Physician payments are
                                                               based on the Resource-Based Relative
Medicare Payment Systems                                       Value Scale (RBRVS), which is essentially a
                                                               fee schedule that is based on the
  Understanding how to pay for language                        approximate resource cost of different
services    in    Medicare     requires first                  medical procedures. There are frequently
understanding how Medicare pays for medical                    variants based on individual patients’ co-
care in general. The program has multiple                      morbidities or characteristics in recognition
payment systems which evolve and change over                   of the greater complexity of treating
time.     The following are very simplified                    certain kinds of patients. In addition,
descriptions of some of the most relevant                      payment bonuses are available for
payment systems in Medicare:18                                 physicians who practice in rural or urban
                                                               health professional shortage areas.
  •   Inpatient hospital payments.     Acute care
      inpatient hospital care is paid under                •   Outpatient hospital payments. Payments for
      Medicare’s Prospective Payment System.                   outpatient hospital services are based on
      The Medicare reimbursement is based on a                 the medical procedures used in treatment.
      Diagnosis-Related Group (DRG), which                     The payment system relies on Ambulatory
      corresponds to the estimated resource                    Payment Classification groups (APCs).
      costs of treating a patient with a given                 They cover the institutional capital and
      discharge diagnosis and treatment                        operating costs of the hospitals in which
      procedure. The prospective payment is                    care is rendered, not the physician-related
      not based on the actual cost of the specific             charges. Typical services covered by APCs
      services provided to each individual patient             include emergency room, clinic, radiology,
      and is designed to avoid reliance on                     laboratory, operating room, etc.
      inflationary cost-reimbursement systems.
      Payments for patients treated for a given            •   Nonphysican payments.         In general,
      diagnosis are similar, regardless of, for                institutional payments and physician
      example, the number of days spent in the                 payments include payment for services
      hospital.    In many cases, there are                    rendered by nurses, clerks or other medical
      alternative DRGs used when a patient has                 staff.      In some cases, however,
      or does not have co-morbidities or                       nonphysician staff may bill and be paid
      complications that make treatments more                  separately, usually based on a Medicare fee
      difficult and expensive. There also are                  schedule. Such payments are available for
      arrangements for so-called “outlier”                     physician assistants, nurse practitioners,
      payments. The Medicare payments cover                    psychologists or social workers, physical or
      the operational costs associated with care               occupational therapists and others. In
      during an inpatient stay (e.g., nursing costs,           some cases, these services are performed

        under a physician’s supervision (e.g.,                  policy is the concept of “pay for
        physician assistants), while in other cases             performance.”19 Broadly speaking, the pay for
        the professionals are largely independent               performance movement promotes giving bonus
        (e.g., psychologists or physical therapists).           payments to providers who demonstrate better
                                                                “quality of care,” as measured by a variety of
    •   Managed care payments. Under managed                    evidence-based quality indicators. One way in
        care, Medicare makes monthly capitation                 which this might be accomplished is to hold
        payments to private health plans, which are             back a small percentage of current Medicare
        responsible for the delivery of and                     payments to create a fund for bonus payments
        payment for medical care to those who                   that would be paid to providers who
        join these plans, instead of remaining in               demonstrate that they meet the quality criteria.
        fee-for-service Medicare.         Capitation            There is broad interest in this as a way to align
        payments under Medicare managed care                    financial incentives with better quality and the
        (now called Medicare Advantage) were                    concept seems likely to spur future refinements
        modified substantially under the Medicare               to Medicare payment policies. Legislation
        Modernization      Act.i        Historically,           approved by the Senate as part of its FY 2006
        capitation payments were based on                       budget reconciliation package included
        estimates of the cost of serving patients               provisions to initiate pay for performance
        under fee-for-service Medicare, with                    systems in Medicare, but these provisions were
        adjustments to the capitation payment                   not contained in the final legislation signed by
        made based on the characteristics of                    the President.
        individual members, so that payments for
        those who are older or sicker are higher                  Medicare cost-sharing. A final issue is that
        than for those younger or healthier. Under              Medicare requires extensive beneficiary cost-
        the new legislation, private plans must bid             sharing. For physician services, for example,
        capitation rates, which will be judged                  beneficiaries must pay a deductible of $124 (in
        relative to benchmark estimates derived                 2006) and pay an additional 20 percent of the
        from estimates of the cost of care under                approved amount above the deductible.ii For
        fee-for-service.                                        inpatient hospital care, there is a large
                                                                deductible ($952 in 2006) and extensive
   Medicare also has payment systems for long                   copayments are required for care received after
term care hospitals, nursing homes, home                        the 60th day in the hospital. Low-income
health care and, most recently, prescription                    beneficiaries are largely protected if they are full
drugs. The need for language assistance might                   dual eligibles (i.e., also receiving Medicaid) or if
crop up in any of these settings as well, but this              they are Qualified Medicare Beneficiaries
report is focused only on language services in                  (QMBs) whose incomes fall below the federal
the context of hospital (inpatient and                          poverty line. For these individuals, state
outpatient) and physician settings and in                       Medicaid programs will pay Medicare cost-
Medicare Advantage (managed care).                              sharing amounts.

 Medicare Value-Based Purchasing. Recently, a                      One of the side effects of providing Medicare
major topic of discussion in Medicare payment                   reimbursement for language services is that
                                                                iiNon-participating physicians may also “balance bill”
iTwo key changes in Medicare managed care under the             and require that patients pay additional amounts beyond
Medicare Modernization Act are that managed care plans          the approved Medicare amount. Non-participating
will include prescription drugs and there can be regional       physicians receive 95 percent of the standard Medicare
preferred provider organizations.                               payment.

