Page images
PDF
EPUB

Bradley, John A., president, Federation of American Hospitals, accom-
panied by Michael Bromberg, national director, and Albert C. Baker,
deputy director__

Busbee, Hon. George D., Governor of the State of Georgia.
Cohelan, Jeffery, executive director, Group Health Association of Amer-
ica, Inc__.

College of American Pathologists, Dr. Dennis B. Dorsey, president, accom-
panied by Dr. Jerald R. Schenken, and Dr. Vernie Stembridge__.
Crowley, David C., executive vice president, American Association of
Homes for the Aging----.

Dennis, Dr. John, president, American College of Radiology, accompanied
by Dr. Frederic D. Lake, chairman, board of chancellors and Otha W.
Linton, director, governmental relations_-_.
Ditzler, Dr. John W., president, American Society of Anesthesologists, ac-
companied by Michael Scott, legal counsel__

Page

132

44

147

279

408

217

237

Dorsey, Dr. Dennis B., president, College of American Pathologists, accompanied by Dr. Jerald R. Schenken, and Dr. Vernie Stembridge---- 279, 291 Ecklund, Ms. Ruth B., president-elect, American Association of Nurse Anesthetists, accompanied by Nancy Fevold, acting executive director, and Kenneth Williamson, consultant---.

Federation of American Hospitals, John A. Bradley, president, accom-
panied by Michael Bromberg, national director, and Albert C. Baker,
deputy director__.

Fiorella, Beverly, president, American Society for Medical Technology,
accompanied by Nancy Preuss, immediate past president; L'Nora Wells,
president-elect; and Dennis Weissman, director, office of government
relations
Francois, Frank, vice president, National Association of Counties___
Group Health Association of America, Inc., Jeffery Cohelan, executive
director

227

132

262

75

147

Health Insurance Association of America, William C. White, vice president, Prudential Insurance Co., accompanied by Fred J. Malley, Jr., vice president, Equitable Assurance Society-

346

63

Hodes, Hon. Richard, chairman, Human Resources Task Force, National
Conference of State Legislatures__—.

Hughes, Frank, president-elect, National Retired Teachers Association-
American Association of Retired Persons, accompanied by Laurence F.
Lane, legislative representative_.

Kaiser Foundation Health Plan, Inc., James A. Lane, counsel.
Lane, James A., counsel, Kaiser Foundation Health Plan, Inc.
MacDonald, Jack A., National Council of Health Care Services--
McMahon, John Alexander, president, American Hospital Association, ac-
companied by Leo J. Gehrig, M.D., senior vice president__.
Moss, Hon. Frank E., a U.S. Senator from the State of Utah----
National Association of Blue Shield Plans, William E. Ryan, president.
National Association of Counties, Frank Francois, vice president_-----
National Association of Manufacturers, Brenda Ballard, director, employee
benefits

National Conference of State Legislatures, Hon. Richard S. Hodes, chair-
man, Human Resources Task Force___

373

149

149

401

113

169

356

75

413

63

National Council of Health Care Services, Jack A. MacDonald.
National Retired Teachers Association-American Association of Retired
Persons, Frank Hughes, president-elect, accompanied by Laurence F.
Lane, legislative representative_-_.

401

373

283

Nunn, Hon. Sam, a U.S. Senator from the State of Georgia...
Phillips, Charles D., president, American Protestant Hospital Association_
Ryan, William E., president, National Association of Blue Shield Plans--
Seidman, Bert, director, department of social security, AFL-CIO, accom-
panied by Robert McLaughtan, legislative representative, AFL-CIO, and
Richard Shoemacher, assistant director, Department of Social Security,
AFL-CIO

Thevenot, Bruce D., director, government services division, American
Health Care Association_-_

Tresnowski, Bernard, vice president, Blue Cross Association__.

