tee's decision. Not only is this a form of practicing medicine but it is an injustice to the patient needing medical care and to his family, often unable to pay for services already provided in good faith by the facility, but suddenly "uncovered services." In this connection, I have personally received this reaction from several of the Western State associations making up region VIII of which I am vice president. Their responses to the subject matter before this committee are still coming in. I want to assure you, Mr. Chairman, that the reports on medicare and title 19 in Arizona, Nevada, Oregon, Washington, Idaho, Utah, and Hawaii will be filed with your committee within the specified time limit. Concluding our comments on retroactive denial of benefits, this situation which has continued for almost a year shows hope of clearing up. Some longstanding denials are now being authorized to be paid under instructions issued September 23 by Director Thomas M. Tierney of the Bureau of Health Insurance. While we are gratified at this progress, we feel that present policies continue to hamper the programs for the elderly. Mr. ORIOL. Mr. Gormly, if I may interrupt? For one, we will be happy to receive those reports. For another, I see Mr. Mulder is still here, and we are interested in full discussion, so if he has any comments to make at the end of this discussion, perhaps you would care to remain? Mr. GORMLY. Fine. Perhaps I might elaborate and ad lib a little bit here on this retroactive denial. What has really happened is that the care has been provided the patient under title 18, the billing submitted to the fiscal intermediary, and the patient has gone home thinking his bill has been paid, and that he was covered under an insurance program. And then payment was not made for the care going back 6 months. Mr. ORIOL. And it is the individual himself who becomes responsible for ultimate payment? Mr. GORMLY. Well, the recipient of medicare-the beneficiary of medicare-assumes that he has an insurance program covering his illness, and all of a sudden by some decision made by some-not necessarily a medical staff-he is not covered under the program. Mr. ORIOL. Who is ultimately responsible for paying that bill? Mr. GORMLY. The patient-if he signs a financial responsibility. In other words, if he signs a financial responsibility statement saying he was responsible for his debt, regardless of governmental coverage or any other insurance coverage, then he would be responsible. But trying to go back 6 months and tell a patient, "I am sorry, your benefits didn't come through"-maybe the patient died-maybe he has moved. The point is, many times you can't recover the cost. Mr. ORIOL. So the nursing homes are bearing some financial loss because of this? Mr. GORMLY. In Kansas City there were over $300,000 in claims disallowed-and arbitrarily disallowed. Mr. ORIOL. And how were those claims paid? Mr. GORMLY. They were not paid. Mr. ORIOL. In other words, the nursing home Mr. ORIOL. They could not collect? We have received reports from elsewhere on this very problem, and we are very interested in it. Mr. GORMLY. Yes, very well. PROPOSED CHAPTER 9 OF PROVIDER REIMBURSEMENT MANUAL Finally, we would like briefly to mention the difficulties with which owners of ECF's and skilled nursing homes will be confronted under a proposed draft of chapter 9 of the Provider Reimbusement Manual now being considered by SSA. We were asked, along with other organizations, to submit comments. Frankly, Mr. Chairman, we find the proposed draft objectionable, and moreover we feel that SSA is asserting authority that Congress did not intend it to have. As stated in our comments submitted to SSA: Our primary objection * * * is that it is invalid and in violation of Section 1801 of the Act. Section 1801 provides in part that "Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any supervision or control *** over the compensation of any officer or employee of any institution, agency or person providing health services ***" Nothing could be clearer than the fact that the Social Security Administration is attempting to regulate in an area from which it has been conclusively foreclosed by Congress. Since time is of the essence, Mr. Chairman, we wish only to cite this as another example of legislating by regulations, and/or guidelines, which will impair the smooth operation of needed programs of elderly patient care. In concluding, we wish to express our appreciation for this opportunity to present comments on the effects of medicare and Medi-Cal. I would particularly like to put in the record the California Association's gratitude for the cooperation and assistance received from Mrs. Mercia Leton Kahn-Regional representative for the Western States of the Social Security Administration-in developing title 18's program in ECF's here in the Far West. Similarly, the State Department of Public Health of California, and the Department of Health Care Services have been most helpful and cooperative, in their acting capacities as arms of the Federal Government on behalf of both the medicare and Medi-Cal programs. To us, our mutual relationships in bettering elderly patient care is a fine example of government and