patients could be required to pay a portion of                             patient requires interpretation services.
those costs, depending on how the payments                                 Once it is determined that these services
are structured. This could be contrary to                                  are needed, they should be available on a
current federal civil rights policies under which                          timely basis (e.g., no requirements for prior
providers are obligated to provide free                                    authorization, no long waits for service).
interpretation services.iii
                                                                       •   Offer flexibility for varying modes of language
                                                                           assistance. At the very least, payment
Principles for Payment                     Methods        for              systems should allow for both in-person
Language Services                                                          and       telephone       interpretation,    as
                                                                           appropriate. It would also be desirable to
   Before beginning a more detailed analysis of                            develop incentives to increase the
options for Medicare payments, the following                               availability of bilingual or multilingual
are principles that can be used to assess                                  clinicians and allied health personnel.
alternative approaches of paying for language
services:                                                              •   Be consistent with broader Medicare payment
                                                                           methodologies. Medicare already has a
      •   Provide financial incentives for reasonable and                  complex system of reimbursement
          efficient provision of competent language assistance             methods. Adaptations for language
          to LEP Medicare patients. Because Medicare                       services should be compatible with current
          does not provide payments for language                           approaches.
          services and has no effective penalties for
          not offering language assistance, the                        •   Be consistent with federal civil rights policies.
          current system creates disincentives for                         Federal civil rights policies require the
          interpretation services and leads to over-                       availability of free interpretation services
          reliance on informal (ad hoc) interpreters.                      for LEP patients, within certain practical
      •   Facilitate timely use of language services by LEP
          patients and health care providers. A system                 •   Provide for accountability of payment for language
          should not impose undue burdens upon                             services and provision of language services. To the
          either patients or providers. For example,                       extent that payments are made to promote
          a patient should not need to take an oral or                     language services, there should be
          written exam to document that he or she is                       documentation or accountability that
          LEP and a clinician should not need to                           services are rendered.
          provide excessive documentation that a
                                                                        An important issue in all the following
iiiFederal civil rights policy establishes that health care          discussions is the competency of interpretation
providers must offer language assistance to LEP patients             and language services.       It is critical that
if the providers receive federal funds, but some guidance            interpreters be competent, both with respect to
notes that this does not apply to physicians who only                language proficiency as well as issues specific to
receive payments under Medicare Part B. Relatively few
physicians, however, receive only Medicare Part B funds
                                                                     the medical context (e.g., understanding
and do not receive funding from other federal programs               medical terminology, confidentiality, etc.)
such as Medicaid, other HHS programs, or other federal               However, there is no commonly accepted
insurance programs such as the Federal Employees                     national standard for the competency of
Health Benefits or TRICARE programs. Moreover,                       interpreters, although some states have
when the physicians operate under the auspices of
hospitals, clinics or managed care plans that receive
                                                                     established standards. It is likely that Medicare
federal funding, these requirements still convey to the              payments would create a stronger need for
physicians.                                                          methods to assess both language proficiency

and professional skills for interpreters, perhaps       services in many cases. An in-person
developed by a national professional                    interpreter can establish better rapport
association. This issue may be the most visible         between the patient and physician and
if Medicare payments are made directly to               help disentangle cultural differences
interpreters, because it would raise the issue of       that may impede communication. They
who is a qualified interpreter eligible for such        can provide not only oral interpretation,
reimbursement. The National Council on                  but can help translate written
Interpreting in Health Care recently released its       documents (e.g., writing down the
“National Standards of Practice for Interpreting        physician’s instructions in the patient’s
in Health Care,” which discusses a number of            language). They can provide other
professional and ethical practice issues, and has       advice to help a patient navigate the
been striving towards development of other              complex medical system. By being
competency standards.20 While this is a critical        physically present, interpreters can also
issue, the nature and development of                    accompany patients through stages of
competency standards is well beyond the scope           medical care, e.g., they can accompany
of this report.                                         the patient from the physician’s
                                                        examining room to the radiology
                                                        department where an x-ray is done.
Options to Pay for Language Services in
Medicare                                                This option would adopt a fee schedule
                                                        for in-person interpreters who could
  This section describes six basic strategies for       directly bill Medicare for services. CMS
paying for language services in Medicare. They          could develop a fee schedule, based on
are not mutually exclusive and could, in some           surveys of prevailing payment rates for
cases, complement one another.           In the         interpreters and other information
sections following this one, we discuss how             about geographic variations in wage
these options might be applied to hospitals,            rates or costs. In order to participate,
physicians and managed care plans. The six              interpreters would need to establish
options discussed are:                                  their professional qualifications and
                                                        agree to contractual elements, such as
    1. Direct reimbursement for in-person               payment rates.       They should also
       interpreters                                     document that each claim being
    2. Contracting for telephone interpreta-            submitted is related to (“incident to”) a
       tion services                                    medical contact for an LEP Medicare
    3. LEP adjustments for individual claims            patient such as a physician visit, hospital
       or payments (e.g., DRG or RBRVS                  interview, etc.       By their nature,
       payments)                                        interpreters     do      not      function
    4. LEP payments for hospitals on a                  independently, but act in conjunction
       facility-specific basis                          with other medical care.
    5. Pay       for     performance  quality
       adjustments                                      This approach is comparable to
    6. Grant programs to promote language               Medicare payments for certain other
       services                                         nonphysician professionals who can bill
                                                        independently.        It is relatively
   1. Direct reimbursement for in-person                straightforward and permits clear
      interpreters. In-person interpretation            linkages between the patient, the
      is often considered the most                      interpreter and the health care provider.
      appropriate way to provide language               Many interpreters would probably

   develop preferred affiliations with
   certain health care providers, while            Telephone        interpretation  typically
   others would be available on a more             involves larger firms. These firms must
   freelance basis and work with multiple          employ a number of interpreters and
   providers.                                      usually cover a variety of languages,
                                                   although some may specialize in a few
   This approach does not require that an          languages (e.g. Spanish). Many, but not
   interpreter have only that role or be a         all, of these firms have the capability of
   full-time interpreter. For example, if a        7 day/24 hour service. They must have
   lab technician or nurse is also qualified       administrative and technology systems
   as an interpreter, that person could bill       to ensure that they can provide relevant
   for the time in which he or she serves          language, communication and billing
   as an interpreter, but otherwise be paid        services.
   for the other functions. There would
   need to be rules that assure, of course,        Unlike an in-person interpreter, a
   that there is no double-billing and that        telephone interpreter does not need to
   this person is qualified.                       be located in the same locale as the
                                                   clinician (and does not even need to be
   Some have noted that it may take                located in the United States). Thus, the
   physicians more time when they must             federal government could play a
   communicate with patients through an            different role by establishing direct
   interpreter. Current Medicare payment           contracts with telephone interpreter
   methods already have an option that             firms for Medicare. Federal contracts
   physicians could use to seek higher             could be established with multiple
   reimbursement when time spent with a            telephone interpreter agencies with
   patient is higher than average. For             varying rates for different types of calls
   evaluation and management (E/M)                 (scheduled, unscheduled, emergency, in
   services, there are codes that are used         Spanish, Mandarin or Serbian, etc.).
   for increased reimbursements for longer         The federal government could negotiate
   amounts of time spent with a patient            with the firms to find the best offers or
   coordinating care or counseling,                accept all offers that meet certain
   particularly when the time spent with a         qualifications and price levels. The
   patient in an outpatient setting exceeds        availability of multiple contracts could
   30 minutes.21                                   help establish market competition that
                                                   could lead to improved and more
2. Contracting       for         telephone         efficient services.
   interpretation services.       Telephone
   interpretation services are necessary and       CMS could then make available to
   appropriate in a wide variety of                Medicare providers the names of the
   circumstances, particularly when it is          contracted firms, describe the services
   difficult to locate an in-person                offered and list the phone numbers. A
   interpreter, when a patient speaks a less       Medicare provider could select which
   common        language,      when     the       telephone contractor to use, arrange for
   practitioner is located in an area with         the telephone call, and provide
   few LEP patients or when the visit was          information about the Medicare contact
   unscheduled or after hours and it is not        (e.g., both the patients’ and providers’
   possible to locate an in-person                 Medicare numbers). After the service is