158

356

251

386

329

White, William C., vice president, Prudential Insurance Co., on behalf of
Health Insurance Association of America, accompanied by Fred J. Mal-
ley, Jr., vice president, Equitable Life Assurance Society-
Womer, Charles B., president, Yale-New Haven Hospital, on behalf of the
Association of American Medical Colleges, accompanied by Richard M.
Knapp, Ph.D., director, department of teaching hospitals, and John
A. D. Cooper, M.D., president..

ADDITIONAL INFORMATION

Press release announcing these hearings..
Text of the bill S. 3205..

Page 346

102

12

COMMUNICATIONS

Ambulance and Medical Services Association of America, Lynne Mahan, executive secretary--.

528

American Academy of Dermatology, Peyton E. Weary, M.D...

541

American College of Nuclear Physicians, Jack K. Goodrich, M.D., president

484

American Dental Association____.

463

American Enterprise Institute, John R. Virts, corporate staff economist,
Eli Lilly & Co------

436

American Medicorp, Inc---

468

American Nurses' Association, Inc., Anne Zimmerman, R.N., president---
American Optometric Association---

494

456

American Osteopathic College of Pathologists, Inc., John A. Kline, D.O.,
president

American Osteopathic Hospital Association, Michael F. Doody, president__
American Physical Therapy Association....

585

542

596

American Podiatry Association, John R. Graham, D.P.M., president_----
American Protestant Hospital Association, Charles D. Phillips, president-
American Psychiatric Association----
American Society of Internal Medicine.
American Society of Oral Surgeons__

[blocks in formation]

Association for the Advancement of Psychology, Nicholas A. Cummings__
Bates, George N., president, Ohio State Medical Association-----

547

473

Boston University Medical Center, University Hospital, James L. Dorsey, administrator for fiscal affairs__

534

Brock, Hon. Bill, a U.S. Senator from the State of Tennessee-

569

Burden, Carter, councilman, Manhattan, 7th District

484

Burns, Chris, C.P.A., hospital financial consultant__.

452

Byrne, Hon. Brenuan, Governor of the State of New Jersey

434

Caffrey, P. Rachael, M.D., president, Pathology and Cytology Laboratories,
Inc

[blocks in formation]

Chamber of Commerce of the United States, Rose P. Wooden, associate director, economic security, education and manpower section___. Community Service Society, Charles B. Dorf, chairman, committee on health

602

551

Coopers & Lybrand

508

Council of Community Hospitals, John F. Horty, president---

587

Cummings, Nicholas A., Association for the Advancement of Psychology--
Doody, Michael F., president, American Osteopathic Hospital Association--
Dorf, Charles B., chairman, committee on health, Community Service
Society

547

542

551

Dorsey, James L., administrator for fiscal affairs, Boston University
Medical Center, University Hospital_-_-

534

Ervin, Clinton V., Jr., M.D., Union of American Physicians--
Goodrich, Jack K., M.D., president, American College of Nuclear
Physicians

478

484

Page

Graham, John R., D.P.M., president, American Podiatry Association__.
Horty, John F., president, Council of Community Hospitals_-
Javits, Hon. Jacob K., a U.S. Senator from the State of New York_
Jolley, Fleming L., M.D., president, Medical Association of Georgia_
Kenneth Associates, Robert J. Kenneth, president_.
Kenneth Williamson Associates, Kenneth Williamson__

559

587

419

568

512

493

Kline, John A., D.O., president, American Osteopathic College of Pathologists, Inc..

585

Koretz, Sidney_.

523

Mahan, Lynne, executive secretary. Ambulance and Medical Services
Association of America___.

528

McKenry, Carl E. B., president, Unihealth Services Corp---

481

Medical Association of Georgia, Fleming L. Jolley, M.D., president--
Medical Personnel Pool, John B. Smith, corporate attorney-

568

460

National Association for Mental Health, Inc., Hilda Robbins, chairperson, public affairs committee___

496

National Association of Home Health Agencies_.

488

National Council of State Public Welfare Administrators of the American
Public Welfare Associaton__.