the private sector working together in a common cause *** which is the same noble cause that brings us all here today. Mr. ORIOL. Thank you very much, Mr. Gormly. I might add that we are impressed by the evidence of the very responsible position taken by the American Nursing Homes Association in its statement. The Nursing Homes Association's statement on matters that are of concern to the Federal Government because of the high level of assistance and support it gives. So we really thank you. Do any other members Mr. GORMLY. If we may have another minute, I would like to give an example of what happens in this "spell of illness" thing. Unless you are familiar with it, or unless you prefer me to submit it for the record. Mr. ORIOL. Well, we are getting-we are late-we are not just getting late. It might be better to submit it for the record. A written question that we will submit to you in writing is: How the intermediate care facility requirement under the 1967 amendment is affecting you here in California. In Washington they are very concerned about it, and we want to known how it is affecting you. Mr. GORMLY. We have filed-I believe-objections to the definition as published in the Federal Register, because we feel that intermediate care is a care concept that should encompass from the title 19 standards going down through licensed residential care facilities, because we don't think that the intermediate care patient is a static thing that he remains in one spot. He will move from slot to slot. Maybe he will require nursing care 2 weeks and then be able to go into a residential care facility providing another type of program. And that is our main difference with the concept of intermediate care as published in the Federal Register. Mr. ORIOL. Thank you. Mr. Mulder, did you have anything you wanted to discuss at this point? Mr. MULDER. No. The points that Mr. Gormly discussed were primarily points to do with medicare. Mr. ORIOL. Thank you. Thank you very much. Mr. GORMLY. Thank you. (Subsequent to the hearing, Senator Williams asked the following questions in a letter to Mr. Gormly :) 1. What are the most common reasons given for retroactive denial of nursing home benefits? We would like to have the reports from individual states for our hearing record. Have any improvements in the situation occurred since Director Tierney's directive of September 23? 2. What will be the likely effects of establishment of the "Intermediate care" category in California? Will redefinition of state categories be necessary? (The following reply was received:) 1. The common reason given for retroactive denial of Medicare nursing home benefits in California as well as other states is that the patient is not qualified to receive such services. This declaration made by the fiscal intermediary thus overrules completely the physician's medical decision. Director Tierney's instructions have lately begun to improve the situation. 2. The likely effect of establishing "Intermediate Care" in California would be to give official sanction to a continuing deficient level of skilled nursing home care, thru by-passing the higher Title XIX standards already pending implementation in 1969. Pressure from agencies concerned with Medi-Cal costs would tend to result in moving patients "down" from Medi-Cal to Intermediate Care: the only practical difference being a reduction in professional nursing coverage from "around the clock" to day shift only. Already some 250 small nursing homes are expected to be de-certified from Medi-Cal in 1969 because of this very "difference," i.e., they cannot meet the higher standards of patient care. There is also considerable question as to how many Medicare and Medi-Cal certified facilities would seek to provide Intermediate Care for the same though transferred-downward patients at a lower reimbursement rate when they must be fully staffed and tooled up to the higher standards. The California State Association's position on Intermediate Care, based upon the H.E.W. guidelines requiring RN and LVN daytime staffing is that "the quality of patient care would be seriously jeopardized by such a program and accordingly is incompatible with the State Association's standing policy advocating higher standards of patient care in nursing homes." In addition, California possesses several thousand licensed Residential Care facilities which, under proposed implementation of the Chappie Bill (AB 389— '68 Legislature) appear to offer a more appropriate type of "Intermediate Care" through a combination of board-and-room and other special services purchased and arranged to better fit the needs of public assistance recipients not needing skilled nursing home care. It is possible that this latter approach may additionally prove more economical to government than Intermediate Care per se. Mr. ORIOL. And now I would like to call Dr. Austin B. Chinn. It is a real pleasure to do so for many reasons. Dr. Chinn is very helpful in the discussion and early work on the preventicare bill, and was the consultant to this subcommittee on the health of the elderly in the first--in the two hearings that we conducted earlier. It is good to see you again, Doctor. Dr. CHINN. Thank you. Mr. ORIOL. We