  provided, the telephone interpretation           Approaches like these have parallels
  contractor could directly bill Medicare.         within Medicare payment systems. For
                                                   example, being LEP could be
  Because of the organizational nature of          considered a risk factor that that signals
  telephone services, it makes more sense          the need for more complex care that
  to pay the telephone contractor rather           must be provided, akin to a higher level
  than the individual interpreter. As part         of severity of an illness or a co-
  of the contracting process, telephone            morbidity factor. There are parallels to
  firms would have to explain and                  this in the current DRG payment
  demonstrate the diversity of languages           system as well as in modifications of the
  and services they can accommodate and            inpatient hospital payment system that
  how they assure the competency of                CMS proposed to increase the extent to
  their interpreters.                              which     there     are    severity-based
                                                   adjustments to hospital payments.
  In this report we discuss telephone
  interpretation, but acknowledge that             Alternatively, payments could be
  other types of remote interpretation are         adjusted based on the actual language
  possible and may become more feasible            services that are appropriately rendered
  as technology improves, such as                  for an LEP patient. If the payment
  videoconferencing, wireless remote               adjustment is based on the service
  interpretation or computer-assisted              utilization, they could be differentiated
  interpretation, and as providers begin to        by the type of language service rendered
  adopt newer technologies.                        (i.e., one amount for an in-person
                                                   professional interviewer, another for
3. LEP  adjustments for individual                 telephone interpretation, yet another for
  claims or payments. This option                  use of a bilingual clinician.) There are
  would modify existing Medicare                   parallels in the Medicare payments for
  payment systems by using adjustments             evaluation and management (E/M)
  (e.g., multipliers or add-ons) when a            services for outpatient hospital services,
  patient is LEP or receives language              which offer varying levels of payment
  assistance. For example, a DRG-based             depending on the intensity of services
  inpatient hospital payment, an APC-              actually delivered in care for a specific
  based outpatient hospital payment, or a          patient. In fact, the American Hospital
  managed care capitation payment could            Association and the American Health
  be increased by some amount or some              Information Management Associations
  percentage to account for the additional         had earlier recommended that factors
  costs of language services needed for            like language proficiency be considered
  LEP patients. Such an adjustment                 as factors in determining outpatient
  might be triggered by either the                 hospital payments for E/M services.22
  identification of a patient as being LEP         The specifics for such an LEP
  or the provision of language services to         adjustment could be designed by HHS
  an LEP patient. That is, the standard            or by the Medicare Payment Advisory
  payment to the provider would be                 Commission (MedPAC).
  increased when there is an LEP patient
  — because LEP patients need                      The virtue of this approach is that it
  additional services — or when                    makes the payment to the main medical
  additional services are rendered.                provider (e.g., the hospital) and offers
                                                   flexibility to the providers about how to

arrange and pay for language services.               concerns that this creates incentives to
Each provider could decide whether it                use more expensive services. That is, if
is more sensible or appropriate to                   use of an in-person interpreter costs
contract with interpreters, to hire                  more than telephone interpretation,
interpreters directly or to increase the             providers may choose the more
number of bilingual or multilingual                  expensive option. But that is often a
clinical staff. In contrast, if a payment            concern in medical care reimbursement
system only pays for interpreters, there             because the determination of the proper
is no incentive to increase the number               course of treatment and intensity of
of bilingual clinicians or to develop                care is judgment-based and there need
other ways of providing the needed                   to be other methods of reviewing
services.                                            whether decisions made are clinically
This approach assumes, however, that
the provider wants to be responsible for             An impediment to immediate use of
arranging for the language service and               this option is that hospitals and other
for being the financial intermediary.                health care providers do not currently
The American Medical Association and                 collect consistent information about the
the American College of Physicians                   language proficiency of their patients or
have stated, for example, that they                  about the language services provided.
would prefer direct reimbursement of                 This gap could make it difficult to
interpreters, so that physicians do not              establish     coding     systems     and
become middlemen responsible for                     reimbursement rates initially, but
their payment. This is less likely to be a           requiring the use of these data to
concern for larger facilities, such as               support claims for reimbursement
hospitals, that already employ and                   would surely spur the collection of
contract with a wide variety of health               these data in a more consistent fashion.
care personnel.
                                                  4. LEP payments for hospitals on a
If the additional payment is triggered               facility-specific basis. Rather than
only by a patient’s LEP status (and not              individually determining whether each
the service rendered), then there might              claim requires an LEP adjustment (as
not be any guarantee that language                   described in #3 above), an alternative is
services are actually delivered. That is,            to create an LEP adjustment factor on
additional payments may be triggered                 the overall volume of care to LEP
even if an LEP patient’s family member               patients provided by each hospital.
or a bilingual clinician provides                    These could be applied as percentage
interpretation and no additional                     increases to the DRG or APC payments
interpreter resources are provided. This             that are otherwise paid for that facility.
is not necessarily an issue, however, if             To qualify for these LEP payments,
the assumption is that the average cost              hospitals could be required to use these
of care increases when LEP patients are              funds for language services for their
served and that providers will make                  patients or related purposes, such as
appropriate service decisions about how              training in using language services for
to meet the patient’s individual needs.              medical personnel, and to submit
                                                     reports to CMS documenting how the
If the additional payment is based on                funds are used.
the service rendered, there may be

