(b) Over the last three years, one of the Department's major goals has been to gain control of the dramatically escalating costs of the Medicare and Medicaid programs. Since there is no clear evidence, even in the most recent report on the subject by the General Accounting Office,1 we are not proposing expansions in home health care. However, it is important to remember that many of the restrictions limiting the provision of home health care have been eased or eliminated over the last three years. For example, there is no longer a limit on the number of home health visits a Medicare beneficiary may receive, and he/she will not be required to pay a deductible or coinsurance for home care. States also now have the flexibility to establish programs of home and community-based services in order to keep Med. icaid patients out of institutions. Question 5. Medicare is focused on acute care, rather than preventive care, and some have suggested that such a policy is, in the long run, more expensive. (a) Do you see any expanded role for preventive health care under Medicare or Medicaid? (b) Would you support additional incentives for expanded preventive care? (c) Would you support the creation of an optional Part C of Medicare, paid through general revenues and premiums for long-term care and health maintenance and monitoring? Answer. (a) The Administration recognizes that expanded coverage of preventive health care under the Medicare and Medicaid program might contribute to the wellbeing of beneficiaries. However, Congress carefully considered coverage of these services and decided to maintain Medicare as essentially an acute-care program. The current Medicare and Medicaid program limitations on these services do not reflect a judgment about their value to beneficiaries, but rather a decision about the best ways of using the funds available to these programs. (b) Under current law, States have a great deal of discretion in determining the services to be covered under Medicaid, including preventive health care services. Eighteen States provide for preventive health services. The Administration does not favor an expansion of Medicare coverage to include a full range of preventive health care services at this time. Expanding Medicare coverage to include a full range of preventive and routine health care services would involve significant additional program costs during a period of fiscal constraint. Nevertheless, we are continually reevaluating the Medicare program to determine what changes might be undertaken, within the limitations of available funds, to make the program more responsive to the health care needs of our beneficiaries. (c) The Administration does not favor the creation of an optional Part C under the Medicare program long term care and health maintenance. Section 2176 of Public Law 97-35 provides authority under Medicaid that allows States to establish case management programs to coordinate long-term care services. In addition, the results of HCFA's long term care demonstrations either recently completed or underway should provide more knowledge on how to best design a system for long term care and health maintenance. Mr. RINALDO. Our first panel of witnesses includes representatives of national, State, and local senior citizens' organizations, who will comment on medicare reform from the perspective of beneficiaries. I would like to call them to the witness table: Herbert Miller, the chairman of the New Jersey Coordinating Council of Organized Older Citizens, one of the largest senior citizen organizations in the State of New Jersey; David Keiserman, member of the New Jersey Council of Senior Citizens Executive Board, and a delegate to the 1981 White House Conference on Aging; Donald Bond, President of the Princeton Chapter of the American Association of Retired Persons, and a specialist in health care delivery in sparsely populated areas; and Esther Abrams, also a resident of Princeton, and a national executive board member of the Older Women's League. So that everyone in the audience can adequately hear you, let me point out that we have only one microphone. That is the large 1 "The Elderly Should Benefit from Expanded Home Health Care, But Increasing These Services Will Not Insure Cost Reductions," GÃO IPE-83-1, December 7, 1982. Mr. M be done. Just to being fir would be appreciated if you would pass it from person to you give your testimony. written statement is longer than 5 minutes, it would be d if you would summarize your testimony. However, the ent will be included in the record. We will begin with OF ONE, MEDICARE REFORM FROM PERSPECTIVE CIARIES-CONSISTING OF HERBERT MILLER, CHAIREW JERSEY COORDINATING COUNCIL OF ORGANIZED CITIZENS, NORTHVALE, N.J.; DAVID KEISERMAN, R, NEW JERSEY COUNCIL OF SENIOR CITIZENS EXECUOARD, MANALAPAN, N.J.; DONALD BOND, PRESIDENT, TON CHAPTER, AMERICAN ASSOCIATION OF RETIRED NS, PRINCETON, N.J.; AND ESTHER ABRAMS, MEMBER, NAL EXECUTIVE BOARD, OLDER WOMEN'S LEAGUE, ETON, N.J. STATEMENT OF HERBERT MILLER ILLER. First let me thank you, Congressman Rinaldo, for his hearing and giving us the opportunity to present some ews of the members of our particular organization. And I to go as fast as I can, but I have some sad notes on here ink are appropriate. ould like to have these suggestions and recommendations ed by Congress when they finalize their ideas of what can We think that broader legislation should be enacted to the hospital costs. Most people cannot afford to pay the ns and the deductibles now. Many stay away from the docare self-medicating themselves because of the fact that the fees are so exorbitant. cal practitioners must be made to realize that their fees be more reasonable. Some of their fees are unconscionable. ors should voluntarily accept the medicare assignments and are unwilling, then a law should be passed to order them to the assignments. In this regard, the Government should esa schedule of reasonable fees by geographical location should be agreed upon by the medical association. t we are suggesting here is that you make the contract bethe Government and the doctor, instead of the Government e senior citizens. edures should be established to detect abuses of the system member of the medical profession. Severe penalties should posed on those caught in fraudulent practices. to give you an example, one of the patients came to the with a pain in the leg, and the doctor said, Well, I cannot do ing about that until I first take some X-rays, et cetera, et , et cetera. And to this day it has never been diagnosed, but esented a bill of $400. And when the patient complained it, he said, Well, in this case I might accept a medicare asent. But