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standards.

The burden of proof should, therefore, be squarely placed on those who would challenge those standards, and not on the facility that chose them.

Secondly, the health care industry is unique among American

business in that we are the only industry in which our costs are mandated, but in which we are not permitted to raise our prices to cover those costs.

Only

Typically two-thirds, or more, of the residents in a nursing
facility are covered by either Medicaid or Medicare.
one-third (or fewer) of our patients are private pay.
Therefore, if a facility is required to make major structural
modifications that increase its costs above that state's
Medicaid cap, that facility will probably be unable to recover
those costs. Unlike other business who are able to raise their
prices, a facility may not charge a Medicaid or Medicare patient
a price that exceeds the maximum allowed under state law.

Thus, it is necessary that health care providers have significant assurances, one way or another, that these additional costs can be recovered, or that such modifications will be delayed, until such time that those costs will be covered.

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One possible approach would be to require that before any facility is required to make any structural modification, that a court must give substantial consideration to the question of whether, and to what extent, a facility will be able to recover those costs under that state's Medicaid program.

Another possible approach would be for Congress to authorize the Small Business Administration to make low interest loans to businesses which are required to undertake these modifications.

A third approach would be to put a cap on the amount of money that a facility would have to spend in making such renovations. This cap might be either a set dollar figure or a percentage of the original or current value of the affected entity.

We are seeking one or more of these specific protections because we do not believe that the undue burden defense, found in Titles I and III, is specific enough, nor are we willing to trust our financial survival to regulations that Congress will not review and which will not be issued until a year or more after the bill is enacted. We will have only limited input into the writing of these regulations, and we feel that additional statutory protection is essential.

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In this regard, I should point out that most long term care facilities, probably more than 80 percent nationwide, are small businesses with annual revenues of less than 3 million dollars, and profit margins under 3 percent. Thus, any significant increase in a facility's cost of doing business imposed without a guarantee of off-setting increased revenue, could spell financial disaster for many facilities.

Also, in the context of determining what financial burden should properly be placed on a facility to comply with the provisions of this bill, we ask that each nursing facility, even if it is part of a chain, be considered as though it were an independent entity.

Facilities operate in 50 different states. They are faced with 50 different reimbursement and regulatory systems. Therefore, they should be regarded as separate entities for purposes of this legislation.

One final concern is the relationship between this proposed legislation and Section 504 (a) of the Civil Rights Act. Certainly, the current law applies to all health care facilities. We suggest that the proposed statute needs to be clarified to indicate that facilities in compliance with Section 504 are then deemed to be in compliance with the proposed law.

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Again, we commend Congress for its consideration of this legislation. Approval of the kinds of amendments that we have suggested will enable health care facilities to continue to provide, as we have done for decades past, the highest quality health care service, on a non-discriminatory basis, without endangering either the quality of that care or the financial integrity of the facilities that are providing it.

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Amendments

1. Limiting the Requirements That A Facility Be Modified To Accommodate A Handicapped Employee

Insert on page 9, after line 17 a new subsection 101 (8) (C), as follows:

(C) Notwithstanding the foregoing requirement, a covered entity shall not be required to physically modify any non-public work area unless an otherwise qualified and disabled applicant has been hired for that position.

Justification

The modification of a facility is expensive and the cost of so doing may not always be recoverable. Therefore, a facility should not be required to undertake such modifications unless it is essential that it do so.

2. Additional Criteria for Establishing An Undue Hardship Defense (Title I)

Insert in Section 101 (9) (B), on Page 10, Line 10 a new subsection (v) as follows:

(v) In the case of health care providers, the court shall give substantial weight to the ability of the facility to obtain full reimbursement for the expenses incurred from that states Medicaid program, and in the case of an entity that operates more than one facility in a state, each facility shall be treated as a separate entity for purposes of determining the financial or other burden it shall be required to incur in complying with this title.

Justification

In many states facilities will be unable to recover the cost of compliance with this act, or will only be able to capitalize these expenses over the depreciable life of the property. This may require a facility to incur significant up-front costs, with reimbursement spread out over 15 or 20 years.

3. Additional Criteria to be Used In Establishing the Undue Hardship Defense (Title III)

Insert in Section 301 (5) (B), on Page 33, line 2, a new
Subsection (B) (iv) as follows:

Use the same language that was used for Amendment #2.

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