         For example, a hospital for which 10                   hospitals, but also give them flexibility
         percent of its patients are LEP might                  about how they implement those
         receive a certain percentage increase in               services, e.g., whether they use these
         its Medicare payments for inpatient and                funds to pay for interpreters or to
         outpatient claims, while a hospital with               increase the number of bilingual or
         20 percent LEP volume could receive                    multilingual clinicians. It would also
         twice that percentage increase.iv These                give them flexibility as to whether to
         LEP payments would be targeted based                   use employed staff or contracted
         on documentation that the providers                    services. In reality, a large hospital
         serve more LEP patients or are located                 probably needs to use a mixture of
         in areas with high concentrations of                   bilingual       clinicians,    in-person
         LEP populations. A more sophisticated                  interpreters and telephone services to
         version of this approach could permit                  meet the diverse needs encountered
         different adjustments for different                    over a large patient caseload and a
         languages. For example, it may be                      variety of inpatient and outpatient
         relatively more expensive to arrange                   services. This option also includes a
         services    for    Cambodian-speaking                  reporting requirement in order to assure
         patients than for Spanish-speaking                     that there is accountability for the use
         patients, and a higher payment                         of these funds. That is, hospitals would
         adjustment may be appropriate.                         need to provide brief reports that these
                                                                funds are used for language services and
         HHS or MedPAC could design a                           that describe the allocation of those
         formula to establish LEP adjustment                    funds.
         levels after examining, as a benchmark,
         the cost of language services at a                     Although there is substantial interest in
         number of hospitals that are known to                  improving the collection of information
         offer strong interpretation and language               about the primary language spoken by
         services. Such payments should be                      patients in health care settings,
         available to all hospitals (i.e., not to just          consistent data for every hospital are
         those with a high volume of LEP                        not yet available. Thus, an interim
         patients), because hospitals with a lower              alternative is to use data already
         volume of LEP patients need additional                 collected by the Census Bureau to
         encouragement and funding to develop                   estimate the percentage of people in
         language services. While hospitals with                hospitals’ service areas who are LEP.
         more LEP patients bear higher burdens                  While this does not directly measure the
         and costs, they are also more likely to                number of LEP patients actually served
         have already developed assistance                      by each hospital, it measures the level of
         programs than hospitals with less LEP                  need in the area served by a hospital,
         volume.                                                which should provide a reasonable
                                                                approximation of service needs. The
         This approach would provide discrete                   decennial Census provides detailed
         funding for language services in                       information about language skills of
                                                                populations in very fine geographic
                                                                detail (e.g.,. down to the Census tract
iv This is analogous to Medicare Indirect Medical
                                                                level). These data could be adjusted to
Education (IME) payments in which the payments are
made based on the number of interns per hospital bed.
                                                                account for population shifts by using
The higher the ratio of interns, the greater the payment        data from the more frequently collected
increase.                                                       American Community Survey which

can produce estimates on a community-               by health care providers.25 The Joint
specific level. Such a Census-based                 Commission on Accreditation for
estimate of the percent of the                      Healthcare Organizations (JCAHO), the
population in a local area that is LEP              primary accreditation organization for
could be multiplied by data about each              hospitals and related health care
hospital’s inpatient and outpatient                 providers, has recently added a standard
caseloads to estimate the number of                 to collect information on each patient’s
LEP patients seen.                                  language status.26 Also, the Health
                                                    Research and Educational Trust
If such an approach is used for a longer            (HRET) — the research and education
time period, there ought to be a                    affiliate of the American Hospital
transition plan to develop consistent               Association (AHA) — has developed
counts of the number of LEP patients                a toolkit to encourage and support
seen in each hospital as a more accurate            hospital efforts to collect data on
measure of LEP volume. Currently,                   patients’ race, ethnicity, and primary
there are no federal requirements for               language.      This toolkit is based on
collection of data about hospital                   their work with a consortium of six
patients’ language status. However, a               major hospitals and health systems to
recent survey by the National Public                develop ways to eliminate disparities.27
Health and Hospital Institute (NPHHI)
found that 50 percent of all acute care           5. Pay  for Performance Quality
hospitals already routinely collect data            Adjustments. Many policy experts are
about the language spoken by their                  discussing modifying Medicare payment
patients, although they do not routinely            methods to “pay for performance,” so
use these data to assess or improve the             that providers who meet certain quality
quality of care and the types of                    criteria receive quality bonuses. While
questions asked vary.23 Using these data            the most active discussions concern
as part of a Medicare payment                       physician payments, the concept has
mechanism would spur hospitals to do                also been discussed for other payment
a better job collecting these data. A               systems (e.g., hospital care or managed
recent report noted that one of the                 care capitation payments). It could be
greatest barriers to hospitals’ collection          possible to include the provision of
of data on race, ethnicity and language             language services as one of the quality
was the perception that these data are              indicators used to modify Medicare
not used.24                                         payments.

There is growing momentum to collect                It is a little difficult to assess this
data about primary language status as a             concept thoroughly at this time because
standard component of medical                       the basic frameworks for Medicare pay
records, so that it may be feasible in the          for performance systems have yet to be
next few years to ascertain the                     established. Nonetheless, the federal
percentage of a hospital’s patients that            government is supporting a number of
are LEP. The National Committee on                  Medicare demonstration projects and a
Vital Health and Statistics, a federal              large number of private initiatives are
advisory group, has recommended that                also underway that could form the basis
HHS require that health plans collect               for a future system.
data on primary language spoken and
facilitate more complete data collection