wanted to make you a "wrap-up" witness, Dr. Chinn. STATEMENT OF AUSTIN B. CHINN, M.D., PROFESSOR OF MEDICINE AND DIRECTOR, REHABILITATION RESEARCH AND TRAINING CENTER, UNIVERSITY OF SOUTHERN CALIFORNIA Dr. CHINN. All right. If you will bear with me. The hour is very late, of course. I don't want to take any more time than is absolutely necessary. What I have to say in attempting to summarize this very full day would be presumptuous on my part in a full context. However, I can make a few remarks regarding points which struck me during the hearings as germane to the issues you have. Many aspects of medicare and medicaid have been presented here. Some of them favorable, and some of them critical. To attempt to comment on all these would be, really, out of order, I think. Dr. Todd commented on the aspects of surveillance which is being provided by organized medicine relative to the medicaid program. And you, of course, have those remarks in the record. Dr. Littlejohn, I think, made some cogent remarks about some of the serious effects that medicaid is having upon medical care, particularly in the ghetto areas. He said that actually, health services are leaving the ghetto areas as a result of medicaid. This, I think, is a very serious charge, particularly since the people in the ghetto areas need medical care and health services more than people anywhere. We all know that the incidence of disease in the population of deprived people is infinitely higher than it is in any other group in the United States. To witness removal of those health services that do exist seems to me to be a very, very serious thing. Dr. Giorgi gave us a sweeping survey of the entire health situation. I wouldn't really feel it appropriate for me to comment on what she said. A couple of things that Dr. Breslow said I would like to mention. He talked about the quality of medical care in this country and the need for quality control and the influence of medicare and medicaid on quality control. One of his thoughts which I would like to emphasize, has to do with the remarks he made about preventive health services. In this context, I think it is accurate to say that there has been in this country, in the past 25 years or more, a vast increase in medical knowledge and skill. The problem has been really to deliver the fruits of this knowledge and skill to the people of the Nation. A factor influencing the delivery of this knowledge is of course the increase in the population, particularly the increase in the very young and the very old. The urbanization of the population has also been an influential factor and has been a direct impediment to the delivery of health services. The shortage of health manpower has been a distinct impediment. There have also been social and economic forces which have impeded the delivery of these fruits of knowledge and skill to the people. Included among these are attitudes and understanding on the part of people about health services. Distances from health services, particularly when old people had to travel, are involved with transportation difficulties, are also problems that are relative to this. The organization of health services and the attitudes of people of the health professions with respect to older people have sometimes been impediments to the delivery of services. Poverty, it goes without saying, has been an enormous influence on the delivery of health services. In the stimulation and support of the delivery of care, however, we have the normal humanitarian instincts that exist in the minds of people in this Nation. These civilized and humanitarian instincts have, of course, predominated with respect to most of us and counter the other influences which tend to impede. Also, a promising increase in health plan power and a promising evolution of different kinds of manpower, such as the doctor assistant and the nursing assistant, is emerging. A better use of manpower is undoubtedly coming about and there are promising organizational changes, such as the establishment of better institutions as here in California. For example, the Long Beach General Hospital, which is devoted entirely to the care of elderly people is an excellent institution, and that kind of thing, I think, is emerging. We are also having better kinds of health services such as home care, home-health services, and ambulatory services, all of which leads toward the development of better utilization of this knowledge that I was talking about earlier. THE VOID: INACTION ON PREVENTION But it seems to me, the most important void in all of this-which Dr. Breslow touched upon and also Dr. Giorgi and has been referred many times here today, is the prevention of illness. This, it seems to me, of necessity has to be approached realistically in this country sometime within the near future. Most attention to illness and disease in this Nation has been directed to the immediate treatment of the sick-with hospitalization, nursing care, medicare, and such other measures necessary to bring about a cure. Historically, however, the greatest progress in health in the world has been made on the one hand by the primary prevention of disease as the acute infectious diseases-smallpox, typhoid fever, diphtheria, |