535

Nebraska Association of County Officials, Arnold Ruhnke, executive director

556

Nelson, Hon. Gaylord, a U.S. Senator from the State of Wisconsin_
Nelson, Lyle H., M.D_-_-

422

499

New York State Department of Social Services, Philip L. Toia, commissioner

590

Ohio State Medical Association, George N. Bates, president__
Pathology and Cytology Laboratories, Inc., P. Raphael Caffrey, M.D.,
president

473

557

Phillips, Charles D., president, American Protestant Hospital Association_
Professional Factoring Association__

553

457

Robbins, Hilda, chairperson, public affairs committee, National Association for Mental Health, Inc__

496

Ruhnke, Arnold, executive director, Nebraska Association of County
Officials

556

Runyan, John W., Jr., M.D__

446

Servicemaster Industries, Inc.. Kenneth T. Wessner, president and chief executive officer--

561

Smith, John B., corporate attorney, Medical Personnel Pool----
Toia, Philip L., commissioner, New York State Department of Social Serv-
ices

460

590

Unihealth Services Corp., Carl E. B. McKenry, president__.
Union of American Physicians, Clinton V. Ervin, Jr., M.D_.

481

478

Upjohn Co., Edward J. Wilsmann, president, Homemakers Home and
Health Care Services/Division___.

570

Virts, John R., American Enterprise Institute, corporate staff economist,
Eli Lilly & Co______.

436

Weary, Peyton E., M.D., on behalf of the American Academy of Dermatology

541

Wessner, Kenneth T., president and chief executive officer, ServiceMaster
Industries, Inc.--.

561

Wilsmann, Edward J., president, Homemakers Home and Health Care
Services/Division of the Upjohn Co---

570

Wooden, Rose P., associate director, economic security, education and manpower section, Chamber of Commerce of the United States____ Zimmerman, Anne, R.N., president, American Nurses' Association, Inc---

602

491

MEDICARE-MEDICAID ADMINISTRATIVE AND
REIMBURSEMENT REFORM

MONDAY, JULY 26, 1976

U.S. SENATE,

SUBCOMMITTEE ON HEALTH OF THE
SENATE FINANCE COMMITTEE,

Washington, D.C.

The subcommittee met, pursuant to notice, at 8 a.m. in room 2221, Dirksen Senate Office Building, Hon. Herman Talmadge (chairman of the subcommittee) presiding.

Present: Senators Talmadge, Dole, and Packwood.
Senator TALMADGE. The hearing will be in order.

Today we begin a full week of hearings on the provisions of my bill, S. 3205, to bring about basic reforms in the administration and reimbursement aspects of Medicare and Medicaid.

[The press release announcing these hearings and the bill S. 3205 follow. Hearing commences on page 27.]

OFFICE OF HERMAN TALAMADGE OF GEORGIA, U.S. SENATE

(Statement of U.S. Senator Herman E. Talmadge [D.Ga.], Chairman, Subcommittee on Health of the Senate Finance Committee, in Opening Hearings on 8.3205, Legislation for Medicare/Medicaid Administrative and Reimbursement Reform, Monday, July 26, 1976)

FOR RELEASE IN THE P.M.'S OF MONDAY, JULY 22, 1976

We begin a full week of hearings on the provisions of my bill, S.3205, to bring about basic reforms in the administration and reimbursement aspects of Medicare and Medicaid.

The situation is indeed urgent. Medicare and Medicaid will cost federal and state taxpayers more than $38 billion in fiscal 1977-an increase of $7 billion over fiscal 1976.

The increasing costs of these programs continually outstrip the rate of rise in federal revenues. The choice is a simple one either we make Medicare and Medicaid more efficient and economical, or we reduce benefits.

We have just too many worthwhile demands on the federal dollar to be able to allocate increasingly disproportionate amounts to Medicare and Medicaid.

There is, of course, another choice-we can increase taxes. But even if that hard decision were taken we would, without necessary changes. be pouring dollars down a bottomless pit.