In November 2005, the U.S. Senate                  researchers — to better measure quality
passed budget reconciliation legislation           related to language services and cultural
that     included    a    “value-based”            competency.       Versions of CAHPS
purchasing system for Medicare that                already exist that apply to Medicare
would require HHS to develop a system              managed care plans and versions for
of bonus payments to be allocated to               hospitals and physicians are in planning.
physicians, hospitals, nursing homes,
etc. who have met quality criteria or              Another concern is that the effect of
whose performance has improved. The                including language services as one of
funds for these quality payments would             several quality indicators could make
come from a two percent reduction in               financial incentives for LEP services
regular provider payments.          This           quite small.      For example, if two
provision was not contained in the final           percent      of    Medicare      physician
budget reconciliation bill, so these               compensation is set aside for quality
issues remain unresolved.                          bonuses and language services are one
                                                   of ten quality criteria used to determine
While measures of the quality of LEP               those bonuses, the relative impact of
services are possible, such measures do            language services is likely to be small (2
not exist yet and, thus, could not be              percent divided by 10 is 0.2 percent)
implemented in the immediate future.               and the amount of the LEP-related
The Joint Commission on Accreditation              bonuses may be less than the cost of
of Healthcare Organizations has                    providing additional services. In and of
standards regarding language services,             itself, this probably would not provide
but they are fairly broad and do not               enough of an incentive for physicians to
readily lend themselves to rigorous                pay for substantially more language
quantitative      measurement;      the            services.
organization is conducting further work
to see how to further improve                   6. Grant   programs to promote
standards and improve hospital                     language services. A final option is to
services.28 The National Committee for             establish special grant programs that
Quality Assurance is also considering              would foster greater availability of
quality standards related to language              language services. While such grants
assistance for health plans.29     One             are not normally associated with
promising approach was recently                    Medicare, CMS or another agency in
developed by child health researchers in           the Public Health Service, such as the
Florida.30 That effort developed a                 Office of Minority Health or the Health
survey that can be asked of parents of             Resources and Services Administration,
recently hospitalized children about a             could develop grant programs to
number of communications issues and                improve the supply of bilingual or
examined other quality measurement                 multilingual clinicians or of trained
approaches that have been used.                    interpreters. For example, a program
                                                   could offer grants to health care
Another approach may be to adapt the               providers or teaching institutions to
Consumer Assessment of Health Plan                 encourage     training   of    bilingual
and Systems (CAHPS) — a set of                     clinicians, whether by increasing the
surveys and data analysis tools                    number of bilingual students entering
developed by the Agency for                        medical or nursing schools or other
Healthcare Research and Quality and                programs or by facilitating language

        training     of      health     students.           available for use at local hospitals and other
        Alternatively, grants could be provided             medical facilities.
        to community agencies to offer training
        in medical interpretation to those who                  Although many hospitals provide language
        are already bilingual or multilingual, to           services, they rarely receive any direct
        boost the supply of trained interpreters.           reimbursement from insurers for these services,
                                                            which discourages wider availability of language
        While we discuss this option in the                 assistance.33 The lack of funding means that
        context of Medicare, it would have                  facilities that provide these services bear higher,
        broader repercussions. To the extent                unreimbursed costs than those that provide
        that it increases the number of trained             little language assistance.
        interpreters or bilingual providers or
        improves the quality of their linguistic               A 2002 report examined the experience of
        abilities, it could also improve services           thousands of uninsured patients in a number of
        for Medicaid, privately insured and                 urban safety net hospitals across the U.S. Of
        uninsured patients who receive care                 the 15 percent of patients who required an
        from the same practitioners.                        interpreter, 7 percent found such aid available
                                                            but 8 percent did not.34 Those who needed, but
                                                            did not receive, interpretation services not only
Paying for Language Services in Hospitals                   reported greater barriers to and frustration with
                                                            medical care, but also received less help
   Evidence suggests that hospitals and medical             regarding financial assistance about paying their
centers, particularly safety net facilities, are the        bills, with the likely result that the LEP were
health care settings most likely to offer language          less likely to get help paying for their medical
assistance. Many hospitals across the nation                care. These findings are consistent with prior
have implemented innovative approaches to try               research that large numbers of LEP patients in
to reduce language barriers that might be faced             hospitals do not receive interpreter assistance.35
by their patients.31 A national survey by the
National Public Health and Hospitals Institute                In addition to serving current patients’ needs,
found that a majority of hospitals have some                an important reason to encourage language
language assistance policies: 38.5 percent have             services in hospitals is that most health
paid staff interpreters, 42.6 percent use                   professionals receive a substantial amount of
contracted interpreters, 64.9 percent use                   their early professional training and experience
telephone language services and almost one-                 in hospitals. Thus, encouraging the hiring
third use a combination of all services (these              and/or training of bilingual clinicians in
amounts total over 100 percent because a                    hospitals should eventually increase their
facility may use multiple methods).32 Because               availability in other community settings. In
of their size, hospitals are better able to employ          addition, monolingual clinicians can become
interpreters and bilingual health staff and to              more familiar working with interpreters in
make arrangements to facilitate language                    serving LEP patients in hospitals, which should
assistance (e.g., creating directories of languages         improve their skills in the community.
spoken by hospital staff, having contracts with
telephone interpretation services, or making                  Any of the six basic payment options listed
arrangements with community groups for                      above could be applied to promote language
interpretation,       conducting        multilingual        services for inpatient or outpatient hospital care
outreach, etc.). Some hospitals have helped                 under Medicare. The options that are most
support community “language banks” that                     appropriate for hospital care are #3, LEP
recruit and train interpreters and make them                adjustments for individual claims or payments or # 4,

LEP adjustment payments on a facility-specific basis.        transitional payment method. The simplest way
Both approaches would essentially augment                    to expedite payments is to use Census data
regular Medicare payments to hospitals and give              about the percentage of the population that is
facilities some flexibility in how to use these              LEP in each hospital’s service area. These
funds through a mixture of in-person                         factors would be used to create proportionate
interpreters, telephone interpreters, bilingual or           adjustments to regular Medicare payments. For
multilingual staff, etc. These funds could be                example, hospitals located in areas with higher
used to help pay for existing language services              density of LEP population would receive a
as well as to boost services.                                higher percentage adjustment to regular DRG-
                                                             based or APC-based payments than hospitals in
   But the approaches differ in some significant             areas with lower LEP density. The transitional
ways, too. Creating LEP adjustments for                      period would serve two purposes. First, it
individual claims is, in the long run, more                  would begin to provide additional revenue to
consistent with the way hospitals are paid and               hospitals offering more care to LEP patients
could be implemented with the addition of                    and create an incentive for these facilities to
simple coding adjustments to standard claims                 upgrade their efforts on a short-term basis.
forms. On the other hand, determining the                    Second, during this interim period, hospitals
proper reimbursement levels and coding                       and HHS could begin to require consistent
categories and then educating providers on                   collection of data about Medicare patients’
their use would take time. Providing facility-               primary languages and the language services
level payment adjustments would be easier to                 rendered (e.g., how often are interpreters used,
implement initially, since it just requires                  telephone language services, bilingual clinics,
information on the general volume of LEP                     informal interpreters, etc.). This information
patients seen at the hospital. On the other                  could be used to develop a more refined
hand, a special pool of funds for language                   approach to fine-tune hospital payments for
services may not be viable on a long-term basis.             LEP services.
Experience suggests that similar payment
adjustments (e.g., Indirect Medical Education                   Phase 2: LEP payment adjustments for individual
or Disproportionate Share Hospital payments)                 claims. An eventual goal would be to develop a
are often viewed as politically vulnerable.                  system that adjusts the amount paid for hospital
                                                             services on a per claim basis. There are at least
  We recommend considering a two-phase                       two ways in which such adjustments could be
approach. The first phase would create facility-             made:
specific payment adjustments based on the
overall volume of LEP patients in a hospital.                  •   Based on a patient’s status as being LEP.
On an interim basis, hospitals would receive                       This might simply note if a patient is LEP
these facility-specific payments and help                          or not. Or it could be more sophisticated,
generate information that could be used to                         based on the primarily language spoken by
develop claims-level adjustments for LEP                           a patient. It is probably less expensive to
services. The second phase would be to create                      help a Spanish-speaking patient than one
payment adjustments for individual claims for                      who speaks Cambodian because Spanish is
LEP patients and services.                                         more common and it is easier to find
                                                                   Spanish interpreters.
  Phase 1: hospital-specific payment adjustments. As
an approach to rapidly encourage improvement                   •   Based on the language services used for
of language assistance in hospital settings and                    LEP patients. That is, the use of an in-
to pay hospitals for language services that are                    person professional interpreter might
being provided, this would develop a                               receive one level of adjustment, but there

