question the proposal for a separate HCFA to be directed by another assistant secretary reportable to the Secretary of HEW.

Performance records, documented in our written testimony, demonstrate that HEW has been hampered in fulfilling its laboratory administration responsibilities by self-ackwnowledged jurisdictional disputes between involved agencies.

The source of these problems seems to be the lack of top management accountability in HEW for coordination of its laboratory related functions.

ASMT feels the appropriate position towards the consolidation and coordination of the Department's health care program and their finances would be to place the authority under a single Assistant Secretary for Health. Without such consolidating and coordinating efforts, laboratories and practitioners are faced with the distinct possibility of the continuation of conflicting decisions as well as the unfortunate situation of expanded periods of time lapsing between resolution of issues.

These occurrences are detrimental and jeopardize quality functioning of laboratories. Therefore, we would strongly recommend that the committee consider amending the bill and place the proposed HCFA under the authority of the Assistant Secretary for Health, who would be the single federal official accountable for the administration and financing of Federal health programs.

Regarding the proposed termination of the Health Insurance Benefits Advisory Council, ASMT believes that the advice and information from professionals and consumers is the only way in which those responsible for title XVIII can obtain the sufficiently broad understanding of the challenges and issues to assure final program decisions which are in the best interests of the patient-public and the health care

system.

We feel that the abolishment of HIBAC would create a void in professional and consumer input.

Senator CURTIS. What is HIBAC?

Ms. FIORELLA. Health Insurance Benefits Advisory Council. The abolishment of this Council would create a void of professional and consumer input that unquestionably would be detrimental to the future of the health care system.

The consumer has the right to formal and direct input. The Federal Government should not be denied the opportunity to enhance its own ability to reach decisions which will impact favorably upon the health care system.

Therefore, ASMT would like to go on record as opposing the abolishment of HIBAC, particularly without establishing an alternative mechanism as a conduit for formal and informal input from the private sector.

Consistent with our viewpoint concerning professional and consumer input, ASMT further endorses the requirement of a 60-day comment period for regulations under the proposed legislation. Mrs. Preuss?

MS. PREUSS. I would like to comment on the Office of Central Fraud and Abuse Control. Consistent with ASMT's historical concern regarding adequate control of reimbursement mechanisms, we endorse

the provisions in this legislation for the establishment of an Office of Central Fraud and Abuse Control.

Although ASMT has been painfully aware of certain fraudulent practices concerning laboratory testing, charges and reimbursement, we are rather shocked to learn that fraud exists within the industry to the extent emphasized in recent governmental reports.

We realize that even under closely monitored conditions, there will be those who will elect to violate commonly accepted practices. However, if we are to believe the available reports, we find that we are not faced with a situation where the violations are rare, but rather a situation where there appears to be a rampant widespread fraud and abuse. Those of us who are in the health care profession would indeed be abrogating our responsibility if we did not publicly deplore the current situation and aggressively seek to effect a solution.

We, as professionals, find the current situation to be disgusting, disheartening, and discouraging. We do our best to assure quality service for the patient, only to find that those with the authority to assure appropriate reimbursement control mechanisms have neglected to assume this most important role.

One way in which ASMT can assist in resolving the problem is to assist in achieving passage of this legislation. We therefore endorse the establishment of the Office of Central Fraud and Abuse Control under the direction of an inspector-general.

However, for such an office to function effectively, everyone in the health care industry will have to assume a personal responsibility for the recognition and bringing to the fore fraud and abuse when it occurs. Such a responsibility cannot be exercised without incurring certain risks, such as loss of employment, suppression of career advancement, internal ostracization or failure to find subsequent employment in other institutions.

Potential loss of economic and job security can serve as a powerful deterrent to disclosure of fraudulent and abusive practices. It does not take but a cursory review of like-situations in other industries to recognize that reprisals for such disclosures are indeed predictable. We are convinced that unless this legislation is amended to include an employee protection provision that the best-conceived Office of Central Fraud and Abuse cannot achieve what is necessary.

We propose an amendment which would protect all practitioners in the health care industry-and I emphasize all practitioners in the health care industry-from discrimination with respect to compensation, terms and conditions and privileges of employment. Such an amendment is regrettably an absolute necessity.

Finally, I would like to comment on the hospital-associated physician reimbursement. Regarding the question of physician reimbursement, this legislation seeks to revise the reimbursement practices.

We feel it is very important for this subcommittee to be provided the opportunity to achieve an accurate understanding of what current employment functions are for laboratory personnel.

Medical technologists perform four major roles in a laboratory. First, the medical technologist performs diagnostic test procedures, routine and specialized.

Second, technologists fulfill the duties and responsibilities of technical supervisors.

Third, the chief administrative technologists assume a variety of managerial responsibilities within a hospital laboratory.

Finally, the medical technologist plays a direct role in the educational process of laboratory personnel.

To expand on each of these roles, first, the role of the medical technologist as a laboratory supervisor. In the majority of hospitals, medical technologists have traditionally served as the technical supervisors of the total laboratory as well as technical supervisors of designated specialty departments or section areas.

Supervisors plan, organize and delineate the responsibilities of personnel working under their direction. They assume the responsibility for instituting new procedures, establishing and maintaining quality control programs. They train personnel, maintain supplies, disseminate information, maintain procedural directions and ascertain reliability of test results.

Medical technologists are unquestionably involved in the supervising, planning, processing and reporting of laboratory tests. These nonphysician functions are commonly established and accepted by hospital administrations.

The role of the chief or administrative technologist in the laboratory management, ASMT recently completed a laboratory management survey. The report illustrates that administrative functions are indeed carried out by medical technologists. A copy of this report has been provided for your committee.

