Bradley, John A., president, Federation of American Hospitals, accom- Busbee, Hon. George D., Governor of the State of Georgia.... College of American Pathologists, Dr. Dennis B. Dorsey, president, accom- Page 132 44 147 279 408 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, accompanied by Michael Scott, legal counsel. 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- Fiorella, Beverly, president, American Society for Medical Technology, 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 Hodes, Hon. Richard, chairman, Human Resources Task Force, National Hughes, Frank, president-elect, National Retired Teachers Association- Kaiser Foundation Health Plan, Inc., James A. Lane, counsel. National Conference of State Legislatures, Hon. Richard S. Hodes, chair- National Council of Health Care Services, Jack A. MacDonald___ 401 373 Nunn, Hon. Sam, a U.S. Senator from the State of Georgia.. Thevenot, Bruce D., director, government services division, American Tresnowski, Bernard, vice president, Blue Cross Association_‒‒‒‒‒‒ 283 158 356 251 386 329 White, William C., vice president, Prudential Insurance Co., on behalf of ADDITIONAL INFORMATION Press release announcing these hearings‒‒‒‒‒‒ Page 346 102 12 COMMUNICATIONS Ambulance and Medical Services Association of America, Lynne Mahan, 528 American Academy of Dermatology, Peyton E. Weary, M.D. 541 American College of Nuclear Physicians, Jack K. Goodrich, M.D., presi- 484 American Dental Association.... 463 American Enterprise Institute, John R. Virts, corporate staff economist, 436 American Medicorp, Inc‒‒‒‒ 468 American Nurses' Association, Inc., Anne Zimmerman, R.N., president_-- 494 456 American Osteopathic College of Pathologists, Inc., John A. Kline, D.O., American Osteopathic Hospital Association, Michael F. Doody, president__ American Podiatry Association, John R. Graham, D.P.M., president---. Association for the Advancement of Psychology, Nicholas A. Cummings-- 547 473 Boston University Medical Center, University Hospital, James L. Dorsey, 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, Chamber of Commerce of the United States, Rose P. Wooden, associate 602 551 Coopers & Lybrand 508 Council of Community Hospitals, John F. Horty, president-- 587 Cummings, Nicholas A.. Association for the Advancement of Psychology-- 547 542 551 Dorsey, James L., administrator for fiscal affairs, Boston University 534 Ervin, Clinton V., Jr., M.D., Union of American Physicians__ 478 484 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_-. 568 512 493 Kline, John A., D.O., president, American Osteopathic College of Patholo- 585 National Association for Mental Health, Inc., Hilda Robbins, chairperson, 496 Nelson, Hon. Gaylord, a U.S. Senator from the State of Wisconsin----- 422 499 New York State Department of Social Services, Philip L. Toia, 590 Ohio State Medical Association, George N. Bates, president___ Pathology and Cytology Laboratories, Inc., P. Raphael Caffrey, M.D., Wooden, Rose P., associate director, economic security, education and man- power section, Chamber of Commerce of the United States-- Zimmerman, Anne, R.N., president, American Nurses' Association, Inc-- 494 MEDICARE-MEDICAID ADMINISTRATIVE AND MONDAY, JULY 26, 1976 U.S. SENATE, SUBCOMMITTEE ON HEALTH OF THE 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. 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 S.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. |