    would be different adjustments when a                 information systems that can accommodate
    telephone language line or bilingual                  such payments.
    clinician is used. And there might not be
    any payment at all if the hospital did not               Other Options Considered. Option #6 (grants to
    provide any formal language assistance                promote language services) is worth
    (e.g., if a friend or family member of the            considering too. The purpose of such grants,
    patient provided interpretation.)                     however, is not quite the same. The grants are
                                                          not designed to pay for services on an ongoing
   One concern is that there are differing                basis, but to help fund recruitment and training
methods used to establish hospital inpatient              of interpreters and develop the human capital
and outpatient services in Medicare. Inpatient            resources needed. The grants need not be
services are paid primarily based on a patient’s          targeted to hospitals only, however, but could
diagnosis, not the services actually rendered.            be directed to medical, nursing and other health
This is designed to avoid creating an incentive           professions schools or to community agencies.
for hospitals to do things in more expensive              Such grants could be used to encourage the
ways and to encourage greater efficiency. (Such           recruitment and training of bilingual clinicians
a concern may be less severe for language                 or of professional interpreters, which ought to
assistance than for other inpatient services.             eventually increase the availability of bilingual
Compared to the very large differences that               clinicians in the community.
might occur for alternative treatment options
for certain diseases, the differences in costs for           Options #1 (direct reimbursement of
in-person     interpretation     vs.    telephone         interpreters) and #2 (contracting with
interpretation vs. paying for bilingual clinicians        telephone interpretation firms) are feasible for
are more modest.) Outpatient payments, on                 hospitals, but have the disadvantage of offering
the other hand, are primarily determined based            somewhat less flexibility and offering no
on the services or procedures actually rendered           incentives for developing bilingual or
in patient care, although they too are                    multilingual clinicians or other health staff. We
prospectively set prices, based on the average            expect that the net result of option #4 would
cost of a bundle of services related to an                be to help increase the use of in-person and
outpatient encounter                                      telephone interpreters for language services in
  Nonetheless, Medicare payment methods are
not so monolithic as to have no exceptions.                  It is hard to assess the appropriateness of
For example, Medicare inpatient payments may              Option #5 (pay for performance) at this time
be adjusted when certain new technologies are             because the discussions about the broader
used for care; this is commonly called the new            structure of a pay for performance system for
technology add-on payment. And, as noted                  hospitals are still nascent. To the extent that
earlier, Medicare outpatient hospital payments            pay for performance pilot or demonstration
permit adjustments of the evaluation and                  projects are being developed, it may be
management services based on the types and                worthwhile considering whether language
complexity of types of services rendered to               assistance should be added as a quality criterion,
individual patient care episodes.                         in addition to the other approaches, listed
  Under the two-phase approach developed,
policy-makers would have time to consider how
to develop claim-specific adjustments that are
most appropriate in hospital settings and
hospitals would have time to develop

Paying    for    Language              Services       in         interpretation services, not the physician, and
Physicians’ Offices                                              the hospital would pay for it using its funds.
                                                                 Independent billing of interpreter services
   Less is known about the availability of                       would not be permitted in conjunction with
language services in physicians’ offices.                        physician care in a hospital setting.
Physicians practice in a wide variety of settings;
the most common are solo or small group                             This option does not directly give financial
practices. A variety of innovative ways to                       incentives for bilingual clinicians, unless they
arrange language services have been developed                    are also certified as interpreters. But to the
in small group physician practices across the                    extent that there are other efforts that foster the
nation,36 but it is likely that an LEP patient is                training of bilingual clinicians, it may be less
less likely to receive language assistance in a                  necessary to provide additional compensation
solo or small group practice setting than in a                   to them. The availability of funds for in-person
larger clinic or at a hospital. The ability of                   interpreters may spur physicians to hire nurses
physicians’ offices to communicate with LEP                      or other health staff who are or can be certified
patients probably varies widely across the                       as interpreters, however.
nation. Areas like Los Angeles County or New
York City probably have more capacity for                           Option #5, including language services as a
LEP patients than other areas with fewer                         pay for performance criterion for Medicare
immigrants.                                                      physician payment, might provide some
                                                                 additional, small incentives. But it is not yet
   The recommended methods of increasing                         clear how to create a quality indicator for
language services in physicians’ offices in                      language assistance and it is questionable
Medicare are options #1 (direct reimbursements of                whether a small quality adjustment would cover
in-person interpreters) and #2 (contracting for telephone        the costs of interpretation services. On the
language services). These would let physicians                   other hand, it should also be noted that
arrange       for      in-person     or      telephone           language assistance may inevitably be related to
interpretation services, but would not require                   quality measurement, even if it is not explicitly
that they be fiscal intermediaries for the                       addressed. For example, if a performance
services. Making the payments based on                           measure for an internist is based on how often
services rendered by interpreters would                          his female patients have mammograms or how
guarantee that the services are used for their                   often his diabetes patients have hemoglobin
intended purpose. If interpreters had a better                   A1C tests, then a physician who cannot
funding base and greater volume of use, they                     effectively communicate with his patients is
could more readily locate in or near physicians’                 likely to perform poorly. In that regard, pay for
offices. This would facilitate use of their                      performance initiatives could indirectly improve
services for all parties and may also make their                 language assistance.
services more efficient and less costly per
encounter.                                                          Option #3, risk adjustments to RBRVS
                                                                 payments for LEP patients, would offer more
  The direct reimbursement and contracting                       flexibility in how to arrange for services in
options could be limited to use in physicians’                   physicians’ offices. But it would require that
offices or other settings that do not have                       physicians become financially responsible for
another language services payment method.                        the costs of interpretation services, which
That is, if LEP bonus payments (discussed                        would create administrative burdens. Finally, it
above) are available for hospitals on an                         would be difficult to ensure that payments
inpatient or outpatient basis, then it would be                  made on behalf of LEP patients are actually
the responsibility of the hospital to arrange for                used to provide language assistance.