As they now operate, Medicare and Medicaid clearly could absorb every single dollar the federal government can come up with. To do that, hard decisions have to be made-decisions which I believe this bill makes. If these decisions are not made now, we may well be confronted with the need to cut and slash payments to hospitals and doctors indiscriminately, and often inequitably. That path is exactly what S.3205 seeks to avoid.

States are now moving to place ceilings on payments to hospitals. Blue Cross plans are moving in that direction. The Administration proposes a flat 7 per cent limit on hospital cost increases. Momentum is rapidly increasing for arbitrary controls on payments to providers and practitioners. This bill, however, seeks to avoid cutoffs of this sort.

(1)

*

In Colorado, for example, the state has ordered a 5 per cent reduction in Blue Cross payments to hospitals and a 5 per cent cut in Blue Shield payments to doctors.

At the National Governors' Conference held in Hershey, Pennsylvania, just last month, the Governors of this country stated that the "rapidly escalating costs of the Medicaid program are bankrupting the states and their localities." The Governors' resolution noted that there is "a need for better control over both the rates paid for health services and the utilization of these services by the patient."

The Governors' Conference urged state governments to intensify efforts to manage their Medicaid programs better and also urged related cooperative action by the federal government to revise "existing regulations and legislation which pose obstacles to effective cost control procedures."

It is my strong belief that S. 3205 is certainly consistent with the resolution of the Governors' Conference. I look forward to the testimony this morning of the able and distinguished Governor of my state, Governor Busbee, who will speak on behalf of our nation's Governors. The National Association of Counties, from whom we will also hear today, has called for immediate wage and price controls on hospitals to avoid bankrupting costs.

But, there is an overriding need to get a handle on Medicare and Medicaid costs apart from the federal, state and local budget effects. There is no question that the way we pay for care under our programs serves to inflate health care costs for all Americans. That situation needs correction now.

There is an absolute need for the federal and state governments to effectively manage the existing health care programs. It is difficult, if not foolhardy, to extend health insurance coverage to other segments of the population until we are satisfied that we can manage what we've got now.

I believe we have a representative range of witnesses this week. It is my hope that these hearings will provide the basis for timely Congressional action on necessary changes in the way government conducts Medicare and Medicaid.

As I have stated repeatedly, none of the provisions in S.3205 are locked in concrete. Hopefully, constructive changes and improvements will be a product of these hearings.

But, while improvements can and should be made, no one should mistake a willingness to make changes as a sign of weakness. With many billions of public tax dollars at stake, there will of course be those who presently profit from waste, inefficiency, fraud and abuse, and outdated methods of payment who will not want any changes made. Often these are the same people who in forums and cocktail parties constantly decry "big wasteful government." Nonetheless, they will come here to try and preserve their own share of that "big government" and those wasteful expenditures." It's always the "other guy" they're talking about. Well, they can't have it both ways. And, they won't have it both ways if we do our job.

I want to assure those people that the limits of tolerance have been reached. What has been glossed over, ignored, or sidestepped in the past will now be faced head-on. We owe that much to the American people.

[94th Cong., 2d sess., S. 3205]

A BILL To provide for the reform of the administrative and reimbursement procedures currently employed under the medicare and medicaid programs, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Medicare-Medicaid Administrative and Reimbursement Reform Act".

TABLE OF CONTENTS

ADMINISTRATIVE REFORMS

Sec. 2. Establishment of Health Care Financing Administration.

Sec. 3. Inspector General for Health Administration.

Sec. 4. State Medicaid Administration.

Sec. 5. Procedures designed to assure economical processing of claims by carriers. Sec. 6. Claims processing and information retrieval systems for medical programs. Sec. 7. Regulations of the Secretary; savings provision.

Sec. 8. Termination of Health Insurance Benefits Advisory Council.

PROVIDER REIMBURSEMENT REFORMS

Sec. 10. Improved methods for determining reasonable cost of services provided by hospitals.

« PreviousContinue »