This survey clearly indicates that medical technologists are now playing an essential role in laboratory management. That data points out that the administrative medical technologist carries out the majority of a laboratory's administrative functions.

Thirty-three administrative functions common to laboratories were listed on the survey questionnaire. These functions ranged from who reviews and manages quality control programs to who evaluates electronic data programs and reports.

Senator TALMADGE. I hate to interrupt you, but unfortunately, your time has expired. Your entire statement will be inserted in the record. I want to thank both of you for your very helpful and constructive suggestions.

I presume my first question would be for Ms. Fiorella. In your experience, can a medical technologist with baccalaureate or master's level training in one of the biological, chemical or physical sciences along with appropriate years of work in clinical laboratory testing, assume responsibility for the direction and supervision of a clinical laboratory?

Ms. FIORELLA. I would say the answer to that is yes, as long as the duties and responsibilities are not of a diagnostic or therapeutic nature do not require diagnostic or therapeutic decisions.

Management, supervisory, technical decisions-definitely yes. Senator TALMADGE. In clinical laboratory work, what specific activities require a pathologist's skills?

Ms. FIORELLA. Again, those skills would be required in diagnostic and therapeutic decisions as opposed to the clinical significance of tests that are within the educational expertise of the medical technologist.

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Senator TALMADGE. My next question would be, I think, for Ms. Preuss. You have asked that S. 3205 be amended to include employee protection, which includes language to protect employees who have testified or are about to testify.

Why are you asking for this protection? Have there been any specific problems in the past?

MS. PREUSS. Regrettably, there were problems in the early seventies regarding a former president of our organization who provided testimony relative to issues involved in this legislation, and who subsequently lost her employment. Our organization is concerned about this type of activity. I would like to add however that we have recently testified regarding the Clinical Laboratory Improvement Act and there have been no incidents of that nature as a result of those statements.

Senator TALMADGE. Do you have any evidence she was discharged because of her testimony?

MS. PREUSS. Senator, you can always be discharged because your shoes are not polished or you do not smile appropriately; however, the discharge came immediately following the testimony and the individual had been employed in the institution for 15 years.

Senator TALMADGE. Who fired her?

MS. PREUSS. In that particular situation, I would assume that both. the director of the laboratory and the hospital administration played a role.

Senator TALMADGE. Thank you.

Senator Curtis?

Senator CURTIS. Those of us who have a responsibility of recommending legislation to the Senate may disagree oftentimes on what is the best approach to the problem, but I can assure you that everyone is interested in stamping out fraud and any acts that are unethical and wrong.

I was impressed by your statement concerning the fear of loss of job security by not disclosing fraud.

What types of fraud are we talking about?

I would like to have some examples. Does it have to do with fraudulent records? What type of fraud is occurring that we should strive to give some protection to those who might reveal it?

I am not limiting the testimony before legislative committees. I am talking about the freedom to go to someone right in the local situation, the hospital administrator, hospital trustee, chief of staff, or whomever it is. What type of fraud is occurring and is not being detected because there is that very justifiable fear?

Ms. PREUSS. We are familiar with the fraud that has been described and discussed in the various governmental reports. The reason for that is

Senator CURTIS. What fraud is that?

MS. PREUSS. For example

Senator CURTIS. Performing services that are unnecessary, falsifying records? What is it?

MS. PREUSS. I would be happy to delineate areas of fraud if I could finish my rationale for qualifying my statement.

It is one thing to learn of these activities from others. It is another to have concrete data from a wide variety of sources to support your feelings and perceptions in this regard.

As president of ASMT last year, I know of members who were aware of fraudulent practices, and felt an obligation to report these. However, there was considerable fear for loss of employment. In one particular case, information was received but it was followed up by a letter which requested that I destroy the information because the individual was afraid they were going to lose their position. Their reason was that they had a family to support.

It has been incredibly difficult to encourage professionals to live up to their obligations in this regard.

As to fraud you asked me to identify-recent disclosures concerning kickback situations-was not news to us.

Senator CURTIS. By whom, to whom?

MS. PREUSS. Such as in Illinois where laboratories were paying funds back to the physician, who referred his lab work to the laboratory. There are situations where laboratory tests may go from a physician's office to more than one laboratory. That can involve double and triple charging.

There are situations where laboratories are paid for work done yet testing is done in another institution.

There is a great deal of variability in terms of what is charged for a laboratory test. It is possible to effect testing economics which could reduce the cost of the test to the patient. In some cases, the patient is the recipient of reduced charges. In other cases, the charges remain the same. A good question to ask is what happens to these savings.

Senator CURTIS. I realize that my time is up, but I have one more question. Believe me, all I want is information.

When a similar test is referred to more than one laboratory, is that ever for good medical reasons or double-checking, or something of that sort?

MS. PREUSS. Certainly, there are occasions where that should occur and it would be an abuse of the physician's obligations to his patient not to do so. We are talking about situations where it is a practice, a common practice, which is more than something which is advisable for a particular patient.

Senator CURTIS. How widespread is it?

Ms. PREUSS. I do not know.

Senator CURTIS. Based on your own experience, percentagewise is it happening in 50 percent of the cases, 3 percent?

MS. PREUSS. I cannot respond to that, Senator. We are unable to get that information.

Senator CURTIS. From your own personal observation?

MS. PREUSS. My own personal observation.

Senator CURTIS. How big a problem is it?

Does it involve 20 percent, 3 percent of the transactions, 100 percent?

Ms. PREUSS. I have been fortunate to work in laboratory situations where this has not been a problem. If you are asking me to respond from personal experience, I cannot provide the information you request.