                                                            without specific funding.41 Thus, the managed
  Options #4 (bonus LEP payments) and #6                    care plans may have contractually agreed to
(grants) do not apply to physician office                   offer language assistance, but their operational
settings.                                                   payment policies can create disincentives for

Paying for Language             Services     under             Of the six payment options, the only one that
Managed Care                                                could readily be applied to managed care
                                                            payments is option #3, risk adjustments for
   Under the regulations for Medicare managed               LEP patients to capitation payments.
care (now called Medicare Advantage),                       However, as noted above, it is not clear if such
managed care plans are required to “ensure that             adjustments should be made. One particular
services are provided in a culturally competent             concern is that it appears that immigrant
manner to all enrollees, including those with               patients have much lower per capita medical
limited English proficiency or reading skills,              expenses than other patients. For example, a
and diverse cultural and ethnic backgrounds.”37             recent analysis of the Medical Expenditure
Given this requirement and the fact that                    Panel Survey found that, after statistical
negotiated contractual agreements assume                    adjustments for a host of characteristics,
compliance with regulatory requirements, it is              including age, race/ethnicity, health status and
less clear that Medicare managed care                       insurance coverage, immigrants’ medical
organizations need additional payments to                   expenditures were roughly half as high as those
provide language services. Moreover, since the              for non-immigrants.42 These differences are
benchmark for managed care rates is based on                probably attributable to a variety of health care
fee-for-service payment levels, increases in                barriers faced by immigrant patients, including
Medicare fee-for-service payments for LEP                   language barriers, and to lower use of medical
patients ought to eventually influence managed              services under the status quo. Making risk
care payments.                                              adjustments to capitation payments based on
                                                            LEP status based on historical data could
   A number of managed care plans already do                inadvertently lock-in lower expenditures for
much to foster language services, but more                  LEP patients and thereby lower resources to
could be done. (See, for example, Medicare-                 pay for their care, rather than provide new
related assessments and recommendations by                  resources for language assistance. Because of
Ellen O’Brien and Timothy Jost38 or general                 this concern, we do not recommend this option
managed care reviews by Cindy Brach and her                 at this time.
colleagues39). CMS published Providing Oral
Linguistic Services: A Guide for Managed Care Plans,         The other five options really do not apply to
a report that offers practical suggestions for              Medicare managed care payments.
Medicare managed care plans.40 Both the Joint
Commission on Accreditation of Hospitals and                  However, HHS can and should do more to
Healthcare Organizations and the National                   increase the quality of language services in
Committee on Quality Assurance have sought                  Medicare managed care and to ensure that
to upgrade standards for language services in               plans    are    meeting   their    contractual
managed care settings. A key pitfall, however,              commitments.       (For example, see the
is that it appears that most managed care plans             recommendations of Jost and O’Brien, op cit.)
do not directly reimburse for interpretation                HHS can review and increase oversight over
services or create incentives for bilingual                 Medicare managed care plans to ensure that
clinicians, they merely pass along the                      they are providing adequate language services.
requirement to their contracted providers                   HHS could, for example, ensure that plans have

or require contractual arrangements for
interpretation services (e.g., telephone services),              •   Physician services are subject to the Part B
that they pay for interpreters and could also                        deductible and 20 percent coinsurance.
heighten efforts to monitor the adequacy of                          This report’s recommendation would
language services provided. In this regard,                          permit separate reimbursement for in-
quality measurement plans that are being                             person and telephone interpretation. If
developed by organizations like NCQA and                             these interpreter services are treated like
JCAHO or similar to those developed by                               physician services (or similar nonphysician
Florida researchers could be particularly                            services), then beneficiaries would be
important.                                                           responsible for at least one-fifth of the

Cost-sharing                                                     •   Managed care. Medicare permits greater
                                                                     flexibility in cost-sharing under managed
  For those who do not also receive assistance                       care than under fee-for-service care. Our
under Medicaid (including QMB coverage),                             recommendation is to not make
there can be substantial cost-sharing in                             adjustments to Medicare capitation
Medicare.v Initiating payments for language                          payments for LEP patients. However,
services in Medicare has the potential to force                      managed care plans, to the extent that they
beneficiaries to pay for language services, which                    pay for interpretation payments, could
could raise issues about a conflict with the                         require beneficiary cost-sharing.
current civil rights requirement that providers
offers these services at no charge to LEP                         The most straightforward solution to this
patients.                                                      issue is to exempt language service payments
                                                               from Medicare cost-sharing.            This is
   Unless there are exemptions for language                    comparable to the exemption from Medicare
services, as discussed below, the impact of our                cost-sharing that now applies to clinical
recommended LEP payment strategies could be                    laboratory services like blood tests or
as follows:                                                    urinanalysis. Language services are similar to
                                                               these diagnostic services since good patient-
    •   Inpatient hospital services.       Medicare            physician communication is an essential
        deductibles and copayments (those which                component of making an accurate diagnosis of
        apply after the 60th day in a hospital) are            the patient’s needs. Earlier research has shown
        fixed. A percentage increase in payments               that physicians often order more diagnostic
        to hospitals for LEP patients would not                tests for LEP patients in order to compensate
        increase beneficiary cost-sharing.                     for their inability to understand the oral
                                                               description of the patients’ symptoms and
    •   Outpatient hospital services are subject to the        problems.43
        Part B deductible ($124 in 2006) and
        coinsurance. The outpatient coinsurance                   Requiring cost-sharing for interpreters could
        level can be substantial, up to 40 percent,            increase barriers to the use of these services
        but is gradually being phased down to 20               which could increase the risk of misdiagnoses
        percent. An LEP adjustment in the                      and medical errors and undercut civil rights
        outpatient payment levels could lead to a              policies. In turn, these disincentives could
        slight increase in outpatient cost-sharing.            create additional liability risks for health care
                                                               providers who may be concerned about the
vUnder Medicaid, dual eligibles may face “nominal”             risks for medical errors due to the lack of
copayments.                                                    proper interpretation.