he billed medicare $155 to get just $100 back. I think is something wrong in the law that allows doctors to do that. e of the greatest concerns we have is facing the possibility of financially wiped out because of an extended illness. The Government, together with the insurance industry, should develop a catastrophic insurance plan that can be purchased by all people, not just the elderly. I think it is possible with the proper deductible. I will give you an example here, the hospice case. This person has run out of all benefits. And they are letting her go from the hospital. The hospital does not want people there without some assurance of getting paid. I think that is possible to get a catastrophic insurance plan. It does not necessarily have to go under medicare. But I think if you work together with the insurance companies, you are going to have the opportunity to develop a proper catastrophic insurance plan. We do not favor raising taxes or increasing beneficiary copayments or using general funds. In our opinion, the problems are not caused by insufficient funds, but by exorbitant fees of the doctors and the charges by the hospitals. These charges must be contained. In this regard, a feasibility study should be made to determine the plausibility of regulating the hospitals and also requiring detailed reporting procedures for the medical profession. The Government, in cooperation with industry, should develop affordable private insurance plans. Small companies should be encouraged to secure the health plan for their employees from an insurance company. Home health care costs should be reimbursed by medicare to encourage more patients to receive medical attention at home instead of in the hospitals. Some employers are now reimbursing retirees for the amount of the medicare premium. Tax laws require that such reimbursements be included as income. The law should be changed to exempt these reimbursements from taxation. Companies are purchasing additional insurance, and if they have a plan of their own, they are reducing their own costs of outgo. So that this is not a taxable item on the senior citizen because they are reimbursed. Probably the most important of all things that concern us is the assurance of proper medical attention for all people at affordable cost. In this regard the laws relating to malpractice should be refined, in order to reduce the expenses of the doctors. There are far too many cases where people are instituting legal action to sue the doctors for malpractice, and far too many instances where the awards are excessive. Because of the high premiums paid by the doctors, they pass it on to the patients. Treatment of an illness by a doctor, in our opinion, is a matter of judgment. There is a shortage of general practitioners throughout the Nation, particularly in populated areas. If more doctors made house calls, it probably would result in keeping more people out of the hospitals. Incentives should be provided by the government to encourage medical students to become general practitioners. And, last, many dollars are paid out for doctor visitations to patients in the hospitals for which for the most part consist of "Howdy," "How do you feel?" "Keep up the good work, and I will see you tomorrow." And he charges the same fee as if you went to his office. There is something wrong with that. These costs must be contained. Doctors' fees for hospital visitation should be limited by Government regulation, and should also be limited as to total re muneration Mr. KEISI senior citiz ous. The ad The taxi ly effect th sis on fring This would health gro age of the benefits to strikes the care. for the number of patients they visit. If they have 10 the hospital, they are charging each one the same ces. I think if he can cover the whole thing within an ld be put on an hourly basis. n going to be popular with the medical profession after se are our viewpoints. 1. Thank you, Mr. Miller. We will get to questions at on of all four of your statements. rman. STATEMENT OF DAVID KEISERMAN ERMAN. Thank you, Congressman Smith, for permitting ident's budget message to Congress regarding medicare crease of the premium for part B of medicare to cover 35 ! Another contemplated change in the medicare program is the proposed regulation drafted by Health and Human Services, which will make auto insurance policies the primary source of medical coverage for injuries related to auto accidents. We in New Jersey, who still own cars, face a doubling of our personal injury protec tion premium, which will increase from $58 to $114 a year that we can expect here in New Jersey. The New Jersey council recommends that Congress and the administration develop a comprehensive health cost containment plan that would control the present runaway costs for health serv ices. Such a plan must include preventative health care, such as HMO's which have proven so successful, more qualified medical schools, and doctors trained in gerontological medicine so that se niors can be properly cared for, expansion of home health care, more trained nurses, therapists, and technicians who can furnish care in their specific fields at much lower cost than those demanded by doctors, controlled growth and spending by hospitals that will prevent constant rising hospital costs. And I am sure there are many more innovative ways by which costs can be contained. I would like to point out yesterday's Star Ledger had a page 1 news item which reflected the premature hospital discharge of people. It is being blamed on the diagnosis related group or DRG. The hospital now encourages to discharge early so they can save money. And there is quite an article in yesterday's Newark Star Ledger regarding this. I would ask that your committee please look into whether or not this is actually taking place here in New Jersey. Let me express again the thanks of New Jersey Council of Senior Citizens for this opportunity to present its views and concerns and to emphatically point out that shifting more of the costs of medicare to the elderly is not solving the problem, but merely adding to the burden that so many of us can so ill afford. Our medical program must be strengthened and made more efficient so that all Americans will have the best medical care in the world at affordable rates now and in the future. We as a nation cannot afford less. Thank you. Mr. RINALDO. Thank you Mr. Keiserman. STATEMENT OF DONALD BOND Mr. BOND. Good morning, Mr. Chairman, Congressman Smith. My name is Donald S. Bond. I live in Princeton, N.J. I am president of the Princeton Chapter 459 of the American Association of Retired Persons. 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