Conclusions                                                  met. This information could be used to
                                                             develop a more refined system that adjusts
  This report lays out six options for ways by               individual inpatient and outpatient hospital
which the federal government could take                      payments on a claim-specific basis for LEP
further steps to reduce language barriers for                patients. Both these approaches give
Medicare beneficiaries with limited English                  hospitals flexibility in determining how to
proficiency, particularly through payment for                provide language services whether through
such services. It includes recommendations for               in-person      professional      interpreters,
approaches to enhance language services in                   through telephone language services or
hospital, physician and managed care settings.               through increased availability of bilingual
These options are preliminary in nature and                  and multilingual clinicians.
could certainly be refined.
                                                         •   Consider grants to hospitals, medical and
   The purpose of this report is to establish a              other health professions schools and
starting point for discussion of these complex               community groups to increase the
issues rather than determine a final end point.              recruitment and training of bilingual or
In     addition    to    the    options     and              multilingual clinicians and professional
recommendations, the report lays out some                    interpreters. The purpose of these grants
principles that could be used to assess the                  should be to broadly foster the training
appropriateness of payment systems for                       and hiring of bilingual and multilingual
language services. The recommendations do                    health     care    providers,      including
not say how much the payment increases                       interpreters. While this report is focused
should be, nor does this report estimate the                 on Medicare, these grants ought to be
cost of such changes. It simply attempts to                  viewed in a broader perspective since
suggest how relevant payment systems for                     health care providers serve multiple
Medicare could be designed. Even if Congress                 populations. That is, the internist or nurse
approved changes like these, further analytical              who cares for Medicare patients is likely to
work and refinement by HHS or the Medicare                   also serve patients covered by Medicaid
Payment Advisory Commission would be                         and other forms of insurance (including
needed.                                                      the uninsured).

  Briefly, this report makes five preliminary            •   Provide direct reimbursement of in-person
recommendations:                                             interpreters, telephone interpretation and
                                                             qualified bilingual staff who serve as
  •   A two-phase system for development of                  interpreters provided in physicians’ offices.
      payments could provide immediate                       HHS could arrange for contracts for
      financing of language services in inpatient            telephone interpretation firms that describe
      and outpatient hospital settings and                   their operations and the training and
      provide time to develop a more refined                 competency standards for their medical
      payment system.       In the first phase,              interpreters. Medicare physicians could
      hospitals could receive additional Medicare            directly contact telephone firms for
      payments based broadly on the volume of                interpretation services and the firms would
      LEP patients, as measured by Census data               directly bill Medicare.
      on the LEP population of their service
      areas. During this interim phase, hospitals        •   At this time, we do not recommend
      would develop more consistent methods                  directly adjusting the basis for Medicare
      of recording data about patients’ primary              managed care plans for LEP patients.
      language and how their language needs are              Medicare health plans already contractually

      agree to provide language services under               The federal government has made an
      the rate bidding system. Language-based             important commitment to ensuring that
      adjustments to capitation rates could               barriers related to race, ethnicity or national
      actually reduce resources available for LEP         origin, including the language a person speaks,
      patients    because     immigrants      have        do not create disparities in access to health care
      historically had poor access and low                or to quality of care. One of the noteworthy
      medical expenditures because of problems            exceptions to this commitment is the lack of
      like language barriers. However, HHS                financing     for     language    services    and
      should do more to strengthen oversight of           interpretation in Medicare.          This report
      managed care plans’ language services.              discusses strategies that could reduce these gaps
                                                          and improve the quality of care. Medicare is a
  •   Exempt language services from Medicare              program that is continually evolving. In a
      cost-sharing requirements, akin to the              nation that can develop, pay for and implement
      exemption that already exists for clinical          high-technology medical advances, it is
      laboratory tests. This is consistent with           regrettable that we stint on simple things like
      existing federal civil rights policies and          language services to help patients communicate
      would avoid unnecessary barriers to the             with their physicians and medical caregivers.
      use of interpreters that could have the             For example, the Medicare program has agreed
      unintended result of compromising                   to pay for costly implantable defibrillators after
      medical quality and increasing the risks of         determining that these devices were effective in
      medical errors.                                     improving health, despite the cost.44 Surely, the
                                                          nation could make similar reforms to Medicare
   This report focuses on one specific issue              to increase the quality of language services for
concerning language services for LEP patients:            LEP Medicare beneficiaries.
how to pay for these services. There are a host
of equally important issues which are beyond
the scope of this report to address. More
research is needed to examine modes and
logistical approaches to provide language
services, including examination of the cost-
effectiveness of alternative approaches.
Elements of language services could be
addressed more explicitly in demonstration
projects concerning disease management or
quality improvement to attempt to examine the
impact of language assistance on longer term
health status and medical costs. As noted
earlier in this report, a basic and fundamental
need is better collection of data about patients’
primary languages and their inclusion as a
standard part of medical records.          More
consideration is needed of methods to
determine the competency of medical
interpreters and of bilingual or multilingual
clinicians. More work is also needed to help
design better performance or quality indicators
concerning language assistance.

                                                               Letter from Larry Gage, President, National
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                                                               See for more information
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                                                             actual list, see

ontentType=GSA_OVERVIEW&contentId=1                          Letter to HHS Secretary Thompson on racial
0122&noc=T                                                   and ethnic disparities in health care, Sept. 26,
17 R. Hasnain-Wynia, J. Yonek, D. Pierce and
R. Kang, Hospital Language Services for Patients with        26
                                                                Joint Commission on Accreditation of
Limited English Proficiency, Health Research and             Healthcare Organizations, JCAHOnline, May
Educational Trust, in partnership with the                   2005.
American Hospital Association, October 2006.
                                                                Health Research and Education Trust, A
   These systems are adjusted for geographical               Toolkit for Collecting Race, Ethnicity and
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U.S. House of Representatives, 2004 Green                    28
                                                                Joint Commission on Accreditation of
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22American Hospital Association and American
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                                                               E. Martinez. Serving Diverse Communities in
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     M. Regenstein and D. Sticker, op cit.                   35
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   K Paez and others, Providing Oral Linguistic
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  S. Mohanty, et al. “Health Care Expenditures
of Immigrants in the United States: A
Nationally Representative Analysis,” American
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  Centers for Medicare and Medicaid Services,
“Press Release: Medicare Expands Coverage of
Implantable Defibrillators to Save Lives and


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